Facilitating effects of benefactor plants on plant species richness have been commonly tested in stressful habitats because competitive effects are assumed to predominate in more productive habitats. Here, we examine this assumption by testing whether benefactor plants can nonetheless be facilitating in competitive environments.We provide a conceptual framework describing how a trait of benefactor plants, canopy height of shrubs, can have a portfolio of facilitative effects on species richness in more competitive environments, and we provide an empirical assessment of this portfolio effect in tundra plant communities.Across tundra plant communities representing an extensive gradient in aboveground live biomass ranging from 11 to above 800 grams per m2, we found that species richness exhibited a humped-back relationship. Increasing canopy height of shrubs to a maximum height of what defines the dwarf shrub tundra, that is 40 cm, consistently and significantly increased species richness along the entire biomass gradient tested.The positive effect of shrub canopy height was not confounded with herbivore intensity, competitive interference or abiotic factors such as bedrock-weathered mineral availability, moisture availability or temperature. However, we cannot rule out that the general presence of large mammalian herbivory may have been central to the positive effect of shrub canopy height in reducing herbivore impacts on species richness.In this study, conceptual and empirical evidence support that increasing canopy height of shrubs facilitates species richness regardless of relative abiotic stress levels within tundra ecosystems. We propose that positive interactions can play an important ecological role in systems where competitive effects are observed or assumed. For tundra plant communities where climate change is currently causing encroachment of shrub species, the effects of increasing canopy height may have unprecedented effects on plant species richness.