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Canada's Inflation Just Hit a 3-Year High—Here's What That Actually Means for Your Money

May's Consumer Price Index report reveals inflation is accelerating again, driven by global oil shocks and rising food costs. We break down the impact on mortgages, savings, and your household budget. Last week, Canada's inflation story took a sharp turn. The May Consumer Price Index report showed inflation climbing to its highest level in three years—a wake-up call for households already struggling with rising costs and a signal that the Bank of Canada's long hold on interest rates may not ease anytime soon. If you've been hoping for relief at the grocery store or relief on your mortgage renewal, this news probably stings. But understanding what's driving inflation—and what it means for your financial decisions—is critical right now. What Pushed Inflation Up This Time? The spike wasn't random. Inflation jumped primarily due to energy and food prices—two categories that hit everyday Canadian wallets hard. Energy prices surged because of geopolitical tensions in ...
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CRA 2025: New TFSA Limits, Adjusted Tax Brackets, and More!

 

The Canada Revenue Agency (CRA) has announced several key updates for 2025 that will impact taxpayers across the country. Here's a brief overview of the most notable changes:


New TFSA Limits

Starting January 1, 2025, Canadians will be able to contribute an additional $7,000 to their Tax-Free Savings Account (TFSA), bringing the total contribution room to $102,000 for those who have maximized their contributions since the program's inception in 2009. This increase is indexed to inflation and aims to provide more flexibility for savings and investment.


Adjusted Tax Brackets

In response to inflation, the CRA has adjusted the federal tax brackets for 2025. The new brackets are as follows:

  • 0 to $57,375: 15%
  • $57,375 to $114,750: 20.5%
  • $114,750 to $177,882: 26%
  • $177,882 to $253,414: 29%
  • Above $253,414: 33%

These adjustments are designed to ensure that taxpayers are not pushed into higher tax brackets solely due to inflation.


Other Updates

  • The basic personal amount (BPA) has been increased to $16,129, allowing individuals to earn this amount without paying federal income tax.
  • The Canada Pension Plan (CPP) benefits will see a 2.7% inflation adjustment, providing a slight increase in payments.

These changes reflect the CRA's ongoing efforts to adapt to economic conditions and support Canadians in managing their finances effectively.




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