You paid duty when the goods came in. If they left Canada unchanged, that duty may be refundable.
Same-condition export drawback is a refund of Canadian duties paid on imported goods that are later exported without being used in Canada. It is the most common type of drawback for ecommerce brands, retailers, wholesalers and distributors.
Claims are filed with the CBSA on Form K32 within four years of the date the goods were released into Canada. Goods exported to the United States in the same condition can qualify for a full refund of customs duties.
This page explains who qualifies, what counts as “same condition”, what is refundable, the documents you need, and a worked example.
Many Canadian businesses import finished goods, pay duty at the border, and then ship some of that inventory back out of the country. A US customer orders from your Shopify store. A pallet moves to a US fulfilment centre. Unsold stock goes back to the supplier.
In each case, the goods were never consumed in Canada, yet the Canadian duty stays on your books as a cost. The CBSA's Duty Drawback Program exists to give that duty back.
Ship imported goods out of Canada?
Drawback is a refund of duties that were paid when goods were imported into Canada. The legal basis is section 113 of the Customs Tariff and the Goods Imported and Exported Refund and Drawback Regulations. The CBSA explains the process in Memorandum D7-4-2, Duty Drawback Program, last updated in October 2024.
“Same condition” means the goods leave Canada in essentially the same state they arrived in. They were not manufactured into something else, and they were not used in Canada before export.
Canada's drawback program also covers imported materials used to manufacture exported goods, and certain obsolete or surplus goods that are destroyed. Those are separate claim types with their own rules. This page focuses on goods that are simply imported and exported again.
Same-condition drawback fits any business that imports finished goods and sends some of them out of Canada. Common examples:
Business size is not the test. A small brand paying 18% duty on apparel and shipping a steady share of orders to the US can have a meaningful claim. A large importer bringing in duty-free goods may have none.
Under D7-4-2, the importer, exporter, processor, owner or producer of the goods can file. Only one party can claim. If more than one party is eligible, the claimant needs waivers from the others:
The CBSA will not accept a claim if a required waiver is missing.
Goods do not need to be untouched. The CBSA accepts minor operations that do not materially change the goods. Its guidance in Memorandum D7-4-3 gives examples such as:
Relabelling and repacking for fulfilment are therefore usually fine. What breaks the claim is use in Canada. Demo units used in a showroom for display are allowed, but goods put into service, rented out, or worn and returned by a Canadian customer are a different matter.
Each operation is judged on its own facts. When the answer is unclear, a business can ask the CBSA for a ruling on whether a process keeps goods in the same condition.
Many Canadian sellers assume CUSMA blocks drawback on goods sent to the US. For same-condition goods, it does not.
CUSMA does limit drawback in one situation: non-originating imported materials used to produce a good that is then exported to the US or Mexico. In that case the refund is capped at the “lesser of two duties”, meaning the Canadian duty paid or the duty paid in the destination country, whichever is lower.
But the CBSA's Memorandum D7-4-3 is explicit that full drawback is allowed on goods exported in the same condition in which they were imported.
| Scenario | Export to US or Mexico |
|---|---|
| Finished goods imported and exported unchanged | Full drawback of customs duties |
| Imported materials used to make goods for export | Capped at the lesser of the two duties |
| Goods of CUSMA (US or Mexico) origin | Not subject to the cap |
For a Canadian brand importing from Asia and selling to US customers, this is the key point. Every unit shipped south from a Canadian warehouse may carry a refundable duty amount.
According to D7-4-2, a drawback can refund:
SIMA duties cannot be refunded on goods exported to the US or Mexico when the CUSMA restriction applies.
GST and HST cannot be refunded by drawback. Registered businesses normally recover import GST/HST through input tax credits with the CRA instead. Brokerage fees, freight and other border costs are also outside the program.
In 2025 the CBSA confirmed that drawback is available for surtaxes paid under Canada's counter-tariff orders on US goods, subject to CUSMA rules. Most of those surtaxes were removed on September 1, 2025, but the steel, aluminum and motor vehicle surtaxes stayed in place. If you paid surtax and later exported the goods, that amount is worth reviewing.
A Toronto apparel brand imports 10,000 jackets made in China. The customs value is $40 per jacket and the duty rate is 18%, so it pays $7.20 of duty per unit, or $72,000 in total.
Over the next year it sells:
The 3,000 jackets that left Canada unchanged carry $21,600 in duty. Because they were exported in the same condition, the US shipments are not capped by CUSMA. The full amount may be recoverable, subject to the records described below.
The brand also has four years from each import's release date to file. If it has been shipping to the US for three years without claiming, the opportunity covers all of those years.
Example figures are simplified for illustration. Actual duty depends on tariff classification, origin and customs value.
A same-condition drawback claim must be filed within four years of the release date of the imported goods. The goods must be exported before the claim is filed.
The clock runs from each import, not from the export. Inventory you imported in late 2022 may already be close to its deadline even if you exported it recently.
If the CBSA takes longer than 90 days to process a claim, interest is added at the prescribed rate starting on the 91st day after the claim is received.
The claim must show that the conditions of the program were met. In practice, that means linking each exported unit back to a duty-paid import:
For high-volume claims, the CBSA accepts computer printouts or data files describing the goods instead of paper invoices. It can also ask for more documents during review.
Claims are made on Form K32, Drawback Claim, submitted with supporting documents through the CBSA Assessment and Revenue Management (CARM) Client Portal. Paper claims at a CBSA office are still accepted and are entered into CARM for processing.
This is the most expensive one. Same-condition exports to the US are not capped by CUSMA.
The four-year limit runs from the import release date. Older inventory expires first.
A sales invoice to a US customer is useful, but carrier data or other export evidence is what shows the goods left Canada. Parcel-level tracking from Shopify or your 3PL is often the missing link.
GST/HST is not part of drawback. Including it inflates the claim and creates questions.
Surplus stock sent back to the factory is an export. It can be claimed the same way as a sale.
We match your import entries to your export data, build the claim, and manage it with the CBSA. You do not pay anything upfront. We are paid a percentage of what is recovered, so if there is no refund, there is no fee.
Most clients only need to share their broker statements and an export of their order or shipping data. We do the matching.
Yes, potentially. If the goods were imported into Canada with duty paid and exported to the US in the same condition, a full drawback of customs duties may be available. The CUSMA “lesser of two duties” cap does not apply to same-condition goods.
Usually not. The CBSA treats minor operations such as repacking, packaging, labelling, testing and cleaning as same-condition processes, as long as they do not materially change the goods.
Four years from the release date of each import. The goods must already be exported when you file.
No. GST and HST cannot be refunded through drawback. Registered businesses usually recover them as input tax credits through the CRA.
No. The importer, exporter, owner, processor or producer may claim. If someone else could also claim, you need a waiver from them on Form K32A or K32B.
Yes, potentially. Returning unsold goods to a foreign supplier is an export, and it can qualify like any other same-condition export.
On Form K32 through the CBSA's CARM Client Portal, with supporting import and export documents.
Yes. Interest at the prescribed rate starts on the 91st day after the CBSA receives the claim and runs until the drawback is granted.
This page provides general information and is not legal, tax or customs advice. Sources: CBSA Memorandum D7-4-2, Duty Drawback Program (October 2024) and Memorandum D7-4-3. Eligibility depends on the facts of each transaction and the rules in effect at the time.
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