With reports emerging last week that Canada is set to launch a C$25bn sovereign wealth fund to boost growth, it’s worth unpacking what’s really going on.
Most people are not stupid. They intuitively recognize something is afoot when the government of a highly indebted country like Canada (despite being an oil producer) cosplays as a cash-rich oil state with buckets of spare revenue to invest.
Canada is no UAE or Qatar. It is facing similar budgetary pressures to other overstretched and inefficient developed European states.
As the CD Howe Institute highlighted recently:
“Many Canadians may still have an image of Canada as a country aware that governments cannot spend and borrow without limit. They should not. The Globe and Mail columnist Gary Mason recently wrote about the “death of fiscal sanity in Canada” (Mason 2026). He pointed to the almost-doubling of the federal government’s net debt over the past decade, with the November 2025 budget projecting yet more, and budgets in British Columbia and Alberta that forecast relentless borrowing. He said we all know a crisis will hit but appear unwilling to act to prevent it.”
CD Howe Institute
So how might Ottawa finance a “sovereign wealth fund”?
It helps, no doubt, that the man launching the fund is Mark Carney, current Prime Minister of Canada, former governor of the BoE and between 2020-2025 a senior executive at Brookfield Asset Management.