New Democrats to Take Power in British Columbia Amid Turmoil

(Bloomberg) -- A former pulp mill worker is set to become the next premier of British Columbia amid deepening political turmoil in Canada’s fastest-growing province.

Lieutenant-Governor Judith Guichon asked John Horgan, who leads the New Democratic Party, to form a government after the resignation of Christy Clark, leader of the Liberals. Clark was ousted in a confidence vote in the legislature earlier Thursday, ending the party’s 16-year rule in the province.

"Tomorrow, I’ll start putting together a government," Horgan, 57, told reporters after emerging from his meeting with Guichon. The premier-designate had earlier said it could take about two weeks to name a Cabinet. "There’s an enormous amount of work to do," he added, citing a U.S. trade dispute over softwood lumber as a priority issue to address.

Yet British Columbia -- home to proposed multi billion-dollar energy projects and one of Canada’s main engines for jobs and growth -- faces further uncertainty. Horgan’s chance to govern comes more than seven weeks after a dramatic election left the Pacific Coast province with no clear mandate.

The NDP is backed by the Green Party, with whom it holds a one-seat majority in the 87-member assembly. Still, one lawmaker in the alliance needs to become the Speaker after the resignation of the prior one -- Steve Thomson from the Liberals.

NDP Alliance

That leaves the NDP-Green grouping and Liberals each holding 43 seats, making legislation difficult to pass. The Speaker -- a traditionally non-partisan, ceremonial enforcer of house rules -- could turn into a constant tie-breaker.

Under their pact, the NDP and Greens have pledged to maintain an NDP-led government until the next scheduled election in four years. Clark and the Liberals, who won the most seats in the May 9 poll but fell one short of a majority, say that situation is untenable, raising speculation of a snap election down the line.

"This isn’t a working legislature," Clark said on Wednesday in a briefing. "And I haven’t seen any evidence it could work."

Investors can take some comfort from the province’s healthy coffers, which will ease any transition, National Bank of Canada analysts led by Warren Lovely, head of public sector research, said in a note to clients.

"What we really aim to highlight is the enviable economic and fiscal position British Columbia finds itself in on the eve of what could be a new political era," they said, noting the province’s C$2.8 billion ($2.2 billion) budget surplus. That creates a stronger starting point and scope for new investments "regardless of who holds the reins of power."