Canadian Tire

Capital Management

Canadian Tire Corporation’s (CTC's) objectives when managing capital are: 

  • ensuring sufficient liquidity to support its financial obligations when due and to execute its operating and strategic plans
  • maintaining healthy liquidity reserves and the ability to access additional capital from multiple sources, if required; 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 ratios 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 target ranges for its credit ratings.

Canadian Tire Corporation, Limited was in compliance with all financial covenants under its bank credit agreements as at October 1, 2022. 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 October 1, 2022.

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 October 1, 2022.

In addition, the Company is required to comply with regulatory requirements for capital associated with the operations of 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 agreements. As at October 1, 2022, 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 agreements.

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, 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, procedures, and controls in place, including an annual Internal Capital Adequacy Assessment Process (“ICAAP”), which it utilizes to achieve its goals and objectives.

The Bank’s objectives include:

  • maintaining strong capital ratios, as measured by regulatory guidelines and internal targets; and
  • holding sufficient capital to maintain the confidence of investors and depositors.

As at Q3 2022, CTB complied with all regulatory capital guidelines established by OSFI and its internal targets as determined by its ICAAP.