By Paul Vieira
OTTAWA--Canada intends to launch its first sovereign-wealth fund, Prime Minister Mark Carney says, as part of the government's drive to build trade corridors and develop resource projects to ease the economic squeeze posed by President Trump's trade policy.
Carney said the sovereign-wealth fund would invest alongside private-sector proponents in large energy, infrastructure, mining and agricultural projects. The projects would be led by the private sector, the prime minister said. He added individual Canadians could also participate, should they deploy their savings in the new fund.
The fund, to be called Canada Strong Fund, would start with an endowment of 25 billion Canadian dollars, or the equivalent of $18.3 billion. Carney said officials would be consulting over the coming months on specific aspects of the sovereign wealth fund.
Carney's sovereign-wealth fund measure is his latest policy effort to accelerate business investment in the country, which has been in the doldrums for a prolonged period.
The push to increase investment has moved into higher gear, as Carney, a former central banker, tries to reorient a Canadian economy long dependent on trade with the U.S. to drive growth.
President Trump's tariff policy includes hefty levies on key Canadian industrial sectors, which are weighing on the country's manufacturing sector. Canada is the lone Group of Seven economy that has yet to reach a deal with the White House on tariff relief, and talks between Washington and Ottawa on a renewed U.S.-Mexico-Canada trade deal appear stalled.
"The U.S. has changed - that's their right. We are responding - that's our imperative," Carney said, according to prepared remarks at a press conference.
The U.S. Treasury Department defines sovereign-wealth funds as government-run investment vehicles which are either funded by foreign-exchange assets or royalties from commodities. Sovereign-wealth fund managers typically have a higher risk tolerance and a higher expected return than traditional official reserve managers.
The United Arab Emirates, Norway, Singapore and Saudi Arabia have some of the world's biggest sovereign-wealth funds.
"Usually countries with sovereign wealth funds are net savers. Canada is, well, not," said Derek Holt, economist at Bank of Nova Scotia. Canada runs a current-account deficit of about 1% of gross domestic product. The current account is the broadest indicator of a country's trading and investing relationship with other nations, and a deficit may reflect a low level of national savings relative to investment.
Given Canada's current-acccount deficit, Holt said a new Canada sovereign wealth fund could divert savings from other institutions and assets without necessarily expanding the amount of capital available "unless Canada somehow shifts toward being a net-saving economy in the future."
Canada's Liberal government, under former Prime Minister Justin Trudeau, also tried to jump start private-sector investment in Canada through the establishment of an infrastructure bank.
That state-owned lender has deployed over C$18 billion in financing to 108 projects.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
04-27-26 0945ET
