The Current - What’s the impact of US tariffs on New Brunswick?

Episode Date: November 20, 2025

New Brunswick is one of the provinces most vulnerable to US tariffs. And they’re hitting wood product makers and soft-wood harvesters the hardest. We'll hear from James McKenna, who owns a kitchen cabinet business, about how he's trying to keep his company afloat in the face of 50 per cent tariffs coming in January. Then Premier Susan Holt will tell us what the province is doing to help and what kind of support she's expecting from the federal government. 

Who was Elon Musk before he was so loved and so hated? Saved free speech. He created so many different great things. Before the billions, before the rockets, before the never-ending headlines. I'm Jacob Silverman, and my new podcast explores the prequel to the Elon Musk era. Let me tell you what you don't know about the world's most notorious billionaire. Understood the making of Musk. Available now, wherever you get your podcasts.

This is a CBC podcast. Hello, I'm Matt Galloway, and this is the current podcast. I'm Rebecca Zanbergen, sitting in for Matt Galloway. This is a bad situation. For the first time that I can remember, I'm discouraged. Andrew Clark has been in the lumber business for more than 40 years. He owns a woodlot where his company harvests trees. Clark lives in Carleton County, a rural part of New Brunswick.

Forestry is one of its key industries and the region is already feeling the impacts from Donald Trump's tariffs. According to the local Carlton Victoria Forest Products Marketing Board, projected sales for the area are down $3 million compared to last year, and that is a nearly 65% drop. A lot of local businesses here that sell groceries, tires, parts, whatever, are not getting that $3 million less that Colorado is experiencing right now. So this isn't just an impact on the private woodlot owners. This is an impact on the royal economy of New Brunswick.

New Brunswick is one of the province's most vulnerable to U.S. tariffs. One of the province's main economic drivers, lumber, has been walloped. U.S. President Donald Trump added another 10% last month to softwood lumber tariffs, bringing the total to 45%. A big hit to an industry that's worth more than $1.5 billion to the province and employs more than 26,000 people. That's not it, though. Those who manufacture finished wood products like cabinets and vanities

are being hit hard too. The U.S. added a 25% tariff to those products last month, and that is set to increase to 50% January 1st. In a moment, we'll hear from the Premier of New Brunswick, but first I'm joined by James McKenna. He is the owner of Glenwood Kitchens in Shediac, New Brunswick. James, good morning. Good morning.

Tell me about your business. How long have you been operational? Yeah, we've been selling kitchen cabinets through eastern U.S. for over 40 years. The business has been around for 55 years. And you've been the owner for how long? About 22 years now. Okay. How much of your business goes to the U.S.? So about 10, 15 years ago, we had 50% of our sales were sent down to the U.S.

Now, we've switched a lot of that over to Canadian market. So at the current moment, we're selling about 20% into the U.S. And was that just fortuitous that you made that switch? Yeah, that was just by luck. How many people do you employ? We currently employ 120 people. So if you look at 20% that we potentially lose, you're looking at about 15, 20 people that we may not need in the next couple months

if we can't recoup this business. I know your industry saw a 25% tariff added just last. last month. Tell us more about the impact that it's having already, and we know more is on the way, it looks like. Yeah, I mean, 50% tariff is not something that we as a company can handle. Our U.S. customers really like our product. We have great relationships with them, but 50% they are not able to recoup that. They're not able to pass that onto their consumer. So we think that we're going to lose, you know, 90% of our sales in the U.S. will be gone very soon. And the problem that that's going to create is we'll then have empty transport trucks.

So it'll make it, it'll make it inconvenient and not profitable for us at all to sell into the U.S. What kind of relationships have you had with clients south of the border? We've got long-lasting friendships with our retailers in the U.S. We've been doing business for them for a very long time. And there's a very strong Acadian culture in New England in the construction industry. So people in roofing, floor and siding, also. cabinet. So we have a very good relationship with people down there. They have relatives in Atlanta Canada, and we've always had good business together. And what conversations are you having

with them knowing what's still to come? Well, they say they still want to buy from us, but we're noticing right now that our sales are dropping. So in 2026, we have very, very little sales where in the past years we would have regular business. So although they tell us that there's not an issue and that they still want to buy from us, we're noticing a decline, rapid decline in sales. Give me an example of some of your clients, like not their names necessarily, but the kinds of business you have. Like, what are you selling exactly? Yeah, so we sell to high-end kitchen and bath stores throughout New England. We have retailers in Maine, Massachusetts, New Hampshire, and Connecticut.

And if you lose 20% of the market, if 90% of that share says that they will no longer be able to afford your product, do you have another option of where you can sell? Well, I mean, ideally we'd like to sell in our local market. So we're really actively trying to find new retailers in eastern Canada. The issue is all of the other kitchen cabinet manufacturers that are exporting right now are doing the same thing. So we're going to have a surplus of companies that have an excess amount of capacity selling into Canada and we're going to start competing against each other where in the past it wasn't a major issue because we would ship down to the U.S. Now we're going to be fighting against each other and that's not

ideal. And are you having conversations with your competitors locally? We're all on the same page. We're all trying to help each other out. We're all trying to get through all this tariff nonsense, the paperwork and the burden that that's created for all of us. So right now, we're in share mode with each other. But, you know, in the next few months, as our business dries up, we're all going to be, you know, trying to sell in each other's market. So I think this is a short, short-lived friendship. Can you tell me a little bit more about your employees. Who are the folks that you employ? So we sell or we we employ as I said 120 people in two factories. About 50% of our employees are new Canadians. So we have

people from Brazil, from Colombia, from Mexico, from India, wonderful people. And we want to keep them. So I don't think there's a whole lot of jobs out there if they don't work for my company. So we're doing everything in our power to make sure that we can try and keep everybody employed. Are you having conversations with them yet? We're not having conversations. We're very open with everybody in our company. They read the news. They know what's going on. They know as much as we do. I mean, as of now, there's a 50% tariff, potentially another 10% added on top of that, but that could change in a minute. So I think we're all just kind of waiting and seeing, hoping that the government is going to be able to give us some

information on what is actually happening in the future. It's extremely hard to run a business like this when you just don't know what you can charge your customers. Who do you blame in all of this? There's only one person to blame in all of this and I think everybody knows who that is. So I think

most of the American people have no issue with Canadian but there is one person obviously Mr. Trump that does and he rules with an iron fist and he does what people say, people do what he says. You know, Shediak is in Dominic LeBlanc's writing. He's the federal minister responsible for

Canada, U.S. trade, I know you've been having talks. You've spoken to him, and he's certainly been the one negotiating these tariffs with the U.S. What did you tell him? What did that conversation sound like? Yeah, I mean, Mr. LeBlanc has been checking up on us on a regular basis. He knows our situation. Unfortunately, I don't, I think his hands are tied right now as well. I don't think he can negotiate with somebody that doesn't want to be spoken to. So I think that they're just waiting and holding their breath and trying to, you know, recreate a relationship with the U.S. He does know how important this is to our business.

And as I said, he's in regular conversation with us trying to see how we're doing. You know, the premier's met with Prime Minister Mark Carney on Monday, and there's been talk after that of the federal government introducing a relief package. Would that be helpful if you had some sort of financial help at this point? I mean, financial help is always wonderful, you know, the three things that we're really looking for as an industry is we want the buy

Canadian requirement. So any time there's, you know, government procurement that it's made sure that it's purchased from Canada, Canadian cabinets. The other thing we really want is to make sure that export countries that are shipping into Canada, you know, countries like China, Malaysia, Indonesia, that are selling, you know, low-cost cabinets into Canada that they, you know, are tariffed because right now they're not. And the third thing that we want is we really want representation at the negotiation table speaking about Canadian cabinets. So those are the three main things we want. But ultimately, we just want to get back to regular business. None of that matters. We just want to sell kitchens into

the U.S. to our friends down there. In the meantime, though, you say you are looking to other places in Canada to sell your cabinets, as is everyone else. But have you considered selling overseas? Is that an option? I mean, everybody says, you know, sell overseas. That sounds easy. Unfortunately, our cabinets are like furniture. They're big, they're bulky, they have to get on a transport truck to a container ship to another transport truck. It takes a lot of movement, and it's not an easy thing to do. Right now, we load up a transport truck in our factory in New Brunswick.

We ship it down eight hours, ten hours into the U.S. We have eight million people there that we can sell to. It's only offloaded once, and there's no issue. So it's not an ideal situation shipping outside of Canada. James, just before you go, we are about to. speak with Premier Susan Holt. What would you want her to understand about everything you're facing right now? I guess I just would like her to keep the pressure on the federal government,

to keep the communication lines open to make sure that we know what to look forward to in the future. Because right now, we can't plan for anything. We can't invest in our businesses. We can't hire more people. The unknown is really killing us. So communication and obviously getting a seat at the next. grocery table are the most important things for us right now. Okay. James McKenna, thank you for your time this morning.

Thank you so much. James McKenna is the owner of Glenwood Kitchens in Shediak, New Brunswick. Hi, I'm Sarah Nicole Landry, and I'm the host of the papaya podcast where each week I ask curious questions to people with incredible stories or expertise in their fields. I'm somebody who has found so much inspiration in storytelling and learning from them, and I wanted to bring that to a podcast where each week we walk away, learn. something that might just change our lives for the better. Check us out every Monday on the Papaya podcast. See you there. Susan Holt is the Premier of New Brunswick and she's been

listening in and joins me now from Frederik Chen. Premier, good morning. Good morning, Rebecca. What do you say to James and others who are in the same situation as him? Well, we share their concern. It's extremely worrying for the New Brunswick economy. These tariffs, that the president has put on a critical industry for New Brunswick, the threat of increases to those tariffs. As Jamie described, coming up for January 1st, it's really going to hurt entrepreneurs and employees in New Brunswick. And we are working with him and with our federal counterparts

to do everything we can to try to get the negotiations going with the coalition in the U.S. to get rid of the softwood lumber tariffs and to make sure that we're doing what we can to support industry in the meantime. We heard about financial support coming from the federal government. What would that look like

and how likely is that to happen soon? Well, what that looks like is a good question. The supports that we provide to lots of different industries in New Brunswick to help them hire, to help them adopt automation solutions, to help them access new markets. Some of those supports are the subject of contention with the softwood lumber group, right?

That's their perception that our industry was not operating with what is actually true, the fair market value principles that we apply here in New Brunswick was what got us into this situation in the first place. So we have to be really careful about providing the right kind of supports that aren't going to make the dispute worse. but we have to, we want to help our companies get through this storm, make sure we minimize the impact on employees and people losing their jobs, accelerate to the opportunities to find new markets. And as Jamie said, it's not easy to put a bunch of kitchen cabinets on a container and ship them to Africa when they've been going on a truck and getting shipped over a very close border to a large market next door. So there's a lot that we need to do here and we need to do

but in partnership with the federal government and with our friends and clients in the U.S. that want to continue and have access to the incredible products New Brunswick produces. You sort of alluded to the fact that softwood lumber has certainly been up for debate with the U.S. for years now. And this perception that Canada is unfairly subsidizing lumber, it's an ongoing trade dispute. There have been tariffs on softwood lumber since 2017 at a lower rate before the second Trump administration slapped this most recent increase. Rick Doucette is the president of the New Brunswick Federation of Woodlot owners. I just want you to have a listen to what he has to say. We're a little frustrated with the fact that this issue isn't new to the current Trump administration.

This issue actually started in the original Trump administration. And we had a lot of opportunity in New Brunswick to get back our tariff exemption over the last nine years. And the federal government and even the provincial governments at the time just didn't seem to see it as an urgency. and now we're in a real crisis because it's compounded with all these new tariffs that aren't actually based on anything other than a bit of a whim. What do you say to someone like Rick Doucette who argues that this has been going on for many years and surely we could have come to a solution over the last nine years? Well, this absolutely has been going on for a long time.

And whether we could have come to a solution is a great question because our team has been working hard and I say our team, But the government of New Brunswick, through multiple administrations, has been working with lawyers and others down in the U.S. and in Washington to go through the process, the appeals, to make the case to get the terrorists removed for a lot of years now. And I share Rick's frustration that we haven't been able to get the decision that we would like, that there's a fundamental disagreement between Canada and the U.S. on softwood lumber that we haven't been able to resolve. I think one thing I've seen through the last number of months is that the Canadian industry has come together nationally. You know, the players in British Columbia and in Quebec and New Brunswick

and in Ontario and at Nova Scotia to some degree have all come to the table to get to a unified position that gives us more strength in the conversation with the U.S. and to get agreement on some core pieces of what we want to. negotiate with them. But as James said, we've got a very erratic negotiating partner that rational approaches doesn't seem to work with. So it's really challenging. I just want to remind our listeners, because we know softwood lumber, that industry is huge in BC. We hear about that all the time. But just remind us how big of a part of your province's economy softwood lumber

represents. Oh, it's really significant. It's the largest contributor to our GDP, as You heard from the gentleman from Carleton County every time, you know, you have a company that's going out to harvest wood and then that impacts the transportation logistics. And then we add value to that product. We turn it into home building materials, into cabinets, into diapers and into Kleenex and things like that. And then that employs a lot of people. We then send it to customers all across Canada and the U.S. and beyond. also employs a lot of people. And by our estimates, these tariffs, if they remain in place,

will impact thousands of employees in New Brunswick and have a tangible 0.5% reduction in the GDP of our province. 1,700 jobs potentially lost next year alone. It's significant. We often hear that, that New Brunswick somehow is the most vulnerable province to U.S. tariffs. Why is that? Well, I think it's because we've had a longstanding,

excellent relationship with the United States. They are our number one customer. And as you heard from Glenwood cabinets, it's quite easy for us to do business with the U.S. And so that's where we've built up our export markets. And it's harder to think about putting a container on a ship at a port and sending it across to a customer in Europe or in Africa or in Asia. When we have great neighbors in New England with a massive population that likes and appreciates the quality of the products that we make. So we've been doing business with our neighbors for a very long time with very good relationships and it's worked well.

Changing that right now is the challenge. It's hard to pivot the ship on a dime. But that is what we're trying to do because there are new customers out there in markets all around the world that are interested in doing business with Canada and New Brunswick. more so than ever right now. They're also trying to untie some of their relationships with the U.S. But that's not happening as quickly as the impact of these tariffs is being felt. And how are employees feeling the crunch already?

I mean, have you seen layoffs? What kind of impact is it already? I know you wrote a letter to the Prime Minister about how the increase in tariffs is hurting the economy, but also the workers. So tell us a little bit about what you're already seeing. Yeah. We, I mean, we have an incredible industry here in New Brunswick.

They have been resilient and creative. And so so far, we've only seen a small number of layoffs, although anyone losing their job is not a good thing. It's been a little bit less here in New Brunswick, actually considerably less than we've seen in B.C. In some other places at the moment, but the trajectory is steep. Right now, businesses are toughing it out. They're leveraging savings. They're making some adjustments to inventories and schedules. They're working hard with their customers in the U.S.

to share some of the burden. I don't know that James talked about this a lot, but we are seeing an increase in Canadian customers. So the market in Atlanta, Canada and Canada for our wood products, has increased. The government's looking at what we could do differently with wood in terms of building schools or other things to try to replace some of that activity.

but we know that big hits are coming because we can't sustain these levels of tariffs for very much longer. Okay, Premier, thank you very much for speaking with us this morning. Thanks very much, Rebecca. Susan Holt is the Premier of New Brunswick. For more CBC podcasts, go to cbc.ca.ca.