Canada begins to levy surtaxes on imports of Chinese steel and aluminum products and announces remission order process

Application of the surtax

On 26 August 2024, the Government of Canada announced that a 25% surtax would be applied against Chinese steel and aluminum products to protect workers and businesses in the Canadian steel and aluminum sectors against Chinese trade policies. The surtax was to be effective as of 15 October 2024. For additional information, see EY Tax Alert 2024 Issue No. 47, Canada imposes surtaxes on imports of Chinese EVs, steel and aluminum products, and considers surtaxes on critical manufacturing goods.

On 1 October 2024, the government released the final list of goods subject to the 25% surtax, which is available on the Department of Finance website. The government also revised the application date of the surtax to 22 October 2024.³

The surtax is applicable to:

• Both commercial and personal importations, including goods shipped to Canada from a country other than China;
• Goods released from a Customs Bonded Warehouse or Sufferance Warehouse on or after 22 October 2024, regardless of the date of importation; and
• Goods eligible for classification in the tariff items of Chapter 99 of the Schedule to Canada’s Customs Tariff (except for goods that are temporarily imported into Canada for repair or re-imported into Canada after being exported for repair) even though the goods are entitled to the Most-Favoured-Nation zero customs duty rate under that Chapter.

The surtax will not apply to:

• Goods eligible for classification in the tariff items of Chapter 98 of the Schedule to the Customs Tariff, other than the prohibited importation tariff items of 9897.00.00, 9898.00.00 and 9899.00.00; and
• Chinese goods that are in transit to Canada on the day on which the surtax comes into force.

The Duties Relief Program and the Duty Drawback Program are available to importers for surtax paid or owed by Canadian businesses, subject to the provisions of the Canada-United States-Mexico Agreement.

Remission of surtax

Canadian businesses may seek a refund or relief from the payment of surtaxes applicable to Chinese steel and aluminum.⁴ Remissions may be applied retroactively to the effective date of the surtaxes.

Remission requests are limited to the following instances:

• Situations in which goods used as inputs (or substitutes for those goods) cannot be sourced either domestically or reasonably from non-Chinese sources;
• Situations in which contractual requirements, existing prior to 26 August 2024, require Canadian businesses to purchase Chinese inputs in their products or projects for a specified period of time; and
• Other exceptional circumstances, to be determined on a case-by-case basis, that could have significant adverse impacts on the Canadian economy.

Learn more

For more information, please contact one of the following EY professionals:

EY Global Trade

Sylvain Golsse, Partner
+1 416 932 5165 | sylvain.golsse@ca.ey.com

Kristian Kot
+1 250 294 8384 | kristian.kot@ca.ey.com

Joanna Liang
+1 416 943 5512 | joanna.liang1@ca.ey.com

Traci Tohn
+1 514 879 2698 | traci.tohn@ca.ey.com

Denis Chrissikos
+1 514 879 8153 | denis.chrissikos@ca.ey.com  

EY Law LLP

Helen Byon, Partner
+1 613 598 0418 | helen.byon@ca.ey.com   

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[1] Customs Notice 24-36: China Surtax Order (2024) – Steel and Aluminum (cbsa‑asfc.gc.ca)
[2] Canada announces tariff remission process for Canadian businesses importing certain Chinese goods - Canada.ca
[3] Canada taking further action to protect workers and critical industries against unfair Chinese competition - Canada.ca
[4] Process for requesting remission of surtaxes that apply on certain goods from China - Canada.ca