On June 19, 2024, Global Affairs Canada issued a Notice to Exporters regarding regulatory amendments to the Export Control List (ECL) that were previously approved by an order-in-council (Order) on May 31, 2024 (Amendments). The Amendments target goods and technology in relation to quantum computing and advanced semiconductors, following similar unilateral amendments (or proposed amendments) to export controls implemented in the UK, France, Spain and Finland.
Exports from Canada of the goods/technology subject to the Amendments will require an individual permit issued by Global Affairs Canada (with the exception of exports to the United States) as of July 20, 2024.
The Amendment creates five new controls, which are listed under Group 5, Item 5506 of the ECL:
- Quantum computers with the capability to confine, control, measure and process the quantum information embodied in 34 or more physical qubits with a small margin of error. This control includes circuits and devices specially designed for quantum computers, such as certain components and devices made to control and measure these quantum computers.
- Cryogenic Complementary Metal Oxide Semiconductor (CryoCMOS) integrated circuits that operate at a temperature of 4.5 Kelvin or below.
- Technology used for the development or production of semiconductor devices or microchips using GAAFET structures (i.e.,nanosheet, nanowire, and gate-all-around transistor technology)
- Equipment designed or modified for isotropic and anisotropic dry etching, which are critical in the making of GAAFET structures.
- Advanced Scanning Electron Microscope (SEM) equipment for imaging semiconductor or integrated circuits, or to perform chip design recovery meeting a specific set of metrics.
The detailed specifications of these new controls are published in Part II of the Canada Gazette along with a Regulatory Impact Analysis Statement, which sets out the policy objectives of the Amendments.
Legislative Background
The Government of Canada may control goods/technology by amending the ECL pursuant to the statutory grant of authority under sections 3 and 6 of the Export and Import Permits Act. The Amendments were made under the authority of subsection 3(1)(a), which permits the Government to list “arms, ammunition, implements or munitions of war, naval, army or air stores or any articles deemed capable of being converted thereinto or made useful in the production thereof or otherwise having a strategic nature or value will not be made available to any destination where their use might be detrimental to the security of Canada”. This is the first amendment to the ECL since 2021, when Canada implemented amendments to streamline the legislative process needed to update its common control lists, which is maintained and updated as part of Canada’s multilateral commitments.
The Amendments target Group 5, “Miscellaneous Goods and Technology” of the ECL, which lists Canada’s unilateral controls (i.e., controls that are not implemented pursuant to Canada’s obligations under the four multilateral export control regimes in which it is a member). Prior to the Amendments, Group 5 included controls reflecting export quota obligations under free-trade agreements, U.S. origin goods, and a limited number of select goods and technologies (e.g. blinding laser weapons, nuclear fusion reactors, anti-personnel mines, goods/technology for use in chemical/biological/nuclear weapons).
Business Impact
While Global Affairs Canada has consulted with businesses operating in the Canadian quantum computing and semiconductor industries as part of it law making process, Canadian exporters should closely review the goods/technologies described in the Order Amending the Export Control List, published in Part II of the Canada Gazette to determine if their goods/technologies are affected. If an exporter is uncertain whether their goods/technologies are affected by the Amendments, they should seek an Advisory Opinion from the Export Controls Division of Global Affairs Canada.
Going forward, Canadian exporters should continue to expect the implementation of further unilateral controls in Group 5 as Canada seeks to coordinate with its allies on the anti-proliferation of goods/technology to hostile foreign governments. This is in large part due to the difficulty in reaching consensus to implement new controls among the membership of multilateral export control regimes, such as the Wassenaar Arrangement.
