Summer 2026 Newsletter 102A
How to Catch Up on Your RRSP Contributions
How to Catch Up on Your RRSP Contributions
If you have ever felt behind on your RRSP, you are not alone. Life gets in the way, rent, a mortgage, kids, a period of lower income, and RRSP contributions get pushed to the back of the list.
Here is the good news: unused RRSP contribution room does not disappear. It accumulates year over year, and many Canadians are sitting on far more room than they realize. Catching up on those contributions is one of the most straightforward ways to reduce your tax bill.
Here is how it works.
What Is RRSP Contribution Room?
Each year, the Canada Revenue Agency (CRA) calculates how much you are allowed to contribute to your RRSP. The formula is 18% of your prior year’s earned income, up to an annual maximum set by the government, which is updated periodically and published by the CRA each year.
If you do not contribute the full amount in a given year, the unused room carries forward to the following year. And the year after that. And so on.
This carry-forward provision is what makes catch-up contributions possible. Someone who has been contributing inconsistently over the past decade may have accumulated tens of thousands of dollars in available room.
How to Find Your Contribution Room
The most reliable way to see your available RRSP room is through your CRA My Account, the federal government’s online portal. Once logged in, look for your Notice of Assessment (NOA) from last year’s tax return. Your RRSP deduction limit for the current year is listed there explicitly.
If you have not set up a CRA My Account, the same information appears on the paper NOA mailed to you after your return is processed. You can also call the CRA directly to confirm your available room.
Your available room is the combined total of any room you did not use in prior years, plus the new room added based on last year’s income.
The Tax Benefit of Catching Up
RRSP contributions reduce your taxable income dollar for dollar. If you are in a 40% combined federal and provincial marginal tax bracket and contribute $10,000 to your RRSP, you reduce your taxable income by $10,000, which means approximately $4,000 less in taxes owed.
That is the core value of catching up. Every dollar of unused room you do not use is a tax deduction sitting on the table.
The benefit compounds over time as well. Money contributed to your RRSP grows tax-sheltered until withdrawn. The earlier it is contributed, the longer it has to grow without being taxed each year.
The RRSP Catch-Up Loan Strategy
One approach many Canadians use is an RRSP catch-up loan, a short-term personal loan taken specifically to make a large RRSP contribution all at once.
Here is the idea: you borrow a lump sum, deposit it into your RRSP before the deadline, and use the tax refund you receive to pay down a significant portion of the loan. If your refund covers half the loan, for example, you are left with only half the balance to pay off over the following months.
This strategy works best when:
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You have a meaningful amount of carry-forward room built up
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You are in a higher tax bracket, which produces a larger refund
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You can realistically pay off the loan within 12 months
The interest on an RRSP loan is not tax-deductible, so the goal is to repay it quickly. Holding the loan for an extended period reduces the overall benefit of the strategy.
Many Canadian banks and credit unions offer RRSP loans specifically for this purpose, often at competitive rates and with repayment terms designed around the expected tax refund timeline.
Timing: The RRSP Deadline
RRSP contributions for a given tax year must be made by 60 days after December 31, which works out to March 1 in most years, or March 2 when the following year is a leap year. Contributions made in January or February of the new year can be applied to either the previous tax year or the current one, giving you some flexibility.
Many Canadians wait until close to the deadline to contribute. While this is common, making contributions earlier in the year, or throughout the year, means the money spends more time growing inside the plan.
Over-Contributing: What to Watch
There is one important guard rail: RRSP over-contributions above a $2,000 lifetime buffer are penalized at 1% per month on the excess amount. This rarely happens accidentally, but it is worth confirming your available room before making a large lump-sum deposit.
Your confirmed room from your most recent NOA, minus any contributions already made in the current year, gives you your remaining available room.
When an RRSP Makes the Most Sense
The RRSP is most valuable when you are in a higher tax bracket now than you expect to be in retirement. Contributing while earning at a high rate and withdrawing at a lower rate in retirement produces the greatest tax advantage.
If you are in a lower bracket now, it can sometimes make more sense to contribute to a TFSA first and save your RRSP room for higher-earning years. Both accounts have their place, and many Canadians use both, the RRSP for the tax deduction today, the TFSA for tax-free access later.
Putting It Together
If you have years of unused RRSP room, that room represents real tax savings that are still within reach. Catching up does not require a windfall. It can be done gradually, contributing more each year than required, or all at once using a short-term loan.
Check your CRA My Account for your current room, run the numbers on what a contribution would mean for your tax return this year, and decide whether catching up makes sense for your situation. The deadline comes every early March, and with every year that passes, the carry-forward room keeps growing.
This content is provided for general informational purposes only. It is not intended to provide investment, tax, or legal advice, and should not be relied upon as such.
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Executive summary – Robin Esrock
What is the big “bucket list” trip you’ve been putting off for years? Is it touring Europe with your grandkids? Maybe sailing the Caribbean with your spouse? Or maybe something right here in our own incredible Canadian backyard?
Last month, we hosted a private conversation with author, travel writer, and TV personality Robin Esrock, and he spent the evening outlining why now – not later – is the time to plan that dream vacation with your family.
Here are his three biggest beliefs on making that dream a reality:
- Don’t wait for tomorrow, as one day you will run out of tomorrows – if there was one thing to take away from our time with Robin, this was it. He relayed the reality check he experienced when his own father had a sudden “widowmaker” heart attack… time is short, so don’t wait for tomorrow – start planning that trip today!
- Take your (entire) family! – These trips aren’t just about the experience, they are about making memories, and memories are best when shared with the people you love – so make plans to bring your family! Don’t let age hold you back; there are companies out there that can accommodate the very young and the very “experienced” among us.
- Get off the beaten trail – the best memories happen when you are surprised and delighted. Visiting the castle you’ve read so much about is one thing, but how many people you know have seen a polar bear in real life? Or visited a true ghost town?
As a Family Office, we are big believers that Mom & Dad (or Grandpa & Grandma) should plan and fund a once-in-a-lifetime family trip. We can put you in touch with the right people at the right companies to make that dream vacation a reality.
What Is Participating Whole Life Insurance?
What Is Participating Whole Life Insurance?
Most people buy life insurance for one reason: to make sure their family is protected if something happens to them. But there is a type of life insurance that does something more – it builds value over time while you are still alive. That type is called participating whole life insurance, and it works very differently from the term policies most Canadians are familiar with.
Here is what it means, how it works, and whether it might be a fit for you.
Permanent Coverage That Does Not Expire
Term life insurance covers you for a set period – 10, 20, or 30 years. Participating whole life insurance is permanent. It covers you for your entire life, as long as premiums are paid, and the death benefit is guaranteed.
That permanence is the first major difference. But the bigger difference is what happens to your premiums while you are alive.
With a term policy, your premiums go entirely toward the cost of insurance. With participating whole life, the insurer pools premiums into a participating account that is professionally managed. Dividends may be paid when the account’s experience is favourable, based on factors such as investment returns, expenses, and mortality experience.
How Dividends Work
The word “dividend” here is different from stock dividends. In the context of a participating whole life policy, a dividend is a share of the insurance company’s surplus – essentially, the company returning a portion of the money when investment performance, claims experience, and expenses go better than expected.
These dividends are not guaranteed. They are declared each year by the insurance company based on how the participating account performed. That said, many Canadian participating insurers have long histories of paying dividends, though past performance does not guarantee future results.
When you receive a dividend, you have a few options for how to use it:
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Take it as cash. The dividend is paid to you directly.
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Apply it to your premium. It reduces how much you pay out of pocket.
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Buy additional paid-up insurance. This is the most common choice. The dividend purchases more coverage, which in turn earns its own dividends. Over time, this compounds.
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Leave it on deposit. The dividend sits with the insurer and earns interest.
Most policyholders who hold participating whole life for the long term choose to purchase additional paid-up insurance, because it accelerates both the death benefit and the cash value of the policy.
The Cash Value
One of the most distinctive features of a participating whole life policy is that it builds cash value. The policy builds guaranteed cash value as part of its structure, and dividends can add a non-guaranteed layer of growth if they are used to buy paid-up additions.
The policy accumulates cash value that you may be able to access, subject to policy terms, in a few ways:
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Policy loans. You can borrow against the cash value without going through a lender or credit check. Policy loans do not have fixed repayment schedules, but any unpaid balance can reduce the death benefit.
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Surrendering the policy. If you decide you no longer need the coverage, you can cancel the policy and receive the accumulated surrender value. The tax treatment on surrender can be technical and depends on the policy’s adjusted cost basis — the disclaimer at the end of this article applies here.
The cash value grows on a guaranteed basis, separate from the dividends. The dividends, if used to purchase paid-up additions, add a non-guaranteed layer of growth on top.
Who Is This Type of Policy For?
Participating whole life is not the right fit for every situation. Because premiums are higher than term insurance, it is most commonly used by people who have a long-term need for life insurance and who can sustain the premium over time.
Some of the most common situations where it makes sense:
Families building long-term wealth. For parents who want to ensure a guaranteed death benefit no matter when they pass, plus build a tax-advantaged asset over decades, participating whole life offers both.
Business owners and incorporated professionals. A participating whole life policy held inside a corporation may offer a tax-efficient approach to building cash value inside a permanent policy, depending on the structure and the corporation’s specific situation. It can be used by incorporated professionals – such as dentists and physicians – to redirect excess corporate cash into a long-term, protected asset.
Estate planning. For those who want to leave a specific, guaranteed sum to their heirs or a charitable organization, a participating whole life policy creates a known outcome – the death benefit- regardless of when death occurs.
High net worth individuals. When other registered accounts (TFSA, RRSP) are maximized, participating whole life can offer a tax-efficient way to build cash value inside a permanent policy, outside of registered limits.
How It Fits Alongside Term Insurance
Term and participating whole life insurance are not competitors- they serve different purposes, and many Canadians use both at different stages of life.
Term insurance is a straightforward, affordable way to protect your family during the years it matters most – while a mortgage is being paid down, while children are young, or while income replacement is the primary concern. It does exactly what it is designed to do.
Participating whole life steps in when the need for coverage is permanent, when building long-term cash value matters, or when the policy is part of a broader estate or corporate strategy. The two products often complement each other well, and choosing one does not mean ruling out the other.
What to Take Away
Participating whole life insurance combines permanent death benefit protection with a growing cash value and the potential for dividends. It is a longer-term commitment with higher premiums, and it is designed for situations where permanence, cash value, and legacy planning are part of the picture.
If you are considering permanent life insurance, take time to review how dividend performance has held up at the insurer you are looking at, understand the various dividend options, and think through whether the long-term commitment fits your situation.
This content is provided for general informational purposes only. It is not intended to provide investment, tax, or legal advice, and should not be relied upon as such. Policy design, dividend scale performance, cash value growth, and tax treatment vary by insurer and by the specific policy contract. Always review the policy illustration and contract terms carefully.
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Tax Lines to Look Out For on Your 2025 Canadian Tax Return
Tax Lines to Look Out For on Your 2025 Canadian Tax Return
The deadline for filing your 2025 income tax return is April 30, 2026. With several changes this year, from a lower federal tax rate to new benefits and eliminated credits, it pays to know what has changed before you file. This guide covers the key updates, deductions, and credits separated into sections for Individuals and Families, and Self-Employed Individuals.
For Individuals and Families
Federal Tax Rate Reduction
Effective July 1, 2025, under draft legislation introduced May 27, 2025, the lowest federal income tax rate was reduced from 15% to 14%. Because this change took effect halfway through the year, the blended rate for 2025 is 14.5%. This applies to the first $57,375 of taxable income and could save an individual up to $420 per year, or up to $840 for a two-income household.
Because the lowest rate also determines the value of most non-refundable tax credits, the government introduced a new top-up credit. This credit restores the full 15% value on eligible non-refundable credits claimed on amounts above $57,375, so the rate cut does not reduce the value of credits like the Basic Personal Amount, medical expenses, or tuition. This top-up credit will remain in place through the 2030 tax year.
Basic Personal Amount (BPA)
For 2025, the Basic Personal Amount has increased to $16,129 for taxpayers with net income up to $177,882. For those with net incomes above this amount, the BPA is gradually reduced, reaching a minimum of $14,538 at incomes of $253,414 or higher.
Capital Gains
The proposed increase in the capital gains inclusion rate from 50% to 66.67% on gains over $250,000 for individuals (and on all gains for corporations and most trusts) has been cancelled. The inclusion rate remains at 50% for all taxpayers. However, the lifetime capital gains exemption has been raised to $1,250,000 for qualifying dispositions of small business shares and farming or fishing property, up from $1,016,836.
Canada Disability Benefit
A new benefit became available in June 2025, providing up to $200 per month ($2,400 per year) for Canadian residents aged 18 to 64 who are approved for the Disability Tax Credit.
The benefit is income-tested, with the maximum amount generally available to single individuals with adjusted family net income of $23,000 or less. For couples, the threshold is higher (generally $32,500 after a working income exemption).
The benefit is gradually reduced as income increases. For single individuals, it is typically reduced by 20 cents for each dollar above the threshold. For couples, the reduction may be 20% or split at 10% each, depending on whether one or both partners qualify for the benefit.
What Has Been Eliminated
Canadian Journalism Tax Credit: The 15% non-refundable tax credit for qualifying digital news subscriptions (up to $75 per year) is no longer available for 2025.
Home Accessibility and Medical Expense Double-Claim: Under proposed measures announced in Budget 2025 and included in Bill C-15, 2025 is expected to be the final year that certain expenses qualifying for the Home Accessibility Tax Credit can also be claimed as a medical expense. Starting in 2026, these expenses will generally need to be claimed under only one provision and cannot be double-counted. Individuals planning eligible renovations may wish to take advantage of the current rules before this change takes effect.
Alternative Minimum Tax (AMT)
The updated AMT rules that took effect in 2024 continue to apply. These include a higher minimum tax rate, modified calculation for adjusted taxable income affecting foreign tax credits and minimum tax carryovers, and limited value on most non-refundable tax credits.
Popular Tax Credits and Deductions
Canada Training Credit (CTC) Eligible taxpayers aged 26 to 65 can claim this refundable tax credit to cover a portion of eligible tuition and fees for training or courses to enhance their skills.
Canada Caregiver Credit (CCC) This non-refundable tax credit supports individuals caring for family members or dependents with a physical or mental impairment. The amount varies based on the dependent’s relationship, net income, and circumstances.
Child Care Expenses Child care expenses, such as daycare, nursery schools, day camps, and boarding schools, are deductible if incurred to enable a parent or guardian to work, pursue education, or conduct research.
Disability Tax Credit (DTC) The DTC provides a non-refundable tax credit for individuals with disabilities or their caregivers to reduce the amount of income tax payable. For 2025, the disability amount is $10,138. Applicants must have a certified disability lasting at least 12 months. The expenses eligible for the disability supports deduction have also been expanded for 2025.
Moving Expenses Deductible moving expenses include transportation and storage costs, travel expenses, temporary living costs, and incidental expenses incurred when relocating at least 40 kilometers closer to a new work location, educational institution, or business location.
Interest Paid on Student Loans Interest paid on eligible student loans can be claimed as a non-refundable tax credit. The loans must be under federal, provincial, or territorial student loan programs.
Donations and Gifts Donations made to registered charities or other qualified organizations qualify for non-refundable federal and provincial tax credits. Typically, eligible amounts up to 75% of net income can be claimed. Note: due to the Canada Post strike in late 2024, eligible donations made in the first two months of 2025 can also be claimed on a 2024 return.
GST/HST Credit The GST/HST credit is a quarterly refundable payment designed to offset the impact of sales tax on low to moderate-income individuals and families. Eligibility is automatically assessed based on the annual tax return.
RRSP Contributions The maximum RRSP contribution for 2025 has increased to $32,490 (up from $31,560 in 2024), based on 18% of the previous year’s earned income. The TFSA annual contribution limit remains at $7,000 for 2025.
First Home Savings Account (FHSA) Contributions of up to $8,000 per year (lifetime limit of $40,000) are tax-deductible, grow tax-free, and qualifying withdrawals for a first home purchase are also tax-free. The FHSA can be used alongside the Home Buyers’ Plan, which maintains a withdrawal limit of $60,000.
For Self-Employed Individuals
CPP Contributions
Self-employed individuals pay both the employee and employer portions of CPP, for a combined rate of 11.90% on earnings up to the YMPE ($71,300). For CPP2, the self-employed rate is 8% on earnings between $71,300 and $81,200, with a maximum CPP2 contribution of $792.
Filing and Payment Deadlines
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Tax Return Deadline: June 15, 2026.
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Balance due must be paid by April 30, 2026.
Reporting Business Income
Report income on a calendar-year basis for sole proprietorships and partnerships.
Digital Platform Operators
Reporting rules require platform operators to collect and report seller information to the CRA. If income is earned through a digital platform, it is important to ensure it is properly reported.
Filing season for 2025 returns opens February 23, 2026. With a lower federal tax rate, increased contribution limits, and several eliminated credits and taxes, reviewing these changes before filing can help maximize savings and avoid surprises. The CRA is also no longer mailing paper tax packages, so returns and forms are available online at canada.ca or by calling 1-855-330-3305.
Sources
Canada Revenue Agency. “Personal income tax: What’s new for 2025.” – Canada.ca – https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/whats-new.html
Canada Revenue Agency. “Important changes to the 2025 income tax package.” – Canada.ca – https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2025/important-changes-2025-income-tax-package.html
Canada Revenue Agency. “Maximum Pensionable Earnings and Contributions for 2025.” – Canada.ca – https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2024/canada-revenue-agency-announces-maximum-pensionable-earnings-contributions-2025.html
Canada Revenue Agency. “Basic Personal Amount.” – Canada.ca – https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/basic-personal-amount.html
Canada Revenue Agency. “Tax rates and income brackets for individuals.” – Canada.ca – https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/canadian-income-tax-rates-individuals-current-previous-years.html
“Budget 2025 – Tax Measures” (Home Accessibility Tax Credit change) – https://budget.canada.ca/2025/report-rapport/tm-mf-en.html
The opinions expressed are those of the author and not necessarily those of CI Assante Wealth Management Ltd. This material is provided for general information and the opinions expressed and information provided herein are subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on the information presented, please seek professional financial advice based on your personal circumstances.
Executive summary – Peter Hofstra
Last month, Portfolio Manager Peter Hofstra joined us for dinner and shared some critically important insights on the geopolitical landscape, market outlook, and how AI is reshaping our lives and our investment opportunities. Overall, the tone was quite optimistic given current world dynamics – here are our three key takeaways:
- Peter labels AI as the biggest opportunity of the next decade – from streamlining healthcare and education to revolutionizing the business world, AI presents the largest single investment opportunity of the next 10+ years. Forget the robots you’re imagining – this is data-scraping at an unfathomable scale that will give us information that would take dozens of humans years to go through – in mere seconds.
- It won’t be a straight line, so expect volatility – the growth trajectory, while impressive, won’t be a smooth ride. However, for those who can invest for the long-term, Peter believes the results will be more than worth the volatility along the way.
- Separate the political news from your market expectations – while it feels like the political landscape is incredibly destabilized, the markets are often able to look past the upsetting developments and continue to grow. Peter expects the current situation to be no different – so sticking to your plan is more important now than ever.
So what does this mean for you and your family? We know from experience that the most volatile times often present the greatest opportunities, so we will continue to work with you to ensure you are in a great position for growth and stability in the decade ahead. In conjunction with that, we believe that now more than ever, families need to take an intergenerational view on their wealth planning, not just for retirement, but for their children and grandchildren – otherwise, they risk being left behind in this AI revolution.