Do Fitness Tax Credits Only Make The Rich Richer?

Yesterday, University of Alberta’s John Spence (on faculty of the annual Canadian Obesity Network’s Student Boot Camp) together with Valerie Carson (former Bootcamper) and coworkers, published a most interesting article in BMC Public Health.

The paper looks at the uptake and effectiveness of the Children’s Fitness Tax Credit (CFTC) on Canadians. This tax credit was introduced by the Government of Canada in 2007 and allows a non-refundable tax credit of up to $500 to register a child in an eligible physical activity program.

A basic assumption of such tax rebates is of course, that they will help alleviate economic barriers that inhibit participation in physical activity.

Based on a 2009 survey of a representative sample of 2135 Canadians, around 55% of parents with children aged 2 to 18 years of age (n = 1004) stated their child was in organized PA and 55% were aware of the CFTC.

However, parents in the lowest income quartile were significantly less aware and less likely to claim the CFTC than other income groups. Thus, while only 28% of parents in the lowest income quartile had claimed the CFTC for the 2007 tax year, the tax credit was claimed by 55% of parents in the highest income quartile.

Parents in the highest income quartile were 2.5 times more likely than parents in lower income households to report their child being involved in organized physical activity, 4.1 times more likely to be aware of the CFTC, and around 3 times more likely to have claimed it for 2007 or were planning to claim it for 2008.

Among parents who had claimed the CFTC, only 16% believed it had actually increased their child’s participation in physical activity programs.

As Spence and colleagues discuss:

“It appears a tax credit such as the CFTC will only benefit those people who can afford to pay the costs of registration for a PA program and carry that burden through to the end of the tax year.”

These findings are in contrast to the Government of Canada’s objective that parents from “different circumstances” have equitable opportunity to benefit from the CFTC.

Basically, families at the lower end of the income continuum cannot afford the costs associated with organized PA and are less likely to be able to take advantage of a tax credit.

Therefore, if a tax credit is to be effective for all children, alternative solutions need to be sought for dealing with issues of inequity.”

Irrespective of what such a tax credit to increase physical activity will actually do for the obesity epidemic (the evidence is certainly not clear on this), this paper nicely illustrates how well-meant policies may often not have the intended effects for the population that needs it most.

Duchesnay, Quebec

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Spence JC, Holt NL, Dutove JK, & Carson V (2010). Uptake and effectiveness of the Children’s Fitness Tax Credit in Canada: the rich get richer. BMC public health, 10 PMID: 20565963