Canadians have a different set of issues to deal with than Americans. Numerous advantages we have in the U.S. are just not available in Canada. In this article, a Canadian offers his methodology, in the hopes that it may be a starting point for others.
I have been involved in dividend investing for nearly thirty years. Over that time, I have learned a number of the ins and outs of the process, and have seen the changes.
However, my knowledge does not extend to the issues that Canadians have. When Canadians have asked me about how to invest in fee-free dividend stocks, I have not been able to help.
Fortunately, there is a community of dividend investors on Google Groups, linked from The Dividend Investing Resource Center, that can be very helpful. Jakob (canuckdriper) offered his take on the issues, and the below information was written by him. I would like to thank him for his helpful post, which may clarify some things for the Canadian dividend investor, and give other Canadians an idea of their path forward.
In Canada, I don't know of any good brokers that DRiP fractional shares. Most brokers only DRiP if you have enough for one entire share. We also do not have many options for low to no fees.
We have RBC Direct Investing, Questrade, Scotia iTRADE, I think something through TD Direct Investing, and Qtrade, along with newer and smaller ones such as Wealthsimple Trade.
I use a combination of Qtrade and Wealthsimple Trade. I also have individual DRiPs through transfer agents, which may be tough to manage later. However, as I am in my mid-20s I am okay doing so.
I use Qtrade, which is about $8 per trade and has either a $25,000 account minimum at the end of each quarter, 100 dollar deposit per month, or two revenue-generating trades per quarter to avoid the $25 per quarter administration fee. As a young investor, I put in $50 per month to avoid the fees.
I use Qtrade mainly for my U.S. stocks. I also have ETFs, as some do not charge fees with a minimum $1,000 trade. I originally started with Qtrade, which is why I still hold some Canadian stocks with them. But they also have DRiPs for some companies, which you have to set). I have both a Canadian Account, a U.S. Dollar account, and TFSA. With Qtrade DRiPs, if you have enough for one share, it will DRiP (not sure about discounts, though). However, if you miss it for one month, then you have to reset the DRiP for the next payment, as it cancels out. That is just something to watch for, as it is not fully automatic.
Something to note is that on Qtrade you also have access to a variety of analyst reports. It calculates your gains (or loss) monthly, quarterly, annually, and lets you compare to benchmarks and such, so I think you get what you pay for.
Some people use Questrade because you do not pay fees to buy and only pay fees to sell, but I think they have other pay-only options and not too familiar with them.
I recently moved to Wealthsimple since they have a no-fee model if you are only trading Canadian listed stocks or ETFs. However, it was only available through mobile (although I think now it may be available on the desktop as well). They don't have an automatic DRiP, so you would have to reinvest money yourself, and to sell or buy U.S. stocks there is a 1.5% currency exchange fee on top of the exchange rate, and they don't have U.S. accounts. It was also more difficult to get various tax slips due to the almost mobile/app-only model.
Also, with Wealthsimple there was a three-day hold on funds before you could trade. They now have a $250 instant deposit that I think you can use three times a week and have introduced, but not enacted, a subscription program. For $3 per month, you get an instant deposit of up to $1000 and real-time pricing data. Wealthsimple trade has many daytraders, but I don't see the purpose of paying $3 per month if you are buying stocks to hold/to collect the dividends).
So there are a few options for you to look at if you wish.
I started with Qtrade because it was linked with my credit union and have been pretty happy and haven't had any major issues (other than the DRiP, which I missed out on one month just because I didn't have it set up right as I had purchased more shares prior but didn't reset it).
Qtrade also happens to be listed as the top online broker in Canada, but I have attached a link here that may tell you more about others: https://www.moneysense.ca/save/investing/best-online-brokers-in-canada/
My thoughts and views might be because I don't make risky trades, like day trading, options, and shorting, so others may have a different viewpoint. I buy and hold blue chips/established companies like Canadian Banks, Intel, collect the dividends, reinvest manually, and sometimes sell a position if it has gone up substantially)
RBC Direct Investing
TD Direct Investing
Safe Stocks for Dividend Investors
A Dividend Spreadsheet for Google Sheets
Learning from Dividend Reductions