TORONTO — The federal government is putting up hundreds of millions of dollars to help four Canadian quantum computing firms to develop one of the technology’s key building blocks, and keep them in the country long term.

The companies selected for the Canadian Quantum Champions Program (CQCP) will receive up to $23 million each in initial funding. Ottawa is promising as-yet undisclosed further sums if they show that their technology can perform as predicted.

AI Minister Evan Solomon announced the new government scheme in Toronto on Monday.

The CQCP fulfills part of the recommendations of the federal Quantum Advisory Council, which, as The Logic first reported, has called for Ottawa to commit nearly $1 billion to match the U.S. Defense Advanced Research Projects Agency’s (DARPA) Quantum Benchmarking Initiative.

Three Canadian companies—Sherbrooke, Que.-based Nord Quantique, Coquitlam, B.C.-based Photonic and Toronto-based Xanadu—are among the 11 firms that made the second round of the U.S. program. DARPA could pay each of them up to US$316 million if they can show that their chosen approach to quantum computing can solve real-world commercial and industrial problems at a reasonable cost by 2033. Most of the money is available at the third and final phase, giving firms an incentive to stay in the program. 

The three firms in the DARPA program will all be part of the Canadian version, alongside Montreal-based Anyon Systems. They must demonstrate they have a path to produce a logical qubit, the basic unit of computation in a useful quantum machine. 

Ottawa isn’t picking a single winner from the quantum computing field, Solomon said. The CQCP will give “Canadian companies the runway to compete globally, but [do] it from home,” he said, adding that firms in the program will have to remain headquartered in Canada.

Solomon and industry executives in Canada had expressed concern that the U.S. could use the DARPA program to make quantum computing firms move across the border. States like Illinois and New Mexico have also been courting companies with new facilities and funding.  

Internationally, firms like PsiQuantum and IonQ have raised billions from private and public markets. “It really is an arms race,” said Christian Weedbrook, CEO of Xanadu, which hosted the announcement Monday.

The CQCP program is “extremely important to ensure that we are staying competitive in the game,” said Nord Quantique CEO Julien Camirand Lemyre, citing the major sums the U.S. and European countries are spending on their quantum sectors and firms. “It’s proof that Canada is willing to play.”

The National Research Council of Canada will assess the progress of the companies in the CQCP, and decide whether they clear technical benchmarks to reach future rounds. Camirand Lemyre and Weedbrook said they’re not expecting that participating in both the U.S. and Canadian programs will create a lot of extra compliance work as some information will be common across both.

Long-term, Canada is betting that quantum computers will aid in the development of key sectors and technologies like drugs, batteries and energy. “You’re going to see this industry grow a lot,” Solomon said. 

Canada has an opportunity to develop key parts of the supply chain for quantum technologies, according to Lisa Lambert, CEO of Quantum Industry Canada, who cited strengths in telecommunications, photonics, microelectronics and cryogenics. The new federal program “builds on our tradition of being pioneers in the space, and putting that onramp into industrialization,” she said, “That will have ripple effects to the whole sector.”

Money for the new quantum programs will come from Ottawa’s $6.6-billion defence industrial strategy. Last month’s federal budget already allocated $334.3 million over five years for quantum technologies, including $111.2 million to “anchor” homegrown firms in Canada. That sum should cover the first phase of the CQCP.

Solomon declined to disclose how much more the federal government is prepared to spend for later stages of the program, and whether it will match the DARPA initiative dollar for dollar. “We’re going to be the best program, and we’re going to anchor these companies here,” he said, adding that the CQCP may also admit other firms that want to participate.

Xanadu has taken on US$241 million in venture capital, per PitchBook, and is set to go public in a deal that could bring in up to US$500 million in new cash. The CQCP is “a small amount compared to what we’ve raised,” Weedrook said. “But it’s the promise of what’s coming beyond this.”