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Quebec vows to fight national securities plan


September 18, 2008 at 6:42 PM EDT

Quebec Finance Minister Monique Jerome-Forget in May

(Paul Chiasson/Canadian Press)

For the second consecutive day, the Quebec government has waded into the federal election campaign, lashing out at the Conservatives' plan to create a national securities commission.

Quebec Finance Minister Monique Jérôme-Forget warned on Thursday that all provinces and territories except Ontario would fight such a plan right up to the Supreme Court of Canada. The confrontation, she predicted, would disrupt markets and create havoc for investors.

Finance Minister Jim Flaherty has been working toward a national securities commission since before the Oct. 14 election was called.

“The protection of investors is a provincial jurisdiction,” she said. “I suspect they [a Conservative government would] come up with legislation. They are going to implement such a securities commission. We are going to appeal. We're going to go as high as the Supreme Court. There's going to be disruption in the market.”

The minister added that Canada's financial leaders underestimate the impact of changes imposed without provincial consent. Ontario is the only province to support the federal initiative. The others propose to harmonize regulations through what they call a “passport” system, where companies can file a prospectus for approval in one province or territory and have it automatically accepted by all the others.

The passport system was discussed on Thursday at a meeting of federal-provincial ministers responsible for their respective securities commissions.

There are currently 13 provincial and territorial securities commissions. Ms. Jérôme-Forget said a national version would only create another layer of bureaucracy and confuse investors.

“People won't know where to go,” she said. “The market will want to know who's in charge. There will be a court challenge right up to the Supreme Court because the provinces argue it is their jurisdiction. Quebec isn't alone. You have British Columbia, Alberta, Manitoba, the Atlantic provinces. They are all on side.”

Improvements to the current system are needed, she added, such as finding ways to accommodate restrictions imposed by the Charter of Rights and Freedoms, which in the past has blocked prosecutors from using confidential information held by regulators to pursue criminal cases such as fraud. “We don't want to change the Charter, but we have to find ways to share the information,” she said.

Backed by two international studies, the minister argued that Canada's current securities regulations are among the best in the world and that there was no need for a new system. Her attack on the Tories' intention to intrude in a provincial jurisdiction follows severe criticism by Quebec this week of other Conservative policies.

According to a source close to the Liberals, who asked to remain anonymous, the Charest government is staging a confrontation with Ottawa, looking to benefit from what it expects will be a Conservative victory and the weakening of the Bloc Québécois. By distancing himself from Ottawa, the source said, Mr. Charest wants to position his minority government as a strong defender of Quebec's interests, and use that as a springboard to a majority in the next provincial election.

On Wednesday, Cultural and Communications Minister Christine St-Pierre heaped scorn on federal Heritage Minister Josée Verner's suggestion that if Quebec wanted culture to have more funding, it should use its own money. “We've increased budgets [for culture] by 25 per cent. We're already doing our share,” Ms. St-Pierre said. Before calling the election, the Conservatives cut $45-million from programs including those that promote Canadian and Quebec culture abroad.

Mr. Charest's ministers sided with the widespread criticism unleashed by Quebec's cultural community, including renowned theatre and film director Robert Lepage, who said the Harper government was discouraging home-grown artists from seeking prominence abroad by locking them into a “cultural prison.”

Ms. Jérôme-Forget also challenged the Conservative party's claim that it has fixed the fiscal imbalance between Ottawa and the provinces, citing a multibillion-dollar agreement for infrastructure projects.

“Obviously for me it's not enough. Postsecondary education [money] for all provinces has not been settled, ” Ms. Jérôme-Forget said. “There was a great move done by [Conservative Leader Stephen] Harper. …but for postsecondary education there is still room to manoeuvre.”

Despite mounting tensions over a growing number of issues, the Quebec government stopped short of calling Mr. Harper's vision of open federalism a failure.

“The objective of federalism isn't to say: ‘If I don't get everything, I'll slam the door.' You have to build alliances and on occasion force your position and try to influence others. It's normal to have differences,” she said