Times have been so good for so long in Canada that most people forget the late 1980s and early 1990s.

Stephen Harper's cabinet shuffle suggests he still remembers.

In those days, with Ontario booming and Alberta on the ropes, the Bank of Canada under Governor John Crow kept boosting interest rates to slow down Central Canada's rampaging inflation. It slowed inflation all right but it crippled Alberta businesses that had to pay more in interest while their economy was almost in recession.

In 2007, Canada could be headed for the mirror image of that scenario. This time it is Ontario suffering while Alberta is booming and while Harper's mostly Western-based Conservatives desperately need Ontario votes if they ever want to form a majority.

Ontario has already lost hundreds of thousands of manufacturing jobs. And with the Canadian dollar pushing close to parity with its U.S. counterpart, that means more tough adjustment, job losses and economic slowdowns ahead.

At the same time $70-a-barrel oil looks like a permanent fixture well into the future, pouring cash into Western Canada and Alberta in particular. The regional disparities to come could end up as great if not greater than they were a decade and a half ago.

That's why the key appointment in this cabinet shuffle is the naming of Albertan Jim Prentice, widely seen as one of this government's best and most competent performers to the key industry portfolio.

He's the one who will have to play an increasing role in fielding the complaints and the demands for help from Ontario industry as the Bank of Canada and the country deal with the tensions created by a booming West and a slumping industrial heartland.

It's the economy

As shuffles go, this one turned out to be much smaller than had been speculated in the media, with only one new face, another Albertan, Diane Ablonczy, effectively replacing Saskatchewan's Carol Skelton, who has already said she won't be running again.

The headlines, of course, will all focus on defence — and the decision to move former defence minister Gordon O'Connor to Revenue, replacing him with Peter MacKay. The much touted reason is that MacKay is a better communicator, though there is limited evidence from his time in foreign affairs to support such a conclusion.

But the idea that any defence minister can be the prime salesperson for sending Canadian troops into a war is naive. That is the toughest decision any prime minister has to make. If Afghanistan becomes the Conservatives' undoing, it will be Harper's fault and responsibility not the result of any failings by his defence minister.

Much more likely though is that by the time of the next election, maybe not until 2009, the issue dominating public discussion will be the one that usually decides elections. It's the economy, not Afghanistan or foreign relations, on which voters will want their say.

Until now, the Conservative industry minister has been Maxime Bernier who was first elected in 2006 and came to the portfolio as a libertarian, believing that the best government was the one that governed least. He pushed hard and successfully for faster deregulation of telecommunications and to reduce the watchdog role of the CRTC.

He was much less comfortable or even interested, it seemed, in listening to groups like the aerospace industry or the auto sector when they came calling, looking for a sympathetic ear and government cash to help with their problems. To his credit, he was ideologically consistent in believing that government should step aside in the economy, which meant fewer regulations as well as subsidies.

More listening

Ideological consistency, however, is frequently bad politics and may be particularly so when the good times seem to be coming to an end just as the Conservatives are hoping to make that push for a majority.

As he heads to his October election, Ontario's Liberal premier, Dalton McGuinty, will be telling the province how badly it is being treated by the federal government on a range of issues, starting with the problems faced by manufacturers.

The last thing the Conservatives need under such circumstances is a libertarian economist who publicly, and in cabinet, wants to stand back and let the world unfold.

Prentice, on the other hand, established a reputation for listening, consulting and acting during his stint in Indian affairs, which is not an easy portfolio. At the same time, he skillfully stood his ground in the House and outside, defending the government's decision to scrap the popular Kelowna Accord reached between the former Liberal prime minister Paul Martin, the provincial premiers and aboriginal leaders.

His other advantage is that business knows they have the prime minister's ear when they speak with Prentice. Judging by his performance so far, he has the political savvy to match whoever is Ontario's next premier and the ability to listen, debate and respond to business, the opposition and the public.

He is going to need those skills to persuade a faltering Ontario that it will probably have to settle for less than it wants, and to convince Alberta that it is in its interest to forget the recent past and help the East get back on its feet.

The future of the Conservative government probably rests with that balance.

Christopher Waddell, a former Ottawa bureau chief for the CBC, is associate director of the School of Journalism and Communication at Carleton University.