One Comment About Taxation – “Tax Reform” Should Not Be A Bunch of New Ideas Added Onto A Tattered House in Disrepair

My wife and I once bought a house. It needed obvious renovations. So, we started doing them. But every time we pulled something apart with the renovators, it revealed a previous patchwork, and sometimes multiple patchworks stacked on top of each other. At those points, we had a decision to make: keep patching, or do it properly. We chose to do it properly, which meant a full rebuild instead of another layer on top of the old ones. It also meant reworking our own budget so the project could actually be paid for. A patch job is cheap precisely because it defers the real cost. We weren’t interested in deferring it but instead in doing it right to last for generations.

 

Canada’s tax system is that house. And this government seems determined to keep patching it. It’s long overdue for repair and reform. It’s a patchwork mess that is almost impossible to navigate.

 

During the 2025 election campaign, the Liberals promised an “expert review” of the corporate tax system – a commitment that at least gestured toward pulling the wiring out of the walls. Budget 2025, tabled on November 4, 2025, did not mention the promised expert review. Neither did the spring economic update of April 28, 2026.

 

Asked recently whether the review was still happening, Champagne’s spokesperson said it would be “inappropriate” to speculate on prospective changes to the tax system, adding only that the minister has been clear about the budget’s emphasis on innovation, growth and entrepreneurship. Translation: the review is dead, and the government would prefer nobody notice. Instead, Canadians are told the pre-budget consultation process launched this July – the annual submission charade exercise – will do the job.

 

It won’t. One of the Prime Minister’s point people on the budget consultations has said Ottawa plans to tackle tax reform “one bite at a time,” with small business changes high on the priority list – a candid admission of the real strategy: individually defensible, politically safe measures, bundled together and marketed as tax reform this fall. Some of those bites may be sensible. None of them, stacked together, will fix a system that hasn’t had a genuine structural look since the Royal Commission of the 1960s and the Wilson reforms of the 1980s.

 

For example, using small business as the starting point, you cannot meaningfully reform how a small business is taxed without also touching how its owner is taxed personally. The small business deduction, the corporate tax rate, the dividend tax credit, and the capital gains treatment when the owner eventually sells are all links in the same chain – you can’t patch one without affecting the others. A consultation portal or meetings with various groups soliciting short-term ideas isn’t built to trace a chain like that. It’s built to generate a list of grievances and popular ideas for political staff to sort into a budget.

 

I understand the political calculus. A body with a genuine mandate takes time, and by the time it reports and anything gets implemented, you’re deep into the back half of the mandate, with the riskiest measures landing just in time to become an opponent’s talking point in the next campaign. Ducking that timeline and calling the consultations “good enough” makes cold political sense.

 

But it’s short-sighted, and Canada has gotten this right before – twice – by choosing the harder path over the politically comfortable one.

 

Michael Wilson’s tax reform didn’t wait for a years-long royal commission. It began with a 1984 paper questioning whether piled-up incentives were distorting business decisions and ended with a 1987 white paper proposing to cut the corporate rate from 36 to 28 per cent in exchange for narrower write-offs. It also collapsed ten personal brackets to three, deductions became credits, the base broadened, and the table was set for replacing the manufacturers’ sales tax – a hidden, cascading 13.5 per cent levy that eroded exporters’ competitiveness – with the GST.

 

The GST was visible, itemized on every receipt, and politically radioactive because of that visibility. Wilson and Mulroney knew that might cost them, and by 1993 it was one of several forces – alongside a deep recession and voter fatigue – that reduced the Progressive Conservatives to just two seats, the worst defeat of a governing party in Canadian history. They did it anyway, because it was the correct call. Hiding a tax doesn’t make it cheaper – it just makes it harder to fix. That act of political self-sacrifice gave Canada a more efficient, transparent consumption tax that’s still a backbone of federal revenue nearly four decades later. None of that came out of a submissions portal, a stakeholder meeting or bite-sized changes.

 

A decade later in 1997, Finance Minister Paul Martin appointed eminent economist Jack Mintz to review Canada’s business tax system to promote job creation and growth, simplify compliance, and enhance fairness. The Technical Committee on Business Taxation recommendations took years to land, but they underpinned the corporate rate reductions and capital gains changes of the early 2000s that made Canada meaningfully more competitive.

 

Both the Wilson and Mintz exercises shared the same shape: focused, credible, deadline-driven, and willing to recommend things that were unpopular in the short run because they were right in the long run.

 

That’s the model worth reviving – not a submissions portal, not a four year long royal commission (even though I’d love to see it), but something closer to Wilson’s white paper or the Mintz Committee: compact, expert-led, with a mandate to look at the whole house rather than take the expedient and cheap path.

 

My wife and I could have painted over the old patchwork. It would have looked fine for a while, until the rot underneath made itself known in far more expensive ways. Instead, we did the harder math and paid for the real job upfront.

 

Budget 2026 is shaping up to be a coat of paint with possible new colors. Canada needs a real renovation.

 

One Comment About Leadership – Controlled Disclosure Isn’t Leadership – It’s Risk Management

 

Every leader makes this decision constantly, whether with a board, a partnership, or a team: how much do you actually disclose, versus how much do you manage the narrative?

 

The short-term math almost always favours disclosing less. Less to explain. Less to be second-guessed on. Less room for the story to get complicated in someone else’s hands.

 

But controlled disclosure is a loan against future trust, and it comes due at the worst possible time. The first moment your audience senses they got the managed version instead of the real one, every subsequent statement gets read with suspicion instead of good faith – including the ones where you were being straight with them. You don’t get to choose when that bill arrives. Watch for this pattern the next time a leader faces a moment that demands full transparency.

 

A clean example of this was last Saturday’s press conference on the collapse of the Canada-U.S. trade talks. Carney had the full picture – the actual terms discussed, the U.S. position, the reasons talks broke down. What Canadians got was a curated account: his characterization of the U.S. position, delivered with ministers standing gravely behind him, no underlying terms released, no independent way for anyone to assess whether his read was reasonable. The information existed. The choice was how much of it to hand over.

 

The leaders worth following default the other way: here’s what I know, here’s how I know it, here’s what I’m still deciding and why. It’s a harder conversation in the moment. It’s also the only version that survives contact with people who go looking for the parts you left out – and someone always does.

 

Next time you’re deciding how much to tell your team about a hard call, ask yourself honestly: are you managing complexity for their benefit, or managing perception for yours? Don’t let the loan get called at the worst possible time.

 

One Comment About Economics / Politics  – The Collapse of the Canada – U.S. Trade Negotiations

 

Late last week, the Canada – U.S. trade negotiations collapsed. I’ve been trying to make sense of where I land on this. It’s not a simple place.

 

Trump’s approach toward Canada – aggressive tariffs, the 51st-state nonsense and “we don’t need anything from Canada” rhetoric – is genuinely corrosive.

 

But I’m also uneasy about how little verifiable information critically thinking Canadians have to work with. Last Saturday’s press conference gave us Carney’s characterization of the U.S. position – not the actual terms, and certainly not enough information to independently assess what was on the table. The U.S., unsurprisingly, tells a different story.

 

If this really is a “war” moment, as the PM’s own language suggests, then Parliament should be the venue for making the case to Canadians – not simply a podium. Extraordinary moments demand more scrutiny, not less.

 

I also think many Canadians underestimate just how lopsided our economic dependence on the U.S. remains. More than 70% of our merchandise exports go to the United States. Trade in goods and services represents roughly two-thirds of Canada’s GDP. Exports alone support nearly 1 in 5 Canadian jobs.

 

That’s the economic reality that “elbows up” rhetoric needs to reckon with. This isn’t a fight between economic equals. Pretending otherwise doesn’t change the math.

 

Take the booze bans. Sure, they apparently annoyed the Americans enough to become a bargaining chip. Carney encouraged provinces to put American alcohol back on shelves as part of getting a fair deal done. But “annoying enough to negotiate over” and “meaningful leverage against the world’s largest economy” are two very different things. It’s a rounding error masquerading as resistance – while Canadian consumers are the ones giving up a nice glass of wine or bourbon.

 

Rather than pretending symbolic retaliation gives us economic leverage we don’t have, Canada should concentrate on the things we can actually control. We can control whether Canada is an attractive place to invest, build businesses, take risks and deploy capital. And one of the biggest levers is entirely within our own control: our tax system.

 

Our current system is horrifically complex and inefficient. It discourages investment, entrepreneurship and competitiveness at precisely the moment we desperately need more of all three.

 

Real, comprehensive tax reform – not another pre-budget “consultation” designed to validate decisions already made – should be an urgent national priority.

 

Because ultimately, economic sovereignty isn’t created by vacuous slogans like “elbows up” or “Canada Strong”. It’s created by economic strength.

 

And Canada has a lot of work to do.

 

Bonus Comment – From Howard Schultz – Former CEO of Starbucks – About Transparency

 

“I think the currency of leadership is transparency.”

Agree! Transparent honesty is an excellent and valuable leadership trait.

 

I hope today’s newsletter has been thought-provoking for you.

 

As many of you know, I’m passionate about helping people make better decisions – whether in tax, leadership, or business. If you’d like to go deeper on those topics, my recently released book, Making Life Less Taxing Version Two(opens in new tab) is now available and expands on many of the practical ideas I’ve written about over the years.

 

I’m also putting the finishing touches on my next book, Leadership Compounds: How Small Decisions Build Culture, Credibility, and Legacy. It explores a simple but powerful idea: leadership isn’t about grand gestures – it’s about the small, consistent decisions that compound over time.

 

For those interested in a more hands-on approach, I’ll soon be announcing a bespoke consulting initiative – The Acorn Growth Program – designed to help leaders and organizations grow intentionally, one small (but important) decision at a time. Feel free to reach out to me directly for more information.

 

And if you’re not already on my mailing list, feel free to sign up for my In the Mood Network(opens in new tab) newsletters to receive more content. No fluff – just practical insights on tax, leadership, and economic policy.

 

Thanks for reading. As always, I welcome your thoughts and feedback.

 

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