Understanding Surtax on Imported Goods in Canada
(CBSA Memorandum D16-1-1 Explained for Importers and Exporters)
International trade normally operates under standard customs duties and tariff rules. However, sometimes governments need special tools to respond to unusual trade situations.
One such tool used by Canada is Surtax on imported goods.
The Canada Border Services Agency (CBSA) explains the administration of surtax in Memorandum D16-1-1. 
This article explains what surtax is, why it is imposed, and what importers must know.
What is a Surtax?
A surtax is an additional duty imposed on imported goods by the Government of Canada.
It is imposed through an Order in Council under the Customs Tariff Act and is collected by the Canada Border Services Agency (CBSA). 
Important point:
A surtax is separate from normal customs duty.
An importer may have to pay:
- normal customs duty
- GST/HST
- plus surtax
depending on the government order.
Why Does Canada Impose a Surtax?
Surtax is usually imposed when the government needs to respond to special trade or economic situations.
Common reasons include:
1. Protecting Canadian Industry
If a sudden increase of imports threatens Canadian manufacturers, the government may impose a temporary surtax to protect domestic industry.
2. Trade Retaliation
If another country takes unfair action against Canadian goods, Canada may impose a surtax on imports from that country.
3. Emergency Economic Measures
Sometimes surtax is used to stabilize markets when imports are disrupting local production.
4. Agricultural Protection
Certain agricultural products may be subject to surtax if international agreements permit such measures.
These powers arise under various provisions of the Customs Tariff, including sections 53, 55, 60, 63, 68, 77.1, 77.6 and 78. 
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Who Decides the Surtax?
The surtax is not decided by CBSA officers.
It is imposed by the Government of Canada through the Governor in Council.
The order specifies:
- the goods subject to surtax
- the rate of surtax
- sometimes the duration of the measure.
The order is normally published in the Canada Gazette. 
CBSA’s role is to administer and collect the surtax.
When Does an Importer Become Liable for Surtax?
An importer becomes liable as soon as the goods are imported into Canada.
The surtax must be declared when filing customs accounting documents.
The payment timeline is the same as normal customs duties and taxes. 
How is Surtax Declared in Canada?
Under the modern CBSA system CARM (CBSA Assessment and Revenue Management), surtax must be declared in the Commercial Accounting Declaration (CAD).
Importers must:
- Identify whether goods are subject to a surtax order
- Enter the correct surtax code
- Declare the amount of surtax payable.
The surtax amount is reported in Field 85 of the CAD document. 
Can the Surtax Order Be Appealed?
An important legal point:
The surtax order itself cannot be appealed.
However, CBSA decisions regarding:
- tariff classification
- value for duty
- origin of goods
may still be appealed under the Customs Act if they affect the surtax calculation. 
What Happens if Surtax Is Not Declared?
If surtax is payable but not declared:
CBSA may issue a re-determination or further re-determination.
The importer may then have to pay:
- additional surtax
- interest
- possible penalties.
Importers who discover an error should submit a self-adjustment through the CARM system.
Refund of Surtax
If surtax has been overpaid, an importer may request a refund by filing an adjustment request.
CBSA will issue a statement through the CARM portal showing:
- refund amount, or
- additional duty payable. 
Practical Advice for Importers
Before importing goods into Canada, businesses should:
verify tariff classification
confirm the country of origin
check whether a surtax order applies
ensure proper declaration in CARM.
Ignoring surtax rules may result in significant financial liability.
The Real Purpose of Surtax
In simple terms, surtax acts as a temporary economic shield.
It allows the Government of Canada to respond quickly when international trade conditions threaten Canadian industries or economic stability.
Disclaimer
This article is intended to provide a simplified explanation of the CBSA surtax framework based on Memorandum D16-1-1. It is provided for general educational purposes only and should not be treated as legal advice. Importers should consult official CBSA publications or seek advice from a qualified customs broker, barrister, or solicitor before relying on this information.