Ottawa, January 1, 2010
2010-001

Archived - Tax-Free Savings Accounts Provide Canadians With More Room to Save in 2010

The Honourable Jim Flaherty, Minister of Finance, today reminded Canadians that with the new year, they will have an additional $5,000 in room for contributions to their Tax-Free Savings Account (TFSA).

"Canadians can benefit by using the TFSA to start saving early for a range of needs they may have in the future," said Minister Flaherty. "The TFSA also provides seniors with a vehicle to meet ongoing savings needs."

The TFSA is a general-purpose tax-efficient savings vehicle for Canadians that complements existing registered savings plans. It is a flexible savings account that allows Canadians to earn tax-free investment income to more easily meet their savings goals.

Contributions to a TFSA are not deductible, but the income earned within a TFSA and withdrawals from the account are not taxed. They also have no effect on eligibility for federal income‑tested benefits and tax credits, such as Old Age Security and the Guaranteed Income Supplement, the Canada Child Tax Benefit and the Goods and Services Tax Credit.

A TFSA can contain different types of investments, similar to those in a Registered Retirement Savings Plan, such as mutual funds, listed securities and guaranteed investment certificates.

Other important information that Canadians should know about how the TFSA works includes:

• Since 2009, Canadian residents age 18 or older are eligible to contribute up to $5,000 annually to a TFSA, with unused room carried forward.
• Withdrawals create contribution room for future savings.
• Contributions to a spouse’s or common-law partner’s TFSA are allowed, and TFSA assets are generally transferable to the TFSA of a spouse or common-law partner upon death.

For more information on TFSAs, please visit www.tfsa.gc.ca.

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For further information, media may contact:

Annette Robertson
Press Secretary
Office of the Minister of Finance
613-996-7861

Jack Aubry
Media Relations
Department of Finance
613-996-8080

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