The Quebec government is going to court to challenge Ottawa's push for a national securities regulator.
Quebec Finance Minister Raymond Bachand said Wednesday that the province has no other option but to fight the federal government on what he termed a critical issue.
"Quebec has no other choice but to take the avenue of a judicial challenge in order to ensure respect of its competencies," he said at a news conference.
It is important that the provinces maintain jurisdiction over securities regulation, he said.
Quebec has an expertise in securities regulation that plays a key role in the province's economic development, he added.
"It's not true that we're going to let that [expertise]migrate to Toronto."
The argument that Canada's patchwork system of 13 provincial and territorial regulatory bodes is inefficient and costly is a false one, he said.
"The present system works. The present system works well," he said.
Federal Finance Minister Jim Flaherty last month named Doug Hyndman, chair of the B.C. Securities Commission, to head a transition office that will lay the groundwork for a national regulator.
Mr. Flaherty pledged in his January budget to create a federal watchdog that will be open to all provinces and territories that want in.
He said the existing system is inefficient and creates the kinds of gaps that led to the global financial crisis.
In his comments Wednesday in Montreal, Mr. Bachand said the so-called "passport" system - which allows for harmonization of the activities of the provincial and territorial regulators - is functioning well. And it is crucial that the regulatory functions be carried out on a regional basis, making for a much closer and more careful oversight of local companies and stakeholders, he said.
The Quebec government will refer to the Appeal Court of Quebec the federal government's decision to go ahead with a pan-Canadian securities commission.
Quebec Justice Minister Kathleen Weil said in a statement that the federal proposal "threatens Quebec's legislative competence and its administrative bodies."