Advisors won’t take no for an answer

Advisors won’t take no for an answer

Advisors won’t take no for an answer Conservative MP Peter Kent has sponsored an online petition that calls on Bill Morneau to leave the annual TFSA contribution at $10,000 reversing Justin Trudeau’s campaign promise to roll it back to $5,500 where it was in 2014.
 
Advisors unhappy with the rollback – there are many – might want to sign the petition if they already haven’t to express their displeasure with the federal government’s move to take away one of the best savings vehicles available to the middle class.
 
Nova Scotia advisor Glen Rankin defended the TFSA in November suggesting that it’s not just a vehicle for the rich; [the rollback] especially does a disservice to seniors who need as much non-taxable income as they can get their hands on.
 
“If I’m a senior, I’m retired and I’m relying on government benefits, maybe I even qualify for a guaranteed income supplement; or I might have had an inheritance from my parents; or I might have just been very frugal and saved a lot of money. A lot of the people I’m seeing are moving money from existing non-registered into TFSAs,” said Rankin. “It’s not all new money for rich people. It’s middle-income people, many of them seniors, that are moving money from their left hand to their right hand to make it more tax efficient.”
 
Unfortunately, a mere 32 signatures have come from Rankin’s home province so advisors in Nova Scotia might want to pick up the pace. Ontario’s garnered the most signatures with close to 1,100 or more than half of the total to date. Interestingly, Quebec has less signatures than either Alberta or British Columbia, despite having a population approximately equal to the two western provinces combined.
 
Speaking of Ontario, IPC Investment Corp. advisor Jason Pereira believes the rollback hurts seniors and low-income Canadians far more than the wealthy and definitely should remain at $10,000.  
 
“The two groups that benefit the most are seniors who have money but are getting clawed back on their OAS because of the income on that and it may sound like $70,000 is enough but it varies from province to province. These people may be losing the benefits without a good reason,” Pereira told WP. “Secondly, lower-income Canadians are better served by a TFSA than an RRSP. If a lower-income Canadian is socking a bunch of money away and they put it all into an RRSP they get next to nothing in tax savings and they’re going to pay more tax later on especially because their OAS is going to get clawed back. I’ve seen that happen many times where people who earn less than $50,000 their entire lives they end up by the time they’re 71 having to take out money and it puts them in a higher tax bracket than they ever been.”
 
To sign the petition click here.
5 Comments
  • John De Goey 2015-12-10 11:49:49 AM
    This is silly. People claim that they are unhappy when politicians break election promises - and then they start petitions asking them to (wait for it) break election promises.
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  • Dave 2015-12-10 12:21:51 PM
    Low income people do not have a clawback issue. You have to earn over 71k before it kicks in. That is 71k not including oas. At last check only about 5% have anything clawed back and about 2% lose it all. Even if you earn more than 72k, if you have a lower earning spouse the income can be split.
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  • Mike Gentile 2015-12-10 12:57:26 PM
    It's great to see that an on line petition in regards to the TFSA rollback has been introduced. We have recommended since 2009 when TFSA's were introduced that our clients contribute to one. If the federal government really believes that by allowing a $10,000.00 contribution they are in effect opening the flood gates,they are living in a fantasy world. TFSA DEPOSITS ARE NOT TAX DEDUCTIBLE. They are a meaningful way of saving money for things such as,home and car repairs etc.If the federal government thinks that it is better to deplete your RRSP savings for unexpected emergencies, they need to think again. Given my experience and the many people I speak to about TFSA's, veryfew people have actually met the allowable contribution limits. Given that our newly elected government plans on spending money like a drunken sailor it think it would only be both wise and fair to let the taxpayers put some money away for a rainy day.
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