Timothy Lane on Canada鈥檚 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鈥檚 threat to devalue the U.S. dollar鈥攑art of his so-called 鈥淢ar-a-Lago Accord鈥濃�攃ould severely disrupt the Canadian economy. Writing amid renewed debate over Canada鈥檚 currency strategy, Lane defends the Bank of Canada鈥檚 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鈥檚 economy in turbulent times. With foreign currency reserves low and no gold stockpile to rely on, Lane emphasizes that Canada鈥檚 resilience stems from its flexible exchange rate and institutional stability鈥攏ot from trying to match erratic U.S. moves. While Trump鈥檚 contradictory ambitions threaten to upend global norms, Lane suggests the Canadian dollar鈥檚 quiet rise in global reserve rankings signals growing international confidence in Canada鈥檚 economic governance.
