The Tax Free Savings Accounts or TFSAs are the most important new savings tool for Canadians in a generation. Over 11 million Canadians have a TFSA and 60% of account holders make less than $60,000 annually.
The federal government claims that the tax loss from these extra savings costs the treasury just over $1 billion. All this while they paid in 2014 over $21 billion of our tax dollars to generous public service pensions and post-retirement health and dental benefits.
We spend a lifetime teaching our children to save, to be thrifty, and to defer spending, to save, in order to be able to enjoy a comfortable retirement later in life. Cutting down the TFSA to half its current amount sends the wrong message to our youth that savings don't matter.
As well, we hear consistently that Canadians do not save enough through the RRSP and will have difficult in retirement if they rely solely on the CPP, OAS and GIS. If that is true (a big if) then why is the federal government cutting in half the single most important new savings tool for young Canadians?
Opinion poll data has repeatedly shown that a majority of Canadians support retaining the current TFSA limit, and this support is consistent across age groups, income levels and regions of Canada; and
Canadians currently pay 43% of their income in taxes - more than they pay for food, shelter and clothing combined. Retaining the TFSA limit of $10,000 is the least the government can do to help the vast majority of Canadians working in the private sector to save for a decent retirement for themselves and their families.