Order Amending the Ukraine Goods Remission Order: SOR/2024-111
Canada Gazette, Part II, Volume 158, Number 13
Registration
SOR/2024-111 May 31, 2024
CUSTOMS TARIFF
P.C. 2024-622 May 31, 2024
Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, makes the annexed Order Amending the Ukraine Goods Remission Order under section 115footnote a of the Customs Tariff footnote b.
Order Amending the Ukraine Goods Remission Order
Amendments
1 Paragraphs 3(a) and (a.1) of the Ukraine Goods Remission Order footnote 1 are replaced by the following:
- (a) in the case of goods other than those classified under one of the tariff items whose number is listed in the schedule, they are imported during the period beginning on June 9, 2022 and ending on June 9, 2025; and
2 Section 4 of the Order is replaced by the following:
Repeal
4 This Order is repealed on June 9, 2027.
3 The schedule to the Order is amended by replacing the references after the heading “SCHEDULE” with the following :
(Paragraph 3(a))
Coming Into Force
4 This Order comes into force on the day on which it is registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Order.)
Issues
The Russian Federation, with support from Belarus, continues to violate the sovereignty and territorial integrity of Ukraine. In addition to the devastating impacts on Ukraine’s population and infrastructure, Russia’s unprovoked and unjustifiable invasion has significantly harmed Ukraine’s economy.
Since June 9, 2022, the Government of Canada has provided comprehensive duty relief to Ukrainian goods imported into Canada in support of Ukraine’s manufacturing and trade activities. The relief is set to expire on June 9, 2024. In close coordination with its Allies, Canada will continue supporting Ukraine’s economy by increasing its export opportunities through an extension of the relief measure.
To ensure predictable levels of imports for over-access supply-managed goods and support production planning by domestic producers, the relief measure will continue to exclude over-access supply-managed products subject to the supply management system.
Background
On February 24, 2022, Russian military forces invaded the sovereign country of Ukraine, including through the territory of Belarus with the permission of that country’s government.
From the beginning of the war in Ukraine, the Government of Canada has responded to Russia and Belarus’s violation of sovereignty and of international law with a broad range of measures and sanctions, in close coordination with our Allies and partners. This response included trade-restrictive measures under the Customs Tariff. Furthermore, the Government of Canada has supported Ukraine, including with development, humanitarian, military and economic assistance.
The Canada-Ukraine Free Trade Agreement (CUFTA), which entered into force on August 1, 2017, represents an important milestone in the Canada-Ukraine relationship that brings economic benefits to both countries. In April 2023, Canada and Ukraine announced the conclusion of CUFTA modernization negotiations and are working toward timely implementation.
To provide further economic support to Ukraine, since June 9, 2022, the Ukraine Goods Remission Order (the Order) has provided additional temporary and comprehensive duty relief to Ukrainian goods imported into Canada under section 115 of the Customs Tariff. Under this measure, temporary relief from customs, anti-dumping and countervailing duties was provided for all Ukrainian goods, along with more flexible requirements than those for imports under the CUFTA, which currently provides duty-free treatment for all Ukrainian goods except certain refined sugars and over-quota supply-managed goods (i.e. dairy, poultry and eggs). Supply managed goods were included under the Order from June 2022 to June 2023, at which time they were removed in response to Canadian industry concerns that this could undermine production planning in supply-managed sectors over time, should import volumes reach significant levels.
From June 2022 through February 2024, imports under the Order have resulted in approximately $7.6 million in customs duties remitted, including for certain household appliances, wood floorings, vegetable oils, and frozen chicken products.
Given the enduring nature of the conflict that continues to significantly disrupt and harm Ukraine’s economy, extending temporary tariff relief is warranted.
Objective
The objective of this Order is to encourage increased exports from Ukraine to Canada to help support economic activity in Ukraine.
Description
The Order Amending the Ukraine Goods Remission Order allows for the remission of customs duties paid or payable under the Customs Tariff, as well as anti-dumping and countervailing duties paid or payable under the Special Import Measures Act, for all goods originating in Ukraine and imported into Canada, with the exception of over-access supply-managed products (i.e. dairy, poultry and eggs).
Remission of duties under the Order is temporary, applying to importations from June 9, 2024, to June 9, 2025.
Regulatory development
Consultation
Since June 9, 2022, the Government of Canada has tracked importations from Ukraine closely and has maintained an ongoing dialogue on the effects of the original Order with domestic industry stakeholders.
The extension of the remission Order addresses this request and the Government will continue to monitor imports and also maintain this ongoing dialogue with stakeholders. Given the exceptional and urgent nature of this measure, and the modification that reflects stakeholder views already expressed over the past year, dedicated formal public consultations were not conducted. As such, this Order was exempted from the requirement set out in the Cabinet Directive on Regulation to prepublish in the Canada Gazette, Part I.
Modern treaty obligations and Indigenous engagement and consultation
The proposal is not expected to impact potential or established Aboriginal or treaty rights, which are recognized and affirmed in section 35 of the Constitution Act, 1982.
Instrument choice
Making an Order in Council under section 115 of the Customs Tariff is the most appropriate mechanism to temporarily extend relief from customs duties, anti-dumping duties, and countervailing duties to support exports from Ukraine to Canada. As such, no other instruments were considered.
Regulatory analysis
Benefits and costs
Providing remission of customs duties, anti-dumping duties, and countervailing duties will continue to encourage economic activity where possible in Ukraine. Extension remission to June 9, 2025, is warranted given the enduring nature of the conflict and its repercussions for Ukrainian production and trade.
The Order will complement the tariff preferences provided by Canada under the CUFTA for Ukrainian goods, while continuing to temporarily grant enhanced market access (i.e. for certain refined sugars not tariff free under CUFTA), along with more flexibility in meeting import requirements to benefit from tariff-free treatment compared to the CUFTA (e.g. rules of origin and shipment documentation requirements).
Based on this, about $1.8 million in duties are expected to be remitted from June 9, 2024, to June 9, 2025, which represents a transfer payment from general revenues to Canadian importers. The Government of Canada will continue to monitor imports from Ukraine under the extended Order.
Small business lens
Analysis using the small business lens concluded that the Order will impact Canadian small businesses. For some small businesses that may import Ukrainian goods, the Order would provide relief from duties as well as cost savings resulting from a reduced burden of proof to access duty relief, namely an exemption from having to provide certificates of origin demonstrating that their goods were produced in Ukraine.
One-for-one rule
The one-for-one rule applies since there is an incremental decrease in administrative burden on business, and the proposal is considered “burden out” under the rule. No regulatory titles are repealed or introduced.
The regulations will temporarily lift requirements to provide documentation in support of preferential tariff treatment, such as proof of origin. It is anticipated that this will save approximately 1 minute of time for each importation made by an estimated 149 importers who in total process 7 676 transactions per year. Assuming this task is performed at the average Canadian salary, this amounts to an estimated annualized savings of $252, as measured using the required method under the Red Tape Reduction Regulations (measured at 2012 price levels and discounted to 2012 using a 7% discount rate).
Regulatory cooperation and alignment
This action is aligned with those of Canada’s allies and partners, including the European Union (EU) and the United Kingdom that extended by another year their suspensions of tariffs and import quotas for all Ukrainian goods, in force since late spring 2022. The EU also extended suspended anti-dumping duties and steel global safeguard measures against Ukraine. The United States (U.S.) did not provide comprehensive tariff or trade remedies relief but have suspended the Section 232 tariffs on Ukrainian steel on June 1, 2022.
Strategic environmental assessment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.
Gender-based analysis plus
No gender-based analysis plus (GBA+) impacts have been identified for this proposal.
Implementation, compliance and enforcement, and service standards
This Order would come into force upon registration to extend duty relief from June 9, 2024, to June 9, 2025. The Government will continue to monitor imports and engage with stakeholders that may be affected by the remission Order. The Canada Border Services Agency (CBSA) will monitor compliance with the terms and conditions of the Order in the normal course of its administration of customs and tariff-related legislation and regulations. The CBSA will inform importers through the publication of a Customs Notice that provides information on making claims of remission (i.e. refunds of relevant duties paid or waiver of duties payable).
Contact
Michael Mosier
Director
Trade and Tariff Policy
International Trade Policy Division
Department of Finance
Ottawa, Ontario
K1A 0G5
Email: tariff-tarif@fin.gc.ca