IKEA Canada is launching a “second-hand tax” across its Ontario “As-is” marketplaces—but this is a tax that will actually save shoppers money.
Dubbed SHT for short, the second-hand tax will discount the price of used items by 13 percent, effectively removing the 13 percent HST on the products.
“Canadians have been paying tax on second-hand items, even though the tax was already paid the first time around,” the Swedish furniture giant said in an April 2 press release.
“Second-hand items may have lost their original look, packaging, and price, but they never lose the tax.”
SHT is not here to stay, however. IKEA says it launched the initiative April 2 to promote “sustainability and affordability” in celebration of Earth Month. It will remain in effect through April 11 at all IKEA As-is marketplaces in Ontario for all of its loyalty program members, the company said.
The retailer is also calling on the federal government to put an end to double tax on second-hand items “so that all Canadians can shop circular for less.”
IKEA’s SHT initiative comes just two months after the company announced price reductions on more than 1,500 products as part of an $80-million investment in its Canadian stores. The company said the price cuts were a bid to help customers amid the rising cost of living.
“We know that in Canada, the cost of living and affordability is more important than ever as many Canadians face rising living costs and increased inflation,” IKEA Canada CEO Selwyn Crittendon said in a press release. “Many are facing an affordability crisis and are struggling with fundamental costs such as housing, fuel, health, and food.”
Although the prices weren’t slashed on all products due to the increased cost of doing business, Mr. Crittendon said the company is “committed” to reducing prices on products when possible to increase affordability for its customers.
Like most retail companies, IKEA hiked prices in 2022, citing supply chain hold-ups and elevated costs for raw materials. The company first started cutting prices in late 2023, although prices have yet to return to pre-pandemic levels.
