DCC Now · Current Affairs · September 27, 2026

Who Really Pays for the Tariffs? Not What the Politicians Say

Both governments say the other side pays. Customs law bills domestic importers. In Canada, GST is then charged on the tariff-inflated value.

Delta, BC — September 27, 2026

A DCC Now explainer on the Canada–U.S. tariff dispute and who actually writes the cheque.

Both governments frame tariffs as making the other country pay. The money is collected from their own importers at the border, and much of it can be passed on to their own buyers. In Canada, there is a second federal take: GST on the tariff-inclusive value.

The U.S. side: a tax collected from American importers

The U.S. importer pays the tariff at the border, rather than the foreign government or exporter. Importers may pass some or all of the cost through in prices.

• The Richmond Fed reported about $287 billion in U.S. customs duties, taxes and fees for calendar 2025, up 192% from 2024. A duties-only or fiscal-year series will show a different total.
• CBO and Federal Reserve estimates cited for this debate suggest most of the economic cost fell on Americans; the exact share varies by method and period.
• Household estimates differ too: about $840 for 2026 from the Tax Foundation and about $1,100 under Yale Budget Lab’s current-law scenario. These are model estimates, not receipts.

Tariff receipts go to the U.S. Treasury, not to the Federal Reserve.

The Canadian side: the same border mechanism

A Canadian importer pays a Canadian surtax to CBSA. The cost may be passed along in the landed price, but the extent of pass-through is not fixed.

• Bank of Canada research on an earlier retaliatory episode found prices of targeted goods rose about 6%, around a quarter of a 25% tariff.
• Desjardins estimated a later counter-tariff round could yield about $7 billion a year.
• Finance Canada reported $10.24 billion in customs import duties for fiscal 2025–26, versus $6.21 billion a year earlier. For April–June 2026, it reported $2.41 billion, versus $3.57 billion a year earlier.
• Canada imposed a new round on September 8, 2026, covering $27.6 billion in U.S. imports. The $27.6 billion is the value of goods covered, not tariff revenue.

A projection of potential tariff receipts should not be confused with audited collections. A government pledge to spend receipts on affected workers and businesses is a separate issue from who pays at customs.

What each country has collected

Collections change as tariff rules, refunds, and trade volumes change. The Richmond Fed’s calendar-2025 U.S. figure includes duties, taxes and fees; it should not be compared as if it were the same accounting series as Canada’s customs import duties. The cited PIIE tracker reported $269.2 billion gross U.S. receipts through July of fiscal 2026, $114.7 billion refunded, and $154.5 billion net.

The easy-to-miss part: GST is calculated on the tariff too

Canada’s GST on imported goods is calculated on a value that includes applicable customs duties and surtaxes. For a taxable item valued at $100 with a $25 surtax and no other duties or taxes, the 5% GST is $6.25 rather than $5.00. CBSA’s September 2026 notice expressly says the value for tax includes the surtax.

• The importer pays the surtax and import GST at the border.
• An eligible GST-registered importer can generally claim an input tax credit for import GST used in its commercial activity. The surtax is a cost and has no comparable GST input tax credit.
• On a later taxable domestic sale, the seller charges GST on its sale price and accounts for input credits. GST is not a separate permanent tax piled up at every resale stage.
• The final consumer generally cannot claim an input tax credit and may pay GST on a retail price affected by the tariff.

Some goods are zero-rated or exempt, and prices do not always rise by the full tariff. The formula and the actual price effect are separate questions.

Why it matters in Delta

Political framing — “we’re making them pay” — does not match customs law in either country. Domestic import companies write the cheque. Domestic buyers pay at the till. In Canada, including in Delta grocery aisles and building-supply yards, GST is calculated on the tariff-included price.

None of this requires a conspiracy. The valuation formula is public. Government economists have written about pass-through for years. It is not the story usually told.