Mr. Chair, our government's long-term commitment to keeping taxes low is making life more affordable for all Canadians. By reducing taxes year after year and enhancing direct benefits to Canadians, the government has given families and individuals greater flexibility to make the choices that are right for them.
Canadian families and individuals will receive $37 billion in tax relief and increased benefits in 2015-16 as a result of actions taken by our government since 2006, including measures announced by the Prime Minister on October 30, 2014. These new measures will provide more than $4.6 billion in annual tax relief and increased benefits to all families with children under age 18.
These measures include an enhanced universal child care benefit that will provide $160 per month for children under the age of 6 and a new benefit of $60 per month for children aged 6 through 17, and that is effective January 1, 2015; a $1,000 increase in each of the maximum dollar amounts that can be claimed under the child care expense deduction, effective for the 2015 taxation year; and the family tax cut, a federal non-refundable tax credit of up to $2,000 for couples with children under the age of 18, effective for the 2014 taxation year.
Among the multitude of tax relief measures this government has introduced, perhaps the most popular is the tax-free savings account, or TFSA. The TFSA is the most important new savings vehicle introduced in Canada since the RRSP was introduced over 50 years ago. As a matter of fact, as of the end of 2013, nearly 11 million individuals had opened a TFSA and the total value of assets held in TFSAs was nearly $120 billion. The TFSA gives Canadians the flexibility to save for their priorities. Whether they want to purchase a new home or car, start a new business or save for retirement, Canadians have many reasons to save at every stage of their lives. That is why the government introduced the TFSA in the first place.
Available since 2009, the TFSA is a flexible, registered, general purpose savings vehicle that allows Canadians aged 18 or older to earn tax-free investment income. I should point out that it is a voluntary program. The contributions are not tax deductible, but investment income earned in a TFSA and withdrawals from it are tax free. Unused TFSA contribution room can be carried forward, and the amount of withdrawals from a TFSA can be re-contributed in future years.
The TFSA provides greater savings incentives for low- and modest-income individuals because, in addition to the tax savings, neither the income earned in a TFSA nor withdrawals from it affect a person's important benefits and credits. Like the Canada child tax benefit, or old age security and guaranteed income supplements that supplement benefits, it is no wonder that Canadians have embraced the TFSA for their savings needs. Best of all, Canadians of all income levels can benefit from TFSAs.
The opposition claims that TFSAs benefit only the rich. This is categorically false. In fact, at the end of 2013, individuals with annual incomes of less than $80,000 accounted for more than 80% of all TFSA holders, and about half of TFSA holders had annual incomes of less than $42,000. About 1.9 million individuals have contributed the maximum amount to their TFSAs. About 46% of these individuals were seniors and over 70% were aged 55 and older. About 60% of the individuals contributing the maximum amount to their TFSAs had incomes of less than $60,000.
In order to provide Canadians with greater opportunity to save on a tax-free basis, this budget proposes to increase the TFSA annual contribution limit to $10,000, effective for 2015 and subsequent years. This new measure will help Canadians save from coast to coast to coast.
Take, for example, Giselle , a small business owner who saves in her TFSA. She now has the flexibility to contribute $10,000 per year to her TFSA. By earning tax-free investment income on $10,000 of annual savings for 10 years, Giselle can accumulate about $3,700 more dollars in after-tax savings than if she had saved the same amount for 10 years under the existing TFSA annual contribution limit with the remainder in a taxable savings vehicle. Giselle will be able to better save for future priorities, which will be good for her, good for her business, and good for the Canadian economy.
The TFSA is also a great savings tool for seniors. The fact is that Canadians are living longer than ever, which is great news. Since 2006, seniors have been benefiting from important money-saving measures such as pension income splitting, and taking advantage of their tax-free savings accounts. In fact, as of the end of 2013, close to 2.7 million Canadian seniors had TFSAs. In a low-interest rate environment, the TFSA can help to boost after-tax returns, as these returns are not subject to taxation. The TFSA provides seniors with a savings vehicle to meet their ongoing savings needs, something to which they previously only had limited access to once they were over the age of 71.
Here is another example. Barry is a retired 72-year-old who does part-time consulting work, and is required to withdraw a minimum amount of $18,000 from his registered retirement income fund, or RRIF. Taking into account his other pension income, his income from part-time consulting work, and his income taxes, Barry's RRIF withdrawal exceeds his current needs by $7,000. With a $10,000 TFSA annual contribution limit, Barry can now save the entire $7,000 remaining from his RRIF withdrawal in his TFSA.
This government understands that Canadian society thrives in a low-tax environment. It is why we introduced the tax-free savings account. It is why we have cut taxes over and over again, in fact over 180 times since we became government in 2006. It is a shame that opposition members have opposed our changes to the tax-free savings account. They do not realize the benefits that it would bring to Canadians across the country. Unlike our Conservative government, the opposition believes in a high-tax, high-spend agenda.
Our government has lowered taxes every year since coming into office and, as I mentioned, we have introduced over 180 tax-relief measures. This equates to over $37 billion in savings for all Canadians, and $6,600 in average savings per year for the average Canadian family. As a result, the overall federal tax burden is now at its lowest level in over 50 years. In fact, John George Diefenbaker was the prime minister the last time that taxes were this low. Going forward, we will remain committed to keeping taxes low and allowing Canadians to save more of their hard-earned money.
I would like to ask the Minister of Finance a question. In what other ways is the government helping Canadians to save and prepare for their retirement?