Few pastimes can test a player's strategy and ability to see the big picture better than chess. Learning to play chess is easy; learning to play well is a lifelong pursuit.
Symbolically, Western Canada is in a global economic chess match. It has a slight advantage now, thanks to some favourable conditions. But as any seasoned chess player knows, a few bad moves and it's game over.
To stretch the analogy further, think of the chessboard's six types of pieces as aspects of Western Canada's economy.
First there are the two rooks, powerful pieces that move quickly across the board. The rooks are Western Canada's international trade position. Trade with the U.S. under NAFTA has traditionally worked fairly well, despite the softwood lumber dispute and other trade irritants. But, like a trapped rook, our trade relations with non-U.S. partners have been pathetically underutilized.
The two bishops are also powerful players. They're Western Canada's taxation and regulatory systems. These must be competitive with other jurisdictions, but "competitive taxes" doesn't mean "no taxes." What's important is how taxes are collected and the revenue reinvested in the economy.
Knights have limitations, but they're extremely useful in tight situations. They're the West's major cities and infrastructure. Cities should be architecturally attractive, environmentally responsible, and appealing to a global audience. A great city, like a strategically positioned knight, can win you the game.
The grandest, most powerful chess piece is the queen. She moves in any direction, without limit. No piece matches her power, and it's extremely difficult to win without her.
Natural resources, which buoy Western Canadian prosperity, are not the queen. Rather, natural resources are the board's tiny pawns. That may seem counterintuitive, given that pawns are by far the weakest pieces. But there is strength in numbers. And just as there are eight pawns, the West's resource base is comprised of oil, gas, crop agriculture, livestock, forestry, fertilizer, base metals, and electrical power. Resource prices rise and fall, just as pawns are helpful but dispensable. You can't win in chess with pawns alone.
The queen, in fact, is a well-trained, highly educated work force, bolstered with investments in schools, polytechnics, universities and colleges. Countries blessed with natural resources (pawns) but lacking literacy (the queen) are left behind. If Western Canada wants to compete internationally, it cannot take its eye off education or literacy for a
second.
The king is the most important piece on the board, albeit very weak offensively. He represents the West's long-term prosperity and standard of living. All of the other pieces serve to protect the fragile king. It may not seem like it today, but Western Canada's future prosperity is extremely fragile.
That's because not all of Western Canada's chess pieces are being played as effectively as they could be. For example, our trade with non-U.S. partners is like a rook moored in the corner of the board. Many of our companies lack the experience, the confidence, and the access to capital required to do business abroad.
As a result, our place in the global economic order is that of raw resource exporter. That's not a great long-term wealth strategy.
Also, like an ineffective bishop that is actually hindering our play, our regulatory system is sometimes counterproductive. It often serves only political, not economic, purposes. Supply management of agriculture and barriers to interprovincial trade are good examples.
And our queen - our highly creative and literate work force - has not been played to full advantage. The queen is powerful, but she is rendered useless if boxed in by her own players, especially the pawns. Has our abundance of natural resources lulled us into a sense of entitlement and delivered wealth for which we've never had to creatively extract? Have we, in a sense, boxed in our queen with our dependence on resources?
It is time for business leaders, governments, and entrepreneurs to make the most of every piece we have on the board, and ensure that the fiercely competitive global economy does not bowl us over. Without effective pieces on the board, Western Canada would soon find itself in an economic checkmate.
Todd Hirsch is a Calgary-based senior economist at ATB Financial. The opinions are Mr. Hirsch's own.