Canada's first sovereign wealth fund

ggeox about 2 hours ago 32 commentsRead Article on cbc.ca

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WorkerBee28474•about 2 hours ago

If this is run anything like the CPP, it will underperform both the market and their own benchmarks yet lead to executives awarding themselves huge bonuses.

cherioo•about 2 hours ago

That seems fine as long as they can show lower volatility than market while still being close in return?

Did they?

dahdum•about 1 hour ago

This is a great way to sidestep the political process to fund popular projects. The political constraints will ensure returns are middling, so unless they subsidize with tax breaks on dividend income I think it would be a poor commercial investment.

Whether its perfect or not, it almost has to be better than the current status quo.

onlyrealcuzzo•40 minutes ago

How are you going to have a Sovereign Wealth Fund when you're in debt ~300% to GDP?

Are they going to fund their "wealth" with debt?

This is an oxymoron.

You aren't "rich" if you have $1M and you owe $4M. You're a con-man living a lie that will crush you eventually.

And by the way, if you have -$3M, sorry, but you're the last person I want to invest money with...

Norway gets to have a wealth fund because they have a small population with a massive amount of oil revenue, and they aren't run by morons.

Canada only produces about 2x as much oil as Norway, but it's got 10x the population. Sorry, you can't all be rich like Norwegians unless you start pumping 5x more oil.

Things like this should be laughed off the world stage.

We live in an upside down world.

I-M-S•2 minutes ago

> You aren't "rich" if you have $1M and you owe $4M. You're a con-man living a lie that will crush you eventually.

I'm not sure the simile lands. If that $1M is financing a lavish lifestyle, then you are for all intents and purposes rich. As for the crushing down part, the modern economy shows us one can stay solvent longer than the market is irrational (especially true the more zeros are added to the numbers above).

roncesvalles•2 minutes ago

>How are you going to have a Sovereign Wealth Fund when you're in debt ~300% to GDP?

This seems to be incorrect. Including federal, provincial and local, the debt is about 110% of the GDP.[1]

The US has 3x more debt per citizen than Canada.

1 https://www.imf.org/external/datamapper/GG_DEBT_GDP@GDD/CAN/...

triceratops•6 minutes ago

> How are you going to have a Sovereign Wealth Fund when you're in debt ~300% to GDP?

https://en.wikipedia.org/wiki/Canadian_public_debt this article says it's 57% of GDP. Where are you getting your 300% from?

glitchc•2 minutes ago

GDP isn't the only measure of wealth. Canada has vast resources that act as collateral for the debt. You wouldn't be friends with a billionaire who only owns stock and lives mostly off the debt issued against that stock?

badc0ffee•7 minutes ago

GDP isn't wealth. This is closer to making $1M/year and owing $4 million.

boringg•about 1 hour ago

One of the biggest challenges is finding investable projects these days. If they put this money in as a hold to time projects well than could be a good future asset for Canada. If it ends up actually being more of a jobs production vehicle for political gain then probably less successful.

red-iron-pine•about 2 hours ago

laudable goal. I suspect it will end up like most other Canadian procurement projects.

also why all the love for Canadian Pacific rail?

nish__•about 2 hours ago

Why is HN so pessimistic?

_whiteCaps_•about 2 hours ago

https://en.wikipedia.org/wiki/British_Columbia_Resources_Inv...

Hopefully turns out better than BCRIC.

hirako2000•about 2 hours ago

[delayed]

Fire-Dragon-DoL•about 2 hours ago

Doesn't that has the problem of over exposing canadians to canada economics from an enormous an investment perspective?

I guess it benefits my kids though

scosman•about 2 hours ago

I think the thesis is it's not solely about returns. Get a 7% return investing a dollar domestically, plus add a taxable dollar to economy (and some recurring benefit to tax base) beats getting a 9% one-time return investing internationally.

incomingpain•about 1 hour ago

A sovereign wealth fund requires surpluses to be run.

This is not a wealth fund at all. This is a debt fund. It doesnt even try to hide the debt that's drowning the federal government.

We are borrowing money to play the stock market.

somewhereoutth•about 2 hours ago

I believe wealth taxes (really, wealth restitution) should go into sovereign wealth funds - not least as then the public can see how that money is working for them, and so support the continuance and expansion of such taxes.

slopinthebag•about 2 hours ago

Usually a sovereign wealth fund is funded by excess profits, like Norway for example. In this case, it's being seeded by $25 billion dollars of debt. Can anyone more financially gifted explain how this is any different from, well, regular government spending and money printing?