Canada Tire: sixty thousand tires, and a telex nobody has sent

A tire company's year is decided in the autumn, and the tires that will be sold in the autumn are ordered in the spring. Canada Tire ordered 344,839 of them. By July 28 it had received 73,229, had 94,565 in transit, and was still waiting on 177,333 — and the single largest gap in that ledger belonged to one supplier in the United States, Unicorn Tire Corporation, which had 60,293 units still to ship and, according to the Monitor, was trying to redirect a further 7,774 to other customers. Together those two numbers came to 19.7% of the winter bookings, per First Report of the Monitor, July 28, 2026, para. 46.

The containers Unicorn is said to be redirecting are not, on the Monitor's account, Unicorn's to redirect. They were shipped FOB departure, which put them into Canada Tire's inventory the moment they left, and they are already charged to the company's senior secured lender. They are sitting at the Port of Vancouver. What has not arrived is a telex release — the shipping document that tells the carrier to hand the goods over — and until Unicorn remits it, the tires stay in the port. The Monitor calls the attempted redirection contrary to the terms of the sale and to an agreement Unicorn signed with the senior lender not to retain inventory, and reports that if Unicorn will not comply, it may return to the Court to compel it, per First Report of the Monitor, July 28, 2026, para. 47.

It did not have to come back. On July 29 the Court gave it the order in advance.

Nine days

When the Court first saw the company, on July 20, it gave it ten days. La Cie Canada Tire Inc. — a tire distributor the application describes as nearly a century old — and Canada Supply & Tire NS Inc. had applied three days earlier under sections 9, 11, 11.02, 11.51, 11.52, 11.7 and 23 of the CCAA, seeking a first-day initial order, an amended and restated order to follow, and an order approving a sale and investment solicitation process. Justice Castonguay granted the initial order and the SISP order that same day, appointed MNP Ltd. as monitor, and stayed proceedings for the ten days the statute allows, per First Report of the Monitor, July 28, 2026, paras. 1–2.

Ten days from July 20 expires on July 30. The comeback was heard on July 29.

In the interval the Monitor did the statutory housekeeping — a website, the section 23 notices, a notice to every known creditor owed more than $1,000, Forms 1 and 2 filed with the Office of the Superintendent of Bankruptcy on July 21 and July 27 — and set the newspaper notices for the Globe and Mail national edition and La Presse+ on August 1 and August 8. It also met the sale agent, reviewed the teaser and the prospective buyer list, and sat down with suppliers, per First Report of the Monitor, July 28, 2026, para. 8.

Its report on the business itself is four sentences long and unremarkable in the way a monitor hopes to be unremarkable: operations maintained, forecast sales levels held, no unexpected interruption of services — with the exception of the shipments from Unicorn, per First Report of the Monitor, July 28, 2026, para. 11.

What the comeback bought

The amended and restated initial order took effect at 12:01 a.m. Montréal time on July 29 and extended the stay to September 30, 2026. Three of the charges granted on July 20 roughly doubled: the interim facility from $1,250,000 to a maximum principal amount of $2,500,000, the interim lender's charge from $1,500,000 to $3 million, and the administration charge from $250,000 to $500,000 — the last securing the Monitor, its counsel at Lavery de Billy LLP, and the debtors' counsel. Two charges are new: a directors' and officers' charge of $1,500,000, and a key employee retention plan with a charge of $350,000 behind it, per Amended and Restated Initial Order, July 29, 2026, paras. 12, 17, 32, 35, 42, 45, 57.

The retention plan covers twelve people — management, financial management, supply chain, sales, and distribution-centre management — at a total of $315,000, which the Monitor describes as three months of salary at their current terms. The charge sits $35,000 above the plan, per First Report of the Monitor, July 28, 2026, paras. 32–33.

The D&O charge is sized against a specific fear. The Monitor's report puts it at one month of unpaid salaries and vacation pay plus the forecast peak exposure to sales taxes through the end of October 2026, and says the exposure grows after that: the winter selling season begins in November and generates the sales taxes for which directors are personally liable. The company holds a D&O policy with $2 million of coverage, renewed since the filing for a further six months, and the charge is drafted to apply only where that policy does not — no insurer may subrogate to it, and the directors reach it only to the extent coverage is absent or insufficient, per First Report of the Monitor, July 28, 2026, paras. 22–26.