United States Surtax Remission Order: SOR/2018-205
Canada Gazette, Part II, Volume 152, Number 22
Registration
October 11, 2018
CUSTOMS TARIFF
Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 115 footnote a of the Customs Tariff footnote b , makes the annexed United States Surtax Remission Order.
United States Surtax Remission Order
Remission
Steel and Aluminum
Remission
1 (1) Subject to subsection (2), remission is granted of surtaxes paid or payable under the United States Surtax Order (Steel and Aluminum) in respect of the goods listed in Schedule 1 or Schedule 2.
Conditions
(2) Remission referred to in subsection (1) is granted on the following conditions:
- (a) in the case of a good listed in Schedule 1, it is imported into Canada on or after July 1, 2018;
- (b) in the case of a good listed in Schedule 2, it is imported into Canada during the period beginning on July 1, 2018 and ending on December 31, 2018;
- (c) no other claim for relief of the surtax has been granted under the Customs Tariff in respect of the good; and
- (d) the importer makes a claim for remission to the Minister of Public Safety and Emergency Preparedness within two years after the date of importation.
Other Goods
Remission
2 (1) Subject to subsection (2), remission is granted of surtaxes paid or payable under the United States Surtax Order (Other Goods) 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 subsequently re-imported into Canada.
Conditions
(2) Remission referred to in subsection (1) is granted on the following conditions:
- (a) the good is imported into Canada on or after July 1, 2018;
- (b) the good was purchased and sold under contract by the importer before May 31, 2018;
- (c) no other claim for relief of the surtax has been granted under the Customs Tariff in respect of the good; and
- (d) the importer makes a claim for remission to the Minister of Public Safety and Emergency Preparedness within two years after the date of importation.
Goods Temporarily Imported into Canada
Remission
3 (1) Subject to subsection (2), remission is granted of surtaxes paid or payable under the United States Surtax Order (Steel and Aluminum) and United States Surtax Order (Other Goods) in respect of goods temporarily imported into Canada for the purpose of repair, alteration or storage.
Conditions
(2) Remission referred to in subsection (1) is granted on the following conditions:
- (a) the good is exported immediately after having been repaired, altered or removed from storage, whichever occurs last, but no later than 12 months after the date on which the imported good was released;
- (b) no other claim for relief of the surtax has been granted under the Customs Tariff in respect of the good; and
- (c) the importer makes a claim for remission to the Minister of Public Safety and Emergency Preparedness within two years after the date of importation.
Definitions
(3) The following definitions apply in this section.
alteration in relation to a good, does not include an operation or process that
- (a) destroys the essential characteristics of the good;
- (b) creates a new or commercially different good; and
- (c) in the case of an unfinished good, is part of the production or assembly of the good into a finished good. (modification)
repair in relation to a good, means the restoration of a good or its components to good operating condition, including renovation, re-dyeing, cleaning and re-sterilizing, but does not include an operation or process that either destroys the essential characteristics of a good or creates a new or commercially different good. (réparation)
Coming into Force
Registration
4 This Order comes into force on the day on which it is registered.
SCHEDULE 1
(Subsection 1(1) and paragraph 1(2)(a))
|
Item |
Column 1 |
Column 2 |
|---|---|---|
|
1 |
7207.20.00 |
cold rolled annealed spring steel; of grade SAE 1095 |
|
2 |
7208.27.00 |
of grade ASTM A1039 (500LA); and of thickness of 0.039 inches (± 0.99 mm) nominal |
|
3 |
7208.40.00 |
of grade HPS 70 W |
|
4 |
7208.51.00 |
for production of large diameter line pipe of grade X65 or X70 (API 5L) |
|
5 |
7208.51.00 |
of grade HPS 70 W |
|
6 |
7208.52.00 |
for production of large diameter line pipe of grade X65 or X70 (API 5L) |
|
7 |
7209.17.00 |
of grade HSLA 60 |
|
8 |
7209.17.00 |
of Martensitic grades |
|
9 |
7210.12.00 |
batch annealed tin plate |
|
10 |
7210.30.00 |
electro galvanized steel |
|
11 |
7210.49.00 |
of grade TRIP TRC400Y/690T; and of thickness of 0.057 inches (± 1.45 mm) or more |
|
12 |
7210.49.00 |
galvannealed; of grade ASTM A653/HSLA 050XK; of a width of 70 inches (1778 mm) |
|
13 |
7210.61.00 |
with aluminized coating; of thickness not exceeding 2.8 mm; of a width not exceeding 863 mm; and meeting standard ASTM A929 or CSA G401 |
|
14 |
7210.69.00 |
aluminized steel |
|
15 |
7210.69.00 |
electro galvanized steel |
|
16 |
7210.69.00 |
with aluminized coating; of thickness not exceeding 2.8 mm; of a width not exceeding 863 mm; and meeting standard ASTM A929 or CSA G401 |
|
17 |
7211.29.00 |
of specification MS-264-060XK |
|
18 |
7211.29.00 |
of grade C1010 SAEJ403; of tensile strength from 70,000 to 84,000 PSI inclusive; of elongation on 2 inches of 3%; and of yield strength of 65,000 PSI minimum |
|
19 |
7212.10.00 |
batch annealed tin plate |
|
20 |
7212.20.00 |
electro galvanized steel |
|
21 |
7212.50.00 |
electro galvanized steel |
|
22 |
7212.50.00 |
aluminized steel |
|
23 |
7214.91.00 |
of a thickness of 0.25 inches (6.35 mm); and of a width of exceeding 8 inches (203.2 mm) |
|
24 |
7214.91.00 |
of a thickness of 0.375 inches (± 9.53 mm); and of a width exceeding 10 inches (254 mm) |
|
25 |
7214.91.00 |
of a thickness of 0.5 inches (12.7 mm); and of a width exceeding 10 inches (254 mm) |
|
26 |
7214.91.00 |
of a thickness 0.625 inches (± 15.88 mm); and of a width exceeding 10 inches (254 mm) |
|
27 |
7214.99.00 |
ductile cast iron bar of grade 65-45-12 |
|
28 |
7214.99.00 |
of grade 4130; vacuum degassed; of hardness of minimum 197 HBW and maximum 237 HBW; of tensile strength of 95,000 psi minimum; of yield strength of 75,000 psi minimum; and of a diameter of up to 12 inches (304.8 mm) inclusive |
|
29 |
7214.99.00 |
of grade 4140; vacuum degassed; of hardness of minimum of 205 HBW and maximum of 237 HBW; of tensile strength of 100,000 psi minimum; of yield strength of 80,000 psi minimum; and of a diameter of up to 12 inches (304.8 mm) inclusive |
|
30 |
7214.99.00 |
of grade 4130; vacuum degassed; of hardness of minimum 237 HBW; of tensile strength of 115,000 psi minimum; of yield strength of 100,000 psi minimum; and of a diameter of up to 12 inches (304.8 mm) inclusive |
|
31 |
7214.99.00 |
of grade 4140 or 4145; vacuum degassed; of hardness of minimum of 253 HBW; of tensile strength of 125,000 psi minimum; of yield strength of 110,000 psi minimum; and of a diameter of up to 12 inches (304.8 mm) inclusive |
|
32 |
7214.99.00 |
of grade 4140; heat treated and stress relieved; of hardness of minimum 32 RC and maximum 34 RC; and of minimum yield strength of 120,000 psi |
|
33 |
7214.99.00 |
of grade 4340; heat treated and stress relieved; of hardness of minimum 32 RC and maximum 34 RC; and of minimum yield strength of 140,000 psi |
|
34 |
7214.99.00 |
annealed; of grade 4140; and of a diameter of less than 4 inches (101. 6 mm) or more than 7 inches (177.8 mm) |
|
35 |
7214.99.00 |
of grade 8620; and of a diameter of more than 7 inches (177.8 mm) |
|
36 |
7214.99.00 |
of proprietary grade SW85; and of a diameter exceeding 4.0625 inches (± 101.76 mm) |
|
37 |
7215.10.00 |
of grade AISI 1018 (ASTM A108); and of a diameter of more than 7 inches (177.8 mm) |
|
38 |
7215.50.00 |
nitrocarburized or oxidized; of minimum yield of 75,000 psi; and of maximum surface finish of 16 RMS |
|
39 |
7215.50.00 |
of grade ASTM A108; and of a diameter of more than 4 inches (101.6 mm) |
|
40 |
7215.90.00 |
chrome plated; and of yield strength of up to 120,000 psi minimum |
|
41 |
7215.90.00 |
ductile cast iron bar of grade 65-45-12 |
|
42 |
7216.10.00 |
standard I sections S 3 x 5.7; of specification ASTM A529 Grade 50 |
|
43 |
7221.00.00 |
of grade 17-7, 201, 208Lsi, 302, 302HQ, 304, 304L, 305, 308L, 309L, 309Lsi, 310, 314, 316, 316L, 316Lsi, 321, 327, 409, 409NB, 410, 420, 430, 430L or 450 |
|
44 |
7222.11.00 |
of grade 13-8, 15-5, 17-4, 201, 303, 304, 304L, 316, 316L, 321, 327, 409, 410, 420, 430, 450 or AMS Custom 465 |
|
45 |
7222.20.00 |
of grade 13-8, 15-5, 17-4, 201, 303, 304, 304L, 316, 316L, 321, 327, 409, 410, 420, 430 or 450; and of a diameter of less than 8 inches (203.2 mm) |
|
46 |
7222.30.00 |
of grade 201, 304, 316, 321, 327, 409, 420, 430 or 450; and of a diameter less than 8 inches (203.2 mm) |
|
47 |
7222.30.00 |
chrome plated |
|
48 |
7222.40.00 |
of grade 201, 304, 316, 321, 327, 409, 420, 430 or 450 |
|
49 |
7223.00.00 |
hot-rolled and annealed; soap coated; of type 304L; and of a diameter of 0.312 inches (± 7.92 mm) |
|
50 |
7223.00.00 |
nickel and soap coated; of type 302 (ASTM A313 specification); and of a diameter of up to 5.25 mm |
|
51 |
7223.00.00 |
nickel and soap coated; of type 17-7PH (ASTM A313 specification); and of a diameter of up to 5.25 mm |
|
52 |
7225.40.00 |
for production of large diameter line pipe of grade X65 or X70 (API 5L) |
|
53 |
7225.40.00 |
of grade HPS 70 W |
|
54 |
7225.40.00 |
of grade Mangabraze |
|
55 |
7225.92.00 |
aluminized; and of specification GMW2M-ST-S-CR5-T1M-120 |
|
56 |
7225.99.00 |
for production of large diameter line pipe of grade X65 or X70 (API 5L) |
|
57 |
7225.99.00 |
of grade HPS 70 W |
|
58 |
7226.91.00 |
of grade HPS 70 W |
|
59 |
7226.99.00 |
aluminized steel |
|
60 |
7226.99.00 |
electro galvanized steel |
|
61 |
7228.30.00 |
of grade 4715; vacuum degassed; of hardness of minimum 56 HRC and maximum 62 HRC; of tensile strength of 119,000 psi minimum; of yield strength of 95,000 psi minimum; and of a diameter of up to 7 inches (177.8 mm) |
|
62 |
7228.30.00 |
of grade 1522CV |
|
63 |
7228.30.00 |
of alloy Aermet 100 |
|
64 |
7228.40.00 |
of grade FX-XTRA; and of a diameter of up to 16 inches (406.4 mm) |
|
65 |
7228.50.00 |
of grade mold lens quality (MLQ) P20 |
|
66 |
7228.50.00 |
of grade MD P-20 |
|
67 |
7228.50.00 |
of proprietary grade Microtec 4M95 |
|
68 |
7228.50.00 |
of proprietary grade Impact 7 |
|
69 |
7228.50.00 |
of grade 5140H |
|
70 |
7228.70.00 |
W-section beams |
|
71 |
7229.90.00 |
chrome silicon spring wire |
|
72 |
7229.90.00 |
chrome silicon valve quality wire |
|
73 |
7304.31.00 |
drawn over mandrel (DOM) of specification SP-TU-001 |
|
74 |
7304.31.00 |
drawn over mandrel (DOM) of specification ASTM A513 Type 5 |
|
75 |
7304.31.00 |
cold drawn seamless tube |
|
76 |
7304.31.00 |
cold drawn of specification SP-TU-009 |
|
77 |
7304.39.00 |
drawn over mandrel (DOM) of specification SP-TU-001 |
|
78 |
7304.39.00 |
drawn over mandrel (DOM) of specification ASTM A513 Type 5 |
|
79 |
7304.39.00 |
hot-rolled of specification SP-TU-002 |
|
80 |
7304.39.00 |
hot finished seamless pressure tubing; of grade 1026; of an outside diameter from 3 inches (76.2 mm) to 24 inches (609.6 mm) inclusive; and of wall thickness from 0.5 inches (12.7 mm) to 4 inches (101.6 mm) inclusive |
|
81 |
7304.39.00 |
hot finished seamless pressure tubing; of grade 4130; of an outside diameter from 3 inches (76.2 mm) to 24 inches (609.6 mm) inclusive; and of wall thickness from 0.5 inches (12.7 mm) to 4 inches (101.6 mm) inclusive |
|
82 |
7304.39.00 |
hot finished seamless pressure tubing; of grade 4140; of an outside diameter from 3 inches (76.2 mm) to 24 inches (609.6 mm) inclusive; and of wall thickness from 0.5 inches (12.7 mm) to 4 inches (101.6 mm) inclusive |
|
83 |
7304.39.00 |
hot finished seamless pressure tubing; of proprietary grade Impact 7; of an outside diameter from 3 inches (76.2 mm) to 24 inches (609.6 mm) inclusive; and of wall thickness from 0.5 inches (12.7 mm) to 4 inches (101.6 mm) inclusive |
|
84 |
7306.29.00 |
coiled tubing; of outside diameter from 0.75 inches (19.05 mm) to 3.5 inches (88.9 mm) inclusive; of length of up 10,000 meters; and of wall thickness from 0.08 inches (± 2.03 mm) to 0.3 inches (7.62 mm) inclusive |
|
85 |
7306.30.00 |
aluminized steel tubing |
|
86 |
7306.30.00 |
drawn over mandrel (DOM) of specification SP-TU-001 |
|
87 |
7306.30.00 |
drawn over mandrel (DOM) of specification ASTM A513 Type 5 |
|
88 |
7306.30.00 |
of in-line galvanized steel |
|
89 |
7306.30.00 |
of grade API 4140 |
|
90 |
7306.30.00 |
of grade API 4142 |
|
91 |
7306.30.00 |
straight seam, electric resistance welded; of circular cross-section of an outside diameter from 16 inches (406.4 mm) to 20 inches (508 mm) inclusive; of wall thickness of up to 0.625 inches (15.875 mm); and of grade CSA G40.21 |
|
92 |
7306.30.00 |
cold drawn seamless tube |
|
93 |
7306.30.00 |
electric resistance welded (ERW) drawn over mandrel (DOM) of any specification |
|
94 |
7306.30.00 |
electric resistance welded (ERW) drawn over mandrel (DOM) of specification SP-TU-001 |
|
95 |
7306.30.00 |
electric resistance welded (ERW) drawn over mandrel (DOM) of specification SP-TU-004 |
|
96 |
7306.30.00 |
electric resistance welded (ERW); of nominal pipe size of 0.125 inches (± 3.18 mm); and of outside diameter of 0.405 inches (± 10.29 mm) |
|
97 |
7306.30.00 |
electric resistance welded (ERW); of nominal pipe size of 0.25 inches (6.35 mm); and of outside diameter of 0.540 inches (± 13.72 mm) |
|
98 |
7306.30.00 |
electric resistance welded (ERW); of nominal pipe size of 0.375 inches (± 9.53 mm); and of outside diameter of 0.675 inches (± 17.15 mm) |
|
99 |
7306.40.00 |
of in-line galvanized steel, including specifications ASTM A500-C and CSA G40.21-44W |
|
100 |
7306.50.00 |
coiled tubing; of outside diameter from 0.75 inches (19.05 mm) to 3.5 inches (88.9 mm); of length of up 10,000 meters; and of wall thickness from 0.08 inches (± 2.03 mm) to 0.3 inches (7.62 mm) |
|
101 |
7306.61.00 |
of square section; of a cross-sectional dimension of 12 inches (304.8 mm) or more |
|
102 |
7306.61.00 |
of in-line galvanized steel |
|
103 |
7306.61.00 |
straight seam, electric resistance welded; of square and equivalent rectangular sections; of dimensions from 12 inches × 12 inches (304.8mm × 304.8mm) to 16 inches × 16 inches (406.4 mm × 406.4 mm) inclusive; of thickness of up to 0.625 inches (± 15.88 mm); and of grade CSA G40.21, ASTM A252 or ASTM A500 |
|
104 |
7306.61.00 |
straight seam, electric resistance welded; of square section; of dimension of 1.5 inches × 1.5 inches (38.1 mm × 38.1 mm); of thickness of 0.25 inches (6.35 mm); and of grade CSA G40.21, ASTM A252 or ASTM A500 |
|
105 |
7306.69.00 |
of grade AISI 1526 |
|
106 |
7306.69.00 |
of grade AISI 4130 |
|
107 |
7306.69.00 |
of in-line galvanized steel |
|
108 |
7606.12.00 |
of alloy AA3002, AA3003, AA3004, AA3104, AA3105, AA3105-H12, AA3105-H24, AA5005, AA5052, AA5083, AA5086, AA5182, AA5205, AA5251, AA5454, AA5657, AA5754, AA6005A, AA6014, AA6016, AA6061, AA6083, AA6111, AA6181A/AA6005A or AA6451; and of a thickness from 0.2 mm to 9.2 mm inclusive |
|
109 |
7610.90.90 |
aluminum composite material consisting of aluminum sheets of 0.5 mm in thickness and bonded by a thermoplastic core of 3 mm in thickness |
|
110 |
7612.90.10, 7612.90.91 or 7612.90.99 |
aluminium cans of 201 ml, 222 ml, 248 ml, 250 ml, 355 ml, 473 ml, 568 ml, 710 ml or 946 ml |
SCHEDULE 2
(Subsection 1(1) and paragraph 1(2)(b))
|
Item |
Column 1 |
Column 2 |
|---|---|---|
|
1 |
7208.39.00 |
of grade 1037; and of a minimum width of 47.375 inches (± 1,203.33 mm) |
|
2 |
7209.15.00 |
cold rolled spheroidized annealed; of grade 4130 |
|
3 |
7209.16.00 |
cold rolled annealed spring steel; of grade SAE 1095 |
|
4 |
7209.16.00 |
cold rolled spheroidized annealed; of grade 4130 |
|
5 |
7209.16.00 |
cold rolled spheroidized annealed; of grade 10B21 |
|
6 |
7209.16.00 |
of grade HSLA 60 |
|
7 |
7209.17.00 |
cold rolled annealed spring steel; of grade SAE 1095 |
|
8 |
7209.18.00 |
cold rolled annealed spring steel; of grade SAE 1095 |
|
9 |
7209.90.00 |
cold rolled annealed spring steel; of grade SAE 1095 |
|
10 |
7210.49.00 |
galvannealed; of grade HSLA 70; and of a minimum width of 44.125 inches (± 1120.78 mm) |
|
11 |
7210.49.00 |
galvanized; of grade HSLA 70; and of a minimum width of 43.29 inches (± 1099.57 mm) |
|
12 |
7210.49.00 |
annealed spring steel of grade C1070 CR |
|
13 |
7210.70.00 |
with polymer coating; of thickness not exceeding 2.8 mm; of a width not exceeding 863 mm; and meeting standard ASTM A929 or CSA G401 |
|
14 |
7210.90.00 |
with polymer coating; of thickness not exceeding 2.8 mm; of a width not exceeding 863 mm; and meeting standard ASTM A929 or CSA G401 |
|
15 |
7211.23.00 |
cold rolled spheroidized annealed; of grade 4130 |
|
16 |
7211.29.00 |
AISI 1055 carbon steel |
|
17 |
7211.29.00 |
cold rolled annealed strip steel; of grade C1050 |
|
18 |
7214.99.00 |
of grade AISI 52100 |
|
19 |
7216.99.00 |
I-section beams |
|
20 |
7216.99.00 |
unequal leg angles with dimensions exceeding 7 inches (177.8 mm) × 4 inches (101.6 mm) × 0.5 inches (12.7 mm) |
|
21 |
7216.99.00 |
MC channels of a depth exceeding 3 inches (76.2 mm) |
|
22 |
7216.99.00 |
C channels of imperial size exceeding C 12 inches (310 mm) × 25 lbs/ft (37 kg/m) |
|
23 |
7222.19.00 |
of grade 201, 304, 316, 321, 327, 409, 420, 430 or 450 |
|
24 |
7225.50.00 |
cold rolled spheroidized annealed; of grade 4130 |
|
25 |
7226.92.00 |
of grade 4140 |
|
26 |
7226.92.00 |
of grade 4142 |
|
27 |
7227.90.00 |
of grade 4320 |
|
28 |
7227.90.00 |
of grade 4330 |
|
29 |
7228.50.00 |
of grade AMS 6425 |
|
30 |
7304.31.00 |
of grade AISI 1026 |
|
31 |
7304.31.00 |
of grade AISI 1045 |
|
32 |
7304.31.00 |
of grade AISI 1526M |
|
33 |
7304.31.00 |
of grade API 4140 |
|
34 |
7304.31.00 |
of grade API 4142 |
|
35 |
7304.39.00 |
of grade AISI 1026 |
|
36 |
7304.39.00 |
of grade AISI 1045 |
|
37 |
7304.39.00 |
of grade API 4140 |
|
38 |
7304.39.00 |
of grade API 4142 |
|
39 |
7304.51.00 |
of grade AISI 1026 |
|
40 |
7304.51.00 |
of grade AISI 1045 |
|
41 |
7304.51.00 |
of grade AISI 1526M |
|
42 |
7304.51.00 |
of grade API 4140 |
|
43 |
7304.51.00 |
of grade API 4142 |
|
44 |
7304.59.00 |
of grade AISI 1026 |
|
45 |
7304.59.00 |
of grade AISI 1045 |
|
46 |
7304.59.00 |
of grade AISI 1526M |
|
47 |
7304.59.00 |
of grade API 4140 |
|
48 |
7304.59.00 |
of grade API 4142 |
|
49 |
7304.59.00 |
of grade 4140; vacuum degassed; of yield strength of 80,000 PSI minimum; and of outside diameter from 3.25 inches (82.55 mm) to 8 inches (203.2 mm) inclusive |
|
50 |
7306.30.00 |
of grade AISI 1526M |
|
51 |
7306.50.00 |
of grade AISI 1526 |
|
52 |
7306.61.00 |
straight seam, electric resistance welded; of rectangular section; of dimensions of |
|
53 |
7306.61.00 |
straight seam, electric resistance welded; of rectangular section; of dimensions of 1.97 inches (± 50.04 mm) × 1.57 inches (± 39.88 mm); and of grade CSA G40.21, ASTM A252 or ASTM A500 |
|
54 |
7306.61.00 |
straight seam, electric resistance welded; of rectangular section; of dimensions of 2.36 inches (± 59.95 mm) × 1.57 inches (± 39.88 mm); and of grade CSA G40.21, ASTM A252 or ASTM A500 |
|
55 |
7306.61.00 |
straight seam, electric resistance welded; of rectangular section; of dimensions of 4.72 inches (± 119.89 mm) × 1.57 inches (± 39.88 mm); and of grade CSA G40.21, ASTM A252 or ASTM A500 |
|
56 |
7306.61.00 |
straight seam, electric resistance welded; of rectangular section; of dimensions of 4.72 inches (± 119.89 mm) × 2.36 inches (± 59.95 mm); and of grade CSA G40.21, ASTM A252 or ASTM A500 |
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Order.)
Issues
On July 1, 2018, the United States Surtax Order (Steel and Aluminum) came into force to apply Canadian surtaxes of 25% on steel products and 10% on aluminum products imported from the United States (U.S.). Similarly, the United States Surtax Order (Other Goods) also entered into force to apply surtaxes of 10% on various goods imported from the U.S.
During the consultations to establish the list of goods that would be subject to surtaxes, Canadian businesses that import steel, aluminum, and other products from the U.S. expressed concerns with the negative impact of the surtaxes on the competitiveness of their Canadian operations. These manufacturers operate in a wide array of economic sectors including auto and auto parts, construction, defence, aerospace, processed metals, machinery manufacturing and energy infrastructure. In addition, marine manufacturers and various boat dealers across Canada raised concerns with the financial burden arising from the application of surtaxes on boats sourced from U.S. suppliers and subject to pre-existing contractual obligations.
In finalizing the list of goods to be subject to surtaxes, efforts were made to mitigate, to the extent possible, the potential negative impacts of the surtaxes on the Canadian economy (e.g. by ensuring that alternative domestic or non-U.S. supply sources were available for goods subject to the surtaxes). However, in the context of long-standing and highly integrated Canada-U.S. supply chains, surtaxes can nevertheless result in negative effects for Canadian businesses.
The surtaxes imposed on July 1, 2018, affect $16.6 billion of imports on an annual basis from the U.S. The surtaxes are a measured and proportional response to the tariffs applied by the U.S. as of June 1, 2018, on Canadian steel and aluminum goods.
On July 11, 2018, the Government of Canada outlined the framework and process under which it would consider remission requests related to these surtaxes on U.S. imports. Under specific circumstances, remission allows for relief from the payment of surtaxes or the refund of surtaxes already paid.
Remission represents an exception to the rules by providing for relief of otherwise applicable duties or surtaxes. As such, remission of surtaxes is made available to address exceptional and compelling circumstances that, from a public policy perspective, are found to outweigh the primary rationale behind the application of surtaxes.
The Government considered requests for remission of surtaxes in the following instances:
- To address situations of short supply in the domestic market, either on a national or regional basis.
- 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.
- To address, on a case-by-case basis, other exceptional circumstances that could have severe adverse impacts on the Canadian economy.
Section 115 of the Customs Tariff provides the authority for the Governor in Council to remit surtaxes on the recommendation of the Minister of Finance.
Objectives
- Provide relief from the surtaxes on imports of U.S. steel and aluminum in exceptional circumstances of short supply to minimize their negative effects on the Canadian economy.
- Provide relief from the surtaxes for boats in situations of pre-existing contractual obligations, and for goods imported temporarily for repair, alteration or storage.
- Preserve the effectiveness of the surtaxes in targeting imports from the U.S. to encourage a prompt end to U.S. tariffs on Canadian steel and aluminum exports.
Description
Pursuant to section 115 of the Customs Tariff, the United States Surtax Remission Order (the Order) remits, in regard to specified goods imported from the U.S., surtaxes paid or payable under the United States Surtax Order (Steel and Aluminum) or the United States Surtax Order (Other Goods) as applicable.
For steel and aluminum goods, specified goods are defined as goods classified under a tariff item listed in Schedule 1 or 2 to the Order and meeting any of the descriptions associated with that tariff item. Descriptions pertain, as applicable, to product characteristics such as dimensions, grades, and technical specifications.
Goods listed in Schedule 1 have been determined to be situations of short supply on an ongoing basis. Remission of the surtaxes is provided for an indeterminate period for those goods. Where it is determined that short supply conditions cease to exist in respect of any particular good, the Order may be amended to remove that good from Schedule 1.
Goods listed in Schedule 2 have been determined to be in potential temporary situations of short supply. Remission of the surtaxes is provided for a period ending on December 31, 2018, for those goods. The period of application of remission for any particular good may be extended as appropriate should short supply conditions be determined to persist.
Overall, Schedules 1 and 2 cover multiple steel goods classified under 59 tariff items and aluminum goods classified under 6 tariff items. Steel goods include certain plates, hot-rolled and cold-rolled sheets, bars, rods, pipes, tubes and stainless steel products as described. Aluminum goods include sheets and cans as described.
The Order also provides remission of the surtaxes for four tariff items for certain boats and vessels, and for goods temporarily imported for the purposes of repair, alteration or storage.
Unless otherwise specified, remission of the surtaxes is granted for goods imported into Canada on or after July 1, 2018. The Order sets out the conditions for granting remission, including the condition that the requesting importer makes a claim to the Minister of Public Safety and Emergency Preparedness within two years after the date of importation.
For steel and aluminum products, requests for remission of the surtaxes made on the basis of contractual obligations that existed prior to May 31, 2018, to use U.S. steel or aluminum in products or projects, or for other exceptional circumstances, are currently the object of further analysis. As warranted, the Order may be amended to provide remission of the surtaxes.
“One-for-One” Rule
The “One-for-One” Rule applies to this Order as there is an administrative burden associated with applying for remission of surtaxes that have been paid. However, the Order is exempted from the “One-for-One” Rule as it is related to tax and tax administration, and to exceptional circumstances requiring immediate action to address the effects of the surtaxes imposed by the United States Surtax Order (Steel and Aluminum) and the United States Surtax Order (Other Goods).
Small business lens
The small business lens does not apply to this Order, as there are no significant costs imposed on small business.
Consultation
The Government of Canada identified a range of goods to consider for remission through the submissions provided by Canadian businesses, including downstream manufacturers of steel and aluminum-containing products, during the comment period ending on June 15, 2018, on Canada’s intent to apply countermeasures on imports from the U.S. These companies requested that their imports be excluded from the surtaxes.
On July 11, 2018, the Government of Canada published on the Department of Finance’s website a notice explaining the framework and process under which remission could be provided for surtaxes imposed, as of July 1, 2018, on imports from the U.S. The Government also made stakeholders aware of the remission framework through communications with business associations.
The notice provided a template that companies registered in Canada could use to submit requests for remission, to ensure that requests were properly substantiated and included the information necessary for assessment. Requests were subject to review by a federal interdepartmental committee to assess the merits of providing remission, in order to make recommendations to the Minister of Finance.
Submissions and remission requests generally highlighted the inability to avoid the surtaxes due to the following considerations, among others:
- for certain specific steel and aluminum goods (e.g. specific dimensions, product composition, compliance with technical standards, quality requirements), the U.S. is the only source of supply;
- high commercial impacts of changing existing sources of supply while meeting current customer requirements, including lead times, costs, and quantity;
- inability to switch the source of supply as a result of customer requirements to use pre-approved materials from designated U.S. suppliers (notably in the auto, aerospace, construction, and defence industries); and
- existing contractual obligations, including under long-term contracts, to buy from U.S. suppliers.
Canadian steel and aluminum producers were consulted on supply conditions in Canada in respect of goods for which remission was requested. Their views allowed the federal inter-departmental committee to assess the extent of short supply in Canada for each steel and aluminum good.
Rationale
Canada continues to work towards full and permanent removal of the unjustified and illegal U.S. tariffs on Canadian exports of steel and aluminum. To defend and protect the interests of Canada’s steel and aluminum industries and its workers, Canada’s surtaxes will remain in place until the U.S. eliminates its trade-restrictive measures against Canadian steel and aluminum.
In accordance with the criteria that have been set out, remission is provided in respect of goods where the negative effects of the surtaxes outweigh the benefits of their application. This includes goods where remission of the surtaxes provides relief to downstream manufacturers without undermining the broader purpose of the surtaxes.
Remission is only provided where warranted by exceptional circumstances. Surtaxes continue otherwise to apply as intended under the United States Surtax Order (Steel and Aluminum) and the United States Surtax Order (Other Goods).
Requests for remission of the surtaxes for steel and aluminum goods in short supply situations in Canada are considered on an ongoing basis. As warranted, the Order may be amended to update the list of specified goods for which remission of the surtaxes is provided.
The administrative costs for Canadian businesses to claim remission of the surtaxes are expected to be limited. In regard to waiving surtaxes on a prospective basis (i.e. for imports after the date of entry into force of the Order), remission claims would be made for each applicable importation as part of the process of filling existing customs documentation requirements. In regard to requesting a refund (i.e. for imports from July 1, 2018, to the date of entry into force of the Order), importers would submit forms requesting refunds for the surtax paid on importations, accompanied by supporting documentation establishing that the imported goods qualify for remission. The administrative burden would be limited as businesses would only make a few refund claims covering past transactions and would not need to make such refund claims on a continuous basis (i.e. surtaxes would be waived).
Implementation, enforcement and service standards
The Canada Border Services Agency (CBSA) will assess any requests for remission made pursuant to the Order and will ensure compliance with its terms and conditions in the normal course of its administration of customs and tariff-related legislations and regulations. In doing so, the existing administrative framework will be leveraged to ensure that costs can be managed within existing resources. Any refund issued pursuant to the Order will be administered by the CBSA. Depending on the volume and complexity of refund submissions, the CBSA strives to achieve a 90-day processing standard.
Contact
Paul Huynh
International Trade Policy Division
Department of Finance Canada
Ottawa, Ontario
K1A 0G5
Telephone: 613-369-3804