28 - Sunday, November 1, Dearlove Grant Big Boost For Thor NSCU member Thor Boe of Van- couver was fortunate to receive an of- fer of admission into the Cooperative Programme in international Develop- ment Studies at University of Toron- to. This particular field of study is not offered in British Columbia and so it was necessary to look outside the province. Thor Boe is the recipient of the Tom Dearlove Grant — $500.00 which he will apply against his January tuition at the University of Torontos Scar- borough College. The Tom Dearlove Grant is one of two NSCU grants administered through the Credit Union Foundation of British Columbia and available to students requiring financial assistance. The Foundation’s Board of Trustees operating within set guidelines can (on approval) provide grant-in-aid assistance to vocational, technical or academic students up to, but not in- cluding, post-graduate studies. The late Tom Dearlove played a significant role in the development of the co-operative movement in BC. Tom and his wife Gertrude provided a home for the fledgling North Shore Credit Union in its early years. Credit Union business and meetings took place in their Chesterfield Avenue residence. One of the the founding members in 1941, Tom Dearlove serv- ed as NSCUs Treasurer from 1942 to 1955. Among his other credits, he was a charter member of the Van- couver Co-operative Association, now amalgamated with Metro Co-op Ser- vices, He was also an officer of the Treasurer's Association of BC. and a founder of the Coal Worker's Co-operative. Congratulations to 1987’s Bursary Award Winners Carmen Chan, King George Secondary David Yen, North Bumaby Secondary Tiffany Edwardson, Carson Graham David Chiu, St. Thomas Aquinas Doug Pearson, Sutherland Secondary Sonja Lindstrom, Argyle Secondary Nooshin Khoshkhesal, Handsworth Tracey Sutton, Hillside Secondary pabrina Hong, Sentinel Secondary ary Ferg, Seycove Secondary - Shall Webster, Windsor Secondary Danny Carson, Pemberton Secondary Leslie Sutherland, West Vancouver Sec. Every year, North Shore Credit Union recognizes the achievements of our most important resource by awar- ding . bursaries to high school graduates who have demonstrated consistent standards of excellence and community leadership. | The students cited above each received a cheque in the amount of $400.00 to help further his or her educational goals, As set out by the NSCU Board of Directors, the guidelines for selection of bursary recipients stipulate that ‘while the student should have a high scholastic achievement level, he/she - should have proven demonstration of community leadership. By communi- . ty leadership, we imply that the stu- dent has shown active involvement in school functions andjer in loca! volun- tary organizations ... we encourage emerging leaders to show their sup- port in organizations they. believe worthwhile’ Almost 30 years ago, NSCU in- itlated the first bursary award to a , school in North Vancouver. Since then our bursary program has expanded to keep in line with North Shorés dynamic growth and today in- cludes over a dozen secondary schools. The bursary program is an impor- tant part of our commitment to the in- dividuals that work, play and learn in * 1 the greater community that we serve. There is no doubt in anyones mind that the future of this country, indeed this planet, is held in the hands of our youth. North Shore Credit Union's Bursary program is a gesture of confidence in recognition of our bright future. 1987 - North Shore News PE Et NSF CRS aL oe ECONOMIC OUTLOOK FOR BC: “Promising” and ' ‘Positive’ The economic outlook for BC. in 1988 is promising. Although growth will not reach levels experienced dur- ing the 1970s, real output is expected to increase 2.8 per cent next year and unemployment rates should improve modestly to about 12.3 per cent. Most of the economy's growth stems from a strong forest industry, improved private sector investment intentions and gains in consumer spending. BC's continued dependence on the health of the forest industry is under- scored by the contribution the industry makes to total output and employ- ment. Wood, pulp, paper and news- print represent more than 12 per cent of gross provincial product (GPP) and one out of every 20 people employed in BC. works directly for the industry. During 1987, exports from the forest industry are expected to reach a record $7.3 billion. This strong per- formance should continue into next year. Pulp, paper and newsprint prices should remain strong as demand shows no sign of easing off. Although forecasis for housing starts in the U.S. have fallen to $1.6 million, softwood market exports should remain relative- ly stable as Canadian and offshore markets have strengthened. Investment in BC's industries has registered stronger growth than an- ticipated for 1987 and this positive trend is expected to continue into 1988. While modernization and ex: pansion th the forest sectur, and hous- ing construction, have been responsi- ble for most of the upturn in 1987, non-residential construction activity is expected to add ¢o the expansion in 1988, The ouilook for inflation. interest rates and the value of the Canadian dollar is generally positive. The fall in the price of oil, continued world food surpluses and technological devel- opments should help to ease the up- ward pressure on inflation rates. As this reality translates into expecta- tions, interest rates will ease slightly, facilitating business investment. Consumer spending, which has been responsible for most of the growth since the recession, will remain strong through 1988. (BC. Central Credit Union Research Report_ 87.09.30. Contact: Robyn Allan, Economics Dept.} 1; OPERATION FACELIFT Whistler ‘and North Burnaby construction sites in early October this year. . If last year was the “Year of The * «Mer -’ Union, then this year might be refer- _Ted to as the Your ¢ of The Facelift” — indeed, changes abound... ‘Two new buildings are well on . ger’, a. period.,of.. spectacular... ‘; growth: for - North * Shore: Credit -" ; "their way and will be ready to move into by year-end. Our new Whistler by early December and our new Bur- ~ naby branch should be completed by the end of December. or early January. TAX REFORM: Much The widely-touted tax reform can- not be described as a bust, but it cer- tainly did not live up to expectations. While one must be relleved that all the rumoured changes did not materialize, the Finance Minister may have lost an opportunity to tichten the system. He certainly avoided any really conten- tious issues — other than bringing in a few experts ahead of time — and one can only say that he has skillfully avoided any traps, On the other hand, problems still remain which may have to be resolved in the future. The switch from personal deduc- tions to tax credits was not unex- pected, but it remains to be determin- ed whether the provinces will apply their rates of tax to the gross Federal tax (and thereby recover losses due to rate reductions) or maintain the spirit of the system and levy their tax on the net Federal tax. The reduction in the dividend tax credit-and the capital’ gains exernptions will undoubtedly irn- pact quite heavily on investors and en- trepreneurs since the rate reductions _ do not appear to be large enough to compensate and it seems odd that a commitment to lawer personal income taxes will be completely negated for this particular group. As an aside, one might say that it was a rather neat trick to confine the capital gains ex- emption of $100,000 to gains that ex- ceed passive income losses (such as interest expense). This mav partially resolve the interest issue, but not en- tirely since it will introduce an element of timing which will make planning more difficult. In the corporate area one can be thankful that there were no restrictions on the deductibility of interest nor an Advance Corporation Tax (except for certain preferred share financings) or minimum tax. The disallowance of 20% of meal and entertainment costs as well as the reduction of allowable automobile expenses, is a gesture of sorts, but hardly in keeping with ma- jor reform. While a lot of changes are to be made, it would appear that any shift of the overall tax burden amongst per- sonal, corporate and consumption taxes is quite negligible. To be sure, Mr. Wilson does not have much room to manoeuvre pending some resolution of the sales tax problem (if ever), but given the advance publicity and chest- thumping, it is rather a disappoint- ment. It is, of course, true that one can't suck and blow at the same time, but one can be forgiven for feeling that life is tike a garden and that he has just been weeded out. Perhaps more was expected, but one can't be faulted for hoping that the candy bar would be the size of the wrapper! INDIVIDUALS Significant changes are proposed to taxation of individuals: Personal Tax Rates and Exemptions * Beginning in 1988, there will be three tax brackets: TAXABLE INCOME up to $27,500 $27,501-$55,000 ~ 26% over $55,000 29% ® The threshold amounts will be in- dexed by changes in the Consumer Price Index in excess of 3% starting in 1989, ; , © The 3% federal surtax ‘will remain 17% - in force until federal:sales tax réform ° . becomes effective. ¢ The present personal tax exemp- tions will change to tax credits of; basic — $1,020; married — $850; dependents under 18 — $65; infirm dependents 18 and over — $250; other dependents 18 and over — NIL; age — $550; disability — $550. The credits will reduce provincial tax in the collecting provinces and will be index- ed commencing in 1989 by changes in the Consumer Price Index in excess of 3%. ¢ The personal exemption credits can be used to reduce taxes payable, but are not refundable. ¢ The age exemption arid disability exemption credits will be transferable to a spouse, or to a supporting parent Valley and Davie branches were con- branch should be open for business: Complete renovations at our Lynn cluded tn September and now work - is under way at our Marine Drive and Village locations. : ‘And just to round off the physical . changes, Head office too is undergo: -"" inga major transformation with r new. : : offices that will expand out. to the greater part'of the third ‘floor it.oc- . cupies currently. ‘These renovations ~~ should be completed before the: new..: * Tooking ‘good, North ‘Shore! Ado About Nothing? or grandparent in the case of the disability credit, depending on net incomes. ° The $1,000 interest and dividend * deduction and the $500 employment expense deduction will be elirninated after 1987. DEDUCTIONS Certain tax deductions will be con- verted into tax credits commencing in 1988: * The $1,000 pension deduction is replaced by a tax credit of $170 and will be transferable to a spouse depen- ding on net incomes. ¢ The deduction for tuition fees is replaced by a 17% tax credit and the- 50 per month education deduction is replaced by a $10 per month tax credit. The definition of eligible tuition fees is expanded to include primary o7 -* Secondary school’ tuition’ fees in ex- - cess of $100.-Up to $600 of the tui- tion and education tax credits can be transferred to a spouse or supporting parent or grandparent of the student. © The medical expense deduction is to be replaced by a 7% tax credit.for expenses in excess of 3% of net income. ¢ The deduction for charitable dona- tion is to be replaced by a tax: credit « ‘ of 17% of the first $250 of donations and 20% on the excess. The new credit will apply to donations carried forward from 1987 and prior taxation years, ¢ The sales tax credit has been modestly increased. Further increases are proposed once the upcoming federal sales tax r‘orm is effective ¢ Deductions for CPP and UIC con- tributions will be replaced by a 17% tax credit. » PENSIONS, RRSPs and DPSPs 1988 maximum contributions stay the same as in 1987: RRSP (self-employed) DPSP RPP—money-purchase $3,500 Individual Employer $7,500 NL NIL $3,500 $3,500 RPPdefined-benelit No'limit As needed Increases in the maximum contribu- tion limits will now. be introduced from 1989 to 1995 instead of from 1988 to 1991. In 1995, the defined-benefit : pension limit of $60,025 and limits on tax deductible contributions will be in- dexed to average wages: Dividend Tax Credit. For dividends reported after 1987, the federal dividend tax credit will be reduced from 2235% to 16%4% and the gross-up, will be reduced from 334% to 25%. As a result, the top tax rate on Canadian dividends will decline from 33% to 31%. Capital Gains and Other * The present one-half inclusion of capital gains is to increase to % in 1988 and, % in 1990. The existing 50% deduction for certain stock op- tion benefits realized, and for employer shares: ‘received under a deferred profit sharing plan and shares provided to prospectors and grubstakers, will be reduced to one- third in 1988 and one-quarter in 1990. ¢ The capital gains exemption will be limited to the 1987 limit of $100,000 for gains realized on all property ex- cept qualified farra property ‘and sinall business corporation shares. The lat- ter will be eligible for a full $500,000 exemption commencing in 1988, The definition of qualified farm property will be restricted for most farmland and buildings acquired after June 17, 1987. Only gains realized on the sale of shares of a small business corpora- tion which were held for at least two years will qualify for the $500,000 ex- emption. The maximum capital gains exemption, in aggregate, cannot ex- ceed $500; ° Capital gains reserves included in in- come after 1987 in respect of proper- ties disposed of after 1984 will now qualify for the capital gains exemption. (Re-produced with permission of Coopers & Lybrand.) &