globaltaxnews.ey.comSign up for tax alert emailsPrintDownload | ||||||||
14 July 2026 Canada extends steel tariff measures for an additional year
The Minister of Finance and National Revenue announced on 3 June 2026 that Canada is extending for an additional year its steel tariff rate quota (TRQ) regime that applies to imports from non-Canada-US-Mexico Agreement (CUSMA) partners. Canada is also extending tariff relief for eligible steel and aluminum products from the United States (US), and for eligible steel products subject to derivative tariffs. TRQs continue to be based on 20% of 2024 volumes for partners without a free trade agreement (FTA) with Canada and 75% for partners with an FTA in force with Canada. A 50% surtax continues to apply to imports exceeding quota limits. The US and Mexico remain exempt from the TRQ regime. Canada announced its extension of the steel TRQ regime for imports from non-CUSMA partners by an additional year, to 27 June 2027. The TRQ quota levels continue to be based on 20% of 2024 volumes for non-FTA countries and 75% for countries with an FTA in force with Canada. Imports exceeding quota limits continue to be subject to a 50% tariff. Effective 28 June 2026, the 50% surtax applies to imports of steel goods originating in non-FTA countries and FTA (non-CUSMA) countries if the quantity of the same class of goods imported during a quarterly period exceeds the limit for that period set out in the relevant column and schedule of the Order Imposing a Surtax on the Importation of Certain Steel Goods, SOR/2025-148 (Steel Order).
Certain quota volumes have been adjusted to reflect updates to 2024 steel import volumes, resulting in adjustments to single country limits. See Notice to importers: Item 82 — Steel goods — Serial No. 1163, which updates the list of the quantity of goods that may be imported without surtax during the period and quarters from 28 June 2026 to 27 June 2027, for FTA and non-FTA countries. As well, four tariff lines have been reclassified from hot-rolled steel sheet to cold-rolled products. Canada announced its extension of the existing horizontal tariff relief for eligible steel products subject to derivative tariffs to 30 June 2027. These changes were implemented by the Order Amending the Order Imposing a Surtax on the Importation of Certain Steel Goods, which was published in the Canada Gazette on 1 July 2026 as SOR/2026-119. The Order Amending the Import Control List (2026-3), SOR/2026-120, was published in the Canada Gazette on the same date. This order:
The Steel Derivative Goods Surtax Order, SOR/2025-267 (Derivative Goods Order) is amended to extend to 30 June 2027 the exemption provided for steel derivative goods used in the manufacturing of motor vehicles, aerospace goods and their parts, and to exempt goods originating in Canada from the surtax. These changes were implemented by the Order Amending the Steel Derivative Goods Surtax Order, SOR/2026-155, published in the Canada Gazette on 1 July 2026. Finally, the United States Surtax Remission Order (2025) is amended to extend remission of surtaxes to:
These changes were implemented by the Order Amending the United States Surtax Remission Order (2025), SOR/2026-154, published in the Canada Gazette on 1 July 2026. The Steel Order came into force on 27 June 2025. The Steel Order imposed a 50% surtax on imports of flat, long, pipe and tube, semi-finished and stainless-steel products from countries that do not have an FTA with Canada. The surtax initially applied to imports that exceeded a TRQ of 100% of 2024 levels, as administered on a quarterly basis. Steel goods classified under a tariff item listed in the Steel Order were generally subject to a surtax of 50% of their value for duty if either:
The Order Amending the Import Control List (made under the Export and Import Permits Act) (ICL Order), which came into force on 27 June 2025, added steel goods that are subject to the Steel Order under Item 82 of the Import Control List. Importers must obtain a shipment-specific import permit under subsection 8(1) of the Export and Import Permits Act to declare an importation of steel goods to be under the TRQ and exempt from the surtax. On 1 August 2025, Canada introduced TRQs of 100% of 2024 levels on imports of steel products for countries with which Canada has an FTA, other than the US or Mexico, with a 50% tariff applying to imports exceeding 2024 levels. In addition, the TRQ levels for steel products from non-FTA countries were reduced from 100% to 50% of 2024 volumes, with the 50% surtax applying to imports exceeding the TRQ. Effective 1 August 2025, if goods are potentially subject to multiple surtaxes imposed under the Customs Tariff, only the surtax imposed under the Steel Order applies. The Order Amending the Order Imposing a Surtax on the Importation of Certain Steel Goods, SOR/2025-266, made the following changes to TRQ levels for steel imports effective 26 December 2025:
In accordance with the Derivative Goods Order, Canada introduced a 25% surtax on the full value of certain steel derivative products from all countries, effective 26 December 2025. This surtax applies to a variety of goods made with steel, such as prefabricated buildings, wire, cable, chain, fasteners and metal office furniture. Section 2 of the Derivative Goods Order exempts a variety of goods from the surtax, including goods that are imported before 1 July 2026 for use in:
The Steel Derivative Goods Surtax Remission Order, SOR/2026-34, came into force on 24 February 2026. This order provides relief for surtaxes paid or payable under the Derivative Goods Order, including for goods imported by specified entities to support public health, health care, public safety and national security objectives, as well as general relief for specific products. The United States Surtax Remission Order (2025), SOR/2025-122, provides relief for surtaxes on certain steel and aluminum goods imported from the US, including goods used to support public health, health care, public safety and national security objectives, as well as goods imported for use in Canadian manufacturing, processing and food and beverage packaging.1 The Order Amending the United States Surtax Remission Order (2025), SOR/2025-269, extended remission periods for the following goods to 30 June 2026:
Multinationals with businesses importing steel, aluminum or steel derivative goods into Canada should consider reviewing product classifications, origin, quota availability and eligibility for remission or other relief, as the extended measures may continue to affect their operations.
Document ID: 2026-1505 | ||||||||
