E-12.00002 - Balanced Budget Act

Updated to 7 December 2023

This document has official status.

chapter E-12.00002

Balanced Budget Act

1. The purpose of this Act is to balance the budget of the Government.

To that end, the Act sets limits on the circumstances that can lead to a budget deficit being anticipated and provides for, in certain cases and in full transparency, a process for returning to a balanced budget.

2023, c. 30, s. 29.

2. The Government may not anticipate a budget deficit, except in the circumstances provided for in sections 5 and 8.

The Government incurs a budget deficit if it has a negative budget balance.

The first paragraph does not, however, operate to prevent an unanticipated budget deficit from being recognized in the public accounts for a fiscal year, to the extent that it does not exceed the revenue recorded in the Generations Fund for that year.

2023, c. 30, s. 29.

3. The budget balance for a fiscal year is the difference between the revenues and the expenditures established in accordance with the Government’s accounting policies.

It does not include

(1)  the revenues or the expenditures recorded in the Generations Fund established by the Act to reduce the debt and establish the Generations Fund (chapter R-2.2.0.1); or

(2)  the amounts relating to the application by a government enterprise of a new CPA Canada standard for a period prior to the changeover date proposed by CPA Canada.

2023, c. 30, s. 29.

4. The budget balance for a fiscal year is determined taking into account the accounting entries made directly in the accumulated deficit figures appearing in the Government’s financial statements, if they are a consequence of the retroactive effect of the correction of an error or change made in that fiscal year to the accounting policies of the Government or one of its enterprises.

However, the budget balance does not include the accounting entries made directly in the accumulated deficit figures that are a consequence of the retroactive effect of a new CPA Canada standard, for the years preceding the changeover year proposed by CPA Canada.

2023, c. 30, s. 29.

5. The Government may anticipate a budget deficit as a result of

(1)  a disaster having a major impact on revenue or expenditure;

(2)  a significant deterioration of economic conditions; or

(3)  a change in federal programs of transfer payments to the provinces that would substantially reduce transfer payments to the Government.

2023, c. 30, s. 29.

6. In the cases provided for in section 5, the Minister must report on the circumstance that explains why a budget deficit is anticipated. The report is made in the Budget Speech anticipating the deficit.

2023, c. 30, s. 29.

7. Where for a fiscal year a budget deficit recognized in the public accounts is greater than the revenues recorded in the Generations Fund for that year, the Minister must, in the first or second Budget Speech after the presentation of the public accounts, present a plan to return to a balanced budget of not more than five years commencing at the beginning of the fiscal year of the Budget Speech concerned.

The plan must present decreasing deficits and anticipate, for the fiscal year preceding the fiscal year of the return to a balanced budget, a deficit of 25% or less of the budget deficit referred to in the first paragraph.

2023, c. 30, s. 29.

8. The Minister may replace a plan to return to a balanced budget if any of the requirements set out in the second paragraph of section 7 cannot be complied with as a result of

(1)  the occurrence of any of the circumstances referred to in section 5 to the extent that it did not give rise to the initial plan; or

(2)  a weaker than anticipated economic recovery at the end of an economic downturn or a recession.

In such a case, the Minister must, at the time the Minister considers appropriate, report to the National Assembly on the circumstance that explains the non-compliance with the initial plan and, in the next Budget Speech, present a new plan of not more than five years containing a revised framework for a return to a balanced budget. However, if the report on the circumstance that explains the non-compliance with the initial plan is made in a Budget Speech, the new plan must be presented at that time.

The new plan must present decreasing deficits and anticipate, for the fiscal year preceding the return to a balanced budget, a deficit of 25% or less of the last recognized budget deficit.

2023, c. 30, s. 29.

9. The Minister must report to the National Assembly, in the Budget Speech, on the objectives of this Act, their achievement and any variance identified.

The Minister must report annually to the National Assembly on the impact any changes in accounting policies in relation to those in force for the preceding fiscal year have upon the financial results of the Government.

2023, c. 30, s. 29.

AMENDING PROVISIONS PUBLIC ADMINISTRATION ACT

10. (Amendment integrated into c. A-6.01, s. 77.3).

2023, c. 30, s. 29.

Act respecting the Ministère des Finances

11. (Amendment integrated into c. M-24.01, s. 23.2).

2023, c. 30, s. 29.

Act respecting public transit authorities

12. (Amendment integrated into c. S-30.01, s. 158.2).

2023, c. 30, s. 29.

TRANSITIONAL AND FINAL PROVISIONS

13. The Minister of Finance is responsible for the carrying out of this Act.

2023, c. 30, s. 29.

14. This Act replaces the Balanced Budget Act (chapter E-12.00001).

2023, c. 30, s. 29.