If you and your spouse want monthly income, the first thing to get right is the “plumbing.” You want a tax shelter, predictable cash flow, and enough diversification that one bad quarter does not derail the plan. In Canada, a Tax-Free Savings Account (TFSA) does a lot of heavy lifting as income and gains stay tax-free. That matters more than people think once you start collecting distributions every month.
Source: Getty Images
Getting started
To get close to $10,000 per year in tax-free passive income, you need to reverse-engineer the math. Nearly $10,000 a year works out to about $833 a month. If a portfolio yields around 5%, you need roughly $200,000 invested to spin off that amount. The exact number moves with price changes and payout changes, but the idea stays the same. The yield sets the required principal, and the TFSA keeps more of that income in your pocket.
Now layer in the TFSA rules so you do not accidentally trip over them. The Canada Revenue Agency (CRA) set the TFSA dollar limit for 2026 at $7,000, and it gets added on January 1, 2026. Each spouse gets their own contribution room, so a couple can add $14,000 of new room in 2026, plus any unused room. And if both spouses have been eligible since TFSAs began and never contributed, the total room can reach $109,000 each in 2026, which makes a “two-TFSA income plan” a lot more realistic.
Consider BCE
BCE (TSX: BCE) is a familiar name for a reason. It owns Bell’s telecom footprint, with wireless and internet as the core engines, plus media assets layered on top. That mix tends to produce steady demand in normal times, as people rarely cancel their phone plan the way they cancel a streaming subscription. In its latest results, it still pointed to revenue growth and a focus on fibre, wireless, and enterprise services.
The dividend stock’s recent performance has not felt “steady,” though, and investors have had to swallow some hard medicine. In May 2025, it reset the annualized common dividend to $1.75 per share from $3.99, explicitly to strengthen the balance sheet and keep flexibility in a tougher backdrop. That kind of move can punish a share price in the moment, even if it helps the business long term.
There is also a simple macro reality at play. Telecom builds cost a lot of money. When interest rates stay high and competition stays intense, the market often gets impatient with leveraged, capital-heavy businesses. BCE itself flagged competitive pricing pressure and regulatory uncertainty as part of the environment it has to manage.
What next
On the earnings front, the latest quarter gives you a clear snapshot of what you are buying today. In Q3 2025, BCE reported operating revenues of $6.1 billion and adjusted earnings per share (EPS) of $0.79. It also posted free cash flow of $1 billion for the quarter, which matters as dividends ultimately come from cash, not opinions.
The valuation looks optically cheap, and the yield still does the job for income investors. The dividend stock trades at just 4.9 times forward earnings, and with a dividend yield at 5.4%, that’s a dividend of $0.438 per share at a quarterly frequency. The forward view is where the “income case” either holds together or falls apart. BCE has laid out a deleveraging path and updated its payout framework, targeting a 40% to 55% dividend payout of free cash flow.
Bottom line
So why can BCE still fit a married-couple’s TFSA income plan? It pays a regular dividend, and the yield remains meaningful even after the reset. Put that inside two TFSAs, and the tax-free nature of the income can make the cash feel larger than it looks on paper. Even now, this is what $10,000, or $5,000 in dividends each, could look like.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| BCE | $32.81 | 5,714 | $1.75 | $9,999.50 | Quarterly | $187,521. 34 |
The catch is the risk, and you should not ignore it: BCE already proved it will cut if it has to, and competitive pressure plus regulation can squeeze results. If you can live with that and size it responsibly inside a diversified TFSA plan, it can still play a useful role in getting you closer to that “nearly $10,000 a year” goal.
