On 25 August 2026 the Government of Canada announced $27.6 billion in new counter-tariffs on U.S. goods, and the clock started ticking for every Durham business that buys from an American supplier. The counter-tariffs are effective September 8, 2026 at 12:01 a.m., 15, 25 and 50 per cent tariffs matching the U.S. tariffs on Canadian goods effective August 22. If your bill of materials touches U.S. steel, dairy, appliances, agricultural equipment, pulp and paper or electronics, your September landed cost is not the same as your August landed cost.
Key takeaways
- On September 8, 2026 at 12:01 a.m., Canada imposes counter-tariffs of 15, 25 and 50 per cent on $27.6 billion of U.S. goods, matching the U.S. dollar for dollar and rate for rate.
- The BDC Pivot to Grow program opens a new $500 million liquidity stream with loans from $250,000 to $5 million and interest-only payments for up to 36 months.
- The Regional Tariff Response Initiative jumps to $1.5 billion in new funding, with non-repayable contributions raised from $1 million to $3 million and liquidity support up to $2 million.
- The Workforce Retention and Retraining Program pays employers up to $1,000 per participant to keep and retrain workers instead of laying them off.
- The GST/HST you pay at the border on the surtax remains recoverable as an input tax credit, but the counter-tariff itself lands in your cost of goods sold.
Canada announces new counter-tariffs on U.S. goods
Canada has announced new retaliatory tariffs on U.S. imports after Washington asked too much and offered too little at the trade table. Finance Minister François-Philippe Champagne confirmed Canada will match the new U.S. tariffs dollar for dollar, rate for rate on $27.6 billion of Canadian goods effective August 22. To protect Canadian workers, farmers and Canadian small businesses, the Government of Canada also opened a $7.5 billion support package for Canadian workers and businesses, on top of the roughly $25 billion in tariff-related supports the government has provided since the U.S. measures began.
Ottawa published the full list of products from the United States subject to counter-tariffs effective September 8, 2026. Existing counter-tariffs on other U.S. goods, including autos, stay in place. The tariff remission framework is still available for exceptional relief requests. These are retaliatory tariffs, not a broad-based sales tax, so the surtax rate and the tariff rate vary per HS code.
Counter-tariffs effective September 8: what they hit and at what rate
Canada will impose counter-tariffs of 15, 25 and 50 per cent, drawn from the U.S. Section 338 and Section 232 tariffs. The tariff rate on each product mirrors the U.S. rate on the matching Canadian import, so the surtax stacks on the value for duty, and the goods keep flowing.
| Tariff rate | Sample U.S. goods now covered | Durham sector impact |
|---|---|---|
| 50 per cent | Steel and aluminum products (up from 25 per cent), furniture, clothing and apparel | Fabricators, contractors, retailers, upholsterers |
| 25 per cent | Appliances, dairy products such as cheese, certain steel and aluminum derivative products | Appliance importers, restaurants, food processors |
| 15 per cent | Other products drawn from the U.S. Section 338 and Section 232 tariffs | Pulp and paper, agricultural equipment, electronics |
The counter tariffs will apply on the value for duty, which is set under the Customs Act, and they sit on top of any existing customs duty. Verify each HS code against the CBSA list before you clear a shipment; small classification changes swing the tariff rate from 15 per cent to 50 per cent.
How this shows up in Durham's supply chain
Durham exposure is heavier than a typical Ontario region. Oshawa and Whitby carry auto-parts, appliance and metal-fabrication shops that source American steel, aluminum and appliance components. Ag equipment dealers across Clarington, Uxbridge and Port Perry sell tariffed U.S. tractor, sprayer and haying lines. Ontario's dairy processing chain reaches every Durham grocery cheese case, and Durham contractors buy plenty of American finished steel.
Three practical questions land on desks this week:
- Which of my top ten SKUs by U.S. dollar volume are in scope, and at what rate.
- Which suppliers can switch to Canadian, Mexican or European sources without breaking a quality spec.
- Which customer quotes are still open at pre-tariff pricing, and how the change gets communicated.
Pull your purchase history for the last twelve months from U.S. vendors, sort by dollar value, then map each SKU to the tariff schedule. That single spreadsheet drives every other decision.
A worked example: a Whitby appliance maker's September COGS hit
Sarah runs a small appliance assembly shop in Whitby with 22 employees and $6.4 million in annual revenue. She imports $180,000 a month in stainless-steel panels and small motors from Ohio. Her August landed cost on that stream was $180,000. Starting September 8, the 50 per cent counter-tariff on steel plus a 25 per cent surtax on the motor components adds roughly $72,000 a month, or $864,000 annualised, to her cost of goods sold.
Sarah has three levers. She can pass 40 per cent of the increase to her wholesale customers through a tariff surcharge line on the invoice, absorb 20 per cent through a temporary margin cut, and cover the last 40 per cent by drawing a $500,000 BDC Pivot to Grow loan at interest-only payments for the first 24 months. Her workforce stays intact through Q4 while her operations lead sources a Quebec panel supplier that quotes 8 per cent above the pre-tariff U.S. price. Once the Quebec line is qualified, Sarah's monthly tariff exposure drops from $72,000 to under $8,000.
The exact split matters less than the discipline of running the numbers. Once you have the SKU-level tariff exposure written down, the levers move quickly.
The $7.5 billion federal support package
Ottawa built the $7.5 billion package around four programs that most Durham small businesses will use in some combination.
BDC Pivot to Grow: $500 million liquidity stream
The Business Development Bank of Canada opened a new $500 million liquidity stream inside its Pivot to Grow program. Loans run from $250,000 to $5 million, with interest-only payments available for up to 36 months. Any business directly hit by tariffs is eligible, regardless of sector. The BDC also lowered the minimum annual revenue threshold for its tariff-support programs to $1 million, so more Durham micro-manufacturers can now apply.
Application is through BDC directly. Bring your last two years of financial statements, a twelve-month cash-flow forecast that shows the tariff impact, and a written plan for how the loan closes the gap. The 36 months of interest-only carries a young business through a supplier switch without a covenant break.
Regional Tariff Response Initiative: $1.5 billion boost, $3 million non-repayable
The Regional Tariff Response Initiative grows by $1.5 billion, delivered through Canada's Regional Development Agencies. For Durham, the delivery agency is FedDev Ontario. The maximum non-repayable contribution rises from $1 million to $3 million per business, and eligible firms can also access up to $2 million in liquidity support on demonstrated need.
Non-repayable is the operative word. If you have a real diversification project (a new production line, a Canadian supplier qualification, an export push into Europe), this stream funds a meaningful chunk of it without adding debt. Application detail is still rolling out. Owners should start assembling project scopes and cost estimates now so they can file quickly when the intake window opens.
Canada Strong Diversification Fund: $2 billion
The new $2 billion Canada Strong Diversification Fund runs as a stream of the Strategic Response Fund. It targets shovel-ready capital projects that let tariff-affected businesses maintain capacity, modernise a line or diversify away from U.S.-dependent markets. Medium-sized and larger enterprises are eligible, and RDAs coordinate intake and triage.
If your growth plan includes a new piece of Canadian- or European-sourced equipment that was already on your five-year roadmap, this fund can pull that spend forward into 2026 or early 2027. Owners across Oshawa, Whitby and Ajax with capital projects already scoped should book time with a CPA and a lender in the next two weeks.
Workforce Retention and Retraining Program
The Workforce Retention and Retraining Program combines the old EI Work-Sharing Program and Worker Retention Grant into one offering. It funds employers up to $1,000 per participant to help with training and administrative costs when workers stay on reduced hours rather than being laid off. Work-sharing lets employees collect partial EI while they keep their job through a soft patch. Ottawa also extended EI flexibilities: the one-week waiting period stays waived, workers can collect EI without first burning through separation payments until October 10, 2027, and long-tenured workers keep access to up to 20 additional weeks of benefits until June 2027.
For a Durham manufacturer running through a temporary demand dip while a Canadian supplier gets qualified, this program is often cheaper than paying severance and rehiring in Q1.
HST and accounting: how a counter-tariff hits your books
The counter-tariff is legally a surtax under a United States Surtax Order made under the Customs Tariff, administered by CBSA. Three accounting points matter for a small importer.
The surtax lands in cost of goods sold. Canadian importers include the surtax in their landed cost, alongside customs duty, freight and insurance, and expense it as part of COGS when the inventory sells. It is deductible for income tax purposes because it was incurred to earn income.
The GST/HST at the border is calculated on a value that includes the surtax. Your GST/HST paid at import is generally recoverable through an input tax credit if you are a GST/HST registrant using the goods for commercial activity. The surtax itself does not generate an input tax credit. The GST/HST that sits on top of it does.
Update your inventory costing method now. If you use standard costing or a moving-average approach, your landed cost per unit changes on your September 8 receipts. Books that keep using the August cost will overstate margin and understate COGS through year-end.
Talk to your bookkeeper this week. Ask whether your accounting software captures the surtax on a separate general ledger account (recommended, so a future remission claim is easy to trace) or blends it into the same line as customs duty (workable, less clean).
FAQ
When exactly do the new counter-tariffs start?
The counter-tariffs effective September 8, 2026 apply from 12:01 a.m. Any shipment released by CBSA on or after that moment pays the new tariff rate. Canadian goods effective before that timestamp clear at pre-tariff rates. If a shipment is inbound, ask your customs broker to confirm the release timing.
Are the new Canadian tariffs on top of existing counter-tariffs?
Yes for many goods, no for others. The 50 per cent rate on steel and aluminum replaces the earlier 25 per cent counter-tariff, so those items step up rather than stack. Other existing counter-tariffs, including on autos, stay in place unchanged. Check the CBSA product list for the specific HS code, because the answer moves per line.
Can my Durham small business really claim $3 million in non-repayable funding?
The Regional Tariff Response Initiative caps non-repayable contributions at $3 million per business, but the actual award depends on the project size, the demonstrated tariff impact and the RDA's assessment. Most Durham small businesses will land in the low six figures. The application is worth building even for a smaller ask.
What is the fastest source of cash if I need it in the next 30 days?
The BDC Pivot to Grow $500 million liquidity stream is the fastest new program to draw on, because BDC already has the infrastructure and the loan is a straightforward debt product with interest-only payments for up to 36 months. Grant programs (RTRI, Canada Strong Diversification Fund) take longer to intake and adjudicate.
We work with owners across Oshawa, Whitby, Ajax, Pickering, Clarington, Bowmanville and Uxbridge who import from the U.S. and need a straight read on their September tariff exposure, a funding-application shortlist and a bookkeeping treatment that stands up at year-end. Book a free 15-minute call and we will walk through your bill of materials, the four federal programs you qualify for and the accounting entries your bookkeeper should make this month.
This article is for general information only and does not replace professional tax advice. Tax rules change, and your specific situation matters. Always confirm with a qualified CPA before making tax decisions.
