Backgrounder – Targeted Relief for Canadian Businesses from Countermeasures on Certain U.S. Imports

In response to the unjustified tariffs imposed by the United States on Canadian steel and aluminum, on July 1, 2018, the Government of Canada applied reciprocal countermeasures on imports of steel, aluminum, and other products from the U.S.

The Government recognizes that Canadian countermeasures against U.S. imports can create challenges for Canadian manufacturers, in particular for those that rely on U.S. steel and aluminum imports. These include manufacturers in sectors such as energy, advanced manufacturing, construction, and automotive parts, among others.

In response to these challenges, on October 11, 2018, the Government announced the United States Surtax Remission Order, which provided targeted relief from countermeasures applied on a number of steel and aluminum products, in cases where these products were determined to be in temporary or ongoing short supply in Canada. This relief was also provided for boats imported under certain pre-existing contractual obligations, and goods imported temporarily for repair, alteration or storage.

Scope of Application of the Amending Remission Order

Today, the Government of Canada announced the Order Amending the United States Surtax Remission Order (SOR/2018-205), which will provide targeted surtax relief on a broader range of products, including for specific companies facing particular circumstances, such as contractual obligations.

For certain steel and aluminum products determined to be in situations of ongoing short supply and referred to in Schedule 1 of the amending Remission Order, relief can be granted from surtaxes paid or payable under the United States Surtax Order (Steel and Aluminum) for an indefinite period (i.e., for products imported from the U.S. on or after July 1, 2018).

For certain steel and aluminum products determined to be in situations of temporary short supply and referred to in Schedule 2 of the amending Remission Order, relief can be granted from surtaxes paid or payable under the United States Surtax Order (Steel and Aluminum) for a time-limited period (i.e., for products imported from the U.S. from July 1, 2018 to April 30, 2019). Schedule 2 of the amending Remission Order also extends the period of remission of countermeasures for products previously covered under Schedule 2 of the Remission Order, from December 31, 2018 to April 30, 2019.

For certain steel and aluminum products imported pursuant to certain contractual obligations existing prior to May 31, 2018, or under exceptional circumstances, and referred to in Schedule 3 of the amending Remission Order, relief can be granted from surtaxes paid or payable under the United States Surtax Order (Steel and Aluminum). This relief is limited to specifically listed importers, for specified periods (e.g., for imports until April 30, 2019 in most cases) and subject to applicable conditions as prescribed in Schedule 3 of the amending Remission Order.

The amending Remission Order also remits surtaxes for two additional manufacturing inputs (i.e., certain plywood and certain paperboard) determined to be in short supply and referred to in Schedule 4. Remission for these products can be granted from surtaxes paid or payable under the United States Surtax Order (Other Goods) for an indefinite period (i.e., for products imported from the U.S. on or after July 1, 2018). This remission is limited, however, to situations in which the products are used as inputs into manufacturing activities in Canada.

The list of products included in Schedule 1, Schedule 2, Schedule 3 and Schedule 4 of the amending Remission Order can be found on the Department of Finance Canada website.

The amending Remission Order reflects the recommendations of the federal interdepartmental committee on remissions, as well as the process for consideration of remissions published on July 11, 2018. The federal interdepartmental committee consulted domestic steel and aluminum producers in order to assess supply conditions of products claimed to be in short supply in the context of the amending Remission Order.

The federal interdepartmental committee is continuing its analysis of requests for relief of countermeasures from Canadian companies. In addition, the Committee for relief of countermeasures, established in October 2018 and comprised of relevant stakeholders, will continue to meet as required to discuss issues relevant to the remission process.