Canada announces creation of $18bn sovereign wealth fund

Canada has announced the establishment of its first sovereign wealth fund, with an initial capital of 25 billion Canadian dollars (approximately US$18 billion).

The fund will invest in major Canadian industrial projects across sectors including energy, infrastructure, mining, agriculture, and technology.

Prime Minister Mark Carney confirmed that the federal government will contribute funds alongside private investors to support the initiative.

The announcement was made ahead of the government's spring economic update.

The fund aims to diversify Canada's economy and reduce its reliance on the United States, especially amid recent trade tensions and tariff threats from the US administration.

Carney highlighted that the fund draws lessons from other countries that established sovereign wealth funds decades ago, initially focusing domestically before expanding.

Sovereign wealth funds typically invest in assets such as stocks, bonds, and real estate and are usually funded by budgetary surpluses, which Canada currently does not have.

Despite this, the government is moving forward with the fund to finance key industrial projects.

Canada's sovereign wealth fund will be smaller than those of other oil-producing nations like Norway and countries in the Middle East.

Globally, there are over 90 sovereign wealth funds managing more than $8 trillion in assets.

Carney, a former central banker in both England and Canada and current chairman of the board of directors for a major financial information company, emphasized the strategic importance of the fund for Canada's economic future.

The announcement follows similar moves in other countries, including the United States, where a sovereign wealth fund was ordered last year, and where more than 20 such funds exist at the state level.

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