Sovereignty is no longer just about borders and diplomacy. It’s about control over essentials that shape our future.Adrian Wyld/The Canadian Press
John Ruffolo is the founder and managing partner of Maverix Private Equity.
Canada’s objective must be clear: sovereignty. If we can’t control our own destiny, someone else will. That’s not a slogan. It’s the reality of the global economy today.
Sovereignty is no longer just about borders and diplomacy. It’s about control over essentials that shape our future: data, communications, energy, food, health care, mobility, defence and money.
These are non-negotiable. To secure them, Canada needs Canadian-owned and Canadian-financed businesses at scale. That requires capital – and this is where we are failing.
Entrepreneurs need three things to build sovereign industries: capital, talent and customers. On talent and markets, the debate continues. On capital, the facts are plain: Canada is weak at domestic capital formation.
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Aging demographics, high taxes, deficits and unproductive wealth trapped in housing mean we simply don’t generate large capital pools for productive assets. Our pension funds, though world-class in size and governance, largely bypass Canadian innovators in favour of global opportunities. Our venture and private equity funds rely heavily on U.S. investors. Our banks, stable by design, avoid the kind of long-term risk capital required to build sovereign industries.
As a result, Canadian innovators turn to foreign capital. That might seem harmless – until you recognize that every major economy is prioritizing its own sovereignty. “Buy American” is back in Washington. Europe is protecting strategic industries with regulation. China has long deployed state-backed capital as a weapon. If we rely on outsiders, we compromise our independence.
It’s time to ask the question: Should Canada create a sovereign wealth fund, as Norway did with its oil wealth, or Singapore with Temasek and GIC?
The answer is yes.
A sovereign wealth fund is not a slush fund. Done properly, it is a professionally managed pool of assets, governed independently, with two purposes: strengthen sovereignty and generate long-term returns.
Canada already has pieces of such a system, but they are scattered and inefficient: BDC, EDC, SIF, CIB, NRC and others. Ottawa isn’t short of programs or acronyms – it’s short of strategy.
Consolidating these into one strategic pool would create scale and focus. Instead of subsidies and grants (often flowing to foreign firms), we could build permanent capital that compounds for future generations.
Norway offers the model. With a population smaller than Ontario’s, it built the world’s largest sovereign wealth fund, now worth more than US$1.5-trillion. Alberta attempted something similar with its Heritage Fund, but political short-termism undermined it. Canada can – and must – learn from both examples.
A Canadian fund could draw from multiple sources:
- Existing programs and assets: Consolidate stakes acquired through federal initiatives.
- Resource revenues: Dedicate a share of royalties, just as Norway did.
- Tax policy: Shift from giveaways to equity participation, turning subsidies into ownership.
- Partnerships: Invite Indigenous nations and pension funds as co-founders. Explore ways to convert unproductive wealth, such as residential property, into productive capital.
This fund must operate as an investor – not a grant dispenser. It should back Canadian-owned businesses through direct investments, co-investments and fund commitments, in a way that attracts private capital rather than crowds it out.
Focus is critical. The fund should prioritize sectors tied directly to sovereignty, such as energy and critical minerals; food and agriculture; data, communications and AI; health care and biotech; mobility and transportation; defence and cybersecurity; the financial system.
This is not about picking corporate winners. It’s about ensuring that industries essential to sovereignty remain anchored in Canada.
The greatest risk is political interference. If the fund becomes another short-term political tool, it will fail.
The solution is independent governance. Models exist: CDPQ operates at arm’s length from Quebec’s government, with a dual mandate to support Quebec’s economy and deliver returns. A sovereign wealth fund must be managed by a professional, independent board, with legislated guardrails to protect its long-term purpose.
The mandate should be clear: Invest in Canadian sovereignty by supporting key domestic industries, and generate long-term sustainable returns by investing globally when appropriate.
The second point matters. Like Norway, the fund should diversify abroad to manage risk and generate steady returns. Sovereignty does not mean isolation. It means ensuring those returns serve Canadian interests.
Without a sovereign wealth fund, we will continue to depend on foreign capital. That means industries vital to our independence will be shaped by the priorities of others.
This is not a partisan issue. It’s about whether Canada is mature enough to create, govern and stick with a fund that builds capital for generations to come.
A sovereign wealth fund would send one clear message: Canada takes its sovereignty seriously enough to back it with hard assets.