If your client has been waiting to withdraw their RRIF minimum for 2025, they need not wait any longer. The Department of Finance says the Liberals’ election pledge to reduce the mandatory minimum RRIF withdrawal by 25% for one year won’t go ahead.
“The proposal to reduce minimum RRIF withdrawals was made in early 2025, at a time of significant stock market volatility and perceived risks of … negative returns,” a Finance official said in an emailed statement. “Since the election campaign, stock markets have rebounded strongly.”
The proposed RRIF measure was announced in April as stock markets dropped in response to U.S. trade tariffs. Currently, the S&P/TSX composite index is up nearly 25% year-to-date.
Given strong market performance, the proposed RRIF measure is “no longer required,” Finance’s statement said. The government “will continue to monitor market conditions.”
In an email, Jamie Golombek, managing director and head of tax and estate planning with CIBC Private Wealth in Toronto, said, “It’s unfortunate that the government hasn’t addressed the need for RRIF reform, as the current RRIF withdrawal age and current minimums force some retirees to withdraw more than they need, and pay tax prematurely. If you haven’t yet taken out your 2025 RRIF minimum, hoping for this change (i.e., the proposed RRIF measure) to pass, now is the time to do so using the standard RRIF table.”
Wilmot George, managing director of tax and estate planning with Canada Life in Toronto, said in an email that Finance’s position means “a missed opportunity to bring more flexibility to seniors with RRIFs. While the election promise was promoted as a temporary measure, in periods of global uncertainty, every dollar counts.”
Further, “the conversations of a reduction to RRIF minimum amounts and an increase to the mandatory RRSP-to-RRIF conversion age have continued to pick up steam as health-care costs and life expectancies increase,” George said. “I would expect that these conversations will continue until changes are made.”
As things stand, “given that the promised RRIF minimum reduction was not included in Budget 2025, seniors can take that as a sign that the change is not an immediate priority for the current government and continue on, based on current rules,” he said.
As Golombek and George indicated, industry groups have been calling for permanent changes to the RRSP and RRIF framework, including reducing the RRIF minimum payout formula, raising the age of RRSP conversion or eliminating minimum withdrawals completely.
RRSPs must be converted to RRIFs by the end of the year in which taxpayers turn 71, and mandatory minimum withdrawals begin the year after a RRIF is opened. Those minimums are calculated by multiplying the fair market value of the property held in a RRIF at the beginning of the year by a prescribed factor based on age. The prescribed factors were lowered by almost 30% in 2015; before that, minimums hadn’t been updated since 1992.
In 2023, Finance produced a report on mandatory minimum withdrawal rates following a consultation in which some stakeholders said eliminating minimum withdrawals would provide retirees with flexibility, while others were concerned that reduced (or delayed or eliminated) RRIF withdrawals would disproportionately benefit high-income retirees.
The report said RRSPs and RRIFs combined are one of the government’s largest tax expenditures, representing an estimated $25.8 billion in forgone federal revenues that year.
Following the report, the government didn’t address RRIF minimums in the 2024 federal budget, the 2024 fall economic statement or the 2025 budget.
The cost of the Liberals’ proposed RRIF measure was $600 million for 2025–26, according to the election platform.