Apart from the fact that B.C.’s minority NDP/Green coalition government has threatened to use “every tool in the toolkit” to stop Morgan’s Trans Mountain Pipeline Expansion — and now has been granted intervener status by the Federal Court of Appeal — minority governments are simply bad for business.
In its August research bulletin, the Fraser Institute says that political and policy uncertainty are “linked and amplified” under minority governments.
This uncertainty leads to lower business investment and acts as a drag on the economy.
Moreover, the pubic policy think tank says that if the B.C. coalition is serious about adopting a proportional representation (PR) electoral system, the province could end up with more policy uncertainty in the future.
“PR systems have more effective competing political parties. This means they are more likely to have members elected, and so are more likely to result in coalition and minority governments,” the Fraser Institute says.
Proportional representation also produces governments that spend more, according to the authors.
“It has been well documented that minority governments that require either formal or informal coalition partners to remain in power often spend more and incur higher debts than do majority governments that do not need to make these concessions.”
Higher provincial debt levels lead to higher taxes, which generally make the jurisdiction less competitive and less attractive to businesses.
“The NDP/Green alliance is advancing several policies that could heighten regime uncertainty, specifically with respect to the province’s financial climate, such as increasing the rates for personal income tax, business tax, and carbon tax, stopping the Kinder Morgan pipeline, and setting the minimum wage at $15 per hour.
“In other words, the pursuit of these policies could signal to investors that British Columbia is not an attractive place in which to conduct business and invest.”