Is Canada’s national fund based on ignorance? You decide.

The following article ran in the April 28th Florida Sun Sentinel:

Canada to launch national fund for investing with $18B
TORONTO — Canada is developing a government-owned investment fund, Prime Minister Mark Carney announced Monday.

Carney said the fund will invest in major Canadian industrial projects in areas such as energy, infrastructure, mining, agriculture and technology. It will begin at 25 billion Canadian dollars, approximately $18 billion.

The prime minister said the federal government will put up funds alongside private investors for projects his government is focused on building as Canada seeks to diversify away from the United States.

The 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.

The announcement comes a day before the Carney government announces its spring economic update. — Associated Pres

First, a Monetarily Sovereign government like Canada’s, does not fund anything via a budgetary surplus. It simply creates the dollars via fiat. If Canada truly runs a surplus to “fund” this investment, that surplus will drain private sector balances in order to justify public investment — in short, it will create a recession.

Canada’s proposed government investment fund is largely financial theater.

A currency-issuing government like Canada’s does not need to “raise,” “earn,” or “recycle” money in order to support industry. It already has the capacity to fund any project that uses available labor, materials, and technology.

Structuring policy as an “investment fund” that seeks returns borrows the language and logic of the private sector, implying a constraint that doesn’t exist. It frames public action as if it must behave like a profit-seeking investor, which is conceptually wrong.

That doesn’t make the idea useless—but it changes what its real purpose must be. The only legitimate justification for such a fund is not financial return, but resource direction.

If the fund helps channel labor, materials, and organization into areas Canada actually needs—energy, infrastructure, supply chains, housing inputs—then it has value. But if it simply co-invests where private capital already wants to go, it becomes a subsidy mechanism: public participation without public purpose, and no meaningful increase in real capacity.

Worse, structuring the fund around dividends, capital gains, or “returns” introduces a deeper conceptual error. A Monetarily Sovereign government does not need income to spend.

When it collects income—whether through taxes or profits—it reduces private sector financial balances, even though its own ability to spend remains unchanged. Like taxation, collection income from the private sector is recessionary.

Designing policy to extract returns therefore risks doing the opposite of what public investment should do: instead of supporting private sector balance sheets, it can become an unnecessary drain, all while reinforcing the false belief that a Monetarily Sovereign government must fund itself like a business.

The deeper issue is that Canada appears to be choosing a roundabout method to do what it could do directly.

Instead of clearly stating, “We will fund and build what the country needs,” it creates an intermediary structure that mimics market behavior and obscures accountability. The public is left evaluating performance in terms of “returns” rather than results—confusing financial metrics with real-world outcomes.

If something is truly vital to the economy, the correct approach is straightforward: define the required outcomes, set the rules, and provide the support necessary to meet them.

Ownership and investment structures are secondary tools, not primary solutions. Canada’s fund will be judged not by its balance sheet, but by whether it actually increases the nation’s productive capacity and improves the lives of its people.

If it does not, then it isn’t just unnecessary and misleading—it actively reinforces the mistaken belief that a Monetarily Sovereign government must behave like a private investor to accomplish its goals.

If anyone has any friends in Canada, please show them this post.

Rodger Malcolm Mitchell

Monetary Sovereignty

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A Government’s Sole Purpose is to Improve and Protect The People’s Lives.

MONETARY SOVEREIGNTY