ICBA ECONOMICS OP/ED: ‘Canada Strong Fund’ Unlikely to Make Canada More Attractive

The following piece by ICBA Chief Economist Jock Finlayson first ran on Energy Now on April 30, 2026.

What are we to make of the new $25 billion “Canada Strong Fund” (CSF) announced by Prime Minister Mark Carney earlier this week? The prime minister pitched the fund as part of a larger plan to kick-start a moribund economy by super-charging investment, after a decade of alarmingly weak business capital spending, a shrinking private-sector capital stock, and historically feeble productivity growth.

Prime Minister Carney—confusingly—referred to the CSF as a “sovereign wealth fund” (SWF), pointing to Norway’s huge US$2 trillion investment fund as a model.

Because Ottawa doesn’t have a spare $25 billion lying around, all the money initially allocated to the CSF will be borrowed, adding to the federal government’s growing debt at a time when national governments around the world are under pressure to lower or at least cap their debt levels. The Canadian government has become a chronic deficit jurisdiction since 2015—a state of affairs that will persist under Carney who evidently shares his predecessor’s comfort with rivers of red ink. The very different fiscal positions of Canada and Norway cast doubt on the Norwegian SWF as a model for what the prime minister is proposing.

There are other differences as well. SWFs typically are funded with revenue streams derived from the development and sale of non-renewable natural resources (most often, oil and natural gas). That’s the case in Norway. But it isn’t in Canada, not least because the federal government doesn’t collect natural resource royalties—these belong and flow to the provinces.

It should also be noted that Norway and other countries with sizable SWFs direct most of their investments to external rather than domestic markets—that is, they mainly invest abroad. Again, the proposed CSF will take a different approach—apparently, all of its investments will be made at home.

So far, the details about the CSF are sparse; we’ll know more about its specific mandate, leadership, governance and how it will collaborate with the Canadian private sector in the coming months. In announcing the CSF, the prime minister failed to mention that the federal government already earmarks billions of dollars annually to finance a wide array of “investments.” Some examples are the significant venture capital and other business growth funds managed by the Business Development Bank of Canada; the $15 billion “Canada Growth Fund” launched in 2023; the $29 billion allocated to support clean tech and clean energy development since 2016 as part of the Trudeau government’s “net zero” climate plan; and the Canada Infrastructure Bank, created in 2017 with a $35 billion Parliament-approved appropriation over 11 years to invest in “revenue-generating” infrastructure projects.

Whatever their merits, these and other initiatives cooked up in Ottawa over the last decade or so have failed to fix Canada’s “investment deficit.” The CSF represents a fresh attempt.

It’s clear that Prime Minister Carney—if not his full cabinet—is seized with the problem of low levels of private-sector capital spending in Canada, including insufficient investment in asset categories that drive productivity growth—machinery and equipment, intellectual property products, and digital and other advanced technologies. The prime minister has also signalled a desire to boost investment in large natural resource, transportation and infrastructure projects, which Ottawa judges to be in the “national interest” and that are aligned with his companion goal to encourage trade diversification.

What his government has not done is commit to the kind of policy reforms that would make Canada a more attractive location for private-sector investment, entrepreneurial wealth creation, business growth and innovation. Adding to the existing alphabet soup of government programs, funding pots and institutional delivery mechanisms does nothing to improve Canada’s tax competitiveness. Nor will it reduce the cost of an ever-increasing regulatory burden that, according to Statistics Canada, has significantly dampened economic and productivity growth since the mid-2000s.

In current circumstances, the principal challenge for federal policymakers is not to find new ways to use borrowed money to spark greater business investment and faster economic growth. It’s to make Canada worth investing in again—not as seen by politicians and media commentators, but rather in the eyes of Canadian firms, foreign investors, pension funds and other institutions with risk capital to deploy. The proposed Canada Strong Fund is unlikely to move the dial on that.