Now in its eighteenth year since its launch in 2009, the TFSA remains one of the best tools for protecting investment income and capital gains from taxes.
The new TFSA contribution limit for 2026 is $7,000. For Canadians who have been eligible since the beginning but never contributed, the cumulative space has grown to an impressive $109,000.
It’s important to maximize your TFSA early in the year. The sooner you deploy capital, the longer it can compound tax-free. That makes stock selection particularly important: TFSA investments should ideally combine sustainability, growth and the potential for meaningful upside without constant trading.
Below are two Canadian stocks worth investigating as long-term tax-free TFSA investments.
A defeated growth stock with a loyal customer base
Growth-oriented investors may want to take a closer look Animal Value Holdings (TSX:PET), which is down about 28% from its 52-week high. The pullback has brought valuations closer to historical norms after a period of strong optimism.
Pet Valu operates in the cyclical consumer sector as a specialty retailer focused on pet food and supplies. The business model combines company-owned and franchised stores with a growing e-commerce platform.
Importantly, Pet Valu benefits from high-margin premium products, private label offerings, franchise fees and a well-managed supply chain supported by customer loyalty programs.
The stock’s recent weakness stems partly from valuation compression and partly from weaker consumer spending. In its third-quarter 2025 earnings report, management lowered its full-year sales outlook and warned that discretionary spending could remain under pressure.
For 2025, management expects sales of approximately $1.2 billion, representing roughly 7.5% year-over-year growth, supported by approximately 40 new store openings and 2% same-store sales growth. Adjusted EBITDA is projected at approximately $258 million, while adjusted earnings per share are expected to be approximately $1.64 (both expected to rise nearly 5%).
The consensus analyst price target suggests the shares are trading at a discount of around 28%, implying potential upside of almost 38% from recent levels around $28. Given the near-term uncertainty, investors may want to consider starting with a partial position within their TFSA.
Reliable income with built-in growth potential
For income-oriented investors Brookfield Infrastructure Partners LP (TSX:BIP.UN) is an attractive TFSA candidate. The stock currently yields about 5.1%, comfortably higher than the Canadian utility sector average, which has recently hovered around 4%.
BIP owns and operates critical infrastructure assets around the world, including utilities, transportation, data and energy infrastructure. That global footprint provides diversification, but also introduces currency, geopolitical and operational complexity. Combined with a higher debt load and an acquisition-based growth strategy, BIP carries more risk than a traditional Canadian utility.
Historically, that extra risk has been rewarded. Over the past decade, BIP.UN has achieved a compound annual growth rate of approximately 13.9%, well above the Canadian utilities sector’s 9.7%. The partnership has increased its cash distribution for approximately 18 consecutive years and is targeting annual distribution growth of 5 to 9%.
Given its volatility, patient TFSA investors could benefit most by buying BIP on weakness to lock in higher returns.
Takeaway for investors
TFSA season is an ideal time to position high-quality Canadian stocks for tax-free growth and income. Pet Valu offers long-term growth potential following a valuation reset, while Brookfield Infrastructure Partners offers reliable income with proven distribution growth. These types of stocks can help you maximize the strength of your TFSA throughout the year.
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