The Ontario government yesterday announced new tariff relief measures designed to support businesses impacted by ongoing trade tensions with the U.S.

Businesses will have an additional six months to remit taxes without interest or penalties under 10 provincially-administered tax programs, including the:

• Employer Health Tax
• Insurance Premium Tax
• Gasoline Tax
• Fuel Tax
• Mining Tax
• Tobacco Tax
• International Fuel Tax Agreement
• Beer, Wine & Spirits Tax
• Retail Sales Tax on Insurance Contracts and Benefit Plans
• Race Tracks Tax

The relief measure is retroactive to April 1^st, 2025, and ends October 1^st, 2025. As the government announcement notes, all deferred taxes owed must be paid by October 1^st, 2025. The government estimates that the deferral will provide as much as $9 billion in extra cash flow to help Ontario businesses manage tariff-related challenges.

In addition, Queen’s Park says it will issue a “… further $2 billion rebate for safe employers” through the Workplace Safety and Insurance Board. This is in addition to a $2 billion rebate delivered in March 2025. The government did not specify the amount that individual employers will receive from this latest WSIB rebate.

We can expect further relief measures from both the provincial and federal governments in the months ahead as the Trump administration engages in a full-blown global trade war. While Canada last week escaped the varying reciprocal tariffs imposed on virtually every country in the world—Canada’s exemption applies only to Canada-U.S.-Mexico Agreement (CUSMA)-compliant goods, and this country is still subject to tariffs on some remaining goods—25 per cent tariffs on Canadian steel and aluminum products went into effect on March 12^th, 2025, while a 10 per cent tariff on energy and potash exports from Canada was imposed earlier last month.

Last week, the U.S. imposed 25 per cent tariffs on foreign-made automobiles, with the same levy looming in May on some automobile parts made in Canada. Canada-U.S.-Mexico Agreement-compliant parts have thus far been excluded from the latest round of tariffs, while finished cars will be taxed on non-U.S. content. Not surprisingly, the process for determining a foreign-made vehicle in the highly integrated North American auto industry is proving challenging for the U.S. Treasury Department.

Ottawa has countered with 25 per cent tariffs on non-CUSMA compliant vehicles assembled in the U.S. and imported into Canada, along with “non-Canadian and non-Mexican content of CUSMA compliant fully assembled vehicles imported into Canada from the United States.”

Making matters more complex is the fact that more than $2.5 billion in goods cross the Canada-U.S. border each day. Determining whether tariffs could apply to each package, container or truckload of goods in transit will be tedious and time-consuming. How the application of cross-border tariffs is managed from this point on remains to be seen. In the meantime, it’s important to understand that the Canada-U.S. trade situation is fluid and could change on short notice. Our team will provide continued updates as they become available.

The RH Partners Tax Team

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