The Common Wealth Fund: Investing for Canada’s future

Canada should have a sovereign wealth fund that invests our common resources to pay dividends to all Canadians. It would be a powerful tool to build wealth for all citizens, share the gains of innovation more broadly, and preserve the natural commons for future generations.

Written by Ken Yang and Floyd Marinescu

“All persons have a right to income from wealth we inherit or create together… paying dividends from wealth we own together is a practical, market-based way to assure the survival of a large middle class.”

— Peter Barnes, entrepreneur and pioneer of cap-and-dividend

Table of Contents

This article is a work in progress (v0.9). We are looking for feedback, help developing this proposal, and advice on where to present and promote it. Please contact info@commonwealth.ca to help out.

Summary

Canada should have a sovereign wealth fund that invests our common resource wealth to benefit all Canadians. A Common Wealth Fund with $2T in assets could generate $60 to $90 billion a year to pay dividends, fund public investments, or pay down debt. This would be enough to pay every Canadian adult a lump-sum dividend of $42,000 after 10 years or annual dividends of $2,600 or more.

The Common Wealth Fund would operate like a pension fund, except all citizens would be beneficiaries. It could be funded with sources of unearned profits arising from natural resources, monopolies, and the financial commons, and designed to work across both federal and provincial jurisdictions. The fund would invest in a diversified portfolio of stocks, bonds, real estate, and other asset classes and distribute a portion of annual returns as a dividend to every adult.

Ownership income for all
In our economy, owning assets makes more money than jobs, a divide that will only be widened by automation and AI. The Common Wealth Fund gives everyone access to the benefits of owning assets which appreciate in value and generate income, while preserving our natural commons. The fund would be a powerful tool to tackle inequality, share the gains of technology more broadly, and ensure future generations benefit from our nation’s shared resources.
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Reclaiming the plundered commons
Canada is on track to lose nearly 80% of its natural resource wealth to private extraction. Natural resources are our shared inheritance, so it’s fair that we capture more of this common wealth to benefit Canadians, rather than squandering most of it to unfettered rent-seeking. A Common Wealth Fund lets us reclaim this value for public benefit and transform finite resources into a vehicle for long-term wealth creation.
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A co-operative management approach
The Common Wealth Fund could be designed with a co-operative management approach that works across federal and provincial jurisdictions, consisting of multiple provincial funds and a federal fund grouped under a single administrative entity. This is a viable model for building a national-scale sovereign wealth fund that benefits all citizens, while respecting the jurisdiction and autonomy of the provinces.
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Examples from around the world
The Common Wealth Fund would be a variant of sovereign wealth funds that already exist in over 60 countries today. Alberta, Quebec, Newfoundland & Labrador, and the Northwest Territories already have sovereign wealth funds that invest natural resource revenues, while Alaska’s Permanent Fund and Norway’s Oil Fund serve as useful exemplars. The idea has been supported by many notable people and organizations including: Nobel Laureate Joseph Stiglitz; OpenAI CEO Sam Altman; investor Ray Dalio; the Canadian Centre for Policy Alternatives; the Fraser Institute; the Canadian Taxpayers Federation; former CPPIB Managing Director Matthew Bianco; former University of Saskatchewan President Peter MacKinnon; former Canada correspondent for The Economist, Madelaine Drohan; Basic Income Earth Network co-founder Guy Standing; political philosopher Karl Widerquist; UBC professor and economist David Green; cap-and-dividend pioneer Peter Barnes; US think tank People’s Policy Project; and two UK think tanks, IPPR and Friends Provident Foundation.
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Funding sources from the commons
The fund would be initially financed primarily via levies on excess profits generated by nature, technology, or society as a whole. This includes profits arising from natural resources, monopolies enabled by special licenses and privileges granted by society, and wealth generated within our financial commons. These options capitalize on Canada’s natural, financial, and technological advantages to build common wealth in perpetuity.
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Fund size and dividends
A Common Wealth Fund with $2T in assets would rank among the world's top sovereign wealth funds, alongside funds in comparatively smaller economies like Singapore, Norway, and the UAE. It could generate $60 to 90 billion a year to pay dividends or other public priorities, assuming either a conservative 6% or optimistic 9% annual return with half re-invested. These return scenarios fall within the range of other sovereign wealth fund proposals and actual fund performance.
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Canada’s vast resource wealth, leadership in finance and technology, and monetary sovereignty over a strong currency make us well-positioned to build a sovereign wealth fund of considerable size and impact. It would be a symbol of Canada's continued commitment to equal opportunity and shared prosperity.

“the best way to improve capitalism is to enable everyone to benefit from it directly as an equity owner.”

— Sam Altman, CEO of OpenAI

Ownership income for all

We live in an economy where assets make more than jobs. This is the fundamental dynamic driving inequality and poverty today. Public Policy Forum Fellow Brett House summarized this reality when he said “the economy is principally working for asset owners right now... by contrast we haven't seen wages keep up”.

According to Oxfam Canada, 50 Canadians have assets of $249 billion, just ahead of the $248 billion in assets belonging to the poorest 40% of Canadians. The wealthiest saw their net worths increase by 50% during the pandemic. Meanwhile, two-thirds of Canadian workers experienced real wage declines.

Sources: StatCan and Oxfam.

For nearly half a century, workers’ share of income has declined as a result of technological advancements boosting labour productivity, suppressing wages, and increasing returns to capital. Research from the US suggests that automation has been the primary driver of income inequality since 1980, and is responsible for 6 times more job loss in manufacturing than global trade. Meanwhile, a growing percentage of Canadians find themselves in precarious employment — part-time, temporary, and gig work.

There is considerable evidence that workers displaced by automation are re-employed at lower wages. They are more likely to work in part-time or non-permanent jobs after being displaced, and work shorter hours on average. Displaced workers experience large and persistent losses to income, even years later.

We live in an economy that benefits those who own things more than to those who work. In this ownership economy, those with wealth buy more assets that in turn generate more wealth and improve their financial position. Workers wages fall behind inflation and their financial position worsens. This trend will only accelerate as technology makes us more productive as a society, allowing us to generate even greater returns to assets.

Sources: TNR, WSJ, The Star.

The Nobel-winning economist James Meade saw that the rise of automation would lead to the erosion of workers’ economic gains and fuel growing inequality. To combat this, Meade believed the answer lay in a ‘property-owning democracy’ in which every citizen would own income-producing property, through social wealth funds.

As the entrepreneur, environmentalist and author Peter Barnes explained: “In the twenty-first century, the inconvenient truth is that labor income by itself can no longer sustain a large middle class… If we want a large middle class in this century, and all that goes with it (including democracy), we must supplement labor income with non-labor income.”

Barnes argues that wealth endlessly concentrates for the simple reason that property commands more market power than labour. While workers are paid for their efforts, property owners gain from many people’s past, present, and even future efforts. This creates a society where assets extract increasing amounts of value from workers and, to an even greater degree, from our natural and social co-inherited wealth.

“The idea is that everyone should collectively own a portion of [a country's] wealth. This would be held in one big fund so we can invest it sensibly so that everyone benefits fairly from the returns…By owning wealth in common, the fund would act as a force for economic equality by distributing returns to capital more widely.”

— Carys Roberts, Executive Director of the Institute for Public Policy Research (IPPR)

Rahul Basu of the Goa Foundation shows from Statistics Canada data that Canada is on track to lose 77% of its mineral wealth to private extraction. That’s equivalent to nearly $1 trillion or $24,000 per Canadian of common wealth that could be collected and invested for public benefit, rather than being squandered as it is today.

The economist and professor Guy Standing describes our economy as rentier capitalism, in which income and wealth flow to owners of property — physical, financial, and intellectual. Rentier incentives dominate our economy, driving the mass plunder of our natural and social commons and depriving society of much of its wealth. This plunder, in his words, has “been turned into sources of huge rental income, that is illegitimate, that is unjust, that has no moral principle justifying what’s been happening”.

What if the solution was to give everyone some ownership, an equity stake, in the wealth generated by nature or society as a whole? As technology continues to create more wealth with less work, and those with wealth acquire even more of it, the answer must lie in some form of capital ownership for everyone (funded by common wealth) to give everyone some ownership income. We could achieve this through a common wealth fund that pays common dividends to all.

Standing believes that such funds are vital to the proper stewardship and preservation of the commons:

“If one wanted to preserve the commons, revive the commons, and if one wanted to deal with the problems of rentier capitalism and uncertainty… I believe that we need to produce a system of common capital funds…

The common capital funds should be built on the principles that those who are taking from the commons, who are making profits from our commons, should compensate the commoners. And those who are polluting the commons, diminishing our commons, should be compensating those who are suffering as a consequence”

Peter Barnes envisions common wealth dividends as part of a system of universal property, a set of non-transferable property rights backed by co-inherited wealth that belongs to all citizens, managed by trustees whose duty is to all current and future generations. A sovereign (or social) wealth fund can “be thought of as lifelong distributor of co-inherited wealth, like a pension fund serving beneficiaries of all ages.” Underpinning this vision is the fundamental recognition that each person has, by birthright, a an equal and shared inheritance in the commons, which comprises most of the world’s wealth today:

“It belongs to us not because we earned it but because we co-inherited it, as if from common ancestors. This co-inheritance is, or should be, a universal economic right, just as voting is a universal political right.

Reclaiming the plundered commons

Source: Peter Barnes.

The American scholar and author of Common Wealth Dividends, Brent Ranalli presents a similarly compelling justification for paying universal dividends from nature:

“Since natural resources are…”found” rather than made, no one has a right to monopolize them. To hold them, yes. But all members of the community have a claim to benefit from them… with common wealth dividends, the redistribution of wealth is not just a nice idea, not just a piece of social engineering, it is a right.”

This system of common wealth could be established “independent of the private and public sectors, to both safeguard common wealth and share some of its economic value among everyone equally.”

A sovereign wealth fund built up by sources of common wealth is how we can mitigate the worst outcomes of a rentier economy and allow the vast wealth generated by nature and technology to be more broadly shared across Canadian society. And as Canadian economists Green, Kesselman, and Tedds have suggested, sovereign wealth funds may be a good way to capture some of the gains of innovation and build public wealth over the long term.

“Minerals are a shared inheritance… We, as custodians, must ensure future generations inherit at least as much as we did, either the minerals or their value. The key objective then is protection of inherited wealth for future generations.”

— Rahul Basu, Research Director of Goa Foundation

We propose the creation of a Common Wealth Fund, a sovereign wealth fund that pays dividends and invests for the benefit of all Canadians.

The Common Wealth Fund would operate similarly to a pension fund, except where all citizens are beneficiaries. Each Canadian adult would be issued one non-transferrable share of ownership in the fund, expiring at death, that entitles them to annual dividends from a portion of investment returns, This would give everyone an unconditional, universal, non-labour investment income.

The fund would invest in a broad range of asset classes including publicly-traded stocks, bonds, real estate, and private equity. Every year, a percentage of investment returns would be paid out as dividends (we propose 50% as a starting point), while the remainer would be re-invested back into the fund to preserve the real (after-inflation) value of the fund over time. As a permanent fund, the principal would not be expendable by governments; only a portion of returns may be distributed as dividends.

Building the Common Wealth Fund

The fund would be managed by an independent board of trustees and executive operating at arm’s-length from the government. Trustees would be democratically chosen and include representatives of a broad cross-section of Canadian society. They would be bound by fiduciary duty to steward the fund in the best interests of their universal beneficiaries — the citizens of Canada. Independent committees would oversee investment, risk, governance, ethics, ecological impact, and other vital functions.

The fund would be capitalized with levies on unearned profits (economic rents) and shared resources, including natural resource revenues, wealth generated within the financial commons, and windfall profits enabled by technology and monopoly. (Read more below in Funding sources from the commons).

“Governments must demonstrate that they are responsible stewards of public money. All levels of government in Canada with revenues from non-renewable resources should stop treating them as income to be spent and start treating them as capital to be saved or invested.”

— Madelaine Drohan, Senior Fellow at the University of Ottawa and former Canada correspondent to The Economist

Under the constitution, the provinces have jurisdiction over the exploration, development, and management of natural resources, including minerals, energy (oil and gas), and forestry. As a result, any fund that receives non-renewable resource revenues would have to be created at the provincial level.

Canada has several existing provincial and territorial sovereign wealth funds that invest resource wealth on behalf of citizens: the Quebec Generations Fund, the Alberta Heritage Savings Fund, the Newfoundland & Labrador Future Fund, and the Northwest Territories Heritage Fund. Saskatchewan had a heritage fund that was terminated in 1992; there have been multiple prominent proposals to re-establish one for the province. British Columbia has a Prosperity Fund that was originally intended to capitalize on the province’s liquefied natural gas (LNG) wealth, but ended up being funded by government surplus instead.

Across the country, there is interest and opportunity to build new sovereign wealth funds from resource revenues. Madelaine Drohan, former Canada correspondent for The Economist, recommended the creation of provincial and national sovereign wealth funds in her 2012 report to the Canadian International Council on Canada’s natural resources. Former President of the University of Saskatchewan, Peter MacKinnon proposed a Saskatchewan Futures Fund; the Canadian Taxpayers Federation as well as the province’s NDP and Liberals have proposed wealth funds in the province under different names. Paul Finch of the BC General Employee Union has called for a BC wealth fund from taxing land rents. Finally, we believe that Ontario’s mineral-rich “Ring of Fire” presents a generational opportunity to build common wealth for future generations through a fund. (Read more below in our Case Study on Ontario’s Ring of Fire.)

Investing natural resource revenues into wealth funds help governments to avoid boom-bust cycles of provincial finances that rely on resource revenues, and therefore, are exposed to resource price fluctuations. It helps provinces get off the resource revenue rollercoaster, while saving today’s harvest for future benefit.

Madelaine Drohan explains why saving non-renewable resource revenues in provincial and federal wealth funds is essential for long-term prosperity:

“All levels of government in Canada with revenues from non-renewable resources should stop treating them as income to be spent and start treating them as capital to be saved or invested. Each province or territory receiving revenues from non-renewable resources should establish (if they do not have one already) provincial wealth funds. The federal government should do the same for the non-renewable resource revenues it receives from the territories and should investigate the possibility of putting corporate income tax revenues directly related to non-renewable resources into a fund.”The Common Wealth Fund could be designed with a co-operative management approach that works across federal and provincial jurisdictions. Multiple provincial funds and a national fund could be grouped under a single administrative entity, where each jurisdiction would own and maintain full control over their respective funds, investment mandates and decisions, and the timing and size of dividends.

This is the approach favoured by former CPPIB Managing Director Matthew Bianco and StrategyCorp senior advisor Elena Mantagaris, who envision that “interested provinces could work together to set up a model and leave the door open to future entrants once success is demonstrated”. They refer to examples of pension funds grouped this way to leverage economies of scale, while still allowing multiples pools of capital to be managed in separate portfolios with their own mandates, objectives, and risk tolerances.

A co-operative management approach

Channeling natural resource revenues into sovereign wealth funds is how the provinces could transform depleting reserves into permanent assets that continue to pay dividends in the future. This principle is enshrined in the Hartwick Rule, named after the Canadian economist John Hartwick, who argued that a society should invest enough rental income from extraction and use of exhaustible resources, rather than consuming it all, so that future generations benefit as much as today’s. In other words, invest resource rents.

Common Wealth Dividends author Brent Ranalli elaborates on the importance of applying this rule in managing natural resource wealth:

“Ideally, 100% of the receipts [of non-renewable resources] should be used to capitalize other resources that will benefit future generations… For the steward to distribute dividends directly out of the resource or concession revenue would be highly irresponsible. But to distribute dividends out of the profits of a revenue-funded investment portfolio would be acceptable, prudent (to build a political constituency to preserve the fund), and arguably even imperative, as the investment portfolio itself would effectively be a sort of renewable resource. Dividends from earnings would allow citizens to benefit in a concrete and equitable way from the funds invested in their name”

A Diversified Resource Nation Every province and territory, except for Prince Edward Island, has either mining, energy, or forest production and sometimes all three. P.E.I. is rich in farmland, which is of increasing global importance.

Each fund could receive revenues that fall within its jurisdiction and operate independently with its own board, management, and mandate. Canadians could receive annual dividends in two parts, one from their province’s fund and another from the national fund. The federal government could introduce incentives for the provinces to establish their own fund, by agreeing to co-invest a small share of national fund revenues into the provincial fund contingent on certain conditions being met. These conditions could include, for example, a provincial dividend, levies on natural resource revenues, and inflation-proofing measures.

A collective approach would enable Canada to establish a national Common Wealth Fund that invests our shared resource wealth to serve all Canadians, while respecting the jurisdiction of the provinces.

A common stake in Canada’s future

The Common Wealth Fund would be a powerful tool to tackle inequality by distributing returns to capital more widely across society. Universal dividends from shared wealth enables whole communities to enjoy the economic security that comes from having assets in an economy where ownership makes more than employment. This is how we preserve our natural common wealth in a multi-generational nest egg for a future where our scarcest resources run out.

The fund would stabilize Canada’s economy by diversifying the country’s investments in various global industries. It would promote greater social stability and instill a common sense of civic and economic participation, as every Canadian would have a literal stake in seeing Canada do well. The Nobel Laureate Joseph Stiglitz believes that a social wealth fund which pays dividends “would generate more buy-in to the economic system because people would feel like they have an ownership stake in that system. That, in turn, would create more stability.”

Madelaine Drohan suggests that a sovereign wealth fund could “lessen currency volatility due to commodity price movements, help stabilize the economy through booms and busts, simplify equalization, and provide a source of investment income over the long term.”

And as OpenAI Sam Altman envisioned in his proposal for an American Equity Fund: “everyone who owns a share in Amazon wants the share price to rise. As people’s individual assets rise in tandem with the country’s, they have a literal stake in seeing their country do well.”

"What could do more to create a democratic capitalistic mindset… than giving them a sense of ownership in that vast resource wealth?”

— Jay Hammond, former Governor of Alaska and creator of the Alaska Permanent Fund Dividend

The Common Wealth Fund would be a variant of sovereign wealth funds that already exist in over 60 countries today, benefiting citizens through public investments, tax relief, and dividends. Many of the world’s largest funds exist in countries with economies smaller than Canada’s, including Norway, Singapore, South Korea, and the UAE. Below, we’ll explore the Alaska Permanent Fund and the Norwegian Oil Fund, as well as relevant precedents from Canada.

Sovereign wealth funds have garnered support from many notable people and organizations including: Nobel Laureate Joseph Stiglitz; OpenAI CEO Sam Altman; investor Ray Dalio; the Canadian Centre for Policy Alternatives; the Fraser Institute; the Canadian Taxpayers Federation; former CPPIB Managing Director Matthew Bianco; former University of Saskatchewan President Peter MacKinnon; former Canada correspondent for The Economist, Madelaine Drohan; Basic Income Earth Network co-founder Guy Standing; political philosopher Karl Widerquist; cap-and-dividend pioneer Peter Barnes; US think tank People’s Policy Project; and two UK think tanks, IPPR and Friends Provident Foundation.

Canadian economist and professor David Green of the University of British Columbia has argued that a sovereign wealth fund could be an effective means to distribute gains from technological advancement more broadly across society.

Examples from around the world

  • • In 2009, conservative economist Dwight Murphey proposed a family of independently managed index funds, capitalized by the Federal Reserve, that would pay equal dividends to every American.

    • In 2011, Saskatchewan Liberals and NDP both proposed a provincial sovereign wealth fund to invest the province’s non-renewable resource wealth. In 2012, University of Regina researchers published a paper proposing the same.

    • Former Canada correspondent for The Economist Madelaine Drohan authored a report in 2012 for the Canadian International Council that proposed sovereign wealth funds as the top recommendation.

    • In 2012, American Professors Karl Widerquist and Michael Howard published a landmark text Exporting the Alaska Model: Adapting the Permanent Fund Dividend for Reform around the World.

    • Jacobin Managing Editor Seth Ackerman proposed the creation of a social wealth fund in 2012.

    • In 2013, the BC Liberals under Premier Christy Clark announced a BC Prosperity Fund that would invest liquefied natural gas (LNG) revenues for citizens; the fund was created but did not end up receiving LNG contributions.

    • Former University of Saskatchewan President Peter MacKinnon published a report in 2013 recommending a Saskatchewan Futures Fund to invest non-renewable resource revenues. Four years later, the Canadian Taxpayers Federation would make a similar proposal for a Saskatchewan Heritage Fund.

    • Entrepreneur and cap-and-dividend pioneer Peter Barnes published a book on the subject in 2014, With Liberty and Dividends for All, which inspired Hillary Clinton to later endorse the idea in her 2017 memoir.

    • In 2015, University of Saskatchewan professor Greg Poelzer published a commentary for the Macdonald-Laurier Institute proposing federal and territorial/provincials SWFs that captured “100 percent of non-renewable resource revenues”.

    • British economist Tony Atkinson (who “virtually single-handedly established the modern British field of inequality and poverty studies”) proposed the idea in his 2015 book, Inequality.

    • Two books were published about it in 2016: Citizens' Wealth by Angela Cummine and A Sharing Economy by Stewart Lansley.

    • In 2016, Indian NGO Goa Foundation and The Future We Need Movement proposed a Future Generation Fund to invest the State of Goa’s mineral wealth and pay a Citizen’s Dividend.

    • Former Greek Finance Minister Yanis Varoufakis proposed a fund that pays universal basic dividends in 2016. Varoufakis then founded the Democracy in Europe Movement 2025 which included the idea in its platform in 2017.

    • Cornell Law Professors Lynn Stout and Sergio Gramitto published a paper in 2017 proposing a “Universal Fund”, a collective mutual fund owned by all US citizens, that acquires securities primarily from high net-worth individuals and corporations.

    • Two British think tanks, the Institute for Public Policy Research and Friends Provident Foundation, published separate reports promoting the idea in 2018.

    • The People’s Policy Project founder Matt Bruenig published a landmark proposal in 2018 for an American Solidarity Fund, a national social wealth fund “along the same lines as the Alaska Permanent Fund”.

    • Two UK organizations, Common Wealth and The Next System Project published a report in 2019 proposing various models of Democratic Ownership Funds. That same year, the UK Labour Party adopted a policy of “inclusive ownership funds” that would require large companies to put shares in worker-controlled funds that pay dividends; and US Presidential Candidate Bernie Sanders proposed a similar plan for “Democratic Employee Ownership Funds”.

    • Basic Income Earth Network co-founder Professor Guy Standing proposed a Commons Fund which pays common dividends in his 2019 book Plunder of the Commons.

    • Nobel Laureate Joseph Stiglitz and legendary fund manager Ray Dalio both endorsed the idea in 2020 as a way to reduce inequality by sharing ownership of wealth.

    • In 2021, OpenAI CEO Sam Altman proposed an American Equity Fund that distributes cash dividends and stock to citizens, as a way to address inequality in an automating economy.

    • Ronin Scholar Brent Ranalli published Common Wealth Dividends: History and Theory in 2021, the most extensive book to date on the topic of dividends from co-owned wealth.

    • In 2021, US billionaire investor Nicolas Berggruen proposed a national common prosperity fund that pays dividends from capital gains to every family.

    • Canada Pension Plan Investments former Managing Director Matthew Bianco and StrategyCorp senior advisor Elena Mantagaris proposed a Canadian sovereign wealth fund in a 2023 Globe & Mail op-ed and a podcast.

Alaska and Norway — eminent models for building common wealth

The Alaska Permanent Fund is a sovereign wealth fund that pays universal dividends from investing the state’s oil wealth. The Alaska State Constitution directs that at least 25 percent of Alaska’s mineral royalties be deposited into the principal of the fund and used for purchasing income-producing investments. Since 1982, every resident of Alaska has received an annual payment of about USD $1,000-$2,000 from a portion of the fund’s net income. This wildly popular program is partly why Alaska has among the lowest inequality and poverty rates in the US.

Jay Hammond, the former Republican governor who set up the program in the 1970s, “wanted to transform oil wells pumping oil for a finite period into money wells pumping money for infinity.” The program became so popular that for decades, politicians understood that proposing to raid the fund would be political suicide.

The following commentary on the work of Hammond reveals his motivation behind the program:

For Hammond and the small group of Alaska legislators, aides and ordinary citizens who worked with him when he was governor to achieve a resource-based investment dividend, the shared core idea was neither charity, nor leveling, nor an attempt to build an income floor. Their shared commitment was to the notion of collective ownership and the fundamental fairness of sharing the returns in equal proportion to their equal ownership.

The Norwegian Oil Fund, the largest sovereign wealth fund globally, was established to manage the nation’s vast oil wealth for the benefit of present and future generations. The fund is well-diversified and invests in a broad portfolio of global equities, fixed income products, and real estate. As the Norges Bank, the country’s central bank and manager of the fund, declares: “It is the people’s money, owned by everyone, divided equally and for generations to come.” In contrast to Alaska’s Permanent Fund Dividend, Norway’s fund is used to finance public pensions, balance government budgets, and other public spending priorities, ultimately resulting in lower taxes for Norwegians.

The following quote by Jens Stoltenberg, former Prime Minister of Norway, captures the importance of the fund as a vehicle of the people’s common wealth:

“The natural resources in the ground, that’s something we own in common… But then we invite foreign companies to invest, to produce…We tax them and they stay, because they earn money even with a tax rate of 78%… we believe in the market, we believe in competition, we believe in open economy. But we believe that the extra rent connected to natural resources shall be something which is in the common ownership of the people of Norway.”

Examples from Canada

Existing sub-national sovereign wealth funds in Canada include the Alberta Heritage Savings Trust Fund, the Quebec Generations Fund, the Newfoundland & Labrador Future Fund, the NWT Heritage Fund, and the Ontario First Nations Sovereign Wealth Fund. Each of these funds received contributions from natural resource revenues, except for the Ontario First Nations fund.

Canada’s pension funds, while not considered sovereign wealth funds, are recognized as “among the strongest in the world” and an “ideal system” for other countries to follow. McKinsey suggests that “there are few industries globally where Canadians dominate, pension funds are one”. The Canada Pension Plan Investment Board (CPPIB) is one of the largest pension funds in the world, and the largest of Canada’s 10 major pension funds (dubbed the “Maple Revolutionaries” by The Economist) that together manage over $2 trillion in assets.

Canada’s carbon rebate (also known as the Climate Action Incentive) is a universal and unconditional payment that returns nearly all of the money from the carbon tax back to Canadians in a progressive way. It is estimated that a majority of households get more money back than they pay in direct costs (although analysis from the PBO suggests most households may see a net loss after indirect costs are considered). This rebate sets an important precedent for collecting revenue from a shared resource — the atmosphere — and returning that money back to its rightful owners, the people.

The carbon rebate shares similarities with the cap-and-dividend system (also known as “Sky Trust”) proposed by Peter Barnes as a way to reduce emissions and pay dividends. His proposal would establish a declining number of permits to sell fuels (the cap), with the proceeds divided equally among US residents (the dividend). As Brent Ranalli explains, this proposal is based on the premise that “[t]he atmosphere is part of our common heritage. If its capacity as a carbon sink is to monetized, every person deserves a share in the wealth that is generated”.

Barnes has extended the Sky Trust idea to capture revenues from other forms of common wealth, including the financial commons, the electromagnetic spectrum, and the intellectual property system.

There are many things that might be rightfully considered part of our common heritage. Canada could build on our track record of carbon rebates, provincial wealth funds, and pension funds to build a national Common Wealth Fund that serves all Canadians.

  • The mineral-rich Ontario Ring of Fire, first discovered in 2007, is estimated to be worth between $90 billion to $1 trillion. Ontario could preserve this resource wealth in a permanent sovereign wealth fund so that future generations benefit from it as much as current generations. Negotiations between First Nations and the province of Ontario acknowledge that this vast resource wealth should be stewarded for the common benefit of the province, including the prosperity of northern indigenous communities.

    The environmental non-profit Goa Foundation advocates for capturing 100% of mining proceeds into a dividend-paying sovereign wealth fund. They assert:

    “Minerals are a shared inheritance… We, as custodians, must ensure future generations inherit at least as much as we did, either the minerals or their value. The key objective then is protection of inherited wealth for future generations.”

    The Ring of Fire is an opportunity for Ontario to get it right, where Alberta and Saskatchewan got it wrong.

    The Alberta Heritage Savings Trust Fund was created in 1976/77 to invest the province’s non-renewable resource wealth for future generations. However, the value of the fund has since eroded significantly due to inflation, a cease in non-renewable resource contributions in 1986/87, and the near complete spending of all earnings on non-dividend investments.

    The Fraser Institute estimated that had the Heritage Fund had been managed similarly to the Alaska Permanent Fund — with annual dividends and consistent inflation-proofing, via saving a portion of annual revenue to preserve the real principal value, rather than spending it all — the fund would be worth 15 times as much as it does ($243 billion vs. $16 billion in 2023). It would have paid $102 billion in dividends, equal to $1,018/year per Albertan since inception. Trevor Tombe of the University of Calgary went even further to suggest that the fund could have grown to $2 trillion had the province saved every penny in resource revenues and investment earnings.

    In her report to the Canadian International Council, Madelaine Drohan showed how Alberta had fallen woefully short of its commitments to recurring contributions: “When the Alberta Heritage Fund was started out in 1976, contributions were supposed to be 30% of oil and gas royalties. Now, if you compare Alberta’s contribution record with that of Norway’s, Alberta would look pretty bad.”

    Saskatchewan established a similar Heritage Fund in 1978 to invest the province’s non-renewable resource wealth. But growth of the fund was mired by a lack of formal controls on how the money was spent, essentially turning it into a vehicle to channel resource revenues to government spending, rather than saving. The fund was terminated in 1992.

    Quebec’s Generations Fund provides a more recent case study. Established in 2006, its primary purpose is to reduce the province’s public debt by investing revenues received from the province’s natural resources. The $19 billion fund receives annual injections of new revenue and is projected to grow to $37 billion by 2027.

    In 2022, Newfoundland & Labrador created a Future Fund to save money from the province’s resource extraction. One model published by the CCPA estimates that the fund could grow as large as $165B by 2050 under an optimistic scenario. The Fraser Institute called the fund “good policy” and recommended that it pay dividends, but cautioned that it needs stronger fiscal rules lest it suffers the same fate as Alberta’s fund.

    Drohan’s top recommendation? Create sovereign wealth funds in every province that has revenues from non-renewable resources — including Ontario. The provinces and Canada could explore a co-operative management approach that works across federal and provincial jurisdictions, as proposed by Bianco and Mantagaris. This could pave the way for other provinces to join, creating economies of scale and enabling a national Common Wealth Fund.

    Drohan believes British Columbia, with its strong forestry, fishing, mining, and hydroelectric sectors, is also well-positioned to build a fund. Paul Finch, Treasurer of the BC General Employees’ Union, has called for a fund in the province capitalized by taxing land rents.

    The Ring of Fire presents a generational opportunity to turn one-time resource revenues into a lasting source of wealth that for Ontarians. It could serve as a model that other provinces, and perhaps the nation, could emulate.

    On provincial wealth funds, Madelaine Drohan believes “the chances are pretty good more will pop up in Canada”. Ontario could be next.

“As a matter of social justice, all forms of rentier — representing a tangible loss to commoners — should be subject to a levy paid into a Commons Fund… Its primary investment objective should be the promotion of common wealth”

— Guy Standing, co-founder of the Basic Income Earth Network

Funding sources from the commons

The Common Wealth Fund would be financed primarily with levies and taxes on unearned profits and wealth arising from nature, technology, and society as a whole. This includes economic rents accruing to natural resources, wealth generated within our financial markets and economic system, and monopoly profits enabled by special licenses or privileges. As a shared pot of citizen wealth, the fund’s value would come primarily from shared assets. We therefore prioritize unearned wealth from common assets, rather than earned incomes (like personal income tax).

Green, Kesselman, and Tedds characterize economic rents as “excess profits from monopolies or resource extraction and activities that damage society as a whole, such as pollution” and as such, they are among “the best options” for new revenue sources. They propose taxing economic rents as a way to capitalize a sovereign wealth fund, for example by extracting rents from technology firms via an “enforced ownership share… in lieu of a corporate tax increase”. Taxes on economic rents are generally considered to be the most efficient taxes, because they do not inhibit production, unlike other forms of taxation.

Below, we introduce 3 categories of funding options: levies on common assets, wealth generated within our financial commons, and levies on monopolies. We selected funding options that meet the definitions of unearned wealth or economic rents and have major precedent and/or support from prominent proposals. We include a 4th category that comprises voluntary contributions and Pigouvian taxes (i.e. taxes on negative externalities). Estimates of potential revenue will be explored in a future version of this article.

A) Levies on common assets

Expand to see precedents and/or proposals for each funding option

  • For provincial funds: Carbon levies (Climate Action Incentive), energy and mineral royalties (Alaska Permanent Fund, Norwegian Oil Fund, Alberta Heritage Savings Trust Fund, Quebec Generations Fund, NWT Heritage Fund, Newfoundland & Labrador Future Fund), forestry stumpage fees.

    See also proposals for a Saskatchewan Futures Fund and Saskatchewan Heritage Fund; a BC Prosperity Fund capitalized with LNG revenues; and Vermont Common Assets Fund.

    For federal fund: non-renewable resource revenues from territories, and corporate income tax revenues directly related to such revenues. (As proposed in CIC report.)

  • Spectrum auctions, Crown land leases, large-scale water use-fees (hydroelectric or large-scale water withdrawals), renewable energy royalties, public infrastructure tolls and use fees.

  • US Data Dividend Project, UK Digital Services Tax on large tech companies, and the proposed Canada Digital Services Tax. As proposed by Barath Raghavan and Bruce Shneier in POLITICO.

  • Federal: Gordie Howe International Bridge, Canada Infrastructure Bank, P3 Canada Fund.

    Provincial/Municipal: Highway 407 ETR (ON), The Canada Line (BC), Vancouver Convention Centre, Edmonton Waste Management Centre, Ottawa Light Rail Transit LRT.

B) Wealth generated within our financial commons

C) Levies on monopolies

D) Other sources

  • Another possible source of funding could be direct donations from high net-worth individuals and corporations in the form of money, securities, or other kinds of assets.

    The US think tank People’s Policy Project included this idea in their proposal for an American Solidarity Fund, a national social wealth fund along the same lines as the Alaska Permanent Fund. The author Matt Bruenig doubts that it could generate enough revenue for an adequately-sized fund, yet he acknowledges that “certainly nothing is lost by allowing such contributions to be made.”

    Cornell Law School professors Lynn Stout and Sergio Gramitto have proposed a social wealth fund financed primarily by acquisitions of securities from wealthy individuals and corporations. They argue that both have strong incentives to make such contributions: for the wealthiest “philanthropy is the only real place money can go”; while for corporations this would be good public relations and a way to counterbalance “the influence of short-term shareholders, especially activist hedge funds”.

    Noteworthy examples of major public giving commitments include:

    • The Giving Pledge signed by over 150 billionaires in 16 countries who have publicly committed to giving the majority of their wealth to philanthropy either during their lifetimes or in their wills.

    • The Windfall Clause, an ex-ante commitment by leading technology firms to donate a significant amount of any eventual extremely large profits as a result of transformative AI.

    • Anthropic, a leading AI safety and research company, offers a 3-1 match on employee donations of company shares to charity, up to 50% fo the employee’s shares.

    • The Blumbergs’ Snapshot of the Canadian Charity Sector 2020 showed $304 billion in total revenue for Canadian charities.

    Although far from a certain funding avenue, the Common Wealth Fund could be an attractive target for philanthropists who believe in the value of building common wealth for Canadians.

  • The Quebec Generations Fund is funded in part by a tax on alcohol. Other examples include taxes on tobacco and sugary drinks.

“A citizen’s dividend allows the proceeds of co-created wealth to be shared with the larger community—whether that wealth comes from natural resources that are part of the common good or from a process, such as public investments in medicines or digital technologies, that has involved a collective effort.”

— Professor Mariana Mazucatto, economist and Founding Director of the UCL Institute for Innovation and Public Purpose

Fund size and dividends

A Common Wealth Fund with $2 trillion in assets could generate $60 to 90 billion a year to pay dividends, fund public investments, or pay down public debt, assuming either a conservative 6% or optimistic 9% annual return with half re-invested. These are based off historical average annual returns of minimal-risk income and growth-oriented asset allocation strategies which a sovereign wealth fund might choose.

This would be enough to pay every Canadian adult a lump-sum dividend of up to $42,000 after 10 years or annual dividends of up to $2,600 that increase every year. (See a preliminary model here.)

These return scenarios fall within the range of other sovereign wealth fund proposals as well as actual fund performance. The Canadian Taxpayers Federation estimated a 5% return for their proposed Saskatchewan Heritage Fund (after expenses and inflation proofing), which they described as conservative; indeed both the Alberta Heritage Fund and CPP have regular exceeded that rate. One model of the Newfoundland & Labrador Future Fund published by the CCPA assumes an 8.8% average annual return. According to IPPR, the majority of sovereign wealth funds have managed to deliver consistent annual returns of 4% or more a year, after inflation and management fees.

A fund of this size would rank among the world's largest sovereign wealth funds, alongside funds in comparatively smaller economies like Singapore, Norway, and the UAE. Canada’s 10 major pension funds combined already exceed $2 trillion in assets under management. There is no reason we could not build a fund of comparable size that benefits all Canadians.

Rahul Basu of the Goa Foundation shows from Statistics Canada data that Canada could build a sovereign wealth fund of nearly $1 trillion by saving the entirety of the nation’s mineral sale proceeds. At a 3% real return, that would amount to $37 billion/year, or a real dividend of $940 for every Canadian in perpetuity. Trevor Tombe of the University of Calgary estimates that Alberta Heritage Fund could have grown to nearly $2 trillion if the province had saved every penny in natural revenues in the fund.

Other rates of re-investment may also be feasible: the Alaska Permanent Fund calculates its annual dividend as 21 percent of the net income of the fund for the last five fiscal years, divided by 2, minus the previous year obligations, expenses and PFD program operations, distributed to all eligible residents. The Commonn Wealth Fund could similarly calculate its dividend based on a multi-year moving average of returns, as a way to smooth out returns from volatile economic conditions.

A variation of this model could give citizens the option to re-invest their annual dividend back into the fund to generate greater compounding returns on an individual basis. Citizens could then withdraw the accumulated dividends at any time, enabling the possibility of saving up a lump-sum dividend of more significant value. The economist and philosopher Karl Widerquist proposed this mechanism in a variant on social wealth funds he calls Citizens’ Capital Accounts. In this model, Widerquist allocates one-third of annual returns for mandatory re-investment, while each citizen can choose to withdraw the remainder or re-invest it in a personalized account to continue earning interest over time.

We live an ownership economy where owning assets makes more money than working. Automation continues to widen this divide, causing a greater percentage of wealth to be accumulated through assets while the share of income going to wages stagnates or declines. This fundamental incentive for rentier profits continues to fuel the exploitation and degradation of our natural ecosystems.

The Common Wealth Fund could address this by giving everyone access to the benefits of owning income-producing assets, while preserving the commons. It would give everyone a direct stake in our nation’s success and ensure that our shared inheritances can be enjoyed by future generations to come. It’s how we build a future where the fruits of advanced automation are shared broadly, so that we can achieve shorter workweeks and greater human potential.

Guy Standing believes that “common dividends and this commons capital fund would be important parts of the fiscal route to enabling us to live a better type of life, working and commoning and indulging in real leisure. That's a vision for all of us, I think.”

Conclusion

Natural Common Wealth and Economic Rent in Canada

In this paper, we estimate the total economic rents (or unearned profits) from Canada’s land and natural resources that could be collected as new revenue, without inhibiting productive investment. At $241 billion/year, it could be enough to raise the 0% personal income tax bracket to $250,000/year or generate a dividend of $7,600/year per adult.

How taxing land can fix the incentives plaguing our housing market

So long as land—what drives home values—is an investment, cost of living will be high. A land value tax would reduce incentives to speculate on land, encourage supply, and bring down the #1 cost of living for Canadians: rent and mortgages. This could make homes 40% cheaper and eliminate income tax for over 90% of Canadians.

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