What Would Happen To Canada If They Adopted The U.S Dollar ?


ballmoney1
#1
Hopping to get long answers or sites sources ....... I have a write-up that has to be done tonight and passed in tomorrow .. so I'm looking for idea's .. THANKS !
 
gerryh
#2
rofl... you want us to write your paper for you??????
 
ballmoney1
#3
ahahahah no .. just looking for ideas
 
SirJosephPorter
No Party Affiliation
#4
And why should Canada do that, ballmoney? I assume you are writing some sort of a report. So here are some points for you to consider.

Adopting US dollar will mean that Canada gives up control on Canada's fiscal policy, economic policy. Canada will no longer have control over its currency. Usually when a currency is sliding, government may take steps to shore it up, when it is too strong, government may take steps to bring it down (like lowering interest rates etc.). These options will no longer be available.

Currently 1 Can $ is about 0.8 U.S. $. What that means is that if we do adopt US dollar, everybody’s salary will go down by 20%. Somebody making 100,000 $ per year will all of a sudden start making only 80,000. People won’t like it, there will be a revolt.

There is the matter of national pride. Why should Canada give up its currency and adopt somebody else’s currency? Especially there are indications that US dollar is losing some of its international influence.

And what is the upside? I don’t see any upside.

All things considered, it is a bad idea.
 
gerryh
#5
Quote: Originally Posted by SirJosephPorterView Post

Currently 1 Can $ is about 0.8 U.S. $. What that means is that if we do adopt US dollar, everybody’s salary will go down by 20%. Somebody making 100,000 $ per year will all of a sudden start making only 80,000. People won’t like it, there will be a revolt.


actually dummy....as of last night the Canadian dollar was a hair over .9
 
Machjo
#6
My take on it:

To ask what would happen if Canada should ust adopt the US dollar is too vague. Do we mean that Canada would adopt the US dolar but that the Treasury of the USA would continue to maintain control over its production and lending rates, to be decided by the US federal government? Would Canada have a say in this?

Or would the US government surrender control over the US dollar to some kind of US-Canadian federal government akin to the EU? If so, how would Canadians feel about US cultural symbols on their currency? Would the currency also undergo changes to the cultural symbols printed on it to reflect common cultural symbols shared by both sides? Woudl we continue calling it the US dollar or give it another name?

It's difficult to answer the question in detail without knowing the answer to al of those questions.

Now there woud be an advantage to sharing a common currency regardless of those details, and that is that it would eliminate the middle man, currency-brokers, in economic exchanges between Canadians and Americans, in the same way that the current common Canadian dollar eliminates the middleman in economic exchanges between Vancouverites and Montrealers.
 
Machjo
#7
As for the matter of national pride, I don't see why we would wrap our pride in a piece of note-paper.
 
Machjo
#8
As far as I'm concerned, currency is just like language, measurement systems of weight, distance, temperature, time, calendars, etc. They are all means of communication, be it of ideas, time, days, weights, temperatures, or, in the case of currency, economic value. For any exchange to occer, a common system is required, whether in the original transactionor through translation into a common measure. It's only logical that having a commom measure allows for a more efficient exchange.
 
SirJosephPorter
No Party Affiliation
#9
To ask what would happen if Canada should just adopt the US dollar is too vague. Do we mean that Canada would adopt the US dollar but that the Treasury of the USA would continue to maintain control over its production and lending rates, to be decided by the US federal government? Would Canada have a say in this?

Machjo, I assume Canada adopting US dollar would be similar to say, Ecuador adopting US dollar. Canada simply gets rid of Can $, and adopts US dollar, without any control over the currency. Presumably US will continue influencing its own currency as before, Canada simply uses US $. We are not talking of a common currency here, we are talking of Canada adopting US $.
 
SirJosephPorter
No Party Affiliation
#10
Quote: Originally Posted by MachjoView Post

As for the matter of national pride, I don't see why we would wrap our pride in a piece of note-paper.

National currency and national flag is what defines the identity of a country (along with other things, of course). Sure currency is just paper and flag is just a piece of cloth. But Canadian dollar, along with Canadian flag denote what Canada stands for, which is quite distinct from what USA stands for.

If you have no problem getting rid of a ‘note paper’, would you be OK to get rid of a ‘piece of cloth’, get rid of the Maple leaf and adopt Stars and Stripes instead? If yes, can Canada getting absorbed in USA be far behind?
 
Machjo
#11
Quote: Originally Posted by SirJosephPorterView Post

To ask what would happen if Canada should just adopt the US dollar is too vague. Do we mean that Canada would adopt the US dollar but that the Treasury of the USA would continue to maintain control over its production and lending rates, to be decided by the US federal government? Would Canada have a say in this?

Machjo, I assume Canada adopting US dollar would be similar to say, Ecuador adopting US dollar. Canada simply gets rid of Can $, and adopts US dollar, without any control over the currency. Presumably US will continue influencing its own currency as before, Canada simply uses US $. We are not talking of a common currency here, we are talking of Canada adopting US $.

If it's to be taken at face value, then the advantage of sharing a common currency would have to be considered within the context of fiscal imperialism, with Canada becoming a fiscal colony of the US.

While I could support what we could refer to as fiscal federalism (i.e. adopting a common currency shared by more than one country), I would be hesitant, perhaps even quite opposed, to fiscal imperialism, which a straightforward adoption of the US dollar by Canada would be. Now adopting the Euro might be more akin to fiscal federalism in that Canada would likely be an equal partner in determining European fiscal policy.
 
Machjo
#12
Quote: Originally Posted by SirJosephPorterView Post

National currency and national flag is what defines the identity of a country (along with other things, of course). Sure currency is just paper and flag is just a piece of cloth. But Canadian dollar, along with Canadian flag denote what Canada stands for, which is quite distinct from what USA stands for.

If you have no problem getting rid of a ‘note paper’, would you be OK to get rid of a ‘piece of cloth’, get rid of the Maple leaf and adopt Stars and Stripes instead? If yes, can Canada getting absorbed in USA be far behind?

Have the French lost their national identy by adopting the Euro?

There is a difference between a flag and a currency. A flag usually serves a strictly patriotic purpose, except sometimes on ships and other such contexts where it then serves a communicative purpose too to identify the registered nationality of the ship.

Currency, on the other hand, seldom serves a simple patriotic purpose, but almost always serves a functional commmunicative purpose of establishing the value of a good or service.
 
Machjo
#13
It is an interesting topic though. i'd be in favour of Canada sharing a currency with another nation or, better yet, with other nations, as long as it's under a federal and not imperial model.
 
L Gilbert
No Party Affiliation
#14
Quote: Originally Posted by ballmoney1View Post

Hopping to get long answers or sites sources ....... I have a write-up that has to be done tonight and passed in tomorrow .. so I'm looking for idea's .. THANKS !

I'd be coloring it with highliter markers for one thing. Greenbacks are just plain dull.
 
Machjo
#15
Quote: Originally Posted by L GilbertView Post

I'd be coloring it with highliter markers for one thing. Greenbacks are just plain dull.

No kidding. Is the federal reserve on a budget that they can't afford a little coloured ink? But hey, their taxes are slightly lower than ours. That might explain it, no frills no gmmicks governance?
 
Machjo
#16
Except for a whopper of a military of course.
 
Machjo
#17
Quote: Originally Posted by SirJosephPorterView Post

If you have no problem getting rid of a ‘note paper’, would you be OK to get rid of a ‘piece of cloth’, get rid of the Maple leaf and adopt Stars and Stripes instead? If yes, can Canada getting absorbed in USA be far behind?

I'm in favour of multilateralism, not bilateralism. As such, not I'd be opposed to just adopting the US dollar and flag. However, I could go for a shared currency none-the-less, as long as its one shared equally, that's all.
 
L Gilbert
No Party Affiliation
#18
I think money is money. Except yen, yuan, pesos, etc. The denominations have to be too high. I've always liked pounds. That even SOUNDS like substantial dough. lol

Cool! Look what I found:

Currencies of the World
 
Machjo
#19
Interesting. The Central African CFA Franc is similar to the Eurp in that it is shared by a number of countries. It just makes sense in a shrinking world.
 
SirJosephPorter
No Party Affiliation
#20
Quote: Originally Posted by MachjoView Post

I'm in favour of multilateralism, not bilateralism. As such, not I'd be opposed to just adopting the US dollar and flag. However, I could go for a shared currency none-the-less, as long as its one shared equally, that's all.

Here I agree with you. A shared currency makes sense; I can see advantages with it. However, ballmoney was not talking about a shared currency, I think he was asking whether Canada should adopt US dollar.
 
SirJosephPorter
No Party Affiliation
#21
Quote: Originally Posted by MachjoView Post

Interesting. The Central African CFA Franc is similar to the Eurp in that it is shared by a number of countries. It just makes sense in a shrinking world.

There are definite advantages in several countries having a shared currency. It makes trade, tourism etc. easier; it eliminates some red tape and flow of goods, information become easier, smoother.

However, that is different from one country unilaterally adopting the currency of another country. In this respect, it is important to note that when EEC counties decided on a common currency, they did not adopt Guilder (Netherlands), Mark (Germany) or Schilling (Austria); they came up with a totally new currency, the Euro.
 
Machjo
#22
Quote: Originally Posted by SirJosephPorterView Post

There are definite advantages in several countries having a shared currency. It makes trade, tourism etc. easier; it eliminates some red tape and flow of goods, information become easier, smoother.

However, that is different from one country unilaterally adopting the currency of another country. In this respect, it is important to note that when EEC counties decided on a common currency, they did not adopt Guilder (Netherlands), Mark (Germany) or Schilling (Austria); they came up with a totally new currency, the Euro.

That's something I could go for. in fact, why isn't Canada pushing to share a common currency with another country or other countries? In fact, as a short-to-medium-term solution, why not look at adopting the Euro?
 
wulfie68
No Party Affiliation
#23
In my mind the biggest reason we won't adopt the Euro is as SirJoe stated above:

Quote:

Adopting US dollar will mean that Canada gives up control on Canada's fiscal policy, economic policy. Canada will no longer have control over its currency. Usually when a currency is sliding, government may take steps to shore it up, when it is too strong, government may take steps to bring it down (like lowering interest rates etc.). These options will no longer be available.

How would that be any different by inserting Euro for USD? We'd be a minority partner at best, compared to the rest of the EU, and while its not as monolithic (different countries will have differing agendas/ideas on fiscal policy) as a partnership with the US would be, its farther removed in terms of its area of interest. Given our economic ties, we ARE more closely related to the US than the EU, so it wouldn't make as much sense, to adopt the Euro if we were looking to give up our national currency.

It would be kind of ironic though to see Canada converting to the Euro while the UK still used the pound
 
Machjo
#24
Quote: Originally Posted by wulfie68View Post

In my mind the biggest reason we won't adopt the Euro is as SirJoe stated above:



How would that be any different by inserting Euro for USD? We'd be a minority partner at best, compared to the rest of the EU, and while its not as monolithic (different countries will have differing agendas/ideas on fiscal policy) as a partnership with the US would be, its farther removed in terms of its area of interest. Given our economic ties, we ARE more closely related to the US than the EU, so it wouldn't make as much sense, to adopt the Euro if we were looking to give up our national currency.

It would be kind of ironic though to see Canada converting to the Euro while the UK still used the pound

The UK chose to keep the pound mainly for symbolic reasons. From a strictly economic standpoint, it would make sense for the UK to adopt the Euro as it would eliminate currency exchanges in trade between the UK and the EU.

As for Canada adopting the Euro, it's quite different from what you mentioned above in that in the case of the EU, no single country controls it entirely, while all member countries have an equal say, unlike if Canada adopted the US dollar. It's strange too that you quote SJP, seeing that a few posts down, SJP supports sharing a common currency too, just as long as it's not one country dominating it.

Also, while it is true that Canada's trade with the US is far greater than with the EU, for Canada to adopt the Euro would in no wise hurt trade between Canada and the US. Honestly, what would be the difference whether the US must trade in US dollars for Canadian or for Euros? Either way it woud have to trade a currency. Of course ideally we'd want a common world currency not dominated by any one country, but controlled equally by all countries. Until that happens, however, regional currencies are a good start. And while Canada's adopting the Euro would neither benefit nor harm relations between Canada and the US, it would benefit relations between Canada and the EU, and so indirectly, between the US and the EU too, through Canada. Looking at it that way, there would be a net gain for all concerned.
 
Toro
#25
It's a bad idea.

So if you are looking for themes for your paper, it is this -

In a monetary union, the benefits of the union must be outweighed by the costs.

These are the benefits:
- it reduces uncertainty for exporters. With 40% of the country reliant on exports to the US, it would provide cost certainty and reduce volatility in the real economy
- it reduces costs because there is a cost with trading currencies that gets vacuumed up by the banks.

These are the costs:
- without a political union, it can put pressure on the real economy if Canada is in a recession and America is not. Canada will have to import American interest rates, which should be lower in Canada if Canada is in a recession and America is not. Canada has a political union between the provinces. When one province, say Alberta, is in a boom and another, say Nova Scotia is in a recession, political union allows for a valve to release the pressure on the economy from a common interest rate. In Canada, workers can move (almost) freely from province to province, so unemployed Nova Scotians can go to Alberta. The government will also transfer funds from Alberta to Nova Scotia. There would be no such political arrangement between Canada and the US.
- Canada would lose sovereignty by giving up its ability to set interest rates and issue its own currency.

I think the costs outweigh the benefits and a monetary union should not be pursued with the US.
 
Nuggler
#26
Quote: Originally Posted by gerryhView Post

actually dummy....as of last night the Canadian dollar was a hair over .9


Don't expect to much of Sir Joe.

Gettin older

Feeble

Minded

Go easy on the old fart

 
Machjo
#27
Quote: Originally Posted by ToroView Post

It's a bad idea.

So if you are looking for themes for your paper, it is this -

In a monetary union, the benefits of the union must be outweighed by the costs.

These are the benefits:
- it reduces uncertainty for exporters. With 40% of the country reliant on exports to the US, it would provide cost certainty and reduce volatility in the real economy
- it reduces costs because there is a cost with trading currencies that gets vacuumed up by the banks.

These are the costs:
- without a political union, it can put pressure on the real economy if Canada is in a recession and America is not. Canada will have to import American interest rates, which should be lower in Canada if Canada is in a recession and America is not. Canada has a political union between the provinces. When one province, say Alberta, is in a boom and another, say Nova Scotia is in a recession, political union allows for a valve to release the pressure on the economy from a common interest rate. In Canada, workers can move (almost) freely from province to province, so unemployed Nova Scotians can go to Alberta. The government will also transfer funds from Alberta to Nova Scotia. There would be no such political arrangement between Canada and the US.
- Canada would lose sovereignty by giving up its ability to set interest rates and issue its own currency.

I think the costs outweigh the benefits and a monetary union should not be pursued with the US.

I think the benefits would outweigh the costs even if it were nothing more than a monetary union. Also, it would not be a question of Canada adopting US interest rates if were were to adopt a new common neutral currency; it would be, rather, the new central bank taking the whole Canada-US economy into account when adjusting interest rates. So the US would lose some of its sovereignty too.

And just a point about sovereignty; it's not sacrosanct. There are in fact advantages to giving up some sovereignty. Imagine if we all refused to give u some of our sovereignty! We'd all be living in city states. Could you imagine having to apply for a visa every time you wanted to travel from Victoria to Vancouver, or Ottawa to Toronto?!

As for your other points, I do believe that the advantages of a monetary union could be more fully exploited through freer movement of labour. In fact, we'd have that if we joined the EU.

And like I'd mentioned before, what says that Canada can pursue a monetary union with the US only? if the US proved uninterested, there'd be nothing stopping Canada from sharing a common currency with another nation. And I can add to that that such a union would not necessarily have to hurt Canada-US ties either. After all, we're not sharing a common currency as it is, so it's not like we'd be abandoning a common shared currency with the US to join another monetary union. We'd simply be joining another monetary union while still not having a common currency with the US. In that respect, not much would change in Canada's relations with the US. In fact, if anything, a common monetary union between Canada and another nation would help to bring the US closer to that nation too owing to the relationship between Canada and the US.
 
Toro
#28
The United States is not interested in the free movement of labour across borders.

And the US will never, ever give up its monetary sovereignty. If there is a common central bank, it will be based in Washington, and it will be called "The Federal Reserve," and it will be answerable only to the United States Congress.
 
Machjo
#29
As an aside, Canada's joining the EU would likely help Canadian unity! Let's think about this for a moment. The EU has already established common education standards for many trades and professions,something Canadian provinces have so far failed to do. A union with the EU would likely expect Canadian provincial ministries of education to consult not only with other EU ministries of education to establish various educational standards for various trades and professions, but with other Canadian provicnes too, something successive federal governments have thus far failed to do, mainly owing to an archaic constitution.

After all, many EU constitutions are relatively new. The German, Spanish, Italian, and Greek ones stem from after WWII. The British one, though old, stems from a centralised monarchist and later imperialist system. This centralizatoin allowed the UK to be able to negotiate efficiently with other nations. France's is similar.

Canada's, on the other hand, was really an incremental step towards fusing separate British colonies into a new Dominion, an incremental step that has never been proceded by a second, except for the Charer of Rights and Freedoms, but that still never touched upon an archac division of responsibilities between governments.

A union with the EU would likely put pressure on Canadian Ministries of Education to start working together to establish common EU-wide standards and so, by implication, common Canadian standards too for various trades and professions, thus allowing for freer movement of labour not ony across the EU, but even between Canadian provinces.
 
Machjo
#30
Not to mention that while Europeans have EU-wide health coverage, Canadians only have province-wide health coverage. Imagine that.
 

Similar Threads

3
Could it happen in Canada?
by CBC News | Nov 29th, 2008
18
1
Voda coming to Canada: will that ever happen?
by Anonymous | May 24th, 2004
no new posts