21 Sep US Tariffs and Your Business: Tax Strategies for Canadian Companies

US Tariffs and Your Business: Tax Strategies for an Uncertain Trade Environment

Ask almost any Canadian business owner what’s keeping them up at night in 2026, and tariffs are near the top of the list. Trade tensions between Canada and the United States have gone through several rounds of escalation this year, with tariffs, counter-tariffs, and shifting exemptions changing the cost of doing business seemingly every few months. If you import from the US, export to the US, or simply compete with businesses that do, this affects you, and there are real tax and cash flow tools available to soften the impact.

You don’t have to be an exporter to feel this

It is tempting to think tariffs are only a problem for companies shipping products across the border. In reality, the costs spread much wider. If your business imports materials, equipment, or components from the US, Canada’s counter-tariffs can raise your input costs directly. Even businesses with no direct US trade often feel the ripple effects through supply chains, pricing pressure from competitors, and general economic uncertainty affecting customer spending.

Given how often the rules have shifted this year, businesses that build in some flexibility, rather than betting on any one outcome, tend to weather this better than those who wait for certainty that may not arrive for a while.

Getting money back on duties already paid

One of the more underused tools available right now is the Canada Border Services Agency’s (“CBSA”) Duty Drawback Program. If your business imports goods that are affected by tariffs and later exports them, either as is or built into a finished product, you may be able to recover some or all of the duties you paid on the way in. Claims can be filed for up to four years after the import, which means it’s worth checking whether you’re sitting on refunds from earlier in this trade dispute that you haven’t claimed yet.

There’s also a separate remission process for businesses that aren’t exporting but are still absorbing higher costs on inputs that simply can’t be sourced domestically or from a non-US supplier. It’s a case-by-case application rather than an automatic relief, but for businesses with no realistic alternative supplier, it may be worth the paperwork.

Watching the government support programs

The Canadian government has rolled out several rounds of support specifically for tariff affected businesses this year, and the details have shifted as the trade situation has evolved. Programs have included low-cost financing through the Business Development Bank of Canada, regional funding aimed at helping smaller businesses adapt, and support for businesses looking to diversify away from reliance on the US market. These programs tend to have specific eligibility criteria, application windows, and funding caps. It may be worth checking current details as what wasn’t available six months ago may be available now, and vice versa.

Rethinking supply chains, carefully

Some businesses are responding to the tariff environment by shifting suppliers, adjusting how goods are classified for customs purposes, or restructuring how products move across the border. These strategies can genuinely reduce tariff exposure, but they also draw increased scrutiny from customs authorities as they have stepped up compliance checks as more businesses look for ways around the higher costs. Any change to sourcing, classification, or cross-border structuring is worth reviewing with someone who understands both the trade rules and the tax implications before you implement it, not after.

Planning around uncertainty, not a fixed outcome

The hardest part of this environment isn’t any single tariff. It’s not knowing what happens next. Rates have moved multiple times this year in both directions, exemptions have been added and removed, and the pace of change shows no sign of slowing. That makes rigid, single scenario planning risky. Businesses that build some flexibility into their supply chains, their pricing, and their cash flow planning are generally better positioned than those betting heavily on one particular outcome.

This article is for general information only and reflects the trade environment as of the time of writing, which continues to change. If tariffs are affecting your business, reach out to your advisor at Clearline to talk through which of these tools apply to your specific situation.