A covered call is an options strategy where you sell a call option against 100 shares of stock that you already own. It is called "covered" because you own the underlying shares, so there is no naked (unlimited) risk as there would be if you sold a call without owning the stock.
By selling a covered call, you collect a premium upfront and agree to sell your 100 shares at the chosen strike price if the stock rises above it by expiration. If the stock stays below the strike, the call expires worthless and you keep both the shares and the full premium.
In the wheel strategy, covered calls are Phase 3 — used after you have been assigned shares from a cash-secured put. They are the income engine that reduces your ACB and eventually profits you out of the position when the stock is "called away."