Canada would most likely not convert any time in the near future.
The challenge for Canada converting to the US Dollar or the fictional "Amero" mentioned by JohnFX is that :
- Canada would lose control over setting interest rates and monetary policy.
- For both the US and Canada to benefit they need to have similar economies. Canada has a strong commodity based economy compared to the American economy.
- Canada would be dominated by American monetary policy. As the larger partner in the union they would have more say and would tend to protect their own interests first.
- The U.S. currently has a high amount of debt which makes its currency not as desirable (as mentioned in another answer).
Some of the benefits would be:
- There is already a free trade agreement between the 2 countries. A common monetary policy would remove uncertainty related to exchange rates.
- Removal of currency exchange costs.
- Price comparison between industries in both countries would be more easily compared.
- Currency devaluation would not occur - this is believed to hide lower productivity.
The challenge right now for any government would be to sell the pros over the cons and from that viewpoint the cons would appear to have more negative impact to voters. Considering that Canada currently has a minority government with no expected change to that status for some time the risk would be very high.
For more details see Pros and Cons of Canadian Monetary Union and to see the Mexican impact see North American Currency Union
It is interesting to note that currency union was first proposed in 1999 when the Canadian Dollar fluctuated between $0.64 to $0.69 US. The Canadian Dollar is closer to par with the US Dollar currently (in fact it rose to $1.10 US in Nov. 2007). Look-up historical rates at the Bank of Canada