CALGARY — Some business leaders in Canada expressed concerns Wednesday that the fallout from British Columbia's election is discouraging the private sector from investing in the province.
Promises by B.C.'s NDP and Greens to hike the minimum wage and carbon tax could further jangle investor nerves after both parties also committed to immediately stopping the Trans Mountain pipeline expansion project.
"The election outcome, and the vow of the Green-NDP alliance to obstruct that pipeline, sends a very worrying message to investors about Canada as a predictable, reliable place to invest," said Gary Leach, president of the Explorers and Producers Association of Canada.
He said the anti-pipeline resolution affects not only the oil and gas sector, but the overall investment climate.
"It's a destabilizing event for investor confidence in Canada generally, and we've been struggling with that."
Kinder Morgan Canada president Ian Anderson, however, said in a statement Wednesday that the company continues to move forward with the project despite comments from the B.C. Greens and NDP, and is awarding major contracts ahead of the expected September start date.
"Trans Mountain has followed every process and met every test put before us," Anderson said. "With financing in place and a final investment decision, we are starting to award significant contracts and are moving ahead with the benefit agreements we have in place."
On Tuesday, the NDP and Greens formalized their alliance in a four-year agreement that commits to raising minimum wage to at least $15, increasing the province's $30 carbon tax by $5 per tonne annually beginning next April, and launching a review of labour laws.
Richard Truscott, vice-president of Alberta and B.C. for the Canadian Federation of Independent Business says while the parties have made some good proposals, several will be a burden to business.
"When governments seem to go out of their way to making operating a small business less affordable and more challenging, that is certainly not good news," Truscott said. "It's not just the one policy that concerns us. It's the build up of everything they're proposing to do."
The agreement also calls for the referral of the Site C hydro dam project to the B.C. Utilities Commission to determine economic viability, which Raymond James analyst Frederic Bastien noted could put major contracts with construction and services providers at risk.
"The formation of a Green/NDP coalition in B.C. could put future large-scale construction projects in the province at risk and lead to an overall state of uncertainty that would not be good for companies with exposure to the region," Bastien said.
B.C. NDP leader John Horgan said in announcing the agreement with the Greens that the policies will make life more affordable and addresses issues that matter to British Columbians.
Matt Toner, a deputy leader of the Green party, said the policies are part of a transition to a more sustainable economy, but that they'll be consulting with business and not making overnight changes.
He said some of the business community concerns could be more of a knee-jerk reaction to the first change in government in 16 years, but he also made clear his vision of a low-carbon economy.
"When it comes down to things like the fossil fuel industry, we just have to have the conversation about how do we keep those resources in the ground," Toner said.
He said fossil fuels will still be needed in the short-term, but to meet climate change commitments there needs to be a significant shift away from them.
"If you look at where we see the future going, we think we have to start making profound changes in the structure of our economy," Toner said.
AN NDP MINORITY GOVERNMENT IN B.C. MAY HAVE TO WATER DOWN ITS AMBITIONS: EXPERTS
An NDP minority government in British Columbia would be hard pressed to make good on all the plans it has laid out in an agreement with the Green party, experts say.
Duane Bratt, a political scientist at Mount Royal University in Calgary, said because NDP Leader John Horgan has the slimmest of minority governments, he might have to scale down some of his ideas.
"Horgan is in a very tenuous minority situation," Bratt said. "I'd be surprised if it lasts more than 18 months."
On Wednesday, Horgan and Green Leader Andrew Weaver delivered signed copies of their four-year agreement to the residence of Lt.-Gov. Judith Guichon. The two leaders say the deal strongly signals to the Queen's representative their commitment to a minority government.
Premier Christy Clark has said she will recall the legislature in June and expects her Liberal government to be defeated in a confidence vote.
Clark's Liberals won 43 seats in the May 9 election, one short of a majority. The formal agreement between the NDP and Greens gives them 44 seats, enough for the New Democrats to form a minority government with the backing of the three Greens in the legislature.
Horgan and Weaver said the agreement lays out a signed, good faith working arrangement for Guichon to consider in deliberations that could result in her asking the NDP to form a new government if the Liberals are defeated.
The plan consists of dozen of commitments including holding a referendum next year on a system of representation by population that would be used to determine the outcome of the next provincial election, if it is approved by voters.
Corporate and union donations would be banned, and limits placed on individual contributions to political parties.
Beyond political and electoral changes, the NDP with the Green party's support wants to increase the $30 per tonne carbon tax by $5 a tonne per year, beginning April 1.
And they have agreed to create a commission that would guide the government in boosting the minimum wage to at least $15 an hour.
There are also promises to create more affordable housing, reshape the provincial economy to reflect the development of the technology sector and bring in an essential drugs program to reduce the costs of prescription medication.
Norman Ruff, a longtime observer of B.C. politics, described the NDP-Green plan as ambitious and evidence of their political will to join in ousting the Liberals from office.
That same political will is going to be necessary to maintain consensus over the four years of the agreement, said Ruff, a professor emeritus at the University of Victoria.
He said he was struck by the gains made by the Green party.
"The Greens have clearly been able to make more than just token, marginal commitments toward their priorities," Ruff said.
Both parties made concessions to get the deal signed, but the document has a "distinctive Green tinge," he added.
Adam Olsen, a Green member who was elected in Saanich North and the Islands, said his party made compromises in its negotiations with the NDP but the agreement addresses democratic-reform issues critical to the party's agenda.
The Green platform promised to overhaul B.C.'s electoral system without a referendum, but Wednesday's deal will put the matter to voters in a November 2018 referendum timed to coincide with municipal elections.
"So, is a referendum the best-case scenario?" Olsen asked. "It's not the position I had during the election but it's where we arrived during the negotiations and I'm comfortable with it."
Lori Williams, a public policy professor at Calgary's Mount Royal University, predicted many compromises would be needed for the government to survive, given the political instability of minority governments.
"Their biggest challenge is going to be just retaining the support of the legislature. That's going to be their biggest thing," Williams said.
"Whatever has been said about promises for support for four years, that's a difficult promise to maintain when you've got such a close division in the (legislature.) I don't think we've ever seen anything like this, certainly not in Canadian history."
