The Canada Revenue Agency (CRA) has set the annual contribution limit for the Tax-Free Savings Account (TFSA) at $7,000 for 2026. But you need not limit your contributions to just $7,000. The CRA’s contribution limit is the amount you can put in the TFSA from your working income. However, what you do inside the TFSA is purely a matter of your investment skill.

How to double your TFSA contributions

Let’s say you invest $7,000 in a stock that grows your money 20–30% to $8,400 or $9,400. This is not a hypothetical figure, but popular stocks like Bombardier, Enbridge, and Power Corporation of Canada have achieved these returns in the first half of 2026.

A 30% return in six months from Bombardier is lucrative and worth cashing out. You could consider selling shares worth $2,400, while keeping the $7,000 invested in Bombardier. This profit can be invested in other seasonal stocks, like Shopify (TSX:SHOP).

By doing this, you have increased your investment to $9,400 in 2026, without breaching the contribution limit. A word of caution. Frequent buying and selling of the same stock within a TFSA could attract the CRA’s attention if they feel it constitutes trading. Thus, avoid frequently rebalancing.

Another way to grow your TFSA contributions is by reinvesting dividends. Suppose you had bought 100 shares of Power Corporation of Canada a few years back. These shares will pay $267 in 2026 at a dividend per share of $2.67. You can reinvest this money to buy growth or dividend stocks.

This rebalancing and reinvesting help compound your returns. In a few years, compounding returns will match your TFSA contributions from working income. This dividend reinvestment may not attract CRA interest, as you are only buying shares. In trading, you both buy and sell shares.

A TFSA stock to buy if interest rates remain unchanged

Oil prices have dropped to pre-war levels as the market adjusts to the US-Iran war situation. In the first quarter, the RBC Consumer Spending tracker noted that Canadian household spending grew steadily despite high energy costs from the war. The cooling of oil prices could boost consumer spending.

Shopify would be a key beneficiary of increasing consumer spending. Now is a good time to invest in the stock, as a strong holiday season sale could push the stock up as much as 50%. This estimate is based on the stock’s past seasonal rally of 70% between August 2023 and February 2024 and 141% growth during the same period in 2024–2025.  

These were the years when the Bank of Canada paused interest rate hikes and began rate cuts in 2024. These were also the years when oil prices corrected after the Russia-Ukraine war, and Air Canada stock touched a $25 share price in peak seasons. The sharp correction in oil prices to US$69/barrel eases concerns of an interest rate hike. All these macro signals point to a strong holiday shopping season.

A TFSA stock to buy if the US-Iran war continues

The US and Iran are on a ceasefire at the time of writing. If the war escalates, Canadian energy stocks could once again see a rally. Canadian Natural Resources (TSX:CNQ) is a stock to buy in small amounts throughout the correction. Owning Canada’s largest oil sands reserves, it has a cost advantage and can sustain a US$50/barrel oil price. Considering the cyclical nature of oil prices, $45–$50 is the ideal entry point for CNQ stock as you can lock in a 5% yield.

If there is another energy shock, it will be a key beneficiary because of its low cost and slowly depleting oil sands reserves. During weak periods, the stock can pay dividends that you can reinvest in growth stocks. During a cyclical rally, you can book a profit and rebalance your portfolio. Moreover, you can enjoy annual dividend growth between 6% and 18%.

Final thoughts

Shopify and CNQ are perfect TFSA stock picks for rebalancing and reinvesting, thereby compounding returns.

The post How to Use Your Annual TFSA Room to Double Your Contributions appeared first on The Motley Fool Canada.

More reading

• 5 Canadian Stocks Beginners Can Buy and Hold Forever
• 2 TSX Stocks That Could Win Big From Canada’s Energy Advantage
• The TFSA Strategy I’d Be Following Heading Into the Rest of 2026
• 3 Canadian Stocks That Could Turn Market Volatility Into Long-Term Gains
• A 3-Stock TFSA Game Plan for the Rest of 2026

The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Air Canada, Canadian Natural Resources, and Enbridge. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned.

The U.S. is the world’s biggest stock market where many attractive dividend and growth stocks trade. From Micron Technology to Pfizer, you can get exposure to global leaders of various profit-making sectors. The Canada Revenue Agency (CRA) allows Canadians to buy US stocks trading on the Nasdaq and NYSE through the Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP). However, the tax benefits of a TFSA come with fine print when holding US stocks.

The fine print of holding U.S. stocks in a TFSA

You can earn from a stock through capital appreciation or dividends. Both fall under different tax brackets. The Internal Revenue Service (IRS) taxes dividends as “Income from Other Sources”. When a non-resident American earns this income, the IRS imposes a 30% withholding tax before crediting the dividend to the beneficiary’s account. Thanks to the US-Canada tax treaty, Canadians face a 15% withholding tax provided they submit the necessary forms with their broker and claim the benefit.

The capital appreciation falls under capital gains tax. This tax is paid by the non-resident in their resident country. In Canada, TFSA investments are allowed to grow tax-free. Thus, if you hold US stocks in a TFSA, you are subject to the IRS’s 15% withholding tax on dividends but benefit from the CRA’s tax-free capital gain.

However, the IRS allows dividends to grow tax-free in an RRSP, as it is a retirement account.

The TFSA only accepts Canadian dollar values

Another fine print point to note for a TFSA holding US stocks is that all values have to be converted into Canadian dollars. The CRA determines TFSA contribution room in Canadian dollars, and even if you invest in US stocks, you have to ensure the investment does not exceed the Canadian dollar limit.

Non-residents cannot invest in a TFSA

Now, if you work in the United States and become a non-resident in Canada, because you stayed 183 days or more out of Canada in a tax year, you cannot invest in a TFSA. The TFSA benefit is only for Canadians. Any contributions made as a non-resident would attract a penalty of 1% per month. As a non-resident, you can’t even accrue new contribution room.

So be careful where you invest in US stocks and know your tax residency before investing through a TFSA.

How to get exposure to US stocks through a TFSA in a tax-efficient manner?

Navigating the fine print, a tax-efficient way to get exposure to US stocks in a TFSA is to buy Canadian Depository Receipts (CDRs) of US stocks. With CDRs, you can buy fractional shares of global tech companies on Canadian exchanges in Canadian dollars. CDRs remove the hassle of currency conversion and hedge your exposure to exchange rate fluctuations. Companies like Micron, SpaceX, and Broadcom have their CDRs listed on the TSX.

Another tax-efficient way to get US stock exposure is through US ETFs trading on the TSX and currency hedged. The iShares NASDAQ 100 Index ETF (CAD-Hedged) (TSX:XQQ) replicates the Nasdaq 100 Index and charges a minimal management fee of 0.35% annually. It calculates the fee on your total investment, irrespective of the performance. If you invest $10,000 in the first year, $35 is charged. If your investment grows to $20,000 in the third year, $70 is charged. This fee is not charged separately but is adjusted to your net asset value.

However, the XQQ ETF’s 39% year-to-date return and 20% average annual return in 10 years make the fee a drop in the ocean. In fact, it is a cost-efficient way to benefit from the artificial intelligence (AI) sector. All AI players trade on the Nasdaq, from AI chipmakers to AI application developers, and AI infrastructure providers. Nasdaq will not only capture the AI revolution but all future tech revolutions like self-driving cars, space travel, and robotics.

Investing tip

The TFSA is a great investment tool as it lets your money grow tax-free. A stock that can grow multiple-fold and help with wealth creation is best placed in a TFSA, as it can save you a significant amount in tax, especially if you fall under a higher tax bracket.

The post The Fine Print Most Canadians Miss When Holding U.S. Stocks in a TFSA appeared first on The Motley Fool Canada.

More reading

• The TFSA Balance You’ll Probably Need to Retire Well in Canada
• Here’s the 3-Stock TFSA Strategy I’d Use in 2026
• The 2 Stocks I’d Combine for a Strong TFSA Strategy in 2026
• How to Grow Your 2026 TFSA Contribution Into $70,000 or More 
• Canadians: Here’s How Much You Need Saved in Your TFSA to Retire

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Broadcom, Micron Technology, and Pfizer. The Motley Fool has a disclosure policy.

Every Canadian above 18 years of age can open a Tax-Free Savings Account (TFSA) and start investing in it. The tax benefits offered by a TFSA make it lucrative, as all the income and capital gains you get from investing is tax-free, whether you reinvest or withdraw. Despite knowing this benefit, many young Canadians are not using the TFSA efficiently because they find the rules confusing. Yes, a TFSA has certain rules that, if breached, incur a 1% monthly penalty. But that shouldn’t stop you, as a TFSA has the power to help you build a tax-free million-dollar portfolio.

Understanding TFSA rules around global investments

Firstly, understand that TFSA tax benefits are offered by the Canada Revenue Agency (CRA). When you invest in stocks in the United States and other countries, the tax rules of those countries apply. Considering the tax treaty Canada has with that country, the taxation rules will change. It’s not just with the TFSA but with all types of income you earn from a foreign country.

Let’s take the example of the United States, as it has the world’s two largest stock exchanges. The TFSA allows you to invest in stocks trading on the NYSE and NASDAQ.

Investing in US dividend stocks through a TFSA

The Internal Revenue Service (IRS) imposes a 15% withholding tax on dividends paid to non-residents under the US-Canada tax treaty. A 15% tax is the treaty benefit that you must claim by submitting Form W-8BEN with your broker. Otherwise, you will be charged a 30% withholding tax.

This tax makes US dividend stocks unattractive for a TFSA. You are simply wasting your contribution room, which you could otherwise invest in Canadian dividend stocks and get tax-free dividends.

However, some tech stocks, like Broadcom (NASDAQ:AVGO) and Nvidia, are good TFSA picks. Even though they pay dividends, their yield is less than 1%, and their key return potential is capital gains from stock price appreciation.

Broadcom’s US$2.60 annual dividend per share versus a US$100 stock price appreciation makes the 15% dividend withholding tax a drop in the ocean.

The sharp 21% dip in Broadcom in June is an opportunity to buy the dip. Almost all artificial intelligence (AI) stocks corrected in June after SpaceX debuted on the NASDAQ. Broadcom’s fundamentals driving the stock are still strong. There was a small hiccup as Broadcom retained its 2026 revenue outlook, while analysts were expecting the company to increase its outlook. However, revenue and profits are growing, and AI data centre investing is still at its peak.  

Capital gains from US stocks

While US dividends attract withholding tax, capital gains are exempt. That is because the IRS allows non-residents to pay tax on capital gains in their resident country. If capital gains are taxed as per the Canadian tax system, the CRA exempts all TFSA investments from taxes. So the US$100 capital appreciation in Broadcom year-to-date is tax-free if invested through a TFSA.

Thus, investing in US growth stocks through a TFSA can help you generate tax-free wealth. However, you have to be careful with the dollar amount you invest.

Convert TFSA global investments to Canadian dollars

Another layer of complexity with foreign stocks is the exchange rate. The CRA determines TFSA contribution room in Canadian dollars. Always convert your foreign stock investments to Canadian dollars to calculate your TFSA contribution room. Any over-contribution will attract a 1% penalty every month from the CRA until you withdraw the surplus.

Final takeaway

While global investments come with their own set of rules, they also bring strong returns. If investing in US stocks seems like a hassle, you can buy ETFs that invest in US stocks and hedge against the dollar rate. The iShares NASDAQ 100 Index ETF (CAD-Hedged) replicates the Nasdaq 100 index but trades on the TSX and gives returns in Canadian dollars.

You could also invest in US stocks through their Canadian Depositary Receipts (CDR), such as SpaceX CDR – (CAD Hedged). You get exposure to US stocks while skipping the tedious task of currency conversion.

The post The TFSA Rules Around Global Investments That Many Canadians Don’t Know About appeared first on The Motley Fool Canada.

More reading

• How to Turn the 2026 TFSA Contribution Into $70,000 or More

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Broadcom and Nvidia. The Motley Fool has a disclosure policy.

What’s so special about age 45? It’s the age when you are growing rapidly in your career. You may have cleared your student loan and now have a mortgage. Many start a family or have children at this age. Some move to pursue their dream project. Each person is at a different stage of their life. But one thing common among all human beings at age 45 is that they are in the middle of their working life. They have worked for 20 years and may retire after 20 years, plus or minus five years.

Retirement planning at age 45

If you don’t start thinking about retirement now, you may not be able to catch up on retirement planning. A Registered Retirement Savings Plan (RRSP) is a crucial investment account because it can provide significant tax savings that you can convert into passive income.

RRSP allows you to contribute 18% of your previous year’s taxable income up to a maximum threshold (2026: $33,810). These contributions are tax-deductible.

For instance, you earn $200,000 in 2026. Your tax bill will be $42,315. You can save $9,347 in taxation by contributing the maximum amount of $33,810 to an RRSP.

Here’s how.

$33,810 RRSP contribution = $18,560 income (29% tax bracket) + $15,250 income (26% tax bracket)

Tax savings = $5,382.40 + $3,965

If you invest this $33,810 in dividend stocks and compound them by reinvesting dividends, you can grow your passive income pool tax-free.

About RRSP withdrawals

RRSP withdrawals are taxable at source. So, if you withdraw $5,000, your financial institution will pay you $4,500. The minimum federal tax rate is 14%. This doesn’t mean you won’t pay the balance tax. You will pay by adding the RRSP withdrawal to your taxable income and deducting withholding tax from your tax liability.

You can start withdrawing from your RRSP even at age 50 if you pay tax on it. It saves you from a 26% and 29% tax bracket and defers that money to the years when you are in the 20.5% or 14% tax bracket. So, if you have taken a career break or fallen sick, because of which your taxable income will be low, you could rely on your RRSP for passive income. You will pay tax, but at a lower rate.

Canadians’ RRSP balance by age 45

Statistics Canada’s 2023 RRSP data shows that Canadians in the 35-44 age group accumulated an average RRSP balance of $88,600. The average balance is much higher than the median of $33,000, hinting at unequal contributions.

A handful of Canadians are contributing way more than the majority, probably because they enjoy a higher tax benefit than the rest. The $33,810 RRSP contribution limit for 2026 can bring tax savings of up to $10,143 if you fall in the 30% tax bracket. These tax savings could be considered as an instant return on investment, and the dividend payouts as a bonus.

What should your retirement savings be?

What is the perfect RRSP balance for you is a strategic decision. When to invest, how much to invest, and when to withdraw from an RRSP should be planned strategically. Professional tax advisors use RRSPs to navigate taxes and maximize after-tax returns.

Do not take your RRSP balance lightly. The average balance should not be your benchmark for your RRSP balance. Your personal tax and finance situation will determine your ideal RRSP balance. Thus, stable dividend stocks like Enbridge (TSX:ENB) and Royal Bank of Canada are suitable for RRSPs. Enbridge has a low-risk business model and a less volatile stock. However, its stock price has been rising aggressively in the past six months as the company brings significant projects online in 2026 and 2027. That doesn’t affect its dividend growth as Enbridge maintains its payout ratio at 60–75%.  

The post How Much Canadians Usually Have in an RRSP by Age 45 appeared first on The Motley Fool Canada.

More reading

• Where I See Enbridge Stock Heading Over the Next 3 Years
• 2 TSX Stocks That Could Win Big From Canada’s Energy Advantage
• 5 TSX Dividend Stocks With Solid Yields Built for Steady Cash Flow in Any Market
• 2 Canadian Dividend Giants to Buy With Rates on Hold
• 1 High-Yield Dividend Stock to Buy and Hold for a Decade or More of Income

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

Are you contributing enough to your Tax-Free Savings Account (TFSA)? The $35,235 average TFSA balance of Canadians in the 50-54 age group in 2024 might put you at ease. The average TFSA balance of those in the +50 age group is not even 50% of their $95,000 cumulative contribution room. It doesn’t mean that they haven’t been contributing. But they have also been withdrawing from the TFSA.

What should be your TFSA focus at age 50?

With just 10-15 years left to earn active income before you retire, it is time to build a sizeable TFSA portfolio which can compound even during retirement. Unlike a Registered Retirement Savings Plan (RRSP), which ends at age 70, a TFSA continues till your death. You can keep contributing till your last breath and pass it on to your spouse tax-free by naming them as successors in your TFSA.

At 50, retirement takes priority over other goals. Maxing out your TFSA contributions can get you started on wealth creation. Once the amount is inside the TFSA, the CRA won’t bother you as long as you invest in publicly listed securities on well-known exchanges and do not trade.

Trading and investing are poles apart. Trading involves the constant buying and selling of shares, wherein you may not hold shares or hold them for a few days or weeks. Investing is when you buy a stock, hold it for several months or years, and later sell it.

Within the TFSA, build a core and satellite portfolio. The core portfolio is where 80% of your contribution will go, and you won’t withdraw from it. The remaining 20% will be the satellite portfolio, which you can use for emergencies and other needs. All TFSA withdrawals can be limited to this portfolio.

TFSA stocks for core portfolio

Within the core portfolio, invest in growth stocks and exchange-traded funds (ETFs) that can give you 15-20% annual returns at a minimum. Even a defensive stock like Loblaw (TSX:L) gave 20% average annual returns in the last five years. Past returns do not determine future returns, but can be used to analyze how the stock reacts to certain economic conditions.

Loblaw is a superstore, pharmacy, bank, and apparel retailer in Canada. Its performance is directly linked to consumer spending and economic growth. The stock has a defensive nature; it remains flat in a bear market and grows in a bull market. But in the long term, it grows, making it an ideal stock for a core portfolio. Shopify and Descartes Systems are other good stocks for growth in your core portfolio.

Within the core portfolio, you can determine a 60:40 or 70:30 ratio for growth and dividend stocks. When your growth stocks give strong returns, you can sell some stocks and reinvest that profit in high-yield dividend stocks. TFSA contribution from your working income is best used in growth stocks, and profits booked from here can be moved to passive income.

TFSA stocks for satellite portfolio

Now, in the satellite portfolio, allocate 20% of your TFSA contribution here. You can use this money to withdraw or invest in high-risk stocks like Ballard Power Systems, which can grow your money threefold in a few months, or fall if risks are realized. If profits are realized, you can treat yourself by withdrawing the profits. That way, you can reap the returns while building a sizeable TFSA balance.

Investors, take note

A little planning and discipline can turn around your finances. A TFSA’s tax-free investment growth and tax-free withdrawals can enhance your investments and make a tax-free million-dollar portfolio a reality in 15-20 years.

The rebalancing can continue even after retirement. At 50, you still have time on your side to make long-term investing work for you.  

The post The Average TFSA Balance for Canadians at 50 appeared first on The Motley Fool Canada.

More reading

• 5 Canadian Stocks Beginners Can Buy and Hold Forever
• 3 Blue-Chip Stocks That Look Built for These Uncertain Times
• 2 Canadian Dividend Stocks I’d Buy for Stability and Growth
• The Lesser-Known Habits That Most TFSA Millionaires Share
• 3 Canadian Dividend Stocks That Look Built to Hold Up Through a Recession

The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Descartes Systems Group. The Motley Fool has a disclosure policy. Fool contributor Puja0 Tayal has no position in any of the stocks mentioned.

How much money do you need to retire? The classic question every Canadian has. You can use the Motley Fool retirement calculator to make a personal retirement goal, as every person has different financial needs. On a more generic note, a million-dollar retirement is a dream figure. Looking at growing inflation, Canadians are aiming for a $1.7 million portfolio to retire, according to BMO’s Annual Retirement Survey.

Determining your TFSA balance for a financially healthy retirement

You can keep adding to the retirement pool, and this will only grow at an exorbitant level. However, don’t lose your sleep over such numbers, as you may not really need that much to retire. In fact, 36% of Canadians who aim for a $1.7 million portfolio believe they may not achieve this goal. However, chasing stars can lead you to mountains.

Let’s take one step at a time and identify your retirement requirements. If you are in your 40s, assess your expenses and determine which will no longer be there when you turn 65. For instance, your mortgage would probably be over, childcare expenses will be gone, and your daily commute to work will be reduced. That would probably be replaced by healthcare and medical bills.

Suppose you earn $70,000–$90,000 annually, and you seek the same amount for your passive income to pay. The Canada Revenue Agency (CRA) will cover for $20,000 to $27,000 of the expense from the Canada Pension Plan (CPP) and Old Age Security (OAS) pension. These are the 2026 payout figures.

You want your Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA) to cover the remaining $50,000–$60,000. Considering a 4% withdrawal rule, a $1.25 million to $1.5 million retirement pool can give you a $50,000 to $60,000 annual payout.

Can you achieve a $1.5 million retirement portfolio?

According to Statistics Canada, 45–54-year-old Canadians have an average TFSA balance of $40,500 and an average RRSP balance of $173,500. Assuming that 50% of this amount is dedicated to a retirement portfolio, $107,000 is a good start at age 45.

However, if you don’t have even $100,000 in retirement savings, it’s time to pull up your sleeves and focus all your savings on retirement. If you start with a $50,000 portfolio today and invest $12,000 annually in a portfolio with 12% compounded annual returns, you can achieve a $1.45 million portfolio 20 years from now.

Two decades from now, $50,000 may not be your requirement, but it can at least help you cope with daily expenses. Someone earning $70,000 annually could consider maxing out on the $7,000 TFSA contribution and investing the remaining $5,000 through an RRSP. If you only have $50,000 in retirement savings at age 45, consider investing 15–25% of your income in retirement instead of 10%.

TFSA stocks to accelerate your retirement pool

Another way to boost your savings is by investing in high-growth stocks through a TFSA and increasing portfolio returns. The iShares NASDAQ 100 Index ETF (CAD-Hedged) (TSX:XQQ) can help you earn up to 20% average annual returns in 10 years. The Nasdaq Index houses the most stocks in the artificial intelligence (AI) supply chain. So far, the AI infrastructure is enjoying the rally. In the future, AI applications will see growth and drive Nasdaq to new highs.

Royal Bank of Canada (TSX:RY) is another stock to buy and forget. Its wealth management and capital market division performs well in a growing economy. Its banking business performs well when interest rates rise. The stock has surged 120% in the last five years, beating its previous 134% rally between 2009 and 2019. This shows that the bank’s growth has accelerated, and it could accelerate further as Canada invests in energy and AI infrastructure.

While the above two stocks can help you beat 12% returns requirement, CT REIT (TSX:CRT.UN) can give you a 5.2% annual yield, 3% dividend growth, and a dividend reinvestment plan to compound the passive income. Some of the most obvious stocks give the best returns.

The post The TFSA Balance You’ll Probably Need to Retire Well in Canada appeared first on The Motley Fool Canada.

More reading

• 5 TSX Dividend Stocks With Solid Yields Built for Steady Cash Flow in Any Market
• 2 Dividend Stocks Worth Holding for the Next 7 Years
• 2 Monthly Dividend Stocks I’d Buy for Steady Cash Flow
• The Average TFSA and RRSP for a 45-Year-Old Canadian
• 3 Blue-Chip Stocks That Look Built for These Uncertain Times

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The Tax-Free Savings Account (TFSA) was mainly created to help Canadians build wealth over time, not necessarily to act as a platform for rapid-fire trading. In certain cases, the Canada Revenue Agency (CRA) may scrutinize accounts that appear to be operating more like a business than a personal investment portfolio.

That doesn’t mean investors should be afraid to use their TFSA. Instead, it highlights the value of owning businesses that could compound quietly over many years – exactly the way the Foolish Investing Philosophy teaches. Companies with stable earnings, dependable cash flow, and straightforward growth plans tend to fit naturally within a long-term TFSA investing strategy. They can also make it easier for you to stay invested instead of constantly chasing the next opportunity.

Let’s discuss two Canadian companies that could help TFSA investors focus on patience, stability, and tax-free growth over time.

A defensive stock for patient TFSA investors

For investors trying to avoid unnecessary risk, a defensive business like Metro (TSX:MRU) could be a good starting point. It mainly operates food stores and pharmacies across Quebec and Ontario under banners such as Metro, Super C, Food Basics, Adonis, Jean Coutu, and Brunet.

At the time of writing, MRU stock traded at $91.65 per share, giving the company a market cap of $19.2 billion. Although the stock has slipped 13% over the last year and 7.2% year to date, it has gained nearly 5% over the last 20 sessions, showing early signs of a recovery. At this market price, it also offers a 1.8% dividend yield.

Metro’s defensive appeal comes from the essential nature of its business. Consumers may delay big-ticket purchases, but groceries and prescriptions remain everyday needs. That helps support steadier revenue than many cyclical businesses can offer.

In the second quarter of its fiscal year 2026 (ended on March 14), Metro’s sales climbed 4.1% year-over-year (YoY) to $5.1 billion. The company’s food same-store sales inched up by 1.8% YoY, while pharmacy same-store sales climbed 5.1%. As a result, its adjusted net profit rose 4.4% YoY to $236.5 million.

Moreover, Metro is expanding its discount network and growing online food sales, which were up 19.8% YoY in the latest quarter.

For TFSA investors, that combination of stability, dividends, and steady execution could make MRU stock a sensible long-term holding, especially for those who want less exposure to sudden swings in economic sentiment.

A utility stock with steadier income

Another attractive stock that fits a patient TFSA approach is Emera (TSX:EMA). This Halifax-based utility firm owns regulated electricity and gas assets across Canada, the United States, and the Caribbean, with a strategic focus on moving from high-carbon to lower-carbon energy sources.

After rising 21% over the last year, EMA stock now trades at $74.47 per share with a market cap of $22.9 billion. Its dividend yield currently sits near 4%.

In the March quarter, Emera’s adjusted earnings per share (EPS) rose 7% to $1.37 with the help of higher earnings from Emera Energy Services, Peoples Gas, and Tampa Electric, despite weakness at its Nova Scotia Power business and currency headwinds.

Longer term, Emera expects 5% to 7% average adjusted EPS growth through 2030, with the potential to exceed that range in 2026. Overall, its regulated asset base and disciplined capital plan give investors a clearer runway than many higher-risk stocks.

Foolish bottom line

Clearly, the CRA’s TFSA rules should push investors toward better habits, not scare them away from investing. A long-term approach built around fundamentally strong companies could reduce avoidable red flags while still leaving room for tax-free growth.

While investing in stocks like Metro and Emera may not make you rich overnight, they could help TFSA investors stay focused, patient, and aligned with the account’s long-term purpose. That matters when the CRA is watching for behaviour that looks too much like active trading.

The post TFSA Investors Take Note – The CRA Is Actively Watching for These Red Flags appeared first on The Motley Fool Canada.

More reading

• 5 TSX Dividend Stocks With Solid Yields Built for Steady Cash Flow in Any Market
• A 3-Stock TFSA Game Plan for the Rest of 2026
• 3 Canadian Stocks Built for the Data Centre Boom
• One Canadian Dividend Stock Built to Hold in Any Market Condition
• How $30,000 Split Across 3 TSX Stocks Can Generate $1,362 in Dividends

Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool recommends Emera. The Motley Fool has a disclosure policy.

The Tax-Free Savings Account (TFSA) can be a great tool to invest in retirement passive income. The payouts from the TFSA investments will be tax-free and not affect your Old Age Security (OAS) pension.

The importance of the TFSA’s tax-free passive income

If your 2025 taxable income is above $93,454, the Canada Revenue Agency (CRA) will claw back a portion of your OAS payout from July 2026 to June 2027. If your retirement income is near this threshold and you need more money, consider withdrawing tax-free passive income from the TFSA to preserve your OAS payout. The maximum OAS payout till June 2026 is $743.05 per month, and it is added to your taxable income.

Considering that all types of retirement income, from Canada Pension Plan (CPP) to OAS to Registered Retirement Savings Plan (RRSP) withdrawals, are taxable, OAS clawback is likely. While you can’t control CPP and OAS, you can control RRSP and TFSA withdrawals.

How much money to withdraw from which account is a strategic decision and can significantly reduce your tax liability and increase your retirement income. However, this is a math you have to do with your financial advisor. Until then, your TFSA can keep accumulating wealth for a sizeable passive income.

Put your TFSA to work while you figure out the payouts

A straightforward way to earn TFSA passive income is to invest in dividend stocks. And if you are looking for immediate payouts, high-yield stocks are a better option.

Cogeco Communications

Cogeco Communications (TSX:CCA) offers a 6% dividend yield on a payout of 30% of its adjusted free cash flow. The economics have changed for the Canadian telecom sector as new regulations have made prices competitive and margins thinner. While BCE and Telus are spending billions on building artificial intelligence (AI) and fibre infrastructure, Cogeco is spending on leasing fibre infrastructure. Cogeco entered the wireless market with Cogeco Mobile in August 2025 and is catering to both the US and Canadian markets.

To compete with BCE and Telus, Cogeco is offering customers free activation, no commitment pressure or surprise overages, and a residential internet subscription package for those seeking bundled service discounts. Looking at Cogeco’s dividend history, it has been growing at an average annual rate of 10% for the last 13 years. However, the growth rate slowed after the price war from 10% to 7% and could slow further.

SmartCentres REIT

SmartCentres REIT (TSX:SRU.UN) offers a 6.2% dividend yield on a payout of 86.4% of adjusted funds from operations. The REIT has the backing of its largest tenant, Walmart, which not only brings footfall but also attracts retail tenants with high creditworthiness. Until 2016, SmartCentres was focusing on Walmart-anchored stores. It launched mixed-use properties in 2016 to make city centres near Walmart stores.

Around 14% of its total property portfolio is under development. Such a large amount of a portfolio under development is temporarily blocking cash flow. But as new projects come online, cash flow from sales and rent will drive SmartCentres portfolio value and rental income.

SmartCentres’ 21-year history of paying regular monthly dividends makes it a good investment for retirement passive income.

How to use a TFSA to average $1,500 per year in tax-free passive income

A 50-50 allocation of dividend income would require 190 shares of Cogeco, which annually pay a $3.95 dividend per share, and 405 units of SmartCentres REIT, which pay $1.85 distribution per share. At their current share price, these shares will cost you $24,636.

If you have some investments in tech stocks, now may be a good time to book profits and convert them into passive income. For instance, Air Canada stock is a sell at its current price of $23, and so is Celestica at $537.

Final thoughts

The best way to build a passive income portfolio in a TFSA is by rebalancing profits from growth stocks, as it can make the most of tax-free growth and withdrawal.

The post How to Use Your TFSA to Average $1,500 Per Year in Tax-Free Passive Income appeared first on The Motley Fool Canada.

More reading

• Turn Your $14,000 TFSA Into a Cash-Gushing Machine
• A Practical Way to Use Your TFSA Contribution Room to Build Monthly Cash Flow
• This Beaten-Down TSX Dividend Stock Still Looks Built for the Long Haul
• 5 TSX Dividend Stocks With Solid Yields Built for Steady Cash Flow in Any Market
• How to Structure a $50,000 TFSA for Practically Constant Income

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Air Canada, Celestica, Cogeco Communications, SmartCentres Real Estate Investment Trust, TELUS, and Walmart. The Motley Fool has a disclosure policy.

One often confuses retirement planning with having a million-dollar portfolio. Can this one figure define a complex retirement plan? Each person has different financial needs, tax baskets, and investments. Only you or your financial advisor can tell what amount is right to retire. In this article, we will focus only on the Tax-Free Savings Account (TFSA) balance and how to determine the right balance for yourself.

The role of a TFSA in retirement planning

Retirement planning is divided into two phases:

• Investing for retirement is where you accumulate wealth by investing in high-growth assets like stocks, ETFs, and mutual funds. The TFSA is a great tool for this stage as it allows your investment to grow and be withdrawn tax-free.
• Investing in retirement is the distribution phase, where you shift your asset allocation to income-generating assets that can give you inflation-adjusted passive income. A Registered Retirement Savings Plan (RRSP) is a great tool for that, as your withdrawals are taxable. You don’t want to withdraw when you are in a high tax bracket and let the CRA take a big bite from your compounded investment.

But this doesn’t mean you stop investing in a TFSA after you retire. Unlike an RRSP, which ceases to exist in the year you turn 71, you can continue to invest and withdraw from a TFSA as long as you live. In fact, the TFSA withdrawals are not added to your taxable income and therefore do not affect your Old Age Security (OAS) payments.

You could consider accumulating TFSA wealth to fill in the gaps in your retirement planning, as your emergency and recreational fund.

How much money do you need in your TFSA to retire?

If you turned 18 in 2009, your cumulative TFSA contribution room is $109,000. Had you maxed out on your TFSA contribution every single year and earned an average 8% return, your TFSA portfolio would be $212,000 in 2026, when you turn 35.

Assuming the Canada Revenue Agency (CRA) increases the TFSA contribution limit by $500 every four years, your cumulative TFSA contribution at age 60 could be $326,000. If your TFSA portfolio continues to earn an 8% average annual return, your TFSA balance could be $2.1 million by age 60. That’s the power of compounding.

This is an ideal scenario. But life has different plans. You will withdraw from a TFSA in your lifetime for various financial goals. Thankfully, the CRA adds back the withdrawals to your TFSA contribution room on January 1 each year.

You could also build a portfolio that may give you a 20% return, especially if you invest in the iShares NASDAQ 100 Index ETF (CAD-Hedged) (TSX:XQQ). This ETF can give you exposure to the hyper growth of the tech sector while mitigating risk by diversifying across the supply chain. Windfall gains in one segment could make up for bear markets in another. Discounting all these factors, even a portfolio growing at a compounded annual rate of 8% can give you $2 million in tax-free wealth.

Is a $2 million TFSA balance enough to retire?

$2 million may look big for now, but 25 years is a long time, and it is difficult to tell how inflation will grow. The CRA will give Canada Pension Plan (CPP) and OAS payouts, which could cover at least 50% of your necessities. RRSP, CPP, OAS, and any other employment pension will make up the majority of your retirement passive income.

TFSA only needs to cover your emergency fund, recreation costs, and gaps in retirement income. A 4% withdrawal rule could help determine if $2 million is sufficient to retire. If you withdraw 4% every year from a $2 million portfolio, it comes to $80,000 annually. Plan your retirement accordingly.

The post Canadians: Here’s How Much You Need Saved in Your TFSA to Retire appeared first on The Motley Fool Canada.

More reading

• The Fine Print Most Canadians Miss When Holding U.S. Stocks in a TFSA
• The TFSA Balance You’ll Probably Need to Retire Well in Canada
• Here’s the 3-Stock TFSA Strategy I’d Use in 2026
• The 2 Stocks I’d Combine for a Strong TFSA Strategy in 2026
• How to Grow Your 2026 TFSA Contribution Into $70,000 or More 

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

A Tax-Free Savings Account (TFSA) is a vault in which you can build wealth and protect it from the Canada Revenue Agency’s (CRA’s) tax claws. The money you contribute to the TFSA is the after-tax income, which means that if you contribute $7,000 in 2026, you will pay tax on it as that amount is included in your 2026 taxable income.

A quick revision of a TFSA’s tax benefits

The payment of tax now frees up capital to be invested in well-regulated, publicly traded securities on both the TSX and the Nasdaq. Now, how much you can contribute is limited to your contribution room, but there is no limit on how much investment income you can earn. However, note that while you can occasionally buy and sell shares, frequent buying and selling is not allowed. Trading is considered a business income in the CRA’s eyes, and a TFSA only allows tax-free investment income.

Investing your TFSA’s limited contribution room in dividend stocks may not be the most efficient use of its tax benefits. However, you can double your contribution without overcontributing.

How to use a TFSA efficiently

The TFSA is designed for high-growth stocks, the stocks that can make you a millionaire. The promise of no taxes once the money is contributed to the TFSA can be a gold mine if it is invested, rebalanced, and reinvested efficiently.

Within a TFSA, you can adopt a core-satellite strategy, with 70% allocated in core and 30% in satellite. The core portfolio could comprise big tech names, like Broadcom and Shopify, which can double your money in two years. They have strong fundamentals and long-term growth opportunities. They are those stocks you want to buy at the dip.

Meanwhile, satellite stocks are high-risk, high-growth stocks, like Hive Digital Technologies and Ballard Power Systems (TSX:BLDP). If the risk works, they can grow your money multiple-fold in a short span. Hive is working as the data center provider for Canada’s sovereign artificial intelligence. One order from a hyperscaler can send Hive stock soaring.

Ballard Power System, on the other hand, has been soaring but fell in June after the Weichai Power joint venture officially ended with the exit of their board members. The dip is normal as investors book profits from the recent triple-digit rally. This is a good entry point. If there is a widespread adoption of hydrogen fuel cell technology, Ballard’s stock will skyrocket. A hydrogen fuel cell has the ability to replace or co-exist alongside petrol and gas as a form of transportation fuel.

The art of rebalancing

The most efficient way to use a TFSA is to rebalance whenever a sharp surge in one stock drastically shifts the core-satellite allocation. For instance, you invested $10,000 in a TFSA in June 2025, of which $7,000 was invested in Broadcom and $3,000 in Ballard Power. After a year, your portfolio has grown to $18,366, and portfolio allocation has changed to 57%-43%. The market forces moved the share prices of Broadcom and Ballard Power.

Clearly, Ballard outperformed Broadcom, creating an opportunity to rebalance $2,392.32. Now, this amount has to go back to the core portfolio for the allocation to return to 70:30. So, you sell Ballard shares worth $2,392 and buy Shopify shares.

Using rebalancing to create a passive income portfolio

Another strategy is to use the rebalancing amount and invest it in high-yield dividend stocks like Cogeco Communications or dividend growth stocks like Canadian Natural Resources. Any profit you book from growth stocks can be converted into regular dividend payouts. On one side, your contribution keeps generating wealth. On the other side, the profit booking converts into tax-free passive income.

The post How to Use Your TFSA to Double Your Annual Contribution appeared first on The Motley Fool Canada.

More reading

• What the Typical 25-Year-Old Canadian Has Saved in a TFSA and RRSP
• How to Grow Your 2026 TFSA Contribution Into $70,000 or More 
• 3 TSX Superstars That Could Beat the Market in 2026 – Get in Now

The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Broadcom, Canadian Natural Resources, and Cogeco Communications. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned.