CRA reviews taxable benefit exemptions for fitness and recreation facilities

CRA has clarified its position in Guide T4130 that the provision to employees of fitness and recreation facilities (whether in-house or external) will not give rise to a taxable benefit provided that the facilities are available to all employees: "all your employees" means all employees in the firm, not all employees in a specific department (even where the facilities were provided to reduce sickness and injury resulting from the nature of the work performed in that department).

T4130 also sets out an exemption where it can be shown that the provision of the facilities is principally for the employer's benefit rather than the employee's.  CRA has stated that this means that the benefit to the employer must be direct (i.e. relating to a high fitness standard inherent to the specific job) rather than indirect (i.e. relating only to general productivity gains associated with health and fitness).

Scott Armstrong.  Summary of 26 July 2012 T.I. 2011-0431681E5 under s. 6(1)(a).