Mark Carney has made economic sovereignty the centerpiece of his premiership. His most ambitious move yet isn’t a tax cut, a trade deal, or a stimulus cheque — it’s a C$25 billion sovereign wealth fund.

The Canada Strong Fund, announced Monday in Ottawa, is the country’s first national investment vehicle of its kind. It will channel public and private capital into energy projects, critical minerals, agriculture, and infrastructure — the physical backbone of an economy Carney says must become less dependent on the United States.

“The US has changed. That’s their right. And we are responding — that is our imperative,” Carney said.

Where the C$25 Billion Comes From

The fund starts with an initial federal endowment of C$25 billion ($18.4 billion). Where the money originates is a fair question. Canada ran a projected deficit of C$78.3 billion in the fiscal year just ended, though Carney told reporters the actual figure has improved — helped in part by a spike in oil revenues tied to the conflict between Iran, the US, and Israel.

Over time, the government plans to grow the fund through “asset recycling” — unlocking value from federal assets — and reinvestment of returns. A yet-to-be-designed retail investment product will let ordinary Canadians buy in directly, earning dividends. That feature has no real parallel among existing sovereign wealth funds.

How It’s Structured

The Canada Strong Fund will operate as an arm’s-length Crown corporation, reporting to Parliament through Finance Minister François-Philippe Champagne. A transition office will handle engagement with market participants and regulators before the fund becomes fully operational.

Investments won’t be restricted to projects classified under Bill C-5, Carney’s fast-track legislation for “nation-building” infrastructure. The fund will cast a wider net, though the specific investment mandate remains under consultation. More details are expected in the government’s Spring Economic Update, scheduled for Tuesday.

The Norway Comparison — and Why It’s Complicated

Carney invoked Norway on Monday, noting that countries blessed with natural resources have used sovereign wealth funds to build long-term national wealth. Norway’s Government Pension Fund, launched in 1990, has swelled to $2.1 trillion in assets, according to a 2025 Bloomberg report.

The comparison cuts both ways. Norway’s fund invests exclusively outside the country and was built from budget surpluses generated by state oil revenues. Canada’s fund will invest primarily at home and is being seeded with borrowed money.

Joseph Steinberg, an economics professor at the University of Toronto, told the BBC that sovereign wealth funds historically channel surplus income from publicly owned assets into diversified foreign portfolios. “In Canada’s case, it appears the money will be mostly used to invest in domestic projects instead,” he said.

Singapore’s GIC, another oft-cited model, manages the city-state’s foreign reserves with a strict global investment mandate. Canada’s fund has a fundamentally different mission: domestic economic transformation, not portfolio diversification.

The Critics Queue Up

Conservative Leader Pierre Poilievre labelled the initiative a “sovereign debt fund,” arguing that countries need surpluses to justify such a vehicle. “Norway, Singapore and Saudi Arabia run big budget surpluses which they accumulate and put into their sovereign wealth funds,” he said. “Carney has no surplus, and therefore no wealth to put in such a fund.”

The Montreal Economic Institute warned the fund “risks costing taxpayers dearly while generating limited returns.”

Industrial Policy Comes Full Circle

Canada’s move reflects a broader revival of state-directed investment across developed economies. The United States under President Trump signed an executive order in February 2025 directing the treasury and commerce secretaries to deliver a plan for an American sovereign wealth fund within 90 days.

Carney — who led both the Bank of Canada and the Bank of England before entering politics — is betting that a G7 nation can borrow its way into a credible sovereign wealth fund. With trade talks to revise the North American free trade agreement looming this summer, the Canada Strong Fund doubles as a signal to Washington: Canada is prepared to build out its economic infrastructure with or without American cooperation.

Whether that bet pays off depends on returns that won’t materialize for years. No major economy has tried anything quite like this.

Sources