The federal government is bringing down its spring fiscal update today.
It comes just one day after Prime Minister Mark Carney announced the creation of a sovereign wealth fund for so-called ‘nation-building’ projects.
That includes major infrastructure or development projects including ports, mines and trade and energy corridors.
Ottawa is starting the fund with $25 billion and will allow Canadians, investors and companies to invest directly into the fund with the creation of a new retail investment product.
Consultations will be held in the coming months on the specific design of the new investment fund. It’s part of Carney’s continued efforts to move away from economic reliance on an increasingly erratic United States.
The Prime Minister also hinted at what’s coming in today’s spring fiscal update.
“It will show how Canada’s new government is combining responsible fiscal management with new measures to ensure that all Canadians can participate in building a more independent and more resilient Canadian economy.”
Finance Minister Craig Pardy
Provincial Finance Minister Craig Pardy is making the distinction between Ottawa’s sovereign wealth fund and the future fund established provincially.
Pardy has introduced amendments to the Future Fund Act, arguing that it does not make sense to borrow money for a Future Fund when the province is facing growing debt and Newfoundlanders and Labradorians are struggling with affordability and accessing essential services.
The proposed amendments would remove the requirement for mandatory annual contributions and limit the ability to withdraw funds.
In a Committee of the Whole discussion in the House of Assembly yesterday, Pardy made a distinction between the federal government’s sovereignty fund and the province’s future fund.
“It’s a sovereign wealth fund, to have the nation become more productive, for major projects. It’s different from the Future Fund, which I think the genesis was you would save money for the future. Many people have compared it to Norway, but my understanding with Norway is that they were debt-free when they started putting money into that. Unfortunately, in our jurisdiction we haven’t been debt-free, at least not since Confederation….so it’s two different funds.”
Pardy says he supports the concept of a sovereign wealth fund especially given the situation the country is facing dealing with the United States.
“I don’t disagree with that, it’s probably a good venture. But we want to make sure that we do leave it for the future. To save money is one aspect, to not increase the debt for our future generations is another one which I think all forty members of the house would agree, that if we can reduce our debt that we leave for our future, that is planning for the future too.”
