Issue 023  ·  Sunday, September 13, 2026

Twenty-one tariff items carry the 15% surtax, every one of them a machine — and the list most importers check is not the instrument that imposes it

Schedule 1 of the United States Surtax Order (2026) sits entirely in two chapters of the tariff. Finance Canada’s published list is a consolidated one spanning this order and others, so finding a good on it does not tell you which instrument put it there.

Update — a correction still owed from Issue 22: Issue 22 said CBSA had published no notice administering the September 8 surtaxes. That was accurate when it was written on September 6 and false by the time it reached you. Customs Notice 26-23 was issued September 7, the day before delivery, and names the codes, the field and the in‑transit evidence.

The Dashboard

A band you can read in one sitting

If you have been pricing a piece of American equipment this month — a fork-lift, an air conditioning unit, a mould, a set of harvester parts — you have probably been working from Finance Canada’s counter-tariff list and trying to find your tariff item in it. There is a shorter route, and a reason the list may not answer the question you are asking it.

The 15 per cent band of the United States Surtax Order (2026) is twenty-one tariff items, every one of them a machine a business buys rather than a material it consumes — and the Finance Canada page most importers check is not that order but a consolidated list spanning several, so the schedule, not the page, is what an accrual reconciles to.

The order is short enough to read. Schedule 1 runs to twenty-one lines (Governor in Council, 2026). That is the whole of the 15 per cent band, and it is reproduced below in full.

Twenty-one items, two chapters, seven headings

Schedule 1 to the order lists: 8207.20.00 and 8207.30.00 (interchangeable tools for drawing and pressing); 8415.10.00, 8415.81.10, 8415.82.10 and 8415.90.30 (air conditioning machines and parts); 8427.10.10, 8427.20.10 and 8427.90.00 (fork-lift and works trucks); 8428.60.00, 8428.70.00 and 8428.90.00 (other lifting, handling and loading machinery); 8431.20.00, 8431.41.00, 8431.42.00 and 8431.49.00 (parts for that machinery); 8433.20.00 and 8433.90.00 (mowers and harvesting-machinery parts); and 8480.49.00, 8480.71.00 and 8480.79.00 (moulds) (Governor in Council, 2026).

Every one falls in Chapter 82 or Chapter 84. Nothing outside those two chapters appears in the band at all. Set against the other two schedules, that concentration is the striking part: Schedule 2 (25 per cent) spreads across dairy, sawn wood, carpets, cutlery, rail rolling stock and furniture, and Schedule 3 (50 per cent) across milk powder, cosmetics, plywood, paper, apparel, lighting and sporting goods (Governor in Council, 2026).

The rate follows the schedule rather than the good. Customs Notice 26-23 gives each schedule its own surtax code — 26186A for Schedule 1, 26186B for Schedule 2, 26186C for Schedule 3 — with the amount entered in field 85 of the Commercial Accounting Declaration, and importers using CARM’s self-declare option calculating it themselves (Canada Border Services Agency [CBSA], 2026, paras. 24–25).

Why the list and the order are not the same thing

The order runs to 335 tariff items across its three schedules: 21 at 15 per cent, 172 at 25, 142 at 50. That is the whole instrument, and it is short enough to check an item against directly.

Finance Canada’s complete list of U.S. products subject to counter tariffs is a larger document, and the difference is visible in the chapters. That list carries Chapter 72, iron and steel, at 50 per cent (Department of Finance Canada, 2026). Chapter 72 does not appear anywhere in the order. Neither does Chapter 76, aluminum. Those goods are surtaxed, but by different instruments: the order’s own section 9 and its consequential amendments name the United States Surtax Order (Steel and Aluminum 2025) and the Steel Derivative Goods Surtax Order as separate orders (Governor in Council, 2026).

Where the two documents overlap, they agree exactly. Chapter 04 carries 34 items at 25 per cent and 17 at 50 on both; Chapter 57 carries 30 and 2 on both; Chapters 44 and 48 match on both counts as well. The divergence is not noise — it is specifically the metals.

The practical consequence is small but real. If you are reconciling a surtax accrual to an instrument, the instrument is the order and not the page — a good sitting on the page may be there under the steel and aluminum order rather than this one, and the page does not say which. The 15 per cent band is Schedule 1, and Schedule 1 is where to read it.

One limit worth stating plainly: these are counts of tariff lines, not of trade. Twenty-one lines may carry more import value than two hundred, or almost none. The order states what each schedule contains, not what any of it is worth in imports, and neither does this issue.

On a US$100,000 machine, the 15% line is C$20,799 — and it drags C$1,039.95 of GST behind it

Take a US$100,000 machine in Schedule 1. At Friday’s daily average of 1.3866, that is C$138,660 of value for duty (Bank of Canada, 2026b). The 15 per cent surtax adds C$20,799.

Then the second-order effect. CN 26-23 computes GST on a value for tax that is “inclusive of surtax even when customs duties are remitted” (CBSA, 2026, para. 17). At the 5 per cent rate the notice applies in its own worked examples, GST on C$159,459 is C$7,972.95, against C$6,933 on the unsurtaxed value — so the surtax pulls C$1,039.95 of GST along with it. The notice also records that surtax is charged “in addition to any other duties owing” (para. 16), and that its imposition “is not subject to appeal” (para. 37).

This is where the band’s composition starts to matter, and where the argument has to be stated carefully. A surtax on a material consumed in production moves through to cost of sales in the period it is consumed. A surtax on a machine forms part of what the buyer pays to acquire a long-lived asset. Whether it is capitalised in a given case turns on the buyer’s own capitalisation policy and the applicable accounting framework, not on the HS code — and several Schedule 1 items, notably the 8431 parts and the 8207 interchangeable tools, are repair and consumable purchases for many buyers. The band is uniformly machinery. The accounting treatment is not uniformly anything.

Two relief routes reach these goods, both on conditions worth reading in the original. Under CN 26-23 the Duties Relief and Duty Drawback programs are available for surtax paid or payable, and where goods are of CUSMA origin the notice states they “may be eligible for full relief, if the CUSMA criteria is met” (CBSA, 2026, para. 11) — a conditional, and it stays one here. Separately, the order amends the United States Surtax Remission Order (2025) so that remission is granted, subject to section 5 of that order, for goods imported for use in Canada “in the manufacture or processing of any good, in the production of any agricultural product or in the packaging of a food product or beverage” (Governor in Council, 2026, s. 5). For a band composed of production machinery, that clause is the one to take to your broker.

The strongest case against reading anything into this

The band’s composition may carry no Canadian design intent whatever. Canada’s stated method is to match the U.S. rate: CN 26-23 records that the goods are “drawn from those targeted by U.S. Section 338 and Section 232 tariffs, with the surtax applicable to each product generally corresponding to the U.S. tariff rate” (CBSA, 2026, para. 2). If the American schedule happened to set 15 per cent on a group of machines, Canada’s 15 per cent band would look exactly as it does with no one in Ottawa having chosen machinery at all — and this issue has not read the rate table behind the July 20 proclamations, so it cannot tell you which is true. Until that table is read, treat the composition as a fact about Canada’s schedule and not as evidence of a Canadian design choice. The composition of the band is unaffected either way — it is simply what the schedule lists.

References

Bank of Canada. (2026a). Bank of Canada maintains the policy rate at 2¼% [Press release]. https://www.bankofcanada.ca/2026/09/fad-press-release-2026-09-02/

Bank of Canada. (2026b). Daily exchange rates. https://www.bankofcanada.ca/rates/exchange/daily-exchange-rates/

Canada Border Services Agency. (2026). Customs Notice 26-23: United States Surtax Order (2026). https://www.cbsa-asfc.gc.ca/publications/cn-ad/cn26-23-eng.html

Department of Finance Canada. (2026). Complete list of U.S. products subject to counter tariffs. https://www.canada.ca/en/department-finance/programs/international-trade-finance-policy/canadas-response-us-tariffs/complete-list-us-products-subject-to-counter-tariffs.html

Governor in Council. (2026). United States Surtax Order (2026) (P.C. 2026-0785). https://orders-in-council.canada.ca/attachment.php?attach=48943&lang=en

A note on framing: Fully Briefed synthesizes publicly available government source material and translates it into financial terms. That synthesis is machine-assisted: automated research pulls from primary government sources and produces a first draft each week. I check every figure, date and citation against the source, edit the result, and decide what ships. Errors are mine. This is education, not legal, customs, or tax advice. Nothing here determines how a specific product, shipment or filing should be treated — the published instruments govern, and your customs broker works the inputs.

Trevor Ryhorchuk, CPA, CIA, PMP

Canadian Trade Intelligence — Fully Briefed
tradeintel.fullybriefed.ca