The Globe & Mail earlier reported that Canada would be setting up a sovereign wealth fund to back major projects and now we’re getting some details.
The Globe & Mail earlier reported that Canada would be setting up a sovereign wealth fund to back major projects and now we’re getting some details. It will be endowed with $25 billion initially, which is a decent chunk of borrowing for a country Canada’s size, and could be notable for the bond market, depending on how the money is raised.
Carney said the fund will grow via asset recycling and reinvestment; he also noted that individual Canadians will be able to invest in the fund. It will be operated as an arm’s-length crown corporation. The announcement comes one day ahead of Tuesday’s spring economic statement, with Finance Minister François-Philippe Champagne running a parallel event in Montreal aiming to get bank CEOs, pension chiefs, and construction heavyweights on board with the fund.
Alberta and Newfoundland already run provincial versions of sovereign wealth funds and people often cite the Norwegian example. The fiscal optics are improving. Ottawa’s deficit ran $25.5 billion through 11 months of the fiscal year, and the senior official briefing reporters says Tuesday’s update will show smaller deficit projections for current and future years — partly thanks to GDP statistical revisions that have nothing to do with policy, along with higher oil prices lately.