Canada is launching a sovereign wealth fund designed to help finance significant infrastructure projects.
On Monday, Prime Minister Mark Carney confirmed the Canada Strong Fund will invest in strategic Canadian projects and companies alongside other investors including individual Canadians.
While the feds didn’t confirm which projects the new fund will initially back, they indicated a focus on infrastructure, advanced manufacturing, energy and mining. The fund will receive $25 billion over three years on a cash basis with the intention to increase its assets over time from generated returns and “other assets that the government may allocate to it,” according to a press release.
The fund will be operated indepedently with professional management at arms-length from government. The feds will create a new Crown corporation led by a chief executive officer and an independent board of directors.
Derek Holt, head of capital markets economics at Bank of Nova Scotia, wrote in a report there’s still a lot of details to discover about this new opportunity, according to a report by Bloomberg. “In principle, I like anything that may lean toward policy emphasis upon saving and investment to motivate higher future productivity and living standards versus too many years of propping up here-today-gone-tomorrow spending.”
The creation of this fund follows the feds’ ongoing efforts to develop and accelerate infrastructure projects in demand across the country like the creation of the Major Projects Office in 2025 to review and advance projects of significant scale.
“Through the Canada Strong Fund, all Canadians will have the opportunity to share directly in these benefits,” said Carney in a press release.
Read: Institutional investors becoming financing cornerstone of global infrastructure projects: expert