TORONTO (AP) — Canada is developing a government-owned investment fund, Prime Minister Mark Carney said Monday.
Carney said that the fund would invest in major Canadian industrial projects, in areas such as energy, infrastructure, mining, agriculture and technology. It will begin at 25 billion Canadian dollars ($18 billion).
The prime minister said that the federal government will provide funds alongside private investors. The money will help finance projects that Carney’s government is focused on building, as Canada seeks to diversify away from the United States.
U.S. President Donald Trump has been threatening Canada’s economy and sovereignty with tariffs, most offensively by claiming Canada could become the 51st U.S. state.
“Many of our former strengths built on our close ties to the United States have become our weaknesses,” Carney said. “The U.S. has changed. That’s their right and we are responding. That is our imperative.”
Carney is a former two-time central banker in England and Canada, as well as ex-chair of Bloomberg’s board of directors.
“We take a lesson from other jurisdictions that had the foresight many decades ago to start sovereign wealth funds,” Carney said, “In some cases, they began with a domestic focus, then outgrew the scale of the domestic focus.”
Sovereign wealth funds invest in assets such as stocks, bonds and real estate. They are typically funded by a country’s budgetary surplus, which Canada currently doesn’t have. The announcement came a day before Carney’s government is due to announce its spring economic update.
There are more than 90 sovereign wealth funds around the world that manage more than $8 trillion in assets, according to The International Forum of Sovereign Wealth Funds, a London-based organization made up of roughly 50 of these entities.
Trump ordered the creation of U.S. sovereign wealth fund last year. In the U.S., more than 20 sovereign wealth funds exist at the state level, according to an analysis by the Center for Global Development, a Washington-based nonpartisan think tank.