TORONTO — Prime Minister Mark Carney announced the launch of the Canada Strong Fund in Toronto, a government-owned investment vehicle that will begin with 25 billion Canadian dollars to back major Canadian industrial projects. The federal government will provide funds alongside private investors, and Canadians will be able to invest directly into the fund.

The fund will invest in energy, infrastructure, mining, agriculture and technology, as Canada seeks to diversify away from the United States. The announcement came a day before Carney's government is due to release its spring economic update.

"Many of our former strengths built on our close ties to the United States have become our weaknesses," Carney said. "The U.S. has changed. That's their right and we are responding. That is our imperative."

U.S. President Donald Trump has imposed tariffs on Canada and stated that Canada could become the 51st U.S. state. Trump ordered the creation of a U.S. sovereign wealth fund last year.

Carney, a former central banker in England and Canada and former chair of the board of directors for Bloomberg, pointed to international precedents for the new vehicle. "We take a lesson from other jurisdictions that had the foresight many decades ago to start sovereign wealth funds," Carney said. "In some cases, they began with a domestic focus, then outgrew the scale of the domestic focus."

Sovereign wealth funds invest in assets such as stocks, bonds and real estate, and are typically funded by a country's budgetary surplus, which Canada currently does not have. There are more than 90 sovereign wealth funds around the world, managing more than $8 trillion in assets, according to the International Forum of Sovereign Wealth Funds. More than 20 sovereign wealth funds exist at the state level in the U.S., according to an analysis by the Center for Global Development.

Norway launched its sovereign wealth fund in 1990, investing surplus revenues of its oil and gas sector exclusively outside the country. The fund has grown to $2.1 trillion in assets, according to a 2025 report by Bloomberg. Canada has the third-largest oil reserves in the world.

"Historically, sovereign wealth funds are vehicles for countries that generate a lot of income from publicly-owned assets, and this is almost always oil wealth," said Joseph Steinberg, an economics professor at the University of Toronto. "In Canada's case, the money will be mostly used to invest in domestic projects instead," he said. The Montreal Economic Institute warned in a statement that the fund risks costing taxpayers dearly while generating limited returns.