1998/99 Legislative Session: 3rd Session, 36th Parliament
FIRST READING


The following electronic version is for informational purposes only.
The printed version remains the official version.


MR. CAMPBELL.

BILL M 201 -- 1998

BALANCED BUDGET AND
DEBT REDUCTION ACT

Contents

Section  
1 Definitions
2 Application
3 Balanced budget
4 Current debt reduction
5 Anticipated liabilities
6 Obligations of public officers
7 Limitations on special warrants
8 Contravention
9 Auditor General obligations
10 Application of savings
11 Regulations
12 Commencement

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

Definitions

1 (1) Subject to subsection (2), the terms used in this Act have the same meanings as defined in the Financial Administration Act.

(2) In this Act,

"deficit" means the difference between revenue and expenditures during a fiscal year if expenditures are greater than revenues;

"expenditures" mean expenditures of the government for all purposes;

"government" includes government bodies;

"government body" means

(a) a government corporation, and

(b) any local or Provincial public authority, other than a municipality as defined in the Municipal Act, which

(i) receives, either directly or indirectly in any manner whatsoever, public money from the government, and

(ii) is designated as a government body by regulation of the Auditor General for purposes of this Act;

"public officers" include all persons employed in the government;

"revenue" means revenue of the government from all sources;

"surplus" means the difference between revenues and expenditures if revenues are greater than expenditures.

Application

2 If there is a conflict between this Act and the Financial Administration Act, this Act applies.

Balanced budget

3 (1) Subject to section 8 (2), the government must not authorize or make expenditures which result in a deficit in any fiscal year.

(2) If there is a deficit in any fiscal year that is not authorized under this Act, the government must achieve at least an offsetting surplus in the next fiscal year.

(3) The Minister of Finance and Corporate Relations must present to the Legislative Assembly in each fiscal year public accounts showing the consolidated estimates of revenue and expenditure for all operations of government in accordance with the Truth in Budgeting Act.

Current debt reduction

4 (1) All surplus in each fiscal year must be applied to the reduction of public debt.

(2) The Comptroller General shall report to the government annually after publication of each fiscal year's public accounts the amount that is available for application under subsection (1).

Anticipated liabilities

5 (1) The Minister of Finance and Corporate Relations will establish a provision for anticipated liabilities in the public accounts.

(2) Any provision established in subsection (1) in a fiscal year shall be considered an expenditure for that fiscal year.

Obligations of public officers

6 (1) The Minister of Finance and Corporate Relations shall not present any estimates of revenue and expenditure to the Legislative Assembly in any fiscal year which forecast a deficit in that year.

(2) In any fiscal year, neither the Minister of Finance and Corporate Relations, nor the public officers in his ministry, shall authorize, permit or acquiesce in expenditures which are in excess of revenues.

(3) No public officer shall authorize, permit or acquiesce in the expenditure of any amount

(a) appropriated under a Supply Act which is in excess of the amount contained in the estimates of revenue and expenditure, or

(b) in excess of a maximum expenditure recorded in subsection (4) or (5).

(4) On or before April 1 of each year, a minister shall file a written report with the Minister of Finance and Corporate Relations and the Auditor General specifying the maximum expenditures available to all programs or departments funded by his ministry.

(5) On or before the first day of the fiscal year of a government operation for which no report is being filed under subsection (4), the chief financial officer of the government operation shall file a written report with the Minister of Finance and Corporate Relations and the Auditor General specifying the maximum expenditures available to fund all aspects of its operations.

Limitations on special warrants

7 (1) No special warrant shall be issued under the Financial Administration Act unless, after having conducted a prudent assessment of the current financial operations of the government, the Minister of Finance and Corporate Relations has certified that the issuance of the special warrant will not result in a breach of section 6 (2).

(2) Subsection (1) does not apply if the Minister of Finance and Corporate Relations or the minister requesting the special warrant has certified that the amount appropriated by the special warrant is to be used to respond to

(a) emergency or unexpected circumstances which are detrimental to the health or safety of persons in the Province of British Columbia, or

(b) a natural disaster for which no appropriation or an insufficient appropriation was provided in a Supply Act.

Contravention

8 (1) If there is a deficit in any fiscal year that is not authorized under this Act, the Premier shall be subject, in the fiscal year immediately following the year in which the deficit occurred, to a 20% reduction in the compensation the Premier receives for acting as a minister and for sitting as a member of the Legislative Assembly.

(2) A minister who has contravened section 6 or 7

(a) on the first occasion, shall be subject, in the fiscal year immediately following the year in which section 6 or 7 was contravened, to a 20% reduction in the compensation the minister receives for acting as a minister and for sitting as a member of the Legislative Assembly, and

(b) on the second occasion, shall be removed from the office of the minister and be disqualified from being appointed a minister for five years from March 31 of the fiscal year in which section 6 or 7 was contravened on the second occasion.

(3) A public officer, other than a minister, who has contravened section 6,

(a) on the first occasion, shall be subject, in the fiscal year immediately following the year in which section 6 was contravened, to a 20% reduction in the public official's compensation, and

(b) on the second occasion, shall be dismissed for cause.

(4) Subsection (2) does not apply if the public officer gave a written warning over his signature to his minister that the contravening expenditure was in breach of section 6.

(5) Nothing in this section shall be construed to limit in any way the grievance rights which a public officer may have under a collective agreement.

Auditor General obligations

9 (1) The Auditor General must

(a) monitor and review the financial operations of the government to ascertain compliance with this Act and to identify any contraventions of this Act, and

(b) prepare, publish and deposit with the Legislative Assembly,

(i) an annual report no later than May 30 in each year, and

(ii) an interim report no later than November 15 in each year.

(2) At the end of a fiscal year, the Auditor General must determine whether the provisions of this Act have been complied with and must include his findings in his annual report.

Application of savings

10 (1) If the Auditor General determines under section 9 (2) that

(a) an actual expenditure for an appropriation under a Supply Act was less than the estimates of the expenditure for that appropriation, and

(b) the reduction in the expenditure was made without compromising the quality or level of services which were to have been funded by that expenditure,

the Minister of Finance and Corporate Relations must

(c) distribute in the form of compensation to the public officers of the ministry responsible for the reduced expenditure 25% of the amount of the difference between the estimate of expenditures and the actual expenditures,

(d) provide to the ministry responsible for the reduced expenditure 25% of the amount of the difference between the estimate of expenditures and the actual expenditures which may be used at the discretion of the minister to fund any ministry purpose or function excluding any increases in compensation or bonuses to public officers, and

(e) apply 50% of the amount of the difference between the estimate of expenditures and the actual expenditures to the reduction of public debt.

(2) Any amounts paid under subsection (1) (c) must be distributed fairly and equitably among all public officers of the ministry, excluding the minister, in accordance with any regulations made under this Act.

(3) After consultation with the Auditor General, the Lieutenant Governor in Council may make regulations applying this section under specified conditions to public officers who are not employed in a ministry.

(4) Notwithstanding subsection (1) (c), no public officer shall be paid an amount under that subsection which is more than 10% of the annual compensation paid to that public officer.

(5) If, after the application of subsection (4), the entire amount allocated under subsection (1) (c) has not been distributed, the surplus must be applied to the reduction of the public debt.

Regulations

11 The Lieutenant Governor in Council may make regulations.

Commencement

12 This Act comes into force by regulation of the Lieutenant Governor in Council.

 
Explanatory Note

The purpose of this Bill is to require the government to prepare a balanced budget, to set objectives to retire the public debt and to make elected and public officials of government personally accountable for meeting these requirements.


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