ST CATHARINES FAMILIES WILL BENEFIT FROM PLAN TO DOUBLE TAX-FREE SAVINGS ACCOUNTS


FOR IMMEDIATE RELEASE

April 7, 2011

 

ST CATHARINES FAMILIES WILL BENEFIT FROM
PLAN TO DOUBLE TAX-FREE SAVINGS ACCOUNTS

 

St. Catharines – Tax-free savings accounts (TFSAs) ceiling limits will double from $5,000 to $10,000 for every Canadian once the budget is balanced, the Conservatives promised today. This measure will provide further tax relief for families and working Canadians, potentially helping thousands of households in St. Catharines.

Conservative candidate Rick Dykstra states TFSAs are excellent vehicles for families to both save money and lower taxes. “As a Government we have focused on providing tax relief for families and, today, the average family is paying $3,000 less in taxes each year.”

“Today’s announcement will allow people to keep more of their hard-earned dollars, while providing them a means to lower their income taxes. In this way, more money goes to people’s savings, so that they can plan for future expenses such as a dream vacation, a new business investment or their own retirement.”

The current TFSAs allow Canadians to save and invest up to $5,000 tax-free dollars per year. The investment income earned in your TFSA, including capital gains, is not taxed, even when withdrawn. Over 4.7 million Canadians are now taking advantage this tax relief mechanism.

 

 Contact:  Karen Moncur – 905-933-0743


Conservative Party of Canada
BACKGROUNDER
April 7, 2011
BACKGROUNDER
THE ISSUE

  • Since coming to office in 2006, Stephen Harper’s Government has been implementing a low-tax plan to help Canadians save and invest for the future. 
  • Our strong record of lowering taxes has allowed families to keep more of their hard-earned money and have the financial security to raise their children and plan for a stable retirement.
  • Today, thanks to Stephen Harper’s low-tax plan, the average Canadian family is paying $3,000 less in taxes each and every year. 
  • One of our Government’s most important low-tax measures is the creation of the Tax-Free Savings Account (TFSA) in 2008.
  • Canadian families need to save for many different purposes over their lifetimes.  Reducing taxes on savings helps to make it easier and more rewarding for Canadian families to save for investment in their own priorities.  That’s exactly what the TFSA does. 
  • The TFSA is a flexible savings vehicle that allows Canadians to save and invest up to $5,000 per year. 
  • Withdrawals from TFSAs are non-taxable.  Canadian families can withdraw their savings when they need them — to purchase a car, renovate their home, start a small business or retire in greater financial security.
     
  • Investment income earned in your TFSA, including capital gains, is not taxed, even when withdrawn. 
  • Not every Canadian is able to save up to $5,000 each and every year.  Those who do not save up to the limit each year are able to carry forward their unused contribution room to future years.  Accordingly, the TFSA could also be a vehicle for any lump-sum amounts that Canadians might receive.
  • In recognition of the fact that families make their saving decisions and plan for their financial security on a joint basis, individuals can provide funds to their spouse or common-law partner to invest in their TFSA, up to their spouse’s or common-law partner’s available room. 
  • The TFSA is especially beneficial to Canadian seniors. 
  • It helps them meet their ongoing savings needs, even after they reach age 71 and must convert their Registered Retirement Savings Plan into a Registered Retirement Income Fund. 
  • Withdrawals from the TFSA do not affect a senior’s eligibility for federal income-tested benefits and credits such as Old Age Security, the Guaranteed Income Supplement and the GST Tax Credit. 
  • The TFSA has been a tremendous success since coming into place in January 2009. 
  • Over 4.7 million Canadians are now taking advantage of the TFSA to save for the future. 
  • The fair market value of all TFSAs held by Canadians is $17.9 billion. 

THE PLAN

  • Hard-working Canadians are concerned about their savings — having enough set aside to go on their dream vacation, start a small business or have a nest-egg for their retirement.
  • A re-elected Stephen Harper Government will — as soon as the budget is balanced within the next term of office — double to $10,000 the amount that Canadians can contribute to TFSAs each year. 
  • This low-tax measure will provide Canadian families with more flexibility to save and plan for the future and lower their taxes over time. 
  • The projected cost of doubling the TFSA limit will be modest in the fiscal planning period.  It is estimated to cost up to $30 million in the first year.