Ontario Manufacturer Weighs Moving Most Production to U.S. After 50% Tariff Hits 70% of Its Exports

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For more than seven decades, an Ontario family business has built wooden outdoor furniture in Canada and sold much of it across the border. Now, the economics that supported that model have changed abruptly. DFC Woodworks Inc., a Kemptville manufacturer known for Muskoka and Adirondack chairs, says roughly 70% of its furniture goes to customers in the United States, where its products are now subject to a 50% duty. President François Bruneau says the company faces a difficult choice: absorb a mounting tariff bill, increase prices and potentially lose American customers, or shift much of its U.S.-bound manufacturing south of the border. The decision confronting the small manufacturer illustrates how quickly a trade dispute can move from government announcements to factory floors, family businesses and long-standing Canadian jobs.

A 71-Year Family Business Reaches a Crossroads

DFC Woodworks traces its roots to 1955, when Gérard Bruneau began making garden swings to supplement his income. His son François learned the craft alongside him, and in 1982 the operation became a full-time business producing Adirondack chairs, swings and related outdoor furniture. By 1999, the company was selling online and reaching customers beyond Canada. What began as a small woodworking venture had gradually become an export-oriented manufacturer with a particularly important customer base in the United States.

That history makes the current decision more than a routine adjustment to shipping costs. Canadian Press reporting says approximately 70% of DFC’s furniture is exported to the United States. François Bruneau, now the company’s president, has made clear that remaining in Canada is his preference. Yet a business that spent decades developing American customers suddenly has to consider whether the location of production itself has become a competitive disadvantage. The tariff has turned geography into a fundamental business decision.

The Tariff Is a Cash-Flow Shock, Not an Abstract Percentage

For DFC, the most immediate problem is cash. Bruneau said the company expects to face roughly $75,000 in duties over an eight-week period. That amount is especially significant for a relatively small manufacturer because tariffs are not simply an accounting entry that can be addressed months later. Money needed for duties competes with payroll, materials, shipping, equipment, inventory and the other expenses required to keep a factory operating.

The timing has created an additional problem. DFC sells directly to consumers, and some American customers placed orders before the latest tariff took effect. Bruneau said the company has been absorbing those added costs rather than attempting to retroactively charge customers dramatically more. The broader U.S. tariff measures affecting DFC took effect on August 22 as part of duties imposed on $27.6 billion worth of Canadian goods. For a business already committed to fulfilling existing orders, an abrupt trade-policy change can therefore affect margins almost immediately, before prices or production plans can be redesigned.

Raising Prices Could Erase the U.S. Market

Passing the entire tariff on to customers sounds straightforward until the size of the increase is considered. Bruneau has warned that asking existing buyers to suddenly pay substantially more could result in cancelled orders. Canadian Press summarized the company’s choices as continuing to absorb the expense, raising prices and risking American sales falling toward zero, or relocating the majority of production serving that market.

That leaves DFC caught between two different forms of financial pressure. Absorbing the duty protects customers but damages the company’s margins and cash position. Raising prices protects margins on each chair sold but risks making those chairs uncompetitive against products made in the United States or imported under different cost structures. Bruneau has said a tariff in the range of 10% to 15% could potentially be manageable, while 50% is not sustainable for the business. That difference illustrates why the headline tariff rate matters: at a certain point, adapting through ordinary price adjustments stops being realistic.

Moving South Has Become a Survival Calculation

DFC has already investigated what operating in the United States might look like. Bruneau said the company has examined High Point, North Carolina, an area with deep ties to furniture manufacturing, and has encountered efforts to attract production through business incentives. High Point continues to market itself as a manufacturing centre, while local governments have used performance-based incentives to attract and expand industrial operations. For a Canadian furniture company suddenly facing a major border cost, such an ecosystem becomes difficult to ignore.

Relocating production would effectively remove the tariff problem on goods manufactured inside the United States for American consumers, although it would create an entirely new set of operational decisions. DFC has stressed that it does not want to abandon Canada. Bruneau told CTV News Ottawa that production for Canadian customers would remain in Kemptville. The potential change is therefore better understood as splitting production by market: Canadian orders would continue to support Canadian manufacturing, while U.S. orders could increasingly be produced on the American side of the border.

Kemptville Would Still Matter—but the Employment Risk Is Real

The production decision has a human dimension because manufacturing expertise cannot be moved as easily as a spreadsheet entry. Bruneau has said some DFC employees have worked with the company for decades. Even if Canadian production remained in Kemptville, transferring a large share of U.S.-bound manufacturing would inevitably change where future production activity, investment and potentially employment growth take place. For employees attached to a 71-year-old local operation, those decisions reach far beyond the price of an individual chair.

The concern comes as Canadian manufacturing has already been navigating trade-related uncertainty. Statistics Canada reported that national manufacturing payroll employment stood slightly above 1.5 million in December 2025, down 40,600 from a year earlier. Ontario accounted for a large share of the decline: manufacturing payroll employment in the province was 656,700, down 27,200 year over year. Conditions improved somewhat during the second quarter of 2026, when Ontario manufacturing employment increased 0.4% from a year earlier, but the broader figures demonstrate why individual factory decisions attract attention.

DFC’s Exposure Mirrors a National Trade Pattern

DFC’s reliance on the United States is unusually high, but the basic pattern is common across Canadian business. Statistics Canada found that 85.7% of Canadian exporting establishments sold goods into the United States in 2025. Ontario was similarly exposed: 19,489 of the province’s 22,685 exporting establishments sold into the American market, equivalent to 85.9%. Geographic proximity, established logistics networks and decades of integrated trade have made the U.S. the natural first foreign market for thousands of companies.

Smaller businesses also tend to have fewer markets to fall back on. Statistics Canada found that only 23% of small exporting enterprises sold to two or more partner countries in 2025, meaning 77% depended on a single foreign market. By comparison, 45.8% of medium-sized businesses and 48.3% of large exporters sold to multiple countries. That difference helps explain the vulnerability identified by Carleton University international affairs professor Fen Hampson: smaller manufacturers often do not have the financial capacity, market diversification or specialized trade teams available to major multinational corporations.

Diversifying Away From the U.S. Is Easier Said Than Done

Canada has already begun shifting some trade away from the United States. Merchandise exports to non-U.S. destinations rose 17.2% in 2025, while exports to the United States declined 5.8%. The American share of Canadian merchandise exports consequently fell from 75.9% in 2024 to 71.7% in 2025. Statistics Canada also recorded 292 more enterprises exporting to non-U.S. destinations in 2025, the first increase in that measure since 2019.

Those national gains, however, do not mean every company can replace American customers quickly. Some of the growth outside the United States came from commodities such as precious metals and energy, where large volumes can be redirected through global markets. Consumer furniture is different. DFC has spent decades cultivating customers and selling directly into the United States. Bruneau has said the Canadian market is far smaller and cannot realistically replace a customer base responsible for roughly 70% of company sales. Diversification may be strategically desirable, but establishing equivalent demand abroad can take years rather than months.

Ottawa Has Support Programs, but Timing Matters

The federal government has expanded financial assistance as tariff pressure has intensified. On September 3, Ottawa highlighted a $7.5-billion package of new and enhanced support for tariff-affected workers and companies, building on almost $25 billion in previously announced measures. The package includes an additional $1.5 billion for the Regional Tariff Response Initiative and a $500-million liquidity stream through the Business Development Bank of Canada’s Pivot to Grow program.

The government has also lowered the minimum revenue threshold for access to BDC tariff programs to $1 million. Under the expanded Regional Tariff Response Initiative, eligible companies may be able to receive non-repayable contributions of up to $3 million, including as much as $2 million for demonstrated liquidity requirements. Such programs can help businesses finance a transition, improve productivity or enter additional markets. Yet assistance does not automatically solve DFC’s underlying commercial problem. If every U.S.-bound product carries a 50% border cost, financing can buy a company time to adjust, but it does not necessarily restore the price competitiveness that existed before the tariff.

Canada’s Counter-Tariffs Will Deepen the Trade Divide

Ottawa is responding to Washington with tariffs of its own. Beginning September 8, Canada plans to impose new counter-tariffs of 15%, 25% and 50% on $27.6 billion worth of U.S. imports, matching American tariff rates on targeted categories. The official Canadian list specifically includes several furniture classifications. Other wooden furniture for domestic purposes, for example, is scheduled to face a 50% Canadian tariff, as are several categories of wooden- or metal-framed seats.

The countermeasures are intended to give Canadian producers a stronger competitive position against tariffed American imports and to impose an economic cost comparable with the measures taken by Washington. They do not, however, eliminate the duty facing DFC when it sells into the United States. That distinction is important. A Canadian furniture producer could benefit from reduced U.S. competition at home while simultaneously becoming less competitive in its largest foreign market. For heavily export-dependent manufacturers, stronger protection in Canada may therefore coexist with an increasingly difficult American sales environment.

A Small Furniture Maker Is a Warning for Canadian Manufacturing

DFC’s dilemma is occurring within a much larger debate about the future of North American trade. Deloitte Canada estimated in September that the United States accounted for approximately 70% of Canadian exports in 2025. In a scenario where Washington formally leaves CUSMA and trade falls back toward less favourable arrangements, Deloitte projects Canadian real GDP would be 1.6% lower by 2036 than under its status-quo baseline. The cumulative economic difference would amount to about $402 billion, with employment averaging roughly 163,000 fewer jobs per year.

Those figures are economic modelling rather than a forecast that such an outcome will definitely occur. DFC’s situation, by contrast, is already tangible. A company that has manufactured furniture in Canada since 1955 is calculating whether most production for its largest market must happen somewhere else. One factory cannot determine the future of Canadian manufacturing, but its decision captures the central risk of prolonged tariff barriers: companies can eventually respond not merely by changing prices or suppliers, but by moving production to the market they can no longer afford to serve from Canada.

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