A new 25 per cent tariff may not be enough to get a planned robotic assembly line up and running, or hire back 200 laid off employees, but the CEO of a struggling Quebec cabinet maker says Ottawa’s move is “sending a strong message” and calls it “a big step in the right direction.” Two weeks after CTV News shared Cabico&co’s story, Ottawa announced new, temporary 25% tariffs on imported wood cabinets and vanities. It’s called a “provisional safeguard measure,” allowed under World Trade Organization (WTO) rules as an emergency stopgap, while the Canadian International Trade Tribunal (CITT) carries out a broader investigation called a safeguard inquiry. Cabico&co’s Alain Ouzilleau says 25 per cent will “probably have a short-term impact” on the volume of foreign product coming into Canada but sees the bigger win in “much stronger credibility,” showing Washington that Canada is taking action. “It’s sending the message to the U.S. administration that, ‘hey, guys, we’re serious about doing something that will avoid diversion of unfair products to your country as well,’” he told CTV News. Ouzilleau was in D.C. in May, and plans to return in September, arguing the Canadian wood products industry are “fair competitors” and shouldn’t be subject to 25 per cent tariffs under Section 232. He also recently found out between 20 and 30 per cent of his two product lines may be subject to the new 50 per cent tariffs U.S. President Donald Trump is threatening to impose later this month under Section 338, which he says is “really frustrating.” “It’s sending a strong message, and I’m really grateful to the Canadian government for doing that,” Ouzilleau said. United States, Mexico, Israel, Chile and developing countries are excluded from Canada’s 25 per cent tariff. Ouzilleau and the Canadian Wood Products Alliance had been pushing for a much bigger 125 per cent provisional tariff, which he said would “seriously stop” imports. They will continue to argue for that amount at the broader CITT safeguard inquiry. The group is also calling for action for hardwood floor and furniture manufacturers as well, which do not fall under the new provisional tariff. Under WTO rules, that tariff can remain in place for up to 200 days. The CITT is expected to finish its investigation by Jan. 15 of next year. “We made an assessment that had we not acted now, there would be significant and possibly irreparable damage to the sector,” a source from the finance minister’s office told CTV News on background. The Canadian Federation of Independent Business’ Dan Kelly says cabinet makers “have been competing with one hand tied behind their back.” The industry faces not just punishing tariffs, but a flood of imports from countries also facing American tariffs, which see Canada as an attractive alternative. Kelly calls that a “double whammy,” and hails the government’s new provisional tariff as a “smart move.” “What this tariff is designed to do is to level the playing field so that Canadian companies can compete,” he tells CTV News. “If other nations are able to sell a better product at a lower cost, that’s fair game. But if they’re doing that because the U.S. market is closed to them, and now they’re just shoving product into Canada to try to get a portion of their money back… well, there are rules around that,” Kelly said. The Retail Council of Canada, meanwhile, says its “very disappointed” by the new tariffs, concerned about consumers paying higher prices. “For variety and price points, retailers have shopped around and sourced these goods from around the globe,” vice-president of federal government relations Matt Poirier told CTV News. “What will happen is that there will be less availability of these goods at certain price points, and that will just drive up the costs of home renovations and home constructions.” “We understand why the government felt they needed to act to help domestic producers, but let’s be clear-eyed about this. This comes at a cost to Canadians and consumers,” Poirier added. Since the measure just came into effect on the Friday before a long weekend, Poirier says retailers are still absorbing what it means, and it’s too early to detail an immediate impact. Cabinet makers have pushed back on the suggestion that prices will climb. Asked about the potential for higher prices, the government source pointed to potential consequences for the industry, and downstream for the economy, if action wasn’t taken. “Canadians are better served knowing there is a domestic industry that can service our domestic needs. We are taking action to support them.”
