The ripple effect: BC politics and your business

Posted by: Kaitlyn Mason on May 31, 2017

What could a Green Party-supported NDP government in BC mean for Calgary’s business community? Read this blog from the Chamber's Economic Policy Analyst, Franco Terrazzano, to find out.

Given Alberta’s reliance on British Columbia to access Asian markets, the political climate next door can have serious implications for business activity in Calgary.

That said, let’s take a look at the recent election in BC and examine the questions that are top of mind for Calgary businesses.

Going forward, which party will govern in BC?

The final tally of absentee ballots and riding recounts had no effect on the initial election results. The Liberals took 43 of the possible 87 seats, the NDP won 41 seats, and the Greens captured the remaining 3 seats, along with the balance of power.

After winning more seats than any other party, Christy Clark remains Premier and the Liberals have the first opportunity to form government.

However, on Monday May 29, 2017 the Green Party announced their support of the NDP, and that has drastically altered the situation in BC’s legislature. The four year “Confidence and Supply Agreement” sets BC up for an opportunity to be governed by a party other than the Liberals for the first time in over a decade and a half.

While the agreement doesn't create an official coalition, guarantees the Green Party’s support for any NDP budgets or confidence measures.

It has also resulted in a situation where the combined NDP-Greens hold 44 of the total 87 seats – a single seat majority. So, while the Liberals have the first opportunity to form government, they are now all but certain to lose confidence in the House.

Other commitments in the NDP-Greens agreement include increasing the Carbon Tax by $5 a tonne per year beginning April 1, 2018, reviewing and changing the environmental assessment process for resources development, immediately referring the Site C dam construction to the BC Utilities Commission on the question of economic viability in the context of current supply and demand, and holding a referendum on proportional representation by Fall 2018.

How will this impact Alberta?

The main election issue for many businesses in Calgary is Kinder Morgan’s Trans Mountain pipeline expansion.  

The expansion has been projected to increase Alberta’s government revenue by $19.4 billion over twenty years, and is expected to create close to 28,000 construction and pipeline operations jobs, along with over 400,000 jobs from additional investments in oil and gas development. The pipeline expansion represents a crucial opportunity for Alberta’s energy sector to boost exports to Asia, while reducing reliance on the U.S. market. Greater economic activity, and additional jobs, will translate into more money flowing into Calgary businesses. 

Unfortunately, these benefits are at risk. Both the NDP, and Greens strongly opposed the pipeline expansion. As illustrated in Tuesday’s official agreement, the parties will do everything in their power to block the pipeline expansion.  

"[The NDP and Greens have agreed to] immediately employ every tool available to the new government to stop the expansion of the Kinder Morgan pipeline.” 
- 2017 Confidence and Supply Agreement between the BC Green Caucus and the BC New Democrat Caucus

Can BC legally block the pipeline expansion?

The movement of energy products across provincial boundaries falls under federal jurisdiction. And, with the federal government’s formal project approval, it appears that the issue falls outside of provincial jurisdiction. However, while BC’s provincial government may not be able to formally block pipeline expansion, there appears to be multiple tools at their disposal that could delay, or ultimately deter, development. 

First, a NDP-Green BC government can try and revoke or re-do the environmental assessment review done under the BC Liberal government. The new government can examine the province’s Environmental Assessment Office decision to accept the federal review, conclude that it was inadequate, and order a new assessment. Second, the government can implement new legislation specifically relating to pipelines that requires health and safety, and Indigenous impact assessments. Finally, the province can stall the expansion by delaying the issuance of local permits. NDP Leader Horgan, has already said that his government will make sure all Trans Mountain permits “are as exhaustively reviewed as we can review them.”  

While it appears certain that a Green-supported New Democratic Party will govern in British Columbia, uncertainty over the biggest election issue for Calgary businesses, the Trans Mountain pipeline expansion, remains.

Gianfranco (Franco) Terrazzano is an Economic Policy Analyst at the Calgary Chamber.