Canadian wholesalers and distributors of HVAC and refrigeration equipment face a new schedule of import duties on 19 categories of products originating in the United States, beginning Sept. 8. In turn, their industry association, the Heating, Refrigeration and Air Conditioning Institute (HRAI) of Canada, plans to advocate for tariff waivers for products with few alternative sources of supply.

Speaking during a webinar late last week, Martin Luymes, HRAI’s vice president of government and stakeholder relations, reiterated the Canadian government’s general criteria for granting regulatory exceptions, which are premised on the products in question:

• being essential for the health, safety, economic security or cultural well-being of Canadians; and
• having no practical or economically viable substitutes.

He argues the HVACR sector has the first condition “in our pocket” and can make a good case for the second in relation to some U.S. imports.

The federal Finance department has confirmed there will be a process for importers to appeal for tariff waivers, which are known as “remissions” in the regulatory lexicon. As well, remissions that have already been granted for the narrower range of counter-tariffs in place to retaliate against earlier U.S. tariffs on Canadian steel, aluminum and softwood lumber will continue to be recognized.

“Canadian officials are in fairly flexible mode right now,” Luymes observed. “They are taking inputs from a variety of industry association leaders to modify and calibrate the response so that it maximizes pain on the U.S., minimized impacts on Canadians.”

Still, he cautioned that HRAI endured a 10-month wait before successfully obtaining a remission for gas furnaces earlier this year. The decision withdrew the tariff on future imports and allowed for reimbursement of duties already paid. However, a remission has a different statutory status than an outright exemption. Most petitioners have experienced waits of three to nine months, with the average at about six.

“The review process should be expedited. The applications should be simpler and the turnaround time should be shorter,” Luymes asserted. “This is a key thing. If the government wants to be of service to the industry by offering remissions, that process should be relatively efficient to access.”

HRAI’s lobbyist on Parliament Hill, Huw Williams, president of Impact Public Affairs, noted that a relatively exclusive group within the Finance department and the Prime Minister’s Office hold the most sway over Canada’s countermeasures.

“The door is open, not enthusiastically, but the door is open to make the case why things should or should not be there. They will not pull things off this list easily because they don’t want to show weakness to the Americans,” he said.

“The previous remission process asked two basic questions: are there alternatives?; and does the tariff pose an outsized negative impact on Canadians or the Canadian economy?,” reported Perry Chao, HRAI’s director of regulatory affairs. “We’ll see what the new process brings, but those are the questions that Finance Canada has in mind when it’s making that decision.”