Mr. Speaker, the question amounts to estimating the cost to the Government of allowing tax-free rollovers of severance pay to a registered retirement savings plan, or RRSP.
Based on available tax data, it is estimated that permitting rollovers of severance pay and lump sum payments received for long service to an RRSP would cost about $285 million annually in forgone federal tax revenue. This estimate takes into account that individuals currently receiving severance pay may contribute all or part of such amounts to an RRSP based on their available unused RRSP room, while others with little or no unused RRSP room would likely take full advantage of a rollover measure.