Dear Valued Clients,

As we move into the first quarter of 2026, the Canadian trade landscape has undergone a significant transformation following the sweeping regulatory shifts that took effect on December 26, 2025. In this newsletter, we break down commodities affected by the implementation of the new 25% global surtax on steel derivatives and outline a critical update on the phased expiry of end-use remission orders. To help you stay ahead of potential enforcement, we also provide details on the CBSA’s 2026 Trade Compliance Verification Priorities, which signal a rigorous new focus on surtax accuracy and origin verification.

Steel Derivatives List
Further to our previous communication, a full listing of the H/S classifications affected by the 25% derivative surtax can be found here.

End Use Remission Update
Under the United States Surtax Remission Order (2025), the Canadian government has established a framework to provide relief from retaliatory surtaxes on U.S. imports. Following several updates in late 2025, these remissions have been categorized by industry and end-use, with distinct expiry dates.

The following is a summary of the current remission categories and their respective deadlines as of January 2026:

1. Steel Remissions (General Manufacturing & Agriculture)
This is the most time-sensitive category. While originally set to expire in late 2025, it was granted a final short-term extension to allow businesses to transition to domestic or alternative supply chains.
Eligible Goods: Steel goods used for manufacturing, processing, food/beverage packaging, or agricultural production.
Expiry Date: January 31, 2026.
Condition: Must be direct inputs for manufacturing or agricultural activities in Canada.

2. Automotive & Aerospace Steel Remissions
Eligible Goods: Steel inputs used specifically for the manufacture of motor vehicles, auto parts, aircraft, spacecraft, or ground flying trainers.
Expiry Date: June 30, 2026.

3. Aluminum Remissions
Eligible Goods: Aluminum goods used for manufacturing, processing, food/beverage packaging, and agricultural production.
Expiry Date: June 30, 2026.

4. Public Health, Safety, and National Security
Eligible Entities: Hospitals, health/dental clinics, long-term care facilities, and government health authorities.
Eligible Goods: Goods imported for medically necessary services, public security, or national security purposes.
Expiry Date: June 30, 2026.

Formal Remission Application – Finance Canada
While the United States Surtax Remission Order (2025) provides relief for specific sectors via special authorization codes at the time of entry, there is a separate, more rigorous process for individual company remissions through the Department of Finance.

This formal application is intended for businesses that do not fit into the broad “end-use” categories but still face exceptional circumstances that justify relief from the 25% surtax. Details on the application structure and submission process can be found here.

2026 CBSA Trade Verification Priorities
For 2026, the agency has moved beyond simple classification checks to focus on revenue risk areas, particularly the China and U.S. Surtax Orders. Below is the breakdown of the current priorities and what they mean for your compliance strategy.

1. High-Priority Surtax Compliance
The most critical change for 2026 is the addition of dedicated verification targets for the various Surtax Orders. The CBSA is now actively auditing whether importers have correctly applied these additional 25% duties.
– Steel & Aluminum Surtaxes (U.S. & China): CBSA is verifying if goods originating from these countries are being misdeclared to avoid the 25% surtax.
– China EV Surtax: Verification of the 100% surtax on Chinese-manufactured electric vehicles.
– Steel Derivative Goods: Auditing the new 25% global surtax that went into effect December 26, 2025.

2. Regional Trade Agreement (Origin) Targets
With supply chains shifting to avoid surtaxes, the CBSA is strictly auditing the Rules of Origin to ensure goods qualify for duty-free status under trade agreements.
– CUSMA (US-Mexico-Canada): A heavy focus remains on the Automotive Sector. Verifications are targeting the regional value content (RVC) and labor value content requirements.
– CETA (Europe) & CUKTCA (UK): General origin verifications to ensure goods claiming these preferences are not actually transshipped from non-partner countries.

3. Tariff Classification
The CBSA continues to use “Rounds” of audits for specific commodities where high rates of misclassification have been historically detected.

4. Valuation and GST Verification
– Valuation (Apparel & Footwear): Verification of the “Value for Duty” (VFD) to ensure that assists, royalties, or subsequent proceeds are not being omitted from the declared price.
– GST Exemption Codes: The CBSA is auditing the use of GST status codes. Many importers are mistakenly using exemption codes for non-exempt commercial transactions, leading to unpaid 5% GST.

CBSA Compliance Intervention Tools
Instead of jumping straight to a full audit, the CBSA is increasingly using these three CARM-era tools:
Trade Advisory Notice (TAN): A “friendly” warning letter. No penalty, but a signal that the CBSA has flagged your entries for review.
Compliance Validation Letter (CVL): A formal request for info where non-compliance is suspected. You have 30 days to respond.
Directed Compliance Letter (DCL): A formal assessment. This comes with a bill for unpaid duties and potential penalties (AMPs).

If you are unsure how these new derivative surtaxes affect your current shipments or have any questions relating to remission or the 2026 Trade Verification Priorities, please contact our team.

Sincerely,
Summit Customs Brokers & Trade Consultants