VICTORIA -- British Columbia would hold a referendum next year on proportional representation as part of an agreement that would see the NDP form a minority government with the support of the Green party.

The two parties have also agreed to ban corporate and union donations to political parties, as well as contributions from non-residents of B.C. after fundraising became a major issue in this month's provincial election campaign.

The parties said Tuesday they would use "every tool available" to stop the expansion of Kinder Morgan's Trans Mountain pipeline, and would refer the Site C hydroelectric dam to the B.C. Utilities Commission to determine its economic viability.

NDP Leader John Horgan said they have a responsibility to "defend" the coastline of British Columbia and that is why the two parties want to stop the pipeline, which would increase tanker traffic seven-fold off B.C.'s coast.

Horgan and Green Leader Andrew Weaver signed the four-year deal in front of their caucuses at the legislature in Victoria.

"The challenge here is to demonstrate to British Columbians, as we are today, that people from different political persuasions can come together in the interest of British Columbians so people don't fear minority governments, in fact, they embrace them," Horgan said.

Premier Christy Clark said she is not ready to walk away from office before recalling the legislature to see if she can get support to continue governing.

But Clark appears resigned to losing a confidence motion, opening the way for the second-place NDP to be given a chance to form a government by Lt.-Gov. Judith Guichon.

Ultimately, Clark said, it would be up to the lieutenant-governor to decide whether the NDP gets the green light or whether a new election is called.

"What's most important is this basic principle, that if there is going to be a transfer of power in this province, and it certainly seems like there will be, it shouldn't be done behind closed doors," she told a news conference in Vancouver.

"Should the government fail the test of confidence in the house, as seems likely, I would be given the job of leader of the Opposition. And I'm more than ready and willing to take that job on."

Clark was speaking for the first time since the NDP and Greens announced a deal on Monday to topple the Liberals from power after no party won a majority of seats in a provincial election three weeks ago.

She said she plans to bring the house back in June and made the decision to test the will of the legislature after consulting constitutional experts.

Horgan and Weaver didn't take issue with Clark's approach.

"I'm hopeful that if Ms. Clark does want to through with that precedent, that she does so in a timely manner," said Horgan. "That would be my only request. We're anxious to get going, we're anxious to start that transition."

The possibility of an NDP minority government in B.C. reopening the debate on the Trans Mountain pipeline drew reaction even before details of the party's agreement with the Greens were released.

Both Prime Minister Justin Trudeau and Alberta Premier Rachel Notley defended the pipeline expansion on Tuesday, saying it was in the best interests of all of Canada.

"We will continue to advocate on behalf of all Albertans and quite frankly all Canadians' economic interests to get that pipeline done. And mark my words: that pipeline will be built," Notley said.

Weaver said comments in support of the pipeline are misguided, likening them to Clark's promises in the 2013 election campaign to the potential prosperity of a liquefied natural gas industry.

"We've heard this before. One-hundred thousand jobs in LNG, $100-billion prosperity fund, $1-trillion increase in GDP, elimination of the PST, debt-free B.C., unicorns in all our backyards," he said.

The Liberals have been in power for 16 years. They took 43 seats in the election, one short of a majority, compared to 41 for the NDP and three for the Greens, leaving them with the balance of power for the first time in Canadian history.

The Greens went into negotiations with the other two parties making three key demands: getting official party status in the legislature, an electoral system based on proportional representation and political fundraising reform.

The Greens and NDP have supported a system of proportional representation that accounts for the number of seats each party gets in the legislature based on their percentage of the popular vote.

Two previous referendums on proportional representation have failed in B.C.

Under the terms of the NDP-Green agreement, the next referendum would take place when municipal elections are held in the fall of the 2018 and both parties would campaign in support of the system that is put to a vote.