Here is the bottom line: if you are stuffing your Tax-Free Savings Account (TFSA) with cash or a low-interest fixed-income product, you are likely costing yourself thousands of dollars in long-term, tax-free wealth.
The smarter play is putting quality compounders inside the account, and right now, Dollarama (TSX: DOL) stands out as one of the best TSX stocks you can buy.
The 2026 TFSA contribution limit, as set by the Canada Revenue Agency (CRA), is $7,000. If you have been eligible since the account launched in 2009 and have never put a dollar in, your total available room sits at $109,000.
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Why Dollarama belongs in your TFSA right now
The TFSA is purpose-built for growth. Every dollar of capital gains, every dividend reinvested, every share that appreciates in value inside that account is completely tax-free on withdrawal.
For investors building toward retirement or a major financial goal, the right move is to load the account with high-quality businesses that compound quietly over time.
One such blue-chip TSX dividend stock is Dollarama. (TSX: DOL). Founded in 1992, Dollarama sells general merchandise, consumables, and seasonal products at discounted prices.
In fiscal 2026, Dollarama delivered same-store sales (SSS) growth of 4.2% in Canada while earnings per share grew by 14%.
Dollarama is well-positioned to benefit from a sluggish macro environment as consumers wrestle with inflation. Household spending has been cautious for several quarters. And when consumers tighten their belts, they trade down, look for value, and go to Dollarama.
Dollarama President and CEO Neil Rossy put it plainly on the earnings call: “As Canadians face pressures on their household budgets, they turn to Dollarama for year-round value and everyday convenience.”
Basically, Dollarama operates a recession-resistant business.
Dollarama’s growth story is far from over
One of the most underappreciated aspects of Dollarama’s story is its international expansion plans.
Through a stake in Dollarcity, the company now operates across Latin America, with over 700 stores in Colombia, Peru, El Salvador, and Guatemala, plus a growing presence in Mexico.
In fiscal 2026, Dollarama’s share of Dollarcity’s net earnings jumped more than 47% to $191.5 million.
At the same time, Dollarama acquired a national discount retail chain in Australia in late fiscal 2026. Rossy framed the long-term vision clearly: “Once you’ve established a low-cost retail platform in Australia with over 500, 600 stores, we feel very confident that being the 800-pound gorilla in the market will play very well for our shareholders.”
That is the kind of long-horizon thinking TFSA investors should want from a core holding.
Dollarama raised its quarterly dividend by 13.4% in fiscal 2026. Dividend income in a TFSA is tax-free, which eliminates the need to calculate dividend tax credits entirely.
The company also bought back more than 4.4 million shares during the year, spending over $834 million to reduce its share count, a direct boost to long-term shareholder value.
Dollarama is guiding for three to four percent SSS growth in Canada in fiscal 2027, consistent with last year’s guidance. Its gross margin guidance of 45% to 45.5% reflects discipline in cost management, even as global supply chain pressures from the ongoing Middle East conflict create some uncertainty.
Management noted on the earnings call that it has “a number of levers” to mitigate near-term cost impacts and will pass on price increases only where absolutely necessary.
That kind of steady, measured execution is what long-term TFSA investors should be hunting for.
Your $7,000 this year deserves better than a savings account. Put it to work in a business that compounds, pays a growing dividend, and gets stronger when the economy gets harder. Dollarama checks every one of those boxes.
