MONTREAL — Paul Tellier, chief executive of Canadian National Railway Co., said on December 13 that monetary union with the United States is inevitable because the economic integration of the two countries is proceeding so quickly, the National Post reports.
“My own view is that, eventually, Canada and its biggest trading partner, the United States of America, will move to a common currency,” Mr. Tellier said, in a speech to the Canadian Railway Club.
“Economic integration is irreversible and part of a global trend,” he added, “but Canada urgently needs a full debate on the consequences, including such highly sensitive areas as sovereignty, monetary policy, the dollar, culture and living standards.”
Canada, with its small population, now has access to the opportunities offered by a huge continental market, he said, but the challenge is how to keep Canada both strong economically and sovereign. Policymakers on both sides must work with a truly North American perspective.
“Eventually we’ll have a closer North American union, much as they have in Europe,” he added. “Canada would keep sovereignty in key jurisdictions in a much larger federation. But we can’t just drift along hoping the crucial issues at stake will just go away … a full and open debate is urgent.”
Mr. Tellier, 62, was formerly Canada’s top civil servant, having served as clerk of the Privy Council in the Mulroney government, which negotiated the Free Trade Agreement.
He has built CN, which was privatized in 1995, into North America’s fifth-biggest railroad through a string of acquisitions. He has long been an advocate of closer Canada-U.S. economic integration.
“The success of CN — and that of other Canadian companies — is due to the fact that we recognize that our economy is more and more integrated with that of the United States,” Mr. Tellier said.
“Integration is going on, it’s inevitable, it’s irreversible and it’s happening faster than anyone expected.”
Canada’s future clearly lies in tapping the opportunities throughout all of North America, he said.
“But as integration proceeds apace, what do we want to protect as distinct and part of the Canadian fabric, when our population will always be only 10% of the United States?”
He cited several bilateral pacts showing how Canada and the United States can work together in a partnership of equals, including the International Joint Commission responsible for Great Lakes water quality and this week’s extensive “smart border” agreement. Such co-operation promotes economic integration without ceding sovereignty, he argued.
“We need more bilateral and trilateral mechanisms … they aren’t an abdication but an assertion of sovereignty … democratically elected governments enter such agreements voluntarily.”
But a common currency is at the heart of the matter, he said. Before long all global trade will be carried out in a handful of currencies — probably the Euro, the U.S. dollar and the Chinese yuan.
“But though Canada has retained the nominal ability to set its own monetary policy, what is it costing us to maintain a separate dollar? The dollar’s drop to US62¢ may make exports cheaper, but imports are more costly, slowing productivity, costing jobs and masking economic decline.
“Canada’s per-capita wealth used to equal the Americans’, but now it’s only 75% and the gap is steadily widening.”
The debate will help Canadians set their priorities and take clear-headed decisions about the future, he said. “We must overcome our traditional insecurity and act to help our country compete globally. Companies such as BCE Inc. and Bombardier Inc. must grow further and our banks must become world players.”