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In 2024, it was the trust reporting requirements that were due for year-end 2023, which included bare trusts. There was — and continues to be — significant confusion as to what a bare trust is for purposes of the filing requirements. At the very last minute, the filing requirements were suspended, but not after practitioners struggled mightily to ensure compliance. Bare trusts will need to start filing again for the 2026 year.

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The third mess was last year’s filing requirement for capital gains, given the uncertainty of the inclusion rate increase proposals coming out of the 2024 federal budget. Such proposals were on life support at the beginning of 2025 for 2024 filings until late March 2025. The uncertainty was simply unnecessary and caused tax preparers fits when trying to figure out how to ensure proper compliance.

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So far, it looks like a quadfecta will not be coming this year for 2025 filings. But, hey, there’s still 3.5 months left until the deadline, so let’s see what happens.

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What’s the solution to all these challenges: expensive and difficult to file, lack of automatic filing, declining numbers of accountants and tax preparers and numerous tax filing debacles?

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Fast-track a real automatic filing system, not a half-measure. If Estonia can deliver a pre-filled return in five minutes, so can we, eventually. The CRA will need the legislative authority and technical commitment to move beyond limited poor pilots that enable filings without taxpayer consent. Such a system should provide for an opt-out, not an opt-in. There are numerous other technical issues, but let’s get at it.

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Simplify the tax system. It’s not just the paperwork and technology that are broken; it’s the underlying complexity. Phase out ineffective tax credits, better align the rules and remove duplicative or unnecessary legislation (especially outright political tax measures). All this should occur with a comprehensive tax reform commitment by the government.

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Launch a proper tax designation and pipeline strategy. It’s long past due to introduce a recognized tax specialist designation to differentiate those who actually know this stuff from those who dabble. Pair it with recruitment and education incentives to get more young professionals into the tax and accounting profession, especially in public practice.

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Stop administering policy by press release. The capital gains debacle, underused housing tax issues, bare trust mess and, most recently, the digital services tax repeal all prove that policy needs to be much better vetted before legislation goes to Parliament. Recognizing policy problems after the law exists and dealing with them by press release changes causes chaos.

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Invest in the tax infrastructure, not just CRA headcount. CRA’s staff has grown by nearly 50 per cent in the past decade, but service has arguably worsened. We need better systems, training and support, not just more bodies or lame 100-day plans.

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Until we take the above seriously and take steps to fix the system, the mid-January blues will keep lasting well into May.

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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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