Balanced Budget and Debt Limit Act, 2012 Leone, Rob — Bill 101 (40th Parliament, 1st Session)

Bill 101, 40-1

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Bill 101, Balanced Budget and Debt Limit Act, 2012

Leone, Rob

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Bill 101 2012

Act to enact the Balanced Budget Act, 2012 and to amend the Financial

Administration Act

Note:

This Act amends or repeals more than one Act. For the legislative history of

these Acts, see the Table of Consolidated Public Statutes – Detailed

Legislative History at www.e-Laws.gov.on.ca.

Her

Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Contents

of this Act

1. This

Act consists of this section, sections 2 and 3 and the Schedules to this Act.

Commencement

(1) Subject

to subsection (2), this Act comes into force on the day it receives Royal

Assent.

Same

(2) The Schedules to this Act come into force as provided

in each Schedule.

Short

title

3. The

short title of this Act is the Balanced Budget and Debt Limit Act, 2012 .

Schedule 1

Balanced Budget Act, 2012

Interpretation

Definitions

(1) In

this Act,

"comprehensive

integrated tax coordination agreement" means the agreement dated November 9,

("Entente intégrée globale de coordination fiscale")

"designated tax statute" means any of the following statutes:

1. Education Act.

2. Employer Health Tax Act.

3. Fuel Tax Act.

4. Gasoline Tax Act.

5. Provincial Land Tax Act, 2006.

6. Retail Sales Tax Act.

7. Taxation

Act, 2007; ("loi fiscale désignée")

"expenditures" means, for a fiscal year of the Province, the

expenditures shown in the financial statements for the Province as set out in

the Public Accounts for the year; ("dépenses")

"PVAT rate" has the same meaning as in the comprehensive integrated tax

coordination agreement; ("taux de la TVAP")

"revenues" means, for a fiscal year of the Province, the revenues shown

in the financial statements for the Province as set out in the Public Accounts

for the year. ("revenus")

Deficit

(2) For the purposes of this Act, the Province has a

deficit in a fiscal year if "A" is greater than "B",

where,

"A" is

the amount of the expenditures for the year less the sum of,

(

a) any

expenditure described in paragraph 1 or 2 of subsection 2 (2) in the year, and

(

b) the

amount, if any, by which the revenues in the year have declined since the

previous fiscal year for a reason other than a reduction in a tax rate under a

designated tax statute or the PVAT rate under the comprehensive integrated tax

coordination agreement, if the decline is at least 5 per cent of the previous year's

revenues, and

"B" is

the sum of the revenues and the accumulated net surplus, if any, for the year.

Accumulated

net surplus

(3) The amount of the accumulated net surplus for a fiscal

year is the amount by which the sum of the revenues for the previous three

fiscal years exceeds the sum of the expenditures for the previous three fiscal

years.

Same,

2018-2019 fiscal year

(4) Despite subsection (3), the amount of the accumulated

net surplus for the fiscal year beginning on April 1, 2018 is the amount by

which the revenues for the previous fiscal year exceed the expenditures for the

previous fiscal year.

Same,

2019-2020 fiscal year

(5) Despite subsection (3), the amount of the accumulated

net surplus for the fiscal year beginning on April 1, 2019 is the amount by

which the sum of the revenues for the previous two fiscal years exceeds the sum

of the expenditures for the previous two fiscal years.

Balanced Budget

Requirement

for balanced budget

(1) For

each fiscal year beginning on or after April 1, 2018, the Executive Council

shall plan for a balanced budget (in which the expenditures of the Province for

a fiscal year do not exceed the sum of the revenues and the accumulated net

surplus for the year) and the Minister of Finance shall present a balanced

budget.

Exceptions

(2) The expenditures may exceed the level described in

subsection (1) to the extent that, in the opinion of the Minister of Finance,

one or more of the following occurs:

1. An

expenditure is required in the fiscal year because of a natural or other

disaster in Ontario that could not have been anticipated and that affects the

Province or a region of the Province in a manner that is of urgent public

concern.

2. An

expenditure is required in the fiscal year because Canada is at war or is under

apprehension of war.

3. Revenues

have declined since the previous fiscal year, for a reason other than a

reduction in a tax rate under a designated tax statute or the PVAT rate under

the comprehensive integrated tax coordination agreement. However, this

paragraph applies only if the decline is at least 5 per cent of the previous

year's revenues.

Public

notice

(3) If, in the opinion of the Minister of Finance, there

is an occurrence described in subsection (2) in a fiscal year, the Minister

shall prepare a statement to that effect and shall lay the statement before the

Assembly not later than 30 days after the Public Accounts for the year are

given to the Clerk of the Assembly or laid before the Assembly, whichever

occurs first.

Change

in accounting policies

(4) A change in the accounting policies or practices

governing the Public Accounts that is adopted after the beginning of a fiscal

year shall not be considered in determining whether any deficit exists in that

fiscal year.

Recovery

plan

(1) If

the Executive Council plans for a deficit for a fiscal year, the Executive

Council shall develop a recovery plan for achieving a balanced budget in the

future and the recovery plan must specify the manner in which and the period

within which the balanced budget will be achieved.

Same

(2) The recovery plan

must be consistent with the principles governing Ontario's fiscal policy

described in

section 2 of the Fiscal Transparency and Accountability Act, 2004 .

Multi-year

fiscal plan

(3) The details of the recovery plan must be included in

the multi-year fiscal plan described in

section 5 of the Fiscal Transparency and Accountability Act, 2004 .

Salary

reduction for Executive Council

(1) This

section applies if the Province has a deficit.

Immediate

salary reduction

(2) The salary of each member of the Executive Council

shall be reduced in accordance with subsection (3) if the deficit for a fiscal

year (the "first year") is greater than 1 per cent of the revenues for the

year, and if there was no deficit in the preceding fiscal year.

Same,

amount and duration

(3) In the circumstances described in subsection (2), the

salary is reduced by 25 per cent for a period of 12 months beginning on the

31st day after the Public Accounts that show the deficit for the first year are

given to the Clerk of the Assembly or laid before the Assembly, whichever

occurs first.

Delayed

salary reduction

(4) The salary of each member of the Executive Council

shall be reduced in accordance with subsection (5),

(

a) if

the deficit for a fiscal year (the "first year") is less than or equal to 1 per

cent of the revenues for the year, and if there was no deficit in the fiscal

year preceding the first year; and

(

b) if,

in the following fiscal year (the "second year"), there is no deficit but the

revenues do not exceed the expenditures by at least the amount of the deficit

in the first year.

Same,

amount and duration

(5) In the circumstances described in subsection (4), the

salary is reduced by 25 per cent for a period of 12 months beginning on the

31st day after the Public Accounts for the second year are given to the Clerk

of the Assembly or laid before the Assembly, whichever occurs first.

Reduction

for further deficit

(6) In either of the following circumstances, the salary

of each member of the Executive Council shall be reduced by 50 per cent for the

period specified in subsection (7):

1. If

there is a deficit in the fiscal year (the "second year") following the first

year described in subsection (2).

2. If

there is a deficit in the second year described in subsection (4).

Same,

duration

(7) The salary is reduced for a period of 12 months

beginning on the 31st day after the Public Accounts for the second year are

given to the Clerk of the Assembly or laid before the Assembly, whichever

occurs first.

Same

(8) Subsection (7) applies, with necessary modifications,

with respect to each consecutive fiscal year in which there is a deficit after

the second year.

Exception,

change in government

(9) If the party that forms the government is replaced,

the fiscal year in which the new government takes office shall be deemed, for

the purposes of this section, to be a year in which there is no deficit.

Subsection (4) does not apply until the following fiscal year.

Definition

(10) In this section,

"salary"

means the salary payable to a member of the Executive Council under

section 3

of the Executive Council

Act .

Fiscal Transparency and Accountability Act, 2004

(1) Section

4 of the Fiscal

Transparency and Accountability Act, 2004 is repealed.

(2) Paragraph 8 of subsection 5 (3) of the Act is

repealed.

Commencement

6. The

Act set out in this

Schedule comes into force on April 1, 2018.

Short

title

7. The

short title of the Act set out in this

Schedule is the Balanced Budget Act, 2012 .

Schedule 2

Financial Administration act

Section

18 of the Financial

Administration Act is amended by adding the following

subsections:

Debt

limit

(2) Despite any other provision in this Act or any other

Act, the Crown is not authorized to raise money by way of loan or to receive

money through the issue and sale of securities at any time if the effect of

doing so at that time would cause Ontario's net debt to exceed 50 per cent of

Ontario's gross domestic product.

Gross

domestic product

(3) For the purposes of subsection (2), Ontario's gross

domestic product at any particular time is Ontario's gross domestic product at

market prices (seasonally adjusted and at annual rates) as published in the

Minister of Finance's most recent quarterly Ontario economic accounts.

Definition

(4) In this section,

"net

debt" means the difference between the Province's total liabilities and its

financial assets.

Commencement

2. This

Schedule comes into force on the day the Balanced Budget and Debt Limit Act, 2012

receives Royal Assent.

EXPLANATORY NOTE

The

Bill enacts the Balanced

Budget Act, 2012 and amends the Financial Administration Act .

Balanced Budget Act, 2012

Beginning

with the 2018-2019 fiscal year, the Executive Council must plan for a balanced

budget and the Minister of Finance must present a balanced budget to the

Assembly. Special provision is made with respect to expenditures arising from

such extraordinary circumstances as a natural disaster or the declaration of

war. Special provision is also made for a decline in revenues of 5 per cent or

more that does not result from a decrease in taxes.

a deficit is planned, the Executive Council is required to develop a recovery

plan for achieving a balanced budget in the future. Details of the recovery

plan must be included in the multi-year fiscal plan in the Budget papers.

there is a deficit, the salary payable to members of the Executive Council

under the Executive

Council Act is reduced. Different rules are established when an

initial deficit is more than 1 per cent of revenues and when an initial deficit

is lower. When there is a lower deficit, provision is made for it to be offset

by an equivalent surplus of revenues in the following year to avoid the initial

salary reduction.

For

an initial deficit, the salary reduction for the members of the Executive

Council is 25 per cent of the salary payable under the Executive Council Act , and lasts for

one year. If there is a deficit in the following yea

Document details

Collection	Ontario — Bills
Citation	Bill 101, 40-1
Type	bill
Volume / chapter	p40 s1 bill 101 html
Language	en
Format	html
Source	PROVINCIAL
Identifier	594e822fe82d6be969ed70e38f1ecf7fdebb3e2c

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