TFSAs also allow compounding to be accelerated over longer periods of time. Canadians can contribute up to $7,000 to their TFSA in 2026.
As for which investment to buy in that TFSA, the market offers us many great choices. These include the following three great investments to provide that tax-free income that will last for decades.
Investment #1: Enbridge
Enbridge (TSX:ENB) is an energy infrastructure giant that offers a mix of defensive appeal, reliable earnings, diversified business segments and a juicy quarterly dividend.
The company generates the majority of its revenue from its pipeline segment. That business generates a defensive, recurring revenue stream with volumes that make it one of the most defensive choices in the market.
Enbridge also operates a growing renewable energy business and a natural gas utility. Collectively, all of Enbridge’s segments generate sufficient revenue so that the company can invest in growth and pay out a nice quarterly dividend.
That dividend currently offers a yield of 5.88%. For investors looking to generate tax-free income, a solid $3,500 investment in Enbridge will generate an income of $205.
Potential investors should note that it is enough to generate a few shares each year through reinvestments, again all tax-free.
And even better, Enbridge has increased that dividend annually without fail for three decades. The company also plans to continue this trend, making this a top buy-it-and-forget choice for any TFSA portfolio.
Investment #2: Pembina Pipeline
Pembina Pipeline (TSX:PPL) has a similar pipeline-like appeal to Enbridge, but with a few key differences.
Pembina generates its revenue primarily from its pipeline activities. This activity, which focuses on Western Canada, includes both natural gas and hydrocarbon liquids. The company also has numerous gas and oil infrastructure facilities.
In many ways, Pembina functions like a toll road, charging customers to use its extensive network. This not only insulates investors from the volatile oil price, but also provides some stability, thanks to long-term fee-based contracts.
This stable revenue stream allows the company to offer investors a generous quarterly dividend. At the time of writing, Pembina offers a yield of 5.07%.
For investors looking for tax-free income from their TFSA, a $4,000 investment in Pembina will return just over $200. Like Enbridge, that’s enough to generate multiple shares each year from reinvestments alone.
Pembina has also offered investors annual increases to that dividend, even after the company switched from a monthly to a quarterly payout in 2023.
Investment #3: Telus
The third stock that offers investors tax-free income is Telus (TSX:T). Telus is one of Canada’s largest telecom stocks, offering subscription-based options for wireless, landline, TV and Internet services.
These services are becoming increasingly defensive, allowing Telus to generate a growing recurring revenue stream.
One of Telus’ main draws is its quarterly dividend. At the time of writing, Telus offers one of the highest returns on the market at 8.86%.
A word of caution for potential investors considering Telus comes in the form of dividend growth. The company recently halted its semi-annual dividend increase. Telus did this to focus on reducing costs and providing a more sustainable payout.
For investors who want to allocate the last $2,500 of that initial $10,000 to a TFSA, that provides an income of just over $220. That’s enough to generate nearly a dozen new shares from reinvestments alone.
Your tax-free income stream awaits you
Investing in a TFSA is an excellent way for Canadian investors to build a long-term portfolio that can grow tax-free for decades.
With the right investments, that portfolio can become a growth machine. Using that initial $10,000 and the three stocks mentioned above, here’s how investors can build a self-growth portfolio.
| Company | Initial investment | Recent price | Number of shares | Dividend per share | Total payout | Frequency |
| Enbridge | $3,500 | 65.99 | 53 | $3.88 | $205.64 | Quarterly |
| Pembina Pipeline | $4,000 | $56.02 | 71 | $2.84 | $201.64 | Quarterly |
| Telus | $2,500 | $18.88 | 132 | $1.67 | $220.44 | Quarterly |
| Total income | $627.72 |
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