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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD ANNUAL REPORT 2003 AND MANAGEMENT PLAN 2004-2005

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Page 1: THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD...Manufacturers, retailers, car dealers, garage operators, transportation firms, drivers and tire consumers in every New Brunswick community

THE NEW BRUNSWICKTIRE STEWARDSHIP BOARD

ANNUAL REPORT 2003 AND MANAGEMENT PLAN 2004-2005

Page 2: THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD...Manufacturers, retailers, car dealers, garage operators, transportation firms, drivers and tire consumers in every New Brunswick community

THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD2

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

THE NEW BRUNSWICKTIRE STEWARDSHIP BOARD

P. O. BOX 308, STATION AFREDERICTON, NEW BRUNSWICKE3B 4Y9

102 QUEEN STREET, SUITE CFREDERICTON, NEW BRUNSWICKE3B 1A5

TEL: 506 454 8473 (TIRE)FAX: 506 454 8471TOLL FREE: 1 888 322 8473

EMAIL: [email protected]

Page 3: THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD...Manufacturers, retailers, car dealers, garage operators, transportation firms, drivers and tire consumers in every New Brunswick community

3

THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

March 31, 2004

Honourable Brenda Fowlie

Minister of Environment and Local Government

P.O. Box 6000

Fredericton, NB

E3B 5H1

Dear Minister:

On behalf of the Board of Directors of the New Brunswick Tire Stewardship

Board, I am pleased to submit our Annual Report for the fiscal year

January 1, 2003 to December 31, 2003. The Report also includes the

Management Plan for fiscal years 2004 and 2005.

Sincerely,

David I. Besner

Chairperson

New Brunswick Tire Stewardship Board

Attach.

LETTER TO THE MINISTER

Page 4: THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD...Manufacturers, retailers, car dealers, garage operators, transportation firms, drivers and tire consumers in every New Brunswick community

THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD4

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

New Brunswick’s Tire StewardshipProgram (TSP) has now diverted5␣ million scrap tires from landfills acrossthe Province since its inception in 1996.

From the outset, the TSP has placed ahigh priority on stimulating ‘value-added’ manufacture of new rubber-based products inside New Brunswick,rather than shipping raw or partiallyprocessed material to other jurisdictions.The job-creation advantages of thisapproach have proven significant on aprovince-wide basis, as well as in Minto,NB, which is home to Tire RecyclingAtlantic Canada Corporation (TRACC).

Some of the most advanced tire recyclingtechnology in the field is now in place atTRACC’s Minto plant, and furtherexpansions in production capacity areplanned for the year ahead. Fromlivestock mattresses to high end roofingtiles, truck and trailer mud flaps,assembly line rollers, or custom-madeindustrial gaskets, the range of productsmade from our recycled scrap tires growsmore diverse every year.

The TSP collection system operates on ayear round basis in all regions ofNew␣ Brunswick. More than 87% of allscrap tires generated in the Provincewere transported to TRACC in 2003,which was one of the highest ‘capture’rates achieved across North America.Year-end totals also show that morethan 98% of production output atTRACC fell under the ‘value-added’category. Such data demonstrate whyNB’s tire recycling system is seen as oneof the most effective in Canada.

CHAIRMAN’S REPORT

At the same time, it’s important torecognize that North-America’s tirerecycling industry is a volatile highlycompetitive field, and the TSP’s futuregrowth cannot be taken for granted.There’s no doubt that our long standingemphasis on ‘home-grown’manufacturing is proving to be a majorstrategic advantage, at a time whenhigher inventories and lower prices forbasic ‘rubber crumb’ have become thenorm in many parts of the continent.Our growing focus on off-shore marketopportunities for New Brunswick’s tirerecycling output is another area wemust continue to emphasize, and isexpected to further benefit the TSP inyears to come.

The past, present and future success ofNew Brunswick’s TSP reflects activesupport from the ProvincialGovernment and year-roundcooperation on the part of everyoneinvolved in the tire industry.Manufacturers, retailers, car dealers,garage operators, transportation firms,drivers and tire consumers in everyNew Brunswick community all play apart in making the TSP system work sowell. The Board sincerely appreciatesthe opportunity to be involved inassisting that process.

David I. BesnerChairman

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

Letter to the Minister

Chairman’s Report

Legislative Mandate ..................................................................................................... 5

Management Plan ........................................................................................................ 6

2003 Highlights .......................................................................................................... 10

• Industry and Markets

• Special Projects

• Operations

Trends ......................................................................................................................... 12

Board of Directors ...................................................................................................... 13

Financial Statements .................................................................................................. 14

• Auditor’s Report ..................................................................................................... 14

• Statement of Financial Position .............................................................................. 15

• Statement of Operations ........................................................................................ 16

• Statement of Changes in Net Assets ...................................................................... 17

• Statement of Cash Flows ........................................................................................ 18

• Notes to Financial Statements ................................................................................ 19

TABLE OF CONTENTS

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD6

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

The New Brunswick Tire StewardshipBoard (NBTSB) is an organization whichallows industry and stakeholders to beaccountable for scrap tire environmentalstewardship initiatives. A not-for-profitassociation, the NBTSB is responsible forfulfilling the following legislativemandate:

The Clean Environment Act (o.c. 96-739)provides the authority for the NBTSB tomake scrap tires a designated material.

The New Brunswick Regulation 96-82under the Act, allows the Board toestablish and administer a scrap tiremanagement program. The programincludes distribution management,supply, use, storage, collection,transportation, recycling, processing,disposal and other tire and scrap tirehandling.

In addition, the Regulation providesauthority to levy $3.00 per tire with rimsize 8” to 17”, as well as levy of $9.00per tire with rim size greater than 17”to␣ a maximum of 24.5” for advancedisposal surcharge. Furthermore, theRegulation stipulates that the Boardmay␣ establish a fee for tires with a rimsize exceeding 24.5” and may vary thefee according to size, usage or otherclassification.

LEGISLATIVE MANDATE

Under the Act and Regulation, the NBTSBis required to provide the Minister ofEnvironment and Local Government anannual audited financial statement, amanagement plan and an annual reportpertaining to the fiscal year:

a) the number of tires supplied by allholders of a supplier registration,

b) the amount of fees remitted to theBoard, including, separately, theamount of interest on outstandingfees and the amount of penalties,

c) the number of scrap tires collected,

d) the number of scrap tire processed,

e) the cost of collection and processing,

f) the results of any inspectionsconducted on suppliers or othersunder this Regulation,

g) a description of all enforcementactivities,

h) a description of other relatedactivities of the Board,

i) a description of emerging trends inthe field of scrap tire management.

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

NBTSB MISSIONSTATEMENT

To administer with quality and care, arecycling program for tires in accordancewith the Clean Environment Act.

MANAGEMENT PLAN

PRINCIPLES• To develop a stable industry

through strong partnerships.

• To develop strategies that areeconomically sound andenvironmentally friendly.

• To implement those strategies in amanner that provides for continualprogram improvement.

The NBTSB is a not-for-profitorganization with a principal businessactivity of overseeing the collection andrecycling of used tires on behalf of theMinister of the Environment and LocalGovernment for the Province ofNew␣ Brunswick.

The primary objective of the program isto ensure that scrap tires generated inthe Province are disposed of properly toavoid negatively impacting theenvironment. A secondary objective isthat the management of scrap tiresgenerates economic activity byoptimizing the resource value of thematerial in the tires. In a more strategicsense, the Board sees itself with a role insupporting the production of value-added products made from recycledscrap tires and in the stimulation of theeconomy through job creation.

The NBTSB uses a two-year rollingManagement Plan based on the Goalsunder this section which ensure that it isfulfilling its legislative mandate. ThePerformance Measures indicate theprogress made toward each goal.

SUMMARY OF GOALSGoal 1:Maximize the number of tires removedfrom the environment.

Goal 2:Maximize the amount of processed tires.

Goal 3:Ensure full accountability for theNew␣ Brunswick Tire Stewardship Board.

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD8

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

PERFORMANCEMEASURESProgram results regarding Goal 1 arecompared below, using two datacategories. The first bar shows the totalnumber of new tires ‘supplied’, or sold atthe retail level. The PTE rating* is basedon their size and resulting rubbercontent. The second bar shows the PTEequivalent of all scrap tires diverted fromlandfill, collected and transported toTRACC’s facility at Minto during the year.

GOAL 1:Maximize the number of tiresremoved from the environment

COMMENTSRetail tire sales in New Brunswick fellroughly 5% during 2003 and, asexpected, the total number of PTE’sdiverted, collected and transported tothe TRACC facility was also somewhatlower at 804,079. Final data shows thatthe TSP achieved an 87% ‘capture rate’for the year as a whole on scrap tiresgenerated from retail sales activity. As anoverall measure of recycling impact,New␣ Brunswick’s scrap tire ‘capture rate’continues to be among the highest inNorth America.

STRATEGIESRetail tire sales for the next two yearsare expected to continue close to presentlevels, with the TSP ‘capture rate’remaining in the 87-89% range. NBTSB’spriority on cleaning up any remaining oldtire stockpiles will also continue in2004-2005 as will public educationefforts encouraging consumers to returnany additional scrap tires they may havein storage to tire retailers, free of charge.

1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3

PTE’s Supplied (‘Sold’)by Registered Dealers

PTE’s Diverted from Landfill, Collectedand Transported to TRACC

*PTE - Passenger Tire Equivalent = 20 lbs.Passenger Tire = 1 PTETruck Tire = 5 PTEAgricultural Tire = 10 PTE

997,

648

804,

295

974,

380

849,

419

890,

172

836,

129

969,

978

862,

478

921,

026

804,

079

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

PERFORMANCEMEASUREProgram results regarding Goal 2 arecompared below using four datacategories representing Value-AddedManufactured Products, Crumb Rubber,Civil Engineering, and Tire-Derived Fuel.Unlike most other jurisdictions inCanada and the United States,New␣ Brunswick’s Tire Stewardshipprogram specifically restricts the use ofcollected scrap tires as Tire-Derived Fuel.This underscores the priority placed bythe TSP on manufacturing new value-added products from this resourceinside the Province.

COMMENTSNBTSB’s focus on manufacturing value-added products from New Brunswickscrap tires is clearly reflected in the 2003data, which confirms that more than98% of output from the TRACC facilityfell into this category. Internationaldemand for the company’s livestockmattresses continues to grow, togetherwith domestic markets for TRACC ‘svarious industrial application products,road repair pylon bases, truck and trailermud flaps, etc.

Total output at the TRACC plant wasreduced at different times during theyear, as various installations of newproduction technology were completed.The entire manufacturing area was alsore-designed to provide sufficient spacefor full-scale roof tile production in thecoming year. Although this re-toolingand upgrading process did impact thefinal summary data for 2003, it alsocleared the way for important increasesin product diversity over the long term.

GOAL 2:Maximizing the amount of processed tires

New Brunswick’s TSP is the only programof its kind in North America which hasnever shipped scrap tires for burning asTire-Derived Fuel. Civil engineeringapplications, requiring large volumes ofshredded tires, can be useful andproductive options to consider, in somecases. They have not been pursued sincethe earliest days of the program,however, when TRACC’s fullmanufacturing system was still indevelopment.

STRATEGIESAssuming that retail tire sales continueat or above present levels, the totalnumber of PTE’s processed at TRACC isexpected to increase somewhat over thenext two years, as new technologies andnew products come on line. Both TRACCand NBTSB are committed to ensuringthat the most valuable output possible isachieved from New Brunswick’s scraptire resource.

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

Value-AddedManufactured Products

Crumb Rubber

1999 2000 2001 2002 2003

850,

262

13,0

49

1,07

3,88

9

12,5

80

1,05

8,40

0

34,2

70

977,

476

10,5

46

770,

637

11,8

91

Civil Engineering

Tire-Derived Fuel

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD10

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

PERFORMANCEMEASUREProgram results regarding Goal 3 arecompared below using four datacategories. The respective bars on thechart represent the two sources of TSPrevenue (Environmental Fees andAudits), the cost of scrap tire Collectionand Processing, and Administration Costexpressed as a percentage of overallprogram operations.

COMMENTSA total of 12 separate audits wereperformed during 2003 representing abroad cross-section of tire retailoperations in New Brunswick. Asubstantial increase in revenue from thissource underlined the importance ofstrong internal procedures for record-keeping and reporting within suchoperations. Advanced deadlines forreporting can also improve the process,and ensure that environmental feerevenue is submitted to the NBTSB in theappropriate fiscal year. This, in turn, canproduce significant changes in the finalrevenue total.

GOAL 3:Ensure Full Accountability for the NBTSB

STRATEGIESThe coming two years will see furthercomprehensive auditing of retailoperations throughout New Brunswick,and additional steps to refine the NBTSBdata management system, together withan expanded emphasis on publiceducation.

Collectedfrom Audits

Administration Cost (%)6.6% 10.1% 11.9% 10.5% 13.4%1999 2000 2001 2002 2003

Total EnvironmentalFees Collected

Cost of Collection& Processing

$ 2,

610,

994

$ 5,

173

$ 2,

008,

245

$ 2,

580,

088

$ 13

,000

$ 2,

290,

056

$ 2,

326,

599

$ 2,

800

$ 1,

972,

093

$ 2,

568,

883

$ 6,

858

$ 2,

429,

962

$ 2,

600,

807

$ 39

,192

$ 2,

275,

026

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0

*

Calculation of annual administrationcost includes all professional consultingfees for services provided to NBTSB, suchas auditing and accounting services, aswell as security operations andcommunication services.

*

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

2003 HIGHLIGHTS

INDUSTRY ANDMARKETS

The central goal in any comprehensivebusiness plan is creating a sustainablefuture for the enterprise concerned.Building a diverse range of products orservices for a variety of markets ispivotal in this regard and provides asecure base for long term growth.

Tire Recycling Atlantic CanadaCorporation of Minto, NB (TRACC) hasfunctioned as the Board’s centralcontractor for scrap tire collection,processing and recycling since the TSPwas introduced. The existing five-yearagreement between NBTSB and TRACCextends to 2007. It underlines theimportance of developing new ‘value-added’ products to complement thosealready contributing to the TSP’s strongperformance in the marketplace.

During 2003, TRACC continued toexpand production of molded rubbergoods, with the addition of heavy-dutymud flaps for use on large transporttrucks, as well as a smaller version of thesame product for installation on utilitytrailers. Other successful molded itemsproduced by TRACC include hard rubberbases for road safety pylons, or‘delineator posts’. These versatile unitscan be used in different weights, andhave been well received by the roadbuilding and maintenance industry.

TRACC’s ability to meet very precisespecifications for custom-made rubbergaskets, rollers, and shock suppressiondevices for industrial plants is also asignificant asset. Advanced milling andcutting systems are increasingly usedfor such applications at the Mintofacility. The technologies involvedallow for exact automated productionon large-scale custom orders.

Market demand for the firm’ssuccessful line of livestock mattressescontinues to grow as well, and furtherexpansion is predicted for 2004. Morethan 100,000 units destined for dairyherd operations across North Americaand abroad were shipped by TRACCduring 2003. In terms of total weight,this production level required at least13 million pounds of recycled rubberfrom New Brunswick scrap tires. Inthe year ahead, TRACC is alsoplanning to introduce a larger versionof the mattress designed for use inhorse stalls, to supplement its existingproduct line for dairy producers.

Re-processed rubber fromNew␣ Brunswick scrap tires continuesto be the primary raw material used byTRACC throughout its manufacturingoperation. But the company’s newroofing tile product will also includerecycled plastic from grocery-typeshopping bags, as part of the processfeedstock.

Such ‘hybrid’ combinations of recycledrubber with other components areexpected to make an increasingcontribution to the firm’s overalloutput in the years ahead, as well asthe recycling of other materials in theProvince. The latest example of thistrend is TRACC’s ongoing examinationof process options and potential exportmarkets for ‘re-mold/re-tread’ tires.

Such an operation would see smaller-sized scrap tire casings diverted fromthe main TRACC facility, and used in asister plant as the starting point forbuilding a top quality tire product.A␣ significant amount of new rubberwould clearly be required for theprocess as well. 100% of the marketfocus for such an operation would beoutside North America, where smaller-sized vehicle tires represent a largersegment of customer demand.

Active work on the pilot project willcontinue and initial full-scaleproduction could begin in 2004.Identifying other specialized ‘off-shore’market opportunities for manufacturedoutput from the New Brunswick’s TSPwill continue to be a key focus forTRACC and the NBTSB in the yearsahead.

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD12

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

SPECIAL PROJECTS

Research and development ofpotential new service componentswithin the overall TSP system is aconstant priority.

• Building on previous developmentalwork involving NBTSB and the U.N.B.Engineering Department, TRACCundertook a major refit of its Mintoplant in 2003, to clear the way for full-scale production of its new roofing tileproduct. The extrusion/moldingtechnology required for this operationuses a hybrid mix of recycled rubberand waste plastic to generateextremely durable ’slate-style’ roofingmaterials. Installing this newproduction capacity promptedextensive re-configuring of the plant’sother manufacturing areas as well. Thetire shredding system was completelyre-tooled, as an example, and itsoperating capacity tripled to ensurepeak efficiency in initial processing forthe plant as a whole.

• TRACC also began work during theyear on developing a tire re-mold/re-tread operation to serve specializedexport markets outside North-America.The new facility would produce smaller-sized tires, using a mix of new rubberand recycled tire casings from NB,which match key export market criteria.

Under this scenario, any scrap tirecasings arriving at the existing TRACCplant, which met the requiredspecifications, would be diverted fromthe normal shredding process andre-directed toward a separate facility,also located in the Minto IndustrialPark. Extensive automated testingwould follow to determine if theselected casings were suitable for eithertire re-molding or re-treading.

By the end of 2003, the requiredproduction equipment had beensuccessfully acquired and evaluated in aseries of on-site test runs. The resultsachieved thus far are seen as mostencouraging from a technicalperspective. Further development workis expected in the coming year, and it’shoped that that the new system canbecome fully operational during 2004.

• The Board concluded a detailedengineering review of potentialmanagement options for ‘Off the Road‘(OTR) scrap tires during 2003, and aQuebec-based system was identified forfurther examination and practical testingin the year ahead.

At least 4000 (OTR) scrap tires aregenerated annually in New Brunswick bythe agriculture, forestry mining and‘loader/grader’ sectors. The internalcomposition of these ‘special grade’tires, as well as their over-sizeddimensions, mean they cannot beprocessed with equipment andtechnologies designed for truck and cartire shredding. The number of scrapOTR’s generated in the Province istypically less than .5 % of the total forpassenger and truck tires. Given thelarger size and weight of such units,however, the volumes of recyclablerubber they contain are significant.

A pilot project to process New BrunswickOTR’s for recycling, is now beingdesigned for 2004, in conjunction withan existing Quebec facility. The projectwill incorporate a detailed evaluationcomponent, and full test data on theresults should be available by mid-year.

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

There are more than 900 tire retailoutlets of various kinds acrossNew␣ Brunswick. Increased auditing ofindividual sites within the overallsystem␣ resulted in significantly higherfee revenue from this source, incomparison to previous years. In severalcases, revisions made in internalreporting deadlines by the retailer alsoproduced noticeable increases in feerevenue registered within theappropriate fiscal year.

The Board’s public education programcontinued in 2003, with promotionalcampaigns around Earth Day in Apriland␣ National Solid Waste ReductionWeek in October, as well as productionof the NBTSB newsletter, and regulardistribution of information/educationmaterials.

In addition to managing the TSP, theBoard also functioned during the year asSecretariat for the Canadian Associationof Tire Recycling Agencies (CATRA).These responsibilities, which includechairing the national association, areshared by different jurisdictions acrossCanada on a two-year rotating basis.During New Brunswick’s tenure, CATRAimplemented a new national system forexchanging and compiling researchinformation in the tire recycling field,and completed a major revision of theAssociation’s web site.

OPERATIONS

The total number of PTE’s recorded;collected and tracked by the NBTSBduring 2003 exceeded 900,000 units.Processing and managing ‘life cycle’data for each scrap tire captured bythe system is a key administrativefunction for the Board. Preciseinformation is obviously required, asthe resulting calculations determinethe level of subsidy paid by NBTSB topartially offset TSP operating costsprovince-wide.

NBTSB’s ‘in-house’ computer systemhas been specifically designed tohandle such large volumes of data.Any needed expansions or upgradesare also completed without delay, toensure sufficient processing capacity isalways available.

Administrative priorities for 2003included a comprehensive review ofexisting tracking log procedures,which generate detailed informationon each scrap tire collection visit, truckload and trip report. Several processimprovements were also introduced toreduce the amount of paperworkinvolved for retailers who sell tires asan occasional extra service to theircustomers, rather than as a corebusiness.

Nine Canadian provinces and the YukonTerritory currently operate a centralizedtire recycling system. Some differencesexist among these jurisdictions in termsof program design, but many of the keyfeatures are quite similar, including astrong focus on manufacturing value-added products from Canada’s scraptire resource. In a region such asAtlantic Canada, expandinginformation exchange and regularcontact among such agencies has asignificant potential to benefit all thejurisdictions involved, and NBTSB willcontinue to actively support suchefforts in the years to come.

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD14

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

Canada’s tire recycling industry hasexperienced unprecedented growthover the past 15 years, as part of anincreased national and global emphasison environmental stewardship andsustainable development.

In New Brunswick, more than100,000,000 pounds of valuableindustrial rubber have been recapturedfrom our solid waste stream forrecycling to date. Prior to the TSP’sintroduction, however, the hugevolumes of scrap tires generated eachyear across the Province were seen asnothing more than a costly wastemanagement headache.

As Canadians, our collective decision tore-define scrap tires as a recyclableresource has generated positiveenvironmental and economic impactsin every jurisdiction concerned. At thesame time, all participants in thisindustry quickly learn that managing a‘resource’ instead of a ‘waste’ bringskey additional factors into play, such asthe basic laws of supply and demand.

Irrespective of the commodity involved,the ‘business’ of recycling can still beaffected by significant changes inmarket conditions over relatively shortperiods of time. Prolonged increases in

the availability of a particular resource,for example, will ultimately putdownward pressure on its inherent value.A practical example of this can be seentoday in North-American prices for‘rubber crumb’, which is the most basicproduct generated from tire recyclingplants.

When Canada’s scrap tire recyclingprograms were in their infancy a decadeago, any new processing facility whichproduced good quality ‘rubber crumb’could usually find a ready market for it,at a reasonable price, from establishedmanufacturers of rubber-based products.Today’s reality is quite different. As moreand more jurisdictions across North-America have implemented tire recyclingprograms in recent years, the overallsupply of ‘crumb’ has steadily risen,followed by predictable drop in prices.

NBTSB’s long standing commitment tomanufacturing new value-addedproducts from our own scrap tires, insideNew Brunswick…..rather than simplyproducing and shipping rubber crumb…is proving more advantageous than everin these circumstances. During 2003, infact, more than 98% of TRACC’s totalannual production took the form ofvalue-added manufactured products.

Another significant development facingthe North-American tire recyclingindustry in recent years has been anoticeable rise in the average size andweight of scrap tires in general. Strongconsumer demand for larger and heaviervehicles such as SUV’s, vans and lighttrucks is one factor driving this change,but many of today’s standard car tirespecifications also call for heavier, larger-rimmed units.

The results of this trend on the tirerecycling industry are easily detectedtoday, at any point in the storage,collection and manufacturing system. Inthe early years of the TSP, for example,scrap tires with a 13 inch rim size madeup at least 15% of the total annual tirevolume received at TRACC. During 2003,only 5% of the scrap tires received werein this category.

From an operational point of view, thismeans that significantly more rubber isbeing delivered each year to facilitiessuch as TRACC, even though the totalnumber of tires being shipped to suchplants may not differ dramatically fromyears past. Meeting and successfullyovercoming this challenge will be acentral focus for both NBTSB and TRACCin the years ahead.

TRENDS

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

The Province of New Brunswick andthe four member associations of theNew Brunswick Tire Stewardship Boardappoint a representative to sit on theBoard of Directors. The currentrepresentatives are, as follows:

Dr. David Besner, ChairpersonDepartment of the Environmentand Local Government

Frank ConnorAtlantic Tire Dealers Association

Wayne FlinnNew Brunswick Solid Waste Association

Alban GaudetAtlantic Provinces Trucking Association

Sandy LeBlancNew Brunswick Automobile Dealers’Association

George HainesDepartment of the Environmentand Local Government

BOARD OF DIRECTORS

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ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

FINANCIAL STATEMENTS

STATEMENT OF FINANCIAL POSITIONDecember 31, 2003, with comparative figures for 2002

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD18

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

FINANCIAL STATEMENTS

STATEMENT OF OPERATIONSYear ended December 31, 2003, with comparative figures for 2002

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

FINANCIAL STATEMENTS

STATEMENT OF CHANGES IN NET ASSETSYear ended December 31, 2003, with comparative figures for 2002

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD20

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

FINANCIAL STATEMENTS

STATEMENT OF CASH FLOWSYear ended December 31, 2003, with comparative figures for 2002

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTSYear ended December 31, 2003

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THE NEW BRUNSWICK TIRE STEWARDSHIP BOARD22

ANNUAL REPORT 2003/ MANAGEMENT PLAN 2004-2005

FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTSYear ended December 31, 2003