CBSA’s Updated Trade Verification Priorities Expand Focus On Steel, Aluminum, And Trade Agreement Compliance

In July 2026, the Canada Border Services Agency (“CBSA“) updated its trade compliance priorities¹, signaling to importers which commercial goods imported into Canada will be subject to enhanced CBSA scrutiny.²

New priorities since the CBSA’s last update in January 2026³ include increased verification of importers seeking to avoid steel and aluminum surtaxes by classifying their goods under tariff items of Chapter 99 or who may be unknowingly relying on an incorrect tariff classification.

New Compliance Priorities Since the CBSA’s January 2026 Update

The CBSA has indicated the following compliance priorities:

• Goods subject to the Steel Derivative Surtax Order⁴ was also listed as a new priority for the CBSA. Since December 26, 2025, this Order subjects certain steel derivative goods imported into Canada to a surtax of 25%.
• The short supply list of products under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”) will also be targeted.⁵

Most existing compliance priorities remain in place. These are:

• The verification of the application of the GST and excise duties and taxes, notably the use of GST exemption codes and whether vaping products are subject to excise duties and taxes.
• Origin verifications under the Canada-European Union Comprehensive Economic and Trade Agreement and
• Origin verifications under the Canada-United Kingdom Trade Continuity Agreement.
• Origin verifications under Canada United States Mexico Agreement, specifically targeting the automotive industry.
• Verifications of licensees importing supply managed goods under the Duties Relief Program.
• The compliance of precious metals under the GST and excise duties and taxes will also be prioritized.

The CBSA has removed previously listed priority regarding the classification of cheese treats for dogs (Heading 23.09).

New Tariff Classification Enforcement Priorities: Emphasis on Steel and Aluminum Surtax Orders⁶

Notably, two new tariff classification priorities focus on the enforcement of Canada’s expanding list of surtax orders affecting steel, aluminum, and their derivatives:

• Since April 2026, the CBSA has intensified its verification of importers’ claims that goods subject to the 25% surtax under the Steel Goods Aluminum Goods Surtax Order⁷ are exempt by virtue of being classified under a Chapter 99 tariff item.
• The CBSA has also identified the Order Imposing a Surtax on the Importation of Certain Steel Goods⁸ as a priority. Since June 2025, the Order applies a 50% surtax to certain steel goods subject to tariff-quota rates listed in its Schedules 1 and 2 and applies to different degrees to goods originating from countries with and without free trade agreements with Canada.

The priority pertaining to the enforcement of the United States Surtax Order (Steel and Aluminum 2025) also remains in place.⁹ This order ensures that the 25% surtax on steel, aluminum, and certain other goods originating in the United States are being applied.

Importers should pay particular attention to steel and aluminum goods that are classified under a tariff item in Chapter 99 of Canada’s Customs Tariff, especially where that classification results from a recent change made by the importer or its customs broker.

Chapter 99 of the Customs Tariff contains special tariff treatment provisions that apply in addition to the tariff classification determined under Chapters 1 to 97. Depending on the applicable tariff item, qualifying goods may benefit from relief from customs duties or other preferential tariff treatment. Certain—but not all— of the recent Canadian surtax orders have incorporated specific Chapter 99 tariff items as a basis for exempting qualifying goods from surtaxes.

It is critical to note that eligibility for Chapter 99 tariff items is often determined by the end use of the imported goods, rather than by their physical characteristics. Accordingly, during a CBSA verification or audit, importers may be required to demonstrate that the goods were used for the qualifying purpose. For distributors, wholesalers, and retailers, this has historically proven challenging where adequate supporting documentation, such as end-use certificates obtained from customers, has not been retained.¹⁰ For importers seeking relief from Surtax Orders, it is also possible to request a Remission Order from the Department of Finance. In certain cases, these Remission Orders can even be granted retroactively for past duties paid.

Ongoing Priorities:

The following custom tariff and valuation verification priorities also remain active:

Relevance for Importers

Importers should review their exposure to the new surtax priorities on steel and aluminum content, their record and documentation of product end use for claiming Ch. 99 relief, their CPTPP origin documentation, and their GST treatment of precious metals. McMillan’s International Trade Group is available to support importers in assessing their compliance status, addressing any past non-compliance, and ensuring ongoing adherence to regulatory requirements.

Footnotes

1. Government of Canada, “Trade compliance verification” (Last Modified July 7, 2026).

2. McMillan, “Canada Border Services Agency’s Updated Trade Compliance Verification Priorities Target Goods Subject to Retaliatory Tariffs” (July 30, 2025).

3. Government of Canada, “Trade compliance verification” (January 7, 2026).

4. Government of Canada, “Steel Derivative Goods Surtax Order” (December 11, 2026).

5. The short supply list is a mechanism allowing certain goods made with non-originating inputs to nonetheless qualify for preferential treatment where those inputs are unavailable within the trade bloc.

6. See McMillan’s bulletins “Following July 1st Review, CUSMA Remains in Effect Until 2036: On-going Negotiations as Part of Annual Reviews to Agree on North American Free Trade Will Continue” (July 3, 2026); “Preparing for All Things Tariffs, bis: Updates to Canada’s Trade Policy Regime Ahead of 2026 CUSMA Joint Review” (October 22, 2025); “Trade Tensions Escalate on Steel and Aluminum” (August 5, 2025) for more details on the latest updates on steel and aluminum surtax orders.

7. Government of Canada, “Steel Goods and Aluminum Goods Surtax Order: SOR/2025-154” (July 30, 2025).

8. Government of Canada, “Order Imposing a Surtax on the Importation of Certain Steel Goods (SOR/2025-148)” (June 26, 2025).

9. Government of Canada, “United States Surtax Order (Steel and Aluminum 2025) (SOR/2025-95)” (March 12, 2025). See also Government of Canada, “Order Amending and Repealing Certain Orders Made Under the Customs Tariff (United States Surtax)”.

10. See, e.g., Entrelec Inc. (28 September 1998), AP-97-029 (CITT) at 11; see also on the point of potentially relevant evidence Entrelec Inc. v. Canada (Minister of National Revenue), 2000 CanLII 16268 (FCA), at para. 8; Entrelec Inc., (17 March 2003), AP-2000-051 (CITT), affirmed in Entrelec Inc. v. Canada (Commissioner of the Canada Customs and Revenue Agency), 2004 FCA 159 (CanLII).

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The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

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