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Adult Fitness Tax Credit: The Promise Tories Hoped You'd Forget

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OTTAWA — Conservative Leader Stephen Harper’s one admittedly broken promise from the last election campaign has been cast aside, and the Tories hope you’ll forget it.

In 2011, Harper pledged to introduce an adult fitness tax credit, worth up to $75, as soon as the budget was balanced. (The non-refundable tax credit would have been worth 15 per cent of up to $500 in the cost of a gym membership or participation in a sports activity).

When Harper posted a surplus budget this spring, however, the adult fitness tax credit was missing. On the campaign trail, he called it his one broken promise of 107 made.

It has been cast aside because the government had trouble defining how the credit should be applied, Conservative campaign spokesman Kory Teneycke told The Huffington Post Canada.

Design problems were punted over to an expert panel but nobody has yet been appointed, HuffPost discovered.

The adult fitness tax credit drew criticism from those who felt it would be unfair to lower-income Canadians who pay little taxes and would not be able to take advantage of it, or believed its $275 million annual cost would do little to encourage healthier lifestyles.

Scott Clark, a former deputy minister in the finance department, labelled it the "height of ridiculous."

"How could you imagine using a scarce amount of money to give people — adults, of all people — money to join a club?" he said. "If you are a jogger, a biker or a walker, you don’t get anything, but if you are a member of a club you get to buy smoothies for another two weeks."

But Teneycke told HufffPost those are not the Conservatives’ concerns.

Instead, he said, the Tories are worried Canadians might seek a tax credit for expensive private clubs, such as the Toronto Club or the National Club, where memberships cost tens of thousands of dollars. Concerns also extended to even smaller spaces, such as seniors’ clubs, that have sports facilities but aren’t really fitness establishments.

"What we’re trying to avoid is having people’s private co-op memberships, or something that isn’t really a gym but might have fitness facilities, [declared] as being eligible," Teneycke said.

"I don’t expect that there will be another announcement on it. We’re looking to implement [it], but we have some scoping issues and, as we outlined in the budget, we are working through them."

The Tories used an advisory panel when it first established a Children’s Fitness Tax Credit in 2007.

Last fall, Harper announced that the Conservatives would fulfil their 2011 campaign pledge and double the amount of money parents could claim for the tax receipt from $500 to $1,000. He also announced the credit would be refundable from 2015 onwards. The Children’s Fitness Tax Credit costs approximately $115 million per year with 1.4 million families benefiting, although it will now cost about $150 million.

The Conservatives have estimated the adult fitness tax credit would cost taxpayers $69 million in its first year and $275 million annually thereafter.

The Parliamentary Budget Officer estimated the cost of the proposal for Canadians 55 years and older would be anywhere from $86 million to $268 million over five years.

The Fitness Industry Council of Canada’s David Hardy said his lobby group estimates the tax credit would encourage almost one million adults to be more physically active and would save the healthcare system lots of money in the long run.

"It goes into the billion of dollars by 2021," Hardy told Toronto’s In-Depth Newstalk 1010 radio station. His group funded research that suggests savings of $1.1 billion by 2029.

The adult fitness tax credit was a popular promise in 2011.

Newmarket–Aurora Conservative candidate Lois Brown praised the move at the time as "great news" for her riding. She said in a news release during that election that she had advocated the initiative since 2004 and pitched it to then-finance minister Jim Flaherty in 2010 with letters of support from the Newmarket Branch of the Taoist Tai Chi Society.

Several well-known gyms such as Good Life, Curves, Energie Cardio, and places such as Calgary’s Fifth Avenue Club — with its squash courts and towel service — and Toronto’s Club Markham — which advertises itself as a place where members are greeted by name — have also lent their support to the lobby campaign for the adult fitness tax credit.

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