Canadian Government Announces New World Safeguard Surtax on Imported Steel

On October 11, 2018, Finance Minister Bill Morneau announced the implementation of a provisional world safeguard of a 25 per cent surtax (tariff) and quotas on steel products in order to protect the Canadian steel market from a surge of foreign steel imports. The U.S. and Mexico have been exempted from these measures, which means companies that are still procuring from these countries will not be affected by this announcement.

The surtax will be applied on October 25, 2018 and will affect products in the structural steel construction sector, including heavy plate, sheet and coil. There are other steel products that are considered at risk and will be impacted, but they do not affect the structural steel construction industry to a large degree.

Here are the important take-aways from this announcement:

• Products granted a duty remission from the recent countervailing Canadian taxes on U.S. steel plate and sheet products will also qualify for an exception from this surtax.
• The safeguard surtax will be provisional for only 200 days until which the Canadian International Trade Tribunal (CITT) will be holding hearings on the just application of surtaxes on each product.
• There will be a quota (tonnage) system imposed that will allow imports of a certain historic volume without immediate surtaxes.
• There is a maximum import quota per country imposed during each 50 day period. This means that no one country can dominate imports. For example, for plate, the max per cent tonnage of import volumes per 50 day period for every country is 25 per cent.
• The surtax is designed to allow imports into Canada at the normal volumes typical from previous years without any penalty. Any surge imports will be discouraged by this surtax, especially large volumes by any one country trying to unload large tonnages into our market that were otherwise destined for the U.S. or the EU. Note: the EU has already imposed similar safeguards in July 2018.

More information is available on the Government of Canada’s website and can be found the link below.