Duty relief and drawback: recovering money Canadian manufacturers leave at the border

Manufacturers that import dutiable inputs and later export finished goods often pay duty they are entitled to recover. Canada's two main mechanisms: the Duties Relief Program, which waives duty upfront on goods that will be exported, and Duty Drawback, which refunds duty already paid once exportation is proven — with claims possible for several years back.

The qualifying logic is broad: goods exported in the same condition, goods consumed or expended in manufacturing exports, and goods incorporated into exported products can all qualify. The constraint is evidence — import entries, production records and export proof must link together, which is why the companies that benefit are the ones with disciplined record-keeping.

Two adjacent tools worth knowing: customs bonded warehouses defer duty until goods enter the Canadian market (and eliminate it for goods re-exported), and correct tariff classification sometimes reveals inputs that were never dutiable in the first place — a review worth doing before building a drawback claim on top of a wrong rate.

The practical first step is a duty-spend review: what did you pay in duty over the past four years, on which inputs, and what share of the related output left the country? For exporting manufacturers, that review frequently pays for itself — and we run it as part of our supply chain advisory work.