Turn Canada's Resources into Lasting Wealth

Goals

• Create a unified, nationally governed Canadian Sovereign Wealth Fund (CSWF):
  • Established through cooperation between federal, provincial, and territorial governments.
  • Aimed at long-term economic stability and enhancing Canada's global economic influence.
• Grow the Fund to $500 billion in 10 years:
  • Aim to be among the world's top five sovereign wealth funds by 2050.
• Distribute a Canada Dividend starting in year 6:
  • Share investment earnings with citizens while protecting the Fund's principal.

Background and Motivation

• Canada generates $20 billion annually in provincial resource revenues but lacks a unified national approach like Norway's Sovereign Wealth Fund.
• Canada's fragmented system leads to minimal national assets and exposes the country to economic volatility.
• Shift from fossil fuels to critical minerals increases urgency for a national wealth strategy.
• Establishing CSWF respects provincial rights while offering collective investment benefits.

Real-World Solutions

• Norway:
  • Largest Sovereign Wealth Fund, funded by oil and gas taxes, investing globally.
• Alaska:
  • Permanent Fund provides annual dividends, ensuring longevity and public support.
• Singapore:
  • Temasek Holdings' diversified investments stabilize and grow the national budget.

Action Steps

1. Foster Partnership

• Intergovernmental Agreements:
  • Voluntary participation with clear equity structures.
  • Federal matching funds encourage provincial investment.

2. Legislate the Canadian Sovereign Wealth Fund Act

• Independent Oversight:
  • Board representation from federal, provincial, territorial, and Indigenous governments.
• Professional Management:
  • Use existing institutional expertise (e.g., CPPIB) for fiduciary excellence.
• Mandatory Transparency:
  • Regular audits and public reporting for accountability.

3. Implement Diverse Funding Sources

• Federal Contributions:
  • Mix of recurring and one-time sources, including windfall profits tax.
• Provincial Contributions:
  • Access to matching federal funds for resource contributions.
• Canada's Future Fund Consumption Levy:
  • Temporary 1% GST levy to raise capital, with a five-year sunset clause.

4. Return Value to Citizens

• Canada Dividend:
  • Starting in year 6, direct annual dividends improve household finances and promote public trust.

5. Reduce Public Debt

• Allocate earnings toward federal and provincial debt repayment starting in year 6.

6. Leverage Investment Capabilities

• Active and Passive Investment:
  • 25% actively managed by CPPIB, 75% passively in global index funds.
• Operational Limits:
  • Cap management fees and staff numbers to ensure efficiency.

7. Ensure Rigorous Oversight

• Audit and Reporting:
  • Frequent audits and transparency to prevent misuse.
• Limit Domestic Investment:
  • Cap Canadian investments to protect global returns.

Common Questions

• Impact of 1% Levy:
  • Temporary and transparent, investing in future returns.
• Provincial Participation Benefits:
  • Multiplies impact with federal matching funds.
• Foreign Investment Impact:
  • Enhances global confidence and attracts investment.
• Political Misuse Prevention:
  • Strong legislation for independence and protection.
• Canada Dividend Feasibility:
  • Structured to protect principal and benefit citizens.
• Prioritizing Current Needs:
  • Dividend supports families today and builds future security.
• Misconceptions on National Energy Program:
  • Fund is voluntary with no changes to resource jurisdiction.
• Fund Management:
  • Index-based strategy with CPPIB's expertise and competitive management.

Conclusion

• Acting now is crucial to convert resource wealth into lasting prosperity.
• The CSWF promises economic security for all Canadians, with strong laws and oversight ensuring transparency and independence.
• This initiative builds a financial foundation for future generations, akin to infrastructure investments of the past.