One Comment About Taxation – My Tax Wish-List Presented to Santa

 

Merry Christmas!  I hope all of you will have a relaxing holiday with loved ones.

So, what does a tax practitioner ask Santa for Christmas?  Well, every year, I have a private session with Santa (longevity in the profession gets you some special hearings with Santa).  I make the long but special trek to the North Pole and have some hot cocoa with the jolly fellow and talk tax wishes.  In some years, I get what I ask for but more often than not Santa says to me “oh, come on, Kim….keep dreaming!”.

Well, for this year, here was my wish list that I shared with Santa.  We’ll see if he comes through.  I’m counting on him!

• A government that sees the benefits of and the need for Canadian comprehensive tax review / reform with a key objective being an attempt to greatly simplify our overly complex tax statute and administration. Yes, fellow tax practitioners (who often write to me or chat with me that I’m not being realistic about trying to simplify our system), it’s a long-shot but one can dare to dream!

As an aside, when Rudolph heard our conversation, he reminded Santa and I about the words to his famous song: “….won’t you guide my sleigh tonight”.  He was hinting that he wanted to lead a tax review if one was ever commissioned.  His logic was that if he can lead a sleigh he can lead a tax review.  I told him to dream on….

• As part of the above reform, a shift to the family as being the basic taxing unit as opposed to the individual. This would eliminate much complexity and be fair.
• A reduction in Canadian personal tax rates. They are much too high and a drag on our country’s productivity and overall GDP.
• The introduction of a tax designation to ensure that people who give tax advice in Canada are adequately trained and experienced so as to protect the public.
• An elimination of the Underutilized Housing Tax which has been an exercise in excessive reporting and data collection for no obvious benefit.
• A better way for Canada to develop taxation policies that benefit Canada as a whole. The last number of years have illustrated the short-sightedness of our government in this department by developing silly new taxation rules that are purely political in nature, add to the complexity and are often duplicative.  Recent examples such as:
  • the silly short-term rental proposals to deny expense deductions to property owners / operators who operate in a municipality that prohibits short-term rentals
  • the ridiculous and duplicative “flipping tax” for dispositions of residential properties held for less than a year
  • the awful amendments to the alternative minimum tax that will have a large negative impact on charitable donations for high income earners
  • the denial of the dividends received deduction for financial institutions

and other measures all illustrate the need for better taxation policy development.

In my view, development of tax policy, currently under the sole purview of the Department of Finance, should be expanded to be more inclusive, transparent and open.  Santa gave me a hearty “Ho, Ho, Ho!” and a wink when I asked for this gift.  I presume that was his polite way of telling me to dream on….

• A government that gets control of its spending so as to ensure that the interest costs on the debt don’t equal the amount of the GST collected in Canada. That’s a ton of interest costs that could otherwise be invested in more positive initiatives for Canadians.  Or reduce taxes (as stated above)…never a bad thing to enable Canadians to retain more of their hard-earned money.
• In order to avoid lumps of coal in my stocking, I asked Santa to eliminate the carbon tax that is adding significant costs to many Canadians on their heating bills – except for Atlantic Canada.
• And, last but not least, a special tax exemption for any income – like the free cookies and milk – that Santa receives during his route. Technically, such cookies and milk might be taxable to Santa and it’s long overdue that this type of income be tax free.  I asked for legislation to be introduced to make this happen.

So, this year when Santa makes his list and checks it twice, let’s hope that the “nice list” includes a good dose of positive tax changes for all.  Canadians need it.

 

One Comment About Leadership – The Importance of Adaptability

 

One of the important characteristics of being a good leader is being adaptable.  Change happens quickly especially in today’s society.  How a leader adapts and / or responds to change is critically important.  If a leader reacts to such change by lamenting for the old days, then the “new days” will quickly consume such a person and often the organization will be left behind.

Now don’t get me wrong…often the old ways are very good.  And a lot of change is simply “faddish” or perceived to be “cool” like “diversity, equity and inclusion”.  That is not the type of change I’m talking about.  I’m talking about real and systemic change.  Think back 40 years ago.  The internet did not exist.  But the use of personal computers was just starting.  I remember the first Toshiba “laptops” that showed up in my accounting office when I was a youngster.  It was an exciting day!  But I recall some of my seniors who used such computers as a glorified and big paper weight. They refused to even try to use them.  Instead, they continued doing what they knew best.  And to a certain extent, I understand that.  Change is hard!  But leaders need to adapt and be open to change.

A good TED talk on how to measure adaptability in leaders can be viewed here.  The speaker talks about three ways to measure adaptability in a person:

• Ask the person – or yourself – “what if” type questions. In this way, you can see how a person would react in a simulated situation.  How do they react?
• Look for signs of “unlearning” in the person or yourself. Unlearning a skill or habit can be a great way to learn and adapt.  And leaders should be willing and able to “unlearn”.
• Look for people who infuse exploration into their life. How curious is the person?  People who explore – rather than exploit – are often able to adapt much better than the average person.

Leaders – how adaptable are you?

 

One Comment About Economics and Politics: The Phase Out of Gasoline Vehicles in Favor of Electric Vehicles

  

Yesterday, the Canadian federal government announced new regulations that will effectively eliminate the sale of gasoline vehicles in Canada by 2035.  The Canadian government announcement can be accessed here. Starting in 2026, the regulations will mandate that 20% of all vehicle sales in Canada will need to be electric vehicles (“EV”) and will gradually increase over the next 10 years to 100% in 2035.

Bluntly, this is “fantasyland” stuff.  The air of reality in this announcement is almost zero and an embarrassment to our country. Frankly, the bureaucrats and political persons who are responsible for the release of this should be embarrassed.  It lacks common sense.

“But, Kim, don’t you care about climate change and want to save the planet?” one might ask?  Well, let’s just say that I’m one of those people who openly question the alarmism surrounding “climate change” or “climate emergency” or the latest “climate boiling” pronouncements. That doesn’t mean I don’t think human beings can have a negative impact on our environment, but I’m not convinced the planet is at risk of extinction anytime soon.  In other words, my simple belief is that we should all be good stewards of our home, but we need to be mindful of not harming our population for the sake of trying to achieve some ideological goal.

With the above in mind, the regulations bring some very obvious questions to mind:

• What will the impact be to the Canadian auto industry? Will this mean that Canada will have to import EVs thus taking away good Canadian jobs?  A good article on that topic can be viewed here.
• What will this do to the affordability of automobiles for low to modest income Canadians? EVs are currently much more expensive than a gasoline vehicle.  Will used EVs be accessible to such a population at a reasonable cost?
• Will the elimination of gasoline vehicles have any measurable impact on improving the health and longevity of Canadians and / or the planet?
• How will batteries be disposed of?
• How will the electricity be generated to provide for the increased load? We know part of the answer – according to our federal government – is that the electricity will be generated from “clean” sources. See the proposed new “Clean Electricity Regulations” released by the federal government earlier this fall.  One can quickly assess that the “clean electricity” regulations are also fantasyland material that, if implemented, will result in many Canadians not having reliable electricity.
• Is Canada’s power grid ready for the huge increased load?
• Will EV technology improve so that the range of the average vehicle is better and can sustain the cold Canadian winters?
• How will charging stations be installed across Canada so as to replace the current “gas stations”?
• Will the time to charge EVs be improved and shortened? Right now, you can “fill-up” the tank in your gasoline car in about 2 mins or less at a gas station meaning it is rare that there are material queues to obtain gasoline.  But it can take 40 minutes or longer at a charging station.  How many charging stations will be necessary so as to avoid long queues?
• How much will all of this cost? Will the federal government be subsidizing the building of the infrastructure?  If so, how much more in debt will Canadians be as a result of this nonsense?

The above is only scratching the surface.  Canadians need to push back at this anti-reality nonsense and demand common sense return to the agenda.

 

Bonus Comment – Quote From Ralph Waldo Emerson – the late American Philosopher – About “Common Sense”

  

“Common sense is genius dressed in working clothes.”

 

Yep, totally agree!

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