The new TFSA (Tax-Free Savings Account) contribution limit increased by $7,000 in 2026. It may not seem like a huge amount today. Nonetheless, even $7,000 compounded by a 9% annual rate (an average market return) could become $16,500 in 10 years, $39,230 in 20 years, and as much as $92,873 in 30 years.
You don’t want to pay tax on those kinds of gains. That is why the TFSA is such an essential tool for Canadians looking to create wealth. If you have a few decades to compound, you are smart to put that $7,000 contribution to work as soon as you save and deposit that cash.
If you are looking for some stock ideas for that 2026 TFSA contribution, here are three quality Canadian stocks to contemplate.
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Constellation Software: The TFSA stock for contrarians
Today, you can actually buy a couple of shares of Constellation Software (TSX:CSU) with the $7,000 TFSA contribution. Its stock has fallen 48% in the past year. The market is pricing severe disruption from artificial intelligence into this stock.
AI is a risk investors need to monitor. Yet, Constellation could also benefit. Investors don’t seem to price that in at all. Firstly, it can use AI for its development and maintenance activities. Secondly, it can provide AI modules to its wide customer base and monetize on those.
Constellation is already heavily entrenched with thousands of niche industry customers. It knows their businesses and software needs best. The company is very thoughtful and cognizant about all its investments. It is likely to be very smart about how it deploys and uses AI as well.
Today, Constellation trades at its cheapest valuation in at least the past 10 years. For a company that just grew cash flows by 24% last year, it seems like a very fair deal today.
MDA Space: A volatile sky-flyer
MDA Space (TSX:MDA) stock is not for the faint of heart. This TFSA stock is incredibly volatile. Any bit of news on space and space investments seems to move the stock (even if it is unrelated). Its stock is down 16% in the past five days.
However, if you zoom out a bit, the company does appear to have a long trajectory of growth ahead. It is a crucial provider of specialized space components, digital satellites, and earth observation services.
Space is truly the new frontier and global demand for communication, observation, and even defensively capable satellites should only grow. Only a small handful of companies have the capacity and expertise that MDA has. If you can stomach the volatility, this company is likely to be much larger in the years ahead.
AltaGas: A top dividend stock for a TFSA
If you are looking for something steadier than the two stocks above, AltaGas (TSX:ALA) could be a good dividend stock to tuck away in a TFSA. The company operates a natural gas utility in the U.S. and an integrated midstream business in Canada.
Both businesses have an attractive growth profile. Its gas utility has significant opportunities to grow it rate base by a mid-single digit rate. The midstream business is growing its liquified petroleum gas (LPG) production and export capacity. Demand in China, Japan, and Korea is rising quickly and AltaGas is taking share in those markets.
AltaGas is only growing by a single digit rate. However, it pays a 2.8% dividend that has been growing regularly. This TFSA stock is set up for a relatively low risk, high single annual digit return for the coming years ahead.
