Canadian Tire

Capital Management

Canadian Tire Corporation’s (CTC'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 Company manages its capital structure over the long term to optimize the balance among capital efficiency, financial flexibility, and risk mitigation. Management calculates credit metrics to approximate the methodologies of credit rating agencies and other market participants on a current and prospective basis. To assess its effectiveness in managing capital, Management monitors these ratios against the target range for the rating. 

The current economic, operating and capital market environment continues to support an increased emphasis on liquidity and capital management. Management is focused on ensuring sufficient liquidity, both through maintaining a strong balance sheet and ensuring access to capital.

The Company was in compliance with all financial covenants under its credit agreements as at July 3, 2021 and January 2, 2021. Under these covenants, the Company has sufficient flexibility to support business growth.

Helly Hansen is required to comply with covenants established under its bank credit agreements and was in compliance with all financial covenants thereunder as at July 3, 2021.

CT Real Estate Investment Trust (“CT REIT”) is required to comply with covenants established under its Declaration of Trust, Trust Indenture and bank credit agreement and was in compliance with all financial covenants thereunder as at July 3, 2021.

Canadian Tire Bank's Regulatory Environment

Canadian Tire Bank (“CTB” or the "Bank”), a federally chartered bank, and other regulatory requirements that have an impact on its business operations and certain covenants established under its bank credit agreement.

As at July 3, 2021, CTB complied with all regulatory capital guidelines established by the Office of the Superintendent of Financial Institutions of Canada (“OSFI”) and all financial covenants under its bank credit agreement.