A surtax on US-origin steel and aluminum runs at 25% of the value for duty, and it's assessed on where the material was actually made, not on which supplier invoiced it. That distinction is the whole exposure question: buying Canadian doesn't remove a surtax if the mill behind the product is American, and buying from a US supplier doesn't create one if the material itself wasn't.
Key takeaways
A surtax on US-origin steel, aluminum and certain related goods runs at “25%” of the value for duty, effective March 13, 2025 per Customs Notice 25-11. The calculation is stated plainly in the notice: for a good with a $150 value for duty and a 0% base duty rate, the surtax works out to $37.50 — a straightforward percentage applied on top of whatever base duty already applies, before GST is calculated.
For a materials budget with any exposure to imported steel or aluminum, that is not a rounding error. It is a cost line that either was priced into the bid or wasn't, and finding out which one only after the material lands is the expensive way to learn.
The Customs Notice is explicit that origin is what triggers the surtax, not the country a supplier happens to be based in: goods are covered “even when exported from a country other than the U.S. into Canada.” A product that was made in the US and routed through a third country before reaching a Canadian buyer is still US-origin for this purpose.
That cuts both ways on sourcing decisions. Switching a purchase order from a US supplier to a Canadian distributor doesn't remove the surtax if the distributor is reselling US-milled steel — the exposure follows the mill, not the invoice. Confirming actual origin, not just the name on the purchase order, is the only way to know whether a substitution genuinely avoids the cost or just moves the paperwork.
BDC's own guidance on purchasing best practices names “taxes and tariffs” as an explicit line in a proper spend analysis, alongside raw material costs, inventory expenses, and transportation — not something to fold into a general materials contingency and hope it covers it. The same guidance notes that a disciplined spend review can cut procurement costs by 5% to 15% through decisions like this one.
A materials estimate built from a supplier's quoted price, without a separate line for origin-based surtax exposure, is a bid that's either padded with an unstated contingency or exposed to a cost nobody priced. Neither is a good position to be negotiating a fixed-price contract from.
Statistics Canada's most recent Daily release on investment in building construction put non-residential investment at “$7.1 billion,” with the industrial component “up 1.8%” for the month — source Table 34-10-0293-01, released 2026-07-20. Industrial and institutional work leans harder on structural steel than most residential construction does, which is exactly the segment where an unpriced surtax exposure does the most damage to a fixed bid.
That doesn't mean every job on that segment carries meaningful exposure — a lot of industrial and institutional material is domestically sourced. It means the segment is worth checking line by line rather than assuming either way, because the cost of being wrong compounds against a fixed price, not a cost-plus one.
An exposed line item on a long-lead order compounds the risk further — see how long-lead items already carry schedule risk — which is one more reason origin confirmation belongs in the takeoff-to-purchase-order handoff, not after a quantity is already locked in.
The Customs Notice framework is not a static, one-time list — it is amended by further orders as trade circumstances change, and a rate or a covered-goods list confirmed today is not guaranteed to still be current on a job quoted six months from now. Treating the current confirmed rate as permanent is a different mistake from ignoring the surtax altogether, but it is still a mistake worth naming: a fixed-price contract signed against today's rate carries no protection if the rate moves before the material actually ships.
That argues for two separate habits on any bid carrying meaningful exposed material: confirming the current rate and covered-goods list against the live Customs Notice at the time of quoting, not from memory of an earlier version, and deciding up front — in the contract itself — who absorbs a rate change between signing and delivery on a long-lead order. Silence on that point defaults to whoever holds the fixed price absorbing it, which is rarely the outcome either side actually intended.
That confirmation habit costs almost nothing next to the exposure it's checking against — a few minutes against the live notice, repeated at quoting time on every bid with meaningful steel or aluminum content, rather than assumed once and carried forward unchecked across a season of otherwise similar jobs.
A worked example
Say a bid carries a $180,000.00 structural steel and aluminum line, and roughly 35% of that material, by value, traces back to US-origin mills once suppliers are asked directly. At the confirmed 25% surtax rate, that's $63,000.00 of exposed material and $15,750.00 of surtax sitting inside the number, unpriced, if nobody asked the origin question before quoting.
Confirming origin before the bid goes out doesn't make the exposure disappear, but it turns an unpriced risk into a priced one — either built into the number or negotiated around with the client up front. These figures are illustrative; the real exposure depends entirely on which mills are actually behind a specific project's steel and aluminum, which has to be confirmed supplier by supplier, not assumed.
No. the surtax under Customs Notice 25-11 applies based on where the goods originate, “even when exported from a country other than the U.S. into Canada” — a Canadian distributor reselling US-milled steel does not remove the exposure. Confirm the mill of origin, not just the invoicing entity.
Before. The surtax is calculated on the value for duty, and GST is applied separately on top of the duty-paid value — the two are not the same calculation and shouldn't be estimated as one line.
Ask suppliers directly for country-of-origin confirmation on steel and aluminum line items rather than assuming a Canadian invoice means Canadian material, then treat any confirmed US-origin content as a separate priced line rather than folding it into a general contingency.
A 30-minute call is enough to tell you whether AI pays for itself here.
