Ottawa is moving to steamroller the old $5,500 TFSA limit back into place by Jan. 1, 2016, less than a week after the federal clerk of petitions posted the government’s version of the Working Canadians’ TFSA petition to keep the annual contribution limit on Tax-free Savings Accounts (TFSAs) at the current $10,000 level.

Details also in my column in Tuesday’s Financial Post or online, headlined TFSA cap cancels out benefits of ‘middle class’ tax cut, critics warn.

The URL for the federal clerk of petitions’ TFSA petition is at https://petitions.parl.gc.ca

The Hub has been following this petition since its creation in the aftermath of the Liberal Government’s electoral victory.

Last Thursday morning, Working Canadians issued an update that was posted at the Hub’s sister site, Findependence.TV, because the Hub itself was down for maintenance that day. It was headlined Majority of Canadians support leaving TFSA limit at $10,000, poll shows.

Updated 3:15 pm.

Working Canadians issued two press releases today. The first was at 5 am under embargo and appeared on the original version of this blog. It is still there at the bottom, but we have added above it one issued mid-afternoon today:

Dear Working Canadians Supporters:

You may have heard that late yesterday afternoon the new federal Finance Minister Bill Morneau said the government was planning to proceed with reducing the Tax Free Savings Account (TFSA) limit from $10,000 to $5,500. As you may know, Working Canadians has waged a very successful campaign over the last few weeks to encourage Canadians to support leaving the TFSA limit at the current level. The support from Canadians of all income levels, of all age groups, and even of those supporting every political party has been overwhelmingly positive. Despite their claims to the contrary, if the government reduces the TFSA limit they will be doing so against the best interests of the vast majority of Canadians.

After we launched the initial Working Canadians electronic petition about a month ago to encourage the government to retain the Tax Free Savings Account (TFSA) limit at $10,000, the federal government very recently created its own online petition process Continue Reading…

Low interest rates are a secular rather than cynical phenomenon, and can be expected to stay with us for the rest of the decade, according to Vanguard global chief economist Joe Davis.

Speaking on a conference call to journalists Wednesday, David said that while the U.S. federal reserve will soon initiate “Lift-off”  on interest rates, this will be followed “by a potential pause around 1%.” He termed this a “dovish tightening” that will remove some of unprecedented accommodation that’s occurred since the global financial crisis.

“In our view, there is a high likelihood of an extended as in interest rates at, say, 1%, that opens the door for balance-sheet normalization and leaves the inflation-adjusted federal funds rate negative through 2017.”

As a result, Vanguard’s outlook for fixed income “remains positive, yet muted … our ‘fair value’ estimate for the benchmark 10-year US Treasury yield still resides at about 2.5%, even with a Fed lift.”

US equity bull market likely to persist for some time

Continue Reading…

Below is a link to my latest Financial Post blog, which tackles the financial implications of the annual spending orgy that starts with Black Friday tomorrow, builds steam with Cyber Monday, and on to Christmas itself. (Not to mention Boxing Day!)

It’s titled Why it makes sense to use your TFSA to get out of debt this Christmas. Note there is also an accompanying video.

BMO Black Friday/Cyber Monday report

While I didn’t have a chance to include it in the FP blog, BMO has released its annual Black Friday and Cyber Monday Report and finds Canadians plan to spend an average of $446 over both days: $300 on average on Black Friday and $229 on Cyber Monday. Continue Reading…