Independent Quebec would keep Canadian dollar, request BoC seat: Marois
Andy Blatchford, The Canadian Press
Published Wednesday, March 12, 2014 12:27PM EDT
Last Updated Wednesday, March 12, 2014 6:49PM EDT
MONTREAL -- An independent Quebec would continue using the Canadian dollar and request a seat at the Bank of Canada, Parti Quebecois Leader Pauline Marois said Wednesday as she campaigned ahead of next month's provincial election.
Marois highlighted the European model and said Canada would benefit from having a sovereign Quebec keep the loonie as well as ties to the central bank.
However, the leader of the province's independence movement acknowledged there would be no guarantees on how much influence a Quebec country would wield with the Bank of Canada.
"We could wish to have a seat at the Bank of Canada, but we accept the fact it is the bank's monetary policy that would apply," Marois said as she campaigned for the April 7 election.
Marois's remarks reiterated the PQ's long-held position that Quebec would continue to use the Canadian currency if it seceded. She pointed out that European nations share the euro even though they are independent.
"Each country has its own policies," she said.
"But they accept to share their borders, to share their money. They have the euro, so that is a model that is very interesting."
Before the 1995 referendum on Quebec independence, then-PQ leader Jacques Parizeau repeatedly said he had no problem with keeping the dollar -- regardless of what Canada thought.
In 1991, he acknowledged that adopting the loonie would remove one of Quebec's economic-development tools, but noted it would be "better to have one instrument missing than to jeopardize the entire project."
Parizeau had also said the idea of creating a Quebec currency "invariably sparks widespread panic among people."
The debate over what type of cash an independent Quebec would use remains hypothetical, as recent polls have suggested support for sovereignty in the province barely reached 40 per cent.
But as the PQ drives for a majority government, the party and its adversaries have pushed the issue of Quebec sovereignty into the spotlight over the past week.
On Tuesday, Marois promoted an independent Quebec without borders, one that would open its arms to tourists from Canada. She explained that her vision for any eventual relationship between the countries of Canada and Quebec would share similarities with the European Union, where people have free movement across borders.
A day later, Marois tried to make the case it would be a win-win situation for both countries if Quebec were part of the Bank of Canada.
"There are eight million people living here in Quebec and we have an economy that is a rich one," said Marois, who has made great efforts in recent months to polish the PQ's image as a sound fiscal manager, long considered a party weakness.
"We have a lot of consumers. We have a lot of business organizations on our territory and I think it is important to have a place at this level (the Bank of Canada). But if it is not the case, we will see."
The PQ leader also promised Wednesday to reduce Quebec's debt to under 50 per cent of gross domestic product by 2018-19. As of March 31, 2014, it was projected to stand at $198.4 billion, or 54.3 per cent of GDP.
The Liberals took to Twitter after Marois's remarks about the dollar, accusing her of knowing nothing about economy.
The tweet, citing two of the party's star economic candidates, said monetary unions aren't possible without a political union.
Liberal Leader Philippe Couillard once again attacked Marois's intention to lead Quebecers toward another sovereignty vote.
"The mechanics of a referendum are already underway," Couillard said Wednesday.
"It's all planned. It's the lobster trap that Mr. Parizeau talked about a few years ago ... Hey, the bait is here. Get in Quebecers, get in the lobster trap and then we'll close the door and you'll have a referendum no matter what."
Couillard was referring to a Montreal La Presse report that quoted Parizeau comparing independence-bound Quebecers to "lobsters in boiling water" as he met with European ambassadors at a private gathering in 1995.
He accused the PQ of trying to dupe Quebecers by making sovereignty seem like a fantasy world, similar to "Alice in Wonderland."
"Everything is going to be so great," Couillard said with a sarcastic tone.
"Everybody is going to be great friends. Of course, in an imaginary world, you don't need borders ... We've had enough of this mythology."
When it comes to adopting a foreign currency, economic experts warned Wednesday that a country puts itself at risk if it has limited or no influence on the decision-making process.
"From a big picture, the fact is, a country can use whatever currency it wants," BMO chief economist Douglas Porter said when asked about Marois's comments.
"The real issue here is whether the country then has any say on the underlying monetary policy that backs up that currency."
Porter said a country's well-being could be at risk if the currency becomes too strong or too weak.
Economist Mike Moffatt, an assistant professor at the Richard Ivey School of Business, said he couldn't envision a scenario where Canada would open a central-bank seat or enter a currency union with an independent Quebec.
"I'm not seeing why Canada would voluntarily give that up and I don't know what Quebec could possibly give Canada in return to make that happen," Moffatt said from London, Ont.
He said it would be possible for Quebec to create its own new currency, though it would likely suffer an initial drop in value and take Quebecers' financial assets with it.
"It's not the most painless thing in the world, but it can be done," Moffatt said.
The currency issue surfaced in Quebec amid a similar discussion in the United Kingdom.
Scotland's pro-independence movement wants the country to continue using the pound if it votes for secession in a referendum this September.
The Bank of Canada's former governor, Mark Carney, weighed in on the subject in January because he now serves as England's central banker.
The Bank of England governor said in January it was up to the parliaments of Britain and Scotland to decide whether Scotland continues to use the pound in the case of independence.
Carney said successful currency unions mean giving up some sovereignty as they require some level of common fiscal policy and bank supervision.