I think that the 38% rate is the average rate the Department of Finance uses as a general rule. It is highly likely that retirees would be subject to a lower tax rate, but it is also highly likely—and I know a lot of retirees for whom this is the case—who would be taxed at 38% or higher.
The public paid $38 billion into RRSPs in 2004 in the form of deferred taxes and withdrew $52.5 billion. Even if the taxation rate was lower, I can guarantee you that the government would not lose out. This is not the future, as Mr. Flaherty pointed out. You have to look at the current obligations. Today, this week, $ 1 billion will be taken out from RRSPs and RRIFs.
Even if the tax rate was lower—