The Canada Border Services Agency (CBSA) began administering the United States Surtax Order (2026) on September 8, 2026, imposing counter-tariffs of 15%, 25% or 50% on designated goods originating in the United States. Set out in Customs Notice 26-23, the measure is Canada's response to U.S. Section 338 tariffs on Canadian goods, with the surtax rate on each product generally tracking the corresponding U.S. Section 338 or Section 232 duty.
Every Canadian importer of U.S.-origin goods, customs broker and freight forwarder must now account for the surtax at release, calculate it on the value for duty, and declare it through the CBSA CARM portal or face penalties and accruing interest. The surtax applies from the day the notice published, including on shipments that fall under de minimis thresholds.
Which goods carry which surtax rate, and how is U.S. origin determined?
The Order splits affected goods across three schedules by rate: Schedule 1 lists 15% items, Schedule 2 lists 25% items and Schedule 3 lists 50% items. The complete list of U.S. products subject to counter tariffs on the Department of Finance site is the authoritative schedule reference.
Origin follows the marking rules: a good is U.S.-origin if it is eligible to be marked as a good of the U.S. under the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations. The surtax does not reach goods eligible to be marked as originating from Puerto Rico, Guam, the Northern Mariana Islands, American Samoa or the U.S. Virgin Islands. It applies to both commercial and casual goods, even when shipped from a third country.
| Schedule | Surtax rate | Surtax code |
|---|---|---|
| Schedule 1 | 15% of value for duty | 26186A |
| Schedule 2 | 25% of value for duty | 26186B |
| Schedule 3 | 50% of value for duty | 26186C |
How must importers declare and calculate the surtax in CARM?
Importers declare the surtax on a Commercial Accounting Declaration (CAD) through the CARM Client Portal, EDI or API, entering the applicable code (26186A, 26186B or 26186C) and the surtax amount in field 85. Under CARM's self-declare option the importer calculates the amount themselves: the surtax equals 15%, 25% or 50% of the value for duty set under sections 47 to 55 of the Customs Act, on top of any MFN duty and anti-dumping duty owing.
GST is then calculated on the value for tax, which includes the surtax even when customs duties are remitted. On a $150 value for duty with a 25% surtax and 0% MFN duty, the surtax is $37.50, the value for tax becomes $187.50, and the 5% GST is $9.38, for $46.88 total. The same $150 value at the 50% rate yields a $75 surtax and $86.25 total with GST.
Which shipments are exempt, and what about goods already in transit?
Goods in transit to Canada on September 8, 2026 are not subject to the surtax, provided the importer holds proof such as a bill of lading, report of entry documents or cargo control documents, which CBSA may request at any time. Goods classified under HS Chapters 98 and 99 are also exempt unless their specific tariff item appears in Schedule 4 to the Order.
The surtax is not cumulative with the Steel Derivative Goods Surtax Order: where both apply, only this Order's surtax is charged. It still reaches shipments covered by the Postal Imports Remission Order, the Courier Imports Remission Order and de minimis thresholds. Specific carve-outs remain for the Akwesasne Residents Remission Order, the Import for Re-Export Program, returning U.S. goods previously duty-paid in Canada, cross-border repairs (except vessels under 9971.00.00), non-resident baggage under 9803.00.00, and eligible ships' stores. Canada's Duties Relief and Duty Drawback programs apply to surtax paid, subject to CUSMA, and for CUSMA-origin goods the "lesser of two duties" rule does not apply, allowing full relief when the CUSMA criteria are met.
What are the correction, appeal and remission routes?
The surtax itself cannot be appealed under the Customs Tariff or the Customs Act, but CBSA re-determinations of origin, classification or value can be challenged. An importer served a re-determination under section 59(2) of the Customs Act may request review under section 60 within 90 days, after paying the amounts owed. Corrections before the payment due date go through CARM; adjustments after it follow Memorandum D17-2-1, and casual-goods adjustments use Form B2G rather than CARM.
Importers needing transitional relief can apply under the U.S. Remission Framework administered by the Department of Finance, alongside the existing United States Surtax Remission Order (2025). Non-compliance triggers the surtax plus penalties and accruing interest, and CBSA may verify origin, classification and valuation post-release.
Continuous, per-jurisdiction real-time monitoring surfaces a CBSA customs notice like this one the moment it publishes, so compliance teams can act on entry-into-force-day measures without delay.
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Next steps for affected teams: confirm whether your SKUs appear in Schedules 1, 2 or 3 against the Finance Canada list, validate that CARM field 85 and the correct 26186A/B/C code are wired into your EDI or API filings, brief brokerage and freight partners on the transit-proof and Chapter 98/99 exceptions, and flag any shipment that may qualify for remission before the next accounting cycle.
