Any opportunity an investor can take to invest tax-free should be maximized. The TFSA (Tax-Free Savings Account) just had its contribution limit increased by $7,000 in 2025. While that may not seem like much, it can multiply if given the right investments and a long period of time.
For example, if you invested $7,000 and earned a 7% tax-free rate of return, it would be worth $27,000 in 20 years. If you doubled that compounded rate of return to 15% over 20 years, $7,000 could be worth over $114,000!
Tax-free compounding can significantly accelerate your wealth-creation process. If you are wondering where you could collect strong returns for years ahead, here are three stocks I’d buy with the new $7,000 TFSA contribution.
A solid long-term stock for a TFSA
FirstService (TSX:FSV) has been a great compounder for investors over time. Its stock is up almost 100% in the past five years and 497% in the past approximately 10 years.
It has a huge condo and strata property management business across Canada and the United States. This generates a strong, recurring stream of cash flows. It tends to be an economically resilient business.
FirstService has been taking its cash flows and buying a variety of commercial franchises focused on property restoration, maintenance, and renovations. In many instances, these franchises have become market leaders in their service category. Smart tuck-in acquisitions have further accentuated this market dominance.
Recently, FirstService’s stock has pulled back by 8.8%. Its valuation is starting to look more attractive after the decline. For a long-term addition to your TFSA, this is a stock you can buy and tuck away.
An infrastructure stock for the decades
WSP Global (TSX:WSP) has been an incredible compounder, but it doesn’t get the recognition that other high-quality stocks do. WSP stock is up 171% in the past five years and 454% in the past 10 years.
WSP is a global leader when it comes to advisory, engineering, and design services. Through smart acquisitions, it has steadily expanded its geographic base and level of expertise.
It can now take on larger, complicated projects. That also means the potential for higher margins and revenues on each of its projects. It is projecting double-digit growth in profits and cash flows in the years ahead.
WSP stock has pulled in 2025. Any further pullbacks could be a great chance to add this stock to a TFSA.
A tech stock for any TFSA
Topicus.com (TSXV:TOI) is the one TFSA stock that is actually up substantially in 2025. Its stock has risen 22% in 2025, and it has risen 142% since it was spun out in 2021.
The company is a niche software consolidator like its parent company, Constellation Software. It has a primary focus on European markets, so it is a great place to invest if you want to diversify away from North America.
Topicus is already having a very active year. It has deployed more capital this year than it did in all of 2024. The company continues to have ample opportunities to grow via acquisition. Its strong development platform also ensures attractive organic growth.
Topicus stock is not cheap by any means. However, if you have a long investment horizon in a TFSA, it could still be an attractive buy today.
