When you are fully set up and doing your own investing, you probably have at least 3 or 4 accounts to contend with: TFSA, RRSP, Non-Registered and RESP. So quite often the question becomes "in what account should I place XXX?". Your investments cause you to incur taxes whenever you receive a dividend or sell a stock and the amount of tax (if any) depend on the following three main factors:
I'm quite positive there are other factors but these are the main ones.
Now, there are countless articles and postings on the web that aim to help steer you in the right direction and I've added some links to them below. It can be quite confusing because in many cases I find the answer to 'in which account should I buy this stock' varies depending on where you (and your stock) are now vs. where you expect things to be 10, 20, 30 years down the road.
What's more, I find most of the articles written on tax efficiency tend to ignore the fact that dollars placed into an RRSP result typically in a refund that typically leads to more dollars invested overall.
As a result of this, for myself I believe RRSPs should be maximized before looking to the other accounts. Only when you know you are going to max out your RRSPs should you really start to be concerned about which account to use.
So I won't go so far as to suggest which account to use for your stocks, but I will provide this handy table so at least you know what to expect. Please note - this table is a handy reference that I personally use but double check the info on your own...I can't guarantee I have made no mistakes!
Further Related Links and Articles
Canadian Stocks Paying US Dollar Dividends - MoneySense
Seek shelter for your U.S. dividend stocks - The Globe and Mail - John Heinzl
TFSA & Non-Resident Withholding Taxes - Canadian Tax Resource Blog
How to Calculate US Capital Gains Tax in a Non-Registered Account - Million Dollar Journey
Not all ETFs share the same tax efficiency - Morningstar
RRSP Myth – Retirement Income Has To Be Lower For RRSP Benefit - Money Smarts Blog