Canada Tire enters CCAA with expedited sale process

Canada Tire Company Inc. and Canada Supply & Tires NS Inc., a century-old Quebec-based tire distributor, obtained protection under the Companies’ Creditors Arrangement Act on July 20, 2026, after Canada Tire said restrictions imposed by operating lender FGI Worldwide LLC had deprived it of the liquidity needed to pay suppliers and secure inventory for its peak fall and winter selling season.

Canada Tire is a family-run tire distributor founded in 1928 and led by fourth-generation chief executive Gabriel Granatstein. Headquartered in Salaberry-de-Valleyfield, Quebec, the company distributes passenger, performance, SUV, light-truck, medium-truck and winter tires, wheels and related products across Quebec, Ontario and Atlantic Canada. Its product portfolio includes exclusive regional distribution arrangements for the Vredestein, Kenda, Minerva and Ovation brands.

The company operates six leased distribution centres in Salaberry-de-Valleyfield, Saint-Augustin-de-Desmaures, Mississauga, Dartmouth, Moncton and Mount Pearl. A seventh facility in Sherbrooke closed July 1 and is being consolidated into the Saint-Augustin operation. The application reports approximately 3,828 customer accounts and 72 non-unionized employees, while the monitor’s report lists 68 employees. Canada Supply is a Nova Scotia corporation with no operations or employees.

Canada Tire’s business depends heavily on its fall selling season. Between 2020 and 2025, July through December generated an average of 61.4% of annual revenue, with October and November alone accounting for approximately 34%. In 2025, those 2 months generated $20.7 million, or 33.6% of annual revenue. Winter inventory must be ordered by early to mid-July because of production and ocean-shipping lead times.

Sales declined from $68.3 million in fiscal 2023 to $62.6 million in 2024 and $61.7 million in 2025. The monitor attributed the decline to disruptions from a new enterprise resource planning system, a price freeze imposed by the company’s largest customer and the loss of Ontario sales personnel. The company recorded a net loss of $1.85 million in 2024, a net loss of $2.73 million in 2025 and a further unaudited loss through May 31, 2026.

As of May 31, Canada Tire reported approximately $26.5 million of assets and $32.5 million of liabilities. Its principal assets were $16.3 million of inventory and $5.4 million of accounts receivable. Liabilities included approximately $14.1 million of secured indebtedness and $17.2 million owed to suppliers, trade creditors and others.

FGI provided Canada Tire with an asset-based revolving facility under a December 18, 2025 credit agreement, with a maximum commitment of $30 million and a stated maturity of December 18, 2028. According to FGI, Canada Tire owed it approximately $14.77 million as of July 7, including a $750,000 termination fee, $70,000 of legal fees, $37,000 of consulting fees and other interest and expenses.

The filing followed the collapse of a pre-filing sale effort. Richter began canvassing the market in July 2025, contacting 30 parties, including 16 strategic buyers and 14 private equity firms. 23 parties signed nondisclosure agreements. Canada Tire entered into a letter of intent with a prospective purchaser in May 2026, but the transaction stalled amid the dispute with FGI.

Canada Tire alleges that FGI demanded repayment of a previously permitted $1.25 million overadvance within 48 hours in late May, imposed additional borrowing-base restrictions, activated default interest on June 2 and continued sweeping customer collections while limiting re-advances. FGI later proposed a forbearance arrangement that included a $500,000 paydown by July 22 and expressions of interest acceptable to FGI by August 6, but did not commit to further funding. No agreement was reached.

The liquidity restrictions left Canada Tire unable to meet supplier payment terms or place winter inventory orders, causing a key supplier suspended further shipments in mid-July.

The purpose of the CCAA proceedings is to run an expedited SISP with Richter acting as sale adviser. MNP is the monitor and FGI is the DIP lender. Counsel includes Stikeman Elliott for the debtors, Lavery de Billy for the monitor, BCF and Cassels for Rockport Capital, and Blakes for FGI.