By Michelle Chai

In Parts I and II of this series, we discussed the remission guidelines and template for submissions published by the Department of Finance Canada (the “Guidelines”) for those importers who may be seeking remission on eligible goods.

Update: An earlier version of this article was published before an updated Customs Notice from the Canada Border Services Agency (CBSA) was released May 20, 2025. As has been the case the last few months, the landscape under which importers operate is constantly changing, and below is our updated commentary on this topic.

The below commentary is based on caselaw which was decided long before the current trade uncertainties.  We have considered caselaw in the remission context which discusses these terms in an effort to provide guidance to eligible importers making their own submissions for remission. 

Exceptional circumstances, adverse impacts, public policy and public interest

The Guidelines state that remission may be available, on a case-by-case basis, due to other exceptional circumstances that could have severe adverse impacts on the Canadian economy. The Guidelines also state that the federal government will only consider remission where “it is required to address exceptional and compelling circumstances that, from a public policy perspective, are found to outweigh the primary rationale behind the application of the tariffs”.

These concepts do not appear to have been considered by the Courts in the context of remissions under the Customs Tariff.

However, a similar remission process exists under s. 23(2) of the Financial Administration Act (FAA) which empowers the Governor in Council to remit a particular tax, penalty, or other debt if it is otherwise “in the public interest” or they deem it to be “unreasonable or unjust”.[1]

The CRA Remission Guide, which applies to remission under the FAA, sets out a non-exhaustive list of factors to consider which may justify recommending a remission order: (1) extreme hardship; (2) financial setback coupled with extenuating factors; (3) incorrect action or advice on the part of CRA officials; and (4) unintended results of the legislation.

Decisions discussing remission under the FAA note that, historically, the Minister of Finance has considered remission in cases involving exceptional circumstances where tax relief is called for but where amending the FAA is not the appropriate mechanism, or on the basis of “unintended consequences of legislation”.[2]

Exceptional circumstances which give rise to financial difficulties may also be a relevant consideration.[3] The CRA Remission Guide suggests that for a corporation, “extreme financial hardship” means as a result of financial difficulties, the corporation would be forced to cease operating, or a large group or community would be affected (e.g. the shut-down of a major industry in a small town).

Adverse impacts on a First Nation, particularly those which contribute to financial hardship, have also been deemed as appropriate considerations, although may not be determinative in the decision to approve remission.[4]

These factors are then generally considered alongside the “public interest”, which is very wide in scope, and cannot be viewed merely in terms of the interests of any one group of taxpayers. Rather, the “public interest” must also take into consideration the concerns of society generally. As stated by the Federal Court of Appeal in Waycobah First Nation v. Canada (Attorney General):

The granting of a remission order necessarily involves a departure, in the particular case of a taxpayer, not only from the ordinary rules of taxation, but from the principle of equality of treatment. The phrase “public interest” must therefore be viewed in the context of the broad regulatory scheme governing the operation of taxation statutes and with an eye towards the principles animating the Excise Tax Act as a whole.[5]

In the context of remissions under the FAA, then, the consideration of “public interest” often operates as a threshold against which the applicant must prove that remission is justified in their particular case – since the public interest is predominantly served when there is equal tax treatment of all Canadians.

The same logic would likely apply to tariff treatment – the public interest favours equal application of the “retaliatory” tariffs on certain goods imported from the United States, which can only be overcome by exceptional or compelling circumstances.

Judicial review

The process for challenging or appealing decisions by the Minister of Finance is via an application in Federal Court for “judicial review”.  However, the Federal Court has noted that a ministerial decision regarding a remission order attracts a high level of deference given the extraordinary and discretionary nature of the remedy.[6]  Importers should therefore make sure that their remission submissions contain all the relevant information required by the Department of Finance Canada and address all the factors noted by the Guidelines.

Key takeaway: If compelling reasons exist, the Department of Finance may find they outweigh the rationale behind the counter-tariffs and recommend relief.

We know these are complicated times and things continue to change quickly. Importers should consider seeking the advice of Canadian customs brokers and trade lawyers prior to importation of their goods and products into Canada, or for assistance with remission submissions.