The Canadian government introduced the Tax-Free Savings Account (TFSA) in 2009 to encourage Canadians to save and invest more efficiently. The TFSA allows investors to earn tax-free returns on contributions made within a defined annual limit. For 2025, the contribution limit is $7,000, bringing the total cumulative room to $102,000 for anyone who was 18 or older in 2009 and has never contributed to a TFSA.
Meanwhile, investors should exercise caution when investing through a TFSA. A decline in a stock’s value, followed by a sale, not only results in a capital loss but also permanently reduces your contribution room. Therefore, it’s prudent to focus on high-quality companies with strong fundamentals when using a TFSA. With this in mind, here are my three top picks.
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Fortis
Fortis (TSX: FTS) is an astute buy for a TFSA thanks to its stable, regulated, and low-risk business model. The electric and natural gas utility company operates nine regulated assets, serving 3.5 million customers across the United States, Canada, and the Caribbean. With 94% of its asset base tied to low-risk transmission and distribution, Fortis delivers steady financial performance regardless of broader market conditions. Over the past decade, it has generated an average total shareholder return of 10.7%.
The company also boasts an exceptional 52-year history of consecutive dividend growth and currently offers a solid yield of 3.6%. Fortis continues to expand its rate base, investing $4.2 billion in the first three quarters of this year and remaining on track to reach its full-year target of $5.6 billion. Looking ahead, it plans to invest $28.8 billion over the next five years, raising its rate base at a projected annualized rate of 7% to $57.9 billion by 2030. Supported by this growth, management expects to increase its dividend by 4–6% annually through 2030.
Given its stability, growth outlook, and dependable dividend profile, Fortis would be a welcome addition to any TFSA.
Waste Connections
Another strong candidate for your TFSA is Waste Connections (TSX: WCN), which collects, transports, and disposes of non-hazardous solid waste. It operates primarily in secondary and exclusive markets across the United States and Canada, allowing it to face less competition and benefit from higher margins. Waste Connections has delivered impressive long-term returns, driven by steady organic growth and a disciplined acquisition strategy. Over the past decade, the stock has gained more than 530%, representing an annualized return of 20.2%.
Looking ahead, management expects to continue its acquisition-driven growth, supported by a robust balance sheet and strong cash flows. The company is also leveraging technology to improve operational efficiency, enhance safety, and strengthen profitability. Improvements in employee turnover and safety metrics should further support margin expansion. Waste Connections recently increased its quarterly dividend by 11.1% to US$0.315 per share, marking its 15th consecutive year of dividend growth, and currently offers a forward yield of 0.82%.
Given its resilient business model, consistent performance, and disciplined growth strategy, WCN would be a compelling addition to your TFSA.
Enbridge
My final pick is Enbridge (TSX: ENB), a diversified energy infrastructure company with one of North America’s largest pipeline networks. It transports oil and natural gas under a tolling framework and long-term take-or-pay contracts, ensuring stable, predictable cash flows. Enbridge also operates three natural gas utilities and 41 renewable energy facilities, most of which are backed by long-term power purchase agreements. With the majority of its earnings derived from regulated assets and long-term contracts, the company is well insulated from market volatility. Its limited exposure to commodity price fluctuations and meaningful inflation-indexing further support financial stability. As a result, Enbridge has raised its dividend for 31 consecutive years and currently offers an attractive yield of 5.8%.
The Calgary-based company also has a substantial $35 billion secured capital backlog. Over the next five years, it plans to invest $9–$10 billion annually to advance these projects. Supported by this robust expansion pipeline, management expects adjusted earnings per share and discounted cash flow per share to grow at a mid-single-digit rate in the coming years. Given this outlook and its long history of reliable cash generation, Enbridge appears well-positioned to continue growing its dividend, making it an appealing addition to your TFSA.
