At my presentation today to the Finance Committee, the CPC members seemed quite shocked that the research would indicate that their Children’s Fitness Tax credit was ineffective, after all, they each had anecdotes from constituents that the tax credit was the only reason why their kids were active in sport.
Of course, you and I know that the plural of anecdotes is not data, so I happily provided them with the data related to the ineffectiveness of the Children’s Fitness Tax Credit. I attached for the consideration of the committee the evidence, along with several popular articles written by my fellow tax policy academic colleagues Kevin Milligan, UBC, and Frances Woolley, Carleton, that provide easily consumable summaries of this research.
Here it is for your consumption:
- Uptake and effectiveness of the Children’s Fitness Tax Credit in Canada: the rich get richer
- Harper’s Boutique Tax Credits
- Using the Tax System to Promote Physical Activity: Critical Analysis of Canadian Initiatives
- Awareness and Use of Canada’s Children’s Fitness Tax Credit
Popular Summaries of the Evidence
- Kevin Milligan, Do Tax Credits Really Get Children to be More Active?
- Frances Woolley, Why Politicians Love Boutique Tax Credits
I would note carefully that neither myself nor any these attachments indicated that the goal of the CFTC, to increase sport participation, is not laudible. In addition, neither myself nor the research indicated that there are not some benefits to low and moderate income households and there is not some increase in sport participation. Rather, the majority of the benefits accrue to high income households and to parents of children who would participate in sport with or without the tax credit.
It is possible to use the funds dedicated to the CFTC to better target households to achieve the stated goals of the CFTC without the unintended consequence of subsidizing high income households (such as my own). I mentioned a few and my colleagues whose work I attach here mention other possibilities as well.