On December 7, 2015, Canada’s new Liberal government announced that the tax rate changes promised in the Liberal platform would be effective starting January 1, 2016. Specifically, this means:
- A middle class tax reduction of 1.5% for income between $45,283 and $90,563; and
- An increase in the top tax bracket of 4% for income over $200,000.
In addition, the government also announced that the contribution limit for Tax-Free Savings Accounts will be reduced from $10,000 per year to $5,500. This means that if you have made no contributions to date, your aggregate contribution room will be $46,500 in 2016.