Canadian retirees are searching for ways to generate income from their savings to complement the Canada Pension Plan (CPP), Old Age Security (OAS), and work pensions.
One popular strategy to earn steady passive income involves owning high-yield dividend stocks inside a self-directed Tax-Free Savings Account (TFSA) portfolio. In the current market conditions where the TSX trades near its record high and tariffs threaten to trigger an economic downturn, it makes sense to look for industry leaders with long track records of delivering reliable dividend growth.
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Enbridge
Enbridge (TSX: ENB) trades near $65.50 per share at the time of writing. That’s down about $5 from the 2025 high, giving investors a chance to buy ENB on a bit of a dip after its big rally over the past two years.
Enbridge is best known for its extensive oil and natural gas transmission networks that move roughly 30% of the oil produced in Canada and the United States and 20% of the natural gas used by American homes and businesses. In recent years, however, management shifted growth spending to other opportunities. The company purchased an oil export terminal in Texas and is a partner on the Woodfibre liquified natural gas (LNG) export facility being built on the coast of British Columbia. Global demand for Canadian and U.S. oil and natural gas is expected to rise in the coming years as countries look for reliable energy supplies from stable countries to fuel electricity production.
Enbridge has also expanded its natural gas utilities footprint. The company spent US$14 billion in 2024 to buy three natural gas utilities in the United States. The deal made Enbridge the largest natural gas utility operator in North America, just as domestic demand for natural gas is expected to surge. Gas-fired power generation facilities are being built to provide power for new AI data centres.
Enbridge has bulked up its solar and wind division, as well. Renewable energy remains an important part of the expansion of the overall electricity supply needed to meet rising power demand.
On the development side, Enbridge is working through a $32 billion capital program. As the new assets are completed and go into service, the added revenue is expected to boost cash flow by about 5% per year over the medium term beyond 2026. This should support ongoing dividend growth. Enbridge has increased the dividend annually for the past 30 years. Investors who buy the stock at the current level can get a dividend yield of 5.75%.
Enbridge pivoted away from major pipeline projects in Canada due to regulatory hurdles. Those challenges remain in place, but Canada’s new goal of reducing reliance on the United States for energy sales could lead to a more favourable environment to get new pipelines built. Canadian oil and natural gas producers need infrastructure that can connect them with export facilities on the coast. If the government decides to make it possible to build the pipelines, Enbridge would be a strong candidate to participate in the process.
Risks
Enbridge’s share price fell from $59 in the middle of 2022 to $44 in the fall of 2023. This occurred in step with rising interest rates in Canada and the United States as the central banks battled to get inflation under control. Rate cuts in 2024 and 2025 helped drive the recovery in the share prices of pipeline and utility companies that use debt to fund their large capital programs. Looking ahead, tariffs could push inflation to the upside in 2026. This will make it harder for the central banks to continue cutting rates. In fact, new rate hikes are possible if inflation surges. In that scenario, Enbridge’s share price would likely come under pressure.
The bottom line
Near-term volatility is expected, but Enbridge pays an attractive dividend that should continue to grow. If you have some cash to put to work in a TFSA targeting passive income, this stock deserves to be on your radar.
