At Monday’s announcement in Ottawa, Carney said that Canada was at a critical point in its history due to its changing relationship with the US, requiring it to invest and build at an urgent pace.
“The US has changed, that’s their right,” he said. “And we are responding, that’s our imperative.”
The prime minister said the fund will invest – along with the private sector – into what his government has described as “nation-building projects” like port upgrades and natural resource development.
“Many countries that are blessed with natural resources like Norway have sovereign wealth funds. Canada hasn’t had one, until now,” the prime minister said.
The Montreal Economic Institute warned in a statement on Monday that the fund “risks costing taxpayers dearly while generating limited returns”.
The opposition Conservatives also criticised the measure.
Leader Pierre Poilievre labelled it a “sovereign debt fund”, noting that the country’s finances were in a deficit.
“Norway, Singapore and Saudi Arabia run big budget surpluses which they accumulate and put into their sovereign wealth funds,” Poilievre said. “Carney has no surplus, and therefore no wealth to put in such a fund.”
The Conservative leader also questioned why Carney wants to put public funds into major infrastructure projects. “If a project has a business case, why would the government need to fund it?” Poilievre asked.
On Monday, Carney said that Canada’s financial position had improved and that the deficit was lower than what his government had anticipated, allowing for the creation of the Canada Strong Fund.
He added that foreign investment in Canada had increased and “is outpacing all other major economies right now”.
The government has said it will hold consultations over the coming months on the details of the fund.