First of all, the Canada Revenue Agency ("CRA") does not define RRSP contribution or deduction limits, or any of the other mechanics relative to RRSPs. This is instead the responsibility of the Parliament of Canada, which legislative body is authorised by the Constitution of Canada to establish "any Mode or System of Taxation". Constitution Act, 1867,
30 & 31 Vict, c 3, § 91(3). In exercise of that power, Parliament has enacted the Income Tax Act,
RSC 1985, c 1 (5th Supp) ("ITA"), which (among other things) contains the rules governing RRSPs.
The CRA webpage text that you quote refers to two amounts: (1) "2015 RRSP deduction limit" and (2) "Unused RRSP contributions available to deduct for 2015". Let's figure out what each of these means.
Under the Income Tax Act, the "RRSP deduction limit of a taxpayer for a taxation year" (i.e. the first thing calculated on the CRA website) is generally equal to "the taxpayer's unused RRSP deduction room at the end of the preceding taxation year" plus "the lesser of the RRSP dollar limit for the year and 18% of the taxpayer’s earned income for the preceding taxation year", subject to various exceptions and special cases. ITA § 146(1). In other words, the "2015 RRSP deduction limit" is
generally equal to the unused RRSP deduction room at the end of 2014 plus the lesser of the RRSP dollar limit for 2015 or 18% of the earned income for 2014. That is the first number shown on the CRA website.
But what exactly is "the taxpayer's unused RRSP deduction room at the end of the preceding taxation year"? Parliament was a bit obfuscatory here and defined this term by reference to a
recursive formula (i.e. the definition includes the term that is being defined!) that has a special base case of zero that prevents infinite recursion. See ITA § 146(1). MDM would probably love this tax code. For our purposes, it suffices to say that "the taxpayer's unused RRSP deduction room at the end of the preceding taxation year" is basically equal to the amount that the taxpayer could have deducted
including contributions that could have been made but were not minus the amount that the taxpayer actually deducted.
Turning to the second figure shown on the CRA website, "the amount of undeducted RRSP [contributions]" is also defined by a similarly awesome recursive definition. See ITA § 204.1(1.2). For our purposes, we can adopt a simpler approximation, which is that the "Unused RRSP contributions available to deduct for 2015" is basically the total of RRSP contributions which have been made for years up to and including 2014 but not yet deducted as of the 2014 return.
From this construction, we can see that (to an approximation) the "Unused RRSP contributions available to deduct for 2015" is a subset of the "the taxpayer's unused RRSP deduction room at the end of the preceding taxation year" which is in turn a subset of the "2015 RRSP deduction limit" as shown on the CRA website.
But we still haven't addressed your real question, which is: How much can you contribute to your RRSP for 2015?
The ITA imposes a tax on the "cumulative excess amount" inside an RRSP, which is defined to be
generally the excess of the "individual's undeducted RRSP [contributions]" (i.e. the second figure given on the CRA webpage) over the sum of $2,000 plus the "RRSP deduction limit of a taxpayer for a taxation year" (i.e. the first figure calculated on the CRA website). See ITA § 204.1.
After all that, we find that, generally but with exceptions, the most you can contribute without penalty is equal to $2,000 plus the difference between the two figures on the CRA website. (Note that the $2,000 margin applies only
once-per-lifetime, not per year. If you take advantage of that extra $2,000 once, you can't take advantage of it ever again without paying a penalty. This is actually a consequence of how all these terms have been defined and is not a special rule.)
I cannot and will not comment on the specific situation of the original poster, but, for the sake of example, I will use the numbers from the original post to illustrate the above analysis. Based on the numbers in the original post (but without actually commenting on the specific situation of the original poster), and assuming that none of the special cases not discussed are applicable, the hypothetical taxpayer could contribute at most an additional $4,898-$3,634+$2,000 =
$3,264 without penalty (but $2,000 of that is the once-per-lifetime margin, which the hypothetical taxpayer may or may not want to use). After making such a contribution, the hypothetical taxpayer could take a deduction of $3,634+$3,264-$2,000 =
$4,898, which of course just recovers the value given by the CRA.
So why doesn't the CRA just give you this on its website? I have no idea. But in any case, now that I have explained the meaning of the information on the CRA website, I will also draw your attention to the following two facts:
- The information on the CRA website does not actually control your limits. Those are determined by the provisions of the laws enacted by Parliament. The CRA website could conceivably be incorrect.
- You say that a CRA phone representative may have given you incorrect information about the meaning of the figures on the website. Even if this actually happened, it would of course be irrelevant to your true limits, because those are determined by the laws enacted by Parliament, not by the oral statements of CRA employees. However, the alleged phone conversation could conceivably be relevant to the determination of the tax for overcontribution, if that tax would otherwise apply. See ITA § 204.1(4).
Although this general information is intended to be helpful, there are a ton of exceptions and special cases that I have intentionally not discussed. Any of them could apply to you and therefore you cannot rely on this information. You should retain some sort of qualified tax advisor to help you resolve your specific situation.
