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Canadian Adult Fitness Tax Credit

The cost of the Canadian Government’s plan to implement the Adult Fitness Tax Credit is stated to be much lower than the originally estimated cost researched by Fitness Industry Council of Canada. On September 25th, a report from the federal budget office was released. This report proclaimed that the implementation of an Adult Fitness Tax Credit could cost the government upwards of $268 million over five years. If the credit were implemented, it would allow Canadians to claim a non-refundable tax credit of up to $500 for eligible physical activity program costs against their taxable income at a rate of 15 per cent, or a maximum of $75 deducted from tax payable. In 2007, Fitness Industry Council of Canada (FIC) commissioned an economic report from the Centre for Spatial Economics (CSE), which outlined the potential costs of implementing the tax credit, as well as potential economic benefits that would result from its implementation. The federal budget office currently estimates that the implementation of an Adult Fitness Tax Credit could cost $268 million over five years. The 2007 CSE report estimated that it would cost government $389.5 million, which makes the government’s prediction $121.5 million less than expected. 

Based on the CSE report, the implementation of the tax credit would also create an economic benefit of $625 million over five years in net healthcare savings versus the tax loss. If both the federal and provincial governments participate, the health care savings would reach $1.1 billion by 2029. With an implemented Adult Fitness Tax Credit, the CSE report estimates the number of physically active adult Canadians would increase by almost one million people. Research consistently shows that a physically active person is more likely to have better health outcomes than a non-active person. Regular physical activity is effective in the prevention of several chronic diseases, untimely saving health care costs. Additionally, the likelihood that workers would miss work due to illnesses related to physical unfitness would decrease. During the 2011 election campaign, Prime Minister Steven Harper pledged that an Adult Fitness Tax Credit would be implemented once the budget was balanced. In March of 2013 at the House of Commons, Finance Minister Jim Flaherty updated his fiscal plan. He stated that the goal remains to balance the Canadian budget by 2015. “The lower cost estimate by the government is positive news for an Adult Fitness Tax Credit and the fitness industry. The estimated cost of the program, and the anticipated balancing of the budget, makes the possibility for an Adult Fitness Tax Credit even stronger,” says David Hardy, President of FIC. FIC is dedicated to continue lobbying the government to ensure that Prime Minister Stephen Harper’s re-election promise from April 2011 of implementing an Adult Fitness Tax Credit is completed once the budget is balanced (expected in 2015). For more information on the Adult Fitness Tax Credit or to review the CSE report, please visit http://www.adultfitnesstaxcredit.ca

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