Canada introduced the surtax in response to the United States’ Section 338 tariffs on Canadian goods, with the list of affected products drawn from goods targeted by both Section 338 and Section 232 tariffs, and the surtax rate generally matching the U.S. rate under the United States Surtax Order (2026). Unlike the steel and aluminum order that came before it, this one applies to a much broader set of U.S.-origin goods, though it excludes goods eligible to be marked as originating from Puerto Rico, Guam, and a handful of other U.S. territories, and the complete list of affected products published by the Department of Finance runs to hundreds of tariff lines. If your team has never tracked surtax exposure outside of metals, this is the notice that changes that.

Where the original steel and aluminum surtax applied a single 25% rate, CN26-23 sorts goods into three tiers: 15% for goods listed in Schedule 1, 25% for Schedule 2, and 50% for Schedule 3, each declared under its own CARM surtax code, 26186A, 26186B, and 26186C. The surtax is calculated on the value for duty first. This is in addition to any other duties owing (e.g., any applicable anti-dumping duties). GST will be applied on that total duty amount, so a manual calculation that applies GST before adding the surtax will come up short every time.

To dig deeper, visit the original article on the Thomson Reuters blog.