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2nd Session, 42nd Legislature

This HTML version is provided for ease of use and is based on the bilingual version that was distributed in the Legislature after First Reading.

Bill 18

THE SUMMARY BUDGETING ACT (VARIOUS ACTS AMENDED AND PUBLIC SECTOR EXECUTIVE COMPENSATION ACT ENACTED)


  Bilingual version (PDF) Explanatory Note

(Assented to                                         )

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

PART 1

THE CROWN CORPORATIONS
GOVERNANCE AND ACCOUNTABILITY ACT

C.C.S.M. c. C336 amended

1           The Crown Corporations Governance and Accountability Act is amended by this Part.

2           Clauses 6(4)(a) and (b) are replaced with the following:

(a) signed by the responsible minister and approved by the Lieutenant Governor in Council;

(b) given to the corporation; and

3(1)        Subsection 7(3) is amended by striking out "and" at the end of clause (b) and adding the following after clause (c):

(d) any applicable directive issued to the corporation under this Act or The Financial Administration Act; and

(e) any applicable regulations made under The Financial Administration Act.

3(2)        Subsection 7(4) is replaced with the following:

Plan to be submitted for approval

7(4)        A corporation must submit its annual business plan, as approved by its board, to the responsible minister at the time directed by that minister. The responsible minister, after having the plan reviewed by Treasury Board, may approve the plan, with or without conditions, or refer it back to the corporation to be revised as directed by Treasury Board or the responsible minister and resubmitted for that minister's approval.

3(3)        The following is added after subsection 7(4):

Additional requirements

7(5)        The requirements under this section are in addition to any requirements imposed by or under any other Act.

4           Clause 9(1)(b) of the French version is amended by striking out "la lettre de mandat donnée" and substituting "lettre de mandat remise".

5(1)        Clause 13(1)(a) is replaced with the following:

(a) respecting matters of policy;

(a.1) requiring the corporation to conduct an organizational review as specified in the directive;

(a.2) requiring the corporation to do something in accordance with its approved annual business plan or prohibiting it from doing anything inconsistent with that plan;

5(2)        Subsection 13(2) is repealed.

6           Section 19 is repealed.

PART 2

THE FINANCIAL ADMINISTRATION ACT

C.C.S.M. c. F55 amended

7           The Financial Administration Act is amended by this Part.

8           The definition "operating expense" in section 1 is amended by striking out "of the government".

9           Section 6 is replaced with the following:

Regulations and directives — general powers

6(1)        Treasury Board may, with the approval of the Lieutenant Governor in Council, make regulations or issue directives that it considers necessary in relation to the discharge of its responsibilities under this Act or any other Act of the Legislature.

Regulations and directives — reporting organizations

6(2)        Despite any other Act, Treasury Board may, with the approval of the Lieutenant Governor in Council, make any regulations or issue any directives in relation to reporting organizations that it may make or issue in relation to the government or a government department.

Regulations — prescribing reporting organizations

6(3)        Treasury Board may, with the approval of the Lieutenant Governor in Council, make regulations prescribing organizations or classes of organizations as reporting organizations.

Regulations and directives — specific powers

6(4)        Without limiting subsections (1) and (2), Treasury Board may, with the approval of the Lieutenant Governor in Council, make regulations or issue directives

(a) establishing reporting requirements for a reporting organization, including requirements respecting

(i) financial reporting, including budgets and financial statements, and

(ii) balanced scorecard reporting, including specific outcomes to be achieved, performance measures used in determining outcomes, and specific outcomes actually achieved;

(b) establishing or changing the fiscal period of a reporting organization, or requiring it to be changed as specified in the regulation or directive;

(c) requiring a reporting organization to adhere to the government's General Manual of Administration or to any part of it;

(d) respecting procurement by the government or a reporting organization;

(e) respecting accounting policies and practices of the government or a reporting organization;

(f) respecting the evaluation of programs, including requiring a reporting organization to conduct a value-for-money review of any of its programs;

(g) respecting inspections or audits, including requiring the provision of access to the books and records of a reporting organization for the purpose of an inspection or audit;

(h) respecting the annual operating budget of a reporting organization, including

(i) requiring it to be submitted to Treasury Board for approval,

(ii) respecting the approval process and conditions that may be imposed on an approval,

(iii) directing a reporting organization to make changes to its operating budget, and

(iv) prohibiting a reporting organization from incurring an operating deficit or limiting the amount of such a deficit;

(i) respecting capital expenditures and commitments to operating expenses in future years relating to the use of capital property, including

(i) requiring the government or a reporting organization to obtain Treasury Board approval before making such expenditures or commitments,

(ii) respecting the approval process and conditions that may be imposed on an approval,

(iii) respecting capital management processes, including procurement, contract provisions, project management and financial controls,

(iv) requiring a reporting organization to prepare a capital plan and submit it to Treasury Board for approval, and

(v) establishing requirements for capital plans, business cases and requests for approval and tendering, and for other procurement documents, including progress and completion reports;

(j) establishing public reporting requirements for a reporting organization respecting procurement practices and respecting expenditures and commitments referred to in clause (i);

(k) restricting or prohibiting the borrowing of money by the government or a reporting organization without Treasury Board approval, including restricting the amount that may be borrowed, or the manner in which or purpose for which it may be borrowed, without that approval;

(l) respecting advertising or the funding of sponsorships by a reporting organization, including prohibiting or restricting such advertising or funding or requiring it to be approved by Treasury Board or the minister responsible for the organization or for any program for which the organization receives government funding;

(m) establishing or regulating such policies and procedures as Treasury Board considers necessary for the efficient and effective operation of the government or a reporting organization.

Regulation may be general or specific

6(5)        A regulation under this section may apply to some or all branches of the government or to some or all reporting organizations. It may establish different requirements or conditions for

(a) different types of procurement, expenditures or commitments; or

(b) different branches of government or different reporting organizations or classes of reporting organizations.

Directive must be specific

6(6)        A directive issued under this section to a reporting organization applies only to that organization. It may establish different requirements or conditions for different types of procurement, expenditures or commitments and may differ from a directive issued to another reporting organization or to one or more branches of the government.

Reporting organization must comply with directive

6(7)        A reporting organization to which a directive is issued under this section must comply with the directive.

Directive to be made public

6(8)        Within 30 days after issuing a directive to a reporting organization, Treasury Board must make the directive public in a manner that Treasury Board considers appropriate.

Guidelines

6(9)        Treasury Board may issue financial reporting guidelines for reporting organizations.

10          Subclause 9(a)(i) is repealed.

11          Clause 32(1)(b) is amended by striking out "more than" and substituting "at least".

12          Subsection 41(4) is amended

(a) by replacing the section heading with "Treasury Board approval required"; and

(b) in the section, by striking out everything after "without the approval of" and substituting "Treasury Board if the settlement amount is greater than $50,000 or, if a greater amount is prescribed by regulation, the amount so prescribed.".

13          Subsections 65(3) to (5) are repealed.

14          The following is added after section 76 as part of Part 8:

Meaning of "authorized person"

76.1(1)     In this section, "authorized person" means the Minister of Finance or a person authorized by the Minister of Finance for the purpose of this section.

Powers of authorized person

76.1(2)     An authorized person may enter any premises where financial records of a reporting organization are kept and inspect those records for the purpose of

(a) verifying any information that has been reported by the organization to the Minister of Finance, Treasury Board or the Comptroller;

(b) determining whether the organization's operations are carried out with proper regard for economy and efficiency;

(c) verifying compliance with this or any other Act or a regulation or directive made or issued under this or any other Act;

(d) determining how any grant, advance or other funding provided to the organization by the government or another reporting organization is or has been used and, if conditions apply to that funding, verifying compliance with those conditions; or

(e) obtaining any information that the government requires to prepare its summary budget or its summary financial statements.

Assistance to authorized person

76.1(3)     A person in charge of the place of inspection or having custody or control of the relevant records of a reporting organization must

(a) produce or make available to the authorized person the records to be inspected; and

(b) provide any assistance or additional information that the authorized person reasonably requires to carry out the inspection.

Copies of records

76.1(4)     The authorized person may

(a) use equipment at the place of inspection to make copies of relevant records; or

(b) remove records from the place of inspection to make copies.

Records removed under clause (b) must be returned to the place of inspection as soon as practicable.

Duties of directors, officers, etc.

76.2(1)     Every director, officer or other person responsible for the business and affairs of a reporting organization, in exercising their powers and discharging their duties, must

(a) comply with, and ensure that the organization complies with, the following:

(i) this Act and all applicable regulations and directives made or issued under this Act,

(ii) each Act under which the organization is established, is given a mandate or powers or carries on its business or undertaking,

(iii) if The Crown Corporations Governance and Accountability Act applies to the organization, that Act, the organization's roles and responsibilities record under that Act and any mandate letter or directive issued to the organization under that Act,

(iv) the organization's by-laws;

(b) act honestly and in good faith with a view to the best interests of the organization having regard to their duty in clause (a); and

(c) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

Reliance on statements

76.2(2)     A person is not liable for a breach of duty under subsection (1) if they rely in good faith on

(a) financial statements of the reporting organization represented to them by an officer of the organization or in a written report of the organization's auditor to fairly reflect the financial condition of the organization; or

(b) a report of a lawyer, accountant, engineer, appraiser or other person whose position or profession lends credibility to a statement made by the person.

15          The following is added after section 80:

Annual report on procurement

80.1(1)     For each fiscal year, the Minister of Finance must prepare a procurement report that includes information about

(a) the government's management of contracts;

(b) improvements made to procurement policies and processes and the financial impact of those improvements;

(c) the numbers and types of contracts that were tendered; and

(d) the numbers and types of contracts that were awarded without tender.

Report to be laid before Assembly

80.1(2)     The Minister of Finance must lay the report before the Legislative Assembly along with the report to be laid before the Assembly by the Minister of Finance under section 67.

PART 3

MUNICIPAL FINANCIAL REPORTING

THE MUNICIPAL ACT

C.C.S.M. c. M225 amended

16(1)       The Municipal Act is amended by this section.

16(2)       Subsection 162(1) is amended, in the part before clause (a), by striking out "in a form approved by the minister and".

16(3)       The following is added after section 162:

Regulations — financial reporting

162.1(1)    The Lieutenant Governor in Council may make regulations establishing financial reporting requirements for a municipality in respect of its operating budget, capital budget, estimate of operating revenue and expenditures and five-year capital expenditure program.

Required accounting policies and practices

162.1(2)    A regulation made under this section may require a municipality to follow specified accounting policies and practices in preparing its budgets and estimates and the regulation prevails over the requirements of this Division, if it so provides.

Scope and application

162.1(3)    A regulation under this section may be general or particular in its application.

THE CITY OF WINNIPEG CHARTER

S.M. 2002, c. 39 amended

17(1)       The City of Winnipeg Charter is amended by this section.

17(2)       Subsection 284(3) is replaced with the following:

Regulations — financial reporting

284(3)      The Lieutenant Governor in Council may make regulations establishing financial reporting requirements for the city in respect of its operating budget, capital budget and capital forecast.

PART 4

PUBLIC SECTOR EXECUTIVE
COMPENSATION

Public Sector Executive Compensation Act enacted

18          The Public Sector Executive Compensation Act set out in the Schedule to this Act is hereby enacted.

PART 5

COMING INTO FORCE

Coming into force — royal assent

19(1)       Subject to subsection (2), this Act comes into force on the day it receives royal assent.

Coming into force — Schedule

19(2)       The Schedule to this Act comes into force as provided in the coming into force section at the end of the Schedule.


SCHEDULE

THE PUBLIC SECTOR EXECUTIVE COMPENSATION ACT

TABLE OF CONTENTS

Section

INTRODUCTORY PROVISIONS

1   Definitions

2   Application

COMPENSATION FRAMEWORK FOR EXECUTIVES

3   Compensation framework

4   Effective date

5   Effect of framework

6   Overpayments

7   Exemptions

ADMINISTRATION AND COMPLIANCE

8   Compensation information

9   Compliance with regulations and directives

10  Deemed agreement terms

GENERAL

11  Incremental increases

12  No deemed employment relationship

13  No constructive dismissal or breach of contract

14  No cause of action, compensation or damages

REGULATIONS

15  Regulations

C.C.S.M. REFERENCE AND COMING INTO FORCE

16  C.C.S.M. reference

17  Coming into force


THE PUBLIC SECTOR EXECUTIVE COMPENSATION ACT

INTRODUCTORY PROVISIONS

Definitions

1           The following definitions apply in this Act.

"compensation" means any consideration or remuneration, regardless of its nature or form, including, without limitation, elements such as salary, retainers, benefits, bonuses, allowances, travelling and living expenses, honorariums and severance pay, paid or payable or provided, directly or indirectly, to or for the benefit of a person who performs duties and functions that entitle the person to be paid. (« rémunération »)

"compensation framework" means a compensation framework established under section 3. (« lignes directrices en matière de rémunération »)

"executive" means an individual who holds any of the following offices or positions with a public sector employer:

(a) the chief executive officer or similar position;

(b) an office or position or class of office or position that is prescribed, but not including an office or position held by an employee who is represented by a bargaining agent. (« cadre »)

"minister" means the minister appointed by the Lieutenant Governor in Council to administer this Act. (« ministre »)

"prescribed" means prescribed by regulation.

"public sector employer" means

(a) the government;

(b) a corporation as defined in The Crown Corporations Governance and Accountability Act;

(c) the following health organizations:

(i) a regional health authority as defined in The Regional Health Authorities Act,

(ii) Shared Health Inc.,

(iii) CancerCare Manitoba,

(iv) a prescribed health sector employer;

(d) The University of Manitoba, The University of Winnipeg, Brandon University, Université de Saint-Boniface, University College of the North, Red River College, Assiniboine Community College, and Manitoba Institute of Trades and Technology;

(e) a school district and a school division as defined in The Public Schools Act;

(f) any other reporting organization as defined in The Financial Administration Act; and

(g) any other prescribed employer in the public sector, or member of a prescribed class of such employers. (« employeur du secteur public »)

"regulation" means a regulation made under this Act. (« règlement »)

Application

2(1)        Subject to subsection (2), this Act applies despite any other enactment that sets, approves or otherwise fixes compensation for a public sector employer or an executive and, to the extent of any conflict or inconsistency with the other enactment, this Act prevails.

Conflict

2(2)        If there is a conflict or inconsistency between this Act and The Public Services Sustainability Act or a regulation under that Act, that Act or regulation prevails.

COMPENSATION FRAMEWORK FOR
EXECUTIVES

Compensation framework

3(1)        The Lieutenant Governor in Council may, by regulation, establish a compensation framework for executives.

Purpose of framework

3(2)        A compensation framework is to govern the compensation that may be provided by a public sector employer to an executive or class of executives and, without limitation, may limit the compensation or elements of that compensation that may be provided to an executive or class of executives.

Effective date

4           A compensation framework takes effect on the prescribed date.

Effect of framework

5(1)        When a compensation framework is in effect, the following prohibitions and obligations apply to a public sector employer and each of its executives:

1.  The public sector employer must comply with the terms of the compensation framework.

2.  The public sector employer must not provide compensation to an executive that is greater than the amount authorized in, or that is otherwise inconsistent with, the framework.

3.  The public sector employer must not do anything to circumvent a limit set out in a compensation framework or restructure its organization so that the framework does not apply to its executives.

4.  An executive is not entitled to receive compensation that is greater than the amount authorized in, or that is otherwise inconsistent with, the framework.

5.  Any provision in an agreement between a public sector employer and an executive that authorizes or requires an amount to be paid that is greater than the amount authorized under, or that is otherwise inconsistent with, the compensation framework is void and unenforceable to the extent that it is not in accordance with the framework.

6.  If an executive accepts compensation greater than the amount authorized in or that is otherwise inconsistent with the framework, the excess amount is deemed to be a debt due to their employer. The public sector employer must, within the year after the date on which the executive accepted it, recover the excess by any remedy or procedure available to the employer by law to enforce the payment of a debt, including deducting that overpayment from any compensation payable to the executive.

7.  The compensation framework applies to an executive even if

(a) the executive is appointed to a new office or position with the public sector employer; or

(b) the executive's contract or agreement is renewed after the framework takes effect.

Effect on existing executives

5(2)        For an executive who is employed immediately before a compensation framework takes effect and continues to be employed in the same position or office, whether under the same or a renewed contract or agreement,

(a) the compensation framework does not apply until two years after it takes effect; and

(b) any increase in an element of compensation contracted for or agreed to that has not been implemented before two years after the framework takes effect is void and unenforceable to the extent that it is inconsistent with the framework.

Overpayments may reduce provincial funding

6           The minister may reduce the amount provided by the government under an agreement or other funding arrangement to a public sector employer by the amount of any excess compensation received by an executive.

Exemptions may be authorized

7(1)        The minister may, if authorized by regulation to do so, exempt a public sector employer or an executive from one or more terms in a compensation framework and set conditions for the exemption.

Written exemption

7(2)        The exemption must be made in writing.

Exemptions to be made public

7(3)        The minister must make the exemption available to the public by posting it on a government website and by any other means the minister considers appropriate.

Exemption not a regulation

7(4)        An exemption is not a regulation within the meaning of The Statutes and Regulations Act.

ADMINISTRATION AND COMPLIANCE

Compensation information

8(1)        The minister may issue a directive to a public sector employer requiring the employer to provide information, including personal information as defined in The Freedom of Information and Protection of Privacy Act, related to compensation that the minister considers appropriate for ensuring compliance with this Act.

Types of information

8(2)        Without limitation, a directive under subsection (1) may include requirements to provide the public sector employer's information about

(a) contracts or agreements between the employer and its executives relating to compensation;

(b) plans respecting compensation for executives and estimates of costs with respect to those plans, including proposed or negotiated changes to such plans; and

(c) policies, guidelines and studies related to compensation for its executives and other employees.

Information must be provided

8(3)        The public sector employer must provide the information in a timely manner.

Information confidential

8(4)        Subject to subsections (5) and (6) and the regulations, the minister and any other person in receipt of the information must keep the information provided by the public sector employer confidential.

Use of information by minister

8(5)        The minister may use and disclose information, including personal information, provided under this section as the minister considers appropriate for the administration of this Act.

Public Sector Compensation Disclosure Act

8(6)        Nothing in this section limits the disclosure of information provided under The Public Sector Compensation Disclosure Act.

Compliance with regulations and directives

9           Every public sector employer to which a regulation or directive issued under this Act applies must comply with it.

Deemed agreement terms

10          Every prohibition or obligation concerning a public sector employer under this Act is deemed to be a prohibition or obligation that the employer is required to comply with under the terms of every agreement or other funding arrangement between the government and the employer.

GENERAL

Incremental increases

11          Nothing in this Act affects an executive's entitlement to a promotion, reclassification or salary increment within an established compensation framework in accordance with the terms of an employment contract or agreement.

No deemed employment relationship

12          Nothing in this Act makes a person an employee of the government who is not otherwise an employee of the government.

No constructive dismissal or breach of contract

13          Neither the enactment or application of this Act nor any changes to the compensation that is payable to an executive as a result of this Act is considered to be a constructive dismissal or breach of contract.

No cause of action, compensation or damages

14          No cause of action or proceeding arises as a direct or indirect result of the enactment or application of this Act, and no compensation or damages are owing or payable to any person in connection with or as a result of the enactment or application of this Act.

REGULATIONS

Regulations

15(1)       The Lieutenant Governor in Council may make regulations

(a) prescribing an office or position, or a class of offices or positions, for the purpose of clause (b) of the definition "executive" in section 1;

(b) in respect of the definition "public sector employer" in section 1, prescribing

(i) a health sector employer, or class of health sector employers, for the purpose of subclause (c)(iv), and

(ii) an employer in the public sector, or class of such employers, for the purpose of clause (g);

(c) prescribing the date on which a compensation framework takes effect;

(d) authorizing the minister to exempt a public sector employer or an executive or a class of public service employers or executives from a compensation framework and prescribing conditions in relation to the exercise of that authority;

(e) respecting the collection, use and disclosure of information, including personal information within the meaning of The Freedom of Information and Protection of Privacy Act;

(f) defining any word or expression used but not defined in this Act;

(g) respecting any matter the Lieutenant Governor in Council considers necessary or advisable to carry out the purpose of this Act.

General or specific

15(2)       A regulation may be general or specific in its application.

C.C.S.M. REFERENCE AND
COMING INTO FORCE

C.C.S.M. reference

16          This Act may be referred to as chapter P264 of the Continuing Consolidation of the Statutes of Manitoba.

Coming into force

17          This Act comes into force on the day it receives royal assent.

Explanatory Note

This Bill amends various Acts to improve the development and implementation of the government's summary budget. It also includes a new Act governing public sector executive compensation.

Part 1: The Crown Corporations Governance and Accountability Act

This Act, which provides for government oversight over certain Crown corporations, is amended for consistency with the changes made in Part 2 to The Financial Administration Act. Those changes provide for greater government oversight over the financial administration of reporting organizations (including the agencies governed by this Act).

  • A mandate letter from the minister no longer needs to be signed by the directors of a Crown corporation.
  • The responsible minister's authority to issue directives is limited to avoid overlap with Treasury Board's expanded authority to make regulations and issue directives under The Financial Administration Act.
  • The statutory duty of directors and officers is repealed because it is being added to The Financial Administration Act.

Part 2: The Financial Administration Act

This Act is amended to

  • enhance Treasury Board's supervisory role in relation to the financial administration of reporting organizations (organizations whose financial results are included in the government's summary financial statements);
  • clarify the period of an adjournment that is required for the government to authorize expenditures by a special warrant;
  • require Treasury Board approval for dispute settlements if the settlement amount is greater than $50,000 or any greater amount prescribed by regulation;
  • clarify the inspection powers of the Minister of Finance (or a person authorized by that minister) in relation to reporting organizations;
  • set out the duties of directors, officers and others responsible for the business and affairs of a reporting organization; and
  • require the Minister of Finance to prepare an annual report on procurement and table it in the Assembly.

Part 3: Municipal financing reporting

The Municipal Act and The City of Winnipeg Charter are amended to enable the Lieutenant Governor in Council to make regulations establishing financial reporting requirements and specifying accounting policies and practices that must be followed by municipalities and the City of Winnipeg.

Part 4: Public sector executive compensation

Under The Public Sector Executive Compensation Act, frameworks for governing compensation for executives of public sector employers may be established by Cabinet regulation. An executive cannot be paid more than the amount authorized by a framework. Employers must recover overpayments paid to their executives. Overpayments may result in reduced government funding for the employer.