Tax Insights: Finance extends relief from Canadian surtax granted to various US-origin goods imported into Canada

Issue 2025-19R2

December 18, 2025 update: On December 12, 2025, Minister of Finance and National Revenue, François-Philippe Champagne announced that the temporary remission from the retaliatory Canadian surtax for certain US‑origin goods imported into Canada will be extended* to goods imported:

• before February 1, 2026, for steel goods used for manufacturing, processing, food and beverage packaging, or agricultural production in Canada**
• before July 1, 2026 – for:
  • steel goods used for the manufacturing of motor vehicles, aerospace goods and their parts in Canada
  • aluminum goods used for manufacturing, processing, food and beverage packaging, or agricultural production in Canada
  • goods used to support public health, health care and public safety, and for national security purposes

The extended remission period is intended “to provide more predictability to businesses as they adjust their supply chains to transition from imported sources to Canadian domestic supply.”

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As previously mentioned in our June 2, 2025 update, on May 20, 2025, the Canada Border Services Agency (CBSA) provided additional guidance on which US‑origin goods would be eligible for the remission of retaliatory Canadian surtax when imported into Canada. Key additional guidance included:

• for manufacturing and processing (M&P) in Canada – the goods must be imported by businesses that are in North American Industrial Classification System chapters 31‑33 (manufacturing); it excludes goods used:
  • in primary material production (e.g. extracting mineral ores, harvesting agricultural goods), even if those primary goods are subsequently processed in Canada (e.g. imported machinery used to harvest grain that is processed into flour is not eligible; however, imported grain that is processed into flour could be eligible)
  • for construction (e.g. building materials), or that may be further processed by a non‑manufacturing business (e.g. grocery store food preparation)

Only manufacturing machinery and direct inputs integral to the finished product are eligible. Indirect inputs that support the functioning of manufacturing machinery and supporting materials are not eligible. The end product (for both M&P and packaging of food products/beverages [see below]) can be exported from Canada.

• for packaging of food products or beverages in Canada – the goods must be imported by and used by the same business for packaging in preparing food and beverages for sale; the remission does not apply for the imported good being packaged, unless the good is eligible under the M&P rules (discussed above). Remission is restricted to the packaging of food for human (not animal) consumption.
• for health care and public health, public safety and national security purposes – the imported goods must relate to the above noted purposes. However, an organization whose mission is solely to advance public health objectives may claim remission on goods (beyond health goods) that advance their mission. A retailer that stores medical countermeasures, but also sells non‑public health purpose goods, can claim remission only on eligible goods (e.g. prescription medicine) and not on goods for general sale.

For more information, see CBSA Customs Notice 25-19, “United States Surtax Remission Order (2025)” (April 17, 2025; updated October 17, 2025) at www.cbsa-asfc.gc.ca. The remainder of this Tax Insights was published on April 28, 2025, under the title “Six-month relief from Canadian surtax granted to various US‑origin goods imported into Canada” (see below). Except for the title, it has not been altered to reflect the Prime Minister’s November 26, 2025 and the Minister of Finance and National Revenue’s December 12, 2025 and October 17, 2025 announcements and the updated information in Customs Notice 25‑19.

^{* The Minister of Finance and National Revenue announced on October 17, 2025 that the temporary remission from the retaliatory Canadian surtax for certain US-origin goods imported into Canada would be: (i) extended by two months to goods imported before December 16, 2025 (the remission was initially for six months and was to end on October 15, 2025, as discussed in our April 28, 2025 Tax Insights below), and (ii) expanded to include goods used in agricultural production. Also, further relief from this surtax on imports from the United States (and China) were implemented for companies that met strict conditions such as demonstrating short supply or existing contractual obligations.}

^{** Prime Minister Mark Carney announced on November 26, 2025 that the temporary remission of the retaliatory Canadian surtax on imports into Canada would end on January 31, 2026, for US steel used in Canada for manufacturing, processing, food and beverage packaging, or agricultural production. This announcement was made in conjunction was Canada reducing tariff rate quota levels for imports of steel mill products and the imposition of a global 25% Canadian surtax on imports into Canada of certain steel derivative products. On December 12, 2025, the Department of Finance published “List of steel derivative products subject to 25 per cent tariffs effective December 26, 2025.” For more information, see our Tax Insights “Canada implements tariff rate quotas and surtaxes on imports of steel mill products” (December 3, 2025 update).}