Timothy Lane on Canada’s Currency in the Face of U.S. Dollar Turbulence | The Globe and Mail
May 26, 2025 | In a interview with The Globe and Mail, J.W. McConnell Visiting Professor of Practice Timothy Lane warns that Donald Trump’s threat to devalue the U.S. dollar—part of his so-called “Mar-a-Lago Accord”—could severely disrupt the Canadian economy. Writing amid renewed debate over Canada’s currency strategy, Lane defends the Bank of Canada’s decision not to intervene in foreign exchange markets, even during crises like the 2008 recession or the COVID-19 pandemic. He argues that a floating loonie acts as a shock absorber, helping stabilize Canada’s economy in turbulent times. With foreign currency reserves low and no gold stockpile to rely on, Lane emphasizes that Canada’s resilience stems from its flexible exchange rate and institutional stability—not from trying to match erratic U.S. moves. While Trump’s contradictory ambitions threaten to upend global norms, Lane suggests the Canadian dollar’s quiet rise in global reserve rankings signals growing international confidence in Canada’s economic governance.
