Canadian Tire

Capital Management

Canadian Tire Corporation’s objectives when managing capital are ensuring sufficient liquidity to support its financial obligations and execute its operating and strategic plans; maintaining healthy liquidity reserves and access to capital; and minimizing the after-tax cost of capital while taking into consideration current and future industry, market and economic risks and conditions.

The current economic environment has not caused Management to change the Company’s objectives in managing capital. 

In order to maintain or adjust the capital structure, the Company has the flexibility to adjust the amount of shares purchased under its normal course issuer bid ("NCIB") program, adjust the amount of dividends paid to shareholders, repay debt, issue new debt and equity, monetize various assets, engage in additional sale and leaseback transactions of real estate properties and increase or decrease the amount of sales of co-ownership interests in loans receivable to GCCT.

Canadian Tire Bank's Regulatory Environment

CTB manages its capital under guidelines established by the Office of the Superintendent of Financial Institutions of Canada (“OSFI”). OSFI’s regulatory capital guidelines are based on the international Basel Committee on Banking Supervision framework entitled Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems (“Basel III”), which came into effect in Canada on January 1, 2013, and measures capital in relation to credit, market and operational risks. The Bank has various capital policies and procedures and controls, including an Internal Capital Adequacy Assessment Process (“ICAAP”), which it utilizes to achieve its goals and objectives.

The Bank’s objectives include:

  • providing sufficient capital to maintain the confidence of investors and depositors; and
  • being an appropriately capitalized institution, as measured internally, defined by regulatory authorities and compared with the Bank’s peers.

As at December 31, 2019 and 2018, the Bank complied with all regulatory capital guidelines established by OSFI, its internal targets as determined by its ICAAP, and all financial covenants under its bank credit agreement.