TFSA Investors: 3 Strong Canadian Stocks to Buy and Hold for Life

A TFSA can reward decades of patience, and these three “boring” Canadian compounders aim to keep growing without relying on perfect markets.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published August 7, 4:00 pm EDT

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Key Points

A TFSA lets dividends and gains compound without Canadian tax, so durable businesses matter more than hype.
Waste Connections, Canadian Pacific Kansas City, and Intact have hard-to-replicate advantages in essential services.
All three can still drop and two look pricey, so buy gradually and diversify beyond just these names.

The ideal lifelong Tax-Free Savings Account (TFSA) stock would be wonderfully boring at dinner parties and relentlessly productive inside the account. It wouldn’t need a meme, a miracle, or perfect economic weather. It would simply keep earning more money while investors got on with their lives.

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins — Source: Getty Images

Why choose a TFSA

A TFSA makes that patience considerably more valuable. Dividends, capital gains, and withdrawals generated inside a TFSA aren’t subject to Canadian income tax, allowing compounding to continue without the Canada Revenue Agency (CRA) taking a yearly nibble.

The 2026 annual limit is $7,000, although unused room carries forward. Withdrawals generally return as new contribution room the following calendar year. Investment losses don’t create replacement room, however, making quality particularly important before a struggling stock turns valuable TFSA space into a historical reenactment.

Buying for life doesn’t mean ignoring a company forever. Investors should still watch debt, competitive advantages, management, and whether earnings continue moving in the right direction. The goal is to find businesses durable enough that selling becomes the exception, which leads to three very different Canadian compounders.

WCN

Garbage doesn’t disappear during recessions, although everyone wishes it would occasionally take a personal day. Waste Connections (TSX:WCN) collects, transfers, recycles, and disposes of non-hazardous waste across Canada and the United States. Landfills and collection routes are expensive and difficult to replicate, helping established operators protect pricing and customer relationships.

Second-quarter revenue increased 6.4%, encouraging management to raise its 2026 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) outlook to between US$3.33 billion and US$3.34 billion. Acquisitions provide another long-term growth engine.

The catch is valuation. At $234.84, Waste Connections trades around 40 times trailing earnings, leaving the shares vulnerable to slower growth, acquisition problems, fuel costs, and weaker recycling prices.

CPKC

Canadian Pacific Kansas City (TSX:CP) owns the only single-line railway connecting Canada, the United States, and Mexico. That network transports grain, vehicles, energy products, consumer goods, and industrial materials across three enormous economies. Building a competing railway would require rather more than enthusiasm and a shovel.

Second-quarter revenue climbed 13%, while core adjusted earnings per share (EPS) also increased 13% for CP stock. Management expects volume and earnings growth to accelerate during the second half as merger synergies and improving freight demand support results.

At $124.52, CP stock trades around 29 times trailing earnings. Yet trade disruptions, weaker industrial demand, regulation, derailments, and rising operating costs remain the principal risks.

IFC

Intact Financial (TSX:IFC) provides the financial position through property-and-casualty insurance operations in Canada, the United States, the United Kingdom, and Ireland. Scale gives the company pricing data, claims expertise, investment income, and acquisition opportunities that smaller competitors may struggle to match.

Severe weather and other large losses pressured second-quarter profit, yet operating return on equity remained 17% and book value per share increased 13% year over year.

At $275.25, Intact trades around 16.5 times trailing earnings, a considerably less demanding multiple than the other two selections. Climate-related catastrophes, claims inflation, pricing competition, and poorly executed acquisitions could still damage returns.

Foolish takeaway

These companies won’t provide complete diversification on their own, and even excellent Canadian blue-chip stocks can suffer painful declines. I’d build each position gradually and add global exposure elsewhere in the portfolio.

Waste collection, continental freight, and insurance should remain useful long after today’s hottest investment trend has misplaced its party hat. If these businesses keep expanding earnings and investors resist unnecessary tinkering, a TFSA could allow decades of growth to remain exactly where it belongs.