Principal Issues: [TaxInterpretations translation] Is a fitness camp provided by XXXXXXXXXX a program of physical activity for the purposes of the Children's Fitness Tax Credit if the camp lasts for XXXXXXXXXX sessions over a period of XXXXXXXXXX to XXXXXXXXXX days?
Position: According to comments from the Department of Finance, the costs incurred for such a camp would not qualify for the Children's Fitness Tax Credit.
Reasons: The camp is not for a period of at least five consecutive calendar days.
XXXXXXXXXX 2007-024134 François Bordeleau, Advocate September 28, 2007
Dear Sir,
Subject: Children's Fitness Tax Credit
This is in response to your letter of June 20, 2007, in which you asked whether fees paid for a fitness camp provided by XXXXXXXXXX can qualify for the children's fitness tax credit ("CFTC").
More specifically, you indicated that the purpose of the fitness camp is the fitness of ringette players who are to participate in the upcoming ringette season. Such a camp normally lasts for XXXXXXXXXX sessions at a rate of one hour per session and is spread out over a period varying between XXXXXXXXXX and XXXXXXXXXX days.
Unless otherwise indicated, all statutory references herein are to provisions of the Income Tax Act.
The situation you have indicated in your letter appears to relate to an actual situation involving a specific taxpayer or taxpayers. As stated in paragraph 22 of Information Circular 70-6R5 dated May 17, 2002, it is our practice not to issue written opinions on proposed transactions otherwise than by way of advance rulings. Furthermore, when it comes to determining whether a completed transaction has received appropriate tax treatment, that determination is made first by our Tax Services Offices as a result of their review of all facts and documents, which is usually performed as part of an audit engagement. However, we can offer the following general comments that we hope may be helpful to you.
Under subsection 118.03(2), an individual may claim the CFTC if the individual pays an amount that is an "eligible fitness expense". In general terms, such an expenditure includes an amount paid to a qualifying entity in respect of the cost of registration or membership of a qualifying child in a prescribed program of physical activity. Provisions in the Income Tax Regulations that will define a program of prescribed physical activity have not yet been proposed.
However, Finance Canada has indicated that such a program must be continuous (i.e., provide at least one session per week for eight weeks or, in the case of a summer or sports camp, be at least five consecutive days in duration), suitable for children, and conducted under supervision. In addition, almost all activities in a CFTC-eligible fitness program must include a significant amount of physical activity that contributes to cardio-respiratory endurance and one or more of the following objectives: muscular strength, muscular endurance, flexibility and balance.
Although the Canada Revenue Agency ("CRA") is responsible for administering the CFTC, it will not generally indicate whether a particular activity qualifies for the CFTC. Rather, the entity offering the activity is in a better position to determine whether it meets the specific requirements of the CFTC. In this context, the CRA is committed to working with entities offering programs of physical activity to ensure that they have all the information necessary to make this determination. For more information on the CFTC, please visit the CRA website at www.cra-arc.gc.ca/whatsnew/fitness-f.html and the Department of Finance Canada website at www.fin.gc.ca/news06/06-084e.html. Similarly, the CRA has developed a checklist to help entities offering a program of physical activity determine if it qualifies for the CFTC. I invite you to consult this checklist at www.cra-arc.gc.ca/whatsnew/checklist-e.html.
Best regards,
Louise J. Roy, CGA
Interim Manager
Business and Partnerships Section
Business and Partnerships Division
Income Tax Rulings Directorate.