A US Court Struck the Tariff, and C$97 Million Came Back

A refund is not a raise. When a household gets money back from an overcharged utility bill, the cheque is real and the monthly bill has not changed. A company's income statement can blur that distinction in a way a household budget cannot, because the refund and the ordinary trading margin land in the same place.

That is what happened in a Vancouver company's second-quarter figures this week, and the reason the money exists at all is a decision handed down in Washington in February.

Aritzia Inc. reported results for the thirteen weeks ended August 30, 2026 in a release issued on October 8, 2026 through PR Newswire. Inside the cost of goods sold section sits a line called "Recovery of tariff refund claims". The release says the company "recognized approximately" C$97.4 million "in International Emergency Economic Powers Act ("IEEPA") tariff refunds that were received", and that these amounts "have been presented separately in the unaudited condensed interim consolidated statements of operations". The precise figure in the statements is C$97,437 thousand. The interim statements themselves are filed on SEDAR+; the figures here are from the release.

The statute the tariffs were built on, and the sentence that removed it

The International Emergency Economic Powers Act is a 1977 American law that lets a president regulate certain foreign transactions once a national emergency has been declared. Through 2025 it was used as the legal foundation for a series of tariffs: a proclamation and three executive orders aimed at drug trafficking, which the Supreme Court's opinion describes as imposing "a 25% duty on most Canadian and Mexican imports and a 10% duty on most Chinese imports", and a further order on trade deficits that applied a duty of at least 10 per cent "on all imports from all trading partners".

On February 20, 2026, in Learning Resources, Inc. v. Trump, No. 24-1287, consolidated with Trump v. V.O.S. Selections, Inc., No. 25-250, the Supreme Court of the United States held, in the words of the syllabus, that "IEEPA does not authorize the President to impose tariffs." Chief Justice Roberts wrote the lead opinion. Justices Thomas, Kavanaugh and Alito dissented.

The decision settled the authority and not the money. The opinion addresses whether the tariffs were lawful; it does not decide how duties already collected should be repaid. That became a separate administrative and judicial problem, and it is still running. The United States Court of International Trade published a notice on April 16, 2026 recording that US Customs and Border Protection had told the court its guidance on new functionality for refunding IEEPA duties "on certain entries" was available. On October 8, 2026, the same day Aritzia reported, the court posted a page headed "IEEPA Refund Class Action Litigation" pointing to the documents in that proceeding.

So the duty was unlawful, some of the money has been paid back, and the mechanism for paying the rest of it is being litigated. A Canadian company that imported goods into the United States and was the importer of record sits inside that story whether it wanted to or not.

What C$97.4 million does to a margin, line by line

Here is the quarter as the release presents it.

Source: Aritzia second-quarter fiscal 2027 results release, October 8, 2026. Amounts are in Canadian dollars.

The reported gross margin rose 1,330 basis points, from 43.8 per cent to 57.1 per cent. Strip out the refund and it rose 490 basis points, to 48.7 per cent. The difference between those two increases is 840 basis points, which is to say that about 63 per cent of the margin improvement came from money repaid on goods bought in earlier periods, and the remaining 490 basis points came from the business. The company attributes that 490 points to initial markup improvements, leverage on store occupancy and other fixed costs, and better markdowns, and notes separately that year-to-date margins were held back by additional tariffs and by the ending of the de minimis exemption.

The refund equals 8.33 per cent of the quarter's net revenue. Divide C$97.4 million by C$1,169.8 million and that is the figure; it is also, almost exactly, the 8.4-point difference between the two gross margins, because gross profit and revenue share a denominator.

Adjusted EBITDA excludes the recovery. That is the choice that makes the quarter legible. One company, one thirteen-week period, two defensible records: a reported gross margin of 57.1 per cent that includes a foreign government's repayment, and an adjusted EBITDA margin of 21.0 per cent that does not. Neither number is wrong. They answer different questions, and only the second one speaks to what the business earns from selling clothes.

The forward-looking language is the clearest signal of how the company itself treats the item. Its outlook, the release says, "does not include any benefit from tariff refunds." A company does not exclude a recurring source of margin from its own outlook.

Canada runs the same machinery in the opposite direction

The symmetry is worth following, because it is where the Canadian arithmetic lands for importers here rather than exporters there.

Canada's current counter-tariff is the United States Surtax Order (2026), SOR/2026-186, registered September 4, 2026 under P.C. 2026-785, published in the Canada Gazette, Part II on September 23, 2026, and in force since September 8, 2026. It imposes a surtax on goods originating in the United States at 15 per cent for goods listed in Schedule 1, 25 per cent for Schedule 2 and 50 per cent for Schedule 3. The surtax applies to the value for duty determined under sections 47 to 55 of the Customs Act, and it is charged in addition to any customs duty.

A worked example makes the weight of that obvious. An importer bringing in a shipment of US-origin goods with a value for duty of C$100,000 pays C$15,000 of surtax if the goods fall in Schedule 1 and C$50,000 if they fall in Schedule 3, on top of whatever customs duty the tariff classification already carries. That cost goes into inventory and then into cost of goods sold, the same line where Aritzia's refund appeared, only with the sign reversed.

The Regulatory Impact Analysis Statement published with the order sets out why it was made. It says the United States imposed tariffs of 50 per cent on 27.6 billion dollars worth of goods imported from Canada under section 338 of the Tariff Act of 1930, effective August 22, 2026, after Canada suspended trade negotiations. The statement writes that amount with a dollar sign and no currency label, so it is reproduced here as the statement gives it. It describes the covered Canadian list as including dairy, appliances, agricultural equipment, pulp and paper and electronics, and records that fish and seafood products were taken off the list after stakeholders objected. It calls the order Canada's fifth response to American tariff action.

The route back, on this side of the border, is remission rather than refund, and it is a much narrower door. The order extends the existing United States Surtax Remission Order (2025) to the goods it covers. Remission under that order reaches goods used for public health, public safety and national security, certain health care goods, and inputs for manufacturing, processing, agricultural production and food and beverage packaging. The Regulatory Impact Analysis Statement is explicit that remission is an exception granted only in "exceptional and compelling circumstances", and that the Canada Border Services Agency assesses the claims. On processing, the statement says only that "depending on the volumes and complexity of refund submissions, the CBSA strives to achieve a 90-day processing standard."

Two differences follow from that. An American refund of an unlawful duty is owed to everyone who paid it, and the argument is about mechanism and timing. A Canadian remission of a lawful surtax is granted to a defined set of goods and uses, and the argument is about eligibility. The first one shows up in an income statement as a lump; the second one, where it is granted at all, shows up as a cost that never fully arrived.

What is settled and what is not

Three things are established on the record. The duty was held to be outside the statute, on February 20, 2026. Aritzia received about C$97.4 million of it and recognised the amount in the thirteen weeks ended August 30, 2026, presented on its own line. And its outlook excludes any further benefit of the same kind.

Two things are not. The broader refund process is live litigation as of this week, which is what the Court of International Trade's October 8, 2026 posting records, so the pace and the completeness of repayment for importers generally remain open. And Canada's surtax is a current cost rather than a historical one: it has been in force since September 8, 2026, which means the quarters now being reported by Canadian importers carry it, and the quarters reported a year from now will be compared against them.

The line to hold on to is the household one. A refund changes the bank balance; the bill is what tells you what next month costs. Both numbers were in the release, labelled, on the same page.

Transparency note. This is an independent due-diligence analysis and editorial opinion piece produced by The Maple Markets editorial desk. It is not sponsored, promoted or commissioned, and no compensation of any kind has been received from any issuer, government body or organisation named in this article or any party acting on their behalf. The analysis is based on public disclosure available as of the publish date; every figure is attributed to its primary source. The Maple Markets and its authors may hold positions in securities mentioned; nothing here is a recommendation to buy, sell or hold any security, and readers should not treat it as investment advice. Past disclosure does not guarantee future results. Policies: Editorial Standards · Financial Disclaimer.