Canada’s Big Bet on Quantum Computing
The Canadian government recently formalized its commitment to the quantum computing sector with the launch of Phase 1 of the Canadian Quantum Champions Program (CQCP), under which it has committed up to C$92 million (C$23 million each), to four Canadian-headquartered quantum computing companies to accelerate the development of industrial-scale quantum computers capable of solving real-world problems across industries in a variety of commercial and defence applications. This initiative forms the first pillar of a $334.3-million, five-year commitment set out in the 2025 Federal Budget to strengthen Canada’s quantum ecosystem, retain key intellectual property and talent in Canada and move quantum technologies from laboratory demonstrations toward real-world use. While the CQCP has been compared to the Quantum Benchmarking Initiative being run by the United States Defense Advanced Research Projects Agency (DARPA), the Canadian program represents a far more significant funding commitment for the participant companies. This commitment also reinforces several key trends that continue to drive private capital and public policy in the defence technology (DefTech) sector.
Quantum in Canada's Defence Strategy
In our recent blog posts, Private Equity and Venture Capital Investors Showing Renewed Interest in the Defence Industry, and Policy, Dual-Use and DefTech Drive a New Era for Private Capital in Defence, we noted that two of the catalysts driving renewed interest in defence-related investment is the advent of supportive government policy shifts we have not seen in generations and that this type of investment no longer focuses exclusively on traditional heavy manufacturing, but now encompasses AI, aerospace, communications, cybersecurity, software and other dual-use technologies. Our previous blogs highlighted quantum computing as a target area for funding and innovation in relation to Canada's Defence Industrial Strategy. The CQCP is an early example of the recently announced transformative government policy commitments moving into implementation:
- Sovereign capability: The program is designed to anchor companies, talent and IP in Canada—and to ensure they remain Canadian-headquartered—at a time when international competitors are actively seeking to attract quantum firms and researchers.
- Milestone-based support: Funding is tied to advancing fault-tolerant, industrially relevant systems, supported by an independent benchmarking platform led by the National Research Council of Canada, signaling a shift from supporting purely academic research toward a clear objective of funding scalable, deployable infrastructure.
- Integration into defence and security policy: Quantum computing is expressly framed as a strategic technology with implications for secure communications, pattern recognition and signal processing, which is consistent with its inclusion in Canada’s broader Defence Industrial Strategy and the Defence Investment Agency's mandate to prioritize Canadian technology and equipment.
In addition to the CQFP, is Canada's Department of National Defence and Canadian Armed Forces' Quantum Science and Technology Strategy pursuant to which the DND is integrating quantum technologies, focusing on national security, secure communications (quantum key distribution), advanced sensing and AI enhancement, aligning with the broader Government of Canada quantum strategy, and collaborating internationally through NATO's Quantum Strategy.
Looking Ahead
As we have been discussing in our blogs, the rising prominence of dual-use technologies is reshaping how investors view the defence sector as an asset class and quantum computing sits squarely within this trend. Potential applications range from optimization, materials discovery and financial modelling to next-generation encryption, secure communications and intelligence capabilities. By backing multiple technical approaches through the initial $92 million commitment and tying public funding to industrial relevance, the CQCP is sending clear and sustained policy signals, ultimately creating a more visible pipeline of opportunities across the capital structure for investment funds, strategic partners and lenders. As Canada’s quantum computing and broader DefTech ecosystem continues to mature, we expect to see increasing alignment between public programs and private capital and we will remain closely engaged with market participants as they navigate and capitalize on this evolving landscape.
To discuss recent developments and emerging opportunities in the defence industry, please contact one of the authors.
