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Bill C-30 Just Passed: 5 Ways It Changes Your Wallet in 2026

  Canadian Money Brief Bill C-30 just received Royal Assent — and it touches your gas tank, your TFSA neighbour the RRSP, your CPP statement, and your tax return all at once. Here are the five changes that actually matter for your wallet. 1. The Federal Fuel Excise Tax Is Suspended Until September 7 The federal excise tax on gasoline and diesel is paused from April 20 through September 7, 2026 — shaving 10 cents per litre off gas and 4 cents off diesel at the pump. The tax break also extends to aviation fuel. If you're road-tripping this summer, the savings show up automatically; you don't need to do anything to claim it. Just don't expect it to last past Labour Day weekend, since the suspension is scheduled to expire September 7. 2. Home Buyers' Plan Repayment Window Triples — From 2 Years to 5 If you used your RRSP to fund a down payment through the Home Buyers' Plan, the grace period before you have to start repaying yourself is extending from two years to five, ...
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How to Make the Most of Your RRSP Contribution Before the 2024 Deadline

 

The Registered Retirement Savings Plan (RRSP) is one of the best tools for Canadians to save for retirement and reduce their taxes. However, many people make mistakes or miss opportunities when it comes to their RRSP contributions. Here are some tips and tricks to help you optimize your RRSP before the deadline of February 29, 2024.

  • Contribute early and often: The sooner you make your RRSP contribution, the more time your money will have to grow tax-deferred. You can also avoid the last-minute rush and stress of trying to find the funds to contribute. If possible, set up a pre-authorized contribution plan that automatically deducts a certain amount from your bank account every month or pay period. This way, you can benefit from dollar-cost averaging and smooth out the market fluctuations.
  • Know your contribution limit: The RRSP contribution limit for 2023 is $30,780 or 18% of your 2022 earned income, whichever is lower. You can also carry forward any unused contribution room from previous years. To find out your exact limit, check your latest Notice of Assessment from the Canada Revenue Agency (CRA) or log on to your online account. If you over-contribute, you may face a penalty of 1% per month on the excess amount, unless it is within the $2,000 lifetime over-contribution allowance.
  • Claim your deduction strategically: You can claim your RRSP contribution as a deduction on your 2023 income tax return, which may lower your taxable income and generate a tax refund. However, you don’t have to claim the deduction in the same year you make the contribution. You can defer it to a future year when you expect to have a higher income and tax rate. This way, you can maximize your tax savings and reinvest your refund into your RRSP or other savings vehicles.
  • Avoid making withdrawals: Unless it is absolutely necessary, you should avoid taking money out of your RRSP before retirement. Any withdrawal will be subject to withholding tax and added to your taxable income for the year. You will also lose the contribution room permanently and miss out on the potential growth of your investments. The only exceptions are the Home Buyers’ Plan (HBP) and the Lifelong Learning Plan (LLP), which allow you to withdraw up to $35,000 and $20,000 respectively from your RRSP to buy your first home or fund your education, as long as you repay the amount within a specified period.
  • Plan for income splitting with your spouse: If you expect your spouse to have a significantly lower retirement income than you, you may want to consider contributing to a spousal RRSP. A spousal RRSP is an RRSP that you contribute to on behalf of your spouse, but you still get the tax deduction. When your spouse withdraws the money from the spousal RRSP, it will be taxed at their lower rate, which may reduce your overall tax burden as a couple. This strategy may be especially beneficial if you are not able to achieve optimal results from pension income splitting, which allows you to allocate up to 50% of your eligible pension income (including RRIF income) to your spouse.

By following these tips and avoiding common mistakes, you can make the most of your RRSP contribution and prepare for a comfortable and tax-efficient retirement. Remember, the deadline for the 2023 tax year is February 29, 2024, so don’t delay and start planning today.

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