Tax Sightings if you are worried about tariffs and their effects

a) Use tax-assisted accounts to build and shore up both income and wealth

Build an emergency fund as soon as you can to prepare for unexpected financial events, like a job or business loss. The first line of defence is a TFSA for each family member 18 years and older. In 2025, the contribution limit is $7,000 for the year, and the lifetime cumulative maximum is $102,000.

Should you receive a lump sum windfall—an inheritance, for example—or if you want to share wealth or gift money within the family, this account is a good one to use. There is no attribution rule, as the amounts accumulate tax-free. So, parents and grandparents can fund their adult children’s accounts or their spouse’s accounts.

b) Get tax deductions with the FHSA and RRSP

Use the FHSA for qualifying family members for saving to buy a home, and the RRSP to reduce both taxes and net income. The RRSP helps to save for retirement but also to increase or create access to more government benefits, such as the Canada Child Benefit (CCB), the GST/HST credit and the Canadian Dental Care Plan.

c) Hedge against both taxes and inflation with asset diversification

Capital gains have been in the news in the past year because of the controversial, and now postponed, income inclusion rate increase. There’s a window of opportunity in 2025 to generate capital gains should the proposed increases take effect, if they do at all. (Both the prime minister-elect and the opposition leader have said they won’t implement those increases.)

But, remember, there is no tax on capital gains until there is a disposition. Therefore, in most cases, there are sound and perfectly legal strategies to minimize tax erosion on these assets.

For example, you can let the capital gains grow on a tax-deferred basis inside your registered accounts. Therefore, diversifying your assets and the income they produce is important; then planning their disposition to straddle two tax years or to be offset by capital losses harvested before year-end can help.

In the case of non-financial assets (think real estate or a small-business corporation), consider playing into the market cycles. Selling an American property when the Canadian dollar is low can offset local real estate value declines. Using special tax provisions to defer and average taxes downward—reserves, capital gains exemptions and donations strategies, for example—can save many thousands of dollars.