In our modern world, a state that has no gold reserves is an exception. Very few countries have chosen not to hold gold, or no longer to do so. Among these rare countries are Norway and, above all, Canada, the only G8 country to have fully liquidated its strategic gold reserves since 2016 ($1150 an ounce at the time). 

This choice may seem all the more regrettable given that the price of gold has almost trebled in less than ten years. Similarly, it should be remembered that, historically, Canada, like the United States, was notably built on the gold rush at the end of the XIXᵉ century. 

ARTICLE SUMMARY : 

• Gold fever on Canadian soil
• The strategic evolution of Canada's gold stocks
• Has Canada abandoned gold altogether?

Gold fever on Canadian soil 

The Klondike Gold Rush left an indelible mark on Canadian history, helping to build the Canadian nation by bringing a massive influx of fortune-seeking prospectors to the north-west. 

Experts estimate that at its peak, the gold rush attracted nearly 100,000 people to the Yukon. However, many did not reach their destination, as the gold seekers had to endure extreme conditions to gain access and live there on a daily basis. 

At the time, Dawson City was a small town that grew rapidly, with over 30,000 inhabitants in just a few months. So much so, in fact, that this population influx prompted Canada to officially create the Yukon Territory in 1898 to better administer this strategic region. 

But this golden period was to last only a short time, as from 1899, the exhaustion of accessible deposits was felt and the Yukon was to be hit by the discovery of new veins, this time in American Alaska. 

The strategic evolution of Canada's gold holdings 

The post-war turning point 

The Bretton Woods Agreement of 1944 established an international monetary system to promote the reconstruction and economic development of countries affected by the war. The leaders of the day decided to return to the ‘gold standard’. 

In concrete terms, the value of a US dollar was indexed to that of gold, with a reference value of 35 dollars per ounce of gold. At the same time, international currencies were pegged to the dollar. In return, the US government guaranteed the value of the dollar. 

This encouraged central banks, including Canada's, to build up a reserve of US dollars rather than a reserve of gold. With this in mind, Canada adopted a policy of gradually liquidating its gold reserves. In 1971, the Bank of Canada still held over 1,000 tonnes of gold. By 2000, this had fallen to just 46 tonnes. More broadly, between 2000 and 2024, gold reserves averaged just under 6 tonnes. 

Source: Tradingview. Level of Canada's gold reserves since 2000 

The final liquidation of reserves in 2016 

At that time, and a few years after the subprime crisis of 2008 and the sovereign debt crisis of 2011, many countries such as the United States, Germany and Russia were continuing their efforts to build up their gold stocks as a guarantee against economic crises.  

Canada, on the other hand, is making the opposite strategic choice. Indeed, at the end of 2015, Canada held 2.7 tonnes of gold (95,894 ounces) according to data from the Department of Finance. In the weeks that followed, the government sold 41,106 ounces of gold and then another 32,860 ounces, leaving it with just 21,929 ounces, or 0.62 tonnes. Converted into dollars at the time, this represented 24 million dollars at the end of January 2016. 

But what did Canada do with the proceeds of these massive sales? The aim was to buy assets that ‘have the potential to generate interest income and are more liquid and tradable’. It's true that gold doesn't earn interest, but gold is an asset that offers protection and, above all, long-term capital gains. 

This choice is particularly disadvantageous today, because the absence of gold reserves means that Canada depends mainly on its currency and financial assets to stabilise its economy. De facto, the country would be more vulnerable to economic crises and inflation (for example, the tariffs introduced by the new Trump administration). 

Has Canada abandoned gold altogether? 

This is also one of the reasons why Canada has abandoned its gold stocks, because Canada's ‘vault’ is its territory. There's no need to hold large quantities of gold when you can mine it yourself.

Canada remains a major player in the global gold industry. In 2024, Canadian gold production will be around 200 tonnes, making the country the world's fourth-largest producer. Since 2013, Canadian gold production has even increased by 55%. 

Source: Statista, main gold-producing countries in the world in 2024 (in tonnes) 

Canada also has one of the world's two largest gold producers, with Barrick Gold. Four of the world's top ten gold companies are Canadian. 

According to the Ministry of Natural Resources, gold is mined mainly in the provinces of Ontario (88.9 tonnes mined), Quebec (50.8 tonnes produced) and Nunavut (25.5 tonnes). One of the main Canadian mines is the Canadian Malartic mine (Quebec). This large open-pit mine has estimated reserves of more than 10 million ounces. 

Conclusion 

Once there was the Klondike gold rush at the end of the 19th century, now there is the 21st century gold rush. After making the controversial decision to withdraw from holding official reserves, Canada is now reversing course and massively reviving its gold mining industry on the back of soaring prices.  

But in reality, Canada did not wait until the last few years to act, because such mining projects are not decided in a matter of months. According to S&P Global, in a study of 70 gold mines around the world, the international average time between the discovery of a gold deposit and the start of production is around 15 years.