United States Surtax Order (2026): SOR/2026-186

Canada Gazette, Part II, Volume 160, Number 19

Registration
SOR/2026-186 September 4, 2026

CUSTOMS TARIFF

P.C. 2026-785 September 4, 2026

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance with respect to the provisions of the annexed Order other than sections 1, 2 and 9 and on the recommendation of the Minister of Finance and the Minister of State (U.S. Trade) with respect to sections 1, 2 and 9, makes the annexed United States Surtax Order (2026) under subsection 53(2)footnote a, paragraph 79(a)footnote b and section 115footnote c of the Customs Tariff footnote d.

United States Surtax Order (2026)

Surtax

Surtax

1 (1) Subject to section 2, goods that originate in the United States that are classified under any of the tariff items set out in Schedule 1, 2 or 3 are subject to a surtax in the amount of the following percentage of the value for duty determined in accordance with sections 47 to 55 of the Customs Act:

Goods originating in the United States

(2) For the purpose of subsection (1), goods originate in the United States if they are eligible to be marked as goods of the United States in accordance with the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations.

Exceptions

Exceptions

2 The following goods are not subject to the surtax:

Consequential Amendments

United States Surtax Remission Order (2025)

3 The portion of section 1 of the United States Surtax Remission Order (2025) footnote 1 before paragraph (a) is replaced by the following:

Remission — public health, public safety and national security

1 Subject to section 5, remission is granted of surtaxes paid or payable under the United States Surtax Order (2025-1), the United States Surtax Order (2026), the United States Surtax Order (Steel and Aluminum 2025) or the United States Surtax Order (Motor Vehicles 2025) in respect of goods imported for use by any of the following entities for the purpose of health care, public health, public safety, national defence or national security:

4 The portion of section 2 of the Order before paragraph (a) is replaced by the following:

Remission — health care

2 Subject to section 5, remission is granted of surtaxes paid or payable under the United States Surtax Order (2025-1), the United States Surtax Order (2026), the United States Surtax Order (Steel and Aluminum 2025) or the United States Surtax Order (Motor Vehicles 2025) in respect of goods imported

5 Section 3 of the Order is replaced by the following:

Remission — manufacture, processing, production or packaging

3 Subject to section 5, remission is granted of surtaxes paid or payable under the United States Surtax Order (2025-1), the United States Surtax Order (2026) or the United States Surtax Order (Steel and Aluminum 2025) in respect of goods imported for use, in Canada, in the manufacture or processing of any good, in the production of any agricultural product or in the packaging of a food product or beverage.

6 Sections 4 and 4.1 of the Order are replaced by the following:

Remission — goods referred to in Schedule 1

4 Subject to section 5, remission is granted of surtaxes paid or payable under the United States Surtax Order (2025-1) or the United States Surtax Order (2026) in respect of the goods referred to in column 1 of Schedule 1 that are classified under a tariff classification number set out in column 2.

Remission — goods referred to in Schedules 2 and 3

4.1 Subject to section 5, remission is granted of surtaxes paid or payable under the United States Surtax Order (2025-1), the United States Surtax Order (2026) or the United States Surtax Order (Steel and Aluminum 2025) in respect of the goods referred to in column 2 of Schedule 2 or 3 that are classified under a tariff classification number set out in column 1.

7 Section 4.21 of the Order is replaced by the following:

Remission — goods referred to in Schedule 4.1

4.21 Subject to section 5, remission is granted of surtaxes paid or payable under the United States Surtax Order (2025-1), the United States Surtax Order (2026) or the United States Surtax Order (Steel and Aluminum 2025) in respect of the goods that are classified under a tariff classification number set out in column 2 of Schedule 4.1.

8 Paragraphs 5(a.01) and (a.02) of the Order are replaced by the following:

Steel Derivative Goods Surtax Order

9 Paragraph 2(a) of the Steel Derivative Goods Surtax Order footnote 2 is replaced by the following:

Coming into Force

September 8, 2026

10 This Order comes into force on September 8, 2026, but if it is registered after that day, it comes into force on the day on which it is registered.

SCHEDULE 1

(Subsection 1(1) and paragraph 2(a))

Goods Subject to 15% Surtax

SCHEDULE 2

(Subsection 1(1) and paragraph 2(a))

Goods Subject to 25% Surtax

SCHEDULE 3

(Subsection 1(1) and paragraph 2(a))

Goods Subject to 50% Surtax

SCHEDULE 4

(Paragraph 2(a))

Goods Subject to Surtax — Chapters 98 and 99

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the orders.)

Issues

On August 22, 2026, the United States (U.S.) implemented tariffs of 50% on $27.6 billion worth of goods imported from Canada under Section 338 of the Tariff Act of 1930 (Section 338). The United States alleges these tariffs are in response to discriminatory Canadian trade practices in the automotive, alcoholic beverages and dairy sectors. In response to these U.S. tariffs, Canada announced its intention to implement counter-tariffs on a dollar-for-dollar basis as of September 8, 2026, on a range of imports from the United States to safeguard the domestic market for goods impacted by the U.S. tariffs.

Background

On July 20, 2026, the United States issued three proclamations to apply new tariffs, pursuant to Section 338 of the Trade Act of 1930, against a range of Canadian products, which would have then come into effect on August 19, 2026. The United States alleges these tariffs are in response to discriminatory Canadian trade practices in the automotive, alcoholic beverages and dairy sectors. These U.S. tariffs are set at 50%.

Canada’s trade practices are not discriminatory against U.S. commerce. Canada’s counter-tariffs on U.S. light vehicles and provincial and territorial restrictions on U.S. alcoholic beverages were legitimate measures implemented in response to the unjustified U.S. tariffs implemented in 2025. Canada’s administration of its Canada-United States-Mexico Agreement (CUSMA) dairy tariff rate quotas is in compliance with its CUSMA obligations.

Since the announcement of Section 338 tariffs, the Government of Canada has negotiated intensively and in good faith with the United States toward a fair and comprehensive trade agreement. Following the Government of Canada’s decision to suspend the trade negotiations, the U.S. Section 338 tariffs entered into effect on August 22, 2026. In turn, the Government of Canada announced its intention to implement counter-tariffs on $27.6 billion in imports from the United States, with rates of 15%, 25% and 50%.

The counter-tariffs represent Canada’s fifth time responding to the unwarranted tariff actions by the United States.

On March 4, 2025, the Government announced a framework and process for how it will consider remission requests for tariffs on products from the United States. 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. Therefore, the Government only considers remission where it is required to address exceptional and compelling circumstances that, from a public policy perspective, are found to outweigh the primary rationale behind the application of the tariffs.

On April 16, 2025, Canada implemented the United States Surtax Remission Order (2025), which provides temporary, horizontal relief for any goods imported by or on behalf of public health, public safety, or national security entities, as well as certain goods deemed necessary for public health and health care. The Order also provides relief for any goods used as inputs in Canadian manufacturing, processing, or food and beverage packaging. Horizontal remission under this Order was initially set to expire on October 15, 2025, but was subsequently extended to December 15, 2025, and was expanded to cover goods used in agricultural production.

On December 11, 2025, the Order Amending the United States Surtax Remission Order (2025) implemented decisions on horizontal remission announced by the Prime Minister on November 26, 2025, as part of a package of measures to support the steel industry. It extended the temporary horizontal remission of counter-tariffs on U.S. steel goods used for manufacturing, processing, food and beverage packaging and agricultural production in Canada to January 31, 2026, for steel, and to June 30, 2026, for aluminum. Horizontal remission for all goods used for the manufacturing of motor vehicles, aerospace goods, and their parts was extended to June 30, 2026, as was the remission of goods used for public health, health care, public safety and national security purposes.

On June 22, 2026, the Order Amending the United States Surtax Remission Order (2025) extended the duration of the horizontal remission expiring on June 30, 2026, to June 30, 2027.

Objective

The United States Surtax Order (2026) and the Order Amending the United States Surtax Order (Steel and Aluminum 2025) will implement, respectively, the necessary provisions and consequential changes to impose counter-tariffs on imports from the United States as of September 8, 2026. The United States Surtax Order (2026) will also extend the application of existing remission under the United States Surtax Remission Order (2025) [Remission Order] to the United States Surtax Order (2026), in accordance with the terms of the Remission Order.

Description

Pursuant to section 53 of the Customs Tariff, the United States Surtax Order (2026) establishes counter-tariffs on a range of goods, including products such as dairy, appliances, agricultural equipment, pulp and paper, and electronics, that are most impacted by U.S. tariffs. Counter-tariffs will be set at 15%, 25%, or 50%, generally matching the corresponding U.S. rate.

Pursuant to section 115 of the Customs Tariff, the United States Surtax Order (2026) will also implement consequential amendments to the United States Surtax Remission Order (2025) to extend remission to the goods subject to counter-tariffs under the United States Surtax Order (2026), in accordance with the terms of the Remission Order.

The Order Amending the United States Surtax Order (Steel and Aluminum 2025) will amend the United States Surtax Order (Steel and Aluminum 2025) to increase to 50% the counter-tariff rate for most steel and aluminum goods that were previously subject to a rate of 25%, generally matching the corresponding U.S. rate.

Any applicable surtaxes will be calculated on the basis of the value for duty of the imported goods, as determined in accordance with sections 47 to 55 of the Customs Act, which establish a hierarchy for valuing imported goods, with the objective of ensuring a fair and consistent customs value for assessing duties. These surtaxes will apply in addition to any applicable customs duty imposed under the Customs Tariff.

The surtaxes will only apply to the relevant goods originating in the United States, which shall be considered as those goods eligible to be marked as goods of the United States in accordance with the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations. These regulations establish how to determine the country of origin that must appear on goods imported from a CUSMA country (Canada, the United States, or Mexico) for marking purposes. The surtaxes will not apply to those U.S. goods that are already in transit to Canada on or before the date that this Order enters into force.

Regulatory development

Consultation

In the context of a continuous series of tariffs applied by the United States, in particular Section 232 tariffs and Section 338 tariffs, Canadian stakeholders proactively provided their views and recommendations to the Government of Canada. Stakeholders notably underscore the importance of applying tariffs on U.S. goods to provide a level playing field for their products in the Canadian market. The scope of the counter-tariffs takes into account these views and recommendations.

The list of goods that would be subject to counter-tariffs was published on August 25, 2026, followed by a briefing hosted by the Department of Finance with Canadian industry and labour stakeholders, including representatives from Canadian businesses, industry associations, producers, processors and importers, on Canada-United States economic issues. During the session, participants discussed the suspension in trade negotiations with the United States and the government’s response to newly imposed and unjustified U.S. tariffs on Canadian goods. Following publication of the list, concerns were raised by stakeholders in the Canadian fish and seafood sector regarding the potential negative impact of tariffs, including on domestic fish processing. Based on the feedback received, the Government made select adjustments to protect against broader economic harms, including removing seafood and fish products from the list of counter-tariffs.

Indigenous engagement, consultation and modern treaty obligations

The orders are 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

Subsection 53(2) of the Customs Tariff provides the authority for the Governor in Council, on the recommendation of the Minister of Finance and the Minister of Foreign Affairs, by Order, to make goods that originate in any country subject to a surtax for the purpose of responding to acts, policies or practices of a country that adversely affect, or lead directly or indirectly to adverse effects on, trade in goods or services of Canada.

Certain powers, duties and functions of the Minister of Foreign Affairs under subsection 53(2) of the Customs Tariff were transferred to the Minister of International Trade by the Order Transferring from the Minister of Foreign Affairs to the Minister for International Trade the Powers, Duties and Functions Under Subsection 53(2) of the Customs Tariff and then to the Minister of State (U.S. Trade) in relation to Canada-United States trade by the Order Transferring from the Minister for International Trade to the Minister of State (U.S. Trade) and the Minister of Foreign Affairs the Powers, Duties and Functions Under Subsection 53(2) of the Customs Tariff.

Section 115 of the Customs Tariff provides the authority for the Governor in Council to remit duties on the recommendation of the Minister of Finance. A remission order under section 115 of the Customs Tariff is the most appropriate mechanism, as it was created to provide remission from duties, including surtaxes.

Regulatory analysis

Benefits and costs

The surtaxes form part of Canada’s response to unjustified tariffs imposed by the United States. By applying surtaxes to an equivalent value of U.S. imports, Canada is seeking to increase pressure for the removal of the U.S. tariffs and creates incentives for importers to diversify away from affected U.S. supply.

In the near term, the surtaxes are expected to increase the cost of certain U.S. goods and inputs used by Canadian businesses. Importers, distributors and retailers that continue to source these goods from the United States would be expected to pass some or all the additional costs on to downstream businesses or consumers.

Over time, the surtaxes are expected to encourage supply chain adjustments, including increased sourcing from domestic producers or from countries not subject to the surtaxes. As substitution occurs, the measures would create new commercial opportunities for Canadian producers, support supply chain diversification and reduce reliance on U.S. suppliers in affected sectors.

In this way, surtaxes applied to an equivalent value of imports from the United States would support Canada’s broader response to the U.S. measures while strengthening Canadian industries impacted by the Section 338 and Section 232 tariff actions. Remission will continue to be available, representing an exception to the rules by providing for relief of otherwise applicable duties under certain circumstances, in line with the government policy objectives. The administrative costs for Canadian businesses to claim remission of the surtaxes are expected to be limited. There would be minimal incremental costs for the Government to process the claims.

Small business lens

Analysis under the small business lens determined that the United States Surtax Order (2026) and the Order Amending the United States Surtax Order (Steel and Aluminum 2025) would not impose administrative or compliance requirements on Canadian small businesses. Duties and taxes (including surtaxes) are not included in the definitions of administrative and compliance burden in the Policy on Limiting Regulatory Burden on Business (the Policy).

Analysis under the small business lens concluded that the Order Amending the United States Surtax Remission Order (2025) will impact small businesses. Some of the importers meet the definition of “small business” in the Policy, and the process to claim remission of duties paid meets the definition of “administrative burden” set out in the Policy. No additional flexibility is necessary for small businesses claiming remission, as all eligible importers already possess the original customs forms required to justify remission and will benefit from the remitted funds.

One-for-one rule

The United States Surtax Order (2026) and the Order Amending the United States Surtax Order (Steel and Aluminum 2025) introduce surtaxes on imported U.S. goods. Taxes (including surtaxes) do not meet the definition of administrative burden under the Red Tape Reduction Act; thus, the value of the surtaxes is not counted under the one-for-one rule.

Extending the United States Surtax Remission Order (2025) to the products covered by the United States Surtax Order (2026) introduces new administrative burden on businesses, as it broadens the range of products for which Canadian importers can claim remission of surtaxes paid. The requirement for Canadian importers to submit claims for remission meets the definition of administrative burden on businesses in the Red Tape Reduction Act. However, duties are considered to be “taxes” for the purpose of the one-for-one rule, and are exempt from the requirement to offset administrative burden and regulatory titles under the one-for-one rule.

Regulatory cooperation and alignment

There is no regulatory cooperation and alignment component associated with amending orders.

Effects on the environment

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment, a preliminary scan concluded that a strategic environmental and economic assessment is not required.

Gender-based analysis plus

No gender-based analysis plus (GBA+) impacts have been identified for these orders.

Implementation, compliance and enforcement, and service standards

These orders come into force on September 8, 2026.

The Canada Border Services Agency (CBSA) is responsible for the administration of, and compliance with, customs and tariff legislation regulations. The CBSA will administer the provisions of these orders in the normal course of its administration of customs and tariff-related legislation. Once the orders enter into force, the CBSA will publish a Customs Notice to inform the importing community of issues related to the administration of the surtaxes.

The CBSA will assess any claims for remission made pursuant to the United States Surtax Remission Order (2025) and will ensure compliance with their terms and conditions in the normal course of its administration of customs and tariff-related legislation 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 amending Order will be administered by the CBSA. Depending on the volumes and complexity of refund submissions, the CBSA strives to achieve a 90-day processing standard.

Contact

Michael Mosier
Senior Director
Trade and Tariff Policy
International Trade Policy Division
Department of Finance Canada
Ottawa, Ontario
K1A 0G5
Email: tariff-tarif@fin.gc.ca