Politicians rely on voters who are swayed more by emotion, gut instinct and catchy slogans rather than policy analysis. Political scientists often refer to this cohort as “low information voters” and they can indeed swing elections.

The most recent example is the laughably empty Elbows Up campaign that the Liberal Party successfully ran on, but, of course, has had zero success in keeping those elbows up.

Why can spoonfeeding such laughable information to certain voters be powerful? Having a basic understanding of economics, taxation, public policy, markets and accounting helps us understand how government works along with its related finances, but the vast majority do not have those types of education. Instead, most rely on what they consume online.

As a result, many election campaigns and subsequent governing policies are not designed to appease people with high financial literacy. Instead, they are often designed to appeal to basic human emotions, especially fear and the desire for security.

Fear can be a huge motivator, with Donald Trump‘s threats to over Canada being a recent example. The desire for security is often appeased by spending initiatives or candy, such as promised tax credits (for example teachers getting a tax credit), so people feel like they are taken care of.

Accordingly, people’s eyes often gloss over when they hear about the billions being spent by the government or the latest government deficit estimates. Pleasant words such as “investments” are used as substitutes for “spending,” and terms like “funds” and “initiatives” are commonly used to justify large spending sprees that appease the cohort’s desire for security.

In the meantime, the average Canadian struggles with trying to make ends meet while relying on our country’s infrastructure for basics such as health care and education (both portfolios under provincial jurisdiction with large funding contributions being made federally).

It’s fair to say that both our health-care and education systems have room for significant upgrades. Been to the emergency room at your local hospital recently? You can often wait hours and hours. Or do you need an MRI? Wait times are atrocious.

Who wouldn’t like to see improvements? Resources, however, are not unlimited, despite what politicians like to imply with their endless promises. As the old analogy goes: you can try to grow the pie or just slice it differently.

If there are no extra resources — in other words, the pie is not bigger — allocating more to one initiative means taking them from another. The harsh truth is that without economic growth and disciplined fiscal management, governments are left playing a zero-sum game.

Canada’s

economic growth

and

productivity

have, frankly, been pathetic. This has been true for at least the past 10 years. Our country’s economic problems did not start with the threats of

Trump’s tariffs

or Canada becoming the 51st state. Far from it. But our country’s real gross domestic product was down 0.4 per cent for the second quarter of 2025, according to Statistics Canada.

To grow our economy will take significant efforts by Canadians with policy help from our governments. And by policy help, I don’t mean spending masked as “funds” or “initiatives.” Instead, much help often comes in the form of getting out of the way. Undertaking

comprehensive tax reform

would be another good way to provide policy help.

Our economy would also benefit by electing governments at all levels that are financially literate and won’t mortgage our children’s future for political wins today.

For example, because of our government’s accumulated debt, it must pay interest and other costs to service that debt. For 2024-2025, our federal government paid $53.8 billion in such costs. To the average person, that number means nothing, so let’s explain that a little further.

Of all the federal government revenues that it collected from Canadians in various forms of taxation, fees and levies, it spent 10.8 per cent of it on interest costs during that year, according to the

Fraser Institute

. That amount exceeded what the federal government transferred to the provinces for health care ($52.1 billion) and child-care benefits ($35.1 billion) during that period.

What if the interest costs were zero? Or even cut in half? There would likely be room for material tax relief for all Canadians, not the token one per cent tax reduction that has been promised but not yet passed by the

Mark Carney

government.

Significant tax reduction would have a meaningful impact on reducing the cost of living for everyone given that

taxes are the biggest expenditure

— 42.3 per cent of a family’s income — for the average Canadian family. Resources could also be reallocated to high-pressure points such as health and education, as previously mentioned.

If Canadians improved their financial literacy, the attraction to “feel good” politicians would diminish. Instead, financially literate Canadians would vote for politicians and parties who would treat their tax dollars with respect and, in turn, our country overall would be better off.

Governments don’t get a pass on basic arithmetic. Continued spending without a disciplined budget is unsustainable, no matter whether it’s labelled as an

operating or capital

budget. Every borrowed dollar must eventually be repaid, usually through higher taxes or reduced services. And increased debt inevitably means higher borrowing costs that crowd out priorities such as health care and education.

As American economist Milton Friedman reminded us, “If you’re not paying for it in the form of explicit taxes, you’re paying for it indirectly in the form of inflation or in the form of borrowing.”

Canadians need to start planting acorns, and that starts with intentional efforts to improve your financial literacy to see through political sugarcoating. Only then will Canadians grow the oak tree of prosperity, one led by governments that finally treat tax dollars with respect.

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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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