Feds to double annual contribution limit to TFSA: report
Posted April 7, 2015 6:45 am.
Last Updated April 7, 2015 6:48 am.
This article is more than 5 years old.
By Jaime Pulfer, 680News; and The Canadian Press
Prime Minister Stephen Harper’s government is reportedly about to double the annual contribution limit to a Tax-Free Savings Account (TFSA).
The Toronto Star reports a confidential letter dated April 6 from Finance Minister Joe Oliver to his caucus discusses the plan, and confirms it will be included in the upcoming budget, set to be tabled on April 21.
The current limit for a TFSA is $5,500 a year, but will be increased to $11,000.
680 NEWS senior business editor Mike Eppel said the move could be beneficial to some Canadians.
“If you take full advantage of it, it’s a great way to keep money from the tax man. Again though, it’s the question how much money do you actually have to set aside at the end of the day to take full advantage of it,” Eppel said.
The majority of Canadians using a TFSA are in their 50s.
However, according to MoneySense magazine some Canadians are worried that with the government is giving up so much revenue, the tax break might not be sustainable over the long haul.
A new survey of Canadians, from BMO Financial Group, found almost 20 per cent of respondents didn’t put aside money in 2014 and a further 40 per cent felt they were not saving enough.
This year’s household savings report said 31 per cent of respondents had a fixed savings plan in place that included monthly contributions.
The BMO study also revealed that a third had less than $10,000 in savings.
