An Ottawa-area furniture retailer is shutting down two of its locations as it tries to cope with the fallout from the Canada-U.S. trade war. The New Oak Tree, a family furniture business that has operated in Ottawa and the Ottawa Valley for more than two decades, is closing its Carleton Place and Pembroke stores to focus its resources on its two remaining Ottawa-based locations, including its showroom in Navan.
Owner Kayman McKay, who purchased the company in 2021, said retaliatory tariffs and rising costs have forced the business to consolidate. Many of the company’s furniture pieces were once sourced from U.S. hardwood, a product targeted by Canada’s retaliatory tariffs on American goods. McKay said the business had to absorb $100,000 in retaliatory tariff costs immediately rather than pass the expense on to customers.
Tariffs Disrupted 40 Per Cent of Business
McKay said the tariffs caused a supply shock, affecting roughly 40 per cent of the company’s business when they first hit. He said the business ultimately paid hundreds of thousands of dollars in direct and indirect tariff-related costs. Rising diesel prices have since added further pressure by driving up delivery expenses.
In response, McKay said the company has already shifted all of its suppliers to Canadian sources in an effort to control costs. Even so, he said the broader financial strain tied to the trade war has continued to affect both the business and him personally.
Wider Pressure on Small Businesses
Dan Kelly, president of the Canadian Federation of Independent Business, said The New Oak Tree’s situation reflects a broader trend, with thousands of small businesses struggling under the weight of tariffs as the trade war continues. Kelly said he hopes the federal government continues efforts to support small businesses, which often operate on thin margins and have limited room to absorb added costs.
The Carleton Place and Pembroke locations, including inventory such as bedroom and dining sets, are being wound down ahead of a planned closure date of Oct. 12. McKay said he is hopeful the consolidation, combined with the shift to Canadian suppliers, will put the business in a stronger position going forward.
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