By Scott Boassaly, MBA, President and Principal Advisor at Balance Financial

A Tax-Free Savings Account, or TFSA, is a type of investment and savings plan offered by the Government of Canada. A TFSA is a registered account, which means that the activity related to the account is recorded and monitored by the Canada Revenue Agency.


The account has a unique tax structure in that no money in the plan will ever be taxed. Deposits may earn interest, dividends or capital gains but no growth is taxed within the plan. Moreover, withdrawals from the plan are made on a tax-exempt basis. In short, everything within the plan and everything that comes out of the plan is entirely tax-free. This allows the plan holder to invest without any taxes eroding his or her earnings. Awesome!


The plan has been in existence since 2009. Since then, Canadians 18 years of age and older have been allowed to contribute up to $63,500 into their own TFSA. This contribution room is cumulative; therefore, you may make up unused contribution room at any point. It’s interesting to note, also, that when you make a withdrawal from a TFSA, you recoup contribution room equivalent to the withdrawal in the following tax year. Beautiful!


When moving non-registered investments (not in an RRSP, RESP or other registered plan) into a TFSA, capital gains may apply on the non-registered investments, unless one of only a few special circumstances apply. Doing so may still be in the individual’s best interest. Paying tax on the capital gains may amount to a fraction of what the individual could save in taxes on future gains were he or she to leave the investments in the non-registered account. Fantastic!


To illustrate, if a client holds $100 000 in a non-registered account and the original investment was $60 000, there is a $40 000 gain on the investment. Should the owner choose to move this investment into a TFSA, half of a capital gain is taxable ($20 000) at the owner’s marginal income tax rate (assume 35%), resulting in this case in taxes payable of $7000. From that point on, the investments grow on a tax-free basis. If we assume a 6% annual growth rate, the investments would be worth about $179 000 after 10 years. The new growth of $79 000 would be tax-free.


If the client had chosen to leave the investments in the non-registered account, the investments would have grown to the same amount, $179 000 10 years later. However, the capital gain is now $119 000 ($179 000 – $60 000), half of which would be taxable. The tax payable at this point would be almost $29 000, far more than the $7000 in taxes payable in the first scenario. Yuck! 

Use your TFSA. It’s a beautiful thing!

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Picture of Scott Boassaly, MBA, President and Principal Advisor at Balance Financial

Scott Boassaly, MBA, President and Principal Advisor at Balance Financial

Scott founded Balance Financial in 2019, the culmination of a 15-year journey to provide accessible and customizable financial planning for clients. In his role as President and Principal Advisor, Scott develops business strategy for the company while managing his own practice. Working closely with his clients, Scott allows people to tell their story and write more chapters as they pave their financial paths together.

A former high school teacher and college instructor, Scott continues that passion for education by providing retirement workshops to the Federal and Provincial public service, as well as free public workshops to adults and teens.


Scott Boassaly



A former high school teacher and college Economics lecturer, Scott Boassaly has always valued education. This is further illustrated by his formal education. He holds a BA in History from Carleton University, a Bachelor of Education from The University of Ottawa, and an MBA from The University of Ottawa. This focus on education reveals itself in his approach to financial advice and in his commitment to offering free financial seminars to both adults and children. Celebrating his 20th anniversary as a wealth manager, Scott started his career at a large national firm where he quickly transitioned into management. Further industry experience was gained working with a reputable brokerage, then managing his own brokerage, Balance Financial, since 2019. Scott is the only certified responsible investment advisor in Ottawa and also holds the Real Wealth Manager designation.