CBSA’s Latest Update of its Compliance and Verification Priorities Focuses on Retaliatory Tariffs

The Canada Border Services Agency (“CBSA”) has released an updated list of its verification priorities as of July 2025 (the “July Update”). The July Update outlines the CBSA’s current priority industries and products targeted for trade compliance verifications and other compliance exercises conducted by the CBSA.

Notably, the CBSA has identified the retaliatory tariff or surtax orders on a broad range of imports from the United States, all imposed by the Canadian government in retaliation to U.S. tariffs, as a key focus area for compliance and verification activities. Importers of goods from the United States should take steps to ensure that their commercial goods are correctly classified under the appropriate tariff codes, that origin and value are accurately declared, and that the appropriate duties and taxes are paid. Particular attention should be paid to any imports for which claims of surtax relief or remission are being made to ensure that all required conditions are satisfied. It is expected that CBSA will be carefully scrutinizing these imports to ensure any applicable surtax was paid, and in the case of claimed remission, all required conditions were met. We also expect the CBSA to review transactions of any goods that may have “slipped through” the compliance process and been imported without the required surtax being paid.

The CBSA updates its priorities for its verification exercises as well as its broader compliance programs on a regular basis, generally ever six months, so importers know what its current focus areas are. The July Update is the latest of these updates, and the CBSA’s priorities set out in this update are summarized below.

Compliance Priorities

The CBSA identifies several updated compliance priorities in the July Update. These include the application of the following:

• United States Surtax Order (2025-01) – the surtax order that was first issued in response to the initial tariffs applied by President Trump directly targeting Canada. More details are available in our client alert released when the surtax order was first issued: Canada Responds to U.S. Tariffs – What Businesses Need to Know.
• United States Surtax Order (Steel and Aluminium 2025) - the surtax order that was issued in response to the application of tariffs on global imports of steel and aluminium into the United States. More details are available in our client alert released when the surtax order was first issued: What Businesses Need to Know About the New U.S. Steel and Aluminum Tariffs and Canada’s Response.
• United States Surtax Order (Motor Vehicles 2025) - the surtax order that was issued in response to the application of tariffs on global imports of motor vehicles to the United States. More details are available in our client alert released when the surtax order was first issued: Trade War Update: Canada Retaliates Against US Tariffs on Automobiles and Parts.

In addition, some existing compliance priorities remain a focus for the CBSA. These include:

• (added in January 2025) China Surtax Order (2024): Electric vehicles;
• (added in January 2025) China Surtax Order (2024): Steel and Aluminium;
• tariff rate quota compliance and appropriate classification of frozen desserts containing 5% of dairy products;
• proper use of GST exemption codes and scrutiny of vaping products that are subject to excise duties and taxes;
• import origin verifications under both the Canada-European Union Comprehensive Economic and Trade Agreement and the Canada-United Kingdom Trade Continuity Agreement; and
• verification of licensees importing supply managed goods under the Duties Relief Program.

Verification Priorities

Three declarations made upon the importation of goods into Canada are key to determining the amount of duties owing: the tariff classification of the goods, their origin for purposes of MFN (most favoured nation) or some preferential tariff treatment (e.g. under CUSMA), and their valuation or “value for duty.” The CBSA conducts verifications primarily on these three declarations as well as duty remission and relief programs.

The July Update sets out the CBSA’s current verification priorities, which are reproduced in the table below. Importers should pay close attention to the listed tariff classification and origin priorities, as these are more likely to be the subject of verification exercises.

Tariff Classification

Origin

Removed from the verification priorities in the July Update were the tariff classification of disposable and protective gloves and the valuation of apparel items. Among the more general compliance priorities, the withdrawal of MFN treatment from Russia and Belarus is no longer identified as a compliance priority for the CBSA, three years after MFN treatment was withdrawn in March, 2022. 

Focus on Retaliatory Surtax Orders

The July Update makes clear that the CBSA is focused on ensuring that importers are properly assessing and paying duties that may be imposed on imports from China and the United States in light of the recent trade volatility. Given the fact that the majority of imports to Canada originate from these two nations, importers from effectively all sectors of the Canadian economy should be prepared for increased scrutiny and ensure all declarations are accurate and complete.

Businesses relying on the existing remission orders exempting the application of duties on certain imports from the United States or China should exercise particular caution. As discussed in detail in our client alert, CBSA Guidance Seeks to Narrow Scope of Relief from Canada’s Retaliatory Tariffs, one of these remission orders provides relief for some goods imported from the United States before October 16, 2025 provided certain conditions are satisfied. However, it may not be interpreted as broadly by the CBSA as importers expected. Careful consideration is required to ensure the relief is applicable to your import before utilizing it. Importers that have relied upon a broader reading of the remission order should remain vigilant during the verification process to ensure their views on interpretation are on the record, and preserve any rights pending appeal.

The McCarthy Tétrault International Trade and Investments team has significant experience assisting clients with these matters and will continue to monitor developments as the CBSA releases additional information regarding its priorities for 2025 and beyond.