The TFSA contribution limit went up by $7000 in 2026. This might not sound like much right now. However, $7,000 growing at 9% per year (which is what the market typically returns) could turn into $16,500 after 10 years, $39,230 after 20 years and $92,873 after 30 years.
Nobody wants to pay tax on those kinds of returns. This is why the TFSA is such a valuable account for Canadians who want to build wealth. If you have several decades ahead of you for your money to grow, it makes sense to invest that $7,000 as soon as you can save it and put it into your account. If you need some ideas for what to buy with your 2026 TFSA contribution here are three solid Canadian stocks worth considering.
Constellation Software: The TFSA stock for contrarians
AI presents a monitoring challenge for investors but Constellation stands to gain from it in ways the market currently overlooks. The company can deploy AI to streamline its own development and maintenance work. Beyond that it has an opportunity to create AI modules for its extensive client network and generate new revenue streams from them. Constellation has built deep relationships with thousands of specialized industry clients over the years.
This positions the company to understand their operational requirements and software demands better than anyone else. The management team has demonstrated careful judgment in its investment decisions historically. This track record suggests they will approach AI implementation with similar strategic discipline. The stock currently trades at valuation levels not seen in over a decade. Given that the company just delivered 24% cash flow growth last year this pricing appears quite reasonable for investors today.
MDA Space: A volatile sky-flyer
MDA Space (TSX:MDA) stock requires strong nerves from investors. This TFSA stock experiences extreme price swings. Almost any space-related news appears to affect the share price regardless of whether it actually involves the company. The stock has dropped 16% over the past five days.
That said taking a broader view reveals the company likely has substantial growth potential ahead. MDA provides specialized space components along with digital satellites and earth observation services that few competitors can match. Space represents an emerging frontier where global demand for communication satellites and observation technology continues expanding.
Defense applications are also driving growth. Only a limited number of companies possess the technical capabilities & experience that MDA has developed. Investors who can tolerate significant price fluctuations may find this company becomes considerably larger over the coming years.
AltaGas: A top dividend stock for a TFSA
If you want something more stable than the previous two stocks, AltaGas (TSX:ALA) might be worth considering for your TFSA. The company runs a natural gas utility in the United States and operates midstream operations in Canada. Both parts of the business show promising growth potential.
The gas utility can expand its rate base at a mid-single digit pace. The midstream division is increasing its liquified petroleum gas production and export capabilities. Markets in China Japan and Korea are showing strong demand growth and AltaGas is capturing market share in these regions.
The company is growing at a single digit rate. It offers a 2.8% dividend that increases on a regular basis. This TFSA stock appears positioned to deliver relatively low risk returns in the high single digits annually over the next several years.
Should you invest $1,000 in Mda right now?
The Motley Fool Canada team has put together their list of the top 10 TSX stocks for 2026. Mda did not make this list. The 10 stocks that were selected have the potential to deliver significant returns over the next few years. Take MercadoLibre as an example.
The Motley Fool first recommended this stock on January 8, 2014. If you had invested $1,000 in this Latin American e-commerce company when they made that recommendation, your investment would now be worth more than $16000. Stock Advisor Canada has achieved a total average return of 87%. This performance is notably better than the S&P/TSX Composite Index, which returned 76% over the same period. You can access the complete list of top 10 stocks by joining the mailing list.
