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THE CHALLENGE

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

This issue was more relevant than ever, amidst a nationwide affordability crisis. 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 and shopping circular.

THE STRATEGY

IKEA Canada's reporting showed that 45% of Canadians were concerned with their finances. Many had 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 mindset challenged us to eliminate barriers to shopping circular.

So, we created SHT (Second Hand Tax): a counter tax that effectively eliminates the unfair double tax on second-hand items. How does it work? HST is 13% and SHT, is -13%. Meaning customers pay 0% tax when shopping the IKEA second-hand marketplace.

The idea was designed to earn attention from those affected (consumers) and those with the power to make change (government & business stakeholders). Timely, urgent and loaded with tension, SHT harmonized affordability with sustainability and offered a blueprint for how public policies can evolve to reflect collective interests and support sustainable choices

THE EXECUTION

We targeted as many Canadians as possible, starting in our organisation and taking a leadership position on affecting the federal tax policy with government.

IKEA sent digital letters to top federal and provincial stakeholders and existing partners, teasing out that SHT was coming.

Open letters appeared in print newspapers across top tier outlets read by Canadian business leaders: The Globe and Mail, Financial Post, Toronto Star and Ottawa Citizen.

IKEA distributed a press release across the Canadian Newswire and conducted targeted pitching to gain awareness of the initiative, drive traffic to IKEA’s second-hand marketplace and spur on petition signatures. We developed a radio chatter sheet with bite-sized messages for broadcast.

Throughout Earth Month, we continued conducting outreach and landed top tier coverage as SHT gained momentum. Outlets encouraged their readers and listeners to sign the petition.

THE OUTCOME

The campaign was hugely successful against IKEA’s goals. In additional to some confidential achievements, the campaign led to:

• 1ST consumer brand in Canada to propose changes to tax laws
• 35,000+ petition signatures
• 192% increase in IKEA second-hand sales

The Canadian government agreed to meet with IKEA to talk about a change in policy to put an end to the double tax. Discussions remain ongoing.