\u2014 Mark Carney (@MarkJCarney) April 27, 2026<\/a><\/p>\n So, how exactly does Canada\u2019s sovereign wealth fund work, and what\u2019s in it for the everyday Canadian?<\/p>\n Daily Hive spoke with economists to break down the fund and see whether it will actually help or hinder taxpayers.<\/p>\n What is a sovereign wealth fund, and why do countries have them?<\/p>\n 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 \u201cnational savings and investment account.\u201d<\/p>\n University of Toronto economics professor Joseph Steinberg likens it to a \u201cgovernment-run asset manager.\u201d<\/p>\n He told Daily Hive that sovereign wealth funds typically invest revenue that is generated by publicly owned assets, most commonly from oil extraction. That\u2019s why countries with big oil industries like Saudi Arabia, Qatar, the United Arab Emirates, and Norway have sovereign wealth funds.<\/p>\n \u201cWhat 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,\u201d explained Steinberg.<\/p>\n 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.<\/p>\n According to the Province<\/a>, it reinvests a portion of Alberta\u2019s revenue from the oil and gas sector, aiming to provide the \u201cgreatest financial returns on those savings for current and future generations of Albertans.\u201d The trust has grown from the initial investment of $1.5 billion to $31.9 billion as of December 2025.<\/p>\n How will Canada\u2019s sovereign wealth fund work? franckreporters\/Shutterstock<\/p>\n According to the spring economic update, the federal government will establish a dedicated Canada Strong Fund Transition Office to finalize the fund.<\/p>\n It did lay out a rough outline<\/a> 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 \u201cto benefit from the financial returns generated by the Fund\u2019s nation-building investments.\u201d<\/p>\n 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\u2019 initial investment would be protected.<\/p>\n Canada\u2019s 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.<\/p>\n How does the Canada Strong Fund compare to other sovereign wealth funds? Oslo, Norway (photovideoworld\/Shutterstock)<\/p>\n Carney used Norway\u2019s 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\u2019s.<\/p>\n The main difference is that it\u2019s going to be funded mainly through government debt.<\/p>\n \u201cThe way it\u2019s supposed to work when it works well, for example, what you have in Norway is that they are using surpluses,\u201d MEI economist Emmanuelle B. Faubert explained to Daily Hive. \u201cFor 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.\u201d<\/p>\n Norway has only run one budget deficit<\/a> since 2019. In comparison, Canada has not had a budget surplus over that period. Canada\u2019s projected budget deficit for 2025 to 2026 is currently $66.9 billion, down from the $78.3 billion projection in the fall budget.<\/p>\n Another major difference between Canada\u2019s sovereign wealth fund and Norway\u2019s is where the money is used.<\/p>\n Steinberg explained that the Scandinavian country\u2019s 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.<\/p>\n \u201cThe express purpose of the Canada Strong Fund is to invest only in domestic projects,\u201d he says. \u201cIt sounds like the goal of the Canada Strong Fund is going to be to take equity stakes in companies and projects that it funds.\u201d<\/p>\n What\u2019s in it for the Canadian taxpayer? ACHPF\/Shutterstock<\/p>\n Faubert said the fund risks costing taxpayers a lot while generating limited returns and argued that the government is essentially \u201cgambling the money of Canadians.\u201d<\/p>\n \u201cIf the prime minister wants to create another sovereign wealth fund, he should take inspiration from Norway by implementing strict safeguards and presenting balanced budgets,\u201d she said.<\/p>\n Steinberg echoed this, saying that his main concern is that the projects that the fund selects aren\u2019t going to \u201cgenerate any kind of material financial return for the taxpayer.\u201d<\/p>\n When it comes to the retail investment product being offered to individuals, Steinberg thinks it\u2019s novel, but is skeptical about whether it will help everyday Canadians in a meaningful way.<\/p>\n \u201cCanadians can already invest in domestic companies through the stock market,\u201d he said.<\/p>\n 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.<\/p>\n \u201cIt is Canadian taxpayers themselves. So Canadian taxpayers are going to bear whatever the losses ultimately are from some of these projects,\u201d he said.<\/p>\n Faubert added that Norway\u2019s explicit mandate to invest abroad rather than at home limits the potential for political interference in the allocation of funds.<\/p>\n \u201cSuch government-backed industrial policies alter incentives, favouring entrepreneurs who tick the right boxes rather than those with the strongest growth potential,\u201d she argued. \u201cWhile the goal of stimulating investment is a commendable one, the method that\u2019s been chosen leaves a lot to be desired.\u201d<\/p>\n 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.<\/p>\n \u201cI 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,\u201d he said.<\/p>\n More details on the Canada Strong Fund can be found in the spring economic update<\/a>.<\/p>\n
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