ANNUAL REPORT 2007

2007 HIGHLIGHTS: EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

INDUSTRY GETS BEHIND THE WHEEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

THE CYCLE OF RESPONSIBIL ITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

KEEPING BCS ENVIRONMENT FREE OF SCRAP TIRES . . . . . . . . . . . . . . . . . . . . . .9

PEAK PERFORMANCE: THE NUMBERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

MOVING TOWARDS A GREENER FUTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

C O N T E N T S

100% of scrap tires generated at TSBCregistered retailers or scrap tire generators

are collected for recycling or reuse

2007 was a year of change for everyone involved. Our

sincere thanks go out to all participants who played their

part to sustain and grow one of the most effective tire

programs in Canada. On behalf of the Board of Directors

and TSBC staff we are proud to deliver our first annual

report to stakeholders describing our 2007 activities,

achievements and highlights of our way forward.

The first major accomplishment was the smooth

transition from government to industry, no small

task for our staff and more than 2,600 retailers,

scrap tire generators, haulers and processors that

had to adapt to new procedures and rate structures.

Tipping fees that had crept into the system over

many years were eliminated. This created free

disposal options for stakeholders, removing any

incentive for illegal dumping of scrap tires.

40,000 tonnes of scrap tires were collected. This

equates to about one car tire for every person in BC

and a diversion rate of 100%.

Over 80% of the scrap tires were recycled into

products such as crumb rubber and blast mats. The

remainder was used as a fuel supplement replacing

fossil fuel alternatives.

The cost of program operations was significantly

reduced through a competitive tendering of the

management and administration function.

Tire Stewardship BC is committed to continuous

improvement in 2008 we:

Introduced an incentive available to BC manu-

facturers for the use of BC crumb. This will create

stable and sustainable markets for BC processors

and crumb supplies for BC manufacturers.

Are piloting a Community Grant program to provide

financial support to eligible BC community projects

that use BC tire derived products. This is an

opportunity to partner with local communities and

local industry to bring recycled scrap tire products

"full circle" back to the community.

Introduced a Return to Retailer program that allows

the public to return scrap tires to participating

retailer sites instead of taking them to landfills. This

will be cheaper and more convenient to the public

and will reduce the landfill costs of handling and

storing scrap tires.

With everyone playing their part, we are moving

steadily towards our goal of dealing with BCs scrap

tires within BC.

Don Blythe Mike HennessyBoard Chair Executive Director

TIRE STEWARDSHIP BC ANNUAL REPORT 2007 3

On January 1, 2007, industry got behind the wheel. Tire Stewardship BC, a not-for-profitsociety formed to represent the tire retailers in the province, took responsibility for theMinistry of Environments tire recycling program which operated from 1991 to 2006.

2007 highlightsEXECUT IVE SUMMARY

Over 80% of the tires collected in 2007were recycled into products, primarily

crumb rubber, used to manufacture otherproducts such as playground surfaces.

TSBC is accountable to both its stakeholders and the

public for the collection, processing and environ-

mentally sound disposal of all scrap tires designated

under the Recycling Regulation.

TSBC collects an eco fee on the sale of every new

tire. These fees are used to pay for transporting and

recycling BCs scrap tires, so that these tires are

disposed of in environmentally responsible ways

instead of ending up in our landfills.

With TSBC firmly behind the wheel, none of the eco

fees we collect go to government. 100% of the

money is used in the operation and enhancement of

the tire recycling program in BC.

The society is governed by a volunteer

Board, comprised of seven directors

representing the following member

organizations:

Retail Council of Canada

Western Canada Tire Dealers

Rubber Association of Canada

New Car Dealers Association

TIRE STEWARDSHIP BC ANNUAL REPORT 2007 5

I NDUSTRY GETS behindthe wheel

Don Blythe(Chair)

Western CanadaTire Dealers

Bert SauerWestern Canada

Tire Dealers

Mark EndersbyWestern Canada

Tire Dealers

Alec PigulevskyRubber Association

of Canada

Ken ReesRetail Council

of Canada

Glenn MaidmentRubber Association

of Canada

Glen RingdalNew Car Dealers

Association

TIRE STEWARDSHIP BC ASSOCIATION (TSBC) is a not-for-profit societyresponsible for operating BCs scrap tire recycling program in accordance with itsMinistry of Environment approved Tire Stewardship Plan and the BC Recycling Regulation.

OUR BOARD OF D IRECTORS

Our vision for BC is anenvironment free ofscrap tires.

TIRE STEWARDSHIP BC ANNUAL REPORT 20076

THE CYCLE OF responsibility

This model illustrates the functions of different stakeholders and the responsibilities they have to eachother and to the process.

MINISTRY OF ENVIRONMENT

TSBC MANAGEMENT & ADMINISTRATION

ADVISORYCOMMITTEE

MARKETS (CANADA & USA)

TIRE STEWARDSHIP BC ASSOCIATION

annualreport

strategicdirection &oversight $

financialincentives

fuelsupplement

tirederived

products

performancereporting

NEW TIRE& VEHICLERETAILERS

CONSUMERS

SCRAP TIREGENERATORS

eco fees

scrap tiresscraptiresPROCESSORS HAULERS

registration

financialincentive

claims

advice

TIRE STEWARDSHIP BC ANNUAL REPORT 2007 7

MINISTRY OF ENVIRONMENT

The ministry requires industry to have an approved

scrap tire stewardship plan according to the Recycling

Regulation, and monitors TSBCs annual performance.

TIRE STEWARDSHIP BC ASSOCIATION

A board of directors directs and governs all aspects of

the program and produces an annual report to demon-

strate the programs accountability to stakeholders.

ADVISORY COMMITTEE

Representatives from the retailers, scrap tire

generators, haulers, processors, manufacturers,

Recycling Council of BC and local government provide

advice on program policy and operations.

TSBC MANAGEMENT & ADMINISTRATION

Management and administration registers retailers,

scrap tire generators and processors as eligible

participants in the program. They collect eco fees from

the retailers and pay financial incentives to processors

for the transportation and processing of scrap tires.

They also manage all other aspects of program delivery

and report on performance.

NEW TIRE & VEHICLE RETAILERS

Tire retailers accept at least one scrap tire for each

new tire sold and remit eco fees to TSBC. New vehicle

dealers remit eco fees for each tire included with the

new vehicle.

SCRAP TIRE GENERATORS

Examples of generators are landfills that accept scrap

tires from the consumer and auto wreckers that

generate scrap as part of their regular business.

HAULERS

Haulers pick up scrap tires from retailers and scrap tire

generators for delivery to processors.

PROCESSORS

BC companies process scrap tires

to be used for tire-derived

products or fuel supplements as

well as sell tire-derived products

to markets in Canada and the US.

They submit claims to TSBC for

transportation and processing

incentives.

MARKETS

Purchase tire-derived products from processors for

sale or resale, or for further manufacture into new

products. Additional markets are fuel consumers such

as pulp and paper mills.

CONSUMERS

Consumers purchase new tires from retailers and pay

the eco fees. Most consumers leave their old tires with

the retailer for disposal.

Crumb rubber processing plant

40,000 tonnes of scrap tires werediverted from the environment,

which roughly equates toone car tire per person in BC

Tires of Many Shapes and SizesFor every new tire sold, the retailer collects an

Advance Disposal Fee (ADF), commonly referred to as

an eco fee, from the consumer and remits it to TSBC.

The ADFs are set by TSBC. The new fees vary by tire

type to adequately compensate for the higher costs of

collecting and disposing of larger tires.

For 2007, the fees for the different tire types were:

Off-the-road (OTR) tires are excluded from the

Recycling Regulation because there is currently no

viable recycling solution for these larger tires.

100% of fees collected go towards the operation

of the scrap tire recycling program.

Scrap Tire CollectionUnlike other product recycling

programs where consumers have to

choose between putting their end of

life product into the w