Known for its highly debated oil and gas industry, pro-business tax environment, and traditional values, the province of Alberta has long been considered the heart of Conservativism and the political Right in Canada. In contrast, the province of British Columbia, recognized by its commitment to corporate social responsibility, strong union presence, and progressive social agenda, has always boasted a much more liberal reputation. However, 2015 has proved to be an interesting year in both provinces, and in many ways, it looks like the political landscape is shifting quickly to the Left in Alberta, while it is beginning to tip more to the right in neighbouring BC.
In May, fed up with a number of recent political hiccups by the Progressive Conservative party, Albertans ousted the Tories from the provincial government for the first time in 44 years. The election of a new NDP majority government represents a major shift to the Left in the province. There is a high level of concern within the business community over the NDP's ability to balance the budget, and moreover, what this change in government means for the future of the provincial economy (impact of potential policy changes to minimum wage, rent control, oil and gas royalty structures, and more). Who knows what the next four years will bring in Alberta?
On the other hand, there has not been a shift of political power in BC; however, the burgeoning housing market (particularly in the Greater Vancouver Area) is placing significant pressure on the cost of living, lowering home affordability, and changing the fiscal decisions of British Columbians. That is, BC taxpayers are now voting down green initiatives that benefit the economy, public health, and environment in order to protect their financial welfare. This was also seen in late May when two-thirds of Metro Vancouver voters said `No` in a plebiscite which proposed a transit tax to fund infrastructure projects (including light rail transit) and reduce congestion throughout the region. Now, in order to achieve sustainable growth, the province is looking to the private sector for a solution.
As Canada continues to move closer to a possible recession (Statistics Canada confirmed the country's real GDP fell for the fifth consecutive month on Friday), different pictures of economic prosperity are being painted across the country. The Conference Board of Canada's Provincial Outlook: Spring 2015, highlights the divergent economic outlooks for Alberta and BC this year. As seen below, Alberta and BC bookend the list.
So far in 2015, we have seen residents of Alberta vote with their feet, shuffling Left and electing an NDP majority government amidst Tory campaign scandals and a sputtering economy. In BC, the economic growth outlook remains encouraging; however, inflationary pressures and sliding affordability are impacting fiscal decision-making and, ultimately, the social agenda once synonymous with BC. As things gear up (or in this case most likely down) for the second half of the year, it remains to be seen if the social and political norms of the past in these two provinces prevail or whether change is here to stay.
Mainstreet Equity Corp. is a publicly-traded (TSX: MEQ) residential real estate company in Canada. Mainstreet currently owns and operates properties in Surrey, BC; New Westminster, BC; Abbotsford, BC; Calgary, AB; Cochrane, AB; Lethbridge, AB; Edmonton, AB; Fort Saskatchewan, AB; and Saskatoon, SK.
Mainstreet provides affordable, renovated apartment suites to Canadians, and is committed to creating real value without diluting shareholder interests.