Is my product on Canada's steel derivative surtax list? A four-question test for each CAD line

What does the steel derivative surtax cover?

The Steel Derivative Goods Surtax Order (SOR/2025-267, P.C. 2025-917) came into force on December 26, 2025. Section 1 charges a surtax of 25% of the value for duty, determined under sections 47 to 55 of the Customs Act, on two kinds of goods:

• goods classified under a tariff item set out in its schedule; and
• goods classified under a tariff item of Chapter 99 that are "otherwise classifiable" under a listed tariff item.

The second limb matters for audits. A line moved to a Chapter 99 end-use item for a lower customs duty does not leave the surtax behind. CBSA Customs Notice 25-33 says the same thing in plain terms: Chapter 99 gives a duty-free or reduced rate, and the surtax still applies.

The schedule lists 61 tariff items at the eight-digit level, unchanged since the order started. They fall into a few families:

Two things in that table catch importers out. The list is set by tariff item, not by the metal in the product, so plastic doors under 3925.20.00 are on it. And it reaches finished goods far from a steel mill: office furniture, upholstered seats with metal frames, light fitting parts and prefabricated buildings.

Question 1: is the tariff item on the schedule?

Match the CAD line's eight-digit tariff item against the schedule. Statistical suffixes do not narrow the list: if the line is under 9403.10.00, every ten-digit number beneath it is caught, whether filing cabinets, desks or tables. Then check the Chapter 99 case: if the line is under a Chapter 99 item, ask what tariff item the goods would fall under without it.

Because the list is driven by classification, a classification error moves the surtax with it. A steel shelving unit under 9403.20.00 (other metal furniture) is off the list; the same unit, if it is in fact office furniture of 9403.10.00, is on it. A tariff classification finding on a past CAD can therefore change two amounts on the line, the customs duty and the surtax.

Question 2: does another steel surtax apply first?

Canada applies one steel surtax per good. Paragraph 2(a) of the order excludes goods subject to a surtax under any of these orders:

Customs Notice 25-33 states the order of precedence: the quota surtax first; then the US, China or melt-and-pour surtax; then the derivative surtax "from all countries". In practice the melt-and-pour order's schedule covers primary steel and aluminum products of Chapters 72 and 76 and the rails, tubes and pipes of 7301 to 7306, and none of its tariff items is on the derivative list, so for most derivative goods the real question is whether a US or China order takes the line. The quota surtax is covered in steel TRQs and the over-quota surtax.

The test runs both ways. A line that carries the derivative surtax and a US surtax is overpaid by 25% of value. A line from a third country left with no surtax because "only Chinese and US goods are caught" is underpaid by the same amount.

Question 3: does an exception apply?

Section 2 lists the exceptions. Each has a date or a condition that an audit should check:

The end-use dates changed once. In the version of the order in force from December 26, 2025 to June 21, 2026, the motor vehicle and aerospace exceptions covered goods imported before July 1, 2026; the Justice Laws point-in-time text shows it. From June 22, 2026 the date reads July 1, 2027. Because the end date moved forward before the first one was reached, lines released in early 2026 for an exempt use are covered either way, but the exception still depends on use, and use needs evidence: a supply contract with a vehicle or aerospace manufacturer, a bill of materials, production records.

For the in-transit exception, Customs Notice 25-33 defines in transit as goods "bound for but not yet arrived in Canada, and under the control of a carrier" and asks for proof such as a bill of lading, report of entry documents or cargo control documents. The window has passed, but lines released in late December 2025 and January 2026 are where an audit finds it, in both directions: surtax paid on goods that were on the water on December 26, and surtax left off goods that shipped after it.

Goods that meet an exception and attract no other surtax are declared as not subject to surtax at accounting (Customs Notice 25-33, paragraph 24).

Question 4: if the line is caught, does remission apply?

A caught line can still recover the surtax through the Steel Derivative Goods Surtax Remission Order (SOR/2026-34), in force since February 24, 2026 and amended by SOR/2026-227 on October 23, 2026. It relieves goods used by listed public health, safety and defence entities, goods for health care, some wind towers, and goods named in three schedules. Remission is not an exception: the surtax is still declared on the line and relieved with a special authority code, and the claim must reach the CBSA within two years after importation. The codes, schedules and claim steps are in steel derivative surtax remission.

A worked CAD: three lines of steel office furniture from Vietnam

The figures are illustrative. One CAD, released November 2, 2026, goods of Vietnamese origin under the marking rules, imported for resale. The Customs Tariff 2026 lists 9403.10.00 at a free MFN rate and 9403.20.00 at 8% MFN and free under the CPTPP tariff.

Line 1 runs through the test like this: 9403.10.00 is on the schedule; Vietnam is not subject to the China or US orders; no exception applies to goods bought for resale. The surtax is CAD 80,000 × 25% = CAD 20,000. The customs duty is zero. GST at 5% is charged on value plus duty plus surtax, as Customs Notice 25-33 shows: (CAD 80,000 + CAD 0 + CAD 20,000) × 5% = CAD 5,000. Line 1 costs CAD 25,000 in surtax and GST.

Line 2 is caught by the same steps, but desks under 9403.10.00.91 are named in Schedule 1 of the remission order. The CAD declares CAD 10,000 of surtax and claims it back with code 26-0145C. Filing cabinets are not in Schedule 1, which is why line 1 pays and line 2 does not, although both are under the same eight-digit tariff item.

Line 3 is off the list, so the derivative surtax does not arise. The CPTPP claim takes the customs duty from 8% to free, which saves CAD 30,000 × 8% = CAD 2,400 if the proof of origin holds.

The usual mistakes on a CAD like this one run both ways. If the broker classified all three lines under 9403.20.00, lines 1 and 2 are underpaid by CAD 30,000 of surtax (less the CAD 10,000 that line 2 could have recovered). If it put line 3 under 9403.10.00, line 3 is overpaid by CAD 7,500. If line 2 paid the surtax without the remission code, CAD 10,000 is recoverable by an adjustment within two years after importation. You can check the rate and surtax for a tariff item, origin and date in the duty calculator.

How do you run the test across your past entries?

1. Export every CAD and B3 line since December 26, 2025 with tariff item, origin, release date, surtax code, field 85 amount, special authority code and GST. Field 85 is the number CBSA's notices give the Surtax field; Memorandum D17-1-10 calls the same field 68 (the CAD field by field explains both).
2. Flag every line under one of the 61 tariff items, and every Chapter 99 line whose goods would otherwise fall under one.
3. Remove lines another steel surtax takes first (US, China, quota, melt-and-pour), and check that those lines carry that order's code instead.
4. Check each exception claimed against its evidence and date: origin proof, Chapter 98 eligibility, end-use records for motor vehicle and aerospace lines, the in-transit documents for late-December 2025 shipments.
5. Check remission on every caught line, with the right code and inside the two-year window.
6. Sort findings by direction. Underpayments are corrected under section 32.2 of the Customs Act; overpayments go to a refund adjustment or a remission claim. Both routes are in correcting a Canadian entry.

TariffSense reads CAD/B3 lines and broker accounting exports, tests each line against the steel derivative schedule and the other steel orders in force on its release date, applies the one-steel-surtax rule, and flags lines that paid a surtax they did not owe or skipped one they did. Filing stays with your broker or your own CARM account. The order-by-order view of every Canadian surtax is in why your CAD shows the wrong surtax, and the full Canadian audit is in auditing CAD/B3 entries after accounting.

What should you do next on your own entries?

Start with the furniture, fasteners, chain and structures lines, because they carry the most value and the most classification judgment. Pull the lines released between December 26, 2025 and today, run the four questions, and look hardest at two groups: lines from Europe, Asia and Mexico with no surtax at all, and US lines carrying two surtaxes. Confirm any filing with a licensed customs broker.