Hello!

I explain this. Right now I am setting up a document for retirement planning that is similar to this outline in the bottom. My question lies in RRSP's and tax on contributing. In the following example "John" puts 16,700 into his RRSP. From what I understand that would reduce his salary by that much before it was taxed. Why does the line below it say "Tax on contributions" starting at 1600 and then 5000 for every year after, I dont understand why there is tax on this contributions.

Visa Payments 5. ECHO 6 090 11.890 909 3 40 0 400 3 2 010 2400 savings TESA Financial Planning 500 TESA NOW Car 250 4 200 1 2010 1 , 200 RESP contributio 090 9000 9000 3, 500 John RRSP contributions 3, 700 16 , 709 16700 16 700 16 700 16 700 for on contributions 1609) 15 000 15000) (5 000) (5 090) 15 000) Rachel RASP contributions 2.500 5,000 1090 2.509 250 0 250 tax on contributions (90 0 ) (1 500) (1 509) (1500) (1 500) (1 500 700 24 , 2010 8 400 20500 16 900 16 90 0 Net increase / ( decrease ) 2 . IEND 10 0 5.90 0 9000 960/ $ 134, 520.09 IFSA long-term investing 900 3000 9 600 Invest in Balanced Fund's 300 New after non - registered investment