Tariff uncertainty puts strain on cash flow, inventory management: Manitoba lumber business owner

February 5, 2025 Canuck

While he says a delay in possible U.S. tariffs is good news, a Manitoba lumber business owner says he’s been fielding questions about their impact from his locations — and he doesn’t expect that to stop.

“Do we need to take this window now that we have with this pause and try to bulk up inventory as much as possible?” LumberZone owner Joel Hartung said Wednesday at his Steinbach location.

A 25 per cent tariff on most Canadian goods — promised by U.S. President Donald Trump — was put on a 30-day hold after leaders in both countries came to an agreement Monday.

Hartung, who also sits on the board of the building supply industry group Supply-Build Canada, says approximately 60 per cent of his sales are Canadian-manufactured products. Between 20 and 25 per cent of sales come from U.S. products.

Heavy machinery moves wood. — A forklift transports lumber at The LumberZone’s Steinbach yard in Steinbach, Man., on Wednesday. (Tyson Koschik/CBC)

He’s also recently had inquiries from customers asking him to order materials now and keep them in stock for a few months before purchasing.

“Lots of people are wanting to … lock in pricing for the project later, but they don’t necessarily want to pay for it or are unable to take delivery [immediately],” he said.

“It puts a lot of stress on our cash flow and just our inventory management.”

Demand for materials has been much higher than it normally is this time of year as customers prepared for tariffs, Hartung said.

“U.S. purchasers were buying as much lumber as they could get their hands on to try to get it into the U.S., on their yards before the tariffs took place,” he said.

While it isn’t in place yet, he estimates a 25 per cent tariff would add up very quickly for some customers who are looking to purchase 7,000 or 8,000 pieces of lumber.

Although he doesn’t export his materials to the U.S., he’s curious what will happen to his American buyers, since the price of lumber is cheaper in Canada. He’s unsure whether they’d have to pay tariffs to bring lumber back across the international border.

He also wonders what would happen with products, such as a specific type of treated lumber where the wood is Canadian, but the product it’s treated with is from the U.S.

He also said the effects of the COVID-19 pandemic left continuing uneasiness within the industry.

“COVID created so many issues in the industry with supply and demand and product stockouts, and just delays of products, that everybody is wanting to be a little bit more on the ball and do the research and secure the product that they have,” he said.

In the short term, Hartung expects the price of lumber to rise before dipping. He also foresees some mill shortages will drive the price up again.

“I’ve said it a lot of times, but it’s just the uncertainty with knowing what is going on and how we are supposed to handle stuff,” he said.

Parliament needs to get back to work: Chamber president

That uncertainty is being felt across the country.

Candace Laing, president and chief executive officer of the Canadian Chamber of Commerce, spoke about the economic relationship between Canada and the U.S. at a Manitoba Chambers of Commerce breakfast in Winnipeg on Wednesday.

“We’re waking up every day right now thinking about the Trump administration in the United States, but Americans don’t wake up every day thinking about Canada,” Laing said.

She says it’s paramount that the federal government ends the prorogation of Parliament and gets back to work for Canadians amid the uncertain tariff situation.

“I don’t think we know how fast we can move, because we’ve never been in this space before,” Laing said.

Manitoba trades $42 billion worth of products south of the border annually, with $5.7 billion going to Illinois, its biggest trading partner, according to the Canadian Chamber of Commerce’s Canada-U.S. Trade Tracker. Minnesota, Tennessee, Wisconsin and Texas round out the top five of Manitoba’s biggest U.S. state trading partners.

Canada is “the biggest customer for 34 states,” Laing said, “and people maybe hadn’t digested the full size and scope of where our trade partnership had really grown to.”

She says reducing inter-provincial trade barriers would be one measure to ease tariff impacts.

WATCH | Uncertainty over tariffs remains for Manitoba lumber business owner:

Amid trade war pause, uncertainty remains for Manitoba business

3 hours ago

Duration 1:55

Just days into the 30-day pause on what was looking like the start of a trade war between the U.S. and Canada, questions remain about what could be looming when that time is up.

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Canada News

Tariff uncertainty puts strain on cash flow, inventory management: Manitoba lumber business owner

Parliament needs to get back to work: Chamber president

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