Evidence of meeting #38 for Industry and Technology in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was quantum.
A recording is available from Parliament.
Liberal
The Chair Liberal Ben Carr
Thank you, Mr. Ste‑Marie.
Mr. Guglielmin, the floor is back to you for five minutes.
Conservative
Michael Guglielmin Conservative Vaughan—Woodbridge, ON
Thank you, Mr. Chair.
Mr. Dhillon, I want to return to the discussion we were having about risk a few moments ago. We were talking in the context of our sort of missing the boat with respect to the auto sector and the opportunity to own our own companies, and how you definitely do not suggest that being repeated in the AI industry, especially with respect to physical AI.
Now, what would you say the specific risks are to Canada if a country like China or the United States sets the rules of the game when it comes to the use cases of these technologies? We know both these countries are making this a strategic industry.
Executive Director, Centre for Designing Change
I think the best way to describe this AI revolution is like this: If we break it up from digital to physical, 80% of it is going to become physical, and 20% may stay digital. If those are the numbers, then physical means sectors, everything from mining to, say, aerospace or space. Therefore, the advancements of AI, both negative and positive, are going to mean revolutions in medicine and in manufacturing. China has already launched several of what it calls “lights-out” manufacturing facilities, and that basically means there's no heating or lighting because there are no humans working in those facilities. I believe Quebec has actually launched the first of its kind in Canada.
I've been here 33 years from the U.K. I've been frustrated for about 33 years about the pace of change here in Canada. If I go back to the Avro Arrow, I think it has a lot to do with the culture that changed in Canada. However, I think we have a golden opportunity because we are the centre of AI research, design and, as my colleague has said, policy as well. We have a golden opportunity to push forward. If we do, we could win. We could truly win because the back end of all of these is critical minerals, which we have an abundance of.
Conservative
Michael Guglielmin Conservative Vaughan—Woodbridge, ON
Scale AI's Julien Billot said publicly that the industry is waiting for a “signal from government”.
Would you say that, in the absence of that signal, the industry continues to sit on its hands—I don't want to say “sit on its hands”—with a lack of clarity? Does it put negative pressure on the innovative side of this or on the commercialization side?
Executive Director, Centre for Designing Change
I think one of the challenges here is that we sometimes wait for government to support initiatives, but then you do get the RIMs or BlackBerrys that didn't necessarily need government support to scale. You get the Shopifys that didn't necessarily need government support directly to scale. I think we're at that moment. With the announcement of a sovereign fund, with the announcements and the relationships growing in Europe and Canada, and with the reduction of trade south of the border but then trade going global, I think that positions Canada truly to lead at this present moment.
However, rest assured that this is the new game in town, and it's not going away. AI will be an element of every sector. From education, K to 12, to space, there is going to be no sector, no element, that will be free from the implementation of AI, so we must lead on it.
Conservative
Michael Guglielmin Conservative Vaughan—Woodbridge, ON
I want to bring it back to workers for a quick moment.
If the United States, or China for that matter, captures the humanoid robotic industry through acquisition, scaling or standards setting, what would you say that would mean concretely for auto workers, say, in Windsor or Oshawa? Is there is a risk that we start losing productivity and production capacity?
Executive Director, Centre for Designing Change
As I mentioned earlier, the OEMs in Canada are not Canadian. For the Detroit Three to have facilities in Canada and be able to reduce the head count, they'll 100% do it. Toyota has already mentioned a relationship with Agility Robotics, an American company. The reduction of the head count is inevitable. This isn't an “it could happen”; it absolutely will happen.
However, what we need to do, probably federally, is look at society 6.0. We're currently in what they deem society 5.0. What happened before the industrial revolution, the cottage industries and how have things changed? Now we should be forecasting the next 25 years to make sure we get this right. There will be an absolute head count reduction. There is no doubt about this. Everybody's talking about this. China is leading it. For Canada, it could mean the utopia as we go through the dystopia and the challenges over the next several years.
Liberal
The Chair Liberal Ben Carr
Thank you.
Mr. Ma, you're last in this round. You have five minutes, sir.
Liberal
Michael Ma Liberal Markham—Unionville, ON
Thank you, Mr. Chair.
Thank you to all the witnesses for being here today.
My first question is for Mr. Jahangir. You mentioned the need for a skills development and certification pathway for AI. How do you envision the rollout of these certifications? Are you picturing something like the Oracle or Cisco certifications?
Vice-President, AI Solution Engineering, Oracle
There are a variety of domains that, from a certification standpoint, we think about. Obviously, there are certifications, training and skills development for people who are in the AI research field, development or engineering to build next-generation AI applications. Oracle, just like many of our peer groups in the industry, relies heavily on digital training, in-person training and then certification paths for those technical professions.
What we are starting to also see sector by sector—which I think one of my fellow panellists mentioned—is a spectrum, whether it's all the way from K to 12 or space work. I'll just pick a sector in the middle, health care: There are now emerging specific skills and specific profiles of knowledge and expertise that are required. For example, for radiologists, we are seeing role-specific and profession-specific...who are going to be trained and certified in responsible usage of AI tools and models, not to replace them but to accelerate their work, to help them be better at analyzing image data, for example, with the power of digital vision-based analysis. Those are the ways that we see it, from a skills and training perspective.
I'll just say that we're early in the game here. This is maturing. This is changing. We have to continuously listen and learn from what actual, real end-users are experiencing, and from how they're using it to adapt all of our strategies to scale, to train and to enable the workforce. I believe we have to do this over the next many years, to help our employees, or even just average human users of AI, to continuously learn what is safe and responsible.
Liberal
Michael Ma Liberal Markham—Unionville, ON
Thank you.
My next question is for Ms. Piovesan. Earlier, you discussed creating a Canadian AI insurance market centred around responsible AI, in which we turn accountability into competitive advantage. Can you walk us through the use case for this insurance market? Also, based on what we just discussed about AI certification, does that play into the AI insurance market as well?
Managing Partner, INQ Law
To take your second question first, it certainly will play into the insurance market. In fact, we actually have a market that's already in development, with certain start-ups that are getting ahead and being supported, in some cases, by global insurance companies in providing AI-specific insurance. As well, we're finding that a large number of S&P 500 companies are starting to report their use of AI in their filings.
We take our fantastic research and move it into commercialization. I agree with what the other panellists have said, that we have to move faster on adoption. We have to move faster on national literacy for AI so that we know how to adopt it appropriately. At the same time, it is really important that we lead this framework we have been working on for years and move it into operationalization.
Singapore is a very interest market, where there has been an effort to take their AI-verified framework and start to identify ways of turning some of those requirements for validation, verification and auditing of those AI systems, into professional certifications that are governed by a body and reported to that body. I think there's a very interesting opportunity for Canada there.
Liberal
Michael Ma Liberal Markham—Unionville, ON
To follow up on that, your last point was about positioning Canada's brand in AI safety. If you were the marketing manager for this brand, what would you do to launch this strategy? What are we selling, and who are we selling it to?
Liberal
Managing Partner, INQ Law
We're lucky we have an AI minister. We would take that minister and start telling the world about how we are investing in safety and responsible AI, and building on over a decade of investment in those areas.
Liberal
The Chair Liberal Ben Carr
Thank you.
Thank you, colleagues.
Witnesses, we very much appreciate you providing some guidance and insight here today. We're going to suspend for a few minutes.
Liberal
The Chair Liberal Ben Carr
We are going to start our second hour here.
Welcome to the new witnesses who are joining us. One is online and three are here in the room.
Colleagues, we're going to have the first two rounds of questions but not the third, as we're running a little bit over time, but we're in good shape to get the ball rolling here.
From the Council of Canadian Innovators, we have Laurent Carbonneau, vice-president, policy and advocacy, and Daniel Perry, director of federal affairs.
Thank you very much for being here, and welcome.
Daniel, we saw each other 48 hours ago; it's nice to have you here.
From Hypertec Group, we have Simon Ahdoot, chief executive officer; welcome.
From Photonic Inc, we have Stephanie Simmons, chief quantum officer, joining us here today. “Chief quantum officer” is not a business card I would have seen when I was in school, and perhaps that speaks to where we are at this moment in time.
I can confirm that all audiovisual tests have been completed. We're ready to begin.
With that, Ms. Simmons, the floor is yours for five minutes.
Stephanie Simmons Chief Quantum Officer, Photonic Inc.
Good morning, Chair and members of the committee. Thank you for inviting me to appear today.
My name is Stephanie Simmons, and yes, I am the chief quantum officer and founder of Photonic Inc. That will become a title you see throughout the industry, just like chief AI officer has come through. These things are going to change the world.
I'm also an associate professor of physics at Simon Fraser University, and I'm a Canadian research chair and co-chair of Canada's national quantum strategy's advisory council. I've been in quantum since 2001, so I've a lot to share. I thank you very much for your interest.
Photonic is proud to be a Canadian leader in quantum computing. We were founded and remain headquartered in beautiful British Columbia. Since beginning commercial operations in 2021, we have now raised more than $375 million and have over 160 employees in Canada and in various allied countries. At Photonic, our core mission is to commercialize the next branch of physics and build the world's first commercial-scale, fault-tolerant quantum computer and, as such, build a truly generational Canadian success story.
I'm here today to explain how quantum technologies that we and our peers in the sector are developing will complement and accelerate the fantastic work going on in the AI sector; give us all a preview of where the puck is going so we can prepare; and outline why supporting and anchoring Canada's quantum companies and talent is not just vital for the quantum sector but also for the AI sector and to ensure that the two sectors can combine to be a key driver of Canada's economic prosperity and national security.
What's quantum? Semiconductor physics has given rise to all of the computational gains and economic output we see today. Quantum technologies use the next set of physical laws that we can leverage for gain. They involve harnessing quantum mechanics to create capabilities that are beyond those of conventional, classical physics, like binary—zeroes and ones—physics. This will enable a range of highly impactful, dual-use technologies across quantum computing, quantum communications, quantum sensing and others, that will in turn unlock use cases in sectors across the board. This is a platform capability that offers exponential speed-ups or otherwise unobtainable capabilities.
Quantum technologies will not replace classical computing systems, which power much of our current digital infrastructure, including AI. However, they will work with them, enable them and make them better, just like the introduction of the airplane did not replace cars, trucks or ships in our transportation system but unlocked completely new capabilities, such as going to the moon, GPS and everything else on top of that. It also resolved formerly difficult and resource-intensive issues.
Similarly, you probably will not have a quantum laptop, but you might have your life saved by a drug that was designed with a combination of quantum and AI systems.
By themselves, quantum technologies offer exponential speed-ups in key algorithms and advantages in key algorithms, including some of the algorithms underpinning AI. The math of quantum is the math of AI, and they are expected to create a market worth hundreds of billions of dollars and hundreds of thousands of jobs in Canada in the next 10 years.
Excitingly, and relevant to the topic here today, quantum computing will be an enabler and accelerator of AI. For example, quantum computers will accelerate key parts of classical AI and machine learning that are currently bottlenecking and driving significant power consumption.
Quantum is far more power efficient. Quantum computers will also be able to improve AI decision-making and solution diversity of AI capabilities, specifically in places where the data needs to be very high in accuracy, and this covers the material world. Writ large, quantum can play a really key role in building out large chemistry models and large physical models beyond the large language models and capabilities of today.
The synergies work in the other direction as well. AI is across the entire quantum stack. It's right down on the metal, driving the quantum bits that we use, and it can also make it all the way through error correction to the algorithms becoming more reliable and efficient by using AI capabilities.
Given Canada's early investment and leadership in both of these sectors, it's critical that both quantum and AI continue to be supported in the government through responsible policies, programs and funding and its role as an early adopter and strategic anchor customer.
To be clear, quantum is at an earlier stage of its maturity cycle relative to AI, but imagine if we could go back to 2018 and predict that the AI wave was to arrive within the next few years. This is exactly the position we are in with quantum. We have a few short years to prepare for the wave that is to come. Fully deployed utility-scale quantum computers are not currently available in the market, but the industry is making incredible progress and they will arrive within the next few short years.
This gives Canada a real opportunity to cement its position as a global leader and ensure that we don’t repeat the well-trodden path we heard about earlier this morning of technologies being invented, grandfathered and developed in Canada but commercialized mostly abroad.
The year 2025 marked an inflection point in Canada’s leadership—
Liberal
The Chair Liberal Ben Carr
I'm sorry to interrupt. I let you go a little over time, but I'm sure that members will return to you during the question rounds and you will have an opportunity to share a little bit more.
Liberal
The Chair Liberal Ben Carr
That's perfect. We'll get that sentence done in a little bit.
Mr. Perry, I will turn to you now. The floor is yours for up to five minutes.
Daniel Perry Director, Federal Affairs, Council of Canadian Innovators
Thank you, Mr. Chair.
Good afternoon committee members.
My name is Daniel Perry. I'm the director of federal affairs at the Council of Canadian Innovators. I am joined by my colleague, Laurent Carbonneau, our vice-president of policy and advocacy.
The Council of Canadian Innovators is Canada’s 21st-century business council. We represent over 175 Canadian-headquartered, high-growth technology companies operating across a number of sectors, including artificial intelligence, digital infrastructure, advanced manufacturing and defence.
As we take a look at the conversation today, I want to step back and look at the global economy. It is no longer neutral or rules-based. Leading economies are actively shaping markets and securing control over critical technologies, value chains and standards. They are doing this by leveraging economic policies and industrial strategies. We have seen this recently in the United States' national security strategy, where America is treating technological leadership, control over critical technologies and economic strength as core instruments of geopolitical power.
AI sits at the centre of this shift as a foundational layer of economic growth and national security. Global economies are becoming increasingly driven by intangible assets. This includes data, intellectual property and algorithms, which determine where value is created and captured. These assets alone make up roughly 92% of the S&P 500 and are approaching $100 trillion in value globally.
In an environment like this, firms that define and capture greater returns are those that are leading out of the gate, and it's the same with the countries that are hosting these competitive firms. This is important context for the committee’s work.
Canada helped pioneer modern artificial intelligence, as we heard earlier on the panel today. However, as we outlined in our submission to the minister’s AI strategy task force, we have not translated that leadership into scalable companies or sustainable economic advantages. This pattern is familiar, as we've seen it before.
We generate the ideas here but we fail to commercialize them. Early-stage scaling firms leave this country and are defined by others. With that, they take their IP, data and decision-making power outside Canada. At a time when our peer countries are moving aggressively, the continued delay in releasing Canada’s AI strategy is not neutral. It is actually putting Canadian firms further and further behind in a race where speed, scale and early market positioning determine long-term winners.
As we outlined in our task force submission, we had three points. The first is enabling Canadian firms to scale here. The core barriers are well understood: access to capital, access to customers and access to talent. Without addressing these, Canadian firms will continue to grow inside foreign systems and we will lose control over long-term economic value.
Our second recommendation focused on building sovereign AI infrastructure. This is compute, cloud capabilities and data, which are all fundamental for economic infrastructure of the 21st century. Without domestic capacity, or control for that matter, both our companies and our public institutions are becoming dependent on foreign platforms and foreign legal systems.
Our final recommendation focused on high-value applications within Canada. These are areas where Canada has its natural strengths and an industrial base to perform under. These priorities align with what we're hearing from the government in its forthcoming AI strategy, as well as the details in the spring economic update.
The issue in Canada has never been identifying the priorities; it has been execution. One of the reasons we're struggling is we have key policy instruments that we are simply not using. If we take public procurement for instance, it is one of the most powerful tools that all governments have at their disposal but we're not leveraging it properly. Domestically, procurement makes up 14% of our GDP. This will validate Canadian technology when other governments purchase it, as well as help firms scale here in Canada.
There is also foreign direct investment. Canada’s approach has largely been volume-driven rather than outcome-driven. Our success has been measured by how much capital enters the country, not by what we retain in terms of those intangible assets. Again, that's IP, data and the long-term economic value.
In strategic sectors like AI, it creates a real risk to our economic sovereignty, as well as our national security. If Canada does not reorient its approach, we risk becoming a branch-plant economy and we will miss one of the most important technological transitions of our time. The window is still open. There is time to act. What we need now is a coordinated strategy that aligns economic policy, industrial capability and national security objectives around one common goal, and that is building and scaling Canadian firms that own and control their assets.
This will set up the economy of today, tomorrow and for future generations.
With that, thank you. I look forward to your questions.
Liberal
The Chair Liberal Ben Carr
Thank you very much, Mr. Perry.
Mr. Ahdoot, the floor is yours for five minutes.
Simon Ahdoot Chief Executive Officer, Hypertec Group Inc.
Thank you, Mr. Chair.
Thank you, committee members.
My name is Simon Ahdoot. I'm the president and CEO of the Hypertec Group. We've been in the IT industry for 42 years, since 1984. During that time, we've really seen every phase of IT evolve. Over the past 20 years, we have developed significant expertise in data centre construction and advanced computing.
What this allows us to do today is to be well positioned to meet the computing needs related to AI—which are really quite different from what we've seen in the past—while maximizing the sustainability and performance of these systems.
Speaking about AI, in general what we see as the key importance for artificial intelligence is first, overall, to fill a productivity gap. I was just walking down the road here in Ottawa. There's a lot of maintenance that needs to be done, but it's expensive. There are a number of resources we can put to it. If we could have that done more productively and more efficiently, then it would do well all around.
A lot of the time, we're importing a lot of things from abroad. If we could do them more efficiently here, that would be a way for us to make sure that we could deliver more competitive products and, frankly, not have to bring them in, but generate them internally.
We already have the capabilities, overall, for digitization and computer systems. What AI does, in large part, is reduce the friction in interacting with them.
For example, my wife is an audiologist. She will help people who have hearing loss, but she spends a significant portion of her time entering the information into a system. You have a professional who's very caring and capable in helping somebody who has a disability, and instead of interacting with people, she spends a lot of her time interacting with the software and the computer system. AI can help, in large part, to reduce that time and let the computer do more of its own work afterward, so constant human intervention is not needed for getting it done.
In order to develop those capabilities, it's going to be really important to ensure that infrastructure is available. Having those tools available to a population will enable us to make sure we can gain those productivity improvements that will help us be more competitive and, frankly, improve quality of life. That's AI as a whole, and the accessibility of it.
We talk about AI sovereignty, which is one of the big topics that's coming up right now. The first dimension is that question of accessibility. Do our citizens have access to those tools in the first place? Here in Canada, I think most people can access some basic tools, but there are still other considerations that make it a little bit more difficult.
The next level is commercialization. If we look at AI as an industry in the future, what proportion of that industry is being produced here as opposed to consumed here? Basically, are we a net consumer or a net producer of artificial intelligence services?
If we are a net consumer, suppose it is a $100-billion industry and we could consume 25% more than we produce. That would mean that $25 billion leaves the country every year. This can get very material. Canada has an opportunity to become a net producer, so it can actually help supply the world. There are additional advances to that, which I can go into afterwards.
The next level is very much one of the key topics that we must address. We talk about questions of confidentiality and protection, such as for data sovereignty. If we are completely dependent on the outside, there is a risk that they could withhold access to those systems.
There is also concern around the data. We talk about access to the data. When you look at that question of data sovereignty, artificial intelligence thrives on access to that data. Your data sovereignty is only as good as your AI sovereignty for whatever data that AI is accessing. It will be very important to consider maintaining the ability, developing the ability, ensuring that we're always able to stay competitive with the access, and being able to produce at least a portion of it locally, so that we can help succeed in the future.
Going back to that piece on commercialization, there's a value chain that goes into AI. In Jensen's speeches lately, he has been talking about this notion of a five-layer cake. It starts with power, goes to the data centre, then to compute, then you get into the models and then the applications.
The largest piece of that is going to be applications. At the end of the day, they're the ones who buy all the other layers underneath. Right now, we haven't settled what those winning applications will be. There's an opportunity for Canada to take a position in becoming the main provider, or at least an important provider, of those applications, and position ourselves as a net producer for the world. Being able to foster that is going to involve creating the infrastructure and creating the systems so we can actually deliver that.
When we look at the opportunity for Canada, currently the leaders in commercialization are the U.S.A. and China. I don't see that we'd be able to completely unseat them, but we can take a really important role. I see that we're first tier in AI research. We understand the importance of sustainable development, and we have an eye to safety, AI safety, and making sure that it's a net positive for the world.
What I see is that we have an opportunity to demonstrate to the world how to effectively enable AI in a way that's safe and sustainable and set that model so everybody can help do it the same way.
Liberal