Short for Registered Retirement Savings Plan — a registered Canadian account where contributions reduce your taxable income in the year you make them, investments grow tax-deferred, and withdrawals are taxed as regular income when you eventually take money out.
Think of it as a trade with the government across time: put money in today, and you get an immediate tax refund on it — effectively investing pre-tax dollars. It grows without being taxed year to year. But when you eventually withdraw it (typically in retirement), that withdrawal counts as taxable income. The bet is that you'll be in a lower tax bracket in retirement than you are while working, making the deferral a net win.
Contributing $10,000 to an RRSP while earning $90,000/year might generate a tax refund of roughly $3,000-$4,000 depending on your province — money you can reinvest immediately. That $10,000 then grows tax-free until withdrawal, at which point it's taxed as ordinary income.