Bill 24, Taxpayer Protection and Balanced Budget Act, 1999

Versions

Bill 24

Bill 241999

An Act to protect taxpayers against tax increases, to establish a process requiring voter approval for proposed tax increases and to ensure that the Provincial Budget is a balanced budget

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

Schedule A

1. The Taxpayer Protection Act, 1999, as set out in Schedule A, is hereby enacted.

Schedule B

2. The Balanced Budget Act, 1999, as set out in Schedule B, is hereby enacted.

Commencement

3. (1) Subject to subsection (2), this Act comes into force on the day it receives Royal Assent.

Same

(2) Schedule B comes into force on April 1, 2001.

Short title

4. The short title of this Act is the Taxpayer Protection and Balanced Budget Act, 1999.

SCHEDULE A

TAXPAYER PROTECTION ACT, 1999

CONTENTS

Interpretation

Interprtation

Definitions

Dfinitions

Taxpayer Protection

Protection des contribuables

Restriction on tax increases, new taxes

Restriction re authority to tax

Exception, election platform

Exception, specified circumstances

Restriction relative aux augmentations

d'impt ou aux nouveaux impts

Restriction relative au pouvoir d'imposition

Exception : programme lectoral

Exception : faits prciss

The Referendum Question and the Effect

of a Referendum

La question rfrendaire et l'effet

d'un rfrendum

Criteria for referendum question

Proposed referendum question

Referendum question

Effect of the referendum

Critres de la question rfrendaire

Question rfrendaire propose

Question rfrendaire

Effet du rfrendum

The Referendum Process

Le processus rfrendaire

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

Writ of referendum

Duty to register

Prohibition, receiving campaign

contributions

Limit on campaign contributions

Campaign advertising as contribution

Period for campaign advertising

Limit on campaign expenses

Financial report

Application of Election Finances Act

Application of Election Act

Costs of referendum

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

Bref rfrendaire

Obligation de s'inscrire

Interdiction : rception de contributions

Plafond des contributions

Publicit constituant une contribution

Priode de diffusion de la publicit lie la campagne

Plafond des dpenses lies la campagne

Rapport financier

Application de la Loi sur le financement des lections

Application de la Loi lectorale

Frais du rfrendum

General

Dispositions gnrales

21.

Offences

21.

Infractions

Complementary Amendments

Modifications complmentaires

22.

23.

Election Act

Election Finances Act

22.

23.

Loi lectorale

Loi sur le financement des lections

Short Title

Titre Abrg

24.

Short title

24.

Titre abrg

______________

Interpretation

Definitions

1. In this Act, "

authority to tax" means the authority (referred to in section 3) to change a tax rate in a designated tax statute, to levy a new tax or to determine the tax rate for school purposes or the amount to be levied as tax for school purposes; ("pouvoir d'imposition") "

campaign organizer" means a person or entity who is required by section 11 to apply for registration with the Chief Election Officer; ("organisateur de campagne") "

Chief Election Officer" means the Chief Election Officer appointed under the Election Act\; ("directeur gnral des lections") "

designated tax statute" means any of the following statutes:

1.The Corporations Tax Act.

2.The Education Act.

3.The Employer Health Tax Act.

4.The Fuel Tax Act.

5.The Gasoline Tax Act.

6.The Income Tax Act.

7.The Provincial Land Tax Act.

8.The Retail Sales Tax Act\; ("loi fiscale dsigne") "

person" includes a trade union. ("personne")

Taxpayer Protection

Restriction on tax increases, new taxes

2. (1) A member of the Executive Council shall not include in a bill a provision that increases, or permits the increase of, a tax rate under a designated tax statute or that establishes a new tax unless,

(a)a referendum concerning the increase or the new tax is held under this Act before the bill is introduced in the Assembly; and

(b)the referendum authorizes the increase or the new tax.

Same, tax for school purposes

(2) The Minister of Finance shall not make a regulation under the Education Act or the Provincial Land Tax Act that increases the average tax rate for school purposes in Ontario, as calculated by the Minister, unless,

(a)a referendum concerning the increase is held under this Act before the regulation is made; and

(b)the referendum authorizes the increase.

Same

(3) The Minister of Finance shall not requisition amounts under section 257.12.1 of the Education Act that are designed to increase the average tax rate for school purposes in Ontario, as calculated by the Minister, unless,

(a)a referendum concerning the increase in the tax rate is held under this Act before the increased amount is requisitioned; and

(b)the referendum authorizes the increase.

Interpretation

(4) If a designated tax statute contains a provision that decreases a tax rate (or an effective tax rate) on a specified future date, the following shall be deemed to constitute an increase in the tax rate:

1.The repeal of the provision before the specified future date.

2.The replacement of the specified future date with a later date.

3. The replacement of the specified decrease with a smaller decrease.

Restriction re authority to tax

3. (1) A member of the Executive Council shall not include in a bill a provision that gives a person or body (other than the Crown) the authority to change a tax rate in a designated tax statute or to levy a new tax unless,

(a)a referendum concerning the authority that is to be given to the person or body is held under this Act before the bill is introduced in the Assembly; and

(b)the referendum authorizes the authority to be given to the person or body.

Same, tax for school purposes

(2) A member of the Executive Council shall not include in a bill a provision that gives a person or body (other than the Crown or a member of the Executive Council) the authority to determine the tax rate for school purposes or the amount to be levied as tax for school purposes unless,

(a)a referendum concerning the authority that is to be given to the person or body is held under this Act before the bill is introduced in the Assembly; and

(b)the referendum authorizes the authority to be given to the person or body.

Constitutional rights and privileges

(3) A referendum is not required for a provision that gives effect to any right or privilege guaranteed by subsection 93 (1) of the Constitution Act, 1867 or by section 23 of the Canadian Charter of Rights and Freedoms.

Exception, election platform

4. (1) During an election campaign and no later than two weeks before polling day, the leader of a registered party (within the meaning of the Election Finances Act) may give the Chief Election Officer a written statement indicating that, if the party forms the government following the election, the party intends,

(a)to increase the tax rate in a designated tax statute by a specified amount;

(b)to establish a new tax; or

(c)to give a person or body (other than the Crown or a member of the Executive Council) an authority to tax.

Statement

(2) The statement must contain a clear, concise and unambiguous description of the proposed increase, the proposed new tax or the proposal to give an authority to tax.

Estimate

(3) If the statement refers to a proposed increase or new tax, it must also set out the increase in annual revenues that the leader expects to result from the proposed increase or new tax.

Review

(4) Within five days after receiving the statement, the Chief Election Officer shall review it to determine whether it complies with subsections (2) and (3).

Results of review

(5) If, in the opinion of the Chief Election Officer, the statement complies with subsections (2) and (3), he or she shall promptly give the statement to the Clerk of the Assembly together with his or her opinion and shall make the statement and opinion available to the public.

Same

(6) If, in the opinion of the Chief Election Officer, the statement does not comply with subsections (2) and (3), he or she shall so notify the leader.

No referendum, increase or new tax

(7) A referendum is not required for the purposes of section 2 with respect to an increase or a new tax,

(a)if the increase or the new tax was described in a statement given to the Chief Election Officer under this section;

(b)if, in the opinion of the Chief Election Officer given in accordance with this section, the statement complies with subsections (2) and (3); and

(c)if the party whose leader gave the statement to the Chief Election Officer forms the government after the election.

Same, authority to tax

(8) A referendum is not required for the purposes of section 3 with respect to an authority to tax,

(a)if the proposal to give the authority to tax was described in a statement given to the Chief Election Officer under this section;

(b)if, in the opinion of the Chief Election Officer given in accordance with this section, the statement complies with subsection (2); and

(c)if the party whose leader gave the statement to the Chief Election Officer forms the government after the election.

Exception, specified circumstances

5. (1) A referendum is not required for the purposes of section 2 if, in the opinion of the Minister of Finance, any of the following circumstances exist:

1.The increase or the new tax is not designed to generate a net increase in the total amount of provincial revenues and revenue raised for school tax purposes under the Education Act and the Provincial Land Tax Act.

2.The increase or the new tax is a response to changes in federal tax laws and is necessary to maintain provincial revenues.

3.The increase or the new tax is required to effect a restructuring of tax authority between the federal government and one or more provincial governments or between the Province and one or more municipalities or school boards.

4.The increase or the new tax is required as a result of the reorganization or restructuring of one or more Crown agencies.

Public notice

(2) If no referendum is required by virtue of subsection (1), the Minister shall prepare a statement indicating that, in his or her opinion, a specified circumstance listed in subsection (2) exists and shall lay the statement before the Assembly or give it to the Clerk of the Assembly before the applicable bill is introduced in the Assembly or the applicable regulation or requisition is made.

Effect of statement

(3) The Minister's statement is, for all purposes, conclusive evidence of the matters addressed in it.

Review

(4) The Minister's statement is not reviewable by any court or tribunal.

The Referendum Question and the Effect of a Referendum

Criteria for referendum question

6. (1) A referendum question must be clear, concise and impartial in its wording and must be capable of being answered in the affirmative or the negative.

Same, increase or new tax

(2) A referendum question may refer to a proposed increase in a tax rate or to a proposed new tax in general terms or may propose a specific increase or new tax.

Proposed referendum question

7. (1) The Executive Council shall give a proposed referendum question to the Chief Election Officer for his or her review.

Results of review

(2) The Chief Election Officer shall advise the Executive Council whether, in his or her opinion, the proposed question complies with subsection 6 (1) and may suggest changes to a proposed question to make it better comply with that subsection.

Referendum question

8. (1) The Lieutenant Governor in Council shall determine the wording of a referendum question.

Same

(2) The wording of a referendum question is not reviewable by any court or tribunal for the purpose of determining whether the question complies with section 6.

Public notice

(3) Before issuing a writ of referendum, the Lieutenant Governor in Council shall give the following documents to the Clerk of the Assembly and shall make them available to the public:

1.A copy of the referendum question.

2.A copy of the proposed question given to the Chief Election Officer and the advice received from the Chief Election Officer about the proposed question.

3.A statement setting out the increase in annual revenues that the Minister of Finance expects to result from any proposed increase or new tax described in the referendum question.

Effect of the referendum

9. (1) A referendum authorizes the action described in the referendum question if more than 50 per cent of votes cast in the referendum are cast in favour of the action.

Effect on subsequent government

(2) A referendum shall not be interpreted to require the Executive Council of a subsequent government formed by another party to increase taxes, establish a new tax or give the authority to tax as described in the referendum question.

The Referendum Process

Writ of referendum

10. (1) The Lieutenant Governor in Council may issue a writ of referendum and shall fix the date of the referendum.

Date

(2) The date of the referendum must be at least 28 days and not more than 56 days after the day on which the writ is issued, and must fall on a Thursday.

Duty to register

11. (1) Every person or entity who wishes to organize a campaign to solicit votes in favour of a particular result or to promote a particular result in a referendum shall apply to the Chief Election Officer for registration as a campaign organizer.

Same

(2) Every person or entity who wishes to advertise in order to solicit votes in favour of a particular result or to advertise to promote a particular result in a referendum shall apply to the Chief Election Officer for registration as a campaign organizer.

Exception

(3) A person or entity is not required to apply for registration if the following requirements are met:

1.The person or entity must not spend more than $1,000 on the campaign to solicit votes or promote a particular result.

2.The person or entity must not combine his, her or its money with that of another person or entity and then spend it on the campaign to solicit votes or promote a particular result.

Same

(4) A broadcaster or publisher is not required to apply for registration solely because he, she or it broadcasts or publishes advertisements described in subsection (2) in the ordinary course of business.

Contents of application

(5) The application must contain such information as the Chief Election Officer requires and must be accompanied by the application fee set by him or her.

Prerequisite

(6) No application may be made until the applicant has appointed a chief financial officer and an auditor licensed under the Public Accountancy Act.

Registration

(7) The Chief Election Officer shall register an applicant upon receipt of the application and fee unless the name of the applicant so closely resembles the name of another registered campaign organizer that the two are likely to be confused.

(8) The Chief Election Officer shall maintain a register containing the names of all registered campaign organizers and the information set out in their respective applications for registration, as that information may be revised.

Inspection

(9) The Chief Election Officer shall make the register available for inspection by the public on request.

Duty to notify

(10) A registered campaign organizer shall notify the Chief Election Officer within a reasonable time if there is any change to the information provided in the application for registration, and the Chief Election Officer shall revise the register accordingly.

Change of name

(11) If the change relates to the name of the campaign organizer, the Chief Election Officer shall not revise the register if the changed name would so closely resemble the name of another registered campaign organizer that the two are likely to be confused. In those circumstances, the name of the campaign organizer shall not be changed.

Prohibition, receiving campaign contributions

12. (1) After a writ of referendum is issued, no person or entity shall accept a contribution to a campaign to solicit votes in favour of a particular result or to promote a particular result in the referendum unless the person or entity is, or is acting on behalf of, a registered campaign organizer.

Same

(2) After a writ of referendum is issued, no registered campaign organizer shall knowingly accept, directly or indirectly, contributions from an individual who usually resides outside Ontario, a corporation that does not carry on business in Ontario or a trade union that does not engage in activities in Ontario.

Limit on campaign contributions

13. (1) No person or entity shall contribute more than $7,500, multiplied by the indexation factor determined under section 40.1 of the Election Finances Act, to one or more campaign organizers who are soliciting votes in favour of the same result or are promoting the same result in a referendum.

Campaign organizer's funds

(2) If a campaign organizer spends his, her or its own money on a campaign, the money shall be considered to be a contribution.

Records

(3) If a registered campaign organizer (or a person or entity acting on behalf of one) receives contributions from a person or entity that, in the aggregate, exceed $25 in connection with the same referendum question, the campaign organizer's chief financial officer shall record the contributions and, if the contributions in the aggregate exceed $100, shall record the person's or entity's name and address.

Campaign advertising as contribution

14. (1) In this section, "

campaign advertising" includes printing documents but does not include news reporting.

Threshold

(2) If a person or entity engages in campaign advertising with the knowledge and consent of a campaign organizer and the aggregate cost of the advertising exceeds $100, the cost is a contribution to the campaign organizer and is a campaign expense of the campaign organizer.

Authorization

(3) All campaign advertising must indicate the campaign organizer, if any, who has authorized it and the persons or entities sponsoring it.

Identification

(4) No person or entity shall cause any campaign advertising to be broadcast or published unless he, she or it gives the broadcaster or publisher, in writing, the person's or entity's name and the name of the persons or entities sponsoring the advertising.

Records

(5) The broadcaster or publisher shall keep the following information for at least two years and shall make it available for inspection by the public on request:

1.A copy of the campaign advertising.

2.The dates and, if applicable, the times when the advertising was broadcast or published.

3.The names given to the broadcaster or publisher under subsection (4).

4.The amount charged to broadcast or publish the advertising.

5.The amount that the broadcaster or publisher would ordinarily have charged to broadcast or publish the advertising, if the amount is different from the amount actually charged.

Period for campaign advertising

15. (1) In this section, "

blackout period" means,

(a)the period that begins when the writ of referendum is issued and ends on the 22nd day before the day on which the referendum is held, and

(b)the day on which the referendum is held, and the preceding day.

Same

(2) No person or entity shall arrange for or consent to campaign advertising that appears during the blackout period.

Same

(3) No broadcaster or publisher shall allow campaign advertising to appear during the blackout period.

Exceptions

(4) Subsections (2) and (3) do not prohibit the following:

1.The publication of campaign advertising on the day on which the referendum is held or the preceding day in a newspaper that is published once a week or less often and whose regular day of publication falls on that day.

2.A campaign advertisement on the Internet or in a similar electronic medium, if it is posted before and not altered during the blackout period.

3.A campaign advertisement in the form of a poster or billboard, if it is posted before and not altered during the blackout period.

Exceptions subject to guidelines

(5) Subsections (2) and (3) do not apply with respect to the following activities if they are done in accordance with the guidelines of the Chief Election Officer:

1.Advertising public meetings.

2.Announcing the location of a registered campaign organizer's headquarters.

3.Advertising for volunteer campaign workers.

4.Announcing services to be provided by a registered campaign organizer in connection with enumeration and the revision of lists of voters.

5.Announcing services to be provided by a registered campaign organizer on the day the referendum is held.

Limit on campaign expenses

16. (1) Subject to subsection (2), no campaign organizer (or a person or entity acting on behalf of one) shall incur campaign expenses in an electoral district that exceed the amount that is the aggregate of $0.60, multiplied by the indexation factor described in subsection (3), for each of the eligible voters in the electoral district (as certified by the Chief Election Officer).

Same

(2) In such northern electoral districts as may be prescribed, the amount calculated under subsection (1) is increased by $7,000, multiplied by the indexation factor described in subsection (3).

Indexation

(3) The indexation factor is the factor determined under section 40.1 of the Election Finances Act.

Regulation

(4) The Lieutenant Governor in Council may, by regulation, prescribe northern electoral districts for the purposes of subsection (2).

Financial report

17. The chief financial officer for a registered campaign organizer shall file the following documents with the Chief Election Officer within six months after the referendum is held:

1.The campaign organizer's financial statements with respect to the referendum campaign.

2.The information required by subsection 13 (3) in connection with the campaign.

3.The auditor's report on the financial statements and on the information required by subsection 13 (3).

Application of Election Finances Act

18. (1) The Election Finances Act applies, with necessary modifications including the modifications set out in this Act, in respect of a referendum campaign unless the context requires otherwise.

Same

(2) For the purposes of this Act, "

person", in the Election Finances Act, shall be deemed to include a corporation and a trade union.

Application of Election Act

19. The Election Act applies, with necessary modifications including the modifications set out in this Act, in respect of a referendum unless the context requires otherwise.

Costs of referendum

20. The costs of the Chief Election Officer that are associated with a referendum under this Act shall be paid from the Consolidated Revenue Fund.

General

Offences

21. (1) Every person or entity who contravenes or fails to comply with any of the following provisions is guilty of an offence:

1.Subsection 11 (1) or (2) (registration, campaign organizer).

2.Subsection 12 (1) or (2) (receiving campaign contributions).

3.Subsection 13 (1) (limit on campaign contributions).

4.Subsection 14 (4) (restriction on campaign advertising).

5.Subsection 15 (2) or (3) (period for campaign advertising).

6.Section 17 (financial report re campaign).

Same

(2) If a chief financial officer fails to comply with section 17, his or her registered campaign organizer is guilty of an offence, whether or not the chief financial officer has been prosecuted or convicted for the failure to comply.

Penalty

(3) Upon conviction of an offence, an individual is liable to a fine of not more than $25,000 or imprisonment for a term of not more than one year or both.

Same

(4) Upon conviction of an offence, a corporation, trade union or other entity is liable to a fine of not more than $100,000.

Complementary Amendments

Election Act

22. Clause 114 (1.1) (b) of the Election Act, as enacted by the Statutes of Ontario, 1998, chapter 9, section 48, is amended by adding "and the Taxpayer Protection Act, 1999" at the end.

Election Finances Act

23. (1) Subsection 2 (1) of the Election Finances Act, as re-enacted by the Statutes of Ontario, 1998, chapter 9, section 52, is amended by adding the following clause:

(a.1)assist campaign organizers under the Taxpayer Protection Act, 1999 in the preparation of returns required under that Act.

(2) Clause 2 (1) (c) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 9, section 52, is amended by adding "and the Taxpayer Protection Act, 1999" at the end.

(3) Clause 2 (1) (g) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 9, section 52, is amended by adding "or of sections 7 to 13 of the Taxpayer Protection Act, 1999" at the end.

(4) Clause 2 (1) (i) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 9, section 52, is amended by adding "or the Taxpayer Protection Act, 1999" at the end.

(5) Subsection 2 (1) of the Act, as re-enacted by the Statutes of Ontario, 1998, chapter 9, section 52, is amended by adding the following clause:

(j.1)provide such guidelines for the proper administration of the Taxpayer Protection Act, 1999 as he or she considers necessary for the guidance of campaign organizers and any of their officers.

(6) Clause 2 (1) (k) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 9, section 52, is amended by striking out "clause (j)" in the second line and substituting "clauses (j) and (j.1)".

(7) Subsection 2 (4) of the Act, as re-enacted by the Statutes of Ontario, 1998, chapter 9, section 52, is amended by inserting "and the Taxpayer Protection Act, 1999" after "this Act" in the third line.

(8) Section 3 of the Act, as re-enacted by the Statutes of Ontario, 1998, chapter 9, section 52, is amended by inserting "or the Taxpayer Protection Act, 1999" after "this Act" in the second line.

(9) Section 6 of the Act, as amended by the Statutes of Ontario, 1998, chapter 9, section 53, is further amended by inserting "or the Taxpayer Protection Act, 1999" after "this Act" in the second line.

(10) Section 7 of the Act, as re-enacted by the Statutes of Ontario, 1998, chapter 9, section 54, is amended by adding the following subsection:

Same

(1.1) If information with respect to the affairs of a registered campaign organizer under the Taxpayer Protection Act, 1999 is reasonably necessary for the performance of the Chief Election Officer's duties under that Act, he or she may request the information and the campaign organizer shall provide it.

(11) Section 8 of the Act, as re-enacted by the Statutes of Ontario, 1998, chapter 9, section 55, is amended by inserting "and the Taxpayer Protection Act, 1999" after "this Act" in the third line.

Short Title

Short title

24. The short title of the Act set out in this Schedule is the Taxpayer Protection Act, 1999.

SCHEDULE B

BALANCED BUDGET ACT, 1999

Interpretation

Definitions

1. (1) In this Act, "

designated tax statute" means any of the following statutes:

1.The Corporations Tax Act.

2.The Education Act.

3.The Employer Health Tax Act.

4.The Fuel Tax Act.

5.The Gasoline Tax Act.

6.The Income Tax Act.

7.The Provincial Land Tax Act.

8.The Retail Sales Tax Act\; ("loi fiscale dsigne") "

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; ("dpenses") "

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. ("recettes")

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, 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, 2001-2 fiscal year

(4) Despite subsection (3), the amount of the accumulated net surplus for the fiscal year beginning on April 1, 2001, is the amount by which the revenues for the previous fiscal year exceeds the expenditures for the previous fiscal year.

Same, 2002-3 fiscal year

(5) Despite subsection (3), the amount of the accumulated net surplus for the fiscal year beginning on April 1, 2002, 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

2. (1) For each fiscal year beginning on or after April 1, 2001, 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. 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.

Salary reduction for Executive Council

3. (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 one 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 one 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.

Ontario Opportunities Fund

(10) The Minister of Finance shall pay into the Ontario Opportunities Fund (established under the Financial Administration Act) an amount equal to the salary reductions required by this section.

Definition

(11) In this section, "

salary" means the salary payable to a member of the Executive Council under section 3 of the Executive Council Act.

Short Title

Short title

4. The short title of the Act set out in this Schedule is the Balanced Budget Act, 1999.

EXPLANATORY NOTE

The Bill enacts the two new statutes: the Taxpayer Protection Act, 1999, set out in Schedule A to the Bill, and the Balanced Budget Act, 1999, set out in Schedule B.

Taxpayer Protection Act, 1999:

a.Taxpayer protection

New rules are established with respect to tax increases and new taxes. New rules are also established when an authority to tax is to be given to another person or body. Before a tax rate under a specified statute can be increased, before a new tax can be imposed, and before the authority to tax (as described in section 3) can be given to another person or body, there must be a referendum authorizing it. (sections 2 and 3).

Certain exceptions are set out (sections 4 and 5). For example, no referendum is required if the action was clearly stated as part of the election platform of the party that forms the government. Nor is a referendum required for an increase or new tax if, in the opinion of the Minister of Finance, it is not designed to generate a net increase in provincial revenues and revenues raised for school tax purposes.

b.The referendum process

Provisions governing referendums and referendum campaigns are set out in the Taxpayer Protection Act, 1999.

The Lieutenant Governor in Council decides upon the wording of the referendum question. Proposed referendum questions are given to the Chief Election Officer for review. The Lieutenant Governor in Council issues a writ of referendum (sections 6 to 8 and 10). The referendum is conducted in accordance with the Election Act and the campaign in accordance with the Election Finances Act, as modified by the new Act (sections 11 to 19). Offences are established with respect to referendum campaigns. The costs of the Chief Election Officer are payable from the Consolidated Revenue Fund.

The referendum authorizes a proposed increase, a proposed new tax or a proposal to give a person or body an authority to tax, as described in the referendum question, if more than 50 per cent of the votes are cast in favour of it (section 9).

Complementary amendments are made with respect to the powers and duties of the Chief Election Officer under the Election Act and the Election Finances Act.

Balanced Budget Act, 1999:

Beginning with the 2001-2002 fiscal year, the Executive Council must plan for a balanced budget and the Minister of Finance must present a balanced budget to the Assembly (subsection 2 (1)). 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 (subsection 2 (2)).

If there is a deficit, the salary payable to members of the Executive Council under the Executive Council Act is reduced (section 3). Different rules are established when an initial deficit is more than one 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 and so to avoid the initial salary reduction (subsection 3 (4)).

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 (subsections 3 (3) and (5)). If there is a deficit in the following year, the reduction is increased to 50 per cent, and lasts a year for each consecutive year in which there is a deficit (subsections 3 (6) to (8)).

When salaries are reduced, the Minister of Finance is required to pay the amount of the reduction into the Ontario Opportunities Fund (subsection 3 (10)).