Credit union taxes debated

REGINA — Provincial Opposition finance critic Trent Wotherspoon says he fears the Saskatchewan government won’t renew a special tax status for credit unions in its upcoming budget, to be released Wednesday.

“Saskatchewan credit unions certainly are vital to our province’s economy,” Wotherspoon said. “They serve many populations that banks have pulled out of and they’re very important to the business lending in this province … In fact, they provide over 50 per cent of the lending to small- and medium-sized businesses in Saskatchewan.”

Wotherspoon said the Opposition worried last year when the federal government moved to phase out, over five years, a special tax status for credit unions that dates back more than 40 years. That change is expected to cost each credit union about $3 million annually.

Saskatchewan Finance Minister Ken Krawetz said last year that the province wouldn’t change its tax regime for 2013, but he said his ministry would take another look for the 2014-15 budget.

Wotherspoon asked Krawetz about his plan during question period Thursday, and said later that he was “concerned” by the responses.

Krawetz told reporters that “everything has been on the table” when it comes to the new budget, but he also said there has been “a tremendous lobby” to maintain the exemption.

“There is a substantial exemption right now that credit unions receive. It has a dollar value of about $14 million, so that’s pretty significant. In the budget planning, all things are taken into consideration,” Krawetz said.

It will be a “tough” budget, he said.

“Many different decisions had to be made,” he said. “Tax increases — or in this case, a removal of a tax exemption — are the last things that we want to do, but those will be things that we will reveal next week.”