A Tax-Free Savings Account (TFSA) allows Canadians to earn tax-free returns on investments up to a specified contribution limit. Given the current market uncertainty, investors should be cautious when choosing TFSA holdings, as a decline in stock value followed by a sale can not only erode capital but also permanently reduce their available contribution room. With this in mind, here are four top Canadian stocks that are well-suited for investors to buy and hold forever in their TFSA.
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Waste Connections
Waste Connections (TSX:WCN) would be my first choice due to the essential nature of its business and its ongoing expansion initiatives, achieved through both organic growth and strategic acquisitions. The waste management company collects, transfers, and disposes of non-hazardous solid waste across the United States and Canada. It operates predominantly in the secondary and exclusive markets, thereby facing less competition and enjoying higher margins.
Given its healthy financial position and robust cash flows, WCN’s management expects to maintain its acquisition momentum in the coming quarters. Further, the company is also focusing on adopting technological advancements to improve operational efficiency, enhance employee safety, and drive profitability. Additionally, the company is witnessing a decline in voluntary turnover amid improved employee engagement initiatives and better safety metrics, which can further support its margin expansion.
Considering these positives, I believe WCN remains an excellent investment choice despite the ongoing headwinds in the recycled commodities market.
Hydro One
Second on my list is Hydro One (TSX:H), a pure-play electric utility company with 99% of its business rate regulated. Additionally, it has limited exposure to commodity price fluctuations, thereby shielding its financials from economic cycles and market volatility. Meanwhile, electricity demand continues to rise, driven by the electrification of transportation and the rapid growth of power-intensive data centres fueled by increasing adoption of artificial intelligence—expanding Hydro One’s addressable market.
To support this growth, the company is advancing its $11.8 billion capital investment plan, which targets a 6% annualized increase in its rate base to $32.1 billion by 2027. Management also expects adjusted earnings per share to grow at an annualized rate of 6–8% through 2027. With these strong growth catalysts, Hydro One, which currently offers a forward dividend yield of 2.47%, is well-positioned to continue rewarding shareholders with steady dividend increases.
Dollarama
Dollarama (TSX:DOL) is a discount retailer that consistently delivers strong same-store sales growth, even in challenging economic conditions, thanks to its compelling value proposition. Its efficient direct sourcing model and streamlined logistics network help keep costs low, enabling the company to offer a wide range of consumer products at competitive prices. Dollarama is also expanding its footprint, with plans to increase its Canadian store count from 1,665 to 2,200 and its Australian store count from 395 to 700 by the end of fiscal 2034.
The company also owns a 60.1% stake in Dollarcity, which operates 658 stores across Latin America. Dollarcity has ambitious growth plans as well and aims to expand its network to 1,050 stores by the end of fiscal 2031. Dollarama additionally holds an option to increase its ownership to 70% by the end of 2027. These expansion initiatives position the company for strong long-term growth, making it an ideal investment opportunity.
Fortis
Fortis (TSX:FTS) operates a highly regulated utility business, providing electricity and natural gas to 3.5 million customers across the United States, Canada, and the Caribbean. Approximately 93% of its assets are tied to low-risk transmission and distribution operations, allowing the company to deliver stable and predictable financial results regardless of broader market conditions. Backed by this reliability, Fortis has raised its dividend for 52 consecutive years and currently offers a forward yield of 3.49%.
The company invested $4.2 billion in capital projects during the first three quarters and is on track to meet its full-year target of $5.6 billion. Fortis has also introduced a new five-year, $28.8 billion capital plan, running from 2026 to 2030, which aims to increase its rate base at a 7% annualized rate to $57.9 billion by 2030. With these growth initiatives underway, management aims to increase dividends by 4–6% annually through 2030, thereby reinforcing Fortis as a long-term investment of choice.
