The TFSA Mistake Most Canadians Are Making

Your 2026 TFSA dollar limit may be $7,000, but your actual room can be very different.

Key Points
  • The 2026 TFSA dollar limit is $7,000, but personal contribution room also depends on unused room, prior-year withdrawals, and current-year contributions.
  • Brookfield’s share price has declined recently, despite growing distributable earnings, fee-bearing capital, and record deployable capital.
  • EQB's PC Financial acquisition is expanding its customer reach, revenue mix, and scale while supporting its longer-term growth strategy.

A Tax-Free Savings Account (TFSA) gives Canadians valuable space to build wealth tax-free, but the annual contribution limit isn’t necessarily the same as your personal contribution room. That’s an important distinction investors can easily miss.

For 2026, the TFSA dollar limit is $7,000. But your actual available room also includes unused contribution room from previous years and withdrawals made in 2025, minus any contributions already made in 2026. So, depending on your TFSA history, you could have much more or less than $7,000 available. Contributing beyond your available room can also trigger tax on the excess. Once you know how much room you actually have, the next step is putting it to work thoughtfully.

In this article, I’ll highlight two TSX stocks that could be attractive long-term TFSA holdings.

Blocks conceptualizing Canada's Tax Free Savings Account

Source: Getty Images

Brookfield stock

If you have TFSA room available for long-term investing, Brookfield (TSX: BN) is one stock that deserves a closer look despite its recent weakness.

It’s a global investment firm with businesses spanning asset management, wealth solutions, infrastructure, energy, private equity, and real estate. BN stock currently trades at $51.70 per share with a market cap of $126.9 billion and a 0.8% annualized dividend yield. Its shares are down 19% over the last year and 18% year to date.

BN’s weak stock performance contrasts with the company’s latest operating results. In the second quarter of 2026, Brookfield’s distributable earnings before realizations increased 15% year-over-year (YoY) on a per-share basis to US$0.61.

Its asset-management business remained a major growth driver. The company’s fee-related earnings jumped 20% from a year earlier as fee-bearing capital increased 19% to US$672 billion. Its Wealth Solutions earnings also climbed 23%, helped by organic inflows, higher net investment income, and the first full-quarter contribution from Just Group.

Just as importantly, Brookfield ended the quarter with a record US$210 billion of deployable capital after raising US$77 billion during the quarter. The firm also completed its Oaktree acquisition in July and continued repurchasing shares.

For TFSA investors focused on compounding wealth over years rather than months, Brookfield’s earnings growth, enormous investment capacity, and expanding global platform make the stock worth considering at its current price.

EQB stock

Another attractive way to put TFSA room to work could be EQB (TSX: EQB), although its recent stock performance tells a very different story.

It’s a Canadian digital financial services firm and the parent of Equitable Bank. Its shares trade at $126.58 per share with a market cap of $5.4 billion and a 1.9% annualized dividend yield. EQB stock has gained 36% over the last year and 22% year to date.

Meanwhile, its underlying business continues to expand. In the third quarter of 2026, EQB’s adjusted revenue rose 27% YoY to $393 million, while adjusted diluted earnings per share increased 2% to $2.12.

The bank’s net interest income climbed 22% to $319 million as higher-yielding PC Financial credit cards helped increase net interest margin. Its adjusted non-interest revenue surged 55%, supported by credit card fee income, insurance, and fair value accretion.

There was some pressure too, as EQB reported provisions for credit losses of $303 million, including a $219.1 million initial provision related to the acquired PC Financial credit card portfolio.

Still, that acquisition has significantly expanded EQB’s long-term opportunity. Notably, PC Financial increased the company’s directly served customer base to more than four million and lifted combined assets under management and administration to $151 billion. Integration efforts have already produced $15 million in annualized cost savings toward a $30 million target.

For TFSA investors, EQB’s larger customer base, broader revenue mix, and growing banking platform could make it an appealing long-term growth stock even after its strong rally.

Fool contributor Jitendra Parashar has positions in Brookfield Corporation. The Motley Fool has positions in and recommends Brookfield Corporation. The Motley Fool recommends EQB. The Motley Fool has a disclosure policy.

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