Running a small business in Canada is tough enough without getting buried under hefty import tariffs with no relief in sight. If you’re bringing in goods from other countries, those extra costs can eat into your profits fast. The good news? Canada offers tariff relief programs that could save you thousands—if you know how to navigate the system.
This tariff relief guide breaks down everything small business owners need to know, from understanding available programs to applying for government relief successfully.
Why Should Small Businesses Care About Tariff Relief?
Think of tariffs as a tax on imported goods. If your business relies on products from outside Canada, these extra fees can make a huge difference in your bottom line. But did you know that some tariffs can be reduced or even eliminated?
The Canadian government has several programs designed to help businesses lower costs and stay competitive. Whether you’re importing raw materials, machinery, or finished products, understanding tariff relief can put real money back into your business.
What Tariff Relief Programs Are Available in Canada?
Canada offers multiple ways to ease the burden of import duties. Here are the main ones you should know about:
1. Duty Deferral Program
If you’re importing goods only to export them later, you may not have to pay tariffs upfront. This program allows you to defer duties and taxes until the goods enter the Canadian market. If they’re re-exported, you might never have to pay at all.
Best for: Businesses that import materials to manufacture goods for export.
2. Duties Relief Program
Similar to the Duty Deferral Program, this option lets businesses avoid paying duties on imports that will eventually leave Canada again. Unlike duty deferral, this one applies specifically to businesses that use imported goods in manufacturing before exporting them.
Best for: Companies that transform raw materials into finished products and sell internationally.
3. Duty Drawback Program
Already paid tariffs but later exported the goods? You might be eligible for a refund. The Duty Drawback Program reimburses businesses for duties paid on goods that didn’t stay in Canada.
Best for: Importers who occasionally export some of their stock and want to reclaim costs.
4. Remission Orders
In special cases, the government issues remission orders, which temporarily waive tariffs on specific goods. These orders are typically introduced during economic downturns or supply chain disruptions.
Best for: Businesses importing goods that are under a temporary tariff exemption.
5. Most-Favoured-Nation (MFN) Tariff Reductions
Canada has trade agreements that reduce or eliminate tariffs on goods from partner countries. If your imports come from a country that has an agreement with Canada, you might qualify for lower rates.
Best for: Businesses sourcing products from Free Trade Agreement partners.
Step-by-Step Guide: How to Apply for Tariff Relief in Canada
Applying for government relief can feel overwhelming, but breaking it down into steps makes it easier. Here’s a simple process to follow:
Step 1: Identify Eligible Goods
Before applying, determine which of your imports might qualify for tariff relief. Check your products’ Harmonized System (HS) codes to understand the tariff rates and possible exemptions. The Canada Border Services Agency (CBSA) website provides a searchable database to help with this.
Step 2: Choose the Right Program
Based on how your business handles imports and exports, pick the program that best suits your needs. If you plan to re-export goods, the Duties Relief or Duty Deferral Programs may work. If you already paid tariffs, a Duty Drawback could be your best bet.
Step 3: Gather Necessary Documents
Each program has specific documentation requirements, but generally, you’ll need:
- Import and export records
- Bills of lading
- Purchase orders
- HS classification codes
- Proof of duty payment (for duty drawbacks)
Step 4: Submit Your Application
Most applications go through either the CBSA or Finance Canada, depending on the program. Submission methods vary—some require online forms, while others may need paper applications.
Step 5: Track and Follow Up
Government processes can take time, so keep an eye on your application status. If there are delays, follow up with CBSA or your trade consultant. If you’re claiming a duty drawback, be prepared for a potential audit.
Common Mistakes to Avoid When Applying for Tariff Relief
Even small errors can delay or derail your application. Here’s what to watch out for:
- Misclassifying Products – Using the wrong HS code can lead to incorrect duty rates or rejection. Double-check your classifications.
- Missing Paperwork – Incomplete documentation is one of the biggest reasons applications get denied. Make sure everything is in order before submitting. Check out Corporate Cleanup to help you get these things in order.
- Waiting Too Long to Apply – Some refunds, like duty drawbacks, have deadlines. Don’t miss your window.
- Ignoring Trade Agreements – If your imports come from a country with a trade deal, you might already qualify for tariff reductions without extra paperwork.
Is Tariff Relief Worth the Effort?
For many small businesses, the savings can be substantial. Even a 5-10% tariff reduction could translate to thousands of dollars in annual savings. The key is understanding which programs apply to your business and making sure you follow the correct process.
Where to Get Help With Tariff Solutions
Navigating tariff relief programs isn’t always straightforward, but you don’t have to do it alone. Trade consultants, customs brokers, and government resources can help guide you through the process.If you need assistance determining which tariff relief programs apply to your business or want expert help with your application, Contact Us today. Our team can simplify the process and help you maximize your savings.