Higher taxes, cuts in services if TFSA contribution limit increased: study

Global News

OTTAWA – A new study says the Conservative government’s plans to double contribution limits for tax-free savings accounts would cost billions in lost tax revenue and primarily line the pockets of wealthy Canadians.

The report by the left-wing Broadbent Institute says most Canadians would not benefit from the plan to nearly double the TFSA contribution limit to $10,000 a year, up from $5,500.

Instead, the report says, they would bear the burden of reduced public services or higher taxes to offset the lost revenues.

The study was written by Jonathan Rhys Kesselman, an economist whose research on so-called tax-prepaid savings plans laid the groundwork for the government’s initial introduction of TFSAs in 2009.

Finance Department estimates suggest the accounts reduced Ottawa’s revenues by $65 million in 2009, $165 million in 2010 and $160 million in 2011. Those same estimates projected a hit of $295 million in 2012 and $410 million…

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