Courts are generally protective of RRSP income since, ideally, that money is collected and preserved exclusively to provide for retirement. There are particular incentives, tax and otherwise, built into the RRSP regime to encourage Canadians to save this way. As a result we have seen courts (and the legislature) protect RRSPs from execution or seizure, even in the context of bankruptcy. That said, courts are reluctant to grant the same protection in the context of support or maintenance orders, and more broadly in the context of child support obligations. In fact, the Ontario Court of Appeal in Fraser v Fraser makes it clear: RRSP income should be treated as income for support purposes under theGuidelines even if the RRSP has been subject to equalization.
In its decision, the Court of Appeal settled two differing approaches to RRSP income for support purposes. Before Fraser, the Ontario Superior Court of Justice in P (JM) v K (TL) noted that treating RRSP receipts as income for child support purposes was discretionary under the Guidelines. The court went on to say that if the RRSP was equalized, that would be a mitigating factor against including the RRSP receipts as income. Interestingly enough, eight years before the P (JM) decision, the same court inStevens v Boulerice stated that not only do the Guidelines require RRSP withdrawals be included as income for support purposes, but equalization does not affect that requirement.
As you may have guessed, in Fraser, the Court of Appeal followed the reasoning inStevens. In doing so the court emphasized a key principle of support: equalization is a matter between the spouses, a matter that should not impact child support.
The Guidelines are clear: when determining income for support purposes, section 16 requires the payor to include “total income”, and total income includes RRSPs. Of course, on certain facts such a ruling may not lead to a fair and just result, but Fraserwas not such a case.
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