What is Canada's new sovereign wealth fund and how will it affect taxpayers?
Prime Minister Mark Carney announced on Monday that Canada will be launching its first sovereign wealth fund.
Ottawa will be spending an initial $25 billion to launch what it calls the “Canada Strong Fund.” In the spring economic update on Tuesday, the federal government said the fund will be used to invest in “key, strategic Canadian projects and companies benefitting Canadians through jobs, economic growth, and greater security.”
“Canada’s new government is catalyzing a series of nation-building projects in energy, trade, critical minerals, transport, data, and beyond – projects that will make Canada stronger, more resilient, and more independent,” stated Carney in the initial announcement on Monday. “Through the Canada Strong Fund, all Canadians will have the opportunity to share directly in these benefits.”
We’re introducing the Canada Strong Fund — Canada’s first sovereign wealth fund — to create more prosperity for Canadians now and for generations to come. pic.twitter.com/TgWi35dfaT
— Mark Carney (@MarkJCarney) April 27, 2026
So, how exactly does Canada’s sovereign wealth fund work, and what’s in it for the everyday Canadian?
Daily Hive spoke with economists to break down the fund and see whether it will actually help or hinder taxpayers.
What is a sovereign wealth fund, and why do countries have them?
A sovereign wealth fund is a state-owned investment fund. Just like how you may have an investment portfolio of stocks, bonds, and real estate, so will this fund, but obviously on a much bigger, global scale. This is why Carney described the sovereign wealth fund as a “national savings and investment account.”
University of Toronto economics professor Joseph Steinberg likens it to a “government-run asset manager.”
He told Daily Hive that sovereign wealth funds typically invest revenue that is generated by publicly owned assets, most commonly from oil extraction. That’s why countries with big oil industries like Saudi Arabia, Qatar, the United Arab Emirates, and Norway have sovereign wealth funds.
“What they do is they take the income generated by their oil extraction, and they invest in a diversified portfolio of stocks, bonds and so forth, all around the world, with the express purpose of generating a strong financial return for the citizens that live in that country,” explained Steinberg.
While the Canada Strong Fund is the first of its kind on a national level, Alberta has actually had its own sovereign wealth fund called the Alberta Heritage Savings Trust since 1976.
According to the Province, it reinvests a portion of Alberta’s revenue from the oil and gas sector, aiming to provide the “greatest financial returns on those savings for current and future generations of Albertans.” The trust has grown from the initial investment of $1.5 billion to $31.9 billion as of December 2025.
How will Canada’s sovereign wealth fund work?
franckreporters/Shutterstock
According to the spring economic update, the federal government will establish a dedicated Canada Strong Fund Transition Office to finalize the fund.
It did lay out a rough outline of how the fund would work. Sources of capital would come from government funding (the initial $25 billion), federal assets and a retail investment product that would offer Canadians an opportunity to directly invest in the fund “to benefit from the financial returns generated by the Fund’s nation-building investments.”
While there are still minimal details about how investing in the Canada Strong Fund compares to investing in bonds or ETFs, Ottawa did say it would be easily accessible and that Canadians’ initial investment would be protected.
Canada’s Major Projects Office would then use these investments to fund projects in clean energy, critical minerals, agriculture and infrastructure. The returns would be reinvested into more projects, paid to retail investors and returned to taxpayers.
How does the Canada Strong Fund compare to other sovereign wealth funds?
Oslo, Norway (photovideoworld/Shutterstock)
Carney used Norway’s sovereign wealth fund (a.k.a the Government Pension Fund of Norway) as the gold standard example. However, Steinberg said the Canada Strong Fund is, in many ways, the opposite of Norway’s.
The main difference is that it’s going to be funded mainly through government debt.
“The way it’s supposed to work when it works well, for example, what you have in Norway is that they are using surpluses,” MEI economist Emmanuelle B. Faubert explained to Daily Hive. “For that, they need to not have a deficit. And so they use that money to invest and essentially to generate more revenue for the population.”
Norway has only run one budget deficit since 2019. In comparison, Canada has not had a budget surplus over that period. Canada’s projected budget deficit for 2025 to 2026 is currently $66.9 billion, down from the $78.3 billion projection in the fall budget.
Another major difference between Canada’s sovereign wealth fund and Norway’s is where the money is used.
Steinberg explained that the Scandinavian country’s fund invests zero per cent of its portfolio in domestic assets and 100 per cent of it abroad to avoid distorting the domestic Norwegian economy with investments that favour one industry over another.
“The express purpose of the Canada Strong Fund is to invest only in domestic projects,” he says. “It sounds like the goal of the Canada Strong Fund is going to be to take equity stakes in companies and projects that it funds.”
What’s in it for the Canadian taxpayer?
ACHPF/Shutterstock
Faubert said the fund risks costing taxpayers a lot while generating limited returns and argued that the government is essentially “gambling the money of Canadians.”
“If the prime minister wants to create another sovereign wealth fund, he should take inspiration from Norway by implementing strict safeguards and presenting balanced budgets,” she said.
Steinberg echoed this, saying that his main concern is that the projects that the fund selects aren’t going to “generate any kind of material financial return for the taxpayer.”
When it comes to the retail investment product being offered to individuals, Steinberg thinks it’s novel, but is skeptical about whether it will help everyday Canadians in a meaningful way.
“Canadians can already invest in domestic companies through the stock market,” he said.
Individuals who do end up investing in the Canada Strong Fund could get positive returns and might share in some profits, on top of their principal investment being protected. However, Steinberg questioned who would be paying to protect that capital if a project fails.
“It is Canadian taxpayers themselves. So Canadian taxpayers are going to bear whatever the losses ultimately are from some of these projects,” he said.
Faubert added that Norway’s explicit mandate to invest abroad rather than at home limits the potential for political interference in the allocation of funds.
“Such government-backed industrial policies alter incentives, favouring entrepreneurs who tick the right boxes rather than those with the strongest growth potential,” she argued. “While the goal of stimulating investment is a commendable one, the method that’s been chosen leaves a lot to be desired.”
Steinberg said that if the problem Canada is trying to solve is its failure to generate the amount of investment needed to keep the economy growing, the wealth fund is a band-aid solution.
“I think the alternative approach that I would prefer is to say this is a particular sector or industry that we need to support, that is not receiving investment to the level that we think it ought, and provide industry-wide subsidies or below-market loans that are transparently available to any project or firm that operates in that industry,” he said.
More details on the Canada Strong Fund can be found in the spring economic update.