Tax & Trade Blog

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CUSTOMS VALUATION & STEEL IMPORTS

GETTING VALUE FOR DUTY RIGHT IN THE STEEL INDUSTRY

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The US-Canada trade dispute created a trade environment that makes proper customs valuation a critical issue for businesses in the steel industry. In particular, getting the value for duty correct (and avoiding costly assessments by the CBSA and US CBP) is critically important when one considers that ordinary customs duties, surtaxes, special tariffs, and anti-dumping duties could potentially apply depending on the steel imports in question.

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CUSTOMS VALUATION & RELATED PARTY PRICING

IT’S THE 1990’S ALL OVER AGAIN! CUSTOMS VALUATION RULES REIGN

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The new tariff environment in 2025 and 2026 has put a premium on getting the “big three” declarations correct when it comes to customs importations. These are: tariff classification, origin, and value for duty.

In this Customs 101 Series Report, we review the basics of customs valuation where goods are being bought from, and imported between, related parties.

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JURISDICTION IN TAX DISPUTES TRICKY

INTERPRETATION OF APPEAL PROVISIONS CAN BE A COMPLICATED TASK!

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We have previously written about jurisdictional issues between the Tax Court of Canada (“TCC”) and Provincial Superior Courts here. A recent decision of the TCC – Desjardins v. the King, 2026 CCI 109 [Desjardins] – further illustrates the tricky nature of jurisdiction in tax disputes and that getting the forum correct is not a simple task.

In this update to our Tax Appeal Series on jurisdiction in tax disputes, we review the Desjardins decision with a view to highlighting the complicated task of statutory interpretation and its intersection with jurisdiction in tax disputes.

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ALUMINUM SURTAX REPORT

MULTIPLE CANADIAN SURTAXES TARGET CHINESE ALUMINUM

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Like Canada’s steel surtax regime, which we have reported on here and here, Canada also implements a series of surtaxes aimed at imported aluminum goods. In particular, aluminum goods of Chinese origin are a primary target of certain surtaxes – and that might be expected given that China is among the world’s top aluminum manufacturers – and often referred to as the World’s center of gravity in aluminum (currently accounting for over 60% of overall production).

In this Customs & Trade Report, we review Canada’s surtax regime with respect to aluminum products, and some special Anti-Dumping & Countervailing duties (“ADCVD”) rules also impacting aluminum imports under Canada’s Special Import Measures Act (“SIMA”).

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CANADA EXTENDING SURTAX REGIMES

DOF CONFIRMS EXTENSIONS INCOMING ON STEEL SURTAXES & RELATED RELIEF

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A recent Department of Finance Canada (“DOF”) news release has confirmed that Canada will be extending certain steel surtaxes and horizontal tariff relief for imported steel goods. The putative aim behind these extensions is to “defend steel workers and industry against steel trade diversion” and “provide producers and importers with greater business predictability and longer-term certainty”.

In this Steel Industry Report, we review which surtaxes and remission categories are set to be extended in the near future.

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GOVERNMENT PROCUREMENT CHALLENGES

REQUIREMENT TO BE LIBERAL PARTY MEMBER, NOT ENOUGH TO TRIGGER SUCCESS?

Yes, this is a bit of clickbait title above – the government contract in question had a requirement that the successful bidder be a member of the Canadian Roofing Contractors Association (“CRCA” and the “Membership Requirement”), and our point is that it could well have required membership in any other organization, even a political one! BUT the Canadian International Trade Tribunal's (“CITT”) refusal to provide relief here is the interesting part.

We review this case below and the tricky nature of challenging government procurement decisions.

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FEDERAL FUEL TAX HOLIDAY

GOVERNMENT TO SUSPEND FEDERAL EXCISE TAX ON CERTAIN FUELS

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The Department of Finance Canada and Office of the Prime Minister both announced today that the Government of Canada will be temporarily suspending the Federal Fuel Excise Tax on gasoline, diesel and certain aviation fuels (the “Fuel Tax Holiday”).

In this report, we provide some legislative and socio-economic/political background on the Fuel Tax Holiday and explain its parameters.

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TRUMP'S NEW TARIFFS - NOT HURTING CANADA?

TRUMP TARIFFS DO NOT APPLY TO CUSMA GOODS

Much of the current commentary surrounding the new US tariff measures has overlooked a central point – namely, that broad-based US tariff actions do NOT apply to Canadian-origin goods that properly qualify under CUSMA.

There are certainly some exceptions like in militarily strategic sectors (like steel and aluminum) and in sensitive economic sectors (like automotives and lumber) but the wider narrative suggesting sweeping tariff exposure for Canadian exports to the US is probably overstated. We provide additional insight below.

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BATTLE WON BUT TRADE WAR NOT OVER?

US SUPREME COURT RULES INITIAL ROUND OF IEEPA TARIFFS UNLAWFUL

In a major development of the Canada-US Trade War (the “Trade War”), the Supreme Court of the United States (“SCOTUS”) in its decision of Learning Resources, Inc. et al. v. Trump, No. 24–1287 (“Learning Resources”), ruled that President Trump’s initial round of tariffs under the International Emergency Economic Powers Act (“IEEPA”) targeting Canada, Mexico and China are unlawful.

In this report, we provide a brief review of SCOTUS’ decision in Learning Resources, along with some implications for the Trade War moving forward, including President Trump’s potential response.

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CANADA'S THIRD-PARTY STEEL SURTAX

HIGH SURTAX RATES APPLY FOR STEEL IMPORTS ABOVE QUOTA LIMITS

As a follow up to our Steel Derivative Surtax Report here, over the recent Christmas holidays Canada also quietly amended the Surtax on the Importation of Certain Steel Goods (the “3P Steel Surtax”) and put in place a Remission Order for the same over the holiday period.

In this report, we report on the application of the 3P Steel Surtax, highlighting the tonnage tariff rate quota (“TRQ”) rules, import permit requirements, and relief available surtax exceptions and the Remission Order.

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SURTAX ON STEEL DERIVATIVE GOODS

BUSINESSES AND CONSUMERS TO FEEL FINANCIAL IMPACT OF NEW SURTAX

During the Christmas holiday season, the Federal Government of Canada quietly adjusted its trade policy QUITE significantly.  A significant development on this front is likely Canada’s enactment of the Steel Derivative Goods Surtax Order (the “Steel Derivative Surtax”) through an Order in Council.

We report below on the application of the Steel Derivative Surtax, and the particular goods targeted by these measures, and potential financial relief that may be available for businesses.

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A CUSTOMS YEAR-END REVIEW

THE TRADE WAR & NOTABLE CASES IN 2025 YOU SHOULD KNOW ABOUT

What just happened to me!   That is probably the sentiment of most people in customs and trade in Canada, after a frenetic 2025.

We present a year-in-review below, starting quite understandably with a high-point review of the Canada-US Trade War (the “Trade War”), followed by some other major developments that dominated customs in the Canadian context.

THE GREAT TRADE WAR OF 2025

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TRQ IMPORT ALLOCATION INSPECTIONS

OBTAINING A TRQ IS NOT THE END OF THE STORY!

We have previously written about tariff rate quota (“TRQ”) applications for dairy and poultry here.  While many businesses may view obtaining a TRQ import allocation as the final step of the process, the reality is that it is very much the beginning of the TRQ process.

Both Applicants and Allocation Holders (i.e., persons/organizations issued a TRQ import allocation) remain subject to ongoing importer compliance obligations under the Export and Import Permits Act (“EIPA”), the Import Allocation Regulations (“IAR”) and associated TRQ policies (collectively, the “TRQ Regime”).  As EIPA inspectors have broad inspection powers, failing to adhere to these compliance obligations could lead to significant financial (and other more serious) consequences.  

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NEW FOOD LABELLING RULES INCOMING

AMENDMENTS TO FOOD AND DRUG REGULATIONS TAKE EFFECT IN THE NEW YEAR

After nearly four years, amendments to the Food and Drug Regulations (“FDR”) labelling regime, previously enacted in July of 2022, are set to take effect on January 1, 2026.

While the changes are laudable from a public health perspective, parties selling regulated food products (“Regulated Parties”) need to ready themselves for compliance with these changes, and in this report, we provide a brief overview of the key changes.

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CANADA'S BANDAID APPROACH TO TARIFFS

EXTENSION OF REMISSION SHOULD BE REPLACED BY REMOVAL OF ALL TARIFFS

While Prime Minister Carney was recently quoted saying there will be no tariffs imposed on US imports, Canada’s remaining tariffs (technically “surtaxes”) on US steel and aluminum and some automotive goods continue to be source of significant economy pain for the remaining industrial businesses left in Canada’s economy.

Even with the recent announcement from the Department of Finance Canada (“DOF”) that remission relief from the tariffs will be extended an additional two months and enhanced, the best course of action in the circumstances would be to tear the “bandaid” right off and eliminate ALL retaliatory tariffs in one fell-swoop.

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CONTROLLED GOODS PROGRAM RENEWALS

TIMELY RENEWAL APPLICATIONS NECESSARY TO AVOID MAJOR HEADACHES

Like many other western nations, Canada regulates the possession and transfer of various military weapons and technologies through its Controlled Goods Program (respectively (“Controlled Goods” and the “CGP”).

In order to possess, examine or transfer Controlled Goods, a person must be registered (or exempt therefrom) under the CGP ("Registration" and a "Registered Party").  As Registration does not last indefinitely, Registered Parties must ensure their Registration never lapses and that required Applications for Renewal ("Renewal Applications") are prepared well in advance of their due dates.  Lapses in Registration, even only one day, can result in technical breaches, exclusion from the CGP and very serious headaches for businesses reliant on the CGP. 

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ELBOWS UP? DUMB STRATEGY

CANADA'S ELBOWS UP STRATEGY WAS DOOMED TO FAIL, AND IT JUST DID

As we first alluded to January 20, 2025, Canada's "retaliatory tariff" – or in the Prime Minister's view, our "elbows up" – strategy was a bad idea and of "questionable economic policy".  We also described it as a fight that Canada could not win for Bloomberg Daily Tax.

Perhaps expectedly, Prime Minister Carney has today backed off the heart and sole of that retaliatory response, creating an exception for US origin goods.

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TARIFF REMISSION UPDATE

CANADA AMENDS UNITED STATES SURTAX REMISSION ORDER

With Canadian businesses still facing down the debilitating financial effects of the Canada-United States (US) trade war, the Government of Canada is attempting to provide businesses with further relief from its retaliatory tariffs.

On July 16, 2025, Canada enacted an Order in Council amending the United States Surtax Remission Order (2025) (the “Remission Order”), extending remission relief to a number of new products (adding further Schedules 2 to 5) and we report on the further opportunities for remission relief here.

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CANADIAN EXPORT CONTROLS

MORE ENFORCEMENT COMING ON CANADIAN EXPORT SANCTIONS?

Canada, like many of its trading partners has a significant framework of export sanctions, targeting the controlled export of goods and technology to sensitive destinations, governments, and foreign actors worldwide.  Yet, for the duration of my International Law practice to date — some 35+ years — the unspoken joke has been that Canada’s enforcement actions were almost nonexistent, at least relative to the situation in the US.  (Indeed, one needs to look far and wide for caselaw regarding Canadian export controls enforcement).

With the recent trade wars and President Trump‘s desire to strengthen borders, this appears to have changed.  We review a recent Canadian arrest for sanctions evasion below, which may be a harbinger of greater action to come despite the rarity of such cases.

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TARIFF REMISSION CLAIMS

A RECOMMENDED OPTION FOR BUSINESSES SEEKING TARIFF RELIEF

With the Canada-United States trade dispute enduring, Canada’s retaliatory tariffs are unlikely to be lifted soon.  Many businesses that considered their strategic options have now concluded Remission Claims are the only viable option to deal with Canada’s retaliatory tariffs.  In this Report, we review the Remissions Process, and why retaining Experienced Trade Counsel is a good idea at this early stage.