BMO Nesbitt Burns Inc. chief economist, Sherry Cooper, says Canada should go ahead and adopt the U.S. dollar.

With the loonie continuing its long slide against the U.S. greenback, Cooper says she has given up hope on reversing this downward trend.

In an e-mail sent to BMO Nesbitt clients yesterday, Cooper said that she had resisted calling for dollarization in the past because she thought that our fiscal policy moves would reverse the decline. But now she thinks it’s a lost cause.

“What makes us think we can buck this tide? Let’s dollarize it and get it over with while we still have something to bargain with,” she said in an email message to clients. “Let’s face it, our currency does not float, it sinks.”

The Bank of Canada has rejected earlier calls for dollarization from other prominent economists, noting that our own free-floating currency has acted as a shock absorber to things such as commodity price fluctuations. Cooper argues that the free-floating loonie has been “a licence to underperform”, and to avoid policy adjustments to preserve our competitiveness.

Cooper said she now believes a move to the dollar is inevitable, and that Canada is in a relatively strong position to negotiate because issues such as harmonizing immigration policy, border controls, and trade policy with the U.S. are also on the table.