Sept. 15, Innovation Credit Union very quietly announced they would be reducing service by more than 40 per cent in six rural communities (Shell Lake, Medstead, Meota, Buffalo Narrows, Hodgeville and Lancer).
As president of the Shell Lake Chamber of Commerce, I spoke with Innovation Credit union's chief retail officer, CEO and board president. I outlined for them our community’s concerns and how this decision could potentially bankrupt our local economy and community as a whole. The seemingly-rehearsed response I received from all three was, "You'll adjust.” I explained the adjustment was what concerned us as small towns typically adjust by dying. I outlined numerous points of concern, but was not given a single benefit to the decision.
I have spoken with community representative from Medstead, Buffalo Narrows and Hodgeville and have left messages for Meota and Lancer. So far all the communities I have spoken with are in agreement that this decision will create a negative financial impact on our communities, small businesses and residents.
Through my research of the situation I pulled the 2014 financial statements for Innovation Credit Union. They state they had projected a net income of $11.9 million for 2014 and actually surpassed that by reporting a net income of $15 million. I then looked at the financial statements for Conexus, Affinity and Synergy for 2014. They reported net profits of $32 million, $31 million and $7 million respectfully. I also noted that, as credit unions are considered non-profit organizations they are taxed at the same two per cent rate as small businesses, instead of the general corporate rate of 12 per cent. Which means that in 2014 our province left approximately $8.64 million in tax revenues in the credit union pockets. The original tax breaks for credit unions were established in 1970 to help credit unions as they were member-owned and gave their members a vote. And they operated in rural committees that charted banks would not operate in, thus filling the financial services need in small rural committees.
I have talked to Innovation Credit Union and Credit Union Central only to find my vote as a member doesn't count. I also came across a news article in the Prairie Post dated June 13, 2013 in regards to Innovation closing six rural branches (Hazlet, Climax, Coderre, Pennat, Sceptre and Shamrock). In speaking with the economic development committee in Hazlet they informed me they also petitioned Innovation Credit Union, wrote letters and held meetings, but six rural branches were still closed.
Innovation Credit Union has made it quite clear they don't listen to their members and they no longer care to operate in rural committees or invest in them. When I approached them this summer for their annual donation to sponsor the mini-ferris wheel, I was informed that they no longer make cash donations to our community. Therefore they no longer fit the criteria of being a non-profit organization and should no longer be allowed preferential tax rates.
If this decision to reduce services to the above mentioned communities goes through Jan. 4, I think it is a clear indication that for the 2015 tax year Innovation has chosen to operate as a corporation and should be taxed as such.
I urge the residents of Saskatchewan to speak with their MLA about how they think the $8.64 million in uncollected tax revenue from our four largest credit unions should be spent, as large credit unions are using it to bankrupt our small businesses and destroy our rural communities.
Rose Freeman
President
Shell Lake Chamber of Commerce
