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Budget 2024 – CKCA’s Concerns, Comments and Message

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Member Directory

Budget 2024 – CKCA’s Concerns, Comments and Message

In response to the Federal Government’s Budget 2024, announced April 17, 2024.

Analysis from our partners is now available, CFIB (Canadian Federation of Independent Business) and CME (Canadian Manufacturers and Exporters).  CFIB Press Release  CME Press Release. CKCA is pleased to support both these organizations and their position and response to the budget.

Other reputable sources include, The Conference Board of Canada (Press Release here) and RBC Economics (Press Release here) both publishing their commentary. All of this is helpful for obtaining a summarized version of the more than 400 pages of budget documentation.

So what does it mean for the kitchen cabinet industry?

Background:

  • The Canadian kitchen cabinet industry is comprised of more than 4,000 manufacturing shops across Canada making us part of the “economic engine” of Canada and one of many manufacturing sectors that contribute to the GDP.
  • In 2023 we generated more than $5 billion in gross revenue sales and employ more than 25,000.
  • We supply  essential infrastructure (kitchens, bathrooms and other millwork) to the housing industry and are comprised of mostly small to medium sized business (1-500 employees).
  • We are an industry in transition that is being impacted by the volatility in the market (interest rates, housing shortages etc.), the skilled labour shortage, an aging demographic of workers and business owners retiring, environmental conditions affecting supply (such as forest fires), advances in automation, complex trade and supply chains and a new generation of workers and business entrepreneurs entering the industry.
  • We are a resilient industry that continued to operate through Covid because we were considered an essential industry sector.
  • We are considered a “high mix, low volume” industry because we produce a highly customizable product that makes our manufacturing process complex.
  • We adhere to Canadian employment standards and safety protocols,  environmental standards and we live and work and contribute to communities across Canada.
  • Our industry is grass roots and, like so many businesses in Canada, we are comprised of workers and business owners who have brought their woodworking skills to Canada from all over the world.

Our concerns:

  • The cost of doing business continues to rise for our sector with increasing taxes, business fees, cost for supplies, labour and more.
  • Our industry continues to adopt new technologies and automation that requires significant  financial investment. This also comes with increased business risk from cyber attacks and requires retraining/reskilling our employees. It also requires increased  dependency and consumption on the power grid (utilities) to run our facilities, all of which is costing more each year.
  • Remaining competitive is challenging and we are being impacted by offshore, cheaper product entering Canada at 40-70% cheaper making it impossible to compete, especially on lower end housing. Our industry’s response to this has been to move into the mid to higher end markets to survive.
  • Fluctuation and volatility in the market, with inflation impacting interest rates, not only slows the market it increases financial pressures on our businesses who must navigate long lead times and delays before full payment is received, creating risk to both borrowers and lenders.
  • The increasing population is growing faster than our ability to build homes which further adds pressure on the housing and rental markets.
  • Cycle times on building remain long and since our industry installs some of the more final components in the home, we are frequently faced with costly delays.
  •  Our sector’s profit ratios remain below the national manufacturing average of just over 9% (we are between 7-8%) which leaves little room for market changes and can create very difficult financial conditions for even the most successful of companies in our industry.
  • While many have the perception that our industry did well through Covid, many companies struggled to operate during these challenges times and are still recovering from the unprecedented changes that occured. As one member who has been in business over 40 years told us: “Since Covid, although a few costs have come down, the major contributing costs (our fixed costs) will not come down and if they do, its minimal due to the new cost of doing business. Even though we raised our prices 30-40% during Covid and had a record year in sales due to this increase in 2023, we still had a $2 million shortfall in order to break even.”

Our comments on the budget:

  • What Government decides and how it budgets impacts our industry. Our partners have all echoed concerns around the new capital gains taxes and we share their concerns.
  • Canada’s GDP has slowed, productivity in Canada has slowed to levels that the Bank of Canada has declared “an emergency” and it is concerning that capital gains taxes on business may de-incentivize further investment in Canadian business.
  • We are pleased to see increase funding for SR&ED that supports R&D, our industry is one of many that need more R&D to drive innovations.
  • We echo CFIB’s comments that the Employee Ownerships Trusts, that allows business owner to access a special capital gains exemption of up to $10 million when selling a business to their employees, is good as our industry is seeing an increasing number of businesses changing hands and we will continue to see this as our aging workforce retires.
  • We are also pleased to finally see some Carbon Tax rebates being returned to small business and commend CFIB for working hard on that issue to represent small business.
  • We echo the concerns of the CME who are deeply concerned about the pace of implementation of previously announced measures by Government.
  • It is good to see the budget has earmarked $409.6 million over four years, starting in 2025-26, to the Canada Mortgage and Housing Corporation to launch a new Canada Secondary Suite Loan Program, enabling homeowners to access up to $40,000 in low-interest loans to add secondary suites to their homes.
  • Increasing affordability for housing, including subsidized housing paid by Government (using taxpayers money) is an important initiative, but creates additional pressure to produce product at the lowest possible price which will likely attract more off-shore cheaper product, even though we can and do manufacture kitchens in Canada. Off-shore product is counterproductive to the Government’s efforts to improve our environmental performance when we know “made in Canada” offers many environmental benefits.
  • The budget proposes more support for modular and pre-fab building techniques, this is interesting, but it is too early to know if this will make the significant dent in the housing crisis. A lot will depend on whether the pre-fab industry can scale up quickly enough to respond to high demand and it could further perpetuate cheaper off-shore product entering Canada as a result.
  • It is good to see amendments that will help first time buyers afford a home (increasing amortization to 30 years from 25)
  • We are pleased to see housing gaining more attention and being prioritized by Government. Our industry wants to be part of the housing solution and to be recognized as a valued stakeholder.
  • We look forward to learning more about the Canadian industrial strategy for homebuilding as well as improved data collection from CMHC and StatsCan who will receive $20 million over four years to enhance their data collection and dissemination of housing data, including municipal-level data on housing starts and completions.
  • There is no one clear solution to the housing crisis, it is a multi-faceted and complex issue that requires a multi-pronged and innovative approach.

Our message:

While the push to build more homes continues, all levels of government need to ensure they create policy to foster the right conditions that enable Canadian business to effectively supply to an already pressurized housing industry. Our industry’s ability to compete and be successful is at a vulnerable crossroads. With demand for housing never being higher, our industry is not only working through skilled labour shortages and the cost of automation upgrades, it is also changing hands as we see an exodus of people from our sector and businesses being handed down to the next generation. This combined with higher interest rates, carbon tax, increased labour costs, increasing material costs, increasing property and rent costs, higher insurance and more, creates significant risk  for many businesses who are looking to Government to provide support as business evolves. The ability to move business from one generation to the next needs to have every opportunity to be successful and viable for those taking over. Federal, provincial and municipal budgets must come with constructive policy and nimble regulations that provide for a positive future and a healthy competitive environment for the next generation of business owners.

Every home has a kitchen. CKCA wants that kitchen to be made in Canada.

 

Rishelle Tarr

Westwood Cabinetry

Rishelle Tarr is a dedicated operations leader with a strong background in finance, sales, and business development. She joined Westwood Cabinetry in 2018 and currently serves as Director of Business Operations, where she plays a key role in scaling the company’s multi-family and B2B cabinetry channels across Canada. With a career spanning finance and operational strategy, Rishelle brings a process-driven mindset and a passion for growth and innovation to her work. As a new voice in the cabinet manufacturing space, Rishelle offers fresh insight into evolving market trends and the next generation of industry leadership. Rishelle is excited to serve on the CKCA Board of Directors, where she aims to support industry connection, knowledge-sharing, and a strong future for Canadian cabinetry.

Craig Atkinson

Marathon Hardware

Founded in 1990, Marathon began with a simple concept; to provide excellent customer service to the woodworking trade by offering affordable high-quality hardware and the best customer support in the industry. Over the last 30 years, we have been dedicated to our customers by creating a company with these cornerstone ideals. Craig joined Marathon in 2011, taking charge of their technology and web, and later all marketing. With extensive operations from BC to Ontario, Marathon takes pride in building long term relationships with its customers. Craig believes that the mission of the CKCA is in direct relation to Marathon’s approach to doing business. By building working relationships based upon trust and mutual respect, everyone moves forward together.

James Dewinetz headshot

Treasurer

James Dewinetz

CPA, CMA – Pacific Rim Cabinets

James has been around the cabinet industry his whole life, working in factories as a summer job. His father started Pacific Rim Cabinets in 1997 to manufacture custom cabinets solely for export to Japan. Over the years, while Japan remains an integral part of the company’s history and sales, Pacific Rim Cabinets now deals primarily with the custom home builders, designers and architects around Vancouver and the lower mainland of BC manufacturing custom kitchens, bathroom vanities, entertainment units, closets, fireplace surrounds, offices, among others.
James began working at Pacific Rim Cabinets in 2010 as the company’s accountant, he completed his CMA designation in 2012 and became the company’s President in 2018.

James works with the CKCA President and the Executive Director to manage and monitor the CKCA Finances on a regular basis. What’s the biggest advantage to being a member according to James? Click here»

Gerald Van Woundenberg

Van Arbour Design

Gerald is owner of Van Arbour Design based in Vancouver, BC. In business for more than 34 years, Gerald is a first generation Canadian with Dutch roots. Gerald loves building and knowing how something works. He is committed to change in an ever changing world and always looks for the best and most effective ways to do things. Gerald’s business is intensively client-driven: quality first, with integrity and honesty and transparency in the process. Gerald has been a presenter at the CKCA National Forum and is now pleased to be a member of the Board of Directors.

What’s the biggest advantage to being a member according to Gerald?
Click here »

Chris Havey

CNC Automation

Chris joined CNC Automation in March 2022 after 19 years at Deslaurier Custom Cabinets where he was a member of the senior leadership group and held the role of manager of supply chain and new product introduction (NPI). As a seasoned operations and supply chain professional, Chris brings tremendous insight and knowledge, both from the viewpoint of a manufacturer and now as a supplier. Chris is results-driven and prides himself on his work. He loves this industry and approaches it with passion and vigor. It is the same passion that has driven Chris to want to be on the CKCA Board of Directors. Chris was elected to the Board on June 15, 2023 to serve his first 3 year term. What’s the biggest advantage to being a member according to Chris? Click here»

James Mckenna

Glenwood Kitchen

James McKenna graduated with a business degree from Saint Francis Xavier University. After working in the natural gas industry in Toronto, James returned home to run the new family business Glenwood Kitchen Ltd.

Glenwood manufactures custom cabinetry and has been in business for 50 years. Mr. McKenna was finalist for Entrepreneur of the year award with Ernst & Young and his company has won the Chamber of Commerce Business of the Year Award.

James volunteers with numerous charities and was awarded the Paul Harris fellowship award. Recently, he was recognized by Junior Achievement as volunteer of the year and by NB literacy coalition for his corporate responsibility

Rick Hurst

Richelieu Hardware

Rick has more than 45 years of industry experience and has been an active voice and advocate for the evolution of kitchen cabinets in the Canadian market. From the euro conversion of cabinets replacing face frames to the various evolution of drawers, hinges, lighting, accessories, and motion technology, Rick has seen and also led a lot of the big events that drive consumer demand and have pushed the industry in an upscale direction. Himself a passionate woodworker with his own home workshop, Rick offers the unique skill combination of understanding the industry and cabinetry from sales to design to innovation, right down to the nuts and bolts of making a cabinet hardware solution work.

Rick was previously a member of the CKCA board for 27 years, serving on all CKCA committees during his tenure. Rich has also served as a board member of AWMAC (approximately 10 years) and the NKBA (approximately 5 years) as well as 10 years in his homeowner’s association, including 3 as president. 

Craig Bauslaugh

Columbia Cabinets

Craig Bauslaugh is the Chief Improvement Officer at Columbia Cabinets, a Canadian cabinet manufacturer, with 170 production staff. He studied Arts at Laurentian University, where he competed on the varsity basketball team, demonstrating a strong commitment to teamwork and high performance. Craig earned his Lean Six Sigma Black Belt from Purdue University and is currently expanding his leadership skills through executive education at Stanford University. He designs and manages programs that enhance operational efficiency and consistency, while leading process improvement, production optimization, and cross-functional initiatives aligned with the company’s strategic vision. Craig also delivers Lean and continuous improvement training to management teams at all levels, and is passionate about building dynamic teams and fostering a culture of continuous growth.

Trevor Chaulk

Chaulk Woodworking

Trevor has been in the trades for more than 26 years, starting off with 10 years in the tool and die industry in the Toronto area.  After moving to Haliburton Highlands, Ontario in 2007, he started a small cabinetry company.  Since then, they have grown to be the largest cabinetry shop in their local area.  Trevor and his wife Angela understand the dynamics of starting, building and running a cabinetry shop in today’s time, while raising three children.  He has always had a passion for woodworking, designing and building things.  After joining the CKCA as a member in 2016, he was enthusiastic about what they were doing and had to offer.  Trevor has a keen interest in seeing the Canadian cabinetry and manufacturing industry learn, grow and thrive.  What’s the biggest advantage to CKCA membership according to Trevor? Check it out here»

Giuseppe Castrucci

Laurysen Kitchens

Giuseppe is Past Vice-President of Marketing & Sales at Laurysen Kitchens in Ottawa. Giuseppe’s wife, Caroline Castrucci  previously served on the CKCA Board and served as President of CKCA. Laurysen Kitchens was established in 1970 and began as a business operating out of the garage of John Laurysen with just 1,200 square feet. With more than 55,000 square feet of manufacturing space this family run business continues to thrive and a third generation is now very actively involved in the business. Giuseppe brings a wealth of experience having served on various Boards over the years including currently President of the Greater Ottawa Home Builders Association, Chairman of the Kitchen & Bath Program at Algonquin College Business Advisory Board, Chair of the Design Excellence Awards Committee for NKBA Ottawa. Giuseppe has a passion for cars and is also Chairman of the FCA Ottawa Ferrari Festival. He was Knighted by the Royal House of Savoia Charity and also by the Ethiopian Order of the Lion Charity.

What’s the biggest advantage of being a CKCA member according to Giuseppe? Read here»

Joerg Brauns

2020

Joerg Brauns is part of the Manufacturing Team at 2020. In 2001, Joerg moved to Canada to open an office for a Germany Software Company. Acquired by 2020 Technologies in 2005, Joerg held several leadership positions at 2020. With over 20 years of experience in the woodworking industry around the world, Joerg has managed ERP implementations and led a team of professional engineers and consultants, before managing new and existing manufacturing accounts around the world. Joerg is also a member of 2020’s worldwide Factory leadership team.

He is a strong believer that the collaboration between like-minded people will allow all of us to grow.

What’s the biggest advantage to being a member according to Jeorg?
Click here »

 

Sandra Wood headshot

Secretary and Executive Director

Sandra Wood

CMP

Sandra has worked in the not-for-profit sector for more than 30 years. Having worked for many different associations in education, medical and now wood sector. Sandra brings a universal perspective based on hands-on experience.  She is passionate about not-for-profits because they work to support their members and the industry. Sandra enjoys “connecting the dots” and facilitating strong networking opportunities to engage members. She believes Associations are about fostering strong business relationships fueled by an empathic and sound business approach. She is an experienced public speaker, writer and has served on various Boards as a Director. She brings a well rounded perspective to CKCA.

Pete Fournier headshot

Past-President

Pete Fournier

Triangle Kitchen

Pete is an experienced entrepreneur – he started his first company at the age of 19 and has held a managerial role for 20 years.  After finishing his degree in Wood Products Processing at the University of British Columbia, he joined the Triangle Group in 2000, where they currently employ more than 100 staff.  Pete is responsible for all aspects and functions of new business development, product development, facility expansion and new markets. Pete previously served as Vice-Chairman of the Board of Directors for the Wood Manufacturing Council, was President of the Canadian Kitchen Cabinet Association and is also an independent Board Member for a private Nano technology company called Metamaterials Technologies Inc.

What’s the biggest advantage to being a member according to Pete? Click here »

Vice-President

Luke Elias

Muskoka Cabinet Company

Luke has been in the industry for more than 30 years and only loves his family more than his pursuit of advancing technology in business.  Luke is passionate about technology in manufacturing and in 1989 started implementing computer hardware and software to improve office to shop communications. Early on Luke invested in cutting and optimization software and invested in a a Nested Based Manufacturing in 2000.  Today Luke is co-founder of SMARTMRP Inc. an ERP/MES automation software specifically designed for the woodworking industry. With SMART at its core, Muskoka boasts one of the most advanced panel processing cells in the world, utilizing Robotics, RFID, ERP and an AGV, for machining, sorting, labeling, transporting and tracking parts. These innovations have resulted in Muskoka having output three times the industry average. Luke believes the key to survival and growth is through integration of processes and automated sharing of information within the organization.

President

Amrita Bhogal

Sunrise Kitchens

Amrita is an enthusiastic HR professional whose focus is to elevate people’s mindset and coach them to live a continuous improvement lifestyle. She has always had an entrepreneurial mindset and turned her passion for helping people into a pursuit of Human Recources in University. Nine months into her career she was introduced to the principles of Kaizen and since then adopted these principles in her life. Presently she is educating the workforce at Sunrise Kitchens on learning to use Kaizen principles in daily tasks at work and at home. Amrita has been a Board member on the Surrey Board of Trade in BC and is a recipient of the Wood Manufacturing Council’s HR Award for Innovation 2020 and has spoken at numerous CKCA events and continues to write and publish articles in CKCA newsletters and other media. 
What’s the biggest advantage to being a member according to Amrita? Click here»