The federal government is turning to a group of established innovation and research programs to deliver its $360-million National Quantum Strategy, designed to capitalize and extend on Canada’s early breakthroughs in the disruptive technology sector. Here’s what you need to know.

The technology: Quantum is an umbrella term for technologies with a range of potential applications, including significantly faster computers that could crack current cryptography and help discover new drugs and industrial materials. 

“We need the traditional industry, but what’s going to power our prosperity and innovation is going to be quantum, AI and cyber,” said Innovation Minister François-Philipe Champagne Friday morning, announcing the strategy at Waterloo’s Perimeter Institute for Theoretical Physics.

The context: In 2019, a consortium of universities and industry representatives called on Ottawa to fund a $460-million national plan for the technology, including money for research, government contracts and education. The Liberals ultimately pledged $360 million over seven years in the April 2021 budget, then conducted a series of consultations on the program’s design.

Federal departments had already begun to roll out parts of the strategy before Friday’s announcement. In March 2022, the National Sciences and Engineering Council of Canada opened applications for $137.9 million in quantum-specific grants via two existing programs. On Friday, Champagne announced how the government plans to distribute the rest of the money it’s pledged.

Crunching the numbers: The strategy allocates $169 million to turn quantum discoveries into salable products and services. 

The National Research Council of Canada plans to spend $50 million over seven years on projects that pair its scientists with academics and businesses to develop new hardware, algorithms and sensors. The federal government will make $70 million in financing for quantum firms available through its network of regional development agencies; the ones for British Columbia, the Prairies and southern Ontario began taking bids last year, with Quebec also due to split a share of the money.

Ottawa is also looking to fund commercialization through two long-standing pillars of its innovation agenda. Startup procurement program Innovative Solutions Canada (ISC) will receive $35 million over seven years to spend on contracts and grants for companies that propose quantum-based answers to government departments’ needs. Launched in December 2017, the program was meant to address long-standing complaints from small tech firms that it was too difficult to sell to the public sector. While ISC has fallen far short of its spending commitments in past years, it’s already in the quantum business, awarding $2.1 million in contracts to four firms thus far.

The strategy will also direct $14 million to the Global Innovation Clusters, formerly known as superclusters. These non-profits are consortia of small firms, multinationals and post-secondary institutions that facilitate industrial R&D projects. Ottawa renewed the program with $750 million in fresh capital in the April 2022 budget, but has also tagged in the clusters in its plans for other disruptive tech, including the $125-million commercialization mandate of its AI strategy. 

Elsewhere, Vancouver-headquartered non-profit Mitacs will receive $40 million to organize industrial work placements for post-secondary talent. And Ottawa is standing up a Quantum Advisory Council, mirroring the one it created to advise it on AI, which will provide input on the development and application of the technology. 

Quantum diplomacy: “Canada invested early in its quantum R&D sector, and it’s been growing dramatically for decades,” noted the council’s newly appointed co-chair Stephanie Simmons, a Simon Fraser University researcher and chief quantum officer at Vancouver startup Photonic. The quantum strategy also gives the country a basis to work with other nations pursuing developments in the field, she said. 

As The Logic first reported, Canada was among several OECD countries that participated in discussions on quantum cooperation hosted by the U.S. in May 2022. The U.S.’s 2018 National Quantum Initiative Act allocated US$1.1 billion over four years to the field, and in May 2022 President Joe Biden ordered federal agencies to cooperate on a national strategy. The Chinese government is reportedly spending billions.

What’s missing: Canada’s national strategy doesn’t include funding for growth-stage domestic quantum firms looking to scale up, as money floods into the field. But the government has used its flagship Strategic Innovation Fund to back such companies, including $40 million for D-Wave, a Burnaby, B.C.-based early mover, and $21 million for quantum startups in the Kitchener-Waterloo region. The Business Development Bank of Canada’s Deep Tech Venture Fund has invested in Toronto’s Xanadu, which is building its own supercomputer.

“The time is now for businesses and the public sector to explore, adopt and incorporate quantum technology into operations,” said Allison Schwartz, D-Wave’s vice-president of global government relations, adding that the firm is looking to work with Ottawa on “efforts to accelerate adoption of current quantum technology, train the quantum workforce of tomorrow, and advance the continued release of quantum hardware and software innovations to expand capabilities and promote use.” 

Some firms have also pushed policymakers to set up a quantum sandbox, where firms could develop and test real-world, immediately useful applications for the technology.