Canada Tire: the year is decided in July

Québec law requires a car to be on winter tires by December 1 every year, and that single date organizes the whole of Canada Tire's calendar. Supplier production and ocean transit take the time they take, so tires that are not ordered by early to mid-July will not be on a shelf for the fall and winter peak. The season is bought in the summer and sold in the autumn, 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. 42–43.

On July 17, 2026 — precisely the week the orders had to be placed — Canada Tire filed for protection under the CCAA instead.

Ninety-eight years, four generations

La Cie Canada Tire Inc. was founded in 1928 by Louis Wiseman and has been passed down through his family since. It is now led by his great-grandson, Gabriel Granatstein, who is chief executive officer and holds all of the company's voting shares; he joined in 2016 as chief operating officer and general counsel, working alongside a father who had led the business for more than forty-five years, per Application for the Issuance of a First Day Initial Order, July 17, 2026, paras. 24–25.

It began in retail and became a distributor — passenger, performance, SUV, light-truck, medium-truck and winter tires, plus wheels and related products, sold to independent retailers, fleet operators, new car dealerships and sub-distributors. As at December 31, 2025 it carried approximately 3,828 customer accounts across Québec, Ontario and Atlantic Canada, Newfoundland included, per Application for the Issuance of a First Day Initial Order, July 17, 2026, paras. 26–28.

Its leased distribution centres are at Salaberry-de-Valleyfield in Québec, which is the head office, and at Saint-Augustin-de-Desmaures, Mississauga, Dartmouth, Moncton and Mount Pearl — plus Sherbrooke, which is being folded into an expanded Saint-Augustin-de-Desmaures facility as its lease runs out on August 31, 2026, after which the application says the company will operate six, per Application for the Issuance of a First Day Initial Order, July 17, 2026, para. 29.

A business with two halves

The seasonality is not a nuance in this record; it is the financial architecture, and the application sets it out in numbers rather than adjectives.

Across the six fiscal years from 2020 to 2025, the second half of the year accounted for between 58.6% and 64.3% of annual revenue, averaging 61.4%. October and November alone averaged roughly 34% of the year. In fiscal 2025 those two months produced $20,706,060 — 33.6% of everything the company sold, per Application for the Issuance of a First Day Initial Order, July 17, 2026, para. 30.

The costs do not follow that curve. Rent, warehouse salaries, distribution infrastructure and administration are substantially fixed and fall evenly through the year, so the company loses money in the first half as a matter of course and earns it in the autumn. In fiscal 2025 it recorded losses before income taxes in January, February, March, May, June, July and August — and earnings before income taxes of $1,628,248 in September, October and November alone, per Application for the Issuance of a First Day Initial Order, July 17, 2026, para. 31.

A lender looking at that pattern in June sees a borrower losing money. The borrower sees a company two months from its year.

What is owed, and to whom

Canada Tire was incorporated under the Companies Act on January 16, 1934 and amalgamated under the Business Corporations Act (Québec) on January 1, 2022. Its co-applicant, Canada Supply & Tire NS Inc., is a Nova Scotia corporation with no operations and no employees; it is in the proceeding because it guaranteed the senior debt, per Application for the Issuance of a First Day Initial Order, July 17, 2026, paras. 35–40.

That debt sits with FGI Worldwide LLC, a Delaware limited liability company acting as lender, agent and hypothecary representative under a Revolving Credit and Guarantee Agreement dated December 18, 2025 — an agreement Canada Tire entered into to refinance and repay in full a prior asset-based facility with Wells Fargo Capital Finance Corporation Canada. The FGI facility is an asset-based revolver with a maximum authorized limit of up to $30 million, maturing December 18, 2028, secured by substantially all the assets of the applicants and of the Granatstein Family Trust, which is a guarantor alongside Canada Supply. Availability turns on a borrowing base: eligible receivables at a 90% advance rate where insured — about 92% of eligible receivables — and 85% otherwise, with eligible inventory advanced against at an effective rate of roughly 55%, per Application for the Issuance of a First Day Initial Order, July 17, 2026, paras. 60–64.

As at May 31, 2026 the company's assets carried a book value of approximately $26,456,076 on an unaudited basis — $200,000 of cash, $5,400,000 of receivables, $16,300,000 of inventory and the balance elsewhere. Total liabilities were approximately $32,453,349, of which $14,100,000 was the secured indebtedness to FGI and $240,881 was accrued employee vacation, per Application for the Issuance of a First Day Initial Order, July 17, 2026, paras. 57–58.

Five supplier relationships carry the inventory: Nexen at approximately $11.0 million of annual purchases, Unicorn at $9.4 million, Goodyear at $6.5 million, Deldo at $3.7 million, and other tire suppliers at about $5.1 million, per Application for the Issuance of a First Day Initial Order, July 17, 2026, para. 44.

The company's account of the spring

What follows is the debtors' pleading. FGI is represented by Blakes, Cassels & Graydon LLP, and no answer from it appears in the first-day record.

Canada Tire says its ability to operate was severely impaired by the actions of its operating lender, which restricted its access to liquidity and "essentially, imposed upon Canada Tire a 'self-liquidation'". In late May 2026, while the company was pursuing a prospective purchaser for the entire business and had executed a letter of intent, FGI issued a demand for immediate repayment of an overadvance — $1.25 million, described as the December Permitted Overadvance, previously agreed and permitted under the credit agreement — requiring repayment within forty-eight hours, failing which it would declare an event of default, per Application for the Issuance of a First Day Initial Order, July 17, 2026, paras. 2–4.

The company says it was blindsided. Days earlier it had disclosed the letter of intent to FGI and arranged an in-person meeting between itself, the prospective purchaser and FGI's representatives at FGI's New York offices, at which — on the company's account — FGI indicated it supported the negotiations, did not expect to need repayment of the overadvance in the near term, and was even open to increasing it, inviting Canada Tire to quantify its incremental liquidity needs, per Application for the Issuance of a First Day Initial Order, July 17, 2026, para. 5.

Then, the application says, came restrictions imposed without prior notice or sufficient written explanation: assets excluded from the borrowing base with matching reductions in what could be drawn, and a default interest rate of the contract rate plus 3% activated as of June 2, 2026 alongside non-utilization fees, per Application for the Issuance of a First Day Initial Order, July 17, 2026, paras. 6, 11.

By the time of filing, the pressure had reached payroll. Canada Tire pays its employees bi-weekly, roughly $135,000 in gross payroll each time plus about $80,000 in related source deductions. It remained current on salaries — but told the Court that unless protection were granted and FGI's ability to sweep its cash daily were stayed, its ability to fund payroll would be at risk, per Application for the Issuance of a First Day Initial Order, July 17, 2026, paras. 54–55.

July 20

Justice Martin Castonguay granted the initial order on July 20, 2026, on an application brought under sections 9, 11, 11.02, 11.51, 11.52, 11.7 and 23 of the CCAA, and appointed MNP Ltd. as monitor. The stay runs ten days, until and including July 30, per Initial Order, July 20, 2026, paras. 6, 16.

The first-day charges are modest, and every one of them was set up to be revisited at the comeback. Canada Tire was authorized to borrow up to $1,250,000 — the same figure as the overadvance it had been told to repay in forty-eight hours — from FGI Worldwide LLC as interim lender, secured by an interim lender charge of $1,500,000. The administration charge was set at $250,000. The order also carries a critical supplier section granting a charge against goods to be shipped and supplied by any supplier the Court declares critical, per Initial Order, July 20, 2026, paras. 32, 35, ss. XIV and XVII.

The interim lender is the same institution the application blames for the crisis. Nothing in the first-day record explains how that came about.

A sale and investment solicitation process order issued the same day, and its milestones are already tight against the season the company is trying to reach: binding offers are due at a bid deadline of September 15, 2026, a successful bid is to be selected by September 18, and any transaction is to close no later than September 30, per Sale and Investment Solicitation Process Order, July 20, 2026, SISP milestones.

The company has also given notice of what it will seek at the comeback hearing: a key employee retention plan with a super-priority charge of $350,000 behind it, and a declaration that designated suppliers are critical under section 11.4 of the CCAA together with an order compelling them to keep shipping, per Application for the Issuance of a First Day Initial Order, July 17, 2026, para. 21(viii), (iv).

Which is the whole problem stated as a request. A distributor that must place its winter orders in the first half of July has arrived at the third week of July with a ten-day stay, a $1.25 million facility from the lender whose conduct its own application blames for bringing it here, and a bid deadline that falls two and a half months before the date Québec drivers must be on winter tires.