20+ Passive Income Ideas for Canadians (2025)

Many people dream about earning a passive income to either supplement their salary or provide them with a freedom to leave their nine to five job. Unlike traditional jobs where you get paid for the time you spend working, passive income requires minimal ongoing work.

Canadians looking to earn a passive income can choose from a range of opportunities, including investing in stocks and property, monetising online ventures, renting out unused assets, and lending money to peers. With the right strategy, anyone can create passive income streams.

In this article, we explore passive income ideas in Canada that can help you turn your skills or assets into ongoing profits.

What is Passive Income?

Passive income is money you earn from little or no ongoing work once you have set it up initially. Unlike regular jobs that are based on trading your time for money, passive income is generated even when you are not working on it. Examples of passive income include renting properties, dividend stocks, selling digital products, and affiliate marketing.

Feature Active Income Passive Income
Effort required Minimal effort after initial setup Requires continuous work
Income frequence Residual or recurring payments When you stop working your income stops, too
Examples Rental income, investments, online businesses Salaried jobs, hourly work, freelance work

Benefits of Passive Income

When successful, passive income comes with a range of benefits. It can help you achieve financial freedom without being tied to a nine-to-five job. This in turn can free you to spend more time with family, travel, your hobbies, and to pursue your passions.

Setting up passive income streams allows you to diversify your income streams rather than relying on income from a single job, thus providing you with more financial security. In addition, passive income can accelerate your savings and investments, helping you achieve your long-term financial goals faster and with less effort.

Passive Income Ideas for Canadians

Once you have decided to set up passive income streams, you need to decide on the best method, or methods, for you. This depends on how much time and money you are willing to invest to generate passive income. Some passive income streams, such as affiliate marketing or content creation, take time and effort before they start to generate an income, while others, such as investments, can be quick to set up. Although, you should still spend time learning about markets before investing.

Similarly, how much money you need to invest to generate passive income varies considerably. For example, investing in a rental property requires a large upfront investment. On the other hand, you can start creating and selling digital products with no upfront costs.

Here are 21 passive income ideas to get you started.

Dividend Stocks

You can earn a passive income by investing in stocks that pay dividends when your investments appreciate in value. There are many Canadian companies, including TD, RBC, and Endbridge, that offer attractive dividends. When you hold dividend-paying stocks for a long time, you will benefit from regular monthly or quarterly payments without the need to sell shares. When investing in dividend stocks, it is important to know that your stocks may go down as well, so consider diversifying your portfolio for a more reliable passive income. If you invest in dividend stocks in Canada, you will also benefit from the Dividend Tax Credit.

Real Estate Investment Trusts (REITs)

If you are interested in receiving rental income but not keen on having to manage a property and tenants, you could invest in REITs. These are companies that own and operate real estate such as apartments, office buildings, and shopping malls. When you purchase shares in a REIT, you will receive a portion of the company’s rental income. REITs offer an accessible way to diversify your passive income streams with a far lower capital investment than purchasing a property. While they work similarly to stocks, they often yield higher dividends than traditional stocks and are less likely to fluctuate.

High-Interest Savings Accounts (HISAs) and Guaranteed Investment Certificates (GICs)

If you are looking for a risk-free way to generate passive income, consider opening a HISA. Many Canadian banks, both traditional and online, offer savings accounts with high interest rates to help you save. GICs are another option with low risk and come with fixed interest payments for a set time. Notice that with a GIC your money is locked in for the agreed term, while most savings accounts allow you instant access to your funds. However, both HISAs and GICs are great passive income options for Canadians seeking stable and predictable income. When choosing a HISA or GIC, make sure to shop around to find the best deal for you.

Peer-to-Peer Lending

If you have money to invest in generating passive income, you can also consider peer-to-peer lending or P2P. There are lending platforms that connect you with individuals or small businesses that need loans or funding. Returns on P2P can be higher than traditional bonds or savings and generate a steady stream of passive income. However, there is always the risk of borrower default with P2P lending. Selecting lower-risk borrowers can minimise your risk as can diversifying across multiple borrowers.

Crowdfunding

Canadians can also generate passive income through crowdfunding. Using crowdfunding platforms you can earn passive income through equity or real estate crowdfunding. With equity crowdfunding, you invest in small businesses or startups and receive a stake in the company in return. When the company grows, you receive passive income. If you invest in real estate crowdfunding, your investment goes into property projects. You earn passive income when the properties are sold or rented. Because money is pooled from multiple investors, you can start with a relatively small amount. However, like with any investments, your returns are not guaranteed as the company might not grow and building projects might not happen.

Index Funds or Exchange-Traded Funds (EFTs)

Index funds and EFTs offer long-term growth and dividend income with a hands-off approach. EFTs include diverse stocks across different industries and are designed to track broad market indices. With EFTs and index fund investing, you can gain exposure to a diverse portfolio with minimal management. Canadians can build wealth with EFTs and index funds by holding them for the long term and setting up automatic contributions. While investing in EFTs and index funds is considered a lower-risk investment than individual stocks, your capital is still at risk.

Affiliate Marketing

Earning passive income from affiliate marketing involves promoting services or products on your blog, social media, or YouTube channel. When readers or viewers click on affiliate links and make a purchase, you earn commision. You can join affiliate programmes offered by, for example, Amazon and Rakuten, or you can work directly with companies. Generating passive income from affiliate marketing does not require monetary investments, but it will take time to build reader/viewerships or follower numbers before you start seeing results.

Print-on-Demand (PoD) Business

If you enjoy taking photos or making designs, you can use them to create and sell custom merchandise such as t-shirts, phone cases, and mugs through PoD platforms. The process is simple: you upload your designs on a PoD platform, link it with an online store such as Etsy or Shopify, and when someone places an order, the PoD platform will handle production and shipping, meaning you do not need to handle any inventory. Setting up a PoD will require time and some ongoing work to keep your merchandise fresh but there is good potential for passive income over time. The downside of PoD is that there is a lot of competition and you will need to figure out ways to stand out and direct traffic to your online store.

Selling Photos and Videos

Canadians who have photography or videography skills can earn money by selling work on platforms such as Adobe Stock, Shutterstock, and Getty Images. When people download your pictures or videos, you receive royalties. Many platforms allow you to upload a small number of images for free if you want to try it out without any monetary investment. However, with so much competition, your pictures can go unseen without a large portfolio. You can also increase your chances of sales by optimising your pictures and videos with relevant keywords. This passive income idea requires upfront effort but if you enjoy taking high-quality photos and making videos, it won’t even feel like work.

Creating and Selling Digital Products

Many Canadians are already making money from producing and selling digital products such as e-books, printable planners, templates, and online courses. You can get started by little or no initial cost by using free versions of design platforms such as Canva. Although, you will get access to a lot more content with paid memberships. There are various platforms that allow you to sell digital products and make it easy to sell and distribute them worldwide. The beauty of selling digital products is that they can be sold again and again without any additional effort. So, although it will take time to get your products ready and online, once they are there, they can be a great source of passive income.

Monetising a Blog or YouTube Channel

There are different ways blogs and YouTube channels can bring you passive income: through advertising revenue, sponsored content, and affiliate marketing. Establishing a passive income stream this way takes time. Many creators will work consistently, how long for varies hugely, before their channel or blog attracts enough audience to make money from advertising or attract sponsors and affiliate partners. Choosing a niche you are familiar and passionate about and one that generates long-term interest, can increase your chances of success. While the income is passive, since it will keep generating while you are not actively working, you will need to keep posting new content to stay relevant.

Short-Term Rentals

If you have a spare room or own another property, you can make money with short rentals through platforms such as Airbnb and Vrbo. This can be an extremely profitable source of passive income, especially in cities like Toronto, Montreal, and Vancouver, that are visited by thousands upon thousands of tourists every year. You have the option to look after the property yourself, which can be time consuming with frequently changing guests, or pay for a property management company to do it for you. The latter will reduce your profits but make the income even more passive. Anyone interested in short-letting their property, needs to check local laws and regulations since some cities may impose restrictions on rentals or require permits. If you are renting an apartment, you also need to check it is not against the building regulations.

Storage Space Rentals

Another way Canadians can make money from unused spaces is to rent it out as storage. If you have space in your basement, attic, garage, or backyard, you can advertise on platforms such as Neighbor to connect people who need to store, for example, furniture, vehicles, or tools. This passive income idea works well in areas where commercial storage facilities are expensive. When storing items for people, ensure you check local regulations. Both parties should also sign a rental space agreement, that way you protect yourself should anything happen to their items whilst they are stored on your property. This is a low-maintenance passive income stream, and as long as you have the space already available, virtually cost free.

Car Rentals

If you own a car that sits idle a lot of the time, you can make money by renting it out for short periods. Companies such as Turo and HyreCar connect Canadian car owners with those who need to rent a car. Often car rentals work best in major cities where you are likely to have more people without cars. But it can still generate some passive income in smaller locations, too. With these peer-to-peer car rental websites, you can set your price based on demand. The downside is the wear and tear on your vehicle and regular cleaning, but you can automate the process by hiring a car detailing service.

Write and Publish a Book

If you have a story in you or factual information you would like to share with the world, what better way to do it than writing a book, publishing it online, and earning a passive income from the sales. Plenty of Canadians already utilise platforms such as Kindle Direct Publishing to self-publish their books. Writers can choose to publish e-books, paperbacks, audiobooks, or all three to maximise earning potential. While writing a book will take time and effort, as will promoting it, books can generate income indefinitely. And while self-publishing has increased in popularity thanks to ease and speed of it, writers can still choose to find a traditional publisher for their work, which will reduce the time you will have to spend marketing it yourself.

License Music or Sound Effects

Musically creative Canadians can use their talents to license their music or sound sound effects. You can use platforms such as AudioJungle or Epidemic Sound to upload music and sound effects to sell to advertisers, filmmakers, and YouTubers. Once uploaded to a platform, your tracks can generate endless income, just like books. Musicians and sound engineers can also register their works with SOCAN, which is the Canadian performing rights organisation, to earn royalties from TV shows, radio play, and public performances.

Develop and Sell an App

If you have an idea for an app, developing and selling it can be a lucrative source of passive income. Canadians can develop apps using platforms such as Flutter or Swift, or hire a freelancer. Once ready, you can launch the app on Google Play and Apple App Store. Apps can generate income through subscriptions, ads, and one-time purchases. Successful apps can generate passive income for years with minimal ongoing work.

Create and Sell Courses

If you have an area of expertise, for example in marketing business, or coding, you can create online courses and publish them on platforms such as Skillshare and Udemy where they can reach a global audience. Once your courses are up the platform, they can generate indefinite income. Offering extras such as downloadable worksheets or quizzes can increase user engagement and encourage them to buy more of your courses. Courses that answer specific questions, such as “How to start generating passive income in Canada?” tend to sell better. If you have your own website, you can host courses there, too, and charge a premium.

Cashback Apps and Credit Cards

Using apps and credit cards that give you cashback can be a source of passive income. These apps and credit cards reward your everyday spending with a small percentage of cashback, generally 1-4%. While earning cashback is not a very effective way to build your wealth, why not get some money back on your regular purchases. However, if you are using a credit card, our cashbacks may get eaten up by interest fees if you do not pay your balance off in full.

Dropshipping

Dropshipping is a type of e-commerce that doesn’t require you to hold any inventory. Instead, you sell products that are held and sent out by a third party supplier. You can use platforms such as Shopify to create a store, list products from the third party, and focus your efforts on marketing your products. When a customer places an order, the third party supplier is notified, and sends out the product. You make money from the markup on each sale. To succeed, you need to select your products carefully, niche markets generally are the best, and direct traffic to your store, for example by engaging with your audience on social media. Setting up takes time, effort, and some money, but once up and running, requires minimal maintenance.

ATMs and Vending Machines

Many people probably do not know this but you can own your own ATM or vending machine in Canada. You can purchase a vending machine and place it in a location with a lot of foot traffic and earn income from items purchased. ATMs, on the other hand, generate income through transaction fee. Both business ideas require restocking and maintenance but this can be outsourced to a management company. Before investing in a vending machine or ATM, check what licenses and permits you might need for your location.

How to Get Started Earning Passive Income

The first thing you need to decide is your approach, which depends on how much time or money you can and want to invest. Canadians with money to invest can choose stocks, real estate, or REITs, while those unable or unwilling to risk capital, can try one of the many income streams that can be started with no or very low cash investment. Anyone with physical assets, such as idle vehicles or spare space, can consider renting out their assets, while Canadians with specific skills to share, can sell books, music, and courses.

Scaling Passive Income Streams

Many Canadians look to passive income as a way to supplement their regular income. However, with the right strategy, you can increase your passive income streams to match and even overtake your regular income. Ways to scale your passive income include reinvesting profits and dividends, using automation tools to streamline online businesses, uploading more content, e.g. books, videos, courses, and outsourcing tasks such as video editing or Airbnb management.

Taxes on Passive Income

Canadians earning passive income will need to pay tax on it. Since different rules apply to different types of passive income such as dividends or capital gains, you may like to engage the services of an accounting service to ensure you pay the right amount of tax.

Important Points to Remember

It takes time to build your passive income. If you are hoping to generate enough passive income to leave your job, don’t expect it to happen in the first year. Although, of course this is sometimes possible. Most people start with one source of passive income. However, you should not rely on it and diversify. For example, content creators can sell their own merchandise or courses, while investors should invest in diverse stocks.

As your passive income portfolio grows, use automation and outsourcing to streamline your income streams. This will free you to spend more time on things you love or start new income streams. Finally, remember to take care of your taxes to avoid surprises.

Next Steps

  • Choose one or two passive income ideas that align both with the time and money you wish to invest and your skills or passions.
  • Research investment tools, platforms, and automation strategies, if applicable.
  • If you have an idea for a passive important stream, take action today.

Sources

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