Annual RRSP Deduction Limits

February 03, 2010 By: M. El-Ayari Category: Retirement Planning

The maximum RRSP contribution amount that can be deducted is called the “RRSP deduction limit”. It is also referred to as your “contribution room” or “deduction room”. Your deduction limit is found on your Notice of Assessment or Notice of Reassessment that you receive each year after you file your tax return from Canada Revenue Agency.

Your 2010 limit would be on your 2009 Notice. The deduction limit is calculated as:

(1) 18% of “earned income” for the preceding year, to an annual maximum (see following table)

(2) less the “pension adjustment” amount, for participants in a Registered Pension Plan (RPP) or Deferred Profit Sharing Plan (DPSP)

(3) less any “past service pension adjustment”, for participants in a RPP or DPSP

(4) plus any “past service pension adjustment” reversals

(5) plus unused deduction room carried forward from the previous year

The annual limits for RRSPs, money purchase (defined contribution) RPPs and defined benefit RPPs are:


Annual Contribution Limits

Defined Benefit
RPPs - Max Pension
Benefit per
Year of Service


Purchase (MP)




























1/9 the MP limit




1/9 the MP limit

The DPSP limit is 1/2 of the MP limit each year. The MP limit and DPSP limits for pension adjustment (PA) purposes are also restricted to 18% of compensation.

For each year after 2009 for RPPs and 2010 for RRSPs, the limits will be indexed for inflation using the Industrial Aggregate average wages and salaries in Canada.

RRSP limits lag behind RPP limits by one year because RRSP limits are based on prior-year earnings, and RPP limits are based on current-year earnings.

Mounir R. El-Ayari, CIM, FCSI, C.h. P. Strategic Wealth
Investment Advisor
Associate Portfolio Manager


This Information Was Provided By

U.S. Private Sector Loses 22,000 Jobs

February 03, 2010 By: Guest Category: The Economy

 The Globe & Mail - Report On Business

U.S. private employers cut 22,000 jobs in January, less than the 61,000 jobs lost in December, a report by a private employment service said Wednesday.

The December decline was originally reported at 84,000.

The median of estimates among economists surveyed by Reuters for the ADP Employer Services report, jointly developed with Macroeconomic Advisers LLC, was for a fall of 30,000 private-sector jobs last month.

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November 23, 2009 By: The Well-Heeled Category: Stock Market


Canadian Home Builders Scramble To Meet Demand

November 10, 2009 By: Guest Category: Real Estate

Garry Marr, Financial Post 

The Canadian housing market’s surprising turnaround is spreading to new home construction as developers scramble to respond to a supply shortage that has sent pricing soaring for existing homes.

But any increase in construction on the new home side will likely not surface fast enough to feed the demand for housing that continues to be spurred on by record low interest rates.

Canada Mortgage and Housing Corp. said Monday there were 157,300 units constructed last month on a seasonally adjusted annualized basis, a 5.4% increase from a month earlier. Annualized starts at dropped as low as 118,500 in April.

“There is not a lot of inventory around,” said Gary Friend, president of the Canadian Home Builders’ Association, adding his industry has been careful not to speculate. “We have to watch our Ps and Qs, as we try to meet this demand.”

Any increase in supply would be welcomed as a shortage of new listings has lead to a spike in prices. The Canadian Real Estate Association said last month existing home prices across the country were up 13.6% in September from a year ago as a supply problem was evident in almost every city.

The shortage has yet to ease despite the suggestion higher prices would coax homeowners to sell. This month the Toronto Real Estate Board reported sale prices in October were up 20% from a year ago.

“The existing homes market is in short supply so we’ve gone from a buyer’s market to seller’s market. The way it gets linked is you get some spillover into the new homes market and that’s starting to happen,” said Bob Dugan, chief economist with CMHC.

The agency has already upped its forecast for new home construction for 2010 from 150,300 to 164,900. Even at that level though, construction is still well off the 211,000 new starts recorded in 2008.

Paul Ferley, assistant chief economist with the Royal Bank of Canada, said “at the margins” new home construction could help ease the housing crunch. “Builders are aware and will contribute where they can to advance construction activity but no they can’t turn on a dime.”