What is a sovereign wealth fund and how does it work?
A sovereign wealth fund (SWF) is a government-owned investment vehicle that uses surplus revenues, often from natural resources, to invest in financial and real assets for long-term economic benefit. Canada has announced its first national SWF, the Canada Strong Fund, starting with a $25-billion federal endowment and structured as an independent Crown corporation. While several Canadian provinces and territories already have such funds, the national initiative aims to support large-scale infrastructure and economic development projects.
- ▪The Canada Strong Fund is Canada’s first national sovereign wealth fund, launched with a $25-billion federal investment.
- ▪Sovereign wealth funds are typically funded by excess oil and gas revenues, budget surpluses, or foreign currency reserves.
- ▪Norway’s Government Pension Fund Global, valued at over US$2.2-trillion by 2025, is one of the world’s largest sovereign wealth funds.
- ▪Alberta’s Heritage Savings Trust Fund, established in 1976, is a provincial example that reached a record high of $30-billion in 2025.
- ▪The Canada Strong Fund will be professionally managed as an independent Crown corporation with federal support for nation-building projects.
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Open this photo in gallery:Governments often use excess profits from oil and gas revenue streams to fund sovereign wealth funds. Countries like Norway, China and the United Arab Emirates have seen economic benefit from these investments.OLE BERG-RUSTEN/AFP/Getty ImagesShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountOriginally a way for countries to safeguard – and grow – surplus revenue, sovereign wealth funds have evolved since they originated in the 1950s.
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