Credit Unions Significantly Impacted By 2017 Provincial Budget – MNP

The delivery of the 2017-2018 Saskatchewan budget on March 22 will have a significant impact on credit unions going forward, as the province has decided to phase out the additional credit union deduction over a four-year period, starting this year.

There is much discussion amongst credit unions and industry groups as to how the system will plan for this change, as the increase in tax will have a significant impact on a credit unions’ ability to build capital reserves.

Saskatchewan’s small business tax deduction for credit unions was designed to accumulate capital in cooperative financial institutions, SaskCentral notes. When banks need capital, they can issue shares traded on public exchanges. Credit unions typically do not issue shares like the banks do, making them unable to benefit from federal incentives such as the generous capital gains exemption

Read More: http://www.mnp.ca/en/posts/credit-unions-significantly-impacted-by-2017-provincial-budget