Quick answer: Financing equipment from a U.S. seller works like financing equipment from a Canadian one, with three extra layers to plan for: customs duty and GST on import, whether a vehicle is admissible and registered for Canadian use, and the exchange rate between the seller's U.S. dollar price and your Canadian dollar payments. Work out the full landed cost first, then ask each lender whether it will fund equipment that is still in the United States, whether it will include import costs in the amount financed, and what documents it needs before paying the seller.
Disclaimer: This article is general information only and is not tax, legal or accounting advice. Tax rules change and depend on your situation. Speak with a qualified accountant or tax advisor before making any purchase or filing decision. Mehmi Financial Group does not provide tax advice.
Key takeaways
- The Canada Border Services Agency (CBSA) says the duty rate depends on the tariff classification and the country of origin, and that you need a sales invoice from the seller to support the value you declare.
- The CRA says the owner or importer of record is responsible for paying GST on imported goods, calculated on the Canadian dollar value including duty. A GST registrant may be able to claim an input tax credit, subject to the rules.
- U.S.-specification vehicles sold at retail in the United States generally enter through Transport Canada's Registrar of Imported Vehicles (RIV) program. Some equipment is not regulated as a vehicle. Check before you pay a deposit.
- Exchange rates move the landed cost. In the worked example below, a five cent change in the rate moves the all-in cost of an US$80,000 machine by about $4,400 once duty and GST are included.
- Duties, surtaxes and rules change. Confirm every figure on the official page the day you buy.
- Mehmi Financial Group works with over 50 lenders, and criteria vary by lender and file.
By Jodhbir Mehmi. See our editorial standards.
The decision this guide covers
This guide is for a Canadian business that has found a machine, truck or piece of equipment for sale in the United States, often at an auction or from a dealer, and wants to know what the purchase will cost once it is in Canada and how financing fits in. It covers the border steps in general terms. It does not replace a customs broker, an accountant or a lawyer, and it does not give legal or tax advice. If you are buying at an auction, our guide to financing equipment bought at auction and the auction financing overview cover the payment side. For trucking operators working across the border, see Canada and U.S. trucking finance and insurance.
What we checked and when
| Topic | Official source | Page date | Status |
|---|---|---|---|
| Duties and taxes on commercial imports | CBSA, Select the duties and taxes that apply | Modified September 17, 2026 | Current guidance as of November 13, 2026 |
| GST on imported goods | CRA, GST/HST on imports and exports | Modified June 22, 2026 | Current guidance as of November 13, 2026 |
| Importing vehicles and the RIV program | CBSA, Memorandum D19-12-1 | Modified September 2, 2026 | Current guidance as of November 13, 2026 |
| Vehicle import compatibility list | Transport Canada, Vehicle Import Compatibility (Admissibility) list | Modified August 30, 2019 | Older page; confirm with the RIV before buying |
These pages describe how current rules work. They do not tell you what rate applies to your machine. That depends on the classification and origin of your goods and on any surtax in force on the day you import.
Step 1: Work out what the border will add
CBSA's guidance for businesses importing commercial goods sets out the order. First find the tariff classification number for the goods, which is a Harmonized System code with Canada-specific digits at the end. Then check the tariff treatment, which depends on the country of origin and sets the duty rate. Most goods use the Most-Favoured-Nation rate unless they qualify for a preferential tariff under a trade agreement. CBSA gives the example that to claim the United States Tariff under CUSMA you need a valid CUSMA Certification of Origin and the goods must ship directly from the United States to Canada.
Origin is not the same as where you bought the machine. Equipment sold by a U.S. dealer may have been made elsewhere, and that can change the treatment. CBSA also describes surtaxes, which it says can be charged on top of customs duties under an Order in Council. Check CBSA's customs notices for any measure in force on your import date.
The value for duty is generally the price paid to the seller, with adjustments in some cases. CBSA says you need an invoice from the seller showing a complete description of the goods, the selling price and the terms of sale. It must be declared in Canadian dollars, using the exchange rate from the date the goods began their direct journey to Canada. CBSA offers a Duties and Taxes Calculator in the CARM Client Portal to estimate amounts before you import.
Worked example: one US$80,000 machine
The figures below are invented to show the arithmetic. The 4 percent duty rate and the exchange rates are placeholders, not the rate for any real product. The 5 percent GST rate is the one used in CBSA's own worked example. Your classification, origin and surtaxes will differ.
| Item | A. Duty 4%, rate 1.37 | B. Duty 0%, rate 1.37 | C. Duty 4%, rate 1.42 |
|---|---|---|---|
| Value for duty (US$80,000 x rate) | $109,600 | $109,600 | $113,600 |
| Customs duty | $4,384.00 | $0 | $4,544.00 |
| Value for GST (value plus duty) | $113,984.00 | $109,600.00 | $118,144.00 |
| GST at 5% | $5,699.20 | $5,480.00 | $5,907.20 |
| Duty plus GST due at the border | $10,083.20 | $5,480.00 | $10,451.20 |
| Machine plus border charges | $119,683.20 | $115,080.00 | $124,051.20 |
The arithmetic follows CBSA's method: convert the invoice to Canadian dollars, apply the duty rate to get the duty, add the duty to the value to get the value for tax, then apply the GST rate. In scenario A, $109,600 multiplied by 4 percent is $4,384, and $113,984 multiplied by 5 percent is $5,699.20. Scenario C shows the exchange rate effect alone: moving from 1.37 to 1.42 raises the all-in figure from $119,683.20 to $124,051.20, a difference of $4,368.
The GST due at the border is a cash-flow item. The CRA says that if you are registered for GST/HST and are the importer, you can claim an input tax credit for the tax paid on imported goods as long as you meet the requirements. Whether that applies to you, and when you recover it, is a question for your accountant. It matters for financing because you may need to fund the GST at the border before you recover it.
Ask the lender early whether the amount financed can include duty, GST, shipping and similar costs, or only the purchase price. Our guide on financing equipment and working capital together explains the usual options. Lenders differ, and nothing here promises that any lender will include them.
Step 2: Check the vehicle rules before you buy
If the equipment is a vehicle, admissibility comes before price. CBSA's memorandum D19-12-1, modified September 2, 2026, says the RIV program applies to U.S.-specification vehicles sold at the retail level in the United States, and to prescribed vehicles from Mexico, including passenger cars, multi-purpose passenger vehicles, trucks and buses. Vehicles not required to register include those built to Canadian standards, age-exempt vehicles, non-regulated vehicles and vehicles imported temporarily.
The memorandum describes non-regulated vehicles as those outside a prescribed class under the Motor Vehicle Safety Regulations, and defines a work vehicle as one designed primarily for civil engineering construction or maintenance work and not built on a truck-type chassis. It lists trailers of any type, trucks and buses among the prescribed classes. For registration it requires an original valid U.S. state certificate of title or equivalent, submitted electronically, together with a Transport Canada import form, either Form 1 or the RIV e-Form 1.
Transport Canada also publishes a vehicle import compatibility (admissibility) list for vehicles purchased in the United States. The page, last modified August 30, 2019, says the list is built from information manufacturers provide voluntarily, that its accuracy cannot be guaranteed and that its content may change without notice. It also says vehicles that cannot be modified to comply must be exported. Check the list, and confirm with the RIV, before you send a deposit. Our guides to buying a used truck in Ontario and emissions regulations for used trucks in Canada cover the Canadian side of the checks once a truck is here. CBSA's memorandum also says it assesses duty on a vehicle manufactured in a country other than the U.S. and Mexico, so origin matters here as well.
Step 3: Plan for currency
The seller will usually price in U.S. dollars. Your financing, if it is with a Canadian lender, is likely to be in Canadian dollars, and the rate used on the day the lender pays the seller may differ from the rate CBSA uses for duty, which is tied to the date of direct shipment. In the table above, a five cent move added $4,368 to the all-in cost of one machine. Ask the lender which currency it pays in, which rate it applies and when, and decide whether you want to lock the rate. Our glossary entries on the exchange rate, currency hedging, import and duty define the terms.
Step 4: Ask the financing questions
| Question for the lender | Why it matters |
|---|---|
| Will you fund equipment that is located in the United States when the deal closes? | Some lenders only fund assets already in Canada or require specific documents |
| Who is paid, in what currency, and when? | Affects exchange rate exposure and the deposit you may owe the seller |
| Can duty, GST and freight be financed? | Changes your cash required at the border |
| What documents do you need: invoice, title or bill of sale, serial or VIN, proof of import release? | Missing papers delay payout |
| How will your security be registered, and what insurance must be in place on arrival? | The lender may require insurance and registration before funding |
| Is there a prepayment or early payout cost? | Affects total cost if you resell or refinance |
Our guides to reading an equipment finance term sheet, what you sign from approval to payout and protecting financed equipment with insurance and maintenance help with the documents. For structure, compare renting versus financing and see how long equipment can be financed in Canada. If cash flow is a worry, read financing equipment without hurting cash flow.
What we see on real files
Cross-border purchases tend to stall on paperwork: an invoice that does not describe the goods fully, a title that is not in the seller's name, or a vehicle that turns out to be inadmissible after the deposit is paid. Buyers who check admissibility, get a written landed-cost estimate and speak to the lender before bidding or paying a deposit usually have fewer surprises. Approval, pricing and terms depend on the lender, the equipment and the file.
Frequently asked questions
Do I pay duty on equipment bought in the United States?
It depends on the classification and origin of the goods and on any surtax in force. CBSA says the duty rate depends on the tariff classification and the country of origin. Use CBSA's calculator or a customs broker to estimate it.
Who pays GST on the import?
The CRA says the owner or importer of record is responsible for paying GST on imported goods. A registrant who is the importer may be able to claim an input tax credit, and your accountant can confirm.
Does every imported truck go through the RIV program?
No. CBSA's memorandum says U.S.-specification vehicles sold at retail in the U.S. generally must register, while vehicles built to Canadian standards, age-exempt vehicles, non-regulated vehicles and temporary imports do not. Check your exact vehicle.
Can I finance equipment before it crosses the border?
Some lenders may, and some may not. Ask early, and expect to be asked for the invoice and title documents.
Can a startup finance U.S. equipment?
Lenders generally want startups to show 6 or more months of revenue in bank statements, including for equipment. Criteria vary by lender.
Is this legal or tax advice?
No. It is general information. Speak with a customs broker, accountant or lawyer about your purchase.
Tools and next steps
- Estimate payments with the equipment financing calculator and see how much you could borrow with the borrowing calculator guide.
- Read about equipment loans and equipment leases.
- Compare structures in the loan vs lease comparison.
Planning to buy equipment from the United States? Mehmi Financial Group works with over 50 lenders and can help you compare how a purchase could be structured. Contact us or call 1-833-863-4644. Approval is subject to lender review.
Disclaimer: This article is general information only and is not tax, legal or accounting advice. Tax rules change and depend on your situation. Speak with a qualified accountant or tax advisor before making any purchase or filing decision. Mehmi Financial Group does not provide tax advice.
Sources
- Canada Border Services Agency, Select the duties and taxes that apply, date modified September 17, 2026, accessed November 13, 2026.
- Canada Revenue Agency, GST/HST on imports and exports, date modified June 22, 2026, accessed November 13, 2026.
- Canada Border Services Agency, Memorandum D19-12-1: Importing Vehicles into Canada, date modified September 2, 2026, accessed November 13, 2026.
- Transport Canada, Vehicle Import Compatibility (Admissibility) list for vehicles purchased in the United States, date modified August 30, 2019, accessed November 13, 2026.
Duty rates, exchange rates and amounts in the examples are illustrative, not quotes. Customs rules, surtaxes and vehicle requirements change; confirm them with CBSA, the CRA, Transport Canada and the RIV before you buy. Eligibility, lender criteria and terms vary by lender and can change. This article is general information and not tax, legal or accounting advice.