Tariffs and Your Bottom Line: A 2026 Finance Playbook for Ontario Importers and Exporters

Quick answer: After the U.S. imposed a 50% tariff on $27.6 billion of Canadian goods in August 2026, Canada matched it with counter-tariffs of 15%, 25% and 50% on U.S. goods from 8 September 2026. Ontario businesses that import or export should recalculate landed costs, reprice where possible, check rules of origin, explore duty relief (drawback and remission), protect cash flow with a 13-week forecast, and look at the federal support programs announced on 25 August 2026.

Key takeaways

• Tariffs hit cost of goods, inventory values, GST/HST on imports and cash flow — all at once.
• Many businesses still price from old landed costs. Rebuild them line by line.
• Rules of origin and correct tariff classification can legitimately reduce duty.
• Duty drawback and remission can recover or waive duty in specific situations.
• Federal support includes $1.5 billion more for the Regional Tariff Response Initiative and a $500 million BDC liquidity stream.

Where things stand in October 2026

The trade relationship between Canada and the United States has been volatile since early 2025. The latest escalation came in late summer:

• On 22 August 2026, the U.S. imposed a 50% tariff on $27.6 billion of Canadian goods.
• On 25 August 2026, the federal government announced matching counter-tariffs on $27.6 billion of U.S. imports, effective 8 September 2026, focused on steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.
• Counter-tariff rates are 50% on steel and aluminum products (up from 25%), furniture, and clothing and apparel; 25% on appliances, dairy products such as cheese, and certain steel and aluminum derivative products; and 15% on other listed goods. Existing counter-tariffs on U.S. autos remain.
• Canada’s tariff remission framework remains available for exceptional relief.
• A $7.5 billion package of new and enhanced supports for workers and businesses was announced alongside the countermeasures.

Lists change, and the details matter at the tariff-item level. Before you make pricing or sourcing decisions, check the current Customs Notices from the Canada Border Services Agency (CBSA) and the Department of Finance.

How tariffs flow through your financials

Tariffs don’t just raise a cost line. They ripple through every part of your numbers.

The playbook: ten moves for Ontario businesses

1. Rebuild your landed cost for every affected product

Landed cost = supplier price + freight + insurance + brokerage + duty + other fees, converted at your actual exchange rate. Do this per SKU, not as an average. Many businesses discover that a handful of products have gone from profitable to loss-making while the rest are fine.

2. Confirm tariff classification and origin

Duty depends on the tariff classification (HS code) and the country of origin of the goods, not where they were shipped from. Goods that qualify as originating under CUSMA or other trade agreements may be treated differently. Ask your customs broker to review your top imported items — misclassification is common and can cost you either way.

3. Explore duty relief programs

• Duty drawback: if you import goods and later export them (as-is or after processing in Canada), you may be able to recover duty paid.
• Duties relief program: lets qualifying businesses import goods without paying duty when they will be exported later, which avoids the cash outlay entirely.
• Remission: Canada’s remission framework can grant relief from counter-tariffs in exceptional circumstances, such as when goods can’t reasonably be sourced elsewhere or when contracts were fixed before the tariffs. Applications need evidence; start early.

4. Reprice with discipline

Use your rebuilt landed costs to set new prices by product and customer. Options include a transparent tariff surcharge, an across-the-board increase, or selective increases where margins are worst. Document the reason — customers accept increases more readily when they see the cost driver. Review contracts for price-adjustment or change-in-law clauses.

5. Re-examine your sourcing

If a U.S. input now carries a 25% or 50% counter-tariff, can you source it from Canada, Mexico or a country covered by CETA (Europe) or the CPTPP (Asia-Pacific)? Even a partial switch can bring the blended cost down. Factor in lead times, quality, minimum orders and currency.

6. Build a 13-week cash flow forecast

Tariffs create a cash timing problem: you pay duty and import GST/HST up front, but collect from customers weeks later. A rolling 13-week forecast, updated weekly, shows exactly when the gap peaks and how much financing you need. Our guide to cash flow planning explains how to build one.

7. Recover import GST/HST quickly

If you’re a GST/HST registrant, the GST/HST paid at the border is generally recoverable as an input tax credit. Make sure your bookkeeping captures CBSA import documents (and not just the broker’s invoice) and that you claim the credits in the right period. Consider moving to monthly GST/HST filing if you’re in a regular refund position — it brings cash back faster.

8. Manage currency risk

Tariffs on U.S.-dollar purchases amplify FX exposure. Options include holding a USD account to match USD receipts with USD payments, forward contracts with your bank to lock in rates for known payments, and negotiating Canadian-dollar pricing with suppliers. See foreign transactions.

9. Talk to your lender before the covenants do

If margins are falling, check your loan covenants (debt service coverage, working capital ratios). Approach your bank early with a forecast and a plan. Lenders respond far better to a plan than to a surprise breach.

10. Use the support that exists

The 25 August 2026 announcement included:

• An additional $1.5 billion for the Regional Tariff Response Initiative, delivered by regional development agencies (FedDev Ontario in southern Ontario), to help small and medium-sized businesses, including with liquidity.
• A new $500 million BDC liquidity stream** under its “Pivot to Grow” program, plus targeted programs for forestry, steel and aluminum. The minimum revenue requirement for BDC tariff-related programs was lowered to **$1 million.
• An additional $2 billion for the Canada Strong Diversification Fund for tariff-affected businesses with shovel-ready capital maintenance projects.
• New flexibilities in the Large Enterprise Tariff Loan facility.
• A $3.5 billion package for workers, including extended EI flexibilities and a new Worker Retention and Retraining Program.

Applications need clean financial statements, forecasts and evidence of tariff impact. That’s where good books pay off.

Accounting and tax points not to miss

• Duty is a cost of inventory, not an immediate expense. Under ASPE, it’s included in the cost of inventory and expensed when the goods are sold.
• Year-end inventory valuation: if tariffs force you to sell below cost, inventory may need to be written down to net realizable value.
• Duty refunds (drawback or remission) reduce the cost of the related goods; record them carefully so margins aren’t distorted.
• Customs records must be kept, generally for six years, and should be reconciled to your books.
• CBSA’s CARM portal is now the system of record for importers; make sure your business is registered, your broker is linked and your statements of account are reviewed monthly.
• Instalments: if profits fall, consider reducing corporate tax instalments based on current-year estimates — but only with a reliable forecast, because underpaying triggers 7% interest.

A worked example

An Ontario furniture retailer imports $400,000 a year of U.S.-made pieces that now attract a 50% counter-tariff.

Import HST is also paid on the higher, duty-inclusive value, so the cash paid at the border rises further, even though it is recovered later through input tax credits.

The retailer’s options: shift part of the range to Canadian or European suppliers, raise prices on the most affected lines, apply for remission on pre-contracted orders, and use a short-term liquidity facility to cover the timing gap while doing so. None of these choices can be made well without product-level numbers.

Frequently asked questions

Get a tariff impact review

Solstice Partners helps Ontario importers, exporters and manufacturers rebuild landed costs, forecast cash flow and prepare the financial evidence lenders and support programs ask for. See our CFO services or book a consultation.

Sources

• Department of Finance Canada — Targeted countermeasures and support for workers and businesses (25 August 2026)
• Government of Canada — Canada’s response to U.S. tariffs
• Canada Border Services Agency — Trade incentive programs (duties relief and drawback)
• Canada Border Services Agency — CARM

This article is general information, not trade, customs or tax advice for your situation. Tariff lists and rates change often; confirm current measures with the CBSA and your customs broker before acting.