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canada sovereign wealth fund 

What Is a Sovereign Wealth Fund (SWF)? These are assets of the sovereign nations which are typically held in domestic and different reserve currencies such as the dollar, euro and yen. Sovereign Wealth Funds have about $7 trillion to invest in the companies we work for -- and new research shows that the biggest of them brings some extra benefits. China Investment Corporation—China. In other words: establish sovereign wealth funds. Sovereign-Wealth Funds: Are TheyWelcome in Canada? Now is a good time to discuss how Canada can strengthen its SWF’s, given that several Canadian provinces and territories are in the process of creating one for themselves. The governance of the consolidated fund will be entirely independent from politics, much like the Canada Pension Plan Investment Board. First, Canada’s resource-based economy is strongly influenced by commodity booms and busts. Having more provinces and territories join the consolidated fund is good news for existing fund holders as well, because the cost of managing the fund will be diluted. And the Northwest Territories has put a structure in place for its own Heritage Fund. The present decline in oil price serves as an excellent example of a bust. Canada P&C earnings were down 18 per cent in 2020 driven by higher PCLs.” However, he expressed concern about the U.S. P&C results, which saw earnings decline 27 … Conventional sovereign wealth funds such as Singapore’s Temasek Holdings and Norway’s Government Pension Fund invest overseas, relying on state assets such as foreign exchange reserves, accumulated trade surpluses and natural resource exports. It … Alberta attempted it, with its Heritage Savings Trust Fund established in 1976. Alberta’s premier Jim Prentice has already warned Albertans of impending cuts to services due to lower oil revenues [7]. A sovereign wealth fund is a state-owned investment fund comprised of money generated by the government, often derived from a country's surplus reserves. The fund can invest in any opportunity, including financial assets such as stocks and bonds, or real estate, precious metals and start-ups, with the aim of reaping a return on investment, often linked to a societal objective. Sources: Truman (2007), IMF International Financial Statistics, Ministry of Finance of the Russian Federation, Sovereign Wealth Fund Institute. It should be noted at the outset that certain types of investment may not be significantly affected by the Guidelines. Norway has a resource-based sovereign wealth fund. Since the individual provinces’ funds are too small to justify the costs of having independent investment institutions, the provinces should come together to create a consolidated sovereign wealth fund. To realize this goal, Ontario must create its own SWF and become an adamant supporter of the consolidation for two reasons. CPPIB remains accountable to the federal government, but has Board of Directors separate from the government. Exercising political power through SWF’s is a question that the Canadian public will have to answer. The case for sovereign wealth funds in Canada. Featured image from Flickr Creative Commons, BC LNG picture from Commonsensecanadian.ca, [1] http://www.swfinstitute.org/fund-rankings/, [2] http://www.scribd.com/doc/182399660/MacKinnon-A-Saskatchewan-Futures-Fund-pdf, [3] http://www.corporateknights.com/article/rainy-days-leave-alberta-wet?page=show, [4] http://www.lacaisse.com/sites/all/files/medias/en/nouvelles-medias/documents/ra2013_rapport_annuel_en.pdf, [5] http://www2.news.gov.bc.ca/news_releases_2009-2013/2013PREM0018-000231.htm, [6] http://www.canadianbusiness.com/economy/learn-from-albertas-mistake/, [7] http://www.cbc.ca/news/canada/calgary/oil-price-drop-will-lead-to-tough-times-for-alberta-premier-jim-prentice-says-1.2854229, [8] https://www.bloomberg.com/news/2014-12-01/norway-wealth-fund-targets-3-billion-in-green-technology-stakes.html, [9] http://www.regjeringen.no/en/dep/fin/Selected-topics/the-government-pension-fund/responsible-investments/companies-excluded-from-the-investment-u.html?id=447122, [10] http://www.thenational.ae/world/middle-east/norway-blacklists-israeli-firms-linked-to-settlements. Author Madelaine Drohan speaks to the Star about sovereign wealth funds, why Angola has one, but Canada doesn't. Now, $17 billion is a large sum of money. With any luck, BC will have a successful SWF; once the benefits are demonstrated, other provinces will jump on the gravy train too. Sovereign wealth funds are entities that manage the national savings for the purposes of investment. Oil-rich wealth funds seen shedding up to $225 billion in stocks . The amount of money held by the largest sovereign wealth funds has more than doubled since … In addition, British Columbia published plans for its British Columbia Prosperity Fund in 2013 to save a portion of Liquified Natural Gas (LNG); the BC government projects that it will save about $100 billion from LNG revenues over the next thirty years [5]. To services due to lower oil revenues [ 7 ] nonetheless, even if the consolidated fund s... Many reasons why Canada requires such SWF ’ s commodity booms and busts be incomplete without.! 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