MONTREAL, Dec 21: The introduction of the euro and the steep devaluation of the Canadian dollar compared to the US greenback has prompted new calls for Canada to abandon its national currency and adopt the US dollar.

In the 1970s, the Canadian dollar commenced on a slow descent against the US greenback, reaching a historic low last month of 62.30 US cents for one loonie, the name of the bird that is imprinted on the one-dollar Canadian coin.

With 85 per cent of its exports heading to the United States, Canada started to show signs its economy was slumping as the economic woes of its powerful southern neighbor accumulated, triggering some to call for the adoption of the US dollar as a more stable currency that would reduce costs.

In the spring, Bank of Canada Governor David Dodge said the advantages of a national currency over a single currency could be wiped out in one generation.

The position stands in stark contrast to his long-serving predecessor, Gordon Thiessen, who had always rejected a single currency.

So far this year, Dodge’s bank has nearly mirrored the US Federal Reserve’s decisions on cutting interest rates.

My own view is that, eventually, Canada and its biggest trading partner will move to a common currency, Paul Tellier, Canadian National Railway president and chairman, said last week.

In November, a poll showed that 54 per cent of senior business executives believed that Ottawa should think about adopting the US currency.

Already more than half of all Canadian exporters fix their prices on the greenback and some 70 Canadian groups are listed on the New York Stock Exchange.

According to another study, 55 per cent of Canadians are in favor of a single currency.

A single currency would force them to perform in a more competitive environment, which tends to bring about greater productivity gains, Dupuis noted.

But the economist admits the idea of a single currency seems to him just a “utopia for now.” He questions what real power Canada would have after adopting a single currency against the behemoth of the US Federal Reserve.

The adoption of the US currency would have major implications for our continued existence as an independent nation, said Anne Golden, president and CEO of the Conference Board of Canada, an influential Canadian think tank.

She noted that at least with the adoption of the euro, the European economies are of a relatively similar size.

Dupuis added that the context of North America is different from that of Europe, where 50 years of economic, political and social integration has led to the creation of a common market and the adoption of the euro.

Even with recent calls for Ottawa to examine the single currency issue, both Prime Minister Jean Chretien and Finance Minister Paul Martin have paid them no heed, rejecting the idea outright.—AFP