One Comment About Taxation – The Move of the Canadian Federal Budget Cycle to the Fall – Appropriate?

Governments don’t like criticism. Understandable. But it’s part of the game. Governments won’t please everyone. But their policies should be transparent, open and subject to scrutiny – especially when those policies reshape how the country’s finances are presented. Over the past decade, the federal government has developed a habit of responding to criticism not with rigorous debate, but with media choreography: friendly journalists pen op-eds, social media influencers post pre-packaged soundbites and coordinated messaging floods the airwaves. The “new” government has added to its playbook – swapping editorials for third-party quotes from “experts” including international institutions that can be conveniently re-shared and weaponized.

 

An example is the recent comments provided by a senior leader of the International Monetary Fund who came out in support of the government’s lame proposal to separate the budget into “operating” and “capital”. It also provided support for moving the budget cycle from the spring to the fall – more on that below.

 

The problem with providing friendly op-eds or quotes is that such rebuttals usually rely on the stature of the person or organization providing it instead of providing a robust counterargument. Such rebuttals are usually shallow and the quote from the IMF most certainly falls into that category. The IMF’s reputation doesn’t make every statement sacrosanct. The quote being circulated lacks the depth Canadians deserve on this issue.

 

To separate the budget into a capital budget and operating budget is simple deception.  While it won’t fool bondholders and credit rating agencies, it can fool the financially illiterate into thinking that this method is a “modern approach” to budgeting cooked up by sophisticated experts. Hogwash.

 

To categorize routine government expenditures as “capital” (by making the definition for this purpose very broad) enables the government to shift those costs off the “operating budget” and then crow that the deficit has shrunk. Simple deception. Canadians need to critically think this through and reject vacuous quotes or op-eds that lack depth and offer no real analysis.

 

In the above spirit, let’s critically examine the proposed change to the budgeting cycle as laid out in the October 6, 2025 Department of Finance release. Such announcement stated:

 

“The government is also modernizing its budget cycle to better align with the needs of builders, businesses, investors, provinces, territories, and municipalities. Starting with Budget 2025, the federal budget will be tabled in the fall, with an economic and fiscal update released in the spring. This change will provide the certainty and predictability needed to plan ahead and ensure projects can begin as soon as construction season starts – helping every level of government make smarter, faster investment decisions.”

 

As a reminder, the government’s fiscal year starts annually on April 1 and ends on the following March 31. And “fall” is generally from September 21 to December 21. So, on the extreme, the budget would be released over six months in advance of the next fiscal year.  And in a best case, a little over three months in advance.  Around the world, the timeliness of the release of government budgets varies widely. Given that variation, it’s difficult to point to any one country as a best practice example.

 

In the Canadian context, the timing of the release of a budget is not a new issue. In 1985, the federal government released a paper as part of the 1985 Budget entitled The Canadian Budgetary Process – Proposals For Improvement. The paper proposed fixed budget dates and provided a thoughtful analysis of when the fixed budget date should be. It explored the pros and cons of a fall budget date stating that the “most compelling reason for a fall budget date is the extra time it provides for the other steps in the budgetary process which follow the tabling of the federal budget”. It also highlighted the convenience that a fall budget date would provide to provincial governments in their budget planning.

 

Regarding the cons of a fall budget date, it highlighted that pre-budget consultations would be very difficult given the fact that such consultations must be carried out well in advance of the budget which would mean the summer – a time when many people are on vacation. But the most significant con presented was the simple fact that a “fall budget forecast is likely to be less reliable for the simple reason that it is prepared too many months in advance of the fiscal year to which it applies.”

 

I agree. Like 1985 – but even more today – things can change quickly.  And those events can materially impact a budget. The paper ultimately concluded that a mid-January to mid-February fixed budget period would be most appropriate.

 

The purpose of a government budget is to provide a comprehensive statement of the government’s financial plans for a given fiscal year, including estimates of revenues, expenditures, borrowing, and debt obligations, along with the policies underlying them. To prepare an annual budget too far in advance would seem to defeat its purpose regardless of whether there is a spring update or not.

 

History is always a good provider of lessons and guidance to learn from. While the government states that this is a “modern” approach to budgeting cycles, I’m not convinced.  What has materially changed from 1985 to today to overcome the recommendation and change to a fall budget cycle? Yes, lots has changed in the world and Canada since that time, but those changes don’t change the 1985 conclusion that budgets prepared too far in advance will be less reliable. And if something has changed, the government hasn’t made the case.

 

Governments that treat criticism as sabotage and lean on quotes from so-called external experts to seek credibility aren’t modernizing anything – they’re managing optics. The 1985 conclusion still holds: budgets prepared too far in advance are less reliable, no matter how well-packaged the rollout.

 

As Nicholas Dahir of the C.D. Howe Institute rightly observed, “Transparent financial reporting is more than a best practice; it’s a democratic responsibility.”

 

Canadians deserve  substance, not deceptive fiscal practices and soundbites.

 

One Comment About Leadership – Leaders,  Are You Keeping Up with Artificial Intelligence?

 

I’ve written and spoken about AI many times in the past decade, especially since November 2022 when ChatGPT was released to the world. The pace of change is mind-boggling – daily, sometimes hourly. I’m aggressive about learning as much as possible and applying it to my work.

 

This past weekend, I listened to an eye-opening presentation by Bill Bishop of The Big Idea Company. I’ve worked with Bill for decades. He’s a unique thinker with deep roots in technology and AI.

 

Two key takeaways stood out:

 

• You can’t delegate AI knowledge. You need to learn it yourself. As a leader, it’s on you to understand it – period.

 

• You can’t afford to sit this one out. AI has the potential to be massively destructive in your industry. If you’re not proactively engaging with it, by the time you react, it may be too late.

 

I think about law firms. Accounting firms. Health care professionals. The list is endless. No sector is immune. No industry is “too good” to avoid disruption. Leaders need to seriously examine how AI can be used to improve, innovate, or reimagine what they do. If not, they risk ending up in the same history pile as Kodak and Blockbuster.

 

Leaders, do you have a real AI strategy? And by that I don’t mean your casual dabbling with Microsoft Co-Pilot, Google Gemini, or ChatGPT. I mean a full review of how AI could transform – or disrupt – every corner of your business.

 

Be  proactive. Now. Not tomorrow.

 

 

One Comment About Economics – Bank of Canada’s Comments on How Productivity Can Provide a  Competitive Edge

 

On October 9, 2025, Bank of Canada Governor Carolyn Rogers gave another noteworthy speech – this time about how boosting competition could help solve Canada’s long-standing productivity crisis. She highlighted Canada’s banking sector as a laggard and pointed to initiatives like Real-Time Rail (RTR) and Open Banking as steps toward increased efficiency and innovation.

 

If her name sounds familiar, it should. Back in March 2024, she sounded the alarm – literally – saying it was time to “break the glass” in reference to Canada’s dismal productivity performance. That speech was unusually blunt for a central banker and, in my opinion, one of the most honest public acknowledgements of Canada’s economic stagnation in years.

 

Her October 2025 follow-up continues that thread, albeit more cautiously. Still, the message is clear: Canada needs real competition – not coddled oligopolies – and meaningful digital infrastructure to get our productivity moving.

 

I’d encourage you to read her latest remarks – they’re informative. And if you missed her 2024 “break the glass” speech, consider it mandatory reading for anyone trying to understand why Canada’s economic engine has been running on fumes.

 

Bonus Comment – Quote Often Misattributed to Charles Darwin – the British Naturalist – But Actually Paraphrased  By Business Professor Leon C. Megginson

 

“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”

 

Absolutely agree!  You may not like AI, but that doesn’t matter.  How responsive will you be to the changes that it will cause?

 

Hope you enjoyed this edition of 1-1-1. If you’re not already part of the In the Mood Network, now’s the time. Please sign-up today.  Whether it’s through consulting, coaching, speaking, or writing, my work is about planting acorns: deliberate, principled actions that challenge the status quo and grow into something far bigger. The goal? Bold reform. Stronger foundations. And a country that values hard work and common sense.