Ontario Tire Stewardship

2016 ANNUAL REPORT

Introduction

Driving Community Engagement

Driving Innovation

Driving the Green Economy

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TABLE OF CONTENTS

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INTRODUCTION

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2016 was a year focused on growing Ontario’s

markets for the high performance, sustainable

recycled rubber products made here in the province.

This helps to grow Ontario’s economy and supports

Ontario’s citizens in making more sustainable

choices for their homes, gardens and communities.

DRIVING SUCCESS

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tires have been recycled through the Used Tires Program. Stacked, that’s the height of over 36,000 CN Towers. Laid side-by-side, they would cross Canada 11 times.

dollars have been invested in Ontario’s economy through the Used Tires Program.

across Ontario have been awarded funding for new and need-to-be-renewed public spaces, playgrounds, fitness tracks, and other shared community spaces.

dollars in grants have been awarded to Ontario communities to support sustainable projects using Ontario-made recycled rubber products.

which starts with collecting 100% of Ontario’s scrap tires, more than...

more than

more than

more than

more than

Tires Annually.

100 million

100 million

60 projects

1 million

12 million

PROGRAM HIGHLIGHTS

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DRIVING COMMUNITY ENGAGEMENT

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In 2016, OTS awarded over $300 thousand dollars

in funding grants to 22 projects in communities

across Ontario. With our support, municipalities,

community groups, schools, and non-profit

organizations revitalized their community spaces

using products made from Ontario’s old tires.

COMMUNITYRENEWAL FUND

COMMUNITY RENEWAL FUND

ESSEX, ONHARROW PLAYGROUNDThis project was made greener through funding from Ontario Tire Stewardship (OTS) to encourage the use of products manufactured from recycled tires.

2,167

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Projects included arena and athletic flooring,

playgrounds, and sidewalks, which helped

demonstrate the durability and benefits of

incorporating recycled rubber into both

outdoor and indoor projects.

Three-quarters of Ontarians believe their

community would benefit from having recycled

tire products used in a public space.

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Approximately 9-in-10 (88%) Ontarians possess

favourable attitudes towards sustainable materials,

and deem it important for governments, local

municipalities, and developers to incorporate

sustainable materials when undertaking community

and infrastructure projects.

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ONTARIANS IN FAVOUR OF SUSTAINABLE MATERIALS

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Connecting with consumers through the RethinkTires

RoadTrip allowed OTS to engage with Ontarians

where they live, work, and play, and helped support

OTS’ message of building stronger, more vibrant

communities by using recycled rubber products.

During our 34 stop Roadtrip and participation at

9 consumer and trade shows, OTS engaged and

educated 150,000 consumers in one-on-one, direct

interactions. We conducted over 11,000 tire safety

demonstrations and inspired consumers to rethink

their relationship with tires.

RETHINK TIRES ROADTRIP & CONSUMER EDUCATION

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OARA: Celebrating its 7th year in 2016, OTS was proud to support OARA Tire Take Back. Hosted in partnership with Ontario Automotive Recyclers Association and Ontario Federation of Agriculture, this community collection event amassed over 64,000 tires and generated donations supporting The Sunshine Foundation of Canada. Since its inception, OARA Tire Take Back has generated over $1 million in donations, making dreams come true for Sunshine Kids across the province.

In 2016, OTS focused on maintaining its diversion rate, and continued to promote the responsible disposal of old tires while creating new opportunities and markets for recycled rubber products.

STC: OTS managed 42 Special Tire Collection (STC) events in 2016, which resulted in over 27,000 tires collected, or approximately 480 tonnes of tires.

COMMUNITY COLLECTION ACTIVITIES X 27,000

TONNES480

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DRIVING INNOVATION

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In 2016, OTS provided almost $1 million dollars in

grants to Registered Product Manufacturers to

help support research and development projects

in Ontario. These projects included equipment

upgrades to help drive efficiencies in manufacturing

processes, implementation of new technologies to

improve product quality, and investments into new

applications of crumb rubber. The manufacturing

innovations of our Program Participants are laying

the foundation for a robust circular economy in

Ontario for years to come.

RESEARCH & DEVELOPMENT HELPING DRIVE GROWTH

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OTS believes in community, innovation and sustainability. We proudly hosted our 3rd Ontario Tire Stewardship Student Design Challenge, in the fields of landscape architecture and industrial design. With the goal of igniting creative environmental landscape architecture and innovative industrial design, nine teams of students from universities and colleges across Ontario competed to reimagine their relationship with tires. The results were impressive. By incorporating recycled tire materials, the winning team from University of Toronto reimagined the landscape at Artscape Youngplace in Toronto. And by showcasing the aesthetics, functionality and high performance of tire-derived products, Sheridan College’s winning industrial design, The Shaw Bench, is in prototype and could soon find its way to an outdoor space near you.

2016 STUDENT DESIGN CHALLENGE

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DRIVING THE GREEN ECONOMY

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In 2016, OTS registered Haulers delivered 136,748

tonnes of tires to registered Processors in Ontario.

Processing capacity continues to significantly

exceed available scrap tire supply, creating a

unique (among North American jurisdictions) and

competitive market for these recycled materials.

FOSTERING ACOMPETITIVE MARKETPLACE 136,748 TONNES

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OTS has helped Ontario consumers make environmentally sustainable choices through its Retail Rebate Program. By providing direct-to-consumer, at-the-till rebates on the purchase of made-in-Ontario recycled rubber products such as landsacpe mulch, garden borders, patio tiles and planters through leading retailers across Ontario, OTS is driving the market for goods made from recycled Ontario tires.

The 2016 Rebate program was the most successful to date, expanding to include additional retailers and products. Offering rebates on over 66 different items at leading retail chains across Ontario, OTS funded over $900,000 in redeemed rebates – savings that directly benefited Ontario consumers. Over 168,000 recycled products were sold through the Rebate program, accounting for 680 tonnes of recycled rubber.

RETAIL REBATE PROGRAM

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A large majority (84%) of Ontario residents express interest in seeing a larger variety of products available in the market which are made of recycled tires.

Through a continuous focus on identifying efficiencies and managing costs our program has been able to continuously reduce the cost of recycling tires in Ontario.

Since the Program launched in 2009, OTS has reduced the cost of recycling Passenger tires by 39%, meaning lower costs for businesses and consumers.

Sales

Transporta

tion/Ha

uling

Processing/R

ecycling

Collection

R&D/Mark

etDevelop

ment

Admin

Regulatory

P&E

Other

2016 EXPENDITURE BREAKDOWN2016 DEMAND FOR RECYCLED PRODUCTS CONTINUES TO BE STRONG

Transportation/Hauling

Processing/Recycling

Collection

R&D / Market Development

Admin

Regulatory

Promotion & Education

Other

30%3%

3%

8%

9%

11%

12%

24%

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Throughout 2016 OTS has continued its focus on delivering the diversion results that ensure the recycling of 100% of the available

scrap tires and programs and funding to support the growth of innovative and sustainable markets for recycled products made in

Ontario. Stimulating the end markets for recycled tire products and moving these uses “up the value chain” has been a hallmark of

the OTS program since inception and the combination of R&D support, demonstration project financing and rebates offered at retail

to Ontario consumers has helped to grow a tire recycling industry in Ontario that is competitive, innovative and second to none in the

world in terms of the recycling outcomes delivered. OTS is proud to be a driver of the circular economy in Ontario, and is recognized

internationally for the progressive and market-focused design of the program we deliver.

But 2016 has also been a difficult year for OTS. The Board confronted challenging issues related to a misappropriation of funds and

worked diligently to successfully resolve them. In the end OTS achieved the full recovery of the funds and further demonstrated the

effectiveness of its oversight by delivering the 6th consecutive Tire Stewardship Fee decrease on Passenger and Light Truck tires, and

an almost 6% decrease in Off-Road tire rates. This track record of delivering cost savings is unparalleled among stewardship programs

and highlights the diligence of the Board in executing its duties as a trustee of the funds paid by Stewards.

Since program launch change has been a constant companion to OTS - in the new tire markets, in the tire recycling industry and in the

political environment. In November of 2016 the Government of Ontario proclaimed into force the Waste Free Ontario Act (WFOA). This

step marks the beginning of a process that will see OTS (indeed all Industry Funding Organizations) wound down and tire producers

becoming individually responsible for implementing tire diversion solutions.

As OTS looks to the future and to the significant changes to come the Board and leadership of OTS remain committed to delivering the

program in accordance with our mandate. Undoubtedly 2017 will also require OTS to turn its attention to planning for wind-down, and

in that process we will look for a responsible solution to ensure the best elements of the current program and the gains made in tire

recycling in Ontario are preserved.

As always my thanks go to the Directors, Staff and many stakeholders of OTS for their continued commitment, professionalism and

diligence on behalf of the organization. It is thanks to their collective efforts that we can be justifiably proud to deliver world-class

end-of-life tire management results to Ontarians.

Sincerely,

Glenn Maidment,

Chairman

Having led OTS since the launch of the program in September 2009 I feel that the results we have achieved in 2016

demonstrate more than ever before the commitment of the entire organization to delivering the pre-eminent stewardship

program in the world. Since day one we have been focused on supporting the growth of a domestic industry that is vibrant,

competitive and innovative, and capable of matching up against that in any other jurisdiction, period.

The proclamation of the Waste Free Ontario Act and the negative narrative that has dominated the media over the past year

make it even more important than ever to assess the true merits of the program and the results that have been achieved in

just over seven years: a 200% increase in tire recycling capacity and manufacturing using Ontario-produced crumb rubber,

tripling of the Hauler sector, improving service and market competition; the elimination of illegal dumping of used tires and

clean-up of historic stockpiles; millions of dollars flowed back to Ontario communities and consumers to grow demand for

Ontario-made recycled rubber products; and improvements in tracking and reporting used tire diversion that have reduced

costs and improved both program and service provider efficiency. All these successes were realized by OTS while we also

reduced diversion costs and fee rates by up to 40%. This is a track record that I am extremely proud of, and one that reflects

the true value of the program to Ontario.

To be sure there have been challenges, the industry continues to evolve and this changing market dynamic has resulted in

disruption to some service providers business models. While OTS has an obligation to ensure a fair and competitive market,

our role is not to intervene on behalf of any one company who may be facing competition from another. This has required

us to walk a fine line between monitoring how the business is changing while not interfering in commercial relationships

between organizations. Our approach may not always be perfect, but the results speak to the successful outcomes, no

Collector has gone without service, no tires have been left unprocessed and diversion rates continue to be high.

This tradition of financial and environmental diligence and results are a credit to the people who work here on the OTS team,

and to the capability and entrepreneurial spirit of the service providers with whom we work. To each one of them I extend

my thanks for their efforts and the results we have achieved together this past year.

Sincerely,

Andrew Horsman,

Executive Director

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MESSAGE FROM THE CHAIRMAN MESSAGE FROM THE EXECUTIVE DIRECTOR

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THE ROAD WE’RE TRAVELLING TOGETHER.