11 June 2007 Ministerial Correspondence 2007-0235931M4 - Children's fitness tax credit

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Will children's camps of four day's duration qualify for the credit?

Position: likely not

Reasons: The Department of Finance has indicated that in order for fees paid for camps to qualify for the credit, the camp must have a 5-day duration with more than 50% of the program time devoted to physical activity.

June 11, 2007

XXXXXXXXXX

Dear XXXXXXXXXX:

I am writing in reply to your email addressed to the Honourable Tony Clement, Minister of Health and Minister for the Federal Economic Development Initiative for Northern Ontario, concerning children's camps and their eligibility for the children's fitness tax credit. I received a copy of your email from Minister Clement's office on May 3, 2007.

In general terms, the children's fitness tax credit is based on the amount paid in the year (up to a maximum of $500) by an individual as an "eligible fitness expense" in respect of his or her child under the age of 16. The phrase "eligible fitness expense" is defined in the Income Tax Act to be a fee attributable to the cost of the child's registration or enrolment in a "program of prescribed physical activity".

The Department of Finance Canada has not yet published the provision of the Income Tax Regulations that will define a program of prescribed physical activity for purposes of the credit. It has, however, indicated in public announcements that the provision will require that the activity be supervised, suitable for children, and ongoing. To be considered ongoing, Finance Canada has expressed approval of programs of a minimum of eight weeks duration with a minimum of one session per week substantially all of which includes a significant amount of physical activity that contributes to cardio-respiratory endurance plus one or more of muscular strength, muscular endurance, flexibility, or balance. In the case of children's camps, Finance Canada has indicated that a camp must be for five consecutive days, provided that more than 50 percent of the program time is devoted to physical activity with the characteristics described above.

While the Canada Revenue Agency is responsible for administering the tax system and applying the current tax legislation as enacted by Parliament, the Department of Finance Canada is responsible for developing tax policy and amending legislation. Any changes to the law regarding what camps will or will not qualify for the credit would have to be considered by the Minister of Finance and approved by Parliament. I am therefore forwarding a copy of your letter to the Honourable James M. Flaherty, Minister of Finance, for his consideration.

I trust the information provided and the referral will be of assistance.

Sincerely,

The Honourable Carol Skelton, P.C., M.P.

c.c.: The Honourable James M. Flaherty, P.C., M.P.

Minister of Finance
House of Commons
Ottawa ON K1A 0A6

Renée Shields
(613) 957-4920
2007-023593
May 15, 2007