Consider a continental currency, Jarislowsky says

STEVEN CHASE
Globe & Mail
Wednesday November 28, 2007

OTTAWA -- Canada should replace its dollar with a North American currency, or peg it to the U.S. greenback, to avoid the exchange rate shifts the loonie has experienced, renowned money manager Stephen Jarislowsky told a parliamentary committee yesterday.

"In a country like Canada we cannot permit ourselves to have a dollar that goes through these kind of gyrations," Mr. Jarislowsky told MPs on the Commons finance committee. " I think we have to really seriously start thinking of the model of a continental currency just like Europe."

MPs on the finance committee are probing the consequences of the strengthened loonie - which has risen more than 20 per cent against the U.S. greenback this year.

Mr. Jarislowsky, a former Canfor Corp. director, said the loonie's rise to above par with the U.S. dollar is destroying manufacturing and could devastate the forest sector.

"We don't have a single mill in Canada which isn't losing cash at the current exchange rate despite the fact we invested hundreds of millions in dollars into new equipment when we had the money," said Mr. Jarislowsky, chairman of Montreal investment firm Jarislowsky Fraser Ltd.

"I believe that if we stay at the present levels the entire forest products industry practically is going to be in liquidation-bankruptcy and there's going to be an enormous loss of employment."

He scorned suggestions that now is a great time to invest in new equipment because the stronger loonie can buy more.

Full article here.