Backgrounder – Relief for Canadian Businesses from Countermeasures on Certain U.S. Imports
In response to the unjustified imposition of the United States' tariffs on Canadian steel and aluminum, the Government of Canada applied reciprocal countermeasures on imports of steel, aluminum, and other products from the U.S., beginning on July 1, 2018.
The Government recognizes that Canadian countermeasures against U.S. imports can create challenges for Canadian manufacturers that rely on steel and aluminum imported from the U.S. This imported steel and aluminum is used in many of Canada's major industries, including energy, advanced manufacturing, construction, and automotive parts.
Process for Relief from Countermeasures
To mitigate the impact on manufacturers, the Government outlined on July 11, 2018, a framework that allows the Government to consider providing targeted relief from Canada's countermeasures in the following instances:
- Situations of short supply in the domestic market, either on a national or regional basis;
- Situations where there are contractual requirements, existing prior to May 31, 2018, for Canadian businesses to use U.S. steel or aluminum in their products or projects; and
- Other exceptional circumstances that could have severe adverse impacts on the Canadian economy.
A federal interdepartmental committee reviewed the requests received from Canadian companies for targeted relief from Canada's countermeasures and made recommendations to the Minister of Finance. Under section 115 of the Customs Tariff, the Minister of Finance has the authority to recommend to the Governor in Council that relief be provided in the form of remission of the countermeasures.
Scope of Application of the Remission Order
The Remission Order provides targeted relief from countermeasures for a number of steel and aluminum products determined to be in short supply in Canada. The federal interdepartmental committee consulted domestic steel and aluminum producers to assess supply conditions.
For certain products determined to be in situations of ongoing short supply and listed in Schedule 1 of the Remission Order, relief can be granted from surtaxes paid or payable under the United States Surtax Order (Steel and Aluminum) for an indefinite period (for products imported from the U.S. on or after July 1, 2018).
For certain products determined to be in situations of temporary short supply and listed in Schedule 2 of the Remission Order, relief can be granted from surtaxes paid or payable under the United States Surtax Order (Steel and Aluminum) for a time-limited period (for products imported from the U.S. from July 1, 2018 to December 31, 2018).
The list of goods included in Schedule 1 and Schedule 2 of the Remission Order can be found on the Department of Finance Canada website. Companies that have applied for and been granted relief can now import these goods without paying surtaxes. A portion of this relief will be temporary, offered until such time that Canadian producers are able to adequately meet domestic demand.
The federal interdepartmental committee is continuing its analysis of requests from Canadian companies, including those related to contractual obligations existing prior to May 31, 2018. In addition, requests for relief due to short supply conditions are assessed on an ongoing basis.