Poilievre to hike TFSA contribution limit by $5K for those who invest in Canadian companies
Conservative leader's proposed TFSA top-up means Canadians could contribute $12K a year
Conservative Leader Pierre Poilievre announced Thursday that a government led by him would allow Canadians to contribute $5,000 more a year to their tax-free savings accounts (TFSA) — as long as that extra cash is being invested in Canadian companies.
Poilievre is pitching it as a way to keep more investment dollars at home because the extra contribution limit will be earmarked for Canadian investments alone.
"It will help us become more self-reliant and sovereign as we stand on our own two feet and stand up to the Americans," the Conservative leader said in a social media video announcing the measure.
The TFSA, first introduced by former prime minister Stephen Harper, is an immensely popular program. Nearly 18 million Canadians have one of these accounts, according to the most recent Canada Revenue Agency (CRA) data.
The money invested in a TFSA can grow tax-free, and unlike a registered retirement savings plan (RRSP) account, there's nothing owed to the government when money is pulled out. The contribution limit for this year is $7,000.
Harper raised the annual TFSA limit to $10,000, but former prime minister Justin Trudeau dialled it back to $5,000 after he was elected, and then tied that amount to inflation, saying a more generous contribution limit only benefited the rich and pulled too many investment dollars out of the tax system.
But CRA data suggests it's not just the wealthy who use TFSAs — more than 9.8 million account holders put some money into one last year. Of that figure, 1.5 million contributed the maximum amount.
Statistics Canada data also shows the popularity of the account has increased in recent years, with Canadians contributing more than when the program was first launched as fewer workplaces offer pension plans.
However, according to BMO, the average TFSA balance is just $44,987, far less than the maximum contribution room allowed: $102,000.
Poilievre said Thursday the amount should rise, arguing his TFSA top-up will reward "patriotic Canadians who will invest in Canadian businesses and help grow our economy."
"Instead of rewarding people for taking jobs and money out of Canada, as Carney and the Liberals did, we need a massive 'bring-it-home tax cut.' The Canada First TFSA is about boosting Canadian businesses, unleashing our economy, so that we can stand up to Trump from a position of strength," he said.
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