Introduction
Canadian businesses are entering a new financial landscape in 2025. With the federal government’s recent decision to implement significant tariffs on imported goods—in response to U.S. trade actions—many companies are now facing higher costs on essential equipment and vehicles. Whether it’s heavy machinery for construction, fleet trucks for logistics, or medical technology, businesses are seeing a jump in equipment prices due to added duties on imports.
As purchase costs rise, equipment financing is becoming more than just an option—it’s a strategic necessity. From leasing and loans to tax incentives and cash flow management, this guide explores how businesses in Abbotsford, Surrey, Edmonton, and nearby areas can continue to invest in their operations without compromising financial health.
Understanding the 2025 Tariff Impact on Equipment Costs
In March 2025, the Canadian government introduced a tariff package targeting $155 billion worth of imported goods. These measures are already affecting prices on a wide range of equipment categories:
- Commercial vehicles and trucks
- Construction and mining equipment
- Medical imaging and diagnostic machines
- Manufacturing and processing machinery
- Energy and HVAC systems
Many of these goods are sourced internationally, especially from the U.S., Asia, and Europe. The tariffs are adding 5–25% to the final price of these items, depending on the category and origin.
For example, a business in Surrey sourcing imported trucks for their delivery fleet might now pay $15,000–$25,000 more per vehicle. Similarly, a construction firm in Edmonton importing a high-efficiency excavator could see costs rise by upwards of $50,000.
These increases are creating an urgent need for companies to rethink how they finance new equipment—especially if they were relying on direct purchases from working capital.
Why Leasing Makes Sense in a Tariff-Driven Market
In a high-cost environment, leasing becomes an attractive tool for managing expenses while still acquiring the equipment needed to operate and grow. Here’s why:
1. Lower Upfront Costs
Leasing typically requires little to no down payment, enabling businesses to secure equipment without draining cash reserves. This is crucial when facing inflated purchase prices due to tariffs.
2. Tax Deductibility
Most lease payments qualify as operating expenses under Canadian tax law. This means businesses can fully deduct their lease payments, effectively reducing their taxable income each year.
3. Flexible Upgrade Paths
With tariffs likely to remain in place for the foreseeable future, leasing offers the flexibility to upgrade to newer equipment at the end of a lease term without dealing with depreciation or resale risks.
4. GST/HST Input Tax Credits
Even when leasing, businesses can still recover the GST/HST paid on monthly lease payments through Input Tax Credits (ITCs). This keeps overall expenses lower and improves cash flow.
Businesses in British Columbia and Alberta are already turning to leasing providers that understand local industries and can help structure agreements that align with their growth and cash flow goals.
Strategic Use of Equipment Loans During Cost Surges
In some situations, an equipment loan may still be the better option—particularly when the goal is to eventually own the asset or if the equipment has a long useful life.
1. Fixed Rate Protection
With interest rates expected to remain relatively stable in 2025, fixed-rate equipment loans can offer predictability and protection against inflationary costs, including those driven by tariffs.
2. Capital Cost Allowance (CCA)
Purchasing equipment via financing allows businesses to claim Capital Cost Allowance (CCA) deductions. These depreciation benefits can offset taxable income over time, especially under the Accelerated Investment Incentive currently available in Canada.
3. Long-Term Asset Value
For heavy-duty or highly customized machinery, ownership can add long-term value to a business. Loans allow you to retain that value after the financing term ends.
Choosing between leasing and loans often comes down to the type of equipment, financial strategy, and tax position of your business. Working with advisors who specialize in equipment financing—especially those familiar with local industries in Abbotsford, Surrey, and Edmonton—can ensure you’re selecting the right approach.
Alternative Approaches to Minimize Tariff-Driven Equipment Costs
Not all strategies involve financing alone. Here are some complementary steps businesses can take to reduce the burden of import tariffs on equipment:
1. Source Canadian-Manufactured or North American Equipment
Where possible, shift procurement to local or Canadian-based suppliers. This reduces exposure to imported goods subject to tariffs. While local prices may still be high due to demand, they are generally more stable than tariff-impacted imports.
2. Lease Used or Refurbished Equipment
Used equipment is typically exempt from new import tariffs and can be leased or financed at lower rates. Many leasing companies offer programs that include refurbished machinery with extended warranties.
3. Use Seasonal or Deferred Payment Leases
To align with revenue cycles, especially in agriculture, construction, or transportation sectors, businesses can choose seasonal lease structures. These allow for payments during peak seasons and minimal payments during off-peak months.
4. Combine Leasing with Government Incentives
Canada and several provinces offer tax credits and rebates for energy-efficient or sustainable equipment. When combined with a lease, these incentives can offset tariff-related cost increases.
For example, a fleet operator in Edmonton leasing electric trucks may benefit from both Clean Technology rebates and input tax credits, effectively reducing the overall lease cost by up to 30%.
Leveraging Expert Guidance for Financial Planning
Businesses navigating this new cost environment shouldn’t go it alone. Partnering with a reputable equipment financing provider ensures access to:
- Tailored lease or loan structures that match tax and cash flow goals
- Access to both new and used equipment options
- Strategies to take advantage of local and federal incentives
- Support for managing GST/HST credits and year-end tax planning
Providers who are active in regions like Surrey, Abbotsford, and Edmonton bring added value through their understanding of local market conditions, supplier relationships, and industry-specific needs.
Planning Ahead: Financing in a Post-Tariff Economy
As Canadian businesses adjust to the reality of rising import tariffs, equipment financing is not just a response to current conditions—it’s a proactive way to build resilience and financial agility. Companies that plan ahead and optimize their financing strategies now will be in a better position to navigate cost increases, remain competitive, and invest in growth over the next few years.
Here are several forward-looking strategies to consider:
1. Lock in Financing Before Further Price Increases
The full impact of the 2025 tariffs may take months to ripple through the supply chain. Financing your equipment now—before price increases reach their peak—could help you secure lower overall costs.
Lenders and leasing companies may still have pre-tariff pricing agreements or inventory that can be financed under better terms if you act early. Businesses in Abbotsford and Surrey with upcoming equipment needs should prioritize pre-approvals and vendor negotiations now.
2. Bundle Financing with Service and Maintenance
Some leasing and financing providers are offering comprehensive equipment packages that include maintenance, servicing, and warranties. This is especially useful for high-cost imports, as replacement parts may also be affected by tariffs.
A business in Edmonton’s construction sector, for instance, may benefit from bundling a leased loader with a long-term maintenance plan, reducing both risk and long-term repair costs.
3. Use Financing to Hedge Against Future Uncertainty
Uncertainty around trade policies and global supply chains makes predictable monthly payments even more valuable. Leasing or financing allows you to stabilize expenses, freeing up capital for other strategic investments—whether that’s marketing, talent acquisition, or technology upgrades.
For businesses that rely on seasonal operations, such as agriculture or tourism, financing with deferred or seasonal payments can smooth cash flow while mitigating the impact of rising equipment costs.
Industries Most Affected by Equipment Tariffs in 2025
While nearly all sectors are feeling the effects of import duties, the following industries are particularly impacted and can benefit greatly from structured equipment financing:
1. Construction & Infrastructure
Excavators, bulldozers, cranes, and drilling equipment are seeing significant price hikes. Leasing or long-term financing helps spread costs and maintain project margins, especially in active markets like Surrey and Abbotsford.
2. Transportation & Logistics
Commercial trucks, trailers, and fleet vehicles—many of which are imported—have seen costs rise. Fleet leasing offers tax deductions, fuel-efficient vehicle upgrades, and avoids depreciation risks. This is especially useful for fleet operators in Edmonton expanding routes or upgrading aging assets.
3. Manufacturing & Processing
Precision equipment and automated systems are often sourced internationally. Financing allows companies to preserve capital for inventory and production while still modernizing their operations to meet demand and compete globally.
4. Agriculture & Agri-Tech
Farmers needing tractors, irrigation systems, and specialized tools are particularly vulnerable to cross-border equipment price fluctuations. Leasing options tailored to seasonal harvest cycles allow for payments during high-income months, preserving solvency throughout the year.
Navigating Government Incentives and Tax Planning
In 2025, several federal and provincial programs continue to support businesses investing in productivity and clean technologies. Pairing financing with these incentives can help offset rising equipment costs even further.
1. Capital Cost Allowance (CCA) – Accelerated Investment Incentive
Eligible equipment purchases may qualify for enhanced first-year depreciation, allowing businesses to claim a higher deduction in the year of acquisition. This is especially valuable for capital leases and purchases made through equipment loans.
2. Clean Technology Investment Incentives
Businesses that invest in green vehicles, solar panels, energy-efficient HVAC systems, or emission-reduction technologies can qualify for tax credits or rebates—many of which stack on top of traditional leasing benefits.
3. GST/HST Input Tax Credits
Financed equipment is typically eligible for GST/HST recovery. Over the course of a lease or loan, this can lead to significant savings, especially when dealing with high-value machinery.
Engaging a financial advisor or leasing specialist can ensure you are capturing every possible deduction, credit, and rebate tied to your equipment acquisition strategy.
Making the Right Choice: Lease or Loan?
If you’re still weighing whether to lease or buy, consider these guiding questions:
- How long will you use the equipment?
Short-term needs or rapidly evolving technology typically favors leasing. - Do you need to conserve cash?
Leasing offers lower upfront costs, ideal when liquidity is a priority. - Do you want to own the asset long-term?
Equipment loans may make more sense for long-lifespan or essential-use assets. - Are you concerned about resale or obsolescence?
Leasing shifts that risk to the finance company.
Each option offers distinct advantages depending on your business’s goals, tax position, and market outlook. Working with a provider that understands your local industry environment, like those based in BC and Alberta, can be key to making the right choice.
FAQs – Equipment Financing Amid Import Tariffs
Q: Will tariffs increase leasing rates?
Tariffs may impact the cost of the underlying equipment, but leasing rates themselves remain competitive. Leasing helps smooth out tariff-related spikes with structured payments.
Q: Can I finance used equipment to avoid tariffs?
Yes. Many businesses are leasing or financing used equipment, which is typically not subject to the new import tariffs. This can provide cost savings and faster approvals.
Q: Is leasing still tax-efficient if equipment prices rise?
Absolutely. Leasing remains tax-efficient regardless of purchase price. In fact, the ability to deduct payments becomes more valuable as equipment prices increase.
Q: Should I wait for tariffs to come down before acquiring equipment?
If your operations depend on specific equipment, waiting can cost more in lost productivity. Financing solutions like leasing can help offset the higher upfront cost.
Q: Are there special leasing programs for green or energy-efficient equipment?
Yes. Many providers offer preferred lease terms and tax incentives for businesses that invest in electric vehicles, energy-saving systems, or low-emission machinery.
Q: Can I refinance existing equipment to improve cash flow?
Yes. Refinancing or sale-leaseback options can free up working capital by turning owned equipment into liquid assets while keeping it in use.
Q: How do I qualify for leasing or loans in a high-cost environment?
Most lenders consider credit history, financial statements, and equipment type. Flexible options are available for established businesses and newer operations.
Q: Are there benefits to financing Canadian-made equipment?
Yes. Locally sourced equipment avoids tariffs, often ships faster, and may qualify for federal or provincial purchasing incentives.
Q: Can I structure payments to match seasonal revenue?
Absolutely. Many providers offer seasonal and deferred payment leases for industries with fluctuating income like agriculture and construction.
Take the Next Step with Confidence
As Canada moves into a new phase of trade policy and economic adjustment, the companies that succeed will be those who stay agile, informed, and financially strategic. Equipment financing—whether through leasing, loans, or a hybrid structure—is a powerful lever that businesses can use to stay competitive and maintain growth momentum.
Partnering with a team that understands the real-world impacts of policy changes, tax law, and industry cycles will give your business a measurable advantage.
Need Help Financing Equipment in 2025?
Whether you’re facing rising machinery costs in Abbotsford, looking to expand a vehicle fleet in Surrey, or planning a facility upgrade in Edmonton, now is the time to act.
Sandhu & Sran Leasing & Financing supports businesses across British Columbia and Alberta with equipment financing solutions tailored to their industry, budget, and tax goals. Our advisors help you make informed decisions that protect cash flow and reduce your total cost of ownership—even in a volatile pricing environment.