UPDATE: NDP incumbent Conroy responds to critical Kootenay Savings letter
By Contributor
Update:
Letter to the Editor:
On May 7, President and CEO of Kootenay Savings Credit Union, Brent Tremblay, wrote a letter to local media outlining his concerns with the proposed capital tax on financial institutions that the NDP has discussed implementing if we win government on May 14. Firstly, I want to thank Brent for expressing his concerns and, having met and discussed this issue with him, I understand that as CEO he is responsible for the wellbeing of KSCU and its members.
I think it is important to clarify exactly what the NDP platform says regarding this issue. As a part of our fully costed party platform, the NDP has stated that, effective Oct. 1, 2013, we would reinstate the corporation capital tax on financial institutions. After discussion with Brent and members of the BC Central Credit Union Board, the NDP and leader Adrian Dix relooked at our initial proposal of a three-per-cent tax on all financial institutions. Banks would continue to pay three per cent, while financial institutions with headquarters in BC, including credit unions, will pay one per cent. If the credit union has capital holdings of less than $20 million they will be exempt from this tax. This measure will add $75 million in revenue in 2013-2014 and $150 million in 2014-15 and 2015-16.
Why are we proposing to reinstate this tax? Since 2011, we have stated that we want to bring back non-repayable grant programs for post-secondary students in BC that was eliminated by the Liberals in 2004-05. This minimum tax on financial institutions will allow us to provide substantial funding for students to address the large skills shortage our province is experiencing.
This tax would not touch any deposits and would affect less than half of BC Credit Unions. Carol Taylor, former Liberal Finance Minister, removed the previous bank tax in 2009 and was later appointed to the Toronto Dominion Bank, Board of Directors. The tax had existed since 1973 in BC. While we appreciate the feedback from KSCU we also realize that we have to be responsible in finding funding for important programs.
Katrine Conroy, NDP Candidate, West Kootenay Riding
Original letter:
Letter to the Editor
Proposed Capital Tax Will Negatively Impact Kootenay Citizens and Communities
In its financial platform, the provincial NDP has announced its intention to apply a capital tax to all BC credit unions with capital in excess of $20 million should they be elected. If this policy is implemented, it will have a significant impact on our organization and the people and organizations associated with us.
This tax will be applied regardless of how profitable the credit union is. While other provinces in Canada apply a capital tax on business, cooperative enterprises such as credit unions, are exempted from the tax.
As we understand this proposal, the cost to Kootenay Savings will be roughly $780,000 per year and will continue to increase annually as our capital base increases. This is a significant cost that will ultimately be borne by our members, our communities and our employees, as it will have to be paid from income that would otherwise be shared with our members, contributed to community organizations or paid in salaries and benefits.
We sincerely hope that the NDP will reconsider this proposed tax on credit unions should they form the next provincial government.
Brent Tremblay
President and CEO
Kootenay Savings Credit Union
