The government has issued two new Innovative Solutions Canada (ISC) challenges aimed at the domestic space and high-tech sectors, offering up to $5.55 million in total potential funding for the development of transportable optical ground stations and long-distance quantum repeaters.
Both challenges opened today and share a deadline of July 2, 2026. The procurements highlight a coordinated federal push to secure next-generation communications infrastructure capable of operating in extreme environments and supporting future space-based architectures.
Tactical Optical Ground Stations for the Arctic
Sponsored by the Department of National Defence (DND), the first challenge seeks an R&D prototype for a transportable Optical Ground Station (OGS) capable of high-bandwidth communications with low Earth orbit (LEO) satellites.
The strategic driver is Continental Defence. DND requires resilient space information mobility in the Arctic, where traditional RF communications face bandwidth and latency limitations. The challenge mandates that the OGS prototype must fit within a standard 20-foot ISO shipping container (or two 10-foot containers) and weigh no more than 15,000 kg.
Technically, the hardware must establish optical links with low Earth orbit (LEO) satellites up to 1,000 km in altitude, maintaining a minimum data rate of 1 Gbps, with an objective of reaching 10 Gbps. Crucially, the system must be ruggedized for immediate deployment on unprepared northern terrain—such as permafrost or ice—and operate in temperatures ranging from -40°C to 40°C.
To ensure interoperability between civilian, military, and allied networks, DND requires the station to be compatible with multiple optical communication standards, including CCSDS, SDA, and ESTOL.
Funding for the OGS challenge is contract-based. Up to four Phase 1 (Proof of Feasibility) contracts will be awarded at a maximum of $300,000 each over four months. One successful applicant may advance to a Phase 2 (Prototype Development) contract, valued at up to $2 million over 14 months.
Scaling Quantum Networks
Concurrently, Innovation, Science and Economic Development Canada (ISED) has issued a grant-based challenge to address a primary bottleneck in both fiber-optic and free-space quantum networks: signal degradation over long distances.
ISED is seeking solutions that advance quantum repeater technologies. To surpass current direct-transmission limits, proposed architectures must incorporate heralded quantum memory—or a functional equivalent—to store and retrieve quantum states, alongside entanglement-swapping capabilities.
This terrestrial networking technology is a necessary counterpart to space-based quantum key distribution initiatives, such as Canada’s QEYSSAT mission, to enable scalable, multi-node quantum networks. The QEYSSAT satellite payload is expected to launch sometime this year.
The quantum repeater challenge is structured as a grant. ISED expects to award two Phase 1 grants of up to $250,000 for six months of work. One company will be selected for Phase 2 system integration, receiving up to $3 million over a 24-month period.
Both challenges are restricted to Canadian small and medium-sized businesses. Proposals must be submitted by 2:00 p.m. Eastern on July 2, 2026.