Old soup factory takes on new high-tech life as quantum computing firm gets $195M federal boost

Jeff Lagerquist · CBC News

· Posted: Aug 29, 2026 12:30 PM EDT | Last Updated: 7 minutes ago

In the echoey void of a gutted Campbell Soup factory in Toronto's west end, Canada's minister of artificial intelligence and digital innovation announced the federal government's biggest bet to date on homegrown technology that could revolutionize artificial intelligence, medical science and a host of other key sectors of the economy.

Against the backdrop of the Canada-U.S. trade war, and U.S. President Donald Trump's frequent threats to Canada's sovereignty, Evan Solomon leaned heavily into patriotism as he announced $195 million in repayable federal funding for Toronto-based Xanadu Quantum Technologies.

"This is absolutely a great day for Canada, for Xanadu, and I think for science around the world," he said on Friday. "It shows what Canadians do best: We build."

Solomon said Canada is going to take "big swings" in that endeavour.

"We are going to not just make a bet on solving the biggest problems in the world, and being the best in the world.... We're going to do it big, fearlessly."

Founded in 2016, Xanadu builds software and quantum computers powered by light instead of electricity. Unlike traditional computers that generate heat as electricity moves through metal wires, Xanadu's chips guide particles of light without electrical friction. 

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 other quantum computers require aggressive, power-hungry cooling to work, Xanadu's units largely operate at room temperature.

Last June, the company unveiled a breakthrough chip capable of generating error-resistant photonic qubits, the basic unit of information for quantum computers.

"The countries that will have built what's called a fault-tolerant quantum computer would have the capacity to break cybersecurity," Solomon said.

"This is why China, the United States, Europe, everyone's racing. And the best companies are right here in Canada, and the IP is in Canada. So, from a sovereign national security point of view, this technology is absolutely critical."

'Like riding a rocket'

Xanadu held the announcement inside a former Campbell's Soup factory in Toronto, where the company plans to set up advanced manufacturing for its fault-tolerant utility-scale photonic quantum computers. The 158,000-square-foot facility is expected to cost $893 million and employ 275 workers.

"If digital computing is like galloping on a horse, quantum computing is like riding a rocket,"  Solomon said. "It's that much quicker." 

In 2023, the federal government launched its $360-million National Quantum Strategy. Friday's $195-million repayable financing pledge to Xanadu represents its largest single financial commitment to manufacturing quantum technology. 

Xanadu CEO Christian Weedbrook says the federal money will bolster the company's presence in Canada. (Submitted by Xanadu Quantum Technologies)

Friday's announcement ranks among the government's top single-company investments in Canada's tech sector. One of the largest was in 2024, when the government provided a $2.14-billion loan to Ottawa-based satellite operator Telesat.

In March, Xanadu announced negotiations with the federal government and the province of Ontario for as much as $390 million in combined financial support to establish advanced semiconductor and photonic manufacturing capabilities in Canada. 

Xanadu CEO Christian Weedbrook said on Friday that up to $195 million in funding is "still being discussed" with Ontario's government, describing the talks as "final negotiations and discussions."

The company said Friday's announcement represents Ottawa's full share. Unlike a traditional loan, there's no fixed date for repayment. The money will come from Innovation, Science and Economic Development Canada's Strategic Response Fund, which provided $40 million to Xanadu in 2023.

'Obligations to keep the jobs here'

Weedbrook, who is originally from Australia, says the money will bolster his company's presence in Canada.

"A building that once fed Canadians will now help the technology of the next generation," he said. "Where we are today will allow us to do most of this work here in Canada, in Toronto."

In May, the U.S. government agreed to invest about $2 billion US in nine quantum companies.