The next time a Fall Economic Statement is released, I suggest releasing it at a time less likely to resemble a ‘winter update.’ With the official start of winter just four days away, the drama surrounding the release felt like a full-blown blizzard.

It started yesterday with the early morning resignation of Finance Minister Chrystia Freeland.  And not just a simple resignation but a full-on, burn-the-house-down public resignation letter released to her X account. The public rebuke of the Prime Minister and the Prime Minister’s Office will be the stuff for history books.

The day continued with numerous rumours about the Prime Minister’s possible resignation, a possible prorogue of Parliament, who would present the FES, that the FES presentation was cancelled but whoops…it’s back on again, whoops, it will just be tabled with no presentation, the appointment of a new finance minister, a number of Liberal MPs calling for the PM’s resignation and a Liberal caucus meeting to discuss the current chaos.

While many expected the former Finance Minister to be shuffled out of her portfolio, it appears the strategic mistake the PMO made was telling the Finance Minister 3 days in advance of her presenting the FES that she was to be shuffled out.  It appears the resignation caught the PMO unprepared for such a possibility since all signals pointed to the purported appointment of Mark Carney to the Finance portfolio shortly after the release of the FES and shuffle.

Alas, after the resignation and related drama, it was the loyal foot soldier, Dominic Leblanc, who was appointed to this thankless position.  If this government survives, he had better get used to the unelected and ruthless officials of the PMO meddling big time.  The last couple of Finance Ministers ultimately couldn’t bear it.

Ahhhh, such great drama and chaos but certainly not of the good type.  Without a doubt, the vast majority of Canadians are craving positive change and stability, especially in light of how the new U.S. regime is threatening crippling tariffs and other measures that will affect our country’s competitiveness, including tax proposals.  Monday’s chaos will certainly do nothing to satisfy such cravings unless we get an early election.  With a stubborn PM, only time will tell if such a wish comes to fruition.

Drama aside, the FES did not have many tax measures as discussed further below.  The obvious highlight in the overly long and vacuous “update” was the $61.9 billion deficit projection for the current fiscal year which exceeded original estimates by about $20 billion.  And this is without analyzing some of the games that were likely played to get to this number.  Large deficits are also projected for the next 6 years. Unbelievable.  However, as this government has shown regularly, such projections are not likely worth the paper they are printed on.

When I was reading the FES documents, these three sentences in Chapter 3 struck me: “Canadians rightfully expect their government to be responsible with tax dollars. In Budget 2023 and the 2023 Fall Economic Statement, the government announced a total of $15.8 billion in savings over five years, starting in 2023-24, and $4.8 billion every year thereafter. These savings are being refocused towards the priorities that matter most to Canadians today, including health care, housing, and an economic growth plan and industrial strategy that create well-paying jobs for workers.”

Ok – let’s be serious.  The government is crowing about being frugal for a total amount of $15.8 billion.  However, this year’s current deficit will exceed its original estimate by over $20 billion.  This crowing is non-sensical. It reminds me of the famous Seinfeld episodewhere the main character, Jerry, makes a reservation for a car rental but when he goes to pick it up no cars are available.  “You know how to take the reservation, but you don’t know how to hold the reservation.  And that’s really the most important part of the reservation”Jerry says to the car rental clerk.  Ditto for this current government.  They know how make the economic estimates, but they don’t know how to stick to the estimates.  And that’s really the most important part.

Regarding tax, here are some of the highlights:

• No changes to the capital gains inclusion rate 2024 Budget proposal.  If the government survives, they will try to get this into a bill when Parliament next convenes.  In the meantime, it will be a tricky time for taxpayers to comply with these proposals as I’ve previously written about;
• No mention about the previously announced $250 cash hand-out vote buying bribes;
• No proactive tax measures to deal with the incoming new U.S. regime which will most certainly provide tax and economic challenges for Canada;
• A commitment to get automatic tax filing for low income CDNs released for 2025.  I’ve written about this necessary endeavour over the last number of years.  The devil is obviously in the details…but I generally like this commitment;
• A proposal to make the Canada Disability Benefit tax free;
• A proposal to expand a very narrow capital gains deferral on the disposition and re-acquisition of certain replacement shares.  This a very rarely used tax provision and very doubtful that these proposed changes will change that;
• Proposed changes for the reporting of non-profit organizations.  I’ve written about this previously and while implementation details are important, any improvement / enforcement in this area is a step in the right direction; and
• As usual, a bunch of “green” initiatives that are not worth commenting on.

So, to quickly summarize, the 2024 FES will be remembered much more for its pre-release political drama and huge blown deficit estimate; not for its vacuous content.  Like Leonard Cohen wrote in his 1992 song, The Future, “The blizzard of the world has crossed the threshold and it’s overturned the order of the soul”.