Decision to temporarily retain current tax rate will result in more money invested back into local communities
Surrey, B.C. Coast Capital Savings applauds the Province of British Columbia’s decision to delay tax increases to credit unions. The deferral will enable the province to consider the impact of the tax increase within the context of its ongoing review of the two main pieces of legislation governing the credit union sector.
“We think this was the right thing to do,” said Coast Capital Savings President and CEO, Don Coulter. “Credit union laws, regulations and tax policy are best examined holistically in the context of what is good for our members, and the contribution B.C.’s 42 credit unions make to the B.C. economy and the communities we serve.”
The original decision to increase credit union taxes was the result of a federal and then provincial directive to remove a small business tax credit that credit unions have received for decades. This credit recognized that, in the financial services sector, even the largest credit unions are extremely small players compared with major bank competitors. The province originally indicated it would phase out the credit at a rate of 20 per cent per year, starting in 2016.
A competitive tax environment allows credit unions to reinvest in the local and provincial economy by creating quality jobs across the province and making more local lending decisions to help small businesses and individuals.
For Coast Capital, the decision to halt that phase out while further review takes place is projected to result in approximately $1 million in tax savings in 2017.
“Unlike a bank, those savings do not go to shareholders. Our members are our owners, and any increase in net income goes back into services for them, enables us to lend more to families or small businesses trying to get started, or is invested into community causes that support better futures for B.C. youth,” Coulter said. “We’re pleased the province has recognized the value we provide to our 532,000 members and has heard our requests to reconsider this tax decision. We look forward to working with them as the legislative review progresses.”
Coast Capital Savings is Canada’s largest credit union by membership. An Imagine Canada Caring Company, the credit union invested $5.6 million into local communities in 2016, focusing on empowering and engaging youth. Coast Capital is one of Canada's 10 Most Admired Corporate Cultures™, and a member of Canada's Best Managed Companies Platinum Club. It has 52 branches serving its 532,000 members in the Metro Vancouver, Fraser Valley, Vancouver Island and Okanagan regions of British Columbia. Product innovations include Canada's first free chequing account from a full-service financial institution. To learn more, visit coastcapitalsavings.com.
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