Canada's Gold Reserves

[Red Bullets]

I was thinking about how Alberta sends equalization payments to the east and it got me wondering why the east is not sending Alberta money from the gold production they do. Ontario and Quebec produce 76% of all of Canada's gold. They produce 130 to 140 tonnes of gold per year. Canada produces between 160 tons and 180 tons of gold per year.

For example, just in 2017 Ontario and Quebec produced $8,551,900,000.00 worth of gold. (133 tons X $64.3 million per ton.) Times that number by just the last 10 years....Where's Alberta's share?????? It is no where near as much as Alberta's oil makes and contributes but still a considerable sum of money that Alberta should get an equalization payment.

The biggest concern is Canada has 0 tons of gold in reserves. Where is all this gold going? Why isn't Canada acquiring a large portion of this gold production for our reserves?

[Deer Hunter]

Mining is expensive and not taxed as heavy as oil and gas wrt production royalties.
It's easier to steal from Alberta then it is to tax mining businesses in your own province.

[DOGFISH]

Our biggest problem in this country is the poor choice of political figures we have. Most of these people cannot run their own households financially or raise kids to be productive citizens. Just look at the ministers we have in Alberta alone. The current ones are fighting to keep their positions because it is the best job any of them will ever have and they lucked out in acquiring them. I personally have little to no faith in Municipalities, Provincial or Federal leaders. There are a few good ones but not many. So how can we expect any good to come out of our current situation. "That's all I have to say about that."

[bdub]

Originally Posted by Red Bullets

I was thinking about how Alberta sends equalization payments to the east and it got me wondering why the east is not sending Alberta money from the gold production they do. Ontario and Quebec produce 76% of all of Canada's gold. They produce 130 to 140 tonnes of gold per year. Canada produces between 160 tons and 180 tons of gold per year.

For example, just in 2017 Ontario and Quebec produced $8,551,900,000.00 worth of gold. (133 tons X $64.3 million per ton.) Times that number by just the last 10 years....Where's Alberta's share?????? It is no where near as much as Alberta's oil makes and contributes but still a considerable sum of money that Alberta should get an equalization payment.

The biggest concern is Canada has 0 tons of gold in reserves. Where is all this gold going? Why isn't Canada acquiring a large portion of this gold production for our reserves?

We just got rid of the last little bit we had in reserves. What is interesting is the amount of gold buying done by other central banks around the world, in particular by China and Russia. The volume of gold bought by central banks is the highest it has been since 1967. These other central banks must be getting nervous over something if they are switching from US treasuries into gold?

Last year Chinese and Indian demand was up 10%. Indians and Chinese are traditionally large buyers of gold. To give perspective of how large they are in per year tonnage, China’s demand/984.5 ton, India’s/848.9 ton. U.S. 192.8 ton. World demand 4072 ton in 2017.

Reserves of gold are getting more expensive to find and develop. Cash costs per ounce don't leave much margin for producers. Don't hold your breath on the equalization thing.

[1bowhunter12]

^^^this

[Habfan]

Originally Posted by Red Bullets

I was thinking about how Alberta sends equalization payments to the east and it got me wondering why the east is not sending Alberta money from the gold production they do. Ontario and Quebec produce 76% of all of Canada's gold. They produce 130 to 140 tonnes of gold per year. Canada produces between 160 tons and 180 tons of gold per year.

For example, just in 2017 Ontario and Quebec produced $8,551,900,000.00 worth of gold. (133 tons X $64.3 million per ton.) Times that number by just the last 10 years....Where's Alberta's share?????? It is no where near as much as Alberta's oil makes and contributes but still a considerable sum of money that Alberta should get an equalization payment.

The biggest concern is Canada has 0 tons of gold in reserves. Where is all this gold going? Why isn't Canada acquiring a large portion of this gold production for our reserves?

I’m a little confused on how Alberta sends equalization payments. Do they write a cheque ? Is it not all taxes collected and distributed differenty, as in Quebec gets more than they pay ? What I thought was a transfer payment is far from reality and it is too complicated for me to explain !! Red do you have a short answer to this that I’m missing ???

[mindoutside]

It is basically the governments way of equalizing the have's and the have nots.
Google wiki- "federal government makes payments to less wealthy Canadian provinces to equalize the provinces' "fiscal capacity" — their ability to generate tax revenues."

[Red Bullets]

Originally Posted by Habfan

I’m a little confused on how Alberta sends equalization payments. Do they write a cheque ? Is it not all taxes collected and distributed differenty, as in Quebec gets more than they pay ? What I thought was a transfer payment is far from reality and it is too complicated for me to explain !! Red do you have a short answer to this that I’m missing ???

I don't have an answer. Just bewildered that our resources are not being distributed evenly and with gold not being amassed in reserves. I would think that all resource revenues generated country wide should be compiled and then distributed evenly.

[mediumrare]

Originally Posted by Habfan

I’m a little confused on how Alberta sends equalization payments. Do they write a cheque ? Is it not all taxes collected and distributed differenty, as in Quebec gets more than they pay ? What I thought was a transfer payment is far from reality and it is too complicated for me to explain !! Red do you have a short answer to this that I’m missing ???

From what I understand it's like Robin Hood.the federal government robs from the 'rich' and gives to the poor.except I Canada's case the 'poor' provinces want to be poor because it's easier to have Robin Hood do the robbing.

[calgarychef]

Perhaps the gold production isn’t included in the formula just like hydro profits are exempt from the formula.

[ChickakooKookoo]

Google "Trevor Tombe" and "Equalization Payments". He's a professor of economics at the U of C and he's written papers specifically about this. It has something to do with how renewable and non-renewable resources are factored into the equalization formula. Bit of a shocker here - there's an exception carved out for Quebec I believe.

[jcrayford]

Originally Posted by DOGFISH

Our biggest problem in this country is the poor choice of political figures we have. Most of these people cannot run their own households financially or raise kids to be productive citizens. Just look at the ministers we have in Alberta alone. The current ones are fighting to keep their positions because it is the best job any of them will ever have and they lucked out in acquiring them. I personally have little to no faith in Municipalities, Provincial or Federal leaders. There are a few good ones but not many. So how can we expect any good to come out of our current situation. "That's all I have to say about that."

^^Need. LIKE. Button...

What Canada needs to do to have a proper government is to create one that is "representation by region", not "representation by population".... If all provinces had equal voting/representation within the government, then it would be a truly fair democratic government. Imagine if Alberta had as much representation/power as Quebec. I know there would be nothing accomplished over 4 years because of the bickering, but it would be more fair.... I'd like to see AB & SK to tell the East to shove it personally.... but that won't happen in my lifetime

As far as the gold reserves and equalization payments headed West from those reserves, well you'd have a better chance of having POT legalized (no wait.... something's wrong there....) We won't ever see a shiny penny come West from that money...

J.

[TargetRick]

Aside from the equalization payments issue, on which I see you might be right, is there that much of a need for gold these days?

- currency worldwide was decoupled from gold in the 1970s, and probably with good reason. That has a good part in why gold coins are less expensive, except for value to collectors.
- people do of course like gold for jewellery and personal ornaments, but honestly how much gold can one wear?
- there is a deep feeling that "gold keeps it value" better than paper currency or other currency, so people buy gold for investment, (especially in India, China, and older areas) but I'm not sure that would stand up to actual trading in times of need. There are other things that hold more value in times of need. The "gold keeps it's value" argument might just be a leftover value.
- originally, gold was one of the "noble metals" that did not corrode in the atmosphere. Iron and copper, for example, do corrode; gold and silver do not. But these days, there are so many new coatings (e.g. the titanium oxide on your drill bits) that do not corrode and have other useful values. The result: gold and silver kind of have less value as non-corrosive these days.
- reading about the Cariboo gold strikes, there seems to be evidence of an a##-load of gold still to be mined in the region. It's only the environmental problem of mud ("slum" as they term it) flowing into the mine shafts that keeps it there. Pumps can't pump out the mud fast enough for gold ore to be extracted. For now - could change.

With all that in play, I'm not sure gold has the value it used to have, and therefore could figure in balance of equalization payments figuring.

Still, I like your contention that there is more figuring left to be done.

Rick

[barsik]

Originally Posted by TargetRick

Aside from the equalization payments issue, on which I see you might be right, is there that much of a need for gold these days?

- currency worldwide was decoupled from gold in the 1970s, and probably with good reason. That has a good part in why gold coins are less expensive, except for value to collectors.
- people do of course like gold for jewellery and personal ornaments, but honestly how much gold can one wear?
- there is a deep feeling that "gold keeps it value" better than paper currency or other currency, so people buy gold for investment, (especially in India, China, and older areas) but I'm not sure that would stand up to actual trading in times of need. There are other things that hold more value in times of need. The "gold keeps it's value" argument might just be a leftover value.
- originally, gold was one of the "noble metals" that did not corrode in the atmosphere. Iron and copper, for example, do corrode; gold and silver do not. But these days, there are so many new coatings (e.g. the titanium oxide on your drill bits) that do not corrode and have other useful values. The result: gold and silver kind of have less value as non-corrosive these days.
- reading about the Cariboo gold strikes, there seems to be evidence of an a##-load of gold still to be mined in the region. It's only the environmental problem of mud ("slum" as they term it) flowing into the mine shafts that keeps it there. Pumps can't pump out the mud fast enough for gold ore to be extracted. For now - could change.

With all that in play, I'm not sure gold has the value it used to have, and therefore could figure in balance of equalization payments figuring.

Still, I like your contention that there is more figuring left to be done.

Rick

historically, gold was the standard of personal and commercial financial interaction. time moved on and the gold standard was replaced by fiat currency in every corner of the planet. in time, fiat currency will also be moved aside to be replaced by digital currency, which is already well established and expanding daily. gold will eventually become what it was before written records were kept, a shiny rock.

[bdub]

Originally Posted by barsik

historically, gold was the standard of personal and commercial financial interaction. time moved on and the gold standard was replaced by fiat currency in every corner of the planet. in time, fiat currency will also be moved aside to be replaced by digital currency, which is already well established and expanding daily. gold will eventually become what it was before written records were kept, a shiny rock.

I don't think that is true. Gold is the ultimate safe haven asset during times of turmoil. When things hit the fan people will flee to gold if history is any indication. (Check the correlation with market downturns and the price of gold, it's a decent bet when things go south most of the time.) Gold as a store of value is not going to ever change, it's remained a store of value for thousands of years. I don't really think digital currency will replace fiat or relegate gold to the dust bin, but who knows, anything's possible. I think you would have a hard time convincing millions of Indian peasants to trade their gold for crypto or Benjamins any time soon.