On 11 July 2018, the Government of Canada published guidelines on the process to make requests for remission from the surtaxes on certain U.S. origin goods that came into effect on 1 July 2018. We wrote about the actions leading up to the Government of Canada’s decision to impose a surtax, and the final list of products subject to the surtax, in our earlier Client Alerts dated 1 June and 3 July.
Only companies registered in Canada are eligible to make remission requests. We are seeking clarification on what the Government means by "registered"; however, we expect that it means that the company has been issued a federal Business Number. Further, the guidelines stipulate that the Government of Canada will only consider requests for remission in "exceptional and compelling circumstances" where the public policy impact outweighs the primary rationale behind the imposition of the surtax. Specifically, remission requests will only be considered in the following circumstances:
- To address situations of short supply in the domestic market, either on a national or regional basis.
- Where there are contractual requirements, existing prior to 31 May 2018, for Canadian businesses to use U.S. steel or aluminum in their products or projects.
- To address, on a case-by-case basis, other exceptional circumstances that could have severe adverse impacts on the Canadian economy.
Note that in addition to meeting the threshold set out above, the Government is requesting a significant amount of information to be provided in support of a remission request, including: evidence of inability to source the imported goods from a Canadian or non-US supplier; detailed cost information; unit selling prices and information on the impact of the surtaxes on cost and price; and consent to share non-confidential information with domestic producers to validate short supply submissions.
Remission requests will be reviewed by an inter-departmental committee that will make recommendations to the Minister of Finance. Any remissions granted will not take effect until an Order in Council is approved by the Governor in Council.
The Government of Canada guidelines can be found online here.