A Better Way to Invest Your RRSP Refund in 2026

The RRSP tax refund is a welcome windfall but can offset taxes further through income and growth investing.

Key Points
  • RRSP contributions for the 2025 tax year were accepted through March 2, 2026 — contributions in that window reduced 2025 taxable income, and any made after qualify for 2026.
  • The average RRSP tax refund (~$3,470) can be reinvested tax-free in an RRSP to generate passive income or capital gains; two TSX options are income-focused TELUS and growth-focused SECURE Waste.
  • TELUS (TSX:T) offers a ~8.99% yield (≈$78/quarter on a $3,470 stake) with strong free-cash-flow targets, while SECURE Waste Infrastructure (TSX:SES) yields ~1.94% but has delivered ~+244% over three years and roughly 80% recurring cash flows.

The Registered Retirement Savings Plan (RRSP) contribution deadline for the 2025 tax year has passed. Canadians who contributed between January 1, 2025 and March 2, 2026 reduced their taxable income. All contributions made after the deadline will qualify for tax deductions in the 2026 tax year.

Remember, the RRSP is a special savings plan that not only helps Canadians save for retirement but also lowers tax payables. Based on published reports, the average RRSP tax refund is approximately $3,470. If you are one of the taxpayers who received a tax refund, there’s a better way to invest the money in 2026.

Since money growth in an RRSP is tax-free, you can invest the tax refund if there’s no urgent need to use it somewhere else. A $3,470 investment in TSX stocks can produce passive income or deliver substantial capital gains.

Blocks conceptualizing the Registered Retirement Savings Plan

Source: Getty Images

Dividend-payer

TELUS (TSX: T) is suitable for income-focused investors. The $28 billion communications and information technology company, through its President and CEO, Darren Entwistle, commits to profitable customer growth. In 2025, the combined mobility and fixed customer additions surpassed one million for the fourth consecutive year.

If you invest today, the 5G stock trades at $18.04 per share (+2% year-to-date) and pays a hefty 9% dividend. A $3,470 investment will generate nearly $78 every quarter. Entwistle said TELUS will maintain dividends at the current level as part of the capital allocation strategy.

Net income in 2025 declined 17% to $777 million compared with 2025, while free cash flow (FCF) increased 11% year-over-year to a record $2.2 billion. Doug French, Executive Vice-President and Chief Financial Officer of TELUS, is confident that the asset mix and diversified business portfolio will help deliver sustained, profitable growth and support FCF expansion.

Other business segments besides TELUS technology solutions include TELUS Health, TELUS Agriculture, and TELUS Digital. Management targets a 10% compound annual growth rate (CAGR) in FCF over three years (2026–2028). For 2026, the consolidated FCF guidance is approximately $2.5 billion, with consolidated capital expenditures decreasing by 10% to around $2.3 billion.

On executive moves, Victor Dodig, former CEO of Canadian Imperial Bank of Commerce, will assume the President and CEO post in place of Entwistle, effective July 1, 2026.

Growth play

SECURE Waste Infrastructure (TSX: SES) combines income and growth investing. While this industrial stock pays a modest 1.9% dividend, it rewards investors with massive capital gains. At $20.62 per share, SES is up 19.4% year-to-date. The total three-year return is plus-243.8%. Had you invested $3,470 in March 2023, your money would be worth $12,189 today.

This $4.5 billion company specializes in oilfield waste treatment and disposal and boasts a fully integrated waste management network. The high-demand for its vital services presents significant growth opportunities and provides revenue visibility. Furthermore, 80% of cash flows are recurring.

In Q4 2025, revenue and net income increased 10% and 56% year-over-year, respectively, to $372 million and $53 million. Its President and CEO, Allen Gransch, said the financial results reflect the resilience and quality of SECURE’s infrastructure-backed business model. He expects several long-cycle, contracted infrastructure projects to come online in 2026.

Welcome windfall

The RRSP refund is a welcome windfall for taxpayers every year. Recipients can offset tax bills further through income and growth investing. TELUS and SECURE Waste Infrastructure are solid choices for either investment strategy.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Secure Waste Infrastructure Corp. and TELUS. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Two seniors walk in the forest
Dividend Stocks

5 TSX Stocks to Buy With $50,000 for Retirement Income

Five top TSX dividend stocks could turn $50,000 into roughly $2,400 a year of retirement income. Here is the story…

Read more »

A worker overlooks an oil refinery plant.
Dividend Stocks

Here’s the 4.3% Dividend Stock I Keep Coming Back To

This 4%+ yield dividend stock is a compelling pick for income and growth albeit with typical asset-manager risks.

Read more »

a woman sleeps with her eyes covered with a mask
Dividend Stocks

This Canadian Staple Is Boring on Purpose — and Your Portfolio Will Thank You

This Canadian staple company may not be the most exciting TSX stock, but its essential businesses and efficiency-focused growth plans…

Read more »

man in suit looks at a computer with an anxious expression
Dividend Stocks

When the Market Drops, This Dividend Just Keeps Showing Up

Fortis Inc (TSX:FTS) stock pays a very reliable dividend.

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA Passive Income: 2 Canadian Dividend Stocks for Retirees

These dividends should continue to grow, even if the economy falters.

Read more »

you're never too young or old to start investing in stocks
Dividend Stocks

Just Opened a TFSA? These Index ETFs Are Great for Beginner Investors

The BMO Canadian Money Market ETF (TSX:XMMK) is a great fund for beginners.

Read more »

abstract visualization of digital data processing
Dividend Stocks

Weird Economy? This Dividend Is the Calm in the Storm

Discover why Fortis stock is a top portfolio anchor to hold for passive income, no matter what happens to the…

Read more »

AI image of a face with chips
Dividend Stocks

AI Needs More Than Chips: These Canadian Stocks Have Something it Needs

AI data centres need far more than processors, creating opportunities in natural gas and electrical infrastructure.

Read more »