Canadians turn to the second-hand market amid tepid economic growth

TORONTO - When Amahl Arulanandam decided to get back into playing guitar in 2014, he turned to Kijiji.

The online classifieds site helped him score a Jackson guitar for $250 - a steep discount from the $600 he estimates it's worth.

See Full Article

Since then, Arulanandam has bought three bicycles using Kijiji. The first turned out to be a dud, but that hasn't deterred him.

"I make a reasonable amount of money but it's not a regular, fixed income," says the freelance musician.

"Anywhere that I can save money just to make sure that I'll have a float for later on, in case I have a dry month, that's always helpful."

The second-hand economy - which includes everything from used goods stores to classified websites to online communities where users can trade goods - provides consumers with an opportunity to save money on their purchases or earn a little extra cash by selling stuff they no longer need.

With the economy projected to grow at a tepid pace this year, some economists say the number of Canadians participating in this segment of the economy is likely to grow.

"In every downturn, there are always people that get harder hit that are looking for ways of trying to MacGyver a better quality of life with whatever they've got," says Armine Yalnizyan, a senior economist with the Canadian Centre for Policy Alternatives.

"And it doesn't always take money. You can spend less and live well, if you can figure out how to work with others who can trade stuff that you want."

According to a report sponsored by Kijiji released earlier this week, roughly 85 per cent of Canadians took part in some form of second-hand transaction last year.

The report, which polled 5,990 people online, estimates that the second-hand economy contributes as much as $36 billion to Canada's GDP.

The Marketing Research and Intelligence Association, the polling industry's professional body, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.

While much of the second-hand economy involves purchasing goods outright, there is another component that doesn't involve money changing hands at all.

In online bartering communities like Bunz Trading Zone, popular amongst millennials, users swap their unwanted items for things that they need.

Emily Bitze started the Toronto-based community in 2013 when she was working at a vintage shop and found herself so stretched one day that she couldn't afford pasta sauce for her spaghetti.

"I lived paycheque to paycheque," Bitze recalls. "There were often times where I couldn't afford to actually buy food."

Bitze decided to create a Facebook group where she could trade goods with her friends. Since then, the online community has swelled to more than 30,000 members, and Bitze recently launched a smartphone app. A countrywide expansion and a U.S. launch are in the works.

Lindsay Tedds, a co-author of the Kijiji study and a professor at the University of Victoria, says most transactions in the second-hand economy represent new economic activity - purchases that wouldn't have happened otherwise. That means they aren't detracting from economic growth.

However, in some instances consumers who would have bought new goods are turning to the second-hand economy instead - a phenomenon that can further fuel the cycle of slow economic growth, says Yalnizyan.

"If they're buying used because it's something they need and can't afford it new, it will slow down the economy," Yalnizyan says.

Bunz partner David Morton says that isn't the millennial generation's problem to solve.

"We're going to let the economists sort that out," says Morton.

"Whoever is to blame for the current economic situation - it's not us. We've just entered the workforce. The people who have been working and voting and being a part of the system since before we were alive, they're the ones who put us in this position. We're just taking care of us."



Advertisements

Latest Economic News

  • Canada open to completing NAFTA talks in short order

    Economic CBC News
    Canadian negotiators are open to working on a timeline proposed by the U.S. to complete NAFTA renegotiations before the end of the year, CBC News has learned. A government source, speaking on background, tells CBC News that Canada is willing to work quickly, but will not agree to a bad deal for the sake of meeting a deadline. Source
  • U.S. wants NAFTA talks to wrap up before year's end, but is it possible?

    Economic CBC News
    Canadian negotiators are open to working on a timeline proposed by the U.S. to complete NAFTA renegotiations before the end of the year, CBC News has learned. A government source, speaking on background, tells CBC News that Canada is willing to work quickly, but will not agree to a bad deal for the sake of meeting a deadline. Source
  • B.C. premier and jobs minister sued by fired LNG advocate claiming $5M

    Economic CTV News
    VANCOUVER -- British Columbia's fired liquefied natural gas advocate is suing Premier John Horgan, the province's jobs minister and a New Democrat MP in a lawsuit claiming $5 million in damages. Gordon Wilson alleges in a statement of claim filed in B.C. Source
  • Millennials in Atlantic Canada most optimistic about owning homes

    Economic CTV News
    Do millennials think they can afford to buy a home? If they live in Atlantic Canada, the answer is a lot more likely to be yes. That’s according to a new online survey of 1,000 Canadians aged 25 to 30, conducted by Leger Marketing from real estate firm Royal LePage. Source
  • Can millennials afford to buy a home? It depends where they live

    Economic CTV News
    Do millennials think they can afford to buy a home? If they live in Atlantic Canada, the answer is a lot more likely to be yes. That’s according to a new online survey of 1,000 Canadians aged 25 to 30, conducted by Leger Marketing from real estate firm Royal LePage. Source
  • $500K hardship fund for former Sears Canada employees approved by judge

    Economic CBC News
    A judge has approved a hardship fund for former Sears Canada employees that will come from a pool of money set aside to pay bonuses for key employees. The $500,000 fund will help former employees facing difficulty who would have otherwise been eligible for severance payments when they lost their jobs at the retailer. Source
  • Elevated testosterone linked to 'reckless' financial trading, study finds

    Economic CBC News
    It's no secret financial traders have always been predominately male. So, when a group of researchers with the Ivey Business School at Western University in London, Ont., set out to at look at the role of testosterone on the markets, it wasn't a far-flung idea. Source
  • Brazil to ask for WTO panel to settle dispute over Bombardier subsidies

    Economic CTV News
    MONTREAL -- Brazil says it will ask the World Trade Organization to establish a dispute settlement panel after consultations with Canada failed to resolve its complaint about government subsidies to aircraft manufacturer Bombardier. The South American country said it will ask the WTO to examine more than 20 subsidy programs granted to the Montreal-based company for the development of its CSeries aircraft. Source
  • Bombardier employee in Swedish unit charged with bribery

    Economic CBC News
    A Russian employee in the Swedish branch of Canadian plane and train maker Bombardier was charged Friday with aggravated bribery and faces up to six years in jail and deportation if found guilty. Swedish prosecutor Thomas Forsberg alleges Evgeny Pavlov bribed a public servant in Azerbaijan to win a $340-million contract for a new signalling system. Source
  • Bombardier says Russian worker charged with bribery doesn't reflect its values

    Economic CTV News
    MONTREAL -- Bombardier says the filing of formal criminal charges in Sweden on Friday against a railway employee doesn't reflect its values. "We take these allegations very seriously as they assert conduct that does not reflect our values or the high standards we set for ourselves, our employees and our partners," the Montreal-based company (TSX:BBD.B) said in a statement. Source