Tax deduction reversal will hurt credit unions

The government’s proposed scrapping of a key tax deduction will hamper the services of Canada’s credit unions, says Bill Maurin, CFO and acting CEO of Meridian.

In its 2013 Budget, the Federal Government has proposed phasing out the tax deduction for credit unions over the course of the next five years. The allowable amount would decrease by 20% per year until 2017.

This change will hit those in small, rural communities the hardest.

“Our [company’s] approach resonates with members across the province, and by reversing this deduction, credit unions, the government will significantly diminish consumer,” says Maurin.

He adds, “Canada is well-served by its big banks, but Canadians [need] alternatives, especially in small communities.”

In Ontario alone, credit unions have 531 branches and represent the only financial services provider in 25 communities. They provide loans to small- and medium-sized businesses and mortgages.

Read: Canadian credit unions post strong 2012 growth

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.