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The Balanced Budget, Debt Repayment and Taxpayer Protection and Consequential Amendments Act

This is an unofficial version.
If you need an official copy, contact Statutory Publications.

S.M. 1995, c. 7

The Balanced Budget, Debt Repayment and Taxpayer Protection and Consequential Amendments Act

(Assented to November 3, 1995)

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

Definitions

1           In this Act,

"Debt Retirement Fund" means the fund established in section 8; (« Fonds de remboursement de la dette »)

"deficit" means the difference between revenue and expenditure in a fiscal year if expenditure exceeds revenue; (« déficit »)

"expenditure" in respect of a fiscal year means expenditure, including current and capital expenditure, as reported in the Statement of Revenue and Expenditure in the audited financial statements of the operating fund for that fiscal year; (« dépenses »)

"Fiscal Stabilization Fund" means the Fiscal Stabilization Fund established in The Fiscal Stabilization Fund Act; (« Fonds de stabilisation des recettes »)

"general purpose debt" means general purpose debt as described in subsection 78(2) of The Financial Administration Act; (« dette à portée générale »)

"minister" means the Minister of Finance; (« ministre »)

"net general purpose debt" means general purpose debt less the book value of related sinking funds; (« dette nette à portée générale »)

"operating fund" means that part of the Consolidated Fund that records the operational activities of the government and does not record activities relating to moneys that are held in trust; (« fonds de fonctionnement »)

"revenue" in respect of a fiscal year means revenue  as set out in the Statement of Revenue and Expenditure in the audited financial statements of the operating fund for that fiscal year; (« recettes »)

"surplus" means the difference between revenue and expenditure in a fiscal year if revenue exceeds expenditure. (« exécedent »)

BALANCED BUDGET REQUIREMENT

Fiscal year 1995-96 and thereafter

2           Subject to section 3 and subsection 4(2),  for the fiscal year commencing on April 1, 1995 and ending on March 31, 1996 and for each fiscal year thereafter, the government is not to incur a deficit.

Calculation of deficit or surplus

3(1)        In determining the deficit or surplus of the government for a fiscal year for the purposes of this Act, transfers to the operating fund from the Debt Retirement Fund shall not be included in the calculation of revenue.

Other amounts not included in determination

3(2)        If expenditure exceeds revenue in a fiscal year, the government shall not be considered to be in contravention of this Act to the extent that the deficit is a result of one or more of the following:

(a) an expenditure required in the fiscal year as a result of a natural or other disaster in Manitoba that could not have been anticipated and affects the province or a region of the province in a manner that is of urgent public concern;

(b) an expenditure required in the fiscal year because Canada is at war or under apprehension of war;

(c) a reduction in revenue of 5% or more in the fiscal year, calculated before transfers to the Fiscal Stabilization Fund and the Debt Retirement Fund, other than a reduction resulting from a change in Manitoba's taxation laws.

Declaration of L. G. in C.

3(3)        A declaration by the Lieutenant Governor in Council that, in the opinion of the Lieutenant Governor in Council, an expenditure or reduction of revenue as described in subsection (2) has occurred is conclusive for the purposes of this Act of the fact that the expenditure or reduction occurred and in that amount.

Content of declaration

3(4)        A declaration under subsection (3) shall include a description of the expenditure and why it was necessary and of the reduction in revenue and why it occurred.

Accounting policies

3(5)        Subject to subsection (6), expenditure and revenue of a fiscal year shall be determined in accordance with the accounting policies that are observed for the fiscal year as disclosed in the audited financial statements of the operating fund for that fiscal year.

Concerns of Provincial Auditor

3(6)        If the audited financial statements of the operating fund for a fiscal year contain a reservation of the Provincial Auditor that results directly from a change in accounting policies occurring after March 31, 1995 that is not authorized by this Act, the government will not be considered to be in compliance with this Act unless a restatement of the revenue and expenditure of the operating fund for that fiscal year, excluding the effect of the change in accounting policies, would show expenditure and revenue in compliance with this Act.

Deficit to be offset in following year

4(1)        If there is a deficit in a fiscal year that is not authorized by this Act, the government is required to achieve at least an offsetting surplus in the next fiscal year.

Application to government change

4(2)        If there is a general election and the party forming the government after the election is different from the party forming the government before the election, subsection (1) does not require the government after the election to achieve an off-setting surplus in connection with a deficit incurred in the fiscal year during which the election took place.

Audited financial statements

5           The audited financial statements of the operating fund for a fiscal year shall be completed and made public within six months after the end of that fiscal year.

Reporting requirements

6           The minister shall include a report on compliance with this Act in the third-quarter financial report and in the audited financial statements of the operating fund for a fiscal year.

Failure to meet requirements:  third-quarter projection

7(1)        If in respect of a fiscal year ending after March 31, 1995 the third-quarter financial report projects that expenditure will exceed revenue in the fiscal year in a manner not authorized by this Act, the amount payable to each member of the Executive Council as remuneration for service as a member of the Executive Council,  for the 12-month period commencing on April 1 of the fiscal year immediately following the fiscal year to which the third-quarter financial report relates, shall be reduced by

(a) 20%, in a case where expenditure did not exceed revenue in a manner not authorized by this Act in the fiscal year immediately preceding the fiscal year to which the report relates;

(b) 40%, in a case where expenditure exceeded revenue in a manner not authorized by this Act in the fiscal year immediately preceding the fiscal year to which the report relates.

Refund

7(2)        If the audited financial statements of the operating fund for a fiscal year show that the government is in compliance with this Act and amounts have been deducted from amounts payable to members of the Executive Council in connection with that fiscal year under subsection (1), the amounts so deducted shall be refunded to the members of the Executive Council.

Failure to meet requirements:  year-end

7(3)        If in respect of a fiscal year ending after March 31, 1995  the audited financial statements of the operating fund show that expenditure exceeds revenue in a manner not authorized by this Act, and no amount is being deducted from amounts payable to members of the Executive Council under subsection (1) in connection with that fiscal year,  the amount payable to each member of the Executive Council as remuneration for service as a member of the Executive Council, for the 12-month period commencing on April 1 of the fiscal year immediately following the fiscal year to which the statements relate, shall be reduced by

(a) 20%, in a case where expenditure did not exceed revenue in a manner not authorized by this Act in the fiscal year immediately preceding the fiscal year to which the statements relate;

(b) 40%, in a case where expenditure exceeded revenue in a manner not authorized by this Act in the fiscal year immediately preceding the fiscal year to which the statements relate.

Reduction process

7(4)        The reduction required by subsection (3) may be prorated over the months that remain in the fiscal year after the publication of the audited financial statements of the operating fund.

Ceasing to be a member of the Executive Council

7(5)        A reduction in the amount payable to a member of the Executive Council under this section applies only during the period when he or she serves as a member of the Executive Council.

New members of the Executive Council

7(6)         A reduction in the amount payable to members of the Executive Council under this section applies on a prorated basis to any new member of the Executive Council appointed during the period of the reduction.

DEBT RETIREMENT FUND

Debt Retirement Fund

8(1)        In this section, "fund" means the Debt Retirement Fund established in subsection (2).

Fund established

8(2)        The Debt Retirement Fund is hereby established under the direction and control of the minister.

Management of fund

8(3)        The minister shall hold the fund in trust and shall manage the fund in accordance with the provisions of The Financial Administration Act and this Act.

Deposits in fund mandatory after 1996-97

8(4)        Notwithstanding The Financial Administration Act, the minister

(a) may, with the approval of the Lieutenant Governor in Council, deposit in the fund any part of the revenue received in any fiscal year; and

(b) shall, in each fiscal year ending after March 31, 1997, until the fund is wound up under subsection (12), deposit in the fund out of any part of the revenue received in the fiscal year, an amount equal to the sum of

(i) an amount equal to the greater of

(A) $75 million, and

(B) 1% of the amount of the net general purpose debt outstanding as at the end of the immediately preceding fiscal year, and

(ii) 7% of all amounts transferred from the fund to revenue of the operating fund in preceding fiscal years.

Earnings of fund

8(5)        The minister shall credit to the fund any earnings from investments of the fund.

Transfers out of the fund

8(6)        The minister, with the approval of the Lieutenant Governor in Council,

(a) may transfer to revenue of the operating fund all or any part of the amounts standing to the credit of the fund to be used for the sole purpose of reducing the general purpose debt of the government;  and

(b) shall, at least once every five years after April 1, 1997, transfer to revenue of the operating fund all of the amounts standing to the credit of the fund to be used for the sole purpose of reducing the general purpose debt of the government.

No lapse

8(7)        Notwithstanding any other Act or law, amounts standing to the credit of the fund do not lapse at the end of a fiscal year.

Fiscal year

8(8)        The fiscal year of the fund is the period commencing on April 1 in one year and ending on March 31 in the next year.

Audit

8(9)        The accounts and transactions of the fund shall be audited annually by the Provincial Auditor.

Financial statements

8(10)       The minister shall, annually, within six months after the end of the fiscal year, submit to the Lieutenant Governor in Council the audited financial statements of the fund for that fiscal year.

Tabling of statements in Assembly

8(11)       The minister shall table in the Legislative Assembly a copy of the financial statements of the fund provided to the Lieutenant Governor in Council pursuant to subsection (10) immediately if the Assembly is then in Session and, if it is not then in Session, within 15 days of the beginning of the next Session.

Winding up of fund

8(12)       If, in the opinion of the minister, sufficient money has been set aside to retire the general purpose debt of the government, the minister, with the approval of the Lieutenant Governor in Council, may wind up the fund and transfer any amounts remaining in the fund to revenue of the operating fund.

DISPOSITION OF SURPLUS

Disposition of surplus

9           If a surplus exists in a fiscal year, the minister shall dispose of the amount of the surplus as follows:

(a) the amount required to bring the Fiscal Stabilization Fund to its target level as described in section 3.1 of The Fiscal Stabilization Fund Act, or any greater amount that the minister, with the approval of the Lieutenant Governor in Council, considers appropriate, shall be transferred to the Fiscal Stabilization Fund;

(b) any amount remaining after a transfer under clause (a) may be left as a surplus of the operating fund or may, with the approval of the Lieutenant Governor in Council, be transferred to the Debt Retirement Fund.

TAXPAYER PROTECTION

Referendum required for tax changes

10(1)       Subject to subsection (2), the government shall not present to the Legislative Assembly a bill to increase the rate of any tax imposed by an Act or part of an Act listed below,  unless the government first puts the question of the advisability of proceeding with such a bill to the voters of Manitoba in a referendum, and  a majority of the persons who vote in the referendum authorize the government to proceed with the changes:

(a) The Health and Post Secondary Education Tax Levy Act;

(b) The Income Tax Act;

(c) The Retail Sales Tax Act;

(d) Part I of The Revenue Act.

Revenue neutral and external changes

10(2)       Subsection (1) does not apply to

(a) a bill to increase the rate of a tax if, in the opinion of the minister, the increase results from changes in federal taxation laws and is necessary to maintain provincial revenue or to give effect to a restructuring of taxation authority between the federal government and provincial governments;

(b) a bill to increase the rate of a tax if, in the opinion of the minister, the proposed change is designed to restructure the tax burden and does not result in an increase in revenue.

Procedures for referendum

11(1)       A referendum under subsection 10(1)  shall be conducted and managed by the Chief Electoral Officer in the same manner, to the extent possible, as a general election under The Elections Act, and the provisions of The Elections Act apply with necessary modifications to a referendum.

Question to be put to voters

11(2)       The question to be put to voters in a referendum under subsection 10(1) shall be determined by Order of the Lieutenant Governor in Council at the commencement of the referendum process.

Regulations re procedures

11(3)       The Lieutenant Governor in Council may make any regulations that the Lieutenant Governor in Council considers necessary respecting the referendum process to give effect to subsection 10(1), including, without limiting the generality of the foregoing,

(a) governing the preparation of a voters list;

(b) governing the expenses, if any, that may be incurred, and the contributions, if any,  that may be made, and by whom, in connection with a referendum;

(c) where greater certainty is required, modifying to the extent necessary the provisions of The Elections Act to make them applicable to the requirements of a referendum.

Costs of referendum

11(4)       The costs of conducting a referendum shall be paid from the Consolidated Fund.

AMENDMENT OR REPEAL

Amendment or repeal

12(1)       Any bill introduced in the Legislative Assembly to amend, repeal, override or suspend the operation of this Act shall be referred at the committee stage to a standing committee of the Legislative Assembly which provides the opportunity for representations by members of the public.

Requirements re hearings

12(2)       The standing committee reviewing a bill described in this section shall not be scheduled until seven days after the later of

(a) the day the bill is distributed in the Legislative Assembly; and

(b) the day the public is given notice of the date, time and place of the committee meeting.

CONSEQUENTIAL AMENDMENTS

Consequential amendments, C.C.S.M. c. F85

13(1)       The Fiscal Stabilization Fund Act is amended by this section.

13(2)       The following is added after section 3:

Target level

3.1(1)      In this section, "target level" means an amount equal to 5% of the expenditure of the operating fund of the Consolidated Fund.

Achieving target level

3.1(2)      The minister shall make every effort to ensure that the amount standing to the credit of the fund reaches at least the target level.

13(3)       Subsection 4(2) is amended by striking out everything after "in each fiscal year".

C.C.S.M. reference

14          This Act may be cited as The Balanced Budget, Debt Repayment and Taxpayer Protection Act and referred to as chapter B5 of the Continuing Consolidation of the Statutes of Manitoba.

Coming into force

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