Canadians don’t need a giant portfolio to build useful tax-free income. A $21,000 Tax-Free Savings Account (TFSA) can create meaningful cash flow if investors keep the plan simple and choose stocks built to send cash back. The key is balance. A high yield can help, but only if the business can keep funding it. That’s where Alaris Equity Partners Income Trust (TSX: AD.UN) and Slate Grocery REIT (TSX: SGR.UN) look interesting today.
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Investors want income without buying only banks, pipelines, or telecoms. Alaris provides non-control capital to private companies. In return, it collects distributions from those partner businesses. Think of it as a way to invest in private-company cash flow through a public TSX unit.
In the first quarter of 2026, Alaris reported total partner revenue of $48.6 million, which came in ahead of guidance. Its payout ratio was 51.9%, below the trust’s target range of 65% to 70%. Then management increased the quarterly distribution by 3% to $0.38 per unit, or $1.52 annualized. That gives investors two things they want. A solid current yield and room for the payout to breathe. Alaris also completed a $75.3 million investment in Kubik after the quarter, adding another partner to its platform. If that capital earns attractive returns, it could help support future cash flow.
The risk comes from concentration and private-company exposure. If one partner struggles, Alaris can feel it. Cash flow can also move around from quarter to quarter. This isn’t a guaranteed-income product. It’s an equity investment with a higher payout, and investors should treat it that way.
SGR
SGR stock brings the second piece of the TFSA income plan. It owns grocery-anchored real estate in the United States. That business model has a nice common-sense feel. People may skip big-ticket purchases when budgets tighten, but they still buy food. Grocery-anchored plazas can stay relevant through different economic cycles.
SGR’s first-quarter results showed demand remains healthy. Rental revenue rose 11.8% year over year to US$59.3 million. Net income increased 17.5% to US$18.9 million. The real estate investment trust (REIT) also completed more than 725,000 square feet of leasing, with double-digit rental spreads. Occupancy sat at 94.4%.
The distribution adds to the appeal. SGR stock pays $1.20 per unit each month. That creates a useful monthly income base for TFSA investors. Still, investors should not ignore the risks. Slate uses debt, and higher rates can pressure REIT valuations. Its AFFO payout ratio also ran above 100% in the first quarter, so investors should watch coverage closely. A grocery-focused portfolio helps, but it doesn’t erase balance-sheet risk.
Bottom line
A simple split would put $10,500 into each stock. Based on recent yields near 6.3% for Alaris and about 7% for Slate Grocery, that portfolio could produce roughly $1,347 a year, or around $112.25 a month on average. The payments won’t arrive in one perfect monthly stream because Alaris pays quarterly while SGR stock pays monthly. But inside a TFSA, the cash can still build without tax dragging down the result.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| AD.UN | $23.58 | 445 | $1.42 | $631.90 | Monthly | $10,493.10 |
| SGR.UN | $17.46 | 601 | $1.19 | $715.19 | Monthly | $10,493.46 |
Together, Alaris and SGR stock offer a simple income pairing. Alaris brings private-business cash flow. Slate brings monthly real estate income. The best part is that this strategy does not require constant trading. Investors can buy, collect distributions, and review results each quarter. They can also reinvest the cash until they actually need it. Over time, that can turn a modest TFSA into a more useful income machine, without making the plan complicated. For many Canadians, that simplicity may be the best benefit.
