In April 2011, the Conservative Party of Canada announced that they would provide an Adult Fitness Tax Credit (AFTC) once the federal budget is balanced within the next Conservative mandate if re-elected in 2015 federal election . Similar to the Children’s Fitness Tax Credit, the proposed AFTC would enable Canadian adults to claim a non-refundable tax credit up to $500 in eligible physical activities. This proposal is estimated to cost the government $69 million in its first year implemented and $275 million annually thereafter .
There are substantial limitation in using the proposed AFTC to promote physical activities. First, the relatively small proportion of the fees that is refundable (15 percent of the amount spent up to $500), and the delay in paying the fee and receiving the credit could discourage the taxpayers in spending money on physical activities in the first place . Second, due to physical activities are multifactorial behavior, it is difficult to predict and measure the long-term impact, especially whether it was driven solely by the tax incentives . Furthermore, the AFTC proposed is a non-refundable tax credit, and a non-refundable tax credit only provides tax relief when the taxpayer incurs taxes payable in the year. Such a tax incentive does not meet the objective of promoting public health as a whole because people who are in the lowest tax bracket is likely to be excluded from benefiting from the tax credit. Unfortunately, the AFTC does not seem to address the most commonly issues leads to sedentary or physical inactive life styles (e.g. “no time”, “don’t want to exercise”, “no chance to exercise”, “no facilities” ) other than the economic factor.
III. Background and Significance
I would like to provide some background of government using tax incentives to promote health of Canadians in this section. I intend to do a comparison of what the provincial government has implemented versus what the federal...