“So there is a second, competing narrative for the recent strength of the Canadian dollar. Instead of focusing on oil exports from northern Alberta, this story centres on Bay Street. I doubt we'll hear anyone at Queen's Park decry the stability of our financial institutions, but don't think for a minute that they have not been a major contributing factor to the high exchange rate. The Ontario government has even run advertisements stating 'The World's Soundest Banking System is Headquartered in Ontario, Canada.'
“If you've got the world's soundest banking system, don't be surprised if you've also got one of the world's strongest currencies.”
"The banks did it” by Philip Cross, a senior fellow at the C. D. Howe Institute in the Financial Times, March 7, 2012.
The beauty of an independent Canadian dollar to Ontario Premier Dalton McGuinty is, of course, not merely emotional. He champions a longstanding nationalist myth: once that ugly boom in Alberta settles down, Canada’s dollar will naturally decline to competitive junior status.
Unfortunately, Canada would have to sacrifice far more than energy exports to engineer a distinctly cheap Canadian dollar, leading to a “renaissance” in Ontario manufacturing. Canada would have to undermine the credibility of its financial institutions and the international appeal of its urban centers.