Bloomberg News

Marois’s Quebec Separatists to Form Minority Government

September 05, 2012

Separatist Party Wins Minority as Shooting Mars Quebec Vote

Parti Quebecois Leader Pauline Marois returns to complete her speech after being escorted off the stage by security in Montreal. Photographer: Paul Chiasson/The Canadian Press/AP

Quebec’s separatists will return to power for the first time in nine years, in an election marred by a fatal shooting at the Montreal nightclub where Parti Quebecois leader Pauline Marois was giving a victory speech.

An armed man entered the building from a back door and fired shots that left one person dead, Montreal police said. Television images showed a man wearing what appeared to be a bathrobe being carried away by police outside the club, yelling: “Anglos have awakened.”

Marois’ Parti Quebecois, which seeks independence from Canada for the French-speaking province, won 54 of 125 electoral districts, seven more than it held before the vote, according to results posted on the Elections Quebec website. That means the PQ will need support from opposition parties to pass laws.

The result also means Marois, the first woman premier of Quebec, probably won’t have a strong enough mandate to start the province toward another referendum on secession. Marois said last week it would be “very difficult” for her to advance the separatist agenda at the desired pace with a minority of seats.

The PQ received “only one-third of the vote and it’s going to be very tough for Ms. Marois to make any kind of headway on sovereignty,” Alain Gagnon, a political science professor at Universite du Quebec in Montreal, said in a telephone interview. “I don’t think one can imagine a referendum taking place during the first mandate.”

Liberals Defeated

The pro-Canada Liberal Party won 50 districts, down from 64 before the vote, with the Coalition Avenir Quebec, which also opposes holding a referendum on secession, winning 19, up from nine. The pro-independence Quebec Solidaire party won two districts, up from one. Liberal Leader Jean Charest, who had been premier since 2003, failed to win re-election in his own district. His party received 31.2 percent of the vote, behind the PQ’s 31.9 percent, while the CAQ won 27.1 percent, according to Elections Quebec results.

Quebec has twice voted in referendums against seceding from Canada, most recently in 1995. The sovereignty issue has lost momentum in recent years, with an Aug. 31 CROP Inc. poll showing support for sovereignty at 29 percent, while 68 percent opposed it.

“Quebeckers made their choice and we will respect this choice by governing with all elected members,” Marois told supporters in Montreal. “I am certain will be able to find the necessary compromises.”

Shots Fired

A Parti Quebecois government would call a referendum on independence “at the appropriate time,” according to the party’s electoral platform. Marois, 63, has refused to commit to holding a referendum in her first mandate, though she has said an independent Quebec is her ultimate goal.

Marois was rushed off stage by security during her victory speech, then returned a few moments later asking for calm and for the crowd to leave slowly.

A man of about 40 was shot and declared dead on the scene, Ian Lafreniere, a spokesman for the Montreal police department, told reporters earlier today. A second man -- who had surgery after suffering gunshot wounds -- is currently in stable condition, while a third person, who was treated for shock, has been discharged, the McGill University Health Center said today in an e-mailed statement.

The shooting took place around midnight New York time near the back door entrance to the Metropolis nightclub in downtown Montreal, Lafreniere said. The 62-year-old suspect was carrying two weapons and tried to set fire to the nightclub after shooting, Lafreniere told Radio-Canada radio in an interview today, adding the man wasn’t known to police.

Police Inquiry

Provincial police are handling the inquiry and cannot rule out the possibility that Marois was a target, Guy Lapointe, a spokesman for the Surete du Quebec, told reporters in Montreal. Investigators have interviewed about 15 witnesses so far, Lapointe said.

“We’re saddened by what happened last night,” Charest told RDI television network today in his Sherbrooke constituency. “It’s a shock. Who would have thought something like this could happen, especially on election night?”

Canadian Prime Minister Stephen Harper said in an e-mailed statement it is “a tragic day where an exercise of democracy is met with an act of violence,” adding “this atrocious act will not be tolerated and such violence has no place in Canada.”

Marois said she wasn’t made aware of any security threats during the election campaign and never felt in danger last night. Quebec “is a non-violent society,” she said in Montreal. “An act of madness cannot erase this reality.”

New Cabinet

Marois said she will probably form her cabinet within two weeks. To honor campaign pledges, she said she plans to cancel planned university tuition increases through a government decree, scrap a law that restricts the rights of demonstrators, and introduce new laws governing the use of French in the workplace.

Quebec bonds outperformed after the election results. The province’s 3.5 percent bonds due in December 2022 tightened two basis points, or 0.02 percentage point, relative to Ontario 10- year bonds, according to Scotiabank data. Quebec’s 4.25 percent bonds maturing in December 2043 also narrowed two basis points versus similar-maturity Ontario debt.

Provincial Debt

Government debt amounted to about 62 percent of Quebec’s 2011-12 gross domestic product, highest among Canada’s 10 provinces, according to an August report by Toronto-based credit-rating company DBRS Ltd. Quebec’s debt is rated A+ by Standard & Poor’s, Aa2 by Moody’s Investors Service and A (high) by DBRS.

The Canadian dollar, which had little reaction to the vote, later fell after Bank of Canada Governor Mark Carney kept interest rates unchanged. The currency declined 0.5 percent at 99.07 cents per U.S. dollar at 2:44 p.m. in New York. One Canadian dollar purchased $1.0094.

“The broad outcome ended up being the expected one,” Jimmy Jean, a strategist in the fixed income group at Desjardins Capital Markets in Montreal, said today in a note to clients. “There is a broad consensus around the fact that with a minority government, the PQ will need to water down some of its most controversial promises in order to maintain power.”

Ministers Defeated

In addition to Charest, other Liberal ministers who lost their districts include Natural Resources Minister Clement Gignac, a former National Bank of Canada (NA) economist, and Alain Paquet, the province’s delegate finance minister.

“With Mr. Charest losing his seat, the Liberals will now become the PQ’s natural allies” in the legislature, Gagnon said. “They will need to rebuild and go through a leadership race. They are not going to try to bring the government down.”

Marois last month pledged to balance the provincial budget by limiting program spending growth to 2.4 percent a year and by boosting revenue through increased mining royalties and higher taxes on wealthy individuals. The tax increases, aimed at residents who earn at least C$130,000, would bring in C$610 million annually, according to the party platform.

Marois wants the government to assert greater control over Quebec’s economy, and came out against Mooresville, North Carolina-based Lowe’s Cos. (LOW:US)’s unsolicited bid for Rona Inc. (RON), the Quebec home-improvement retailer.

A Parti Quebecois government would wind down the C$4 billion Generations Fund -- currently managed by the Caisse de depot et Placement du Quebec -- and use the money to pay down the debt at the end of this year, according to its platform.

Mining Royalties

Marois wants Quebec to boost mining royalties because she argues the province doesn’t get enough from resource extraction. The PQ planned a 5 percent minimal royalty on the gross value of all mining output, in addition to a 30 percent tax on “super profits” from the extraction of non-renewable resources -- a royalty regime similar to that of Australia.

Harper last night congratulated Marois on her victory. “We do not believe that Quebecers wish to revisit the old constitutional battles of the past,” Harper said in an e-mailed statement. “We believe that economic issues and jobs are also the priorities of the people of Quebec.”

Others echoed that sentiment. “The good thing for federalists is that Ms. Marois doesn’t have any kind of a majority,” Harold Chorney, a political science professor at Concordia University, said in a telephone interview from Montreal. “The sovereignty agenda has to be put on the back burner.”

To contact the reporter on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net


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