PROPOSED LEGISLATION REAFFIRMS GOVERNMENT'S COMMITMENT TO FISCAL RESPONSIBILITY: FRIESEN
The Manitoba government is introducing legislation that would ensure the sustainable financial future of the province, Finance Minister Cameron Friesen said today.
“Our government has committed to Manitobans that we will restore prudent fiscal management in order to ensure the sustainability of services today and into the future,” said Friesen. “The fiscal responsibility and taxpayer protection act would set out clear rules for managing government budgets and would include financial penalties for ministers who fail to achieve legislated targets."
The proposed legislation will require government to:
table a budget before April 30 every year with a fiscal responsibility strategy outlining the government’s current and future financial objectives;
refrain from incurring a deficit of more than a baseline amount - this would be the lesser of either the annual deficit amount projected for the 2017-18 budget or the lowest actual annual deficit amount for any fiscal year beginning with 2017;
calculate deficit or surplus amounts on a summary basis;
maintain a balanced or surplus budget once a deficit has been eliminated; and
address debt reduction once a budget is balanced.
The legislation would also require 20 per cent of all ministerial salaries to be withheld each year that a deficit occurs. The amount withheld would increase to 40 per cent if two consecutive years of legislation-contravening deficits were experienced. This amount would be paid to ministers only if the government demonstrates progress from the baseline deficit.
If the deficit were to exceed the legislated requirement by $100 million or more, the entire amount withheld from the annual ministerial salaries for the year would be forfeit. If the deficit were to exceed the legislated requirement by less than $100 million, a proportional amount withheld from the ministerial salaries would be paid. For example, a deficit exceeding the legislated requirement by $80 million would mean that 80 per cent of the amount withheld would be forfeit, a deficit exceeding the legislated requirement by $30 million would mean that 30 per cent of the amount withheld would be forfeit, and so on, the minister explained.
“Fiscal management and deficit reduction remain a top priority of our government as we make the reforms necessary to set the course to fiscal recovery,” said Friesen. “This legislation would require government to demonstrate real progress toward balance through progressively smaller deficits, while ensuring the rules around compensation to cabinet ministers reflect our commitment to returning to balance.”
The legislation would also require a non-binding referendum before the government introduces any bill to increase tax rates under The Health and Post Secondary Education Tax Levy Act, The Income Tax Act or The Retail Sales Tax Act.