298: Canada’s New Budget | The Hidden Debt Crisis

When Policy Meets Reality “If you think you’re going to bring our trade with the United States down to zero, you’re dreaming.” – Kim Moody Canada’s economy is inseparable from the United States. Nearly 70 percent of our economic activity depends on that relationship. So when the federal government drops a new budget promising $60 billion in savings, public-service cuts, and “sacrifice,” the ripple effect reaches every Main Street business and household. This week on Wealth on Main Street, Richard Canfield sits down with Kim Moody, founder of Moody Private Client and one of Canada’s most outspoken tax experts. Together, they unpack what’s really inside Ottawa’s 2025 budget and what it means for Canadians trying to protect family wealth in a time of inflation and fiscal fatigue. Why the Budget Delay Matters Kim doesn’t mince words: a delayed budget is a disgrace. Since 1867, Canada has delivered a federal budget every year through world wars, depressions, and recessions except 2020, when COVID spending exploded without accountability. This year’s delay, he argues, signalled confusion and denial, not caution. “A budget isn’t just paperwork; it’s a plan. Without it, business owners live in planning limbo.” Spending, Inflation & the Hidden Tax The discussion turns bluntly toward inflation, the silent tax that erodes purchasing power faster than most realize. Canada now spends over $55 billion annually to service the national debt. That figure could hit $76 billion within a few years, roughly equal to all GST revenue. Debt interest doesn’t buy better healthcare or education; it rewards bondholders, often outside Canada. Moody calls this the numbing of the nation: billions and trillions tossed around until Canadians stop paying attention.The hosts compare it to “white noise that puts people to sleep.” Winners, Losers & Token Good News There are bright spots, but they’re narrow. The underused housing tax is gone. A partial rollback of the luxury tax (except on cars). 100 percent write-offs for certain manufacturing buildings. Early steps toward automatic tax filing, a move Moody applauds as common sense. Everything else? Layers of political clutter that complicate an already bloated Income Tax Act. “We reward unproductive bureaucracy instead of simplifying the system for people who actually create jobs.” The Debt Spiral Ahead Moody warns that Canada is repeating the mistakes that triggered the 1990s debt crisis.There are only three ways out: Raise taxes. Cut spending. Devalue the currency. None is painless, and the current budget doesn’t commit t...