The Business Development Bank of Canada is deploying $1 billion to support quantum computing, post-quantum cryptography, and dual-use deep technologies, aiming to fill funding gaps for Canadian startups beyond the seed stage.
The Business Development Bank of Canada (BDC) is making a $1 billion investment in quantum and deep technology through its $6 billion Defence Platform. Announced at the Canada Investment Summit 2026, this initiative will fund quantum computing, quantum-safe cybersecurity, post-quantum cryptography, and related dual-use technologies with national security applications. The Defence Platform itself is an established $6 billion framework for financing, investment, and advisory services for Canadian defense and dual-use tech companies, as outlined by the Office of the Prime Minister.
How the capital is allocated
The $1 billion is split between two main channels. The BDC Defence Fund will put $500 million into Canadian and allied-nation venture capital, growth equity, and private equity funds, with a focus on funds that invest heavily in Canada. The first investment from this pool went to Intrepid Growth Partners, a $525 million fund focused on AI and defense-related dual-use technology. At the same time, BDC is adding $200 million to its StrongNorth direct early-stage venture capital fund, bringing StrongNorth's total to $500 million. StrongNorth invests directly in dual-use security startups, including those working on quantum-resilient identity and cryptography.
StrongNorth recently led a $16 million Series A extension for Lastwall, a Fredericton-based company developing quantum-resilient cyber identity technology. The focus on post-quantum cryptography and quantum-safe security reflects a growing sense that, while quantum computers are not yet a practical threat to current cryptographic systems, investment in new standards and architectures is urgent. This trend is mirrored globally, with research at institutions like MIT and Stanford focusing on quantum-resistant cryptography as a major area of study and policy.
Strategic focus and technical priorities
BDC's Defence Platform prioritizes quantum technologies and sensing, advanced materials, energy systems, artificial intelligence, and secure communications. The fund-of-funds approach is meant to attract private institutional capital by using BDC's balance sheet to reduce risk for private co-investors. The direct investment arm, led by BDC's VP of Defence Strategy, co-invests with private syndicates in early-stage companies working on post-quantum cryptography, identity-first security, intelligence-surveillance-reconnaissance (ISR), autonomous systems, and space technologies.
By focusing on dual-use applications, BDC is trying to address the funding gap for Canadian hardware and deep-tech startups that have moved beyond seed funding but are still considered too risky for traditional private equity. The program aligns with federal priorities under the National Quantum Strategy, which aims to secure supply chains and speed up the commercial rollout of quantum and advanced technologies in defense, energy, and financial infrastructure. The need for reproducibility and scalability in quantum hardware has been highlighted in journals such as Nature, where researchers stress the importance of robust engineering and independent validation as quantum devices move toward commercialization.
Numbers and context
The $1 billion is divided into $500 million for the BDC Defence Fund (indirect, fund-of-funds), $200 million in new capital for StrongNorth (direct early-stage VC), and $300 million in existing StrongNorth commitments. The first major allocation from the Defence Fund went to Intrepid Growth Partners. StrongNorth's direct investments are overseen by BDC's internal defense strategy team, with a focus on quantum-resilient and post-quantum security startups. The Lastwall Series A extension, led by StrongNorth, is an example of the kind of early-stage, dual-use company this initiative targets.
Scaling quantum and deep-tech startups beyond the lab is a challenge not unique to Canada. As reported earlier, moving from prototype quantum devices to scalable, manufacturable systems remains a global hurdle, with capital, fabrication, and engineering challenges persisting even as investment grows. Research centers like CERN and NASA have also pointed to the need for cross-disciplinary collaboration and infrastructure investment to overcome these barriers.
Policy and industry impact
BDC's approach is closely tied to federal policy, especially the National Quantum Strategy's focus on supply chain security and secure communications. By using its balance sheet to reduce risk for private capital, BDC is trying to help startups cross the "valley of death"-the stage where promising prototypes often fail to attract the investment needed for commercial deployment. The focus on dual-use architectures reflects the view that quantum and post-quantum technologies are both scientific frontiers and strategic assets for national security and critical infrastructure.
While $1 billion is a large sum by Canadian standards, the scale of the challenge is still significant. The success of this investment will depend on whether funded startups can show reproducible device performance, scalable fabrication, and credible paths to integration in defense, energy, and financial systems. The announcement did not include detailed technical benchmarks or independent performance data, highlighting the need for ongoing scrutiny as these investments move from allocation to measurable results. Peer-reviewed journals such as Science and PNAS have repeatedly emphasized the need for transparent metrics and reproducibility in quantum technology development.
BDC's billion-dollar commitment is a major step in Canada's quantum and deep-tech funding, but the real test will be whether this capital leads to reproducible, scalable, and commercially relevant quantum systems. Without transparent technical benchmarks and independent validation, public investment alone will not guarantee that Canadian startups can move from lab demonstrations to real-world deployment. The next phase will require not just capital, but rigorous engineering, reproducibility, and a willingness to address the ongoing limitations of current quantum hardware and post-quantum security architectures.
Quantum-safe security refers to cryptographic systems designed to withstand attacks from future quantum computers, which could break widely used public-key encryption. Post-quantum cryptography is based on mathematical problems believed to be hard even for quantum computers and can be implemented on conventional hardware. In contrast, quantum key distribution uses quantum states to establish secure keys but needs specialized quantum communication infrastructure. This distinction matters: while quantum computers capable of breaking current encryption do not yet exist, the shift to quantum-resistant standards is already underway to protect sensitive data against future threats. The engineering challenge is to develop, validate, and deploy these new systems at scale, with reproducible performance and strong security guarantees.
