Federal surtax on cheap wood imports good first step, but more needed, industry says

Minister of Finance and National Revenue François-Philippe Champagne attends the 2026 pre-budget consultations, and hold a roundtable discussion with the Canadian Chamber of Commerce in Ottawa on Monday, July 6, 2026. Photo by HYUNGCHEOL PARK /Postmedia

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OTTAWA — For the past six months, Luke Elias, the president at Muskoka Cabinet Company Inc., says his workers have been working only two or three days a week.

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The company based in Eastern Ontario, which has been making custom wood cabinetry for nearly four decades, is one of the thousands of companies in the kitchen cabinet industry that have been crippled by cheap imports coming from primarily southeast Asian countries.

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Elias said his company, like many others, has been working at less than half of its capacity, and he has had to lay off 30 out of 70 workers.

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“Not only is our survival at stake, but we can’t even think about investing and growing because of the imports,” he said in an interview with National Post.

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“This is just unfair trading — below fair market value pricing. It’s just predatory, and we’re just asking for a level playing field,” he said.

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On Friday, Minister of Finance François-Philippe Champagne announced a 25 per cent surtax on imports of certain wood cabinets and vanities, effective immediately, to remain in place for a maximum of 200 days. That tariff will not apply to products manufactured in the United States, Mexico, Israel and other developing countries.

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The surtax is meant to be a temporary measure to help stabilize Canadian businesses while the Canadian International Trade Tribunal (CITT) completes its inquiry into the trade conditions that are impacting Canadian manufacturers of wood products, including wood cabinets, hardwood flooring and storage furniture.

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The tribunal has until January 15, 2027, to submit its findings.

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Dan Kelly, president and CEO of the Canadian Federation of Independent Business, said the surtax is a very important first step in helping address dumping.

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“Freer trade is better trade, but tariffs are an absolutely important part of trade policy when unfair trading practices are engaged in, and every country, including Canada, has used them on and off over decades to try to address problems in the system,” he said.

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The Canadian Wood Products Alliance (CWPA), which represents manufacturers like Muskoka Cabinet Company Inc. that produce finished wood products including cabinets, furniture, flooring, and panels, said in an unattributed statement this surtax was “very welcome news” and a “much-needed step in the right direction.”

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But the organization said it remained concerned on two main fronts.

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First, the CWPA said that several types of wood products, such as flooring and furniture other than cabinets and vanities, have been excluded from the tariff while many manufacturers are also struggling. Second, it said the 25 per cent tariff should be considered a starting point if the government wants to stop the flow of cheap imports.