The Tax-Free Savings Account (TFSA) is an ideal tool for long-term wealth creation. It allows eligible investors to earn tax-free returns, including dividends, interest, and capital gains, on investments within the contribution limit. For this year, the annual TFSA contribution limit is $7,000, while the cumulative contribution room for eligible Canadians stands at $109,000.
That said, investors should be selective when building a TFSA portfolio. Since gains and losses affect the account’s cumulative contribution limit, it is important to focus on high-quality companies with reliable business models and strong long-term growth potential. Investing in fundamentally strong businesses can help maximize tax-free wealth creation while reducing the risk of permanently eroding contribution room through losses.
With that in mind, here are two high-quality Canadian stocks that are excellent choices for long-term wealth creation in a TFSA.
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Dollarama
Dollarama (TSX:DOL) is an excellent stock to hold in a TFSA, thanks to its resilient business model and multiple long-term growth drivers. The discount retailer operates 1,719 stores across Canada and 410 stores in Australia. Its direct-sourcing strategy, efficient logistics network, and disciplined cost management enable it to offer a broad range of everyday products at attractive price points. As a result, Dollarama continues to generate strong same-store sales and resilient financial performance across varying economic conditions.
In addition to healthy comparable-store sales growth, Dollarama continues to expand its store network. Management expects the company’s footprint to reach 2,200 stores in Canada and 700 stores in Australia by the end of fiscal 2034. Supported by its capital-efficient business model, rapid sales ramp-up, short store payback periods, and low maintenance capital requirements, these expansions should drive sustained revenue and earnings growth.
Dollarama also has a meaningful growth opportunity in Latin America through its 60.1% ownership stake in Dollarcity, which operates 652 stores across five countries in the region. Dollarcity plans to expand its network to approximately 1,100 stores by the end of 2031, while Dollarama also has the option to increase its ownership stake to 70% by the end of next year. Backed by multiple growth catalysts, resilient operations, and proven execution, Dollarama is well-positioned to deliver attractive long-term returns, making it an excellent addition to a TFSA portfolio.
Savaria
My second pick is Savaria (TSX:SIS), which offers accessibility and mobility solutions. The company designs, manufactures, distributes, and installs a broad range of products, serving customers across North America, Europe, Asia, and Australia through its extensive manufacturing footprint and well-established dealer network.
Savaria is well-positioned to benefit from the long-term growth of the global aging population, which is driving demand for accessibility and mobility solutions. To capitalize on this favourable trend, the company continues to invest in innovative products, expand its manufacturing capacity, improve operational efficiency, and strengthen its market position. In addition to these organic growth initiatives, Savaria remains focused on strategic acquisitions to broaden its geographic footprint, enhance its product portfolio, and reinforce its competitive advantage.
The company’s “Savaria One” initiative is also driving operational improvements and supporting sustained financial growth. Backed by these initiatives, management expects revenue to grow at an annualized rate of approximately 12% to reach $1.6 billion by 2030, while maintaining an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin above 20%.
In addition to its strong growth outlook, Savaria pays a monthly dividend and currently offers a forward dividend yield of approximately 1.8%. Supported by favourable industry fundamentals, multiple growth drivers, and consistent execution, Savaria could deliver oversized long-term returns, making it an ideal choice for your TFSA portfolio.
