A latitudinal pattern in coastal air‐sea CO2 flux has emerged where mid‐and high‐latitude shelves act as net sinks and low‐latitude shelves as net sources to the atmosphere. Regional studies, however, report the mid‐latitude Scotian Shelf (SS) at the eastern Canadian seaboard acts as a large source of CO2, contradicting several global syntheses. Here, we combine observations and a regional biogeochemical model to explain, for the first time, how this net outgassing of CO2 is sustained. We employ a novel approach using passive dye tracers to estimate how carbonate properties change along dominant transport pathways. We show that cold, carbon‐rich subpolar North Atlantic water is a dominant endmember that warms and combines with low alkalinity (TA), carbon‐deplete freshwater from the Gulf of St. Lawrence, becoming oversaturated with CO2 on the SS. Our approach explicitly considers the 3‐dimensional nature of coastal ocean transport processes and should be applied to other shelf regions.