The Canadian government introduced the Tax-Free Savings Account (TFSA)in 2009,which allows Canadians to earn tax-free investment returns on a limited amount of savings each year.What is the underlying goal of such a government policy?

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The underlying goal of introducing the Tax-Free Savings Account (TFSA) is to increase desired saving of Canadian households. It is intended to encourage Canadians to save more, thereby increasing the pool of financial capital available for investment in the economy. By providing tax-free investment returns, the government hopes to incentivize individuals to save and invest their money, rather than simply spending it. This increased saving can then be utilized by firms for investment in the economy, leading to growth and development.

The Canadian Government Introduced the Tax-Free Savings Account (TFSA)in 2009,which