Measures for Steel and Aluminum Businesses
As the Government of Canada works towards the complete repeal of the illegal and unjustified United States tariffs on steel and aluminum, we recognize that United States tariffs and Canadian countermeasures may be having an impact on Canadian businesses, workers and communities. That is why the Government has announced up to $2 billion in support measures to defend and protect the interests of Canadian workers and businesses in the steel, aluminum and manufacturing industries. In addition to these support programs, the Government has provided assistance to Canadian manufacturers facing increased surtax costs, by giving targeted relief from Canadian surtaxes collected.
On July 1, 2018, Canada also started imposing countermeasures (surtaxes) against C$16.6 billion in imports of steel, aluminum, and other products from the United States, representing the value of 2017 Canadian exports affected by the U.S. tariffs.
To stand up for Canada's steel industry and support Canadian workers and businesses, the Government is taking further steps to prevent diversion of foreign steel products into Canada. On October 25, 2018, the Government imposed provisional safeguards on imports of certain steel products and requested that the Canadian International Trade Tribunal (CITT) conduct an inquiry to determine whether final safeguards are warranted and, if so, to recommend appropriate remedies. The provisional safeguards will be in place for 200 days pending the CITT findings and recommendations.
The information below informs Canadian businesses about these announcements and measures, and gives contacts for further information.
Relief from Surtaxes on Imports from the United States
On October 11, 2018, our Government put in place the United States Surtax Remission Order (Order) in order to address certain challenges for Canadian manufacturers that rely on steel and aluminum imported from the United States.
Remission of surtaxes has been granted for certain steel and aluminum products imported from the United States that have been determined to be in short supply in Canada. The eligible products for remission of surtaxes based on short supply conditions are listed in Schedules 1 and 2 of the Order. Any importer of the eligible products can make a claim to the Canada Border Services Agency (CBSA) for the refund or waiver of the surtaxes. Information on making claims for remission is provided in Customs Notice 18-16 of the CBSA.
The Order was amended on December 17, 2018 and on April 15, 2019 to expand its scope of application on a company-specific basis, based on contractual obligations or exceptional circumstances. Information on this additional relief can be found in Schedule 3 of the Order.
Information on remission of surtaxes for imports of other goods can be found in Schedule 4 of the Order.
For any additional products, companies registered in Canada may submit requests to a federal interdepartmental committee who will assess whether any additional products could be recommended to the Minister of Finance for remission of surtaxes. Requests for the remission of surtaxes must explain the reason why a remission is sought (e.g., short supply or contractual requirements) and follow the template provided on the Department of Finance Webpage.
The Committee on Remission of Surtaxes provides a forum for interested industry associations representing downstream users of steel and aluminum to (a) inform the Government of issues related to the application of surtaxes, including challenges in switching sources of supply (b) express views on supply conditions of manufacturing inputs in Canada, and (c) share information about efforts to source from Canadian suppliers. The Canadian Manufacturers and Exporters (CME) has assumed a convening role for the Committee.
Duty Deferral Programs
Other than remission of surtaxes under the Order, relief may be available under existing duty deferral programs administered by the CBSA.
- The Duties Relief Program relieves from the payment of surtaxes on imported goods from the United States if the goods will eventually be re-exported either in the same condition or after using, consuming or expending them to process other goods.
- The Drawback Program has the same advantages as the Duties Relief Program. The only difference is that the Drawback Program is for companies who have already paid the surtaxes and are asking for a refund of those surtaxes.
Provisional Safeguards on Certain Steel Imports
On October 11, 2018, the Government of Canada announced the imposition of provisional safeguards on seven steel product categories, effective October 25, 2018. The provisional safeguards are applied in the form of tariff-rate quotas (TRQ), whereby a 25-per-cent surtax only applies to imports without a shipment-specific import permit or that exceed the TRQ.
The surtax-free quota is administered by Global Affairs Canada (GAC) through shipment-specific import permits, issued on a first-come, first-served basis. For a shipment to be imported free of the provisional safeguard surtax, importers must present a valid shipment-specific import permit to the CBSA at the time of final accounting. Information regarding GAC’s administration of the provisional safeguards TRQ, including the procedures for obtaining shipment-specific import permits, can be found in Notice to Importers No. 936.
On February 2, 2019, the Government amended the provisional safeguard TRQs for imports of energy tubular products and wire rod.
Notice to Importers No. 936
Steel Tariff Rate Quota Utilization Tables
Changes to Energy Tubular Products and Wire Rod TRQs
The Canada Border Services Agency (CBSA) is responsible for enforcing the provisional safeguards in accordance with Customs Notice 18-17. On December 19, 2018, the Government also announced surtax relief for Canadian companies importing steel products that were in transit before provisional safeguards were imposed on October 25, 2018. This surtax relief is administered by the CBSA in accordance with Customs Notice 18-24.
Canadian International Trade Tribunal (CITT) Inquiry
The CITT is currently conducting an inquiry to determine whether longer-term, final safeguards are warranted. If the CITT finds that final safeguards are warranted, it will also recommend appropriate remedies to the Government.
Support for Businesses
Business Development Bank of Canada (BDC)
The Business Development Bank of Canada has made up to $800 million in commercial financing available over the next two years for eligible small and medium-sized businesses. This financing could help companies expand into new markets, increase operational and environmental efficiency, or purchase new technology and equipment.
If you are not yet a client and wish to discuss your financing or advisory needs, please contact BDC at 1-877-232-2269 or write to email@example.com.
Export Development Canada (EDC)
Export Development Canada has made up to $900 million available over the next two years in commercial financing and insurance to companies in the steel and aluminum sectors and related industries including SMEs. EDC solutions are available to companies looking for support to enable execution on established business plans, to free up working capital, or to insure payment.
Innovation, Science and Economic Development Canada (ISED)
The Government has made up to $250 million available in new funding for targeted assistance as part of the Strategic Innovation Fund managed by ISED. These funds will support companies that choose to make investments in innovation, and capital expenditures including: new equipment, production and process technologies; and workforce training and upskilling related to these new technologies and processes.
The Regional Economic Growth through Innovation Steel and Aluminum Initiative has made available $100 million in support to Canadian small- and medium-sized steel and aluminum manufacturers and users for investments in innovative projects that will enhance productivity and/or competitiveness. The regional development agencies are implementing this program.
Canada Economic Development for Quebec Regions: firstname.lastname@example.org
Canadian Northern Economic Development Agency: CanNor.InfoNorth.InfoNord.CanNor@canada.ca
FedDev Ontario: FDO.FedDevOntario.FDO@canada.ca
FedNor Ontatio: email@example.com
Western Economic Diversification Canada: WD.contactus-contactez-nous.DEO@canada.ca
Atlantic Canada Opportunities Agency (ACOA)
Canada Economic Development for Quebec Regions (CED)
Western Economic Diversification Canada (WD)
Trade Commissioner Service at Global Affairs Canada
Global Affairs Canada stands ready to assist entrepreneurs in exploring new and longer-term market diversification opportunities. In addition, $50 million over five years in new support will be provided to help Canadian companies diversify their exports to take advantage of new trade agreements, such as CETA and CPTPP.
Support for Workers
In order to help employers avoid layoffs and retain skilled workers, as a temporary measure, our Government has extended the maximum duration of Work-Sharing agreements from 38 to 76 weeks. The mandatory cooling off period has also been waived so that employers with a recently expired agreement may immediately apply for a new agreement, without waiting between applications.