Federal Balanced Budget Act (S.C. 2015, c. 36, s. 41)

Act current to 2016-05-12

Federal Balanced Budget Act

S.C. 2015, c. 36, s. 41

Assented to 2015-06-23

An Act respecting the balancing of federal government budgets

[Enacted by section 41 of chapter 36 of the Statutes of Canada, 2015, in force on assent June 23, 2015.]
Preamble

Whereas a sound fiscal position is crucial to economic growth and job creation over the longer term;

Whereas attaining and maintaining a sound fiscal position requires that the Government of Canada achieve annual balanced budgets and reduce debt, other than when a recession or extraordinary situation occurs;

Whereas maintaining balanced budgets and reducing debt helps to keep taxes low, instill confidence in consumers and investors, strengthen Canada’s ability to respond to longer-term economic and fiscal challenges and preserve the sustainability of public services;

And whereas reducing the debt burden will help to ensure fairness for future generations by avoiding future tax increases or reductions in public services;

Now, therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

Short Title

Marginal note:Short title

 This Act may be cited as the Federal Balanced Budget Act.

Interpretation

Marginal note:Definitions

 The following definitions apply in this Act.

balanced budget

équilibre budgétaire

balanced budget means a budget in which the total amount of expenses for a fiscal year does not exceed the total amount of revenues for that year, those revenues being calculated before any amounts to be set aside for contingencies are subtracted. (équilibre budgétaire)

deputy minister

sous-ministre

deputy minister, with respect to an organization named in column 1 of the schedule, means the person occupying the position set out in column 2. (sous-ministre)

extraordinary situation

situation exceptionnelle

extraordinary situation means a situation that results in an aggregate direct cost to the Government of Canada of more than $3 billion in one fiscal year and that is caused by any of the following:

  • (a) a natural disaster or other unanticipated emergency of national significance; or

  • (b) an act of force or violence, war or threat of war, or other armed conflict. (situation exceptionnelle)

federal debt

dette fédérale

federal debt means the accumulated deficit as stated in the Public Accounts. (dette fédérale)

initial deficit

déficit initial

initial deficit means a deficit that is projected in respect of the fiscal year that follows a fiscal year in respect of which a balanced budget was projected or recorded. (déficit initial)

Minister

ministre

Minister means the Minister of Finance. (ministre)

open fiscal year

exercice ouvert

open fiscal year means the first of the fiscal years covered by budget projections in respect of which the financial statements of the Government of Canada have not been reported in the Public Accounts. (exercice ouvert)

operating budget freeze

gel du budget de fonctionnement

operating budget freeze means the measure set out in each of paragraphs 7(1)(a) and 8(1)(a). (gel du budget de fonctionnement)

pay

rémunération

pay means,

  • (a) in respect of the Prime Minister, a minister or minister of State, the sessional allowance provided for in paragraph 55.1(2)(b) of the Parliament of Canada Act and the annual salary provided for in section 4.1 of the Salaries Act or, in respect of a minister of State who does not preside over a ministry of State, the annual salary provided for in an appropriation Act; and

  • (b) in respect of a deputy minister, a base rate of pay, whether expressed as a single rate of pay or a range of rates of pay or, if no such rate or range exists, any fixed or ascertainable amount of base pay. (rémunération)

pay freeze

gel salarial

pay freeze means the measure set out in paragraph 7(1)(b). (gel salarial)

pay reduction

réduction salariale

pay reduction means the measure set out in paragraph 8(1)(b). (réduction salariale)

recession

récession

recession means a period of at least two consecutive quarters of negative growth in real gross domestic product for Canada, as reported by Statistics Canada under the Statistics Act. (récession)

Application

Marginal note:Economic and fiscal updates

 This Act does not apply in respect of economic and fiscal updates.

Marginal note:2015-2016 fiscal year and subsequent years

 For greater certainty, this Act applies in respect of the 2015-2016 fiscal year and subsequent fiscal years.

Federal Debt Reduction

Marginal note:Debt reduction

 Any surplus recorded in the Public Accounts in respect of a fiscal year must be applied to the reduction of the federal debt.

Projected Deficit

Marginal note:Appearance of Minister
  •  (1) If the Minister tables a budget in the House of Commons that projects an initial deficit in respect of the open fiscal year or the following fiscal year, the Minister must appear before the appropriate committee of the House of Commons on any of the first 30 days on which that House is sitting after the day on which the budget is tabled to explain the reasons for the projected deficit and present a plan for a return to balanced budgets that includes

    • (a) the measures set out in subsections 7(1) and 8(1) that apply; and

    • (b) the period within which a balanced budget is to be achieved.

  • Marginal note:Subsequent appearances

    (2) The Minister must appear before the committee annually to present an updated plan until a balanced budget is recorded in the Public Accounts in respect of a fiscal year that is covered by the plan.

Marginal note:Recession or extraordinary situation
  •  (1) If a deficit is projected due to a recession or extraordinary situation that, at the time the budget is tabled, has occurred, is occurring or is forecast,

    • (a) there is to be no increase in the operating budget of any government entity to fund annual wage increases; and

    • (b) there is to be no increase in the pay for the Prime Minister, ministers, ministers of State and deputy ministers.

  • Marginal note:Duration of measures

    (2) The operating budget freeze and the pay freeze are to take effect on the first day of the fiscal year that follows the fiscal year in which the recession or extraordinary situation ends and are to remain in effect until a balanced budget is recorded in the Public Accounts.

  • Marginal note:End of recession

    (3) For the purposes of subsection (2), a recession ends in the fiscal year in which the second consecutive quarter of positive growth in real gross domestic product for Canada is reported by Statistics Canada under the Statistics Act.

Marginal note:No recession or extraordinary situation
  •  (1) If a deficit is projected for reasons other than a recession or extraordinary situation,

    • (a) there is to be no increase in the operating budget of any government entity to fund annual wage increases; and

    • (b) there is to be a 5% reduction in the pay for the Prime Minister, ministers, ministers of State and deputy ministers.

  • Marginal note:Duration of measures

    (2) The operating budget freeze and the pay reduction are to take effect on April 1 of the year in which the budget is tabled and are to remain in effect until a balanced budget is recorded in the Public Accounts.

Recorded Deficit

Marginal note:Deficit recorded but not projected

 If a deficit that was not projected in a budget is recorded in the Public Accounts in respect of a fiscal year, the Minister must appear before the appropriate committee of the House of Commons on any of the first 30 days on which that House is sitting after the day on which those Public Accounts are tabled to explain the reasons for the deficit and present a plan for a return to balanced budgets that includes

  • (a) the measures set out in subsections 7(1) and 8(1) that apply; and

  • (b) the period within which a balanced budget is to be achieved.

Marginal note:Recession or extraordinary situation
  •  (1) If the deficit referred to in section 9 is due to a recession or extraordinary situation that, at the time the Public Accounts are tabled, has occurred or is occurring, the operating budget freeze and pay freeze are to take effect on the first day of the fiscal year that follows the fiscal year in which the recession or extraordinary situation ends and are to remain in effect until a balanced budget is recorded in the Public Accounts.

  • Marginal note:End of recession or extraordinary situation

    (2) For the purposes of subsection (1),

    • (a) a recession ends in the fiscal year in which the second consecutive quarter of positive growth in real gross domestic product for Canada is reported by Statistics Canada under the Statistics Act; and

    • (b) an extraordinary situation ends in the fiscal year in which the Public Accounts recording a deficit due to that situation are tabled.

 
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