Carney Is Shooting at the Wrong Target

Key Takeaways

• Canada Strong Fund proposes $25 bn seed capital for co‑investments.
• Existing public asset portfolios often exceed national GDP but remain undervalued.
• Better asset registers can create a pipeline for private capital.
• Singapore’s Temasek model shows benefits of a public wealth fund.
• Ignoring hidden assets risks fiscal strain despite new sovereign funds.

Pulse Analysis

The Canada Strong Fund, announced by Prime Minister Justin Trudeau and championed by former Bank of England governor Mark Carney, is billed as a $25 bn sovereign‑wealth fund that will partner with private capital to finance infrastructure, energy transition and defence projects. Proponents see it as a pragmatic response to fiscal constraints, yet critics note that Canada runs a deficit and must borrow to seed the fund, raising questions about the efficiency of using public money for a vehicle traditionally reserved for surplus‑rich nations. Moreover, the fund’s focus on creating new equity stakes overlooks a more pressing issue: the scarcity of well‑structured, investable projects.

Across advanced economies, governments sit on massive portfolios of real estate, utilities, transport networks and state‑owned enterprises—assets that collectively can dwarf annual GDP. Yet these holdings are often recorded at book values far below market prices, scattered across ministries, and excluded from fiscal planning. Studies by the IMF and independent analysts estimate that better stewardship of such assets could free up trillions of dollars in non‑tax revenue, providing a fiscal cushion without raising taxes or increasing debt. Transparent asset registers, market‑based valuations, and clear return expectations are essential to transform these hidden resources into a reliable source of funding.

The Singapore experience offers a blueprint. Temasek, a public‑wealth fund, consolidates domestic commercial assets, imposes disciplined governance, and aligns returns with national priorities, while GIC handles global financial investments. New Zealand’s shift to accrual accounting and net‑worth‑based budgeting further demonstrates how embedding asset performance into fiscal rules can boost public wealth. For Canada, the UK, and other middle powers, the strategic priority should be to map, value, and professionally manage existing assets, creating a robust pipeline that makes new sovereign‑wealth initiatives a complementary, not primary, lever for fiscal resilience.