This work was a direct response to the affordability crisis that was affecting the entire country, and Canadians responded in a big way. We targeted a tax injustice head on – speaking to those affected by it (consumers) and those who hold the power to change it (government and business stakeholders). A simple three-letter acronym had the nation inspired to take action. Tens of thousands of Canadians signed our petition. Canada’s biggest corporations, retailers, non-profits, and government agencies showed their support. And the most important response? The federal government agreed to meet with IKEA to discuss a change in legislation.

Canada was hit with a nationwide affordability crisis in 2023. Housing affordability specifically, reached its worst level in history. This created heightened economic anxiety for millions of people who were struggling to meet the rising costs of living. As a result, the second-hand economy became a widespread choice for those seeking value. There was only one problem: a federal tax policy that was punishing Canadians for making sustainable choices.

Every time they buy a second-hand item, it gets taxed. Even though the tax was already paid the first time. Put simply, that’s paying tax on the same thing twice. For a country that is known as a global leader in sustainability, this was shocking. An outdated, and frankly, unfair tax policy was making it harder for Canadians to choose affordable and sustainable options, especially in one of the country’s most financially challenging times.

As a brand that’s committed to creating a better everyday life for the many people, IKEA knew this was a moment to reinforce its role as a leader in environmental stewardship and affordability by championing a more equitable approach to taxation. This work was a timely intervention that promoted systemic change – aligning with Canadians’ urgent demand for innovative solutions that would have a tangible impact on their lives.

In Canada, a 13% federal tax called HST (Harmonized Sales Tax) is applied to every sales transaction. It’s a tax that’s been around since 1997, so it’s something no one thinks twice about. Until IKEA discovered that buying second-hand means paying tax twice. Even though these items lose their original look, packaging, price, and value, they never lose the tax. Every new owner must pay the HST that was already paid the first time. This unfair double taxation on second-hand items generates a whopping $720 million for the federal government. Money that should rightfully be in Canadians’ pockets.

This was a moment for IKEA to double down on our undeterred commitment to affordability and sustainability. Within our As-is (second-hand) marketplace, we re-sell everything from gently used products to furniture from our Sellback Program. So, as a leading retailer of second-hand items ourselves, we had just one thing to say: SHT.

SHT (Second-Hand Tax) is a counter tax that effectively eliminates the unfair double tax on second-hand items. HST is 13% and SHT is -13%. Meaning, customers pay 0% tax on our As-is (second-hand) items. More than just a clever play on letters, SHT is a bold articulation of the sentiment all Canadians felt about this issue. It harmonized economic affordability with environmental sustainability. It offered a blueprint for how policies can evolve to support sustainable consumer choices. Most of all, it kickstarted the beginning of the end to the double tax on second-hand items, for good.

According to a 2023 IKEA report, 45% of Canadians said their finances and disposable income were a top concern. Many turned to the second-hand economy to make the most of every dollar – with 31% having purchased second-hand items more than once a month. This shift in consumer mindset challenged us to rethink ways in which we could eliminate barriers to circular shopping. That’s when we uncovered this significant, but little-known, issue of double taxation on second-hand items. Our approach to tackling it was to start within our organization and thereby, take a leadership position on affecting the tax policy at a government level. Because tax laws vary by province, we chose Ontario, Canada’s largest province with the highest intensity index in participation in the second-hand economy (92 compared to the national average of 85) to start our stance against the unfair tax and ask Canadians to join us.

On April 2nd, the start of Earth Month, IKEA educated Canadians that SHT was happening. We put out an open letter in Canada’s biggest newspapers that revealed this unfair double tax, introduced our solution, and called on everyone to join us in putting an end to it. Then, SHT was everywhere. We promoted it across IKEA stores, letting customers know that we would give them SHT back on all our As-is (second-hand) items. We announced SHT on Instagram and TikTok. Our CEO was talking SHT on LinkedIn, while journalists were covering the initiative across digital, print, online and broadcast. Brand fans and influencers made SHT even bigger, without even being paid. Canadians flocked to sign our petition on change.org. We conducted outreach to government and business stakeholders directly to get them on board. And, we convened over 100 leaders from business, government and civil society to discuss change.

IKEA was the 1st consumer brand in Canada to propose changes to tax laws. We ignited the biggest bipartisan tax law debate in recent years, making SHT the most covered campaign in IKEA Canada’s history, starting as a single-market effort and sparking national reform.

We gained +32,000 petition signatures. Purchase intent was 81% and IKEA sustainability perceptions increased by 11%. The campaign also led to significant business impact, with a 192% increase in IKEA As-is (second-hand) sales and a 16% increase in foot traffic.

Canada’s most important tax and retail organizations, representing +235,000 members and +142,000 stores respectively, shared their interest in working with IKEA almost immediately. Most importantly, as a result of the campaign, provincial and federal decisionmakers engaged with IKEA to discuss a change in policy that would end the double taxation on second-hand items Canada-wide. **PLEASE SEE CONFIDENTIAL INFORMATION SECTION FOR ADDITIONAL RESULTS**

This work is a direct reflection of IKEA’s purpose: to create a better life for the many people. When the affordability crisis impacted the many peoples’ ability to create a better life, we sought to activate that purpose in a way that would drive meaningful change. Canadians needed our help more than ever, and our core values became more relevant than ever. IKEA has always believed in caring for people and the planet, and in making a significant impact today and for years to come. SHT does both. Not only does it reinforce IKEA’s commitment to making sustainable living accessible and affordable, but it also ignites systemic change; thereby broadening the impact of sustainability and affordability in the marketplace now and in the future.