Trading in the year 2025 has become more complicated and costly than ever. What the new 25% tariff has meant for Canada and its international businesses is an advancement in curiosity on the mechanisms and programs that offer tariff relief. With new high-duty environments waiting for Canadian importers, it has become more critical than ever to leverage every advantage available. But what is available to Canadian businesses affected by these tariffs? And, perhaps more importantly, how do those businesses functionally put these programs to work? 

Consider this week’s blog an introduction to some of the services and options Canadian importers have when looking to achieve tariff relief. It’s also going to serve as a brief introduction to PCB’s Trade Advisory Services, which can help indicate and facilitate these trade opportunities. 

What is Canadian Tariff Relief, and How Does it Work? 

When pursuing tariff relief, it’s worth discussing what the goals of that process tend to be. Obviously, saving costs at the border is high on that list, but how an importer manages that can take on different forms. It’s easiest to think of it in terms of what you are trying to achieve, and the best way to articulate that is with an example. 

Let’s imagine a Canadian company that has a trade relationship with a manufacturer in a country abroad. They have been importing goods from this country for years, but then Canada implements restrictive import regulations, including a tariff on the goods that they have been importing from that country.

For many international businesses, there are two ways forward from this situation - 

1. Find a way to make this relationship work by balancing the new cost out in other ways. 
2. Find a new relationship in a place with less restrictive regulations and tariffs. 

Finding Additional Cost Savings

Finding savings in an effort to maintain a business relationship that has become more expensive, be it through Customs, supply chain management, or through tactics like finding new terms of sale, is a valid path forward for Canadian businesses. Discovering new ways to streamline and find efficiencies is the goal, and doing it while maintaining as much of the status quo as possible and not changing too much about how you’ve done business in the past is the standard that every business is reaching for in this situation.

With that in mind, one of the best ways to offset or entirely avoid the increased tariff is through Customs’ own programs. The CBSA maintains several programs, which have been around for a while, that may work to offset the cost of the increased tariffs. These are official tariff relief processes and Canada Border Services Agency (CBSA) programs that can help you save money at Customs, and they have always been a good way to save if you qualify, but not every business knows that they even exist. 

A Trade Advisor can help you determine which of these make sense for your business and how to apply for them if they do. 

Duty Drawback Program (DRP)

We discuss the DRP for both Canada and the US in some detail in previous blogs, and the Canadian program is detailed officially on the Canadian government’s website, but in short, this program is designed to offer a return of the duties paid on goods provided they meet one of the following criteria: 

• The goods that are imported are later exported as-is.
• The imported goods are used to produce other goods for export, such as parts used to manufacture a product for export.
• The imported goods become obsolete, surplus, or are manufactured into an item that is obsolete or surplus.

Now, it is worth discussing one of the additional rules that apply here, particularly when it comes to getting duty drawback benefits from goods imported from other countries benefitting from the CUSMA free trade agreement. In certain circumstances, CUSMA limits how much duty can be refunded via drawback when exporting to other CUSMA nations. This is referred to as the “lesser of two duties’ rule. 

We go into some technical detail on the aforementioned blog, but the abbreviated version is that, as an importer, you can only benefit from a drawback on the lesser of: 

• The duties you paid on goods you imported from countries outside of CUSMA. 
• The duties were paid when the product was first imported into another country in CUSMA. 

Applying for the Duty Drawback Program is not an overly complicated affair, and the form requesting a drawback from the CBSA can be found on their website. However, recognizing that your goods can benefit from a duty drawback can be trickier. You are always encouraged to speak with a trade advisor to ensure this is the right path for you. 

Exporters of Processing Services Program

Like Duty Drawback, the Exporters of Processing Services Program is fairly niche in its application and won’t be something every business can take advantage of, but for those importers to whom it does apply - it’s a vital piece of the importing puzzle. This program allows importers to import goods belonging to non-residents for processing, distribution, or storage, so long as they are subsequently exported, free of GST/HST on the goods they import, provided they meet the following criteria: 

• The business is registered to pay GST/HST and has access to financial security if required. 
• The goods that are imported remain out of the possession of another Canadian business, with the exception of storage or transportation. 
• The goods are owned by nonresidents who are not closely related to you.
• The goods are never consumed or used in Canada.
• The goods will be exported within four years of accounting for them. 

Essentially, this program is designed to help businesses import goods designated for processing, distribution, or storage before they are promptly exported again.

Remission of Tariffs

For most businesses, this is going to be the option you are most likely drawn to when it comes to CBSA programs and the current situation in the marketplace. Unfortunately, its official application is the most nebulous. Put simply, this is a request directed to the Department of Finance indicating that your business should be exempt from tariffs for one of two reasons: 

• The goods that are being imported by your company cannot be sourced domestically, on either a national or regional basis, and must come from the country that is being tariffed. 
• A unique circumstance, determined on a case-by-case basis, but it will probably have a severe and adverse impact on the Canadian economy. 

Your application is then assessed, and a ruling is determined. There are no guarantees in this process, but like the others, having a Trade Advisor is particularly valuable, as they can indicate ahead of time whether your goods will likely qualify for a remission, and they can even help you craft the application letter. It doesn’t work for every business, but for some, it is a silver bullet solution to the challenges posed by specific tariffs.  

Explore New Opportunities

Once you’ve exhausted the official programs, it’s time to start looking for new opportunities. After all, official programs will only take you so far; a more effective path forward in the long run is to develop and grow your international trade strategy and logistics abroad. While, of course, you are free to explore your options on your own, a discussion with a trade advisor with an eye towards tariff relief can reveal opportunities that aren’t just good for tariff relief but also good for your business. Here are a few examples of services we can provide and the ways that they can reveal potential paths forward in the face of increased tariffs. 

HS Classification Review

A Classification Review is always a good idea - particularly when you are importing a new item. It helps you understand where that specific good falls when it comes to its classification in the eyes of the CBSA and can be an indicator of what to expect cost-wise when it’s time to import that good. 

In the world of tariff relief, however, it takes on a slightly augmented role, seeing as the goods have likely already been classified. At this point, a classification review can reveal options and alternatives you may not have considered that can potentially reduce or avoid tariffs by changing something on the manufacturing level. Different processes, sources, or certifications can fundamentally change how Customs view a good, and a Classification Review can reveal preferential treatments available under free trade agreements (FTAs) that may not be immediately obvious without a specialist’s perspective. 

It is a fantastic starting point when exploring options in the face of new tariffs or regulations.

Free Trade Agreement Review

Free trade agreements will be foundational to how most businesses manage these new tariffs. We have several articles detailing how FTAs work, what they can mean in the year 2025, and what you can do to put them to their most effective use. Canada maintains around 15 free trade agreements with countries worldwide, so when a trading partner becomes prohibitively expensive to work with, it can pay dividends to look at options further abroad. If the goal is to find alternative trading partners in the wider world, FTAs can be fantastic signposts for your business to follow.  

Our Trade Advisory team not only knows the nature of these agreements, including what is involved in their application, but also what goods you are importing that could best benefit from a supplier shift. From top to bottom, we can help you fundamentally shift how your business operates toward a more streamlined operation.

Supply Chain Diversification

One of the ways to save money is by refining and streamlining your supply chain, and, to that end, there is no better way forward than with a freight forwarder. A freight forwarder, like the ones you’ll find in our Freight Management department, can help you build and optimize your supply chain with an eye towards determining areas of cost savings and inefficiencies in your current logistics plan. Not only can this help reduce costs, but it can help immensely when considering your plans to broaden your scope and begin trading abroad. 

Diversifying your supply chain is a critical valve to turn when considering cost savings, and working with a supply chain expert is the surest way to ensure that your logistics plan has everything moving in the right direction.

Tariff Troubles? Tariff Solutions.

Of course, this is just the beginning of what Tariff Relief can do to help a Canadian business thrive during times of market turbulence. There are plenty of options and opportunities to explore for the savvy business, and with the help of a trade advisor, a few minor changes or enrollments can be a significant difference-maker when attempting to cut costs and save money. 

With a bit of help from us, you’ll be set to handle anything the international marketplace can throw at you. For more information about the ongoing trade action in Canada, you are encouraged to visit our Tariff Update page. For the full list of services available from our Trade Advisory Team, please be sure to visit the Trade Advisory site for all the details.