Fraser Forum

Green/NDP pact poses further challenges to B.C. energy production

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Yesterday’s announcement that the British Columbia NDP and Green Party have signed an agreement to unite to form the next B.C. government raises some major red flags with regard to energy-related policies in the province.

During the campaign, the two parties positions were considerably more stringent on both energy and climate change than the BC Liberals.

On the climate change front, the main difference between the Greens/NDP and the Liberals is on the carbon tax. The Liberals proposed maintaining the existing $30 per tonne carbon tax until 2021. The NDP wants to raise the tax in 2020, reaching $50 per tonne by 2022 (in line with the new federal price floor). The Greens would go faster than that, raising the tax in 2018, reaching $70 per tonne in 2021, and expanding the tax to additional natural resource activities.

It's on the energy policy side that divisions are more pronounced.

• Both the NDP and Greens oppose the Kinder Morgan Trans Mountain pipeline expansion.

• Both the NDP and Greens oppose (or want to re-examine) the proposed Site C dam that would power B.C.’s future LNG industry.

• And, both the NDP and Greens generally oppose the idea of LNG production—the Greens overtly, the NDP indirectly, invoking a range of conditions that would make LNG facilities exceptionally difficult to build.

Taken together, and if enacted, these actions could cost British Columbians many billions in foregone earnings, foregone tax revenues and foregone employment.

But B.C. is not the only loser here, as Alberta Premier Rachel Notley must now realize that no amount of the self-inflicted economic harms likely to flow from the Alberta Climate Leadership Plan will obtain the promised social licence to build pipelines to B.C.’s coast allowing Alberta to bring its oil to more lucrative foreign markets.

It remains to be seen if the NDP/Green coalition can form (or maintain) a minority government capable of governing. Liberal Leader Christy Clark has not (as of this writing) resigned, and there’s speculation she may seek to retain government. And the prime minister has restated his commitment to the Kinder Morgan pipeline expansion, as has Premier Notley.

But either way, the results of the last B.C. election have raised barriers to energy development in not only B.C. but in all of Western Canada. The biggest impact, however, is the element of uncertainty the results add into resource markets. As we show in our surveys of upstream oil and gas executives and mining company executives, uncertainty is the nemesis of investment attractiveness of energy producing or mining-intensive jurisdictions.


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