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Loads of Canadians maintain U.S. shares in a Tax-Free Financial savings Account (TFSA), even when there isn’t a neat public operating tally that reveals precisely what number of do. The CRA publishes TFSA statistics with a lag, not a dwell breakdown of what number of account holders personal U.S. names particularly, however the broader development is tough to overlook.

Canadians purchased a report quantity of U.S. shares in February 2025, and Statistics Canada mentioned Canadian traders purchased $133.8 billion of overseas securities in 2025, with most of that geared toward U.S. company securities. So sure, Canadians clearly like U.S. publicity, and loads of that enthusiasm spills into TFSAs.

What to contemplate

The very first thing Canadians ought to perceive is {that a} TFSA doesn’t make U.S. dividend withholding tax disappear. The account is tax-free in Canada, however the US nonetheless usually withholds 15% on dividends paid by U.S. firms inside a TFSA. That cash often comes off earlier than the dividend lands within the account, and in contrast to a taxable account, you usually can’t declare a overseas tax credit score to get well it. That doesn’t make U.S. shares a foul concept in a TFSA, however these dividend-heavy U.S. names lose a little bit of their shine there.

The second factor is forex. Even nice U.S. shares can underwhelm if traders ignore change charges and conversion prices. For those who purchase in U.S. {dollars}, your return doesn’t rely solely on the inventory, however on what the loonie does versus the dollar and the way a lot your brokerage fees to transform money. That’s wonderful for long-term traders, however value remembering {that a} completely good inventory choose can nonetheless look mediocre after overseas change drag.

The third factor is account match. A TFSA works finest when traders maintain companies they will go away alone for years. If a U.S. inventory pays little or no dividend and has robust long-term progress potential, the TFSA can nonetheless be a really helpful house as a result of capital positive aspects keep tax-free in Canada. But when the inventory is generally about revenue, the Registered Retirement Financial savings Plan (RRSP) typically will get higher tax therapy on U.S. dividends. That’s why Canadians ought to take into consideration the kind of U.S. inventory they’re shopping for, not simply whether or not it’s American.

FFH

That’s what makes Fairfax Monetary (TSX:FFH) such an attention-grabbing match on this dialogue. Fairfax inventory is listed on the TSX, so traders should buy it in Canadian {dollars}, avoiding direct U.S. dividend withholding points tied to proudly owning a U.S.-listed inventory in a TFSA. Then, get significant publicity to the US and international markets by way of its insurance coverage and funding operations. It’s typically described as a Canadian reply to Berkshire Hathaway, and during the last 12 months. it saved performing like one. Fairfax reported 2025 internet earnings of US$4.77 billion, up from US$3.87 billion in 2024, whereas ebook worth per fundamental share climbed to US$1,260.19 from US$1,059.60.

The enterprise itself is broad and helpful for long-term traders. Fairfax owns property and casualty insurers around the globe and invests the float these operations generate. Greater rates of interest can really assist right here, as insurers can earn extra on fixed-income investments. Gross premiums written rose to US$33.6 billion in 2025, displaying the insurance coverage aspect remains to be rising, not simply the funding portfolio.

The valuation nonetheless appears affordable, too. Fairfax inventory trades at roughly 8 instances trailing earnings, which isn’t demanding for an organization that simply posted report annual revenue. There may be danger, after all. Fairfax inventory may be lumpy as a result of funding positive aspects and underwriting outcomes don’t transfer in a straight line. However for Canadians who need long-term progress in a TFSA with out taking up the direct tax quirks of U.S.-listed dividend shares, it offers a really sensible center floor.

Backside line

The principle takeaway is easy. U.S. shares can nonetheless make sense in a TFSA, however Canadians ought to perceive the withholding-tax hit on dividends, the forex piece, and the distinction between holding a U.S. progress inventory and a U.S. revenue inventory. Fairfax inventory received’t change each U.S. title, nevertheless it reveals there’s a couple of solution to get worldwide publicity in a TFSA with out making the account more durable to handle than it must be.