The signs of a slowdown in Saskatchewan’s economy are getting hard to ignore. Royal Bank of Canada’s March forecast projects that the province – which posted 3.9% gross domestic product (GDP) growth in 2013, second-highest among the provinces – will finish fourth in GDP growth in 2014 (at 2%) and fifth in 2015 (2.7%).

Commodity prices have been weak almost across the board, from grains and oilseeds such as wheat and canola to minerals such as potash and uranium. Oil is the notable exception.

Saskatchewan has also been hit hard by a grain-shipping backlog, which has prevented as much as half of the province’s record crop of grains and oilseeds from being delivered. In addition, retail sales were down in the first quarter, as were housing starts.

But some analysts are suggesting the province’s problems aren’t just economic. A recent study by the Institute of Certified Management Consultants of Saskatchewan points out that, while the province’s economy grew strongly from 2007 to 2012, Saskatchewan trailed Alberta in both population and employment growth.

Lack of a large city (population of more than 500,000) appears to be the reason, that study says. Most Great Plains provinces and states tended to lose population over the past 30 to 40 years. But Prairie provinces and states that had a city with 500,000 in population or more, such as Manitoba (Winnipeg) or Iowa (Des Moines) tended to fare better than those without a large city, such as Saskatchewan or the Dakotas. The theory is that cities with populations of 500,000 or more have self-sustaining economies that generate more processing and service industry jobs, and thus attract more people.

The study, nicknamed “Think Big, Saskatchewan,” urges policy-makers to encourage the development of large metropolitan centres. Of course, neither Regina (pop.: 233,000) nor Saskatoon (253,000) is likely to hit the 500,000 mark in the next 20 or 30 years. But with Saskatoon the second-fastest growing city in the country and Regina fourth-fastest, both will probably reach 300,000 within this decade.

The study’s authors believe that a regional approach to economic development could help to spur the creation of larger metropolitan areas. By working together, urban municipalities such as Regina and nearby Moose Jaw (pop. 35,000), or Saskatoon/Prince Albert (the smaller city has a population of 43,000), together with other, adjacent rural municipalities and bedroom communities, could replicate the effect of having a city of 500,000.

That means having joint planning commissions, similar zoning rules and complementary rather than competing economic-development strategies. It also means, the study says, urban and rural residents working together in common cause.

Without large cities, the study says, Saskatchewan can’t grow to its potential. But without the rural areas, the province has no economic base – namely, agriculture, mining, oil and gas, and forestry.

Urban and rural areas need each other to thrive; otherwise, the province could be stuck in the commodity cycle forever. Hardly ground-breaking stuff, but it just might work.

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