Budget's proposed reversal of tax deduction will hurt credit unions' ability to serve Canadians
TORONTO, March 21, 2013 /CNW/ - Bill Maurin, CFO and Acting CEO of Meridian, Ontario's largest credit union, says the federal government's proposed scrapping of a key tax deduction will seriously hamper Canadian credit unions' ability to service their members, particularly those in small, rural communities.
In its 2013 budget, the federal government has proposed phasing out a longstanding tax deduction for credit unions over the course of the next five calendar years. Under the proposed change, the allowable deduction amount for credit unions would decrease by 20 percent per year beginning in 2013 until its elimination in 2017.
The deduction, implemented by the government approximately four decades ago, provides credit unions with a vital tool to allow them to better service their members against a Canadian financial services landscape that is dominated by the traditional banking sector.
"Canadians want and need a viable alternative to the traditional banks. For more than a century, the country's credit unions have fulfilled that need," says Maurin. "Meridian's approach continues to resonate with our members across the province, who have helped us grow from $3 billion to $9.6 billion in assets over the past seven years alone. By reversing this important and longstanding deduction for credit unions, the government will significantly diminish consumer choice for Canadians."
Maurin says the move will prove particularly harmful to small, rural communities underserved by the traditional banking sector. "Canada is well-served by its big banks. However, it's vital that Canadians have alternatives to the traditional banks, especially in small communities where local residents may not have access to any banking presence," he says. "Meridian is calling upon the federal government to seriously reconsider the proposed scrapping of this deduction in light of the negative, long-term implications it will have on Main Street, Canada."
"As a supporter of more than 15,000 locally-based businesses across Ontario, Meridian understands what makes local economies tick," says Maurin. "While the government is suggesting that its 2013 budget will serve to foster and ignite local economies, we feel strongly that the move to repeal this deduction will have the absolute opposite effect."
In Ontario alone, credit unions have 531 branches and represent the only financial services provider in 25 Ontario communities, providing loans to small and medium sized businesses, mortgages to buy homes and donations of time and money to strengthen communities.
Meridian is Ontario's largest credit union, serving more than 247,000 Members at 61 branches and 8 Commercial Business Centres in communities across south central Ontario. With more than 70 years of banking history, Meridian delivers a full range of financial services, solutions and advice tailored to meet each Member's individual needs, including access to The Exchange® Network with more than 2,400 no-fee ABMs in Canada. Membership at Meridian is open to anyone looking for a financial services provider with a local, community focus that offers a viable alternative to traditional banking options.
SOURCE Meridian Credit Union