In a significant move impacting bilateral trade, the Government of Canada has announced the implementation of the United States Surtax Order (2026), introducing new surtaxes on specific goods originating from the United States. This measure, detailed in Customs Notice 26-23, comes into effect on September 8, 2026, as Canada’s response to the U.S. imposition of Section 338 tariffs on Canadian goods.
The surtaxes will apply to certain goods imported into Canada origination from the U.S., with rates set at 15%, 25%, or 50% of the value for duty, depending on the product. The list of affected goods and their corresponding surtax rates are outlined in the Schedules to the United States Surtax Order (2026).
Key details for importers:
- Effective date: The surtaxes are applicable to goods imported into Canada on or after September 8, 2026.
- Origin criteria: The surtax applies specifically to goods that originate in the U.S., defined as those eligible to be marked as U.S. goods under the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations. It’s important to note that goods originating from Puerto Rico, Guam, the Northern Mariana Islands, American Samoa, or the U.S. Virgin Islands are exempt.
- Scope of application: The surtax will be applied to goods imported for both commercial and casual purposes, even if they are exported to Canada originating in a country other than the U.S.
- Exemptions: Goods classified under Chapters 98 and 99 of the Customs Tariff are generally exempt from the surtax, unless explicitly listed in Schedule 4 of the Order.
- Goods in transit: Goods that were in transit to Canada before September 8, 2026, will not be subject to the surtax. Importers must retain proof, such as shipping documents (e.g., bill of lading), report of entry documents, or cargo control documents, to demonstrate that the goods were in transit.
- Compliance and verification: Imported goods are subject to examination at the time of importation and to post-release verification. Non-compliance may result in the assessment of surtaxes, customs duties, taxes, and penalties, with interest accruing on outstanding amounts.
The CBSA is responsible for administering the United States Surtax Order (2026). Importers are advised to review the specific details in Customs Notice 26-23 and the associated Order to ensure compliance. For questions regarding tariff classification, origin, or value for duty, businesses can request rulings from the CBSA.
Simultaneously, the Canada Border Services Agency (CBSA) has updated Customs Notice 25-11 in response to tariffs imposed by the U.S. on Canadian steel and aluminum products, which came into effect on March 13, 2025. The notice outlines the application of surtaxes on imports of steel and aluminum goods. The notice has since been updated, with significant changes taking effect on September 8, 2026.
Key details of the surtax:
The surtax applies a rate of 25% or 50% on the value for duty of specified steel, and aluminum goods imported into Canada from the U.S.
Updates effective September 8, 2026:
The notice underwent revisions that became effective on September 8, 2026.
The surtax rate increases to 50% of the value for duty for aluminum and steel goods listed in the new Schedules 1.1 and 2.1, respectively. Aluminum goods listed in Schedule 1 and steel goods listed in Schedule 2 continue to be subject to a 25% surtax rate. Note that Schedules 3 and 4 remained unchanged.
Important exemptions:
- Specific products: Poultry and egg products eligible for import through Supplemental Import Permits under Canada’s Import for Re-export Program are exempt.
- Campobello Island Residents: Personal or household goods acquired in the U.S. and imported by residents of Campobello Island, New Brunswick, are also exempt.
- Returning goods/repairs: Goods made in the U.S. and previously duty-paid in Canada, or goods sent for repair or alteration across the border, may not be subject to the surtax under certain conditions.
Implications for Importers and refunds:
Importers affected by these surtaxes are advised to review the updated notice carefully. Those who may have overpaid or were incorrectly assessed due to subsequent changes are eligible to submit corrections/adjustments and apply for refunds.
For enhanced predictability and certainty regarding the application of these measures, importers can request binding advance rulings on Free Trade Agreement (FTA) origin, tariff classification, or marking of goods before importation.
Remission continues to offer relief to Canadian businesses:
The U.S. Surtax Remission Order (2025) allows for the relief of surtaxes paid or payable for eligible goods.
Who is eligible for remission?
Remission is granted for goods that fall under several key categories, with the intention of supporting Canadian industries and essential services:
- Manufacturing, processing, and packaging: Goods used in Canadian manufacturing, processing of any good, or the packaging of food and beverage products are eligible. The CBSA clarifies that for “manufacturing or processing, eligibility is often determined using Statistics Canada’s NAICS industrial activity classification system. However, remission for food or beverage packaging is not limited by NAICS codes.
- Public Health, healthcare, safety, and security: Goods imported for use in public health, healthcare, public safety, and national security objectives are also eligible. This includes imports by government health research organizations or clinical health research organizations. The eligibility for health-related goods depends on the identity of the end-user and the goods’ direct relation to these specific purposes.
- Specific steel and aluminum goods: Certain steel and aluminum goods, including those for aerospace and motor vehicles, qualify for remission under specific conditions. The latest updates introduced a new Schedule 6 of eligible steel and aluminum goods.
Important clarifications:
- Remission generally applies to goods imported within specified periods, with recent updates extending key import deadlines to July 1, 2027, for some categories.
- While goods imported for repair may not qualify for this specific remission, they might be eligible for relief under other duty programs if imported for repair and subsequent export.
- Remission for “packaging” is specifically for food and beverage products for human consumption; packaging for animal food does not qualify.
How to claim remission:
Importers seeking remission must follow specific procedures:
- At time of import: For commercial goods, the appropriate special authorization Order-in-Council (OIC) code must be entered in the “Special Authority OIC” field on the Commercial Accounting Declaration (CAD). Even when remission is granted, the surtax must still be properly declared and reported.
- Courier Low Value Shipments (CLVS): For eligible goods imported via CLVS, an adjustment request can be submitted through the Commercial Client Portal (CCP).
- Documentation: All claims for surtax relief must be supported by relevant documents, such as the Commercial Accounting Document (CAD), purchase orders, commercial invoices, and bills of lading, demonstrating compliance with the conditions of the Remission Order.
- Time limit: Importers must make a claim for remission to the Minister of Public Safety and Emergency Preparedness within two years after the date of importation.
Learn more:
If you have any questions, please contact your Livingston account representative.