That's a great way to raise a child.  My creative parents raised us similarly, and I still believe I can make pretty much anything I set my mind to.  It is economical and fun, but I think figuring out how to make things also helps children to learn critical thinking.  
 
When my child was small, we used to go to a drop-in centre near where we lived in Toronto.  There were lots of toys and kids to play with there. I heard of at least one toy library that I believe was organized by a parent group, but we only found out about it when we were moving, so I really don't know how it worked.