MONTREAL - Tuesday's minority election win by the Parti Quebecois will tie the hands of the left-of-centre party and likely force it to abandon those of its policies that are least appealing to the business community, experts say.
"It's not a bad election result (for business)," McGill economics professor William Watson said as it became clear the election front-runners had fallen short of a majority win.
"I think the program will have to be modified somewhat. I think there will be a push towards the left, but not as far as the program threatened."
The business community will likely welcome any move by the new government to step away from its pledge to dramatically increase taxes on wealthy individuals, companies or the resource sector, Watson predicted.
And it's sure to embrace the likelihood that a referendum on Quebec independence won't be in the cards — at least during the first 12 to 18 months of what could well be a short-lived government.
Having PQ Leader Pauline Marois as premier can only add to the political uncertainty in Quebec, since it raises the spectre of a referendum taking place eventually, said Carleton University professor Bruce Hicks.
But unlike the last time the PQ took power in 1994, Marois — the first-ever female premier in Quebec — doesn't have the mandate that almost resulted in a Yes result in the sovereignty vote that took place the following year.
"This government isn't being voted in — it's tumbling in, because the Liberals are being voted out," Hicks said.
Former Montreal Canadiens star Mike Cammalleri asked the question on Twitter that most property owners in Quebec were wondering as they watched the election results roll in: "How's this vote going to affect the value of my house in Montreal?"
The answer, experts say, is that after 10 years of substantial increases, real estate prices are likely to remain flat in many Montreal communities — at least until the true threat of a sovereignty referendum appears on the horizon.
As election night was winding down Tuesday, the PQ was leading or elected in 56 ridings, seven shy of the 63 seats needed for their coveted majority. The Liberals trailed with 48 seats, the Coalition party with 19 and Quebec solidaire with two.
The PQ victory may limit direct new investment in the province, but it's not likely to frighten off established businesses, observers said.
"Its most direct impact will probably be on new business investment as opposed to scaring away businesses or money that's already committed to the province," said Hicks.
The Canadian dollar is also unlikely to suffer dramatically, in part because the Caisse de depot, Quebec's pension fund manager, and the Bank of Canada both have the ability to prop it up, he added.
The loonie was unchanged at $1.0142 US in after-hours trading Tuesday.
A PQ government is sure to pick fights with Ottawa to boost nationalist support, but its minority standing will diminish its power to enact the sort of legislation that Quebec business leaders fear most, such as expanding the application of the Bill 101 language charter.
"It's going to be tricky to govern," said Michel Poitevin, economics professor at the University of Montreal.
Poitevin said the PQ will have to confront the reality of a slowing economy and revise some of its spending promises and economic plans, such as increasing the top marginal tax rate, freezing tuition fees and capping hydro rates.
Higher top-tier taxes, for instance, might prompt the early retirement of some of the province's most productive workers, he warned.
"Any party that would have been elected would have had to make tough decisions," Poitevin said. "I guess for the PQ, maybe it's going to be harder internally because of all the promises that they made."