Ontario Business Trends March 2026 – Optimism In Ontario Despite Tariff Revisions
As we move forward in 2026, business owners remain cautiously optimistic as the imposed tariffs continue to be revised by the U.S. In Canada, Prime Minister Carney and his government are moving forward to diversify trade partnerships and catalyze new levels of investment. Hardwood contacts commented that business since the start of the year has been mixed. Some reported modest sales, while others say it has been slightly quieter. All are hopeful business will pick up this spring.
Ash markets are the same as previously reported, with modest quantities moving to established customers for furniture, millwork and distribution centers. Production of eight-foot FAS lengths is outpacing demand, while demand longer material is outpacing production. Exporters noted that sales to China and Vietnam for common grades of this species are moving.
Aspen producers are receiving orders, but demand is at a lower rate at this time.
Production is limited, and so its scarcity makes it an item in demand. For those seeking Aspen, they are seeking farther afield to obtain supplies.
Basswood is selling mostly to the moulding, window blind and shutter sectors, which remains at the same pace as at year-end 2025 at the time of this report. Some exporters noted their overseas customers are seeking Basswood, although not in large quantities.
Birch sales are also less favorable, stated some contacts. Birch has its own markets, as an alternative to supplies of other whitewoods, like Hard Maple, when they do not keep pace with demand or prices rise. Flooring producers’ demand for this species is stable, as well as that of cabinet manufacturers who use Birch.
Hard Maple production and demand is strong. Sawmills are cutting what they have on hand. Some contacts noted that demand for green Hard Maple is tepid. Soft Maple also remains strong on markets. Buyers are steadily purchasing upper grades, for SAP & Better color. Sales of No. 1 Common are mixed depending on the region contacted, with some struggling to sell what they produce. Prices are firmer for upper grades than common grades.
Sales of Red Oak to truck trailer flooring producers is slow, while residential flooring reports are noted as fair. Interest in green No. 1 Common & Better are reported as decent. Mills were prioritizing Hard Maple over Red Oak at the time of this writing. Supply is meeting demand for Red Oak. Contacts noted similar conditions for White Oak. Sales are based on specific lengths to established customers.
Demand for finished hardwood flooring products was steady for manufacturers recently. Businesses take this time to review their supplies for their finished products. Making a sale during this time was a bit more challenging, noted some contacts. With housing statistics on the rise, and the Government of Canada committing to build more homes across the country, producers hope this will be a positive outcome and generate more business for them.
The U.S. postponed its 50 percent tariff increase on kitchen cabinets and vanities and 30 percent rate on upholstered furniture for a period of one year to January 1, 2027. There was relief among the Canadian manufacturers and suppliers at the news. However, Luke Elias, vice-president of the Canadian Kitchen Cabinet Association (CKCA) is “calling for complete removal of the existing 25 percent tariff, which he stated is highly punitive and continues to distort trade and pricing for businesses and consumers on both sides of the border.” These tariffs have disrupted longstanding trade flows between the two countries, created uncertainty around future orders and elevated costs throughout the supply chain. In the U.S., tariffs contribute to higher costs for new home construction and kitchen renovations.
While the association welcomes the federal government’s Build Canada Homes Initiative, they are urging Ottawa and the provinces to go further by extending the Build Canada model across all housing-related incentive programs. The CKCA also calls on the federal government to urgently address the growing volume of imported kitchen cabinets entering Canada at below fair market value, which has increased at approximately 20 percent annually over the past five years.
Elias said the federal government must also address the effect of parts imports coming in at below market value — a major irritant for the American cabinet and furniture industry. He said low-priced parts from Asia are being brought into Canada, assembled and sold in the United States under a “made-in-Canada” label.
The Canadian industry also has said these parts imports are undermining the domestic industry.
United States President Donald Trump said the tariffs on furniture are needed to “bolster American industry and protect national security.”
The Canada-United States-Mexico Agreement is up for review this year, and it will be critical that the cabinet and furniture industry is not ignored in favor of higher-profile tariff targets like steel and automobiles. There are 3,500 companies, employing more than 25,000 Canadians, being affected by the duties.
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