Canada announces tariff remission process for Canadian businesses importing certain Chinese goods

From: Department of Finance Canada

News release

October 18, 2024 – Ottawa, Ontario – Department of Finance Canada

Canadian workers, the auto sector, the steel and aluminum industries, and related critical manufacturing supply chains are threatened by unfair competition from Chinese producers, who benefit from China’s intentional, state-directed policy of overcapacity and oversupply, as well as its lack of rigorous labour and environmental standards. The federal government has recently implemented a suite of tariffs (also known as surtaxes) on certain Chinese imports to level the playing field and protect Canada’s workers and businesses from China’s unfair trade policies. These include:

Today, the federal government launched the process for Canadian businesses to request remission of surtaxes on electric vehicles (EVs) and steel and aluminum imported from China. Remission would also be available for potential surtaxes on critical manufacturing sector products. To ensure that Canadian industry has sufficient time to adjust supply chains, remission will provide relief from the payment of surtaxes, or the refund of surtaxes already paid, under specific and exceptional circumstances.

The federal government is offering this relief in recognition of the potential challenges that Canadian industry faces as the result of adjusting supply chains in a timely manner. Remission from applicable surtaxes would be provided in compelling circumstances in line with the rationale behind the application of the surtaxes—leveling the playing field for Canadian workers and businesses. The government is ensuring Canadian workers and businesses are not unduly burdened by surtaxes on imports from China.

Accordingly, the federal government will consider requests for remission of surtaxes to address the following circumstances:

  • Situations where goods used as inputs, or substitutes for those goods, cannot be sourced either domestically or reasonably from non-Chinese sources;
  • Where there are contractual requirements, existing prior to August 26, 2024, requiring Canadian businesses to purchase Chinese inputs into their products or projects for a specified period of time; and,
  • Other exceptional circumstances, on a case-by-case basis, that could have significant adverse impacts on the Canadian economy.

Remission will not be granted for goods intended for resale in the same condition to the United States.

The federal government will consider the appropriate duration of remission, with intent to provide it on a transitional basis only in most cases, as supply chains adjust and may also be applied retroactively to the date of implementation of the surtaxes.  

Should the government decide to impose additional surtaxes on other goods, such as critical manufacturing sector products, the remission process would become available for those goods.

Remission requests and related inquiries can be submitted to remissions-remises@fin.gc.ca. Submissions received before November 8, 2024, will be processed on a priority basis, with subsequent submissions to be processed thereafter. Further details are available in the Public Notice for Remission.

Quotes

“We are moving in lock-step with key international partners to level the playing field for Canadian workers and businesses by protecting them from China’s intentional, state-directed policy of overcapacity and oversupply, which is undermining Canada’s ability to compete in domestic and global markets. Our government recognizes the challenges that Canadian businesses face in adjusting their supply chains away from Chinese imports, which is why we are providing remission relief as they work to secure imports from our trusted trading partners.”

- The Honourable Chrystia Freeland,
Deputy Prime Minister and Minister of Finance

“Canada is well positioned to lead in the electric vehicle supply chain thanks to its skilled workforce, abundance of critical minerals and innovative capabilities. That is why our government has taken decisive action to protect Canadian workers and investments from unfair trade policies.”

- The Honourable Mary Ng,
Minister of Export Promotion, International Trade and Economic Development

"The auto supply chain in Canada supports nearly 550,000 direct and indirect jobs, and automotive is one of the country’s largest export industries. We're securing the fair, prosperous future Canadians deserve by imposing tough tariffs and making sure our workers, from the steel to the auto sector to various key manufacturing sectors, have the flexibility they require to stay competitive. That's how we'll protect our industries, secure jobs, support communities and  keep building the products Canada, and its partners, need."

- The Honourable François-Philippe Champagne,
Minister of Innovation, Science and Industry

“Today, we are taking further action to level the playing field for Canadian workers in the face of China’s unfair, non-market practices. By providing relief from surtaxes, we are helping Canadian businesses foster home-grown clean technology and electric vehicle supply chains—from critical minerals to batteries and electric vehicles. As countries around the world increasingly look for a reliable supplier of green products, Canadian workers and businesses will be front and centre in seizing the economic opportunity this demand presents.”

- The Honourable Jonathan Wilkinson,
Minister of Energy and Natural Resources

Quick facts

  • Under section 115 of the Customs Tariff, the Governor in Council may waive duties, including surtaxes, on the recommendation of the Minister of Finance.  

  • The 100 per cent tariff on Chinese EVs is in addition to the Most-Favoured Nation import tariff of 6.1 per cent that will continue to apply to EVs produced in China and imported into Canada.

  • Since 2020, China has emerged as the largest manufacturer and exporter of EVs in the world, and its capacity continues to grow, as a result of policies such as extensive state subsidies and other non-market practices. In 2023, China’s annual EV exports totaled $47.2 billion, up from $0.2 billion in 2018. 

    • China’s unfair trade practices include weak standards across EV supply chains, including poor labour standards, a lack of environmental protections, and trade policies supporting oversupply.

  • Despite softening global demand, China has increased its steelmaking capacity by 18.6 million metric tonnes (more than Canada’s total production capacity) since 2018, making it the world’s largest steelmaker with over 1 billion metric tonnes produced in 2023.  Similarly, China’s primary aluminum capacity has grown from 11 per cent of global production share to 59 per cent over the last two decades, with the government investing up to $70 billion between 2013-2017 alone, according to the OECD.

  • Key likeminded trading partners have identified similar concerns with Chinese policies and practices in sectors critical in the net-zero transition, including the commitment from G7 Leaders in June 2024 to “acting together to promote economic resilience, confront non-market policies and practices that undermine the level playing field and our economic security, and strengthen our coordination to address global overcapacity challenges.”

Associated links

Contacts

Media may contact:

Katherine Cuplinskas
Deputy Director of Communications
Office of the Deputy Prime Minister and Minister of Finance
Katherine.Cuplinskas@fin.gc.ca

Media Relations
Department of Finance Canada
mediare@fin.gc.ca
613-369-4000

General enquiries

Phone: 1-833-712-2292
TTY: 613-369-3230
E-mail: financepublic-financepublique@fin.gc.ca

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