If I could put one stock in my Tax-Free Savings Account (TFSA) and never look at it again, it would be Waste Connections (TSX: WCN). This is not a flashy AI play or a speculative growth bet. It is a durable, cash-generating business that quietly compounds wealth year after year. And right now, it is firing on all cylinders.
Here is exactly why I think this is the best forever TFSA stock a Canadian investor can own.
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A recession-resistant Canadian stock
Let us start with the basics. Waste Connections collects, transfers, and disposes of non-hazardous waste across the United States and Canada. It also processes recyclable materials, operates landfills, and manages waste from oil and gas exploration.
Garbage does not go away during recessions. Businesses still produce waste, and residents continue to fill bins across market cycles, which makes Waste Connections about as recession-resistant as a business can get.
In 2025, Waste Connections delivered adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $3.1 billion, up 7.7% from the prior year.
Adjusted EBITDA margins rose to 33%, an industry-leading figure, up 100 basis points year over year. And management is guiding for another 30 to 40 basis points of margin expansion in 2026.
For context, EBITDA margin tells you how much of every dollar in revenue turns into operating profit before certain costs. A 33% margin in the waste industry is exceptional.
A focus on margin expansion
One of the strongest signals about a great business is whether it can raise prices without losing customers. Waste Connections showcased that it can do this amid a challenging macro environment.
- Solid waste core pricing came in at 6.5% in 2025, exceeding the company’s own expectations for the year.
- For 2026, management is guiding for core pricing of 5% to 5.5%, still well above inflation.
- The reason the company can do this consistently comes down to discipline. Management focuses on maintaining a spread of roughly 150 to 200 basis points between price increases and rising costs.
- If costs go up 3%, pricing goes up around 5%. That spread becomes margin expansion, which generates additional free cash flow for shareholders.
Employee turnover and safety incident rates both hit multiyear lows in 2025, continuing a three-year improvement trend. Fewer turnovers mean lower training and recruitment costs, while better safety means lower insurance and risk management costs.
These are structural, durable advantages that show up directly in the profit margin.
A focus on free cash flow
For a TFSA investor, free cash flow is what pays your future dividends and funds the share buybacks.
In 2025, Waste Connections generated $1.3 billion in adjusted free cash flow. In 2026, management is guiding for $1.4 billion to $1.45 billion in FCF, representing double-digit growth.
The company returned over $830 million to shareholders in 2025 through dividends and buybacks. The quarterly dividend was raised by 11.1% during the year.
Waste Connections has a long track record of annual dividend increases, making it a reliable income grower for TFSA holders who want tax-free compounding.
Leverage sits at a conservative 2.8 times debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization).
That leaves plenty of room for acquisitions, which have historically added significant annual revenue. In 2025, the company closed 19 deals worth about $330 million in annualized revenue, and the M&A pipeline remains active heading into 2026.
The Foolish takeaway
Down 22% from all-time highs, WCN stock is priced at 40 times forward earnings, which is expensive. However, analysts forecast FCF to grow by 13% annually through 2030.
The TSX dividend stock is armed with best-in-class margins, a widening free cash flow base, consistent dividend increases, and a management team that has executed flawlessly for years.
Boring businesses that compound reliably tend to make investors very wealthy over time. Waste Connections is one of the best examples of that principle on the TSX.
