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Canada’s high personal tax rates stifle investment and act as a repellent to retaining and attracting talent. Eight of the 13 provinces and territories have personal tax rates that exceed 50 per cent at the highest rate, which has been a significant factor for many successful Canadians leaving Canada. This lump of coal needs to be burnt and replaced with more moderate and competitive rates.

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The recent conclusion on Dec. 11, 2025, of the politically motivated 100-Day Plan, initiated by Finance Minister François Champagne, to improve CRA call centres and other services was a big lump of coal. Instead of looking at the root causes of poor taxpayer service, it was a political public relations exercise for the CRA to tell Canadians how it was dealing with some of the symptoms, followed up by a concluding self-congratulatory press release. Embarrassing.

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What about my tax wishes? From a broad perspective, I wish Canada would get back to the four tenets of a good tax system as espoused by economist Adam Smith in his 1776 book, The Wealth of Nations. Those four tenets — fairness (equity), certainty, convenience and efficiency in collections — should be at the forefront of every new tax policy introduction.

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Unfortunately, it has not been the norm for years. If it was, reduced complexity would be the result, which is one of my additional tax wishes. The tax system should be approachable to the average Canadian, but it is not.

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What we desperately need — and what I keep asking Santa for every year — is serious tax reform. Not tinkering. Not targeted vote-buying gimmicks. Actual reform. A system that rewards hard work and risk-taking. One that doesn’t drive productive people out of the country. One that follows Smith’s foundational principles rather than the politics of envy.

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At the end of the day, Santa can only do so much. His sleigh is currently weighed down with political baggage, broken economic compasses, staggering debt loads and a crew more focused on optics than outcomes. Given that, Canadians shouldn’t expect many tax gifts under the tree next year either.

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Next year, instead of mailing letters to Santa, I might just fly to the North Pole to hand-deliver my tax wishes. Now that the carbon tax is gone, perhaps I can finally burn my coal pile, assuming Environment Canada doesn’t classify it as a luxury fuel or require a net-zero offset permit to get there.

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Maybe Santa Carney will join me, but he’ll need to bring a better tax and economic policy compass and definitely a lighter spending sleigh.

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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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