Credit unions (CUs) in British Columbia will keep their special tax status for one more year to give the provincial government more time to complete a legislative review of the sector, the province announced on Tuesday.
Specifically, B.C.’s government has decided to pause the planned phase-out of the tax advantage that CUs currently enjoy. The halt, which will be introduced in the provincial budget on Feb. 21, is intended to enable a review of the Financial Institutions Act and Credit Union Incorporation Act to be completed.
This review will “allow the province to consider the complete picture of the regulatory environment in which B.C.’s credit unions operate,” the government said on Tuesday. “There will be an opportunity for credit unions and other stakeholders to provide further input later in the review process.”
In 2013, the federal government said that it would eliminate the preferential tax treatment for CUs and B.C. said it would follow suit by phasing out the advantage in the provincial tax system over five years, starting Jan. 1, 2016.
The change in policy is subject to the approval of the legislative assembly.