Everyone wants passive income — but the real magic happens when that income grows year after year. Canadian investors have a powerful advantage: eligible dividends are tax-efficient in taxable accounts and completely tax-free inside a Tax-Free Savings Account (TFSA). That makes high-quality dividend growth stocks especially compelling.
Here are three Canadian dividend stocks built not just to pay income today, but to grow it for decades.
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1. Growth at a discount: Thomson Reuters
Thomson Reuters (TSX: TRI) is a global leader in legal, tax, accounting, and compliance software. Its tools — including Westlaw and Checkpoint — are deeply embedded in professional workflows, creating sticky, recurring revenue streams.
After peaking above $290 per share in 2025, the stock plunged to nearly $110 in 2026 amid fears of AI disruption. But that narrative overlooks a key fact: Thomson Reuters has integrated AI into its platforms since the early 1990s and continues to invest in AI. Rather than being disrupted, it’s leveraging AI to enhance productivity tools like CoCounsel.
The selloff has created opportunity. At recent prices, the dividend yield sits around 2.6% — roughly 87% above its five-year average. Even better, this is a proven dividend grower, with approximately 32 consecutive years of increases and a five-year dividend-growth rate near 9.4%. Its latest hike of over 10% reinforces management’s confidence.
With a trailing-12-month payout ratio of about 51% of free cash flow, the dividend appears sustainable — and positioned to keep rising.
2. Defensive and dependable: Empire Company
When markets turn volatile, grocery stores don’t stop selling food.
Empire (TSX: EMP.A) operates or franchises more than 1,500 stores nationwide under banners such as Sobeys, Safeway, Farm Boy, and FreshCo. It also owns Lawtons Drugs and retail fuel locations, giving it diversified consumer exposure.
While its dividend yield of roughly 1.7% may look modest, focusing solely on yield misses the bigger picture. Empire has raised its dividend for about 31 consecutive years. Over the past five years, dividend growth was about 10.9%, including a 10% increase announced last June.
For long-term investors, steady earnings growth combined with consistent dividend hikes can produce compelling total returns. In a defensive sector with pricing power and resilient demand, Empire offers growing income with lower volatility.
3. Higher yield, higher upside: Brookfield Asset Management
If you want more current income with growth potential, Brookfield Asset Management (TSX: BAM) deserves attention.
This global alternative asset manager oversees more than US$1 trillion in assets, with roughly US$600 billion in fee-bearing capital across infrastructure, renewable power, private equity, real estate, and credit. Its scale and global reach provide diversified cash flows tied to long-term contracts and essential assets.
Recent market weakness has pulled the shares back, creating what analysts estimate to be a discount of over 20% at current levels near $64. The dip has pushed the dividend yield to approximately 4.3%. Even more compelling, BAM recently boosted its dividend by about 15%, highlighting strong distributable earnings growth.
For investors seeking both yield and expansion, Brookfield combines income today with asset growth for tomorrow.
Investor takeaway
Passive income is powerful — but growing passive income builds real wealth. Thomson Reuters offers discounted growth with a reliable dividend track record. Empire Company delivers defensive stability and steady hikes. Brookfield Asset Management provides higher yield and global growth exposure.
Together, these three Canadian dividend stocks offer a compelling blend of resilience, growth, and rising income — exactly what long-term passive-income investors should demand.
