By Erin Phelan
Fitness Industry Council of Canada
Imagine being a member of a gym in St. John’s, Newfoundland, where not only do you benefit from a supportive fitness community, improved physical and mental health, access to group classes and personal trainers, and nutritional guidance, but you can also write off your gym membership as a medical expense at tax time.
This is a reality in Newfoundland and Labrador, thanks to the Physical Activity Tax Credit introduced in 2021. However, in neighbouring provinces like New Brunswick or Prince Edward Island, or anywhere else in Canada, this is not the case.
The Physical Activity Tax Credit in Newfoundland and Labrador provides an annual, refundable tax credit of up to $2,000 per family for accessing sports and physical activities. This initiative was launched with the ambitious goal of making the province the healthiest in Canada by 2030. The credit serves as an incentive for families to engage in healthier lifestyles and also supports the local health and wellness industries.
“Staying active is vital to both our physical and mental health,” said the Honourable Andrew Furey, Premier of Newfoundland and Labrador, in a press release. “Soccer fields, gyms, pools, dance studios, martial arts dojos, and so many other places where we have fun and stay active are vital in helping us manage the everyday stresses of life. Our investments in sport and recreation provide opportunities for people of all ages to be active and support individuals to live productive and rewarding lives.”
Eligible fitness expenses under this credit include any program that requires significant physical activity contributing to cardiorespiratory endurance, as well as activities that improve muscular strength, endurance, flexibility, and balance.
Exercise is medicine
It is a model of hope and inspiration, says Gabriel Hardy, Executive Director of Fitness Industry Council of Canada (FIC), the non-for-profit association that supports and advocates on behalf of the fitness industry.
The FIC has strongly advocated that exercise Is effective for the prevention and treatment of chronic illnesses and for improved mental health outcomes, and will, and will once again propose that the government revise line 33099 of the tax form to allow gym memberships to be included as a medical expense. This line allows Canadians to submit receipts for expenses such as Vitamin B12 or hearing aids, but not gym memberships.
“Including a gym membership as part of a tax credit will help incentivize people to move more and give a strong message of the importance of physical activity as a preventive health solution,” says Hardy. “You go to the gym to improve your health. Exercise is taking a dose of preventative medicine – for heart disease, for diabetes, for chronic health conditions. If a senior starts exercising with a trainer in a gym, and working on balance and stability, they will be less likely to fall and end up in the ER.”
Evidence suggests inactivity carries a significant financial burden, placing a cost of roughly $2.7 billion on the Canadian public healthcare system, according to a June 2022 report issued by Deloitte. The loss in productivity from the health effects of inactivity costs the economy approximately $7.9 billion per year.
The Case for Fitness Memberships as a Medical Expense
FIC conducted research through Abacus Data in 2021 and discovered that 59% of Canadians believe the government should allow gym memberships to be considered as a medical expense; 40% of Canadians say including athletic and fitness club fees as a medical expense would motivate them to create a healthy fitness routine and 36% say it would motivate them to purchase a membership.
ROI OF FITNESS
A global report produced by Deloitte and Touche in 2021 found that the cost of investing $2000 in moving someone from inactive to active provided a ROI in less than one year, by fostering a healthier population, reducing reliance on the healthcare system, and creating a happier, more productive workforce.
The financial benefits of such a policy could be substantial.
One study, presented to the government by Participaction, estimates that a 10% decrease in sedentary behaviour could save Canada $219 million annually in avoided healthcare costs. A recent study of over 11,000 women in Australia found that those who achieved 150 minutes of physical activity weekly had better health outcomes – and could reverse the effects of aging, even if they had been inactive.
LONG-TERM SAVINGS
One of the most significant studies to date looked at long-term physical activity and healthcare costs savings from $824 to $1,874 every year in retirment. A study by Sheffield Hallam University (UK) estimated that sport and physical activity in Canada generate a total net health savings of $23.4 billion, preventing 2.2 million cases of disease across seven conditions.
The Canadian fitness industry also contributes significantly to the national economy, directly adding $2.2 billion and indirectly another $1.8 billion, while employing over 82,000 people. This sector has the potential to be even stronger and more impactful, especially with support for policies that encourage greater fitness and exercise participation. Allowing individuals to claim fitness memberships as medical expenses could make these services more affordable, particularly in times of inflation and cost-of-living pressures.
COST A BARRIER
In the Abascus research poll, the FIC found that one in three Canadians cited cost as a barrier to maintaining a healthy lifestyle. With rising household costs, providing Canadians with not only an incentive, but a financial reward for being active isn’t simply goodwill – it is a smart strategy.
The Physical Activity Tax Credit in Newfoundland and Labrador serves as a model for what is possible in Canada and around the world.
Fitness Industry Council of Canada (FIC) is the not-for profit trade association that represents the voice of fitness facility operators across Canada. Representing more than 6,000 facilities with more than six-million members nationwide, FIC pursues a legislative agenda in the hope of bettering the fitness industry for both consumers and operators. FIC aims to work with both industry and government to improve the health and physical activity levels of Canadians.
