The Economic Impact of Fitness

Sports and Fitness Ontario
Ontario Ministry of Tourism and Recreation

Fitness and the Economy

In the past ten years, fitness has become an integral part of life, for many Ontario residents. Recent studies show that 4.2 million people in this province are active at least once a week. The Sports and Fitness Branch of the Ministry of Tourism and Recreation (MTR) is responsible for ensuring that the people of Ontario have the opportunity to achieve personal growth and well-being through participation in sport and fitness activities appropriate to their needs, interests and abilities.

In addition to the physical and emotional rewards fitness provides for individuals, it also delivers increasingly important economic benefits for our society as a whole.

Studies reveal a substantial link between participation in physical activity and the Ontario economy. As direct expenditures associated with participation in sport, fitness and recreational activities circulate through the economy, they result in a significant increase in employment. The total direct and indirect income generated by the $62.8 million annual expenditures of the Ministry's Recreation Division is estimated at $536 million - or $8.60 for every dollar spent by the Division. In addition, volunteer time valued at $29.6 million or 47 cents per dollar of expenditure, is directly related to the Division's programs.

Increased leisure time means more opportunities to pursue recreation and studies show that a typical Ontario family spends $2,300 per year on recreation. In total, this amounts to $7.3 billion annually.

Expenditures include:

The Cost of "Unfitness"

On the other hand, studies show that a lack of fitness in North American society has a severely negative economic impact. In 1982, for example, annual medical costs grew to nearly 10 per cent of the gross national product. And in the United States, more than half of the $623 billion spent on health care annually went to treat preventable conditions - with at least one-quarter of the total cost reflecting adverse personal life-styles. Translated into dollars and time, the significance of inactivity, or being unfit, is staggering:

• Health and Welfare Canada reports that medical costs associated with diseases related to lifestyle exceed $2.76 billion a year.
• Over $9 billion annually is lost in time and salaries by executives through illness stemming from lack of fitness.
• 745 million productive hours were lost in 1975 across Canada at a cost of $3.8 billion because of lifestyle-related illness.
• In 1979, the cost of absenteeism in Canada was $4.9 billion, 25 times more than the economic loss attributed to labour disputes.
• A 1976 study indicated that the Ontario Hospital Insurance Plan could save $31 million dollars in health care costs if residents of the province had an average level of physical fitness.
• Research at the Canada Life Assurance Co. shows that the cost of hiring and training a new supervisory level employee is about $8,600.
• A U.S. study indicates that to replace a top executive can cost as much as $600,000.

The Fitness "Prescription"

The point is that fitness can substantially help to reduce personal illness, both physical and emotional. Physically fit people tend to be ill less often and able to recover more quickly.

The benefits to business and industry are obvious. Studies show that energetic, alert and enthusiastic employees are less likely to have accidents on the job. Employee fitness programs appear to boost job satisfaction, efficiency and productivity while reducing absenteeism and staff turnover. Companies with a positive approach to fitness and health may even enjoy reduced health insurance premiums. In short, a healthier, more involved work force generally means a healthier, more productive company.

One recent case study showed that a company with an employee fitness program enjoyed benefits equivalent to $513 per worker-year. The cost-benefit calculation examined turnover and absenteeism costs (which vary widely from one company to another) against potential gains in productivity. The study also determined that improved worker satisfaction resulted in higher production quality that could boost sales and reduce warranty service expenses. It also noted that the in-house fit- ness program might enable the company to negotiate premium reductions of up to 32 per cent in purchasing supplementary health insurance.

Investing in Fitness

The fitness movement offers private sector companies a variety of investment opportunities. Some profit by supplying fitness equipment, clothing and services to meet the public demand. Others enhance their public images by providing support to events and activities related to sport and physical fitness, thus integrating their corporate identity with the interests of a significant segment of the population.

MTR encourages such private sector Support of sport and fitness activities. The Ministry's Sports and Fitness Branch has established guidelines for suitable "partnerships" under which companies can co-sponsor a wide variety of Branch programs designed to increase public awareness and participation.

Sports and Fitness Ontario
Ontario Ministry of Tourism and Recreation

For more information on the economic implication of fitness and the programs of Sports and Fitness Ontario, please contact:

Ministry of Tourism and Recreation
Fitness Section
77 Bloor Street West
8th Floor
Toronto, Ontario
M7A 2R9
Telephone: (416) 965-6311

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