Canada Strong Fund Still Has No Launch Date Six Months On

Nearly six months after Prime Minister Mark Carney announced the Canada Strong Fund, Ottawa still has no launch date for it, no chief executive, no board and no law to create the agency that would run it.

Carney announced the fund in April, in the spring economic update. It would be Canada's first national sovereign wealth fund, with seed funding of 25 billion Canadian dollars over three years. The fund is meant to invest only in Canada, at arm's length from the government, in fields such as energy, infrastructure, agriculture and technology. It would work with private investors and include a retail product so ordinary Canadians can buy in. None of those details has been set out.

John Fragos, a spokesperson for Finance Minister Francois-Philippe Champagne, said the fall budget will carry a significant update. "In due course, we will have outlined who the CEO will be, who the board will be," he said. The budget is set for November 5, according to reporting on the fund this week. Fragos said the project is new and that the government is studying how other countries and other Canadian funds do this work.

Why it matters

The fund was a headline item in the spring update, sold as a way to make sure the returns from the government's building program are shared with Canadians. Six months on, the 25 billion dollar figure is the only firm number attached to it.

The delay also raises a basic question: what would the fund do that Ottawa does not already do? Canada already runs the Canada Infrastructure Bank, the Canada Indigenous Loan Guarantee Corporation and the 15 billion dollar Canada Growth Fund, all of which finance or back private projects.

"I don't know why specifically there's a need to set up a special fund for this," said Dana Galizia, an associate professor of economics at Carleton University. "That doesn't mean it's a bad idea. It just means that, without the details, I'm not really clear on what the value is here."

Governments usually build sovereign wealth funds from a surplus. Norway's fund, the example Carney cited, is built from oil revenue. Canada would seed this fund while running deficits, which is part of why the design work matters.

What happens next

The fall budget on November 5 is the next set date. If it names a chief executive, a board and a start date, the fund becomes a real institution. If it does not, the April announcement stays a promise with a price tag and no machinery behind it.