The Fiscal Responsibility and Taxpayer Protection Act

The Fiscal Responsibility and Taxpayer Protection Act, C.C.S.M. c. F84 (Assented to June 2, 2017) bilingual version (HTML) Table of Contents Section PART 1 FISCAL RESPONSIBILITY 1 Definitions 2 Annual budget 3 Fiscal responsibility strategy 4 Deficit not to exceed baseline amount 5 Government not to incur deficit after deficit eliminated 6 Calculation of surplus or deficit 7 Annual report 8 Ministerial accountability 8.1 Payment on achieving balance PART 2 TAXPAYER PROTECTION 9 Referendum required for tax changes 10 Referendum procedures PART 3 AMENDMENT OR REPEAL 11 Restriction on amendment or repeal PART 4 C.C.S.M. REFERENCE ANDCOMING INTO FORCE 12 C.C.S.M. reference 13 Coming into force HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows: PART 1 FISCAL RESPONSIBILITY Definitions 1 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 sections 8 and 8.1, 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 ») S.M. 2018, c. 32, s. 2 . BUDGET AND FISCAL RESPONSIBILITY STRATEGY Annual budget for government reporting entity 2(1) For each fiscal year, the minister must table in the Legislative Assembly a budget for the government reporting entity. Time to table budget 2(2) 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 3(1) 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 3(2) 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 3(3) 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 4(1) For each fiscal year, the government is not to incur a deficit that exceeds the baseline amount. Meaning of baseline amount 4(2) For the purposes of this section and section 8, "baseline amount" means (a) in relation to the 2020-2021 fiscal year, the deficit reported under section 7 for that year; and (b) in relation to any subsequent fiscal year, the baseline amount for the immediately preceding year minus the lesser of the following amounts: (i) the amount equal to 1/8 of the deficit described in clause (a), (ii) the amount, if any, by which the deficit for that preceding year was less than the baseline amount for that preceding year. Application until deficit eliminated 4(3) This section ceases to apply at the end of the first fiscal year for which the government does not incur a deficit. S.M. 2018, c. 32, s. 3 ; S.M. 2021, c. 42, s. 2 . MAINTAINING BALANCE Government not to incur deficit after deficit eliminated 5 The government is not to incur a deficit for any fiscal year after section 4 ceases to apply. CALCULATION OF SURPLUS OR DEFICIT Accounting on summary basis 6(1) 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 6(2) 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. Fiscal stabilization account 6(3) 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. Other adjustments 6(4) 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; (a.1) an expenditure incurred in the fiscal year ending on March 31, 2022, in response to the pandemic caused by the communicable disease known as COVID-19; (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; (d) a one-time expenditure or reduction in revenue of more than $25,000,000 arising from (i) a change in public sector accounting standards, or (ii) an organization or fund, or part of an organization or fund, becoming or ceasing to be included in the summary financial statements. Declaration of LG in C 6(5) 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. Content of declaration 6(6) 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. S.M. 2018, c. 32, s. 4 ; S.M. 2021, c. 42, s. 3 . ANNUAL REPORT Annual report 7(1) 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; (a.1) shows each person's salary reduction for that year under subsection 8(5) or (6), if any; (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. Exception for 2020-2021 fiscal year 7(1.1) Clause (1)⁠(a.1) does not apply in respect of the 2020-2021 fiscal year. Report included in public accounts 7(2) The report is to be included in the public accounts for the fiscal year. S.M. 2018, c. 32, s. 5 ; S.M. 2021, c. 42, s. 4 . MINISTERIAL ACCOUNTABILITY Definitions 8(1) 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 8(2) 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 8(3) 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. Full payment — no deficit 8(4) 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 8(5) 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 consequence of the contravention is that 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 8(6) 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 × (B − C)/B In this formula, A is the amount withheld for that year under subsection (2); B is the amount equal to 1/8 of the deficit reported under section 7 for the 2020-2021 fiscal year; C is the lesser of (a) the amount equal to 1/8 of the deficit reported under section 7 for the 2020-2021 fiscal year, and (b) 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. When payable 8(7) 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 8(8) 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 8(9) 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 8(10) 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 8(11) 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. Transitional: 2020-2021 fiscal year 8(12) This section does not apply to the 2020-2021 fiscal year. S.M. 2018, c. 32, s. 6 ; S.M. 2021, c. 42, s. 5 . Payment on achieving balance 8.1(1) Subject to subsections (2) and (3), when the report under section 7 for the first fiscal year ending after 2021 and before 2030 that the government does not incur a deficit is tabled in the Assembly, the government must pay to each minister or former minister an amount equal to the total of all amounts, if any, by which their salary has been reduced under subsection 8(5) or (6). For this purpose, "former minister" includes the person's heirs and legal representatives. Exception 8.1(2) The government may refuse to pay an amount under subsection (1) to a former minister if the Lieutenant Governor in Council, having regard to the person's conduct while they were a minister, considers such a payment to be contrary to the public interest. No application to salary reductions before change in government 8.1(3) Subsection (1) does not apply to a salary reduction that was made in respect of a fiscal year that ended before the last general election that resulted in a change of government. S.M. 2018, c. 32, s. 7 ; S.M. 2021, c. 42, s. 6 . PART 2 TAXPAYER PROTECTION Referendum required for tax changes 9(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 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 9(2) 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. Referendum procedures 10(1) 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. Question to be put to voters 10(2) 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. Regulations re procedures 10(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 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. Costs of referendum 10(4) The costs of conducting a referendum are to be paid from the Consolidated Fund without any legislative authority other than this subsection. PART 3 AMENDMENT OR REPEAL Restriction on amendment or repeal 11(1) 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. Requirements re meetings 11(2) 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. PART 4 C.C.S.M. REFERENCE AND COMING INTO FORCE C.C.S.M. reference 12 This Act may be referred to as chapter F84 of the Continuing Consolidation of the Statutes of Manitoba . Coming into force 13 This Act comes into force on the day it receives royal assent.