A Tax-Free Savings Account (TFSA) can be an excellent vehicle for long-term wealth creation, allowing eligible investors to earn tax-free returns on investments within their available contribution room. However, investors should carefully select the stocks they hold in their TFSAs, as losses can permanently reduce their contribution room. Unlike gains, losses cannot be added back to the TFSA contribution limit, making risk management particularly important when investing through this account.

Against this backdrop, let’s look at three top Canadian stocks that I believe could be excellent additions to a long-term TFSA portfolio.

Fortis

Fortis (TSX: FTS) is one of my top picks for a TFSA, thanks to its highly regulated asset base and low-risk utility operations. Most of its assets are concentrated in regulated electricity and natural gas transmission and distribution businesses, allowing the company to generate stable earnings and predictable cash flows across different economic conditions. This resilient business model has supported consistent shareholder returns, with Fortis delivering an average annual total shareholder return of 9.8% over the past 20 years. The utility has also increased its dividend for 52 consecutive years and currently offers a forward yield of 3.34%.

Looking ahead, Fortis continues to expand its asset base to meet rising demand for its infrastructure and services. The company plans to invest $28.8 billion through 2030, which could grow its rate base at an annualized rate of 7% to $57.9 billion. At the same time, Fortis also focuses on improving operational efficiency, maintaining disciplined capital allocation, and leveraging innovation to control costs and enhance customer affordability. These initiatives should support long-term financial growth, while management expects to increase its dividend by approximately 4% to 6% annually in the coming years. With its defensive business model, reliable dividend growth, and attractive long-term prospects, Fortis could be an excellent TFSA holding.

Waste Connections

Another reliable stock that could be an excellent TFSA holding is Waste Connections (TSX: WCN), which provides non-hazardous solid waste management services across the United States and Canada. The essential nature of its services provides resilient demand, while the company’s consistent expansion through organic growth and strategic acquisitions has supported strong financial and shareholder returns. Over the past decade, WCN has delivered a total shareholder return of approximately 270%, representing an annualized return of 14%.

Looking ahead, WCN is leveraging its strong financial position and healthy cash flows to accelerate its growth. Year to date, the company has completed acquisitions expected to contribute approximately $100 million in annualized revenue, while potential deals under consideration could add another $30 million annually. Management expects acquisition activity this year to be above average. Meanwhile, WCN is expanding its renewable natural gas (RNG) platform, increasing its facilities from seven to 12 by the end of this year, creating another potential growth driver.

With its essential business, strong financial position, acquisition-driven expansion, and initiatives to improve operational efficiency and profitability, WCN appears well positioned to deliver sustainable financial growth and attractive long-term shareholder returns, making it a compelling TFSA investment.

Dollarama

Dollarama (TSX: DOL), which operates 1,719 discount stores in Canada and 410 in Australia, is my final pick. Its efficient direct-sourcing model, streamlined operations, and optimized logistics help keep costs under control while allowing the retailer to offer a broad range of consumer products at attractive prices. This value-focused approach has helped Dollarama consistently generate healthy same-store sales across different economic environments.

Looking ahead, Dollarama has significant room to expand its store network, targeting 2,200 locations in Canada and 700 in Australia by the end of fiscal 2034. The company also has meaningful exposure to the fast-growing Latin American market through its 60.1% stake in Dollarcity, which currently operates 752 stores across five countries. Dollarcity plans to expand to 1,050 stores by the end of 2031, while Dollarama has the option to increase its stake to 70% by the end of next year.

With a capital-efficient business model, multiple avenues for geographic expansion, and significant exposure to Dollarcity’s growth, Dollarama offers a compelling long-term growth profile and could be an excellent addition to a TFSA portfolio.