The Tax-Free Savings Account (TFSA) gets an annual refresh that increases the cumulative contribution room. After the $7,000 update in 2026, the cumulative TFSA contribution room stands at $109,000. If you do not utilize the contribution room of any given year, it carries forward to the next. For any withdrawals you make in one contribution year, you get the equivalent added on for the next contribution year.
Since you contribute with after-tax dollars, any earnings from assets you hold in a TFSA can grow without incurring taxes. While you can use the contribution room to hold cash and let it grow through interest income, it might be a waste of an excellent opportunity.
Instead of thinking of your TFSA as a mere savings account, consider its tax-sheltered status and use it to invest for the long run. Due to the qualities it boasts, it can be an excellent investment vehicle for tax-free growth of qualifying assets like stocks.
Today, I will discuss a Canadian tech stock you can buy and hold in a TFSA to unlock tax-free capital appreciation potential: Shopify Inc. (TSX: SHOP).
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Shopify
Shopify is a company that did not take long to virtually become a household name. The $224.8 billion market cap giant in the Canadian ecommerce space operates a cloud-based commerce platform that lets merchants of all sizes create and run online businesses across all channels. It has been one of the biggest contributors to the growth of global ecommerce, making access to the industry much easier for merchants.
By giving merchants the software and payment infrastructure to run modern retail, it helps clients generate more revenue. In turn, that growth drives more success for Shopify, letting it grow shareholder value through long-term capital appreciation.
Shopify was briefly the largest stock on the TSX by market cap, but the tech selloff brought its shares down to more reasonable levels. As of this writing, Shopify stock trades for $173.51 per share, down by 28.9% from its October 2025 all-time high. Despite the pullback, the underlying business is doing well.
The first quarter of 2026 saw Shopify report 34% growth in revenue compared to the same period last year. It also reported a 15% free cash flow margin, which spells more good news for the business. The merchants using its platform also crossed the US$100 billion mark in gross merchandise volume during the quarter, indicating that Shopify is now more than a mere online store builder. It has established itself as a mainstay of global commerce.
Foolish takeaway
For Canadians building long-term wealth, the TFSA can be an excellent tool. While creating a well-balanced portfolio is crucial for sustainable wealth growth, reaching your goals requires injecting growth into your portfolio. Shopify is not a risk-free investment to consider due to its tendency to be extremely volatile amid changing market environments.
With all that said, Shopify stock can be an excellent way to increase the value of your TFSA contribution. Making sure you create a well-balanced portfolio to mitigate losses before jumping to riskier investments can be a smart way to use your TFSA.
