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Canada’s sovereign fund hinges on returns and costs

Published: 4 June 2026

Canada’s proposed sovereign fund is drawing scrutiny over its cost and potential returns, but Sebastien Betermier, Associate Professor of Finance at 91˿Ƶ Desautels, sees conditional upside. He argues the roughly $750 million annual interest burden is manageable if the fund is well structured and generates returns above borrowing costs.

“If we end up generating returns above 3% while paying 3% on the debt, we come out ahead,” he notes. Betermier adds the fund could also attract foreign capital into major infrastructure projects, delivering a dual benefit. Ultimately, he stresses that success will hinge on disciplined governance and long-term investment performance. 

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