Canadian furniture manufacturers and retailers are entangled in a battle over sofas and recliners being shipped from Asia.
On May 5, the Canada Border Services Agency (CBSA) implemented tariffs on some leather-seated products from China and Vietnam.
They reached as high as 295 per cent for products from China and up to 101 per cent for products from Vietnam.
It’s a measure the CBSA took after it determined products were being dumped and subsidized in the Canadian marketplace.
Furniture retailers have been making appeals to lawmakers across the country to address the taxes.
Many are deciding whether to pass on the added expense to customers or to take on the tax themselves, which they say is tough given the economic situation brought on by the COVID-19 pandemic.
Richi Collection operates a handful of stores in Alberta and said it had about $300,000 worth of furniture ordered that was subject to the full 295 per cent tariff the day the CBSA made its decision.
“Now I have two choices. Either A, I forfeit all the money that I spent for that product. Or B, I pay in excess of $1 million to basically bring it, land it in Canada to sell to the public which obviously is not going to sell at those prices, nor do I want to sell it to the public at those prices,” Rishi Dhawan said.
Like many showrooms across the country, Richi Collection has a mixture of Canadian and imported furniture, but because of wages and environmental standards in Canada, products from Asian countries tend to be cheaper.
The CBSA’s investigation was prompted after five Canadian manufacturers applied for tariff protection.
Palliser, one of the companies who made the application, said Canadian products made up more than half of the products in the market for reclining and stationary leather seating in 2003.
It says that’s now down to 18 per cent, which has also led to four of its five Canadian factories being shut down.
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