CU Central of Canada Passes on Recommendations to House of Commons

OTTAWA, Canada – Appearing before the House of Commons Standing Committee on Finance in pre-budget consultations, Credit Union Central of Canada recommended the government take action in four areas when it releases its next Federal Budget – debt reduction, Farm Credit Canada, BSE (mad cow disease), and Competition Bureau fees. Speaking before the Committee, Credit Union Central of Canada Chairman Jack Smit urged the Committee to “exercise some caution when contemplating cutting taxes further or increasing program spending,” in light of the challenges facing the government’s budget caused by the economic slow down. Instead of cutting taxes, he recommended the Federal Government “continue to work at reducing the ratio of debt to GDP and not undertake fiscal measures that could unduly threaten this hard fought victory,” referring to the decline in the accumulated federal debt. Smit also encouraged the government to look at the role the Farm Credit Canada plays in rural communities throughout the country and to ensure that the government consider ways in which crown agencies can more effectively partner with credit unions. In addition, noting that the “flat fee framework actually discourages mergers in the credit union system,” Smith further recommended that Canada’s Competition Bureau adopt more equitable, sliding scale fees based on asset and transaction sizes for merger reviews conducted by the Bureau. The current framework, he said, “acts as a disincentive for larger credit unions seeking to merge with smaller credit unions.” He further noted that sliding scale fees would also reduce the “current disincentive faced by smaller credit unions seeking to become more competitive by merging with other credit unions in their provinces.” In regards to the government’s response to the BSE “crisis,” Smit noted that many of credit unions’ members are cattle producers and credit unions are major lenders to the cattle industry. “Credit unions are seeing the impact of the border closures on our members and we are concerned that the government do all it can to support a sector hurt by the BSE scare,” Smit told the Committee. There are more than 600 credit unions in Canada with more than 4.6 million members and total assets of $69 billion. -