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CANADA LEADERS OPTIMISTIC ABOUT CONSTITUTIONAL TALKS

Political leaders, meeting for a fourth day of negotiations aimed at keeping Quebec part of Canada, predicted they would successfully conclude their constitutional talks late Wednesday.

"I think there's a chance of doing it today. We are making progress," Ontario Premier David Peterson told reporters before talks resumed Wednesday.But Manitoba Premier Gary Filmon, who opposes the constitutional amendment Quebec demands be passed before it agrees to stay a Canadian province, warned it was too early for optimism.

"We've still got a lot of tough slugging to go," he said.

Late Tuesday, political leaders reached informal agreement on a process to reform the 123-year-old Senate, moving closer to resolving the constitutional impasse.

"We did a pretty good day's work. We made some progress but arrived at no conclusions and are a long way from any final arrangements," Prime Minister Brian Mulroney said after the third straight day of negotiations, which adjourned Tuesday night.

The 10 provincial premiers, including those most strongly opposed to the constitutional amendment, agreed that there was a more positive mood during negotiations. Some, like Nova Scotia Premier John Buchanan, predicted that the talks would conclude Wednesday with agreement on all outstanding issues.

The constitutional amendment, formally called the Meech Lake Accord, recognizes the French-speaking province of Quebec as a "distinct society," and grants the province powers to promote and preserve its French language and culture.

The amendment was drafted three years ago after Quebec objected to a constitution that Canada adopted in 1982. Quebec refused to sign the constitution on grounds it did not recognize the province's 6.2 million French-speaking residents. The country's 10 provincial premiers must approve the measure by June 23 or it becomes void.

The three provinces that oppose the accord, New Brunswick, Manitoba and Newfoundland, want the amendment changed to ensure that the distinct society clause does not override Canada's Charter of Rights and Freedoms. The provinces fear that Quebec will use the clause to pass laws that put the English-speaking and other ethnic minorities in the province at a disadvantage.

Manitoba and Newfoundland also are seeking a legally binding commitment that Canada's Senate, the upper chamber of Parliament, will be reformed to better reflect the interests of smaller provinces. Ultimately, they want an elected, rather than appointed Senate, with equal representation from all provinces.

The 11-hour meeting Tuesday went a long way toward addressing the issue of Senate reform. According to premiers and sources close to the negotiations, the federal government will set up a commission to examine Senate reform and present options to the premiers.

If Senate changes are not completed within the next three years, the federal government would increase the number of seats in the Senate, giving additional representation to all provinces except Quebec and Ontario. Those two provinces already account for about half of Senate members.