Quantum, cloud and cyber take shape in Canadian defence plan

Cybersecurity may not be listed as a standalone sovereign capability in Canada's Defence Industrial Strategy, but it underpins almost every priority area identified by Ottawa.

"Even when we talk about cyber, it's a pretty large field itself, but it really is one component in almost all of these key sovereign capabilities," said Alexander Rudolph, a PhD Candidate in the Department of Political Science at Carleton University and an expert on Canadian cyber policy. "All of these businesses have cybersecurity, or really need cybersecurity to run their business."

The strategy outlines 10 key capabilities for sovereignty: Aerospace, Ammunition, Digital Systems, In-Service Support, Personnel Protection, Sensors, Space, Specialised Manufacturing, Training and Simulation, and Uncrewed and Autonomous Systems.

The federal strategy identifies key sovereign capabilities tied to supply chains and industrial themes rather than discrete technical functions. In that context, Rudolph said, cybersecurity is treated as a cross-cutting enabler rather than a vertical industry.

Secure cloud infrastructure is the clearest illustration. Military networks handling classified information require hardened cloud environments, often referred to as "secret cloud", with enhanced controls beyond those used in commercial systems.

The same logic applies to autonomous and uncrewed systems. Platforms deployed in conflict zones must be protected against remote takeover or interference. As defence systems become increasingly software-defined, cyber resilience becomes inseparable from operational capability.

Quantum navigation is another emerging area of interest, particularly for air forces operating in environments where GPS signals may be jammed or spoofed. Recent incidents of GPS disruption affecting aircraft in Europe have sharpened attention on alternatives.

According to the Center for Strategic and International Studies, extensive Global Navigation Satellite System jamming and spoofing have been used during active conflict in Ukraine.

Michael Murphy, Director of the Centre for International and Defence Policy at Queen's University, views quantum-based inertial navigation systems, which do not rely on satellite signals, as a potential resilience measure in high-end conflict scenarios.

The strategy places renewed emphasis on quantum technologies, but questions remain over whether the country can convert its research strength into deployable military capability. 

Canada is frequently described as a global leader in quantum research, with major academic hubs at institutions such as the University of Waterloo and Université de Sherbrooke. However, Murphy said the country has historically struggled to retain the commercial and strategic benefits of past early-stage technology breakthroughs.

"We're in a critical period of the development of quantum technologies to see if it will be history repeating itself, or an opportunity to really bring that value from research through commercialization, industrialization, and see Canadians broadly benefit from the technological development that public investments in research have really laid the foundation for," said Murphy.

Canada's strong record in early discovery has often been followed by an outflow of talent and intellectual property, particularly to the United States.

"I think that we'll find out in 10 years if we were able to capture the industrial benefits, or if it will be another 'AI', where Canada makes the early stage research discoveries and then loses the economic and social benefits to other countries, mostly the U.S.," he said.

Defence strategy shift

The Department of National Defence (DND) published a Quantum Science and Technology Strategy in 2021, identifying priority areas including quantum sensing, quantum-secure communications and the long-term pursuit of fault-tolerant quantum computing.

However, Murphy noted that the strategy predated Russia's full-scale invasion of Ukraine and was developed during a period of comparatively constrained defence spending.

At the time, Canada was under-spending relative to its NATO commitments, limiting the scale of defence-oriented quantum procurement and experimentation. That environment, he suggested, reduced incentives for startups and researchers to prioritise military applications.

The fiscal and geopolitical context has since shifted. With increased defence allocations and renewed emphasis on sovereignty and readiness, Murphy said the incentive structure for quantum innovators is changing.

He pointed to growing engagement between Canadian quantum startups and defence stakeholders, including NATO-linked bodies and specialised units within the Canadian Armed Forces (CAF), particularly in areas such as maritime sensing and situational awareness.

Rudolph pointed to the 2022 attack on Viasat satellite communications at the outset of Russia's invasion of Ukraine as an example of how cyber operations can disrupt military command and control through space-linked infrastructure. It was one of the first attacks Russia made against Ukraine.

Within this month's defence industrial strategy, space is another domain where cyber risk is expanding. Satellite systems and associated ground infrastructure are now recognised as potential targets for hostile states and non-state actors.

Hyperscaler gap

While Canada has an established ecosystem of cybersecurity firms providing services to government and defence clients, Rudolph drew a distinction between specialist cybersecurity services and large-scale digital infrastructure.

"There is a really robust industry of cybersecurity firms that provide services to the government and in defence," said Rudolph. "Where you begin to see more non-Canadian companies come in is when you're talking about larger infrastructure that are kind of commercial, off the shelf, like Microsoft and Amazon [AWS]."

Last September, the government released documents showing $1.3 billion spent on cloud services from U.S. companies, with the bulk of the investment going to Microsoft. This information was first published by The Canadian Press.

Canada currently lacks a domestic hyperscaler capable of competing at the scale of Amazon Web Services, Google Cloud or Microsoft Azure. That gap has implications for sovereignty, particularly as a secure cloud is framed as a key sovereign capability.

"If they are specifically saying secure cloud is a key sovereign capability, I would argue that there's unlikely to be a Canadian firm to be able to provide secure cloud yet," said Rudolph.

Under the Canada–United States–Mexico Agreement (CUSMA), governments are generally restricted from imposing data localisation requirements. National security exemptions do exist, allowing Canada to mandate the location of domestic data centres for defence purposes. However, this does not eliminate all exposure.

The U.S. CLOUD Act allows American authorities to compel U.S.-incorporated firms to provide data under subpoena, even if that data is stored outside the United States. For Canadian defence workloads hosted by US-headquartered cloud providers, this introduces a structural legal risk.

Technical mitigations such as encryption, physical air-gapping and strict access controls can reduce vulnerability. Canada's Policy on Government Security also restricts access to classified systems via the open internet. But reliance on foreign-owned hyperscalers requires additional safeguards and oversight to manage legal uncertainty.

Sensors and sovereignty

Among the most immediate defence-relevant applications are quantum sensing technologies.

Murphy highlighted quantum magnetometry as one example. Canadian firm SBQuantum, based in Sherbrooke, has developed diamond-based magnetometers capable of detecting subtle disturbances in the Earth's magnetic field. Originally developed for mineral exploration, such systems can be adapted for defence use, including detecting concealed objects or activity through structural barriers.

Another area is quantum-enabled Light Detection and Ranging (LIDAR). Phantom Photonics has developed advanced maritime sensing capabilities designed to improve underwater detection.

For a country with extensive coastlines and Arctic approaches, improved maritime domain awareness is strategically significant. High-fidelity sensing systems could strengthen submarine detection and coastal surveillance, while also supporting civilian applications such as infrastructure monitoring.

Murphy emphasised that many of these technologies are inherently dual-use. The same sensors that enhance submarine detection can monitor underwater pipelines or inspect nuclear cooling systems, for example.

As Canada expands energy and digital infrastructure, including nuclear facilities supporting AI data centres, such crossover applications become more economically relevant.