In 2007, the federal government implemented the Children’s Fitness Tax Credit (CFTC) with the goal of promoting physical fitness and reducing obesity among children. Parents with children aged up to 16 can claim a non-refundable income tax credit up to a maximum of $500 for each child if they register them in an eligible fitness program. Claiming $500 equates to a $75 reduction in taxes for the family. The tax credit costs the federal government between $90-$115 million per year in foregone revenue.
In theory, the CFTC sounds promising. Rates of childhood obesity are on the rise in Canada and everybody likes kids playing hockey or taking swimming lessons. However, the CFTC is an example of how policies that are not well thought through can have inequitable impacts for different populations.
A new study on the effectiveness of the CFTC found that the program disproportionately benefits higher income families. Households that earned over $200,000 were able to claim an average of $250 more than households earning less that $40,000. This is because families with very low incomes already pay no income taxes; a non-refundable tax credit doesn’t add a penny to their household’s income. The study also found that families with at least one male child were more likely to claim the CFTC. These findings are not a surprise – in fact, they were all predicted before the CFTC was implemented.
There is no doubting that childhood obesity is a major issue that needs to be addressed, but subsidizing sports for the well-off isn’t the solution. In Canada, 24 percent of children growing up in the best-off neighbourhoods are obese, compared with 35 percent of children in the poorest neighbourhoods. Of course it’s a problem that a quarter of kids in wealthy neighbourhoods are obese, but their families are doing well enough that cost is unlikely to be a barrier to enrolling their kids in sports and fitness activities. With limited resources, it makes much more sense to support programs that will be available to everyone.
Addressing childhood obesity isn’t just about doing a better job of getting our kids to kick around a soccer ball. Obesity is affected by a multitude of factors including income, early childhood development, and neighbourhood factors. Families that can’t afford healthy and nutritious food; who don’t have access to safe housing, clean air, affordable child care and high quality health care; and whose neighbourhoods don’t include safe sidewalks and parks are unlikely to benefit from a tax credit that is designed for the already well-off.