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November 23, 2007 Why is Finance Minister Jim Flaherty requesting advice on a common currency? That's the big question to come out out of today's Globe and Mail report about recommendations from "renowned money manager Stephen Jarislowsky (and former Canfor. Director)" that, "Canada should replace its dollar with a North American currency, or peg it to the U.S. greenback, to avoid rate shifts the loonie has experienced." According to Globe reporter Steven Chase, the Finance Department (thankfully), "resolutely opposes the notion [of a common currency] in briefing notes prepared for Finance Minister Jim Flaherty and obtained by The Globe and Mail under access to information law earlier this year. Finance officials told Mr. Flaherty that a common currency would mean an erosion of sovereignty for Canada. They say it would ultimately mean Canada abandoning an independent monetary policy and therefore its ability to directly influence economic conditions within its borders." Whether Flaherty agrees with his department isn't mentioned, but the common currency has come up quite a bit over the past year. * On October 27, 2007, former Mexican president Vicente Fox, who launched the Security and Prosperity Partnership with then prime minister Paul Martin and U.S. President George Bush in 2005, is asked by Evan Solomon in the Globe and Mail, "Is there any truth to the notion that you, President George W. Bush and former prime minister Jean Chretien discussed a common North American currency, the Amero?" Fox replies, "I brought the subject up myself. I had a long-long-term proposal and it would be at the very end of our integrating process." * On May 22, 2007, the Globe and Mail reported: "Bank of Canada Governor David Dodge says North America could one day embrace a euro-style single currency… Some proponents have dubbed the single North American currency the 'amero'. It is more likely, however, that a common currency would mean that Canada and Mexico would adopt the U.S. dollar, giving up significant economic control to a central bank dominated by the United States." * And in a speech to the Couchiching Institute on Public Affairs on "Economic integration in North America" from August 7, 2003, Dodge said the following: "If there was a political decision in Canada to adopt policies of deeper North American integration, would it still make sense for us to keep our own currency? Or should we be thinking about adopting the U.S. dollar as our currency?... Suppose we were well on our way to achieving a true single market for goods and services, labour, and capital. Then it would be sensible to consider a common currency in the context of the industrial structures prevailing at that time, with a view to ascertaining whether the benefits of lower transaction costs associated with a common currency outweighed the higher costs of economic adjustment."
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