One Comment About Taxation –Remembrance Day, The 2025 Federal Budget and the Need For Tax Reform

In late May 2024, I had the privilege to visit Juno Beach in Normandy, France with my Mom and sister. For those that need a reminder, that was the site that Canadian soldiers landed on D-Day – June 6, 1944 – during WWII. My visit was days before the 80^th anniversary of that important historical day. It was a chilling moment to stand in the exact spot that many Canadians gave their lives for to protect our precious democracy. And to admire and honor those that fought hard against strong resistance.

 

Over the years, I’ve admired people like Don Cherry – who deserves the Order of Canada – who have been adamant about the need to reflect on November 11 about the sacrifices made by our country’s veterans and honor them. In my view, like Don’s, such reflection and honor should be more than just one day – it should be year-round – and it comes with a solemn duty to do what you can to work to ensure that their sacrifices are built on.

 

For me, that duty means fighting for a tax system that rewards hard work and risk-taking, not punishes it. I’m one small voice – but silence isn’t an option when policy drifts.

 

Honoring sacrifice also means protecting what they fought for – including how we steward our nation’s finances. That leads me to the November 4, 2025 federal budget. The build-up to it was that it was going to be transformational! Well, hardly. If you consider huge spending and its related debt that will ultimately land on the backs of our youth to deal with (by massive tax increases, large austerity or both), then transformational it is.

 

Or if you believe the messaging that the spending is going to “catalyze” massive investment into Canada, well, I have some bridges to sell you. Cheap. And with government financing of course. Large government intervention into an economy does not have a great historical track record around the world despite those that keep pushing it.

 

It’s been interesting to watch the reaction from media, “experts,” and the usual budget cheerleaders. Many seem perfectly fine with the explosion in government spending. Their justification? A barrage of international comparisons, debt-to-GDP ratios, and other abstract metrics designed to make Canadians feel that everything’s under control. But, cutting through the noise, I think it’s actually very simple: every dollar the government spends that it doesn’t have will be paid for by someone – usually our kids and grandkids. As renowned economist Thomas Sowell put it, “The real cost of government is not what it taxes, but what it spends. The deficit is simply a deferred tax.”

 

Some critics say that Sowell’s view is overly simplistic and that government spending can drive growth or reduce inequality. Maybe in theory. But here in the real world, when spending outpaces economic growth and accountability is reduced (like the delay of the budget this year and the deceptive attempt to split the budget into ‘operating’ and ‘capital’ categories to mask deficits), all you’re left with is a bloated public sector, lower productivity, and a tax bill nobody voted for. I’ll take Sowell’s blunt realism over academic idealism any day.

 

With respect to our tax system, the recent budget broke a streak of ten years of having some sort of annual tax increase or new taxes. That’s a good thing.  And it was supplemented by the elimination of the ridiculous Underused Housing Tax and the repeal of the luxury tax on planes and boats (unfortunately the luxury tax for automobiles was retained….this too needs to be eliminated). Again, a good thing.

 

But the good was overtaken by the “bad” – including the introduction of a new personal tax credit, the Personal Supports Worker Credit – which such clutter is the last thing our tax statute needs – and downright “ugly” economics: the projected total deficit for the current fiscal year is $78.3 billion slowly decreasing to $57.9 billion for 2028-29 – a reckless path that adds about $322 billion to our country’s cumulative debt during that time.

 

Joseph Howe, an early Canadian statesman and democratic reformer who later helped integrate Nova Scotia into Confederation, stated in an 1871 address: “A wise nation preserves its records, gathers up its muniments, decorates the tombes of its illustrious dead, repairs its greatest structures and fosters national pride and love of country, by perpetual references to the sacrifices and glories of the past.”

 

I totally agree. And in today’s fiscal context, one of the “greatest structures” that Canada has is its taxation system. But it is in dire need of repair. Once again, an opportunity to reform our tax system was missed in the recent budget. Given the Liberals’ promise to have an “expert review of the corporate tax system” during the spring election campaign, it was very disappointing that the budget did not contain this – or a much-needed broader reform. This is just plain “bad”.

 

Many – including me – have often stated that our tax system has become so complex, so inefficient, so punitive and grown into a giant income re-distribution scheme that it actively works against the values of hard work and sacrifice. Again, it’s long overdue for change.

 

Don Cherry has always been clear on one thing: we live in the greatest country in the world because of the men and women who serve – those who gave their lives, those who came home, and those who continue to stand on guard today. His message, year after year, was simple: we should honor that sacrifice not just on Remembrance Day, but every day.

 

I couldn’t agree more. True remembrance is about how we protect and strengthen what they fought for. That includes the integrity of our institutions – including our tax system. If we want to honor their legacy, we need to govern with discipline, respect taxpayers, and stop punting responsibility to future generations.

 

Anything less is a betrayal of the freedom they secured. And you can honor that by wearing a poppy proudly.

 

One Comment About Leadership – Leaders,  Are You Answering Questions Respectfully?

 

I love to watch “leaders” address questions from teammates, contrarians or otherwise interested parties.  What I look for is body language, tone and content. Often, I see eyes rolling, body slumps, and condescending smirks while listening to the question. And with the response, I sometimes see a “how stupid of a question” type answer with “well, I obviously have different views” that fails to address why. In the political realm, our country’s PM – Mark Carney – is famous for this kind of behavior. But he is certainly not the only one.

 

In my view, all of the above are disrespectful and not necessary. If you’re this type of leader, then take two seconds to realize that you’re not the smartest person in the room. No, really – you’re not. You might think you are and that’s where you need a shift.

 

A respectful response is one that is empathetic and kind. Why? Because obviously everyone doesn’t share your views. To try to put yourself into someone’s shoes is a necessary leadership attribute. Why? Because it helps you understand the conversations that are happening around you. And with such understanding, your responses can be much more pointed, kind and – of course – empathetic.

 

Leaders, don’t be that that disrespectful person that answers questions with dripping narcissism. You can be better than that.

 

Respectful leadership isn’t soft – it’s strategic. Don’t let ego cost you credibility

 

One Comment About Economics – The 2025 Federal  Budget – Deficits and Debt

 

I stated the following in my November 6, 2025 Financial Post article about the “ugly” economics coming out of the 2025 Federal Budget:

 

• The projected deficit. As has been widely reported, the projected total deficit for the current fiscal year (purposely ignoring the deceptive “capital” versus “operating” budget split) is $78.3 billion slowly decreasing to $57.9 billion for 2028-29. This is beyond reckless and adds about $322 billion to our country’s cumulative debt during that time;
• Public debt charges. With increased debt comes increased public debt charges. Those charges are expected to increase from $53.4 billion during the current year to $76.1 billion in 2029-30. Wow. That’s a $22.7 billion annual projected increase in five years, or 42.5 per cent. Again, that is reckless. To put this into perspective, by the time 2030 comes around, our country will be spending $1.46 billion per week in debt charges. That’s a lot of hospitals, schools, roads, defence, artificial intelligence build-up and other important infrastructure that could have been built with those wasted funds. Every single Canadian should be extremely concerned about this kind of wasteful spending;
• Not enough spending cuts. Total spending cuts are apparently going to be $60 billion over the next five years, including public service staff reductions. From the budget: “From a peak of almost 368,000 in 2023-24, the public service population is expected to reach roughly 330,000 by the end of 2028-29 — a decline of about 40,000 positions or 10 per cent.” These are not the deep cuts that many were asking for, especially when you consider the new spending. It’s       my opinion that the bloated public service needs to be reduced by a lot more while ensuring critical services are, of course, not compromised; and
• The spending in this budget is eye-popping: $450 billion, on a cash basis, in overall new spending. Again, if you like government intervention, you’ll love what the government is “investing” in but to suggest the cuts described above are meaningful when you have this kind of spending is like saying you’ve lost weight when you’ve actually gained significantly.

 

It boggles my mind that some are not concerned about the large increase in federal spending and deficits. In my view, ALL Canadians should be. The public debt charges alone are eye-popping and concerning and, like I said, could provide for a lot of additional public services annually if those costs were not around. In the meantime, we continue to pay such charges with zero public good to show for it.  Not good. And, of course, very concerning.

 

Will credit rating agencies take note? Well, they already have. Fitch Ratings stated the following on November 6, 2025 – two days after the release of the Budget:

 

Canada’s…proposed budget, announced in Parliament on Nov. 4, underscores the erosion of the federal government’s finances, says Fitch Ratings. While Canada’s rating is broadly stable, persistent fiscal expansion and a rising debt burden have weakened its credit profile and could increase rating pressure over the medium term. This may be exacerbated by persistent economic underperformance caused by tariff risks and structural challenges, including low productivity. 

 

Budget 2025 substantially increases capital expenditure while moderating growth in operating expenditures and delivering modest savings. Coinciding with a weak economy, the budget expands the forecast federal deficit to CAD78.3 billion (2.5% of GDP) for the fiscal year ended March 2026 (FY 25-26), up from our prior estimate of CAD70.4 billion (2.1%).

 

These translate into a general government deficit of 3.3% of GDP, which is higher than the ‘AA’ median of 2.3% and substantially higher than Canada’s pre-pandemic deficits which averaged 0.4% in the two decades prior to 2019.

 

Again, this is not good. Could other rating agencies come out soon with concerns as well? Will Canada see a ratings downgrade? If so, that would spell trouble with increased debt charges leading to further financial pressures on our government finances.

 

Not good.

 

Bonus Comment – Quote From Ernest  Hemingway –  Famous American Writer – About the Importance  of Respectful Listening

 

“When people talk, listen completely. Most people never listen.”

 

Absolutely agree! Leaders respectful listening and responding is a key leadership attribute!

 

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.