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Preferential Income Tax Treatment for Credit Unions Phase Out Paused


MNP’s TAKE: On February 21, as part of Budget 2017, Finance Minister Michael de Jong announced that credit unions throughout the province will keep their preferential tax advantage a little longer as the provincial government intends to pause* for one year the phase-out of the tax advantage credit unions have enjoyed. The pause is pending the review of both the Financial Institutions Act and Credit Union Incorporation Act. This will allow the province to consider the complete picture of the regulatory environment in which B.C.’s credit unions operate. Credit unions and other stakeholders have been actively engaged in the review and will have the opportunity to provide input in the ongoing review process.

In short, this means that through to the end of 2017, credit unions will continue to receive 80 per cent of the full provincial preferential tax treatment instead of having its value reduced to the previously scheduled 60 per cent. At this point it is unclear whether this indicates a possible reversal of the planned elimination, but it does provide some tax relief for the current year. It is also promising for B.C.’s credit union’s that the provincial government will re-examine in light of the many regulatory changes that they are currently faced with and the impact that these will have on them. *The one-year pause is subject to the approval of the legislative assembly.

For more information on how B.C.’s Budget 2017 could have an impact on credit unions, contact Darcy Haw, CPA, CA at 250.763.8919 or [email protected].