The crucial question, however, is whether the savings from such an arrangement would compensate for the loss of monetary policy independence and for the loss of the buffer that a flexible exchange rate provides against economic shocks. Research by the Bank of Canada and by many outside analysts confirms that Canada benefits significantly from having a separate currency and a floating exchange rate.
It is true that Canada and the United States share many characteristics. But when it comes to economic structure, there are many important differences. Not only is our economy far more open than that of the United States, but Canada is also more dependent on raw materials. Moreover, while we are net exporters of primary commodities, the Americans are net importers.