At the end of the day, there's macramé

PINCHER CREEK, Alberta -- Determined to see something of the Old West, my family and I have arrived at a ranch near this old cow town in the province's southwest.

"And what are the main activities on the ranch?" I ask Colleen Cyr, an owner.

"Our classes in macramé, quilt-making and scrapbooking are very popular," she says brightly.

I glance at her husband, Francis, a lanky guy in jeans with a cowboy belt buckle. "The classes allow me to raise 50 head of cattle on the back property," he says.

Cowboy macramé is only one of the economic changes whooshing through the Prairies like a thunderstorm.

Ranching and farming played a big role in opening up the Prairies. Today, however, there is more interest in what's under the soil, not what's on top of it. Oil, gas, potash and uranium (Saskatchewan produces 25 per cent of the world's supply) are all hot commodities -- at least they have been.

That's one of the problems with the Prairie economy. It's heavily dependent on commodities and their prices can move faster than the swinging doors of a western saloon.

America's political crisis and Europe's financial problems have dimmed the outlook for some commodity prices. Last week, the price of oil, which peaked above US$114 a barrel four months ago, fell $5.67 a barrel, a drop that made high-cost oilsands producers nervous. Oil prices moved higher in later trading.

But Todd Hirsch, a Calgary-based senior economist with ATB Financial and a lecturer at the University of Calgary, says Canada's economic centre of gravity will continue to shift west.

His reasons? The western provinces are in better fiscal shape than most of those in eastern Canada; they are much more oriented than eastern provinces toward the big-growth nations of China and India; some of their cities -- Saskatoon, Regina and Calgary -- are the fastest-growing in Canada and they benefited in the early part of 2011 from strong commodity prices, with the exception of natural gas.

In addition, he says, the world's largest international investors and investment bankers are settling in the West, many of them in Calgary.

The political punch of the Prairies is also improving. The Harper government has announced plans to increase the number of seats in the House of Commons for Ontario, B.C. and Alberta in time for the 2015 federal election.

These new members and other MPs are going to face some major challenges in the West.

Agriculture is still important for the Prairies, but this year it has suffered from the weather -- too little rain or too much. As well, the National Research Council says the productivity of Canadian wheat farms has not seen the rates of increase of some other countries because of such challenges as a relatively short growing season and a dry climate in much of the wheat-growing region.

Our most important export, oil, has suffered from grievous government neglect.

Ottawa and Alberta have allowed the perception to spread that the oilsands projects are major polluters and that our older pipelines are badly worn, poorly maintained and subject to slack supervision.

Because of these perceptions, companies are having trouble getting approval to build pipelines in the U.S. and a much-needed line from the oilsands to a port on the West Coast -- a development that would give Canada a new outlet for its oil in Asia.

Mining is having problems with foreign investment. Robert Stewart, a well-known mining expert, writes me: "Canada has sold out its future interests to foreign investors who now put the Canadian landscape up against the rest of the world. We are the losers for it. Billions of dollars of investment have fled Canada and barely a trickle is coming in."

A recent Newfoundland and Labrador inquiry -- the Roil Commission -- highlighted another problem: Workers are not sharing in the wealth that mining brings.

Newfoundland and Labrador (along with Alberta and Saskatchewan) is one of three Canadian "have" provinces. Yet, personal incomes are the second-lowest in the nation. A lot of mining profits are being skimmed off by the multinational owners, says Jim Sanford, an economist with the Canadian Auto Workers.

The Prairies have some serious problems, to be sure. But Prairie people are resilient. And if all fails, there's always macramé.

Tom Ford is editor of The Issues Network.

Republished from the Winnipeg Free Press print edition August 15, 2011 A11