First Session, Thirty-Seventh Legislature
This version is based on the printed bill that was distributed in the Legislature after First Reading.
It is not the official version. If accuracy is critical, you can obtain a copy of the printed bill from Statutory Publications.
Bill 41
THE BALANCED BUDGET, DEBT REPAYMENT AND TAXPAYER PROTECTION AMENDMENT AND CONSEQUENTIAL AMENDMENTS ACT
| Explanatory Note |
(Assented to )
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:
The Balanced Budget, Debt Repayment and Taxpayer Protection Act is amended by this Act.
The title is amended by striking out "PROTECTION" and substituting "ACCOUNTABILITY".
Section 1 is amended
(a) by repealing the definitions "deficit" and "surplus";
(b) by repealing the definitions "expenditure", "general purpose debt" and "revenue" and substituting the following in alphabetical order:
"expenditure" in respect of a fiscal year means expenditure as reported in the audited financial statements of the operating fund for that fiscal year, but does not include transfers from the operating fund to the Fiscal Stabilization Fund or the Debt Retirement Fund; (« dépenses »)
"general purpose debt" means general purpose debt as described in subsection 78(2) of The Financial Administration Act, but does not include
(a) debt associated with the acquisition of capital assets by the government for which an amortization allowance has been included in expenditure of the operating fund, or
(b) other debt incurred by the government for which a repayment provision has been included in expenditure of the operating fund; (« dette à portée générale »)
"revenue" in respect of a fiscal year means revenue as reported in the audited financial statements of the operating fund for that fiscal year, but does not include transfers to the operating fund from the Debt Retirement Fund or the Fiscal Stabilization Fund; (« recettes »)
(c) by adding the following definitions in alphabetical order:
"allocation committee" means the Debt Retirement Fund Allocation Committee appointed under subsection 8(6.2); (« Comité de répartition »)
"balance" for a fiscal year means the net result as shown on the financial statements after expenditure, as adjusted by section 3, is subtracted from revenue, as adjusted by section 3, and after the application of transfers from the operating fund to the Debt Retirement Fund and from the Fiscal Stabilization Fund to the operating fund; (« solde »)
"Crown corporation" means Manitoba Hydro, The Manitoba Public Insurance Corporation, The Liquor Control Commission and The Manitoba Lotteries Corporation; (« société de la Couronne »)
"financial statements" means the special purpose statements regarding the operating fund, prepared for the purpose of this Act to show whether the government is in compliance with this Act; (« états financiers »)
"net pension liability" means pension liability less the book value of related funds established for the payment of pensions; (« passif net découlant du régime de retraite »)
"pension liability" means the amount required to fully fund the pensions provided for under The Civil Service Superannuation Act and The Teachers' Pensions Act that are payable out of the operating fund and not funded in another manner; (« passif découlant du régime de retraite »)
Section 2 is repealed and the following is substituted:
Fiscal year 2000-01 and thereafter
Subject to subsection 4(2), for the fiscal year ending on March 31, 2001 and for each fiscal year thereafter, the government is not to incur a negative balance.
Subsection 3(1) is repealed and the following is substituted:
Transfers from Debt Retirement Fund not included in determining balance
For greater certainty, transfers from the Debt Retirement Fund to the operating fund shall not be included in determining whether there is a positive or negative balance for a fiscal year.
Proceeds from sale of Crown corporation not included in determining balance
Revenue or other financial assets received by the government in a fiscal year ending after March 31, 2000 as a result of selling shares or assets of a Crown corporation in the course of a privatization of the Crown corporation shall not be included in determining whether there is a positive or negative balance for the fiscal year.
Subsection 3(2) is amended
(a) by repealing the section heading and the part before clause (a) and substituting the following:
Other amounts not required to be included in determining balance
The government is not required to include the following in determining whether there is a positive or negative balance for a fiscal year:
(b) in clause (c), by striking out "calculated before transfers to the Fiscal Stabilization Fund and the Debt Retirement Fund,".
Subsection 3(6) is amended
(a) by striking out "revenue and expenditure" and substituting "financial statements"; and
(b) by striking out "would show expenditure and revenue in compliance with this Act" and substituting "would show the government to be in compliance with this Act".
Subsection 4(1) is repealed and the following is substituted:
Negative balance requires offsetting positive balance in following year
If there is a negative balance in a fiscal year, the government is required to achieve at least an offsetting positive balance in the next fiscal year.
Subsection 4(2) is amended
(a) by striking out "surplus" and substituting "positive balance"; and
(b) by striking out "deficit" and substituting "negative balance".
Subsection 7(1) is repealed and the following is substituted:
Failure to meet requirements: third-quarter projection
If in respect of a fiscal year ending after March 31, 2000 the government is projecting a negative balance in the third-quarter financial report, 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 the government did not incur a negative balance in the fiscal year immediately preceding the fiscal year to which the report relates;
(b) 40%, in a case where the government incurred a negative balance in the fiscal year immediately preceding the fiscal year to which the report relates.
Subsection 7(3) is repealed and the following is substituted:
Failure to meet requirements: year-end
If in respect of a fiscal year ending after March 31, 2000 the audited financial statements of the operating fund show that the government incurred a negative balance, 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 the government did not incur a negative balance in the fiscal year immediately preceding the fiscal year to which the statements relate;
(b) 40%, in a case where the government incurred a negative balance in the fiscal year immediately preceding the fiscal year to which the statements relate.
Subsection 8(4) is repealed and the following is substituted:
Transfers to the fund from the operating fund mandatory
Despite The Financial Administration Act, the minister
(a) may, with the approval of the Lieutenant Governor in Council, transfer to the fund from the operating fund in any fiscal year any amounts that the Lieutenant Governor in Council considers appropriate; and
(b) shall, in each fiscal year ending after March 31, 2000, until the fund is wound up under subsection (12), transfer to the fund from the operating fund an amount equal to the greater of the following amounts:
(i) $96,357,000., as adjusted from time to time under subsection (4.1),
(ii) 1% of the total of the net general purpose debt and the net pension liability as at the end of the immediately preceding fiscal year.
The amount set out in subclause (4)(b)(i) shall be increased in each fiscal year commencing after March 31, 2001
(a) by 7% of all amounts transferred from the fund to the operating fund after March 31, 2000 for the repayment of general purpose debt; and
(b) if the amount remaining, after the allocation to general purpose debt, is insufficient to match the projected pension contributions of new employees hired on or after April 1, 2000, by any amount the minister considers necessary to ensure that those projected pension contributions can be matched.
Subsection 8(6) is repealed and the following is substituted:
Transfers from the fund to the operating fund
The minister, with the approval of the Lieutenant Governor in Council,
(a) may, from time to time during a fiscal year, transfer to 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 and the pension liability of the government; and
(b) shall, at least once every five years after March 31, 2000, transfer to 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 and the pension liability of the government.
Allocation between general purpose debt and pension liability
The amount transferred to the fund under clause (4)(b) shall be allocated between general purpose debt and pension liability as follows:
(a) for the fiscal year ending March 31, 2001, $75,000,000. to general purpose debt and the remainder to pension liability; and
(b) for each fiscal year ending after March 31, 2001, as determined by the allocation committee.
Debt Retirement Fund Allocation Committee
The Debt Retirement Fund Allocation Committee is established consisting of
(a) the Deputy Minister of Finance, who shall be the chairperson of the allocation committee; and
(b) at least four other individuals appointed by the Lieutenant Governor in Council who, in the opinion of the Lieutenant Governor in Council, demonstrate financial expertise and competence, each of whom may be appointed for any term the Lieutenant Governor in Council considers appropriate.
Duties of allocation committee
The allocation committee shall determine the allocation between general purpose debt and pension liability of
(a) the amounts transferred to the fund under subsection (4) and clause 9(b); and
(b) any earnings from investments of the fund.
Effective reduction of aggregate amount
In determining the allocation of the amounts transferred to the fund between general purpose debt and pension liability, the allocation committee shall follow investment and debt reduction principles that, subject to subsection (6.5), in the opinion of the committee, will result in the most effective reduction of the aggregate amount owing.
Requirement regarding matching contributions for new employees
The allocation committee shall ensure that provision exists for matching the projected pension contributions of new employees hired on or after April 1, 2000.
Subsection 8(12) is amended
(a) by adding "and cover the pension liability" after "general purpose debt"; and
(b) by striking out "revenue of".
The centered heading before section 9 is amended by striking out "SURPLUS" and substituting "POSITIVE BALANCE".
Section 9 is amended by striking out "surplus" and substituting "positive balance"
(a) in the section heading; and
(b) wherever it occurs in the section.
The centered heading before section 10 is repealed and the following is substituted:
Section 14 is amended by striking out "Protection" and substituting "Accountability".
Consequential amendments, C.C.S.M. c. F55
The Financial Administration Act is amended by this section.
The following is added after subsection 30(2):
Amounts included for amortization of capital investment
Despite clause (2)(a), amounts may be included in the main estimates in respect of the amortization of capital investments and may be charged to the Consolidated Fund in accordance with the accounting policies required to be stated in the public accounts, but shall not be paid out of the Consolidated Fund except to repay debt.
The following is added after subsection 32(3):
Amounts included for amortization of capital investment
Amounts may be included in a special warrant in respect of the amortization of capital investments and may be charged to the Consolidated Fund in accordance with the accounting policies required to be stated in the public accounts, but shall not be paid out of the Consolidated Fund except to repay debt.
Subsection 65(2) is repealed and the following is substituted:
The Minister of Finance shall, within six months after the end of each fiscal year,
(a) submit the public accounts to the Lieutenant Governor in Council and make them public; and
(b) lay a copy of the public accounts before the Legislative Assembly immediately if it is sitting, or, if it is not, within 15 days after the beginning of the next sitting.
Consequential amendments, C.C.S.M. c. F85
The Fiscal Stabilization Fund Act is amended by this section.
Section 1 is amended
(a) by adding the following definitions in alphabetical order:
"balance" has the same meaning as in The Balanced Budget, Debt Repayment and Taxpayer Accountability Act; (« solde »)
"Crown corporation" means Manitoba Hydro, The Manitoba Public Insurance Corporation, The Liquor Control Commission and The Manitoba Lotteries Corporation; (« société de la Couronne »)
(b) by repealing the definition "revenue".
Subsection 3(1) is repealed and the following is substituted:
Subject to subsection (1.1) and despite The Financial Administration Act, the minister may, with the approval of the Lieutenant Governor in Council, transfer to the fund any part of a positive balance, in accordance with The Balanced Budget, Debt Repayment and Taxpayer Accountability Act.
The following is added after subsection 3(1):
Proceeds of sale of Crown corporation
For greater certainty, the minister shall not deposit in the fund any revenue or other financial assets received by the government in a fiscal year ending after March 31, 2000 as a result of selling shares or assets of a Crown corporation in the course of a privatization of the Crown corporation.
Subsection 4(1) is amended by striking out "revenue of".
This Act is retroactive and is deemed to have come into force on April 1, 2000, and applies to fiscal years commencing after March 31, 2000.