This paper investigates long-term trends and variability in hydroclimate using the Climate Moisture Index (CMI): precipitation (P) minus potential evapotranspiration (PET), as modeled by the Third Generation of the Canadian Climate Model (CGCM 3.1) and reconstructed for Medicine Hat back to 1723 using tree rings from the Cypress Hills. Three SRES climate change scenarios show an expanding aridity zone in the southern Prairies reaching further into Manitoba. B1 forecasts the worst case scenario with nearly one-third of the Prairie region below the moderate aridity index by the 2080?s. The duration and number of drought events remains relatively similar under the A1b scenario but duration increases for both A2 and B1 scenarios. The standardized tree-ring chronologies were used to assess the GCM?s ability to model past climate and drought conditions. Drought events were classified as extreme and moderate, using the 10th and 25th percentiles, of the 1961-1990 CMI baseline period to compare drought events between the past climate and future climate scenarios. The pre-industrial control model appears to model more drought events at shorter durations than observed in the reconstructed CMI for Medicine Hat. On the other hand, there is larger range of drought duration in the proxy record suggesting that the GCM does not simulate some droughts of very long durations (> 10 years). At timescales great than 8 years model simulations for the 20th Century reproduces a similar pattern to the observed data. These patterns appear to follow the PDO signal, switching from a positive phase in 1947 to negative and again positive in 1977. This teleconnection between positive PDO phases and dry periods on the prairies has been well documented. Future climate variability follows a similar pattern but with a trend towards increasingly negative P-PET (i.e. increasing aridity). Further analysis will incorporate other methods of computing potential evapo-transpiration, multiple GCM?s, and more tree-ring chronologies from our network spanning a large of the Alberta and Saskatchewan