Canada’s steel import landscape undergoes a significant transformation as new protective measures take effect during the final week of December 2025. The federal government has announced comprehensive changes to tariff-rate quotas and surtax policies designed to shield domestic steel producers from international market pressures. These revised regulations represent the most substantial overhaul of Canadian steel import controls in recent years, affecting importers, manufacturers, and downstream users across multiple industrial sectors.
The government introduces full steel protection policies
It has been observed that there have been three significant amendments introduced to the current frameworks for the import of steel within the Canadian market. These include, first, the limits that would apply for the import of steel that would not qualify for a surtax; this is expected to affect the current import limits that apply for FTA partners and non-FTA partners. The surtax that applies to the import of steel-derivative products would include a 25% duty for finished goods that contain a high value of steel.
Further, the exemption for horizontal remission has also been announced to be withdrawn, whereby certain U.S. steel was exempt from surtaxes for import into Canada, as it was meant for use in manufacturing. Withdrawing the special exemption came into effect from February 1, 2026, which will be one of the most pivotal moments for Canada and the U.S. in relation to the import of steel into Canada from the U.S, because it might raise the cost of production.
A reduction in the import limits is also recorded for countries with free trade agreements; however, the limits are lessening from 100% of the volumes for the year 2024 to 75% of the volumes of the year 2024, whereas the reduction for countries with no free trade agreement is more severe, lowering the limits down from 50% to 20% of the volumes of the year 2024. The quota usage is implemented as soon as the permit is issued.
Steel derivative products will be liable to a further 25% surtax
Beginning from December 26th, 2025, a general surtax of 25% on all kinds of steel derivatives will be applied to imports from every country. This will apply to finished goods that have large steel contents. This tariff will be applied to the total value of the imported good and not on the value of the steel content, as is usually the case. There are five kinds of surtaxes that are levied in Canada and are potentially applicable to imported steel.
None of these is applied cumulatively to the imported items; that is, in a certain order, only one will apply to the imported product. It is explained that the tariff rate quota surtaxes will be accorded greater importance than the other two kinds of surtaxes on imported US or Chinese steel, or lastly, the steel derivative product surtaxes on imported items not pertaining to other safeguarding schemes.
An intricate regulatory environment poses challenges for compliance
The new steel import system has implemented a complex tiered system of import protection, which must be carefully navigated by steel importers if they are to be compliant and cost-effective across their entire operations. Surcharges exemption importation documents apply for steel imports that must be uploaded 15 days before the date, and 30 days before and after the proposed importation date.
“Steel is a foundational material used in construction, manufacturing, energy projects, vehicles, and household products. In recent years, the global steel market has been under strain due to overproduction in some countries, leading to very low-priced steel flooding world markets.”
The deep restructuring of Canada’s steel import rules that has been introduced takes account of increasingly evident global issues of overcapacity and unfair trading practices, as well as seeking to achieve an acceptable level of support for Canadian steel production within the needs of industries that use steel. However, their effectiveness will be contingent on their proper administration.
