In response to the imposition of the United States’ tariffs on Canadian steel and aluminum, the Government of Canada applied reciprocal countermeasures on imports of steel, aluminum, and other products from the US, beginning on July 1, 2018. The Government recognizes that the Canadian countermeasures can create challenges for Canadian manufacturers that rely on steel and aluminum imported from the US. This imported steel and aluminum is used in many of Canada’s major industries, including energy, advanced manufacturing, construction, and automotive parts. On October 11, 2018, the Government outlined a framework that allows the Government to consider providing targeted relief from Canada’s countermeasures in the following instances:
- Situations of short supply in the domestic market, either on a national or regional basis;
- Situations where there are contractual requirements, existing prior to May 31, 2018, for Canadian businesses to use U.S. steel or aluminum in their products or projects; and
- Other exceptional circumstances that could have severe adverse impacts on the Canadian economy.
A federal interdepartmental committee reviewed the requests received from Canadian companies for targeted relief from Canada’s countermeasures and made recommendations to the Minister of Finance. Under section 115 of the Customs Tariff, the Minister of Finance has the authority to recommend to the Governor in Council that relief be provided in the form of remission of the countermeasures.
The United States Surtax Remission Order provides targeted relief from countermeasures for a number of steel and aluminum products determined to be in short supply in Canada. The federal interdepartmental committee consulted domestic steel and aluminum producers to assess supply conditions.
For certain products determined to be in situations of ongoing short supply and listed in Schedule 1 of the Remission Order, relief can be granted from surtaxes paid or payable under the United States Surtax Order (Steel and Aluminum) for an indefinite period (for products imported from the U.S. on or after July 1, 2018).
For certain products determined to be in situations of temporary short supply and listed in Schedule 2 of the Remission Order, relief can be granted from surtaxes paid or payable under the United States Surtax Order (Steel and Aluminum) for a time-limited period (for products imported from the U.S. from July 1, 2018 to December 31, 2018).
The list of goods included in Schedule 1 and Schedule 2 of the Remission Order can be found on the Department of Finance Canada website.
CBSA issues information on the US Surtax Remission Order
On October 11, 2018, the Canada Border Services Agency (CBSA) issued Customs Notice 18-16 United States Surtax Remission Order, which provides information on the introduction and application of the United States Surtax Remission Order, 2018-1272, which is intended to minimize the negative effects of the surtaxes on Canadian companies and the economy by providing relief in exceptional situations.
The remission order remits the surtaxes imposed by the United States Surtax Order (Steel and Aluminum): SOR/2018-152 and the United States Surtax Order (Other Goods): SOR/2018-153 which took effect on July 1, 2018 (25% in the case of certain steel products, 10% in the case of certain aluminum products and 10% for certain other goods listed in the order) under the following situations:
- Pursuant to section 115 of the Customs Tariff, in respect of the goods listed in Schedule 1 and Schedule 2 of the remission order;
- Pursuant to section 115 of the Customs Tariff, in respect of goods classified under tariff item No. 8903.10.00, 8903.91.00, 8903.92.00 or 8903.99.90 in the List of Tariff Provisions set out in the schedule to the Customs Tariff, excluding those that have been exported from Canada and then subsequently re-imported into Canada; and
- Goods temporarily imported into Canada for the purposes of repair, alteration, or storage, including those classified under tariff item No. 8903.10.00, 8903.91.00, 8903.92.00 or 8903.99.90 that have been exported from Canada.
CN 18-16 explains how to make remission claims, account for relief of the surtax, and how to make corrections, obtain re-determinations and obtain refunds.