You don’t have to be rich to start building passive income in Canada. You only need the right stocks inside the right account. Here is my take: a $10,000 TFSA (Tax-Free Savings Account) split between TELUS (TSX:T) and Enghouse Systems (TSX:ENGH) is one of the simplest, most low-maintenance ways to build a growing tax-free income stream in 2026.
Let’s dive deeper.
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TELUS belongs in your TFSA right now
TELUS is one of Canada’s largest telecom companies, and its most recent earnings call made a compelling case for income investors.
- In 2025, TELUS reported record free cash flow of $2.2 billion, an 11% year-over-year increase.
- It aims to grow FCF by at least 10% through 2028, enabling the Canadian telecom behemoth to reduce balance-sheet debt and reinvest in growth projects.
- TELUS added more than 1.1 million combined mobile and fixed customers last year. It was the fourth consecutive year that the telecom giant topped one million additions.
- Moreover, its postpaid churn stood at 0.97%, the 12th consecutive year of below 1%. TELUS enjoys market-leading customer retention rates, which generate a stable stream of recurring revenue.
Down over 50% from all-time highs, the TSX dividend stock offers you a tasty yield of 10.2%. While TELUS has paused dividend hikes, it generates enough cash to sustain current payouts.
TELUS also stated that it will raise the dividend once deleveraging targets are hit and the DRIP (dividend reinvestment plan) discount is removed, which is expected by 2027.
TELUS is also pushing aggressively into artificial intelligence, with AI-enabling revenue growing 44% in the fourth quarter of 2025 to $229 million. The company is targeting roughly $2 billion in AI-enabling revenue by 2028, making it an AI play as well.
Is this TSX tech stock a good buy?
Enghouse Systems is another Canadian company with an exceptional dividend track record. The TSX tech stock has raised the annual dividend payout from $0.28 per share in 2016 to $1.24 per share in 2026. Currently, it offers shareholders a forward yield of over 5%.
Last month, the company’s board approved a 3.3% dividend increase, marking the 18th consecutive year of dividend growth. It ended its most recent quarter with $260.2 million in cash and no long-term debt.
In fiscal Q1 2026, Enghouse reported revenue of $120.1 million. Recurring revenue, which includes software-as-a-service and maintenance contracts, accounted for over 70% of total sales. The majority of the company’s sales are recurring, allowing it to generate stable cash flows across market cycles.
Enghouse CEO Stephen Sadler was candid on the earnings call about his capital allocation thesis. Sadler explained that Enghouse will look to deploy capital and repurchase its own shares, which are down almost 80% from all-time highs.
How to split the $10,000 in the TFSA
Canadian investors can split the $10,000 equally between the two TSX dividend stocks. TELUS provides you with exposure, strong cash flow visibility, and an attractive yield. Enghouse is a profitable software company with 18 straight years of dividend growth and no debt.
In the TFSA, every dollar of dividend income you collect grows completely tax-free. Reinvest those dividends, and the compounding effect accelerates over time.
