How to Generate $500/Month Tax-Free Using a TFSA

Generating passive income can enhance financial stability and help protect your purchasing power during periods of rising prices. It can also enable investors to reach their financial goals more quickly. With interest rates relatively low, investors may consider adding high-yield, monthly-paying dividend stocks to their portfolios to strengthen their passive-income streams.

You can further improve after-tax returns by holding these investments in a Tax-Free Savings Account (TFSA). For Canadians who were at least 18 years old in 2009 and have never contributed, the cumulative TFSA contribution limit has reached $108,000. Allocating $92,000—well within this limit—across the following two stocks could generate a stable monthly income of more than $500.

COMPANYRECENT PRICENUMBER OF SHARESINVESTMENTDIVIDENDTOTAL PAYOUTFREQUENCYNWH.UN$5.758,000$46,000$0.03$240MonthlyWCP$13.243,474$45,996$0.075$269.2MonthlyTotal$509.2

Let’s take a closer look at each of these companies.

NorthWest Healthcare Properties REIT

First on my list is NorthWest Healthcare Properties REIT (TSX: NWH.UN), which owns and operates 167 healthcare properties across seven countries, representing approximately 16 million square feet of gross leasable area. The real estate investment trust (REIT) serves more than 1,300 tenants and has a weighted-average lease term of 13.4 years. Thanks to its defensive healthcare-focused portfolio, diversified tenant base, and long-term lease agreements, the company maintains solid occupancy levels across economic cycles and periods of market volatility.

The REIT is also prioritizing balance sheet improvement by reducing its debt. Between January 2024 and November 2025, it divested $1.3 billion in non-core assets and used the net proceeds to lower its debt levels. Supported by stable operating performance, its adjusted funds from operations (AFFO) payout ratio declined from 99% in the same quarter last year to 85%, reflecting improved distribution sustainability.

Looking ahead, rising demand for healthcare infrastructure—driven by aging populations—could provide a long-term tailwind for NorthWest Healthcare. With liquidity of $250 million at the end of the third quarter, the REIT remains well-positioned to pursue selective growth opportunities while maintaining financial flexibility. Backed by these prospects, NorthWest Healthcare, which currently pays a monthly distribution of $0.03 per unit and offers a forward yield of 6.26%, appears well placed to continue delivering attractive income to its unitholders.

Whitecap Resources

Another monthly-paying stock I’m bullish on is Whitecap Resources (TSX: WCP), an oil and natural gas producer with operations primarily in Western Canada. Following its merger with Veren in May 2025, Whitecap has significantly strengthened its production base and enhanced its overall scale. The transaction has also improved the company’s balance sheet and financial flexibility. At the end of the most recent quarter, Whitecap reported $1.6 billion in liquidity and maintained a conservative net debt-to-annualized funds flow ratio of just one.

Looking ahead, the company has planned to invest approximately $2 billion last year and between $2 billion and $2.1 billion this year. These investments will focus on disciplined capital allocation, operational execution, and sustainable production growth. Supported by these initiatives and the Veren merger, management expects its average production in 2026 to range between 370,000 and 375,000 barrels of oil equivalent per day (boe/d), marking a substantial increase from its 2025 average production guidance of 305,000 boe/d.

Whitecap has also delivered merger-related synergies ahead of schedule, including capital efficiencies from procurement savings and rig-line optimization. With integration progressing smoothly, management now expects to realize $300 million in annual capital, operating, and corporate synergies this year—about 40% higher than initially projected.

Meanwhile, oil prices have rebounded from last month’s lows amid ongoing geopolitical tensions. Sustained strength in crude prices could further support Whitecap’s earnings and cash flow growth. Considering these factors, Whitecap—currently offering a monthly dividend of $0.0608 per share and a forward yield of 5.51%—appears well positioned to continue delivering attractive income to shareholders.

The post How to Generate $500/Month Tax-Free Using a TFSA appeared first on The Motley Fool Canada.

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More reading

• The Ideal TFSA Stock for February Paying 5.7% Each Month
• Passive Income Investors: This TSX Stock Has a 5.7 Percent Dividend Yield With Monthly Payouts
• This TSX Dividend Stock Could Pay You Every Month for Years
• Your 2026 TFSA Game Plan: How to Turn the New Contribution Room Into Monthly Cash
• An Ideal TFSA Stock Paying 6% Each Month

Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust and Whitecap Resources. The Motley Fool has a disclosure policy.