Canadian cabinet makers cut jobs and production as U.S. tariff increase nears
Canadian cabinet makers report steep shipment losses, layoffs and curtailed production as a 50% U.S. tariff rate approaches in January.
Canadian kitchen-cabinet manufacturers are reporting sharply reduced U.S. sales, job cuts and production retrenchment ahead of a scheduled increase in U.S. tariffs. BNN Bloomberg reported on Nov. 5 that the duty on Canadian kitchen cabinets is set to rise from 25% to 50% on Jan. 1, 2027, increasing pressure on a fragmented industry that employs nearly 25,000 people. [1]
Cabico, a Quebec-based manufacturer that previously shipped 90% of its products to the U.S., said its American shipment volumes have fallen 25% from 2024 levels. The company has laid off more than one-quarter of its 700 employees after investing about $30 million over five years to expand and automate plants in Quebec and Ontario. Its founder, Alain Ouzilleau, said the company is now considering U.S. production partners, an option it had not previously contemplated. [1]
The reported strain extends beyond one producer. Muskoka Cabinet Company has reduced its workforce by 40% from 70 staff, cut operations to three days a week and halted investment, according to its president, who also leads the Canadian Kitchen Cabinet Association. Industry representatives said Canadian manufacturers are operating at just over half of the capacity used three years ago, while cheaper Chinese imports have limited their ability to redirect excess output into the domestic market. [1]
The cabinet sector was already subject to a 25% Section 232 duty imposed last year, which the report says was intended to prevent Asian producers from routing goods through Canada to avoid U.S. duties. Producers said the situation deteriorated after Canada-U.S. talks collapsed in August and Washington expanded tariffs to additional cabinet components; Decor Cabinet Company said it absorbed part of the cost to retain customers, reducing its margins. The company has also used a federal work-sharing program to preserve skilled labour by reducing hours rather than relying solely on layoffs. [1]
Canada introduced temporary import relief in July through a provisional 25% surtax on specified imported wood cabinets and vanities, pending a Canadian International Trade Tribunal inquiry into whether import volumes are harming domestic producers. The inquiry is due to end Jan. 15, after which the federal government is to assess whether final safeguard measures are warranted. Manufacturers told BNN Bloomberg that the temporary measure has not halted imports and that some are seeking substantially stronger protection. [1]
This is a significant forestry-sector impact because cabinet producers report concrete operating effects—lower U.S. shipments, layoffs, reduced workweeks, paused investment and consideration of U.S. production—before the scheduled 50% tariff rate takes effect on Jan. 1, 2027. The rating is not raised further because the packet provides a single publisher’s reporting and does not independently establish sector-wide outcomes beyond the companies and industry representatives cited. [1]