One Comment About Taxation – Lessons For Canada to Learn From the Ill-Conceived California Ballot-Initiative to Introduce a One-Time “Billionaires Tax”

About 15 years ago, one of my sons got into trouble at his elementary school. His crime? He didn’t like a particular teacher so, with the encouragement of some of his friends, he started a petition to have the teacher fired. By the time the teacher and principal became aware of my son’s initiative, it had pretty good momentum. Suffice it to say the school’s teachers and principal were not impressed, and Mom and Dad were lectured about his “wrongs”. I admit there was a big piece of me that chuckled and was impressed by his hustle.

 

I was thinking about this experience when I became aware of California’s latest ballot initiative that proposes to introduce a one-time 5% wealth tax on California residents whose total net worth is $1 billion or more as of January 1, 2026.

 

California’s ballot initiative process lets citizens propose new laws or constitutional amendments and put them directly to a vote, bypassing the legislature entirely. Proponents must gather hundreds of thousands of signatures. If successful, the measure appears on the ballot and can become binding law with a simple majority. Twenty-three other U.S. states also allow ballot initiatives or referenda in some form, though rules vary widely. Canada, by contrast, has no equivalent process – at the federal level or in any province – leaving lawmaking solely in the hands of elected officials.

 

While ballot initiatives are often celebrated as democracy in action, they can wreak havoc on coherent policy, including taxation. Complex fiscal matters can be reduced to emotionally charged yes/no questions. In the tax world, that can mean poorly designed measures with unintended consequences becoming locked into law, immune to future adjustment without another costly and uncertain ballot fight.

 

In most cases, proponents have a vested-interest in bringing forward a proposal. The driving force behind the California billionaire tax initiative is SEIU–United Healthcare Workers West, a politically influential labor union known for using ballot measures to push progressive health and social policy. The union authored and filed the “2026 Billionaire Tax Act”, aiming to fund public health care, education, and food assistance, by avoiding the legislature and appealing directly to voters. Signature gathering is underway.

 

The proposal is, not surprisingly, divisive. California Democratic governor Gavin Newsom has opposed the idea. He has expressed concern about some wealthy leaving and the already high tax burden on that group. San Jose mayor Matt Mahan has expressed similar concerns. Other influential business leaders have also publicly opposed the idea. Others, of course, support it.

 

Just the threat of a new tax is causing some of California’s approximately 250 billionaires to pack up and leave.  For example, Google co-founder Larry Page and Oracle founder Larry Ellison are reported to have taken steps prior to January 1, 2026 to leave California. Other less visible billionaires are also reported to have left. This loss of wealth, especially if it continues, could have a material long-term negative impact on California’s tax revenues.  And on its already poor reputation for not being a good place to do business and build wealth.

 

For Canada, there are many lessons to be learned from this yet-to-be-concluded story. The first is that vested-interest proposals – like most ballot initiatives – are often flawed. While Canada doesn’t have explicit ballot initiatives, forms of populist tax policy show up in different ways like politically motivated tax incentives (the recently introduced Personal Support Workers Tax Credit and the numerous “green initiatives” are good examples) and policies (like the prohibition of deductions on short-term rentals is another example). Such messes have no place in a coherent and proper tax system.

 

The second lesson is to be careful about aggressively going after a small group of people to fund taxation revenues. While most won’t disagree that higher income people should pay progressively more in tax than lower income people, tipping points are often met by the introduction of poor policy that continuously asks them to pay more. The poor speaking point that the Trudeau government nauseatingly trotted out from 2015 onwards to justify increased taxation on higher income taxpayers – “we’re asking the wealthiest one per cent to pay a little more so the middle class can pay less” or “we’re asking the rich to pay just a little bit more” – was a tipping point for many. Such blatant attacks have consequences including people leaving Canada.

 

The third is that wealth taxes have a spotty record of success around the world. Despite such continuous failures, they continue to be recommended by left-leaning organizations for solutions to many of society’s ills. The Trudeau government toyed with the idea of a possible one-time wealth tax imposition in 2021-2022 but ultimately didn’t impose it. A July 15, 2021 Parliamentary Budget Officer Report estimated that a one-time wealth tax of 3% on wealth over $10 million and 5% over $20 million would raise between $44-$60 billion over 5 years. Ouch!

 

California’s billionaire tax proposal may or may not survive, but the damage is already evident. The mere threat has accelerated departures and reinforced the state’s reputation for fiscal unpredictability. Canada would be foolish to dismiss this as an American curiosity. Our version of populist tax policy simply takes different forms – but the economic consequences are remarkably similar.

 

Good tax systems are built deliberately. They are boring by design, resistant to pressure, and anchored in principles that survive election cycles. Once governments abandon those principles, they trade durable revenue for short-term political satisfaction – and rarely get either.

 

And that’s why I still remember my son’s elementary-school petition. It had a cause, momentum, and plenty of cheering supporters – but no responsibility for coherence, durability, or what came next. In Canada’s tax system today, where governments have long ignored sustained calls for meaningful tax reform, policy is increasingly driven by pressure and optics rather than coherent tax design.

 

California’s ballot initiative is laughable – but it reflects a mindset Canada should be working hard to avoid.

 

One Comment About Leadership – Do Leaders Have a Limited Shelf Life?

 

Do leaders have a shelf life? It’s a question I’ve wrestled with for years – especially when I see what happens in pro sports.

 

Coaching changes have become a spectacle in their own right. A losing streak hits, and the common justification for firing the coach is that they’ve “lost the room” or “it’s time for a new voice.” In pro sports – where athlete careers are short and pressure is sky-high — those reasons often hold water.

 

Yes, there are exceptions. Bill Belichick stuck around for decades with the New England Patriots. Jon Cooper has had a long and successful tenure with the Tampa Bay Lightning. But those cases are rare. Longevity requires adaptability — and results.

 

What about leaders in business or professional environments? Do they have a similar shelf life?

 

In my view: yes.

 

Good leaders adapt – not to stay popular, but to stay effective. That requires constant self-awareness, which many simply don’t have. Too often, ego clouds the ability to read the room.

 

Great leaders – the rare ones – recognize when their voice is no longer being heard. And if they know they can’t turn it around, they step aside. Not out of weakness. Out of wisdom.

 

That’s real leadership.

 

One Comment About Economics  – Some Perspectives For Canada’s Oil and Gas Sector – Post Venezuela Political Change

 

With the U.S. greenlighting reinvestment in Venezuela’s oil sector following regime change, Canada’s energy industry – especially in Alberta and Saskatchewan – needs to wake up and take notice.

 

As many loyal readers will know, I’m a proud Alberta resident. Alberta is home to a world-class oil and gas industry and some of the globe’s largest reserves. I grew up in Fort McMurray – the heartbeat of the oilsands – and yes, despite Jane Fonda’s lame 2017 assessment, it’s a stunningly beautiful place.

 

Despite what some climate zealots naively believe – that oil and gas should be shut down tomorrow and magically replaced with “green energy” – the reality is this industry has dramatically improved global standards of living by delivering reliable, affordable energy. And it isn’t going away anytime soon.

 

The recent U.S. removal of Venezuelan dictator Nicolás Maduro has opened the door for renewed investment in Venezuela’s long-depleted oil sector, home to the world’s largest proven reserves. The U.S. government has made clear it wants Venezuelan production to ramp up – and U.S. refineries, especially those in the Gulf Coast, are well-equipped to process heavy crude similar to Venezuela’s and Canada’s. If – and it’s a big if – Venezuela stabilizes, their oil could increasingly replace Canadian supply to our biggest customer.

 

That should set off alarm bells in Ottawa, Calgary, and Regina. Canada currently exports 96% of its oil to the U.S. A trading relationship that one-sided is a problem. Market diversification is not a luxury – it’s a necessity.

 

But it doesn’t happen overnight.

 

Yes, some oil majors are calling Venezuela “uninvestable” for now (like Exxon CEO Darren Woods), but others may take a different view if Washington creates the right incentives. Canada should not be complacent. We need to aggressively expand market access and export capacity before Venezuela becomes a viable competitor.

 

Despite the recent MOU that Alberta signed with the federal government, it’s not even close to enough. We need pipelines, LNG export capacity, port access, and a regulatory and fiscal framework that welcomes – not obstructs – responsible development. That means eliminating red tape, statutory roadblocks, and ideologically driven policies that cripple competitiveness.

 

One example: the industrial carbon tax. Canada is one of the few jurisdictions imposing such a tax – a cost most of our global competitors don’t bear. Meanwhile, Canadian producers continue to lead in emissions reductions and technological innovation. But rather than supporting that progress, Ottawa doubles down on virtue signaling.

 

It’s time to get back to basics: supply and demand. Alberta and Saskatchewan have the reserves, the talent, and the drive. What they lack is a federal partner committed to economic growth rather than handouts, PR campaigns, or regulatory paralysis.

 

Canada needs real leadership.

 

This matters.

 

Bonus Comment – Quote From Nelson Mandela –  Former South African President and Global Symbol of Courageous  Leadership and Dignity – About Leadership  Communication

 

“Quitting is leading too.”

 

Exactly. Leadership isn’t about clinging to the mic. It’s about knowing when to pass it — and being secure enough to do it well.

 

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.