The Best Canadian Stocks to Buy and Hold Forever in a TFSA

The Tax-Free Savings Account (TFSA) was introduced to Canadians in 2009, and the maximum cumulative TFSA contribution limit reached $109,000 in 2026 for eligible Canadians. This means that investors can earn tax-free income, dividends, and capital gains on a significant amount of their wealth. The best Canadian stocks to buy and hold in your TFSA are those stocks that generate income and have the potential for strong, healthy capital gains.

Let’s explore.

Your TFSA contribution room

If you’re wondering how to calculate your TFSA contribution room, you’re not alone. But rest assured, it’s pretty straightforward.  

The first thing to take note of is that you must be a Canadian resident who is over the age of 18 to contribute. It is not necessary for you to have earned income to contribute, but you must have a valid social insurance number. Essentially, your TFSA contribution room begins to accumulate the year that you turn 18.

So, if you turned 18 in 2014, for example, your cumulative contribution limit in 2026 is $83,500. Now let’s figure out the best Canadian stocks to buy in your TFSA.

Here are two of the best to consider.

Fortis

Fortis (TSX:FTS) is a North American utility company with nine regulated utilities in Canada, the United States, and the Caribbean. The company’s utility assets are 100% regulated, and therefore, Fortis’s business is highly predictable, with steadily growing earnings and cash flows.

The stability and predictability are evident in Fortis’s dividend history of 51 consecutive years of increasing dividend payments. In the last 20 years, Fortis’s annual dividend has increased more than 300% to $2.56 per share. This translates into a compound annual growth rate (CAGR) of more than 7%. That’s a 7% increase in Fortis’s dividend every year for the last 20 years!

In Fortis’s latest quarterly results, the company reported yet another quarter of steady results. Revenue increased 6% to $2.9 billion, and adjusted earnings per share (EPS) increased 2.4% to $0.87. This was driven by continued rate base increases and customer growth.

Looking ahead, Fortis will continue to invest in its network. The company’s five-year plan includes continued rate base increases to the tune of 7%, along with 4% to 6% annual dividend increases.

Fortis is currently yielding a generous 3.54%, and it remains one of the best Canadian stocks to buy and hold in any TFSA.

BCE

BCE (TSX:BCE) is one of Canada’s top telecom companies, with a vast network across Canada. While the company has experienced some well-publicized difficulties recently, the outlook appears stable at this time. Management has instituted a plan to fix BCE’s operational shortcomings and inefficiencies. This has meant layoffs, divestitures, and a renewed focus on operational efficiency. This has also meant getting creative in the search for growth.

The telecom giant has a goal to build on its position as Canada’s fastest and farthest-reaching broadband internet connection and leading position in fibre optics. BCE’s acquisition of Ziply Fibre will do just that. Ziply Fibre is the largest broadband and fibre internet provider in the U.S. Pacific Northwest. The U.S. fibre market is underpenetrated, and this will give BCE more scale while diversifying its operating footprint and establishing a platform for further expansion.

BCE’s current dividend yield is a very healthy 5.22%, and it’s one of the best Canadian stocks to buy for the long term in any TFSA.

The bottom line

So, once you’ve checked on how to calculate your TFSA contribution room, you can start thinking about which stocks to buy. Two of the best Canadian stocks to buy and hold forever in your TFSA, Fortis and BCE, have been discussed in this article. Start maximizing your tax savings by considering these two stocks.

The post The Best Canadian Stocks to Buy and Hold Forever in a TFSA appeared first on The Motley Fool Canada.

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More reading

• 3 Beginner-Friendly Stocks Perfect for Canadians Starting Out Now
• TFSA: 4 Blue-Chip Stocks to Buy and Hold Forever
• 2 Top Dividend Stocks for Long-Term Returns
• Married Canadians: How to Make $10,000 in Tax-Free Passive Income
• 1 Reason I’ll Never Sell This ‘Boring’ Utility Stock

Fool contributor Karen Thomas has positions in BCE. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.