The prime minister says the federal government will put up money alongside private investors to fund major projects.

Canadian Prime Minister Mark Carney says his government is developing a government-owned investment fund.

Carney said on Monday that the fund, a first for the country, will invest in major Canadian industrial projects in areas such as energy, infrastructure, mining, agriculture and technology. It will begin at 25 billion Canadian dollars (US$18bn).

The prime minister said the federal government will put up funds alongside private investors. The money will help finance major projects that Carney’s government is focused on building as Canada seeks to diversify away from the United States.

US President Donald Trump has threatened Canada’s economy and sovereignty with tariffs and claims that Canada could be “the 51st state” in the US.

Carney is a former central banker in England and Canada as well as chairman of the board of directors for Bloomberg.

“We take a lesson from other jurisdictions that had the foresight many decades ago to start sovereign wealth funds,” Carney said. “In some cases, they began with a domestic focus then outgrew the scale of the domestic focus.”

Sovereign wealth funds invest in assets, such as stocks, bonds and real estate. They are typically funded by a country’s budgetary surpluses, which Canada currently does not have. The announcement came a day before Carney’s government announces its spring economic update.

There are more than 90 sovereign wealth funds around the world. They manage more than $8 trillion in assets, according to the International Forum of Sovereign Wealth Funds, a London-based organisation made up of roughly 50 of these entities.

Trump ordered the creation of a US sovereign wealth fund last year. In the US, more than 20 sovereign wealth funds exist at the state level, according to an analysis from the Center for Global Development, a Washington, DC-based nonpartisan think tank.