One Comment About Taxation – So, We’re Finally Going to Have a Federal Budget!  What Can We Expect?

Well, it looks like we’re finally going to have a federal budget.  Not in October as originally thought but even later on November 4, 2025. PM Carney stated in the House of Commons that he is “looking forward…to releasing the budget on November 4 [and it] will contain the biggest investment in this country’s future in a generation…”. He also continued to trot out the vacuous phrase that they will “spend less to invest more” and that the “operational budget will be balanced in three years”.

 

It’s shameful that the budget was not presented in the spring.  When it is finally presented, it will have been 567 days since the last federal budget was presented. I can forgive the first 365 days but not the next 202 days. In other words, since the government’s fiscal year commences on April 1 annually, 218 days will have passed (with only 148 days remaining) without Canadians knowing how their precious tax dollars have been spent. It’s highly inappropriate and Canadians should not accept the tired old excuses to forgive this kind of non-accountability.

 

Regarding the vacuous phrase, “spend less to invest more”, it’s a nice sounding phrase for the financially illiterate voter that signals increased government spending. For those that buy into the ideology that increased government involvement in our lives is wholly appropriate and necessary, it fits nicely.

 

And “balancing the operational budget within 3 years” is a deceptive and old accounting trick. In the government context, such a separation of spending is intended to try to pretend that some spending is an “investment” rather than a current cost. But the simple fact is that if the government spends money and incurs debt, it’s highly doubtful that lenders will care if it’s labeled as “operational” or an “investment”. In other words, if the overall deficit is $100 billion, it is useless to label $60 billion as “capital” and the remaining $40 billion as “operational”. Again, such a separation is a tired old deceptive accounting trick designed to divert attention from the big picture.

 

So, what can we expect to see in the budget besides a historically high deficit? Well, for tax measures, one should remind themselves of the unimpressive taxation promises from Liberal Party 2025 election policy platform.

 

The signature tax policy promised was a 1% reduction in the lowest personal income tax bracket. That promise was put before Parliament in the short spring sitting but has not yet passed into law. It will most likely pass in the current sitting but the government has been crowing about this measure as if it’s law for some time now. I’m sure we’ll see more crowing about it in the upcoming budget but the simple fact is that it is a minuscule measure for the average Canadian (less than $200 of savings annually).

 

The Liberals also promised:

 

– to reduce the minimum RRIF withdrawal amount by 25% for 1 Year. Given that 2025 will be almost complete at the time of the budget release, this measure will likely need to be made effective for 2026 to ensure fairness but I guess we’ll see;

– to expand the labour mobility tax deduction by reducing the required travel distance from 150 km to 120 km and “consult” on increasing the current $4,000 annual deduction limit;

– to introduce a new refundable “HealthCare Workers Hero Tax credit” which was short on details but apparently will pay “Personal Support Workers” up to $1,100 a year;

– to expand the critical minerals tax credit and the Canadian Exploration Expense deduction (no details were provided);

– to revive the unimpressive Multi-Unit Residential Building (MURB) tax shelter from the 1970s as a “plan” to stimulate private rental housing development; and

– to conduct an “expert review” of the corporate tax system.

All of the above are short on details and shallow policies but I’m guessing we’ll see some updates about them in the upcoming budget.

 

I also expect to see an update regarding the “100 day plan” that the finance minister announced on September 2 for the CRA to improve their call centres. In a clearly knee-jerk fashion, the CRA announced late last week that as of September 8 – six days after the plan announcement – they had increased the number of employees in contact centres, and it will “continue augmenting the number of agents in the coming weeks.” This train wreck is a systemic, long-standing mess whose root causes won’t be solved by simply adding bodies. The 100^th day of the plan is on December 11 – more than a month after the release of the budget. We’ll see if the budget has any further announcements on this. In the meantime, the CRA appears to be committed to tracking progress.

 

Canadians have endured over 10 years of governance that views taxation less as a tool of sound economic stewardship and more as a blunt ideological instrument for social engineering and political messaging. I don’t expect that to change in the November 4, 2025 budget. Real change would mean “big bang” personal and corporate tax reform – big ideas and bold thinking that encourage investment rather than having the government “do the investing.”

 

Mark Carney declared himself to be a “great fiscal and budgetary expert” in the House of Commons last week, but good taxation policy does not appear to be part of that repertoire of his “new government”. While gimmicks might fool the financially illiterate voter, they won’t fool lenders, business owners, or anyone who has ever balanced a set of books.

 

On September 23, I’ll be in Vancouver watching the great classic rock band, The Who, belt out their classic song “Won’t Get Fooled Again.” Canadians would be wise to remember that refrain when the budget drops on November 4. We can either demand bold leadership and a tax system that rewards hard work and risk-taking or settle for being fooled, and misled, again.

 

One Comment About Leadership – Leaders, You Need to Be Aware of Your Surroundings

 

I love being aware of my surroundings. When I’m mingling with a lot of people, like in airports, restaurants and train stations/ rides, I love people watching. Why? Well, it’s interesting.  The human race is comprised of all kinds of people, and I find it fascinating. I often wonder what a person’s “story” is.  Are they happy today?  Sad? Worried?  I’m hopeful that they are on the “right path”. 

 

While I’ve written and spoken on this topic many times before, it’s amazing to me how many people are glued to their phones with their heads turned down with zero self-awareness. It’s often combined with over the ears headphones or earbuds. The combination of heads down with headphones gives no opportunity for people to be aware of their surroundings. Hey, I’m guilty of this sometimes as well, but not very often…I’d much prefer to soak in my surroundings to learn, observe and wonder.

 

I actually find it sad. The phone has permeated spaces where interruptions were not acceptable. Nice restaurants, church services, movie theaters and other spots where one would previously be distraction free and present is now all full of people on their phones.

 

I have to hand it to the phone and software developers…they have created something that draws people’s attention and eyeballs aware from the great things of life to their devices and content.  Obviously that is good for them. But is it good for society?

 

My conclusion is an emphatic, no. As I write this, I’m in a coffee shop, early morning, watching people rush down the street to work.  About every second person is engrossed in their phone as they walk. One person stumbled but thankfully didn’t trip.

 

From a leadership perspective, are you leading your organization as if you are walking down the street, head down into your phone with your headphones on and stumbling? If so, how are you aware of your surroundings? Don’t kid yourself….you cannot be an effective leader if you are not aware of your surroundings and have consistently long periods of time where you are distraction free and present to reflect. You need purposeful time – especially in this era of distractions being commonplace.

 

Good leadership does not involve burying your head in a device or being so absorbed in noise that you miss what’s right in front of you. It’s about having your eyes up, tuned into your surroundings, and being present enough to notice risks and opportunities. Leaders who cultivate that awareness position themselves and their teams to move forward with clarity and confidence.

 

In a world that rewards distraction, true leadership requires presence and situational awareness.  Practice “heads up / eyes up leadership”.

 

One Comment About Economics – The “Shadow Budget” of the Prominent Think-Tank, C.D. Howe

 

The C.D. Howe, a prominent think-tank in Canada, recently released its “Shadow Budget”, a collection of ideas that it proposes for the government to consider when developing its budget. It is a thoughtful piece that I would encourage you to read. It discusses the need for significant government cost cutting in order to bring government finances back into balance.  I agree with most everything the excellent piece has to say.

 

It also discusses some good points about tax changes.  Some highlights from the piece:

 

This Shadow Budget would pause or eliminate several recent problematic measures.

 

• It clarifies that the legislation to increase the inclusion rate on many categories of capital gains income and other changes to capital gains taxation will not be reintroduced.

• It rescinds the temporary exemption of home heating oil from the carbon tax.

• It revokes the “luxury tax” on cars, boats and airplanes.

• It revokes income surtaxes and taxes on inter-corporate dividends imposed on financial institutions.

• It reinstates the inter-corporate dividend deduction for financial institutions on Canadian shares held as mark-to-market property to avoid double or multiple taxation of the same income.

• It revokes the tax on share buy backs.

• It phases out the tax credit for first-time homebuyers and the First Home Savings Account. Both measures stoke demand and contribute to high prices for housing. The second violates basic tax principles by providing deductions on contributions yet allowing tax-free withdrawals.

• It discards proposed reforms to the alternative minimum tax as they apply to the treatment of charitable donations.

• It does not include revenue from the new digital services tax, assuming that Canada will suspend this tax as part of its negotiations with the United States.

 

To encourage charitable donations, this Shadow Budget would relieve more donations of private company shares and real estate from capital gains tax…

 

Again, I agree with this. It is doubtful the government will follow the recommendations of the C.D. Howe Shadow Budget but, in my opinion, it should.

 

Bonus Comment – Quote From Yogi Berra – American Baseball Player, Manager and Coach – About Self-Awareness

 

“You can observe a lot just by watching.”

 

Absolutely agree.  Leaders, “heads-up / eyes-up”.

 

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.