Principal Issues: Whether bowling will be considered a "prescribed physical activity" for purposes of the Children's Fitness Tax Credit.
Position: Question of fact.
Reasons: While the provision of the Income Tax Regulations that will define a prescribed physical activity has not yet been drafted, the Department of Finance has indicated that the activity must be ongoing (either a minimum of eight weeks duration with a minimum of one session per week or, in the case of children's camps, five consecutive days), supervised, and suitable for children. In addition, substantially all of the activities must include a significant amount of physical activity that contributes to cardio-respiratory endurance plus one or more of muscular strength, muscular endurance, flexibility, or balance. The Agency will generally rely on the organization to make such determinations since it has the detailed knowledge of the particular program.
March 21, 2007
XXXXXXXXXX
Dear Colleague:
Thank you for your letter received on January 15, 2007, and the attached letter from one of your constituents, concerning the definition of an eligible activity for the Children's Fitness Tax Credit. I apologize for the delay in responding.
While the Canada Revenue Agency (CRA) will administer the credit, it will not be making general determinations on whether a particular activity, including bowling, is eligible. The organization offering the program will have the detailed knowledge necessary to determine if the definition will be met. The CRA is committed to working with organizations to provide them with as much information as possible to assist them in making their own determination. To this end, information on the credit is available on both the CRA and the Department of Finance Canada Web sites at www.cra.gc.ca/whatsnew/fitness-e.html and www.fin.gc.ca/news06/06-084e.html, respectively.
The Department of Finance Canada is responsible for developing tax policy. I am therefore forwarding a copy of your correspondence to the Honourable James M. Flaherty, Minister of Finance, for his consideration.
I trust that this explanation will assist you in responding to your constituent.
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
Randy Hewlett
957-2049
2007-022214