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CU Tax Debate: Beyond U.S. Borders

Most Canadian credit union executives can't remember a time when they didn't have to pay a nominal tax on income. But in the near future, the 40-year-old credit union tax, like most taxes, will increase.

By Michael Muckian | Updated on November 13, 2013

Most Canadian credit union executives can’t remember a time when they didn’t have to pay a nominal tax on income. But in the near future, the 40-year-old credit union tax, like most taxes, will increase.

The current combined federal/provincial income tax, which mirrors Canada’s small business deduction and includes an additional deduction for other earnings not covered under small business, varies by province from 11% to 15%. Those rates are scheduled to increase by 4% according to provisions in Canada’s 2013 federal budget, passed on June 26, which calls for a five-year phase-out of what had been considered a preferential tax rate.

Gene Blishen, general manger of $42 million Mt. Lehman Credit Union in Mt. Lehman, B.C., spoke on a panel during the CU Water Cooler Symposium in Nashville in October. When the panel topic turned to tax reform, Blishen surprised attendees by speaking positively about Canada’s tax on credit unions, saying it gives the industry more influence with lawmakers.

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