Surtax Remission for U.S. Motor Vehicles

Summary#

The federal government made the United States Surtax Remission Order (Motor Vehicles 2025) to let some Canadian auto companies get relief from the 25% surtax Canada applied to certain U.S.-made cars and trucks. Eligible manufacturers can import a set number of U.S.-assembled, CUSMA-originating vehicles tariff-free if they meet conditions and file a claim; the per-company allowances are withheld from publication.

What it does#

• Grants remission (refund or waiver) of the 25% surtax for certain vehicles covered by the U.S. surtax response.
• Limits the remission to the number of vehicles listed in a closed schedule tied to each importer’s business number. The schedule of who gets how many vehicles is not published.
• Sets the eligible import window as vehicles imported on or after April 9, 2025 and not later than April 8, 2026.
• Requires an importer to file a claim within two years after each vehicle’s date of importation to get the remission.
• Requires companies to provide information on imports, sales in Canada, and Canadian manufacturing and Canadian-origin content when asked by the Minister of Public Safety and Emergency Preparedness or the Minister of Industry.
• Allows accommodations for firms that paused Canadian production for retooling, but ties continued remission to restarting and meeting production commitments. If promised production does not start, duties that were remitted may have to be repaid.
• Prohibits double claims for the same vehicle (no other remission under the Customs Tariff for that vehicle).
• Directs the Canada Border Services Agency (CBSA) to publish a Customs Notice with claim procedures and to handle refunds (the CBSA aims for a 90-day processing standard where possible).

Who's affected#

• Primarily Canadian-based auto manufacturers that both make vehicles in Canada and import U.S.-assembled vehicles for sale in Canada — specifically those with business numbers listed in the unpublished schedule.
• Auto dealers and retailers may be indirectly affected because the measure changes how many tariff-free U.S. vehicles manufacturers can bring into Canada, which can influence supply and pricing.
• The general public could be affected through potential impacts on vehicle availability and prices.
• It is unclear from the order exactly which companies are eligible and how many tariff-free vehicles each will receive, because that allocation was withheld from publication.

Why it matters#

• This order is part of Canada’s response to U.S. tariffs and is intended to protect integrated North American auto production while encouraging manufacturers to keep making vehicles and investing in Canada.
• Allowing some U.S.-assembled, CUSMA-originating vehicles in tariff-free helps firms manage costs and supply chains and may reduce the risk of higher retail prices for some vehicles.
• The Canadian auto sector is economically significant: in 2024 Canada exported $44.4 billion in finished vehicles to the U.S. and imported $35.6 billion; the industry supports about 125,000 direct and 425,000 indirect jobs in Canada and roughly 75,000 direct jobs in the U.S. linked to imports.
• Because the schedule of who gets allowances is not public, people cannot see which manufacturers benefit or how large each company’s allowance is.