I always get nervous when business leaders call for a national debate. It generally means they’ve decided to change Canada in some major way and they figure it’s time to begin preparing the public.

So when Paul Tellier, chief executive of Canadian National Railway, called last month for a national debate on economic integration with the United States, you knew it wasn’t the ideal time to invest in a Canadian flag-producing venture.

“Let’s be perfectly blunt,” he said, alerting his business audience to brace themselves for something truly audacious and groundbreaking, “CN’s success — and the success of other Canadian businesses — comes from acknowledging that Canada’s economy is increasingly integrated with the United States. This integration will continue. It is inevitable. It is irreversible.”

So what’s to debate? Tellier and some other business leaders have concluded that economic integration — even adopting the American dollar — is inevitable.

In fact, Tellier has tried to make it inevitable. A former senior civil servant in the Brian Mulroney’s Liberal government, he helped push Canada significantly in the direction of economic integration in the late 1980s with the signing of the Canada-U.S. Free Trade Agreement.

Now that the FTA has succeeded in further integrating the two economies, Tellier argues integration is inevitable.

It may not be inevitable that you’ll be injured crossing the street. But if someone pushes you directly in front of an oncoming car, it can turn out to be inevitable. Funny how that works.

In any event, the campaign for further economic integration has been ratcheted up recently, and not only in business circles. John Manley has been pushing hard in that direction and will no doubt use his new clout as Deputy Prime Minister to further the cause.

Earlier this month, the House of Commons foreign affairs committee announced plans to hold coast-to-coast hearings on the issue; its chair, Bill Graham, has just been elevated to Minister of Foreign Affairs.

Many in business and political circles seem to believe the post-September 11 period is a great time to insist economic integration is inevitable, thereby ensuring Osama bin Laden has a hand in making Canada’s key economic decisions for Canadians.

In fact, in some ways, it could be considered a dreadful time to try to make the case for further economic integration, at least when it comes to the key matter of a common currency.

Now, before going any further, we should note that “common currency” is simply a euphemism for adopting the American dollar. Or is there someone out there who actually believes the U.S. would give up its own currency in some kind of spirit of co-operation and power-sharing with its friendly neighbour Canada?

If so, let that person declare himself. (And I use the masculine pronoun here deliberately, on the assumption only a man would be likely make such a mistake; women have been on the receiving end of power for too long to misunderstand what closer ties with the U.S. would mean for Canada.)

But to continue, this should be a bad time to push to adopt the U.S. dollar because we have right now a perfect example — Argentina — of why adopting American currency makes about as much sense as adopting the Tajik ruble.

Much effort has gone into attributing the Argentine economic disaster to things like corruption and political instability. No doubt these have played a role in Argentina’s long decline, since its heyday in the 1920s. But the current crisis is heavily linked to its decision in 1991 to peg its currency to the U.S. dollar (which has much the same effect as adopting the U.S. dollar.)

This has some interesting lessons for Canada. Both Argentina and Canada are heavily reliant on their export commodities. So a drop in world commodity prices puts both countries in a difficult position. They can either allow their currency to be devalued against other currencies, thereby keeping their exports competitive on world markets or they can maintain the value of their currency and become uncompetitive on world markets.

It’s a tough choice, but if your currency is pegged to the U.S. dollar, it’s a choice you don’t even have. You must maintain the value of your currency, and watch as your export markets collapse and your economy spirals into double-digit unemployment. (Argentina’s unemployment rate has soared above 18 per cent.)

Canada, on the other hand, still has some degree of choice. If it pegs its currency to the U.S. dollar or simply adopts the U.S. dollar, Canada will lose that choice. Canadian currency will have to be maintained at that level, regardless of the consequences for unemployment.

Ultimately, Canadian monetary and fiscal policies will be determined in the U.S., without consideration for their impact on Canadians. (Or is there someone out there who believes Federal Reserve chair Alan Greenspan consults Argentina before making decisions affecting the value of the U.S. dollar? If so, let that person declare himself — I suspect it’s the same guy as before.)

For some Canadians, particularly those in the financial and business sector, the prospect of tying Canadian hands like this would be a dream-come-true. They would rather trust Alan Greenspan and the U.S. administration to make decisions about Canada’s economy than risk allowing ordinary Canadians having a say in the matter.

So it’s not surprising there are some who are keenly pushing Canada to adopt the U.S. dollar — after a national debate, of course, makes clear it’s all inevitable anyway.

Linda McQuaig

Journalist and best-selling author Linda McQuaig has developed a reputation for challenging the establishment. As a reporter for The Globe and Mail, she won a National Newspaper Award in 1989...