Can I exempt transactions in Canada?

You can exempt transactions in Canada by using exemption reasons specific to Canadian provinces. Refer to the Exempt reason matrix for the US and Canada Knowledge Center article for more information. After you understand these use codes, you have a couple of options:

Create a Product Taxability Tax Rule making the tax codes of the products non-taxable in Canada and in the province.
Create an Exempt Entity Tax Rule making the entity use code of your choice tax exempt in Canada and in the province.