A Tax-Free Savings Account (TFSA) is an excellent vehicle for long-term wealth creation, allowing investors to earn tax-free returns on eligible investments within their available contribution room. However, investors should be cautious when selecting TFSA investments. Selling a stock at a loss can permanently reduce the contribution room associated with that loss, limiting the account’s future growth potential. Therefore, investors should focus on companies with strong financials, reliable cash flows, and solid long-term growth prospects.
Against this backdrop, the following two Canadian stocks could be excellent additions to a TFSA. Let’s take a closer look at these investment opportunities.
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Dollarama
Dollarama (TSX:DOL) is a leading discount retailer operating 1,719 stores in Canada and 410 in Australia. Its direct-sourcing model strengthens purchasing power and eliminates intermediary costs, while its efficient logistics network helps control expenses and maintain attractive prices. These advantages have enabled Dollarama to deliver healthy same-store sales across economic cycles.
Looking ahead, the company plans to expand its Canadian and Australian store networks to 2,200 and 700 locations, respectively, by fiscal 2034. Its capital-efficient model, quick sales ramp-up, relatively short payback period, and low maintenance requirements should support profitable growth as the network expands.
Dollarama also owns a 60.1% stake in Dollarcity, which operates 652 stores across five Latin American countries and plans to expand its network to 1,100 locations by fiscal 2031. Furthermore, Dollarama has the option to increase its ownership to 70% by the end of next year. As Dollarcity expands, its contribution to Dollarama’s earnings could increase, providing an additional growth catalyst. Meanwhile, Dollarama has consistently increased its dividend since 2011, with its quarterly payout rising eightfold since inception. Although the stock’s forward yield is modest at 0.25%, investors could benefit from its strong dividend-growth track record. Given its multiple growth catalysts and consistent dividend increases, Dollarama could be an excellent long-term addition to a TFSA.
Waste Connections
Another stock that would be an excellent addition to a TFSA is Waste Connections (TSX:WCN), which provides non-hazardous solid waste management services across secondary and exclusive markets in the United States and Canada. Its presence in these less competitive markets gives the company strong pricing power and supports industry-leading margins. WCN has also consistently expanded through organic growth and strategic acquisitions, supporting its long-term financial performance and shareholder returns.
The company delivered strong second-quarter results, with revenue and adjusted net income increasing 6.4% and 16.2%, respectively, supported by solid operational execution. Its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin also expanded 70 basis points to 32.8%. Following its strong first-half performance, management raised its 2026 outlook, with the midpoint of its revenue and net income guidance implying year-over-year growth of 6% and 8.7%, respectively.
WCN continues to pursue growth through acquisitions and organic expansion. After commissioning seven renewable natural gas (RNG) facilities, it plans to bring another five online by year-end. Year to date, completed acquisitions have added approximately $100 million in annualized revenue, while additional deals under consideration could contribute another $30 million. Management expects 2026 to be an above-average year for acquisitions.
Meanwhile, investments in robotics, optical sorters, business analytics, AI-powered productivity tools, and AI-driven pricing optimization should further improve efficiency and profitability. Given these multiple growth drivers and its resilient business model, WCN could be an excellent long-term addition to a TFSA.
