On October 18, 2024, the Department of Finance launched its remission process to allow Canadian businesses to apply for relief or refund from surtaxes levied at Chinese products in an effort to level the playing field for Canadian businesses and workers.  Eligible Canadian businesses can apply to the Minister of Finance and present their plea on how the surtax policies have unduly burdened their business operations.

Businesses that request remission prior to November 8, 2024, will receive priority in application processing, while subsequent submissions will be processed thereafter in the usual course.

What are the surtaxes?

Canada has been addressing perceived unfair Chinese Trade Practices by levying surtaxes under subsection 53(2) of the Customs Tariff on certain Chinese origin goods. 

As discussed in our previous blog, there was first a 100% surtax on Chinese-built electric vehicles which came into effect on October 1, 2024.  The second batch of surtaxes was a 25% surtax on Chinese-origin steel and aluminium products which went into action on October 22, 2024 (see our previous blog). 

The Department of Finance has consulted on a third batch of surtaxes on solar panels and batteries, although to date no official surtaxes have been issued.

Who can apply for remission?

The Governor in Council has the discretion to waive duties, including surtaxes, on the recommendation of the Minister of Finance per section 115 of the Customs Tariff.

While the government accepting remission requests sounds like great news for import businesses, the Minister’s announcement makes it clear that “the federal government will consider requests for remission only in the following instances”:

1. Situations where goods used as inputs, or substitutes for those goods, cannot be sourced either domestically or reasonably from non-Chinese sources.
2. Where there are contractual requirements, existing prior to August 26, 2024, requiring Canadian businesses to purchase Chinese inputs in their products or projects for a specified period of time.
3. Other exceptional circumstances, on a case-by-case basis, that could have significant adverse impacts on the Canadian economy.

What to Include in Remission Requests?

The Department of Finance provided a template on what should be included in requests such as tariff item information, detailed reasons for the request, and information on competitors. 

Takeaways

Canadian businesses are required to present a detailed and thorough remission request to advance their application.  As such, importers should review how professional legal advice can help their business put their best case forward to the Minister of Finance.

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