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Canadians want opposition parties to keep their hands off the new expanded contribution limits for tax-free savings accounts (TFSAs), according to an online survey.
In April, the Conservative government nearly doubled how much a saver could put into his or her TFSA, boosting it from $5,500 a year to $10,000. Opponents charge the big increase benefits mostly wealthier Canadians who have enough disposable income to take advantage of the supersized savings room.
Liberal and New Democratic leaders have vowed to reverse the increase, but 67 per cent of respondents in a poll conducted by the Angus Reid Institute were opposed to the rollback.
When asked if Ottawa should limit yearly TFSA contributions to $5,500, only 33 per cent of respondents agreed. The remainder said the federal government should allow annual contributions up to $10,000.
The new $10,000 limit was popular across the political spectrum. Among those who intended to vote NDP, 63 per cent were in favour, while 62 per cent of Liberal supporters and 78 per cent of Conservative loyalists also voiced support.
The widespread support for the proposal is odd since many Canadians don’t use the savings vehicle, which allows investments to grow tax-free. Few taxpayers appeared to find the old, smaller limits to be a hindrance to their savings plans.
TFSAs were introduced in 2009, but 62 per cent of eligible Canadians had yet to open one by the end of 2013, according to Rhys Kesselman, an economist at Simon Fraser University.
In a study for the left-leaning Broadbent Institute, Prof. Kesselman crunched Canada Revenue Agency data and concluded only about 17 per cent of the minority of Canadians with TFSAs maxed out their contribution room in 2013. He estimated there was $592-billion in unused TFSA contribution room by the end of that year.
Finance Minister Joe Oliver has defended the rise in contribution limits, arguing it is good for Ottawa to put more money into the pockets of Canadians even if there is a hit to tax revenue as a result.
The strong support in the survey for the higher TFSA contribution limits doesn’t amount to a blanket endorsement of Conservative proposals. An even larger majority – 81 per cent of respondents – liked Liberal and NDP proposals to maintain eligibility for Old Age Security at 65 years, rather than gradually increasing it to 67 as Conservatives plan.
The online survey of 1,563 Canadian adults was conducted between Sept. 2 and 7 and is accurate to plus or minus 2.5 percentage points 19 times out of 20. The survey was commissioned and paid for by the Angus Reid Institute, a not-for-profit public opinion research organization.