Entrant Company
Edelman Canada
Entry Type
Product/Service
Category
Sustainable Commerce
In Canada, a 13% tax called HST (Harmonized Sales Tax) is applied to every sales transaction. It’s been around since 1997, so no one thinks twice about it. 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This outdated, unfair tax policy was making it harder for Canadians to choose affordable and sustainable options. As a brand that’s committed to creating a better everyday life for the many people, we needed to double down on IKEA’s commitment to affordability and sustainability. Within our As-is (second-hand) marketplace, we re-sell everything from gently used products to furniture. So, we had just one thing to say: SHT.
SHT (Second-Hand Tax) is a counter tax that 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 items.
We ignited the largest bipartisan tax law debate in recent years, becoming the most talked about local-market initiative in the history of IKEA Canada. Purchase intent was 81% and sustainability perceptions increased by 11%. The campaign also led to significant business impact, with a 192% increase in As-is sales and a 16% increase in foot traffic.
Canada’s most important tax and retail organizations shared their interest in working with IKEA immediately. The Canadian Taxpayers Federation, Retail Council of Canada, and Canadian Federation of Independent Business all shared notes of written support. The Ontario Minister of the Environment and The Ontario Minister of Finance each met with IKEA to discuss actionable next steps. Most impressively, IKEA met with the Prime Minister of Canada to talk about ending the double tax for good.