OTTAWA — Canada will earmark C$15 billion ($12 billion) over five years for a Growth Fund to attract private investment in new and green technologies, a senior government source said on Wednesday, a day before this year’s budget presentation.
The money being set aside for the fund will come from the “existing fiscal framework” and the government will seek to attract C$3 of private investment for every C$1 of public funding, the source said.
The finance ministry declined to comment. Finance Minister Chrystia Freeland is due to present the 2022 budget around 4 pm ET (2000 GMT) on Thursday.
“This is about attracting international capital and investment into Canada,” the source said, in part because the transition to a net-zero emissions economy “is going to require huge technological shifts and investments and new industries.”
The fund, to be drawn from money set aside in the past, will be outlined in this year’s budget, but it will take a few months to flesh out its mandate and make operational, said the source, who was not authorized to speak on the record.
Investment professionals at arm’s length from the government will run the fund, though it will be held accountable by a ministry, the source said without providing details.
The aim of Prime Minister Justin Trudeau’s Liberal government is to use the fund to stand up projects that may not be possible without public support. Private international or domestic investors will be eligible to use it, the source said.
Reuters this week reported Canada would invest in a critical minerals strategy in the budget. That investment of at least C$2 billion will be separate.
However, as an example, the Growth Fund could also be used to develop a critical minerals mine in a remote corner of the country that would be too costly for a company to do on its own, the source said.
Trudeau’s government has already committed to spend more on defense following Russia’s invasion of Ukraine. The government could add as much as C$8 billion in defense spending in the budget, the Canadian Broadcasting Corp (CBC) reported on Wednesday, citing a source.
No timeline for the spending was given and it can be spread out over multiple years. The increase in expenditure will be focused on upgrades to NORAD, which is the North American defense organization, buying weapons for Ukraine, and equipment shortfalls in the armed forces, CBC said. ($1 = 1.2549 Canadian dollars) (Reporting by Steve Scherer in Ottawa Editing by Howard Goller and Matthew Lewis)