How a drone distributor automated tax compliance across 13 Canadian provinces

The challenge

Candrone is a Canadian drone distributor operating across all thirteen provinces and territories. Every province has its own tax structure. Some charge GST only. Some combine GST with a provincial sales tax. Five provinces use a harmonized HST. Quebec has its own QST. And some clients are tax exempt at the provincial level, the federal level, or both.

Before the build, the sales team was handling all of this manually. Tax rates were looked up, line items were adjusted by hand, and the correct tax codes for Business Central had to be entered on every quote. Training products added another layer. Each training SKU exists in thirteen province-specific variants, and the wrong variant meant the wrong tax treatment downstream in the ERP.

The team had PandaDoc in place, but the quoting process was not automated. Reps were assembling quotes without guardrails, and errors in tax treatment were only caught when they hit Business Central.

What we built

We started with the tax engine. A lookup table maps each province to its tax rate, tax description, and the exact Tax Area Code and Tax Exempt Code values that Business Central expects. Eight CPQ rules fire in sequence when a quote is built. The rules read the shipping province and the client’s exemption status, then set the correct tax rate and write the corresponding codes directly into the quote table. Provincial exemptions in PST provinces reduce to GST only. Provincial exemptions in HST provinces keep the full HST, because the harmonized tax cannot be split. Full exemptions zero out the rate and write a nontaxable code.

We tested every path. Six scenarios covering standard GST, PST, HST, provincial exemption in a PST province, provincial exemption in an HST province, and full exemption. All six passed.

The training SKU problem was solved in the guided selling form. A set of rules maps the selected shipping province to its two-letter abbreviation and writes it to a hidden field. A product selector then filters the catalogue by that value, so a rep who selects Manitoba sees only the ten training SKUs ending in -MB. The rep cannot select a training product for the wrong province.

Business Central integration was configured end to end. Tax Area Codes and Tax Exempt Codes write from PandaDoc into the quote table columns that Business Central reads on import. No manual entry required.

The results

The sales team launched the CPQ and started sending live quotes on day one. Tax calculations that used to be looked up and entered by hand now fire automatically from the province selection. The guided selling form walks reps through each quote step by step, and province-specific training products are filtered so the wrong SKU cannot be selected.

Business Central receives the correct tax codes on every quote without manual intervention. The tax logic handles all thirteen provinces, both exemption types, and the distinction between HST and PST jurisdictions that previously tripped the team up.

Seven sales reps are now quoting from the system. Candrone’s parent company, Draganfly, is evaluating the same engine for their own sales process.