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Election brings unwelcome uncertainty to business

The uncertain B.C. election results might have sown seeds of doubt through the provincial economy. “Uncertainty is not a friend of business,” said Greg D’Avignon, president of the Business Council of B.C.
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Kinder Morgan's Trans Mountain facility in Edmonton. April 2017

The uncertain B.C. election results might have sown seeds of doubt through the provincial economy.

“Uncertainty is not a friend of business,” said Greg D’Avignon, president of the Business Council of B.C. after the Liberals appeared to have narrowly won the election, but face the prospect of a minority government.

D’Avignon said the business community already had concerns about the cost of doing business in B.C. The added uncertainty could translate into capital looking for new markets and investment drying up, he said.

“We knew it would be a tight election, but for the first time in 65 years we have uncertainty around a government’s agenda,” he said.

> More election news at timescolonist.com/bcelection

D’Avignon noted the province is facing a situation where three political parties with very different priorities could have a say in how government is run. “Business is very simple — regardless of which party is in power, whether I am a small business hiring one person or a big business investing hundreds of millions of dollars — I want to understand what the rules are and what the government agenda is,” he said.

With the Liberals weakened and facing the prospect of a minority government, the NDP strengthened and the Greens apt to wield the power to make things happen, questions are being asked about the future of the liquefied natural gas industry, pipeline expansion, the Site C dam and even the province’s stance on the softwood lumber issue.

The Liberals had hoped to have three LNG facilities ready for construction by 2020 and the NDP have said they want an industry that works for B.C. But the Greens have said they do not support LNG at all. In fact, some of the loudest criticism of LNG has come from one of the new Green MLAs, Adam Olsen, who last year organized protests against Steelhead LNG’s plans for a plant in Saanich Inlet in partnership with the Malahat First Nation.

“I think that Malahat LNG folks at Steelhead know exactly where I stood on this. I’ve been very, very publicly clear on where I stand on an LNG facility in the Saanich Inlet,” said Olsen. “I’m certain over the coming weeks and months I’ll be getting together with our community and probably will be having another conversation with them at some point I would imagine.”

D’Avignon said investment in the LNG industry has already started to dry up, and warned the millions that have already been spent exploring mean nothing. He said LNG companies make several small bets in various sites around the world, but won’t hesitate to pull back, walk away from their early investment — in the tens of millions — and invest billions where the deal is best.

Nigel Kuzemko, chief executive of Steelhead LNG, would not get drawn into predicting what effect the election results would have on their project.

“We believe our proposed Sarita LNG [near Port Alberni] and Malahat LNG projects will provide significant benefits for local communities, British Columbians and Canadians,” he said in a statement. “Both projects are in the early conceptual design phase and have benefited from the feedback we received from local aboriginal groups and residents.”

For pipelines, the Liberals backed the federal government’s approval of Kinder Morgan’s expansion of its Trans Mountain pipeline, the Green Party opposed and the NDP said it will use whatever tools it can get its hands on to stop it.

Ian Anderson, president of Kinder Morgan Canada, issued a brief statement congratulating all three parties, taking care not to make mention of a specific winner.

University of Victoria economics professor Kees van Kooten said what the NDP and Green Party say during a campaign, however, could differ from what they can do with a little power.

“Any incoming government cannot throw up too many impediments to export of energy, forest and agricultural products,” he said, noting the province relies on resource revenue to fund its programs and capital spending.

“[Christy] Clark realizes this and tries to walk a fine line. The line gets crossed when a government pays companies to extract resources and sell them abroad — LNG.

“When you do that, it is very, very important that what you as a government collect as revenue from the extraction, transport and final sales exceeds what you put in.”