Number of Canadians contributing to RRSPs drops

Number of individuals, amount contributed decreases following record highs

The number of Canadians contributing to registered retirement savings plans (RRSPs) dipped in 2001 following record high levels the year before.

According to Statistics Canada, 6,241,050 taxfilers contributed more than $28.4 billion in 2001. By comparison, 6,291,170 contributed nearly $29.3 billion in 2000.

The median contribution declined from $2,700 in 2000 to $2,600 in 2001. (The median is the point at which half of taxfilers are below and half are above.)

To be eligible to contribute to an RRSP, an individual must have unused room. This consists of either new room as a result of qualifying income from the previous year (generally employment income) or unused room from earlier years.

For 2001, 83 per cent of those who filed taxes had unused room. Of these, about 34 per cent made contributions. But the total contributions of $28.4 billion represented only about nine per cent of the total room available to all filers.

Contributions declined in all provinces and territories except for the Northwest Territories (+4.1%) and Nunavut (+1.9%). The largest declines were in the eastern provinces.

The number of contributors also declined, except for small increases in Quebec, Alberta, Northwest Territories and Nunavut. About 36 per cent of those with room in Alberta made contributions, as did 35 per cent in Ontario and 34 per cent in Quebec, Manitoba and British Columbia.

The decline in contributions and contributors occurred even though employment income increased slightly in 2000, when employment income determined new room for 2001 contributions. Median employment income in 2000 was $23,905, up 0.4 per cent after adjusting for inflation.

In 2000, large pay equity payments were made to federal government employees and Statistics Canada said this probably resulted in increases in RRSP contributions in that year. Because these were one-time payments, this may also explain some of the decline in contributors and amounts contributed for tax year 2001.

Median contribution levels across the country

Canada: $2,600
Newfoundland and Labrador: $2,200
Prince Edward Island: $2,000
Nova Scotia: $2,100
New Brunswick: $2,000
Quebec: $2,400
Ontario: $2,800
Manitoba: $2,100
Saskatchewan: $2,400
Alberta: $2,800
British Columbia: $2,900
Yukon: $3,100
Northwest Territories: $3,500
Nunavut: $4,400

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