If you’re a Canadian business relying on imported manufacturing goods, important changes have occurred. The Government of Canada has cracked down with new surtaxes on a wide range of critical goods. These extra charges can impact your costs, timelines, and supply chain.

But the good news is that smart planning can help you reduce risks and find new opportunities. Let’s walk through what these surtaxes mean, why they exist, and how your business can stay ahead.

What Are Surtaxes?

Surtaxes are extra taxes added on top of regular import duties. There are financial penalties for bringing in certain goods from specific countries. Governments often use surtaxes during trade disputes or to protect national industries.

In this case, Canada introduced these surtaxes on goods that were considered “critical” to the economy, especially manufacturing.

What Goods Do They Target?

The surtaxes apply to several core manufacturing inputs, including:

  • Steel and aluminum products
  • Electrical equipment and parts
  • Machinery used in assembly lines
  • Automotive components
  • Certain chemicals and raw materials

These aren’t everyday consumer goods. These are essential components in the automotive, construction, aerospace, and electronics industries. If your business imports these, now is the time to act.

Why Did Canada Add Surtaxes?

There are three main reasons:

1. National Security

Canada wants to rely less on foreign-made materials in key sectors like defense, energy, and transportation.

2. Support for Canadian Industry

The government aims to make foreign goods more expensive so Canadian manufacturers can compete more effectively.

3. Trade Disputes

This move also responds to past international tariffs placed on Canadian goods. Canada is protecting its interests.

How Much Will It Cost You?

It depends on what you import and where it comes from. Most surtaxes range from 10% to 35%, but some can be even higher.

Let’s say you import machinery from a country on the surtax list:

  • Machine cost: $100,000
  • Standard duty: 6% = $6,000
  • Surtax: 25% = $25,000
  • Total import cost: $131,000

That’s a huge impact on your cost structure.

What’s at Risk for Your Business?

These surtaxes don’t just cost you more. They also create serious risks:

  • Delays at customs due to added paperwork
  • Reduced profits from higher costs
  • Production slowdowns due to part shortages
  • Frustrated customers because of missed timelines

How to Plan: Smart Moves You Can Make Today

Here’s what to do to protect your operations and cash flow.

Review Your Supply Chain

Make a list of everything you import. Highlight the goods now subject to surtaxes.

Ask yourself:

  • Where do they come from?
  • Are there alternative suppliers in non-affected countries?
  • Can you find Canadian replacements?

Recheck Your Product Classifications

A wrong product classification could cost you thousands in surtaxes. A single HS code error can trigger the wrong tax rate.

Work with a licensed customs broker like Clearit Canada to double-check your HS codes. Accurate coding can help you avoid or reduce surtaxes.

Use Free Trade Agreements (FTAs)

Canada has FTAs with many nations. Avoid these new taxes if you import from countries like Mexico, South Korea, or EU members.

Explore trade agreements like:

  • CUSMA (with the U.S. and Mexico)
  • CETA (with the European Union)
  • CPTPP (with Asia-Pacific countries)
  • CUKTCA (with the UK)

Use them to your advantage.

 

Negotiate with Suppliers or Explore Alternatives

Have open conversations with your suppliers. Some might help absorb part of the surtax, and others might offer alternative product lines that don’t face surtaxes. Direct discussion can often uncover these opportunities.

Use Government Relief Programs

You may qualify for special customs programs that reduce the impact of surtaxes:

Duties Relief Program

Let’s you avoid duties if you re-export goods

Customs Bonded Warehouses

stores goods without paying duties upfront

Duty Drawback

Reclaim paid surtaxes if you export or manufacture the goods

Adjust Financial Forecasts for Long-Term Impact

Don’t treat these surtaxes as a one-time cost. They may last for months or years.

Update your pricing, budgets, and financial forecasts. Instead of reacting to each shipment, plan for long-term impact.

Diversify Your Supplier Base

Sourcing from multiple suppliers in different regions can reduce your dependency on high-cost imports. When surtaxes affect specific countries, having backup suppliers can help your business maintain operations without the high cost.

Even if it’s a small portion of your inventory, diversifying helps spread the risk. It also enables you to negotiate better prices with suppliers who value your business in return for greater security.

What If You Ignore These Changes?

Some businesses may wait it out. That’s a mistake. If you don’t act, you could face:

  • Your goods could get stuck in customs
  • Surprise costs that shrink profits
  • Broken timelines and client trust
  • Fines for non-compliance

How Clearit Canada Supports You

At Clearit Canada, we simplify customs processes for Canadian businesses.

We offer:

  • Correct HS code classification
  • Surtax impact analysis
  • Real-time duty calculations
  • Help with bonded warehouses and relief programs
  • Ongoing compliance support

Our licensed brokers work fast and keep things simple. No surprises, no delays—just clear answers.

Conclusion

Surtaxes on critical manufacturing goods are already in place. They affect your cost, speed, and success. You must understand what’s changing and how to respond if you import.

Let’s Make Your Next Shipment Smoother! Surtaxes are here, but they don’t have to slow you down. Talk to Clearit Canada today and plan confidently. We make importing easier, even when policies change fast.