How Do I Get Out of This? New Guidance on Eligibility for Tariff Remissions and Support Programs for Canadian Businesses

Written By By Jessica Horwitz, Sabrina A. Bandali, Alison FitzGerald, George Reid and Rajat Beniwal

This blog was published on May 22, 2025 and is accurate as of that date. The tariff landscape is evolving quickly. Please contact one of the authors or a member of the Bennett Jones International Trade and Investment group for the most up-to-date guidance on US tariffs and Canadian surtaxes.

It has been a tumultuous spring for businesses involved in trade between Canada and the United States. This blog rounds up the latest frequently asked questions on Canada-US tariffs, including revised guidance issued on May 20, 2025 by the Canada Border Services Agency (CBSA) that clarifies the agency's interpretation of the exemptions from surtaxes on importations of US goods.

Are there any exemptions from the Canadian surtaxes?

Yes.

The Canadian Minister of Finance registered two remission orders on April 15, 2025 to the surtaxes introduced on March 4, 2025, March 13, 2025 and April 8, 2025:

1. The United States Surtax Remission Order (2025): SOR/2025-122 (6-Month Remission Order) provides six months of relief for US origin imports that are used to support public health, health care, public safety and national security activities, or used in Canadian manufacturing, processing or food and beverage packaging, and certain specific goods necessary to public health and health care. According to informal Department of Finance estimates, this remission program grants relief to approximately 60 percent of the remission applications received before mid-April.
2. The United States Surtax Remission Order (Motor Vehicles 2025): SI/2025-60 provides limited-quantity remissions for motor vehicles imported from the United States by certain specific automakers (named in a confidential schedule), on the condition that those automakers maintain pre-tariff employment levels in Canada.

In addition, businesses that do not qualify for these remissions can continue to request case-specific remission (relief from surtaxes going forward and refunds of duties already paid) to address situations of short-supply of goods used as inputs or in exceptional circumstances where the surtax would have a severe adverse impact on the Canadian economy. See further discussion below on how to apply.

How do I claim the remission? Is a separate application required?

The 6-Month Remission Order applies to surtaxes paid or payable under the United States Surtax Order (2025-1): SOR/2025-66, the United States Surtax Order (Steel and Aluminum 2025): SOR/2025-95 and the United States Surtax Order (Motor Vehicles 2025): SOR/2025-118, provided that the goods are imported on or after the date that the respective surtax came into force and before October 16, 2025, and no other surtax relief has been granted. Any eligible importer can claim relief when accounting for goods imported into Canada. Because the claim is made on the Customs Accounting Declaration, only the importer of record, whether a Canadian resident or non-resident, can claim the remission.

No separate application is required to claim remission of surtaxes. Importers must self-assess whether their transaction meets the eligibility criteria. If the importer concludes they are eligible, they should instruct their customs broker to insert the relevant corresponding "Special Authority" code (specified in Customs Notice 25-19) in the "Special Authority OIC" field of the Commercial Accounting Document. Inputting the applicable Special Authority code relieves the surtaxes instantaneously at the time of customs accounting.

Refund claims based on the remission order for surtaxes already paid can be made for a period of up to two years from the date of importation.

Remission claims are subject to post-importation verification (audit) for a period of four years. If the importer cannot produce appropriate documentation upon request to evidence eligibility, or if the CBSA otherwise concludes that a claim is invalid, the 25 percent surtaxes will be re-assessed with interest, and the importer could be subject to penalties and punitive interest rates for the error.

Does the 6-Month Remission Order apply to my goods?

The wording of the 6-Month Remission Order has led to significant uncertainty in the importing community about its scope.

On May 20, 2025, the CBSA updated Customs Notice 25-19 to clarify the agency's interpretation of the scope of the 6-Month Remission Order. Here are some of the notable points of clarification from the update:

• The remissions granted in paragraphs 1 and 2(b) of the 6-Month Remission Order are dependent on the identity of the end-user, i.e. whether it is an eligible organization based on its function (listed health care and public health, public safety and national security purposes). But not all importations by these organizations are eligible for relief: the goods must be related to those purposes. For example, a pharmacy that stores pharmaceuticals or medical devices would be a specified end-user under paragraph 1(b) of the 6-Month Remission Order, but its eligibility to claim a remission under paragraph 1(b) does not extend to goods for use in its non-qualifying activities (e.g. importation of prepacked snacks for retail sale).
• The remissions in paragraphs 2(a) and 3 of the 6-Month Remission Order can only be claimed if the goods are imported for a specified end-use (i.e. the provision of medically necessary health care services, the manufacture or processing of any good or the packaging of food or beverage products).
• To benefit from remission based on the end user or the end use the goods must be:
  1. imported directly by the end-user who will be using the goods in its eligible end-uses (as importer of record);
  2. shipped directly upon importation to the end user who will be using the goods in its eligible activities (named as consignee on the shipping documents); or
  3. for "immediate sale" to an eligible entity or an entity performing eligible activities, as evidenced by a purchase order or contract of sale.

In other words, goods must be demonstrably earmarked for an eligible end use at the time of importation. The CBSA will not consider goods imported by a distributor or reseller that are later sold for an eligible end use to be eligible for remission.

What manufacturing, processing or packaging activities qualify for relief under the 6-Month Remission Order?

The updated Customs Notice 25-19 articulates the following policies regarding scope of eligibility under section 3 of the 6-Month Remission Order:

• The CBSA adopted Statistics Canada's "NAICS" industrial activity classification system to identify which types of "manufacturing or processing" operations are eligible for the remission in paragraph 3 of the 6-Month Remission Order. The Customs Notice states that only businesses performing activities described in NAICS Chapters 31-33 (Manufacturing) are eligible for this remission. Importers should review these chapters carefully as many processing activities are categorized in Chapters outside of 31-33. Under this non-binding policy, any "processing" performed in the course of business activities that are not classified in Chapters 31-33, would not be eligible for remission.
• The remission in paragraph 3 of the 6-Month Remission Order under the "food or beverage packaging" ground is, in contrast, not limited by NAICS code. The policy merely states that the packaging material must be "imported by a business that is, itself, using the packaging in preparing food and beverages for sale". It is noted that the comments earlier in the Customs Notice that goods may be either "imported by" the qualifying end user, or directly consigned or for "immediate sale" to them, are also stated to apply to the "food or beverage packaging" ground.
• Under the "manufacturing or processing" remission ground, only direct materials are eligible for the remission, meaning materials that will become an integral part of the finished product. Indirect materials, fuel and equipment for use in manufacturing or processing operations in Canada are not eligible for the remission.
• The Customs Notice notes that the 6-Month Remission Order encompasses a narrower definition of "process" than the definition in Part 2, section 80 of the Customs Tariff, which includes the "adjustment, alteration, assembly, manufacture, modification, production or repair of the goods". The Customs Notice states that “repair is not included for remission”, though it notes that items imported for repair and subsequent export may qualify for relief from surtaxes under other duties relief programs.
• Remission is only granted for product imported and used for packaging food and beverage products for human consumption; goods imported for the packaging of animal food do not qualify for the "packaging" scope of the remission.

I'm not eligible for the 6-Month Remission. Can I still apply for an exemption?

Yes, Finance Canada is still accepting individual applications for discretionary remissions (exemptions) of the surtaxes.

Businesses must demonstrate exceptional and compelling circumstances to support their request.

• When products used as production inputs cannot be obtained domestically, nationally or regionally, or are not reasonably available from foreign markets other than the United States.
• When other exceptional circumstances arise that could cause serious adverse effects on the Canadian economy.
• The government will only consider refunding or waiving tariffs in special and exceptional cases where a strong public or economic interest outweighs the primary reason for imposing the tariffs.

Applications are by letter to Finance Canada, submitted via email to remissions-remises@fin.gc.ca, and supported by all relevant available information that addresses the points listed in the information template. If any of the information in the submission is confidential, applicants are advised to specifically identify it as such and request confidential treatment, to reduce the risk that the information could be disclosed to third parties or exposed to an Access to Information Program request.

The Department of Finance will review the remission requests in consultation with other relevant departments and interested parties, such as domestic producers in Canada. After review, the Department will make a recommendation to the Minister of Finance. The remission order(s) will be registered publicly through an Order-in-Council, issued by the Governor in Council, although for any company-specific remissions that are issued, businesses will typically be identified only by their Canada Revenue Agency business number for confidentiality, not by their name.

The government has not provided a specific processing timeline for specific remission applications connected to the US tariffs, but based on processing times for remissions issued in 2018 in connection with the first round of US steel and aluminum tariffs, and earlier this year for the China surtaxes imposed in 2024, businesses should anticipate that the process will take several months.

What is the status of notice of intent to impose countermeasures on C$200 billion worth of goods imported from US (so-called Phase 2 list items)?

Except for a handful of steel and aluminum derivative tariff codes from the proposal list that made their way onto the March 13, 2025 retaliation list and vehicles included in the April 8, 2025 list, Canada has not imposed tariffs on Phase 2 goods. We understand that there are no plans to impose additional product-specific retaliatory tariffs at this time.

If the United States introduces new sector-specific tariffs (e.g., on semiconductors or lumber, or other products currently subject to investigation by US trade authorities) or other trade-restrictive measures, Canada could respond by either drawing from the existing list or by considering alternative countermeasures (such as quotas or other retaliatory measures).

The United States introduced an exemption to its tariffs for "USMCA-qualifying" goods. Does Canada have the same exemption?

No, Canada does not have a reciprocal exemption for USMCA-qualifying or "CUSMA-compliant" goods. Canada's retaliatory tariffs are applied on a product-by-product basis rather than to all US origin goods, and so there is no broad exemption for goods that qualify as originating under the United States-Mexico-Canada Agreement ("USMCA", or in Canada, "CUSMA", also called "T-MEC" in Mexico).

The 25 percent and 10 percent tariffs imposed on products of Canada under the US International Emergency Economic Powers Act (IEEPA) apply to goods that are eligible to be marked as "made in Canada" in accordance with certain US product marking rules of origin, which tend to be a lower threshold than the test for tariff preference (duty free treatment) under the USMCA. Under the US rules, goods that meet the USMCA's tariff preference rules of origin are exempt from IEEPA tariffs if the exporter or producer provides a valid certification of origin and the importer claims the tariff preference on the customs entry. Note that this is not necessarily the case for other categories of US tariffs against Canada. For example, the tariffs on Canadian steel and aluminum products that do not benefit from the “USMCA-qualifying” goods exemption.

Is financial support or other resources available for Canadian businesses impacted by the tariffs?

Yes. A new financing program called Large Enterprise Tariff Loan Facility (LETL) has started accepting applications to provide financial support to Canadian businesses effected by tariffs and countermeasures. See our blog, Canadian Government Financing for Large Enterprises Impacted by US Tariffs and Canadian Countermeasures.

Along with the remission framework described above, there are several programs that may relieve surtaxes, such as the Duties Relief Program and the Duty Drawback Program, though these programs are typically conditional on re-exporting the goods in the same condition as imported or after the goods are processed or repaired.

Other measures available to support businesses and help them diversify trade beyond the United States include:

• Export Development Canada’s Trade Impact Program which provides an additional C$5 billion in support over two years, helping eligible companies across a range of products navigate economic challenges.
• The Business Development Bank of Canada rolled out the Pivot to Grow initiative, a C$500 million project that offers financing, advisory services and loan deferrals to small and medium enterprises (SMEs) affected by the tariffs.
• Farm Credit Canada introduced the Trade Disruption Customer Support Program, offering C$1 billion in new lending to assist agribusinesses, farm operations and food processors facing financial difficulties.
• The government activated special measures under the EI Work-Sharing Program from March 7, 2025, to March 6, 2026, to help affected businesses avoid layoffs and stabilize operations.
• The Trade Commissioner Service established a support line to assist businesses in understanding rules of origin and certification of origin requirements for CUSMA compliance.

For advice and assistance in understanding how to mitigate the impact of Canadian surtaxes, please contact a member of the Bennett Jones International Trade and Investment group.

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