Indeed, as we have seen recently in Asia, in Mexico in 1994, and in Europe in 1992, when adjustments are resisted, fixed exchange rates can become unsustainable. To obtain the economic benefits that I described earlier, a currency union, not just a fixed exchange rate, is required.
* But, as I have also noted, even with a currency union the economic benefits come at a price. And that price is the loss of a degree of political and economic autonomy and flexibility. Just how significant would that price be for Canada?