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Saputo eyeing new Quebec government warily

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One of Quebec's top business leaders is keeping a close watch on the ruling Parti Quebecois after the recent provincial election, which ushered in the return of the nationalist party.

The head of the Quebec-based dairy and cheese giant Saputo (SAP-T) tells BNN that while the company is not currently looking to relocate its Montreal headquarters at the moment, it wouldn't rule out that option in the future.

"I think that depending on where tax rate issues go, depending on where the economic conditions are for Quebec, our head office will continue to be there until there is reason for us not to be there," Lino Saputo Jr., CEO and vice chairman of Saputo, tells BNN. "I have a responsibility to all shareholders and at the end of the day if there is a dramatic change in the political landscape in Quebec we would have to consider it."

Saputo maintained that at this stage the company has no plans to move outside of Quebec, but "should the dynamics change" it would have to "consider something."

He also says recent speculation that the Saputo family has been selling its shares in the company in anticipation of higher tax rates after the Parti Quebecois was elected into office are off the mark.

"There has been a lot of speculation of that, but the simply answer is 'No.' It's not related to the elections," he says. "It's not that we feel there are any risks in Quebec it just happened to be along the same lines and same timing as a political election."

His remarks come in the wake of comments from Quebec Finance Minister Nicolas Marceau that the government is considering raising taxes on high-income earners as well as on capital gains and dividends.

Meanwhile, the impact of a recent revival in Quebec economic nationalism has put the province's biggest businesses in the spotlight.

In July, Quebec-based home improvement retailer Rona revealed that it had received and rejected a nearly $1.8-billion unsolicited takeover proposal from U.S. rival Lowe’s Cos.

A political firestorm erupted immediately in the wake of the proposal, with the former Quebec Finance Minister Raymond Bachand saying the deal was not in the interests of "either Québec or Canada.”

The potential takeover then became a major issue in the provincial election, with the then-ruling Liberal Party and the Parti Quebecois both coming out against it.

The Liberal party even called on the head of Investissement Québec -- the province’s development corporation -- to set up a fund to counter Lowe’s offer and “defend Québec's interests.”

The Caisse de dépôt et placement du Québec [Caisse] -- which oversees the province’s public sector pension fund and is a major Rona shareholder -- quickly stepped into the fray and laid out a number of criterion for a deal, including maintaining a head office in the province. Hours after the proposal was made public, Caisse also increased its stake in the retailer by about 2 percent to 14.2 percent of outstanding shares, saying the purchase was made “in the context” of the unsolicited bid by Lowe’s.

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