Quebec separatists win weak grip on power, will survive for now

MONTREAL/OTTAWA (Reuters) - Voters have given French-speaking Quebec its first separatist government in nine years, but denied the new government the ability to push through radical policy plans in a legislature where it will need support from other parties to stay in power.

The left-leaning Parti Quebecois (PQ) won 54 of the 125 seats in the provincial legislature in Tuesday's election, only four more than the outgoing Liberal government, and far short of the majority it would need to hold a referendum on independence.

The turnout was almost 75 percent, unusually high for a provincial election and up from 57 percent in 2008.

Analysts said the minority government will have to water down campaign promises that included higher personal taxes and increased royalties on mining firms. The party also wants to make foreign takeovers of Quebec companies more difficult and toughen laws on the use of French.

Previous PQ governments held referendums in 1980 and 1995 on whether to break away from Canada and both failed. The party won just 31.9 percent of the vote in Tuesday's election, showing that enthusiasm for the idea of independence is muted at best.

PQ leader Pauline Marois, 63, must now calculate how much of her agenda she can push through. In early comments at a late-night victory celebration that was interrupted by a fatal shooting, she hinted at compromise.

"Quebecers have made their choice and we will respect this choice by governing with all the other parties," she said. "We are all here to serve Quebecers and I am convinced that on this basis we can find the necessary compromises to ensure the state runs properly."

Minority governments tend to have relatively short lifespans in Canada, but Marois seems in no immediate danger of defeat.

Liberal leader and Quebec Premier Jean Charest lost his own seat in the election. If Charest quits as leader, after nine years in power, the party will need a new chief just as a probe into alleged corruption in the construction industry and possible links to political parties looks set to embarrass it.

The third-placed party, the newly created right-leaning Coalition for the Future of Quebec (CAQ), won 19 seats in the election, fewer than it had predicted.

Antonia Maioni, director of the Institute for the Study of Canada at Montreal's McGill University, said the first real test for the PQ government will be its first budget. Budgets are traditionally delivered in March.

"The budget is going to be interesting because that's where the dividing line is between Marois and the two opposition parties on a lot of those economic issues," she said, adding that she did not expect rivals to force an election before then.

As well as raising taxes on mining companies, Marois wants to scrap Liberal plans for tuition hikes that sparked big student protests this year. A former finance minister in a previous PQ government, she also wants to rework an C$80 billion Liberal plan to open up the resource-rich north.

Guy Laforest, a political scientist at Laval University in Quebec City, said he expects Marois - who became a PQ legislator in 1981 and took part in three leadership races - to be cautious.

"She will be reasonably prudent managing the Quebec state and Quebec society, and I think it very unlikely that she will dare (to introduce) bold legislative measures either this fall or next spring," he said.

"This is a calm collected person. She will like to govern. She will like the job, and she will not do foolish things to risk everything upon first notice."

Investors welcomed the weak minority government and the implication that Marois would have to tread carefully.

The gap between Canadian and Quebec government bond yields narrowed slightly, an indication that investors were demanding less of a risk premium.

Canadian stocks were mostly higher, but shares in home improvement store Rona Inc fell as the PQ victory appeared to lower the chance of a possible takeover by U.S. rival Lowe's Cos.

The PQ victory was marred by a fatal shooting in the Montreal theater where Marois gave her victory speech. The gunman appeared to make comments suggesting he was defending the rights of the province's minority English-speaking community.

Marois's promise to further strengthen the use of French increased tensions between French and English speakers, and she went out of her way on Tuesday to stress that she wanted both communities to work together.

"It's probably the most important kind of societal problem that she has to face, because if she can't keep social peace, she won't succeed as a premier," Maioni said.

French speakers make up about 80 percent of Quebec's 7.8 million population.

(Additional reporting by Randall Palmer; Editing by Janet Guttsman)

Source: http://news.yahoo.com/quebec-separatists-win-minority-government-tv-networks-022440848.html

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