final cut pro quality loss

I have final cut pro 7.0.3 and when i import my footage and watch in the viewer window it looks crisp as it should as it is 1080p video but when i watch it after putting it onto my timeline in the canvas window I can notice the quality has decreased. Then I tried exporting it hoping it was just the canvas but no, once exported the quality looked as if it was 360p..... Need Help

Thanks