From a billion dollars to zero: Canada stands alone in G7 as it empties its coffers of gold

Canada is among the largest gold producers on the planet, but as of last month the government valued its official holdings of the precious metal at zero.

The country sold 21,851 ounces of coins in February, the Finance Department said Thursday inside a disclosure of its official international reserves. A footnote in the report said the federal government continues to have 77 ounces from the precious metal.

Asset valuations are rounded towards the nearest $1 million in the official international reserves, so the worth of the rest of the gold was set at zero, department spokesman David Barnabe said by e-mail.

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Data in the World Gold Council suggest Canada stands apart from the industrialized peers as the only G7 country without a stockpile of at least countless tonnes of gold.

Canada’s gold reserves peaked in 1965, if this held around $1,150,000,000 in bullion and coins. In 1980, the federal government began selling its gold “at a gradual and controlled pace” to enhance returns, using the proceeds committed to interest-bearing foreign currency assets, according to the finance department website.



A department spokesman says the government includes a long-standing policy of diversifying its portfolio by selling physical commodities like gold in order to invest instead in assets which are more easily traded.

Former senior Finance Department bureaucrat Don Drummond says he doesn’t think it makes sense at all for Canada to hold any gold since it hasn’t delivered a great rate of return with time and it is expensive to keep it.

Drummond says that hundreds of years ago gold symbolized the insightful a country.
Canada has been gradually selling from its gold stash for many years and, in recent years, the federal government has increased its holdings of U.S. and British currencies.

The last bullion was sold by December 2003. The remaining high quality coins were sold by January 2014, Barnabe said.

All that remained were “lower-quality King George V $5 and $10 gold coins dated 1912, 1913 or 1914, which contained imperfections from handling or environmental conditions,” Barnabe said. They were melted off into gold bullion and therefore are for sale off “at market prices.”

In February, the U.S. held 8,133 tonnes of gold, which composed 72 percent of their reserves, based on the World Gold Council.

The council also said Germany had 3,381 tonnes for 66 percent of their reserves last month, while Italy and France each held more than 2,400 tonnes – over 60 per cent of the respective reserves.

With files from Canadian Press

Bloomberg.com