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ANNUAL REPORT | 2013 Saskatchewan Scrap Tire Corporation


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WHO WE ARE


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TABL E O F C O N T E NT S CONTENTS MESSAGES

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ABOUT SSTC

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THE 3 PHASES

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SUSTAINABILITY THROUGH Managing Responsibly

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SUSTAINABILITY THROUGH ACCOUNTABILITY & TRANSPARENCY

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SUSTAINABILITY THROUGH Revenue Generation

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SUSTAINABILITY THROUGH STOCKPILE ABATEMENT

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SUSTAINABILITY THROUGH PARTNERSHIPS

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SUSTAINABILITY THROUGH COMMUNITY INVOLVEMENT

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SUSTAINABILITY THROUGH education & Awareness

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APPENDICES APPENDIX A: BOARD OF DIRECTORS & STAFF

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APPENDIX B: COMMUNITY DEMONSTRATION GRANT Recipients PAGE 19 APPENDIX C: FINANCIAL STATEMENTS

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APPENDIX D: 2013 SCRAP TIRE SUPPLY

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APPENDIX E: 2013 SCRAP TIRE COLLECTION & TRANSPORTATION PAGE 29 APPENDIX F: 2013 Scrap Tire Processing & Manufacturing

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APPENDIX G: 2013 SCRAP TIRE DIVERSION SUMMARY

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A ME S S A GE FROM THE MINISTER OF ENVIRONMENT

On behalf of the Government of

and most comprehensive mandate of

Thank you to SSTC and its members

Saskatchewan, I am pleased to extend

any scrap tire recycling program across

for helping to make Saskatchewan

congratulations to the Saskatchewan

the country.

an incredibly enviable place to live

Scrap Tire Corporation for continuing to meet the challenges of a busy and event-filled year of recycling tires in Saskatchewan.

The SSTC should be commended on the implementation of its new methodology for setting the recycling that the program and the organization

reasons to celebrate, in particular

will remain viable and sustainable to

the 15th anniversary of operating an

carry out its mandate.

program for scrap tires.

success. Sincerely,

fees for scrap tires, which will ensure

This past year gives SSTC many

industry-led, province-wide recycling

and work. Best wishes for continued

Ken Cheveldayoff With the prosperity and growth the province is experiencing, the

During this time, SSTC has overseen

Saskatchewan Scrap Tire Management

the collection and recycling of more

Program and the other provincial

than 10 million scrap tires of all sizes –

recycling programs play an increasingly

the equivalent of 20 million passenger

important role in ensuring that the

car tires. Saskatchewan’s scrap tire

environment is protected and our

recycling program has the broadest

quality of life is maintained.


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A M E S S A GE FROM THE CHAIRMAN On behalf of the Board, I am pleased

SSTC has helped change the way

the end of this year. It has been a great

to present SSTC’s 2013 Annual Report.

Saskatchewan residents view tire

experience and I am very proud of the

As you can see, SSTC continues to

recycling and, with their support, we

important work that SSTC does each

deliver a program that has not only

have built one of the most successful

and every day. I would especially like

diverted 20 million scrap tires from our

and innovative tire recycling programs

to thank the Board, whose knowledge,

waste stream, but has also developed

in Canada. Consumers have made

commitment, and focus have set the

a host of programs that will ensure

this possible by paying a recycling

successful direction of SSTC from the

responsible tire management well into

fee when they purchase new tires

beginning. I am excited about the

the future.

and the funds are remitted to SSTC.

journey I am about to embark upon,

All revenue generated from this fee

and equally excited about the journey

is spent on activities directly related

that SSTC is taking to ensure a strong

to the program including collecting,

and sustainable future.

Over 4,000 tires are purchased in Saskatchewan every day and this number continues to grow. In a year, this equates to over 1.5 million tires – enough to span across the province one-and-a-half times. Before SSTC, most consumers simply purchased their new tires and drove off without a second thought; and many of their endof-life tires ended up in local landfills, were stockpiled, buried, burned, or

transporting, and recycling of the scrap tires. April 1, 2014, will see

Sincerely,

a much-needed new rate schedule which was developed with rate setting experts to ensure the methodology is consistent with other tire recycling programs across Canada and is fair to

Don Taylor

all consumers.

even dumped indiscriminately along

After 15 years of serving on SSTC’s

roadsides without much thought.

Board of Directors, I will be retiring at

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A ME S S A GE FROM the executive director

2013 was an exciting and busy year for

Plan that was approved by the Ministry

recycling of private stockpiles – can be

Saskatchewan Scrap Tire Corporation

of Environment, December 18, 2013.

completed.

(SSTC).

This was a significant milestone in our

In many ways the program is far different from when it was launched

program, and one that ensures that we can meet our program obligations.

Sustainability is defined in many ways, meaning different things to each of us. At SSTC, sustainability is how we

15 years ago however, tire collection

The key piece of our Plan was

define our success. With an eye to the

and diversion remains constant.

the development of an objective

future, we look forward to working

Managing scrap tires and tire recycling

methodology for rate setting, one that

with the Ministry and all the program

in a booming, growing province brings

reduces cross subsidization across

stakeholders to continue to deliver

increasing challenges for retailers,

all tire categories. Applying the new

a vibrant and responsive solution to

recyclers and SSTC alike.

methodology has resulted in new tire

scrap tire management throughout the

recycling fees for the province. With

province.

This past year, a large part of our operations involved ensuring the sustainability of this program into the future. After a great deal of internal review and strategic thinking, the Board’s direction was clarified in the

2014 - 2018 Program Management

this new rate structure in place, SSTC will be in a position of cost-recovery

Sincerely,

that will ensure program sustainability, and ensure sufficient revenue is generated so that program liabilities such as Phase 3 – cleanup and

Theresa McQuoid


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AB O U T S S T C

The Saskatchewan Scrap Tire

recycling program in Saskatchewan

and cleaned up decades worth of old

Corporation (SSTC) is a non-profit, non-

is mandated to impose and collect a

tires from municipal landfills. These

government, industry-led organization

tire recycling fee on the sale of all new

tires have been recycled into useful,

that delivers a province-wide tire

tires.

marketable products.

recycling program.

Established in 1996, SSTC has grown

SSTC works cooperatively with

Through the Environmental

to include 1,360 registered retailers

Tire Retailers, Auto Dealers, Rural

Management and Protection

and a strong recycling network of

Municipalities, local governments,

Act (EMPA) and the Scrap Tire

haulers and processors who are

Regional Waste Authorities,

Management Regulations (1998),

involved in the collecting and recycling

Processors, Collectors and the general

thereunder Section 4(1), the authority

of over one million scrap tires per

public to ensure that scrap tires are

is provided to make scrap tires a

year. Since its inception, SSTC has

recycled in an environmentally friendly

designated material. Therefore, SSTC

diverted over 20 million used tires

and sound manner.

being the only approved scrap tire-

from the Saskatchewan waste stream

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TH E 3 PH A S E S

Over 4,000 tires are purchased in Saskatchewan every day – and the number continues to grow. In a year, this equates to over 1.5 million tires; that is enough tires to span across the province one and a half times. Prior to SSTC’s program, almost all of these tires ended up in our local landfills as domestic waste, were stockpiled, buried or even burned. Through its approved 2014 - 2018 Program Management Plan, SSTC provides a comprehensive program that manages all tire waste in three phases. These three phases help SSTC ensure that all waste tire material is removed from the waste stream and is recycled responsibly to help maintain a clean and healthy environment for generations to come.

NO. 1

NO. 2

NO. 3

CURRENT GENERATION TIRES

LANDFILL CLEANUP

PRIVATE STOCKPILES

This is the daily activity of gathering

This phase of the program involved

Black Gold Rush is Phase 3 of SSTC’s

scrap tires accumulated at the retail

removing tires from registered landfills in

program and offers a one-time, free

level. At no cost to the Tire Retailer, tires

Saskatchewan. When the work wrapped

cleanup of stockpiled tires on private

are picked up under SSTC program and

up in 2010, the SSTC had removed the

land and urban residential property.

diverted from landfill disposal and from

equivalent of two million passenger car

Prior to SSTC’s existence, most farmers

the environment in general.

tires from more than 300 landfill sites

and landowners simply stockpiled tires,

around the province. In exchange for

as there was no other disposal option.

the free clean up, municipalities were

The program has removed 258,163 scrap

required to pass bylaws banning scrap

tires from 113 Rural Municipalities to date.

tire disposal from their landfills.


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sustainabilitY through

M AN AG I N G R E S PO NS IB L Y

SSTC is accountable to its stakeholders, the provincial government, and the public for the collection, processing and environmentally sound disposal of scrap tires in Saskatchewan. Managing these functions responsibly is essential to program success and sustainability. To ensure the efficient and effective operations of SSTC, three main committees are in place to assist the Board in dealing with specific issues faced by the program. The Board Directives are carried out by:

Executive Committee

Finance Committee

Industry Committee

The Executive Committee is comprised

This committee oversees and

This Industry Committee is responsible

of the Chairman, Vice Chairman

reviews the financial activity of the

for assisting with the development of

and Treasurer who act as officers

Corporation. The Committee assists

policies and executing strategies that

of the Board. This committee has

with the review of SSTC’s financial and

benefit the growth and stability of

the authority and ability to execute

annual budget. The Finance Committee

the scrap tire recycling industry. The

decisions in the absence of SSTC

is also responsible for overseeing

Committee is also a liaison between

Directors. The Executive Committee is

the preparation and maintenance of

the industry and the Board, handling all

responsible for the oversight of Board

financial records and for ensuring the

issues and concerns brought forward.

activities, Board policy and to help

credibility of these records through

ensure that emerging issues are dealt

the process of an annual financial audit

with in a manner consistent with the

and the review of annual budgets and

vision of the Board.

monthly financial statements.

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sustainabilitY through

ACCO U N TAB I LIT Y & T R A NS PA R E N C Y

SSTC continues to increase the focus on compliance with program guidelines and contractual obligations of stakeholders to ensure a fair and level playing field for all participants. SSTC ensures transparency by communicating openly and honestly with all stakeholder groups which includes the Ministry of Environment, the Board of Directors, Tire Retailers, and all other program participants through a variety of mediums, all operating in compliance with the Scrap Tire Management Regulations, 1998. Accountability of program operations is provided through:

Annual Audit

Retailer Compliance

Collector & Processor Audits

SSTC is charged with the

Responsibility of ensuring that all

As contributing participants in the

administration of the collected Tire

consumer-paid tire recycling fees

day to day activities of SSTC these

Recycling Fees and managing the

are collected and reported and that

stakeholders have a prominent role

operations of the program. SSTC

all retailers are compliant with the

in the movement of scrap tires.

has procedures in place to ensure

Regulations is achieved through

Evaluation and audits of these

proper financial management and

Retailer Compliance Reviews.

stakeholders involve many facets of

accountability. A comprehensive

their business in accordance with the

financial administration and

SSTC policy defined in the Collector

accounting system is maintained to

and Processor Guidelines manual.

manage and report on revenues and expenditures resulting from SSTC activities. SSTC’s financial activity is reviewed annually by an independent auditing firm that provides assurances that the corporation is conducting business in accordance with acceptable accounting practices.


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sustainabilitY through

REVE N U E GE N E R A T I O N

SSTC uses a Tire Recycling Fee (TRF) to provide program revenue for the collection, transportation, responsible recycling, and administration of regulated tires in Saskatchewan. Currently the program uses TRFs for the following tire categories: passenger car/light truck, medium truck, farm/agriculture, off the road (medium and large). These fees apply to all Dealers and Retailers in the province who sell new tires or lease vehicles/equipment that have new tires. The program is funded through recycling fees paid by consumers purchasing new tires. All revenue generated from the TRF is spent on activities related to the program. Over 80% of the money is paid to the processors and haulers to collect, transport and recycle the scrap tires. The remainder is committed to program management, consumer education and awareness, and community involvement.

2013 expenditure breakdown 45% Processing/Recycling

9% 10%

36% Transportation/Collection

36%

10% Community cleanup/grants 9% Administration

45%

For every new tire sold, the Retailer collects the TRF or environmental fee, and is required to report all new tire sales and funds to SSTC. The TRFs are set by SSTC and vary according to the type of tire.

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sustainabilitY through

S TO C K P I L E A B A T E M E NT

In addition to keeping over 1,500,000 current generation tires out of landfills yearly, SSTC is mandated to address historical waste tire material. This is limited to tires located in landfills and on private lands, as outlined in the Scrap Tire Management

Regulations. SSTC has chosen to include other registered sites such as Auto Recyclers and Bicycle Retailers and Department of Highways ensuring sound waste tire management. Phase 3 of SSTC program, branded

Return2Retailer; a program

Phase 2: Landfill Cleanup

as Black Gold Rush, offers a

providing residents with an

was a major move toward stockpile

one-time, free cleanup of stockpiles

opportunity to drop off 10 rimless

abatement in Saskatchewan. After

on private land and urban residential

scrap tires, free of charge at select

a 10 year lifespan, Phase 2 wrapped

property. The program works in

Tire Retailers. The program, designed

up in 2010 with over 300 municipal

partnership with municipality offices

as a leave behind program for

landfills cleaned of landfilled tires.

and service groups to design a

residents in areas that previously

collection event that meets the needs

participated in Black Gold Rush,

of each community while removing

captures tires that may have been

thousands of abandoned scrap tires.

missed and prevents future stockpiles

• 32 Rural Municipalities targeted in northeast Saskatchewan • 95,656 scrap tires removed for a total weight of 4.4 million pounds • $800,000 spent on Black Gold Rush Program in 2013

from reoccurring. • 13 new Retailer locations across the province were introduced, for a total of 21 participating Retailers • 3,777 tires collected at participating Retailers • $40,000 spent which includes collection, processing and advertising

Other stockpiles: Auto Recyclers, Bike Tire Retailers and Department of Highways (road clean up) all found waste solutions through SSTC’s stockpile management program. • Over 20, 299 tires were collected from these sources and recycled responsibly • 36 Businesses • 522 bicycle tubes and tires collected from registered bike Retailers


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sustainabilitY through

P AR T N E R S H IP S

SSTC works with and supports a number of organizations that share the same environmental beliefs. SSTC realizes and appreciates the benefits of partnerships in the promotion of this industry and in the common goal of support, harmonization and advancing responsible stewardship.

Recycle Saskatchewan (RS) RS exists for the education of responsible recycling in Saskatchewan; promotes awareness of Product Management Programs and acts a unified voice for these programs. Together, SSTC and RS supports the province wide cause of creating

partners with SWRC in their summer

Rubber Association of Canada (RAC)

student program; the students are

The Rubber Association of Canada

of the environment. Each year, SSTC

typically hired for specific projects like the “Be Tire Smart” campaign or the Community Demonstration Program.

Canadian Association of Tire Recycling Agencies (CATRA)

a recycling minded culture in the

CATRA is comprised of leaders from

province by growing and advancing

the tire recycling programs in Canada.

stewardship programs.

Its purpose is to work together for the betterment of tire recycling initiatives

Saskatchewan Waste Reduction Council (SWRC)

in Canada. CATRA’s goal is to enhance

The SWRC is a strong recycling voice

and recycling across the country

in the province and brings together

through sharing of information,

the major players of the recycling

expertise and resources.

(RAC) designed an advocacy campaign “Be Tire Smart” to educate consumers about the benefits of proper tire inflation and maintenance, which, in turn, increases tire life and reduces waste. SSTC also has a responsibility to educate consumers about proper tire care and waste reduction, and partners with the RAC to promote the program through Summer Car Care Clinics.

the effectiveness of scrap tire diversion

industry in Saskatchewan to create a solid, unified presence for the benefit

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sustainabilitY through

C O M M U N I T Y I N V O L V E M E NT

Communities around the province invest considerable resources to support recycling as a way to protect the environment and enhance quality of life for Saskatchewan residents. SSTC’s program supports these efforts through various events and programs that fosters public awareness and ultimately a change in how residents view scrap tire management.

130 SCRAP TIRES collected aND OVER 600 residents WERE educated about recycling

7 NEW Community demonstration grant projects WERE approved

$66,000 paid to service groups

worth $30,000 in funding for a total

Rush program

while partnering with the City of

of 76 since the program began in 2010

Regina’s Household Hazardous Waste Roundup event

for their efforts during the Black Gold


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sustainabilitY through

e ducation & awareness

SSTC focuses its stakeholder outreach on a broad education and communications campaign, raising consumer awareness while helping Saskatchewan residents understand the purpose of SSTC’s mandate and programs.

EDUCATION

Awareness

Understanding needs, concerns and perspectives of program stakeholders is important to SSTC and is addressed through newsletters, website, social media, direct communications, surveys, etc. • Treads newsletter released quarterly to all program participants • Website received over 17,000 visits, two thirds of which were unique visitors • Launched Facebook and Twitter pages • Produced “Dawn of the Treads” video to educate

• 35,000 residents educated in partnership with Bike Regina to promote bike tire recycling • Radio advertising promoting Be Tire Smart Week, Black Gold Rush and Return to Retailer programs • Educated over 2,500 municipal decision makers at SARM/ SUMA Conferences • Promoted tire recycling to over 51,000 attendees at the Regina and Saskatoon home shows • Busboards, radio and newspaper advertising making over 500,000 impressions

consumers of the importance of tire recycling • Introduced “Summer Tire Family” social media campaign to increase program awareness

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WHO WE ARE


17

AP PE ND I C E S

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APP E ND I X A

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BOARD OF DIRECTORS & STAFF

SSTC Board of Directors SSTC is governed by a Board of Directors which is comprised of seven directors: Don Taylor | Chair

Pat Zatylny | Director

Saskatchewan Association of Rural Municipalities

Canada West Equipment Dealers Association

Lanny McInnes | Vice Chair

Len Ritchot | Director

Retail Council of Canada

Western Canada Tire Dealers Association

Joanne Fedyk | Treasurer

Debra Button | Director

Saskatchewan Waste Reduction Council

Saskatchewan Urban Municipalities Association

Kevin Lane | Director

Kim Yee | Advisor

CAA Saskatchewan

Saskatchewan Environment (non-voting)

SSTC Staff SSTC’s staff is in charge of the daily activities directly related to scrap tire recycling:

A PPENDI X A

Theresa McQuoid

Jackie Kuntz

Jolene Kainz

Executive Director

Director, Special Projects

Retailer & Collector Services

Kelcey Harasen

Jeremy Gourlay

Administrative Assistant

Accounting & Audit Compliance


APP E ND I X B COMMUNITY DEMONSTRATION GRANT RECIPIENTS

The Community Demonstration Grant Program (CDG) awards eligible communities grant monies for the purchase and installation of Saskatchewan-manufactured recycled rubber products. The program allows recycled scrap tires to come back “full circle” into communities throughout the province. A total of seven projects were selected under the 2013 Community Demonstration Grant Program, totaling $30,000 in grant monies being awarded to the following projects: Esterhazy Community Daycare Cooperative Daycare Improvements

The Estevan Daycare Cooperative With the vision to create a safe outdoor learning

As part of a series of major improvements to its backyard

environment for children to learn, explore and grow in,

and play area, the Esterhazy and Community Daycare

the Estevan Daycare Cooperative was able to build an

Cooperative used rubber paving blocks to create sidewalks

ecofriendly area featuring slip resistant rubber surfacing

and crumb rubber under the play structures to create a

and will be fully accessible for people with disabilities.

safer play environment for the children. Hazlet School Playground Update

Town of Tisdale Kinette Playground After participating in the Black Gold Rush Program offered

After installing a colored Pour-in-Place recycled rubber

by SSTC, the Tisdale Middle School Business Club felt it

surfacing, Hazlet School Playground has an area that can

was vital to create public awareness and the showcase the

be used by people of all ages in the community. The area

importance of recycling by creating a green environment.

houses play structures for the daycare/school children as

The recycled rubber base for their playground is now a

well as outside gym/fitness equipment for other community

unique showpiece in their community for all youth to enjoy.

residents. The recycled rubber surfacing product is slip resistant and durable enough to withstand high-impact use. Midale and District Lions Club Manley Park After having to dismantle an unsafe playground, and forced to go years without, the Midale Lions Club established a project to refurbish Manley Park – rich in small town history. With the use of green colored SoftStuff recycled rubber crumb material, the playground is not only bright and attractive, but safe for kids of all ages to enjoy.

Village of Liberty Playground Upgrade After replacing some of its aging playground equipment, the Town of Liberty used crumb rubber underneath the play structures for the added safety benefit. Town of Lashburn Heritage Park Revitilization As its only public play area in Lashburn, it was time to revitalize Heritage Park Playground. The Pour-in-Place rubber surfacing with colored splash details will allow children and families to enjoy a clean, safe and fun environment for years to come.

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AP P E ND I X C

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FINANCIAL STATEMENTS

To the Members of Saskatchewan Scrap Tire Corporation: Management is responsible for the preparation and presentation of the accompanying financial statements, including responsibility for significant accounting judgments and estimates in accordance with Canadian accounting standards for not-for-profit organizations and ensuring that all information in the annual report is consistent with the statements. This responsibility includes selecting appropriate accounting principles and methods, and making decisions affecting the measurement of transactions in which objective judgment is required. In discharging its responsibilities for the integrity and fairness of the financial statements, management designs and maintains the necessary accounting systems and related internal controls to provide reasonable assurance that transactions are authorized, assets are safeguarded and financial records are properly maintained to provide reliable information for the preparation of financial statements. The Board of Directors and Finance Committee are composed entirely of Directors who are neither management nor employees of the Organization. The Board is responsible for overseeing management in the performance of its financial reporting responsibilities, and for approving the financial information included in the annual report. The Board fulfils these responsibilities by reviewing the financial information prepared by management and discussing relevant matters with management and external auditors. The Board is also responsible for recommending the appointment of the Organization’s external auditors. MNP LLP is appointed by the members to audit the financial statements and report directly to them; their report follows. The external auditors have full and free access to, and meet periodically and separately with, both the Board and management to discuss their audit findings.

February 28, 2014

Management

A PPENDI X C


21 Independent Auditors’ Report

To the Members of Saskatchewan Scrap Tire Corporation: We have audited the accompanying financial statements of Saskatchewan Scrap Tire Corporation, which comprise the statement of financial position as at December 31, 2013, and the statements of operations and reserves and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Saskatchewan Scrap Tire Corporation as at December 31, 2013 and its financial performance and cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations.

Regina, Saskatchewan February 28, 2014

Chartered Accountants

ACCOUNTING › CONSULTING › TAX SUITE 900, ROYAL BANK BUILDING, 2010 - 11TH AVENUE, REGINA SK, S4P 0J3 1.877.500.0780 P: 306.790.7900 F: 306.790.7990 MNP.ca

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Saskatchewan Scrap Tire Corporation

22

Statement of Financial Position As at December 31, 2013 2013

2012

541,495 976,206 48,973 33,304

1,026,415 960,309 37,715 14,565

1,599,978

2,039,004

67,921

91,527

474,308

412,699

2,142,207

2,543,230

701,022 27,462

616,778 29,803

728,484

646,581

1,413,723

1,896,649

2,142,207

2,543,230

Assets

Current Cash and cash equivalents Marketable securities (Note 3) Accounts receivable Prepaid expenses and deposits

Capital assets (Note 4) Investments

Liabilities

Current Accounts payable and accruals Goods and services tax payable

Commitments (Note 7)

Reserves

Stablization reserve (Note 5)

Approved on behalf of the Board Director

Director

The accompanying notes are an integral part of these financial statements 1

A PPENDI X C


Saskatchewan Scrap Tire Corporation

Statement of Operations and Changes in Reserves For the year ended December 31, 2013

Revenue Tire recycling fee (Note 2) Other Unrealized gain on investments

Recycling costs Recycling fee commission Processing and collection costs Professional fees - program compliance Special projects

Program administration expenses Advertising, sponsorships and memberships Amortization Bad debts Computer support Conferences Directors' remuneration Equipment rental Insurance and licenses Canadian Association of Tire Recycling Agencies (CATRA) Meeting expense Office operations Postage Printing and publications Professional fees Recycle Sask Rent Salaries, wages and benefits Stationary and supplies Telephone, fax and internet Training and education Travel

Net loss Transfer from stablization reserve (Note 5) Unrestricted reserve, end of year

2013

2012

8,211,563 42,877 48,194

7,909,788 48,360 21,195

8,302,634

7,979,343

137,931 6,739,940 70,061 887,863

146,618 6,578,815 115,939 764,301

7,835,795

7,605,673

122,562 28,315 46,611 39,850 3,796 19,950 5,438 16,146 17,109 4,433 11,652 7,970 38,370 175,008 24,034 39,763 317,270 4,315 9,594 17,579

106,380 28,483 9,656 30,159 3,247 16,864 6,327 18,705 13,104 3,767 9,737 5,266 28,837 107,786 5,786 38,856 287,318 4,796 8,039 740 11,625

949,765

745,478

(482,926)

(371,808)

482,926

371,808

-

-

The accompanying notes are an integral part of these financial statements 2

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Saskatchewan Scrap Tire Corporation

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Statement of Cash Flows

For the year ended December 31, 2013 2013 Cash provided by (used for) the following activities Operating Cash received from customers Cash paid to suppliers Cash paid for salaries and benefits Other revenue

8,153,695 (8,330,203) (317,270) 42,877

7,881,658 (7,934,501) (287,318) 48,360

(450,901)

(291,801)

(4,707) (13,415) -

(49,602) (15,315) 477,584

(18,122)

412,667

(Decrease) increase in cash resources Cash resources, beginning of year

(469,023) 1,986,724

120,866 1,865,858

Cash resources, end of year

1,517,701

1,986,724

541,495 976,206

1,026,415 960,309

1,517,701

1,986,724

Investing Purchase of capital assets Purchase of investments Proceeds on disposal of investments

Cash resources are composed of: Cash Marketable securities

The accompanying notes are an integral part of these financial statements 3

A PPENDI X C

2012


Saskatchewan Scrap Tire Corporation Notes to the Financial Statements

For the year ended December 31, 2013

1.

Incorporation and nature of the organization Saskatchewan Scrap Tire Corporation (the “Corporation�) was incorporated under the Not-for-profit Corporation's Act and is exempt from income taxes. The purpose of the Corporation is to establish and manage a mandatory scrap tire waste reduction program on behalf of its members as set out in The Scrap Tire Management Regulations.

2.

Significant accounting policies The financial statements have been prepared in accordance with Canadian not-for-profit accounting standards and include the following significant accounting policies: Going concern These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the payment of liabilities in the ordinary course of business. The SSTC has identified that the sustainability of the program depends on its ability to adequately fund its mandated activities. The 2014-2018 Saskatchewan Scrap Tire Coporation Product Management Plan outlines measures to solidify the program and create a foundation for continued success. The key piece of the plan is the development and implementation of the TRF Rate Setting Methodology. This methodology gives credibility to rate setting and ensures that the tire recycling fee accurately reflects the cost of managing scrap tires in accordance with the requirements set out in the Scrap Tire Management Regulations. In December 2013, the Ministry of Environment approved the 2014-2018 Saskatchewan Scrap Tire Coporation Product Management Plan. It is the belief of management that these measures adequately address the going concern issues. Revenue recognition Revenue from tire recycling fees is recognized when retailers submit reports for tires sold. All other revenue is recognized in the period it is earned. Cash and cash equivalents Cash and cash equivalents include balances with banks and short-term investments with maturities of three months or less. Capital assets Capital assets are initially recorded at cost. Amortization is provided using the method and rates intended to amortize the cost of assets over their estimated useful lives. Method Rate Computer equipment declining balance 30 % Computer software declining balance 100 % Office equipment declining balance 20 %

In the year of acquisition, amortization is taken at one-half of the above rates. Measurement uncertainty

The preparation of financial statements in conformity with Canadian accounting standards for not-for-profit organizations requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Accounts receivable are stated after evaluation as to their collectability and an appropriate allowance for doubtful accounts is provided where considered necessary. Amortization is based on the estimated useful lives of capital assets. Financial instruments The Corporation recognizes its financial instruments when the Corporation becomes party to the contractual provisions of the financial instrument. All financial instruments are initially recorded at their fair value.

4

20 13 Annu al R eport Sas katc hewan sc rap tire co rpo ra tio n

25


APP E ND I X A

Saskatchewan Scrap Tire Corporation

26

Notes to the Financial Statements

FROM THE EXECUTIVE DIRECTOR

For the year ended December 31, 2013

The Corporation subsequently measures all its financial assets and liabilities at amortized cost, except for marketable securities and investments in equity instruments that are quoted in an active market, which are measured at fair value. Changes in fair value are recognized in the statements of operations and changes in reserves in the period incurred. Fair value is determined by published price quotations. Financial assets measured at amortized cost include cash and cash equivalents and accounts receivable. Financial assets measured at fair value include marketable securities and investments. Financial liabilities measured at amortized cost include accounts payable and accruals. Transaction costs and financing fees directly attributable to the origination, acquisition, issuance or assumption of financial instruments subsequently measured at fair value are immediately recognized in the deficiency of revenues over expenses for the current period. Conversely, transaction costs and financing fees are added to the carrying amount for those financial instruments subsequently measured at amortized cost or cost. 3.

Marketable securities Marketable securities consist of cash and money market mutual funds with interest rates of 1% (2012 - 1.45% to 2.00%) and no fixed maturity dates (2012 - December 5, 2013).

4.

Capital assets Accumulated Cost amortization Computer equipment Computer software Office equipment

5.

2013 Net book value

2012 Net book value

223,869 23,450 53,818

165,253 22,140 45,823

58,616 1,310 7,995

81,201 333 9,993

301,137

233,216

67,921

91,527

Stabilization reserve In 2006, the Board internally restricted funds through the establishment of a stabilization reserve to ensure that funds are available to meet financial obligations of the Corporation. The amount of $482,926 (2012 - $371,807) was transferred from the reserve as at December 31, 2013 and is subject to change at the discretion of the Board of Directors. The ending balance includes $67,921 (2012 - $91,527) invested in Capital Assets. 2013 2012 Stabilization reserve, opening balance Transfer from unrestricted reserve

6.

1,896,649 (482,926)

2,268,457 (371,808)

1,413,723

1,896,649

Unrestricted reserve The opening balance in unrestricted reserve was $nil (2012 - $nil).

7.

Commitments The Corporation has entered into various lease agreements with estimated minimum annual payments as follows: 2014 43,673 2015 44,601 2016 34,046

5

A PPENDI X C


Saskatchewan Scrap Tire Corporation Notes to the Financial Statements For the year ended December 31, 2013

8.

Financial instruments The Corporation, as part of its operations, carries a number of financial instruments. It is management's opinion that the Corporation is not exposed to significant interest, currency, credit, liquidity or other price risks arising from these financial instruments except as otherwise disclosed. Liquidity risk Liquidity risk is the risk that the Corporation will encounter difficulty in meeting obligations associated with financial liabilities. The Corporation exposure to liquidity risk is dependent on the receipt of tire recycling fees, collection of accounts receivable, purchasing commitments and obligations or raising funds to meet commitments and sustain operations. Other price risk Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices, whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The Corporation enters into transactions to purchase/sell equity investments for which the market price fluctuates.

9.

Comparative figures Certain comparative figures have been reclassified to conform with current year presentation.

6

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27


APP E ND I X D

28

2013 Scrap Tire Supply SSTC has over 1,360 Registered Retailers that reported total sales of 1,596,886 tires in 2013, including those on new vehicles and/or equipment.

Tire Type

(2013)

PERCENT OF Annual Sales

units Sold (2012)

PERCENT OF CHANGE Year-over-year

PLTT

1,063,418

67 %

1,024,201

4%

MTRK

200,561

13 %

197,324

2%

AG

44,215

3%

39,205

13 %

OTR I

7,415

0.5 %

6,507

14 %

OTR II

1,507

0.1 %

1,517

-1%

279,770

18 %

276,815

1%

Vehicle Sales (5 PLTT Tires/unit)

TOTAL

A PPENDI X D

units Sold

1,596,886

1,545,569


AP P E ND I X E

29

2013 Scrap Tire Collection & transportation

The SSTC has four registered tire collection companies that are responsible for the collection and transportation of scrap tires. Collectors picked up

799,416 scrap tires in 2013, or 47,572,027 lbs

(approximately 2,378,601 million passenger car tire equivalents.)

PERCENT OF CHANGE

Tire Type

units COLLECTED

UNITS COLLECTED

(2013)

(2012)

PLTT

666,874

669,302

0.5 %

MTRK

118,250

110,089

7%

AG

12,412

9,886

26 %

OTR I

1,641

1,370

20 %

OTR II

239

144

66 %

TOTAL:

799,416

790,791

Year-over-year

(UNITS)

TOTAL:

47,572,027

(WEIGHT)

20 13 Annu al R eport Sas katc hewan sc rap tire co rpo ra tio n


AP P E ND I X F

30

2013 Scrap Tire Processing & Manufacturing

Saskatchewan has two registered Processors located in the province who were contracted to convert

43,230,282 lbs of scrap tire material into useable, marketable crumb, mulch, molded or stamped product and other uses.

Material

2013

2012

PERCENT OF CHANGE Year-over-year

CRUMB

5,470,983

6,324,984

- 14 %

Tire Shred/Mulch

30,843,411

7,623,401

305 %

1,781,217

915,066

95 %

974,660

---

100 %

2,078,030

584,899

255 %

WASTE STEEL/FIBRE

2,081,981

3,757,001

- 45%

TOTAL

43,230,282

19,205,351

Product Molded/Stamped Energy Other Material Transfer

A PPENDI X F


AP P E ND I X G

31

2013 Scrap Tire diversion summary

PERCENT OF CHANGE

2013

2012

(pounds)

(pounds)

66,813,640

38,623,210

73 %

47,572,027

47,396,321

1.5 %

TIRE VOLUME RECYCLED

43,230,282

19,205,351

125 %

CLOSING INVENTORY

71,603,635

66,814,180

8%

CARRY OVER INVENTORY FROM PREVIOUS YEAR RECEIVED TIRE VOLUME (POUNDS) FROM PROGRAM

Year-over-year

20 13 Annu al R eport Sas katc hewan sc rap tire co rpo ra tio n


scraptire.sk .ca PHONE 306.721.8473 FAX 306.721.1585 info@scraptire.sk.ca

PO Box 1936 | Regina, Saskatchewan | S4P 3E1 420-2220 12th Avenue | Regina, Saskatchewan | S4P 0M8

SSTC 2013 Annual Report  

The 2013 Annual Saskatchewan Scrap Tire Corporation Annual Report.

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