Canada has announced the creation of the Canada Strong Fund, a government-owned investment vehicle designed to finance major development projects as a response to US tariff threats, according to official statements. The fund will receive an initial C$25bn ($18.4bn; £13.5bn) and will invest in energy, infrastructure, mining, agriculture, and technology, according to multiple reports.
According to reports, Canadians with extra money can invest directly into the fund. The fund will collaborate with private investors to advance nation-building projects, such as port upgrades and natural resource development. Officials say this direct investment vehicle will give Canadians a direct stake in national development projects.
The US has changed, that's their right. And we are responding, that's our imperative.
The fund draws inspiration from Norway's sovereign wealth fund, launched in 1990, which invests surplus oil revenues exclusively abroad. Norway's fund has grown to become the largest of its kind, with assets totalling $2.1tn. Canada, which possesses the world's third-largest oil reserves, has not had a comparable fund until now, according to reports. Unlike Norway's fund, which limits investments abroad, the Canada Strong Fund will prioritize domestic projects.
Because Canada is currently in debt, the fund will be financed by borrowed money rather than from revenue surpluses, according to multiple reports. Prime Minister Mark Carney said: "The US has changed, that's their right. And we are responding, that's our imperative." He added: "Many countries that are blessed with natural resources like Norway have sovereign wealth funds. Canada hasn't had one, until now." Carney argued that the fund will stimulate economic growth and create jobs, making the borrowing worthwhile.
Many countries that are blessed with natural resources like Norway have sovereign wealth funds. Canada hasn't had one, until now.
Opposition leader Pierre Poilievre argued that Norway, Singapore, and Saudi Arabia run big budget surpluses to fund their sovereign wealth funds. "Carney has no surplus, and therefore no wealth to put in such a fund," Poilievre said. He also asked, "If a project has a business case, why would the government need to fund it?" The Montreal Economic Institute warned that the fund "risks costing taxpayers dearly while generating limited returns." Poilievre has labelled the initiative a "sovereign debt fund." He warned that adding more debt to finance the fund could strain Canada's fiscal position further.
The exact deficit figure Carney referred to remains unclear. Details on the fund's structure, project selection criteria, and timeline for consultations and launch have yet to be announced. The government has not specified how borrowing will affect Canada's national debt.
risks costing taxpayers dearly while generating limited returns