The number of Canadians that contributed to their RRSP dipped to 53% this year, down from 57% last year and 65% in 2014, according to BMO Financial Group's annual Post-RRSP Deadline Study.
While the number of Canadians who contributed is down slightly from last year, the amount that Canadians have contributed has increased. On average, Canadians contributed $4,117 this year compared to $3,737 in 2015 and $3,518 in 2014.
The BMO study also looked at the impact that recent market volatility had on Canadians' decisions to contribute. Forty-two per cent reported that market volatility played no role while 37% stated that it did; 19% indicated that market volatility caused them to contribute more, while 18% said they contributed less.
"RRSPs are one of the most tax-efficient ways one can save for retirement so it's great to see that the majority of Canadians are taking advantage of the program this year," said Robert Armstrong, Vice President, BMO Global Asset Management.
"Market volatility can often create confusion and uncertainty about whether or not to invest. Rather than avoid making a contribution and losing out on potential returns from your RRSP investments, it's a good idea to consult a financial professional who can provide guidance on how to navigate the current market environment."
The study also found that one third of Canadians who expect to receive a tax refund from the Canada Revenue Agency after making an RRSP contribution will save or invest the money. This is down slightly from 34% in 2015 and 36% in 2014.
"Receiving a tax refund as a result of RRSP contributions is always a welcome bonus to one's cash flow. It's important for Canadians to have a strategy for how they will spend this money. It could be an excellent opportunity to grow savings or get ahead on paying down outstanding debt," said Mr. Armstrong.