Canada abandoned all of its currency controls and virtually all of its capital controls shortly after the Second World War, and moved to a floating exchange rate in 1950, well before the collapse of the Bretton Woods system.12 Despite the monetary independence that a floating exchange rate gave us, our long-term interest rates have always moved closely with those of the United States (Charts 7 and 8).
These costs are still high and there is scope for lowering them. There are a number of options available that could be tapped into to address some of these problems.