The United States Surtax Order

5. Who is affected by the surtaxes?
The surtax applies to both commercial and casual/non-commercial resident and non-resident importers of U.S.-origin goods into Canada.

6. How are the surtaxes calculated?
The surtax is calculated as 25% of the value for duty (VFD) of the imported goods. This is in addition to any other duties and taxes owed.

Exclusions for motor vehicles qualifying under CUSMA
For motor vehicles that qualify under CUSMA, the value of the goods originating in Canada or Mexico is excluded from the VFD for the purposes of calculating the surtax. A standard deduction of 15% will be applied to the VFD, reflecting the assumed value of the Canadian and Mexican-origin components used in production. Importers seeking to claim an exclusion amount greater than 15%, must obtain sufficient supporting documentation of goods that originate in Canada or Mexico used in the production of the motor vehicle and provide it to the CBSA upon request. For additional details, refer to Customs Notice 25-15.

Example 1: Goods with MFN duty rate of 0 %
The VFD of an imported good subject to a surtax is $150. The imported good has a Most Favoured Nation (MFN) duty rate of 0%. The applicable surtax is 25%, as per the Schedule to the United States Surtax Order (2025-1) or Schedules to the United States Surtax Order (Steel and Aluminum 2025).

The amount of surtax is calculated as follows:

• $150 (VFD) x 0.25 (% surtax) = $37.50 (surtax payable)

Customs duties and taxes are to be calculated as follows:

• $150 (VFD) x 0 (% MFN duty) = $0 (customs duty)
• $150 (VFD) + $37.50 (surtax payable) + $0 (customs duty) = $187.50 (value for tax)
• $187.50 x 0.05 (% GST) = $9.38 (GST)
• Total of surtax, customs duty, and GST payable is $37.50 + $9.38 = $46.88

Example 2: Goods with MFN duty, anti-dumping duty, and surtax
The VFD of an imported good subject to a surtax is $150. The imported good has a Most Favoured Nation (MFN) duty rate of 5% and is subject to anti-dumping duties of $34. The applicable surtax is 25%, as per the Schedule to the United States Surtax Order (2025-1) or Schedules to the United States Surtax Order (Steel and Aluminum 2025).

The amount of surtax is calculated as follows:

• $150 (VFD) x 0.25 (% surtax) = $37.50 (surtax payable)

Customs duties and taxes are to be calculated as follows:

• $150 (VFD) x 0.05 (% MFN duty) = $7.50 (customs duty)
• $150 (VFD) + $37.50 (surtax payable) + $7.50 (customs duty) + $34.00 (anti-dumping duties) = $229.00 (value for tax)
• $229.00 x 0.05 (% GST) = $11.45 (GST)
• Total of surtax, customs duty, anti-dumping duty, and GST payable is $37.50 + $34.00 + $7.50 + $11.45 = $90.45

Example 3: Motor vehicle entitled to the United States Tariff (15% deduction)
An imported motor vehicle has a VFD of $30,000 and qualifies for the United States Tariff (UST) under CUSMA, which has 0% duty rate. The applicable surtax under the United States Surtax Order (Motor Vehicles 2025) is 25%. Since the vehicle qualifies under CUSMA, a 15% deduction is applied to the VFD to account for Canadian and Mexican-origin components. Therefore, the surtax is calculated based on 85% of the VFD.

The surtax is calculated as follows:

• $30,000 (VFD) x 0.15 (%) = $4,500 (value of excluded Canadian/Mexican content)
• $30,000 - $4,500 = $25,500 (adjusted VFD for surtax)
• $25,500 (VFD for the purposes of surtax calculation) x 0.25 (% surtax) = $6,375 (surtax payable)

Customs duties and taxes are to be calculated as follows:

• $30,000 (VFD) x 0 (% UST duty) = $0 (customs duty)
• $30,000 (VFD) + $6,375 (surtax payable) + $0 (customs duty) = $36,375 (Taxable value for GST)
• $36,375 x 0.05 (% GST) = $1,818.75 (GST)
• Total of surtax, customs duty, and GST payable is $6,375 + $1,818.75 = $8,193.75

7. What is the value for duty (VFD)?
The primary method used to calculate VFD is the ‘Transaction Value Method’. Using this method, the VFD is based on the price paid or payable for the goods. For more details, refer to Memorandum D13-3-1.

8. Do the surtaxes apply to casual/non-commercial goods that qualify for de minimis treatment?
Yes, the surtax applies even to U.S.-origin goods eligible for de minimis treatment under the Courier Imports Remission Order (shipment valued at CA$40 or less exported from the U.S. or Mexico; or CA$20 exported from elsewhere).

9. What documentation is required for commercial goods?
Commercial importers must provide proof of origin documentation (e.g., a certificate or certification of origin) as outlined in the Canada-United States-Mexico Agreement (CUSMA).

10. How is the origin of casual goods determined?
For casual goods, the country-of-origin markings on the shipment documentation will be used. If no information is provided and there is no evidence that the goods originate from another country, the goods will be assumed to originate from the U.S. when shipped from the U.S.

11. Who would be responsible for paying the surtaxes?
The party (individual or business) acting as the importer of record for the goods would be responsible for paying the surtaxes, along with any applicable duties and taxes.