How to Earn Passive Income in Canada: 16 Easy Ways

Passive income is one of the best ways to get rich in Canada—it can maximize profits, but requires minimal effort to generate and maintain. 

Below you will find more information on how to earn passive income in Canada and 16 residual income ideas that could help you get started. 

What Is Passive Income?

Generating passive income means that you are earning money from an up-front investment rather than getting paid for services or products you provide. It is called passive or residual income since it is acquired with minimal effort and no additional input is needed to keep the cash coming in.

With passive income, you are investing time or money, or sometimes both. 

How to earn passive income in Canada?

There are several ways to make passive incomefrom renting out a property to investing in a business. 

You should note that passive income ideas don’t always pan out. If you have a low-risk tolerance, it’s better to stick with a safer passive income tactic such as opening a savings account or starting a dropshipping business. Those willing to raise the stakes and earn more profit can try out riskier investments such as trading crypto or stocks. 

 Top 16 Passive Income Ideas

Now that you know a bit more about passive income, here are a few ideas on how to generate it.

1. Invest in cryptocurrency

  • Initial investment: Medium
  • Risk Level: High 
  • Average Income: $10,000+ a year

Even with recent shake-ups in the industry, cryptocurrencies remain one of the most popular investment vehicles. This passive income idea is not for everyone though. Crypto is extremely volatile and even though the initial investment is low, the risk of financial loss is very high. 

Trading cryptocurrencies also requires a lot of research and thorough knowledge of the market, meaning it’s not well suited to absolute novices. 

How to get started: Open an account with a reliable crypto exchange platform such as Binance Canada, Netcoins or Bitbuy and start trading. 

Tip: Those with a lower risk appetite or less experience can try staking crypto, i.e. earning interest by holding onto coins. Most of the biggest crypto exchange platforms in Canada offer this option, although some will limit you to staking certain tokens only. 

2. Take advantage of cashback

  • Initial investment: Low
  • Risk Level: Low
  • Average Income: Up to 25% on purchases 

Although you’re not technically earning passive income, using cash-back apps and cashback credit cards is a practical way to save some money. Both apps and credit cards reward you for purchases with points that can be redeemed for cash or other perks, such as upgraded flights, cheaper hotel bookings and discounts on car rentals.

How to get started: Sign up for a cashback app, like Rakuten, KOHO, or Swagbucks

If you are applying for a new credit card, take a look at providers that offer generous rewards, such as Scotia Momentum Visa Infinite, BMO Cashback Mastercard and RBC Cash Back Mastercard

Tip: Not all cashback rewards are created equal, so make sure to compare as many apps and cards as possible to find one that suits your shopping preferences. 

3. Set up a high-interest savings account

  • Initial investment: Low
  • Risk Level: Low
  • Average Income: 0.5–2% annually 

Opening a HISA is one of the safest investments and the most common way to generate passive revenue. Not only are HISAs secure, but the initial investment is quite low—most banks do not impose minimum limits and have low to no monthly charges on savings accounts. That said, the more you deposit, the higher the return.

Speaking of returns, don’t expect to make a fortune with HISAs as the interest rates tend to be rather low, generating between $5,000 and $15,000 on one million.  

How to get started: Open a HISA with a bank—these are some of the most profitable options available: EQ Bank’s Savings Plus Account (2.50%); Neo Financial Savings Account (2.25%), Oaken Financial Savings Account (3.40%)

Tip: Go with online banks as they tend to offer higher returns than traditional banking institutions. 

4. Start a dropshipping business 

  • Initial investment: High
  • Risk Level: Medium
  • Average Income: $100,000 a year 

A dropshipping business is basically an e-commerce store where people browse and buy products. Once an order is made it is automatically sent to your supplier who manufactures, packages and ships the goods to the customers, meaning you do not physically handle or stock items. 

There is a wide range of products you could sell and returns can be through the roof, which is not surprising considering online shopping sales are set to reach US$36.5 billion by 2024. Another great thing about this secondary income idea is that you don’t pay your supplier until you get paid, thereby limiting your risk. 

Dropshipping may be a hands-off gig, but it does require a lot of time and money to set up. 

How to get started: Start an e-commerce store and contact a dropshipping supplier such as AliExpress, Alibaba, SaleHoo or Worldwide Brands.

Tip: Make sure the product you invest in has a market as some niches are more profitable than others. 

5. Rent property on Airbnb

  • Initial investment: High
  • Risk Level: Medium
  • Average Income: $500–$3,000/month

Renting your property on Airbnb is a very popular way to generate passive income in Canada. It’s flexible—you can rent anything from the basement to the entire house, profitable (the average host in Canada makes around $19,844), and secure (the platform provides liability and damage protection insurance). 

On the downside, letting out your home as an Airbnb requires a bit of an investment—you might have to purchase a second property or renovate a house you already own. Income is not guaranteed and you might experience long stretches when the property is vacant. 

How to get started: Create a free Airbnb account and establish a listing

Tip: If Airbnb is not right for you, try HomeAway, or VRBO.

6. Invest with a robo-advisor

  • Initial investment: Low
  • Risk Level: Low
  • Average Income: 5–10% a year

Robo advisors are online or mobile apps that manage your investment for you. 

You basically open an account, deposit money, choose your risk tolerance and the app creates custom portfolios for you that are managed and rebalanced automatically. 

Since it requires minimal to moderate human intervention, robo-investing is a great way for a beginner to generate passive income. You don’t need a lot of money to start investing with robo-advisors either as most of them charge a small fee. The downside is that returns are not guaranteed, which is true for any investment vehicle. 

How to get started: Open an account with a robo-advisor, such as Wealthsimple, Questwealth and CI Direct Investing.

Tip: Look for an app that offers portfolios which align with your goals or principles. 

7. Invest in dividend stocks

  • Initial investment: Low
  • Risk Level: Medium 
  • Average Income: 3–5%

Dividend stocks are one of the best passive income sources since they offer solid returns with almost no effort. What’s more, dividends are paid out quarterly, semi-annually or annually giving you an income source throughout the year

Dividend stocks are more suited to seasoned investors—you need some experience to pick a stock that performs well since companies only pay out dividends when they are making good returns. 

Keep in mind that not all corporations pay dividends and even the ones that do reserve the right to cut payments at any time. 

How to get started: Buy stock in a company that pays dividends through an online broker or investment platform

Tip: Look for companies that have a long history of dividend payments, like Fortis or Keyera Corp. You could also invest in one of the Canadian banks which are known for making high dividend payments.

8. Invest in startups

  • Initial investment: High
  • Risk Level: High
  • Average Income: $10,000/month

Backing an entrepreneur with a great idea is one of the best passive income investments you can make, provided you have the capital and are willing to wait a while before you see any returns. It’s a risky process as well—a lot of ideas fail and only a few can result in net gains. 

On the plus side, there is no effort on your part and who knows—you might just invest in the next big thing and make millions. 

How to get started: You can take a look at local startups through personal connections or sign up to a platform like FrontFundr, GoTroo and SeedInvest to find projects to invest in.

Tip: Don’t get involved unless you fully understand the risks, as well as the strengths, weaknesses and opportunities of the business you are investing in. 

9. Start a blog

  • Initial investment: Low
  • Risk Level: Low
  • Average Income: $10,000/month

Blogging is not technically considered passive income since you need to generate content to keep the blog up and running.

If you do decide to put in the work and invest a big chunk of your time, there are several ways to monetize your blog and potentially earn a six-digit income—from display ads on the site to affiliate marketing which allows you to earn a commission each time you make a sale through your website.

How to get started: Find something to blog about (preferably something you are passionate about), then register a domain, buy hosting, find a theme and design it (or hire a professional designer) so that it suits your style, audience and content. 

Tip: You should also consider investing in SEO and marketing to attract more visitors to your blog. 

10. Create a mobile app 

  • Initial investment: Medium
  • Risk Level: Medium
  • Average Income: $10,000/month

Building a mobile app can get you a nice profit from ads, subscriptions or in-app purchases. Those who have some coding skills can even make this happen with a small initial investment. 

Complete newbies, on the other hand, will need a larger sum of money to get started. If you can’t code you will have to outsource the work to developers who can be very pricey. 

How to get started: You first need to think of an idea for an app (what niche will it cater to, how will it help users) and then think of ways to monetize it. The good news is that with 37 million mobile connections in Canada, you’re sure to find a market for whatever concept you come up with.

Tip: Carefully compare multiple offers from mobile app developers so you can get the best deal. 

11. Invest in REITs

  • Initial investment: Low 
  • Risk Level: Medium
  • Average Income: 5–9.5%

REITs, or real estate investment trusts, are companies that own and manage real estate allowing investors to pool their funds and purchase properties they could not afford to buy individually.

If you have some money saved up, REITs are one of the best passive income sources to consider—they require a low initial investment (as little as $500 is enough to get you started) and minimal effort, but provide double-digit returns, which go up in time as the asset gains value.

How to get started: You can purchase REIT stock or REIT ETFs through a licensed broker or through platforms like WealthSimple Trade.

Tip: Do your research before investing or starting a REIT. You need to be well-informed about where your money is going in order to get a solid return and minimize risk. 

12. Create an online course

  • Initial investment: Medium 
  • Risk Level: Low
  • Average Income: $10,000/month

If you want to share your knowledge and skills with a wider audience, creating an online course is a great idea. This can be a very lucrative income stream as welldo it right and you could be profiting from it for years to come. 

Although creating an online course or courses is simple and incredibly rewarding, you will need to do some serious work up front, from researching the topic to making sure your content targets the right audience. Otherwise, you could end up spending a lot of time and effort on building a course that no one wants to buy. 

How to get started: Sign up for an online course platform, like Udemy, Teachable or Thinkific and create your course.

Tip: Don’t go for the platform that gives you the biggest cut of the profit. Instead look for the one that provides you with the most useful features (such as payment options, tax forms, flexibility and guidance).

13. Earn royalties from stock photography and music 

  • Initial investment: Low to medium
  • Risk Level: Low
  • Average Income: $0.30–$99.50 per sale 

Content creators, such as influencers, bloggers and affiliate marketers, always need images and music to feature in their posts. Supplying them can be a profitable side gig, especially if you are into music or photography (both as an amateur and professional). 

How to get started: There are several platforms where you can post photos and music and earn money each time they are downloaded. For photos, try Shutterstock or iStockPhoto. Premium Beat and are great choices for music and sound creators, while  Storyblocks lets you contribute video and sound. 

Tip: To turn this into a more lucrative business you would need to actively engage and produce more content to sell—it’s unlikely that you will earn a large sum from royalties for just one or two contributions. 

14. Rent your car 

  • Initial investment: Low
  • Risk Level: Low
  • Average Income: $100–$1,000/month

Renting out your car is a great way to make money off a vehicle that you’re not using, plus you can use the extra funds to help with your car loan payments

The best way to do it is through Turo. This platform is like Airbnb for your car, i.e. it allows you to easily share your vehicle with others when you’re not using it. Keep in mind though that Turo is not available in all provinces across Canada and there are certain requirements your vehicle needs to meet before you list it on the platform. 

How to get started: Sign up for free on Turo and list your car. You will need to pay a small fee of 15 to 40% to get started. 

Tip: If Turo is not an option, try renting out your vehicle to Uber instead. 

15. Set up a vending machine business

  • Initial investment: Medium
  • Risk Level: Low
  • Average Income: $100–$300 a month per machine 

It may not be the first thing you think of when it comes to business ideas for passive income, but investing in vending machines can actually be a solid source of residual revenue.

The cost of a traditional snack & drinks machine ranges between $2,000 and $10,000, meaning you will need to make a bigger investment upfront. But you can earn around $100 a week from a well-placed machine with minimal effort, so not a bad deal overall. 

How to get started: Buy a vending machine (you can find them on eBay and Kijiji) and set it up, preferably in a busy location, such as an office or canteen. Contact the proprietor to rent out the space for your machine. 

Tip: Go for higher-priced vending machines if possible as they do not break down as easily, so you will be saving on maintenance costs in the long run. 

16. Lend on peer-to-peer lending platforms

  • Initial investment: Medium to high
  • Risk Level: High
  • Average Income: 5–20%

Thanks to the rise of online platforms like goPeer, Funding Circle, and Lending Loop, P2P lending has become increasingly simpler, accessible, and more profitable. 

There are risks involved though. People and businesses usually turn to P2P sites as an alternative to personal loans which means they could be high-risk borrowers and more likely to declare bankruptcy or default on the loan. Also, there is no set ROI as the interest rate is unique to each borrower’s financial situation. 

How to get started: Sign up for an online peer-to-peer lending platform and they will connect you with loan applicants. Negotiate terms with them and seal the deal. 

Tip: If your risk appetite allows it, connect with high-risk borrowers as these loans typically incur higher interest rates and thus offer bigger returns. 

Finishing Thoughts

Despite the name, passive income won’t just come to youyou will need to get active and put in a certain amount of money, time or effort.

Whichever option you decide to pursue, make sure you know what you’re getting into beforehand. Do your research, think about long-term returns and risks and don’t put any money or time into a passive income idea you are not 100% sold on.


What are the best ways to generate passive income in Canada?

This depends on several factors. Some highly profitable, but risky passive income ideas like investing in REITs or startups do not require any effort, only capital. Others, such as starting a blog or opening a HISA are safer, but the returns are not as high.

To find the best passive income idea for you, consider the amount of time and money you are willing to invest and your risk tolerance.

Is passive income taxable?

Yes, passive income is taxable, although depending on how revenue is generated there are possibilities for tax deductions. Talk to tax professionals or accountants before you get started to fully understand the tax implications.

Do you need specific skills to earn passive income?

It depends on how you are generating income. For instance, if you are thinking of developing a mobile app or starting a blog you will need some skills. On the other hand, passive income ideas such as renting out a property or investing in a startup don’t require any special talents or qualifications.

Can passive income make you rich?

It depends on what and how much you invest. Usually, when it comes to how to earn passive income in Canada, the higher the risk the bigger the return. Thus, some passive income ideas can help you earn thousands every month, but come with high stakes. Low-risk projects, on the other hand, have a lower ROI, but might be better suited to your risk appetite.


With an early start in journalism and years of work as a technical translator, Marija felt it was natural to blend the two. Passionate about news and research, she enjoys sifting through the data, researching new currents and the constant changes in our technologically and financially driven lives, as well as presenting the stats and facts to the readers so you don’t have to dig deep on your own.

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