Tasha Kheiriddin: Carney’s new fund is for corporate welfare, not sovereign wealth

Prime Minister Mark Carney walks to his office for a Cabinet meeting on Parliament Hill in Ottawa April 28, 2026. Photo by Blair Gable/Postmedia

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Congratulations, Canada! On Monday, our nation joined an exclusive club: countries with sovereign wealth funds. Norway, Kuwait and other resource-rich nations have long tapped royalties and budget surpluses to fund investment vehicles: in this era of geopolitical uncertainty and an erratic neighbour, Prime Minister Mark Carney thinks it’s time Canada does the same.

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Problem is, we’re tapping debt, not revenue. When asked where the Fund’s initial $25 billion will come from, Finance Minister Francois Philippe Champagne admitted that it will be borrowed. But that’s ok, because we’ll get great rates. “I would say there’s only two countries in the G7 which have a AAA credit rating, Canada can borrow on the international market at some of the lowest rates that you can see,” Champagne crowed.

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Canada already has sovereign wealth funds at the provincial level, with a very mixed track record. Alberta set up its Heritage Trust in 1976, to stabilize the boom-and-bust cycles of its resource-based economy. It has woefully underperformed, in part because in 1982 then-premier Peter Lougheed diverted more than $850 million to shore up farms and business during a recession. The fund also did not follow the diversified model of funds like Norway’s, despite advice to do so.

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Quebec also has a resource-based fund, the “Fond des Generations.” Created in 2006 to pay down the province’s debt, it is financed largely through hydroelectric royalties from Hydro-Québec. Over seen by the Caisse de Depot, revenues are invested in financial markets; the fund is now worth nearly $17 billion, which is used to offset Quebec’s provincial debt.

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But there’s another fund in Quebec that is closer to what Carney is envisioning: the Fonds Solidaire, established in 1983 by the Fonds des Travailleurs du Quebec (FTQ), Quebec’s largest labour union. The Fond’s mission is to boost employment and regional development in the province: like Carney’s Canada Strong Fund, it invests solely in domestic businesses. Investors get a 30 per cent tax credit on top of their regular RRSP tax credit split equally between the province and Ottawa, on a maximum annual contribution of $5000. The tax credit is necessary to attract investors, because the Fonds does not perform as well as more diversified funds, but buying into it is seen as a patriotic gesture and a means for ordinary people to invest in the province.

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There are shades of this in the Canada Strong Fund: Carney claims that the fund will permit Canadians with “a bit of extra money” to buy it directly, by launching a “retail investment product” like a mutual fund or pension scheme where Canadians can buy into the fund and earn a dividend. To mitigate risk, investors’ capital will be government-protected: in other words, if investments lose money, the government (aka the taxpayer) will cover the loss.