The future of key resource projects in British Columbia has been thrown into disarray after a squeaker in the provincial election left the BC Liberals politically weakened.
BC Liberal Premier Christy Clark's reduced mandate will place pressure on her to appeal to BC Green supporters as she tries to fend off the opposition BC NDP, according to political observers and environmentalists.
While the final seat count has yet to be determined, a BC Liberal minority government means that Ms. Clark will need to re-examine her party's positions on items such as proposed liquefied natural gas (LNG) projects, the planned expansion of Kinder Morgan Inc.'s Trans Mountain oil pipeline and the Site C Dam already under construction.
"On Kinder Morgan, alarm bells are going off in Ottawa and in Alberta. Alberta and the federal Liberals have to be nervous about this," said Norman Ruff, an associate professor emeritus at the University of Victoria.
The Liberals won 43 seats in Tuesday's provincial election, outpacing the NDP's 41 seats, while potentially leaving the Green Party holding the balance of power with victories in three ridings. "Ms. Clark is going to have to be a very good listener," Mr. Ruff said in an interview Wednesday.
On coal, the Liberals have already found common ground with environmentalists.
Midway through the campaign, Ms. Clark asked Ottawa to impose a ban on exports of U.S. and Canadian thermal coal from B.C. ports.
If Ottawa doesn't take heed, the BC Liberals pledge to impose a hefty $70-a-tonne carbon tax on exports of thermal coal – a commodity that goes into coal-fired plants to generate electricity.
The Green Party supports the proposed coal ban, but it wants the province's existing carbon tax to be increased, and also to expand what is subject to that environmental levy.
In her April 26 letter to Prime Minister Justin Trudeau, Ms. Clark linked her request for a ban on thermal coal exports to the Trump administration's decision to slap duties of up to 24.12 per cent on Canadian softwood lumber shipments south of the border.
Whether it's exporting LNG, oil or coal, "the Liberals need to pay more attention to the support in B.C. for taking action against climate change." said Josha MacNab, B.C. director of the Pembina Institute, a clean-energy think tank. "Even if the Liberals form a majority, there are things that British Columbians are unhappy about, and certainly one of those is the current approach to climate change."
During the campaign, the NDP and Green Party criticized the Liberals for their oft-repeated promise to jump-start an LNG industry in the province. Ms. Clark heavily touted LNG's economic prospects during the 2013 provincial election. But the Greens oppose LNG exports while the NDP has major concerns, especially ecological worries about Pacific NorthWest LNG's plans to build a liquefaction plant on Lelu Island in northwestern British Columbia.
Under Ms. Clark, the Liberal government has essentially given its blessing to the expansion of Kinder Morgan's Trans Mountain oil pipeline, although mayors in Burnaby and Vancouver promise to block it by withholding construction permits.
NDP Leader John Horgan pledged to use "every tool in the toolbox" to prevent the company from completing construction. Andrew Weaver's Green Party also opposes the Kinder Morgan project that would increase shipments of Alberta bitumen piped across British Columbia.
The voting results on Tuesday prompted Alberta NDP Premier Rachel Notley to issue a statement on Wednesday that names all three B.C. political leaders. "I look forward to working with them on what they have all described as a desire for change and a new way of governing B.C.," Ms. Notley said.
The BC Liberals hope to wrest one seat from the BC NDP in the closely contested Courtenay-Comox riding, where absentee ballots will be tallied in a couple of weeks. The NDP won Courtenay-Comox by just nine votes.
"A weakened Christy Clark is probably going to cause concern for Trans Mountain because it raises the prospect of uncertainty and more focus on the project," said Alan Ross, managing partner for law firm Borden Ladner Gervais in Calgary.
He said the federal government has paramountcy in approving interprovincial pipelines, and Kinder Morgan has that approval in hand.
"There doesn't appear to be much in the way of legal or procedural tools in a toolbox for the next complexion of a B.C. government to preclude the Trans Mountain project from proceeding," Mr. Ross said in an interview. "It becomes more of a soapbox than a toolbox for B.C. political leaders to attack the Kinder Morgan project."
One regulatory lawyer said provinces and municipalities have an obligation to issue permits where the federal government has given its approval for a project under its jurisdiction, but can seek to impose delays or conditions that frustrate a proponent.
Federal Green Party Leader Elizabeth May said the combined popular support for the BC NDP and provincial Greens makes it clear that there is widespread opposition to Kinder Morgan's project, as well as BC Hydro's planned $8.8-billion Site C Dam in northeastern British Columbia.
She disagreed with Mr. Ross's assessment of Trans Mountain.
"Does the province have the levers to stop the project? Yes," Ms. May said. "In a constitutional showdown, the province has levers. The pipeline can't be built without a whole slew of provincial permits."
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