While the idea of a sovereign wealth is great, I am rather skeptical of the actual proposed implementation. A typical SWF model is that you have a revenue source such as resource royalties or foreign exchange that’s directed to a fund with political independence and a broad investment mandate as seen in Norway or Singapore.

But the proposed approach by the Federal Government does not follow these practices. It is using national debt to make initial investments. In theory, if your return is greater than interest it can work, but it’s not ideal. These investments are targeted at major projects in the national interest. But just like the Major Projects office, these are politically-prioritized. This makes me skeptical of the independence aspect of the fund. Finally, we should ask why our independent wealth funds (CPP/Pensions/Private) and global capital are not more interested in major project investments.

I am open to being convinced with more details provided because we do need a sovereign wealth going forward.