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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.

AMS
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

4 Comments

  1. I think this was obvious from the onset. The poorest Canadians don’t pay any attention to tax credits in the first place because they don’t generally pay taxes. They don’t really need a tax credit to reduce their income tax payable since their income is already so low. I’m not surprised that lower income Canadians were unaware. What I do find surprising is the suggestion that the intent of the credit was to provide less privileged kids with opportunity to participate in sports and fitness related activities. If that indeed was the intent, whoever came up with it wasn’t thinking clearly.

    I thought the intent was to reduce childhood obesity – which is a joke as well because that issue has more to do with diet than activity level. Our food sources have been contaminated, and we’ve been fooled into believing that a diet high in protein, low on carbs leads to heart disease. The result? We’re getting fatter, and at greater risk for heart disease as well as diabetes and other diseases. Let’s get rid of the Canada Food Guide and keep special interest groups out of our kitchens.

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    • u are sooooooooooo right!

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  2. This is a good article to see and supports what many of us have thought (as Karen has pointed out).

    Perhaps I am cynical, but regardless of how it was advertised, the purpose of most targeted tax cuts is to garner votes for the politicians introducing the tax cuts. People who are at the lower end of the income scale are also less likely to vote so politicians have less motivation to implement strategies to improve their health and quality of life.

    The development of policies that address the health needs of the population and the motivation of politicians are likely to be most effective and sustainable.

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