The Canadian government launched the Tax-Free Savings Account (TFSA) in 2009 to encourage Canadians to save and invest more efficiently. The TFSA allows individuals to earn tax-free returns on contributions made within their annual limit. For 2025, the Canada Revenue Agency has set the annual contribution limit at $7,000, bringing the total cumulative room to $102,000 for Canadians who were 18 or older in 2009 and have never contributed to a TFSA.
Meanwhile, Canadian equity markets have experienced heightened volatility in recent days amid concerns about the potential impact of the trade war on global economic growth and elevated valuations amid sharp stock price gains. Given this uncertain environment, TFSA investors should exercise caution. A decline in stock values, followed by selling, can not only erode capital but also permanently reduce their TFSA contribution room. Against this backdrop, let’s look at two high-quality Canadian stocks I believe would be ideal for a TFSA right now.
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Dollarama
Dollarama (TSX: DOL) is a Montreal-based retailer operating 1,665 stores in Canada and 395 in Australia. The company follows a capital-efficient, growth-oriented business model, supported by its strong direct sourcing platform that eliminates intermediaries and enhances its bargaining power. Its efficient logistics network helps lower costs, enabling Dollarama to offer a wide range of consumer products at attractive price points. As a result, the company continues to generate solid sales even in a challenging macroeconomic environment. Its expanding store network has further strengthened its financial performance, contributing to a strong stock rally. Over the past 10 years, Dollarama has delivered an impressive annualized return of 21.3%.
Looking ahead, the discount retailer has ambitious expansion plans. It aims to increase its store count to 2,200 in Canada and 700 in Australia by the end of fiscal 2034. Thanks to its capital-efficient investments, quick sales ramp-up, and low maintenance capex requirements, these expansions could enhance both revenue and earnings. Additionally, Dollarama holds a 60.1% stake in Dollarcity, which operates 658 stores across five Latin American countries and plans to expand its network to 1,050 stores by fiscal 2031. Dollarama also has the option to increase its ownership in Dollarcity to 70%. With these developments, Dollarcity’s contribution to Dollarama’s net income is likely to grow in the coming years.
Dollarama has outperformed the broader equity markets this year, delivering returns of more than 40%. This strong performance has pushed its valuation higher, with its next-12-months (NTM) price-to-sales and price-to-earnings multiples now at 6.9 and 41, respectively. Although these metrics appear elevated, I believe the company’s robust growth outlook justifies them. With its solid business model and strong long-term prospects, Dollarama remains an excellent addition to your TFSA.
Enbridge
Given the prevailing uncertainty, my second pick is Enbridge (TSX: ENB), one of Canada’s premier dividend-paying companies. Its tolling framework, long-term take-or-pay contracts, renewable energy assets backed by power-purchase agreements, and low-risk utility operations collectively generate stable and predictable cash flows, supporting its ability to deliver consistent dividend growth. Enbridge has increased its dividend at an impressive average rate of 9% over the past 30 years and currently offers an attractive yield of 5.58%.
Moreover, the Calgary-based energy giant has expanded its secured project backlog by $7 billion, bringing it to a robust $35 billion. These projects can enter service through 2030, providing a clear pipeline of growth that can support its financial performance in the years ahead. Reflecting this strong outlook, Enbridge’s management anticipates returning between $40 billion and $45 billion to shareholders over the next five years. Given its regulated operations, resilient cash flows, and compelling growth trajectory, I believe Enbridge is well-positioned to continue increasing its dividend, making it an attractive long-term investment.
