Mr. Speaker, I am very pleased to rise today to take part in this important debate.
The issue before the House today is rapidly moving to the forefront, particularly since the introduction of the Eurocoin on January 1 of this year.
I am very proud to say that the Bloc Quebecois is the first political party to raise this issue, not only in Canada but, to my knowledge, in all of America.
Everybody knows I have been interested in this issue for some time. I circulated a study paper on this at the beginning of the year, which sparked a debate in Quebec, in Canada and even among our neighbours to the south.
It would be sad, inappropriate and most of all unfortunate for the Parliament of Canada not to consider this issue, particularly since even the Canadian ambassador to the United States himself, Raymond Chrétien, the Prime Minister's nephew, raised this possibility.
This brings me to talk about the wording of the motion, which does not imply the adoption of a common currency, but rather the striking of a committee to consider the issue. The Bloc is not asking that a common currency be adopted tomorrow, but that we, as parliamentarians, elected by the people, study the issue.
We are all aware of the globalization of the economy, which brings as a consequence the regionalization and continentalization of markets. The European Union, NAFTA and MERCOSUR are examples of that.
We also need to take into account the fact that there are only three major currencies left in the world, the U.S. dollar, the euro, and the Japanese yen, the other world currencies being tied to these.
Where does the Canadian dollar fit into all this? I believe that the Canadian dollar, being only an intermediary currency, will become the object of increasing speculation, since the birth of the euro last January 1 deprived speculators of 11 currencies. This makes it all the more important to think things through carefully.
As has already been said, monetary and trade issues cannot be separated one from the other. Perhaps, then, the Canadian trade situation ought to be looked at.
Since the Free Trade Agreement, Canadian trade, which had been primarily east-west, has rapidly become north-south and south-north. In 1984, Canadian exports to the rest of the world were 113% of interprovincial trade. In 1996, this figure was up to 183%, and Canada-U.S. trade is now greater than interprovincial trade.
By way of comparison, on average 62% of exports of countries in the European Union are with each other, whereas 82% of Canada's exports go to the United States.
In terms of GNP, exports among EU countries represent only 16% of their GNP, whereas Canada's to the U.S., represent 30% of Canada's GNP.
Canada is therefore more economically integrated with the United States than the countries of the EU are with each other. Also the fact that 11 EU countries have decided to adopt a common currency argues strongly in favour of establishing a formal link between Canadian and American dollars.
In addition, it is logical for monetary integration to follow economic integration. Thus a pan-American currency would probably apply to Canada and the United States first, before possibly extending fully to the three Americas in the wake of the liberalization of trade that is on the agenda for all countries in the western hemisphere.
In October 1998 Canada's money supply represented $364.5 billion U.S. By comparison, at the same time, the American money supply totalled $5,841 billion U.S., an increase of 10,7% from October 1997.
The Canadian money supply amounts to 6.2% of the American money supply. This means that, for the United States, the adoption by Canada of a dollar tied to their currency represents barely a few months of the normal growth of their money supply.
We must also talk about the main advantages and drawbacks of a single currency. The main argument against a single currency was mentioned by the Conservative member and has to do with the principle of monetary independence. What about the independence of Canada's monetary policy? There is no such independence, it is a myth. There is no Canadian monetary independence.
This is not my opinion but that of several, including Sherry Cooper, chief economist and senior vice-president at Nesbitt Burns.
Let us take a closer look at the figures. For example, between 1950 and 1986, in order to get the Bank of Canada rate, we simply had to add 1.1% to the rate of the U.S. federal reserve bank.
In 1996-97, for the first time in 50 years, with the exception of 1973, the Bank of Canada rate was lower than the American rate. As we all know, this resulted in the Canadian dollar taking a nose dive and falling to 63 cents U.S. It is to correct this situation that the Bank of Canada increased its rate to 1% above the U.S. rate. This is a return to the old econometric model.
What would be the main advantages of a common currency? First, it would eliminate the risks of devaluation and the losses that result from converting national currencies. Second, it would lead to greater transparency of costs and prices within a monetary zone, thus facilitating comparison. Finally, it would allow optimal allocation of capital, largely because certain regions have a savings surplus while others have trouble coming up with the capital needed to develop their projects.
In short, as parliamentarians, we should be debating all of the above. The train is already leaving the station. Before it goes too far, we should get on. Not only can we be on board, but we can even be in the locomotive pulling the whole train.
I wish to move an amendment to the motion moved by the member for Laurier—Sainte-Marie. I move:
That the motion be amended by adding after the word «struck» the following:
«immediately».
In conclusion, I would argue that, if 11 European countries decide, for their own interests, to create a monetary union, why could Canada and the other countries of the Americas not do the same? The elected representatives of the House must ask themselves the following question: how can Quebec and Canada now make the most of the new economic context of globalization?
We have an opportunity to take the time to examine this important issue. I put it to the House that we must not let this opportunity slip through our fingers.