Canadians took up less RRSP room in 2001

(November 19, 2002) Canadians used up only about 9% of the total RRSP contribution room available in 2001.

Statistics Canada reported today that a total of 6,241,050 taxfilers contributed just over $28.4 billion to their RRSPs in 2001. The RRSP contributions fell 3.0% from 2000, when Canadians socked away $29.3 billion. The number of contributors fell 0.3% from the 6,291,170 taxfilers in 2000.

“The median contribution declined from $2,700 in 2000 to $2,600 in 2001,” said Stats Canada, which gathered the data from tax forms filed last spring.

In 2000, a record number of Canadians made record levels of contributions to RRSPs.

Most taxfilers (83%) had unused RRSP room for the 2001 tax year. About 34% of these filers made contributions to their registered plans. The maximum annual contribution limit to an RRSP is 18% of earned income (to a maximum of $13,500). For years several groups have lobbied the federal government to raise the limit to 30% or eliminate it altogether.

“However, the total contributions of $28.4 billion represented only about 9% of the total room available to all filers,” said the federal agency. Based on this data, the total RRSP room available was approximately $313 billion.

Only Northwest Territories (+4.1%) and Nunavut (+1.9%) recorded an increase in contributions. The largest declines were in the eastern provinces.

The number of contributors increased slightly in Quebec, Alberta, Northwest Territories and Nunavut. The highest levels of contributions were in Alberta (36%), Ontario (35%) and Quebec, Manitoba and British Columbia (all 34%).

An estimated 30% of Canadians have not saved any money in either an RPP or RRSP.

Last week, Statistics Canada reported a decrease in the number of Canadians who reported investment income in 2001, while total investment income increased slightly, compared to 2000. Roughly eight million Canadians reported receiving $32.8 billion in investment income last year. In 2000, about 8.5 million people received $32.6 billion in investment income, after adjustments for inflation.

Filed by Jim MacDonald, Advisor.ca, jmacdonald@advisor.ca.

(11/19/02)