Canada to set up sovereign wealth fund with initial funding of C$25 billion

Canada will set up a sovereign wealth fund with an initial endowment of C$25 billion ($18.38 billion) to invest in major domestic projects, Prime Minister Mark Carney told reporters on Monday.

The announcement, which comes just a day before Canada‘s fiscal update, will be the nation’s first sovereign fund.

“A sovereign wealth fund is essentially a national savings and investment account – designed to grow wealth for future generations,” Carney said.

The Canada Strong Fund will invest in major projects across the country along side private sector on a commercial basis and will grow in size through asset recycling and reinvestment, Carney said.

Many countries endowed with natural resources, especially oil and natural gas, have state-owned investment funds to manage surplus wealth. These sovereign wealth funds typically invest in projects and markets globally.

($1 = 1.3599 Canadian dollars)

(Reporting by Disha Mishra in Bengaluru and Promit Mukherjee in Ottawa; Editing by Toby Chopra and David Ljunggren)