Key facts
- US tariffs on Canadian kitchen cabinets are set to double to 50% on January 1.
- Cabico owner Alain Ouzilleau said the company is weighing production in the United States.
- Cabico's US shipments fell 25% from 2024 levels and it cut more than a quarter of 700 employees.
- Muskoka Cabinet cut 40% of its 70 staff and operates three days a week, president Luke Elias said.
- Canada imposed a provisional 25% surtax on certain wood cabinet and vanity imports for up to 200 days.
US tariffs on Canadian kitchen cabinets are set to double to 50% on January 1, threatening thousands of small manufacturers that employ almost 25,000 people, according to Alain Ouzilleau, owner of Quebec-based Cabico. Ouzilleau said he is reluctantly considering moving production to the United States, a step he has never taken in 40 years of building the company.
Cabico shipped 90% of its products to the US before President Donald Trump returned to office and began imposing tariffs on Canadian goods. Ouzilleau said volumes shipped to the US fell 25% from 2024 levels and the company laid off more than a quarter of its 700 employees. In the last five years Cabico invested roughly C$30 million ($21 million) to expand capacity and automate its two plants in Quebec and Ontario.
"That brings us to a fact, to a very unwilling option, that we start looking to have some US partners to produce some products in the States," Ouzilleau said.
Luke Elias, president of the Canadian Kitchen Cabinet Association and president of Ontario-based Muskoka Cabinet Company, said Canadian furniture makers became collateral damage. "The tariffs have been devastating for the industry," he said, adding that many companies would shut if the rate doubles next year. Elias said imports have undercut prices and flooded the market so heavily that Canadian companies are operating at just over half the capacity of three years ago. Muskoka Cabinet has cut 40% of its 70 staff, is operating three days a week and has stopped all investment, he said.
Dave Schellenberg, chief financial officer at Manitoba-based Decor Cabinet Company, said the situation worsened after talks between Ottawa and Washington collapsed in August and Washington imposed new tariffs covering more parts of the cabinet industry. To keep its US customers, Decor absorbed part of the tariff cost and its margins shrank considerably, he said. The company also uses a federal work-sharing program that cuts working hours to avoid layoffs.
After lobbying, cabinet makers won temporary relief in July when Canada's Finance Department announced a provisional safeguard measure, a 25% surtax on imports of certain wood cabinets and vanities for up to 200 days, while the Canadian International Trade Tribunal investigates whether a surge in imports is harming domestic producers. Manufacturers said the surtax has not stemmed imports and many want a duty of at least 100%. The US and Canada resumed talks ahead of the US midterm elections.