This article goes into the advantages for Canada of a unified North American currency. It also makes the idea sound more legitimate.
Now, a full North American monetary union supported by a high degree of goods and labor market integration would mitigate many of these problems, but these are unrealistic goals at a time when even progress with the Prosperity and Security Partnership is stalled. Canada's current choice is between the status quo -- stable domestic inflation supported by a floating exchange rate -- and a pegged rate accompanied by greater domestic instability that would itself tend to undermine the very regime producing it.
The status quo thus remains Canada's better option. We should face this fact and get on with policies that will make it easier to cope with continuing pressures from world commodity markets. Progress in creating a single domestic market for goods and labor, reducing disincentives to investment in manufacturing and elsewhere, and enhancing the labor force's skills and flexibility, will require hard work and take time. Unlike a quick exchange rate fix, however, it would actually help matters.
--- - David Laidler is a Fellow-in-Residence at the C.D. Howe Institute and Professor Emeritus, Department of Economics, University of Western Ontario.
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