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.

The supplier order

The relief with the most immediate operational bite divides the tire suppliers into two schedules on a single distinction: whether they agreed. Six suppliers who had constructive discussions with the company after the initial order and were willing to keep shipping if they were protected went into Schedule B as essential suppliers — Maxtrek Tyre Limited, Gubersail Tyre (Jiangsu) Co., Ltd., Maxxis International – Canada, American Kenda Rubber, Goodyear Canada Inc., and Nexen Tire Canada Corporation. Each is granted a charge over the goods it supplies after the date of the order and the proceeds of their sale, per Amended and Restated Initial Order, July 29, 2026, paras. 61, Schedule "B".

Schedule A has one name on it. Unicorn Tire Corporation is declared a critical supplier under section 11.4 of the CCAA and ordered to continue supplying the debtors, with the same species of charge over what it ships, per Amended and Restated Initial Order, July 29, 2026, paras. 58–60, Schedule "A".

Behind the charge sits a piece of warehouse choreography the Monitor built with management, and it is the part of this record a professional reader will want. Goods from a critical supplier are routed to a location called RESERVE before they arrive. On arrival the container is received into RESERVE and nowhere else. While there, the goods cannot be picked against a customer order and do not appear on the website. They leave only on an approved transfer order raised against a forecast requirement — and the release is what triggers payment to the supplier, within the period the order sets. Balances and every movement in and out are reportable at any date, per First Report of the Monitor, July 28, 2026, para. 48.

The Monitor's argument for why this prejudices nobody rests on the same mechanism: the supplier charges attach only to goods the company does not yet own or possess, and so fall outside the senior lender's existing security. Should a SISP transaction close, the amounts owing for critical and essential supplier inventory are to be paid from the proceeds, and any transaction must allocate the purchase price to that inventory dollar for dollar, per First Report of the Monitor, July 28, 2026, paras. 50–51.

Who is funding this

The interim facility is from FGI Worldwide LLC — the senior secured lender whose conduct the company's own application blames for bringing it to court. The application, filed July 17, alleges that FGI restricted access to liquidity and "essentially, imposed upon Canada Tire a 'self-liquidation'", and that it demanded repayment of a $1.25 million permitted overadvance inside forty-eight hours, days after a meeting at its New York offices at which it had said it was supportive of the sale discussions and open to increasing that same overadvance, per Application for the Issuance of a First Day Initial Order, an Amended and Restated Initial Order and a SISP Order, July 17, 2026, paras. 2–6. Those are allegations in a pleading; FGI is represented by Blakes, Cassels & Graydon LLP, and nothing in the filed record yet carries its answer.

The service list as of July 20 identifies a different institution as the debtors' proposed interim lender: Rockport Capital Inc., of North York, with BCF LLP and Cassels Brock & Blackwell LLP as counsel, per Service List as of July 20, 2026, p. 2. The order of July 29 authorises borrowing from FGI.

The fortnight that decides it

Four deadlines now sit within fifteen days of each other. Binding offers are due at the bid deadline of September 15, 2026; a successful bid is to be selected by September 18; any transaction is to close no later than September 30; and the stay expires on September 30, per Sale and Investment Solicitation Process Order, July 20, 2026, SISP milestones and Amended and Restated Initial Order, July 29, 2026, para. 17.

Between now and the bid deadline the company has to get the winter on the water. Seven exhibits — R-16 through R-19, R-21, R-25 and R-25A — are sealed, so the reserve prices and the buyer list are not on the public record, per Amended and Restated Initial Order, July 29, 2026, para. 86. What is on the record is the inventory table, and it says that on July 28 more than half the tires the company had bought for the season it is being sold into had not yet reached it.