Using a Tax-Free Savings Account (TFSA) is one of the easiest ways you can build wealth without paying tax on investment gains — but you’ll need to be careful with it. The contribution rules can trip people up. One of the biggest mistakes you can make is assuming the number shown in your Canada Revenue Agency (CRA) account is always fully up to date.
The CRA says TFSA information is updated annually using the previous year’s transactions, so referring to your own most recent records throughout the year can matter a lot. For 2026, the annual TFSA dollar limit is $7,000, but your actual room could be higher depending on unused room and withdrawals from 2025. It could also be lower if you’ve already contributed this year. Getting your contribution room number wrong could lead to tax on the excess contribution.
Once you’re certain you know how much room you have, you may want to consider adding some stocks to your TFSA.
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Waste Connections
If it were me buying stocks for a TFSA today, I’d consider investing some of my room in a fundamentally solid stock like Waste Connections (TSX: WCN).
The company mainly provides waste collection, transfer, disposal, and recycling services across the United States and Canada. After sliding 9% over the last year, WCN stock currently trades around $220 per share with a $55 billion market cap and a 0.9% annualized dividend yield.
The recent pullback in the stock doesn’t feel justified when you look at the underlying business fundamentals. In the second quarter, Waste Connections’ revenue rose 6.4% year-over-year (YoY), while its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed 6.8% to US$840.1 million.
The waste services firm’s adjusted net profit for the quarter also jumped nearly 15% YoY to US$381.7 million, while adjusted free cash flow surged 25%. Strong execution helped the business absorb higher fuel costs and weaker commodity values while maintaining a strong 32.8% adjusted EBITDA margin.
Waste Connections recently also raised its 2026 revenue and adjusted EBITDA outlook. In addition, the company completed acquisitions representing more than US$100 million in annualized revenue during the first half of the year.
That combination of cash generation and continued growth makes WCN an appealing stock for long-term TFSA investors, especially after its recent declines.
Constellation Software stock
Another business worth considering for a TFSA is Constellation Software (TSX: CSU), particularly if long-term growth is your priority.
The Toronto company focuses on acquiring, managing, and building vertical market software businesses worldwide. Down about 22% over the last year, CSU stock currently trades close to $3,000 per share with a market cap of $64 billion. Still, the stock is actually up around 400% over 10 years.
Constellation’s second-quarter revenue jumped 17% YoY, mainly for making quality acquisitions. Its organic growth was 3% as its maintenance and other recurring revenue also climbed to roughly US$2.6 billion from about US$2.1 billion.
At the same time, cash flow from operations rose 10%, while free cash flow available to shareholders increased 57%.
With recurring revenue, stronger cash generation, and an acquisition-driven growth strategy, CSU could be another attractive way to put properly calculated TFSA contribution room to work for the long run.
