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CONTINUED FOCUS ON U.S. & CHINESE SURTAXES
The Canada Border Services Agency ("CBSA") has released its January 2026 update to its compliance and verification priorities. This update is part of the CBSA's semi-annual process of resetting its verification priorities, which occurs in January and July of each year.
In this January 2026 update, new priorities include certain global surtaxes, amongst other items. Enforcement of Surtaxes Orders on Chinese and U.S. goods also remain a prominent holdover from previous rounds. We provide a detailed breakdown of these priorities below.
Compliance Priorities
Given the overcapacity in the global steel and aluminum markets, and Canada's concern with protecting domestic steel and aluminum industries, the CBSA is emphasizing review and enforcement of compliance with global surtaxes imposed in 2025:
- Order imposing a Surtax on the Importation of Certain Steel Goods: this aims to manage the supply of certain steel goods through tariff rate quotas, applying a 50% surtax.
- Steel Goods and Aluminum Goods Surtax Order: this targets steel and aluminum goods that contain either steel melted and poured, or aluminum smelted and cast, in China with a 25% surtax.
Additionally, the CBSA continues to review and enforce compliance with surtaxes on goods originating in China and the U.S., as its enforcement statistics demonstrate a significant number of companies were non-compliant/paying the incorrect amount of surtax. These surtax orders include:1) Chinese EVs; 2) Chinese steel/aluminum; 3) United States Surtax Order (2025-1) (previously repealed on September 1, 2025); 4) U.S. steel/aluminum, and; 5) U.S. motor vehicles (collectively, the "Surtax Orders").
Tariff Classification and Origin Priorities
The CBSA is maintaining its focus on five (5) types of specifically identified goods for tariff classification: gloves, bags, LED lamps, frozen desserts, and spent fowl. Additionally, tariff classification of goods targeted by the Surtax Orders is also a verification priority. For origin verifications, the CBSA will be focussing on goods imported under Canada's free trade agreements with Europe (CETA), the United Kingdom (CUKTCA), and the U.S. and Mexico (CUSMA).
Despite having a non-compliance rate of 83%, the CBSA has removed freezers and other freezing equipment, and furniture for non-domestic purposes, from their priority list. That said, importers of these products may still be selected for verification by CBSA.
Other CBSA Verification Priorities
The CBSA's new priorities also include the following items:
- Tariff rate quota and classification of supply managed goods, namely: verifications on the classification of cheese for dog treats, and spent fowl products.
- GST and excise duties and taxes for precious metals.
- Verifications on electricity imports under chapter 28 of the Customs Tariff.
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Given that CBSA's renewed focus on surtaxes, importers should review their compliance and seek legal advice from experienced customs counsel to avoid costly audits and explore the potential of remission relief. |
Takeaways
While it is important that importers try to get the "Big Three" of tariff classification, valuation, and origin correct initially, the CBSA's priorities are special targets due to high levels of non-compliance identified by the CBSA.
Accordingly, importers should seek legal advice, not only to ensure compliance, but also because financial relief may be available for CBSA compliance priorities such as the Surtax Orders.
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