The Tax-Free Savings Account (TFSA), introduced by the Canadian government in 2009, is designed to help Canadians grow their savings. It allows investors to earn tax-free returns on a set contribution amount, referred to as the contribution limit. This year, the Canada Revenue Agency has set the annual limit at $7,000. Meanwhile, individuals who were 18 or older in 2009 and are just beginning to invest in a TFSA can contribute up to $109,000.
That said, investors should exercise caution when using a TFSA. Selling investments at a loss not only erodes capital but can also permanently reduce available contribution room. Given this, maintaining a well-balanced portfolio—comprising growth, dividend, and defensive stocks—can help optimize long-term returns while managing risk. With that in mind, here are my top three picks.
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Celestica
My first pick is Celestica (TSX: CLS), a compelling growth stock that delivers essential infrastructure solutions to hyperscalers building and scaling data centers. The company also maintains a strong presence across aerospace and defence, industrial, healthcare technology, and capital equipment markets.
With the rapid adoption of artificial intelligence (AI), hyperscalers are significantly increasing investments in AI-ready data centres, creating a solid long-term growth runway for Celestica. To capitalize on this demand, the company is focusing on innovation, strategic partnerships, and the expansion of its production capabilities.
Celestica has also raised its capital investment plans for 2026 and 2027 to support this growth. It expects to invest around $1 billion this year—approximately 6% of its projected revenue—to expand its global footprint and strengthen capabilities in high-reliability manufacturing, advanced design engineering, and end-to-end supply chain solutions. Given these strong growth prospects, Celestica stands out as an attractive addition to a TFSA portfolio.
Fortis
My second pick is Fortis (TSX: FTS), a reliable defensive stock that serves over 3.5 million customers across the United States, Canada, and the Caribbean. Backed by a regulated asset base and a portfolio largely focused on low-risk electricity and natural gas transmission and distribution, the utility generates stable earnings and predictable cash flows that are relatively insulated from economic volatility.
This regulated business model has enabled Fortis to deliver an average total shareholder return of 10.78% over the past two decades. Additionally, the company has increased its dividend for 52 consecutive years and currently offers a forward yield of 3.27%.
Looking ahead, Fortis continues to expand its asset base to meet rising energy demand driven by economic growth. The company plans to invest $28.8 billion through 2030, targeting a 7% annualized rate base growth to reach $57.9 billion. Alongside these investments, its focus on improving cost efficiency could further strengthen earnings and support continued dividend growth.
Enbridge
My final pick is Enbridge (TSX: ENB), a high-quality dividend stock with a strong track record of consistent payouts and an attractive yield. The energy infrastructure giant operates an extensive pipeline network for transporting oil and natural gas, along with three natural gas utility businesses and a growing portfolio of renewable energy assets.
With around 98% of its earnings supported by regulated assets and long-term contracts—and roughly 80% tied to inflation—Enbridge generates stable and predictable cash flows that are less sensitive to economic cycles and market volatility.
These dependable financials have enabled the company to pay a dividend for more than 70 years and increase its payout for 31 consecutive years. It currently offers a forward yield of 5.31%.
Looking ahead, rising oil and natural gas production, along with increasing energy demand in North America, continue to drive the need for Enbridge’s infrastructure. To capitalize on these opportunities, the company has identified a $50 billion growth pipeline and plans to invest $10–$11 billion annually to support its expansion. Given its resilient business model and strong growth outlook, Enbridge remains well-positioned to sustain dividend growth, making it a compelling addition to a TFSA portfolio.
