Will the TFSA limit rise in 2023?

By Guillaume Poulin-Goyer | December 6, 2021 | Last updated on September 15, 2023
1 min read
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The annual TFSA contribution limit is expected to increase to $6,500 in 2023 from $6,000 in 2022, says Daniel Laverdière, senior director with National Bank Private Banking 1859 in Montreal.

Unless the Canada Revenue Agency’s indexation adjustment for personal income tax and benefit amounts for 2023 is less than 1.4%, Laverdière calculated, the annual TFSA limit should increase by $500. The 2022 indexation increase was 2.4%; 2023’s figure will be released in November 2022.

Laverdière calculated that the indexation adjustment would have to exceed 9.5% for the limit to rise to $7,000, which is unlikely. He further calculated that if the annual adjustment figure is 2% in 2023 onward, the annual TFSA limit would reach $7,000 in 2027.

The CRA uses inflation figures over the 12 months from Oct. 1 to Sept. 30 to determine the indexation adjustment. Statistics Canada reported that inflation hit an 18-year high of 4.7% in October, which will count toward next year’s adjustment.

In December 2015, the federal government announced that for 2016 onward, the annual limit on TFSA contributions would be set at $5,000, indexed to inflation for each year after 2009, and rounded to the nearest $500. Thus, as soon as the indexed annual contribution limit reaches $6,250, the annual limit will increase to $6,500.

Other indexed amounts include the threshold for reimbursement of old age security, which will be $81,761 in 2022, and the lifetime capital gains exemption for qualified farm or fishing property and qualified small business corporation shares, which will be $913,630 in 2022.

Guillaume Poulin-Goyer Guillaume Poulin Goyer headshot

Guillaume Poulin-Goyer

Guillaume Poulin-Goyer is an associate editor with Finance et Investissement and Conseiller.ca. He has written for the publications since 2010. Reach him at guillaume@newcom.ca