On September 9, the Canadian International Trade Tribunal (CITT) reported to Cabinet in its safeguard inquiry on frozen and canned vegetable goods (GC-2025-001). It split the case into two classes:

  • Frozen – no import surge, no injury, no remedy.
  • Canned – affirmative finding of serious injury, with a recommended remedy.

 

Under CUSMA (what the Canadian’s call USMCA – and they have their own implementation rules), Canada must exclude U.S. goods from a global safeguard unless they account for a substantial share of imports and contribute importantly to the injury. That test is why the U.S. was carved out of Canada’s provisional 10% surtax in June.

 

The Tribunal found the test is met for canned goods: the U.S. is a top-five supplier, and U.S. volumes apparently rose 151% in 2025 after falling 17% in 2024, outpacing overall import growth. Mexico, Chile, Israel, Korea, Panama, Peru, Colombia, Honduras and all GPT (developing-country) suppliers were excluded. The United States, EU, and China were notexcluded.

 

The recommended remedy is a three-year tariff-rate quota: 13.0 million kg duty-free in year one (roughly 2024 import levels), rising 2% annually; over-quota surtax of 50%, stepping down to 45% and 40%, each subsequent year.

 

Administration would be quarterly, first-come first-served, with no country allocations.

The annual volume (13M kg duty free) is broken into quarterly tranches (roughly 3.25 million kg per quarter in year one). The Tribunal recommended the quarterly structure but left the exact split to the government. Within a quarter, shipments draw down that tranche in the order they clear Canadian customs. When the tranche is exhausted, every further shipment that quarter pays the surtax. The quota resets at the start of the next quarter for that subsequent quarter’s new quota portion.

 

The Tribunal rejected the domestic Canadian industry’s ask of 75%.

 

U.S. shippers could now move from duty-free access to competing with lower-rated developing countries that were excluded, as well as now competing with the EU and China for a single unallocated quota bucket each quarter. Over-quota at 50% is effectively prohibitive for business in Canada.

This is not law yet. The Governor in Council decides and is not bound by it, country coverage, volumes and rates can all move. The 10% provisional surtax runs until replaced or until roughly January 5, 2027.