SENATORS’ STATEMENTS — Canadian Photonics Fabrication Centre

Honourable senators, last month the government announced that National Research Council Canada, or NRC, will spin off the Canadian Photonics Fabrication Centre, or the CPFC.

Making the CPFC a stand-alone commercial entity is phenomenal news. Why? Because the demand for compute capacity is skyrocketing in this AI era, doubling every three months. Spinning off the CPFC creates an opportunity to scale the latent sovereign potential resting within this highly advanced microchip manufacturing foundry.

Until recently, microchip processing capabilities doubled every two years, but that technology reached its limit. As a workaround, data centres began interconnecting chips, effectively making one extremely powerful microchip. But the limited data transmission capacity of copper wire restricted that workaround to 72 chips.

This is where the CPFC comes in. The CPFC makes the components that enable optical transmission of data using photons. Compared to electrons over copper wire, photons can securely transmit 100 times more data 100 times faster and up to 200 times further, while using only one tenth of the power.

The CPFC is a critical node in the global photonics supply chain. Countries strive to control strategic assets like this because they create sovereign power and geopolitical leverage.

The details of this spinoff have not yet been announced. That has caused me to worry that the incredible potential of this opportunity might not be fully understood by decision makers.

My fears are not unfounded. Reflect back on the privatization of Connaught Medical Research Laboratories in the 1980s. Connaught’s stellar global reputation was earned over decades due to its leadership in commercializing the Salk polio vaccine, eliminating smallpox and producing penicillin, among many other accomplishments. The Canada Development Corporation ultimately sold Connaught to Sanofi Pasteur in 1989. Perhaps that strategic miscalculation was not fully realized until the COVID-19 pandemic.

The NRC has engaged a similar Crown corporation, the Canada Development Investment Corporation, to manage the CPFC spinoff. This government entity is led by talented generalists, but not domain experts who deeply understand the CPFC’s strategic value.

Consequently, we need Canada’s deep-tech investors and industry experts with market expertise to be engaged in this process. They have the insights, the incentives and the understanding needed to shape a shareholder and governance structure that will ensure that the CPFC’s best-in-class manufacturing capabilities are scaled for the long-term benefit of all Canadians.

Colleagues, let’s not miss this once-in-a-lifetime opportunity to unlock the Canadian Photonics Fabrication Centre’s strategic economic and geopolitical value. Thank you.