Bill C-363

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First Reading

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	1st Session, 37th Parliament, 49-50 Elizabeth II, 2001
	House of Commons of Canada
	BILL C-363
	An Act to Prevent Deficit Budgets
	Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
Short title	1. This Act may be cited as the Deficit Prevention Act.
Interpreta- tion	2. The following definitions apply in this Act.
``Crown'' « Sa Majesté »	``Crown'' means Her Majesty in right of Canada.
``debt'' « dette »	``debt'' means the accrued total debt of the Crown.
``deficit'' « déficit »	``deficit'' means an excess of expenditure over revenue in a fiscal year.
``expenses'' « dépenses »	``expenses'' means the expenses recorded in the financial statements of the government.
Limit on deficit	3. Subject to section 6, no deficit shall be incurred by the Crown in any fiscal year commencing on or after April 1, 2002.
Balanced budget with contingency reserve	4. For every fiscal year the Minister shall present to Parliament a budget that shows a surplus after providing as an estimated expenditure a contingency reserve in accordance with section 5.
Contingency reserve	5. (1) In every fiscal year that commences on or after April 1, 2002, every budget presented to Parliament must include an expenditure estimate in the form of a contingency reserve of no less than three percent of the total of all other proposed estimated expenditures of the Crown to cover:
	(a) unforeseen but unavoidable expenditures; and
	(b) revenues of the Crown being less than estimated.
Use of contingency reserve	(2) Any amount of a contingency reserve that is not expended in the fiscal year for which it is provided must be applied at the end of the fiscal year to reduce the debt of Canada.
Special deficit in unusual circumstances	6. If a special deficit is created by the expenditures of the Crown exceeding the revenues of the Crown in a fiscal year, and the Auditor General of Canada certifies that the deficit has been substantially caused by any of the following special circumstances:
	(a) natural catastrophes resulting in a loss of revenue to the Crown or an increase in expenditure by the Crown;
	(b) a war or apprehended war or an insurrection or apprehended insurrection; or
	(c) a reduction in revenue of five percent or more in the fiscal year from the previous fiscal year that has not been caused by a change in law,
	the special deficit is not a contravention of section 3, but budgets presented to Parliament during the following three fiscal years must provide for the special deficit so created to be paid off, even if the special circumstances continue.
Expenditure reduction	7. If the Minister of Finance has reason to believe, during a fiscal year that revenues of the Crown will be less for the year than estimated in the budget for the year, except in circumstances described in paragraph 6(a), (b) or (c), and that, notwithstanding the contingency reserve, the shortfall in revenues is likely to create a deficit for the year, the Minister shall reduce the expenditures that have been planned for the balance of the year sufficiently to avoid the creation of a deficit for the year.

Bill C-363

BILL C-363