Looking Forward: TFSA
TFSA limit should remain at $10,000 to ensure fairness for average working Canadians
Working Canadians, is a not-for-profit organization dedicated to opposing the negative impact excessive union influence has on the Canadian economy and society
Toronto In the wake of the election of a Liberal federal government, there has been discussion that the limit of Tax Free Savings Accounts (TFSAs) will be reduced from the current $10,000 to the previous ceiling of $5,500. In all of the dialogue about how well-prepared Canadians are for retirement, short shrift has been given to the fact that the 80% of Canadians who do not work in government collectively contribute tens of billions of their tax dollars every year so that government workers can enjoy very generous, defined-benefit pensions, indexed to inflation, with additional post-retirement extended health and dental benefits. Catherine Swift, spokesperson for Working Canadians, stated that “This situation is profoundly unfair to the vast majority of Canadians. Canadians in the private sector would be much more able to adequately save for their own retirement if they were not pouring so much of their money into gold-plated pensions for government employees." Working Canadians, a not-for-profit organization dedicated to opposing the negative impact excessive union influence has on the Canadian economy and society.
Introduced in 2009, the TFSA gave hope to private sector Canadian taxpayers that they now could access a program that would permit them to save their own money for a decent retirement. And since TFSA contributions have already been taxed, the government has already received significant monies on this income, as only the appreciation in TFSA investments can be accumulated tax-free. “The enthusiasm with which Canadians have embraced TFSAs is a good indication that such a tool was needed for the large majority of Canadians who do not have the immense advantage of a government employee pension,” expressed Swift.
Indeed, looking at the data on TFSAs since their inception, the facts are impressive. More than half of Canadians have a TFSA, and of the TFSA holders who have topped up their contributions to the maximum limit, fully 60% earn less than $60,000 per year. And TFSAs are an excellent tool for seniors who can no longer contribute to a Registered Retirement Savings Plan after the age of 71. “TFSAs have been criticized by some as being a tool for the rich yet these statistics show that is simply not true. Canadians currently pay about 43% of their income in taxes more than they spend on food, shelter and clothing combined. And many of those tax dollars go to provide very generous pensions to government workers pensions that the average Canadian cannot afford for themselves,” said Swift. Adding, “It would seem that leaving the TFSA limit where it currently stands at $10,000 is the least a government can do to enable 80% of Canadians to put away some funds for a proper retirement for themselves.”
“Even if someone contributed the maximum of $10,000 per year to a TFSA, it would still not compare to the very rich public sector pension plans. But, it would at least give 80% of Canadians a fighting chance to save for a decent retirement for themselves and their families,” stated Swift.