Towards North American Monetary Union?: The Politics and History of Canada's Exchange Rate Regime.

Graeme S. Mount is a history professor at Laurentian University and
author of Canada’s Enemies: Spies and Spying in the Peaceable Kingdom.

As this review is written, the Canadian dollar is worth more than the American and pundits are warning of dire consequences to Canada’s tourist and export industries. When the value of the Canadian dollar was lower than that of its U.S. counterpart, Canadian snowbirds and consumers felt the pinch. One suggested solution was that Canada simply follow the lead of Panama and Cambodia and make the U.S. greenback its currency. Helleiner examines another possibility: that the U.S. and Canada share a common currency, which they would jointly control. His conclusion is that this will not happen. Americans would not want to share control of their currency with another country, nor would Canadians accept another country’s currency without some input into monetary policy. (He might have mentioned the lunacy of the Bush administration’s financial policies.)

Helleiner devotes the first half of his book to a history of the Canadian dollar, from its adoption in the 1850s at a time when a free trade agreement between the British North American colonies and the United States was in effect, through the interwar years and what he calls the short-lived commitment to the Bretton Woods Agreement at the end of the Second World War, and the period since then. He launches the story with an anecdote about a 1997 meeting of the International Studies Association, which met in Toronto. Conference organizers infuriated Canadian delegates with a demand that they pay their registration fees in U.S. dollars. Two years later, Helleiner says, debate on North American monetary union became serious.

Helleiner offers several useful features, among them charts that show the value of the Canadian dollar since 1860 in comparison with the U.S. dollar and the British pound. There is also a chapter about the reluctance of most Quebec nationalists to propose a separate currency for an independent Quebec. They fear that such an idea, says Helleiner, would conjure images of instability. Unlike most other nationalists, Quebec nationalists favour continued use of the Canadian dollar or North American Monetary Union, despite the fact that neither would offer them much input.