CBSA Notice 25-33 Now in Effect: 25% Surtax on Steel Derivative Goods

CBSA Notice 25-33 Now in Effect: 25% Surtax on Steel Derivative Goods

What Canadian Importers Need to Know

As of December 26, 2025, the Canada Border Services Agency (CBSA) has implemented a 25% surtax on certain steel derivative goods imported into Canada, following the release of Customs Notice 25-33: Steel Derivative Goods Surtax Order.

This update is significant for Canadian importers because it applies to imports from all countries, covers a wide range of downstream steel products, and can apply even when goods would otherwise qualify for preferential tariff treatment.

Below is a clear, practical summary of what this surtax means and how importers should prepare.

Why the Government Introduced This Surtax

The Government of Canada introduced the Steel Derivative Goods Surtax to address:

  • Persistent global overcapacity in the steel sector
  • Non-market policies and trade practices affecting steel production
  • Market distortions created by foreign trade restrictions, including U.S. Section 232 steel tariffs

The measure is intended to protect domestic industries and stabilize trade conditions by discouraging the circumvention of existing steel trade remedies.

Which Goods Are Affected

The surtax applies to steel derivative goods, meaning finished or semi-finished products manufactured using steel.

Examples include:

  • Structural steel components
  • Fasteners (bolts, screws, washers)
  • Wire, cables, mesh, and chains
  • Certain furniture and prefabricated building components

Important:

The surtax applies based on tariff classification, not product description. If your goods fall under any of the HS tariff items listed in the Schedule to the Steel Derivative Goods Surtax Order, the surtax applies—regardless of country of origin.

The full list of affected tariff items is set out in the Order and should be reviewed carefully by all importers of fabricated or finished steel goods.

Surtax Rate and How It Is Calculated

  • Surtax rate: 25%
  • Applied to: The value for duty, determined under sections 47–55 of the Customs Act
  • In addition to:
    • Customs duties (MFN or other applicable rates)
    • Anti-dumping or countervailing duties, if applicable
    • GST/HST (calculated on the value for tax, which includes the surtax)

This means the surtax directly increases both the duty payable and the GST base, significantly affecting total landed cost.

Non-Stackable Steel Surtax Policy

Canada applies a non-stackable policy to steel surtaxes. Only one steel-related surtax may apply to a particular good.

The order of precedence is:

  • 1. Steel imports exceeding tariff rate quotas (non-CUSMA countries)
  • 2. Country-specific steel surtaxes (e.g. U.S. or China)
  • 3. Surtaxes on non-U.S. imports containing steel that is melt-and-poured in China.
  • 4. Steel derivative goods surtax (this measure)

If a good is already subject to another applicable steel surtax, this derivative surtax does not apply.

Key Exceptions Importers Should Be Aware Of

The surtax does not apply in the following situations:

Goods in Transit

Steel derivative goods in transit to Canada on December 26, 2025, are exempt, provided importers can produce proof (such as a bill of lading or cargo control documents).

Goods Covered by Other Steel Surtax Orders

Goods already subject to other federal steel surtax orders are excluded.

Chapter 98 Goods

Goods classified under Chapter 98 of Canada’s Customs Tariff are not subject to the surtax, even if they would otherwise fall under a listed tariff item.

Time-Limited Industry Exceptions (Until July 1, 2026)

Steel derivative goods imported before July 1, 2026 for use in:

  • The manufacture of motor vehicles or automotive parts, or
  • Aircraft, aerospace, or spacecraft manufacturing

may qualify for exemption, subject to documentation and intended-use requirements.

Utility Wind Towers

Utility wind towers and sections classified under tariff item 7308.20.00, imported for installation in energy projects west of the Ontario–Manitoba border, are also excluded.

How to Declare the Surtax Under CARM

Importers must declare the surtax when accounting for goods using the Commercial Accounting Declaration (CAD) through the CARM Client Portal, EDI, or API.

Key details:

  • Surtax code: 25267A
  • CAD field: Field 85 -“Surtax”
  • If using CARM’s self-declare option, the importer is responsible for calculating and entering the surtax amount correctly.

Failure to declare accurately may result in reassessments, penalties, and interest

Compliance, Verifications, and Adjustments

CBSA may conduct:

  • Examinations at time of importation
  • Post-release verifications of tariff classification, origin, and value
  • Re-determinations or further re-determinations of surtax applicability

If surtax was incorrectly self-assessed or not assessed at all, importers must submit adjustments through CARM, EDI, or API in accordance with CBSA procedures.

What Importers Should Do Now

  • Review your product classifications (HS Code) against the surtax schedule
  • Recalculate landed costs and pricing models
  • Confirm supplier documentation and proof of origin
  • Ensure internal CARM processes are updated for surtax reporting
  • Consider advance rulings for complex or borderline products

Final Thoughts

This surtax represents a significant cost and compliance shift for many importers, especially those dealing in fabricated steel products or downstream components.

Early review and proactive compliance will help avoid unexpected assessments, penalties, and supply-chain disruptions. To read up on the full Customs Notice 25-33 from CBSA, here is the link.

If you need help assessing exposure or navigating surtax declarations, working with a licensed Canadian Customs Broker is strongly advised.