IKEA Canada provides key recommendations for Ontario's 2026 Budget

Ontarians are seeking solutions

As Ontario continues to grapple with global uncertainty and the rising cost of living, Ontarians want to feel safe and secure in their homes and communities. However, people have less confidence that they will be able to live the way they want. Affordability concerns, such as increasing grocery prices, housing unavailability, and environmental issues such as more severe fires & floods, weigh on the minds of Ontarians. 

Government, business, community groups, and individuals have a responsibility to bring solutions to the table to support Ontarians. To address ongoing affordability concerns, IKEA has reduced prices by more than $100M. We’ve also supported a broad network of furniture banks that provide home essentials to the most vulnerable Ontarians. Since 2019, IKEA Canada has donated over 25,000 returned mattresses to furniture banks, providing beds for over 11,000 families in need in the Greater Toronto Area. Not only does this provide another affordable option, but it also keeps waste out of landfills.

Caring about how Ontarians live in their homes is not the sole responsibility of government. As a leading national brand, IKEA Canada has a responsibility to care for our co-workers, customers, and communities. The public interest is shared amongst all Ontarians.

Recommendation 1:  Implement a Home Essentials Tax Credit (HETC)

The Protect Ontario by Building Faster and Smarter Actmade clear strides to accelerate the approval and building of housing across Ontario. The province’s own Housing Supply Progress Tracker shows that 94,908 new homes were started, meeting 75.9% of the 2024 goal of 125,000 starts.¹ But having a house does not necessarily make it a home.

Many households face “furniture poverty”—lacking basics like beds, tables, chairs, and kitchenware, conditions that negatively affects sleep, nutrition, hygiene, and children’s ability to study. Ontarians are spending so much on physical housing, that they cannot afford to live in their homes. Furnishing even modest homes with used items costs $1,600–$3,000, a burden many cannot afford after closing costs.² Furniture poverty is widespread; in 2024, 45.7% of Ontarians spent ൒30% of income on housing, with mortgages making up ~75% of household credit. ^{3 4}

Ontarians would benefit greatly from a refundable Home Essentials Tax Credit (HETC) of $500 per person to help homeowners purchase basic furnishings and necessities, plus an income tested top up of up to $500 for lower and middle-income households. Eligible items should include home essentials such as mattresses/bedframes, essential appliances, sitting and dining furniture, children’s furniture, kitchenware, and lighting. Claims should be simple and receipt- based. Pairing Ontario’s housing supply success with a targeted HETC rebate will help ensure homes are truly livable— helping homeowners settle while leaving more money in their pocket for other essentials.

Recommendation 2: Create the Ontario Circular Economy Infrastructure Fund

Given the current economic climate, Ontarians are actively seeking ways to save wherever they can. Increasingly, they are turning to lower priced second-hand goods to manage household budgets. Nationally, the used goods retail sector is a $3B market supported by over 1600 businesses (with the majority operating in Ontario). This demonstrates strong consumer demand and a broad base of local enterprises that refurbish and resell goods to keep costs down for families.⁵ However, there is not a clear provincial policy framework, nor any championing of the second-hand sector. 

The Ontario Circular Economy Infrastructure Fund can accelerate the province’s transition to a circular economy through financing infrastructure that supports reuse, repair, refurbishment, recycling, and resource recovery of household items. This initiative will reduce waste, create local jobs, and strengthen Ontario’s leadership in sustainable innovation. 

The fund seeks to reduce landfill waste through large-scale reuse and recycling, support businesses in developing circular supply chains, create jobs in refurbishment, logistics, and recycling sectors, and lower carbon emissions by extending product lifecycles and reducing raw material extraction. This shift will contribute to environmental sustainability by keeping pre-owned consumer goods out of landfills. In 2024, Ontario generated approximately 16.88M tonnes of waste, with 12.75M tonnes disposed in landfills. At current disposal rates, the province’s landfill capacity could be depleted by 2037.⁶

The proposed program would allocate a budget of $150M over five years. Support can be provided through grants for up to 50% of project costs (maximum $100,000 per project), Eligible applicants would include manufacturers, retailers, municipalities, Indigenous communities, and non-profits. Examples of qualifying projects would include:

• Start-up funding for small business for refurbishment and repair centers, reverse logistics hubs, advanced recycling facilities, and digital platforms for resale and resource-sharing;
• A 20% refundable Circular Investment Tax Credit on capital investments in circular infrastructure;
• A Circular Operations Deduction of up to 150% on qualifying operational expenses for repair and take-back programs;
• A 10% Consumer Incentive Pass-Through tax credit on discounts passed to consumers for refurbished goods;
• A Circular Certification Bonus of an additional 5% tax credit for businesses certified under a proposed Ontario Circular Economy Standards.

Success of the fund will be measured by tonnes of waste diverted from landfill, jobs created in circular sectors, reductions in greenhouse gas emissions, and increased consumer access to refurbished goods. Ontario has the potential to become a leader in circular economy innovation, delivering significant cost savings for consumers through affordable refurbished goods.

Recommendation 3: Widen options for Ontarians to save money by making their homes more energy efficient

Ontario has made major strides in helping residents save energy and money. The Home Renovation Savings Program covers up to 30% of costs for upgrades like windows, insulation, heat pumps, and solar panels—rebates that can reach $8,900 for insulation and $12,000 for heat pumps. These efforts are part of a $10.9B investment expected to cut electricity demand by 3,000 MW by 2036.⁷

Still, the big-ticket retrofits covered by the program remain out of reach for many. Simple changes matter as well: LED bulbs use up to 90% less energy, last 15 times longer, and can save households $200–$300 annually.⁸ Occupancy sensors can cut lighting energy by 10–90%.⁹ Expanding rebates for everyday energy-saving products—like LEDs, smart thermostats, and sensors—would empower families to take both major and small steps toward efficiency and saving more money.

Conclusion

While housing affordability is a key focus for many, how people are living in their homes is equally important. The large-scale affordability initiatives already announced by the provincial government can be extended to help Ontarians address the rising cost of living during these uncertain times. Small and large-scale investments in our households, communities and businesses can help move Ontarians towards a better future.

References

1. Ontario Housing Supply Tracker, https://www.ontario.ca/page/tracking-housing-supply-progress
2. Cost to furnish with used items; hidden nature of furniture poverty. CanadaHelps/Furniture Bank, “Furniture Poverty: A Challenge Behind Closed Doors” (accessed Jan. 2026). [ontario.ca]
3. Debt to income ratio ~174–175%; mortgages ~75% of household credit (2025). Statistics Canada summaries reported via Canadian Mortgage Trends & CMP (Q1–Q2 2025). [saveonenergy.ca], [canadianre...agazine.ca]
4. Ontario mortgage delinquency rate 0.23% (Q2 2025). CMHC, Residential Mortgage Industry Report – Fall 2025. [mipropertyportal.com]
5. Aravenda Consignment & Resale Statistics – Canada Resale Facts & Stats (May 13, 2024): market size (C$3.0B), ~1,619 used goods businesses nationwide.https://www.aravenda.com/2024/05/13/canada-consignment-and-resale-statistics/
6. Waste to Resource Ontario (W2RO) – 2025 State of Waste in Ontario: Landfill Report (Dec 1, 2025): 16.88M tonnes generated; 12.75M tonnes landfilled; capacity depletion estimates (2037; 2034 if borders close). https://www.w2ro.org/articles/2025-w2ro-state-of-waste-in-ontario-landfill-report
7. https://news.ontario.ca/en/release/1005539/ontarios-new-and-expanded-energy-efficiency-programs
8. IKEA Canada LED lights
9. How Occupancy Data Improves Energy Analytics