Order Amending the Schedule to the Customs Tariff: SOR/2026-173
Canada Gazette, Part II, Volume 160, Number 17
Registration
SOR/2026-173 August 7, 2026
CUSTOMS TARIFF
P.C. 2026-732 August 6, 2026
Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, makes the annexed Order Amending the Schedule to the Customs Tariff under subsection 82(1) of the Customs Tariff footnote a.
Order Amending the Schedule to the Customs Tariff
Amendment
1 Tariff item No. 8507.60.20 of the List of Tariff Provisions set out in the schedule to the Customs Tariff footnote a is amended by replacing the reference to “electrically-powered motorcycles”, in the column “Description of Goods”, with a reference to “motorcycles or cycles with an electric motor”.
Coming into Force
2 This Order comes into force on the day on which it is registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Order.)
Issues
This Order eliminates tariffs on lithium-ion batteries used as input goods in the production of electric bicycles in Canada. Previously, lithium-ion batteries imported for use in the manufacture of electric bicycles in Canada faced a 7% tariff.
Background
Section 82 of the Customs Tariff authorizes the Governor in Council, on the recommendation of the Minister of Finance, to amend Canada’s schedule of tariff rates to reduce or eliminate tariffs on goods used in the production of other goods. This policy helps to reduce costs of input goods, which supports the competitiveness of Canadian producers.
Electric bicycles imported into Canada do not face any tariffs. Prior to this Order, Canadian producers of electric bicycles using imported lithium-ion electric batteries faced a 7% duty on batteries used as inputs into electric bicycles. This put domestic manufacturers at a competitive disadvantage relative to fully assembled foreign-made electric bicycles sold in Canada.
Objective
The objective of this Order is to change the tariff treatment applied to lithium-ion batteries used as input goods in the production of electric bicycles. Through the application of this Order, the 7% tariff on these goods is effectively eliminated.
Description
Pursuant to section 82 of the Customs Tariff, this Order amends the list of tariff provisions, on a prospective basis, for lithium-ion batteries used in the production of electric bicycles, eliminating the otherwise applicable tariff.
Regulatory development
Consultation
The Department of Finance undertook consultations with targeted stakeholders that could be impacted by a change in the tariff rate applicable to lithium-ion batteries for use in electric bicycles, including Canadian electric bicycle manufacturers and associations representing Canadian battery manufacturers. No adverse impacts were identified, as no domestic supplier of lithium-ion batteries meeting required specifications was found. The elimination of tariffs on lithium-ion batteries used in electric bicycles is expected to reduce costs and improve the competitiveness of Canadian electric bicycle makers.
Indigenous engagement, consultation and modern treaty obligations
The Order is not expected to impact potential or established Aboriginal or treaty rights, which are recognized and affirmed in section 35 of the Constitution Act, 1982.
Instrument choice
An Order seeking to amend the schedule to the Customs Tariff, 2026 pursuant to section 82 is the most appropriate mechanism for the relief sought. This provision was specifically designed to allow for amendments to Canada’s schedule of tariff rates to lower tariffs on goods used as inputs by Canadian manufacturers. This change will allow any Canadian importer that imports lithium-ion batteries for use in electric bicycles to benefit on a go-forward basis.
Regulatory analysis
Benefits and costs
This change is expected to result in minimal foregone tariff revenue for the Government. Under this Order, the main benefits for domestic producers of electric bicycles using lithium-ion batteries as input goods are (i) lower costs of production, as a result of the elimination of the 7% tariff; and (ii) enhanced competitiveness in both domestic and international markets.
One-for-one rule
The one-for-one rule does not apply to this Order, as there is no change in administrative costs to businesses.
Regulatory cooperation and alignment
The Order is related to domestic law and, given its relieving nature, it does not raise any issues of inconsistency with international trade or regulatory agreements.
Effects on the environment
In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment, a preliminary scan concluded that a strategic environmental assessment is not required.
Gender-based analysis plus
No gender-based analysis plus (GBA+) impacts have been identified for this Order.
Implementation, compliance and enforcement, and service standards
The Canada Border Services Agency (CBSA) is responsible for the administration of, and compliance with, customs and tariff legislation and regulations. In the course of administering these tariff amendments to the schedule to the Customs Tariff, 2026, pursuant to this Order, the CBSA will inform relevant stakeholders. The amendment will come into force on the date of publication.
Contact
Michael Mosier
Executive Director
Trade and Tariff Policy
International Trade Policy Division
Department of Finance Canada
Ottawa, Ontario
K1A 0G5
Email: tariff-tarif@fin.gc.ca