This business owner says she's being 'penalized' for bringing manufacturing to Canada from China

A Canadian company that manufactures children's toy couches finds itself facing a stiff bill for import tariffs after bringing production home to this country.

While Barumba Play is no longer importing a majority of its product, a single component of the couches has been reclassified by the Canada Border Services Agency and is no longer tariff-free.

The company's flagship product is a couch for children made of pieces that can be easily taken apart and reassembled for play. Sara Feldstein founded the company in Markham, Ont., in 2021 and initially produced the couches entirely in China.

As the couches were classified as a children's toy, Feldstein told CBC News they were not subject to tariffs and were brought into Canada without import fees. Tariffs can be used by the Canadian government as a form of taxation on imports to protect Canadian economic development.

Trouble started for her in 2023, when Feldstein opted to move production of the couches to Canada from China.

"I on-shored my manufacturing to Canada from China and have been penalized for it," she said.

Feldstein was able to manufacture every part of the couch in Canada except for cloth slipcovers, which she had to keep producing in China.

She received a letter from the Canada Border Services Agency in the summer of 2023 indicating it felt classifying the slipcovers as part of a toy was incorrect. This contradicted what Feldstein was told to expect from business advisors and industry experts that she turned to for advice before opting to transfer manufacturing most of her product to Canada.

Instead, Feldman says the slipcovers have been lumped in with textiles such as carpets, bed linens and table linens — and now she's expected to pay 18 per cent duty on imports.

The CBSA declined an interview request from CBC News, and did not provide a written statement or any comment by publication deadline.

According to Feldstein, her business now owes at least $47,000 in retroactive tariffs, and she expects costs could escalate up to $70,000 while she waits for the appeals process to play out.

It's a cost she's not sure her business can bear, because she must pay the tariffs now even while she tries to appeal the decision.

That appeal process could take close to a year, according to the CBSA's current processing times.

"It would make me want to tell others, don't bother bringing your business back to Canada. Do it overseas. It's safer that way," she said.