Following public consultations to develop a policy response to Chinese-origin electric vehicles (EVs) that are flooding global markets, the Canadian government has imposed a 100 per cent surtax on all EVs made in China, effective Oct. 1, 2024, and a 25 per cent surtax on steel and aluminum imports from China, effective Oct. 22, 2024. Full lists of impacted EV, steel and aluminum products have been published.
The federal government recognizes that Canadian businesses relying on Chinese imports may struggle to adjust their supply chains in the face of such sudden and steep measures. To reduce this burden, the government has introduced a remissions framework.
What is considered a valid request for remission?
Under this framework, the government will consider requests for tariff relief by Canadian importers where:
- a Canadian business cannot reasonably source goods used as inputs, or substitutes for those goods, either domestically or from non-Chinese sources;
- a contract that existed before Aug. 26, 2024, requires a Canadian business to purchase Chinese materials for a specified period of time; or
- there are other exceptional circumstances, evaluated on a case-by-case basis, that could have significant adverse impacts on the Canadian economy. Examples are when materials are in short supply or businesses require additional time to switch to alternate sources because of situations like certification requirements.
The government will not grant remission for goods that are intended for resale in the same condition to the U.S.
Further consultations were held concerning possible surtaxes to protect other critical manufacturing sectors. If the government decides to impose additional surtaxes, those goods would also be covered by this remission process.
Similar frameworks have been implemented in the past. For example, after imposing surtaxes on U.S. steel and aluminum products in 2018, the government instituted a regime for importers to request relief from the payment of surtaxes or the refund of surtaxes already paid.
What is the path forward?
The Minister of Finance has set the criteria for eligibility and will consider applications for remissions under this framework. There is a 14-step template that importers must follow.
Ensure your application for remission is complete and compelling by reaching out to the authors or any member of BLG’s International Trade and Investment team.
