The federal government is weighing a Canada Strong Fund that could give households the option to invest alongside Ottawa in domestic growth projects, said Scotiabank Economics on Tuesday.
The aim is to boost participation in nation-building investments and steer more household savings toward national priorities, wrote the bank in a note.
"The idea is novel," wrote Rebekah Young, vice-president, economic policy, as it would allow "Canadians to share more directly in the upside of the domestic growth agenda."
However, the key question is whether it addresses a genuine gap in capital allocation, rather than simply offering a new retail investment option, added Young in the note.
Prime Minister Mark Carney launched the fund in April as Canada's first sovereign wealth fund, with about $25 billion in initial government funding directed toward infrastructure, energy, critical minerals and other priority sectors.
As the global landscape becomes more fragmented, investment flows may not naturally align with strategic domestic priorities, stated Scotiabank.
Despite sizable household wealth, a large share remains tied to residential property, while investable savings are often directed outside Canada because of limited domestic investment choices, according to the bank.
A retail offering may encourage greater investment in Canadian growth assets, but its success would depend on striking the right balance between accessibility and risk management, wrote Young.
Its success will ultimately depend on whether it expands investment opportunities while avoiding excessive taxpayer exposure, concluded the bank.