The Government of Canada offers tariff relief programs that could help you cut costs and stay competitive. Running a small business is challenging enough without unexpected costs cutting into your bottom line. If tariffs on imported goods are making things more expensive, there may be some good news. But how do you know if you qualify? Let’s break it down.
What Is Canada’s Tariff Relief Program?
The tariff relief program is designed to help businesses that rely on imported materials, especially when those materials aren’t available in Canada. The government either reduces or eliminates certain tariffs, allowing businesses to save money and reinvest in growth.
The main programs that provide Canada tariff relief include:
- Duties Relief Program – Allows businesses to defer or eliminate duties on imported goods that are later exported.
- Duty Drawback Program – Offers a refund on duties already paid when the goods are exported.
- Remission Orders – Special government orders that provide tariff reimbursement in Canada for specific industries or situations.
- Most-Favoured-Nation (MFN) Tariff Reductions – Lower tariff rates for goods imported from specific trade partners.
Each program has different eligibility rules, so let’s look at who can qualify.
Who Can Qualify for Tariff Relief?
Many small businesses may be eligible for tariff relief, but the exact qualifications depend on how you use imported goods. Here’s what you need to know:
1. Are You Importing Raw Materials or Components?
If your business imports raw materials, components, or parts that are used in manufacturing, you may qualify for tariff relief. This is especially true if those materials aren’t produced domestically.
For example:
- A furniture maker importing specialty wood not available in Canada.
- A clothing manufacturer sourcing fabric that isn’t produced locally.
2. Are You Exporting Finished Products?
Businesses that import goods and then export them as finished products can apply for duty deferral or reimbursement through the Duties Relief or Duty Drawback Programs.
For example:
- A tech company assembling electronics in Canada and shipping them overseas.
- A food manufacturer using imported ingredients for products sold internationally.
3. Are You in an Industry Eligible for Special Tariff Remission Orders?
Some industries have received special remission orders that remove tariffs on essential imports. These vary by sector but have included:
- Steel and aluminum products for manufacturers.
- Medical supplies during the COVID-19 pandemic.
- Certain agricultural products that Canada doesn’t produce in sufficient quantities.
If your industry has been impacted by high tariffs, check if a remission order applies to you.
4. Are You Affected by Unfair or Excessive Tariffs?
If a tariff is putting your business at a competitive disadvantage, there may be options to request relief through trade agreements or government appeals. Canada has agreements with countries like the U.S., EU, and members of the CPTPP that may reduce tariffs on certain goods.
How to Apply for Tariff Relief in Canada
Once you determine that your business qualifies, here’s how to start the application process:
- Identify the Right Program
- If you import and export goods, look into the Duties Relief Program or Duty Drawback Program.
- If your industry has been impacted by tariffs, check for Remission Orders.
- Gather Necessary Documentation
- Import records and receipts.
- Proof of export (if applicable).
- Business registration and tax information.
- Apply Through the Canada Border Services Agency (CBSA) or Department of Finance
- The CBSA oversees the Duties Relief and Duty Drawback Programs.
- The Department of Finance handles Remission Orders and MFN Tariff Reductions.
- Stay Compliant
- Keep detailed records of all imports and exports.
- Ensure that you meet all reporting and compliance requirements.
Is Tariff Relief Worth Applying For?
If you rely on imported materials or export finished goods, government aid for tariffs could save you thousands of dollars annually. These savings can help you:
- Lower your production costs.
- Improve your product pricing and competitiveness.
- Reinvest in business growth and hiring.
While the application process takes some effort, the long-term financial benefits make it worthwhile for many businesses.
Key Takeaways
- Canada offers tariff relief programs to help businesses reduce costs on imported goods.
- Eligibility depends on factors like whether you import raw materials, export finished products, or belong to an industry with special tariff remission orders.
- Programs like the Duties Relief Program, Duty Drawback Program, and Remission Orders provide different ways to save on tariffs.
- Small businesses can apply through the CBSA or Department of Finance, but detailed documentation is required.
If tariffs are cutting into your bottom line, don’t leave money on the table. Contact us for expert guidance on navigating the tariff relief process and maximizing your savings.
