Saskatchewan credit unions and their supporters have one week left to voice their concerns to the provincial government about a possible change to the tax regime that would severely harm a credit union’s ability to remain competitive with Canada’s big banks.
Lise de Moissac, senior vice president and chief financial officer at Affinity Credit Union, said the level of taxation currently in place in Saskatchewan has credit unions at an effective tax rate that is similar to their big bank competitors. She said this would change if the provincial government follows through with a change to the credit union’s tax regime similar to the federal government change announced in their 2013 budget.
“Because our province aligns itself with federal changes to taxation it had to do something,” said de Moissac. “They had to make a decision to either make no change and disconnect federally or to follow the feds and they chose for the 2013 year to leave the rate alone, but as we’re going into a provincial budget (the Saskatchewan government) intimated to us that they would re-look at all rates to taxation across all businesses.”
de Moissac said they are not expecting a change to the tax regime, but they are just making sure they are doing a good job of letting the province know as they go into their budget conversations what a 10 per cent tax increase that could amount to an additional $3 million in tax would do to their business.
“Anytime we have to pay more tax we really see it as an additional expense, so any tax increases reduce our credit union’s bottom line and in turn reduce our equity,” she said. “If we’re going to weather a tax increase we have to make up that bottom line somehow and some of the ways we would make up that bottom line loss would be to decrease our services, (so) to reduce the time and the money that we’re currently giving back to our communities, which is considerable. It could mean a loss of jobs and it would certainly mean decreased stability to compete with the banks.”
To try and stop this, de Moissac said they and all other credit unions in the province are asking credit union members along with the wider community to sign a petition to let the provincial government know that they want to maintain the current rate of tax. She said in addition to the petition they are hoping community organizations, credit union members and businesses would also send a pre-printed postcard or letter template to the Saskatchewan Minister of Finance and their individual MLAs expressing their support of credit unions.
“If they wanted to find that template it is online at saskcu.com or at affinitycu.ca and the deadline for that is Feb. 14, Valentine’s Day, so I suppose if you are in love with the credit union system in this province we would really urge people to take up the call to action and make sure that they make their voice heard.”