About two-thirds of Canadians are in favour of increasing the contribution limit for the Tax Free Saving Account (TFSA), but even more want a boost in benefits received through the Canada Pension Plan (CPP), a new Nanos poll shows.
The results suggest support for some Conservative government initiatives in the lead up to the federal election this fall, but also give room for opposition parties calling for changes to the pension system, notes Nik Nanos, chairman of Nanos Research.
The survey, conducted for The Globe and Mail, was released on the same day Liberal leader Justin Trudeau said he plans to reverse the Conservative government’s recently announced TFSA increase, if elected. Trudeau said he would use the extra money to cut taxes for the middle class and boost child benefits.
The Nanos report shows 64 per cent of Canadians surveyed were in favour of hiking the contribution limit for TFSAs. That’s even though only 55 per cent were likely to take advantage of it.
In its budget tabled on April 21, the Conservative government announced an increase in the TFSA limit to a maximum of $10,000 from $5,500 starting in 2015.
“Even if Canadians aren’t likely to put money into it, it’s a symbol that this is another way to save money,” Nanos said. “For opposition parties to complain about the Tax Free Savings Account – it might be good public policy, but there’s not a lot of political traction.”
The Nanos poll included 1,000 Canadians who were surveyed between April 24 and April 27. It showed 17 per cent of Canadians oppose increasing the TFSA limit as a government priority, while 14 said they would “somewhat” oppose it.
A survey conducted by Tangerine bank last week shows 28 per cent of Canadians are still unsure of how a TFSA actually works. Only 56 per cent knew the limit had been increased to $10,000, and just 14 per cent knew it took effect in 2015. Among survey respondents, only half had set up a TFSA. Still, even they were confused about its rules and limits. For example, only a third knew you could carry over contribution room from previous years, according to the survey conducted among 1,509 randomly selected Canadian adults who are Angus Reid Forum panelists.
The Nanos survey suggests Canadians are more focused on benefits through the CPP, with 88 per cent of respondents saying they support increased pension benefits. The average payment is about $7,673.28 a year (or $639.44 a month.)
Increasing CPP benefits is something the Conservative government opposes, but it’s supported by both the opposition NDP and Liberals.
“This speaks to a potential vulnerability for the Conservatives, and an opportunity for any opposition party,” said Nanos.
Some provinces, such as Ontario, have been pushing for pension reform.
The Canadian Association of Retired Persons (CARP), which advocates for seniors, has been calling for an increase to the CPP to ensure people will not outlive their money. It’s also in favour of the increase to the TFSA.
CARP head Susan Eng told CTV’s Power Play program recently that it’s not only the wealthy that will benefit from the TFSA.
“It is true, you have to have a few dollars set aside. But of the people who have taken out TFSAs, it has been 2.7 million seniors and 60 per cent of them have less than $40,000 incomes,” she said. “So we’re not talking about very wealthy people. We find the TFSA is a good idea to help them save for ongoing retirement needs.”