Canada’s Steel TRQs and 25% Derivative Surtax
Your ultimate guide to Canada’s steel import rules, including tariff-rate quotas (TRQs), the 25% steel derivative surtax, and importer obligations for accurate reporting and compliance.
Canada’s steel import framework now includes tightened tariff‑rate quotas (TRQs) on steel mill products and a 25% steel derivative surtax effective December 26, 2025.
TRQs limit duty‑free volumes and impose a 50% surtax on over‑quota imports. The 25% surtax applies to finished and semi‑finished goods containing steel, with both measures affecting landed cost, classification, and compliance planning.
GHY can help importers correctly classify steel and steel derivative products, calculate TRQ and 25% derivative surtaxes, and maintain accurate documentation for CBSA reporting. We also assist with eligible remission requests in line with regulatory requirements.
Canada’s Steel Derivative Surtax
The 25% Steel Derivative Goods Surtax, which took effect on December 26, 2025, applies to finished and semi-finished products that fall under the targeted harmonized system codes, regardless of steel content. The surtax is calculated on the full value for duty of the imported goods and applies to products from all countries.
What Products are Covered?
Section 321 is suitable for both casual or commercial products.
Steel derivative goods mainly target items that contain steel as part of their structure or function. Examples include:
- Machinery, tools, and equipment with steel components
- Automotive and appliance parts
- Prefabricated structures, bridges, and building frames
- Plastic building components such as doors, windows, and frames, where specifically listed under Canada’s tariff schedule
- Fasteners, wire, cables, and chains
- Furniture, seating, and other steel-framed items
Check out the complete list of steel derivative goods subject to the 25% surtax.
Steel Tariff Rate Quotas (TRQs)
Canada’s steel TRQs regulate the volume of steel mill products eligible for normal duty rates. When imports exceed allocated quotas for a specific product and period, a 50% surtax applies to the full value for duty of the over-quota quantity.
Unused quota generally expires at the end of the quarter, though carry-forward may be permitted under Global Affairs Canada (GAC).
TRQ Reductions
(Effective December 26, 2025)
Canada revised steel TRQs as part of its industry support measures:
- Non‑FTA countries: Quotas set at 20% of 2024 import levels; over‑quota imports trigger a 50% surtax.
- FTA partners (excluding U.S. and Mexico): Quotas set at 75% of 2024 import levels; imports above the quota are subject to a 50% surtax.
- CUSMA (Canada‑U.S.‑Mexico): Steel from the U.S. and Mexico remains exempt from quotas under the existing trade agreement.
TRQ Structure and Administration
Canada revised steel TRQs as part of its industry support measures:
- TRQs cover five steel categories: flat, long, pipe & tube, semi‑finished, and stainless steel.
- Country share limits exist to prevent a single origin from filling a quota category.
- Annual quotas are administered in quarterly periods. Quota remaining at period end may roll forward only under specific rules set by GAC.
Permits and Entry
Canada revised steel TRQs as part of its industry support measures:
- Shipment‑specific permits are required from GAC to claim quota.
- Permits must exactly match CBSA entry information to avoid surtax application.
- Importations without a valid TRQ permit will be subject to the 50% TRQ surtax by CBSA.
How the Surtax Is Calculated?
Value for Duty
All surtaxes are calculated based on the full value for duty of the imported goods, as determined under the Customs Act. This includes the transaction value, plus any necessary adjustments such as assists, royalties, or related-party pricing.
The value for duty forms the basis for both the 50% TRQ surtax (if applicable) and the 25% steel derivative surtax.
Exemptions and Relief
Remission and Exceptional Circumstances
Importers may request remission of the 25% Steel Derivative Goods Surtax in limited cases where domestic sourcing is not possible or where the surtax would cause significant economic harm. Remission is discretionary and assessed individually.
When Remission Applies
Remission of the 25% Steel Derivative Goods Surtax, as outlined in Customs Notice 26‑02 may be granted in the following cases:
Goods in Transit
- Applies to goods in transit to Canada on or before August 1, 2025.
- Must be imported on or after August 1, 2025.
- Proof of transit is required (bill of lading, report of entry, cargo control documents).
- No other claim for the same surtax under the Customs Tariff.
Schedule-Listed Goods
- Certain goods listed in the Order’s schedule qualify for remission.
- Must be imported on or after June 27, 2025.
- No other claim for the same surtax under the Customs Tariff.
The 25% steel derivative surtax exempts:
- Goods under existing surtax orders (e.g., China 2024, U.S. 2025).
- Casual goods under Canadian regulations.
- Items under Chapter 98 of the Customs Tariff.
- Steel imported before July 1, 2026, for motor vehicles, chassis, parts, aircraft, spacecraft, or flight trainers.
- Utility wind towers (HS 7308.20.00) for energy projects west of Ontario–Manitoba.
- Goods already in transit to Canada on the tariff’s effective date.
How to Make a Claim
Documentation Requirements
- Temporary imports with full relief: Form BSF865, Temporary Admission Permit, or A.T.A. Carnet.
- Permanent imports or partial relief: Commercial Accounting Declaration (CAD) via CARM.
Declaration
- Enter the special authorization code in the Special Authority OIC field on CAD:
- 25‑0976A – in-transit goods on or before August 1, 2025.
- 25‑0976B – schedule-listed goods meeting the Order’s description.
- Surtax must be declared alongside any approved remission.
Remission requests are assessed by the Department of Finance based on policy and Canada’s economic interests. Approval is discretionary, so meeting the criteria does not guarantee relief.
Important Notes
- Remission is separate from the regular exemptions (such as goods in transit on the effective date or time‑limited automotive/aerospace exclusions).
- Importers should coordinate with customs brokers and legal/trade advisors when preparing remission requests, as CBSA does not adjudicate the remission itself; it is administered through the Department of Finance’s process.
Documentation and Reporting Requirements
Canada requires importers to maintain accurate records and report correctly for all steel and steel derivative imports to comply with tariff rate quotas (TRQs) and the 25% steel derivative surtax.
Managing Steel Import Compliance
Common Compliance Risks
- Misclassification: Using outdated or generic HS codes can result in retroactive surtax and penalties.
- Valuation Errors: Underreporting value for duty increases exposure to reassessments and interest charges.
- System Gaps: ERP or customs systems failing to flag in-scope products may cause repeated errors.
- Documentation Gaps: Missing invoices, BOMs, or permits can lead to audit findings and fines.
Consequences of Non‑Compliance
- Retroactive Surtaxes and Duties: CBSA can reassess past entries up to 4 years.
- Interest Charges: Accrues on unpaid duties and surtaxes from the original accounting date.
- Monetary Penalties: Misclassification, undervaluation, or reporting errors can trigger administrative fines.
- Audits and Verifications: CBSA may review entries; deficiencies can lead to reassessments.
- Operational Delays: Shipments may be held, and future entries face increased scrutiny.
Best Practices for Steel Import Compliance
✅ Confirm Product Applicability: Verify whether imports are raw steel, semi-finished steel, or listed steel derivative goods using official HS codes.
✅ Obtain Permits Early: Secure TRQ import permits from Global Affairs Canada before shipment arrival.
✅ Track Quota Usage: Monitor TRQ allocations per quarter to avoid over-quota imports and the 50% surtax.
✅ Calculate Duties and Surtaxes Accurately: Apply 50% TRQ surtax for over-quota steel and 25% steel derivative surtax on full value for duty.
✅ Maintain Audit-Ready Records: Retain commercial invoices, bills of materials, supplier statements, and permit documents.
✅ Consider Remission When Applicable: Submit requests if goods cannot be sourced domestically or importation causes severe economic harm.
✅ Stay Informed: Follow CBSA notices, Department of Finance updates, and trade alerts to remain current on quota, tariff, and surtax changes.
Interaction with Other Trade Measures
TRQs and Surtaxes Apply Separately
- Steel TRQs (50% surtax): Applies to over-quota steel imports.
- Steel Derivative Surtax (25%): Applies to listed steel derivative products regardless of TRQ status.
Steel Surtax Precedence Order
Canada applies a non-stackable policy for steel surtax measures — only one steel surtax may apply to a given good. CBSA Customs Notice 25-33 establishes the following order of precedence:
1.
TRQ Surtax (50%)
- Applies to over-quota steel mill products under Canada’s steel tariff-rate quota regime (highest precedence).
2.
Country-Specific Steel Surtaxes (25%)
- U.S. Steel Surtax — applicable to covered steel imports from the United States
- China Steel Surtax — applicable to steel goods originating in China or containing steel melted and poured in China
3.
Steel Derivative Goods Surtax (25%)
- Applies to listed steel derivative products only when no higher-precedence steel surtax applies (lowest precedence).
What else can stack upon the steel surtax?
Hover for answerRegular customs duties, anti-dumping and countervailing duties (AD/CVD), and GST/HST
are applied separately and continue to stack on top of the applicable steel surtax.
Anti-Dumping and Countervailing Duties
- TRQs and the 25% derivative surtax are applied independently of anti-dumping or countervailing duties.
- Importers may encounter multiple duties on the same shipment: TRQ surtax + most favored nation duty rate + AD/CV duties.
- Total landed cost calculations must account for all applicable measures.
GST and Other Taxes
- GST is calculated on the sum of customs value, duties, and surtaxes.
- TRQs and derivative surtaxes increase the base for GST, affecting total import costs.
Frequently Asked Questions (FAQs)
As of February 2026, there are 23 steel mill product categories covered by Canada’s TRQs. The image below shows the quota, country share, utilization, and remaining quota for each product grouping:
The government has published a detailed list of steel derivative products subject to the 25% surtax. These include imported goods defined by specific tariff items in Canada’s Customs Tariff Schedule. For precise HS codes and full descriptions, consult the official list.
There is no blanket exemption for Canadian manufacturers or Canadian origin goods. Any potential relief will be specified in the customs notice, and historical exemptions do not automatically carry over.
The surtax is applied to the value for duty of the goods, not the duty-paid value. For example, a $100 item with 10% duty would have the surtax calculated on $100, not $110.
No. Aluminum items are not subject to this surtax unless they’re classified under the steel derivative schedule.
It depends on whether steel derivatives are part of the product and if the HS code is on the steel derivative list. Each product must be reviewed individually for classification and origin.
Yes, TRQs apply to imports from countries that do not have an FTA with Canada. Quotas and surtaxes also apply to countries with FTAs (except under certain carve‑outs like CUSMA for U.S. and Mexico).
They can apply in sequence, but Canada follows a non‑stackable policy among multiple steel surtax measures. Only one applicable steel surtax applies per importing scenario, following a set order of precedence in official rules.
Related GHY Resources
- Canada Announces New Measures to Protect Steel and Lumber Industries
- Canada Releases List of Steel Derivative Products Subject to 25% Tariff
- CBSA Announces Changes to U.S. Surtax Remission Order
- Canada Revises Steel Import Tariff-Rate Quotas and Permits
- CBSA Updates U.S. Surtax Orders Including Steel, Aluminum and Motor Vehicles
- 50% Surtax on Certain Steel Imports into Canada Effective June 27, 2025
Turn Steel Surtax Complexity into Compliance and Recovery Opportunities
Let us help you navigate Canada’s evolving steel import landscape with confidence. From tightened tariff-rate quotas and the 25% steel derivative surtax to complex classification, valuation, and reporting requirements, these measures can significantly impact landed cost and compliance risk. GHY’s trade specialists provide the expertise needed to interpret regulatory changes, calculate applicable surtaxes, secure permits, and support remission opportunities—so you can focus on keeping your supply chain moving without disruption. Book a meeting with us to ensure your steel import strategy is accurate, compliant, and cost-efficient.
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