Earn $200 Every Month That the CRA Can’t Tax (Without Doing Any Work)

With inflation hitting 8% in 2022, the Bank of Canada’s decision to raise key interest rates in the country was completely warranted. As of this year, inflation has cooled to a much better 3.8%.

That said, the central bank aims to bring it down to 2%, indicating the need for further interest rate hikes. As inflation and higher interest rates persist, your current income might not be enough to meet expenses and have money left over.

In times like these, you likely wish you had another income stream. Preferably, it should be an income stream that does not demand too much time or effort but pays regularly. While there are a ton of ways to do it, few compare to the hassle-free approach of investing in dividend stocks that pay regular dividends.

Today, we will look closely at three dividend stocks that can help you set yourself up with substantial monthly income without doing any work.

Keyera

Keyera (TSX: KEY) is a $7.59 billion market capitalization midstream oil and gas company headquartered in Calgary. Considered one of the best dividend stocks, it has a long history of raising shareholder dividends each year. It also offers the benefit of long-term wealth growth through capital gains.

The largest independent midstream energy business in Canada, Keyera plays a critical role in processing, transporting, and marketing clean-burning natural gas. With no drilling or exploration projects necessary for its business model, it has access to the highest-value markets by providing essential processes, transportation, and storage solutions to energy sector peers.

As of this writing, it trades for $32.97 per share, boasting a juicy 6.07% dividend yield.

Brookfield Renewable Partners

Brookfield Renewable Partners (TSX: BEP.UN) is an $8.39 billion market capitalization giant in the global renewable energy industry.

The company owns an extensive and internationally diversified portfolio of renewable energy production and storage facilities across North and South America, Europe, and Asia. With around 21 gigawatts of installed production under its belt, it is continuously working to increase its production further.

Well capitalized and set up for substantial long-term growth due to rising green energy demand, it is also a reliable dividend stock. Paying its investors on a quarterly schedule, its steadily growing funds from operations (FFO) reflects its ability to continue paying dividends. As of this writing, Brookfield Renewables stock trades for $29.05 per share, boasting a 4.57% dividend yield.

First National Financial

First National Financial (TSX: FN) is a $2.09 billion market capitalization company headquartered in Toronto. It is the parent company of First National Financial LP, a private lending company. It is among the top three in market share in the mortgage broker distribution channel.

Unlike many other businesses in high-interest-rate environments, its revenue rises. By collecting extra interest revenue when rates rise, it enjoys better margins, just like banks.

Unlike banks, this non-bank lender does not have to worry about liquidity as much. Why? Because it issues mortgages to Canadians by partnering with brokers, who refer them leads.

By issuing bonds with fixed maturity dates to finance its mortgages, liquidity becomes a secondary concern. As of this writing, it trades for $34.62 per share, paying its shareholders at a juicy 6.93% dividend yield.

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Foolish takeaway

While the situation is entirely hypothetical, it shows you the power of dividend investing to create a passive-income stream.

To make this much money without letting the Canada Revenue Agency (CRA) take a chunk of it in taxes, you can put your Tax-Free Savings Account (TFSA) contribution room to work. By allocating a portion of your TFSA to dividend stocks, you can generate a passive income exempt from taxes.

Whether you reinvest the dividend income in your TFSA to achieve compounded growth or withdraw it to meet monthly expenses will be up to you.