Allen Lau made his name building the online fiction platform Wattpad. Now his Toronto venture capital firm, Two Small Fish Ventures, is seeking to back the Next Big Thing.
That’s why he’s in Old Montreal on this day in mid-June, attending Quantum Now, a conference for the emerging quantum technology space. He’s watched the sector for a while but didn’t think it was mature enough for an early-stage fund with a 10-year lifespan to back. This year, he changed his mind. “It’s much more investible now,” says Lau.
Perhaps you’ve heard of quantum computers, or technologies such as quantum sensors that harness the mind-bending physical properties of subatomic particles to unleash unprecedented digital capabilities. You might know that the United Nations declared 2025 International Year of Quantum Science and Technology. Or that Group of Seven country leaders in June issued their first joint statement on the quantum sector, promising to co-operate and promote investment in research and development, responsible innovation and commercialization.
Market watchers may know some of the hottest (and most volatile) stocks this year have been those of quantum computer developers, including D-Wave Quantum Inc. QBTS-N, founded in Burnaby, B.C. Quantum companies have raised record amounts of capital in 2025, and there’s been a pickup in mergers and acquisitions.
Bridget Walshe, associate head of the Canadian Centre for Cyber Security. During a panel at the Quantum Now conference in Montreal this June, Ms. Walshe said that the time to act to quantum-proof critical infrastructure is now.Supplied
Then there is Nvidia Corp. NVDA-Q chief executive officer Jensen Huang, who said in January that he didn’t expect quantum computers to be “very useful” for 15 to 20 years. By June, the tech demigod had changed his mind. “There’s an inflection point happening,” he said in a speech, adding that quantum computing would solve “some interesting problems in the coming years.” This week Silicon Valley quantum computing startup PsiQuantum said it would collaborate with Nvidia to develop its technology and that the GPU giant is also an investor.
“Quantum is definitely having a moment,” says Lisa Lambert, CEO of Quantum Industry Canada, host of the June conference, which attracted 400 attendees – 100 more than expected – including investors, suppliers, clients, and mandarins from Canada and around the world.
That’s true. It’s also true that the surge in investor interest comes with some uncertainty about how soon quantum technology will yield big returns – or if it ever will. Metaphorically, the entire industry, including Canada’s robust contingent, resembles Schrödinger’s Cat of quantum physics fame: simultaneously teeming with opportunity and clouded by doubts as to whether it can deliver.
Canada’s quantum industry landscape
An analysis of 104 Canadian firms that have a role in developing the quantum computing sector, as of August, 2025
NUMBER OF FIRMS BY MAIN FOCUS AREA
Enabling tech
and components
Communications
and networking
Post-quantum
cybersecurity
Quantum computing
software
Quantum computing
hardware
Note: Some companies attributed to more than one focus area.
THE GLOBE AND MAIL, SOURCE:
QUANTUM INDUSTRY CANADA
Canada’s quantum industry landscape
An analysis of 104 Canadian firms that have a role in developing the quantum computing sector, as of August, 2025
NUMBER OF FIRMS BY MAIN FOCUS AREA
Enabling tech
and components
Communications
and networking
Post-quantum
cybersecurity
Quantum computing
software
Quantum computing
hardware
Note: Some companies attributed to more than one focus area.
THE GLOBE AND MAIL, SOURCE: QUANTUM INDUSTRY CANADA
Canada’s quantum industry landscape
An analysis of 104 Canadian firms that have a role in developing the quantum computing sector, as of August, 2025
NUMBER OF FIRMS BY MAIN FOCUS AREA
Enabling tech and components
Communications and networking
Post-quantum cybersecurity
Quantum computing hardware
Quantum computing hardware
Note: Some companies attributed to more than one focus area.
THE GLOBE AND MAIL, SOURCE: QUANTUM INDUSTRY CANADA
Quantum-computer developers may be just five to 10 years away from getting machines to commercial scale, as many quantum proponents insist – or decades away, as skeptics have long maintained, given the hurdles ahead to make the hardware work reliably and cost-effectively. A U.S. government competition aims to determine if they can be built by 2033. Three Canadian companies are in the running. An estimated 500 clients, including banks, automakers and pharmaceutical companies, are already testing the technology.
Canada’s leadership in quantum computing positions the country to benefit economically – but also makes it vulnerable to being sidelined or denuded in a global race. That’s happened before in breakthrough fields Canada pioneered. While Canada pledged in 2021 to spend $360-million on a quantum strategy focused on research, many countries have committed billions of dollars toward building industries. Illinois alone is outspending Canada; Governor J.B. Pritzker is determined to turn Chicago into the Silicon Valley of quantum. Maryland Governor Wes Moore has similar aims.
“Canada doesn’t need more Nobel Prizes,” says Stephanie Simmons, founder and chief quantum officer of Coquitlam, B.C.-based quantum computer developer Photonic Inc., alluding to artificial intelligence pioneer Geoffrey Hinton, the celebrated University of Toronto professor whose breakthroughs primarily benefited U.S. tech giants. Prizes, she says, “won’t move the needle for us as a country. Let’s make markets, let’s grow the income tax base. If we want to win globally, we have a clear shot on goal.” Industry leadership, she adds, “is ours to lose but also ours to win.”
Quantum Now, a conference for the emerging quantum technology space, was held in Montreal this June, bringing together leaders in the growing industry. Canada’s leadership in quantum computing positions the country to benefit economically, but also makes it vulnerable to being sidelined in a global innovation race.
Jean-Michel Naud/The Globe and Mail
Evan Solomon, Canada’s Minister of AI and Digital Innovation, has heard the concerns. He’s promising a re-upped quantum strategy this fall. The plan, he said during an interview, “will make sure Canada is competitive with any program in the world and will ensure that Canadian companies that are leaders in quantum stay here.”
Canada’s first AI Minister Evan Solomon on his plan to scale up the industry
Yet, the advances the technology could bring are twinned with dread. That’s because quantum computers could enable bad actors to pick the locks on cryptography algorithms that secure the world’s digital economy. Canada’s intelligence and defence establishment have recognized the threat for years.
“This could happen as early as in the 2030s,” says Bridget Walshe, associate head of the Canadian Centre for Cyber Security, during a panel at the Quantum Now conference. She said that the time to act to quantum-proof critical infrastructure is now.
Mr. Solomon agrees. “We’re past the tipping point on whether countries need to bet big on quantum,” he says. For security, sovereignty and commercial reasons, he adds, “you have to.”
Senior scientist Tomohiro Nakamura works in the lab at Xanadu Quantum Technologies’ Toronto office on Sept 8. Xanadu’s technology utilizes qubits, tiny superconducting circuits, coded into flashes of laser light – an approach that lessens the demand for cryogenic cooling.Fred Lum/The Globe and Mail
How to build a quantum computer
It’s been a century since theorists such as Werner Heisenberg and Niels Bohr worked out the principles of what was then called “the new physics.”
Back in 1925, the goal was to explain how nature behaves at the smallest scale. To the shock of the pioneers of quantum physics, they found that doing so required accepting a strange version of reality in which particles can be in more than one place at the same time or can act as though they’re connected even when separated by large distances.
Even Albert Einstein was perplexed by the implications. But quantum theory has since proved remarkably effective at describing real-world technologies such as semiconductors and lasers. More recently, scientists have sought to leverage the quantum characteristics of matter and light to develop a new class of computers.
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A conventional computer contains billions of microelectronic switches that manipulate bits of information – the 1s and 0s that make up our digital world.
A quantum computer, by comparison, runs on qubits. They can be tiny superconducting circuits, ions trapped in electromagnetic fields or beams of light that are oriented in different ways, among other possibilities. What they have in common is that they are physical systems that can exist in two possible states. That means they can be used in a computer to represent 1 or 0. But thanks to the weird rules of quantum physics, they can also exist as a mix of both.
When many qubits are linked together, this added flexibility can make quantum computers incredibly fast at performing certain kinds of calculations, including some that would take conventional processors millions of years to complete.
The standard example is encryption. Digital information is typically kept secure using a protocol called RSA, which involves locking up information with a cryptographic key derived from multiplying two massive prime numbers.
For a conventional computer, discovering the key is akin to searching for a needle in a haystack – trying one possible answer after another, making the problem effectively unsolvable. With a quantum computer, qubits can interact to suppress incorrect possibilities. The haystack cancels itself out, leaving the needle in plain sight.
Quantum computer components are tested at Xanadu’s Toronto office.
Fred Lum/The Globe and Mail
Not all tasks that computers perform can be accelerated in this way. But there are enough potential applications to make quantum computers an exciting commercial prospect. These include modelling financial risks, solving optimization problems (such as improving traffic flow or factory production lines), and simulating the behaviour of molecules to discover medicines or better batteries, for example.
Paul Terry, CEO of Photonic, believes chemistry will be where quantum computing first makes its mark. “We can’t do chemistry very well on supercomputers,” Mr. Terry says during a panel at Quantum Now. “Chemistry is a quantum problem.”
It’s possible the killer app of quantum hasn’t yet been conceived, says Rafal Janik, chief operating officer of Xanadu Quantum Technologies Inc. of Toronto, on the same panel. He adds that 70 years ago futurists weren’t thinking about Facebook or Tinder when envisioning what computers would be used for. What we can imagine today for quantum, he says, is “not the limit.”
Nord Quantique CEO Julien Camirand-Lemyre shows off a qubit at the company’s lab in Sherbrooke, Que.Evan Buhler/The Globe and Mail
But there are many challenges. Qubits typically have to be isolated from the slightest disturbance to maintain their quantum state. Most systems require elaborate cryogenic facilities to minimize vibrations and keep qubits at temperatures colder than deep space. Quantum computers are still far from operating at commercial scale.
Nevertheless, big tech players, including International Business Machines Corp. IBM-N, Google GOOGL-Q, Microsoft Corp. MSFT-Q and Amazon.com Inc. AMZN-Q have invested heavily toward building the computers. So have startups, including United States-based Quantinuum, IonQ Inc., and Rigetti Computing Inc., and at least six Canadian groups, including Photonic and Xanadu.
So far, no single approach has emerged as the front-runner.
“There’s still widespread enough interest in quantum computing – and yet it’s far enough in the future – that people are willing to invest money in lots of different ideas in hopes that one will win out,” says Daniel Gottesman, a quantum physicist at the University of Maryland.
Canada: quantum trailblazer
Canada was an early mover in quantum, in part because of timely bets by one of the country’s most successful entrepreneurs and by public sector funders.
Research in Motion Ltd. co-founder Mike Lazaridis funded the creation of the Institute for Quantum Computing (IQC) at the University of Waterloo in 2002 (later supported by government funding). In 2013 he established Quantum Valley Investments, which has backed local startups.
Waterloo, Ont., is also home to Open Quantum Design, a federally funded not-for-profit IQC spinoff working to develop an open source quantum computer to help academic and industry groups commercialize their ideas.
British Columbia’s Lower Mainland is another Canadian quantum hot spot. Burnaby-based D-Wave, founded in 1999, has long billed itself as building the world’s first commercial quantum computer maker. The caveat is that its machines exploit a particular effect, quantum annealing, that narrows the kinds of problems they can solve.
The region is also home to the University of British Columbia’s Stewart Blusson Quantum Matter Institute, quantum software maker 1QBit and Photonic.
Stephanie Simmons, founder and chief quantum officer of Coquitlam, B.C.-based quantum computer developer Photonic Inc.Tijana Martin/The Globe and Mail
Photonic’s founder, Stephanie Simmons, grew up in the Waterloo area and decided to devote her life to quantum computing after learning about IQC. But when it came time to set up her company, she chose the Vancouver area, believing it was a great place to recruit talent. Photonic’s quantum computer uses silicon spin qubits – electrons caged inside a silicon chip and linked by light – an approach she says can integrate with telecommunications infrastructure.
Elsewhere in Canada, the University of Calgary has partnered with the Alberta government and industry to create its Quantum City technology hub, while the University of Toronto’s Creative Destruction Lab (CDL) accelerator has helped get quantum companies up and running.
A leading example is Xanadu, founded by Australian-born Christian Weedbrook, who came to Toronto in 2010 to complete his postdoctoral research and stayed to launch his startup. Xanadu’s technology utilizes qubits coded into flashes of laser light – an approach that lessens the demand for cryogenic cooling.
Meanwhile, one of the country’s most active quantum areas is the University of Sherbrooke, in Quebec, which opened an IQC-inspired Institut quantique in 2016. It has helped to launch several startups, including quantum computer maker Nord Quantique, whose technology is based on microwaves that bounce around within ultracold aluminum cavities.
The biggest foreign player here is IBM, which operates an experimental-scale quantum computer in Bromont, Que. The Australian-born head of IBM’s quantum computing initiative, Jay Gambetta, did postdoctoral work at IQC.
Dany Lachance-Quirion, left, and Chloé Gauvin-Ndiaye discuss a their quantum computing project at Nord Quantique’s lab in Sherbrooke. Nord Quantique is a quantum computer maker whose technology is based on microwaves that bounce around within ultracold aluminum cavities.
Evan Buhler/The Globe and Mail
Progress and prudence
Like a juggler balanced on a high wire, the biggest challenge for any quantum computer is that one or more of its qubits will topple out of their quantum state and cause an error. To guard against this, quantum systems must be “fault tolerant.” This means dedicating many more qubits to keep a check on those doing the actual calculating.
What has changed is the emergence of new strategies for correcting errors that require fewer qubits than once anticipated. This has raised hopes that commercially useful systems are now closer to becoming reality, shifting the sector from looking like a collection of science projects to an industrial wellspring.
Mr. Weedbrook, founder of Xanadu, says his company will open a quantum data centre by 2029.Fred Lum/The Globe and Mail
“Now the exciting part – and why this is very real – is the acceleration of the cycles of learning from an engineering perspective,” says Jerry Chow, director of quantum systems for IBM, who is based in Yorktown Heights, N.Y.
As an example, IBM said in June that its next major milestone is a quantum computer called Starling that it aims to complete by 2029. The machine will consist of 10,000 “physical” qubits that work collectively to tamp down errors and operate as 200 “logical” qubits when performing calculations. While this is still modest compared to what developers envision will be needed to spark a true quantum revolution, it is enough to explore early niches in which a quantum system may offer advantages over conventional computers.
Other companies are operating on similar timelines. Xanadu’s Christian Weedbrook says his Toronto company will open a quantum data centre by 2029 with hundreds of fault tolerant qubits “solving big problems.”
Specialists who work in the field tend to say that the scientific challenge of creating a quantum computer has now evolved into an engineering problem more directly related to bringing the technology to fruition. At Xanadu, Rafal Janik takes it a step further, saying the challenge will soon be about manufacturing hardware at the scale needed for commercial deployment.
But as progress continues, it’s also the case that conventional systems powered by AI are improving too and increasingly making gains that may reduce some of the need for quantum systems. One case in point: Montreal-based startup Kothar Computing last month unveiled a platform that it says can simplify and speed up numerical simulations of the kind that quantum computers are still far from tackling effectively.
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Nevertheless, quantum computers can’t be ignored, because they have the potential to render conventional cybersecurity obsolete.
Many experts fear encrypted data is already being harvested for later unlocking by quantum computers. That poses “a significant threat to the global financial system,” the Basel-based Bank of International Settlements said in a July report. In 2024, Canada’s Office of the Superintendent of Financial Institutions issued a technology risk bulletin on quantum readiness to this country’s financial institutions.
Mattia Montagna, CEO and co-founder of Toronto-based Quantum Bridge Technologies Inc. notes that the typical turnaround time for a large organization to upgrade its digital network is six to seven years. Even if there’s only a slim chance that a quantum computer will break RSA encryption within that period, the implications are immediate.
“Regulation will probably impose quantum security as a requirement by 2031-2032,” he says. “If you’re renovating anything that needs to survive beyond that point, it should be quantum safe.”
Beyond qubits: quantum sensors
It’s hard to say when quantum computers will reach commercial scale, but a new tech sector is already blooming. The same physics and engineering needed to manipulate qubits is suited to other purposes. Quantum sensors – devices that can discern tiny effects and signals in the environment – are leading the nascent quantum economy.
One example can be found at SBQuantum. The Sherbrooke startup has developed a magnetometer that uses quantum effects in synthetic diamonds to measure the direction and orientation of the Earth’s magnetic field. The device is more compact and versatile than conventional hardware and usable in space.
When CEO David Roy-Guay founded SBQuantum in 2017, he says, “my dream was to get quantum technologies out into the field. Now we’re at that point.”
Next year, the company’s hardware will be launched into orbit as one of three finalists in the U.S. government’s MagQuest Challenge. The goal is to find cheaper, better ways to measure and update a global model of the Earth’s magnetic field – a model used by navigation systems and smartphones.
If the device proves itself, it will bolster SBQuantum’s goal to provide commercially or scientifically relevant magnetic data for customers operating in space, underwater, at mining sites or elsewhere.
SBQuantum developed a magnetometer that is more compact and versatile than conventional hardware, and usable in space.ALEXIS AUBIN/The Globe and Mail
Meanwhile, Qubic Technologies, co-located in Sherbrooke and Waterloo, is exploiting quantum information principles for communications and surveillance.
Among its applications is a form of quantum radar that can spot interlopers without revealing its own presence. This is different from conventional radar systems, which blast out powerful and easily spotted microwave signals to pick up reflections from distant objects.
Qubic’s technology generates distinct, complementary pairs of photons – particles of microwave energy light. One particle per pair is recorded at the source and one is sent out. Normally, a single returning photon would be lost in the noise. Qubic’s system can compare those photons with the ones it recorded to identify matching pairs.
The company is working with the Department of National Defence to develop the technology for Arctic surveillance. It’s an example of quantum technology’s “dual-use” or utility for commercial and military buyers. This is one reason why many countries are committing billions to develop their own quantum capabilities.
David Roy-Guay, CEO and co-founder of SBQuantum, prepares a drone which will be deployed to conduct advanced magnetic surveys for the mining industry.ALEXIS AUBIN/The Globe and Mail
The amazing quantum race
The U.S. Defense Advanced Research Projects Agency, is conducting a high-stakes competition to determine if quantum computers are the real deal. Canada is well-represented.
DARPA in April announced that three Canadian companies – Xanadu, Photonic and Nord Quantique – were among 18 groups from five countries that qualified for the Quantum Benchmarking Initiative (QBI). Another group led by Hewlett Packard Labs includes Vancouver software developer 1QBit.
It’s a novel program from the agency that funded the creation of GPS and the internet that challenges participants to prove by 2033 that their machines will work at industrial scale. Participants in the first six-month stage will get US$1-million each if DARPA believes their plans are plausible. Those groups that succeed have a year to describe their research and development plans, and qualify for another US$15-million.
Independent verification and validation teams from U.S. federal labs and research institutions will then test their technology. That’s where the real money is. DARPA could pay up to US$300-million per winner – if the winner raises matching funds. That shouldn’t be difficult: Finishers will be seen as front-runners in the global quantum race.
An artist’s concept of manned and unmanned combat aerial vehicles operating together using technology from DARPA’s Artificial Intelligence Reinforcements program. In April, DARPA announced that three Canadian companies qualified for the Quantum Benchmarking Initiative.Colie Wertz/DARPA
Making it into QBI is a big deal but puts Canadian participants in an awkward position. The brightest minds in the U.S. government will poke and prod them – as will teams from research institutes tasked by DARPA to help, housed at universities that hope to become quantum centres in their own right.
“The U.S. has guaranteed they will have enduring, extensive technical and business insights into the winning quantum technologies and how best to control” them, says Photonic’s Stephanie Simmons. “Canada should have its own separate diligence on what is up from down in quantum so they can place the adequate investment.”
Investors take the quantum leap
D-Wave’s stock closed at US$10 a share on its first day of trading on the New York Stock Exchange in August, 2022. By early 2023 D-Wave faced a cash crunch, and one year ago it was worth less than US$1 and at risk of being delisted. Now, D-Wave stock trades in the mid-teens and the company is flush.
Quantum stocks took off in late 2024 thanks to advances across the sector. D-Wave and its peers that went public during the COVID-19 pandemic by merging with listed special purpose acquisition companies took advantage, selling stock to eager investors. By June 30, D-Wave had US$819-million cash, up from US$41-million a year earlier.
The hoopla doesn’t relate to its financial results: Revenue from D-Wave’s core business of selling access to its machines was just US$1.24-million in the second quarter. It lost US$167.3-million. “People who are investing in quantum stocks are investing in the promise,” D-Wave CEO Alan Baratz told Barron’s in August.
The quantum craze has the earmarks of a bubble. “We believe retail investors are making bets in the quantum space, but it’s likely they are doing so without a deep understanding of the technology, but rather indications that meaningful advances may be on the horizon,” says Margaret Wu, lead investor with Toronto-based Georgian Partners, an investor in privately-held Xanadu.
It’s also made it trickier for private companies to fundraise with such loftily valued public companies to compare with. While there are more quantum-curious private investors, “it’s often difficult, particularly in deep tech, to find one lead anchor for a syndicate to rally behind,” Ms. Wu says.
Canada’s quantum computing developers have drawn a range of investors, including homegrown early stage funds Real Ventures, Golden Ventures, Inovia Capital and Georgian and big U.S. investors including Microsoft, Goldman Sachs and Jeff Bezos. Canada’s pension funds have been active: the Public Sector Pension Investment Board was D-Wave’s largest investor until recently. Ontario Municipal Employees Retirement System has backed Xanadu and B.C. Investment Management funded Photonic.
Ms. Wu warns “private capital alone will likely be insufficient to support enough approaches to have this technology come to fruition, particularly given its complexity.” Dozens of governments have collectively committed tens of billions of dollars to the space already.
And while there have been some takeovers, Ms. Wu expects big tech companies to snap up promising names “once they decisively figure out some of quantum’s technical hurdles, such as fault tolerance.”
Government responseOpen this photo in gallery:
Minister of AI and Digital Innovation Evan Solomon says launching a more robust quantum strategy is a ‘top priority’ for the Liberal government, which is set to announce a new plan this fall.Sean Kilpatrick/The Canadian Press
In addition to funding $1-billion-plus in quantum research since 2012, the federal government and DND have both launched quantum strategies this decade. The new federal Bureau of Research, Engineering and Advanced Leadership in Innovation and Science (Borealis), announced in June, will also support an array of military-focused technologies.
DND launched its strategy in 2021 and updated it two years later, with a focus on supporting quantum-enhancing radar and LIDAR detection technology, quantum algorithms for defence applications and quantum-secure communications networks. The federal government’s $360-million strategy, launched in 2023, has three missions: to make Canada a leader in developing, deploying and using quantum computing to benefit domestic industry, governments and citizens; to keep communications networks secure; and to support adoption of quantum sensing technologies.
But the federal strategy is already outdated and overly focused on funding research, says Photonic founder Stef Simmons. She chairs the National Quantum Strategy Advisory council, which has pressed the government for up to $2-billion in new funding, arguing Canada risks falling behind France, Germany, Japan, Britain, the U.S., China and others, which have each pledged billions to quantum.
The council is calling for up to US$1-billion to match DARPA’s program for Canadian participants that advance through the U.S. competition – which could include Ms. Simmons’ company. It asks for $420-million to fund quantum science, innovation and technology ecosystem centres in B.C., Alberta, Ontario and Quebec; $160-million for research funding; $290-million for quantum cybersecurity transition across communication and authentication channels, and $100-million for a quantum incubator.
Open Quantum Design CEO Greg Dick agrees Canada needs to refocus to benefit from its historically strong position in quantum. To remain at the vanguard, “there’s some urgency to reinvest and figure some things out,” he says.
Mr. Solomon says launching a more robust quantum strategy is “a top priority” for the Liberal government. He won’t reveal his plan, which he said will launch this fall, but hinted it will expand “significantly” upon the 2023 strategy, put Canada on par with other countries and focus on developing domestic dual-use technologies. That “should count toward our commitments to NATO.”
And while past Canadian industrial strategies have heavily supported foreign giants operating here, Mr. Solomon says the program will be “significantly more targeted toward our industry and will work with our own champions” to ensure they stay here.