Canadian Tire Proposal

1. CanadianTireCorporation,Limited
Canadian Tire Marketing Plan

2. Introduction

3. 3
OUR ROLE IN THE CANADIAN RETAIL SPACE
Estimated Market Size
$45.0 Billion $20 Billion $3.8 Billion $19.0 Billion
$52 Billion
(receivables)
Retail Sales Revenues Receivables Comp Sales Retail Sales
$6.8 Billion $1.3 Billion $3.2 Billion (1) >4-5% $790.7 Million
Canadian Tire participates directly in a commercial marketplace valued
at close to $140 Billion. With leadership positions in our businesses,
we have considerable space ahead of us to grow.
(1) Gross average receivables.

4. Canadian Tire: More than just tires
• Canadian Tire today is:
} More than $9 billion in retail sales
} An inter-related network of businesses engaged in
retail, retail-related and financial services businesses
} 1,100 stores and gas stations
} We operate Canada’s most-shopped general
merchandise retailer
} We are the 2nd largest MasterCard issuer in Canada
based on the number of active accounts
} We operate Canada’s largest independent gasoline
retailer, outpumping integrated retailers on average
more than 2:1 per site.
4

5. 5
Canadian Tire is a growth company
Top-quartile TRS among North American retailers
T
T
R
R
S
S-- 2
20
00
01
1--2
20
00
05
5 286% *
2001
2002
2003
2004
2005
Annual TRS
40.3%
30.4%
26.5%
43.0%
24.7%
Ranking
Second quartile
Top quartile
Second quartile
Top quartile
Top quartile
* December 31, 2000 to December 31, 2005

6. PERFORMANCE COMPARED TO ASPIRATIONAL
TARGETS
6
2001- 2005
Performance
2005
Performance
Comparable store
sales increase 2,4
2.6%1
3.0%
8.3% 8.7%
EBITDA and minority
interest increase 3
11.7% 12.2%
16.9% 12.2%
8.7
1
9.7%
%
1 Averages of 2001 to 2005 performance, not calculated on a compound annual growth rate (CAGR) basis.
2 Represents sales growth at CTR only.
3 These metrics are expressed in terms of (CAGR).
4 Average of 2001-2005 percentages
Aspirational
Targets
3-4%
Gross Operating Revenue 3
>10%
10-15%
12-15%
>10%
Basic Earnings per share
increase 3
4
After-Tax ROIC

7. Canadian Tire
has delivered
consistent financial
performance
272
307 316 324
350 362
460
535
630
721
161
0
200
400
600
800
'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 YTD
3/06
Cash Flow from
Operations ($ millions)
CONSOLIDATED FINANCIAL PERFORMANCE
7
3.9 4.1
4.3
4.7
5.2 5.4
6.6
7.2
7.8
1.6
2
4
6
0
'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 YTD
3/06
8 Gross Operating Revenue
($ billions)
5.9
1.49
1.77
2.09
1.85 1.85
2.21
2.54
2.99
3.60
4.04
0.66
0
1
2
3
4
5
'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 YTD
3/06
Basic EPS from
continuing operations ($)

8. 8
Financial Snapshot: A position of strength
(1) Cash generated from operations
Q1 2006 Q1 2005 +/-
Retail Sales $1.71 billion $1.60 billion 6.9%
Revenues $1.57 billion $1.51 billion 4.2%
Net Earnings $47.6 million $35.3 million 34.9%
Cash(1) $160.7 million $139.6 million 15.1%
Assets $5.3 billion $5.0 billion 5.5%

9. Distribution of Q1 2006 Revenues and Earnings
GROSSOPERATINGREVENUE
9
EarningsBeforeTaxes
CTR
49%
Mark's
11%
Petroleum
2%
Financial Services
38%
CTR
61%
Mark's
8%
Petroleum
21%
Financial Services
10%

10. Detailed
underlying
strategies
are in place
to execute
Canadian
Tire’s
2005-2009
Strategic
Plan
imperatives
2005-2009 STRATEGIC PLAN CHARTS OUR COURSE
FOR GROWTH
10
Grow sales and revenue
Improve earnings performance
Embed a Customers for Life Culture
Extend growth and performance
beyond 2009
Enhance value creation through financial
flexibility and maximization of real estate
4
5
3
1
2

11. CTC’s competitive advantage exists through its brand,
loyalty and product mix
Reach & scale
Brand recognition
& trust
Real estate
Platform of inter-related
businesses
Canadian Tire
‘Money’
Innovative
formats, products
& services
11

12. 12
118
83
115
130
0
CTROnly CTR/CTP CTR/OMC CTR/OMC/CTP
50
100
150
Indexed ShareofSpending at CTR
Indexed
Shareof
wallet
at
CTR
*
(Average
of
all
CTRCustomers=
100)
Average
Annual
OMC
Spend
at
CTR
and
CTP
$1,000
$2,000
$3,000
$4,000
$667 $1,003
NoCTP CTPAverage Octile 1
$414
$638
$2,701
OMCSpendatCTP
OMCSpendatCTR
$0
SIGNIFICA NT VA LUE EX ISTS IN INTE R-RELATE DNE
SS
• Customers who shop at
CTP and use OMC spend
significantly more at CTR
than the average customer
• CTR shopping frequency
drastically increases when
customers begin using CTP
• OMC customers who shop
at CTR and fill-up at CTP
are Canadian Tire’s best
customers
Average Cardholder
TotalSpendonOMC $3.1M $6.7M $11.8M
* Universe of all CTR customers (based on customer survey data).

13. Five major inter-related strategic priorities
Loyalty CTFS Share Co-location
of Tender of Mark’s at CTR
sites
Co-marketing Exploit
petroleum
advantages
13

14. Business Unit Strategic Focus
14

15. Canadian Tire Retail (CTR): Strategic Highlights
2006
• Concept 20/20 Store Renewal
Program - up to 80 projects
• Exciting, New and Exclusive
products
• Global sourcing
2005-2009
• 300 store projects, including 100
new or replacement stores and
200 retrofits
• 50% global sourcing target
• Inventory systems
15

16. 3 Differentiators
• Exciting, new &
exclusive products
• Impactful
merchandising
• Inspiring events &
promotions
4 Imperatives
• Right selection &
quality
• Price assurance
• Friendly, quick &
helpful assistance
• Products in-stock
CTR Strategy
Discount
Stores
Home Improvement
Warehouses
Department/
Specialty Stores
CANADIAN TIRE RETAIL (CTR): DIFFERENTIATION
STRATEGY
16

17. 17
Three primary CTR product divisions
Automotive
Parts
Auto Custom
Car Care & Accessories
Tires and Batteries
Auto Service
$1.8 billion
Home
Home Décor
Home Repair &
Maintenance
Tools
Consumables Electronics
& Home Office
Kitchen & Small
Household Appliances
Storage & Organization
$2.8 billion
Leisure
Outdoor Recreation
Sports
Backyard Living
Lawn & Garden
Outdoor Tools
Seasonal
Footwear & Apparel
$1.9 billion
Retail Sales by
Product Divisions
As of December 31, 2005
43%
30%
27%

18. Categories with
Merchandise
Group
Highest Market Share
Among Mass
Merchants
Strengths Growth Areas
Automotive
Home
Leisure
22/35 (63%) Light to medium DIYer B Car Care, Accessories, Power
Sports, Auto Electronics
18/43 (42%)
Kitchen & Home Appliances,
Storage & Organization, Tools
B Home Repair & Maintenance,
Home Décor and
Organization, Renewable
Energy
36/58 (62%) Hunting, Fishing, Camping, B Footwear & Apparel,
Outdoor Tools, Backyard Backyard Living, Seasonal
Living, Pool Equipment &
Accessories
CANADIAN TIRE RETAIL’S MARKET POSITION IS VERY
STRONG
18
Weare themarketleaderin56%ofourcategories

19. 415 389
359 327
293
244
208 180 161 143 130 117 103 88 70 54
67 103
137
188 233 270 290 305
302
292
238
188
158
128
129
199
249
299
426 430 430 432 441 450 451 462
53
470 475 477 481
423
8
424
35
457
25
452
4
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006F 2007F 2008F 2009F
Traditional stores New Format stores Concept 20/20
CTR’S STORY IS ONE OF TRANSFORMATION
19
Planned investment in CTR stores is ~$850-900 million

20. Year 1 Sales Growth
(53 stores)
New On Plan
Replacement 67%
Retrofit 10%
Retrofit Expansion 20%
Concept 20 / 20 Performance
Comparable Sales Growth
2003
Stores
2004
Stores
Year 2 4.9% 6.8%
Year 3 5.8% N/A
Performance of the Concept 20 / 20 store format led to the
decision to accelerate CTR’s national roll-out
20

21. CONCEPT 20/20 PERFORMANCE
DRIVEN BY COMBINATION OF
INCREASED BASKET SIZE AND
CUSTOMER COUNT
21
Average Transaction Average Customer Count Change
+21.7%
$32.77
+15.3%
$37.81
$-
$15
$30
$45
Year0(Pre-20/20) Year1(Post-20/20)
200,000
400,000
600,000
Year0(Pre-20/20) Year1(Post20/20)

22. CTR marketing a differentiator
Strong Marketing Platforms
⏷Canadian Tire catalogue
⏷Flyer program
⏷Exciting, New and Exclusive products
Exclusive
Brands
30% of CTR products are private-label
22

23. CTR is investing in the infrastructure
to take the ENE concept to the “next” level
⏷World search capabilities
⏷Advanced consumer feedback methods
⏷Global sourcing infrastructure
⏷New “I nnovation” and “Style and Design”
management teams
⏷Trend and category innovation focus ( versus item
focus)
23

24. GLOBAL SOURCING IS CRITICAL TO CTR’S SUCCESS
24
▼ Provides margin
protection
⏷ Provide stronger retail
sales results
⏷ “Breakthrough”
price points
⏷ Access to innovative
products
⏷ Promotional
program
⏷ Supply chain evolution
to handle offshore
growth
50%
35%
65%
Domestic Offshore
2005 Percentage of
Products Sourced Offshore
2009F

25. 25
1998
⏷ China had 1 port in
the world’s top 4 ports
for container
throughput
⏷ China represented
24% of the
throughput for the
world’s top 10 ports
China: Some Context
2005
⏷ China had 3 ports in
the world’s top 4 ports
for container
throughput
⏷ China represented
57% of the
throughput for the
world’s top 10 ports
Source: Century Logistics

26. Canadian Tire: Growth through Global Sourcing
⏷ Canadian Tire Retail has been sourcing products globally
since 1970s, and developed strong working relationships
with suppliers throughout Asia
1970’s 1980’s 1990’s 2000’s
26

27. Supply Chain Capacity for Offshore Growth
V To enhance our capabilities and prepare for continuing offshore growth,
we have expanded our Supply Chain presence to Asia
V In March 2005, the Supply Chain Operations - Asia team began
working out of our Cantire (China) Ltd. office in Hong Kong.
VDirect Supply Chain execution in Asia
VProvide forecasting support and education to suppliers
VDeal with Supply Chain issues at origin and improve vendor relations
VProvide analysis to category managers in Canada and Asia
VWork with suppliers on factory consolidation and establishing Export
Licensed Consolidation facilities
VAct as a resource to support packaging quality, quantity and sizing
decisions
27

28. CANADIAN TIRE USES 29 PACRIM PORTS IN 10
COUNTRIES
28
Nava
Sheva
Cochi
n
Penang
Port
Kelang
Pasir Gudantg/
Tanjung Pelepa
Hai
Pong
Xingan Dalian
g
Qingda
o
Fuzhou
Keelun
g
Xiamen
Yantia
n
Gongyi
Suraba
ya

29. Canadian Tire Financial Services: Strategic Highlights
2006
29
• Growing average balances
• Improving productivity
• Testing new card products and
services
2005-2009
• Retail banking pilot
• New cards and loan products
• Insurance and warranty products

30. Financial Services has significant competitive advantages
World class
call centres
Low cost
acquisition
channels
Sophisticated
credit risk
management
systems
Brand trust
& loyalty
Technology
Partnerships &
Platforms / Scale
30

31. Personal (Term) Loan Portfolio
$350MM
80,000
Q1-2006
TARGET
(END OF 2007)
31
Target pretax return on receivables of ~ 4.0%
# Accounts ~ 38,625
Gross Receivables $294MM

32. Evaluating longer-term opportunities
• Canadian Tire is actively pursuing the development of
potential new financial services for testing, such as:
Mortgages
High Rate Savings Accounts
GICs
• As with all new products or services, we will take a
measured and balanced approach to testing of any new
services.
32

33. Canadian Tire Petroleum: Strategic Highlights
2006
33
• Q pilot concept
• Expanding network – Minimum of 3
new gas bars, approximately 10 re-
brands
• Growing non-gasoline sales
2005-2009
• Q pilot concept
• Expand network by adding 25 to 35
gas bars and through re-branding
• Grow non-gasoline sales

34. CTP’s market position brings value to other business units
• CTP contributes materially to the profitability of CTFS and CTR,
especially in terms of customers shopping one or more branded
divisions
• The shopping frequency of CTR customers increases by 28% just
one year after starting to use CTP
• 40% of CTR customers state their shopping at CTR increased since
buying gas at CTP
34

35. Petroleum initiatives to grow sales and revenue
V Q - redefines the convenience
offer and ‘leaps’ over the
competition
V Re-branding strategy
V Grow the non-gas business
V Capitalize on CTP’s high fuel
volume
35

36. PartSource: Strategic Highlights
2006
36
• Network expansion – up to eight
new stores in Ontario
• Grow comparable store sales
2005-2009
• Network expansion to more than
100 stores through new stores and
small-scale acquisitions
• Operations review

37. PartSource Key Initiatives to Grow Sales and Revenues
⏷ More than 100 stores planned by the end of 2009
⏷New store build
⏷Small-scale acquisitions
⏷ Focused growth in Ontario and Prairies
⏷GTA expansion
37
PartSource adds incremental sales and expands
Canadian Tire’s total market penetration

38. Mark’s Work Wearhouse: Strategic Highlights
2006
38
• Increase comparable store sales
growth
• Network expansion by 15 to 21
stores.
• 24 additional store retrofit /
renovation projects
2005-2009
• Network expansion to 395 to 400
stores
• Expansion of category offerings
and product lines

39. Mark’s growing contributions to Canadian Tire
$21.7
$65.0
2002 2005
Mark’s Earnings Contributions
(Before Tax)
The earnings contribution of
Mark’s has climbed
close to 200% since the
acquisition by CTC in 2002.
• Market-leading rates of growth
in apparel and footwear retailing
• Significant increases in all
categories and in all regions
• Expansion into relatively new
segments such as business-to-
business, healthwear and
ladieswear
39

40. Strategic Plan Imperative: Customers for Life Culture
⏷ Embedding a ‘Customers for Life’ philosophy is a 2005-2009
Strategic Plan Imperative
⏷ Canadian Tire has unrivalled customer relationships and
more than 225 million interactions every year
⏷ Each business has targeted business activities to embed
Customers for Life into the organization:
⏷ Customer-centric product design and development
⏷ Store auditing and customer measurement
⏷ Customer database relationship management
40

41. 2005 - 2009 Strategic Plan: New Business Development
⏷ Develop opportunities that materially contribute to
CTC’s growth in 2009 and beyond
⏷ Pursue opportunities to leverage our core
capabilities
⏷ Focus on retail, retail-related and financial services
opportunities in Canada
⏷Acquisitions
⏷Joint ventures, strategic alliances
⏷New store concepts
41

42. 2005-2009 Strategic Plan: Financial Flexibility
VSteady cash flow from operations
$721MM in ’05
V $640 million in committed but unused
credit lines*
V N o short term debt
V Long-term debt to total capitalization
is 31.7%*
V Rigorous capital allocation program
based on risk / return of each project
Cost
Productivity
Capital
Management
Funding
Optimization
* as at December 31, 2005
42

43. Canadian Tire Real Estate
43

44. Canadian Tire’s Real Estate Portfolio
Real estate development and management is a core competency that
enables effective expansion of the company’s store network
⏷ $2 billion book value of unencumbered real estate
⏷ active store properties (own over 70%)
⏷ surplus store properties for disposition
⏷ special projects in large urban centres
⏷ Realized approximately $50 million of gains and $250 million of proceeds
on the disposal of surplus property in the last 10 years and we expect this
to continue
⏷ Sale-lease back of two distribution centres in early 2006, realized $46M-
$50M gain, amortized over 21-year lease
44

45. Corporate Governance
• MD&A recognized by Canadian Institute of Chartered Accountants as "model
of disclosure"
• Full disclosure of compliance with Canadian Securities Administrators
guidelines
• Independent Chairman, separate from CEO
• Majority of Directors are independent
• Rigorous training and evaluation of directors
• Independent Audit Committee and disclosure of all auditor fees paid
• Independent Management Resources Committee and disclosure of
compensation advisors and fees paid
• Share ownership guidelines for Directors and Officers
• Executive compensation closely tied to shareholder returns
• Minimal earnings dilution from prior stock options
• Limited stock appreciation rights granted to Senior Management in 2006
45

46. Summary
● Effective execution of imperatives will:
● Enhance our competitive position
● Support life-long relationships with our customers
● Result in higher revenue and earnings
● Entire organization focused on achieving financial aspirations
● We believe achievement of financial aspirations will lead to
top-quartile TRS
46