Ottawa funds a Toronto quantum plant while Xanadu's packaging stays offshore

Xanadu on Friday received a C$195 million repayable loan from Canada’s federal government to build a photonics manufacturing facility in Toronto.

The quantum computing company still outsources most of the chip packaging and assembly to contractors in other countries.

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Xanadu signed a definitive agreement for the funding, which is a repayable contribution through Innovation, Science and Economic Development Canada’s Strategic Response Fund, the successor to the Strategic Innovation Fund.

The loan is for the establishment and operation of the facility over the next five years, and the company will have to make a significant co-investment of its own.

The C$195 million is about half of the up to C$390 million Xanadu has been seeking from both Ottawa and the Ontario government.

The request is part of Project OPTIMISM, expected to cost C$893 million in total and create up to 275 highly skilled jobs.

According to a press release from Xanadu, the federal commitment is the largest government investment in quantum manufacturing in Canadian history. CEO Christian Weedbrook said he hopes Ontario money will follow, but he had no firm update on those talks.

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