The TFSA is About to Get Better

Walter Harder

There may be one silver lining to all this inflation…the Tax-Free Savings Account (TFSA), arguably the best savings vehicle available to Canadians, is about to get even better.

When the account was first introduced in 2009, the annual contribution room was limited to $5,000. This amount is indexed annually, but only in increments of $500. 

In 2012, the annual contribution room increased to $5,500, and it wasn’t until 2019 that the current limit of $6,000 was reached. The good news, due to inflation, the contribution limit is expected to increase to $6,500 in January 2023.

Taxpayers, who have been residents in Canada and are over the age of 18 since the TFSA was introduced, will see their available contribution room reach $88,000 in 2023. Those who qualify for the first time in 2023 (residents of Canada who are at least 18 years of age) can maximize their annual TFSA contributions to the new $6,500 amount based on their new room available in January.