(Reuters) - Quebec’s governing Liberal party, trailing in the polls ahead of September 4 elections, has joined its main rival in a quest to crack down on foreign takeovers.
The Liberals, in power for nearly 10 years, promised on Monday to bring in a new law allowing companies to reject a foreign approach and said they would set up a C$1 billion ($1 billion) fund to help Quebec companies buy assets abroad.
“A Liberal government will adopt measures that will allow Quebec companies to evaluate a proposed purchase and to refuse it if it chooses,” Premier Jean Charest’s Liberal Party said in a news release.
The front running Parti Quebecois, which believes the French-speaking province should separate from the rest of Canada, has already pledged to do more to combat takeovers.
The Liberals likened their proposal to laws in several U.S. States, and Charest said it would give companies the power to block hostile takeovers without holding a shareholder vote.
“We’re going to change the law so that boards of directors of Quebec companies take into account factors that go beyond the strict interests of shareholders. They can, and should, take into account the interest of workers and of the entire community,” Radio-Canada quoted Charest as saying.
At issue in the immediate term is the fate of Quebec-based home improvement retailer Rona RON.TO, which has rejected a hostile approach by U.S. retailer Lowe’s Cos Inc (LOW.N). Critics fear job losses and less business for local suppliers if Lowe’s buys the Quebec-based retailer.
Approving or rejecting foreign takeovers is the responsibility of the federal government, but strong opposition from provincial governments who argue a deal would harm their economy could be a factor as Ottawa determines whether a deal would provide a “net benefit” to the country.
Foreign takeovers in Canada often ignite nationalist passions and spark debates about the wisdom of letting resources like oil or technology fall out of Canadian control. That sentiment is especially strong in Quebec, which seeks to protect its unique identity within the dominant North American culture.
Charest faces a tough race against Parti Quebecois leader Pauline Marois and the surprisingly successful upstart party, Coalition for the Future of Quebec (CAQ),led by former PQ member Francois Legault.
Allegations of corruption, a big budget deficit and a controversial law cracking down on student protests have all hurt Liberal popularity. The latest polls showed the PQ in the lead.
If the PQ won a majority of seats in the provincial parliament, it could push for holding a referendum on independence, although Marois has signaled she would not move quickly on the separatism issue.
($1 = C$0.99 Canadian)
Reporting by Louise Egan; Editing by Janet Guttsman