Prime Minister Mark Carney's government is launching a $25-billion sovereign wealth fund to participate alongside private funds in the country's nation-building projects. The fund, Canada's first of its kind, is inspired by Norway's model, where assets are nearing $2 trillion.
Key Details of the Fund
The fund will be designed to help propel priority infrastructure projects already identified, but will go beyond that and allow Canadians to contribute and have a stake in the fund, which is expected to grow through future government investments and the proceeds of asset recycling.
"We are building together with all Canadians for all Canadians," Carney said at a news conference Monday morning. "The investments that are made will be clear. The objective is to grow wealth for Canadians over the long term."
Professional Management and Transparency
Carney said the fund will be professionally managed and operated at arm's length from government as a Crown corporation, with full disclosure about its operations. He pledged to fund projects on a different scale than in the past and said returns will be shared between private and public sector participants, unlike previous nation-building projects such as the Canadian National Railway where only monopoly private sector financiers benefitted.
Broader Scope than Previous Initiatives
The new sovereign wealth fund will be able to finance a broader range of projects than those triggered by the Building Canada Act, Carney said. It will be different from past iterations such as the Canada Infrastructure Bank because the government will remain a stakeholder after a project is funded and built.
International Inspiration
Canada is taking inspiration from resource-heavy countries such as Norway that established sovereign wealth funds decades ago to invest money for future generations. Carney also cited Singapore as a model, noting that its fund began investing domestically and then expanded beyond its borders.
He said that when the federal government helps make a project happen through tax incentives, regulations or other means, there is often, at the core, a commercial business that will make a profit. "(It’s) just smart for Canadians to have a share directly of those profits, and that’s what the fund is going to make possible," Carney said.
Upcoming Fiscal Update
The prime minister said there will be good news from his government Tuesday when Finance Minister Francois-Philippe Champagne delivers a fiscal update, adding that his government is performing well against its objectives to get spending under control so Canada can invest more. He declined to elaborate, saying details would be available on Tuesday.
