Introduction
In April 2025, Canada implemented a 25% tariff on non-CUSMA-compliant U.S. vehicle imports, a move designed to protect Canadian auto manufacturing and respond to retaliatory measures from the U.S. While this policy may benefit domestic producers in the long run, it has introduced immediate challenges for businesses dependent on imported trucks and commercial vehicles.
This includes owner-operators, small fleet owners, agricultural haulers, and logistics companies across British Columbia and Alberta who now face a new question: How can we afford to finance vehicles that have suddenly become 25% more expensive?
The answers aren’t simple, but there are financing strategies and tools that can help mitigate the impact. In this article, we’ll explore how this tariff is affecting the truck loan landscape in 2025—and how businesses in places like Surrey, Abbotsford, Edmonton, and other transportation hubs can adapt without sacrificing financial stability.
What Exactly Changed with the Tariff?
The Canadian government’s 25% import tariff applies to trucks that do not meet Canada-United States-Mexico Agreement (CUSMA) trade criteria. Many U.S.-manufactured trucks—particularly those customized for Canadian road conditions or commercial use—now fall outside the exemption.
That means a U.S.-imported commercial truck previously costing $110,000 CAD may now have a post-tariff price tag of $137,500 CAD, not including GST/HST or other applicable fees. For businesses financing their vehicles, this increase directly impacts:
- Loan principal size
- Monthly payment amounts
- Interest paid over time
- Total cost of ownership
Financial institutions and non-bank lenders have already begun to reassess risk on truck loans, prompting tighter approval standards or revised down payment expectations.
How the Tariff is Affecting Truck Loans in Canada
1. Increased Loan Sizes, Stricter Terms
Higher equipment prices mean businesses must borrow more. But lenders are cautious. They’re reviewing:
- Debt service coverage ratios more closely
- Business credit scores
- Operational history and projected income from vehicle use
This may result in:
- Larger down payments
- Shorter amortization periods
- Higher interest rates to compensate for greater lender risk
In areas like Abbotsford and Edmonton, where many businesses operate with lean margins, these changes can create pressure on cash flow.
2. Pre-Approvals Losing Buying Power
Some businesses that obtained pre-approvals before April 2025 are finding that their approval amounts no longer cover the full cost of a vehicle. Even a $10,000–$20,000 gap can derail procurement plans or force a downgrade in truck specifications.
To adapt, many are renegotiating financing packages or exploring used vehicle alternatives.
3. Used Trucks Gaining Popularity
Because the tariff applies primarily to new imports, used trucks already in Canada are not affected. As a result, there’s growing demand for:
- Used truck financing options
- Lease buyback programs
- Refinancing existing trucks to free up working capital
Prices for certain models on the used market have already started to rise due to the shift in demand, particularly in urban centers like Surrey and Calgary, where transportation and delivery services are expanding.
Is Leasing the Smarter Alternative in 2025?
Leasing, once seen as a secondary option to ownership, is now becoming a strategic financial decision for many businesses. Here’s why:
1. Smaller Monthly Commitments
Because leasing typically finances only a portion of the truck’s value (based on expected depreciation), it results in lower monthly payments than a comparable loan. This helps:
- Preserve cash flow
- Fund multiple vehicles with less upfront capital
- Offset the 25% price inflation through operating budget adjustments
2. Built-in Tax Efficiency
Most business leases qualify as operating expenses, meaning monthly payments can often be written off against income. In contrast, loan-financed purchases require depreciation accounting and carry the risk of outdated asset values on the balance sheet.
This is particularly advantageous for transport-focused businesses in Alberta, where companies face seasonal revenue cycles and need write-offs aligned to tax season.
3. Flexibility to Upgrade or Walk Away
As tariffs raise the cost of long-term ownership, leasing provides an exit path. At the end of a lease term, businesses can:
- Upgrade to a newer, potentially tariff-exempt model
- Extend the lease on favorable terms
- Walk away without having to resell a depreciated asset
For businesses unsure how long the tariff will last, or how their operations will evolve in the next few years, leasing de-risks commitment.
Financing Alternatives Gaining Ground in British Columbia and Alberta
In response to these market shifts, a number of new and adapted financing options are gaining traction in BC and Alberta:
1. Lease-to-Own Truck Programs
These hybrid options allow businesses to:
- Lease trucks at lower monthly costs
- Apply a portion of payments toward eventual ownership
- Defer large payments until cash flow improves
This model combines the tax advantages of leasing with the long-term value of ownership.
2. Seasonal and Deferred Payment Plans
Especially popular in agriculture and construction, these plans offer:
- Lower payments during off-seasons
- Balloon payments timed to revenue spikes
- Payment skips during winter or low-traffic months
This structure helps protect working capital and improve loan serviceability in cyclical industries.
3. Equipment Refinancing and Sale-Leasebacks
For businesses already holding owned trucks or equipment, refinancing can unlock equity tied up in assets. A sale-leaseback, where a lender buys the equipment and leases it back, can provide:
- Immediate liquidity
- Tax-deductible payments
- Continued use of the same asset
This option is gaining popularity in markets like Edmonton, where fleet upgrades are essential but upfront capital is tight.
How to Strategically Navigate the Truck Financing Landscape in 2025
With the cost of new U.S.-imported trucks up by 25% due to Canada’s tariff, proactive planning is more important than ever. Fortunately, there are practical steps businesses can take today to maintain access to high-quality vehicles without compromising operational budgets.
1. Work with Lenders Who Understand the Sector
Not all lenders are equipped to handle the nuances of commercial trucking, especially under current market pressures. It’s important to collaborate with financial institutions or independent providers that have:
- Experience with transportation, logistics, and heavy equipment financing
- Access to alternative lending tools like sale-leasebacks, seasonal lease plans, or used vehicle financing
- Flexibility in structuring payments to suit your business model and cash flow
Companies in British Columbia and Alberta are increasingly turning to regional specialists who understand the real economics of fleet operations in cities like Abbotsford, Surrey, and Edmonton.
2. Bundle Vehicles and Services
Many dealers and leasing providers now offer bundled solutions that include:
- Vehicle financing or leasing
- Maintenance and servicing
- Fleet insurance
- Telematics or GPS fleet tracking solutions
Bundling not only simplifies vendor relationships but can also lead to volume-based pricing, additional tax efficiencies, and better cost predictability in the face of tariff-driven price spikes.
3. Diversify Your Fleet Procurement Strategy
Rather than relying solely on new imports, businesses should evaluate a mix of:
- New Canadian-assembled trucks
- Used vehicles already in inventory
- Short-term rental or leasing options for short contracts or seasonal projects
This diversified approach helps businesses mitigate risk from single-source pricing and maintain flexibility as the market evolves.
4. Monitor Trade Policy and Adjust Accordingly
There’s still uncertainty around how long the current 25% tariff will remain in effect. Trade negotiations between Canada and the U.S. are ongoing, and the possibility of CUSMA-aligned exemptions or easing of restrictions may emerge later in the year.
Businesses should monitor:
- Announcements from Finance Canada and Global Affairs Canada
- Changes in the tariff rate or scope
- Availability of tariff exemptions for essential or specialized vehicles
Adjusting procurement and financing decisions based on evolving policy will be key to maintaining cost efficiency throughout 2025.
FAQs: Truck Financing and Canada’s 25% Tariff
Q: How does the new tariff directly affect truck loans?
The 25% tariff raises the base price of U.S.-imported trucks, which in turn increases the amount financed through a loan. This can lead to higher monthly payments, greater total interest paid, and a need for larger down payments.
Q: Are there financing options that help reduce the impact of higher costs?
Yes. Leasing, lease-to-own programs, used truck financing, and sale-leaseback options are all strategies that can help lower monthly payments and preserve capital.
Q: Is leasing better than buying in this environment?
Leasing offers flexibility, smaller monthly obligations, and tax-deductibility. While buying still makes sense for long-term use cases, leasing is often the better choice during periods of price inflation or trade policy volatility.
Q: Do these tariffs apply to used trucks or Canadian-made trucks?
No. The tariff applies to new U.S.-manufactured truck imports. Canadian-assembled trucks and used vehicles already in the country are exempt, making them more attractive financing options.
Q: How can I structure financing to align with seasonal cash flow?
Providers may offer seasonal payment plans, allowing lower or deferred payments during off-peak periods. This is ideal for agricultural, forestry, and construction businesses with seasonal income.
Q: Should I delay purchasing until tariffs are removed?
Delaying can make sense if the purchase is non-urgent and the vehicle type is likely to become exempt or replaced by a domestic model. Otherwise, leasing or purchasing a used or Canadian-assembled truck is likely a better path.
Final Thoughts: Financing Smarter in a Tariff-Driven Market
Canada’s 25% tariff on U.S.-made trucks is reshaping the landscape for commercial vehicle financing in 2025. While it presents new challenges, it also opens the door to smarter, more adaptive financing strategies.
Whether you’re a single owner-operator or managing a regional fleet, success now depends on your ability to:
- Evaluate total cost of ownership
- Leverage alternative financing structures
- Work with experienced partners who understand both your industry and your region
Sandhu & Sran Leasing & Financing works with businesses across British Columbia and Alberta to provide customized solutions for truck leasing, fleet loans, and equipment refinancing. With deep regional experience and a commitment to transparent, tax-smart structuring, we help clients stay ahead—even in uncertain economic times.
