Fiscal Transparency and Accountability Act, 2004, S.O. 2004, c. 27 - Bill 84

JurisdictionOntario
Bill Number84
Date16 December 2004

EXPLANATORY NOTE

This Explanatory Note was written as a reader’s aid to Bill 84 and does not form part of the law. Bill 84 has been enacted as Chapter 27 of the Statutes of Ontario, 2004.

The Bill enacts the Fiscal Transparency and Accountability Act, 2004.

Section 2 of the new Act sets out principles that govern Ontario’s fiscal policy. Section 3 requires that the fiscal policy seek to maintain a prudent ratio of provincial debt to Ontario’s gross domestic product. Section 4 requires the Executive Council to plan for a balanced budget and specifies when a deficit is permitted. If a deficit is planned, the Executive Council is required to develop a recovery plan for achieving a balanced budget in the future.

Sections 5 to 9 of the Act require the Minister of Finance to release specified information to the public. Section 5 requires the release of a multi-year fiscal plan in the Budget papers. Section 6 requires the release of a mid-year review of the fiscal plan. Section 7 requires the periodic release of updated information about Ontario’s revenues and expenses for the current year. Section 8 requires the release of Ontario’s economic accounts each quarter. Section 9 requires the release of a long-range assessment of Ontario’s fiscal environment within two years after each provincial election.

Section 10 requires the Ministry of Finance to release a pre-election report about Ontario’s finances, in such circumstances as may be prescribed by regulation and before the deadline established by regulation. The Provincial Auditor is required to review the pre-election report to determine whether it is reasonable, and to release a statement describing the results of the review.

If the Minister does not release information required by the Act on or before the specified deadline, section 11 requires the Minister to release a statement explaining why the information was not so released. The Assembly may debate the Minister’s statement.

Section 12 provides for the establishment of the Ontario Economic Forecast Council. Upon request, the Council shall give the Minister of Finance advice relating to the Budget and fiscal plan.

The Balanced Budget Act, 1999 is repealed as of May 18, 2004.

chapteR 27

An Act to provide
for fiscal transparency
and accountability

Assented to December 16, 2004

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

Interpretation

Definitions

1. In this Act,

“Minister” means the Minister of Finance; (“ministre”)

“provincial debt” means, in a year, the accumulated deficit shown in the financial statements for the Province as set out in the Public Accounts for the year; (“dette provinciale”)

“provincial election” means a general election as defined in section 1 of the Election Act; (“élections provinciales”)

“release” means make available for inspection by the public; (“rendre public”)

“year” means the fiscal year of the Province. (“exercice”)

Governing Principles

Principles governing fiscal policy

2. The following principles govern Ontario’s fiscal policy:

1. Responsibility: Ontario’s fiscal policy should be based on cautious assumptions.

2. Flexibility: it should recognize the need to respond to changing circumstances.

3. Equity: its impact on different groups within the population and on future generations should be considered.

4. Transparency: it should be clearly articulated and information about it should be readily available for inspection by the public without charge.

Provincial debt

3. Ontario’s fiscal policy must seek to maintain a prudent ratio of provincial debt to Ontario’s gross domestic product.

Balanced budget

4. (1) For each fiscal year, the Executive Council shall plan for a balanced budget unless, as a result of extraordinary circumstances, the Executive Council determines that it is consistent with prudent fiscal policy for the Province to have a deficit for a fiscal year.

Same

(2) A balanced budget for a year is a budget in which expenses for the year, including a reserve, do not exceed revenues for the year.

Recovery plan

(3) If the Executive Council plans for a deficit for a fiscal year, the Executive Council shall also 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

(4) The recovery plan must be consistent with the principles governing Ontario’s fiscal policy.

Information for the Public

Multi-year fiscal plan

5. (1) Each year, the Minister shall release a multi-year fiscal plan in the Budget papers that are laid before the Assembly.

Period of the plan

(2) The fiscal plan must address the fiscal year of the Budget and the following two years, and it may address a longer period.

Contents

(3) The fiscal plan must include the following information:

1. Ontario’s fiscal policy objectives for the period of the plan.

2. The macroeconomic forecasts and assumptions used to prepare the Budget and the plan and a description of any significant differences from the forecasts and assumptions used to prepare the previous Budget and plan.

3. An estimate of Ontario’s revenues and expenses for the period of the plan, including estimates of the major components of the revenues and expenses.

4. Details of the reserve described in subsection (4).

5. A comprehensive discussion of the risks that, in the Minister’s opinion, may have a material impact on the economy or the public sector during the period of the plan.

6. A description of the intended effects of the plan on the province.

7. Information about the ratio of provincial debt to Ontario’s gross domestic product.

8. If a deficit is anticipated, the details of the recovery plan required by subsection 4 (3).

Reserve for unexpected adverse changes

(4) The fiscal plan must include a reserve to provide for unexpected adverse changes in revenues and expenses, in whole or in part.

Comprehensive discussion of risks

(5) The comprehensive discussion of risks must include information about the following matters if, in the Minister’s opinion, they may have a material impact on the economy or the public sector during the period of the plan:

1. The contingent liabilities of the Province.

2. The potential impact of a variation in the macroeconomic forecasts.

3. Matters that have not otherwise been addressed in the plan because of uncertainty about the likelihood or timing of their occurrence or the magnitude of their impact.

4. Risks associated with any assumptions about public sector labour costs during the period of the plan.

Mid-year review of the fiscal plan

6. (1) Each year on or before November 15, the Minister shall release a mid-year review of the fiscal plan.

Information for pre-Budget consultations

(2) The mid-year review must include the following information for the purpose of pre-Budget consultations with the public:

1. A description of the key issues that, in the Minister’s opinion, should be addressed in the next Budget.

2. Information about the estimated cost of expenditures that are made through the tax system.

3. Details about how to participate in the pre-Budget consultations.

Exception

(3) No mid-year review is required in such circumstances as may be prescribed by regulation.

Interim updates about revenues and expenses

7. Each year on or before August 15 and on or before February 15, the Minister shall release updated information about Ontario’s revenues and expenses for the current year, including updated information about the major components of the revenues and expenses as set out in the fiscal plan.

Quarterly...

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