Thank you, Ms. Nash. I'm happy to take that question.
For us the measure is really about the neutrality in the tax system. Credit unions had access to the small business rate on a basis that was not consistent with other small businesses in Canada. Credit unions prior to the proposed measure in budget 2013 were able to shelter income beyond the $500,000 small business limit and without reference to the taxable capital limit that all other small businesses must respect. In that context the measure is about neutrality. It puts credit unions on the same footing as all other small businesses. Many credit unions will be unaffected by this measure. Those that are small, that are below the taxable capital threshold, will by and large be able to shelter their income up to $500,000 and will be unaffected. The measure has its primary impact on those larger credit unions that have taxable capital beyond that limit and have income in excess of $500,000.
The small business deduction came into being in the early 1970s in a form that was very different, and it's changed over the years with the introduction of an annual limit and a taxable capital threshold. We've also seen the narrowing of the differential between the general corporate income tax rate and the small business tax rate. All those factors argue in favour of promoting a more neutral tax system as has been the government's stated objective to put the corporate tax system on a more neutral and equitable basis across different types of businesses. That's the fundamental policy rationale for the change to credit unions.
I can also tell you that since the announcement in the budget we have had discussions with the credit unions and have met with them. We've been able to discuss these issues with them on occasion.