The Canada Revenue Agency (CRA) sets the annual contribution limits for the Tax-Free Savings Account (TFSA). However, are the amounts enough given the need to build a financial cushion for any eventuality? The answer is not really.
Based on data provided by the Bank of Montreal, 2024 was a good year for investors. Many Canadians utilized their investment accounts, owing to the 8% year-over-year increase in TFSA values. The mean account balance reached a new all-time high record of $44,987. Also, the average contribution last year was $6,600.
For 2025, the contribution limit is the same as in 2024. If you plan to max out the limit and are still prospecting, two dividend stocks are perfect for a $7,000 investment. Besides their high yields, the payout frequency is monthly. You’d receive tax-free passive income by investing in one or both.
Serving a needs-driven, growing sector
Sienna Senior Living (TSX:SIA) is displaying stability amid the tariff chaos in 2025. The healthcare stock experienced a resurgence in the post-COVID era. Today, this $1.7 billion company is well-positioned to serve Canada’s growing senior living sector and benefit from demographic tailwinds. Government funding also lessens the impact of inflation.
At $18.80 per share, the dividend offer is 4.9%. SIA outperforms the TSX year-to-date, 23.7%-plus versus 9.3%-plus. A compelling reason to invest is the needs-driven business created by the demographic shift. Besides long-term care (LTC) residences, Sienna has wholly and jointly owned retirement residences as well as managed residences.
In Q1 2025, revenue increased 1.4% year-over-year to $234.2 million, while net income fell 20% to $15.8 million versus Q1 2024. Still, the profit drop is not a cause for concern. Its President and CEO, Nitin Jain, said it is a defining time for Sienna. As demand for senior housing continues to accelerate, the supply inventory will remain low for at least five years.
Jain added that Sienna has significant scale, a solid balance sheet, and ample liquidity to meet demand in Canada. The same property (SP) occupancy rate target for Q1 2026 is 95% from 91.9% in Q1 2025. Property redevelopment should also enhance portfolio quality. SIA has been paying monthly shareholder dividends since January 2012.
National property landlord
Crombie (TSX:CRR.UN), the real estate business of Canadian conglomerate Empire Company, continues to outpace the broad market. At $14.74 per share, the year-to-date gain is 15.1%-plus. Prospective investors can partake in the generous 6% dividend.
The $2.7 billion real estate investment trust (REIT) is a national retail property landlord. It owns and operates grocery-anchored properties and shopping centres, as well as some industrial and mixed-use properties. There are around 330 income-producing properties. Crombie designed the platform for long-term success.
In Q1 2025, property revenue and net property income increased 3.5% and 4.8% year-over-year to $122.7 million and $77.2 million, respectively. The committed occupancy rate is 97.1%, while the weighted average lease term (WALT) is 8.4 years. Approximately 82% of annual minimum rent comes from grocery tenants and necessity-based retailers.
Prolific combination
Sienna Senior Living and Crombie REIT form a prolific combination for TFSA investors seeking additional income. A $7,000 investment (equal allocation) will generate $31.79 in monthly tax-free income. The amount should increase if you buy more shares yearly to hold inside the account.
