Federal government may move ahead with fitness tax credit for adults
Forget all those chunky kids, the federal government is moving towards paying adults to get off the couch and into the gym.
After months of preparation, the Parliamentary Budget Office has finally come up with an estimate of what would likely cost to create the adult fitness tax credit it promised in its election campaign. The credit would be similar to the children’s fitness tax credit the government introduced a few years ago.
If adopted, the rule change would allow taxpayers “to claim a non-refundable tax credit of up to $500 in eligible physical activity programming costs against their taxable income each year at a rate of 15% (i.e. the maximum annual amount to be offset against an individual’s taxes payable would be $75),” the PBO estimates.
The credit wouldn’t be transferable, so only those actually burning calories would be able to claim it.
The PBO looked at three ages of eligibility — 55, 60 and 65. Assuming implementation in 2014, between 5 million and 11 million Canadians would be eligible.
The average Canadian between 55 and 64 spends $114 a year on fitness programs, while those over 65 spend an average of $76, the PBO estimates.
The proposed credit would cost between $15 and $47 million a year, depending on the age of eligibility. Over five years, the cumulative cost could be as high as $286 million.
All of which is a complete waste of money, say some critics.
"The notion that a fitness credit will get you off the couch is laughable. Legions of Canadians already buy gym memberships they stop using after two weeks, or fitness equipment that now serves as a clothes hanger. Only now, they would get money back for doing so — at everyone else’s expense."
But, if you look at the big picture, it's really a major step in the right direction, others counter.
"If we can get another 300,000 Canadians doing something to improve their health, the $75 cost per person is a drop in the bucket compared to the potential costs to the health-care system if those Canadians don’t become more active."
"Even allowing that the bulk of the tax credit would be used by Canadians who are already active, the total potential cost of the program would still likely be much less than the added health-care costs that would result from 300,000 adults who weren’t trying to improve their fitness in some way."
Do you agree? Is $75 enough of an incentive to get boomers to change the habits of a lifetime?
By Gordon Powers, MSN Money