The Canada Strong Fund Should Be a Startup Fund of Funds
If Canada wants a sovereign wealth fund, the Maple Eight should help make it the anchor investor for a real Canadian startup ecosystem
Canada has created its first national sovereign wealth fund.
That sentence would have sounded strange a few years ago. It sounds necessary now.
The Canada Strong Fund is starting with a $25 billion federal commitment over three years. It will be an arm’s-length Crown corporation, focused on commercial returns, investing in strategic Canadian projects and companies alongside private capital. The interesting part is that it is not just a government balance sheet vehicle. Ottawa also wants a retail product so ordinary Canadians can invest in it, share in the upside, and have their initial invested capital protected.
That hybrid structure matters. It means the fund can become more than a government program. It can become a coordination layer for Canadian capital.
The first test is obvious: will the big Canadian pension funds participate?
Ontario Teachers’. OMERS. CPP Investments. PSP. La Caisse. BCI. HOOPP. AIMCo. The Maple Eight have become some of the best institutional investors in the world. They manage trillions of dollars. They buy toll roads, airports, utilities, data centres, private companies, credit portfolios and public equities all over the world. They are exactly the kind of long-duration capital Canada says it needs.
So they should be in the Canada Strong Fund.
Not as a patriotic donation. Not as political theatre. Not because anyone should raid pension assets to solve an Ottawa messaging problem.
They should participate because the Canada Strong Fund can be designed as an investable, professionally governed, commercially disciplined platform for opportunities that are currently too fragmented for them to underwrite at scale.
And the most important mandate for that platform should be startups.
The Data Is Uncomfortable
Canada is not short of capital. We are short of organized risk capital pointed at Canadian company formation.
CPP Investments reported $780.7 billion in assets at the end of 2025. Its own geographic disclosure showed $366.9 billion in the United States, or 47 percent of assets, and $98.3 billion in Canada, or 12 percent. OMERS reported that 55 percent of its assets were in the U.S. and 18 percent in Canada at December 31, 2025. PSP Investments reported 40.5 percent U.S. exposure and 20 percent Canada exposure at March 31, 2025. Ontario Teachers’ is more balanced, with 38 percent of gross investments in the U.S. and 31 percent in Canada.
These figures are not pure S&P 500 or U.S. index allocations. They are geographic exposure across public markets, private equity, credit, infrastructure, real estate and other assets. But they are still the right starting point for the national question: where is Canadian retirement capital actually compounding?
This does not mean the funds are doing something irrational. The U.S. is the deepest capital market in the world. A CPP spokesperson told CBC that major global equity benchmarks are roughly 65 percent U.S. by weight, so a 47 percent U.S. exposure is not some wild overweight.
But the national outcome is still strange.
Canadian workers, teachers, nurses, municipal employees and public servants are saving enormous pools of capital. Those pools are compounding, quite rationally, in the places with the most investable assets. Too often, that means the U.S. public market, U.S. private equity, U.S. venture-backed technology, U.S. infrastructure, U.S. credit.
Meanwhile, Canadian venture capital is tiny by comparison.
CVCA reported that Canada saw $8.0 billion invested across 571 venture deals in 2025, down from 2024. The same year, NVCA reported that U.S. venture capital reached 15,352 deals worth $320 billion. The ratio is not close. The U.S. deployed about forty times as much venture capital as Canada.
This is the real problem.
Canada has pension-scale pools of capital and founder-scale ambition, but not enough institutional plumbing between the two.
The Answer Is Not “Force Pensions to Buy Canada”
This argument can get stupid quickly.
Pension funds have a fiduciary duty. They are not industrial policy slush funds. Ontario teachers do not contribute to a pension so that a minister can pick startups. Municipal workers do not need their retirement security tied to whatever sector is fashionable in Ottawa this year.
The case for pension participation has to pass the same test any investment should pass: governance, returns, liquidity, risk, manager quality, benchmark discipline, and enough scale to justify the work.
That is exactly why the Canada Strong Fund matters.
The missing piece in Canada is not patriotism. It is product.
If you are a $300 billion pension fund, you cannot solve Canadian seed funding by writing $2 million cheques into promising pre-seed rounds. You need vehicles. You need professional managers. You need diversification. You need reporting. You need co-investment rights. You need governance. You need enough deal flow to absorb real capital without distorting the market.
Canada should build that vehicle inside the Canada Strong Fund.
Call it the Canada Strong Startup Platform.
Its job would be simple: become the anchor LP for the Canadian innovation economy.
What the Platform Should Do
The platform should not try to pick every startup directly. That would be a mistake.
It should operate primarily as a fund of funds, with a co-investment sleeve.
The rough structure:
70 percent into Canadian venture funds, from pre-seed to growth.
20 percent into direct co-investments alongside those managers, especially for Canadian companies that need $50 million to $300 million rounds without immediately moving south.
10 percent reserved for secondaries, follow-ons, and liquidity support so the ecosystem can recycle capital.
It should back many managers, not five famous ones.
Canada needs more funds, not just bigger funds. It needs specialist AI funds, health funds, climate funds, fintech funds, robotics funds, bio-manufacturing funds, defence technology funds, energy technology funds, developer tool funds, and boring software funds. It needs first-time and second-time managers with real edge. It needs funds in Toronto, Montreal, Vancouver, Waterloo, Calgary, Edmonton, Ottawa, Halifax and Quebec City.
The platform should write anchor commitments that make funds possible.
A $50 million commitment into a $150 million fund changes the trajectory of an emerging manager. A $150 million commitment into a $500 million growth fund changes whether Canadian scale-ups can raise locally. A standing co-investment program changes whether our best companies have to become Delaware companies with U.S. lead investors by default.
This is where pensions can participate without pretending to be seed investors.
They can commit to the Canada Strong Startup Platform on commercial terms. The federal government can seed it. The pension funds can scale it. Retail Canadians can participate through the broader Canada Strong product. The platform can recycle returns into the next generation of funds.
That is how you turn a sovereign wealth fund from a press conference into an ecosystem machine.
The Math Is Not Crazy
The Canada Strong Fund starts at $25 billion.
That is big for Ottawa. It is small compared with Canadian pension capital.
CPP alone is roughly $780 billion. Ontario Teachers’ is $279 billion. PSP is almost $300 billion. OMERS is $145 billion. La Caisse reported $517 billion in net assets for 2025. BCI manages nearly $295 billion in gross assets.
One percent of these pools is enormous.
One percent of CPP is about $7.8 billion. One percent of Ontario Teachers’ is about $2.8 billion. One percent of PSP is about $3.0 billion. One percent of OMERS is about $1.5 billion. One percent of La Caisse is about $5.2 billion.
Nobody has to bet the pension system on Canadian startups.
A 0.5 percent to 1.0 percent allocation from a few major funds, phased over five to ten years, would create one of the most important venture capital engines in Canadian history. It would still be small enough to sit inside a diversified institutional portfolio. It would be large enough to change founder behaviour.
Founders respond to capital availability.
If the only serious Series B and Series C capital is in San Francisco or New York, companies will orient themselves there. If the only deep AI infrastructure investors are American or Gulf-backed, the best Canadian AI companies will become Canadian in origin and foreign in ownership. If Canada wants headquarters, jobs, tax base, intellectual property, and decision-making authority to stay here, it needs domestic growth capital.
Not grants. Capital.
The Gulf Already Understands This
The Gulf funds are not subtle about what they are doing.
Saudi Arabia’s Public Investment Fund has Jada, a fund-of-funds company created to develop the country’s private equity and venture ecosystem. The Saudi Press Agency recently reported that Jada had allocated SAR 3.5 billion across 46 venture capital and private equity funds, while Sanabil had committed roughly SAR 1.5 billion to support 165 emerging companies. That is ecosystem construction, not passive portfolio allocation.
Abu Dhabi has been just as deliberate.
Mubadala helped back Hub71, Abu Dhabi’s global tech ecosystem. Hub71’s 2024 impact reporting said startups in the ecosystem had raised $2.17 billion and generated $1.2 billion in revenue. Mubadala also built venture exposure through Mubadala Capital and partnered with global managers. More recently, Abu Dhabi’s MGX has become a major AI and infrastructure vehicle, partnering with Microsoft, BlackRock and GIP on AI infrastructure.
The lesson is not that Canada should copy Gulf political economy. We should not.
The lesson is that sovereign capital can be used to create a market.
The Gulf funds understand that startup ecosystems are not just office space and accelerators. They are capital stacks. They are anchor LPs. They are procurement relationships. They are immigration policy. They are compute, power, customers, regulators, universities, and later-stage financing. They are the whole machine.
Canada has pieces of this machine. We have strong universities. We have AI labs. We have technical talent. We have public pension sophistication. We have stable institutions. We have energy. We have immigration. We have founders.
But we do not yet have the capital stack at national scale.
The Canada Strong Fund can become that stack.
The Mandate Should Be Narrow
If everything is strategic, nothing is strategic.
The Canada Strong Fund will be tempted to become a basket of airports, mines, ports, transmission lines, manufacturing projects, defence suppliers, telecom infrastructure, and politically important regional deals. Some of that belongs in the fund. Canada does need nation-building infrastructure.
But startups deserve a dedicated mandate because startups are how new strategic sectors are born.
A mine is important. A port is important. A transmission line is important.
But the companies that turn minerals into materials, biology into medicine, compute into software, robotics into productivity, and AI research into global products are also infrastructure. They are the productive infrastructure of the next economy.
The fund should define a clear innovation allocation and publish it.
For example:
At least 20 percent of Canada Strong Fund capital committed to the Canada Strong Startup Platform over the first decade.
At least half of that deployed through independent Canadian venture managers.
No political deal selection.
Independent investment committee.
Commercial return targets.
Annual disclosure of commitments, managers, vintage diversification, fees, net returns, follow-on rates, Canadian headquarters retention, patents, exports, employment and tax base.
Co-investment rights for pension partners.
A strict rule that government cannot direct individual company investments.
This is how you keep the fund from becoming a subsidy program.
The goal is not to make venture capital easier. The goal is to make Canadian venture capital investable at institutional scale.
What Ontario Teachers’ Should Do
Ontario Teachers’ should be first.
It already has Teachers’ Venture Growth. It already invests in global technology companies. In 2025, Teachers’ reported venture growth returns of 30.2 percent, and highlighted investments in Anthropic, Grafana Labs, Gusto, Darwinbox, Kraken and Quantexa. It also led StackAdapt’s latest funding round in Canada.
That is the muscle Canada needs.
Ontario Teachers’ should publicly commit to evaluating an anchor allocation to the Canada Strong Startup Platform, with a preference for fund commitments and co-investments that can pass its normal underwriting bar.
OMERS should follow. It serves Ontario municipal workers, school boards, transit systems, electrical utilities, emergency services and local agencies. It is already deeply connected to Ontario’s public economy. It has 55 percent of assets in the U.S. and 18 percent in Canada. It does not need to abandon global diversification to put more capital behind Canadian company formation.
CPP Investments should participate carefully. CPP has the strongest need to protect independence, because it is the national plan. But even CPP can allocate through a professionally governed, commercial platform without turning itself into a policy tool.
PSP should be natural. It already manages Canada Growth Fund independently. It understands the difference between government policy capital and pension capital. It can help design the governance firewall.
La Caisse should be a model. Quebec has long understood that institutional capital can support local economic development while still pursuing returns. Canada should learn from that without making the governance sloppy.
BCI, HOOPP and AIMCo should be at the table too.
This should not be a single cheque. It should be a standing market.
The Policy Ask
Ottawa should do five things.
First, create a dedicated startup fund-of-funds sleeve inside the Canada Strong Fund.
Second, invite the Maple Eight to become anchor LPs on commercial terms, with co-investment rights and independent governance.
Third, use a comply-or-explain model for federally and provincially sponsored public funds: each major plan should annually disclose whether it evaluated Canada Strong Fund opportunities and why it did or did not invest. Do not force bad investments. Force serious consideration.
Fourth, make BDC complementary, not duplicative. BDC can keep doing direct support, debt, seed programs and fund commitments. The Canada Strong Startup Platform should be the national institutional allocator that brings pensions, sovereign capital and private LPs into the same architecture.
Fifth, measure the right outcomes. Not announcement dollars. Not jobs promised in press releases. Measure fund performance, follow-on capital, manager formation, company scale-up retention, Canadian headquarters, exports, productivity, tax base and realized returns.
The Canada Strong Fund should not be judged by whether it sounds patriotic.
It should be judged by whether, ten years from now, a Canadian founder can build an important company in Canada without immediately depending on foreign capital to survive.
Build the Capital Stack
Canada’s startup problem is usually described as a talent problem, a culture problem, a market problem or an ambition problem.
Some of that is true.
But a lot of it is a capital stack problem.
The U.S. has a massive venture capital machine. The Gulf is using sovereign wealth to build one. Europe is trying to mobilize institutional capital for strategic sectors. Everyone has figured out that the next economy will be shaped by who finances the companies before they are obvious.
Canada finally has a sovereign wealth fund.
Now it needs to make the fund useful.
Put the pension funds in the room. Give them a professionally governed vehicle they can actually underwrite. Make startups a core mandate, not a footnote under “technology.” Back many Canadian venture funds. Reserve capital for growth rounds. Keep politics out of investment decisions. Publish the data. Compound the returns. Recycle the gains.
If Canada Strong is going to mean anything, it should mean that Canadian capital helps Canadian builders build Canadian companies at global scale.
That is the sovereign wealth fund we need.
Sources
Government of Canada, Canada Strong Fund backgrounder, April 27, 2026.
Government of Canada, Spring Economic Update 2026, Canada Strong Fund section.
CPP Investments, The Fund, assets and geographic allocation as of December 31, 2025.
CBC News via Yahoo, Amid ‘Buy Canadian’ fervour, Canada’s top pension funds still heavily invested in U.S., February 2026.
Ontario Teachers’ Pension Plan, 2025 Annual Report.
Ontario Teachers’ Pension Plan, Performance and track record.
OMERS, 2025 Annual Report.
PSP Investments, 2025 Annual Report.
La Caisse, 2025 results press release.
CVCA, Year-End 2025 Canadian Venture Capital Market Overview.
NVCA, 2026 Yearbook press release.
Public Investment Fund, Jada Fund of Funds.
Saudi Press Agency, PIF Governor reviews strategy, April 2026.
Hub71, 2024 impact reporting via Zawya.
Hub71, Mubadala, Antler and Hub71 National Founders Programme, September 2025.