Rising U.S. tariffs put price pressure on Manitoba home construction sector

As another slew of American tariffs hit Canadian goods, affected Manitoba industries warn of more expensive builds — including homes — and worry about decreased sales.

On Tuesday, U.S. President Donald Trump slapped 25 per cent tariffs on imported kitchen cabinets, bathroom vanities and upholstered furniture. He’s threatened to raise the kitchen cabinet and vanity rate to 50 per cent on New Year’s Day. Upholstered furniture could reach 30 per cent at the same time.

Imported softwood timber and lumber face 10 per cent tariffs, as of Tuesday.

Construction in Manitoba could become pricier if the levies remain in place, said Liz Kovach, president of national association Supply-Build Canada (which is headquartered in Winnipeg).

“What a lot of people don’t understand is there’s going to be a trickle effect that impacts everyone,” Kovach said.

She’s worried Western Canada’s softwood industry will reduce production in response to faltering demand south of the border. That would make it harder for Canadian retailers, including local hardware shops, to find products, Kovach said. As a result, prices could increase.

A quarter of Canadian-produced lumber is shipped to the United States, Supply-Build Canada data show. Statistics Canada valued Canada’s softwood lumber exports to the U.S. at $8.4 billion in 2020.

“Canada’s economy is not large enough to consume that,” Kovach said. “If we could have redistributed that, that would already be happening.”

Manitoba’s building materials supply and forest products sector accounts for just under $1 billion of the provincial GDP, Kovach said.

She plans to visit Capitol Hill in the coming weeks to lobby U.S. bureaucrats. She’s hoping for “managed trade” without duties in the future.

Ottawa’s federal industry minister promised financial support for Canada’s softwood lumber sector earlier this week. In August, Prime Minister Mark Carney announced $1.2 billion for the industry, including through loan guarantees.

Robert Bury & Company, a wholesale distributor of wood products geared at kitchen cabinets, bathroom vanities and furniture hasn’t seen a marked decrease in demand due to tariffs, said Justin Richardson, the company’s Manitoba division manager.

The branch typically sells to Manitoba manufacturing companies. If U.S. sales flag for local makers, the ripple effect will hit businesses like Robert Bury, Richardson said.

“It’s manageable right now at 25 per cent,” Richardson said, adding businesses and customers are sometimes splitting the fee. “When another 25 per cent hits in January, that’s devastating. That will completely cripple the market.”

Robert Bury stocks inventory based on historical usage. A decrease in sales mean thousands of dollars of inventory sitting on the floor.

“I’d just like to see a deal put in place so that we don’t have to wonder what’s going to happen tomorrow, next week, next month,” Richardson said. “We can’t plan based off of these decisions that are being made.”

A deal without tariffs is the best-case scenario, Richardson said.

Kane Millwork is among the companies seeing tariffs in sometimes confusing waves. The Manitoba cabinet maker typically ships its wares within Canada. Its imported building materials have “come and gone and come again” with tariffs over the past half-year.

“There’s been sort of episodic surcharges added,” said Jeff Mitchell, president of Kane Millwork. “There has been a noticeable increase in the cost of material, but it hasn’t been uniform and it hasn’t been consistent.”

Material costs have, in some cases, increased five to 25 per cent, Mitchell said. He shared an example: he buys doors from a local supplier, but they get cores from the United States. At one point, the cores faced a 25 per cent tariff, so the doors became more expensive.

Not every cost increase is as easily traced to tariffs, Mitchell said: “It’s difficult to keep track.”

gabrielle.piche@winnipegfreepress.com