Growing intrusions

In a story closely related to this afternoon's post on the Cons' likely problems in trying to impose the TILMA on Quebec, the Globe and Mail reports that La Belle Province is already in a fighting mood when it comes to another of Jim Flaherty's plans to impose the Cons' view of markets on unwilling provinces:

The notion of a single national securities regulator for Canada is turning into a politically charged issue with an international twist.

Quebec's Finance Minister accused the federal government Monday of pressuring the International Monetary Fund to back Ottawa's campaign for a single, countrywide regulator.

Alluding to the coming release of an IMF study that recommends the creation of a single watchdog in Canada, Monique Jérôme-Forget said the only way to explain such “intervention” in the country's internal affairs is that Ottawa put pressure on the world body.

The “close ties between the [federal] finance ministry and the International Monetary Fund are certainly one of the reasons,” she told a financial markets luncheon audience.

“Pressure was probably exercised by the federal government to encourage this interference in our internal debates,” she said.

The charge is the latest salvo in an increasingly bitter set-to between Ms. Jérôme-Forget and federal Finance Minister Jim Flaherty over the need for a single national regulator...

Ms. Jérôme-Forget is an ardent proponent of the so-called passport system that would create a virtual national regulatory system for Canada, thus avoiding shifting power to a central body in Toronto or Ottawa.

All of the provinces except Ontario support the passport idea, which would allow companies or individuals to get regulatory approval in their home jurisdiction with the other provinces or territories automatically accepting the decision.

I commented last year on the Cons' efforts to link artificial limitations on federal spending to the provinces' willingness to tie their own hands. In effect, the Cons have long been offering to trade the promise of ineffective federal government for ineffective provincial government, in hopes that provinces would be happy enough with perceived non-intervention from Ottawa to limit their own freedom of action.

Now, Flaherty's patience seems to have reached an end - leading to an attempt to instead force unwanted restrictions on the provinces through both federal action and outside pressure. But it's not surprising that Quebec and others aren't interested in playing along. And if the federal push to neuter provincial governments gets the attention it deserves, then it wouldn't be surprising to see a strong push headed in the opposite direction to make sure the Cons can't impose their agenda on the provinces.