Increased water-to-air carbon dioxide fluxes are a potentially important, but as yet unquantified, consequence of canal estate developments in estuaries surrounded by coastal wetlands. We used detailed pCO2 and radon (222Rn, a submarine groundwater discharge tracer) surveys to investigate whether water-to-air CO2 fluxes were enhanced in residential canal systems, and whether groundwater exchange may drive pCO2 distribution. Observations were performed along 300 km of canals, rivers, estuaries, and coastal embayments from the Gold Coast (Queensland, Australia), one of the largest estuarine canal systems globally. Overall, residential canal estate waters were supersaturated in CO2 withpCO2 ranging from 372 to 3639 μatm and 434 to 3080 μatm in the dry and wet season surveys, respectively. pCO2 usually increased in areas of reduced connectivity (i.e., poorly flushed dead end canals). A stronger correlation between 222Rn and pCO2 than between dissolved oxygen and pCO2 implied that groundwater seepage (not pelagic respiration) was the major driver pCO2 supersaturation within the canal system. Average area-weighted water-to-air CO2 fluxes within canals were 34 and 67 mmol C m− 2 d− 1 during the dry and wet seasons respectively. When upscaled to the entire Gold Coast estuarine system, residential canal contributed 46% and 56% of the total flux of CO2 to the atmosphere during the dry and wet seasons, respectively. These results imply that areas that were previous atmospheric carbon sinks (i.e. coastal wetlands) have become sources of CO2 to the atmosphere since the development of residential canal estates.