Canadian Tire Corporation Ltd Annual Shareholders Meeting

May 11, 2017 AM EDT
CTC.A.TO - Canadian Tire Corporation Ltd
Canadian Tire Corporation Ltd Annual Shareholders Meeting
May 11, 2017 / 02:00PM GMT 

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Corporate Participants
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   *  Debbie Champion
   *  Douglas B. Nathanson
      Canadian Tire Corporation, Limited - General Counsel and Secretary
   *  Lisa Greatrix
      Canadian Tire Corporation, Limited - Senior Vice-President of Finance & IR
   *  Maureen Joanne Sabia
      Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board
   *  Stephen G. Wetmore
      Canadian Tire Corporation, Limited - CEO, President and Non-Independent Director
   *  Will Zeyl

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Conference Call Participants
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   *  Mark Nash
   *  Olga Giovanniello

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Presentation
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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [1]
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 (presentation)

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [2]
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 Good morning, everyone, and a very cordial welcome to Canadian Tire's Annual General Meeting. It's a pleasure to see so many of you here, and I hope I'll have an opportunity to chat with many of you after the meeting. Whether you are a customer, a shareholder, an employee, past or present, or one of our advisers, you have all contributed much to our success. And for that, I thank you.

 This morning, I will share a few thoughts with you, after which, we will deal with the formalities required of our AGM. When the formalities have been concluded, Stephen will address us and then we will open the meeting to questions.

 But first, 2017 is Canada's 150th birthday. Wasn't that video a very special birthday card? We live in a great country, and Canada has been good to us all so I think we should stand tall and wish Canada a very happy birthday. I'm a proud Canadian. I think, however, that Canada needs to rediscover its brand for the next 150 years, a brand to which all Canadians can be committed. We need to rediscover the unity, the grit and the determination we demonstrated so heroically 100 years ago at Vimy Ridge. We need to celebrate our oneness, our unity as Canadians, our pride in being Canadians and not focus so much on the differences which divide us.

 To be frank, I am not content to have Canada known merely as the kindest, gentlest country in the world. My birthday wish for Canada is to be known as the country where great leadership, ambition, hard work, innovation, growth and individual responsibility and accountability make us one of the most prosperous countries in the world because that is good for all who claim Canada as home.

 The Board of Directors took a bold decision in July of 2016 to change the leadership of Canadian Tire, and reappointed Stephen Wetmore as President and CEO. I want to be very clear on why. My colleagues and I felt strongly that we had the responsibility for the sustainable long-term success of the Tire, and we were unanimous in our belief that a transformational leader was needed to lead the company at this time of unprecedented change in the retail industry. Moreover, we firmly believe that Stephen will take the Tire's iconic brand to the next level, a strategic imperative for all of us on the board. Given that Stephen had transformed the company during his previous tenure as CEO, had laid the foundation for the company's strong performance and fortunately had remained on the Board of Directors, we were delighted that Stephen agreed to return as our CEO.

 That decision marked the beginning of an energetic and exciting journey. Great people, great products, a great customer experience and creating value for our shareholders were our watchwords. We believe in creating at Canadian Tire a unique marketplace of innovative products and services to serve all Canadians for the jobs and joys of life in Canada over their lifetime. Moreover, we recognize that in today's world, it is imperative that Canadian Tire have the best possible talent, and so we are making talent management a priority. Indeed, our talent strategy has become an integral part of our strategy for the Tire. Canadian Tire is known for its private brands, think of NOMA, Canvas and Mastercraft. We are now embarked on strengthening our private brands and expanding our portfolio of them as part of a larger consumer brands business, which we believe is both a safeguard in a world of increasing competition and an opportunity for significant growth.

 Much has been achieved in the last 10 months, and Stephen will speak to you about those achievements and how he sees the way forward. I know you will find his vision very compelling. I hope you will agree with me that the past year has been a successful one. We have seen dividend growth, revenue growth and very nice share price growth. We continue to be the go-to store and our brand continues to be among the most trusted and respected. Our success is built on a sustainable foundation, but we must never be, and we will never be, complacent.

 Last summer, I posed a question to our management and to our board, what is our vision for the Tire as we approach our 100th birthday in 2022? Under Stephen's leadership, we have set out, with relentless determination, to become the undisputed #1 retail brand in Canada by 2022. We are in a strong position to achieve that goal, but it will require us to make some changes to meet our customers' evolving demand. We must foster a test-and-learn culture and encourage innovative thinking and prudent risk taking. Much will be demanded of us, but most of all, it will require that we be open to doing things in a different way in the interest of making our vision a reality. Management is working diligently on the changes it wants to make and how best to effect those changes.

 For its part, the Board of Directors believes that it has an equal responsibility to look at how it should work differently, and we have done that. We have revised the Board's mandates and the mandates of its committees to ensure that they are appropriate for the journey upon which we have embarked and, very importantly, how they can assist the board to add value to management. We have examined our relationship with management and we are seeking even better ways of making sure that the flow of information to the board is as effective as possible to facilitate even better decision making in the interest of achieving our goal. It is the view of your directors that in today's fast-changing world, it is not enough for us to be at the leading edge of good governance, disclosure and oversight and, of course, we will be, but we must be very good at working together with management to achieve our goals, while at the same time maintaining a healthy degree of skepticism and challenge.

 At Canadian Tire, both management and the board agree that boards of directors should not be content with simply an oversight function. We believe that boards have a responsibility to lead. We are convinced that responsibility for leadership should be shared between the board and management. Yes, this is a more activist model for governance, but in the current world, that is no longer -- that is no longer a business-as-usual world, it is a change that is necessary and desirable. There is a school of thought that believes the fundamental flaw in corporate governance is the asymmetry of information between the board and management. While there can be no doubt that managements will always have more information than boards of directors, and should have, much can be done to redress the balance.

 At Canadian Tire, the board and I are working diligently with the CEO and his executive team to ensure that the information provided to the board is structured in such a way as to enable my colleagues and I to add more value to management. Decision making is always better if the discussion of the issues, and the potential solutions, is more focused. And so both the board and management have agreed that all briefing materials must begin with the issues involved, the choices management had in dealing with those issues, the choices management made and the reason why they made those choices. Your board expects and gets complete candor from management, whether the news is good or not so good. As a board, we give management freedom to change its mind, to test and learn. Indeed, we encourage it. We believe much can be learned from failure and we believe that this freedom allows management to think much bigger thoughts for the longer term. In other words, to take some risk, prudently managed risk, but risk all the same.

 At Canadian Tire, we think that the more educated the board is on the current issues facing the corporation, the better will be the board's approach to decision making and the better able the board will be to add value. Your board spends considerable time informing itself about those issues. For example, the board spent a day recently with data scientists led by Dr. Eric Anderson, one of our new directors; and 2 of his colleagues, educating ourselves about data analytics, the uses to which it can be put in our retail context and how a more sophisticated approach to interpreting the data can lead to better decisions.

 At the Tire, we are pretty sophisticated in our analytics, but we can always be better. And we spent a few hours one day with an investment bank understanding how they viewed the Tire. And that leads me to say a few words about how committed the board and management are to taking a long-term view. It is unfortunate, in my view, that many shareholder activists are focused on the short term and this, of course, puts pressure on management and on the board to think in the short term. And I'm not convinced that shareholders want companies to take a short-term view of life as that will force many companies to mortgage their future for short-term gain, not the way to create real and sustainable shareholder value. And now a few words on some continuing concerns of mine.

 I continue to be concerned about the reluctance of the business community to begin a dialogue on the benefit, or lack thereof, of some of the initiatives that weaken the role of the board and, hence, the disciplined governance of the company. Canadian Tire is committed to excellence in governance, but the governance industry appears to have lost sight of the fact that our current legislation requires that the board manage the company, which it does, by hiring talented management and working with management to create shareholder value. Yes, increasingly, the governance industry proposes that many decisions, more appropriately and under the law belonging to the directors, be taken away from them and put in the hands of the shareholders at large.

 Like the authors of the Harvard Business Review article, the error at the heart of corporate leadership, I believe that the board and the management have a duty to the corporation. And so I favor a more company-centric model of governance that acknowledges our legal framework, that makes it very clear that directors and management have duties to the corporation as well as to shareholders. Short-termism is not in the interest of a sustainable future. Corporations are complex organizations whose effective functioning depends on a talented board and talented management. And effective functioning for a sustainable future means taking a long-term view. Crafting strategy, building a strong organization, developing and motivating talented executives and allocating resources for present and future returns are significant responsibilities and they cannot and should not be focused on the short term.

 And I have another concern, which I mentioned last year, the abdication of shareholder responsibility to proxy advisers who are largely unaccountable. I could not agree more with those who say that the governance industry has created a distrust of boards and management and then capitalize on that distrust by framing its initiatives as solutions to this so-called problem. Once again, I ask, how much better it would be if we followed a path of more meaningful engagement between boards and management with the investor community to help overcome the trust deficit and reestablish bonds of common purpose? This may have the benefit of being a substitute for the endless demands for regulated solutions.

 Canadian Tire's policy with respect to shareholder engagement has been well articulated and is robust. I feel very strongly that one of the responsibilities of a board is to be the stewards of the company's relationship with its shareholders and is one which your board takes very seriously. And wouldn't it also be better if, as our board believes, the governance industry were mindful that a one size fits all approach to governance may be inappropriate given the unique circumstances of individual corporations, but I have been digressing.

 On behalf of my colleagues on the board, I want to say a big thank you to Stephen and his management group for their very hard work these past 10 months, for their thinking big approach to our future, for their innovation and their discipline as they set about implementing Stephen's vision for the Tire.

 During the year, the board added 2 new directors, whose experience and wisdom will add considerable value to our deliberations as we face the imperative of overcoming the challenges presented by the business and retail environment in which will live. They are Pat Connolly, a longtime Senior Executive, recently retired, of Williams-Sonoma, who was instrumental in creating the very successful e-commerce business of Williams-Sonoma; and Dr. Eric Anderson, a leading data analytic scientist and academic at the Kellogg School of Management. These appointments, of course, are in keeping with our policy and practice of recruiting directors to fill the current skills requirement of the Tire.

 Sadly, the Board must say to goodbye to George Vallance, a valuable member of our board. George has retired as a dealer and, if the shareholders approve, will be replaced on the board by Don Murray , a highly experienced dealer. George contributed significantly to our deliberations during his 6-year tenure on the board. He set a very high standard and he will be missed.

 I want to tell you that Canadian Tire and its shareholders could not be better served by your Board of Directors. Our directors act with courage. They understand the challenges facing the Tire. They never fail to assist management when their experience and expertise can be helpful. They never shrink from challenging management. They work hard at their relationships with their fellow directors, which results in an effective and productive boardroom dynamic and they seek always to make the board even more effective. They ask why, of course, but more importantly, they ask why not?

 Finally, I cannot adequately express my appreciation to my fellow directors for the support they have given me in a year that taxed us all. While always supportive, my colleagues were especially helpful to me this past year, never hesitating to be there when I needed them for advice and counsel. I am very optimistic about the future for Canadian Tire. It promises to be a very exciting one. My expectations are high, but I recognize that achievement is but the reward of struggle and hard work. Fortunately, hard work is one of the hallmarks of the culture at Canadian Tire. I hope that all of you share my optimism.

 And now we will turn to the formal business of the meeting. As Chairman of the Board, I will act as Chairman of the meeting. I have asked Doug Nathanson to act as Secretary to the meeting. I appoint Paul Allen and [Jamie Bassett] of Computershare Trust to act as scrutineers. I am advised that notice calling this meeting, together with the information circular dated March 9, 2017, and the formal proxy were mailed on April 3, 2017 to shareholders of record as at the close of business on March 23, 2017. I direct the Secretary to keep a copy of the notice calling the meeting, and the proof of mailing of the notice calling the meeting, the information circular and the formal proxy with the minutes of this meeting. The scrutineers' report has been received, and I am advised that a quorum of holders of both the common shares and Class A nonvoting shares of the corporation is present. I, therefore, declare this meeting duly constituted for the transaction of business.

 The scrutineers' report, which will indicate the number of shares represented at this meeting, will be read by the Secretary at the end of the meeting. To make the best use of our time, I have arranged in advance for certain shareholders to move and second the motions required at this meeting. These arrangements are in no way intended to influence or discourage discussion of the motions. However, please hold your questions not directed to the formal business of the meeting until the question period following the CEO's remarks. I would also ask that any person who wishes to speak first give his or her name and advise the meeting whether he or she is a registered shareholder or a proxy for a registered shareholder.

 The first item of business is for shareholders to receive the consolidated financial statements of the corporation as at year ended September -- December 31, 2016, and the auditor's report thereon, both of which can be found in our 2016 Report to Shareholders. The 2016 Report to Shareholders has been sent to shareholders who requested the report and has also been filed on SEDAR and on our website. I will invite our CEO to provide you with the highlights from the past year and his look into the future of the corporation following the conclusion of this formal business.

 The next item of business is the election of 13 directors by the holders of common shares. I will ask Will Zeyl to nominate the 13 directors named in the information circular to be elected by the holders of common shares.

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 Will Zeyl,    [3]
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 Madam Chairman, I nominate: Eric T. Anderson, Martha G. Billes, Owen G. Billes, Diana L. Chant, Patrick J. Connolly, David C. Court, Mark E. Derbyshire, John A.F. Furlong, Claude L'Heureux, [Donald A. Murray], Maureen J. Sabia, Anatol von Hahn and Stephen G. Wetmore for election as directors of the corporation by the holders of common shares to hold office until the next annual election of directors.

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [4]
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 Thank you, Will. Are there any further nominations? There being no further nominations, I declare that nominations are closed. Holders of common shares have been provided with the opportunity to vote for each individual director nominee or withhold their vote. As proxy holder, I am advised that sufficient votes in favor of the election of each individual director nominee were cast prior to the meeting. Accordingly, I propose that we proceed with a single motion to elect the persons nominated. I will ask Debbie Champion to make a motion to elect the persons nominated.

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 Debbie Champion,    [5]
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 Madam Chairman, I move that the persons nominated for election as directors by the holders of common shares be elected as directors of the corporation to hold office until the next annual election of directors.

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [6]
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 Thank you, Debbie. May I have a seconder?

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 Unidentified Participant,    [7]
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 I second the motion.

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [8]
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 Thanks, Lenny. Only registered holders of common shares and their proxy holders are entitled to vote on the motion. Everyone in favor of the motion, please raise your hand.

 (Voting)

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [9]
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 Anyone opposed?

 (Voting)

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [10]
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 I declare the motion carried, and that the 13 persons nominated for election by the holders of common shares are duly elected as directors of the corporation to hold office until the next Annual Meeting of Shareholders.

 I will now turn to the election of 3 directors by the holders of Class A nonvoting shares. I will ask Olga Giovanniello to nominate the 3 directors named in the information circular to be elected by the holders of Class A nonvoting shares.

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 Olga Giovanniello,    [11]
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 Madam Chairman, I nominate Pierre Boivin, James L. Goodfellow and Timothy R. Price for election as directors of the corporation by the holders of Class A nonvoting shares to hold office until the next annual election of directors.

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [12]
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 Are there any further nominations? There being no further nominations, I declare that nominations are closed. Holders of Class A nonvoting shares have been provided with the opportunity to vote for each individual director nominee or withhold their vote. As proxy holder, I am advised that sufficient votes in favor of the election of each individual director nominee were cast prior to the meeting. Accordingly, I propose that we proceed with a single motion to elect the persons nominated. I will ask Mark Nash to make a motion to elect the persons nominated.

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 Mark Nash,    [13]
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 Madam Chairman, I move that the persons nominated for election as directors by the holders of Class A nonvoting shares be elected as directors of the corporation to hold office until the next annual election of directors.

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [14]
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 Thank you, Mark. May I have a seconder?

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 Unidentified Participant,    [15]
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 I second the motion.

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [16]
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 Thank you, Lenny. Only registered holders of Class A nonvoting shares and their proxy holders are entitled to vote on the motion. Everyone in favor of the motion, please raise your hand.

 (Voting)

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [17]
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 Opposed, if any?

 (Voting)

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [18]
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 I declare the motion carried and that the 3 persons nominated for election by the holders of Class A nonvoting shares are duly elected as directors of the corporation to hold office until the next Annual Meeting of Shareholders.

 And now ladies and gentlemen, it is my pleasure to introduce you to all of your directors for the coming year. I will call upon each of my colleagues to stand and be recognized: Eric Anderson, Martha Billes, Owen Billes, Pierre Boivin, Diana Chant, Pat Connolly, David Court, Mark Derbyshire, John Furlong, Jim Goodfellow, Claude L'Heureux, Don Murray, Tim Price, Anatol von Hahn, and Stephen needs no introduction.

 Appointment of the auditor, that's our next item of business. It will include not only the appointment of the auditor, but the authority for the directors to fix the remuneration of the auditors. The directors of the corporation recommend the reappointment of Deloitte LLP as the corporation's auditor for the ensuing year. I will ask Lisa Greatrix to make a motion appointing Deloitte LLP as the auditor of the corporation and authorizing the Board of Directors to set the auditor's compensation.

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 Lisa Greatrix,  Canadian Tire Corporation, Limited - Senior Vice-President of Finance & IR   [19]
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 Madam Chairman, I move that Deloitte LLP chartered professional accountants be appointed the auditor of the corporation to hold office until the close of the next Annual Meeting of Shareholders of the corporation with compensation to be fixed by the Board of Directors, the directors being hereby authorized to fix such compensation.

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [20]
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 Thank you, Lisa. May I have a seconder?

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 Mark Nash,    [21]
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 I second the motion.

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [22]
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 Thank you, Mark. Only registered holders of common shares and their proxy holders are entitled to vote on the motion. Everyone in favor of the motion, please raise your hand.

 (Voting)

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [23]
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 Opposed, if any?

 (Voting)

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [24]
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 I declare the motion carried. Deloitte LLP is hereby reappointed as the corporation's auditor for the ensuing year and the Board of Directors is hereby authorized to set the auditor's compensation. I will now ask the Secretary if he is ready to read the scrutineers' report on attendance.

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 Douglas B. Nathanson,  Canadian Tire Corporation, Limited - General Counsel and Secretary   [25]
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 Madam Chairman, there are 37 holders of common shares present in person or represented by proxy, representing 3,241,915 common shares, or 94.7% of the issued common shares of the corporation. There are 294 holders of Class A nonvoting shares present in person or represented by proxy, representing 44,216,566 Class A nonvoting shares, or 66.45% of the issued Class A nonvoting shares of the corporation. These figures are subject to amendment to cover late arrivals and to correct any clerical errors or omissions.

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [26]
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 Thank you, Doug. This completes the formal business for which this meeting was called. And if there is no further business, may I have a motion to terminate the meeting.

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 Debbie Champion,    [27]
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 Madam Chairman, I move that this meeting be terminated.

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [28]
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 Thank you, Debbie. Everyone in favor of the motion, please raise your hand.

 (Voting)

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [29]
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 Opposed, if any?

 (Voting)

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 Maureen Joanne Sabia,  Canadian Tire Corporation, Limited - Non-Executive Chairman of the Board   [30]
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 The motion is carried and the formal business of the meeting is now terminated. And now it is a great pleasure for me to invite Stephen Wetmore to speak to us about the accomplishments of the past year and his vision for the Tire's future.

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 Stephen G. Wetmore,  Canadian Tire Corporation, Limited - CEO, President and Non-Independent Director   [31]
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 Thank you, Maureen, and good morning, everyone, and thank you for joining us. Let me start first by thanking our Chairman, Maureen Sabia, and our Board of Directors for the tremendous support and guidance they give to all of us. Their experience and expertise is not only invaluable, but it is always available to us and we truly appreciate it.

 2016 was an incredibly successful year for your company, and it's due to the excellent retailers sitting here in the front row. Our results have been well covered, in particular, the strength we saw in Q4 with Canadian Tire Retail achieving its first billion-dollar month in December. But as retailers, we all know that it doesn't matter what you did yesterday, it's what you're going to do tomorrow.

 For 95 years, our brand promise has been to prepare Canadians for the jobs and joys of life in Canada. It's why we've created unique product offerings for our customers for so many years. From the days when a tire company branched out into selling skates, we've been committed to evolving with our customers throughout their lifetime and in the communities that they call home. So while the reason why we come to work every day hasn't changed, how we deliver on that promise is ever changing. We are always testing and learning to improve the customer experience without compromising the secret sauce that makes Canadian Tire so iconic. This is not an easy task. We're in the midst of a retail revolution and companies are having to react quickly. Digital devices are the starting point for information, entertainment, social engagement and, of course, commerce. Established retailers are facing difficult investment decisions. Creating or maintaining your brand identity is incredibly challenging as traditional scale has become digital reach.

 The art of the advertisement has been replaced with the science of reaching the right person through the right media at the right time. Unique assortments are being challenged by millions of products available 24 hours a day, delivered to the customer's door. Not the best economic model, but with time, this too will be overcome. These challenges and changes provide Canadian Tire with great opportunity. We have taken the time to consider our options and evaluate the path that is right for Canadian Tire. It's tempting to react impulsively and create a strategy to reinvent the Tire. Imitation has never been the Canadian Tire way and it's rarely the right solution. We need to continue to be bold enough to stay true to who we are, but we must change how we do things to meet the challenges ahead of us. And as with any change, timing is everything.

 With that in mind, as the Triangle celebrates its 100th birthday in 2022, we must aspire to be the best and, therefore, our goal is to be the undisputed #1 retail brand in Canada within 5 years. A lofty goal, perhaps, but it embodies all that we must do to be #1 in the eyes of our shareholders, customers, employees and partners. To be #1 by 2022, the Triangle must again evolve to new heights. The Triangle has always been synonymous with Canadian Tire Retail. I've always looked at PartSource, Mark's, Sport Chek and all our other banners as extensions of Canadian Tire Retail, assets focused on the jobs and joys of life in Canada and extending the role our triangle plays in the lives of Canadians. We have combined our back-office capabilities that let our individual banners operate customer-facing activities independently. Canadian Tire Retail has built a strong brand, a world-class portfolio of own brands and executed operational initiatives with excellence. Mark's has had tremendous success in building its own brands and being a world leader in innovation and footwear and apparel. Sport Chek has successfully built strong relationships with a new generation of Canadians and is a pioneer in digital marketing. And our category specialist banners, like Pro Hockey Life and PartSource, have become entrenched in their target markets.

 With a stable and successful retail banners and a strong own brands portfolio, we now have the opportunity to organize the whole enterprise to be one company focused on one customer. We have moved from mass merchants to banner-centric retailers, and we are now focusing on becoming truly customer-centric enterprise focused on one customer throughout a lifetime in Canada. The power of one is evident when you look at our over 1 billion interactions per year with Canadians from in-store visits, to digital engagement, to the use of our credit card. What an incredible starting point for building lifelong relationships with our customers.

 Over the past 8 months, we have concentrated on reorganizing our business and focusing our efforts on 3 fronts, our products, our capabilities and our assets. Product innovation is at the heart of our strategy. Last year, we created a company-wide consumer brands division focused on improving design capabilities and creating unique and exclusive products, a great example where taking a single view of our assets from Denver Hayes to Mastercraft builds a competitive advantage. And I'm extremely pleased with our progress. In 2016 alone, our own brands portfolio grew by $300 million.

 Yesterday, we announced the acquisition of Paderno, a leading kitchenware brand with made in Canada roots and a reputation for excellence in craftsmanship and quality. We will continue to develop our brand portfolio both organically and through acquisitions to strengthen strategic categories. We've begun the journey to start selling our branded products internationally, which opens up significant growth opportunities in the years to come. In terms of capabilities, our unprecedented access to data, to analytics and to digital innovation is deepening our understanding of the jobs and joys of life in Canada. We are using this data to run a more efficient company and to guide us in creating better products, brands and experiences.

 Over the last number of months, we've moved the bar using the power of our data to take our management teams to a new level in decision making. We have a rich history in data analytics. In fact, with the help of our data analytics team at Canadian Tire Financial Services, we assisted the Canadian Olympic Committee in making decisions that put more Canadian athletes on the podium in Rio. Our ability to communicate to our customers is now being recognized around the world. As an example, our Canadian Tire wheels ad from last summer's Olympics was one of the most-watched ads in history, with over 170 million online views worldwide. And Sport Chek is recognized as one of North America's leading digital marketers.

 Combining our capabilities allows us to create the digital experience required in today's marketplace. As a first step in aligning our assets towards one company, Canadian Tire Retail will begin testing the introduction of select assortments for Mark's in Canadian Tire stores, and we think our customers will love the expanded assortment.

 Early next year, Canadian Tire Retail will also test the introduction of the Pro Hockey Life brand in selected assortments in Canadian Tire stores and at canadiantire.ca. This is another great example of how we will bring the world's best assortments to every community in the country. In late 2017, Sport Chek will be launching the first Chek kids store, testing an expansion of Canada's kids store, a concept first launched by Canadian Tire Retail in 2015. Focused on kids' clothing and footwear, Chek kids will be an exciting fun trial of the Chek banner positioned with a special twist. This follows Sport Chek's recent opening of the first women's only Sport Chek store in Calgary.

 The evolution of our loyalty program is a critical enabler of our one company, one customer strategy and our current [OMC] credit card is a major component of our loyalty portfolio. And as a first step, we're in the process of designing a new program and brand with an internal working name of Crimson. Our Crimson proposition will enable us to develop an even closer relationship with our loyal customers across all our banners. Working with our Canadian Tire Associate Dealers is critical. They have executed our strategies in each and every community in Canada for generations. They make unique assortments possible as they build stores for life in their community. Associate Dealers have allowed us to build a brand that has a distinct national identity with local relevance. It's what we refer to as the dealer model, and it was a turning point for our founders to become a national player many years ago. In 2013, another milestone was reached through our renewed contract, and once again we redefined our relationship, which has been a primary driver of our recent financial performance.

 Focusing on one customer is another turning point. As we think more broadly about the potential of all our assets and, of course, being open to new ways of working, a powerful combination for the enterprise. It's about being relevant to all Canadians, what they want and how they want it for a lifetime in Canada. With this in mind, 2017 will obviously be a busy year. Of course, we have to continue to deliver strong results, but we're also working on initiatives that will create sustainable growth for years to come. For example, to complement our existing click and collect in-store experience at Canadian Tire Retail, our Associate Dealers and the corporation are developing a deliver-to-home trial that will commence in late 2017. The testing won't be limited to just Canadian Tire. Each banner has a role to play in building the collective strength of our total enterprise offering. Mark's, Sport Chek, PartSource, Pro Hockey Life and Atmosphere have well-established deliver-to-home capabilities that we will continue to develop. In fact, we have no fewer than 30 e-commerce initiatives under way at the moment, providing us critical learning in everything from search optimization to website experience to back-end fulfillment options.

 While many of my comments relate to the digital future of retailing, I should point out that most of our current profits come from bricks and mortar. We are continuing to invest in our store infrastructure, in-store technology and training. And this summer, our new distribution center in Bolton, Ontario, will come online. It's a balance we will continually monitor, a balance we call connected retail.

 So in the coming months and quarters, you can expect to see more announcements regarding the focus and organization of our business. We're looking at each business and asking, how can they contribute more to Canadian Tire and how together we can be stronger. We cannot forget that what fuels our success and what will drive our journey is our talent. We need to motivate, engage and attract the best, to foster a culture of ingenuity and creativity and to encourage risk taking so that we stay at the forefront of innovation. We want great people. We're proud to work for the Tire and are dedicated to building the future.

 A cornerstone of our brand is our Jumpstart Charity. We are very proud of the work that has been done to help kids from financially disadvantaged homes get in the game. Each year, Jumpstart invests in our communities from coast-to-coast. In addition to this commitment to our kids across the country, Jumpstart plans to make a significant announcement in the coming months that will make Canada an even more accessible place to play. As you can see, we have set the stage for all our banners to work as one company, to deliver on our customers' needs in a way that no other retailer can. We want a lifetime of products and services for our customers from the their first pair of skates to their first home to their retirement home, and to be part of every moment throughout their lifetime in Canada. We want to dress them for work and for play. We want to fix and fuel their cars, finance their trips and help their kids play sports. We must develop products for the next generation and for our loyal baby boomers. This is what it means to be part of a lifetime in Canada.

 We cannot forget who we are, where we came from or our brand promise, one that Canadians depend on. We will never under estimate the power of the shelf and the in-store customer experience. Canadian Tire is an iconic brand that evokes memories, honors traditions and Canadian values from coast-to-coast and it will do so for years to come. What we are creating is a great opportunity for growth and we must maintain this momentum. The success of our individual banners is something to be very proud of, and we have come a long way. But 8 successful independent banners will never match the combined strength of a single enterprise. We must always take care of our customers. One company focused on one customer is our strategy and our path to become the #1 retail brand in Canada.

 With that, thank you very much.

 Now it's my pleasure, as I have done a number of times before, to open up the floor to our question period. We've got mics in the middle aisle here, should any of our shareholders wish to ask us any questions. So I'll open it up and -- I think we set a record a couple of years ago by having 2 questions. Maybe we could beat that this year. Yes?

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Questions and Answers
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 Unidentified Shareholder,    [1]
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 Welcome back.

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 Stephen G. Wetmore,  Canadian Tire Corporation, Limited - CEO, President and Non-Independent Director   [2]
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 Thank you.

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 Unidentified Shareholder,    [3]
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 I'm [Phil Snell], I'm a shareholder, but perhaps more importantly, a customer, may be the one customer today at the microphone. Given some flooding close to home in Ottawa and Montréal, has Canadian Tire thought of lending a hand in any kind of way to the people who have lost their home to flooding, damage or something like that?

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 Stephen G. Wetmore,  Canadian Tire Corporation, Limited - CEO, President and Non-Independent Director   [4]
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 Very, very, very good question. We -- through the years, many, many years, Canadian Tire and Jumpstart and all our banners have responded to emergencies across this country and become extremely, extremely good at it. In this case, we've done exactly the same. Our stores locally are responding. Our supply chain system is in place to take equipment and supplies. I think with one phone call, we supplied 100 pair of hip waders within a couple of hours to the volunteers, et cetera. So we always participate and we do absolutely as much as we can, in this case, we are again.

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 Unidentified Shareholder,    [5]
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 Excellent. Faster than the Public Safety Group, perhaps.

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 Stephen G. Wetmore,  Canadian Tire Corporation, Limited - CEO, President and Non-Independent Director   [6]
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 We're pretty quick at it, yes.

 Well, that was a nice question. I guess it's because the year was so good that there's no question. So I'll take that as a compliment. Sure, nobody else? Then it's my pleasure to say thank you very, very much for attending. We appreciate it very much, and we look forward to building your company. So thank you, and good day.




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