Mark Carney announced Canada's first "sovereign wealth fund" today — a $25-billion entity called the Canada Strong Fund. He cited Norway as a model. He described it as a national savings account designed to grow wealth for future generations.

The Canada Strong Fund is not a sovereign wealth fund. The federal government is running a $78-billion deficit. There is no surplus to save. The $25 billion is borrowed.

How sovereign wealth funds are actually created

A sovereign wealth fund exists when a government has more revenue than it needs to spend and saves the surplus for future generations. Every major sovereign wealth fund in the world was built on this principle.

Norway's Government Pension Fund Global, now worth over US$2.2 trillion, is funded entirely by petroleum revenues. The law creating it was passed in 1990, but the fund sat empty for six years because Norway was running deficits during a banking crisis. The first deposit was made only in 1996 — when the budget returned to surplus. Norway does not spend the principal. Under its fiscal rule, the government may spend only 3% of the fund's value per year — set to approximate the expected real return so the capital base is preserved indefinitely.

Abu Dhabi's Investment Authority was created in 1976 from oil export surpluses that far exceeded domestic spending. Singapore's GIC was established in 1981 to invest excess foreign reserves accumulated from persistent fiscal surpluses. Alaska's Permanent Fund is capitalized by constitutionally dedicated oil royalties — 25% of all mineral revenues flow in automatically. Australia's Future Fund was created in 2006 during the Howard government's ninth consecutive surplus, when net government debt had reached zero for the first time in three decades. The initial capital came from budget surpluses and Telstra privatization proceeds.

You save what you have left over.

Canada's $78-billion deficit makes a sovereign wealth fund impossible

The federal government is projecting a $78.3-billion deficit for 2025-26 — 2.5% of GDP, the highest outside a recession since 1995-96. The Parliamentary Budget Officer gives only a 7.5% probability that the government's own fiscal anchor will hold. Net new spending of $126 billion was added in Budget 2025. The debt-to-GDP ratio is rising to 43.6% by 2033-34.

The $25 billion for this fund is borrowed money. There is no surplus. There is no dedicated revenue stream. There are no oil royalties flowing into a ring-fenced account. The government is running a structural deficit and simultaneously announcing a "savings" fund.

The Peterson Institute for International Economics calls deficit-funded sovereign wealth funds "a confused solution to an undefined problem." The Cato Institute calls the concept "fool's gold." The Committee for a Responsible Federal Budget says a debt-funded investment in risky assets "does not improve the government's fiscal position."

The government borrows at 4-5% and hopes to earn 6-7%. The spread is narrow, the risk sits with taxpayers, and the private sector can already do this without a Crown corporation.

The Canada Infrastructure Bank and Canada Growth Fund already exist

The Canada Infrastructure Bank was created in 2017 with a $35-billion mandate. The PBO projects it will miss that target by $20 billion. A parliamentary committee recommended abolishing it. Two-thirds of its "private" co-investment came from other public-sector entities — defeating the entire purpose. After seven years, a handful of projects are complete.

The Canada Growth Fund was created in 2022 with $15 billion. It has committed $5 billion across 22 transactions.

And now comes the Canada Strong Fund with another $25 billion?! The government's own announcement cannot explain how it differs from the other two. Three arm's-length vehicles with overlapping mandates is not a strategy. Nobody has explained how this one differs from the other two.

Why comparing the Canada Strong Fund to Norway's sovereign wealth fund is wrong

Norway built a $2.2-trillion fund by producing hydrocarbons at massive scale and taxing the profits at a 78% marginal rate. The Norwegian state owns 67% of Equinor. The government captured the resource wealth, saved the surplus, and invested the proceeds globally.

The Canadian government under Liberal leadership since 2015 did the opposite. It revoked Northern Gateway's permits in 2016. It passed the tanker moratorium in 2019, blocking crude exports from northern British Columbia. It passed the Impact Assessment Act — ruled largely unconstitutional by the Supreme Court in 2023. It told Germany in 2022 that there was "never a strong business case" for Canadian LNG exports. It forced the taxpayer to buy the Trans Mountain pipeline for $4.5 billion because private capital fled regulatory chaos — then watched the final cost hit $34 billion, more than six times the original $5.4-billion estimate.

Over $670 billion in cancelled resource projects since 2015. More than $1 trillion in net capital outflows between 2015 and 2024 — the largest capital exodus in Canadian history. Only one of 18 proposed LNG terminals reached completion. Canada now ranks last in the G7 for investment in machinery, equipment, and intellectual property.

Norway built a sovereign wealth fund by developing its natural resources. Canada blocked its natural resource development, drove out the capital, forewent the royalties, and is now borrowing money to create a "sovereign wealth fund" named after the concept it spent a decade destroying the preconditions for.

Carney was Trudeau's economic advisor. This is not a new government making a fresh start. This is the same policy framework — deficit spending, arm's-length vehicles, government-directed capital allocation — rebranded with a Norwegian flag. Are Canadians so easily duped?

Asset recycling: privatization without debt reduction

The stated growth mechanism for the fund is "asset recycling." This means selling or long-term leasing existing public assets — airports, ports, Crown corporations — to private investors and putting the proceeds into the fund.

There is nothing wrong with privatization. Governments should not be running airports and ports. But a government running a $78-billion deficit that sells public assets and routes the proceeds into a new spending vehicle — rather than paying down the debt — is not "building wealth for future generations." It's another Liberal shell game.

If the Liberals believed in privatization, they would sell assets, retire debt, and reduce the carrying cost that crowds out everything else in the federal budget. Instead, they have invented a mechanism to privatize without admitting it, spend the proceeds without reducing the deficit, and call the result "savings."

Canadians can "invest" in the fund — just like Canada Savings Bonds

The government says Canadians will be able to "invest directly" in the fund. Canada Savings Bonds — a retail product allowing Canadians to lend money to the federal government — were discontinued in 2017 because sales had collapsed and administration costs were unjustifiable - even if you had fond memories of your grandma buying them for you as a kid.

Repackaging government retail borrowing as participation in a "sovereign wealth fund" does not change the underlying structure. Terms, returns, risk-sharing, and liquidity are entirely unspecified. The announcement contains no product details — only a promise of future consultations.

The Canada Strong Fund is a political announcement, not a policy

The Canada Strong Fund was announced one day before the Spring Economic Update. It has no enabling legislation. It has no governance framework. It has no investment mandate beyond sector buzzwords. It has a "transition office" to figure out the details later. We'll see if it's located in Terrebonne!

This is a political announcement — thinly veiled as policy. It exists to frame deficit spending as "investment," to associate Canada with Norway's success, and to generate a positive headline before the government has to explain where $78 billion went.

Every element of the Norway comparison is false. Norway had surpluses; Canada has deficits. Norway taxed resource extraction at 78%; Canada blocked resource extraction entirely. Norway saved oil revenues in a dedicated account for 30 years; Canada has never ring-fenced a dedicated revenue stream for this fund. Norway's fund is capitalized by commodity revenues; Canada's fund is capitalized by borrowing.

No major sovereign wealth fund in history has been created by a government running a large structural deficit. You cannot save money you do not have. Calling borrowed money a "fund" does not make it savings.