One Comment About Taxation – Canada’s Accounting Profession is Critically Important For Proper Tax Administration

 

I was chatting with a colleague last week about tax season. “We’ll get it done” he said. “But given the shortage of qualified teammates, it’s going to be tough. But at least we don’t have the chaos of the last three years from the government. So far – knock on wood!”.

 

Knock on wood – that’s the state of tax administration in 2026: cautious relief and significant shortages of staff.  But my colleague is right. Mercifully, the debacles of the last three years are non-existent this year: no capital gains inclusion rate fiasco, no bare trust uncertainty and no Underused Housing Tax confusion (which thankfully this tax was eliminated for 2025 in the November 4, 2025 federal budget). The last three years of avoidable, policy-induced disorder were dumped onto a profession already running on fumes.

 

Is the silence of no debacles indicative of a healthy tax system? No. More accountants are scrambling, simply hoping to get through tax season with minimal collateral damage. The shortage of qualified accountants is a structural problem that the chaos years obscured and a calmer tax season will not fix. The people inside the system are absorbing the strain, so you don’t have to see the cracks.

 

Let’s look at the numbers. In 2023, 90% of finance and accounting managers in Canada struggled to fill vacant positions. And for 2025, that dropped slightly to 86%. What do firms do when faced with talent shortages? Well, offer higher salaries, of course. CPA salaries climbed 7.7% between 2022 and 2024, outpacing inflation.  And early career CPAs are now earning a median $92,000 within three years of attaining their designation.

 

But even with that, there are still shortages. The problem is a structural one. And it’s not difficult to find the roots. The average Canadian accountant is 47 – five years older than the overall workforce. Why does that matter? It means retirements will hit the accounting profession sooner than most, adding to the problem. In short, the accounting profession is not replacing itself when you consider entrants to the profession versus exits (retirements and deaths).

 

Universities and colleges across North America report declining enrollment in accounting programs. The pool of new U.S. accounting graduates has contracted every year since 2015-16 – down 7.4 per cent in 2021-22, 9.6 per cent in 2022-23, and 6.6 per cent in 2023-24. The bleeding may be slowing but the wound is not closed. It’s obvious students are attracted to other professions. Why? Well, tax and accounting are not viewed as sexy professions. I think it is but maybe I’m weird?

 

And the gap opening up is concentrated precisely where individual Canadians and small business owners need help most: tax planning and its related compliance. Not good.

 

Will automatic tax filing and artificial intelligence (“AI”) help out?  Automatic tax filing – especially the long overdue expanded version that appears to be on its way – will take a load off certain low-income taxpayers and hopefully eliminate the need for tax preparers for those people. But I don’t think it will materially impact the vast majority of accountants and the taxpayers they serve for quite some time yet.

 

While some providers of AI are trumpeting that they can prepare tax returns – especially in the U.S. – I think it will be a bit more time before AI can confidently prepare tax returns that can take a load from a strained profession. Having said that, there are plenty of things AI can do to reduce the load of certain preparation elements and I’m aware of many practitioners and firms that are responsibly using AI to try to assist with the workload.

 

Let’s be clear about one thing: CPAs are critical to the administration of Canada’s tax system. Without them, Canada’s entire tax system collapses. Accordingly, any material strain on CPAs is certainly a national concern.

 

So, what should be done about it? Well, I have some ideas.

 

First, it’s time to make the profession sexy again. For me, interest in the accounting profession started with a “career day” at my high school where a couple of practicing Chartered Accountants came to discuss what being an accountant was all about. It grabbed my attention and the rest is history. These kinds of coordinated visits to high schools seem to have disappeared from the profession’s tool belt. It’s time to bring that back – to plant acorns early.

 

Second, the provinces and feds need to fix credentialing. The Carney government has committed $97 million over five years to a Foreign Credential Recognition Action Fund, acknowledging in its own 2025 budget documents that over half of immigrants with a bachelor’s degree or higher are overqualified for their jobs. However, that program is narrowly targeted at healthcare and construction. Canada has internationally trained CPAs who cannot practice because their credentials don’t survive the border crossing intact. Extending the government’s own framework to professional services with the provinces cooperation – including accounting – is not a stretch and an obvious next step.

 

Third, reduce the compliance burden through meaningful tax reform. Canada’s tax system has become a patchwork of politically motivated rules layered on top of each other. Policymakers need to recognize a simple truth: you cannot keep adding incomprehensible complexity to a system while the number of people capable of administering it is shrinking.

 

Fourth, stop the policy whiplash. The past few years have shown how damaging rushed and poorly executed tax changes can be. Stability and predictability are not exciting political talking points, but they are essential for a functioning system. And, again, this policy whiplash can be avoided by engaging in serious tax reform.

 

A quieter tax season is a welcome relief. But it should not be mistaken for progress. Fragile systems eventually break. Let’s hope the wood my colleague is knocking on is sturdier than the system it’s quietly holding together.

 

And if things seem to run smoothly this year, don’t be fooled – it didn’t happen by accident. Kudos to my colleagues holding it all together.

 

One Comment About Leadership – Leaders, What’s Driving Your Purpose?

 

Last week, I watched one of leadership guru Lee Brower’s “Meaningful Monday” videos. I’m a big fan.

 

He told a story about a young boy playing under his family’s porch. His parents came outside, unaware he was there. As they talked, his mother began crying – worried they didn’t have enough money to buy food. His father shared the same concern.

 

That moment changed the boy.

 

He decided, right then and there, that he would work, earn money, and make sure no one around him would suffer like that again. He got multiple jobs, started sweeping floors at a grocery store, worked his way up, eventually bought the store – and then built a large grocery business.

 

Years later, when asked what drove him, he pointed to that single “porch moment.”

 

Here’s the leadership lesson:

 

That moment didn’t just give him purpose. It gave him drive. And that drive shaped his purpose.

 

When Lee encouraged him to share the story with his family, they were surprised. They had simply viewed him as a workaholic. They had no idea what was driving him.

 

I shared this story with one of my coaching groups last week. It sparked a great discussion: what is your “porch moment”? And how has it shaped your drive – and ultimately your purpose?

 

Viktor Frankl, in Man’s Search for Meaning, wrote that people who have a clear purpose can endure almost anything. I’d add this: purpose doesn’t just appear out of thin air – it’s often forged by defining moments that create deep internal drive.

 

Leaders – if you don’t understand what drives you, your purpose will lack clarity. And neither will be obvious to those around you.

 

Leaders…what’s your porch moment? And what is it driving you to do?

 

One Comment About Economics  – Government Should Get Out of the Way When it Comes to Housing

 

Jack Mintz argues in the Financial Post that Canada’s housing crisis is winding down on its own – no government rescue required. Since peaking in summer 2022, the new-housing price index has dropped 3.5%, and after adjusting for inflation, real housing costs are back to 2017 levels. Affordability remains a stretch – mortgage payments and utilities still consume 43% of disposable income – but that’s well off the 55% peak hit in Q3 2023, and falling interest rates should help further.

 

As Jack points out, the drivers are market forces, not policy: a softer economy, flat real incomes, immigration curbs, and condo investors exiting a market where rents can’t cover costs. If the market is already self-correcting, Mintz asks, why are governments still piling on with $13 billion housing funds, matched provincial infrastructure programs, and GST/HST holidays on new homes? Some of that spending will simply inflate land prices rather than reduce them. I agree.

 

Mintz saves particular scorn for blanket zoning – pointing to his home town of Edmonton where eight-unit complexes are eroding the value of surrounding homes. He also points out that vacancy type taxes (like those in Vancouver, Kelowna, Hamilton, Toronto and even Canmore, AB – but a recent Alberta government bill will soften the impact of Canmore’s vacancy taxes) that generate negligible revenue while burying homeowners in compliance paperwork. Land transfer taxes, meanwhile, add up to $73,000 to the cost of an average home south of Toronto’s Highway 401, making it harder for people to move for work or family.

 

His prescription is straightforward: wind down the interventions, reform genuinely bad taxes like land transfer levies, keep Ottawa out of local housing markets, and remember that the biggest household expenditure is taxes paid to government. He concludes his article stating that if politicians want to make life more affordable, spend and tax less.  Again, absolutely agree.

 

I would take Jack’s recommendations one step further: repeal the duplicative and unnecessary 2023 “flipping tax” and repeal the nutty short-term rental prohibition of expense deductions as well. Those interventions into the housing area were misguided and add unnecessary complexity. It’s time for those to go.

 

Bonus Comment – By Friedrich-Nietzsche (As Popularized by Viktor Frankl) – German Philosopher – About Having a “Why”

 

“He who has a why to live can endure almost any how.”

 

Totally agree. Leaders, what is your Why? And your “porch moment”?

 

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 2), 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 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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