The wild card is Canada's economy being so tied to the US.
If they have big problems so will we and Ontario and Quebec will probably be the hardest hit. Under that scenario it will be the governments further reaction to this that will dictate what happens.

that's the way i see it as well. there are two canadas, the west which will do very well when oil and gas prices recover (probably later this year.) i think that is the key to the strength of the currency, too. since the economy is heavily based on commodities, the loonie should move back to par with the us dollar once energy prices go back up. on the other hand, eastern canada will not do as well. since the industrial base is so closely tied to exports to america, where demand will be sluggish at best, and a stronger currency will only make things worse. make no mistake, a strong currency is better than a weak one, but it doesn't help if you're depending on exports to a country that can't pay for them any more.