In asking the Supreme Court to rule on whether the federal government has the power to create a national securities regulator, Stephen Harper is taking up a fight from which every prime minister before him has fled.
The man who has offered one concession after another to Quebec, and to all provinces, is asserting a potent claim: that Canada is an economic as well as a political union, and that the federal government has the right and duty to preserve that union.
Quebec, which sees the country as a condominium of sovereignties, with Quebec given special authority to protect the French nation, will react with fury. Premier Jean Charest, who must prove he is as willing as any separatist to fight in defence of his province's interests, will howl. That howl will be echoed in Alberta, which is no less fiercely determined to preserve provincial autonomy.
This will test the nation. Previous references to the Supreme Court have asked whether Ottawa could unilaterally patriate the Constitution; in what circumstances Quebec could secede; whether the federal government could legalize same-sex marriage.
They were battles royal, and this one will not be pleasant either. But Mr. Harper is committed to shaping Canada as a single economic space. And he will enter the ring knowing that he is almost certain to win.
"It is legally wise and politically astute for Ottawa to do this," said Ed Morgan, an authority on constitutional law at the University of Toronto.
Traditionally, the provinces have controlled their securities markets, on the grounds that they are constitutionally responsible for regulating industry. This has led to the cumbersome patchwork of 13 different securities regulators in the provinces and territories from which companies must seek approval (although there has been some harmonization).
But many constitutional experts, including Prof. Morgan, believe Ottawa could create a national regulator using its powers to regulate commerce. Previous governments have shied away from such a federal-provincial confrontation.
Mr. Harper is hardly a Trudeauesque centralizer. He is the prime minister who recognized Quebec as a nation. He has gone further than any of his predecessors to end the so-called disequilibrium between the federal spending power and the provincial spending responsibilities.
But whether it is harmonizing sales taxes or regulating the markets, this government is committed to reducing barriers to trade and investment.
And since Quebec had already asked its Supreme Court to rule on the constitutionality of a national regulator, it makes sense for the federal government to trump that by framing the question in its own terms before the highest court in the land.
There is another reason to move now. Canada is host of the G8 meeting in Huntsville, Ont., next year. This country promotes itself as a model of responsible financial regulation that allowed it to escape the debacle of the banking crisis that brought on a global recession.
But the existence of a Nunavut securities registrar hardly squares with such an enlightened, efficient image. Finance Minister Jim Flaherty will at least want to be able to say that Canada is moving toward creating a national commission when he makes his pitch for regulatory reform at G8 or G20 meetings.
This move will not be without political cost. Mr. Harper has given Gilles Duceppe and the Bloc Québécois a potent political weapon. See, the Bloc will tell Quebeckers, nothing is safe. Only sovereignty will protect us from the predatory federal power.
Mr. Harper will reasonably respond that Quebec, Alberta or any other province can decide not to join the national commission. The fear, though, is that companies will be given a choice to be regulated by a provincial or federal commission. Bigger companies in Quebec or Alberta might well opt to be nationally regulated, leaving the Quebec and Alberta securities commissions a rump authority.
(Manitoba, which is in a leadership race for a new premier, is also not onside, although that could change.)
The contest will be neither pleasant nor brief. The fights over the Constitution, the Clarity Act and gay marriage pitted Canadian against Canadian, region against region, politician against politician. This won't be quite that intense - most people have no strong feelings about which jurisdiction should regulate securities - but more than enough rhetorical blood will be spilled before this is ended.Report Typo/Error