The Canadian government has introduced legislation to help put more money in Canadians’ pockets. Bill C-31, the Tax-Free Savings Account (TFSA) Enhancement Act, would increase the annual contribution limit for TFSAs from $6,000 to $8,000. The change would be retroactive to 2023, meaning that Canadians could contribute an extra $2,000 to their TFSAs this year.
In addition, the bill would allow Canadians to carry forward unused TFSA contribution room indefinitely. Currently, Canadians can only carry forward unused contribution room for five years. The change would give Canadians more flexibility to save for their long-term financial goals.
The TFSA is a registered savings account that allows Canadians to save for the future tax-free. Contributions to TFSAs are not tax-deductible, but withdrawals are tax-free. This makes TFSAs an attractive option for Canadians who are saving for retirement, a down payment on a home, or other long-term financial goals.
The government estimates that the proposed changes to TFSAs would benefit 11 million Canadians. The changes would also provide a significant boost to the Canadian economy, by encouraging Canadians to save more money.
The TFSA Enhancement Act is expected to be passed by Parliament in the coming months. Once the bill is passed, the changes to TFSAs would come into effect on January 1, 2024.
Government tables legislation to put more money in your pocket
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