Canada’s new counter-tariffs took effect September 8, imposing duties of 15%, 25% or 50% on $27.6 billion of U.S. goods. Within hours, the United States announced further measures affecting certain Canadian dairy products, alcoholic beverages and motor vehicles.
The import restrictions take effect September 29, while other product-list changes begin September 15. U.S. agencies were also directed to remove Canadian-origin goods from federal procurement schedules.
For Canadian companies, waiting for trade policy to stabilize is no longer a business strategy.
Tariffs affect far more than the duty on an invoice. They influence margins, pricing, suppliers, export markets, production planning and investment decisions.
This is an important moment for Canadian business. Decisions being made now about suppliers, equipment, automation, product design and plant location will shape where Canadian productive capacity resides for years.
Before absorbing the cost, redesigning a product or moving production, businesses should determine whether public funding can change the calculation.
Which products are affected?
Canada’s counter-tariffs apply only to qualifying U.S.-origin goods. The following are selected examples from the Government of Canada’s tariff schedule:
| Category | Examples | Tariff |
| Dairy ingredients | Milk and cream powders, whey, casein and milk proteins | 50% |
| Cheese | Cheddar, mozzarella, parmesan, brie and other cheeses | 25% |
| Honey | Natural honey | 50% |
| Steel and aluminum | Ingots, flat-rolled products, bars, rods and selected derivatives | 25–50%; many products increased to 50% |
| Softwood lumber | Sawn pine, spruce, fir, S-P-F and hemlock | 25% |
| Plywood and engineered wood | Plywood, laminated veneer lumber and blockboard | 50% |
| Pulp and paper | Selected pulp, kraft paper, tissue, envelopes and paper products | 25–50% |
| Plastics | Selected coverings, tableware and packaging products | 50% |
| Carpets | Selected woven, tufted and synthetic floor coverings | 25–50% |
| Apparel | Selected shirts, sweaters, dresses, suits, coats and gloves | 50% |
| Beauty and personal care | Perfumes, makeup and selected hair products | 50% |
| Glass containers | Selected bottles, jars and packaging glass | 50% |
| Equipment, appliances and electronics | Selected agricultural equipment, appliances and electronic products | Varies by tariff item |
| Automobiles | Existing Canadian counter-tariffs continue under a separate measure | Product-specific |
This table is indicative, not a customs-classification opinion. The applicable rate depends on the precise tariff item, product description and country-of-origin rules. Businesses should review the government’s complete consolidated list before making import decisions.
A significantly larger federal response
The federal government’s latest $7.5 billion package adds $1.5 billion to the Regional Tariff Response Initiative (RTRI), bringing total RTRI funding to $3.45 billion nationally.
RTRI now provides two principal funding streams:
- Liquidity support of up to $2 million, non-repayable, covering up to 50% of eligible costs.
- Funding for projects that strengthen or reposition a business, including up to $1 million non-repayable at a maximum 50% contribution rate. Larger contributions are repayable and can cover up to 75% of eligible project costs.
A business can receive up to $3 million in combined non-repayable support. Total RTRI assistance, including repayable funding for larger projects, can reach $20 million.
Eligible projects can include equipment, automation, production expansion, product adaptation, supplier replacement, supply-chain restructuring and market diversification.
The 25% U.S.-revenue benchmark is only one route to establishing exposure. Increased input costs, duties, supply-chain disruption, lost customers or declining revenue can also demonstrate a tariff impact.
Current federal guidance generally requires an incorporated, for-profit business with at least $1 million in annual revenue in one of its last two fiscal years and evidence that it was viable before the tariffs. Final eligibility, priorities and application procedures depend on the regional development agency administering the program.
The package also announced a second $500 million stream under BDC Pivot to Grow and a new $2 billion Canada Strong Diversification Fund under the Strategic Response Fund. Businesses should confirm current delivery terms before relying on either measure in an investment plan.
Tariff relief and provincial incentives also matter
Canada’s tariff-remission process provides exceptional relief in qualifying circumstances. The Duties Relief Program and Duty Drawback Program can also provide relief from, or refunds of, duties on imported goods that are subsequently exported.
Provincial and regional incentives can reduce an investment’s cost further:
- The Ontario Made Manufacturing Investment Tax Credit provides qualifying Canadian-controlled private corporations with a 15% refundable credit on eligible manufacturing buildings, machinery and equipment, up to $3 million annually. A temporary 15% non-refundable credit is also available to qualifying non-CCPCs.
- Ontario businesses planning significant expansion or productivity investments should also examine the Eastern Ontario Development Fund and Southwestern Ontario Development Fund. The current intake for both programs closes September 23, 2026.
- The new B.C. Manufacturing and Processing Investment Tax Credit provides qualifying B.C. CCPCs with a 15% refundable credit on up to $2 million in net eligible expenditures… a maximum credit of $300,000.
Other regional equivalents include Quebec’s Tax Credit for Investment and Innovation, Saskatchewan’s Manufacturing and Processing Investment Tax Credit, Alberta’s Agri-Processing Investment Tax Credit and the federal Atlantic Investment Tax Credit.
Tariff-driven experimentation can qualify for SR&ED
Scientific Research and Experimental Development (SR&ED) is Canada’s largest federal R&D tax incentive. It provides tax deductions and investment tax credits for eligible experimental work performed in Canada.
Tariffs are generating this type of work by forcing companies to replace materials, ingredients, components, suppliers and manufacturing processes.
A routine substitution is not SR&ED. Eligibility arises when existing technological knowledge cannot predict whether the substitute will perform as required and the company conducts a systematic investigation… formulating hypotheses, performing experiments, analyzing results and generating new technological knowledge.
Examples include:
- A metal fabricator testing alloys and process parameters to resolve unexpected cracking, corrosion, hardness or welding failures.
- A food or beverage producer testing formulations and processing conditions to restore fermentation, texture, stability, yield or shelf life after changing an ingredient.
- An agricultural-equipment manufacturer conducting engineering trials to resolve fatigue, vibration, calibration or system-integration problems caused by replacement components.
- A pulp, paper or packaging manufacturer testing fibres, coatings, resins or adhesives where supplier data cannot predict strength, moisture resistance, bonding or line performance.
The project doesn’t need to succeed. Failed trials can qualify when they form part of a documented systematic investigation.
The program has also expanded. For taxation years beginning after December 15, 2024, the expenditure limit for the enhanced 35% credit increased from $3 million to $6 million.
The enhanced rate is now available to qualifying CCPCs and eligible Canadian public corporations, or ECPCs. An ECPC must be resident in Canada, listed on a designated Canadian stock exchange and not controlled by non-residents. Subject to the applicable limits and associated-group rules, the enhanced credit can reach $2.1 million annually. Qualified expenditures above the enhanced limit earn the general non-refundable 15% credit.
One decision deserves one complete assessment
A single supply-chain decision can involve several programs. Tariff remission can affect imported inputs. New equipment can qualify for RTRI and an investment tax credit. The experimental work required to make a replacement material, or process function can qualify for SR&ED.
These incentives interact, so their values can’t simply be added together. Examining only one program, however, can leave substantial funding unidentified.
Supply-chain resilience can also require coordinated investment. A Canadian supplier can need new equipment or engineering capacity before replacing an imported component, while its customer can require technical validation before committing to a purchasing agreement. Each company can have a separate fundable project arising from the same supply-chain decision.
Leyton operates in 20 countries, including Canada and the United States. Our teams assess government funding and R&D incentives across the jurisdictions involved in an investment or supply-chain response. Where appropriate, we also support discussions among businesses, suppliers, customers, advisers and strategic partners whose investments depend on one another.
If tariffs have changed what your company buys, manufactures, tests, automates or exports… give us 30 minutes.
There’s no cost and no obligation. Before making a permanent decision about your Canadian operations or supply chain, determine whether public funding can change the math.