The Budget proposes a new Children’s Arts Tax Credit to promote participation of children in artistic, cultural, recreational or developmental activities. Parents will be able to claim and share a 15% non-refundable tax credit based on an amount up to $500 in eligible expenses per child paid in a year. For a child under 16 years of age at the beginning of the year, the credit will apply to enrolment in an eligible program. If a child is eligible for the Disability Tax Credit and is under 18 years of age at the beginning of the year, the credit may be claimed on an additional $500 disability supplement amount when a minimum of $100 is paid in eligible expenses.

Eligible Expense An eligible expense will include a fee paid in the taxation year to a qualifying entity for the registration or membership of a child in an eligible program of artistic, cultural, recreational or developmental activities; however, fees paid for the purchase or rental of equipment for exclusive personal use (e.g., musical instruments), travel, meals and accommodation will be excluded. Expenses eligible for purposes of the child care expenses deduction, or the Children’s Fitness Tax Credit, will also be ineligible.

Qualifying Entity A qualifying entity will be a person or partnership, other than an individual who is under 18 years of age, that offers one or more eligible programs of artistic, cultural, recreational or developmental activities. A qualifying entity will not include the spouse or common-law partner of a person who is claiming the credit in respect of his or her child.

Eligible Activity An eligible activity will be a supervised activity suitable for children that:

  • contributes to the development of creative skills or expertise in an artistic or cultural activity;
  • provides a substantial focus on wilderness and the natural environment;
  • helps children develop and use particular intellectual skills;
  • includes structured interaction among children where supervisors teach or help children develop interpersonal skills; or  
  • provides enrichment or tutoring in academic subjects.

This measure will apply to eligible expenses paid in the 2011 and subsequent taxation years.