Every year, more Canadians and Americans ask the same question: Is the Canadian dollar backed by gold? With growing concerns about inflation, U.S. debt, and global economic instability, many people are searching for a safe haven and naturally look toward Canada. Some even imagine that if the U.S. dollar collapses, they could switch to Canadian dollars and then convert that value into gold.
But before assuming this is a viable backup plan, it’s important to understand how modern money actually works.
More people today also realize that the U.S. dollar is not backed by gold. Although this alarms some, the reality is that if the United States—and other Western nations—still operated on the gold standard, the modern world as we know it simply wouldn’t exist. Economic growth would be limited by how much gold could be mined, which would create severe deflation and dramatically restrict innovation, investment, and infrastructure.
Supporters of the old gold standard often praise it because it rewards savers, not investors. But if the world returned to a gold-backed monetary system, whoever already owns the gold would control the economy. Everyone else would be locked into permanent poverty.
So, Is the Canadian Dollar Backed by Gold?
The answer is absolutely NO.
No modern fiat currency is backed by gold—not the Canadian dollar, not the U.S. dollar, not the euro.
What Is a Fiat Currency?
A fiat currency is simply money declared by a government to be legal tender. For Canadians, this means CAD. Look at any Canadian bill and you’ll find the phrase:
“This Note Is Legal Tender.”
This confuses people because conspiracy theorists online often claim gold backing still exists—or that returning to it would solve everything. In reality, most of those claims are speculation or misunderstandings. Yes, governments can be corrupt, but most regular people just want stability and a functioning financial system.
It’s important to remember:
If our money were still tied to gold, governments would literally need to dig gold out of the ground before printing more. This is one of the reasons gold-backed systems historically caused extreme inequality, wars, and economic stagnation.
Unlike silver, gold is rarely consumed or destroyed—meaning those who hoard it can dominate entire societies. If you grew up with limited resources, you should actually be grateful the gold standard was removed. Under that system, the poor never stood a chance.
Today, when recessions or crises happen, governments can increase the money supply to stabilize the economy. Under gold, this would be impossible.
In many developing nations, farmers—not doctors or engineers—are the wealthy class simply because they control land and food. A strict gold or land-based system locks people into whatever class they were born into. This is why so many nations with commodity-backed systems also suffer from corruption and limited upward mobility.
In Western nations, the fiat system allows credit, investment, entrepreneurship, and upward mobility. When demand increases, more money can enter circulation. Investors can borrow capital, build businesses, and expand the economy. This flexibility is part of the reason the gold standard was phased out.
So again: The Canadian dollar is not backed by gold—and that’s a good thing.
If you want to personally diversify into precious metals, consider reading the following guide:
Where To Buy Gold Coins Online.
By removing the gold and silver standard the only people who have benefited have been the banks, not us the tax payer. They have been given the printing press, no accountability and inflated the money supply and reduced our purchasing power. How in the world do you find a non-backed money system good! I’m sure you believe “War is Peace” also.
what planet on you on AuAg? Yes ok good point about the banks – well on a Gold standard the companies that sell the gold and silver will replace the banks and then you have a whole new problem so I guess it safe to say to say you believe “War is Peace” also. You conspiracy theorists know nothing about progression or wealth for that matter.
Say what you want about expanding the economy and printing money when we need more, the fact is The Federal Reserve is printing money irresponsibly and the only people benefiting are banks and corporations on the inside. The amount of devaluation of the dollar has been 93% over the past hundred years. With gas over 3 dollars a gallon, do you think the gas is somehow better or worth more than it was when it was at 1 dollar a gallon? No. It’s the same gas, it’s the value and purchasing power of the money that has failed, is failing now. Money can still be backed by gold, the percentage would have to be figured out, obviously, but just being able to tie the hands of the criminals in charge of our money would be worth the slightly slower, but far more stable growth. Your argument neglects to point out that over half of the nation’s gold was confiscated in 1933, and the price promptly inflated for profit, and the amount of gold backing the currency became less and less over the years until it was abolished in 1971. During that time, overseas banks that were paid in gold with redeemable dollars, started redeeming them and subsequently drained our gold reserves leaving us pretty bone dry on gold. The Fed currently has around 500 billion in hard assets, yet is 65 trillion in debt. With accruing interest, repayment is impossible. So your “awesome, wealth building” fiat currency is on self-destruct mode, and nothing can stop it! The “wealth” this fiat dollar has created is false, fake, not real. Unless you purchase a hard commodity, such as gold, and hold it. Hence the argument, “paper is not wealth”.
Thank you for your comment but what makes you think Gold is any more valuable than fiat currency? The world wasn’t at peace when dollars we’re back by Gold in fact slavery and war was the name of the game when dollars we’re backed by Gold. I understand what you people are saying in regards to printing money but what you don’t seem to understand is that under a Gold standard especially in times of nuclear weapons is a very dangerous thing. Example if a few Rich people from Saudi Arabia decide to take their “Gold” out of American banks and the world is under a Gold Standard America goes down Europe goes down Canada goes down which ultimately leads to war.
In order for a Country to have power it must be able to control its money supply. If dollars are back by Gold – GOLD is the money supply and he who has the gold rules. Things don’t work like that with fiat money – LAWS are the money supply and the country with best laws enjoy the best standard of living if you don’t believe me read about Switzerland and learn why the average Swizz citizen makes over $400,000 per year. Switzerland’s government has the closest thing to a direct democracy in the world their people are active in politics which means – they the people control where their fiat money goes. The problem Canada, America and other countries are facing is that most of the people are not involved in politics instead they go down to wall street and pitch tents hoping someone will listen to them. If you have a problem with your government get involved in politics otherwise stop the complaining.
People who think Gold will solve this problem have not studied history. Gold standards throughout history in every nation dating back to the Roman empire have always failed.
My goodness, a simple one line question requires the reader to wade through an entire paragraph to convey a simple NO ? ….scary!
@kathy Are you colour blind?
Steve,
All I have to say is educate yourself. Spent a couple of your fiat dollars and buy the book “The Creature from Jekyll Island” by G. Edward Griffen which is in it’s 5th edition.
Then tell me whether you really can stick to your statement that fiat money is good and learn just how the Roman Gov’t. failed.
@Bill Thank you for your comment. I’ve read the book that’s and that’s only one persons point of view. The problem with you people is you think Money is the problem, Money is not the problem education about money is the problem. A country must control it’s money supply, If fiat money is backed by Gold all countries will fall because of Rich money speculators. There’s no such thing as a perfect monetary system which is why under a colonial system of government a country must control it’s money supply. With a Gold back monetary system Gold and the markets will control the money supply meaning in this day and age the people with all the Oil and resources will rule, you people are looking at things from an individual perspective and not a global one. Deflation is what a country fears most not Inflation. The funny thing about the way you people think is the fact that you can still buy Gold and silver bullion coins? If you have a problem with fiat Monetary system just continue to buy Gold and silver? If Gold and silver backed money worked we would have never had a great depression!
For those of you interested in this topic type “the creature from jekyll island mp3” in Google or visit Amazon and type “the creature from jekyll island” It’s a very nice book and it will open most of your eyes to what Ron Paul is rambling about. However my position on this topic is Fiat Money with a democratic government makes a lot more sense than a Democratic government with Gold back money supply.
Money speculators through out history have always destroyed governments and great countries this goes back to the Roman empire. Before getting sold on the idea of a gold backed money supply read about “money speculators” first. Add this to the fact there are rich Arab terrorists and Countries that wish to destroy America, Canada Europe and other developed nations and you’ll understand my stance on the federal reserve and fiat money.
Yes I would love a world with people who are peaceful and will “share the wealth” but this not the worlds current REALITY. The reality is that they’re ruthless people in the world that if given the opportunity will take the wealth of countries and people and HOARD it. Gold backed money allows rich people to HOARD money.
If Rich people are allowed to HOARD money they can also prevent whole governments from functioning properly. If you read and learn about the whole story behind the great depression you would know this. “MONEY SPECULATORS” Read and educate yourself on it without bias.
“the creature from jekyll island” is a book created from a person with a singular point of view. Monet means different things to different people which is why with currently have an elastic monetary system. Do you have a computer right now? Do you have electricity? Do you have access to food? Do you have shelter? Do you have the ability to purchase Gold or Silver bullion coins? If you answered yes In my opinion you shouldn’t be complaining about Canada’s fiat money!
What will happen when/if the dollar collapses?
@Anonymous ~ In the event that happens it would be a good idea to have Guns, Oil, transportation, food, and silver or gold BULLION coins which can be bought at bullion dealers locally or online.