Have you ever thought of using your Tax-Free Savings Account (TFSA) for more than just holding cash? While the TFSA is often misunderstood as a savings tool, it is actually one of the most powerful investment vehicles available to Canadians. In 2025, with markets facing renewed volatility and interest rate shifts on the horizon, the way you use your TFSA could make a meaningful difference to your long-term wealth.
The key lies in understanding your risk tolerance, aligning with investment goals, and selecting fundamentally strong stocks that could thrive in a tax-sheltered environment. Whether you’re aiming for income, growth, or capital preservation, the TFSA can work harder for your portfolio.
In this article, I’ll highlight two top stocks you can add to your TFSA in 2025 to maximize your long-term returns.
The first strong TFSA stock for 2025
The first TFSA stock to consider in 2025 is GFL Environmental (TSX:GFL), a Canadian company that’s quickly becoming a top player in the waste management space.
Based in Vaughan, GFL provides a full range of environmental services, everything from solid waste and liquid waste to soil remediation, across Canada and more than half of the U.S. states. Following a 47% jump over the last year, GFL stock currently trades at $69.83 per share with a market cap of $27.5 billion.
In the December 2024 quarter, GFL beat expectations across the board as its revenue rose 5.5% YoY (year over year) to $2 billion. Adding to the optimism, the company’s adjusted quarterly EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped 17.4% from a year ago to $578 million with the help of stronger volumes in its solid waste segment and higher pricing. Even with a quarterly loss due to divestitures and one-time charges, GFL’s underlying operational performance was clearly strong.
In 2025, it expects solid organic growth, stronger margins, and nearly $1 billion in free cash flow. During the year, GFL also plans to pay down debt and return more capital to shareholders, making it a smart pick to consider now.
And another solid TFSA pick to maximize returns
Another smart TFSA stock to look at in 2025 is Dollarama (TSX:DOL), Canada’s biggest discount retailer with a growing international presence. The company mainly focuses on selling everyday essentials and affordable products to consumers, which keeps the demand for its products high even amid economic slowdowns. Currently, DOL stock trades at $150.04 per share with a market cap of $41.7 billion after rallying more than 43% in the last 12 months.
In the third quarter (ended October 2024) of its fiscal 2025, Dollarama posted a 5.7% YoY increase in sales to $1.6 billion. Its adjusted quarterly EBITDA also rose 6.4% from a year ago to $509.7 million. This strong performance came despite cautious consumer spending, supported by strong demand for everyday essentials.
Besides its strong financials, Dollarama’s ambitious expansion plan makes it even more attractive. Notably, the company plans to expand to 2,200 stores across Canada by 2034 and is now entering Australia by acquiring The Reject Shop. Considering that, Dollarama stock could continue soaring and help you maximize your TFSA returns in the long run.
