I was recently having a chat with some people about the election, and one person ended his mini-speech about the Liberals’ and Conservatives’ policies by saying he looked forward to reviewing all the parties’ policy platforms and voting for the party that had the “best” ones.

Normally, I would respect such a statement. However, the Liberals and their shiny new apparent statesman don’t deserve the chance to fix the mess they created, especially given the reasonable alternatives. Such a platitude does not have my respect this time around.

The most recent “statesman politicking” from Mark Carney was with respect to the phone call that he had with United States President Donald Trump on March 28. According to Trump’s press release, the call was “extremely productive.” Carney’s companion release called it “constructive.” These press releases were heavy on adjectives and light on substance. In other words, they were all about the optics, not the outcomes.

So, with tongue slightly in cheek, here’s how I imagine a post-phone call conversation and resulting press release went (with thoughts being audible as well):

Trump: Marky Mark. Great call today. I told my people it was “extremely productive.” That’s the headline. I even threw in “great for both countries.” You’re welcome.

Trump’s thought: Keep it vague; sound like a statesman. Let the markets speculate. Meanwhile, we’re steamrolling ahead with our tariffs and a future tax plan … we’ll announce that in the months ahead. I’m sure we’ll catch Canada with their pants down again.

Carney: Thank you, Mr. President. I also called it “constructive.” Canadians need to believe diplomacy is alive and well and that I can handle strong personalities like yourself.

Carney’s thought: DJT is going to unleash a firestorm of tariffs on April 2. This presser is about damage control masked as diplomacy.

Trump: I loved the part where you said we’d work on a new economic and security relationship. Smart move … it leaves me room to announce the deal whenever it happens and take credit for it.

Trump’s thought: I think I’m going to call this deal the America-First Fair Trade Accord … yeah, I like that.

Carney: We will, of course, be implementing retaliatory tariffs.

Carney’s thought: Canadians seem to fall for the word “retaliatory.” Our polling numbers go up when we say that.

Trump: Do what you have to do. Just remember we have more capital coming our way.

Trump’s thought: I can’t wait to unleash our tax package. While Carney wants to play games with “capital budgets” versus “operational budgets” to hide massive spending for his tax and spend agenda, we’ll be moving faster. I can already hear the sucking sound of capital leaving Canada.

Beyond the diplomatic theatre, Canada’s real challenge lies in its economic strategy. Without bold thinking, big ideas and ensuring our country’s resources are not restricted, our country will continue to struggle and not be equipped for the battle that lies ahead.

What have we seen so far from Carney regarding those big ideas that we so desperately need? Nothing, except big spending announcements that take as much intellect as a mouse to develop and implement.

One big idea that was announced by Pierre Poilievre on March 30 was the automatic deferral of taxation on realized capital gains (from July 1, 2025, to December 31, 2026, but could be made permanent) if such proceeds are reinvested in Canadian assets.

The Income Tax Act currently provides very limited opportunities for Canadians to defer taxation on realized capital gains. This proposal appears to provide a blanket deferral opportunity in the right circumstances and provide comparable results to Americans who also have had a broad-based deferral of capital gains in many circumstances (but has recently been limited to real estate).

I would hope, however, that this proposal becomes permanent since I’m convinced the long-term benefits of tax deferral on a reinvestment would be felt much stronger over the long term rather than only 18 months.

For example, with respect to business, by not taxing realized capital gains that are reinvested in Canadian businesses and property, the Canadian government is investing in those Canadian businesses on behalf of all Canadians. Future profits will be taxed when the reinvestment yields a return — say, dividends or capital gains — so all Canadians benefit.

The tax-the-rich crowd might raise their voices on this idea to say it only benefits the rich, but I say nonsense. If Canadians — such as our wonderful existing and budding entrepreneurs — can defer taxation by reinvesting in Canada, this might do wonders to increase overall economic activity. Especially if this proposal is part of overall tax reform that has been promised by the Conservatives by convening a Tax Reform Task Force within 60 days of getting elected.

If we want to protect their prosperity and sovereignty, we will need to see past the performative polish of Carney and remember the poor tax and economic policies of the last 10 years.

As the old Latin proverb says, “Fortune favours the bold.” Our country needs bold ideas and substance right now, not increased spending that is fiscal laziness dressed up as leadership.

Kim Moody, FCPA, FCA, TEP, is the founder of Moodys Tax/Moodys Private Client, a former chair of the Canadian Tax Foundation, former chair of the Society of Estate Practitioners (Canada) and has held many other leadership positions in the Canadian tax community. He can be reached at kgcm@kimgcmoody.com and his LinkedIn profile is https://www.linkedin.com/in/kimgcmoody. 

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