Ottawa, December 31, 2012
The Honourable Jim Flaherty, Minister of Finance, and the Honourable Gail Shea, Minister of National Revenue, today highlighted that Canadians will have more contribution room to invest in their Tax-Free Savings Account (TFSA) in the new year.
“Our Government remains committed to its low-tax plan for jobs and growth, and we are very pleased to offer Canadians this important way to save on taxes and keep more of their hard-earned money,” said Minister Flaherty.
Since the Harper Government made TFSAs available in 2009, Canadians have been able to earn tax-free investment income on contributions of up to $5,000 per year—a limit that will increase to $5,500 as of 2013. All Canadians—from students to young families to seniors—can earn tax-free income through a range of investment products. TFSAs have become increasingly popular, with approximately 8.2 million Canadians having opened an account and roughly 2.5 million Canadians contributing the maximum amount in 2011.
“Through the Tax-Free Savings Account, our Government is providing increased tax relief to Canadians, and encouraging savings and investment in the economy,” said Minister Shea. “We are pleased to see so many Canadians benefiting from the program already, and hope that more Canadians will take advantage of this important savings vehicle in 2013.”
The TFSA is a flexible, registered, general-purpose savings vehicle that allows Canadians to earn tax-free investment income. A TFSA can contain a range of investments, similar to those in a Registered Retirement Savings Plan, such as mutual funds, listed securities and guaranteed investment certificates.
Key features of the TFSA to keep in mind:
When the TFSA was introduced, the Harper Government announced that the $5,000 annual contribution limit would be indexed to inflation in $500 increments. 2013 will be the year in which the first $500 increment takes effect, which means more room for Canadians to put funds aside for their financial goals.
For more information on TFSAs, please visit the Canada Revenue Agency website or contact your financial institution.
Office of the Minister of Finance
Department of Finance