This article appeared in our Defence Forecast 2025 guide, which highlights the hot topics impacting Canada's aerospace and defence industries. Read the Forecast here.

As geopolitical tensions continue to shape global trade and security dynamics, export controls have become a critical area of compliance for Canada’s aerospace and defence industries.

Throughout 2025, businesses operating in these sectors will face heightened scrutiny and evolving regulations aimed at safeguarding national security, preventing illicit technology transfers and aligning with international allies’ security measures. Staying ahead of these regulatory developments will be essential for companies looking to maintain market access, minimize compliance risks and navigate complex global supply chains.

This article outlines key export control trends expected in 2025, including updates to Canada’s Export Control List, geopolitical trade restrictions, increased oversight of dual-use and emerging technologies and regulatory fee adjustments. We also provide practical strategies for ensuring compliance and mitigating risks in an evolving regulatory environment.

Updates to Canada’s Export Control List and regulatory framework

The Export Control List (“ECL”), maintained by Global Affairs Canada, is periodically revised to reflect new security concerns, emerging threats and international treaty obligations. The Forward Regulatory Plan 2025-2027 outlines several anticipated changes that will impact the aerospace and defence sectors:

  • Expansion of controlled items: New ECL amendments will include additional controls on semiconductor manufacturing equipment, quantum computing technologies, high-temperature coatings and advanced 3D metal additive manufacturing machines. These measures aim to regulate the export of emerging technologies with potential military applications.

  • Adjustments to export permit and certificate fees: After remaining unchanged for decades, export permit fees will increase by 75 per cent over a phased five-year period. Businesses must account for these additional compliance costs when planning international transactions.

  • Stronger enforcement measures for end-use monitoring: Canadian authorities will place greater emphasis on tracking and verifying the end-use of exported aerospace and defence technologies, ensuring they are not diverted for unauthorized military applications.

Companies engaged in the export of controlled goods should closely monitor these amendments and proactively assess how these changes affect their operations.

Geopolitical impacts: Sanctions and trade restrictions

Geopolitical instability continues to drive new and expanded sanctions, affecting key defence markets. In 2025, Canadian exporters must navigate evolving restrictions on trade with sanctioned entities and embargoed regions. Notable areas of concern include:

  • Stricter export prohibitions on Russia, Belarus and other high-risk jurisdictions in response to ongoing security threats.

  • Increased alignment with U.S. and EU sanctions frameworks, particularly concerning technology transfers to China.

  • Enhanced due diligence requirements for transactions involving sensitive end-users, intermediaries and foreign subsidiaries.

To mitigate risks, businesses should establish robust internal screening processes and ensure compliance with Canadian and allied nation trade regulations.

Increased scrutiny on dual-use and emerging technologies

The rapid development of dual-use and emerging technologies presents new challenges for export compliance. As military and commercial applications of AI, cybersecurity tools, and advanced materials become increasingly intertwined, regulatory authorities are placing greater emphasis on preventing unauthorized transfers. Key areas of focus in 2025 include:

  • AI and machine learning applications in defence systems, particularly those with potential use in autonomous weapons and surveillance.

  • Additive manufacturing (3D printing) technologies with implications for weapons proliferation and supply chain security.

  • Cyber security and encryption tools, which could be subject to enhanced licensing requirements to prevent unauthorized access by adversarial actors.

Companies dealing in these technologies must implement stringent export controls, conduct thorough risk assessments, and maintain detailed compliance records.

Canada's new Sensitive Technologies List

In February 2025, the Government of Canada released the Sensitive Technology List (“STL”), identifying eleven broad technology areas considered sensitive due to their potential implications for national security and defence. The STL aims to protect emerging and novel technologies from unwanted transfer to foreign threat actors, thereby safeguarding Canada's technological advantages.

The STL encompasses areas such as advanced digital infrastructure technology, advanced materials and manufacturing, aerospace, space and satellite technology, artificial intelligence and big data technology, quantum science and technology, and robotics and autonomous systems. These sectors are particularly relevant to the aerospace and defence industries, given their dual-use applications and potential to enhance or degrade military capabilities.

The introduction of the STL signifies the Canadian government's commitment to aligning its export controls and foreign investment reviews with evolving technological landscapes. For aerospace and defence companies, this development underscores the importance of staying informed about which technologies are deemed sensitive and ensuring compliance with associated regulations to prevent unauthorized transfers.

By proactively integrating the considerations outlined in the STL into their compliance programs, businesses can better navigate the complexities of export controls and contribute to the protection of Canada's national security interests.

Next steps for aerospace & defence exporters

To prepare for these regulatory developments, Canadian aerospace and defence companies should adopt proactive compliance strategies, including:

  1. Stay informed on regulatory changes: Monitor updates from Global Affairs Canada, the Wassenaar Arrangement and allied trade authorities to anticipate compliance requirements.

  2. Enhance internal compliance programs: Conduct regular audits, employee training and risk assessments to align with best practices.

  3. Implement stronger due diligence measures: Screen customers, end-users and third-party intermediaries to identify potential compliance risks.

  4. Strengthen supply chain security: Assess the risk exposure of suppliers and partners to sanctions, technology control measures and geopolitical trade shifts.

  5. Engage with government and industry groups: Work with export control advisory services, trade associations and regulatory bodies to navigate complex compliance landscapes.

Conclusion

As export control regimes continue to evolve, aerospace and defence companies must remain vigilant and adaptable to maintain compliance and competitiveness. The increasing regulatory focus on emerging technologies, geopolitical risks and dual-use goods necessitates a proactive and strategic approach to export compliance.

By staying informed, strengthening internal controls and prioritizing due diligence, businesses can navigate 2025’s complex regulatory environment effectively while mitigating risks and seizing global opportunities.

The Forward Regulatory Plan 2025-2027 highlights Canada’s commitment to strengthening its export control framework in response to technological advancements and international security threats. As new ECL amendments, regulatory fee adjustments and geopolitical trade policies take effect, exporters must take a strategic and compliance-driven approach to remain competitive.

Understanding and adhering to Canada’s evolving export control landscape will be essential for companies that seek to operate with integrity, security and continued market access in an increasingly volatile global trade environment.