---
title: Understanding the Duty Deferral Program for Canadian imports
description: Canada’s Duty Deferral Program gives eligible importers three options to relieve, defer, or recover duties on imported goods. Learn more about this program
image: https://blog.coleintl.com/hubfs/Images/Import%20Foundations-Freight%20Fundamentals/Import%20Foundations/Updated%20version/Import%20Foundations%20-%20CND.jpg
---

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# Understanding the Duty Deferral Program for Canadian imports

 Trade Update: June 8,2026

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Understanding the Duty Deferral Program for Canadian imports

4:24

*The Duty Deferral Program can help Canadian importers reduce certain duty costs, but only when the import, storage, use, and export path of the goods meets specific program rules.*

If your imported goods are not immediately released for sale or use in Canada, it may be worth checking whether a trade incentive program applies.

The Canada Border Services Agency (CBSA) offers several programs that may help eligible importers manage duty costs when goods are stored, processed, used in production, or later exported.

One of these programs is the **Duty Deferral Program**, through which you may be able to defer, relieve, or recover duties when your goods and operations meet specific program requirements.

## **What is the Duty Deferral Program?**

As one of Canada’s trade incentive programs, the [Duty Deferral Program](https://www.cbsa-asfc.gc.ca/trade-commerce/tip-pec-eng.html#a4) is a customs program that may help you manage duty costs in specific import scenarios. Depending on how your goods are imported, used, stored, or exported, duties may be **relieved**, **deferred**, or **refunded**.

Eligibility depends on the type of goods, what happens to them after import, and whether your operations can meet the requirements of the relevant program component.

The Duty Deferral Program does not replace your regular customs obligations. You still need to apply the correct [tariff classification](https://blog.coleintl.com/import-foundations/how-tariff-classification-works-in-canada), determine the [value for duty](https://blog.coleintl.com/import-foundations/how-to-calculate-value-for-duty-for-canadian-imports), and claim any applicable [preferential tariff treatment](https://blog.coleintl.com/import-foundations/understanding-canadas-tariff-treatments-for-imported-goods).

## **The three components of the Duty Deferral Program**

The Duty Deferral Program has three main components, each of which applies to a different import scenario.

### 1. Duties relief

The Duties Relief Program allows qualifying companies to import commercial goods without paying duties, provided the goods are later exported.

This may apply when goods are exported in the same condition they were imported, or when imported goods are used to produce other goods for export.

Rather than paying duties upfront and applying for a refund later, **duties may be relieved at the time of import**. However, in most cases, goods must be exported within four years from the date they enter Canada.

### 2. Duty drawback

The [Duty Drawback](https://blog.coleintl.com/import-foundations/duty-drawback-in-canada-can-you-claim-a-refund-on-duties-paid) Program allows you to recover duties already paid on imported goods in certain export-related scenarios.

This may apply when goods are exported in the same condition in which they were imported, or when imported goods are consumed or expended in the production of goods that are later exported.

Unlike duties relief, **drawback applies after duties have been paid**. It provides a way to recover costs when the final destination or use of goods changes after import, when goods are used in production for export, or when duties relief was not used at the time of entry.

Separate rules may also allow duties to be refunded on imported goods, or goods manufactured from imported goods, that are destroyed in Canada because they are obsolete or surplus.

In most cases, claims must be presented within four years from the date the goods enter Canada.

### 3. Customs bonded warehouse

A customs bonded warehouse (CBW) is a private-sector facility regulated by the CBSA where imported goods may be stored with [duties and taxes](https://blog.coleintl.com/import-foundations/understanding-canadian-import-duties-and-taxes) deferred.

Under the Customs Bonded Warehouse Program, your goods can remain in a bonded facility while you decide what happens to them next. They may later be released for sale or use in Canada or exported to another market. Duties and taxes are generally payable**only when goods leave the warehouse for the Canadian market**.

This program can be useful if you need to store, sort, relabel, repackage, consolidate, or prepare goods before they are either released domestically or exported.

Goods in a bonded warehouse cannot be further manufactured, and [allowable activities](https://blog.coleintl.com/blog/customs-bonded-warehouse-activities-that-are-allowed-for-imported-goods) are limited to handling, preparation, and maintenance operations.

Imported commercial goods must generally be removed within four years from the date they enter Canada, unless an extension applies.

## **How we can help**

At Cole International, we offer [trade consulting](https://www.coleintl.com/services/trade-consulting/) and [customs brokerage](https://www.coleintl.com/canadian-customs-brokerage/) services to help Canadian businesses determine which component of the Duty Deferral Program may apply to their imports.

**Reach out to one of [our trade professionals](https://www.coleintl.com/contact-us) to discuss your import and export activities and explore duty deferral options available for your goods.**

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