The United States Surtax Remission Order (2025), registered as SOR/2025-122, provides targeted, time-limited relief from Canadian surtaxes imposed on U.S. goods. These surtaxes were enacted in retaliation to tariffs the United States had placed on Canadian exports, notably on steel, aluminum, energy, potash, and automobiles, beginning in March 2025. In total, Canada introduced three major surtax orders covering over $60 billion in U.S. goods: the United States Surtax Order (2025-1), the United States Surtax Order (Steel and Aluminum 2025), and the United States Surtax Order (Motor Vehicles 2025). The remission order is authorized under section 115 of the Customs Tariff, allowing for exceptions when exceptional public policy circumstances outweigh the broader goals of the tariffs.

The remission order is specifically designed to address challenges faced by certain sectors struggling with immediate disruptions in their supply chains due to the surtaxes. Stakeholders, particularly from the public health, health care, public safety, and national security sectors, indicated during consultations that they often rely on U.S.-made goods that are not readily replaceable through Canadian or alternative international sources. Many of these goods are required to meet strict certifications or fulfill contractual obligations, which limits substitution options.

The Order grants surtax relief to goods imported by or on behalf of a defined set of public sector organizations. These include health research entities, emergency responders, public health offices, firefighting services, police forces, correctional institutions, the Canadian Armed Forces, the Department of National Defence, and the Canadian Security Intelligence Service. It also applies to goods used in medically necessary services delivered at hospitals, clinics, labs, dental facilities, and long-term care institutions. Additionally, the Order covers entities managing blood, tissue, or organ supplies, as well as all levels of public health authorities in Canada.

Beyond public services, the Order also includes remission for Canadian businesses engaged in manufacturing, processing, or food and beverage packaging, where U.S. inputs are vital and alternatives are not feasible. To further support public health and health care, the Order includes a schedule of specific goods eligible for surtax relief. These include specialized infant formulas, metabolic dietary products, medical compression garments, and sterile packaging materials used in medical settings. Each of these products is linked to specific tariff classification numbers, providing clarity on eligibility.

This remission framework aligns with the broader Canadian government objective to uphold pressure on the U.S. to eliminate unjustified tariffs while mitigating unintended harm to critical sectors within Canada. It balances national economic strategy with the operational realities of essential services. The Government has also emphasized that while remission provides short-term flexibility, the broader strategy includes encouraging Canadian industry to “Choose Canada” and seek domestic alternatives whenever feasible.

Canada (SOR/2025-122) May 7, 2025
Disclaimer: Insights are for informational purposes only and do not reflect RRI’s official position or constitute legal opinion.