Uncertainty under fixed and flexible exchange rates Despite Canada's success with a flexible exchange rate system, there are still critics who find it hard to deal with the uncertainty that can come with a floating dollar. Large currency movements, such as the roughly 35 per cent appreciation in the Canadian dollar since early 2003, can be hard for businesses to deal with.
This hard struggle is the only sure way to reduce our vulnerabilities and dependence on the IMF. Why can’t this be done now or earlier? Because the resource generation capacity of the economy is still and will remain below the debt servicing obligations for several years.