Canada Budget 2025: Improving Defense & Quantum Research
Canada Budget 2025
Quantum investment is important, but global trade uncertainty weighs on the economy.
In reaction to Canada Strong: Budget 2025, the quantum industry applauded major defence spending and cutting-edge technology but warned that overall scale may still be below competitors worldwide.
The $334.3 million five-year federal budget investment in quantum technology under the new Defence Industrial Strategy shows that it is a national priority. This funding promotes quantum applications in defence and other critical industries and aims to build Canadian quantum technology companies.
Lisa Lambert, CEO of Quantum Industry Canada (QIC), called the investment a “meaningful step,” stating that Canada considers quantum as important infrastructure for security and economics. However, QIC noted that the support “seems far less than what is required to compete with global peers that are investing at industrial levels.” Lambert said Canada needs spend at the potential level and go from ideas to industrialisation to lead.
Canada was one of the first to recognise the quantum promise and has a strong research base. According to Canada's National Quantum Strategy, the industry may account for approximately 3% of GDP by 2045, matching the aerospace industry and making Canada the G7's strongest economy.
Resilient Strategy and Industrialisation
Nord Quantique, a proud Canadian quantum company, says the budget is a historic document that sets the nation up for success. Budget 2025 provides direct investment and measures to help Canadian quantum companies secure their IP and scale swiftly. Increased venture capital investment incentives, updated efforts like the Innovation Asset Collective Patent Collective, and better intellectual property rights are examples.
The new strategy relies on the “Buy Canadian” principle, which favours domestic technological leaders. This means Canadian quantum firms have increased possibilities to win defence and public sector infrastructure contracts.
The budget invests $925.6 million to construct large-scale, Canadian-owned AI and computational capacity to support national security, commercialisation, and quantum and AI research.
Global Challenges and Economic Change
The new financial and industrial strategy corresponds with a “profound transformation” of the global economy driven by rapid technological advancement, economic nationalism, and geopolitical uncertainty.
These global developments affect Canada, whose exports make up one-third of GDP. Canada's major trading partner, the US, has imposed trade obstacles and is overhauling its economic agreements.
With average tariffs on all countries increasing from 2% in 2024 to 17% today, U.S. policy has a significant impact. Due to high tariffs and trade proceedings, key Canadian exports like steel, aluminium, automobiles, canola, pork, and fisheries have suffered as a result of this change to protectionist trade policy.
It diminishes exports and business investment, hurting the Canadian economy. The 2024 Autumn Economic Statement predicted over 2% real GDP growth in 2025 and 2026, but currently it is estimated to be just over 1%. Forecasters believe the economy is adapting to reduced growth.
The government's strategy to address these challenges is to Unify Canada's Economy (removing internal trade obstacles), Diversify Our Trade, Build Our Nation (via Build Canada Homes), and Harness Canada's Strengths (including AI and Quantum). This comprehensive industrial policy aims to strengthen Canada's industrial capacity, resilience, and productivity.
For this plan, the government is implementing a new growth-oriented budgeting system based on two fiscal anchors: limiting the deficit-to-GDP ratio and balancing daily operations spending and revenues by 2028–2029. Budget 2025 allows $1 trillion in investment over five years through stronger capital investment and careful public spending.
