Awareness, Use and Impact of the Children's Tax Credit


Principal investigator: von Tigerstrom, Barbara J. (University of Saskatchewan)

Co-investigators: Reeder, Bruce (University of Saskatchewan); Chad, Karen E. (University of Saskatchewan); Larre, Tamara (University of Saskatchewan); Mawani, Amin (York University); Cameron, Christine; Tremblay, Mark S. (Statistics Canada).

This research is funded through the Childhood Obesity Prevention and Treatment initiative of the Heart and Stroke Foundation of Canada (HSFC) and co-funded by the Canadian Institutes of Health Research (CIHR) and the Rx&D Health Research Foundation (HRF).
It is widely accepted that obesity is a pressing public health issue in Canada, and the significant rates of childhood obesity in Canada are of particular concern. The complexity of obesity as a public health problem presents challenges in terms of determining priorities and choosing the most effective interventions (Perdue et al., 2004). Comprehensive independent evaluation of policy measures is therefore critical.
Promoting physical activity has been recognized as one essential part of obesity prevention (Standing Committee on Health, 2007; Raine, 2004). One way of increasing physical activity is by creating incentives through the tax system. Canada has recently implemented this strategy in the form of the "Children's Fitness Tax Credit (CFTC)", which allows parents to claim a non-refundable tax credit for eligible fees incurred to register children under the age of 16 in physical activity programs that meet prescribed criteria formulated by an expert panel. To date three provincial/territorial governments have implemented similar tax credits. The effectiveness of economic incentives like the CFTC depends on numerous factors relating to the behaviour they seek to affect and the structure of the incentives, and there is limited evidence as to the efficacy of economic incentives in influencing individual behaviours relating to physical activity (Pratt et al., 2004; Yancey et al., 2006). Examination of the CFTC during its initial years of implementation represents an important opportunity to study a new policy as it is being implemented and assess its potential impact. A full analysis of this policy will benefit from the unique combination of expertise of a multidisciplinary team.
This project will evaluate the extent to which the CFTC is likely to achieve its objective of reducing rates of overweight and obesity through increased participation in physical activity, based on public awareness and use of the program, and its impact on decisions about participation in physical activity. Specifically, it will investigate (1) the extent to which the CFTC has influenced or will influence parents’ decisions to enrol their children in organized physical activity, and (2) the extent to which awareness and use of the CFTC varies according to identifiable characteristics of the individuals or families, such as household income or province of residence. The data on each of these points will be collected in two separate years to enable comparisons between the first and second year of availability of the CFTC.
There are two main components to this project: (1) a population-based survey; and (2) analysis of Canada Revenue Agency (CRA) data. The survey will consist of a set of additional questions on the 2009 and 2010 Physical Activity Monitor (PAM) conducted by the Institute for Social Research (ISR) at York University on behalf of the Canadian Fitness and Lifestyle Research Institute (CFLRI). Our module on the PAM will include fixed and open-ended questions related to awareness and use of the CFTC. The estimated sample size will be a total of 2000 parents over two years. Data regarding rate of use of the CFTC and demographic characteristics will be sought from the Statistics Division of the CRA for the first two tax years in which the CFTC is available.
This research will contribute to an exciting area of emerging research on the role of incentives in physical activity, an area wide open for empirical research(Sturm, 2005). It will provide a preliminary assessment of the CFTC’s potential effectiveness and thus inform decision making regarding the CFTC and more broadly with respect to the use of economic incentives to address obesity and other public health issues.
The CFTC was implemented by the Canadian government on January 1, 2007. Given that it has only been in effect for one tax year and that this is a new research area, there is no previous work on which to draw or summarize.