Workers produce furniture at a factory in Hangzhou, China, October, 2022. Bestar's planned shutdown would be the second this week after South Shore Furniture's closure, amid industry warnings about low-cost Asian competition.-/AFP/Getty Images
Union officials say furniture maker Bestar Inc. is shutting its two factories in Quebec, the second Canadian furniture manufacturer this week to signal it is ending operations amid what many industry watchers say is unfair competition from low-cost Asian rivals.
Bestar makes modular, ready-to-assemble furniture and is owned by private equity firm Novacap. In 2020, Bestar merged with another manufacturer, Bush Industries, and was rebranded as eSolutions Furniture Group.
The company held two internal meetings with employees in recent days to advise them the Bestar plant in Lac-Mégantic, Que., would close, said Daniel Cloutier, Quebec director for the Unifor union. He said a separate Bestar plant in Sherbrooke, which was already on a work stoppage for several months, will also close.
Some 120 unionized workers in Lac-Mégantic will lose their jobs in addition to a number of management employees, Mr. Cloutier said.
Mr. Cloutier said workers were told a formal announcement will come Thursday morning. Luc Berthold, a Conservative Party MP who represents the Mégantic-L’Érable riding, confirmed the news in a social-media post Tuesday, citing sources within the company.
Novacap did not respond to a request for comment.
“It’s disastrous,” Mr. Cloutier told The Globe and Mail. “We saw it coming. Things had been difficult for several years already.”
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The developments at Bestar come barely a day after another major Canadian furniture maker, South Shore Furniture, announced it would shut down operations gradually over the coming weeks.
South Shore, a family-owned business based in the town of Sainte-Croix, Que., said it could not continue in the face of dumping by competitors from China and Vietnam. It also cited the effect of U.S. import tariffs, which have hurt its own sales into the country and redirected Asian exports slated for the United States to less restrictive markets such as Canada.
“For Canadian manufacturers such as South Shore Furniture, demand has just simply vanished on both sides of the border,” the company said in a news release Monday. It said its own sales have dropped 77 per cent between 2022 and 2025.
South Shore makes ready-to-assemble furniture, including dressers, beds, nightstands and bookshelves. The company has been in business for 86 years while Bestar has a 78-year history.
As the U.S. tightens access to imports, Asian countries have been increasing their shipments of low-cost furniture into Canada, selling items at prices even cheaper than in their domestic markets, according to Gilles Pelletier, chief executive of the Quebec Furniture Manufacturers Association. That amounts to a violation of World Trade Organization rules should it be proven.
It took a village to build this Quebec furniture empire. The trade war is knocking it down
Selling into the U.S. is also becoming more difficult, Mr. Pelletier said in an interview this week. The sheer unpredictability of the White House on trade has created “enormous confusion on where Canadian products stand” and they’re losing their lustre among American buyers, he said.
“The back-to-back closures of Bestar and Meubles South Shore within a 24-hour period send a clear message: Quebec’s furniture manufacturing sector is in jeopardy,” Unifor said in a statement. It urged Ottawa to step up efforts to protect the sector.
Earlier this month, the federal government launched a trade inquiry into several types of manufactured wood products with the aim of protecting domestic producers from a surge in foreign competition. The Canadian International Trade Tribunal will conduct a so-called safeguard inquiry into the global imports of cabinets and vanities, solid and engineered wood flooring, and storage furniture.
Safeguard inquiries are designed to prevent a sudden flood in foreign products from undercutting local manufacturers, and they can result in significant tariffs being placed on imports. They differ from the more common anti-dumping and countervailing duty inquiries in that safeguard measures are applied to all countries, rather than specific ones.
The Canadian Wood Products Alliance, an industry group that was established to lobby Ottawa for protection, is pushing the federal government to immediately implement provisional tariffs on foreign-made goods entering Canada. It says that’s necessary to prevent a stockpiling of products in Canada and to avoid more layoffs in the coming months while the inquiry is going on.