Registered retirement savings plan contributions

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The number of taxfilers making contributions to registered retirement savings plans (RRSPs), and the amount contributed both increased for the third consecutive year in 2006.

Contributions rose 5.8% from 2005 to $32.4 billion, the highest amount ever reported. Data are from income tax returns filed in the spring of 2007.

Just under 6.2 million taxfilers contributed to an RRSP in 2006, an increase of 60,000 or 1.0% from 2005. This was the highest level since 2001, when over 6.2 million people contributed to an RRSP. Alberta had the largest gain in the number of contributors, an increase of almost 26,000.

To be eligible to contribute to an RRSP, a taxfiler must have either new room as a result of qualifying income from the previous year (generally employment income), or unused room from earlier years. The limit is based on 18% of the previous tax year's earned income, to a fixed maximum, less any pension adjustment, plus any unused room carried forward. The fixed maximum in 2006 was $18,000, up from $16,500 in 2005.

Almost 88% of taxfilers were eligible to contribute to an RRSP for the 2006 tax year, up from 86% in 2005. Out of the 88% of taxfilers eligible to contribute to an RRSP in 2006, about 31% actually made contributions, which is comparable to 2005.

The $32.4 billion in RRSP contributions in 2006 represented about 7.0% of the total room available to eligible taxfilers, which is the same ratio as in 2005.

Total contributions increased in all provinces and territories in 2006 except for Prince Edward Island (-7.2%), New Brunswick (-2.3%), and Nunavut, which remained relatively stable. The decrease in Prince Edward Island is a turnaround from 2005, when the province had recorded the largest increase (+21.8%) in the country. In 2006, taxfilers in Alberta recorded the largest percentage increase (+12.5%) in total contributions, followed by those in the Northwest Territories (+12.1%) and Saskatchewan (+8.6%).

Nationally, the median contribution was $2,730 in 2006, up $100 from 2005. The median is the point at which exactly one-half of contributing taxfilers contributed more than $2,730, and the other half less.

The median contribution in the three territories again surpassed those in all provinces, continuing a historical trend.

The highest median contribution at the census metropolitan area (CMA) level occurred in Calgary, where it was $3,580, followed by Vancouver at $3,350, and Toronto at $3,250. The same three CMAs have occupied the top three positions for the last five years.

The largest percentage gains in total contributions among CMAs were in Greater Sudbury (+13.7%), followed by Thunder Bay (+13.0%), Calgary (+12.8%), and Edmonton (+11.2%). This is a change from 2005, when Calgary and Edmonton had the largest percentage increases in total contributions.

Of the 27 CMAs, 20 had an increase in the number of contributors in 2006, while the remainder were relatively stable.

Available on CANSIM: tables 111-0039 to 111-0041.

Definitions, data sources and methods: survey number 4106.

The databanks, RRSP Contributors (17C0006, various prices), RRSP Contribution Limits (17C0011, various prices), and Canadian Taxfilers (17C0010, various prices), are available for Canada, the provinces and territories, cities, towns, census metropolitan areas, census divisions, federal electoral districts, and areas as small as forward sortation areas (the first three characters of the postal code), and letter carrier routes.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Client Services (toll-free 1-866-652-8443; 613-951-9720; fax: 1-866-652-8444 or 613-951-4745; saadinfo@statcan.gc.ca), Small Area and Administrative Data Division.

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