Credit unions across the province are applauding the provincial government’s decision to reinstate a more favourable tax rate.
The changes announced in the NDP provincial budget on Sept. 11 reinstates a lower tax rate for credit unions. The former Liberal government had planned to increase the rate incrementally over the next four years.
The Liberals, who were defeated in the May election, had previously decided in January to defer a decision on the proposed increases to allow time for more consultation.
The government’s announcement is welcome new for credit unions, said John de Leeuw, CEO of the Ladysmith &District Credit Union. Credit unions in B.C. were facing a tax increase of more than $26 million a year.
“We’re thrilled by the decision,” he said. “With this permanent tax change, we’ll have money to lend to our members and support local businesses. Ultimately, this decision enables us to continue to make important investments in our community and support local economic growth. It helps level the playing field with the big banks.”
De Leeuw said he is pleased the provincial government recognized that a competitive tax rate enables credit unions to reinvest in a diverse provincial economy, create jobs and provide additional support for community projects. It also acknowledges the unique position credit unions are in regarding reinvesting capital back into the economy, he noted.
“In communities where credit unions are the sole financial service provider, the tax change is likely to have an even bigger impact,” de Leeuw added.