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The bare trust reporting rules followed this exact same arc. Despite years of warnings from the tax community and a series of recent amendments, the upcoming filing season is setting up to be yet another preventable gong show.

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The third category is the most telling because gravity wasn’t even allowed to do the correcting. Politics did it first.

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The Digital Services Tax was rescinded in 2025 within days of becoming collectible, under direct United States trade pressure. Last week, it was revealed that the Canadian Radio-television and Telecommunications Commission’s streaming-services levy, the so-called Netflix tax, is being scrapped after similar U.S. trade pressure, with the foregone revenue replaced by taxpayer-funded federal spending.

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The 2024 capital gains inclusion rate increase was eliminated after poor consultation and a lot of political fury.

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None of these examples reflect a government that reconsidered the merits; they reflect one that discovered the political cost first.

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New Zealand recognized decades ago that tax policy works best when taxpayers, practitioners, business leaders and government all stress-test ideas before they become political announcements. Its Generic Tax Policy Process, running since 1995, builds genuine consultation into the earliest stage of policy development rather than bolting it on after an announcement.

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Canada has drifted in the opposite direction. Consultation typically begins only after the government has already announced its preferred outcome. It’s then too late to test whether an idea should proceed and it only pays lip service to the feedback.

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The United Kingdom once had a rigorous tax policy design process — a formal five-stage Tax Consultation Framework that became an international benchmark for disciplined tax policy development — but it was replaced in June 2025 with looser Tax Policy Making Principles that trade staged rigour for government flexibility, a shift some tax professionals are already warning could mean less consultation, not more. Canada should view this as a cautionary tale.

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Recognizing that our tax system is failing, the Liberals promised an expert review of the corporate tax system during the 2025 election campaign. However, Finance Minister François-Philippe Champagne has since said he doesn’t need one.

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Instead, the government will once again rely on pre-budget consultations, a charade that is long on submissions, but short on meaningful influence. To date, the consultations have collected 1,300 submissions, but virtually all those submissions will be ignored.

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We don’t simply have bad tax policies; we have a broken process for creating them and both need reform.

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Engineers don’t ask the public for input and then build whatever they’d already decided to build. That’s the difference between consultation and theatre. Our government has spent more than a decade proving it can’t tell them apart.

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Gravity doesn’t reward the appearance of listening. It rewards the load-bearing work of doing it. Canada hasn’t reviewed or rebuilt its tax system from first principles since the Royal Commission on Taxation 60 years ago.

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I’ll keep thanking the engineers who respect gravity, but I’m still waiting for our government to do the same.

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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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