Grants and tariff relief
Usually, yes. But how it works depends on what the grant paid for. Here it is in plain words, with examples.
Grants and tariff relief
Usually, yes. But how it works depends on what the grant paid for. Here it is in plain words, with examples.
The short answer
In Canada, a government grant to a business is usually taxable in some way. You don’t pay tax on the grant twice. It either counts as income, or it lowers the cost it paid for.
Canada’s tax law treats government help to a business as part of your business money. This is true for most grants, subsidies and similar help.
That is not a bad thing. You still keep the grant. You just report it the right way.
Some grants pay for normal costs, like wages, rent or utilities. There are two ways to report these. Both give about the same result.
Some grants help you buy things that last, like machines or a building. Here, the grant lowers the cost of the item for tax.
That matters because you claim depreciation (the CRA calls it capital cost allowance) on the cost of the item. A lower cost means smaller claims.
A loan is not income, because you pay it back. But if part of a government loan is forgiven, that part may count for tax, like a grant.
Some programs give both grants and loans. Read your agreement so you know which parts are which.
Give these to your accountant at year end. Keep them for at least six years.
Looking for grants first? Start with our simple guide, or check what you qualify for.
Usually, yes, in some way. It either counts as income, or it lowers the cost it paid for. Your accountant will show you which.
Grants like this are usually treated as government help for tax. How you report it depends on what it paid for. Ask your accountant.
No. A loan is not income because you pay it back. But a part that is forgiven may count for tax.
Usually in the year you get it, or when it lowers a cost. Your accountant will match it to the right year.
Keep reading
4 min readA simple guide to small business grants in Canada for 2026: what a grant is, the main types, who qualifies, and the tariff grant worth up to $3 million.
Read the article
3 min readEvery tariff relief program for Canadian businesses in 2026, explained simply: grants up to $3M, BDC loans with 0% interest for a year, Work-Sharing and provincial help.
Read the article
3 min readHow to apply for a government grant in Canada, step by step: find the right program, check the rules, gather documents, write a clear plan and avoid common mistakes.
Read the articleTalk to a specialist
One short form or a quick call. Open 7 days a week, 7 AM to 7 PM ET.
