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ECONOMIC
AND FISCAL UPDATE 2001
LEGISLATION SUMMARY
TITLE
OF BILL
Bill
4 Balanced Budget and Ministerial Accountability Act
Sponsoring
Minister
Honourable
Gary Collins
Minister of Finance
Purpose
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This
bill: |
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provides
for salary holdbacks for Cabinet Ministers to help ensure the
achievement of fiscal and other results, including the prohibition
of annual deficits commencing with the 2004/05 fiscal year; and |
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repeals
the Balanced Budget Act. |
Summary of the Main Provisions
Government's
Fiscal Accountability
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This
Act: |
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re-establishes
the prohibition against annual budget deficits commencing in
2004/05; |
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sets
no limits on budgeted deficits until 2004/05, but does require
that any budgeted deficit until 2004/05 not be exceeded; |
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requires
that, in years when a surplus is budgeted, at least 50 per cent of
that surplus be achieved. |
Individual Ministerial Accountability
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This
Act establishes accountability for all Ministers (including
the Premier): |
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for
expenses of the Consolidated Revenue Fund for which they are
responsible (Ministry and other appropriations); |
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in
the case of the Minister of Provincial Revenue, for achieving
specified revenue targets; and |
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in
the case of the Ministers without those responsibilities (i.e.
Ministers of State) for achieving performance targets specified by
Treasury Board. |
Penalty for Non-Compliance
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This
Act establishes a salary holdback of 20 per cent for members of
the Executive Council, which is divided between collective
responsibility for achieving the government's bottom line
objectives (10 per cent) and individual responsibility for
achieving their fiscal or performance targets (10 per cent). |
Other
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This
Act repeals the existing Balanced Budget Act when the new
Act is
passed; the other provisions of the new Act take effect April 1, 2002. |
TITLE
OF BILL
Bill
5 Budget Transparency and Accountability Amendment Act
Sponsoring
Minister
Honourable
Gary Collins
Minister of Finance
Purpose
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This
bill: |
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makes
amendments to the BTAA and the Financial Administration Act
(FAA)
regarding the overall government accountability framework. |
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repeals
the Environment and Sustainability Statutes Amendment Act
(ESSAA),
2001 (which consisted of several amendments to the Auditor General
Act and the Budget Transparency and Accountability Act [BTAA]);
and |
Summary of the Main Provisions
Key
Provisions for the Accountability Framework
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the
elimination of special warrants (which provide funding without
prior legislative approval) for all but (i) natural disasters, and
(ii) the period surrounding an election; |
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the
adoption of generally accepted accounting principles (GAAP) as the
mandatory basis for government accounting policies, and the
establishment of an accounting advisory committee to advise on the
implementation of GAAP; |
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the
disclosure of all material assumptions and policy decisions
underlying the three-year fiscal projections in the budget; |
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the
establishment of a fixed budget date (the third Tuesday in
February) which can only be delayed in the case of an election;
and the advancement, by a month and a half, of the legislature's
pre-budget public consultation process to reflect the earlier
budget date; |
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the
addition, in service plans and reports, of a signature by the
responsible Minister, indicating personal accountability for the
plan and the results; |
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changes
to the date when ministry and Crown entity service plans are to be
filed, from April 30 to budget day, to provide a closer link
between government's fiscal plans with what is to be accomplished
by the budget; |
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the
suspension, until the 2002/03 budget, of the requirement for a
government strategic plan and for ministry and Crown service
plans. |
TITLE
OF BILL
Bill
2 Taxation Statutes Amendment Act 2001
Sponsoring
Minister
Honourable
Gary Collins
Minister of Finance
Purpose
This
bill amends 4 statutes to implement the government's tax cut
initiatives: the Income Tax Act, the Corporation Capital Tax
Act, the Social Service Tax Act and the Motor Fuel Tax Act.
Summary
of Main Taxation Provisions
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| Income
Tax Act |
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This
Act is amended to: |
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implement
the 25 percent personal tax cut announced on June 6, 2001; |
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reduce
the general corporate income tax rate to 13.5 percent from the
current 16.5 percent rate, effective January 1, 2002; |
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introduce
a new BC Mining Flow-through Share Tax Credit; |
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limit
the Manufacturing and Processing Investment Tax Credit to property
acquired before July 31, 2001
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| Corporation
Capital Tax Act |
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This
Act is amended to: |
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phase
out the tax on non-financial corporations by reducing the tax rate
to 0.15 percent effective September 1, 2001 and eliminating the
tax on September 1, 2002.
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| Social
Service Tax Act |
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This
Act is amended to: |
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provide
an exemption for purchases/leases of eligible production machinery
and equipment by eligible manufacturers and persons regularly
engaged for commercial purposes in: |
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logging; |
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the
exploration for and development of coal and mineral mines;
and |
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the
exploration for, discovery and development of, oil and
natural gas. |
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increase
the price threshold at which the surtax on expensive vehicles
applies from $32,000 to $47,000.
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A
regulation under the Act is amended to increase the maximum rebate
of tax for the purchase or lease of eligible factory manufactured
alternative fuel vehicles from $500 to $1,000 for alternative fuel
passenger vehicles, and from $5,000 to $10,000 for alternative
fuel buses.
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| Motor
Fuel Tax Act |
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This
Act is amended to: |
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reduce
the domestic jet fuel tax rate to 2 cents per litre from the
current rate of 5 cents per litre; |
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lower
the aviation fuel tax rate to 2 cents per litre from 3 cents per
litre; and |
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eliminate
the tax on marine bunker fuel. |
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A
regulation under the Act is added to introduce a tax exemption for
PuriNox motor fuel, a new cleaner-burning diesel/water emulsion
that is an alternative to conventional diesel fuel. |
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