Canadian retirees are trying to find methods to generate passive revenue on their hard-earned financial savings as a solution to complement the Canada Pension Plan, Previous Age Safety (OAS), and work pensions. One in style technique to generate funding earnings entails proudly owning prime TSX dividend shares inside a self-directed Tax-Free Financial savings Account (TFSA).

TFSA advantages

The TFSA contribution restrict in 2025 is $7,000. This brings the cumulative most contribution area to $102,000 per particular person. That’s a big sufficient portfolio to generate an honest stream of tax-free passive revenue.

All curiosity, dividends, and capital beneficial properties earned inside a TFSA are tax-free. This implies the complete worth of the earnings can go proper into your pocket or reinvested. Any quantity faraway from the TFSA opens up equal new contribution area within the following calendar 12 months, along with the common annual contribution restrict enhance.

Retirees who acquire OAS don’t have to fret about TFSA revenue pushing them into a better tax bracket or triggering the OAS pension restoration tax.

Financial institution of Nova Scotia

Financial institution of Nova Scotia (TSX:BNS) is up greater than 20% previously 12 months, however buyers can nonetheless get a strong 4.9% dividend yield from the inventory.

The financial institution’s share value has really underperformed its giant friends lately, however which may change as administration navigates the enterprise via a method transition that may see the financial institution focus its progress investments on the USA and Canada reasonably than on Latin America the place Financial institution of Nova Scotia’s large bets over the previous two or three a long time haven’t delivered the anticipated investor returns.

Financial institution of Nova Scotia can also be centered on bettering effectivity and lowering working bills. These efforts ought to assist enhance earnings within the coming quarters. The financial institution delivered strong leads to the fiscal third quarter (Q3) of 2025 with adjusted internet revenue rising to $2.52 billion in comparison with $2.19 billion in the identical quarter final 12 months.

Enbridge

Enbridge (TSX:ENB) is a well-liked inventory amongst Canadian dividend buyers. The vitality infrastructure agency has elevated its dividend yearly for the previous 30 12 months and at present supplies a 5.7% dividend yield, even after its stellar rally over the previous 24 months. Enbridge trades close to $66 per share on the time of writing. The inventory was beneath $44 in October 2023.

Falling rates of interest assist Enbridge and different firms that use debt to fund progress applications. Pipelines and different vitality infrastructure tasks can price billions of {dollars} and typically take years to construct. Decrease borrowing prices can cut back debt bills. This frees up money for debt discount or dividend funds.

Enbridge is engaged on a $32 billion capital program. As new property are accomplished and go into service the enhance to money stream ought to help ongoing dividend will increase. Enbridge will get further income and revenue growth from strategic acquisitions. For instance, Enbridge spent US$14 billion in 2024 to purchase three pure gasoline utilities in the USA. The offers additional diversify Enbridge’s income stream and complement the present pure gasoline transmission infrastructure.

The underside line

Financial institution of Nova Scotia and Enbridge pay good dividends with enticing yields. If in case you have some money to place to work, these shares need to be in your radar.