Furniture 2010

Introduction .................................................................................................................................... 2
Scope of the Report ................................................................................................................. 2
The Canadian Market .................................................................................................................. 4
Imports ....................................................................................................................................... 6
General Furniture Market ...................................................................................................... 11
Trends and Opportunities ..................................................................................................... 15
Trade Practices........................................................................................................................... 16
Competition ............................................................................................................................. 16
Trade Shows ........................................................................................................................... 16
The Buyer ................................................................................................................................ 17
Design ...................................................................................................................................... 19
Quality and Inspection ........................................................................................................... 21
Price ......................................................................................................................................... 21
Packaging and Transportation ............................................................................................. 22
Labelling................................................................................................................................... 23
Distribution................................................................................................................................... 25
Import Regulations ..................................................................................................................... 27
Tariffs ....................................................................................................................................... 27
Taxes ........................................................................................................................................ 27
Importing .................................................................................................................................. 27
Inspection ................................................................................................................................ 28
Antidumping ............................................................................................................................ 28
Regulations ............................................................................................................................. 28
Tips for Exporters ....................................................................................................................... 30
Sources of Information .......................................................................................................... 31
Other Useful Internet Sites ................................................................................................... 31
Trade Shows ........................................................................................................................... 32
Publications ............................................................................................................................. 32





This report is distributed subject to the condition that it shall not, by way of trade or otherwise, be lent, sold, hired out, or otherwise
circulated without TFO Canadas consent, in any form of binding or cover other than that in which it is published.
All information provided in this document is based on the best available at the time of preparation and is offered without responsibility on the
part of TFO Canada. The reader is advised to check with TFO Canada for updates and clarification through www.tfocanada.ca or by writing to
the address provided in the Annex. This report has been produced with funding from the Canadian International Development Agency.

Trade Facilitation Office Canada, 2010



Furniture 2010


2
1
Introduction

TFO Canada offers a series of product-specific market
reports to exporters in client countries identified by the
Canadian International Development Agency. This list
of countries and the reports are available through TFO
Canada or on request by writing to TFO Canada. They
are also distributed through export promotion
organizations and Canadian embassies in the client
countries as well as through client country embassies
accredited to Canada.

The market reports are intended to provide the
exporter with background information on the
Canadian market for a product; advice on how to
go about finding a Canadian buyer; and
suggestions on what to do once a buyer is found.
The reports offer exporters enough information to pursue the Canadian market on their own and to seek
further details from suggested sources through websites, electronic mail, fax, mail or telephone. These
reports are intended for the experienced exporter who is serious about trying to enter the Canadian
market. Canada is not the market to test your first export experience; a history of exporting to a market
closer to home is invaluable before attempting this one. Show the potential buyer that you have done your
homework and are serious about a long-term relationship. Research, planning and commitment are
essential in establishing a good reputation in trade with this country.
Scope of the Report
This report covers items classified under the North American Industry Classification System (NAICS) for
Household and Institutional Furniture and Kitchen Cabinet Manufacturing; and Office Furniture (including
Fixtures) Manufacturing. Table 1.1 provides a list of products in each of these categories. The report
excludes mattress, blinds and shades manufacturing.

As of April 1, 2010, Canadas population was estimated at
34 million, an increase of 0.26% from January 1, 2010. All
four western provinces had growth rates stronger than the
national average. More than two-thirds (71%) of the first-
quarter increase was due to net international migration,
while 29% was attributable to natural increase.

The six largest metropolitan areas in Canada are Toronto
(5.5 million inhabitants); Montreal (3.7 million); Vancouver
(2.3 million); Ottawa-Gatineau and Calgary (1.2 million
each); and Edmonton (1.1 million). Canadas two official
languages are English and French.
If you have at least one year of export experience, you may be eligible
to receive TFO Canadas free promotion of your product offer to
Canadian importers via the monthly Import Info E-Newsletter and
online searchable database. If you are not yet registered with TFO
Canada, please complete Steps 1 and 2 (Step 3 is optional but
recommended). If you are already registered, please sign in, click on
Exporter Profile, and review the details you have provided. Note that
product information is very important.
Furniture 2010


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Table 1.1: Selected Products (NAICS Codes)
HOUSEHOLD AND INSTITUTIONAL FURNITURE AND KITCHEN CABINETS (NAICS 3371)
NAICS 337110 Wood Kitchen Cabinet and
Counter Top Manufacturing
NAICS 337121 Upholstered Furniture Manufacturing

Bathroom vanities, wood
Counter tops, wood
Kitchen cabinets (not free-standing), wood
Kitchen/Bathroom/Bar table or counter tops, plastic
or laminated
Chairs
Chesterfields, convertible sofas
Juvenile furniture
Living room furniture
Metal framed furniture
Ottomans, Recliners
Springs for chairs, couches, cots
NAICS 337123 Other Wood Household Furniture
Manufacturing
NAICS 337126 Household Furniture (except wood or
upholstered) Manufacturing
Bedroom furniture, incl. headboards
Bookcases
Cabinets for radios, television sets, record players
Cabinets, household, free standing
Cedar chests
Chairs, household
Children's furniture, including cribs
Coffee tables
Dining, living room and hall furniture
Domestic sewing machine cabinets
Household furniture components for assembling
Kitchen furniture, incl. cabinets, free standing
Laundry hampers
Outdoor furniture (porch, lawn, garden, beach)
Vanity dressers
Baby seats for automobiles
Brass furniture
Cane chairs
Glass household furniture
Household stools (except wood)
Metal card tables and chairs
Metal household beds
Metal household furniture
Metal or plastic free standing kitchen cabinets
Plastic (incl. fiberglass) furniture
Rattan, weed, malacca, fibre, willow, wicker
Wrought iron furniture
NAICS 337127 Institutional Furniture Manufacturing
Assembly hall furniture
Barber/beauty shop hydraulic chairs
Benches for public buildings
Cafeteria furniture
Church furniture
Draughting tables
Factory furniture (stools, work benches, tool stands, cabinets)
Hotel and motel furniture
Portable folding chairs
Restaurant, school, store and theatre furniture
OFFICE FURNITURE (INCLUDING FIXTURES) MANUFACTURING (NAICS 3372)
NAICS 337213 Wood Office Furniture, incl. Custom
Architectural Woodwork
NAICS 337214 Office Furniture, exc. Wood
NAICS 337215 Showcase, Partition, Shelving and Locker
Manufacturing

Bookcases
Cabinets
Custom designed office interiors (furniture,
architectural woodwork, fixtures)
Filing boxes, cabinets and cases
Furniture (padded, upholstered, plain)
Office chairs, desks, stools and tables
Panel/modular furniture systems
Display cases and fixtures
Furniture frames, parts and components
Lockers
Merchandise display stands
Office and store fixtures and shelving
Point-of-purchase wire display racks
Postal service lock boxes
Pre-fabricated partitions
Source: Trade Data Online - Trade by Product, Industry Canada, 2010 (nes=not elsewhere specified)

Exporters should note that the Canada Border Services Agency (CBSA) requires individual imports to be
identified by 10 digit HS codes; importers could be fined if these are not provided. Current codes are
available from CBSA or from your buyer.


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2
The Canadian Market


According to the Conference Board of Canada
1
, Canadas struggling furniture industry should begin to
see a modest rise in revenues in 2010 after four years of steady decline due in large part to competition
from low-cost countries. The industry's total revenue is expected to advance 1.1% in 2010 to $10.6 billion
after falling 15.1% in the previous year. The pace of growth is expected to rise even more, to 3.9% in
2011, then 5% in 2012 and 4% in 2013. However, the industry's overall profitability is expected to fall by
3.8% due to the increasing costs of raw materials, particularly wood, plastics, textiles, and metal
components.

Retail Sales: In contrast to the decline in Canadian manufacturing sales, retail sales grew by an
average of 6% a year between 2005 and 2008 as consumers chose cheaper imported goods over higher
quality - but more expensive - domestic products.

Although retail sales declined for the first time in four years in 2009, in part because of the reluctance of
consumers to purchase on credit, sales advanced strongly in the first half of 2010.


Source: Statistics Canada, Monthly
Retail Trade by Industry, September
2010
http://www40.statcan.ca/l01/cst01/trad4
2a-eng.htm





1
http://www.conferenceboard.ca/documents.aspx?did=3744 and
http://www.homegoodsonline.ca/index.php?option=com_content&task=view&id=4560&Itemid=2
Table 2.1: Furniture Retail Sales, June 2010
June 2009 June 2010
$ millions % change
Furniture stores 772 815 5.6
Home furnishings stores 415 486 17.2
Home electronics and appliance stores 1144 1208 5.6
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According to Statistics Canada
2
, furniture store sales in June 2010 reached $815 million on an unadjusted
basis, up from the revised $797 million sold in May 2010. It was also 5.6% over the $772 million sold in
June 2009. Home furnishings stores - which cover everything from floor coverings to window treatments,
wall art and decorative accessories - had sales of $486 million, moving quickly up from the revised $439
million sold the prior month and a 17.2% gain over the $415 million sold in June 2009.

This strong increase is largely a result of impressive house sales that took place before the
implementation of the new Harmonized Sales Tax in Ontario and British Columbia on July 1 of this year.
Furniture sales are also closely linked to construction activity:

Residential Construction: Except for Prince Edward Island, every area of Canada experienced a
decline in the numbers of new housing from 2008 to 2009. These statistics are clearly linked with the
recent economic crisis; nonetheless, there was an increase in new housing construction of more than
3,700 units between 2009 and 2010. This growth is predicted to continue into the future: between 2010
and 2018 there is to be an estimated increase of 10,000 units of total new housing construction.

Nova Scotia is expected to experience an annual increase of roughly 300 new housing units between
2010 and 2018; Newfoundland and Labrador will witness a decrease of 150 in that same period. Growth
in the rest of the Atlantic Provinces is expected to remain relatively consistent over the next decade.
Housing in Qubec is predicted to see an increase of roughly 500 new housing units between 2010 and
2018, while that in Ontario is expected to almost double with an increase of over 7,000 during the same
period. For central Canada, Manitoba is predicted to experience an increase in new housing construction
of over 400 units between 2010 and 2018, while Saskatchewan is expected to experience more modest
growth during that same period (50 new housing units). Western Canada is likely to experience significant
growth, with the number of new housing constructions in British Columbia doubling between 2010 and
2018, and numbers in Alberta increasing by about 1,000 during the same period.

Institutional Construction: Canadas total institutional investment fell from $32.5 billion in 2008 to $31.9
billion in 2009, a decrease of roughly $500 million, likely due to the recent economic crisis. A rebound of
$2 billion was witnessed between 2009 and 2010, raising total institutional investment in 2010 to $34
billion. By 2018, it is expected that Canadian institutional investment will reach over $43 billion, and that
all Canadian provinces will experience an increase in institutional investment over that same time period.





2
http://www40.statcan.gc.ca/l01/cst01/trad15a-eng.htm?sdi=furniture and
http://www40.statcan.ca/l01/cst01/trad52-eng.htm
Furniture 2010


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Imports
3

Canadas traditional trade surplus in furniture showed a trend reversal in 2008 and 2009, largely due to
intense competition particularly from low cost suppliers in other countries. As a result, increasing numbers
of Canadian furniture manufacturers are producing at least part of their line in the Pacific Rim, most often
in China, but also in Indonesia, Vietnam and other countries to take advantage of lower labour costs.




In 2009, Canadas imports of furniture
declined sharply to levels last seen in
2005, after impressive year-over-year
growth between 2006 and 2008.














3
Note: All trade statistics were obtained from Trade Data Online - Trade by Product, Industry Canada, 2010

Furniture 2010


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While the United States ($1.7 billion), China ($1.6
billion) and Mexico ($375 million) were the top
three suppliers to this country, Vietnam, Malaysia,
and Indonesia ranked among the top 10 suppliers
of furniture to this market in 2009.




Among other TFO Canada
client countries, Thailand
($30.8 million), India ($13
million), Brazil ($11.6
million), the Philippines ($9
million), Honduras ($5
million), and South Africa
($3 million) each supplied
over $1 million worth of
furniture to Canada in 2009.



















Furniture 2010


8





Upholstered furniture continues to be the most
imported category, at $805 million in 2009. In
the first six months of 2010, imports in this
category rose by 16.4% over the same period
in the previous year, significantly higher than
the overall rise in total furniture imports of
8.2% over the same period.

Household furniture that is not upholstered or
made of wood showed the largest decrease,
at 8.5%.








Table 2.2: Change in Furniture Imports (Jan-July 2009 to Jan-July 2010)
Total Furniture Imports 8.2%
NAICS 337215 - Showcase, Partition, Shelving and Locker 19.0%
NAICS 337121 - Upholstered Household Furniture 16.4%
NAICS 337110 - Wood Kitchen Cabinet and Counter Top 12.6%
NAICS 337123 - Other Wood Household Furniture 5.9%
NAICS 337213 - Wood Office Furniture, incl. Custom Architectural Woodwork 1.6%
NAICS 337127 - Institutional Furniture -4.4%
NAICS 337214 - Office Furniture (ex Wood) -7.5%
NAICS 337126 - Household Furniture (ex. Wood and Upholstered) -8.5%
















Furniture 2010


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In 2009, imports of household and
Institutional furniture decreased for the
first time in five years to $2.7 billion,
down from $3 billion in 2008. The
decline continued for institutional
furniture which dropped by 4.4% in the
first half of 2010.

Vietnam ($121 million), Malaysia ($77
million), Indonesia ($45 million), and
Thailand ($25 million) were among the
top ten suppliers in this category in
2009.














Furniture 2010


10

In 2009, imports of office furniture
also fell to $1.9 billion, the second
consecutive year of decline since
2005. While wooden office furniture
showed a modest rise in the first six
months of 2010 at 1.6%, imports of
non-wood office furniture continued to
decline by 7.5% over the same
period.




At nearly $15 million,
Malaysia ranked
among the top ten
suppliers of office
furniture to this
market in 2009, just
behind Austria at $17
million.





























Furniture 2010


11

General Furniture Market
Canadian household furniture manufacturers transform relatively low-value-
added materials such as lumber and particleboard into high-value-added,
finished consumer goods of innovative design and good quality. Wooden
furniture production is largely concentrated in Qubec, while upholstered
products are mostly made in Ontario. The furniture industry is the third
largest consumer of Canadian textiles, and uses about one third of all Canadian hardwood lumber
production. Several market niches offer above-average growth, including home entertainment furniture,
home office furniture and ergonomic furniture. Customers are knowledgeable about products and
services related to this industry, and are price sensitive.

Suppliers use price, design, function and styling features, as well as product quality and delivery services
to attract clients. Canadian firms are competitive in terms of product quality, innovative designs and
aggressive marketing in the higher priced niche markets. Increasingly, manufacturers are using novel
materials to distinguish their product in a crowded marketplace. These include exotic woods such as
jarrah, palmwood and sapele, materials such as seagrass, woven banana rush and abaca, a Philippine
plant valued for its leaf sheath fibres, and fabrics from around the world, including washable microfibre
faux suede, ethnic linens, silks, beaded cottons and jute. Environmentally friendly furniture, or eco
furniture, is a growth area in both the residential and office furniture markets as the architectural
community focuses on indoor air quality. To this end, one North American manufacturer is now in the
process of converting all of its standard hardwood plywood production to produce formaldehyde-free
panels called PureBond. Cost-competitive with the standard urea formaldehyde (UF)-made hardwood
plywood, Columbia's PureBond formula is derived naturally then enhanced with a proprietary resin, giving
it particularly strong bonding and water-resistance qualities. It enables the company to completely
eliminate formaldehyde from its standard veneer-core decorative panel production.

Investment in the office furniture sector has also seen the introduction of environmental programs and
other innovations such as eco-friendly powder coatings to reduce solvent emission. If green furniture is
available at a competitive cost, architects would be inclined to specify it for major projects as they did for
the athletes village residence units in the 2010 Vancouver Olympic Games.

The boundaries between different interior styles such as traditional, contemporary, colonial and avant
garde have become much vaguer, with the mixing of different styles and fashions to suit personal tastes,
comfort, budget and sense of style. Significant trends in Canada include:

continued preference for European designs;
increasing presence of African and Asian designs;
neutral, timeless designs and shapes, allowing decorative effects to be achieved by smaller furniture,
accessories and accent colours rather than by a bold statement of larger pieces;
multi-functionality, such as flexible seating for sitting, reclining and sleeping. While pull-out sleep
sofas are popular, adjustable beds are not in demand in Canada as they are in Europe;
specialized furniture for home offices, for youth and for older people, focusing on ergonomics and
comfort. Modular cupboards and wall systems are in high demand for housing personal computers
and electronics so that they do not dominate bedrooms or living rooms;
attention to warmth, coziness and comfort, achieved in larger pieces of furniture by the use of warm
earth tones, soft, warm materials such as wood as opposed to steel, metal and glass, and fabrics that
are softer in texture and appearance;
lighter, more delicate styles are preferred to heavy looking furniture, while bright colours are used
mostly on childrens furniture;
mixing materials in one piece of furniture, such as different types of woods, wood and cane, granite
with glass, and metal with wicker; exotic woods and fabrics continue to be in demand.

Canadian buyers have stated that
deterrents to importing from
specific countries include
inconsistent product quality, poor
packaging and unacceptable
hidden costs in waybills.
Furniture 2010


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Household Furniture: There is a wide range of Canadian consumer preferences in furniture, as well as
recognized categories of low, medium and high-priced products. Imports from Asia and some European
countries are in the low- to medium-priced ranges and compete with Canadian products largely on the
basis of price. Canadians remain value-conscious consumers and are always comparison shopping for
the best quality at the most affordable price.

The household furniture industry purchases raw materials from both domestic and foreign (mostly Asian)
sources, including lumber and wood-based components, metal, rattan, particleboard, textile products,
furniture, and finishing materials. Many Canadian manufacturers import complete sets of finished furniture
components for assembly and packaging in their Canadian plants, while others import finished products
to complete their product line, or import component parts for use in their manufacturing process. These
are in addition to assembled and ready-to-assemble (RTA) products imported by importers and retailers.

Wooden Furniture: Popular woods in Canada remain the traditional oak, pine, maple, cherry, ash and
similar domestic woods, but there is interest in teak, rosewood, mahogany, lauan, meranti, seraya, ramin,
afrormosia and other exotic woods. Aggressive marketing of the more exotic woods, particularly veneers
that frequently substitute for the more expensive solid wood, is crucial to success in this market.
Composite board or particleboard and medium-density fibreboard (MDF) are also commonly used in
furniture manufacturing to substitute for solid lumber since they have lower manufacturing costs and are
more stable in diverse humidity conditions. This results in the production of low-cost wall systems, tables,
desks, bedroom suites and similar items.

A key requirement of imported woods (solid and veneer) includes the correct seasoning, aging and kiln
drying to comply with moisture content requirements for withstanding the variations of humidity found in
Canadian homes and businesses. The normal maximum acceptable moisture content of wooden furniture
or parts entering Canada is 6-8%. Most North American wood is kiln dried and conditioned down to 6%.
Veneered panels imported to Canada must contain less than 9% moisture. By kiln drying, the moisture
level is uniformly reduced throughout the wood, and warping and splitting due to internal stresses are
largely eliminated. Exporters should send samples of the wood and/or finished product to the importer so
that the material can be tested and agreed on before the goods are dispatched. Tips on kiln drying may
be found online. Another important technical consideration is the choice of glues and gluing processes
used in furniture for export to Canada. These must be adapted to withstand variations in extreme
Canadian temperature changes.

Upholstered Furniture: In upholstered furniture, for which China is currently the dominant import supplier,
textile products are the most important material input and the more tightly woven the better. In Canada,
100% cotton or poly-cotton with a high stitch count, and olefin fabrics are highly regarded for durability.
Foam cushions for sofas (with a minimum foam density of 2 lbs) should be wrapped in dacron before the
fabric is attached. Fabrics should be free of marks, pulls or uneven patterns, and comply with Canadas
strict fire-retardant requirements. The cost of the textile materials alone represents about 30% of the total
manufacturing cost in this country with more than half of these textiles originating in the United States.
The selection of fabrics for upholstered office furniture continues to be largely determined by fashion, cost
and fire safety. Leather is popular for sofas, particularly easy care, soft, comfortable feeling varieties as
opposed to full grain leather. Recliner chairs are sold in increasing quantities with adjustable armrests,
headrests and retractable footrests.

Ready-to-Assemble (RTA) Furniture: While ready-to-assemble furniture continues to be popular, older,
more sophisticated and busy consumers are increasingly requesting that the store assembles the
furniture before delivery. This category (RTA) is particularly suited to bedroom furniture, childrens
furniture, wardrobe units, modular desks and shelving for computers and electronics, tables, and
incidental furniture. Many pieces of outdoor furniture are purchased in this form. Instructions for assembly
must be clearly written in English and French, and must be easy to follow in a step by step format.
Consumers are often frustrated by unclear instructions, or instructions that miss a key step in the process.
In preparing the instructions, pretend that you are a buyer who has no knowledge of how to assemble the
Furniture 2010


13
furniture. In a freight intensive industry, RTA offers a cost effective way to ship large quantities per
container to the Canadian market. Importers and retailers may request information on:

available colours/options/pieces;
type of material: wood, veneer, plastic,
laminate, etc.;
thickness/quality of veneer, matching grain on
veneer;
strength of the stress points;
gauge of the steel or aluminum used if
applicable;
type of cushion material: filling, sturdiness of
the cover;
quality of plastic or metal components such as
furniture;
quality of finish must be consistent so that a
customer can add matching pieces at a later
date;
fabric treatment - stain-resistance, waterproof;
information kits and clear instructions for retail
staff about furniture care (stains, polishes,
cleaning materials);
ease of assembly: is every piece equally easy
to assemble? Does the piece use modern lock
and key furniture or screws and glue?
quality of packaging and labelling;
safety features such as rounded corners since
safety is a key selling point to customers with
young children.

One of the most successful companies in the RTA category is IKEA. A review of their product offerings
will be useful for potential suppliers to this market.

Summer/Casual Furniture: These furniture products are designed for use on porches, in sun rooms, on
the lawn and/or patio, or as odd pieces throughout the home. Designers have been promoting the
concept of the outdoor room complete with weather-resistant carpets but this is still in the infancy stages
of acceptance given the high cost for a short usage time in this climate. Wooden, wicker and wrought iron
outdoor furniture require more maintenance than plastic and special weather/rust-resistant stains and
paints have been developed for this purpose.

Rattan/Cane/Osier/Wicker: Furniture made from rattan, cane, osier, bamboo and other such materials are
less popular than a decade ago with sales higher during the non-winter months of April to October,
indicating that these products are used primarily in outdoor settings. Canadian consumers often use
these terms interchangeably so exporters should ensure that their products and orders are correctly
defined and understood. There is wide use of painted or lacquered products such as living room and
casual furniture sets (occasional chairs, tables, barstools) with white or natural finishes being the most
popular. The Canadian market for these products is generally smaller than in the U.S. or Europe, and
tends toward the low-medium price range. The major producers for the Canadian market are China (with
good prices), the Philippines (with attractive designs), Indonesia, which produces most of the worlds
rattan, and Vietnam. At the high-end of the market, well-designed, high quality rattan is combined with
leather, metal, bamboo, cane and high quality upholstery fabrics in luxurious designs.

Plastic: Plastic outdoor furniture sold in Canada is largely composed of injection moulded synthetic resin.
There is virtually no demand for furniture made of poly vinyl chloride (PVC) tubing in this market. The
plastic outdoor furniture market remains popular with consumers demanding high quality, stylish,
lightweight and durable outdoor furniture in the medium- to low-priced range in a choice of fashionable
colours. This furniture is also being used to serve a dual outdoor/indoor purpose, so appropriate designs
are welcomed. Canadian capacity to produce this product has improved and joint ventures with
established foreign manufacturers are of increasing interest to Canadian manufacturers. This allows them
to better compete with European, U.S. and East Asian manufacturers in world markets. In this case, the
Canadian partner may want to provide the direction in the joint venture.

Metal and Wood: Other materials used in the production of summer/casual furniture include aluminum,
wrought iron, steel and kiln-dried hardwood. Teak must be grown in plantation woodlots and is imported
as highly styled casual indoor/outdoor furniture, primarily to fulfill special contracts; Australia is enjoying a
niche success in this area. Commonly available are specially coated metal patio sets consisting of swivel
rockers and matching footrests, double horizontal rockers to seat two people, dining tables with
Furniture 2010


14
accommodation for an upright umbrella, and occasional tables and chairs upholstered in attractive
weather-resistant fabrics. Inexpensive versions of these sets are made of plastic and glass instead of
steel. Sand blasted or other opaque glass is preferred over clear glass. Free-standing, movable shade
umbrellas are enjoying a growing market for use with outdoor spas, swimming pools and decks.

Cast iron and cast aluminum tables, chairs, park benches, etc. must be sturdy in order to withstand
extremes of weather in this country. Tubular aluminum is a leading frame material for folding outdoor
furniture due to its light weight, low price and dependable quality. Solid bar and cast aluminum, although
much heavier, are also sometimes used. Increasingly popular at soccer, picnics and camping are canvas
and aluminum chairs which can be folded, umbrella-style, into a bag for convenience. Some have
recesses in the arms to hold drinks, while others have attached foot rests. Steel is extremely durable
when properly finished, and in a mesh or grill pattern seating, can be very comfortable. Most steel
furniture is protected by baked enamel or a powder coat finish. The most expensive outdoor furniture
includes a coated steel frame holding a weatherproof, porous fabric. This furniture can be left outside in
the winter without damage.

Office Furniture: Office furniture is usually constructed of metal with laminated tops and wood or plastic
trim. The core market consists of systems furniture, seating, desks and extensions, tables, electronic
support furniture, and storage units. Canadian-made office systems and high-end executive wood
furniture enjoy a continent-wide reputation for finish, design and performance. Wood furniture has lost
ground for general office purposes because of cost and the fact that it is less durable and scratch-
resistant than metal. However, it is still desirable for its warm, attractive appearance and will continue to
find a niche in executive office suites. Potential exists for exporters who can supply cheaper, standard
sized products of veneered or melamine furniture, particularly in the RTA category.

Home Office Furniture and Furniture for Electronics: Furniture designed to hold audio, video, home
office products or software and accessories include home entertainment centers, home theater systems,
systems that enhance the look of flat screen televisions which are free-standing or can be hung on the
walls, audio and video racks, and compact electronic storage systems. While home office furniture sales
have recently declined, manufacturers continue to innovate for niche markets, e.g., to attract younger
consumers. The office-at-home is an important market for computer support furniture. The majority of
Canadian homes are equipped with at least one computer and many homes built today have a separate
computer or home office room. Computer-based furniture is generally designed to be ergonomically
friendly, i.e., fully adjustable so that work surface heights, keyboard heights and angles as well as
shelving heights can be adapted to individual needs. Electronic support furniture must accommodate a
computer, monitor, keyboard, printer, paper-handling trays and slots as well as provide a work surface
and paper storage space. Since the size requirements to accommodate various kinds of electronic
equipment are wide-ranging, a close working relationship between the makers of office automation
equipment and users will help keep manufacturers abreast of market needs and give them crucial input
for design and marketing of their furniture. The competitiveness of suppliers of this type of furniture will
continue to depend on these relationships.

Furniture 2010


15

Trends and Opportunities
Demographics: It is important to consider Canadian demographics when marketing furniture in Canada.
Canadas population is ageing rapidly and becoming more urban. Two main reasons for the ageing of the
population are the nations low fertility rate and increasing life expectancy. For the first time, in the 2006
census, the number of seniors aged 65 years and over surpassed the four million mark. The percentage
of seniors as a whole of the Canadian population has consistently risen over the past decade. This
increase is observed at the national level as well as in every province, territory and census metropolitan
area in the country. At the same time, the working-age population (15 to 64 years) is becoming older and
the number of people approaching the age of retirement has hit a record high. The fastest growing age
group is those individuals aged 55 to 64 who are nearing retirement. These citizens are relatively wealthy,
well educated and are often interested in improving their living environment by buying new furniture. Most
Canadian buyers will expect furniture to be competitively priced and of good quality. This is particularly
important because of building codes in Canada and the competitive nature of the retail environment.

Exiting high cost countries: Countries with lower production costs are generally gaining more orders
and those with higher costs are losing orders. This is happening globally and within geographic regions.

Importance of trade agreements: Bilateral and regional trade agreements play a significant role: as
tariffs are removed, buyers are motivated to source from those particular countries and regions. Leading
up to and after the end of tariffs, many buyers start to reduce the number of small suppliers with whom
they have direct relationships and instead begin establishing longer-term relationships with a fewer
number of large suppliers. This does not necessarily mean the demise of small business as these large
companies often have their production done in several wholly owned or subcontract facilities in a number
of countries.

Corporate Social Responsibility: Canada is adding parallel Labour and Environment agreements to
most trade agreements signed as recently as 2009; this is expected to continue into the foreseeable
future. As such, an exporters Corporate Social Responsibility strategy becomes important in trade with
this country. Corporate social responsibility (CSR) is not a new concept, but buyers are taking a direct
and deliberate look at the total production process including procurement, manufacturing and waste
disposal. Exporters should try to market themselves by offering buyers their published CSR statements
and try to choose to work with vendors committed to the same level of compliance. While labour rights
issues are not currently viewed by most buyers as being as important as environmental issues, importers
do evaluate these factors as part of the whole picture, particularly when making decisions about whether
to buy from specific countries. As well, major violations of human rights and/or political or social instability
can affect sourcing decisions. Brands clearly want governments in producer countries to improve on
environmental and labour standards regulations and their enforcement. According to companies
interviewed in a recent survey, countries in Central America and the Caribbean could gain some degree
of competitive advantage over Asian countries with relatively lower production costs, if they meet the
challenges described above.

Environmentally-Friendly Practices: Green interests are here to stay they are no longer a fad as
companies have become serious about their responsibility to the environment. This is increasing demand
for resource suppliers who collect, manufacture and move their products in environmentally friendly and
sustainable ways.


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3
Trade Practices
Competition
Since Canada ranks among those countries with the highest imports per capita, exporters from all over
the world are present here, competing fiercely and consistently for a part of this lucrative market. To make
inroads here, an exporter must therefore either offer a completely new product or be able to push aside
an existing supplier with a more attractive offer in terms of quality, service, price, packaging or labelling.
Canadian businesses engaged in importation, resale, distribution and retail sales across Canada look for
sales support as well as regulatory compliance, marketing and promotional efforts from their foreign
suppliers in order to market their products and develop new client bases.

Canadas domestic industry is being forced to adjust to this intense competition from imports. For
instance, one of the countrys largest domestic furniture producer, Palliser, has divided into five separate
but related companies to better manage its niche businesses: Palliser Furniture (upholstery), DeFehr
Furniture (wood manufacturing), Blend Furniture Company (imported casegoods), EQ3 (concept retail)
and Arconas (contract furniture).

The key to successful exploitation of the Canadian market is the development of an organized marketing
strategy. The following require priority attention:

rapid turnaround in sample production;
same-day reply (by e-mail, fax or telephone)
to every communication;
on-time deliveries, with any delays agreed
to in advance with your buyer;
delivery of product which corresponds
precisely with agreed-to specifications or
samples, with any changes agreed to in
advance with your buyer;
continuity of supply;
maintenance of high quality at a competitive price;
appropriate packaging material for overseas
shipments;
adequate handling and storage facilities;
promotion, especially of new products (include
names of current or past clients and/or their
countries);
knowledge of payment terms.

In addition, you should ensure that your representative who is in contact with the buyer speaks and writes
clear and fluent English or French, depending on the buyers preference. Exporters can focus on
strategies including:

adjusting to globalization by becoming niche players, specializing by product or by market;
improving export marketing skills and knowledge of foreign markets;
putting more emphasis on product development and the production of quality-assured and
environmentally friendly products, i.e., adopting the ISO 9000 series or similar quality standards
and ISO 14,000 series or similar environmental management standards.

Trade Shows
Canadian importers and a number of retail buyers usually visit foreign markets and their suppliers once a
year. They normally organize such trips to coincide with the most important foreign trade shows where
they can explore possibilities for imports, as well as assess industry trends. The major trade show for
Canadian, U.S. and international manufacturers is the Canadian Home Furnishings Market held in
Furniture 2010


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Toronto each January when buyers are most open to buying, having delivered most of their sales to
consumers in December. This allows them time to get samples for their fall collections and full shipments
for their summer collections delivered to their warehouses. The Interior Design Show (IDS), held in
Toronto in February, is Canadas premiere platform for contemporary residential design where the most
current design trends in Canadian and international furnishings, fixtures and accessories for the
residential market are launched and exhibited.

Exporters interested in reaching the office or commercial/contract market are advised to note Torontos
IIDEX and Montreals SIDIM shows which are aimed at interior designers and architects. IIDEX is usually
held early in November, while SIDIM is held early in December. Technibois is the only event of its kind
held in Canada every two years where an overview of equipment, supplies and cutting edge technologies
is presented for the sawmilling and woodworking sectors such as veneer and plywood machinery, pallet
machinery, wood component, furniture, and laminated lumber. The next event will be held in 2012 in
Qubec City.

In addition, there are permanent year-round showrooms and design centres for furniture in Toronto and
Montreal. These give a good indication of the current types of materials and colours used in different
designs and price ranges. Other shows attended by Canadian buyers are the High Point Market held in
the United States in April and October, the Milan international furniture exhibition held in September and
shows in Toronto, Dallas, Cologne, Paris, Malaysia and San Francisco. Details are available on these
and other shows through Industry Canada.

It is advisable to check with your agent, buyer or embassys commercial counsellor to fully assess the
documentation requirements, costs and benefits of your participation in trade shows. Please note that
TFO Canada does not provide letters of invitation to assist with obtaining travel or entry visas. These
must come from the buyer directly, or from proof of registration at a trade show.
The Buyer
Finding a Buyer: Entering a new market can be daunting, but with a well-defined marketing plan, the
rewards will be well worth the effort. Exporters have one chance to make a good first impression. Use this
chance to show what you are selling. Initial information about your company should include photographs,
prices, specifications, and quality/safety certifications of your latest products. You can also include photos
of your production facilities. The internet is an essential tool for communication with Canadian buyers, so
develop a website or have an e-mail address that will allow you to readily provide this information so that
they can quickly assess whether they are interested in pursuing an arrangement with you. If you do not
show in such an immediate and concrete fashion what you are capable of, the buyer loses interest.

Finding a buyer requires perseverance and a serious commitment of
time, effort, and cost. The appointment of a good local agent or
representative is crucial in this competitive environment and exporters
should note that different agents may be required to cover separate
regional areas. TFO Canada encourages exporters to use any of the
following tools to help in these efforts:

Participate in trade shows in your own country or region, since
buyers frequently attend these. In addition, international shows can
be an invaluable source of market intelligence. If you cannot attend these, contact the organizers to
obtain the catalogue of exhibitors, many of whom will be importers. When attending international
trade shows, be sensitive to exhibitors, who will be busy trying to sell their own product. Introduce
yourself, leave a business card and brochure with product information, and ask if you can call them to
arrange an appointment within the timeframe of your visit to discuss what you can do. Do not try to
sell on the spot at these shows; you will likely not succeed.
Consult with the trade representatives at your Embassy in Canada. They can provide help in
identifying potential Canadian importers, or may be able to direct you to an independent researcher
Consistency in quality and delivery of the
product with ordered specifications are
crucial to maintaining Canadian orders.

Continuity of supply is a key factor in the
importers, wholesalers and retailers
commitment to marketing imported
goods in Canada. Sporadic shipments
will damage the exporters reputation and
chance of success in Canada.
Furniture 2010


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who could provide you with a detailed listing of interested Canadian buyers. Generally, the more
publicity you generate for your company and product, the more interest you will create in buyers.
Take advantage of a buyers personal visit to your country. The Canadian Embassy in your country or
your national export promotion office may have advance notification of such visits. Let them know that
you would like to meet with any visiting buyers in your product line and if possible, contact the buyer
directly to arrange a meeting.
Obtain a list of Canadian buyers who have traded with your country and contact them to offer your
products. These lists may be available from your local Chamber of Commerce, foreign trade ministry,
and directories that can be purchased, such as the Retail Chains Directory. Some of these directories
are expensive, but may be consulted without charge at Canadian public libraries while you are on a
visit here.
Contact any bi-national Chamber of Commerce existing between your country and Canada.
Use trading companies and agents (regional, national or in Canada).
Seek the assistance of your bank or freight forwarding company.

Industry Canada provides links to registered Canadian furniture manufacturers. Exporters can also
identify Canadian buyers who are listed on the internet by sector or through guides that might be
compiled by Canadian sector trade associations.

Foreign Affairs and International Trade Canada also provides information to assist non-Canadian
businesses, including information on How to Do Business with Canada; Expand or Invest in Canada; and
Find a Supplier or Partner.

Dealing with a Buyer: Many importers or their agents may visit the production facilities of the supplier to
assess the suppliers capabilities, assure themselves of the quality of production facilities, and to build a
solid trading relationship. Suppliers should maintain good communication with their buyer throughout the
entire sales and after-sales process. In addition to offering value, buyers expect efficient handling of
export procedures by a supplier, as well as reliability, experience, competence, a proven ability to source
and a determined commitment to a long-term business relationship. Canadian importers have reported
that a problem in dealing with new suppliers is that they are often asked to purchase unrealistically large
minimum quantities for a market the size of Canadas. Exporters must bear in mind that the Canadian
market is about 10% the size of the U.S. market and therefore must be prepared to fulfill small orders.

At first contact with an importer in Canada, the exporter will likely be asked for samples. These samples
should be accompanied by a certificate of analysis issued by a recognized authority in the country of
origin. Shipments must be accompanied by an Import Declaration form and any related fees for
verification of these forms. In Canada they will be assessed for compliance with regulations and quality
standards. Both containers and their contents will be examined. Canadian buyers usually perform an in-
house company inspection of the product to determine if it complies with stated specifications, for the
companys own satisfaction.

If the samples are acceptable, the importer may place a trial order with the supplier. If some adjustments
are required, the importer will request new samples based on the instructions for needed changes. A trial
shipment which is consistent with the accepted samples and which is delivered according to an agreed-to
delivery schedule may then be sent to Canada. The importer generally advises the supplier of the sizes
and types of a product that should sell best in Canada and on the condition that the item should arrive in
this country. The importer uses samples to assess the interest of wholesalers and retailers in carrying the
item.
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Exporters should bear in mind potential
competition from suppliers in the United
States and Mexico. Canadian importers
are aware of the advantages of purchasing
from North American suppliers lower
transportation costs, shorter delivery and
lead times and simpler payment
mechanisms. These exporters are also
usually very familiar with the Canadian
market and business norms. Exporters
should consider these facts when setting prices and evaluating business practices.

Import terms vary with individual importers. In general, quotations should be made f.o.b. foreign port,
including packaging, but may be requested c.i.f. to a named warehouse. Payment for imports from
traditional suppliers is generally cash against documents. The majority of Canadian importers will not
work with Letters of Credit but may select other credit formats and terms that would suit both parties.
Contracts often include a clause stating that the goods must be inspected and signed off in-country by the
buyer or agent prior to shipping. The importer usually requests a guarantee to be included in the contract
against hidden quality defects.

Once an imported product has established a reputation for high quality, a brand name and trademark
should be adopted. Such identification is important so that customers can easily recognize the product
and know that it represents good value.
Design

Design is crucial to the successful introduction of new products to the Canadian market. Canadian
household furniture producers have been historically reluctant to designate resources that improve the
styling of their products. They have emphasized commerce at the expense of art, and relied primarily on
the United States for design inspiration. However, in recent years, a series of smaller, more innovative
firms have adopted an aggressive design-led strategy by forging closer relationships with retailers and
designers to enhance the marketing and styling of their products in order to compete with the success of
lower cost imports. Globally, research continues in the ergonomics of office furniture, resulting in better
workstation and adjustable chair design. The most impressive investment Canada has made is in design
and designers for this sector, whether hiring an in-house team or using Canadian or international
freelance designers.

The exporter should make sure that Canadian regulations for safety are met, e.g., the paint used on
childrens furniture must be non-toxic, and the space between rungs on a babys crib must be a specified
distance. For design considerations, furniture proportions must be accurate and colour (which makes up
60% of the buying decision) must blend well with other pieces on the market. Paper or online catalogues
published by furniture retail stores in Canada such as Leons, Ikea, Sears, etc. are a useful source for
ideas on what is currently popular in Canada.

Canadian standard sizes are different from those in Europe. Some items like wardrobes and dressing
tables which are popular in Europe, are not in Canada. Some examples of common Canadian sizes of
furniture are outlined in Table 3.1.

Items a buyer may cover in negotiating with a supplier include:
Product attributes
packaging
logo mould
breadth of product line
quality
price range
product exclusivity
country exclusivity
special arrangements
Ordering services
availability of product
promptness of initial delivery
availability of repeats
promptness of repeats
product substitution
complete or split shipments
order revision
reliability of shipping direct to Canada
Furniture 2010


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Table 3.1 : Selected Canadian Furniture Sizes
Item Height Width Length Other
Dining Room Set: Generally composed of 1 table, 4 side and 2 arm chairs and optional buffet/china servers.
Tables 30" 42-44" 72" 2x16" leaves
Dining chairs 20"-21" 17"-18" depth
Armchair arms 24"-26"
Round Tables 36"-48" diameter
Buffet 78-90" 18" 66"
Bedroom
Single bed 38" 74"
Double bed 54" 74"
Queen size bed 60" 80"
King size bed 80" 80"
Dressers 54-72"
Chests of
drawers
50 or more
Night tables 20"
Living Room Set: Generally composed of a 3-seat sofa, a 2-seat love seat and 1 chair.
Seat cushions 16"-20" depth

Design Details: Exporters should be aware of the following desirable or essential details in designing
wooden furniture for the Canadian market:

To accommodate the severe weather conditions in Canada, there must be sufficient tolerance in
fitting of doors and drawers to allow for a certain amount of shrinking and swelling during the
changing seasons.
Drawer glides and slides as well as dining room table sliders should be coated with wood stabilizers
such as Nelsonite and lubricants to assure smooth sliding action.
End panels must be rigidly glued and screwed to the drawer rails. Tops should be glued and cleated
to the end panels.
It is a quality feature to have drawers separated by dust panels.
Drawer sides should be joined to the drawer front by a lock with dove-tailed construction.
All interiors must be smooth and snag-proof.
Drawers should be centre-guided.
Dining room tables should be made extendible by the use of additional leaves. A total extension of
about 100 inches is desirable.
The most popular bed head-board is queen sized but requires an accommodation to receive a king
mattress as well since this size is growing in popularity. The use of rails and a matching foot-end is
optional.
Dresser mirrors should have methods for both wall hanging as well as supports to fasten the mirror
directly.
Acid-cured finishes are difficult to repair and are not as popular as polyurethane; eco-friendly coatings
should be looked into as an option. The finish must stand up to temperatures of +40 to -40
o
C.
Wherever possible, doors and drawer front designs should try to incorporate a lap construction rather
than one which is fitted to an opening. This will give more tolerance in any shrinkage or swelling of
the furniture.
Many china decks or display cabinets may require the inclusion of a canopy light or an electrical
outlet. All electrical components must be C.S.A. (Canadian Standards Association) approved and
bear the approved label.




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Quality and Inspection
Canadian guidelines for furniture affect imported and domestic products equally. Imports sold on the
Canadian market must meet minimum standards based on factors such as flammability, durability and
strength. In many cases, buyers also have their own specifications for imported items. Careful attention
should be paid to overall workmanship and the quality of detailing.

Quality and supply must be consistent and reliable, and the product must offer real commercial viability to
the Canadian buyer. Close communication is critical, since the buyer needs constant feedback from the
supplier. Make yourself consistently available to answer questions and provide information, and ensure
that someone in your group can speak English or French. Send photographs and where possible,
samples of your items, since this is a very visually oriented sector. Larger retailers insist that suppliers
have internet access capabilities for quick communication. These factors are all crucial in affecting the
decision of the buyer, who can source items from many other competitive sources.

Hazard Analysis Critical Control Points (HACCP): While it is associated with the food and agriculture
industry, this practical system can be used as a guide for furniture manufacturers to review all potential
health and safety hazards in their plant operation and focus on controlling the points that are critical to the
safety of the finished product. The benefits of using the HACCP system include:

international acceptance of your products as the system is adopted worldwide;
national acceptance, allowing you to become a leader in national industry;
defining responsibilities between government and industry;
improved marketability, using internationally recognizable logos and symbols;
reduced recalls and product destruction, vital to an exporters reputation for quality.

Based on the HACCP, the following may be used as a guide by exporters:

Review your business and company procedures, physical facility, processes, shipping, and
distribution systems. Identify areas where you might be vulnerable to potential sabotage or
terrorist attacks and outline control measures for each of these areas.
Ensure that there are adequate security measures for your facility and employees.
Have procedures in place to ensure the composition and integrity of all raw materials and
packaging materials in each facility.
Develop procedures to ensure the integrity and security of your manufacturing equipment and
water supply used in manufacturing.
Develop procedures and anti-tampering measures to ensure the security of your products
once they are produced and shipped to retail.
Develop an action plan to respond to an emergency, including cordoning off areas, moving
employees and contacting identified authorities.
Ensure all hazardous chemicals are securely stored away from production and handling and
are listed on safety sheets on site.
Price
Product pricing is vital to remaining competitive. In the retail sector, for example, Canadian businesses
have followed the successful United States trend toward larger stores with highly competitive prices. To
this end, many retailers have invested in large discount-style operations to expand sales in an
increasingly competitive market. The emergence of high-volume warehouse merchandising in this market
is the direct result of consumer demand for competitively priced quality goods. Value for dollar is the
predominant purchasing determinant in both the consumer and industrial markets.
Furniture 2010


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The consumer price index outlined in the table below shows that furniture prices increased slightly in
2009 after a difficult year in 2008. However, they are still below 2002 levels and are expected to remain
suppressed in the coming year.

Consumer Price Index (2002=100)
2005 2006 2007 2008 2009
Furniture and household textiles 100.3 99.3 99.2 97.5 98.6
% change from previous year
All-items 2.2 2 2.2 2.3 0.3
Furniture and household textiles 0.3 -1 -0.1 -1.7 1.1

With the recent strong value of the Canadian currency pricing many domestic goods out of the market,
intense competition for customers has resulted in the Canadian furniture industry lowering traditional
markups
4
at all levels. In the past, wholesalers margins were about 30% of the retail price and furniture
retailers and department stores usually operated on a 40% gross margin. Importers margins were
generally 10%, depending on the value of the furniture. The suggested retail price in the past was
therefore approximately 80% above the delivered Canada price. Current industry reports indicate that this
has been lowered to between 35%-60% and is unlikely to increase in the near future. Retailers also offer
regular sales discounts to entice customers to buy. Markups therefore vary depending on the level of
discount being proposed.

In the case of problem loads, a commission previously negotiated between the supplier and importer may
be charged and can range anywhere between 12.5% and 18.5% of the selling price. The exporter may
also be requested to provide rebates as a result of poor product quality, damage before or during
shipping or late delivery. For large volumes, exporters may initiate special terms which allow them to shift
warehousing or inventory costs over to the retailers. Since the retail price could be three to four times the
price paid to the supplier, medium to low pricing on products is most attractive to the buyer.
Packaging and Transportation
Besides trucking, imports enter Canada mainly by sea, generally in 20-40 containerized units. Small
shipments are usually given to consolidators who build container loads (LCL). Requirements for customs
documentation (invoice, certificate of origin, import declaration form, etc.) are detailed by the Canada
Border Services Agency. Since the rate of duty depends on the origin of the product, the certificate of
origin is crucial for both exporter and importer.

Freight costs account for a large part of landed costs, ranging from 10% to 25% for bulkier items.
Because of this, exporters in a number of countries have adopted one or the other of the following
procedures for delivery:

bulk component form for assembly in Canada;
composite flat pack, ready-to-assemble units for factory assembly and finishing;
composite flat pack, completely finished and ready to assemble by the consumer.

Furniture packs must be snug and firm to protect the contents and preserve its quality; materials used
must be safe and hygienic and relate in cost to the value of the contents. Cartons should be pound and
shock tested. Two hundred pound test corrugated cartons are the norm, with sufficient interior materials

4
Markup refers to the amount added to the cost of a product or service, to provide for profit, handling and other
costs. Margin is the final difference between the selling price and cost.
Furniture 2010


23
to prevent surface damage to the finish. Components should be packed in plastic wraps and well sealed
cartons to prevent moisture absorption during transportation.

Outer Packaging: There should be consistency of packaging and package sizes, an orderly loading of
containers, shipping marks on the master pack and article numbers on the inner packs. Shipping
containers must be clearly stamped or stencilled on a minimum of two sides with all code markings, and
in waterproof ink. Since buyers generally use the same packaging to ship products out of their
warehouse, the packages should be sturdy enough for multiple handlings. Reusable rather than
disposable packaging addresses environmental concerns. Proper packaging is important since sub-
standard packaging may damage the product and create problems for the importer in clearing and
marketing the goods. The importer will then refuse to do further business with that supplier.

Wooden Crates: To prevent the spread of harmful exotic insects and pathogens such as the Asian gypsy
moth, Asian long-horned beetle, pine shoot beetle, European spruce bark beetle, brown spruce longhorn
beetle, the emerald ash borer, and the sudden oak death pathogen, all species of non-manufactured
wood used as dunnage, pallets, crating or other packaging material must be treated by heat, fumigation
or chemical preservatives. This applies particularly to imports from China and Hong Kong. Packaging
material must be completely free of bark and visible pests. Manufactured wood and wood particles such
as sawdust and wood shavings used as packaging are exempt. Similar restrictions apply to packaging
material consisting of straw and hay to prevent the introduction and spread of cereal leaf beetle in this
country. All shipments containing solid wood crating must be accompanied by an official phytosanitary or
treatment certificate from the official plant protection authorities in the exporting country, confirming that it
has been treated. Shipments not containing solid wood crating must carry a statement to that effect on
accompanying documents. Shipments not meeting these requirements may be seized or denied entry
into Canada, with incurred costs being the importers responsibility.

Retail Packaging: Attractive, appropriate and appealing retail packaging is important and suppliers
should consult the Canadian buyer on this subject. Creative packaging may make the product more
attractive for consumers. Space for labelling as required by Canadian regulations should also be made
available on the package and product identification codes included on all retail packages. To this end,
exporters should note that Canada is gradually shifting from the UPC (Universal Product Code) to the
GTIN (Global Trade Item Number) coding system that will eventually be used worldwide to facilitate global
trading. Experts in Canada can provide designs, artwork, translations and send over final film for printing
in your country, which is often more economical than printing in Canada. Your buyer may be able assist
you with these details.
Labelling
Labels on imports must conform to Canadian standards. Exporters should consult with
and have the buyer approve drafts prior to printing. If any requirement of the Canadian
labelling regulations is missing, the goods cannot be sold. Exchanging or attaching
additional labels is time consuming and expensive. Imports bearing a description in a foreign language must have a separate
label in English and French which complies with labelling regulations. The importer in this case is responsible for the labelling.
Pictures and illustrations on the label must correspond to the contents of the package.

Most labelling requirements for furniture are federally governed, but imports of upholstered and stuffed
furniture must also meet provincial requirements for flammability labelling. Dealer identities on the label
are required for the trade of such furniture, and the labels must be printed on approved materials. Failing
this, the article will be placed off sale. Samples of approved labels are available from provincial
ministries. Please note that U.S. labels are not accepted in Canada. Each label must designate the type
of filling material in accordance with approved Federal/Provincial definitions. Samples must be provided
whenever there is any doubt as to the classification, and when they are to be used by newly registered
manufacturers.

Labels are generally supplied by the Canadian buyer for the supplier to attach to the product. A dealer
cannot import incomplete or improperly labelled consumer products into Canada, except in cases where
The province of Qubec has additional
requirements concerning the use of the
French language on all products
marketed within its jurisdiction. Details
on labelling instructions can be
obtained through your buyer.
Furniture 2010


24
labelling of the articles will be completed in Canada. In this case, an Industry Canada inspector must be
notified at the time, or in advance of importation, of all details respecting the nature and quantity of the
importation, the date and port of entry and the address of the premises where the re-labelling of the
articles will be completed. The dealer must notify the inspector on completion of the re-labelling and prior
to resale, to allow the inspection of the labelled goods. Imports bearing a description in a foreign
language have to be provided with an additional label in English and French which complies with the
labelling regulations. The importer in this case is responsible for the labelling.

Outer shipping packages should be labelled with the following information:

brand name;
product number;
net amount in the immediate container in
terms of weight, measure or number;
expiry date;
name and address of the importer;
UPC/PLU or other bar code, identical to the
one on the individual products;
lot number (to identify individual shipments).

For retail packages, information regarding the nature of the product, contents, and manufacturer must be
provided. The label must be conspicuous and the lettering designed according to prescribed minimum
size letters and numerals. The following should be shown in English and French:

Name and head office address of the
manufacturer or person who markets the goods
in Canada in their own name;
Name or description of the contents, including
the products composition (e.g., 100% nylon);
Product of . . . (country name);
Quantity of the contents in Canadian weights
and measures (metric net quantity) if
appropriate;
UPC or other bar code as required;
Warning labels (e.g., do not use certain
cleaning products) must be clear and include
what the actual risks are (e.g., fading).

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4
Distribution


Distribution of household furniture in Canada is essentially based on direct delivery from manufacturer to
freight forwarder to importer, which in some cases may be the retailer. Although the principal flow of
household furniture is direct from manufacturer to retailers warehouses or stores, independent wholesale
distributors also play an important part in servicing some segments of the industry. Residential furniture,
bed springs, mattresses and home office furniture are sold mainly through retail outlets, including their
online stores. A significant percentage of office, hotel and institutional
furniture is sold by tender and contract. In these instances, architects
and interior designers, acting on behalf of the end-use purchasers, play
an important role in the selection.

Often, complete coverage of the consumer market requires
representation in the various regions of Canada. Toronto, the largest
metropolitan area and commercial center of the country, is usually the most logical location for
establishing sole representation. From a regional perspective, the country may be divided geographically
into five distinct markets, plus the territories. These are:

The Atlantic Provinces: New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and
Labrador (2.3 million persons);
The Province of Qubec (7.6 million persons);
The Province of Ontario (12.5 million persons);
The Prairie Provinces: Manitoba and Saskatchewan (2.2 million persons);
The Western Provinces: Alberta and British Columbia (7.5 million persons); and
The Territories: Yukon, the Northwest Territories, and Nunavut (0.1 million persons).

Establishing representation in each of these markets provides optimal coverage and the ability to target
promotional programs to suit specialized market needs.

Producer/Exporter: A co-operative organization (formed
either by producers within a single country or by exporting
countries in a geographical region) would be a good vehicle for
developing an export trade relationship with Canada. Such an
organization would allow producers to work together to
improve handling and distribution; set up adequate processing,
packing and storage facilities; develop a grading system; gain
access to suitable transport (through increased volume); and
establish a brand name or trademark.

Specialized personnel could also be hired to give advice on production methods and to conduct
marketing activities. Initially, member producers should concentrate on exporting those items with the
best market potential and/or those in which they have a strong comparative advantage. Then, as the
organization gains experience and proficiency and market conditions warrant it, the range of products
could be expanded. By coordinating activities in this way, a strong position could be established on the
Canadian market. However, it should be noted that poorly managed co-operatives can have a negative
effect, especially when many small manufacturers are involved. Canadian importers are, in fact, wary of
such co-operatives since many have had the experience of receiving shipments of inconsistent qualit y. In
such circumstances, trade will be suspended.
Retailers source their products through
a combination of:
Trade shows (91%)
Sales representatives (60%)
Trade magazines (35%)
Other retailers (32%)
Web sites (28%)
DISPUTE SETTLEMENT
Both exporters and importers should ensure that
each transaction or contract is specific about
questions relating to non-performance of either party,
as well as the acceptability or not of products as
delivered, e.g., by stating product specifications
and/or payment terms. Any potential for
disagreement should be covered by specifying an
arbitration board, e.g., the Canadian International
Trade Tribunal and its relevant rules of arbitration.
Both parties should agree beforehand to be mutually
bound by the contract.
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Importers and Agents: Once you have shown a potential buyer what you are capable of producing and
they express an interest in taking the relationship further, it is considered normal and prudent to request
references from the buyer or agent. Take the time to follow up on these to avoid potential problems in any
future dealings with the importer. Importers and agents have an extensive knowledge of the trade network
and account for a large portion of imports from TFO Canada client countries. They are generally more
willing to take the risks involved in dealing with new suppliers. They are, however, likely to subject
suppliers to careful study before doing business. They expect references and will want to know about the
suppliers export experience, financial standing, and other such details. Exporters who do not supply
references will likely not be well-received. Importers/agents are also more aware of potential problems
that may arise in meeting Canadian requirements for quality, etc., and might be willing to assist suppliers
with hints on adapting the product, providing labels to assist in penetrating the Canadian market, and
providing production order guarantees to allow the factory to plan labour and materials.

Wholesalers: Apart from registering with TFO Canadas database for marketing purposes, exporters
should find that the Canadian Importers Database might be useful for identifying Canadian marketers of
furniture; many of these companies import for resale.

Retailers: Canadian retailers are often looking for specialty fashion items such as curio cabinets, wall
consoles, credenzas, dinettes, chairs and varieties of occasional pieces. Retail sales distribution is
through four types of outlets, almost all of which have online shopping availability and often advertise
sales discounts:

Independent furniture stores deal with a relatively limited range of furniture and account for a large
volume of sales in Canada. Sales in these stores have been growing rapidly, so they represent a
good opportunity. Some independent stores partner with brand name manufacturers to display
furniture in well-accessorized gallery settings. Gallery furniture is generally displayed in elaborate
room settings, which aids the consumer in selecting styles and colour co-ordination. Several gallery
stores and many of the more fashion oriented independent stores are excellent outlets to sell
imported items on an exclusive basis.
Discount warehouse stores such as Costco.
Chain stores such as Home Sense and The Brick.
Department stores, some of which have been separated, warehouse-style, from their parent store.
For example, Sears Home is now separate from Sears, and Home Outfitters is now separate from
The Bay. Generally, purchases are made through importers.

Consumers of office furniture are mainly corporations, institutions and government, with demand
depending on new commercial construction, retro-fitting and large-scale replacements. Architects and
interior designers, acting on behalf of the ultimate purchaser, also play a key role in the selection of office
furniture. A close relationship must therefore be established by the manufacturer and the purchaser or
their representatives for the marketing of office furniture. Although many furniture stores carry better
quality, fashionable, solid wood furniture for the home office market, the majority sold is lower-priced,
ready to assemble furniture of laminated particleboard. While a growing number of furniture stores handle
such products, the bulk of sales still take place through electronics stores, mass merchants, discounters,
home office specialists and other channels.

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5
Import Regulations
Tariffs
Tariffs on imports depend on the product and on the supplying country and its applicable tariff treatment.

Under the Market Access Initiative, Canada has eliminated all duties and quotas on most imports from 48
Least Developed Countries. Accurate identification of the origin of the product is vital to ensuring that the
most favourable tariff rate is applied to your product; as such, each shipment must be accounted for with
the correct import documentation.
Taxes
The federal government imposes a 5% percent Goods and Services Tax (GST) on almost all goods and
services sold here. Only food sold in grocery stores, medical and dental services and a few others are
exempt. All imports are subject to the GST, which is paid by the importer when the product enters
Canada. In addition to the GST, federal excise taxes are imposed on certain goods sold in Canada.
Imports of these are subject to a duty equivalent to the regular customs duty plus the excise duty imposed
on similar Canadian manufactured products. A provincial retail sales tax is also collected by retailers in
most areas upon the final sale of goods and some services to the customer. While they affect the retail
price, these sales taxes are never levied directly on imports.

Important Note: As of July 1, 2010, the provinces of Ontario and British Columbia have implemented a
harmonized sales tax (HST) which replaces existing provincial sales taxes and the federal GST in those
provinces. The HST will be applied on most supplies of goods and services made in Ontario at a rate of
13%, consisting of the 5% federal portion and an 8% provincial portion. An HST is already in place for the
Atlantic provinces.

Businesses in Ontario that are registered for the GST would be required to collect the HST and would
report their HST according to their current GST filing frequency. Retailers and service-providers will
upgrade their point-of-sale, cost and accounting systems to meet the implementation date.

Imports are subject to GST or the federal part of HST with some exceptions. For example, goods
imported by manufacturing service companies to be processed for non-residents and later exported
without being used in Canada are considered a non-taxable import. An input tax credit can also be
claimed in some circumstances. GST/HST is calculated on the Canadian dollar value of the goods,
including duty and excise tax, and is collected at the border at the same time as these duties. The owner
or importer of record is responsible for paying the tax on imported goods. Details are available through
the Canada Revenue Agency.
Importing
CBSA provides information on importing goods into Canada. While the information on this site is aimed at
Canadian importers, suppliers should review it to get a feel for information a buyer might request from the
exporter. This information includes:

Accounting for your shipment: Invoices, import permits, Certificate of Origin, Duty Deferral Program,
international trade agreements;
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Examining your shipment: Why goods are examined;
Registering your business: Business number, import/export account;
Release of your shipment: Release programs, posting security, transaction number;
Reporting your shipment: Required documents;
Dispute Resolution: Appeal rights, self-adjustment;
Electronic Commerce: Electronically sending commercial data to the CBSA;
Importer programs: Customs Self Assessment Program;
Other government departments requirements: Other requirements that may apply;
Licensed customs brokers: Information on hiring an agent and the licensing process.

According to International Trade Canada, only those products that are eligible for a tariff benefit
established under free trade agreements such as with Mexico, Chile, and Cost Rica will be subject to
import permit requirements.
Inspection
If an importer in Canada has received a shipment in a deteriorated condition or has agreed to handle
product in a deteriorated condition, that importer can request an inspection from the Canadian
Government within 24 hours of reception. This is to help determine the responsibility for the condition of
the load so that a fair settlement may be made between the shipper and receiver.
Antidumping
Through CBSA exporters could access information relating to:

Anti-Dumping and Countervailing;
International Events in Canada;
Postal and courier programs;
Useful tools and a simplified step-by-step approach to importing;
Customs Interest Calculation Program;
Forms and publications for importers.
Regulations
Canadian quality standards for furniture are very high, second only to Japan in the world. Two of the most
important sets of standards for the industry have been developed by the Canadian General Standards
Board (CGSB) and the Canadian Standards Association. Standards are developed through consensus
with governments, business, consumer groups, labour, academic and educational institutions, and testing
and research organizations.

In most cases, these groups set voluntary standards for the industry. The characteristics they may look
for may include workmanship, finish, weight, markings, chemical composition, hardness, toughness,
thickness, moisture absorption, flammability, resistance to frost and sudden temperature changes,
resistance to stains and acids, and colour fastness.

The International Organization for Standardization (ISO) promotes the international development of
standardization and related activities with a view to facilitating trade in goods and services. ISOs work
results in international agreements which are published as International Standards. Users have more
confidence in products and services that conform to these standards. Assurance of conformity can be
provided by manufacturers declarations, or by audits carried out by independent bodies. Exporters are
encouraged to have their products and manufacturing premises ISO-certified for greater acceptance by
Canadian buyers. ISO standardization for furniture includes performance, safety and dimensional
requirements; specifications for properties of materials and for workmanship; furniture for furniture;
assessment of resistance to heat, impact and scratching; determination of strength, durability and stability
Furniture 2010


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of furniture; safety of childrens furniture; and assessment of the ignitability of upholstered furniture. In
addition, the Forest Stewardship Council (FSC) sets standards and certifies wood harvested through
responsible forestry methods through the Smartwood program.

Flammability: It is illegal to sell furniture in Canada which does not meet flammability regulations as
outlined in the Hazardous Products Act administered by Health Canada. The Canadian Council of
Furniture Manufacturers (CCFM) implements a voluntary program to encourage furniture manufacturers
to use material for upholstery and stuffing that is resistant to ignition from cigarette or candle burns. This
program follows the guidelines of the UFAC (Upholstered Furniture Action Council) program in the nited
States. Exporters should obtain information on UFAC since it may affect future sales. As consumers
become aware that furniture bearing a UFAC hangtag has a reduced risk of flammability, safety will
become a key feature for purchase. Retailers supporting the UFAC program may request that only
furniture bearing UFAC labels be supplied to them. Key elements in the UFAC Voluntary Program are:

a) Fabric classification and flammability tests: All upholstery components must pass the UFAC
flammability tests, including welts, filling, padding materials, liners and barriers.
b) Construction criteria: Only UFAC approved upholstery components can be used; an approved barrier
must be used between certain cover fabrics and specific stuffing materials.
c) Labelling: The Textile Labelling Act outlines the stringent labelling requirements for upholstered
furniture sold in Canada. A UFAC hangtag identifies furniture meeting UFAC criteria. This hangtag,
attached to furniture by manufacturers, is displayed to consumers at retail locations to assure them
that these items are safer because they are made in accordance with UFAC recommended
construction criteria.

Compliance procedures: A UFAC testing and inspection service is carried out in Canada, and samples of
materials are requested periodically from manufacturers for laboratory testing. Health Canada also
monitors the industrys compliance through a variety of means, such as the purchase and testing of
UFAC tagged furniture from time to time, and reviewing the results of such testing with CCFM officials.

Manufacturers purchase UFAC hangtags from the CCFM. Revenues from the sale of hangtags are used
to finance printing, handling, shipping, customs duties (where applicable), royalties, other fees payable to
UFAC-USA, and additional expenditures relating to the implementation and management of the program
in Canada, including legal fees, testing and publicity. UFAC hangtags are protected by certification mark
and copyright. In order to comply with the UFAC program, manufacturers need the assistance of
suppliers to ensure materials they use meet UFAC test procedures. Suppliers who support the UFAC
program certify that their product meets UFAC standards. Interested suppliers should contact the CCFM
for details.
Further information on regulations is available through the following websites:
Bureau de normalisation du Qubec
Consumer Packaging and Labelling Act and Regulations
National Institute of Standards and Technology (NIST)
o National Standards Bodies
Quebec Upholstered and Stuffed Articles Act
Standards Council of Canada
Upholstered Furniture Action Council (UFAC) Flammability Program
American National Standards Institute
American Society for Testing and Materials
Bankruptcy & Insolvency Act


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6
Tips for Exporters

The Canadian market is extremely competitive. Exporters should note that any failure on their part to give
buyers excellent service will result in the buyer quickly turning to other suppliers. The following are
important factors in establishing your reputation for reliability:

Establish an attractive, easy to navigate and informative website with contact links to your e-mail and
ensure that you respond the same day with any information requested. This immediately shows the
potential buyer, who gets many of these offers each week, what you are capable of. Always include
links to your website in any communication with the buyer.
Always keep your fax machine switched on. Since Canada is divided into different time zones, e.g.,
Vancouver is three hours behind Toronto; communication with a buyer might be at unusual hours.
Buyers who cannot readily contact an exporter will quickly turn to other sources of supply. Send an
interim note if information is not immediately available. Give a reasonable date for when all the
information would be ready and honour that date.
The buyer looks at your sample and how you handle the request to provide one as concrete proof of
your capability and an example of how you would handle a potential business relationship. Ensure
that you provide the sample well within the requested timeframe and that the sample is of impressive
quality and value. This will assure the buyer that you are a viable alternative source of supply. Follow-
up orders must match the quality of this sample.
No surprises. Canadians expect delivery of the product they purchase. Unavoidable delays should be
immediately reported and justified to the buyer; ask the buyer to accept the delay.
Provide accurate information and follow up key sales calls in person as soon as possible.
Enclose a standards certificate of the product and photographs of the manufacturing facilities with the
letter of introduction to the importer. This certificate may be needed to show conformity with Canadian
standards and should be obtained from the appropriate authorities in your country.
Get to know the Canadian market and your importer. Read trade publications and visit trade shows
and retail stores in Canada to get a feel for the market.
Establish contact with trading companies or import agents since they may be the most promising
channel for new entries. Hire an agent/importer to represent you in Canada.
If you are asked for exclusive rights to your product, you should include a clause in the contract for a
minimum level of annual purchases. Be flexible and solicit feedback from your buyer on your product
and trade relations. Put all verbal agreements in writing.
Use English (or French in Qubec) in all correspondence and provide information on the product
range, capacities and price list, quoting prices in Canadian or U.S. dollars.

Finally, if you have at least one year of export experience, be sure that you are taking full advantage of
TFO Canadas free promotional services. This includes direct promotion of your company and products to
Canadian importers via our monthly Import Info E-Newsletter and inclusion in our online searchable
database of exporters. Please check your current profile with us by signing in to our website and going to
your Exporter Profile. Ensure that all your information is correct and that you have accurately completed
Step 2 of the registration process including entering one or more of your exported products. Note that
while Step 3uploading additional information such as photos, price lists etc.is optional, we
recommend that you take the time to complete it as well. In the event that you are not registered with TFO
Canada, please register with us by accurately completing Steps 1 and 2, and as explained above, the
optional Step 3.


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Annex
Sources of Information
TFO Canada
56 Sparks Street, Suite 300
Ottawa, Ontario, Canada K1P 5A9
Tel.: (613) 233-3925 In Canada: 1-800-267-9674
Fax: (613) 233-7860
E-mail: tfocanada@tfocanada.ca

Canadas entire furniture industry is represented by the
following three associations:

THE QUEBEC FURNITURE MANUFACTURERS
ASSOCIATION
1111 St-Urbain Street Suite 101
Montreal, Quebec, Canada H2Z 1Y6
Tel.: 1-866-468-4436 / (514) 866-3631
Fax:1-888-538-7648 / (514) 871-9900

CANADIAN HOME FURNISHINGS ALLIANCE
6900 Airport Road, Suite 239C, P.O. Box 85
Mississauga, Ontario, Canada L4V 1E8
Tel.: (905) 677-6561
Fax: (905) 677-1212

FURNITURE WEST
1873 Inkster Blvd.
Winnipeg, Manitoba, Canada R2R 2A6
Tel.: (204) 632-5529
Fax: (204) 694-1281
CANADA BORDER SERVICES AGENCY
A directory of CBSA offices across Canada is available
through the Internet site.

CANADIAN COUNCIL OF FURNITURE MANUFACTURERS
(e-mail only)
29-1313 Border St
Winnipeg, Manitoba, Canada R3H 0X4
Tel.: (204) 694-5872

I.E. Canada (CANADIAN ASSOCIATION OF IMPORTERS
AND EXPORTERS)
160 Eglinton Avenue East, Suite 300
Toronto, Ontario, Canada M4P 3B5
Tel.: (416) 595-5333 Fax: (416) 595-8226

INDUSTRY CANADA
Furniture
Second Floor, West Tower
235 Queen Street, Ottawa, Ontario, Canada K1A 0H5
Tel.: (613) 947-7466 Fax: (613) 954-6436

INTERNATIONAL TRADE CANADA
Export and Import Controls Bureau
125 Sussex Drive, Ottawa, Ontario, Canada K1A 0G2
Tel.: (613) 996-3711
Fax: (613) 995-5137

NORTH AMERICAN RETAIL FURNITURE ASSOCIATION
CANADA
360 DuPont St.
Toronto, Ontario, Canada M5R 1V9
Tel.: (416) 489-3396
Other Useful Internet Sites
Association of Registered Interior Designers of Ontario (ARIDO): www.arido.ca
Business and Institutional Furniture Manufacturers Association (BIFMA International USA): www.bifma.com
Canadian Office Products Association: www.copa.ca
ImportSource.ca: www.importsource.ca (provides information and guidance on importing to Canada.)
Interior Designers of Canada (IDC): www.interiordesigncanada.org
List of Canadian Associations of Architects: http://strategis.ic.gc.ca/epic/internet/infurniture-meuble.nsf/en/rf03562e.html
List of Canadian Associations of Interior Designers: http://strategis.ic.gc.ca/epic/internet/infurniture-
meuble.nsf/en/rf03561e.html
Packaging Association of Canada: www.pac.ca
Quality Canadian Furniture: http://www.canadianfurniture.com/
Wood Manufacturing Council: www.wmc-cfb.ca

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Trade Shows
CANADIAN HOME FURNISHINGS MARKET
1111 St-Urbain Street , Suite 101
Montreal, Qubec H2Z 1Y6
Tel.: (514) 866-3631
Fax: (514) 871-9900

INTERDESIGN
10 Alcorn Avenue, Suite 100
Toronto, Ontario, Canada M4V 3A9
Tel.: (416) 599-3222 Fax: (416) 599-3224

INTERNATIONAL DU DESIGN DINTERIEUR DE
MONTREAL (SIDIM)
4398, Boul. Saint-Laurent, bureau 103
Montral, Qubec, Canada H2W 1Z5
Tel: (514) 284-3636 Fax: (514) 284-3649

INTERNATIONAL INTERIOR DESIGN EXPOSITION (IIDEX)
10 Alcorn Ave., Suite 100
Toronto, Ontario, Canada M4V 3A9
Tel: (416) 944-3350 Fax:(416) 921-2707

TECHNI BOIS
Tel: (819) 344-2247
Fax: (819) 344-2516

Publications
A list of industry related publications can be found through Industry Canada and includes the following:
Azure
Canadian Interiors
Constructo.ca
Decoration Chez-Soi
Decormag
Home Goods Online
Info-Link
Intrieurs
Value-Created Review
Wood Focus
Woodworking