One Comment About Taxation – The “Dad Tax” Lesson Governments Keep Ignoring

 

When my kids were younger, I used to impose what they jokingly called the “Dad tax”. If we went out for dinner and they ordered something that looked particularly good, I would demand a small sample as my tax for paying the bill. It became a real annoyance with the kids. Over time, they figured out how to avoid the tax by ordering things they knew I wouldn’t want. In other words, their behavior changed.

 

Economists would recognize this instantly: when you tax something, behavior changes.  And in some cases, there are unintended consequences. That simple lesson – learned at the dinner table – has shaped tax policy outcomes and caused behavior changes for centuries. In Canada, high personal tax rates act as a repellent to success. California’s ballot initiative to tax billionaires is spooking such people out of California. And Washington State’s amendments to its capital gains tax for high-income earners have done the same. The Netherlands’ proposed tax on certain unrealized gains has the hallmarks of capital flight.

 

One of the most famous historical examples of a tax influencing behavior is the British “window tax”. Introduced in 1696, the government of the United Kingdom decided to tax homes based on the number of windows they contained. The logic: wealthier households tended to have larger homes with more windows, so it was a convenient proxy for taxing wealth.

 

But homeowners quickly adapted. Rather than pay the higher tax, many simply bricked up their windows. Entire streets of otherwise elegant Georgian homes became darker and poorly ventilated. The tax remained in place for more than 150 years before it was finally repealed in 1851, largely because of the public-health problems it helped create. The bricked-up windows remain today as a visible reminder of what happens when governments design taxes without considering incentives.

 

We are seeing similar dynamics play out today. For example, British Columbia recently introduced a series of tax increases as the province struggles to finance rapidly growing government spending. The province’s fiscal outlook shows persistent deficits stretching years into the future, driven largely by program spending growth that has significantly outpaced economic growth.

 

At the same time, British Columbia has recently begun losing residents to other provinces. In 2023 and 2024, more Canadians moved out of B.C. to other parts of the country – particularly Alberta – than moved in. That reversal of long-standing migration patterns is notable and reflects the growing pressures of high taxes – and now even higher ones – rising housing costs and overall affordability challenges.

 

When governments allow spending to grow faster than the economy that supports it, they eventually face a basic arithmetic problem. They only have three options: reduce spending, borrow more money or raise taxes. Politically, the third option is often the easiest – although in an environment where affordability is already strained, it is a tough sell.

 

The federal fiscal picture points in the same direction. The November 4, 2025, federal budget revealed a deficit of $78 billion for this current year – fueled by out-of-control spending – while projecting large ongoing deficits for years to come. While PM Carney frequently misleads and frames the spending as “investments,” the fiscal mechanics remain unavoidable. Spending must eventually be paid for. Additionally, interest payments on the federal debt are projected to reach roughly $55 billion this year and continue rising sharply in the years ahead. That outlay of money produces no public services and no benefits to Canadians.

 

If PM Carney gets his much-desired majority government, the pressure to raise taxes or create new ones will intensify.  That is precisely why Canada urgently needs serious tax reform rather than a steady stream of new taxes layered onto an already complex system.

 

Last week, economist Jack Mintz and his colleagues released a major report through the C.D. Howe Institute proposing “Big Bang” tax reform. Their recommendations go far beyond incremental changes. Instead, they call for a comprehensive restructuring of Canada’s tax system designed to improve economic growth, investment and productivity.

 

Among the key proposals are:

 

• Major reductions in personal income tax rates;

• The introduction of an optional simplified personal credit of $10,000 to reduce complexity;
• A 5% reduction in corporate tax rates along with the elimination of many preferences (like the small business deduction);
• An option to introduce a corporate distribution-based tax model,
• Under this system, corporate profits would be taxed primarily when they are distributed to shareholders rather than when they are earned by the corporation. This would encourage firms to reinvest earnings and expand productive capacity.

 

To help pay for the tax reductions and reform, Mintz and his co-authors propose to increase the GST by 2.8% or to introduce a new 3% employer-paid payroll tax.

 

With significant tax reform, one can expect behavior changes. The authors state that in “…the long run, the reforms could increase non-residential capital by roughly $140 billion and raise GDP by approximately $79 billion (about 2.5 percent), generating more than $26 billion annually in additional tax revenues while preserving Canada’s strong redistributive outcomes”.  This is exactly the type of behavior shift Canada needs.

 

Canada’s current system does the opposite with high tax rates, endless targeted credits and politically motivated tax provisions that discourage investment, reduce productivity and drives capital elsewhere.

 

Without reform, governments facing rising deficits will continue searching for new sources of revenue. History suggests those searches rarely produce elegant solutions. Three centuries ago, British policymakers thought taxing windows was a clever way to raise money from wealthy homeowners. Instead, it encouraged people across the country to brick up their windows.

 

My kids eventually figured out how to avoid the “Dad tax” by ordering food they knew I wouldn’t want. Tax policy works the same way. If governments continue to allow spending to grow out of control without meaningful tax reform, Canadians should expect increasingly creative tax proposals in the future.

 

And just like the window tax – or the Dad tax – people will find ways to respond.

 

One Comment About Leadership – Good Leaders Need To Have Good “Sales Skills”

 

Being a salesman is a tough job. Especially if you are making cold calls. But if you can master the art of sales, it’s my belief you have a skillset that can take you through life. 

 

You see, much of life involves “sales”. Whether you are trying to convince your spouse / partner to do something, giving advice to your clients that you hope they will follow, providing reasons for your teammates to go in a specific direction, trying to negotiate the terms of a large contract – and a host of other negotiations – all involve some aspect of sales.

 

One of the key elements of closing a sale is to have the attention of the person who you’re trying to sell to. Once you have their attention, you can “pitch” to them. But, again, the key is to get their attention. I can recall many times in my career as I was building my firm that getting the attention of qualified prospects was often the hardest part.  Often, the prospect would cancel a meeting with short-term notice or no notice. I got frustrated and hurt by that.

 

I’ve been watching my son, Lucas, with that very issue. He loves the art of sales and has always sought positions that involve that. From being a real estate agent and now a full-time clothing salesman for LGFG Fashion House (the highly successful clothing company where I get all of my jackets from started by my friend Dimitry Toukhcher), it astounds me how many people feel that it is ok to cancel scheduled meetings with little or no notice. I get it and I’ve been there – sometimes emergencies happen. But not regularly.

 

When you’re on the sales side of the table, those cancellations can be frustrating and sometimes even discouraging. You prepare and carve out time. And then…nothing. Early in my career I took those situations personally. Over time, however, I learned an important lesson: sales – and leadership – require thick skin.

 

The ability to pick yourself up, remain professional, and keep moving forward is critical. If you let every cancelled meeting, rejected proposal or ignored message discourage you, you simply won’t last long in the world of sales. And by extension, you won’t last long in leadership either.

 

Good leaders, like good salespeople, must be able to communicate clearly, build trust, handle rejection and keep going despite setbacks. Whether you are selling an idea, a strategy, a cultural change within your organization or a product to a customer, the same basic skills apply.

 

In short, leadership involves sales. Lots of it. Leaders who cannot “sell” their ideas – respectfully, thoughtfully and persistently – will struggle to inspire people to follow them. But leaders who master those skills will find that people are far more willing to listen, engage and ultimately buy into the vision being presented.

 

Leaders, sharpen your sales skills. They are not just for salespeople – they are essential leadership tools.

 

[P.S. – don’t be the person that cancels meetings at the last minute.  It shows poor character.]

 

One Comment About Economics  – Oil at $100 Is Great for Alberta…But Canadians Should Brace for Higher Costs

 

Oil prices have recently surged above $100 per barrel. For Alberta’s provincial government, that kind of price increase can feel like winning the fiscal lottery.

 

The most recent Alberta budget assumed oil prices of US$60 per barrel. Governments typically use conservative assumptions when forecasting commodity prices, which is sensible given how volatile energy markets can be. But if oil were to stay around US$100, the fiscal implications would be enormous.

 

According to Alberta’s fiscal sensitivity estimates, every US$1 increase in the price of oil increases provincial revenues by roughly $630 million per year, primarily through higher royalties, corporate taxes, and increased economic activity tied to the energy sector.

 

Do the math. If oil averages US$100 instead of US$60, that’s a US$40 difference, which could translate into roughly $25 billion in additional revenue relative to the budget assumption. While production levels, royalty formulas, exchange rates, and Western Canadian Select discounts would affect the final number, the direction is obvious: sustained US$100 oil would dramatically improve Alberta’s fiscal position and would very likely eliminate any projected deficit.

 

For Alberta’s treasury and economy, that’s welcome news. However, the story does not end there. Higher oil prices ripple throughout the entire economy. Gasoline and diesel prices rise quickly, transportation costs increase, and those higher costs eventually work their way into everything from airline tickets to groceries. Energy is a core input into almost every good and service we consume.

 

As energy historian Daniel Yergin once observed:

 

“Oil is the world’s most important commodity — and its price affects almost everything.”

 

Strong oil prices are clearly beneficial for energy-producing regions like Alberta and Saskatchewan and can help strengthen government finances and investment in the sector. But the economic reality is that sustained high energy prices inevitably push costs higher across the broader economy.

 

In other words, while governments and energy producers may benefit from $100 oil, Canadians should simply brace themselves for higher costs across the board – from gasoline to groceries to transportation.

 

That’s not a criticism of strong oil prices. It’s simply the economic reality of living in a country – and a world – where energy prices influence almost everything.

 

And when oil moves to US$100, it doesn’t just move energy markets – it moves the cost of living.

 

Bonus Comment – From John Maxwell – Leadership Guru – About Leadership and “Sales”

 

“Leadership is influence — nothing more, nothing less.”

 

Exactly. Leaders, sharpen your influence / “sales” skills. It’s critical.

 

Amazon Books: https://www.amazon.ca/Making-Life-Less-Taxing-Attention/dp/B0GGTNMV2Q/ref=sr_1_1?

Apple Books: https://books.apple.com/ca/book/making-life-less-taking-version-2/id6758958890

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.