The TFSA (Tax-Free Savings Account) is a Canadian investor’s best friend when it comes to building a portfolio that generates sustainable income from dividends. Inside the TFSA, no income is taxed. That can save an investor as much as 10-20% (depending on their tax bracket every year).
If you are looking to build a cash machine inside your TFSA, here is a mini five-stock portfolio that could generate as much as $1,315 in annual tax-free income.
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A top infrastructure stock for a TFSA
The first stock to put $5,000 into is Pembina Pipeline (TSX:PPL). You could buy 92 shares at a price of $54.13. With a yield of 5.3%, you would earn $65.32 quarterly, or $261.28 annually.
Pembina is sitting at a very attractive crossroad. Canada is finally interested in maximizing its vast resources. Big infrastructure announcements could result in new opportunities for Pembina.
Currently, it is one of only a few companies already building a liquified natural gas (LNG) export terminal on the West Coast. For a well-managed company with great assets and an attractive dividend, it is a great buy today.
A renewable stock
Speaking about energy infrastructure, Northland Power (TSX:NPI) is a global player in green energy. It operates 3.2 gigawatts of offshore and onshore wind, solar, and battery power. It also has a utility in Colombia.
The company is nearing completion of a substantial offshore project in Taiwan. Once the project is completed, Northland should be set to yield considerable cash flows.
If you put $5,000 into this TFSA stock, you could buy 219 shares at $22.75 per share. At a yield of 5.25% that would earn $21.90 per month, or $262.80 annually.
A play on energy growth in Canada
Topaz Energy (TSX:TPZ) is another way to get exposure to the energy theme in your TFSA. Topaz is a major infrastructure supplier to Western Canadian energy producers. It also owns substantial land assets where it earns a royalty stream from the energy produced on its lands.
Major energy players like Tourmaline Oil have recently announced plans to continue scaling production. That bodes favourably for Topaz, which collects a higher royalty from that higher production.
A $5,000 TFSA bet on Topaz would buy 192 shares at $25.93 per share. With a 5.4% dividend yield, you would earn $65.28 quarterly, or $261.12 annualized.
A top restaurant chain
Another TFSA stock is A&W Food Services Canada (TSX:AW). It operates the iconic A&W burger chain across Canada. It’s a popular chain that delivers a consistent product Canadians have grown to love. It isn’t growing fast, but you can at least expect GDP or better growth per year. Its dividend per share is likely to grow at a low single-digit rate.
A $5,000 TFSA investment in A&W would buy 131 shares at today’s $38.11 price. With a 5% yield, investors would earn $62.88 quarterly, or $251.52 annually.
Be a landlord in your TFSA
Dream Industrial Real Estate Investment Trust (TSX:DIR.UN) is another great TFSA income play. With $5,000, you could buy 398 units at $12.55 per unit. This stock yields 5.6%. You would earn $23.21 monthly, or $278.60 annually.
Dream has a large portfolio of multi-tenanted industrial properties in Canada and Europe. These are well-located properties with a strong +95% occupancy and attractive rental rate growth prospects.
Dream’s assets trade at a big discount to its private market value. It’s an attractive play for income and value right now.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| Pembina Pipeline | $54.13 | 92 | $0.71 | $65.32 | Quarterly |
| Northland Power | $22.75 | 219 | $0.10 | $21.90 | Monthly |
| Topaz Energy | $25.93 | 192 | $0.34 | $65.28 | Quarterly |
| A&W Food Services | $38.11 | 131 | $0.48 | $62.88 | Quarterly |
| Dream Industrial REIT | $12.55 | 398 | $0.0583 | $23.21 | Monthly |
Prices as of September 16, 2025
