The China Surtax Order (2024) Goes into Effect in Canada Today
This significant surtax will impact imports of electric and hybrid cars, trucks, and buses and aims to protect both Canadian workers and EV supply chains.
Beginning today, October 1, 2024, Canada will implement a 100% surtax on electric vehicles (EVs) manufactured in China under the new China Surtax Order (2024). This move, which aims to protect Canadian workers and EV supply chains, will affect imports of electric and hybrid cars, trucks, buses, and delivery vans.
The surtax will be calculated at 100% of the duty value for all eligible imports and administered by the Canada Border Services Agency (CBSA). Importers must provide proof of origin for their imported vehicles using documentation such as commercial invoices or Canada Customs Invoices.
According to the CBSA, the surtax applies on top of the existing 6.1% Most-Favoured-Nation tariff and will impact both commercial and personal imports. Goods originating from China, even if shipped from another country, will be subject to the China Surtax Order.
CBSA, in its Customs Notice 24-32, also stated that goods in transit to Canada before October 1 would not be subject to the surtax, provided the importer can prove the transit date with proper documentation, such as shipping manifests.
However, goods released from customs warehouses after October 1 will be subject to the surtax, even if imported before that date. Exemptions will apply to certain temporary imports, such as U.S.-registered vehicles brought into Canada for repair or returning Canadian vehicles previously imported with duties paid.
Starting October 21, 2024, the CBSA Assessment and Revenue Management (CARM) system will officially manage the accounting for all surtax payments—provided Release 3 is rolled out on time.
During a recent Parliamentary Standing Committee on International Trade (CIIT) meeting, witnesses, including CBSA staff union and industry representatives, expressed concerns about inadequate training for frontline officers and the lack of clear communication with the trade community.
A Parliamentary debate scheduled for tomorrow will discuss a proposed CARM delay and shape the next steps in the CARM rollout.
Despite this, CBSA remains committed to the October implementation, and businesses are advised to prepare for the CARM transition during the cutover period from October 4 to 21.
Most Chinese EVs will be subject to the China Surtax Order, but vehicles temporarily imported for repairs or emergency alterations will be exempt.
For commercial importers, Canada’s Duty Relief and Drawback Programs remain available for refunds on surtax payments, subject to provisions of the Canada-U.S.-Mexico Agreement (CUSMA).
Correction requests, re-determinations, and refunds can be processed through the CARM Client Portal (CCP), and importers are advised to check with CBSA for the correct procedures to avoid penalties or delays.
Canadian importers can refer to CBSA Memorandums D16-1-1 and D17-1-10 for more detailed instructions on handling surtax payments, corrections, and exemptions.
For more information about how this new Order will affect your Chinese EV imports, please reach out to one of our trade professionals.