Government of Ontario Releases
Their 2009 Budget

The Negative Affect of Harmonization
on Ontario Fitness Clubs
By: David A. Hardy

Government departments are widely praising the effort, claiming that the harmonized tax system will cut the costs of businesses by cutting back on administrative filing costs by an estimated $190 Million. Fitness Industry Council of Canada (FIC) is extremely concerned that the increased tax burden on memberships will slow membership sales and increase membership attrition in an already stressed economy. In addition, due to the new costs associated with obtaining a fitness membership, access and the health of Ontario’s citizens will be at risk, as many individuals may forgo membership due to the increased cost. Tory opposition members claim that the harmonization is just hitting people with tax hikes when they can least afford it.

In response, the government is offering a tax credit to middle-income earners. The up-to $260 credit per year, will last for 3 years. But the opposition notes the last installment is just 3 months before the next election, making the credit look very much like a bribe to electors.

Compliance with new harmonization rulings will mean headaches in the next year-and-a-half while businesses overhaul their sales-tax reporting and collecting procedures.

FIC is currently working on a strategy to reverse this position, working closely with our government relations firm Sussex-Strategy Group; we intend to lobby both the provincial and federal government to remove the new tax on fitness memberships for the health of all Ontarians. Other industries impacted by the harmonization include the restaurants, the coal, wood, electricity and natural gas industry. Goods for re-sale, research equipment, medicines, magazines, dentures, optical appliances and hearing aids.