IKEA Canada's 2025 Federal pre-budget submission
Canada is the place we call home
Canadians view home as more than a physical space—it is a place of comfort, community, and resilience. It represents safety in the face of global uncertainty, extreme weather, affordability pressures, and rapid technological change. Home is also about connection: no one should feel alone. Supporting this broader vision of home requires a shared effort from government, business, community organizations, and individuals.
IKEA Canada recognizes this responsibility. As a global retailer, with roots that span almost 50 years in Canada, we are committed to making everyday life more affordable and sustainable for the many. In response to rising cost-of-living pressures, we have invested over $130 million to lower prices, helping Canadians access essential home furnishings without compromising quality.
We are also expanding access to affordable, sustainable options through our As-Is and Sell-Back programs. Over the past two years, participation in our Sell-Back program—where customers return theirgently used IKEA furniture for resale—has grown by 36%. These initiatives not only provide cost-effective solutions for households but also support Canada’s circular economy goals by reducing waste through extending product life cycles.
We believe that helping people thrive at home requires everyone to bring solutions to the table. IKEA Canada is committed to working alongside government and community partners to ensure that every Canadian has access to a safe, affordable, and sustainable home—today and into the future
Recommendation 1: Expand Canada’s Global Trade Horizons
Presently, IKEA Canada carries more than 10,000 products sourced from approximately 40 countries. IKEA understands and supports the federal government’s efforts to strengthen economic resilience and competitiveness. One of the most impactful ways to achieve this is by diversifying Canada’s trade relationships beyond our traditional reliance on north-south trade. To truly grow the economy, Canada must look beyond a solely inwardly focused 'Made-in-Canada' approach. Protecting and creating Canadian jobs can be achieved through strengthening our role as a trusted global partner by enhancingsupport for expanded trade opportunities.
Canada’s trade agreements with the European Union (CETA) and Asia-Pacific partners (CPTPP) offer significant untapped potential. However, Canadian businesses—including IKEA—continue to face bureaucratic and regulatory hurdles that limit the full realization of these opportunities. These include:
- Canadian tariffs and related barriers placed on imported products that reduce market competition and increase prices for consumers.
- Complex and inconsistent import documentation requirements across ports and provinces.
- Delays in customs clearance due to outdated digital infrastructure and limited harmonization with international standards.
- Tariff classification ambiguities that create uncertainty and increase compliance costs.
- Redundant product testing and certification requirements, even for goods already approved in trusted jurisdictions like the EU.
We urge the federal government to streamline and modernize import processes, including:
- Establishing mutual recognition agreements for product standards with key trading partners. For example, with the U.S.’s Environmental Protection Agency (EPA) reported plan to end the Energy Star program, a common North American standard for energy efficiency maydisappear. Aligning with European standards would help ensure continued consumer confidence and product safety.
- Investing in digital customs platforms that reduce paperwork and improve transparency.
- Creating a single-window trade portal for businesses to manage all federal import/export requirements.
In addition to improving trade processes and practices, Canada must invest equally in expanding physical trade infrastructure. Strengthening key trade corridors—especially ports and rail—areessential to moving goods efficiently into Canada and across the country. Reliable infrastructure ensures timely delivery and keeps costs low for Canadians. However, recent years have exposed vulnerabilities in our supply chains, with delays at ports and disruptions from climate-related events like wildfires and floods. Strategic investments in national infrastructure will boost economic resilience and give Canadians confidence that goods will arrive on time and affordably.
Recommendation 2: Addressing Furniture Poverty: The Missing Piece in Canada’s Housing Strategy
While Canada’s housing plan rightly focuses on building nearly 4 million new homes, it often overlooks a critical issue: the ability to live with dignity inside those homes. Many low-income Canadians face furniture poverty—the lack of basic household items like beds, tables, and kitchenware. This is not about comfort; it is about meeting essential needs.
Unlike housing insecurity, furniture poverty is largely invisible. Yet it affects everything from a child’s ability to do homework to a family’s ability to cook a meal or a senior’s dignity to maintain personal hygiene.
Furnishing a home with even used items can cost between $1,600 and $3,000, not including essentials like towels, cookware, or lighting—costs many simply cannot afford.
The 2023 federal budget acknowledged cost-of-living pressures through the Grocery Rebate. Now, it istime to address furniture poverty by introducing a $500 Furniture and Home Essentials Tax Credit for individuals earning under $32,000 or households under $38,000. Eligible items should include:
- Basic furniture (excluding outdoor/office)• Essential appliances (fridge, oven, microwave)
- Mattresses
- Kitchenware and tableware, including plates, pots/pan, glasses, cutlery, food storage, etc.
- Lighting
- Bathroom accessories, including, mirrors, toilet paper holders, toiletbrushes, toothbrush holders, shower heads, towel, etc.
- Cleaning accessories, including mops, brooms, buckets, and shower squeegees.
This targeted support would help close the gap between housing and livability, ensuring every Canadian has the essentials to truly call a place home
Recommendation 3: Modernizing Tax Policy for the Second-Hand Economy
As affordability pressures grow, more Canadians are turning to second-hand goods and repairs to stretch their budgets. Nearly one-third buy used items monthly, and 73% do so to save money. Among Gen Z, that number rises to 42%. This growing second-hand economy also supports environmental goals by reducing waste and encouraging reuse.
Yet, current tax rules have not kept pace.
Canadians often pay HST/GST twice—once when the item was new, and again when it is resold—penalizing those who rely on second-hand goods, further disadvantaging those already struggling financially. While individuals and charities earning under $30,000 are exempt from charging tax on used goods, businesses must still charge tax, creating inconsistency and discouraging growth in this sector.
IKEA Canada recommends two targeted changes:
- Remove HST/GST on second-hand goods priced at $250 or less, regardless of seller.
- Eliminate HST/GST on household repairs under $50, including furniture, clothing, and small electronics.
These changes would:
- Ease cost-of-living pressures.
- Support a growing reuse and repair economy.
- Reduce landfill waste.
A national, harmonized approach would reflect how Canadians live today, helping them save money while supporting sustainability. Additionally, this would harmonize efforts already being made in some provinces that currently exempt PST on certain second-hand goods
Recommendation 4: Making At-Home Energy Efficiency Accessible to All Canadians
The federal government has made important progress in promoting home energy efficiency, including through the Greener Homes Grant, the new Canada Greener Homes Affordability Program (CGHAP) and investments in public electric vehicle (EV) infrastructure. However, as Canadians struggle with cost-of-living pressures, large-scale retrofits remain unaffordable for many Canadians. To make energy savings even more accessible, the government should also support micro-efficiency upgrades through a consumer rebate to make more affordable everyday purchases that reduce energy use and lower utility bills. These include LED lightbulbs, smart thermostats, lowflow showerheads, weather stripping, thermal curtains, and occupancy sensors. Such items are easy to install and can significantly cut energy consumption.
Recommendation 5: Continue to Build Canada’s Electric Vehicle Infrastructure
The federal government has made significant investments to help Canada reach its net-zero emissions targets by 2050. These efforts include support for EV battery production and processing, as well as tax incentives such as the Medium- and Heavy-Duty Zero-Emission Vehicles Program and the Enhanced Capital Cost Allowance introduced in the 2022 federal budget.
IKEA Canada is contributing to this transition with a strong commitment: 100% of our home deliveries in primary market areas will be made using electric vehicles or other zero-emission solutions. However, more can be done to create the optimal conditions for all businesses to expand their EV ambitions.
To accelerate progress:
- Pair incentives with targeted R&D investments: While purchase incentives are a good start, further progress can be achieved by coupling them with federal investments in technical research and development. Commercial-use EVs still face barriers such as limited battery life, cold weather performance issues, and insufficient charging infrastructure. Addressing these challenges through increased R&D funding will support made-in-Canada solutions, create high-quality jobs, and position Canada as a global leader in green technology.
- Expand public commercial EV infrastructure: A dedicated commercial EV corridor between Windsor and Quebec City would significantly enhance accessibility and reliability. Currently, reliance on privately owned charger stations limits broader business adoption of EVs as a dependable tool.
Long-term EV success also depends on ensuring affordability and accessibility for all Canadians—not just businesses.
Homeowners and renters continue to face cost barriers. Incentives to upgrade household electrical systems and install EV chargers—especially in multi-unit residential buildings—are essential to support equitable access. A dual approach that encourages both business investment and residential EV readiness will empower more Canadians to participate in the transition to a low-carbon future.