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S.M. 2017, c. 20
Bill 21, 2 nd Session, 41st Legislature
The Fiscal Responsibility and Taxpayer Protection Act
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Explanatory Note This note is a reader's aid and is not part of the law. The Balanced Budget, Fiscal Management and Taxpayer Accountability Act was repealed in the First Session of the 41st Legislature. The Fiscal Responsibility and Taxpayer Protection Act is established. The Minister of Finance must table a budget for the government reporting entity every year, typically by April 30. At the same time, the minister must table a fiscal responsibility strategy setting out the current and future financial objectives for the government. Once the deficit has been eliminated, this strategy must also set out the government's debt reduction objectives. Until the deficit is eliminated, the government is not to incur a deficit that is more than the baseline amount. This amount is set by legislation as either the annual deficit amount projected for the 2017-2018 budget or (if it is lower) the lowest actual annual deficit amount for any fiscal year starting with 2017. Once the deficit has been eliminated, then the government must maintain balance by not incurring a deficit. The deficit or surplus amount is to be calculated on a summary basis. Certain amounts are excluded from the calculation, such as Manitoba Hydro's net income or loss. Adjustments are to be made for amounts transferred to or from the fiscal stabilization account. As part of the public accounts for a fiscal year, the Minister of Finance must report on the deficit or surplus amount and compare actual results with the budget and the fiscal responsibility strategy. Each fiscal year, 20% of the ministerial salary is withheld pending the tabling of the public accounts for that year. The amount withheld increases to 40% if there are two consecutive years in which there is a contravening deficit. The withholding does not apply to new ministers in the fiscal year of their appointment, and any increase in withholding to 40% does not apply to new ministers in the second and third fiscal years following their appointment. These exceptions also apply to ministers appointed following a general election that resulted in a change in government. The portion of the withheld amount that is paid to a minister is determined by the actual results for the year. If there is no deficit, the full amount withheld is paid to them. If there is a contravening deficit, the ministerial salary for that year is reduced by the full amount withheld. If there is a deficit but it does not exceed the legislated requirement, the ministerial salary is reduced proportionally, with the full amount payable if the deficit is lower than the legislated requirement by $100 million or more. A non-binding referendum must be held before the government introduces any bill to increase the rate of tax under The Health and Post Secondary Education Tax Levy Act, The Income Tax Act or The Retail Sales Tax Act. The Fiscal Responsibility and Taxpayer Protection Act cannot be amended or repealed without being referred at the committee stage to a standing committee of the Legislative Assembly for public meetings to be held with seven days' notice. |
(Assented to June 2, 2017)
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:
FISCAL RESPONSIBILITY
The following definitions apply in this Act.
"fiscal stabilization account" means the fiscal stabilization account continued under section 26.1 of The Financial Administration Act. (« compte de stabilisation des revenus »)
"fiscal year" means the period beginning on April 1 of one year and ending on March 31 of the following year. (« exercice »)
"government reporting entity" has the same meaning as in The Financial Administration Act. (« entité comptable du gouvernement »)
"minister", except in section 8, means the Minister of Finance. (« ministre »)
"public accounts", in relation to a fiscal year, means the public accounts for that year under section 65 of The Financial Administration Act. (« comptes publics »)
"summary financial statements", in relation to a fiscal year, means the summary financial statements included in the public accounts for that year. (« états financiers sommaires »)
BUDGET AND FISCAL RESPONSIBILITY STRATEGY
Annual budget for government reporting entity
For each fiscal year, the minister must table in the Legislative Assembly a budget for the government reporting entity.
The budget for a fiscal year is to be tabled by April 30 of that year except where
(a) it is not practicable to do so because of unusual circumstances; or
(b) the Legislature is dissolved at any time in that month or the immediately preceding month.
Fiscal responsibility strategy
For each fiscal year, the minister must prepare the government's fiscal responsibility strategy, including a description of the government's financial objectives for the fiscal year and for the future.
Debt reduction to be addressed when deficit eliminated
The fiscal responsibility strategy — for every fiscal year after the first fiscal year for which the government does not incur a deficit — must include objectives for reducing the general purpose debt of the government.
Strategy to be tabled with budget
The minister must table the strategy referred to in subsection (1) in the Legislative Assembly at the time of tabling the budget under section 2.
DEFICIT REDUCTION
Deficit not to exceed baseline amount
For each fiscal year, the government is not to incur a deficit that exceeds the baseline amount.
For the purposes of this section and section 8, "baseline amount", in relation to a fiscal year, is the lesser of the following amounts:
(a) the annual deficit projected in the budget for the fiscal year beginning in 2017;
(b) the lowest annual deficit incurred for any fiscal year beginning in or after 2017.
Application until deficit eliminated
This section ceases to apply at the end of the first fiscal year for which the government does not incur a deficit.
MAINTAINING BALANCE
Government not to incur deficit after deficit eliminated
The government is not to incur a deficit for any fiscal year after section 4 ceases to apply.
CALCULATION OF SURPLUS OR DEFICIT
For the purposes of this Act, the surplus or deficit for a fiscal year is the net income or loss as shown in the audited summary financial statements for the government reporting entity for that fiscal year, subject to the adjustments made under subsections (2), (3) and (4).
Manitoba Hydro's net income or loss excluded
Manitoba Hydro's net income or loss is not included in determining the surplus or deficit for a fiscal year for the purposes of this Act.
In determining the surplus or deficit for a fiscal year for the purposes of this Act
(a) an amount transferred to the fiscal stabilization account for that fiscal year is to be deducted as if it were an expenditure for that year; and
(b) an amount applied from the fiscal stabilization account for that fiscal year to support core government operations for that year or to repay debt shall be included as if it were revenue for that year.
The government is not required to include the following for the purpose of determining the surplus or deficit for a fiscal year for the purposes of this Act:
(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 resulting from a decision of another level of government or of a regulatory body that took effect after the budget for the fiscal year was tabled in the Legislative Assembly or within 30 days before it was tabled, the fiscal impact of which was not anticipated in the budget.
A declaration by the Lieutenant Governor in Council that, in the Lieutenant Governor in Council's opinion, an expenditure or reduction of revenue as described in subsection (4) has occurred is conclusive for the purpose of this Act of the fact that the expenditure or reduction occurred and in that amount.
The declaration must include a description of the expenditure and why it was necessary or, in the case of a revenue reduction, a description of the reduction and why it occurred.
ANNUAL REPORT
After each fiscal year, the minister must prepare a report that
(a) shows the surplus or deficit for the fiscal year for the purposes of this Act;
(b) sets out any adjustments made under section 6 in determining the surplus or deficit; and
(c) compares the results for the year to
(i) the objectives set out in the fiscal responsibility strategy tabled under section 3 for that year, and
(ii) the budget that was tabled for that year.
Report included in public accounts
The report is to be included in the public accounts for the fiscal year.
MINISTERIAL ACCOUNTABILITY
The following definitions apply in this section.
"minister" means the President of the Executive Council and any member of the Executive Council who is appointed to preside over one or more departments. (« ministre »)
"ministerial salary" means the additional salary otherwise payable to a minister under The Legislative Assembly Act for services as a member of the Executive Council. (« traitement supplémentaire »)
20% of ministerial salary to be withheld
Subject to subsections (3) and (8), an amount equal to 20% of the ministerial salary otherwise payable to a minister is to be withheld pending the application of subsection (4), (5) or (6), whichever applies.
40% to be withheld after consecutive contravening deficits
Subject to subsection (9), the amount to be withheld under subsection (2) for a fiscal year is 40% of the ministerial salary if each of the last two reports prepared under section 7 before the beginning of that fiscal year showed that the government incurred a deficit in contravention of section 4 or 5.
If the report under section 7 for a fiscal year shows that the government did not incur a deficit, an amount withheld from a person under subsection (2) for that fiscal year is payable to the person for that fiscal year, without interest.
Salary reduction — contravening deficit
If the report under section 7 for a fiscal year shows that the government incurred a deficit in contravention of section 4 or 5, the ministerial salary of a person to whom subsection (2) applied for that fiscal year is reduced by the amount withheld for that fiscal year under that subsection.
Salary reduction — non-contravening deficit
If the report under section 7 for a fiscal year to which section 4 applies shows that the government incurred a deficit that does not exceed the baseline amount for that fiscal year, the ministerial salary of a person to whom subsection (2) applied for that fiscal year is reduced according to the following formula:
Reduction = A × ($100,000,000 − B)/$100,000,000
In this formula,
A
is the amount withheld for that year under subsection (2);
B
is the lesser of $100,000,000 and the amount by which the baseline amount exceeds the deficit.
If the amount withheld for the fiscal year exceeds the salary reduction for that year, the excess is payable to the person for that fiscal year, without interest.
An amount payable under subsection (4) or (6) for a fiscal year is not payable until the report under section 7 for that year is tabled in the Legislative Assembly.
New minister — no withholding in year 1
Subsection (2) does not apply to a person for the fiscal year in which he or she first becomes a minister.
New minister — 20% withholding in years 2 and 3
Subsection (3) does not apply to a person for the first two fiscal years after the fiscal year in which he or she first becomes a minister.
Minister appointed after a change in government
Subsections (8) and (9) apply to a person when he or she becomes a minister for the first time after a general election that results in a change of government, even if that person was a minister in an earlier government.
Transitional — 20% of annual ministerial salary to be withheld for 2017-2018
Despite subsection (2), amounts totalling 20% of the annual ministerial salary are to be withheld under that subsection from the ministerial salary otherwise payable to a minister for the 2017-2018 fiscal year.
TAXPAYER PROTECTION
Referendum required for tax changes
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 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 non-binding referendum:
(a) The Health and Post Secondary Education Tax Levy Act;
(b) The Income Tax Act;
(c) The Retail Sales Tax Act.
Revenue neutral and external changes
Subsection (1) does not apply to a bill to increase the rate of a tax if, in the opinion of the minister,
(a) 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; or
(b) the proposed change is designed to restructure the tax burden and does not result in an increase in revenue.
A referendum under section 9 must 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.
The question to be put to voters in a referendum under section 9 must be determined by an order of the Lieutenant Governor in Council at the commencement of the referendum process.
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 section 9 including, without limitation,
(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.
The costs of conducting a referendum are to be paid from the Consolidated Fund without any legislative authority other than this subsection.
AMENDMENT OR REPEAL
Restriction on amendment or repeal
Any bill introduced in the Legislative Assembly to amend, repeal, override or suspend the operation of this Act must be referred at the committee stage to a standing committee of the Legislative Assembly that provides the opportunity for representations by members of the public.
The standing committee reviewing a bill described in this section must 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.
C.C.S.M. REFERENCE AND COMING INTO FORCE
This Act may be referred to as chapter F84 of the Continuing Consolidation of the Statutes of Manitoba.
This Act comes into force on the day it receives royal assent.