{"id":430784,"date":"2026-05-03T21:49:36","date_gmt":"2026-05-03T21:49:36","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/430784\/"},"modified":"2026-05-03T21:49:36","modified_gmt":"2026-05-03T21:49:36","slug":"neither-norway-nor-singapore-decoding-canadas-new-sovereign-wealth-fund-national","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/430784\/","title":{"rendered":"Neither Norway nor Singapore: Decoding Canada\u2019s new sovereign wealth fund – National"},"content":{"rendered":"

When Prime Minister Mark Carney<\/a> was making his pitch for why Canada needs a sovereign wealth fund<\/a>, he pointed to another resource-rich western economy \u2014 Norway.<\/p>\n

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But that comparison doesn\u2019t quite work, some experts argue.<\/p>\n

\u201cMany countries that are blessed with natural resources, like Norway, have sovereign wealth funds. Canada hasn\u2019t had one. Until now. The new Canada Strong Fund will give all Canadians a direct stake in building Canada strong,\u201d Carney told reporters while announcing the $25 billion fund.<\/p>\n

Carney said it will \u201cinvest in the major projects that are transforming our economy.\u201d<\/p>\n

The Canada Strong Fund is Canada\u2019s first national sovereign wealth fund. It will invest in the major projects that are transforming our economy \u2014 and give Canadians a direct stake in our nation\u2019s prosperity.<\/p>\n

\u2014 Mark Carney (@MarkJCarney) April 27, 2026<\/a><\/p>\n

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But while the precise structure of the fund remains unclear, fundamental differences between the political and industrial realities in Canada and Norway mean that comparison might not be so straightforward, experts say.<\/p>\n

\u201cI actually struggle to make the comparison to Norway,\u201d said Sebastien Betermier, professor of finance at McGill University\u2019s Desautels Faculty of Management and executive director of the International Centre for Pension Management.<\/p>\n

\t\t\t\tHow does Norway’s sovereign wealth fund work?\n\t\t\t\t\t\t<\/p>\n

\u201cSovereign wealth fund\u201d is an umbrella term that can refer to many things, but in essence, it is a state-owned investment vehicle by which a government can invest public money towards a particular purpose.<\/p>\n

It is that purpose where Norway and Canada\u2019s funds fundamentally differ.<\/p>\n

The Canada Strong Fund is geared towards funnelling money towards large public infrastructure projects and will \u201cinvest alongside the private sector in nation-building projects,\u201d Carney said, pointing to the construction of the Canadian Pacific Railway in the 1870s as one nation-building example.<\/p>\n

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Norway takes a different approach with their fund.<\/p>\n

\u201cThe Norwegian fund is prevented from investing in Norway. Everything is invested globally so that it can diversify the country from oil and gas price fluctuations on which the country is very dependent,\u201d Betermier said.<\/p>\n

The Norwegian Government Pension Fund Global (GPFG) takes oil and gas revenues, puts them into the fund and invests the money elsewhere. According to one estimate, it owns more than US$2.2 trillion in assets and has equity in more than 9,000 companies across more than 70 countries around the world.<\/p>\n

This means the fund owns 1.5 per cent of the value of all of the world\u2019s publicly listed companies, making it one of the largest institutional investors in the world.<\/p>\n

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It does so to ensure that the country does not become too dependent on oil money, thereby buffeting it against the boom-and-bust cycles that places like Alberta have faced.<\/p>\n

\u201cCanada\u2019s fund is not like that. Canada\u2019s fund is aimed at investing, from what I can tell, in Canada to promote economic development. It\u2019s a different category of sovereign wealth funds,\u201d Betermier said.<\/p>\n

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Carney said the new sovereign wealth fund will begin with a domestic focus, potentially going global later.<\/p>\n

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\u201cIn some cases, they began with a domestic focus, then outgrew the scale of the domestic focus,\u201d he said, pointing to the state-owned private investment fund Temasek Holdings in Singapore.<\/p>\n

When it was founded in 1974, Temasek made largely domestic investments in Singapore. Recently, however, it has broadened its scope with global investments.<\/p>\n

But Temasek\u2019s goal, too, is different from the Canada Strong Fund.<\/p>\n

\u201cThe goal (of Temasek) is to manage the large state-own companies like Singtel or Singapore Airlines through a vehicle that is competent, professional, run at arm\u2019s length from government,\u201d Betermier said.<\/p>\n

Carney\u2019s idea sounds a lot more like the wealth funds in the Persian Gulf countries than it does the Norwegian or Singaporean ones, he added.<\/p>\n

Some of the Middle Eastern funds have development mandates inside their sovereign wealth funds, like in Qatar or in the Emirates,\u201d Betermier said.<\/p>\n

\u201cHere it looks like it\u2019s going to be exclusively an economic development mandate,\u201d he added.<\/p>\n

\t\t\t\tWhat challenges can these funds face?\n\t\t\t\t\t\t<\/p>\n

The idea of a government-run investment fund isn\u2019t new.<\/p>\n

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Alberta, for example, has the Alberta Heritage Savings Trust Fund, which reinvests a portion of the province\u2019s resource revenues, particularly from the oil and gas sector.<\/p>\n

Quebec has the Caisse de d\u00e9p\u00f4t et placement du Qu\u00e9bec (CDPQ).<\/p>\n

The Canada Pension Plan Investments is currently one of the largest institutional investors in the world, with over $780 billion in assets under its management globally.<\/p>\n

The Canada Investment Bank and Canada Growth Fund both perform the functions that Carney outlined in his press conference \u2014 unlocking capital for large infrastructure projects in Canada.<\/p>\n

\u201cThe Canada Infrastructure Bank, the Canada Growth Fund, have very similar mandates to support related projects in very similar sectors \u2014 clean energy, trade infrastructure, for example,\u201d said Kate Koplovich, senior policy analyst at the CD Howe Institute.<\/p>\n

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How the new fund differs from these other investment vehicles and avoids stepping on their toes will be the \u201cmillion-dollar question,\u201d she added.<\/p>\n

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\t\t\t\tWhere will the money come from?\n\t\t\t\t\t\t<\/p>\n

Broadly speaking, sovereign wealth funds draw money from two sources: revenues from resources like oil and gas, and budget surpluses.<\/p>\n

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Canada has no budget surplus. In the Spring Economic Statement, the Liberals estimated that last year\u2019s federal deficit came in at $66.9 billion<\/a>.<\/p>\n

\u201cCanada\u2019s sovereign wealth fund will be based on debt,\u201d Koplovich said.<\/p>\n

\u201cWhat that means for the fund is that, of course, the returns from the fund then have to be greater than the borrowing costs for the government to supply that debt,\u201d she added.<\/p>\n

While Canada, as a resource-rich nation, could finance this new fund with oil and gas revenue, like Norway does, there\u2019s one key difference.<\/p>\n

\u201cThe difference between Norway and Canada is Norway does not have provincial governments with nearly the power that we have in Canada,\u201d said Concordia University economist Moshe Lander.<\/p>\n

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\u201cAny attempt to try and deal with the oil and gas industry at the federal level will instantaneously be met with pushback, of course, from Alberta, but also from Newfoundland and Labrador,\u201d he added.<\/p>\n

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Norway\u2019s sovereign wealth fund is also known for its fiscal discipline.<\/p>\n

By law, the government cannot draw any of the principal amount from oil revenues into its budget. Only the interest \u2014 which comes out to around three per cent of the revenues \u2014 can be put into the budget.<\/p>\n

Alberta, in contrast, has in the past used their own as \u201ca rainy-day fund, rather than as some sort of generational fund,\u201d said Lander.<\/p>\n

\u201cAnytime something goes sideways in the province, which it inevitably does because it\u2019s boom-and-bust cycle, they just go and grab the money,\u201d he said, noting that wouldn\u2019t be a sustainable approach for Carney\u2019s proposed sovereign wealth fund.<\/p>\n

The Canada Strong Fund has another difference from Norway\u2019s model: everyday Canadians will be able to invest in the fund.<\/p>\n

It is not yet clear how that will be implemented, whether it\u2019s going to be through portfolios or bonds or any other way. But no other sovereign wealth fund in the world has this aspect to it.<\/p>\n

The concern with that is that retail mom-and-pop investors often lack the patience for long-term projects, Betermier siad.<\/p>\n

\u201cI expect this fund most likely to be invested in long-term infrastructure projects that can take years before cash flows come out. Retail investors are usually not that patient,\u201d he said.<\/p>\n

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Everyday investors often have a very limited amount of money they can invest, which means the Canada Strong Fund will be competing with global equities for investment.<\/p>\n

\u201cWhy would I want to invest my money in building some bridge in Canada when I can invest my money in some tech company in the U.S.? That\u2019s where private capital is going to say, \u2018thanks, but no,\u2019\u201d Lander said.<\/p>\n

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