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Tax Policy Comparison:
PERSONAL TAXATION #5
| Tax Policy Comparison: PERSONAL TAXATION #5 |
Conservative Party | Liberal Party |
|---|---|---|
| POLICY | $5,000 Top-Up For TFSAs If Invested in Canadian Equities | N/A |
| DATE | 27-Mar-25 | N/A |
| URL | View Policy Video | No Policy to View |
| DESCRIPTION & COMMENT | Calling this the Canada First TFSA Top-Up, the Conservatives announced today that if elected they would introduce a $5,000 top-up to the normal TFSA contribution limit of $7,000 if such amounts are invested in Canadian equities. Currently, the Income Tax Act has strict rules as to what can be invested in registered plans, like RRSPs, RRIFs, TFSAs, etc. pursuant to the “qualified investment” rules under various sections of the Act. For TFSAs, the rules fall under the definition of “qualified investment” under subsection 207.01(1) and Regulation 4900 of the Regulations to the Act. The Conservatives intend to amend the Act to ensure that it is clear as to what types of Canadian entities will qualify for this additional contribution limit.
There is precedent for this proposal. Prior to 2005, there were foreign content restrictions in the Act that were designed to limit the amount of foreign property that could be held within registered plans like RRSPs, RRIFs and RESPs. In the 1990s, the limit was that no more than 20% of the plan could be foreign content. In 2001, that limit was increased to 30%. The limits were repealed in 2005. These restrictions were in place to ensure that a significant portion of the investments remained within Canada. With the Conservative announcement, the foreign content rules would re-appear such that 0% of the extra $5,000 TFSA contribution limit could be invested in foreign entities. |
N/A |
Tax Policy Comparison:
PERSONAL TAXATION #5
Tax Policy Comparison: Personal Taxation #5
Conservative Party
Date: March 27, 2025
Summary:
$5,000 Top-Up For TFSAs If Invested in Canadian Equities
Description & Comment:
Calling this the Canada First TFSA Top-Up, the Conservatives announced today that if elected they would introduce a $5,000 top-up to the normal TFSA contribution limit of $7,000 if such amounts are invested in Canadian equities. Currently, the Income Tax Act has strict rules as to what can be invested in registered plans, like RRSPs, RRIFs, TFSAs, etc. pursuant to the “qualified investment” rules under various sections of the Act. For TFSAs, the rules fall under the definition of “qualified investment” under subsection 207.01(1) and Regulation 4900 of the Regulations to the Act. The Conservatives intend to amend the Act to ensure that it is clear as to what types of Canadian entities will qualify for this additional contribution limit.
There is precedent for this proposal. Prior to 2005, there were foreign content restrictions in the Act that were designed to limit the amount of foreign property that could be held within registered plans like RRSPs, RRIFs and RESPs. In the 1990s, the limit was that no more than 20% of the plan could be foreign content. In 2001, that limit was increased to 30%. The limits were repealed in 2005. These restrictions were in place to ensure that a significant portion of the investments remained within Canada.
With the Conservative announcement, the foreign content rules would re-appear such that 0% of the extra $5,000 TFSA contribution limit could be invested in foreign entities.
View Policy Video
Summary:
$5,000 Top-Up For TFSAs If Invested in Canadian Equities
Description & Comment:
Calling this the Canada First TFSA Top-Up, the Conservatives announced today that if elected they would introduce a $5,000 top-up to the normal TFSA contribution limit of $7,000 if such amounts are invested in Canadian equities. Currently, the Income Tax Act has strict rules as to what can be invested in registered plans, like RRSPs, RRIFs, TFSAs, etc. pursuant to the “qualified investment” rules under various sections of the Act. For TFSAs, the rules fall under the definition of “qualified investment” under subsection 207.01(1) and Regulation 4900 of the Regulations to the Act. The Conservatives intend to amend the Act to ensure that it is clear as to what types of Canadian entities will qualify for this additional contribution limit.
There is precedent for this proposal. Prior to 2005, there were foreign content restrictions in the Act that were designed to limit the amount of foreign property that could be held within registered plans like RRSPs, RRIFs and RESPs. In the 1990s, the limit was that no more than 20% of the plan could be foreign content. In 2001, that limit was increased to 30%. The limits were repealed in 2005. These restrictions were in place to ensure that a significant portion of the investments remained within Canada.
With the Conservative announcement, the foreign content rules would re-appear such that 0% of the extra $5,000 TFSA contribution limit could be invested in foreign entities.
View Policy Video
Liberal Party