On November 26, Prime Minister Carney announced new protectionist measures for the Canadian steel industry that will come into force on December 26, 2026. These measures will directly impact the cost of importing foreign steel and certain derivative steel products into Canada, indirectly increasing the cost of doing business for importers whom cannot source tariffed steel products domestically. The measures were included alongside other federal commitments to boost the Canadian steel and lumber industries in the face of changing global trade patterns led by the United States.
The measures, in addition to the existing surtaxes on certain US and Chinese steel products, on steel melted and poured in China, and AD/CVD measures in force, represent the most expansive suite of trade protections for the Canadian steel industry in recent memory.
The measures include the following:
- Reducing existing steel TRQs for FTA and non-FTA trading partners.
- Introducing a 25% tariff on derivative steel products.
- Creating a dedicated steel AD/CVD compliance team at the Canada Border Services Agency.
The Government has also extended the temporary remission for steel imports used in Canada for manufacturing, foods and beverage packaging and agricultural production.
Amendments to existing steel TRQs
Since June 27, a 50% surtax has applied to ROW steel imports, with the exception of steel originating in Mexico and the United States that exceed a country-specific and product specific TRQ and/or where importers fail to obtain a shipment-specific import permit. In order to avoid the 50% surtax, importers must ensure adequate quota remains for the specific steel product (by HS Code and by country of origin) and must obtain a shipment-specific import permit issued by Global Affairs Canada. Import permits are administered on a first-come-first-serve basis.
The TRQ volumes are currently based on 50% of 2024 import volumes for Canada’s non-FTA trading partners and 100% of 2024 import volumes for Canada’s FTA trading partners (as amended in August); however, as of the third steel surtax quarter, which commences on December 26, 2025, steel imports originating in Canada’s non-FTA trading partners will be reduced to 20% of 2024 import volumes and steel imports originating in Canada’s FTA partners will be reduced to 75% of 2024 import volumes.
Steel importers should read the Notice to Importers and review the amended customs notice when posted, and should continue to plan ahead for 2026 foreign steel imports to ensure adequate TRQ remains and import permits remain valid for a shipments date of entry.
The amended Orders in Council are available here (FTA) and here (non-FTA).
25% surtax on steel derivative products
As of December 26, 2025, Canada will apply a 25% surtax on certain ROW derivative steel products listed in the schedule here, which includes the following goods: wind towers; prefabricated buildings; fasteners; and wires. While the Government of Canada has provided limited exemptions, it will only grant remission on a case-by-case basis to “address situations where goods cannot be sourced domestically or other exceptional circumstances that could have severe adverse impacts on the Canadian economy”.
Exemptions to the surtax include:
- Casual goods (means any goods imported into Canada other than goods imported for sale or for any commercial, industrial, occupational, institutional or other like use).
- Goods properly classified under Chapter 98 of the Customs Tariff.
- The follows goods imported prior to July 1, 2026 for the following end uses:
- The manufacture of motor vehicles or chassis for motor vehicles or in the manufacture of parts of or accessories for motor vehicles or chassis for motor vehicles;
- Aircraft, ground flying trainers or spacecraft or in parts of aircraft, ground flying trainers or spacecraft;
- Utility wind towers, and sections of those towers, that are classified under tariff item 7308.20.00 and imported for installation in energy projects located west of the Ontario–Manitoba border.
- Goods in transit to Canada as of December 26, 2025, which typically requires an importer to furnish proof that the goods were bound for but not yet arrived in Canada, and under the control of a carrier.
The surtax will be cumulative with any AD/CVD duties owing, but will not be cumulative with other Canadian surtaxes currently applicable to imported steel. In other words, Canada’s existing surtaxes are “non-stackable” and apply in the following hierarchical order:
- 50% surtax applicable under the Order Imposing a Surtax on Importation of Certain Steel Goods (FTA and non-FTA steel TRQs).
- Either:
- a) 25% surtax on U.S. steel and aluminum products applicable under the US Surtax Order (Steel and Aluminum 2025) ;
- b) 25% surtax on Chinese steel and aluminum products applicable under the China Surtax Order; or
- c) 25% tariffs on non-U.S. imports that contain steel melted and poured, or aluminum smelt and cast, in China applicable under the Customs Notice 25-28: Steel Goods and Aluminum Goods Surtax Order
- 25% surtax on steel derivative products from all countries applicable under the Steel and Derivative Goods Surtax Order (effective December 26, 2025)
The Order in Council is available here. The relevant customs notice is not available (as of the time of publication), but will be available here.
Importers should consider these next steps to prepare for the entry into force of this surtax:
- Assess the impact of the surtax on their supply chain and contractual obligations.
- Review the applicable customs notice (once published) for details on customs procedures and the accounting and release of goods subject to the surtax.
- Consider immediate remediating measures such as importing products in advance of December 26 and conducting a market assessment to determine whether domestic suppliers have same/similar products available for sale in Canada.
- Conduct a financial assessment on the impact of the surtax. Prepare to accrue funds for payment of monthly CARM statements of account. Duty and GST (payable on the duty-paid value of an imported good) liability will increase when importing goods subject to the surtax.
- Consider whether the surtax will require an adjustment to financial security posted on the CARM Client Portal.
Introduction of CBSA steel compliance team
The Government of Canada has also promised to ramp up enforcement of Canada’s trade remedies program and application of the surtaxes, creating a dedicated steel compliance team. This announcement follows the Government’s commitment to hiring 1000 new CBSA officers to investigate unfair trade practices and the CBSA reporting having assessed CAD $187.5 million in AD/CVD duties and launching 20 AD/CVD investigations into steel products throughout 2025. Steel importers should expect increased trade compliance verifications focused on classification, origin and declared value of steel products.
Extension of temporary remissions on US steel products
The Government has extended the temporary remissions of Canadian tariffs on US steel imports for a limited amount of time, providing importers with an opportunity to adjust their supply chains in response to the new steel measures.
The remissions are extended as follows:
- January 31, 2026: steel goods, used for manufacturing, processing, food and beverage packaging, and agricultural production in Canada, with the exception of steel goods used for the manufacturing of motor vehicles, aerospace goods, and their parts, for which remission is extended to June 30, 2026.
- June 30, 2026: aluminum goods used for manufacturing, processing, food and beverage packaging, and agricultural production in Canada; and
- June 30, 2026: goods used for public health, health care, public safety and national security purposes.
The amending Order in Council is available here and customs notice (yet to be amended as of the date of publication) is available here.
