The RRSP and TFSA question comes up constantly, and the honest answer is that there isn't a universal winner. Both accounts are genuinely useful. The right choice depends on your income today, what you expect to earn in retirement, and your province. Getting it wrong doesn't ruin anything, but you do leave money on the table over time.
The RRSP works by giving you a tax deduction upfront. When you contribute, it reduces your taxable income for that year, and you get a refund from the government. The money then grows inside the account without being taxed until you take it out in retirement, at which point it's counted as income. The RRSP comes out ahead when your tax rate now is higher than your tax rate will be when you withdraw.
The TFSA has no upfront deduction. You contribute with after-tax dollars and the money grows completely tax-free. When you take it out, you don't pay tax on any of it, ever. The TFSA is the better choice when your income today is relatively low compared to where it will be in retirement, or when you want the flexibility to access funds without a tax bill attached.
A rough guide: if you're earning above $80,000 today, the RRSP deduction saves you real money. If you're below that, the TFSA often makes more sense, or a combination of both. If you're not sure where your retirement income will land, splitting contributions is a reasonable hedge.
One approach that works well for a lot of people: contribute to the RRSP, take the refund, and immediately put it into a TFSA. You get the deduction benefit from the RRSP and the tax-free growth from the TFSA at the same time. It layers the two advantages together instead of choosing between them.
Our RRSP vs. TFSA calculator can help you model your own scenario, or book a call and we can work through it based on your actual numbers.