Prime Minister Mark Carney has announced Canada’s first national sovereign wealth fund, calling it the “Canada Strong Fund,” ahead of Tuesday’s spring economic update.
Carney officially made the announcement in Ottawa on Monday morning after unveiling the initiative in a YouTube video.
The federal government will initially contribute $25 billion into the fund, which Carney says “will grow through asset recycling and reinvestment, creating even greater opportunities for future generations.”
A sovereign wealth fund is a state-owned investment fund that uses government surplus reserves to invest in financial assets like stocks and bonds but is independently managed. Alberta has its own sovereign wealth fund, called the Alberta Heritage Savings Trust Fund, that was established back in 1976.
According to Carney, the fund will be “professionally managed and operate as an arm’s length independent Crown corporation” and “will be accessible to everyone.”
The fund is also intended to complement and accelerate the work of existing institutions like the Business Development Bank of Canada and the advancement of projects through the Major Projects Office.
“Whether a project is in Alberta, Quebec, or in the far north, high north, all Canadians will have a stake because this is about ensuring that you and your children and your children’s children benefit from the prosperity that we are creating today,” Carney later added.
Asked by reporters why a new agency is required, Carney said the Canadian Infrastructure Bank “provides debt” and “helps make projects possible,” while the new fund “comes in on a commercial basis” to get returns alongside the private sector.
Carney also said the fund will not be strictly investing in projects deemed in the national interest, as described under the Building Canada Act, and said “absolutely not” when asked if the fund signals that there is not enough private sector investment for projects.
“I don’t think that it will be that restricted, but it will be a focus on investing in Canada,” he said.
Sources say deficit will be smaller than projected
The announcement comes as Finance Minister Francois-Philippe Champagne is set to unveil the Carney government’s first spring economic update on Tuesday, and the new fund will be part of that update.
Two senior government sources tell CTV News that the deficit will be smaller than what was projected in the federal budget back in November, in part due to increased revenue from inflation and the price of oil.
While speaking to reporters, Carney emphasized that the government is “determined to get spending down” and admitted that “you can’t do everything at the same time.”
“In order for the numbers to be better, you have to be on top of them, and we’re on top of them,” Carney said, while adding that issues of affordability will be addressed.
Last fall’s federal budget forecasted a $78-billion deficit in 2025-26 and a $65-billion deficit for 2026-27, with the figure decreasing to $56.6 billion by 2029-30.
On Sunday, Conservative Leader Pierre Poilievre wrote an open letter to the prime minister to cap the deficit at$31 billion and “present a plan to return to a balanced budget in the medium term.”
With files from CTV News’ Chief Political Correspondent Vassy Kapelos
