In the spacious remains of a vacant Campbell Soup factory located in Toronto’s west end, the Canadian minister of artificial intelligence and digital innovation revealed the largest investment by the federal government in local technology, which has the potential to transform artificial intelligence, healthcare, and various critical sectors of the economy.
Amid the ongoing Canada-U.S. trade tensions and U.S. President Donald Trump’s repeated assertions threatening Canadian autonomy, Evan Solomon emphasized national pride while announcing a substantial $195 million in repayable federal support for Xanadu Quantum Technologies, a Toronto-based company.
“This marks a fantastic day for Canada, for Xanadu, and I believe for science globally,” he stated on Friday. “It exemplifies what Canadians excel at: We create.”
Solomon expressed that Canada is poised to take “significant risks” in this pursuit.
“We are committed to not only tackling the world’s most pressing issues but also to being the best globally…. We’re going to do it boldly, without fear.“
Established in 2016, Xanadu specializes in developing software and quantum computers that utilize light rather than electricity. Unlike conventional computers that produce heat as electricity flows through metal wires, Xanadu’s chips manipulate light particles without generating electrical resistance.Â
Evan Solomon, Canada’s minister of artificial intelligence and digital innovation, announces $195 million in repayable federal funding for Toronto-based Xanadu Quantum Technologies on Friday in Toronto. (Submitted by Xanadu Quantum Technologies)
While many quantum computers necessitate intense, energy-draining cooling systems to function, Xanadu’s devices primarily operate at ambient temperature.
In June of last year, the company revealed a significant chip that can produce error-resistant photonic qubits, the fundamental unit of information in quantum computing.
“Nations that successfully develop a fault-tolerant quantum computer will possess the capability to compromise cybersecurity,” Solomon warned.
“This is why China, the U.S., and Europe are in a competitive race. The top companies are right here in Canada, and the intellectual property resides here. Therefore, from a national security perspective, this technology is critically important.”
‘Like riding a rocket’
The announcement took place in a former Campbell’s Soup factory in Toronto, where Xanadu intends to establish advanced manufacturing for its fault-tolerant utility-scale photonic quantum computers. The 158,000-square-foot facility is projected to cost $893 million and create 275 jobs.
“If digital computing is like riding a horse, then quantum computing is akin to riding a rocket,” Solomon remarked. “It’s exponentially faster.”Â
This year, the federal government initiated its $360-million National Quantum Strategy. The $195-million repayable financial commitment to Xanadu marks its largest single investment in quantum technology manufacturing to date.Â
Xanadu CEO Christian Weedbrook states that federal funding will enhance the company’s presence in Canada. (Submitted by Xanadu Quantum Technologies)
Friday’s funding commitment ranks among the most significant single-company investments in Canada’s technology sector. One of the largest was made in 2024, when the government issued a $2.14-billion loan to Ottawa’s satellite operator Telesat.
In March, Xanadu announced ongoing discussions with the federal government and the province of Ontario regarding up to $390 million in combined financial assistance to develop advanced semiconductor and photonic manufacturing capabilities in Canada.Â
Christian Weedbrook, CEO of Xanadu, mentioned on Friday that the potential $195 million funding is still under negotiation with the Ontario government, characterizing these discussions as “final negotiations and discussions.”
The company clarified that Friday’s announcement represents the entirety of Ottawa’s contribution. Unlike standard loans, there is no specified repayment timeline. The funds will be sourced from Innovation, Science and Economic Development Canada’s Strategic Response Fund, which awarded $40 million to Xanadu in 2023.Â
‘Obligations to keep the jobs here’
Weedbrook, originally from Australia, expressed that the funding will strengthen his company’s operations in Canada.
“A facility that once nourished Canadians will now contribute to the technology of the future,” he remarked. “Our current location will enable us to conduct most of this work right here in Canada, in Toronto.”
In May, the U.S. government announced an investment of roughly $2 billion in nine quantum enterprises.Â
Xanadu is also expanding its influence in the United States. In 2025, it formed partnerships with the U.S. Department of Defense and the U.S. Air Force Research Laboratory. Additionally, the company collaborates with major U.S. corporations such as Lockheed Martin and chipmaker AMD.
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University of Calgary to house quantum defence hub to develop tech for armed forces
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Xanadu CEO on Canada’s quantum future
“I believe there is a responsibility to retain jobs here for a considerable period,” stated Amy Karam, a business consultant and fellow at the Canadian Global Affairs Institute.
“Having the government involved in business decision-making can foster a more supportive environment for companies to remain in Canada. Merely providing funding and conducting research is no longer sufficient.”
Xanadu intends to name its 158,000-square-foot photonics hub, depicted here in a digital rendering, after the acclaimed Christopher Nolan film, Inception. (Submitted by Xanadu Quantum Technologies)
In March, Xanadu became dual-listed on both the Toronto Stock Exchange and the Nasdaq, elevating the company’s visibility among U.S. investors alongside well-known names like Apple, Microsoft, and Nvidia.
“Retaining companies here presents a significant challenge,” Karam acknowledged.
“According to the Global Innovation Index, we are experiencing a notable decline,” she pointed out.
“We must take decisive action to restore our global technology leadership, and I trust that this government recognizes this, understands it, and is taking appropriate measures.”
Matthew da Mota, a senior policy researcher at the Canadian SHIELD Institute, emphasized the need for vigilance. The Toronto-based think tank, founded by BlackBerry co-founder Jim Balsillie, aims to modernize policies regarding technology and national security while protecting Canadian intellectual property.
From creating innovative pharmaceuticals to enhancing cybersecurity, da Mota cautioned that Xanadu’s advancements could pose risks if misused.
The IBM Quantum System Two quantum computer is depicted during its inauguration at the IBM-Euskadi Quantum Computational Center in the Basque Foundation for Science Ikerbasque headquarters in San Sebastian, Spain, on October 14. (Ander Gillenea/AFP/Getty Images)
“It enables extremely rapid processing and computation, allowing multiple operations simultaneously in ways that traditional computing cannot achieve. It has the potential to undermine existing encryption,” he explained.
“This poses significant risks for Canada and its allies, yet it also represents a powerful asset for long-term cybersecurity.”
Google claims to have overcome a significant hurdle in quantum computing with its new Willow chip, solving a computational issue in five minutes that would take classical computers an impractical length of time.
In a conversation with media, Solomon minimized the risks associated with the government making a concentrated investment in a single pioneering firm within an emerging technological field.
“If we are not at the forefront with Canadian firms in quantum computing, we will face future vulnerabilities,” he asserted.
“It is crucial for this nation from a security, scientific, and economic standpoint to ensure that the leading companies are present in Canada.”