Prime Minister Harper is often viewed by his many supporters and critics as a calculating political strategist with great political instincts. But here is a case, where Harper’s acute political instincts have failed him badly.
Harper has permitted his Finance Minister Jim Flaherty to revive Flaherty’s all-consuming goal of creating a single federal securities regulator.
Accordingly, Harper has committed an enormous political blunder.
This huge political blunder will not only revive the fortunes of Marois’ Pequiste government, but will wipe out the Federal Conservatives in vote-rich Quebec, (their remaining six federal seats). In addition, this blunder will reduce Federal Conservative support throughout Canada, especially in its western base and inevitably lead to a devastating Conservative defeat in the next federal election.
Since we have all seen this film before, Flaherty and his spinmeisters will have a harder time pulling the wool over our eyes. At least for some of us.
Flaherty clearly seems to have hoodwinked the Ontario Finance Minister Sousa, into jumping on board the single “national co-operative” securities regulator.
Sousa, Premier Wynne and the whole Liberal Government do not appreciate that Flaherty’s scheme is clearly contrary to Ontario’s own economic and fiscal interests, but will clearly benefit the Federal government at the expense of Ontario.
As I will elaborate in a subsequent article, Sousa, by purportedly signing the province of Ontario onto the Flaherty “co-operative” scheme, will in effect hand over the levers of Ontario’s economy to Flaherty and Harper.
Flaherty’s “co-operative” scheme will also restrict Ontario’s ability to access the capital markets, in order for Ontario to fund its annual deficits and its rapidly growing provincial debt. Thus forcing Ontario to drastically raise corporate and personal taxes and drastically cut its annual social welfare, health care and educational government expenditures.
Minister Flaherty, let us try to cut out all this hooey.
Your single “co-operative national securities regulator” is in reality, an Ottawa-dominated single federal securities regulator bent on the federal government intruding into and substantially influencing the economies of each of the provinces.
You and you alone, have been the driving force behind this federal initiative. Not the provinces of B.C. and Ontario. There is nothing voluntary or co-operative about your single federal securities regulator scheme.
Last time around, (pre 2011) Flaherty tried to dress this scheme up and market it to the Canadian people and the Supreme Court as a “single national” securities regulator, with a voluntary opt-in provision.
The only province that supported Flaherty’s regulator model and reference to the Supreme Court of Canada, was Ontario. The participation of one province, even the great Ontario, does not confer national status on such a regulator.
Also the voluntary opt-in feature. Not so voluntary. Because once a province like Ontario opted in, it was like a bear trap. Once in, the province had to renounce its existing securities law and regulations and hand over to the feds its securities regulatory infrastructure. Practically speaking, the province could not then choose to opt back out, because it had no laws, regulations or securities regulatory infrastructure, with which to start afresh.
This time around, Flaherty is calling his latest scheme, a “national co-operative” securities regulator, with the emphasis on the “co-operative.” But it is still a federal bear trap.
As the Globe and Mail‘s Sophie Cousineau astutely notes,
“Finance Minister Jim Flaherty calls it the ‘co-operative’ regulator. That is false advertising. The initiative was concocted behind the backs of Quebec and Alberta, two provinces that have long fought Ottawa’s attempts to encroach upon their jurisdiction over securities regulation, and that have won their case all the way to the Supreme Court.”
The provinces of B.C. and Ontario (the latter, not officially) have been voluntarily co-operating in a provincial regulatory securities system known as the passport system with all the other provinces, including Alberta and Quebec, for many years.
Accordingly, it was not very “co-operative” for B.C. and Ontario, to secretly, without the knowledge of its fellow provincial passport partners, to enter into a back room deal with the feds, in an attempt to isolate Alberta and Quebec. Both provinces,Quebec and Alberta, as expected, have come out against Flaherty’s new scheme.
Prime Minister Harper, what in the name of Brian Mulroney and Meech Lake were you thinking?
Canadian history has shown that back room deals, without proper knowledge of the parties affected, usually lead to failure and sometimes disastrous political consequences for the participants.
Mulroney begat Meech Lake which begat The Bloc and Reform and the end of the Progressive Conservative Party.
As for Quebec…
Marois’ Charter of Values has failed to unite Quebec society behind her party against the rest of Canada. Her party was heading to a possible defeat in the next provincial election.
For the first time in a long time, Harper’s Conservatives’ defense of Quebec’s religious minorities, and opposition to Marois’ Charter, were gaining some traction in Quebec and there was a potential for political growth for the Conservatives in Quebec.
Flaherty’s revival of the single federal securities regulator and his clumsy attempt to once again isolate Quebec on this file, will have the effect of reviving Marois’ party.
As the Globe‘s Cousineau notes:
“The Quebec government has already indicated it will challenge the co-operative national regulator every step of the way. And in that fight it has the full backing of the province’s political and business elite, from the National Bank of Canada to the Desjardins financial group. Keeping the province’s securities regulator in Quebec is as unifying an issue as the Charter of Quebec Values is divisive.”
Accordingly, every Quebec provincial party will be supporting the Marois government in its political and constitutional fight against Flaherty trying to impose a single federal securities regulator on Quebec and the rest of Canada. All of Quebec will oppose Flaherty’s attempt to interfere in Quebec’s regulation of derivatives and by extension, the Quebec economy.
Since Quebec is an important political base for Mulcair’s NDP and Trudeau sees great potential in Quebec as well, Mr. Harper, you have just handed your opponents a great Quebec issue with which to attack your remaining six Federal Conservative members in Quebec.
Because of this one decision, you will have wiped out your entire Quebec caucus. But the political devastation won’t be restricted to Quebec.
I predict your Alberta, Saskatchewan, B.C. and Manitoba conservative base will oppose Flaherty’s unconstitutional and unwarranted federal intrusion into their provincial economies. And apparent federal grab of their western oil and gas and resource industries.
Because Mr. Prime Minister, as you seemed to have forgotten, your western base can imagine what a Trudeau or Mulcair government would do with an intrusive single federal securities regulator in western Canada.
Say hello to the return of the dreaded National Energy Program.
Mr. Prime Minister, shelve this Flaherty Folly for good. Keep Flaherty’s eye on the ball of reducing deficits and reducing taxes. Otherwise Flaherty will pull a “Balsillie” (who chased NHL dreams, while Blackberry burned).
And the Conservative Party and brand will go the way of the once invincible Blackberry.