Build Canada's Wealth Fund

This memo contains updates from Shane's original memo.

Goals

• Create a unified, nationally governed Canadian Sovereign Wealth Fund (CSWF) through voluntary cooperation between federal, provincial, and territorial governments. The Fund will be transparent, independently managed, and focused on long-term economic stability, intergenerational prosperity, and enhancing Canada’s global economic influence.

• Grow the Fund to over $500 billion within 10 years, with a long-term goal of ranking among the world’s top five sovereign wealth funds by 2050, based on total assets under management.

• Distribute a “Canada Dividend” to all citizens starting in year 6, returning a share of investment earnings directly to households each year—while safeguarding the Fund’s principal and long-term purpose.

Background and Motivation

Canada needs to turn temporary resource profits into lasting wealth.

Canada is one of the most richly endowed countries in the world with natural resources, generating around $20 billion annually in provincial resource revenues. However, natural resources are finite – you can’t keep extracting them forever.

Other resource-rich nations have been proactive about saving some of the funds generated through natural resources in sovereign wealth funds. These are large pools of money owned by a country, invested in stocks, bonds, or other assets, with the goal of saving and growing wealth for the future.

Norway's Sovereign Wealth Fund surpassed CAD $2.5 trillion in 2024. Canada has the makings of something similar, but lacks a unified national approach. Our current fragmented system, largely dictated by provincial ownership and jurisdiction over resources (Constitution Act, 1867, S. 109 & 92A), leaves minimal lasting national assets derived from these revenues.   Provincial funds, such as the Alberta Heritage Fund — which holds $31.9 billion as of December 2025¹ — are modest in scale compared to the wealth generated over decades.

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This fragmentation exposes all Canadians to the volatility of global commodity markets, leading to boom-and-bust cycles that impact families, businesses, and investor confidence. 

Furthermore, the accelerating global shift away from fossil fuels and the looming rise of critical minerals underscores the urgency of establishing a strategy that captures the value of oil and gas revenues while also capturing the value generated from other non-renewable resources. Without a coordinated national wealth strategy, Canadians risk missing the opportunity to convert finite resources into sustainable economic benefits across generations.

Canada's economic situation makes this more urgent than ever. The economy is struggling. GDP contracted in Q4 2025,² per-capita GDP declined for three consecutive years before showing tentative improvement, and Canada has the worst real GDP per capita growth record in the G7 over the past decade.³ The OECD projects Canada will remain dead last among advanced economies for per-capita growth through 2060.⁴ Now is not the time for new taxes. It's time to stop wasting what we already have and start saving it instead.

Establishing a Canadian Sovereign Wealth Fund (CSWF) through a voluntary, cooperative framework is the answer. It respects provincial jurisdiction while offering the scale, diversification, and stability benefits of collective investment, ensuring all partners and generations share in our natural abundance.

By starting now and committing to disciplined savings, Canada can build a fund that rivals Norway's success while ensuring all Canadians benefit from our natural abundance.

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Real-World Solutions

• Norway's Wealth Management: Norway’s Sovereign Wealth Fund, the largest globally, is primarily funded through taxes on profits from the country's oil and gas industry, which can reach as high as 78%. It strategically invests these revenues into global equities and infrastructure. Through disciplined governance and transparent management, the fund delivers lasting prosperity for future generations while effectively insulating Norway’s economy from the volatility of oil prices.

• Alaska's Dividend Model: Jay Hammond, the former governor who set up Alaska’s Permanent Fund in the 1970s, “wanted to transform oil wells pumping oil for a finite period into money wells pumping money for infinity.” To safeguard the fund's longevity, Alaska implemented strict rules protecting its principal, allowing only the earnings from investments to be distributed. Today, the fund provides Alaskans with annual dividends, typically between $1,000 and $2,000 USD per citizen. This direct dividend fosters strong public support, reduces economic inequality, and stimulates local economies.

• Singapore’s Strategic Success: Singapore’s Temasek Holdings strategically invests globally, providing stability and steady income streams to the national budget. This proactive, diversified investment approach secures consistent growth, even through global economic downturns.

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What Needs To Be Done

To secure Canada’s long-term economic future, Canada must establish a Canadian Sovereign Wealth Fund (CSWF) through a cooperative federal-provincial-Indigenous framework. 

The Fund must respect constitutional resource rights while delivering shared national prosperity. It will rely on voluntary participation, diverse and fair funding mechanisms, and ironclad governance to ensure transparency, independence, and lasting benefit.

1. Fund it by cutting government, not taxing Canadians. The primary funding source for the CSWF must come from restoring federal government spending to pre-2015 levels on a per-capita basis — with one exception: the Department of National Defence, which must be exempt and funded to meet Canada's NATO commitments.⁴

The federal civil service added over 108,000 employees between 2015 and 2024 — a 42% increase — while the population grew just 14%.⁵ The Parliamentary Budget Officer estimates federal personnel spending alone hit $71.1 billion in 2024-25. Departments consistently fail to meet even half their own performance targets.⁶ We spent more and got less. 

O&G is already heavily taxed. The toll on consumers and investment is real. The answer isn't more taxes. It's less government.

Reversing the post-2015 hiring surge would save over $13 billion annually in personnel costs alone, with further billions available from a comprehensive program review. Of these savings:

• 75% goes directly into the Sovereign Wealth Fund — building a permanent asset for all Canadians.
• 25% goes back to Canadians — through tax cuts, deficit reductions, a GST reduction, or other relief. The economy is worse than anticipated. Canadians need to feel the benefit immediately.

Canada did this before. The Chrétien program review of the 1990s cut federal spending from roughly 22% to 17% of GDP in five years, reduced the civil service by nearly 15%, and delivered over a decade of balanced budgets.⁷ We can do it again.

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2. Foster Partnership Through Shared Benefits: The foundation of the Fund must be Intergovernmental Agreement(s) based on voluntary participation. The partnership will: 

• Establish clear and transparent provincial/territorial equity structures reflecting each province’s contributions—structured as a matching fund, with allocations available from federal energy revenues based on population or GDP share. Provinces that contribute their share unlock federal matching funds. This approach ensures fairness, encourages broad participation, and gives provinces significant leverage on every dollar they invest.
• Provide tangible provincial value through shared investment strength: Through the Fund’s scale, provide access to premium investment opportunities (e.g., large infrastructure, private equity) that provinces or territories could not access alone.

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3. Supplement with Diverse Federal Revenue Sources: In addition to budget savings, federal contributions to the CSWF will come from a mix of recurring and one-time sources. These include resource-based revenues such as offshore royalties, revenues from federal territories, pipeline fees, and proceeds from asset sales and spectrum auctions. To ensure the Fund grows in step with responsible fiscal management, 20% of all net federal government spending reductions will also be allocated to the CSWF. Finally, federal contributions will include revenue from a targeted windfall profits tax — a levy on excess profits from resource companies during periods of exceptionally high global commodity prices, based on a clearly defined baseline. This ensures that temporary spikes in resource income are captured and transformed into permanent public wealth.

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4. Legislate the Canadian Sovereign Wealth Fund Act. Create federal legislation that defines the Fund’s mandate, governance, protections, and operating rules:

• ‍Independent Oversight: Establish a board with representation from federal, provincial, territorial, and Indigenous governments, composed of proven business leaders focused on long-term performance—not politics. 
• ‍Professional, Arm’s-Length Management: For the first 5 years, leverage Canada’s existing institutional investment expertise (e.g., CPPIB model) to ensure fiduciary excellence.
• ‍Principal Protection: Enshrine fiscal rules that strictly limit withdrawals, protect principal capital, and ensure a focus on inflation adjusted returns. 
• ‍Mandatory Transparency: Require regular independent audits, annual public reporting, and clear performance dashboards to guarantee accountability.

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3. Implement Diverse Funding Sources

• Federal Contributions: Federal contributions to the CSWF will come from a mix of recurring and one-time sources. These include resource-based revenues such as offshore royalties, revenues from federal territories, relevant corporate taxes, carbon pricing proceeds, and pipeline fees. Additional contributions will come from one-time appropriations, including proceeds from asset sales, spectrum auctions, and similar events. To ensure the Fund grows in step with responsible fiscal management, 20% of all net federal government spending reductions will also be allocated to the CSWF. This ensures that efforts to streamline government operations directly support long-term national prosperity. Finally, federal contributions will include revenue from a targeted windfall profits tax—a levy on excess profits from resource companies during periods of exceptionally high global commodity prices, based on a clearly defined baseline. This ensures that temporary spikes in resource income are captured and transformed into permanent public wealth.‍
• Voluntary Provincial/Territorial Contributions: Provinces and territories will have access to federal matching contributions from a defined pool of energy-related revenues, distributed by per capita or GDP share. To unlock these funds, participating provinces must contribute a matching portion of their own resource revenues. This matching structure creates strong incentives for early and full participation, especially for resource-rich provinces who stand to gain the most from the Fund’s long-term growth.‍
• Canada’s Future Fund Consumption Levy: While the preferred approach is to redirect 1% of the existing GST for a five-year period, a fallback solution would be to introduce a temporary 1% levy on non-essential, non-child-related consumer purchases. This charge would be transparently listed alongside the GST and explicitly earmarked as a contribution to “Canada’s Future Fund.”
  
  Essential items—including groceries, children’s clothing, baby formula, school supplies, books, and other core family needs—would be fully exempt. The levy is projected to raise up to $85 billion over five years, providing a powerful source of capital for long-term national prosperity.
  
  Clear, transparent communication of the Fund’s purpose will be critical to maintaining public trust. Canadians will see their contributions as a direct, time-limited investment in permanent national wealth—one that provides dividends to every citizen and reduces long-term tax pressures. A legislated sunset clause will automatically cancel the 1% levy after five years—without exception.

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4. Return Value to Citizens Through the Canada Dividend:
Beginning in year 6, allocate 20% of the Fund’s 5-year average net earnings (from retained earnings) to a direct annual dividend for every Canadian citizen.

In addition, provincial contributions will influence the share of national earnings allocated to residents—ensuring that the Canada Dividend reflects the level of commitment and participation each jurisdiction makes to the Fund. This structure creates a fair incentive: the more a province contributes, the more its citizens benefit. ‍

• Direct Economic Impact: Improves household finances, reduces inequality, and stimulates local economies.‍
• Builds Public Trust: Demonstrates real, tangible value early on, strengthening long-term support and national unity.‍

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5. Reduce Public Debt for Future Generations. Also starting in year 6, allocate up to 20% of average net earnings toward federal and provincial debt repayment, easing fiscal burdens on future taxpayers.

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6. Leverage Canada’s world-class investment capabilities —

To manage the 25% of the CSWF allocated to active investments, Canada will leverage its world-class institutional expertise—such as that found at the Canada Pension Plan Investment Board (CPPIB). For the first five years, CPPIB will manage this portion of the Fund, focused exclusively on infrastructure and real estate investments in G7 countries.

A shared-services model with a dedicated management team will avoid bureaucratic duplication, keep costs low, and help the Fund reach operational maturity quickly. Meanwhile, 75% of the Fund will be passively invested in global index funds—50% in global equities and 25% in global bonds—providing broad market exposure at minimal cost.

To enforce discipline and protect the Fund’s integrity, strict operational limits will apply. The management team will be capped at 10 full-time staff with an annual budget of $20 million, indexed to inflation. The Fund will have no access to debt, and any breach of the approved budget will trigger automatic dissolution of the board.

Active management fees will be capped at 0.50% (50 basis points) of assets under management. Beginning in year six, CPPIB must compete for the right to continue managing the Fund’s active portion—ensuring performance, not entitlement, governs who manages Canadians’ wealth.

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7. Ensure Rigorous Oversight and Transparency. Legislate enduring protections to prevent short-term interference:

• Audit and Reporting Requirements: Regular parliamentary audits, public dashboards, and performance reports ensure full accountability.‍
• Political Firewalls: Staggered board terms, legislative barriers to principal drawdowns, and inflation-proofing protect the Fund from political misuse—ensuring it serves Canadians for generations.  ‍
• Strict Limits on Domestic Investment: To help ensure this does not become a political slush fund: Cap total investments in Canadian-based projects at no more than 10% of the portfolio, with clear eligibility criteria and independent review. Provinces or territories that receive investment allocations and fail to meet the risk-free rate of return within five years will be required to annually reimburse the Fund for any shortfall until the capital is repaid.The Fund’s primary mandate is global: to grow Canada’s wealth by capturing superior returns abroad and bringing that value home.

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Common Questions

Won't cutting government spending hurt the services Canadians rely on? 

Federal spending grew massively in real terms over the last decade. Canada now has the worst real GDP per capita growth in the G7. The Parliamentary Budget Officer has found that departments consistently fail to meet their own performance targets. The spending increase didn't work. Restoring per-capita spending to 2015 levels doesn't mean gutting healthcare or pensions — it means reversing the bureaucratic bloat that produced worse outcomes at higher cost. Defence is exempt and must be funded to meet NATO commitments. Canada did this before: the Chrétien program review of the 1990s cut federal spending from roughly 22% to 17% of GDP in five years, reduced the civil service by nearly 15%, and delivered over a decade of balanced budgets.

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Why would Alberta or other provinces contribute?
Because it multiplies their impact. Provinces that contribute unlock matching federal funds and secure a larger share of long-term investment returns for their citizens. Alberta, for example, would have leverage over every dollar it contributes—transforming temporary resource income into permanent dividends and national influence.

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Could this discourage foreign investment in Canada?
On the contrary. A stable, sovereign wealth fund boosts global confidence in Canada's economic future, attracting long-term investments and partnerships across sectors.

By investing abroad and owning stakes in global income-generating assets, Canada strengthens its position as both a reliable investment destination and a formidable global investor. This creates a virtuous cycle: as the Fund grows, so does our economic credibility, attracting more capital, forging stronger partnerships, and enhancing Canada’s global leverage—economically and diplomatically.

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How will political misuse be prevented?

‍The CSWF will be protected by strong legislation that keeps it independent, transparent, and focused on Canada’s long-term future. The Fund will be overseen by an independent board made up of trusted leaders from the federal, provincial, territorial, and Indigenous governments. These members will be chosen based on merit, and their terms will be staggered so that no government can control the board. The law will clearly ban any government from dipping into the Fund’s main capital, and will only allow limited, inflation-proofed withdrawals. To prevent political interference, no more than 10% of the Fund can be invested in Canadian projects—and only if they meet strict criteria. If a province or territory takes investment and doesn’t deliver at least a risk-free return after five years, they must repay the difference each year. In the first five years, the Fund will use CPPIB’s proven investment expertise, but after that, CPPIB must compete to continue managing the money—ensuring high performance. On top of all this, the Fund will be audited regularly, report to Parliament, and show its results publicly through easy-to-read dashboards. These layers of protection create a firewall against political misuse and keep the Fund safe for future generations.

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Isn't this just another version of the National Energy Program? 

No. Provincial participation in the fund will be voluntary, provincial jurisdiction over natural resources will not change, and no price controls will be involved. The primary funding source is federal budget savings — not taxes on resource producers.

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Shouldn't we prioritize current needs? 

It's a fair question, especially when many Canadians are struggling just to get by. But the CSWF is built to support both today and tomorrow. Starting in year six, every Canadian will receive a Canada Dividend — a direct payment to households that provides real financial relief, year after year. And 25% of the budget savings that fund the CSWF go back to Canadians immediately through tax cuts. Rather than spending billions on one-off programs that vanish, Canada can invest those dollars and generate steady income: $500 million annually, forever, from a $10 billion investment. That money can lower future taxes, give communities more control, and finally break the boom-and-bust cycle that's held us back for generations.

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How will the CSWF be managed?

‍The Fund will be managed with a single, clear goal: to grow Canadians’ wealth over the long term while keeping costs low and discipline high. To achieve this, the CSWF will adopt a passive, index-based strategy, with 75% of assets invested passively—split between 50% in global equities and 25% in global bonds. The remaining 25% will be actively managed by the Canada Pension Plan Investment Board (CPPIB) for the first five years, focused exclusively on infrastructure and real estate investments in G7 countries. This balanced structure supports stable, diversified growth while providing exposure to real assets that can help protect against inflation and deliver long-term value. After year five, CPPIB will be required to compete for the right to continue managing the active portion—ensuring that performance, not politics or entitlement, drives who manages Canadians’ wealth.

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Conclusion

The time to act is now. Every day we wait is another day of resource wealth lost, wealth that could have been invested to secure our future.

A Canadian Sovereign Wealth Fund is more than just economic policy. It’s a promise to each other, and to the generations that will follow. The evidence is clear: Norway’s fund has grown to over $2.5 trillion, helping stabilize its economy for the long term. In Alaska, annual dividends enjoy strong bipartisan support because they put real money in people’s pockets. 

We don't need new taxes to build this.. Restore the federal government to pre-2015 per-capita spending levels — exempt the military — and put 75% of the savings into a locked sovereign wealth fund. Give 25% back to Canadians who are hurting right now. Norway has a 2% toll on the world economy. Canada can have the same. It would strengthen our independence, our country, and our position at every negotiating table.

The Fund will be protected by strong laws, independent oversight, inflation-proofing, and full transparency. Every dollar contributed will be shielded from political misuse and focused solely on long-term results. This Fund belongs to Canadians—not to politicians—and it will work for Canadians, forever. 

This is our chance to turn Canada’s natural wealth into a permanent economic engine. Just as past generations built the roads, bridges, and institutions we depend on today, we now have the opportunity and responsibility to build the financial foundation for a stronger, more secure future for all. 

Now is our moment to act, not just for ourselves, but for every Canadian who comes next.