Finance Minister Joe Oliver delivered the Federal Budget in Ottawa on April 21, 2015. It is already being labeled as an “Election Budget,” but there are some items that can potentially make a difference to most Canadians’ long-term wealth:
Tax Free Savings Accounts (TFSAs) – Probably the most obvious item in the Budget is the increase to the annual contribution limits to TFSAs from $5,500 to $10,000 and is effective for the 2015 tax year. Often criticized as a plan that benefits the rich 
more than the poor or middle-class, a TFSA can play a very important role for most Canadians retirement cash flow.
Deposits made to a TFSA, while not deductible from income for tax purposes, grow truly tax-free. Deposits to Registered Retirement Savings Plans are deductible from income, but withdrawals will be taxable when they are withdrawn. Because withdrawals from a TFSA are tax free, the opportunity exists for many taxpayers to maximize their government retirement income benefits like Canada or Quebec Pension Plans, and Old Age Security. This means that for some a TFSA could be more beneficial than an RRSP. Your financial advisor can help you make the wise choice. If you had maximized your TFSA for 2015, this means you can add another $4500.00. If you have maxed it out for 2014, you can add another $10,000.00.
Additionally, TFSA contribution limit increases will no longer be determined by inflation. Any future increases to TFSA deposit amounts will need to be legislated by the government.
Reduced RRIF Minimum Withdrawal Factors
Upon reaching 71 a holder of an RRSP must convert their plan to a RRIF. In subsequent years a minimum amount must be withdrawn annually. The budget proposes to reduce the minimum amount till the holder has reached the age of 95 at the beginning of the year. This could help some with OAS claw back.
Home Accessibility Tax Credit
The new non-refundable Home Accessibility Tax Credit is aimed at seniors and persons with disabilities. The 15% credit applies to up to $10,000 of eligible renovation expenditures per year, per qualifying individual, per eligible dwelling. These renovations include wheel chair ramps, wheel-in showers and walk-in bathtubs.
Lower Small Business Tax Rates
The Budget proposes to reduce small business tax rates to 9% from 11% by 2019. There will be small reductions each year starting in 2015. This reduction generally applies to the first $500,000 of taxable business income. The tax rate will be pro-rated for businesses with non-calendar tax years.
Registered Disability Savings Plans (RDSP) 
A temporary measure in the 2012 Budget allowed a qualifying family member (a beneficiary’s parent, spouse or common-law partner) to become the plan holder of an RDSP for adults lacking the capacity to enter into a plan themselves. This measure was to apply until 2016.
The 2015 budget proposes to extend this temporary measure until 2018 to allow the provinces to streamline the processes and appointments of such qualified family members.
Lifetime Capital Gains Exemption for QualifiedFarm or Fishing Property – The Budget proposes the Lifetime Capital Gains Exemption for dispositions of farm or fishing property after April 20, 2015 be increased to $1 million. The exemption for dispositions earlier in 2015 is $813,600.
There are additional proposed changes and initiatives. Work with your financial advisor to see how they can affect your overall financial plan.
