Any merger needs to deal with Canadian reality
By Michael J. Knell -- Furniture Today, January 6, 2002
OTTAWA — Regional differences and a lack of funding aren't the only stumbling blocks to creation of a national furniture factory association in Canada.
"There's a (political) reality in Canada and our industry certainly reflects it," said Michel Deveault, president of the Quebec Furniture Manufacturers Assn. "One of the problems with the (Furniture/Today) survey is that it doesn't take into account the real political situation in our country," he maintained.
That reality is grounded in history and geography and involves the divide between English and French Canada as well as that between western and central Canada. In recent years, western Canada and Quebec have had more in common on a wide range of regional, national and international issues than either has had with Ontario, which long has been this country's political and economic heavyweight.
Despite these differences, the three factory groups — QFMA, the Ontario Furniture Manufacturers Assn. and Furniture West — have worked together when the need arises, and recent efforts are expected to bear more fruit soon.
While most Canadian manufacturers believe that the QFMA, OFMA and Furniture West should be merged, each has roles that can't easily be assigned to a national body.
For example, while both the provinces and the federal government share responsibility for economic development, the former has exclusive jurisdiction over occupational health and safety while the latter has power over international trade.
Until 1992, the three groups supported the Canadian Council of Furniture Manufacturers, which had an office in Ottawa.
"Launched out of that office was our response to free trade with the United States, the textile tariff anomaly and a number of other issues," said Terry Clark, chairman of Furniture West and president of the CCFM.
But with the economy in recession and the industry crumbling under the then-new Free Trade Agreement with the United States, money for CCFM dried up. Some of its functions, including the Canadian UFAC program, were transferred to Furniture West, where they remain.
Once a restructured, and considerably smaller, Canadian industry emerged from the recession of the early '90s, it enjoyed almost 10 years of growth, and little thought was given to restoring the CCFM or creating another national association. But in the past few years, manufacturers again have been challenged by an increasingly uncertain economy and by a rising tide of imports, particularly in case goods.
Deveault said QFMA and Furniture West are better equipped to withstand pressures, thanks to the markets they own and operate. "The shows are a way to create revenue to provide services," he said. "Those revenues are there only to provide services, and in Quebec we have the only association that has succeeded, generally speaking, in providing a lot of services."
Quebec is also home to most of Canada's larger producers — Canadel, Dutailier, Bestar, Shermag, Dorel and El Ran, among others — giving the QFMA a more affluent member base.
Without a market and with a membership base comprised mainly of smaller upholstery producers and bedding manufacturers, Ontario has struggled in recent years. The OFMA's major sources of revenue have been membership fees and proceeds from the Trillium Awards program, but neither produce the revenues of a trade show.
It's no secret that many OFMA members aren't happy with the association and that support for the Trilliums has declined. This has put considerable pressure on the group to find new revenues and a new role.
'Make things happen'
OFMA President Gerry Cockerill acknowledged that many member complaints are valid. "I agree with them wholeheartedly," he said, "and as the managers of the association, (the board) has an obligation to make things happen."
Deveault summed up the situation this way: "Quebec is happy, Ontario is not and Furniture West is OK. Quebec manufacturers are very satisfied with the work of the association, but that doesn't mean we're not ready to work nationally."
Much of that work already has begun. "There's a new spirit of cooperation between the associations," Cockerill said.
Deveault believes that recent behind-the-scenes efforts will result in the strengthening of all the associations while bolstering the OFMA financially.
"The first step is to provide new services, and then we're going to find new ways to grow revenues so that they're not as dependent on membership fees," Deveault said, adding the first of these efforts will be announced shortly.
Ready to act in concert
Furniture West's Clark said this new spirit will enable the three groups to act in concert on a wide variety of issues looming on the horizon.
"Competitive freight rates are still an issue," he said. "While credit isn't as big an issue as it used to be — in part because of the influence of the buying groups — it's still an issue.
"And as we are pulled deeper into the global economy, there will be a greater need for a clearinghouse for these and other issues," Clark said.
"It's imperative that we get together as an industry," Cockerill said. "There are a lot of pressures out there. It's up to us, as an industry, to do something about them."
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