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The 2013 Annual Saskatchewan Scrap Tire Corporation Annual Report.
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ANNUAL REPORT | 2013SaSkatchewan Scrap tire corporation
WHO WE ARE
2
TABLE OF CONTENTS
3
CONTENTSMESSAGES PAGE 4
ABOUT SSTC PAGE 7
THE 3 PHASES PAGE 8
SUSTAINABILITY THROUGH MANAGING RESPONSIBLY PAGE 9
SUSTAINABILITY THROUGH ACCOUNTABILITY & TRANSPARENCY PAGE 10
SUSTAINABILITY THROUGH REvENUE GENERATION PAGE 11
SUSTAINABILITY THROUGH STOCKPILE ABATEMENT PAGE 12
SUSTAINABILITY THROUGH PARTNERSHIPS PAGE 13
SUSTAINABILITY THROUGH COMMUNITY INvOLvEMENT PAGE 14
SUSTAINABILITY THROUGH EdUCATION & AwARENESS PAGE 15
APPENDICESAPPENdIX A: BOARd OF dIRECTORS & STAFF PAGE 18
APPENdIX B: COMMUNITY dEMONSTRATION GRANT RECIPIENTS PAGE 19
APPENdIX C: FINANCIAL STATEMENTS PAGE 20
APPENdIX d: 2013 SCRAP TIRE SUPPLY PAGE 28
APPENdIX E: 2013 SCRAP TIRE COLLECTION & TRANSPORTATION PAGE 29
APPENdIX F: 2013 SCRAP TIRE PROCESSING & MANUFACTURING PAGE 30
APPENdIX G: 2013 SCRAP TIRE dIvERSION SUMMARY PAGE 31
On behalf of the Government of
Saskatchewan, I am pleased to extend
congratulations to the Saskatchewan
Scrap Tire Corporation for continuing
to meet the challenges of a busy and
event-filled year of recycling tires in
Saskatchewan.
This past year gives SSTC many
reasons to celebrate, in particular
the 15th anniversary of operating an
industry-led, province-wide recycling
program for scrap tires.
during this time, SSTC has overseen
the collection and recycling of more
than 10 million scrap tires of all sizes –
the equivalent of 20 million passenger
car tires. Saskatchewan’s scrap tire
recycling program has the broadest
and most comprehensive mandate of
any scrap tire recycling program across
the country.
The SSTC should be commended
on the implementation of its new
methodology for setting the recycling
fees for scrap tires, which will ensure
that the program and the organization
will remain viable and sustainable to
carry out its mandate.
with the prosperity and growth
the province is experiencing, the
Saskatchewan Scrap Tire Management
Program and the other provincial
recycling programs play an increasingly
important role in ensuring that the
environment is protected and our
quality of life is maintained.
Thank you to SSTC and its members
for helping to make Saskatchewan
an incredibly enviable place to live
and work. Best wishes for continued
success.
Sincerely,
Ken Cheveldayoff
A MESSAGEFROM THE MINISTER OF ENVIRONMENT
4
A MESSAGEFROM THE CHAIRMAN
On behalf of the Board, I am pleased
to present SSTC’s 2013 Annual Report.
As you can see, SSTC continues to
deliver a program that has not only
diverted 20 million scrap tires from our
waste stream, but has also developed
a host of programs that will ensure
responsible tire management well into
the 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 end-
of-life tires ended up in local landfills,
were stockpiled, buried, burned, or
even dumped indiscriminately along
roadsides without much thought.
SSTC has helped change the way
Saskatchewan residents view tire
recycling and, with their support, we
have built one of the most successful
and innovative tire recycling programs
in Canada. Consumers have made
this possible by paying a recycling
fee when they purchase new tires
and the funds are remitted to SSTC.
All revenue generated from this fee
is spent on activities directly related
to the program including collecting,
transporting, and recycling of the
scrap tires. April 1, 2014, will see
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
all consumers.
After 15 years of serving on SSTC’s
Board of directors, I will be retiring at
the end of this year. It has been a great
experience and I am very proud of the
important work that SSTC does each
and every day. I would especially like
to thank the Board, whose knowledge,
commitment, and focus have set the
successful direction of SSTC from the
beginning. I am excited about the
journey I am about to embark upon,
and equally excited about the journey
that SSTC is taking to ensure a strong
and sustainable future.
Sincerely,
don Taylor
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2013 AnnuAl RepoRt SASkAtchewAn ScRAp t iRe coRpoRAtion
2013 was an exciting and busy year for
Saskatchewan Scrap Tire Corporation
(SSTC).
In many ways the program is far
different from when it was launched
15 years ago however, tire collection
and diversion remains constant.
Managing scrap tires and tire recycling
in a booming, growing province brings
increasing challenges for retailers,
recyclers and SSTC alike.
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
Plan that was approved by the Ministry
of Environment, december 18, 2013.
This was a significant milestone in our
program, and one that ensures that we
can meet our program obligations.
The key piece of our Plan was
the development of an objective
methodology for rate setting, one that
reduces cross subsidization across
all tire categories. Applying the new
methodology has resulted in new tire
recycling fees for the province. with
this new rate structure in place, SSTC
will be in a position of cost-recovery
that will ensure program sustainability,
and ensure sufficient revenue is
generated so that program liabilities
such as Phase 3 – cleanup and
recycling of private stockpiles – can be
completed.
Sustainability is defined in many ways,
meaning different things to each of
us. At SSTC, sustainability is how we
define our success. with an eye to the
future, we look forward to working
with the Ministry and all the program
stakeholders to continue to deliver
a vibrant and responsive solution to
scrap tire management throughout the
province.
Sincerely,
Theresa McQuoid
6
A MESSAGEFROM THE ExECuTIVE DIRECTOR
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2013 AnnuAl RepoRt SASkAtchewAn ScRAp t iRe coRpoRAtion
The Saskatchewan Scrap Tire
Corporation (SSTC) is a non-profit, non-
government, industry-led organization
that delivers a province-wide tire
recycling program.
Through the Environmental
Management and Protection
Act (EMPA) and the Scrap Tire
Management Regulations (1998),
thereunder Section 4(1), the authority
is provided to make scrap tires a
designated material. Therefore, SSTC
being the only approved scrap tire-
recycling program in Saskatchewan
is mandated to impose and collect a
tire recycling fee on the sale of all new
tires.
Established in 1996, SSTC has grown
to include 1,360 registered retailers
and a strong recycling network of
haulers and processors who are
involved in the collecting and recycling
of over one million scrap tires per
year. Since its inception, SSTC has
diverted over 20 million used tires
from the Saskatchewan waste stream
and cleaned up decades worth of old
tires from municipal landfills. These
tires have been recycled into useful,
marketable products.
SSTC works cooperatively with
Tire Retailers, Auto dealers, Rural
Municipalities, local governments,
Regional waste Authorities,
Processors, Collectors and the general
public to ensure that scrap tires are
recycled in an environmentally friendly
and sound manner.
ABOUT SSTC
NO. 1CURRENT GENERATION TIRES
This is the daily activity of gathering
scrap tires accumulated at the retail
level. At no cost to the Tire Retailer, tires
are picked up under SSTC program and
diverted from landfill disposal and from
the environment in general.
NO. 2LANDFILL CLEANUP
This phase of the program involved
removing tires from registered landfills in
Saskatchewan. when the work wrapped
up in 2010, the SSTC had removed the
equivalent of two million passenger car
tires from more than 300 landfill sites
around the province. In exchange for
the free clean up, municipalities were
required to pass bylaws banning scrap
tire disposal from their landfills.
NO. 3PRIVATE STOCKPILES
Black Gold Rush is Phase 3 of SSTC’s
program and offers a one-time, free
cleanup of stockpiled tires on private
land and urban residential property.
Prior to SSTC’s existence, most farmers
and landowners simply stockpiled tires,
as there was no other disposal option.
The program has removed 258,163 scrap
tires from 113 Rural Municipalities to date.
THE 3 PHASES
8
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.
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2013 AnnuAl RepoRt SASkAtchewAn ScRAp t iRe coRpoRAtion
ExECUTIVE COmmITTEE
The Executive Committee is comprised
of the Chairman, vice Chairman
and Treasurer who act as officers
of the Board. This committee has
the authority and ability to execute
decisions in the absence of SSTC
directors. The Executive Committee is
responsible for the oversight of Board
activities, Board policy and to help
ensure that emerging issues are dealt
with in a manner consistent with the
vision of the Board.
FINANCE COmmITTEE
This committee oversees and
reviews the financial activity of the
Corporation. The Committee assists
with the review of SSTC’s financial and
annual budget. The Finance Committee
is also responsible for overseeing
the preparation and maintenance of
financial records and for ensuring the
credibility of these records through
the process of an annual financial audit
and the review of annual budgets and
monthly financial statements.
INDUSTRy COmmITTEE
This Industry Committee is responsible
for assisting with the development of
policies and executing strategies that
benefit the growth and stability of
the scrap tire recycling industry. The
Committee is also a liaison between
the industry and the Board, handling all
issues and concerns brought forward.
SuSTAINAbIlITY THROugH
MANAGING RESPONSIBLY
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:
10
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
SSTC is charged with the
administration of the collected Tire
Recycling Fees and managing the
operations of the program. SSTC
has procedures in place to ensure
proper financial management and
accountability. A comprehensive
financial administration and
accounting system is maintained to
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.
RETAILER COmPLIANCE
Responsibility of ensuring that all
consumer-paid tire recycling fees
are collected and reported and that
all retailers are compliant with the
Regulations is achieved through
Retailer Compliance Reviews.
COLLECTOR & PROCESSOR AUDITS
As contributing participants in the
day to day activities of SSTC these
stakeholders have a prominent role
in the movement of scrap tires.
Evaluation and audits of these
stakeholders involve many facets of
their business in accordance with the
SSTC policy defined in the Collector
and Processor Guidelines manual.
SuSTAINAbIlITY THROugH
ACCOUNTABILITY & TRANSPARENCY
45%
36%
9%
10%
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2013 AnnuAl RepoRt SASkAtchewAn ScRAp t iRe coRpoRAtion
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.
SuSTAINAbIlITY THROugH
REVENUE GENERATION
45% PROCESSING/RECYCLING
36% TRANSPORTATION/COLLECTION
10% COMMUNITY CLEANUP/GRANTS
9% AdMINISTRATION
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.
2013 ExPENDITuRE bREAkDOwN
12
Phase 3 of SSTC program, branded
as BLACK GOLD RUSh, offers a
one-time, free cleanup of stockpiles
on private land and urban residential
property. The program works in
partnership with municipality offices
and service groups to design a
collection event that meets the needs
of each community while removing
thousands of abandoned scrap tires.
• 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
RETURN2RETAILER; a program
providing residents with an
opportunity to drop off 10 rimless
scrap tires, free of charge at select
Tire Retailers. The program, designed
as a leave behind program for
residents in areas that previously
participated in Black Gold Rush,
captures tires that may have been
missed and prevents future stockpiles
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
PhASE 2: LANDFILL CLEANUP
was a major move toward stockpile
abatement in Saskatchewan. After
a 10 year lifespan, Phase 2 wrapped
up in 2010 with over 300 municipal
landfills cleaned of landfilled tires.
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
SuSTAINAbIlITY THROugH
STOCKPILE ABATEMENT
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.
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2013 AnnuAl RepoRt SASkAtchewAn ScRAp t iRe coRpoRAtion
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
a recycling minded culture in the
province by growing and advancing
stewardship programs.
SASKATChEwAN wASTE REDUCTION COUNCIL (SwRC)
The SwRC is a strong recycling voice
in the province and brings together
the major players of the recycling
industry in Saskatchewan to create a
solid, unified presence for the benefit
of the environment. Each year, SSTC
partners with SwRC in their summer
student program; the students are
typically hired for specific projects like
the “Be Tire Smart” campaign or the
Community demonstration Program.
CANADIAN ASSOCIATION OF TIRE RECyCLING AGENCIES (CATRA)
CATRA is comprised of leaders from
the tire recycling programs in Canada.
Its purpose is to work together for the
betterment of tire recycling initiatives
in Canada. CATRA’s goal is to enhance
the effectiveness of scrap tire diversion
and recycling across the country
through sharing of information,
expertise and resources.
RUBBER ASSOCIATION OF CANADA (RAC)
The Rubber Association of Canada
(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.
SuSTAINAbIlITY THROugH
PARTNERSHIPS
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.
14
SuSTAINAbIlITY THROugH
COMMUNITY INVOLVEMENT
130 ScRAp tiReS collected And
oVeR 600 ReSidentS weRe
educAted about recycling
while partnering with the City of
Regina’s Household Hazardous
waste Roundup event
7 new community demonStRAtion
gRAnt pRojectS weRe AppRoVed worth $30,000 in funding for a total
of 76 since the program began in 2010
$66,000 pAid to SeRVice gRoupS for their efforts during the Black Gold
Rush program
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.
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
consumers of the importance of tire recycling
• Introduced “Summer Tire Family” social media campaign
to increase program awareness
15
2013 AnnuAl RepoRt SASkAtchewAn ScRAp t iRe coRpoRAtion
• 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
SuSTAINAbIlITY THROugH
EdUCATION & AWARENESS
AwAReneSSeducAtion
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.
WHO WE ARE
16
17
2013 AnnuAl RepoRt SASkAtchewAn ScRAp t iRe coRpoRAtion
APPENdICES
18
AppendiX A
APPENdIX AbOARD OF DIRECTORS & STAFF
DON TAyLOR | ChAIR
Saskatchewan Association of Rural Municipalities
LANNy mCINNES | VICE ChAIR
Retail Council of Canada
JOANNE FEDyK | TREASURER
Saskatchewan waste Reduction Council
KEVIN LANE | DIRECTOR
CAA Saskatchewan
PAT ZATyLNy | DIRECTOR
Canada west Equipment dealers Association
LEN RITChOT | DIRECTOR
western Canada Tire dealers Association
DEBRA BUTTON | DIRECTOR
Saskatchewan Urban Municipalities Association
KIm yEE | ADVISOR
Saskatchewan Environment (non-voting)
ThERESA mCQUOID
Executive director
KELCEy hARASEN
Administrative Assistant
JACKIE KUNTZ
director, Special Projects
JEREmy GOURLAy
Accounting & Audit Compliance
JOLENE KAINZ
Retailer & Collector Services
SSTC bOARD OF DIRECTORSSSTC is governed by a Board of directors which is comprised of seven directors:
SSTC STAFFSSTC’s staff is in charge of the daily activities directly related to scrap tire recycling:
19
2013 AnnuAl RepoRt SASkAtchewAn ScRAp t iRe coRpoRAtion
APPENdIX BCOMMuNITY DEMONSTRATION gRANT RECIPIENTS
ESTERhAZy COmmUNITy DAyCARE COOPERATIVE
DAyCARE ImPROVEmENTS
As part of a series of major improvements to its backyard
and play area, the Esterhazy and Community daycare
Cooperative used rubber paving blocks to create sidewalks
and crumb rubber under the play structures to create a
safer play environment for the children.
hAZLET SChOOL PLAyGROUND UPDATE
After installing a colored Pour-in-Place recycled rubber
surfacing, Hazlet School Playground has an area that can
be used by people of all ages in the community. The area
houses play structures for the daycare/school children as
well as outside gym/fitness equipment for other community
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.
ThE ESTEVAN DAyCARE COOPERATIVE
with the vision to create a safe outdoor learning
environment for children to learn, explore and grow in,
the Estevan daycare Cooperative was able to build an
ecofriendly area featuring slip resistant rubber surfacing
and will be fully accessible for people with disabilities.
TOwN OF TISDALE KINETTE PLAyGROUND
After participating in the Black Gold Rush Program offered
by SSTC, the Tisdale Middle School Business Club felt it
was vital to create public awareness and the showcase the
importance of recycling by creating a green environment.
The recycled rubber base for their playground is now a
unique showpiece in their community for all youth 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.
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:
20
AppendiX c
APPENdIX CFINANCIAl 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
2013 AnnuAl RepoRt SASkAtchewAn ScRAp t iRe coRpoRAtion
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 offinancial position as at December 31, 2013, and the statements of operations and reserves and cash flows for the year then ended, anda summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance with Canadianaccounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enablethe preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance withCanadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan andperform 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. Theprocedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theentity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, 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.
OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position of Saskatchewan Scrap TireCorporation as at December 31, 2013 and its financial performance and cash flows for the year then ended in accordance withCanadian accounting standards for not-for-profit organizations.
Regina, Saskatchewan
February 28, 2014 Chartered Accountants
ACCOUNTING › CONSULTING › TAXSUITE 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
22
AppendiX c
Saskatchewan Scrap Tire CorporationStatement of Financial Position
As at December 31, 2013
2013 2012
AssetsCurrent
Cash and cash equivalents 541,495 1,026,415Marketable securities (Note 3) 976,206 960,309Accounts receivable 48,973 37,715Prepaid expenses and deposits 33,304 14,565
1,599,978 2,039,004
Capital assets (Note 4) 67,921 91,527
Investments 474,308 412,699
2,142,207 2,543,230
LiabilitiesCurrent
Accounts payable and accruals 701,022 616,778Goods and services tax payable 27,462 29,803
728,484 646,581
Commitments (Note 7)
ReservesStablization reserve (Note 5) 1,413,723 1,896,649
2,142,207 2,543,230
Approved on behalf of the Board
Director Director
The accompanying notes are an integral part of these financial statements
1
23
2013 AnnuAl RepoRt SASkAtchewAn ScRAp t iRe coRpoRAtion
Saskatchewan Scrap Tire CorporationStatement of Operations and Changes in Reserves
For the year ended December 31, 2013
2013 2012
Revenue Tire recycling fee (Note 2) 8,211,563 7,909,788Other 42,877 48,360Unrealized gain on investments 48,194 21,195
8,302,634 7,979,343
Recycling costs Recycling fee commission 137,931 146,618Processing and collection costs 6,739,940 6,578,815Professional fees - program compliance 70,061 115,939Special projects 887,863 764,301
7,835,795 7,605,673
Program administration expenses Advertising, sponsorships and memberships 122,562 106,380Amortization 28,315 28,483Bad debts 46,611 9,656Computer support 39,850 30,159Conferences 3,796 3,247Directors' remuneration 19,950 16,864Equipment rental 5,438 6,327Insurance and licenses 16,146 18,705Canadian Association of Tire Recycling Agencies (CATRA) 17,109 13,104Meeting expense 4,433 3,767Office operations 11,652 9,737Postage 7,970 5,266Printing and publications 38,370 28,837Professional fees 175,008 107,786Recycle Sask 24,034 5,786Rent 39,763 38,856Salaries, wages and benefits 317,270 287,318Stationary and supplies 4,315 4,796Telephone, fax and internet 9,594 8,039Training and education - 740Travel 17,579 11,625
949,765 745,478
Net loss (482,926) (371,808)
Transfer from stablization reserve (Note 5) 482,926 371,808
Unrestricted reserve, end of year - -
The accompanying notes are an integral part of these financial statements
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24
AppendiX c
Saskatchewan Scrap Tire CorporationStatement of Cash Flows
For the year ended December 31, 2013
2013 2012
Cash provided by (used for) the following activities Operating
Cash received from customers 8,153,695 7,881,658Cash paid to suppliers (8,330,203) (7,934,501)Cash paid for salaries and benefits (317,270) (287,318)Other revenue 42,877 48,360
(450,901) (291,801)
Investing Purchase of capital assets (4,707) (49,602)Purchase of investments (13,415) (15,315)Proceeds on disposal of investments - 477,584
(18,122) 412,667
(Decrease) increase in cash resources (469,023) 120,866Cash resources, beginning of year 1,986,724 1,865,858
Cash resources, end of year 1,517,701 1,986,724
Cash resources are composed of: Cash 541,495 1,026,415Marketable securities 976,206 960,309
1,517,701 1,986,724
The accompanying notes are an integral part of these financial statements
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2013 AnnuAl RepoRt SASkAtchewAn ScRAp t iRe coRpoRAtion
Saskatchewan Scrap Tire CorporationNotes 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 isexempt from income taxes. The purpose of the Corporation is to establish and manage a mandatory scrap tire wastereduction 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 includethe following significant accounting policies:
Going concern
These financial statements have been prepared on a going concern basis, which contemplates the realization of assets andthe 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 mandatedactivities. The 2014-2018 Saskatchewan Scrap Tire Coporation Product Management Plan outlines measures to solidifythe 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 methodologygives credibility to rate setting and ensures that the tire recycling fee accurately reflects the cost of managing scrap tires inaccordance 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 ProductManagement 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 inthe 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 thecost of assets over their estimated useful lives.
Method RateComputer 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 organizationsrequires management to make estimates and assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenuesand expenses during the reporting period. Accounts receivable are stated after evaluation as to their collectability and anappropriate allowance for doubtful accounts is provided where considered necessary. Amortization is based on theestimated useful lives of capital assets.
Financial instruments
The Corporation recognizes its financial instruments when the Corporation becomes party to the contractual provisions ofthe financial instrument. All financial instruments are initially recorded at their fair value.
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26
AppendiX
APPENdIX AFROM THE ExECuTIVE DIRECTOR
26
AppendiX c
Saskatchewan Scrap Tire CorporationNotes to the Financial Statements
For the year ended December 31, 2013
The Corporation subsequently measures all its financial assets and liabilities at amortized cost, except for marketablesecurities 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. Fairvalue is determined by published price quotations.
Financial assets measured at amortized cost include cash and cash equivalents and accounts receivable. Financial assetsmeasured at fair value include marketable securities and investments. Financial liabilities measured at amortized costinclude accounts payable and accruals.
Transaction costs and financing fees directly attributable to the origination, acquisition, issuance or assumption of financialinstruments subsequently measured at fair value are immediately recognized in the deficiency of revenues over expensesfor the current period. Conversely, transaction costs and financing fees are added to the carrying amount for those financialinstruments 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
2013 2012Accumulated Net book Net book
Cost amortization value value
Computer equipment 223,869 165,253 58,616 81,201Computer software 23,450 22,140 1,310 333Office equipment 53,818 45,823 7,995 9,993
301,137 233,216 67,921 91,527
5. Stabilization reserve
In 2006, the Board internally restricted funds through the establishment of a stabilization reserve to ensure that funds areavailable 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 tochange at the discretion of the Board of Directors. The ending balance includes $67,921 (2012 - $91,527) invested inCapital Assets.
2013 2012
Stabilization reserve, opening balance 1,896,649 2,268,457Transfer from unrestricted reserve (482,926) (371,808)
1,413,723 1,896,649
6. 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 43,6732015 44,6012016 34,046
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2013 AnnuAl RepoRt SASkAtchewAn ScRAp t iRe coRpoRAtion
Saskatchewan Scrap Tire CorporationNotes 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 theCorporation is not exposed to significant interest, currency, credit, liquidity or other price risks arising from these financialinstruments 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 accountsreceivable, 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 changesin market prices, whether those changes are caused by factors specific to the individual financial instrument or its issuer, orfactors affecting all similar financial instruments traded in the market. The Corporation enters into transactions topurchase/sell equity investments for which the market price fluctuates.
9. Comparative figures
Certain comparative figures have been reclassified to conform with current year presentation.
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APPENdIX d2013 SCRAP TIRE SuPPlY
28
AppendiX d
TIRE TYPE uNITS SOlD (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 %
vehicle Sales
(5 PLTT Tires/unit)279,770 18 % 276,815 1 %
TOTAL 1,596,886 1,545,569
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.
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2013 AnnuAl RepoRt SASkAtchewAn ScRAp t iRe coRpoRAtion
APPENdIX E2013 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.)
TIRE TYPE
uNITS COllECTED (2013)
uNITS COllECTED (2012)
PERCENT OF CHANgE
YEAR-OVER-YEAR
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: (UNITS)
799,416 790,791
TOTAL: (wEIGhT)
47,572,027
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AppendiX F
APPENdIX F2013 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 2012PERCENT
OF CHANgE YEAR-OVER-YEAR
CRUMB 5,470,983 6,324,984 - 14 %
TIRE SHREd/MULCH 30,843,411 7,623,401 305 %
PROdUCT -
MOLdEd/STAMPEd1,781,217 915,066 95 %
ENERGY 974,660 --- 100 %
OTHER -
MATERIAL TRANSFER2,078,030 584,899 255 %
wASTE STEEL/FIBRE 2,081,981 3,757,001 - 45%
TOTAL 43,230,282 19,205,351
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2013 AnnuAl RepoRt SASkAtchewAn ScRAp t iRe coRpoRAtion
APPENdIX G2013 SCRAP TIRE DIVERSION SuMMARY
2013 (POuNDS)
2012 (POuNDS)
PERCENT OF CHANgE
YEAR-OVER-YEAR
CARRY OvER INvENTORY
FROM PREvIOUS YEAR66,813,640 38,623,210 73 %
RECEIvEd TIRE vOLUME
(POUNdS) FROM PROGRAM47,572,027 47,396,321 1.5 %
TIRE vOLUME RECYCLEd 43,230,282 19,205,351 125 %
CLOSING INvENTORY 71,603,635 66,814,180 8 %
PO bOx 1936 | REgINA, SASkATCHEwAN | S4P 3E1 420-2220 12TH AVENuE | REgINA, SASkATCHEwAN | S4P 0M8
SCRAPTIRE.SK.CA
PHONE 306.721.8473 FAx 306.721.1585 [email protected]