IKEA Canada's -13% 'Second-Hand Tax' zeroes out HST on used goods — 192% As-Is sales jump

In Canada, 13% HST is added to every sales transaction, and it has been since 1997. IKEA discovered a quiet absurdity inside that rule: second-hand goods are taxed again every time they are resold. A sofa loses its packaging, its price and much of its value, but it never loses its tax — every new owner pays HST that was already paid once before, an estimated $720 million a year flowing to the federal government.

IKEA was an unusual complainant: its As-Is corners and Sellback Programme make it one of Canada's biggest retailers of used furniture. Instead of protesting in a manifesto, the company announced its own law. SHT — Second-Hand Tax — is a counter-tax of -13%, exactly cancelling Ontario's HST. From 2 April 2024, the start of Earth Month, customers in IKEA's Ontario As-Is marketplaces effectively paid zero tax on second-hand items, and the cheeky name (read aloud, it sounds like an expletive) made the point impossible to ignore.

The campaign opened with an open letter in the Globe and Mail, Financial Post, Toronto Star and Ottawa Citizen, then spread through store signage, Instagram and TikTok, a LinkedIn post from the CEO and a change.org petition. IKEA also went directly to the people with power: it lobbied tax and retail organisations, wrote to federal and provincial stakeholders, and convened more than 100 leaders from business, government and civil society to discuss the change.

The numbers followed. SHT collected more than 32,000 petition signatures (Edelman later put it above 35,000), lifted purchase intent to 81%, raised IKEA's sustainability perception by 11%, and drove a 192% increase in As-Is sales and 16% more foot traffic. It became the most covered campaign in IKEA Canada's history and the country's biggest bipartisan tax-law debate in years — and federal decision-makers agreed to meet IKEA to discuss ending double taxation on second-hand goods.