The Fitness Industry Council of Canada is trying to get Ottawa to include gym memberships and services as a medical expense on personal taxes.Jeff McIntosh/The Canadian Press
Canada’s fitness industry is stepping up efforts ahead of a possible fall election to try to get Ottawa to include gym memberships and services as a medical expense on personal taxes, alongside other eligible costs such as physiotherapy, dietician consultations and medical cannabis.
The Fitness Industry Council of Canada (FIC), which oversees about 6,000 fitness organizations with about 150,000 employees and roughly six million members across Canada, says it has been actively discussing its proposal with the federal government since January.
The FIC was invited to consult on the federal Liberal government’s plan to help the fitness industry recover from the financial hit caused by the COVID-19 closings. Instead of asking for money, the FIC put forward what it views as a longer-term solution to help improve the fitness industry and the physical and mental health of Canadians.
“We thought, ‘how about we have an ask that includes improving Canadians’ accessibility to fitness, putting the power in their hands,” says Sara Hodson, who is leading the FIC initiative from British Columbia. She believes the time to make the change is now, as Canadians slowly come out of the pandemic with health and wellness top of mind.
“I think if we don’t stay loud about this now, and we let it just kind of fizzle away, we will never have the opportunity and platform that we do right now to get this passed,” says Ms. Hodson, who is also the founder and chief executive officer of Live Well Exercise Clinic.
The FIC proposal is to have fitness memberships and services, such as fitness training, considered a health care expense in line 33099 on a personal tax return. Ms. Hodson says it would be an easy change since there’s already a line for “athletic or fitness club fees,” on the tax form, but they are listed as “not eligible.” The government would just need to agree to switch it to “eligible,” she says.
While the FIC was disappointed not to see a change in the recent federal budget, Ms. Hodson says the FIC was asked to appear before the House of Commons standing finance committee the day after and is still actively talking to various government departments and lobbying members of Parliament. She hopes the proposal will show up in a campaign platform in the next federal election.
Meantime, the Liberal government of Newfoundland and Labrador announced a new physical activity tax credit in its recent budget last month, which provides a refundable tax credit of up to $2,000 per family for sports and recreational activities. The government said the tax credit would incentivize people to get active and support the local health and wellness industry.
Ms. Hodson says the provincial tax credit is broader than what the FIC is proposing to Ottawa, but her organization plans to push other provinces to follow Newfoundland’s lead.
A federal Finance Department spokeswoman said in an e-mail that eligible expenses under the medical expense tax credit (METC) are “generally limited to expenses for items and services that are designed primarily for – and are used exclusively by – persons with a medical condition,” and added that the government “regularly assesses the tax system to ensure that it is fair and efficient for all Canadians.”
Jason Heath, a certified financial planner at Objective Financial Partners Inc. in Markham, Ont., says the government has added different expenses to the METC in recent years such as service animals, so there’s precedent for change.
However, he notes many of the roughly 140 items that are eligible are to treat medical conditions, not prevent them as a fitness membership might.
The threshold is relatively high for medical expenses to be eligible for a tax credit. The Canada Revenue Agency says only expenses that exceed the lesser of $2,421 (for 2021) or 3 per cent of your net income (line 23600 on a tax return) can be claimed for a federal tax credit. For example, if your eligible medical expenses amount to $5,000 and your income exceeds $80,700, your federal tax credit is 15 per cent of the difference of $2,579. There are provincial tax credits for medical expenses as well.
Mr. Heath thinks a fitness tax credit might be better, but appreciates the industry isn’t likely to push for it since the current government axed the children’s fitness tax credit four years ago.
Still, he thinks any incentive to get Canadians to be more active is a good idea.
“I’d be surprised if something like [having a fitness membership included as a medical expense] got introduced by the current federal government, but I’d love to see it,” he says, noting that tax incentive programs such as the registered retirement saving plan, “are a good way to encourage people to make good choices” whether it’s for their health or saving for retirement.
Terri-Lynn Thomson, 41, says she would love to be able to deduct her gym membership as a medical expense on her taxes. The Sarnia-area resident says she easily spent about $2,400 a year on her gym membership, which includes small group fitness classes, before the pandemic closings – and is ready to get back to that routine.
While the sum sounds steep to some, Ms. Thomson says it’s an investment in her health and that has ended up saving her money. “Before going to the gym, my muscles were weak and I had horrible posture, which caused me to make routine visits to the chiropractor, sometimes three times a week,” she says.
Ms. Thomson thinks a tax deduction would motivate more people to join the gym. “A lot of time when you pay, it’s what keeps you accountable.”
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.
