Case Study: Canada's Quantum Advantage

You might know that Canada played an important role in incubating artificial intelligence technology. Key researchers — the so-called “godfathers” of AI — were working out of Canadian universities when they developed deep learning neural networks.

And yet, the leading AI companies in the world today are not Canadian. We let our advantage slip away, because we didn’t have the economic strategy and the policy framework to capture value from AI.

Instead, Google, Meta, OpenAI, and others swooped in and seized the opportunity. Will we learn from this failure?

It may be too late to alter Canada’s place on the AI playing field. But we can apply these kinds of lessons to an emerging technology where supply chains and market roles are not yet settled: Quantum technology.

Canada has real advantages in the quantum realm, but we will have to think strategically about what we have, what we can build, and how we can leverage existing supply chain chokepoints to our advantage.

So, what are Canada’s potential opportunities in quantum technology? And what would a strategy for capturing value look like?

Research and Talent Centres

Canada has significant research capacity in quantum computing centred in a handful of anchor locations: the Institute for Quantum Computing (IQC) and the Perimeter Institute in Waterloo, the Institut Quantique in Sherbrooke, and allied groups at UBC, Calgary, Toronto, and TRIUMF, Canada’s particle accelerator. These centres trained the people who now run Canada’s quantum companies and produced the science those companies are commercializing.

This success was built on more than half a billion dollars in research funding from the National Quantum Strategy and Quebec’s provincial quantum funding, but with that funding beginning to expire, Canada needs to decide where we go next.

New funding has been committed, but it is narrower. Budget 2025 added $334.3 million over five years under the Defence Industrial Strategy, and the National Research Council is putting more than $161 million over five years into IQC for defence applications. NSERC has also opened new Alliance Quantum grants. This all steers quantum technology towards important defence-related uses, such as quantum encryption and quantum sensing technology. But because this money is focused on defence and security, it risks overshadowing the fundamental science where Canada has long been a global leader.

In June 2026, representatives from Université de Sherbrooke testified at the House of Commons Science and Research Committee on dual-use and defence research needs. They said that fundamental research must be supported alongside targeted defence work, rather than shifting too far toward purely capabilities-driven research for defence.

Canada can do both, and striking the right balance between fundamental science and specific defence applications for quantum technology will be a key strategic question for the government to answer.

Quantum Computing Capacity

Canada has four quantum computing companies each valued at around a billion dollars or more. Each pursues a distinct hardware approach, giving Canada a diversity of bets on how quantum computing might actually become a competitive, usable technology, and perhaps multiple of these methods will produce successful quantum computers.

• Xanadu (Toronto, photonic method),
• Photonic Inc. (Vancouver/Coquitlam, silicon spin qubits using isotopically engineered “T-centres”),
• Nord Quantique (Sherbrooke, a bosonic error-correction approach), and
• Anyon Systems (Montréal, using superconducting).

These companies form a small but robust potential quantum computing capacity and an ecosystem of scaling more firms in Canada. But Canada has historically struggled to keep promising scale-ups rooted here, and we will need to address key issues like a lack of capital if we want to maintain our emerging quantum champions.

Burnaby-based quantum computing company D-Wave has already moved much of its infrastructure and core work to Palo Alto — a warning of what can happen when companies lack the support and ecosystem to thrive at home. With Canada already facing a sovereignty crisis over AI compute, we cannot afford to squander this robust, homegrown set of approaches to quantum computing. The hyperscalers of future quantum compute could be Canadian, but if this is going to happen, we need to ensure we protect and nurture this growing sector.

Photonics Manufacturing

Beyond the research talent and corporate champions of new technology, Canada also has some major advantages in quantum hardware, which is distinct from other computing hardware. This new technology track is important because it means a potentially totally different supply chain.

Photonics are one of the most important elements of this supply chain. This refers to computing hardware that transmits information through light rather than through electrical signals.

Photonics hardware is part of some quantum computing systems like Xanadu’s, but photonics is also essential for the optical interconnects between systems in quantum computing. Moreover, photonics can be used in traditional data centres to transmit information between data stacks.

The Canadian Photonics Fabrication Centre (CPFC) in Ottawa is, by the federal government’s description, the only end-to-end pure-play compound semiconductor fabrication centre in North America. A legacy of the Nortel era and past defence spending, it makes the indium phosphide, gallium arsenide, and gallium nitride devices — lasers, detectors, photonic integrated circuits — used in both photonic quantum computers and the optical interconnects.

Canada also has other smaller photonics packaging centres such as Xanadu’s chip packaging facility. Packaging is important because it handles the downstream task of putting already-built chips (manufactured elsewhere) into photonics-connected housings, so they can be used by Xanadu’s researchers.

By building this facility, Xanadu onshored significant elements of its supply chain while creating a new hub for other companies (not all in quantum) to do their chip packaging as well, using the excess manufacturing capacity to serve their needs. A simple investment in a small element of photonics led to significant industrial benefit in the Canadian ecosystem.

This chokepoint puts Canada among only a few nations that can control this manufacturing space. The same centre that supports Xanadu’s work — primarily through chip packaging — also serves telecom, defence, and AI compute, making it core infrastructure for Canadian firms. Ottawa is now spinning the CPFC out of the NRC into a commercial entity, working with the Canada Development Investment Corporation to attract private capital and scale faster than a government lab can. Industry advocates point to the Taiwan/TSMC model: a well-capitalized strategic public fabricator that catalyzes a downstream industry of designers and component makers around it. The assumption here is that supporting and semi-privatizing the CPFC, with strong sovereignty requirements in place, it will become the anchor of a sovereign photonics supply chain running from raw material to finished chip for the next generation of AI and quantum hardware.

Quantum Materials Manufacturing

Quantum devices are built from materials that must be engineered atom by atom, and Canada is among the few places in the world with the capability to do it.

Waterloo’s QNC-MBE facility, in the Mike & Ophelia Lazaridis Quantum-Nano Centre, is among the most advanced of its kind anywhere. It sits alongside the Institute for Quantum Computing, the Waterloo Institute for Nanotechnology, and the Quantum NanoFab cleanroom, putting material growth, device fabrication, and characterization in one place. This is the layer of the supply chain hardest to stand up and hardest to copy: it takes specialized equipment, ultra-stable facilities, and people who have spent careers learning to grow these materials.

Here Canada is not one of a few leaders but the world leader, with a truly cutting-edge capability. It should treat that as a strategic asset and fund it to scale, rather than leaving a world-class lab dependent on research grants. Moreover, it is not just that Canada owns machinery or facilities for this work but it has an interconnected ecosystem rooted in manufacturing capacity but ensconced in a research community, talent pool, and community of startups that draw on this manufacturing capacity while also helping to advance it.

This is perhaps the least discussed but more strategically important of Canada’s quantum chokepoints which needs to be preserved and advanced with care.

Seizing Our Quantum Economic Opportunity

Canada is truly poised to lead in quantum technology in a way that was never even fully true of AI in the early days of that technology. The advancement of the technologies associated with quantum research is significant, and much of it is housed in Canada in various forms.

Out of necessity, Canada has also built a strong manufacturing base for this nascent industry which has compounded and bolstered the success of quantum technology companies so far. These are all chokepoints or chokepoints in the making that Canada needs to continue to foster and advance over time.

The core technology of quantum computing is still not fully ready for commercialization, but there are other adjacent technologies that are already more promising — technologies like quantum sensing, and quantum-based mapping. All of these are being prototyped, some by Canadian companies.

But these technologies will not work alone; they need other companion systems in which to be deployed, particularly in the context of Canadian defence.

And so, the final ‘chokepoint’ or strategic space for quantum is ensuring that auxiliary or potentially peripheral technologies to quantum are integrated in an ecosystem with real world testing and deployment.

It is not enough to develop the technology. We need a strategy for commercialization and deployment, or else Canada will once again pride ourselves on incubating a technology that ultimately provides enormous economic benefits to other countries around the world.