Steel TRQ Extension and 50% Surtax

Summary#

The Order Amending the Order Imposing a Surtax on the Importation of Certain Steel Goods (SOR/2026-119) extends Canada’s temporary tariff‑rate quota (TRQ) framework for steel and makes technical quota and product classification updates. It comes into force on June 27, 2026 and is set to remain in place until June 27, 2027 (the second anniversary of the original order).

What it does#

• Extends the existing steel TRQ regime for one more year, moving the repeal date to June 27, 2027.
• Adds new quarterly periods so quotas continue to be managed in three‑month chunks through the extension.
• Updates a few quota volumes and single‑country limits to reflect revised 2024 import data.
• Reclassifies four tariff lines so some products move from hot‑rolled sheet to cold‑rolled categories (technical change to better match product types).
• Keeps the out‑of‑quota surtax at 50% on imports that exceed quota limits.
• Keeps quota thresholds at 20% of 2024 volumes for countries without a free trade agreement (non‑FTA) and 75% for non‑CUSMA FTA partners.
• Requires shipment‑specific import permits to enter quota amounts surtax‑free. The permit fee is up to $31 per permit.
• Expected administrative details:
  • The order comes into force at 24:00 Eastern Daylight Time on June 27, 2026 (with one section coming into force a day earlier).
  • The government estimates roughly 15,000 permits could be issued over a year, at an estimated cost to businesses of $495,000.

Who's affected#

• Canadian steel producers — the measure is designed to protect their market from diverted imports.
• Importers of steel — they must apply for permits to avoid the 50% surtax and may face higher costs if quotas are filled.
• Downstream manufacturers and construction users who buy steel — they may see changes to supply availability and prices.
• Small businesses that import steel — face the same permit rules and possible delays or administrative burdens.
• Government bodies involved in administration:
  • Global Affairs Canada (GAC) issues shipment‑specific import permits.
  • Canada Border Services Agency (CBSA) administers the surtax at the border.
• Countries exempt from these TRQs: United States and Mexico (CUSMA partners).
  If it’s unclear whether a specific product or shipment is covered, importers will need to check the schedules and classification details or contact GAC/CBSA.

Why it matters#

• The government says the extension is meant to prevent a wave of diverted steel imports after U.S. tariff changes. That aims to stabilize a domestic steel sector that supports about 23,000 jobs and contributed roughly $3 billion to Canada’s GDP in 2024.
• For importers and some buyers, the rule can raise costs quickly if quota limits are reached and the 50% surtax applies. The government gives a notional estimate that, at upper bounds, the surtax exposure could be up to $1.1 billion for non‑FTA imports and $271 million for non‑CUSMA FTA imports — though the government also says actual impacts are likely much lower.
• For the public, this can affect prices and timing for steel‑intensive projects (construction, infrastructure, manufacturing). The government also notes a potential environmental effect if higher‑carbon foreign imports are replaced by relatively cleaner domestic or other foreign sources.
• The measures are time‑limited and will be reviewed as market conditions evolve.