Canadian Tire – Centralized Waste Management

October 2014 Since our inception more than 90 years ago, has grown to become one of ’s most recognized and trusted brands. 98% unaided brand awareness and over 90% of Canadians live within 25km of a store

One of Canada’s most-shopped general retailers with over 1,700 retail and gasoline outlets

Canadian Tire Retail PartSource Petroleum FGL Sports Mark’s Financial Services 498 stores 91 stores 289 gas bars 534 stores 385 stores >4 MM MasterCard accts Profile • General merchandise • Specialty automove • Gasoline retailer • Sporng goods retailer: • Industrial and casual • Canadian Tire-branded retailer – Living, Fixing, stores apparel, footwear and clothing and footwear credit cards, personal Playing and Auto equipment retailer loans, insurance Business Model • Stores are operated by • Majority of stores are • CTC owns the sites • : corporately • Primarily corporate • CTC owns and finances Associate Dealers corporately owned while independent owned and operated; model, some franchises all receivables and operated Agents operate them : franchised

Product Environmental Stewardship centralized under CTC to manage stewardship and waste for all business units in 2014.

2 Business Sustainability Strategy

Profitably grow the business

Energy and Without increasing the net carbon Climate footprint of the economy Business Sustainability Energy and Climate Waste While eliminang unnecessary packaging and send zero waste to landfills Waste

Products Products Providing innovave products and services that meet customers’ needs without compromising the ability of future generaons to meet their needs

3 3 CTC’s vision for waste was to move from compliant on environmental sustainability to a collaborative approach of managing waste, with the goal of developing strategic value for CTC.

2010 2012 2013 2014

STAGE 1 STAGE 3 STAGE 4 STAGE 5 Internal Data Gathering RFP and Vendor Selecon Implementation Reporng & Opmizaon

• Determine how waste is • RFP Development for • Communicaon to all • Opmizaon for Marks, managed (vendors, all business units Corporate locaons Partsource and paral diversion vs. landfill) engaged (does not • Collecon and CTP complete by July 1, • Determine scope for the include Canadian Tire terminaon of all 2014. waste footprint and RFP Retail Stores) contracts • Terminaon of for Consolidated Waste • Collaboraon across • Consolidate weight and significant # of legacy Services all business units to cost data for contracts in 2014 understand reporng comprehensive waste • 14 Store waste audits STAGE 2 processes and footprint completed by end of External Data Gathering required reporng • Create processes and year • Retrieve site specific • Selecon of naonal/ systems for accurate, • 1St Centralized waste service regional provider(s) reliable and efficient reporng of waste requirements and • 122 Vendors to just 2! reporng costs, services and weight data from top • Launched July 1st 2013 diversion rate (50%) three waste vendors • Decreased waste costs • Decreased waste costs by 23% by 36% in first full year

4 Right sizing outliers at Partsource in 2014 will save an estimated 10% in unnecessary waste costs. Savings will increase as we continue to right size over the next two to three years.

Landfill Yards/Week 20

15

10 Always aiming to move this line 5 down

0 • Opportunity to reduce stores that are over average landfill yardage per week either through change in bin size or frequency.

• Adding/Expanding recycling service to stores will further reduce landfill yardage. Observaons indicated that up to 50% of landfill stream could be recycled based on inial observaon

5 5 Best practices including clear bag policies and employee training will ensure waste and recycling are properly disposed. Increased diversion and fewer service charges will result in cost savings.

• Recyclable materials being disposed as waste due to limited recycling programs (specifically CTP) • Limited space for addional bins hindering stores from adding programs for recycling • Inconsistent programs for other common recyclable materials (i.e: skids, light tubes) • Cardboard is not being broken down causing increased number of lis

6 6 Zero Waste Pilot at PartSource

CTC is currently pilong zero waste at PartSource with the intenon to roll out to all PartSource locaons in 2015.

Change should result in significantly decrease in waste costs, with minimal impact on in store processes.

Info Changes at Store level Some Expected Learnings/Outcomes

Number of stores: 1 - 3 • Establish hazardous waste and metal • Instead of changing behaviours ; propose to Length: 3 months recycling service change service to reflect current behaviour • Implement clear plasc bags • Significant decrease in landfill waste • Increase recycling waste service • Increased recyclables and responsible waste • Reduce dry waste service handling procedures • RM and Staff educaon waste • Less frequent waste and recycling pick ups educaon (read-and-sign, best • Stores take ownership of waste pracces) • Learn what works and what does not (training, services, etc.)

7 7 Future Adventures

• Expand the Zero Waste to all of Partsource in 2015 • Expand Zero Waste Pilot to other business units • Uncover revenue opportunies from new waste streams as result of • Always opportunies to improve processes J ` Thank you

Sarah Webb Manager, Product Environmental Stewardship Canadian Tire Corporaon, Limited. Sarah.webb@canre.com

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