Canada’s recent imposition of countertariffs on $28 billion worth of U.S. imports is being mitigated for many businesses through an established tariff relief mechanism, according to trade experts and government data. The federal government enacted or increased duties on 629 American products earlier this month in response to new tariffs imposed by the United States, aiming for a “dollar-for-dollar” retaliatory response. However, a significant portion of these tariffs may not result in direct costs for Canadian importers due to a remission system designed to reduce economic disruptions for domestic industries reliant on imported inputs.

This remission program, which has been in operation for approximately 18 months, allows importers to apply for exemptions from duties if they demonstrate that the imported goods cannot be sourced domestically or from alternate suppliers outside the U.S., or if tariffs would cause harm to the Canadian economy. Analysis indicates that about one-third of the newly tariffed products are already covered under existing remission orders. This coverage increases to over 60 percent for steel and aluminum items, which are heavily impacted by both American tariffs and Canadian countermeasures.

Since March 2025, the Department of Finance has received over 1,800 remission requests related to U.S. surtaxes, with individual requests often encompassing numerous products. The department stated it continues to process new applications linked to the most recent countertariffs, which range from 15 to 50 percent.

This tariff relief aims to lessen the unintended consequences of retaliation, which can include rising costs for Canadian manufacturers and potential damage to integrated North American supply chains. Tony Stillo, director of Canada Economics at Oxford Economics, noted that while the tariffs represent a form of pushback between the two countries, the remissions help maintain business competitiveness by preserving supply chain functionality and reducing the risk of production relocating abroad.

Government figures reveal that between March 2025 and April 2026, Canada collected approximately $9.7 billion in customs duties on U.S. imports but remitted nearly $5.5 billion back to importers through these relief measures, indicating that close to 57 percent of assessed tariffs were waived. Remissions can be permanent or temporary, with temporary relief providing companies time to transition their supply chains away from U.S. sources. Permanent exemptions tend to apply in cases where no practical alternatives exist, such as specialty steel grades.

In addition to product-specific remissions, there is horizontal tariff relief automatically applicable to certain inputs used for manufacturing in critical sectors like automotive, aerospace, and healthcare, though the government does not publicly disclose details on these claims.

Leading Canadian firms have secured multiple remission approvals. For example, Magna International Inc. holds eight such approvals covering 17 steel-related tariff categories, while MHI Canada Aerospace, Inc. has two approvals including a range of aluminum products tied to sales for Bombardier Inc. Bombardier recently announced plans to acquire MHI Canada Aerospace’s assets, but declined to comment directly on the tariff relief.

Economic analyses suggest that despite the tariffs, the presence of remission orders reduces the inflationary and growth impacts on Canada’s economy. A previous Bank of Canada report found that retaliatory tariffs contributed to a roughly 6 percent price increase in targeted goods, accounting for approximately 0.3 percentage points of inflation at the peak. Oxford Economics projects that the current countertariffs could add about 0.12 percentage points to consumer inflation before considering remission effects, and that the combined trade restrictions might reduce Canadian GDP growth by around 0.3 percent in 2027. The availability of tariff relief lessens these impacts, mitigating costs to businesses and consumers alike while supporting efforts to adjust supply chains over time.