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As a follow up to our Steel Derivative Surtax Report here, over the recent Christmas holidays Canada also quietly amended the Surtax on the Importation of Certain Steel Goods (the "3P Steel Surtax") and put in place a Remission Order for the same over the holiday period.
In this report, we report on the application of the 3P Steel Surtax, highlighting the tonnage tariff rate quota ("TRQ") rules, import permit requirements, and relief available surtax exceptions and the Remission Order.
Targeted Goods & TRQ Thresholds
Like the Steel Derivative Surtax, the 3P Steel Surtax targets certain classes of steel goods (by particular HS codes). Unlike the application of Canada's other Steel Surtaxes, however, the 3P Steel Surtax applies at 50%, but only applies once imports of a class of steel goods exceed a specified quota (a tonnage threshold) specifically allocated to the particular import (a "TRQ") OR when those same imports exceed per-country tonnage thresholds (which is calculated by multiplying the specified per country percentage by the specified tonnage threshold). This is an extraordinarily complex application methodology – even for Experienced International Trade Lawyers to understand!
Import Permit Required!
The Department of Finance policy in CBSA Customs Notice 25-24 also makes it clear that shipment-specific permits are a requirement to "declare the importation is under the TRQ". This means that without import permits, a shipment of a targeted class of steel goods will be subject to the 50% surtax. As obtaining import permits can be a confusing process, professional advice and assistance is recommended.
Surtax Exceptions
Notable exceptions to the 3P Steel Surtax are that it does not apply to goods that originate in Canada, the United States or Mexico, nor does it apply to casual goods as defined here. As origin rules are extremely complicated, with errors giving rise to correction obligations and potential Administrative Monetary Penalties, it is recommended that importers consult with Experienced International Trade Counsel to explore their eligibility for surtax exceptions.
Remission Order Relief
On December 18, 2025, Canada enacted a Remission Order providing financial relief from the 3P Steel Surtax for certain classes of steel goods. Provided other conditions for relief in the Remission Order are met, remission will be granted for a class of steel goods set out in column 1 of the Schedule to the Remission Order if they meet the definitional requirements in column 2.
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Canada's 3P Steel Surtax places high surtax rates on imports above specified tonnage thresholds. Affected importers should contact Experienced Counsel to explore opportunities for financial relief. |
Takeaways
The rules of the 3P Steel Surtax and importation process are very complicated and require an acute understanding of one's obligations. Failure to abide by the rules or pay keen attention to TRQ allocations can result in significant surtaxes. Importers affected by 3P Steel Surtax can generally benefit from the professional assistance of Experienced International Trade Counsel for everything from compliance advice to tariff and surtax minimization strategies.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
