Quantum Revolution: Is this the Canadian Century?

Why the Ontario region may be the new Silicon Valley on steroids.

Many of our readers would have heard that quantum computers will revolutionize the computing industry thanks to their ability to harness the computational power of nature. Quantum systems (think atoms or particles) can be leveraged to solve hard game-changing computational problems that were previously thought to be impossible to solve in a meaningful time frame. In our new ‘quantum Revolution’ series we will dive deep into the leading and emerging quantum computing hubs around the globe. Today, we’ll be covering Canada. In our view, a potential quantum superpower is quietly in the making.

To help the non-technical reader get a snapshot of quantum technology, McKinsey & Company recently published a report entitled ‘The next tech revolution: quantum computing’ that you can download for free. At Zaiku Capital, we’re excited about the potential of quantum algorithms for the finance industry & for the purposes of portfolio optimization. In fact, we are currently trying to ‘quantise’ the Kolmogorov IPO Score originally developed by our team at Kähler Insights! :) Wall Street giant Goldman Sachs seems to also be taking quantum tech seriously by recently stating that they are “ramping up research in quantum finance”.

The Rise of Canada as a Quantum Powerhouse

Canada’s journey to become a quantum powerhouse can be traced back to the late 90s and early 2000s, when BlackBerry founder Mike Lazadiris first bankrolled the creation of the Perimeter Institute for Theoretical Physics in 1999.


Perimeter Institute is a leading centre for scientific research, training and educational outreach in foundational theoretical physics. Founded in 1999 in Waterloo, Ontario, Canada, its mission is to advance our understanding of the universe at the most fundamental level, stimulating the breakthroughs that could transform our future. Perimeter also trains the next generation of physicists through innovative programs, and shares the excitement and wonder of science with students, teachers and the general public.


Perimeter is committed to building an equitable, diverse, and inclusive environment. We acknowledge that we all have a long way to go to reach these ideals – as an institute, and in physics more broadly. Through initiatives like the Simons Emmy Noether Fellows program, Inspiring Future Women in Science conference, and the volunteer-led Inclusive Perimeter Platform, we work toward change.


Perimeter’s vision is to create the world’s foremost centre for foundational theoretical physics, uniting public and private partners, and the world’s best scientific minds, in a shared enterprise to achieve breakthroughs that will transform our future.


Foundational theoretical physics is a cornerstone of modern science, on which so much else rests. It is perhaps the highest-impact, lowest-cost area of basic research. The field advances our fundamental understanding of the universe, with its powerful ideas seeding the technologies of tomorrow.

The launch of Perimeter was followed by the creation of The Institute for Quantum Computing (IQC):

About IQC

IQC was launched in 2002 thanks to the pioneering vision and incredibly generous personal investment of Mike Lazaridis. The BlackBerry creator understood that truly revolutionary technologies can only emerge when scientists are given the resources and intellectual freedom to pursue trailblazing research. Lazaridis had already demonstrated this passion and support for fundamental science by founding Waterloo's Perimeter Institute for Theoretical Physics, where scientists ponder the deepest questions of reality. 

Lazaridis also saw the need to transform fundamental discoveries, through laboratory experiments, into practical technologies with widespread societal impact. He recognized quantum information science as a nascent area of research that was in the midst of moving from pure theory to lab experimentation and real applications. With this in mind, he teamed with David Johnston (then president of the University of Waterloo), to establish a new, cutting-edge research facility at the university. The duo recruited Raymond Laflamme, a top quantum information scientist then working at Los Alamos National Laboratory, to turn their idea into a reality.

Lazaridis, Laflamme and Johnston knew the University of Waterloo — with its established history of scientific excellence and entrepreneurial spirit — would provide fertile intellectual soil from which this new institute could grow. They worked closely with Prof. Michele Mosca, a University of Waterloo mathematics alumnus who had recently earned his doctorate at Oxford, to establish the core group of researchers and key areas of focus. Through partnerships between the private sector, academia, and the federal and provincial governments, IQC launched in 2002 with Laflamme as its executive director and Mosca as deputy director.

Today, Canada’s quantum information technology ecosystem is one of the most mature in the world. In particular, Toronto and Waterloo are, in our view, two of the most influential quantum innovation hubs in the world. This indeed positions the Ontario region as a strong candidate with the potential to disrupt Silicon Valley’s dominance! Of course, Silicon Valley has the likes of; Google & Rigetti, and also more recently a stealth startup with UK origins called PsiQuantum that raised $215M. PsiQuantum was founded on the promise to implement a one million physical qubit photonic based quantum machine in ‘few years’.

What are the key drivers of the growth in the Canadian quantum ecosystem? Apart from heavy investment in R&D from government and private capital, we have identified the following as being important drivers:

  1. Progressive Migration Policy: Canada is one of the most progressive countries in the world when it comes to skilled migration. Two policies that we would like to highlight are:

    • Global Skills Strategy:

      Canada’s Global Skills Strategy makes it easier for Canadian businesses to attract the talent they need to succeed in the global marketplace.

      Whether recruiting professionals from around the world to train Canadian workers, or working with employers planning job-creating investments in Canada, the Global Skills Strategy provides businesses in Canada with a faster way to bring in global talent in order to scale-up and grow—creating better jobs for more Canadians.

    • Startup Visa Program:

      Canada's Start-Up Visa Program offers Canadian permanent residence to qualified immigrant entrepreneurs. Candidates can initially come to Canada on a work permit supported by their designated Canada-based investor, before qualifying for permanent residence once their business is up and running.

  2. Disruptive Startup Ecosystem: Inspiring from Silicon Valley, where startup accelerators such as YCombinator helped create a dense tech startup ecosystem. In Canada, a similar thing is happening in emerging deep-tech, with ambitious accelerators such as Creative Destruction Lab (CDL). This accelerator is taking the advantage of Ontario’s leading research in quantum information technology to foster the creation of a vibrant startup ecosystem. Moreover, some notable US born quantum startups such as Zapata Computing have a Toronto office, housing many bright international quantum researchers and engineers attracted by the opportunity to be a part of the next chapter in the history of technology.

    Recently, we’ve been noticing a sizable number of bright young European researchers choosing to move to Canada to either join CDL or a research institution in Ontario. The Matter lab, a research group led by star scientist Alan Aspuru-Guzik (Zapata co-founder), is one of the hottest destinations for young European quantum research talent. This is despite the EU having created the so-called ‘Quantum Flagship Fund’ aimed at the making the EU a quantum hub.

To sum up, the realization of a useful quantum technology with the potential to solve groundbreaking problems requires a collaborative startup environment where ethos of the ‘winners-take-all’ does not hold. The reason being is that a successful quantum implementation certainly requires multiple skills that span across multiple layers of the quantum tech stack. This therefore makes it exceedingly hard for a single company to be dominant in all these layers. However, the Ontario region’s research institutions and organisations like CDL have the foundation foster such an environment.

Quantum tech stack example diagram - credit to QuTech.

Potential to Become a Global Quantum-driven Economy

In a book entitled ‘The Canadian Century: Moving Out of America's Shadow’, the authors make the following observation:

‘‘For years Canada has lived in the shadow of the United States. No more. As the authors argue, while the United States was busy precipitating a global economic disaster, Canada was on a path that could lead it into an era of unprecedented prosperity. It won’t be easy. We must be prepared to follow through on reforms enacted and complete the work already begun. If so, Canada will become the country that Laurier foretold, a land of work for all who want it, of opportunity, investment, innovation and prosperity. Laurier said that the twentieth century belonged to Canada. He was absolutely right; he was merely off by 100 years.’’

Based on what we are seeing, we certainly believe that Canada has the potential to become a global economic superpower in field of quantum technology. A report from World’s Top Exports (WTEx) shows the current state of Canada’s exports:

Canada exported a total US$446.5 billion worth of products around the globe in 2019. That dollar amount reflects a 9.2% increase since 2015 but a -0.9% dip from 2018 to 2019.

Based on the average exchange rate for 2019, the Canadian dollar has depreciated by -3.8% against the US dollar since 2015 and retreated by -2.4% from 2018 to 2019. Canada’s weaker local currency make Canadian exports paid for in stronger US dollars relatively less expensive for international buyers.

The latest available country-specific data shows that 91.6% of products exported from Canada were bought by importers in: United States (75.4% of the global total), China (3.9%), United Kingdom (3.3%), Japan (2.1%), Mexico (1.2%), Germany (1.1%), South Korea (0.9%), Netherlands (0.9%), India (0.8%), Hong Kong (0.7%), France (0.6%) and Italy (0.5%).

From a continental perspective, 76.7% of Canada exports by value were delivered to North American countries while 11.7% were sold to Asian importers. Canada shipped another 8.9% worth of goods to Europe. Smaller percentages went to Latin America excluding Mexico but including the Caribbean (1.3%), Africa (0.9%) then Oceania led by Australia and New Zealand (0.5%).

Given Canada’s population of 37.5 million people, its total $446.5 billion in 2019 exports translates to roughly $11,900 for every resident.

The following export product groups categorize the highest dollar value in Canadian global shipments during 2019. Also shown is the percentage share each export category represents in terms of overall exports from Canada.

  1. Mineral fuels including oil: US$98.4 billion (22% of total exports)

  2. Vehicles: $61.4 billion (13.8%)

  3. Machinery including computers: $34.8 billion (7.8%)

  4. Gems, precious metals: $21.3 billion (4.8%)

  5. Electrical machinery, equipment: $13.5 billion (3%)

  6. Plastics, plastic articles: $12.7 billion (2.8%)

  7. Wood: $11.7 billion (2.6%)

  8. Aircraft, spacecraft: $11.3 billion (2.5%)

  9. Ores, slag, ash: $8.9 billion (2%)

  10. Pharmaceuticals: $8.4 billion (1.9%)

Canada’s top 10 exports approach two-thirds (63.2%) of the overall value of Canadian global shipments. Led by gold the gems and precious metals category represents the fastest grower among the top 10 export categories thanks to its 16.2% increase since 2018. In second place for improving export sales was ores, slag and ash gained 12.7% led by iron ores and concentrates. Canada’s shipments of pharmaceuticals posted the third-fastest gain in value via its 7.4% improvement.

Canada’s current top exports, noted above, have the potential to be supercharged with quantum technologies. As a country with a political leader who understands the potential of quantum technologies, as Mr. Trudeau has displayed, we wouldn’t bet against Canada becoming a quantum economic superpower! :)

A side note to fellow investors

As with past instances of hype surrounding buzzwords like AI & IoT, one must be cautious of jumping on the bandwagon & the lurking presence of FOMO when you’re pitched a ‘quantum powered’ solution. Unless the proposed solution is attempting to solve at least one of the ‘hard problems’ that cannot be solved with classical computers, any solution developed will not really contain the innovation factor. Furthermore, be aware of the difference between Noisy Intermediate-Scale Quantum (NISQ) technologies versus the holy grail of quantum technology breakthroughs that are needed in order to solve non-trivial problems that only quantum technology can crack. Unfortunately, a lot of companies seeking VC funding or selling quantum solutions don’t make it clear enough that they are pursuing the NISQ approach to market. It is widely accepted that we are currently in the NISQ era, as described by Professor John Preskill (recently hired by Amazon) in his influential article entitled ‘Quantum Computing in the NISQ era and beyond’.

One method of appraisal that can be deployed when being pitched to by a quantum hardware company is to use the extended ‘DiVincenzo criteria’ (download here and here) to help you asses the investment risks. Of course, further due diligence drawing upon an expert researcher in the field is a wise measure to take.

Disclaimer: Any opinions, newsletters, research, analyses, prices, projections or other information offered by ZAIKU CAPITAL is provided as general market commentary, and does not constitute investment advice. ZAIKU CAPITAL will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.  ZAIKU GROUP LTD.

Disclosure: We have no positions in Canadian equities, and no plans to initiate any positions within the next 7 days.