Understanding Canada’s Surtax Refunds and U.S. IEEPA Tariffs Developments
By Jean-Daniel Vermette
May 06, 2026
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Tariff Recovery Opportunities for Canadian Businesses
Over the past year, trade measures between Canada and the United States have created a complex tariff environment for importers. While many businesses have absorbed these additional costs as part of normal operations, a significant portion of these duties may, in fact, be recoverable.
For Canadian companies, the opportunity exists on two fronts:
1. Canada’s surtax remission framework, and
2. Potential U.S. refunds linked to recent legal developments under IEEPA Tariffs
Understanding where your business fits within this landscape is key to determining whether funds can be recovered.
The U.S. Ruling: What It Changes, and What It Doesn’t
In early 2026, the U.S. Supreme Court, in Learning Resources, Inc. v. Trump, ruled that tariffs imposed under the International Emergency Economic Powers Act exceeded presidential authority.
This decision regarding IEEPA tariffs has prompted understandable interest among Canadian businesses.
The tariffs that most significantly affected Canadian industries, particularly in steel, aluminum, automotive, and lumber, were imposed under Section 232 of the Trade Expansion Act, which remains fully in force.
That said, the ruling does create a targeted but meaningful refund opportunity for companies that:
● Imported goods into the United States, and
● Paid duties specifically tied to IEEPA tariffs measures
This primarily concerns businesses acting as importer of record in the U.S., either directly or through a U.S. entity.
Canada’s Surtax Regime: Where Most Opportunities Lie
In response to U.S. trade actions, Canada implemented a series of 25% retaliatory surtaxes on U.S. imports beginning in March 2025, administered by the Canada Border Services Agency.
While some of these measures have since been rolled back, particularly for CUSMA-compliant goods, the associated remission (refund) mechanisms remain available.
In practice, this is where most Canadian businesses will find the largest and most immediate recovery potential.
Overview of Applicable Surtaxes
● General U.S. goods (25%) Applied broadly as of March 2025 and largely repealed in September 2025. → Duties paid during this period may still be recoverable.
● Steel and aluminum products (25%) Remain in effect, with remission available in specific circumstances.
● U.S.-manufactured vehicles (25%) Applicable to certain imports prior to April 8, 2026, where remission criteria are met.
● Steel derivative goods (25%) Introduced in December 2025, with a newer remission framework that many businesses have yet to assess.
Determining Eligibility: More Flexible Than Expected
A common misconception is that surtax refunds apply only in exceptional situations. In reality, eligibility is often broader and tied to operational realities.
Businesses may qualify where they can demonstrate that U.S. sourcing was necessary, including situations involving:
● Supply shortages or lack of viable alternative suppliers
● Pre-existing contractual obligations
● Integration of imported goods into Canadian manufacturing or processing activities
We frequently see eligibility across sectors such as manufacturing, food and beverage, agriculture, and specialized industrial operations often in cases where companies initially assumed no recovery was possible.
The Claims Process: Technical and Time-Sensitive
Surtax recovery is not automatic and must be actively claimed through the CARM platform.
The appropriate approach depends on the status of each import transaction:
● At time of importation → remission can be claimed directly
● After declaration, before payment due date → corrections can be filed
● After payment → formal adjustments are required to obtain a refund
Each path requires precise documentation and correct use of CBSA procedures.
Importantly, all claims are subject to a two-year limitation period from the date of importation. Once this deadline passes, the ability to recover funds is permanently lost.
Cross-Border Considerations: An Overlooked Layer
For companies operating in both Canada and the United States, the recovery opportunity is often more complex and more significant.
Canadian businesses may also have exposure to U.S. duties if they:
● Import goods into the U.S. on behalf of clients
● Act as importer of record for U.S. shipments
● Operate through a U.S. subsidiary or distribution entity
In these cases, it is possible to have parallel recovery opportunities:
● Surtax remission in Canada
● IEEPA Tariffs-related refunds in the United States
These processes are distinct but can be coordinated to ensure a complete recovery strategy.
Why These Opportunities Are Frequently Missed
Despite the scale of potential refunds, many businesses have not pursued recovery. The reasons are consistent:
● Multiple overlapping surtax programs with evolving rules
● Eligibility criteria tied to detailed operational facts
● Strict documentation and audit requirements
● Complexity within the CARM system
● Limited visibility from traditional compliance-focused processes
As a result, recoverable amounts are often left unclaimed, not due to ineligibility, but due to lack of clarity or internal capacity.
Final Thoughts
For Canadian importers, the current environment presents a time-limited opportunity to recover duties paid in 2025 and 2026.
In most cases:
● The primary opportunity lies within Canada’s surtax remission framework, and
● A secondary opportunity may exist in the U.S. for businesses with cross-border operations
Given the strict deadlines and technical requirements, early assessment is critical. Many companies are surprised to discover that they qualify and that the amounts at stake are material.
Not sure if your business qualifies?
Leyton’s Customs Duty specialists can help you assess your eligibility, identify potential recovery opportunities, and guide you through the remission process before key deadlines expire.
