First West Applauds BC Chamber of Commerce Policy on Credit Union Taxation
LANGLEY, BRITISH COLUMBIA--(Marketwired - July 9, 2014) - The BC Chamber of Commerce's unanimous adoption of a policy advocating for a permanent small business tax benefit for the province's credit unions was welcome news to First West Credit Union.
"We deeply appreciate the efforts of the BC Chamber of Commerce in supporting credit unions," says First West CEO, Launi Skinner. "Credit unions are not the same as banks. We are mostly community-based, small businesses in a sector essentially dominated by larger national financial brands. Yet credit unions remain critical to the vitality of local economies throughout our province."
The 2013 federal budget started a five-year phase-out of the extended small business tax benefit for credit unions. In B.C., provincial tax rates on credit unions were directly tied to federal levels, meaning that had the provincial government not taken action, B.C.'s 43 credit unions would have experienced additional tax burdens immediately. In the 2014 B.C. budget, the province amended legislation to phase out the provincial tax benefit for credit unions starting in 2016. While this is a positive first step, the BC Chamber's resolution calls on the provincial government to extend the preferential tax rate for credit unions permanently.
The resolution brought to light a key tax concern for credit unions. Similar to Canada's banks, credit unions are required to build ever-increasing capital to ensure soundness. But unlike banks, credit unions are member-owned co-operatives and cannot access capital markets. Instead they must rely on retained earnings for capital, while banks are able to issue stock on capital markets. Increasing taxes on credit unions impedes their ability to grow retained earnings and capital.
"In standing alongside credit unions, we're also standing alongside small businesses," said John Winter, president and CEO of the BC Chamber of Commerce. "Credit unions provide financial services in underserved markets, such as in northern and rural B.C. These organizations are integral to the health of small business in communities throughout our province."
Facts and insights
The 2013 federal budget eliminated the extended small business tax benefit for credit unions over five years.
Current provincial legislation provides a similar tax rate as the federal rate for B.C. credit unions; phasing out the federal tax benefit would result in a corresponding elimination of a provincial tax benefit.
The 2014 B.C. budget amended the provincial Act to phase out the provincial small business tax benefit for credit unions beginning in 2016.
B.C. credit unions employ more than 8,700 British Columbians; First West Credit Union employs nearly 1,300.
Credit unions are currently the only financial institution in more than 40 communities in B.C.
First West Credit Union serves more than 171,000 British Columbians in mostly small, mid-sized and rural communities throughout the province. It has one of the fastest growing memberships in all of B.C.
In 2013 alone, First West Credit Union gave more than $2.4 million in community investment efforts.
About First West Credit Union
First West Credit Union offers members the financial strength, comprehensive product selection and extended branch network of a large financial institution while maintaining local brand identities and a unique grassroots approach to service. Led by Launi Skinner, First West is British Columbia's third-largest credit union with $7.7 billion in assets under administration, more than 177,000 members and close to 1,300 employees. It operates 38 branches throughout the province under the Envision Financial, Valley First and Enderby & District Financial brands. For more information on First West Credit Union, visit firstwestcu.ca.
Follow us on Twitter: @firstwestcu
About the BC Chamber of Commerce
The BC Chamber is the largest and most broadly-based business organization in the province. Representing more than 125 Chambers of Commerce and 36,000 businesses of every size, sector and region of the province, the BC Chamber of Commerce is "The Voice of Business in BC."
Media Contacts: First West Credit Union Cheryl Shaw 604.539.7360 firstname.lastname@example.org
BC Chamber of Commerce Jenny MacPhee 604.638.8114 email@example.com