A Tax-Free Savings Account (TFSA) is a powerful tool for long-term wealth creation, allowing investors to earn tax-free returns on investments made within the prescribed contribution limits. However, investors must exercise caution when investing through a TFSA, as losses on TFSA-held investments and subsequent selling can not only erode capital but also permanently reduce available contribution room.
With this in mind, here are three high-quality stocks investors can confidently buy and hold in their TFSA for the long term.
Fortis
Fortis (TSX:FTS) is an excellent addition to a TFSA, supported by its regulated asset base and low-risk utility business, with approximately 94% of its assets tied to transmission and distribution operations. This regulated, defensive business model, combined with a steadily expanding rate base, has underpinned Fortis’s consistent financial performance and delivered a reliable average total shareholder return of 9.7% over the past 20 years. In addition, the company has increased its dividend for 52 consecutive years and currently offers a forward dividend yield of 3.47%.
Looking ahead, rising demand for electricity and natural gas continues to support growth in Fortis’s underlying business. The utility is also expanding its asset base through a $28.8 billion capital investment plan, which could grow its rate base at a compound annual rate of 7% to $57.9 billion by 2030. Alongside these investments, Fortis is implementing cost-reduction and efficiency initiatives that should further strengthen earnings and support share price appreciation.
Moreover, management expects to increase the dividend at an annualized rate of 4%–6% through the remainder of this decade, reinforcing Fortis’s appeal as a high-quality, long-term TFSA holding.
Dollarama
Another reliable stock that I believe would be an excellent addition to a TFSA is Dollarama (TSX:DOL). The discount retailer has built a highly efficient direct sourcing model that eliminates intermediary costs and enhances its bargaining power with suppliers. Coupled with a well-optimized logistics network, this allows Dollarama to keep operating costs low and offer a wide range of everyday consumer products at attractive price points. As a result, the company consistently delivers healthy same-store sales growth, regardless of broader economic conditions.
Looking ahead, the Montreal-based retailer continues to expand its store footprint and expects to increase its Canadian store count from 1,684 to 2,200, while growing its presence in Australia from 401 to 700 stores by the end of fiscal 2034. Thanks to its capital-efficient, growth-oriented business model—characterized by rapid sales ramp-ups, shorter payback periods, and low ongoing maintenance costs—these expansions should drive both revenue and earnings growth.
In addition, Dollarama owns a 60.1% stake in Dollarcity, which currently operates 683 stores across five Latin American countries. Dollarcity is also pursuing an aggressive expansion strategy and aims to increase its store count to 1,050 by the end of fiscal 2031. Dollarama also has the option to increase its ownership stake in Dollarcity to 70% by the end of next year, further enhancing its long-term growth potential.
Considering its resilient business model, strong execution, and multiple growth avenues, Dollarama stands out as a high-quality, long-term TFSA holding.
Waste Connections
Waste Connections (TSX:WCN), a non-hazardous solid waste management company, is my final pick. The company operates primarily in secondary and exclusive markets, where it faces limited competition and benefits from higher margins. In addition to steady organic growth, WCN has consistently expanded its footprint through strategic acquisitions. Since 2020, the company has completed more than 100 acquisitions, representing approximately $2.2 billion in annualized revenue.
Supported by a strong balance sheet and healthy cash flows, management expects to maintain its active acquisition strategy. WCN also has a robust pipeline of private acquisition targets across the United States and Canada, with total annual revenues of roughly $5 billion. Alongside acquisitions, the company continues to adopt technological advancements—such as robotics and optical sorting—at its recycling facilities to enhance operating efficiency.
Furthermore, improvements in employee engagement and safety metrics have continued to reduce voluntary turnover, thereby supporting margin expansion over time. Given its disciplined expansion strategy, improved operational efficiency, and resilient business model, WCN appears well-positioned to deliver superior returns regardless of broader market conditions, making it an ideal long-term holding for a TFSA.
