On Monday, Prime Minister Mark Carney announced the creation of a new sovereign wealth fund, the Canada Strong Fund.
Carney says the fund will begin with a $25-billion federal contribution and invest alongside private capital in “nation-building projects.”
“Many countries that are blessed with natural resources, like Norway, have [sovereign wealth funds],” Carney said in a speech announcing the fund.
“Canada has not. Until now.”
But economists say comparisons to Norway’s sovereign wealth fund — widely considered the global benchmark — are off base. Canada’s proposed fund differs from Norway’s in three key respects: its funding, its governance and its purpose.
Money in
The most fundamental difference between Canada’s proposed fund and Norway’s is the source of funds.
“It is a sovereign wealth fund in the sense that a government agent is going to be investing money on behalf of the general public,” said Steve Globerman, an economist at the Fraser Institute think tank.
“[But] the sources of funding for the Canada Strong Fund are unclear other than the first $25 billion, which is clearly coming from … general revenues,” he said. “And presumably, that’s really borrowing since the government has a deficit.”
Norway, by contrast, established the Government Pension Fund Global in 1990 following the development of the country’s offshore oil industry.
The fund began receiving money in the mid-1990s once the government started running consistent surpluses. Today, it has grown into the world’s largest sovereign wealth fund, with about US$2 trillion in assets under management.
Canada, by contrast, does not have a comparable federal surplus stream.
Ottawa has run deficits every year since 2015. This week’s spring economic update shows a shortfall of nearly $67 billion for 2025–26, and projects continued deficits for the next five years.
Jean Philippe Fournier, an economist who advised Quebec’s finance minister from 2020 to 2022, agrees with Globerman that the Canadian fund still qualifies as a sovereign wealth fund, because the term simply refers to a state-owned investment fund.
But the proposed funding model is “muddled,” he said. Canada’s fund appears likely to draw from several sources: federal transfers, potential asset sales, debt, and possibly retail investment by Canadians.
“Those are all a bit unorthodox,” said Fournier.
The core economic issue is not only borrowing, says Globerman, but opportunity cost.
“The real cost is what those funds would otherwise be used for that could generate economic growth,” he said.
Conservative Leader Pierre Poilievre has said the absence of surplus wealth makes the proposal fiscally reckless.
“[Carney] wants to put another $25 billion on the national credit card to gamble on a Liberal slush fund that will enrich Liberal insiders at the expense of hardworking Canadians,” he said.
A Department of Finance official defended the fund in an email to Canadian Affairs, noting it has “a clear objective to achieve commercial returns to build the wealth of Canada.”
Governance
The second major difference is governance.
Norway’s fund is managed by Norges Bank Investment Management, a division within Norway’s central bank. The bank is known for its transparency, professional management and distance from day-to-day political decision-making.
The fund has two parts: a global fund that invests petroleum revenues abroad, and a much smaller fund that invests domestically and in other Nordic markets. The fund invests just two per cent of its assets in Nordic markets.
Norway’s foreign investment model was designed “precisely” to prevent the investment process from becoming political, says Globerman.
Both Globerman and Fournier warn that the domestic, nation-building mandate of the Canada Strong Fund creates an unavoidable risk of political influence.
“The [Canada Strong] Fund, as it was announced, is meant to both nation build and produce commercial rates of return,” said Globerman. “ [This] really cuts against the grain of what is considered to be best practice for sovereign wealth funds.”
Fournier says the better comparison for Canada’s new fund may be the Caisse de dépôt et placement du Québec (CDPQ), a Quebec pension fund that combines investment goals with a mandate to support the Quebec economy.
If that is the model, the fund could become a powerful domestic investment institution. But it also risks blending financial and political objectives.
“It’s the meshing of the political and the financial interests which can get messy very quickly,” said Fournier.
“On paper, sure,” independence may exist, Fournier says. “In practice, when the doors are closed, there will always be [influence].”
The Department of Finance says the Canada Strong Fund will operate at arm’s length from the government as a new Crown corporation. It will be led by a CEO and a qualified independent board of directors.
“Independence and professional management ensure a sovereign wealth fund can make long-term, economically sound investment decisions,” the finance official said in its emailed statement.
Purpose
The third distinction between Canada’s proposed fund and Norway’s is purpose.
Norway’s fund is primarily a long-term savings vehicle. Some of the returns generated in the fund are used to support the national budget.
Canada’s proposed fund has multiple stated purposes. The government says it will invest in domestic projects and companies, complement existing federal Crown corporations, and partner with private capital. It has also suggested there will be a retail investment component to it.
The Canada Strong Fund will focus on “investing alongside private capital in … [a] growing pipeline of projects and companies, and generating strong, commercial returns for Canadians,” said the finance official.
However, Canada already has institutions designed to support infrastructure, exports and economic development, says Globerman. He pointed to the Canada Infrastructure Bank and Export Development Canada as two examples.
“There are many agencies that, in one way or another, are subsidizing or directly funding … broad economic growth objectives,” he said, adding that the historical record of state-directed investment should make Canadians cautious.
“If we look at the history of industrial policy — government playing a major role in determining priorities for investing, research and development, et cetera — the outlook isn’t favourable,” he said.
Poilievre says the government should not need to invest in projects that the private sector is already prepared to back.
“If a project has a business case, why would the government need to fund it?” he said at an April 27 press conference. “If it doesn’t have a business case, why would the government want to fund it?”
Ultimately, the fund’s efficacy will depend on particulars that remain unannounced, says Fournier.
“The devil’s in the details,” he said. “I don’t think anyone instinctively thinks this is bad. It could be a good thing, [but] you want it to be as independent and objective as possible.
“That’s very difficult, even with the best of intentions.”
“Sovereign Wealth Fund” HUH! I don’t believe it. Please, we have the Canada Pension Fund generating investment returns from 47% of it’s holdings (including rental apartments) and less than 13% from Canada. I wonder why? Could it be the existing layers of tax on tax in Canada? Will the highspeed train network from Quebec City via Ottawa to Toronto qualify as a Canada Strong investment? Will a one-way economy ticket price of $27,347. expensed by government bureaucrats ensure profitability?
Consider the failed Mirabel Airport and aborted Pickering Airport projects as less than stellar examples of federal government mismanagement. Our federal government bureaucrats can’t manage the use and welfare of 24 Sussex Dr in Ottawa. These are left in the dust of historic perpetual deficit spending. No one is responsible and no one is accountable.
Three federal Cabinet Ministers have announced their resignations since the 2025 election requiring costly byelections to select replacements. What happened to the concept of serving their constituents with respectful “duty of care” obligations until the next election unless health issues preclude their service? Surely career changes should not attract these costs from taxpayers.
Shame on Canadian voters for enabling and condoning this pathetic performance.
Please correct my earlier comment with ( in America ) after the (including rental apartments) portion.
Thank you.