Canada's New Surtax on U.S. Goods: Which Origin Counts

On 8 September 2026 Canada began charging a surtax of 15%, 25% or 50% on a list of goods arriving from the United States. If you are a small U.S. exporter with Canadian customers, your buyer is the one who pays it. But whether they pay it, and how much, is decided by paperwork you produce.

The part that catches people out is which origin rule the order uses. It is not the one on your CUSMA certification. This post walks through the difference, the in-transit exception, and the two documents your Canadian buyer will ask you for this week.

What the surtax is and who pays it

The Government of Canada announced the measure on 25 August 2026 in response to U.S. tariffs imposed on Canadian goods, describing it as a dollar-for-dollar response covering roughly $27.6 billion of imports from the United States. The published product list focuses on sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics (Department of Finance Canada).

The operational detail sits in CBSA Customs Notice 26-23. The surtax "is calculated in the amount of either 15%, 25% or 50% of the value for duty of the imported good," and that value for duty is determined under sections 47 to 55 of the Customs Act (CBSA Customs Notice 26-23).

The legal obligation to pay lands on the Canadian importer of record, not on you. That is exactly why this becomes a documentation problem for the exporter: your buyer cannot answer CBSA's questions from their own records. The origin of the goods and the date they left your dock are facts only you hold.

Which origin rule the surtax actually uses

Both the Finance Canada notice and the CBSA notice define the goods in scope the same way: goods "eligible to be marked as a good of the U.S. in accordance with the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations."

Those are the marking regulations, SOR/94-23. They are a different instrument from the CUSMA Rules of Origin Regulations that decide whether a good gets preferential duty treatment. CBSA says so directly in its own memorandum on the marking rules: "For the purposes of marking, the imported goods do not need to 'originate' within the meaning of the CUSMA Rules of Origin Regulations" (CBSA Memorandum D11-3-3).

The two rules answer different questions:

• Preferential origin asks whether the good qualifies for reduced or free duty under the agreement. That is the determination behind your certification and its nine data elements.
• Marking origin asks which country the good must be labelled as coming from. It is worked out by tariff shift, using the schedules inside SOR/94-23.

So the practical point is this: qualifying for preferential treatment is not by itself the thing that takes a good outside the surtax order. The order's scope is drawn by the marking determination. A good can clear one test and still fall inside the other.

If you have never separated these two in your own files, that is the work this week. It is the same class of problem as the documents behind a CUSMA origin claim: the certification is a conclusion, and the conclusion is only as good as the determination sitting behind it.

The in-transit exception is a dated-document exception

Customs Notice 26-23 states that "the surtax will not apply to U.S. goods that are in transit to Canada on the day on which the surtax comes into force." Finance Canada says the same in its announcement.

An exception is only worth what you can prove. The CBSA notice is specific about that: importers with in-transit goods "must have proof in their possession that such goods were in transit to Canada," and it names what counts — "shipping documents (for example, a bill of lading), report of entry documents, and cargo control documents."

Read that list again from the exporter's side. Every item on it is a transport document, and every one of them carries a date. Your buyer needs a document showing the goods were already moving before 8 September. That means:

• The bill of lading or equivalent transport document, with a legible date of shipment.
• A date that is consistent with everything else you sent. If the invoice date, the packing list date and the transport document date tell three different stories, the exception gets harder to defend, not easier.

If you have a shipment that left in the first week of September, send your buyer the dated transport document now, before they file. Retrieving it after an entry has been made is a correction, and corrections cost time you do not get back.

What proof of origin has to contain

Canada requires proof of origin for imported goods, subject to the exceptions in the Proof of Origin of Imported Goods Regulations. For commercial goods, CBSA says that proof "may be in the form of a commercial invoice or any other documentation that contains the minimum data elements as set out in Annex 5-A."

That sentence is doing more work than it looks. It means your commercial invoice can be the proof of origin document — there is no separate prescribed form to hunt for. It also means the invoice has to actually carry the required content, including a description of the goods and an HS tariff classification to the six-digit level, along with the certifier, exporter, producer and importer details (CBSA Memorandum D11-4-2).

An invoice that says "assorted parts" and no HS number is not proof of anything. Neither is one whose goods description does not match the description on the certification travelling with it. This is the ordinary cross-document consistency problem, arriving with a price tag attached: at 50%, a description mismatch that triggers a review is expensive for your customer and awkward for you.

Where to read the rules yourself

Two instruments are named above, and both are worth having open in a tab the first time you work through this. Neither is long.

• Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations, SOR/94-23 — the marking rules that draw the scope of the surtax order. The tariff-shift schedules are the operative part.
• Proof of Origin of Imported Goods Regulations, SOR/98-52 — the rules behind the proof-of-origin requirement, including the exceptions CBSA refers to.

If your Canadian buyer disputes an origin position, these are the two texts the argument will be settled against. Reading the relevant schedule once is cheaper than reading it under a 50% assessment.

Relief exists, and it is not automatic

CBSA notes that "the Government has established a remission framework to help importers who may need to seek transitional relief from surtax," with the details held by the Department of Finance. Canada has also indicated its intention that goods hit by these new measures benefit from remission under the existing United States Surtax Remission Order, subject to approval.

Two honest cautions. First, remission is a process your Canadian buyer pursues, not something you can file for them. Second, it is a moving target — the framework and the product list can change, and the version in force on the day of entry is the one that governs. If your buyer tells you a remission applies, ask which order and which date, and keep their answer with the shipment file.

A short checklist for this week

1. Pull your Canada shipments from the last two weeks. Anything that departed before 8 September may qualify for the in-transit exception. Find the dated transport document for each and send it to the buyer.
2. Check what origin your commercial invoice actually claims. Not what you assume it says — open it and read the origin line and the HS number.
3. Separate the two origin answers in your own notes. One line for the marking determination, one for the preferential claim. If you cannot state the first one, that is the gap.
4. Check the product list against your HS codes. The order covers a list, not everything American. Your six-digit codes tell you whether you are in it.
5. Make the four documents agree. Invoice, packing list, transport document and origin certification should carry the same goods description, the same HS number and dates that tell one story.

Where the repeated typing bites

Nothing above is difficult on one shipment. It gets difficult across thirty, because the same handful of facts — exporter, consignee, goods description, HS number, origin, shipment date — has to appear identically on four documents, and each one is usually typed separately.

That is the specific problem ovrseas is built for: one master file per shipment, and every document reads from it, so the description on the invoice and the description on the certificate of origin cannot drift apart. We wrote about that pattern in more detail for certificates of origin and commercial invoices, and about when a tool is worth it at all for small exporters.

To be clear about what we do not do: ovrseas does not classify your goods, does not make the marking determination, does not file anything with CBSA and does not decide whether a surtax applies. Those are your calls, and for a 50% exposure they are worth a conversation with a customs broker. What we remove is the re-typing that makes four documents disagree — which, on this particular rule, is the part that turns a defensible position into a dispute.

Sources checked 8 September 2026: CBSA Customs Notice 26-23; Department of Finance Canada product list of 25 August 2026; CBSA Memoranda D11-3-3 and D11-4-2. Rules and product lists change — confirm the version in force on your date of entry.