50% Surtax on Certain Steel Imports

Summary#

The government issued the Order Imposing a Surtax on the Importation of Certain Steel Goods (SOR/2025-148). Starting June 27, 2025, many steel imports above set quarterly limits will face a 50% surtax for up to one year (the order is repealed on the first anniversary).

What it does#

• Sets separate quarterly import quotas for five classes of steel. Imports above those quotas — or above a per‑country share of a quota — are hit with a 50% surtax on the goods’ value for duty.
• The five classes and their quarterly totals are:
  • Flat: 186,856 tonnes (max 36% per country)
  • Long: 178,512 tonnes (max 28% per country)
  • Pipe and tube: 117,406 tonnes (max 47% per country)
  • Semi‑finished: 152,383 tonnes (max 72% per country)
  • Stainless: 5,568 tonnes (max 91% per country)
• Countries listed in Schedule 2 (mostly Canada’s free‑trade partners, including the United States, United Kingdom, EU members, Mexico, Japan, Australia, and others) are exempt from the surtax. Goods already in transit to Canada when the order comes into force are also exempt.
• To enter under the quota (and avoid the surtax), importers need a shipment‑specific permit issued under the Export and Import Permits Act (these goods are added to the Import Control List as item 82).
• Permit fees can be up to $31 per permit; officials estimate roughly 33,300 permits and a total fee cost of about $1,032,300 over the year.
• The surtax applies in addition to any regular customs duties and is calculated on the value for duty as defined in the Customs Act.
• The order comes into force June 27, 2025 and is set to be repealed on its first anniversary. The government will review the measure within 30 days and periodically after that.

Who's affected#

• Steel importers and their customs brokers. They must apply for permits to avoid the surtax and may face extra paperwork and permit fees.
• Domestic steel producers and steel workers. The measure is intended to limit sudden increases in low‑cost imports that could harm domestic producers.
• Downstream manufacturers and construction firms that use steel. They may face higher prices or supply constraints if suppliers hit surtaxed volumes or delays in permit processing occur.
• Federal agencies involved in implementation: Global Affairs Canada (issues permits) and the Canada Border Services Agency (administers surtax at the border).
• Small businesses that import steel may be disproportionately affected by administrative burden and any short‑term cash‑flow impacts if refunds are needed.

Why it matters#

• The government says the order is meant to prevent a wave of redirected steel shipments into Canada after other countries (notably the United States) raised steel tariffs. That diversion could hurt Canadian steelmakers and jobs.
• For importers and buyers, the practical effects are higher costs for any steel shipments that exceed the quota levels or country limits. That can raise input costs for manufacturing and construction and could slow projects.
• The requirement for shipment permits adds administrative steps and modest fees (up to $31 each). Delays in permit issuance could force some importers to pay the surtax up front and later request refunds, affecting cash flow.
• The measure is temporary (about one year) and will be reviewed regularly, so its continuation or adjustment will depend on market developments and trade discussions.