a rise for a number of years.  It is primarily the rapidity of the appreciation that was unexpected. A major reason that witnesses expected a rise in the exchange rate is the view that the Canadian dollar has been undervalued relative to the U.S. dollar for some time.  Andrew Sharpe (Executive Director, Centre for the Study of Living Standards) stated that, according to the notion of purchasing power parity (PPP) -- a measure of the long-term equilibrium value of the exchange rate at which the price of goods and services in two countries are approximately equal -- the Canadian dollar is worth about 84 or 85 cents US. Other witnesses proposed different measures of what the "appropriate" level of the Canadian dollar relative to the US dollar should be in the near term.  John Anania and Jim Stanford (Economist, Canadian Auto Workers) both stated that unit labour costs in Canada and the US were about equal when the Canadian dollar was in the low 70-cent range while George Vasic (Chief Canadian Economist, UBS Securities Canada Inc.) suggested that a trade-weighted basket of Canadian commodity exports indicated a similar value for the doll ar. Of all the witnesses appearing before the Committee, not one suggested that economic forces would push the Canadian dollar back to the 63-cent range in the foreseeable future.( [4] )  The main reason for this belief is the view that, while Canadian economic conditions are much improved today compared to the mid-1990s, the appreciation in the Canadian