Have you ever considered how little gold there is in Canada? Most other countries, including the US, do have gold, therefore it’s a good question.

The Bank of Canada began selling its gold holdings in the early 2000s. Canada is the G7 country.  Together with Angola, Belize, and Tonga, Canada is currently one of the 88 countries without any gold reserves. This will undoubtedly surprise and annoy anyone with even a basic understanding of economics.

Canada’s Gold-Less History

In 1965, Canada had 1,023 tonnes. That was the pinnacle. Canada’s stockpile had only 500 tonnes left by 1985. Canada kept selling its gold from the 1990s until 2002. Canada’s gold holdings have now fallen to their lowest point. None.

Canada’s Alternatives to Gold Reserves

The rationale offered by Canada for the sell-off is that genuine bullion bars cannot be sold as readily as, example, government bonds. Having gold is costly in terms of storage. Canada is in a special position. They choose an alternative to retaining gold reserves, which is what many other countries do.

•   Foreign Exchange Reserves

Canada holds thousands of billions of dollars in foreign exchange reserves, which are made up of the equivalent value in international currency. At the IMF, Canada currently holds a reserve position of US$10,412 billion.

•   Commodity Reserves

Commodity reserves provide additional stability to their economy, as they consist of crude oil, natural gas and other natural resources that are valuable and serve as a form of economic insulation from global economic shifts.

•   Financial Assets

The bulk of Canada’s reserves is composed of financial assets like stocks, bonds, and short-term debt instruments. These financial assets are used to fund government services and sold off when necessary—which can help offset inflationary pressure on their economy.

Hence, while it is true that Canada no longer holds any gold reserves, we may find comfort in the fact that our choice to sell off those assets was made with caution and foresight rather than out of financial irresponsibility.