Certain Wood Cabinet and Vanity Goods Surtax Order: SOR/2026-169

Canada Gazette, Part II, Volume 160, Number 16

Registration
SOR/2026-169 July 31, 2026

CUSTOMS TARIFF

P.C. 2026-727 July 31, 2026

Whereas it appears to the satisfaction of the Governor in Council, on the basis of a report of the Minister of Finance, that the goods set out in Schedule 1 to the annexed Certain Wood Cabinet and Vanity Goods Surtax Order are being imported under such conditions as to cause or threaten serious injury to domestic producers of like or directly competitive goods;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, makes the annexed Certain Wood Cabinet and Vanity Goods Surtax Order under subsection 55(1) of the Customs Tariff footnote a.

Certain Wood Cabinet and Vanity Goods Surtax Order

Surtax of 25%

1 (1) The following wood cabinets and vanities, and their subassemblies, that are classified under a tariff item set out in Schedule 1 — or that are classified under a tariff item of Chapter 99 of the List of Tariff Provisions and that are otherwise classifiable under a tariff item set out in Schedule 1 — are subject to a surtax in the amount of 25% of their value for duty for a period of 200 days beginning on the day on which this Order comes into force:

For greater certainty

(2) For greater certainty, wood cabinets and vanities, and their subassemblies, are subject to the surtax regardless of the following:

Definition of permanent installation

(3) In this section, permanent installation, in respect of a wood cabinet or vanity, means installation in a fixed location as an integral part of a building or structure, regardless of whether the cabinet or vanity can be removed, relocated or replaced.

Exceptions

2 (1) The following goods are not subject to the surtax:

Origin of goods

(2) For the purposes of paragraphs (1)(a) and (b), the origin of the goods is determined in accordance with the rules of origin set out in the Determination of Country of Origin for the Purpose of Marking Goods (CUSMA Countries) Regulations or the Determination of Country of Origin for the Purpose of Marking Goods (Non-CUSMA Countries) Regulations.

Canadian International Trade Tribunal report

3 Beginning on the day on which the Canadian International Trade Tribunal submits the report referred to in section 7 of Order in Council P.C. 2026-340 of April 20, 2026 to the Governor in Council, this Order applies only to the goods that, according to that report, are being imported under such conditions as to cause or threaten serious injury to domestic producers of like or directly competitive goods.

Coming into force

4 This Order comes into force on the day on which it is registered.

SCHEDULE 1

(Subsection 1(1) and paragraph 2(1)(d))

Tariff Items — Goods Subject to Surtax

SCHEDULE 2

(Paragraph 2(1)(b))

Developing Countries and Territories

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Order.)

Issues

Current data suggests there is a reasonable indication that certain wood cabinet and vanity goods are being imported into Canada in such incrementally higher quantities and under such conditions as to cause serious injury to the Canadian wood cabinet and vanity industry. From 2023 to 2025, imports increased in value by 25%, with $340 million of wood cabinets and vanities imported into Canada in 2025. This increase appears to be the result of Canada’s obligations under World Trade Organization (WTO) agreements, including tariff concessions, combined with unforeseen developments in global trade. This includes some measures WTO members have taken, or are considering taking, to restrict imports of wood cabinets and vanities into their own markets. These actions have diverted, or threaten to divert, trade toward Canada, contributing to the increased volume of imports.

Background

Canada’s wood cabinet and vanity subsector plays a vital role in the domestic wood manufacturing industry by providing Canadian households and businesses (e.g. health care facilities, schools) with high-quality and sustainable wood products. The sector is composed of wood cabinets and vanities, with producers located across the country, primarily in British Columbia, Ontario and Quebec.

Global safeguards are emergency measures that may be applied to fairly traded goods to provide domestic industries with time to adjust to unforeseen changes in global trade conditions. Under the WTO Agreement on Safeguards, a WTO member may impose global safeguard measures when goods are imported in such increased quantities and under such conditions as to cause, or threaten to cause, serious injury to domestic producers. On April 20, 2026, the Governor in Council, on the recommendation of the Minister of Finance (the Minister), referred the matter of the importation of certain wood goods into Canada to the Canadian International Trade Tribunal (CITT) for inquiry.

Pursuant to the WTO Agreement on Safeguards, in critical circumstances where a delay could cause damage to the domestic industry that would be difficult to repair, WTO members may introduce provisional safeguard measures for up to 200 days on the basis of a preliminary determination, pending the results of a safeguard investigation and the imposition of final safeguard measures, if warranted. In Canada, the requirements for imposing global safeguard measures are set out in the Customs Tariff. The Customs Tariff allows the Governor in Council to impose a surtax for a period of up to 200 days, on the basis of a report by the Minister, if goods are being imported under such conditions as to cause or threaten to cause serious injury to domestic producers of the subject goods. A report of the Minister may be made only if there are, in the opinion of the Minister, critical circumstances, or if the report relates to perishable agricultural goods.

In the case of solid and engineered wood cabinets and vanities, a report from the Minister to the Governor in Council (the Minister’s report) has preliminarily determined that these wood cabinets and vanities are being imported in increased quantities and under such conditions as to cause serious injury to the domestic producers. It has also been determined that, in the opinion of the Minister, critical circumstances exist, including the imminent risk of diversion of wood cabinet and vanity imports into Canada and losses of domestic contracts to foreign suppliers, resulting from price undercutting by foreign suppliers. Firms in this subsector are undergoing closures or curtailments, which is, in turn, negatively affecting the rural communities that manufacture these goods, as well as affecting suppliers of the wood cabinets and vanities subsector, such as wood panel manufacturers and softwood lumber producers. The Minister’s report determines that these factors warrant the imposition of a provisional safeguard measure, taking the form of a surtax of 25%.

The Governor in Council has accepted the Minister’s report and its preliminary determination that provisional safeguard measures on certain wood cabinet and vanity goods are warranted. While the provisional safeguard measure is in place, the CITT will continue to investigate whether safeguard measures are warranted and, if so, will recommend appropriate remedies to address the serious injury or threat of serious injury to domestic producers. The CITT is required to submit a report of its findings to the Governor in Council, through the Minister, by January 15, 2027.

Objective

The objective of the Certain Wood Cabinet and Vanity Goods Surtax Order (the Order) is for the Governor in Council to impose a 25% surtax on the importation of certain wood cabinet and vanity goods to address the serious injury to domestic producers caused by increased imports of those goods, while the CITT conducts its inquiry.

Description

The Government of Canada is imposing a provisional safeguard measure in the form of a 25% surtax on the importation of certain wood cabinet and vanity goods.

Pursuant to subsection 55(1) of the Customs Tariff, the Order imposes a provisional safeguard measure on imports of certain wood cabinet and vanity goods (as described in the Order), coming into force on the day on which the Order is registered. The Order imposes a 25% surtax for up to 200 days on imports from all countries, except imports from certain free trade partners (i.e. the United States, Mexico, Chile, Israel and other Canada-Israel Free Trade Agreement beneficiaries) and developing countries. Once the CITT has presented its inquiry report, the Order will only apply to goods in respect of which the CITT has found that safeguard measures are warranted, if any.

When applied, the surtax will be calculated on the basis of the value for duty of the imported goods. It applies in addition to any other applicable duties owing, including customs duties, anti-dumping or countervailing duties, and taxes that may be applicable.

Consistent with Canada’s international obligations, special consideration was given to certain free trade agreement partners and developing countries. Certain of Canada’s free trade agreements provide that trading partners may be accorded preferential treatment when imposing safeguards. This includes mandatory exclusions for imports from the United States, Mexico, Chile, Israel and other Canada-Israel Free Trade Agreement beneficiaries, unless they account for a substantial share of total imports, and contribute importantly to the injury or threat of serious injury.

Additionally, the WTO Agreement on Safeguards requires developing countries with an import share below 3% to be excluded from safeguard measures, unless those developing countries with less than 3% of import shares collectively account for more than 9% of total imports. Under the Customs Tariff, Canada considers developing countries to be those benefiting from the General Preferential Tariff (GPT) and this list of GPT beneficiaries is used for the purposes of excluding developing countries from the application of the provisional safeguard measure. All developing countries included on the list of GPT beneficiaries met the criteria for exclusion under the WTO Agreement on Safeguards. As a result, Schedule 2 of the Order excludes all GPT beneficiaries from the scope of the surtax.

Should the CITT find that final safeguards are warranted, the Governor in Council, based on a recommendation by the Minister, may impose final safeguard measures on certain wood cabinets and vanities. In this case, the provisional measures will remain in place for 200 days or until they are replaced by final safeguard measures.

Alternatively, should the CITT find that final safeguards are not warranted, the provisional safeguard measures will cease to apply as of the date of the CITT’s negative finding, pursuant to section 3 of the Order. In such circumstances, the Governor in Council may, on the recommendation of the Minister, refund the provisional safeguard surtax paid through an Order in Council pursuant to section 58 of the Customs Tariff.

Regulatory development

Consultation

The Canadian Wood Products Alliance, an industry organization representing manufacturers across Canada that produce finished wood products, including cabinets, furniture and flooring, has raised concerns about recent trade disruptions and has requested urgent action to protect them.

Retailers, who are purchasers of the wood products covered by the CITT safeguard inquiry, have expressed their opposition to trade measures that would increase the cost of their imports, citing impacts on consumer choice and potential price increases.

The imposition of a temporary, provisional safeguard measure is concurrent with a safeguard inquiry conducted by the CITT that will determine whether longer-term safeguard measures are warranted. The CITT inquiry is conducted in an independent, transparent manner and allows for views from implicated stakeholders to be fully taken into consideration. Interested parties were invited to participate in the ongoing inquiry by providing written submissions and can participate in the public hearing scheduled for October 1–9, 2026. Should the CITT make an affirmative determination that final safeguard measures are warranted, these views would be reflected in the CITT’s recommendation as to the appropriate remedy to impose.

In addition, in accordance with Article 12 of the WTO Agreement on Safeguards, Canada notified the WTO Committee on Safeguards of the initiation of investigation on April 23, 2026. WTO members will have the opportunity to comment on the action at the Committee meeting in October 2026. Canada will likewise notify the WTO Committee on Safeguards upon the imposition of the provisional safeguard measure on certain wood cabinet and vanity goods.

Indigenous engagement, consultation and modern treaty obligations

Following an assessment of modern treaty implications, no adverse impacts on potential or established Indigenous or treaty rights, which are recognized and affirmed in section 35 of the Constitution Act, 1982, were identified in the Order.

Instrument choice

Under subsection 55 of the Customs Tariff, the Governor in Council has the authority, on the recommendation of the Minister of Finance, to impose a surtax by order on specified goods imported into Canada. This authority allows the surtax to apply to goods from specified countries, or to goods imported into a defined region or part of Canada, for the duration set out in the order.

Regulatory analysis

Baseline scenario

In the absence of the application of a provisional safeguard measure, the incentive to import low-priced wood cabinets and vanities under conditions that cause or threaten to cause serious injury to the domestic industry would remain. This activity would exacerbate the critical circumstances the Canadian domestic industry is currently facing, including the risks of trade diversion in light of the imposition of border measures imposed by other countries and of continued domestic contract loss, as import increases continue unchecked.

Regulatory scenario

Canadian importers of certain wood cabinets and vanities will be charged a surtax of 25% of the value of duty of these importations for up to 200 days. This will increase the cost of importing certain wood cabinet and vanity goods while the CITT conducts an inquiry to determine if longer-term measures are warranted.

Benefits

The provisional safeguard measure is intended to support domestic manufacturers of wood cabinets and vanities, primarily located in British Columbia, Ontario and Quebec. The provisional safeguard will provide short-term protection to the industry while the CITT inquiry is ongoing, and the imposition of final measures is considered.

For Canadian manufacturers of wood cabinets and vanities, the provisional safeguard measure is expected to provide temporary support by preventing the critical circumstances the industry is facing from resulting in lasting damage that will be difficult to repair (e.g. permanent loss of domestic market share). This will be done through decreasing the incentive for imports into the Canadian market, thereby helping stabilize prices.

Costs

There will be incremental costs for importers of subject wood cabinet and vanity goods, such as distributors and retailers of home improvement and construction goods, which are likely to have a downstream effect on the price of cabinets and vanities for consumers (e.g. residential and multi-residential builders and developers, homeowners, etc.). The amount of these costs that will be borne by final consumers will depend on the availability of suitable domestic and/or lower tariff import substitutes. This price increase would not exceed the initial 25% charges. A tariff rate of 25% has been chosen to balance the need to protect the Canadian industry from the critical circumstances it is facing against the potential for the surtax to result in additional costs on importers being passed on to Canadian consumers. These cost increases will be limited in time, as the provisional measures are imposed for only up to 200 days, while the CITT inquiry continues and the imposition of final measures, if warranted, is considered.

It is estimated that around $165 million in imports will be subject to the 25% surtax, assuming no changes in 2026 import patterns and the provisional safeguard is in place for its maximum duration. This is expected to generate roughly $41.2 million if it remains in place for the full 200-day period. However, this estimate assumes no changes to 2026 import patterns and, therefore, overstates the revenue implications given the likely shifts in trade patterns, including the possibility for importers to source from domestic producers instead of foreign suppliers and/or substitution to other foreign markets.

Small business lens

The Order is expected to have impacts on some small businesses. Small business importers and purchasers of imported wood cabinet and vanity goods may face increased costs as a result of the 25% surtax. Some small businesses that manufacture wood cabinet and vanity goods will benefit from the temporary protection provided by the provisional safeguard measure. These impacts are expected to be limited, as the surtax would apply for a maximum of 200 days while the CITT conducts its inquiry. In addition, should the CITT determine that final safeguard measures are not warranted, the Governor in Council may authorize the reimbursement of surtax paid pursuant to section 58 of the Customs Tariff. The 25% surtax rate was selected to balance the need to protect domestic producers, including small businesses, from serious injury or threat thereof, while limiting additional costs for consumers and downstream businesses, including small businesses.

One-for-one rule

The one-for-one rule does not apply, as there is no incremental change in administrative burden on businesses.

Effects on the environment

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment, a preliminary scan concluded that this Order would not result in positive or negative environmental effects; therefore, a strategic environmental assessment is not required.

Gender-based analysis plus

No impacts based on gender and other identity factors have been identified for this Order.

Implementation, compliance and enforcement, and service standards

The Order will come into force on the day on which it is registered.

The Order will be implemented by the Canada Border Services Agency (CBSA), as the administrator of the Customs Tariff. The CBSA will release a customs notice to inform the importing community of information related to the administration of the tariffs.

Contact

Marie-Hélène Cantin
Director
Trade Rules
International Trade Policy Division
Department of Finance Canada
Ottawa, Ontario
K1A 0G5
Email: fin.simaconsult-lmsiconsult.fin@fin.gc.ca