Christian Weedbrook, CEO of Xanadu, by Aurora, a prototype quantum computer at the company’s Toronto office in September, 2025.Fred Lum/The Globe and Mail
Xanadu Quantum Technologies Ltd. XNDU-T has secured $195-million in federal funding to support the building of an advanced photonics research, development and manufacturing facility in Toronto.
The Toronto-based quantum computer developer, which went public in March, is also negotiating for up to an equal amount of funding from the Ontario government. The project, located in a 158,000-square-foot facility on the site of a former Campbell’s soup plant in Etobicoke, is expected to cost $893-million.
While the federal government has provided financial support for Canada’s fertile quantum technologies sector for decades, Ottawa is under pressure to provide hundreds of millions more to keep domestic players from relocating abroad, a fate that has happened in other technology subsectors.
The stakes are high as the Canada-U.S. trade war worsens, which Evan Solomon, federal minister for artificial intelligence and digital innovation, alluded to as he announced the funding at the empty facility Friday.
“This is literally what it looks like” for Canadians to control their own destiny, he said of the funding. “We are going to take big swings and we’re going to build big. That’s what this moment requires.”
Several U.S. states including Illinois, Colorado and Maryland have been aggressively courting quantum companies from Canada and elsewhere with incentives to locate in their jurisdictions.
Christian Weedbrook: Seize the quantum future – or let the U.S. own it. Which way, Canada?
The U.S. government in May also agreed to invest a combined US$2-billion in nine quantum companies. One of the recipients, Australia’s Diraq Pty Ltd., opened a technology hub in Los Angeles this week. Another, D-Wave Quantum Inc., redomiciled to Delaware from Burnaby, B.C., in 2022 and later moved its headquarters to the U.S. D-Wave, a past recipient of Canadian government funding, was once majority-owned by Canadian pension fund PSP Investments.
Julien Camirand Lemyre, chief executive of Sherbrooke-based quantum computing developer Nord Quantique Inc., said that despite heavy public-sector investment in quantum infrastructure in the region east of Montreal, it might not be enough to keep his company here if government funding at home doesn’t keep up.
He said U.S. states are offering tens of millions of dollars in incentives just to open satellite offices in the U.S., and more if companies move some or all of their operations there. While he said the Canadian government has been supportive of the homegrown sector, “at the end of the day, money speaks. There is a strong pull from the U.S. to provide that capital to companies that are willing to set up a significant presence there. If the opportunity in Canada is no longer here, there’s a point where it doesn’t make sense for us to stay.”
He added Nord Quantique would “need sizable support in Canada for us not to move,” on the order of hundreds of millions of dollars. “Canada needs to act, it needs to act now, if we want to be competitive in that space, if we don’t want to repeat the story that we’re tired of hearing in Canada, about good companies leaving the country.”
When asked whether his government would make that level of further commitment to the sector, Mr. Solomon replied in an interview: “I just invested hundreds of millions of dollars today. Clearly we’re prepared to do it.” He added “We’re doing this because these are the best companies, we believe there is a real return for Canadians, and we’re trying to keep this stuff here.”
Mr. Solomon added the government could also consider taking equity stakes in domestic quantum companies through a new $500-million technology growth fund. Crown corporation Business Development Bank of Canada has also backed several Canadian quantum companies.
Christian Weedbrook, CEO of Xanadu on the eve of their IPO on March 19.Janick Laurent/The Globe and Mail
Canada was an early leader in the development of quantum computers, which unlike conventional systems don’t derive power from manipulating bits of information, but by tapping the peculiar properties of matter and light at microscopic scales.
There are several ways to leverage these effects in a quantum computer, and no clear winner has emerged yet. But if proponents are right, quantum computers will be vastly more powerful than the world’s most advanced supercomputers and able to do calculations beyond the reach of conventional systems. That could open new applications in fields such as material science, drug discovery and financial forecasting.
Quantum computers could also enable bad actors to pick the locks on cryptography algorithms that secure the world’s digital economy.
The Carney government has stressed that supporting its homegrown industry is of national importance. Three domestic companies – Xanadu, Nord Quantique and B.C.-based Photonic Inc. – have advanced to the second stage of a U.S. Defense Advanced Research Projects Agency competition challenging developers to show they can build a commercial-grade quantum computer by 2033.
Last December, Ottawa committed up to $23-million apiece to those three (plus a fourth company that isn’t in the competition) to match what DARPA has offered those that complete the first two stages. Companies that make it through a third and final leg could qualify for another US$300-million each in U.S. government funding.
Xanadu’s system performs calculations using packets of laser light connected by fibre optic networks. The method is different from other quantum computers whose chips need to be cooled to temperatures just above absolute zero (-273.15 C), to harness their quantum effects. Xanadu’s machines largely operate at room temperature.
Last year, Xanadu unveiled a chip capable of performing quantum error correction, a measure seen as essential for reaching reliable performance for practical uses. Continued efforts to correct errors and improve performance remain a key challenge for Xanadu and its rivals. Its system is also built via a modular approach, making it easier to network and scale up than other systems.
Xanadu has also developed open-source software called Penny Lane that has tens of thousands of active users across an array of quantum systems.
Xanadu CEO Christian Weedbrook said the company’s new facility is named Inception, after the film by his favourite movie director, Christopher Nolan. Mr. Weedbrook, a one-time film student, said Xanadu’s rapid advancement since its inception in 2016 “feels like we’re living in a dream.”
The operation will employ 275 people and serve as Xanadu’s global facility for manufacturing, packaging and assembling quantum computing components.
Mr. Weedbrook, who has committed to keep building Xanadu in Canada, said at the announcement, “I want the next generation of scientists and engineers to see Canada as a place where they can stay or come to build something very important.”
The government’s commitment is a repayable financing through its Strategic Response Fund, which previously provided $40-million to Xanadu in 2023.