A global shutdown caused by the coronavirus pandemic gave Canadians an increase of unanticipated savings that led to a short period of stronger retirement savings contributions, says Amin Mawani, director of the Master of Health Industry Administration and professor of taxation at the Schulich School of Business at York University.

It has been five years since the pandemic was declared by the World Health Organization and Mawani says there were retirement savings trends in motion that saw some changes to their development due to the global crisis.

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He adds the trend described was only seen in 2020 and 2021 with contributions for retirement vehicles like registered retirement savings plans declining again after the period. “We had lots of money and no restaurants or movies to go to, so we saved. RRSP [contributions] went up in those two years only, then continued their downward decline since then.”

A 2021 survey from the Healthcare of Ontario Pension Plan found nearly half (46 per cent) of Canadians saved more money than they would’ve otherwise since the start of the pandemic. However, the survey found only 37 per cent of respondents were able to set aside any savings for retirement.

According to Statistics Canada, in 2023, 11.3 million tax filers in Canada contributed to an RRSP or a tax-free savings account, with median annual contributions of $3,420 and 6,500, respectively.

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A separate report from Statistics Canada found participation in TFSAs is rising, while participation in RRSPs has stagnated. The report found with the onset of the pandemic, a record high 58.1 per cent of Canadian families participated in one or more of the three registered accounts.

Mawani says there’s consistency with lower wage workers declining to contribute to retirement savings or flat out being unable to make them. “Income inequality is getting worse, so the lower-income people are just not able to save much.”

The Statistics Canada report also found employee contributions to DC plans grew five per cent from 2019 to 2020 and individual retirement plan contributions grew 10 per cent. However, contributions made by employers fell by 12 per cent.

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