Bill 87 - Fiscal Transparency and Accountability Act

BILL 87

Fiscal Transparency and Accountability Act

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

Definitions

1 The following definitions apply in this Act.

“balanced budget” means a budget for a fiscal year in which the total amount of expenses for that year do not exceed the total amount of revenue for that year. (budget équilibré)

“expenses”, in relation to a particular fiscal year, means the expenses of the Province for that fiscal year as reported in the most recent Public Accounts. (charges)

“first fiscal period” means the period of five fiscal years commencing on April 1, 2014, and ending on March 31, 2019. (première période financière)

“fiscal period” means the first fiscal period or a subsequent fiscal period, as the case may be. (période financière)

“fiscal year” means the period commencing on April 1 in one year and ending on March 31 in the next year. (exercice financier)

“GDP”, in relation to a particular year, means the nominal Gross Domestic Product for the Province as set out for that year in the most recent version of the Provincial and Territorial Economic Accounts published by Statistics Canada under the authority of the Statistics Act (Canada) or, if that figure is not available, the projected Gross Domestic Product published by the Department of Finance in its most recent fiscal update. (PIB)

“general election” means a general election as defined in the Political Process Financing Act. (élection générale)

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

“net debt”, in relation to a particular fiscal year, means the net debt of the Province in that fiscal year as reported in the most recent Public Accounts. (dette nette)

“publish” means to make public by or through any media. (publier)

“revenue”, in relation to a particular fiscal year, means the revenue of the Province for that fiscal year as reported in the most recent Public Accounts. (recettes)

“scheduled general election” means a scheduled general election as defined in the Elections Act. (élections générales programmées)

“subsequent fiscal period” means a period consisting of five consecutive fiscal years with the first such period commencing on April 1, 2019, and ending on March 31, 2024, and each successive period commencing on the day following completion of the preceding period. (période financière subséquente)

PART 1

FISCAL ACCOUNTABILITY

Division A

Balanced Budget

Objectives

2 The following objectives shall govern the Province’s fiscal policies:

(a) annual balanced budgets on or before the end of the first fiscal period;

(b) on or before the end of the first fiscal period, the Province’s net debt for a fiscal year will be less than the net debt for the preceding fiscal year;

(d) after March 31, 2017, quarterly fiscal updates will include a statement of the actual expenses and revenue to the end of the quarter to which the update relates.

Multi-year fiscal plan

3( 1) In each fiscal year, the Minister shall table with the Main Estimates a multi-year fiscal plan that addresses the fiscal year to which the Main Estimates relate and at least two subsequent fiscal years.

3( 2) A multi-year fiscal plan shall include the following information:

(a) an estimate of the Province’s revenues and expenses for the period addressed by the plan;

(b) an estimate of the annual deficit or surplus for each fiscal year addressed by the plan; and

(c) if, when the Main Estimates are tabled, the Minister is projecting a deficit for the fiscal year prior to the year to which the Main Estimates relate, a deficit reduction plan to meet the requirements set out in section 6.

Revenue contingency

4( 1) When the Main Estimates are tabled, if the Minister is projecting a surplus of less than $50,000,000 for the fiscal year to which the Main Estimates relate, the Main Estimates shall include a revenue contingency that is equal to that projected surplus.

4( 2) When the Main Estimates are tabled, if the Minister is projecting a surplus of $50,000,000 or greater for the fiscal year to which the Main Estimates relate, the Main Estimates shall include a revenue contingency of $50,000,000.

In-year fiscal management

5( 1) If, during the course of a fiscal year, the estimated deficit increases for that fiscal year, the Minister shall present to the Board of Management options for addressing the Province’s deteriorating financial position.

5( 2) If, during the course of a fiscal year, the government proposes a new program, service or other initiative that was not provided for in the Main Estimates for that fiscal year, the program, service or initiative shall require Board of Management approval before proceeding, and the expenses related to the program, service or initiative shall be funded from a reduction in other expenses of the Province or from new revenue to the Province.

5( 3) If the political party forming the government after a general election is not the political party that formed the government before that election, subsection (2) does not apply to a program, service or initiative proposed by the new government during the fiscal year in which the election is held.

Deficit reduction requirements

6( 1) When the Province reports in the Public Accounts a deficit for a fiscal year, in the following fiscal year, the Province shall report one of the following:

(a) a deficit that is at least $125,000,000 less than the deficit reported in the Public Accounts for the preceding fiscal year; or

(b) a surplus.

6( 2) When the Province reports in the Public Accounts a surplus for a fiscal year, the Province shall report a surplus in the following fiscal year.

Extraordinary events

7( 1) An expense or change in revenue shall not be included when determining whether the requirements of section 6 have been met for a fiscal year if the expense or change in revenue is the result of any of the following events or circumstances:

(a) a natural or other disaster;

(b) Canada is at war or under apprehension of war;

(c) an extraordinary event that, in the opinion of the Minister, has had a material effect on the Province’s financial situation; or

(d) a change in accounting practices or policies.

7( 2) An expense may be excluded under subsection (1) only if the net effect of all expenses described in subsection (1) is to increase the deficit for the fiscal year by more than $20,000,000 or to reduce the surplus for the fiscal year by more than $20,000,000.

7( 3) A determination by the Minister that an expense or change in revenue described in subsection (1) has occurred is conclusive for the purposes of this Act that the expense or change in revenue has occurred and in the amount stated in the determination.

7( 4) A determination under subsection (3) shall be included in the Public Accounts and shall include the following information:

(a) in the case of an expense, a description of the expense, including why it occurred, and the amount of the expense; and

(b) in the case of a change in revenue, a description of the change, including why it occurred, and the amount of the change.

Taxpayer Protection Act

8 Despite the Taxpayer Protection Act, if the projected deficit for a fiscal year is $400,000,000 or greater, a referendum is not required to be held under section 4 of that Act in order to implement any measure to reduce the amount of the deficit for that fiscal year or any following fiscal year.

Compliance with deficit reduction

9( 1) On the tabling of the Public Accounts under the Financial Administration Act, the Auditor General shall examine the information set out in the Public Accounts and shall determine whether section 6 has been violated or has failed to have been complied with for the fiscal year to which the Public Accounts relate.

9( 2) If the Auditor General determines that section 6 has been violated or has failed to have been complied with, the Auditor General shall include such a determination in the opinion given in accordance with section 11 of the Auditor General Act.

Administrative penalty

10( 1) When the Auditor General makes a determination referred to in subsection 9(2), an administrative penalty shall be imposed on each person who was a member of the Executive Council for any period during the relevant fiscal year.

10( 2) The amount of an administrative penalty imposed under subsection (1) shall be one of the following:

(a) if the person was a member of the Executive Council for the entire fiscal year, $2,500; or

(b) if the person was a member of the Executive Council for a portion of the fiscal year, an amount calculated as follows:

(A/365) × $2,500

where

A = the number of days in the fiscal year that the person was a member of Executive Council.

10( 3) An administrative penalty shall be imposed under subsection (1) by issuing a notice of administrative penalty to the person, and the notice of administrative penalty shall be mailed to the person’s last known address by registered mail.

10( 4) A notice of administrative penalty shall be deemed to have been received five days after the date the notice of administrative penalty is deposited in the mail.

10( 5) The notice of administrative penalty shall include the following information:

(a) the name of the person required to pay the administrative penalty;

(b) the amount of the administrative penalty; and

10( 6) A person shall pay an administrative penalty within 30 days after the person receives notice of the administrative penalty.

10( 7) The Province may sue for and recover an administrative penalty in an action in any court as if the amount were a debt.

10( 8) Subsection (1) does not apply to a person who is not a minister appointed under section 2 of the Executive Council Act.

10( 9) It is not a defence to an administrative penalty under this section that the person exercised due diligence to ensure that section 6 was complied with or that it was not violated.

Amendment of deficit reduction measures

11 Section 6 may be substantively amended only if not less than two-thirds of the members of the Legislative Assembly who are present and vote at third reading of the Bill containing the amendment vote in favour of that Bill.

Suspension of deficit reduction measures

12( 1) The Minister may recommend to the Lieutenant-Governor in Council that the applicability of sections 6, 9 and 10 be suspended for any fiscal year if the Minister is of the opinion that an economic or financial crisis has occurred that makes it unreasonable for those sections to apply in that fiscal year.

12( 2) On the recommendation of the Minister, the Lieutenant-Governor in Council may issue an order that sections 6, 9 and 10 do not apply in the fiscal year set out in the order.

Division B

Fiscal Reporting

Laying Main Estimates before Legislative Assembly

13( 1) Not later than March 31 of each year, the Minister shall lay before the Legislative Assembly the Main Estimates for the next fiscal year.

13( 2) The Main Estimates shall include estimates of the following:

(a) the difference between revenue and expenses for the fiscal year to which the Main Estimates relate, exclusive of a change in revenue or an expense referred to in section 7; and

(b) the ratio of net debt-to-GDP for the fiscal year to which the Main Estimates relate.

Laying Capital Estimates before Legislative Assembly

14 Not later than December 31 of each year, the Minister shall lay before the Legislative Assembly the Capital Estimates for the next fiscal year.

Information to be included in Public Accounts

15 In addition to the information set out in subsection 41(3) of the Financial Administration Act, the Public Accounts shall include the following information:

(a) the difference between revenue and expenses for the fiscal year to which the Public Accounts relate, exclusive of a change in revenue or an expense referred to in section 7; and

(b) the ratio of net debt-to-GDP for the fiscal year to which the Public Accounts relate.

Examination by Auditor General

16 The Auditor General shall examine the information referred to in section 15 to be included in the Public Accounts and shall express his or her opinion as to whether the information is fairly presented in accordance with the provisions of this Act.

Publishing fiscal updates

17 In accordance with the following schedule, the Minister shall publish quarterly fiscal updates that contain revised forecasts of the economic situation and financial condition of the Province for the current fiscal year:

(a) within 60 days after the end of the first quarter of the fiscal year; and

(b) within 45 days after the end of the second and third quarters of the fiscal year.

Financial reporting in year of scheduled general election

18( 1) At least 60 days before the day a scheduled general election is to be held, the Minister shall publish the financial statements of the Province for the previous fiscal year with respect to which the Auditor General has given an opinion in accordance with section 11 of the Auditor General Act.

18( 2) At least 90 days before the day a scheduled general election is to be held, the Minister shall publish an updated version of the multi-year fiscal plan tabled with the Main Estimates for the current fiscal year.

18( 3) An updated multi-year fiscal plan published under this section shall also include general information to assist a registered political party in complying with its obligation under Part 2 to prepare disclosure statements with respect to its election commitments.

Prebudget consultation

19 Each year the Minister shall provide details as to how the public may participate in prebudget consultations.

PART 2

TRANSPARENCY IN ELECTION COMMITMENTS

Division A

Costing of Election Commitments

Purposes

20 The purposes of this Part are the following:

(a) to increase transparency with respect to and accountability for election commitments made by registered political parties;

(b) to provide electors with information on the financial consequences of election commitments made by registered political parties; and

(c) to promote an atmosphere in which the public does not expect the fulfilment of election commitments for which the cost has not been disclosed in accordance with this Act.

Definitions

21 The following definitions apply in this Part.

“chief agent” means a chief agent as defined in the Elections Act. (agent principal)

“cost estimate” means a disclosure statement described in paragraph 23(1)(a). (estimation des coûts)

“election commitment” means a statement that, due to the nature of the statement, creates a reasonable expectation with electors that a registered political party, if it forms the government, will implement the policy, program, service or initiative referred to in the statement. (engagement électoral)

“financial consequences” means an increase or a reduction in expenses or revenue. (répercussions financières)

“leader commitment” means an election commitment made by the leader of a registered political party that (engagement d’un chef)

(a) is published by any person, and

(b) if implemented, will have material financial consequences.

“maximum cost statement” means a disclosure statement described in paragraph 23(1)(b). (énoncé des coûts maximaux)

“official representative” means an official representative as defined in the Elections Act. (représentant officiel)

“ordinary polling day” means the ordinary polling day as defined in the Elections Act. (jour ordinaire du scrutin)

“party commitment” means an election commitment (engagement d’un parti)

(a) that is included in the election platform of a registered political party, or

(b) that is published by a registered political party.

“registered political party” means a registered political party as defined in the Elections Act. (parti politique enregistré)

“Supervisor” means the Supervisor of Political Financing referred to in section 4 of the Political Process Financing Act or a person who is delegated by the Supervisor under section 11 of that Act. (Contrôleur)

Application

22( 1) Subject to subsection (2), this Part applies to an election commitment that is made before a scheduled general election.

22( 2) This Part applies only to an election commitment that is a party commitment or a leader commitment.

Disclosure of election commitment cost

23( 1) A registered political party that makes an election commitment on or after the ninetieth day before the ordinary polling day shall publish and file with the Supervisor one of the following disclosure statements:

(a) an estimate of the financial consequences of the election commitment;

(b) subject to subsection (2), if the election commitment is a new or expanded program or service, a statement of the maximum cost that the registered political party commits to with respect to that election commitment if it forms the next government; or

23( 2) If a registered political party indicates that an election commitment for which a maximum cost statement has been prepared will also increase or reduce revenue, the registered political party shall also publish and file under subsection (1) one of the following:

(a) a cost estimate with respect to the increase or reduction in revenue; or

(b) a disclosure statement described in paragraph (1)(c) .

23( 3) If a registered political party publishes and files a disclosure statement described in paragraph (1)(c), the disclosure statement shall include one of the following statements:

(a) a statement that insufficient information was available to the registered political party to enable it to prepare a cost estimate;

(b) a statement that the election commitment will not have financial consequences for the Province; or

(c) a statement that the registered political party declines to prepare a cost estimate or a maximum cost statement with respect to its election commitment.

23( 4) The official representative of a registered political party shall ensure that a disclosure statement is published and filed as required under this section, and the official representative may designate, in writing, the chief agent of the registered political party to fulfil his or her obligations under this subsection.

23( 5) If a political party becomes a registered political party after the ninetieth day before the ordinary polling day, this section applies to all election commitments made by the political party on or after the ninetieth day before the ordinary polling day.

23( 6) This section applies to an election commitment made by a registered political party before the ninetieth day before the ordinary polling day if the registered political party restates or otherwise affirms that election commitment on or after the ninetieth day before the ordinary polling day.

23( 7) A disclosure statement shall

(a) be in the format prescribed by and be prepared in accordance with the regulations, and

(b) include any other information or documents prescribed by regulation.

Additional requirements of disclosure statement

24( 1) A disclosure statement under section 23 shall include the sum of the following amounts:

(a) the estimates of the financial consequences of all election commitments for which a cost estimate has been published and filed; and

(b) the maximum cost of all election commitments for which a maximum cost statement has been published and filed.

24( 2) A disclosure statement may deal with more than one election commitment and, in that case, such a disclosure statement shall include a disclosure statement as required under subsection 23(1) with respect to each election commitment and may include the sum of the amounts indicated in all the cost estimates and maximum cost statements included in the disclosure statement.

24( 3) With respect to an election commitment that will have financial consequences for the operating budget of the Province as provided for in the Main Estimates, a cost estimate or a maximum cost statement shall include the anticipated financial consequences of the election commitment for the fiscal year in which the election commitment is made and each of the four following fiscal years.

24( 4) With respect to an election commitment that will have financial consequences for the capital budget of the Province as provided for in the Capital Estimates, a cost estimate shall include the following information:

(a) the estimated total capital expenditures related to the election commitment; and

(b) the estimated capital expenditures related to the election commitment in the fiscal year in which the election commitment is made and in each of the four following fiscal years.

24( 5) With respect to an election commitment that will have financial consequences for the capital budget of the Province as provided for in the Capital Estimates, a maximum cost statement shall include the following information:

(a) the maximum total capital expenditures related to the election commitment; and

(b) the maximum capital expenditures related to the election commitment in the fiscal year in which the election commitment is made and in each of the four following fiscal years.

24( 6) A computational, clerical or typographical error or any error of a similar nature in a disclosure statement does not constitute a violation of or a failure to comply with this section.

Timing of disclosure statement

25 A disclosure statement shall be published and filed with the Supervisor as follows:

(a) subject to paragraph (c), with respect to an election commitment made on or after the ninetieth day before the ordinary polling, but before the day on which the writs of election are issued, no later than the day on which the writs of election are issued;

(b) with respect to a party commitment made on or after the day on which the writs of election are issued, the day on which the commitment is made;

(c) with respect to a leader commitment made on or after the second day before the day on which the writs of election are issued, no later than the third day following the day on which the commitment is made;

(d) despite paragraph (c), with respect to a leader commitment made on or after the third day before the ordinary polling day, the day on which the commitment is made; and

(e) with respect to an election commitment made by a political party referred to in subsection 23(5) before it becomes a registered political party, no later than the seventh day following the day on which the political party becomes a registered political party.

Inspection of disclosure statements

26 The disclosure statements filed with the Supervisor shall be available to the public for inspection and copying at the office of the Supervisor during its regular office hours.

Application for declaration of non-compliance

27( 1) Within 30 days after the day on which the writs of election are returnable, the official representative of a registered political party may apply by Notice of Application to a judge of The Court of Queen’s Bench of New Brunswick for a declaration that a registered political party has violated or failed to comply with section 23, 24 or 25.

27( 2) An application under this section shall include the following information:

(a) the name of the registered political party against which the declaration is sought;

(b) the name of the official representative of that registered political party; and

(c) the election commitment that it is alleged has given rise to a violation or failure to comply with section 23, 24 or 25.

27( 3) When a Notice of Application is issued under this section, the applicant shall deliver or send by registered mail to the Supervisor a copy of the Notice of Application.

27( 4) To the extent that they are not inconsistent with this Act and the regulations, the Rules of Court apply to an application commenced under this section.

Declaration of non-compliance

28( 1) On hearing an application under section 27, if the judge is satisfied that the registered political party has violated or failed to comply with section 23, 24 or 25, the judge shall issue a declaration to that effect.

28( 2) When a judge renders his or her decision on an application, the clerk of the court shall forward to the Supervisor certified copies of the decision and of any declaration issued under subsection (1).

Ineligibility for annual allowance

29( 1) Despite the Political Process Financing Act, on receipt by the Supervisor of the certified copy of a declaration issued under section 28, the registered political party with respect to which the declaration is made is ineligible to receive an annual allowance under section 31 of the Political Process Financing Act.

29( 2) A registered political party shall be ineligible under subsection (1) to receive an annual allowance for the period commencing with the fiscal year following the fiscal year in which the violation or failure to comply occurred and ending with the fiscal year in which the next general election is held, inclusive of both fiscal years.

29( 3) If an application is commenced under section 27, no quarterly instalments of the annual allowance under the Political Process Financing Act for the period referred to in subsection (2) shall be payable to the registered political party against which a declaration is sought until after the judge has rendered his or her decision on the application.

Division B

Legislative Library Research Support

Definitions

30 The following definitions apply in this Division.

“department” means a portion of the public service of the Province specified in Part 1 or Part 4 of the First Schedule of the Public Service Labour Relations Act, but does not include the Office of the Premier. (ministère)

“Director” means the Director of the Legislative Library appointed under the Legislative Library Act. (directeur)

“record” means a record as defined in the Right to Information and Protection of Privacy Act. (document)

Research support by Legislative Library

31( 1) During the six-month period before the ordinary polling day for a scheduled general election, the Legislative Library shall provide research services to registered political parties in order to assist them in meeting their obligations under this Part.

31( 2) When providing information to registered political parties, the Director of the Legislative Library is not restricted to providing only information that is accessed in accordance with this Act and shall take reasonable steps to access relevant information from other available sources.

Access to information

32( 1) The Director is entitled to request and receive from a department any records in the custody or under the control of that department that the Director requires to assist a registered political party in meeting its obligations under this Part.

32( 2) The right to request and receive records under subsection (1) does not extend to the following:

(a) a record that contains information that is excepted from disclosure under Division B or C of Part 2 of the Right to Information and Protection of Privacy Act, but if that information can reasonably be severed from the record, the Director has a right to request and receive information from the remainder of the record;

(b) the records, information and other documents referred to in paragraphs 4(a) to (k) of the Right to Information and Protection of Privacy Act; and

32( 3) A request under subsection (1) may be made only to the deputy head of a department or a person designated by a deputy head to receive those requests and shall be made in writing or by electronic means.

32( 4) Not later than the one hundred and twentieth day before the ordinary polling day for a scheduled general election, the Clerk of the Executive Council shall provide to the Director the name of the deputy head of each department and of any person designated by a deputy head to receive requests under subsection (1).

Confidentiality of requests and sources

33( 1) When the Director makes a request under section 32, the Director shall not disclose to the departmental official any information respecting the registered political party for which the Director is requesting the records.

33( 2) When the Director provides information to a registered political party for the purposes of this Part, the Director shall not disclose the source of his or her information to the registered political party.

33( 3) When a request is received under section 32, a person shall limit the disclosure of any information relating to that request, including that a request has been received, to those persons who require the information for the purpose of replying to the request, and in no case shall a person disclose such information to any member of the Executive Council or to a person employed under subsection 18(1) of the Civil Service Act.

33( 4) A person who violates or fails to comply with subsection (1), (2) or (3) commits an offence punishable under Part 2 of the Provincial Offences Procedure Act as a category F offence.

Time period for response

34( 1) When a request under section 32 is received by a departmental official more than 60 days before the ordinary polling day, he or she shall respond in writing to the request within seven days after receiving the request.

34( 2) When a request under section 32 is received by a departmental official no more than 60 days before the ordinary polling day, he or she shall respond in writing to the request within three business days after receiving the request.

Designation by Director

35( 1) The Director may designate one or more employees of the Legislative Library to act on the Director’s behalf for the purposes of this Division.

35( 2) A designation under subsection (1) shall be in writing and a copy shall be provided to the Clerk of the Executive Council.

PART 3

MISCELLANEOUS PROVISIONS

Review of Act

36( 1) The Minister shall complete a review of this Act every five years after April 1, 2014, and the review shall include consideration of the fiscal objectives for the subsequent fiscal period.

36( 2) Section 11 does not apply to an amendment arising out of a review conducted in accordance with subsection (1).

36( 3) During the first session of the fifty-eighth Legislative Assembly, the Legislative Assembly shall appoint or designate a committee of the Legislative Assembly to review and report on the effectiveness of Part 2 of this Act during the scheduled general election held in 2014.

36( 4) A committee under subsection (3) shall make its final report to the Legislative Assembly no later than the earlier of the end of the second session of the fifty-eighth Legislative Assembly and December 31, 2016.

36( 5) If the Legislative Assembly is not sitting when the committee completes its final report, the committee shall file the report with the Clerk of the Legislative Assembly.

Regulations

37 The Lieutenant-Governor in Council may make regulations

(a) prescribing the format and content of a disclosure statement, including prescribing information or documents to be included with a disclosure statement;

(b) requiring a cost estimate to include a statement from an accountant and prescribing the format of, the content of and the manner of preparing such a statement, including incorporating by reference accounting standards and practices applicable to its preparation and modifying those standards and practices;

(c) governing the engagement and use of an accountant to prepare a statement referred to in paragraph (b), including prescribing who will be responsible for engaging the accountant;

(d) governing expenses incurred by a registered political party to have a statement referred to in paragraph (b) prepared, including prescribing a maximum amount that a registered political party will be reimbursed for those expenses;

(e) defining words or expressions used, but not defined, in this Act.

PART 4

CONSEQUENTIAL AMENDMENTS, REPEAL AND COMMENCEMENT

Legislative Library Act

38( 1) Section 1 of the Legislative Library Act, chapter 185 of the Revised Statutes, 2011, is amended by adding the following definitions in alphabetical order:

“registered political party” means a registered political party as defined in the Elections Act. (parti politique enregistré)

“scheduled general election” means a scheduled general election as defined in the Elections Act. (élections génerales programmées)

38( 2) Section 2 of the Act is amended

(a) by renumbering the section as subsection 2(1);

(b) by adding after subsection (1) the following:

2( 2) During the six-month period before the ordinary polling day for a scheduled general election, the Legislative Library shall provide research services to registered political parties in order to assist them in meeting their obligations under Part 2 of the Fiscal Transparency and Accountability Act.

Political Process Financing Act

39 Subsection 67(2) of the Political Process Financing Act, chapter P-9.3 of the Acts of New Brunswick, 1978, is amended by adding after paragraph (f) the following:

(f.1) the reasonable expenses incurred by any person for the purpose of fulfilling the obligations of a registered political party under Part 2 of the Fiscal Transparency and Accountability Act;

Repeal

40 The Fiscal Responsibility and Balanced Budget Act, chapter 161 of the Revised Statutes, 2011, is repealed.

Commencement

41 Sections 20 to 35, 37, 38 and 39 and subsections 36(3) to (5) of this Act come into force on a day or days to be fixed by proclamation.