VANCOUVER, BC – Central 1 Credit Union (Central 1), along with British Columbia credit unions, is pleased by the B.C. government’s decision to fully reinstate the credit union tax treatment, as announced in the September 11 provincial budget update.
Without the restoration of the credit union tax treatment, B.C. credit unions faced a tax increase of over $26 million annually – money that could be better spent investing in businesses and individuals supporting local non-profit organizations.
A competitive tax environment enables credit unions to reinvest in a diverse provincial economy by creating quality, head-office jobs across the province, providing more financial support for community projects, and making more local lending decisions to help small businesses and individuals thrive.
“We worked closely with B.C. government to restore the small business tax treatment for credit unions, and allow them to continue to support their members. We’re glad to see that our recommendation has influenced policy,” says Marilyn Mauritz, Interim President & Chief Executive Officer at Central 1. “With this tax change, credit unions will have more lending power, and will be better positioned to make important community investments – which strengthens the provincial economy as a whole.”
In communities where credit unions are the sole financial services provider, the tax change is likely to have an even bigger impact.
“Credit unions play an essential role in B.C.’s financial industry – particularly in smaller, underserved communities,” says Mauritz. “It benefits communities and the businesses that serve them when credit unions are taxed fairly.”
In 2014, the province planned to phase out the small business tax rate on credit unions and increase it incrementally over five years, beginning in 2016. In January 2017, the government deferred the planned tax increase for one year, pending further consultation. Previously, the lower tax rate was implemented in recognition of the fact that B.C. credit unions are in a unique position to reinvest capital back into the provincial economy.
With offices in Vancouver, Mississauga and Toronto, Central 1 holds on balance sheet approximately $17.7 billion in assets. We provide wholesale financial products, trust services, payment processing solutions and direct banking services to about 300 credit unions and institutional clients from coast to coast.
In addition, Central 1 is the primary liquidity manager, payments provider and trade association for our 42 member credit unions in B.C. and 70 Ontario member credit unions. Our members represent a consumer-oriented, full-service retail financial network that collectively serves 3.3 million members and holds more than $121.6 billion in assets. For more information, visit www.central1.com.
Director, Member & External Communications
Central 1 Credit Union
T 604.714.6581 or 1.800.661.6813 ext. 6581