Tax-Free Savings Account (TFSA) season is officially back, and for Canadian investors, itâs one of the most powerful opportunities to build long-term wealth.
Now in its 18th year since launching in 2009, the TFSA remains one of the best tools for sheltering investment income and capital gains from tax.
The new TFSA contribution limit for 2026 is $7,000. For Canadians who have been eligible since inception but have never contributed, cumulative room has grown to an impressive $109,000.
Maximizing your TFSA early in the year matters. The sooner you deploy capital, the longer it compounds tax-free. That makes stock selection especially important: TFSA holdings should ideally combine durability, growth, and the potential for meaningful upside without constant trading.
Below are two Canadian stocks worth investigating as long-term, tax-free TFSA holdings.
A beaten-down growth stock with a loyal customer base
Growth-oriented investors may want to take a closer look at Pet Valu Holdings (TSX:PET), which has fallen roughly 28% from its 52-week high. The pullback has brought the valuation closer to historical norms after a period of strong optimism.
Pet Valu operates in the consumer cyclical sector as a specialty retailer focused on pet food and supplies. Its business model blends corporate-owned and franchise stores with a growing e-commerce platform.
Importantly, Pet Valu benefits from high-margin premium products, private-label offerings, franchise fees, and a well-run supply chain supported by customer loyalty programs.
The stockâs recent weakness stems partly from valuation compression and partly from softer consumer spending. In its third-quarter 2025 earnings report, management trimmed its full-year sales outlook and warned that discretionary spending could remain under pressure.
For 2025, management expects revenue of about $1.2 billion, representing growth of roughly 7.5% year over year, supported by approximately 40 new store openings and 2% same-store sales growth. Adjusted EBITDA is projected at about $258 million, while adjusted earnings per share are expected to be roughly $1.64 (both expected to rise by almost 5%).
The analyst consensus price target suggests the stock trades at a discount of roughly 28%, implying potential upside of close to 38% from recent levels near $28. Given near-term uncertainty, investors may consider starting with a partial position inside their TFSA.
Reliable income with built-in growth potential
For income-focused investors, Brookfield Infrastructure Partners L.P. (TSX:BIP.UN) is an attractive TFSA candidate. The stock currently yields about 5.1%, comfortably higher than the Canadian utility sector average, which recently hovered near 4%.
BIP owns and operates essential infrastructure assets around the world, including utilities, transport, data, and energy infrastructure. That global footprint provides diversification but also introduces currency, geopolitical, and operational complexity. Combined with higher leverage and an acquisition-driven growth strategy, BIP carries more risk than a traditional Canadian utility.
That added risk has historically been rewarded. Over the past decade, BIP.UN delivered a compound annual growth rate of about 13.9%, well ahead of the Canadian utility sectorâs 9.7%. The partnership has increased its cash distribution for approximately 18 consecutive years and targets annual distribution growth of 5â9%.
Given its volatility, patient TFSA investors may benefit most by buying BIP on weakness to lock in a higher yield.
Investor takeaway
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 provides dependable income with proven distribution growth. These types of stocks can help maximize the power of your TFSA all year long.
The post TFSA Season is Here: Canadian Stocks Worth Holding Tax-Free All Year appeared first on The Motley Fool Canada.
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More reading
- 1 Smart Buy-and-Hold Canadian Stock
- 2 Ultra-Safe Dividend Stocks to Own for the Next 10 Years
- The Canadian Stock Iâd Trust for the Next 10 Years
- 3 of the Top Stocks TFSA Investors Can Buy Now
- Safe Canadian Stocks to Buy Now and Hold Through Market Volatility
Fool contributor Kay Ng has positions in Brookfield Infrastructure Partners. The Motley Fool recommends Brookfield Infrastructure Partners and Pet Valu. The Motley Fool has a disclosure policy.
www.fool.ca (Article Sourced Website)
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