By recovering duties and taxes on imported goods, you can significantly improve your bottom line. If your business imports raw materials or components then exports finished products, you may be eligible to reclaim those costs through the Canada Border Services Agency (CBSA) Duty Drawback Program.

To get the most out of the program, you need to understand the process, avoid common mistakes and use the right tools. This article walks you through how to file a claim, what documents you’ll need and how to make duty recovery part of your export strategy.

Duty drawback documentation review and audit tips

It’s a good idea to review and audit your documentation and processes, including:

• Setting up a monthly or quarterly review of import/export records
• Identifying missed opportunities for duty recovery
• Creating an internal process for ongoing claims

• Bike manufacturer: A Canadian company imports bicycle parts, assembles them into finished products and exports them to Europe. By linking import and export records, they’re able to claim thousands of dollars in duty refunds through the drawback program.

• Food processor: Under customs supervision, a food manufacturer destroys surplus imported packaging materials that were never used or exported. By filing a duty drawback claim within five years, they recover import costs paid on the original shipment.
• Cleantech exporter: A cleantech firm sends equipment to a U.S. trade show under Tariff Item No. 9993.00.00. After re-exporting the equipment, they recover duties paid at import, saving significant costs.

Duty drawback claim mistakes to avoid

Common errors that can delay or reduce your refunds include:

• Missing or incomplete documentation
• Filing outside the eligible time window
• Not linking imported goods to exported products using stock keeping units (SKUs), product codes or shipment IDs to help CBSA verify eligibility
• Not using waivers when multiple parties are involved

Galbraith says, “Claims may be audited if documentation is incomplete, goods are high value, or affected by trade agreements. Keep records for at least six years.” She adds, “CBSA regularly publishes a list of targeted goods for compliance verification. If your goods fall under these categories, your drawback claim may be flagged for review.” 

Carley Mortimer, senior knowledge product manager at Export Development Canada (EDC), says, “Even experienced exporters can benefit from a structured approach to claiming duty refunds. It’s about making sure no opportunity is missed.”

To create a sustainable duty recovery strategy:

• Review import/export records regularly to identify missed opportunities
• Set up an internal process for tracking eligible goods and filing claims
• Work with a certified customs specialist (CCS) or customs broker to stay compliant and improve recovery.

“You don't need to be an expert,” says Mortimer, “But having the trade knowledge of how it works is very beneficial for your company.”

EDC offers expert guidance to help Canadian businesses navigate customs processes and improve duty recovery through MyEDC.

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New to duty drawbacks? Start with our article, Duty Drawback Program in Canada: Recover duties and boost cash flow, to understand eligibility and strategic benefits.

This content was created in part using generative artificial intelligence (Gen AI).