Credit unions are applauding the federal government’s plan to introduce legislation that will make it easier for the co-operative financial institutions to operate nationally.

In his federal budget, Finance Minister Jim Flaherty said Ottawa will move forward with legislation that allows credit unions to incorporate federally.

Credit unions say the legislation will give them more growth options if they are allowed to operate outside their traditional provincial boundaries.

“We are marking a historic milestone today,” said Mark Mcloughlin, chairman of the Case for Progress committee, an industry group that has been lobbying for such changes for years.

“This new legislation benefits all Canadians by increasing their choices in selecting a financial institution. It will strengthen the stability and competitiveness of the entire financial services industry in Canada.”

Credit unions are relatively small co-operative financial institutions that are owned by their members. Currently, more than five million Canadians belong to a credit union.

In Quebec, one of that province’s biggest financial players is the Desjardins financial co-operative, which operates banking, credit union and other financial services.

Credit unions also have a bigger presence in British Columbia and other parts of Western Canada, where the movement has deep roots.

Mcloughlin said the new legislation, if passed into law, will provide the credit union system with increased economies of scale and more competitive costs. That would make them `a strong and viable nationwide alternative within the financial services industry in Canada.

He said the decision whether to expand is up to individual credit unions. As well, approval from members would be required before any credit union could proceed to expand across provincial borders.

The committee includes FirstWest, Coast Capital Savings and Vancity in BC; First Calgary in Alberta; Meridian, Alterna, and Buduchnist in Ontario and Credit Union Atlantic in the Maritimes.