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ANNUAL REPORT

SOCIÉTÉ DE GESTION DES HUILES USAGÉES DE L'ATLANTIQUEATLANTIC USED OIL MANAGEMENT ASSOCIATION

UOMA ATLANTIC

2017

Keep nature clean!

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A word from the new General Manager 04 Standard Flow Cycle of Funds and Products 05 A year of changes for UOMA Atlantic 06 UOMA NB Scoreboard 08 UOMA PE Scoreboard 10 UOMA NB Zones 12 UOMA PE Zones 13UOMA Atlantic Members 14UOMA Atlantic Committees 16

Financial StatementsIndependent Auditor’s Report 17 Income 18 Appendix A – UOMA NB and PE Sectoral Income 19 Appendix B – UOMA NB Income 20 Appendix C – UOMA PE Income 21 Changes in Net Assets 22 Balance Sheet 23 Cash Flow 24 Notes to Financial Statement 25

TABLEOF CONTENTS

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It is with great pride and enthusiasm that I undertook on July 1, 2017 the position of general manager of the Atlantic Used Oil Management Association.

I will succeed Mr. Gilles Goddard, the association’s first ever general manager, who left his position on December 31, 2017 for a well-deserved retirement. Mr. Goddard was able to successfully develop the used oil management association program which has become a model in Canada. The last two years, I have been in the position of assistant general manager, a period in which I have had the privilege of working closely with Mr. Goddard in order to prepare for this important transition.

My goal will be to continue my predecessor’s dedicated work, but I also intend to further more modernize procedures and available services as a whole. Amongst other things, we’ll replace classic paper forms with electronic ones, implement a national one window approach for our members, utilize geolocation in order to facilitate the search for collection facilities on mobile devices, make our website more user-friendly, increase UOMA Atlantic’s visibility and many other changes in the same vein.

As assistant general manager, I had the opportunity to work closely with our board members and took note of their professionalism. I would like to thank them for their support in my new position and the responsibilities that come along with it.

I know the future holds wonderful challenges to rise to and I would like to tell our partners, the members, the board of directors, Recycle NB, the Prince Edward Island Communities, Land and Environment Department, the employees, collectors, processors, collection facilities as well as generators, that you can expect my full collaboration. As our new campaign states, together we will work to «Keep nature clean».

A WORD FROM THENEW GENERAL MANAGER

Jean DuchesneauGeneral Manager

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GENERATORS

Establishments that generate used products (garages, dealers, commercial, industrial and municipal sectors, forestry, agriculture, transporters, individuals)

COLLECTORS

Establishments that collect the products from generators and collection facilities and receive subsidies from UOMA NB (for additional information, see page 12) and UOMA PE (for additional information, see page 13).

PROCESSORS

Establishments that give a second life to products

MEMBERS OF UOMA NB AND MEMBERS OF UOMA PE

Brand owners or first importers or suppliers who fund the system at $0.05 per litre for applicable lubricating oils; $0.10 per litre for oil and glycol (antifreeze) containers of 50 litres or less; $0.17 per litre for non-metal or non-HDPE oil and glycol (antifreeze) containers of 50 litres or less; $0.10 per litre of glycol (antifreeze) mix; $0.16 per litre of glycol (antifreeze) concentrate; $0.50 per filter of 8 inches or less or 203 mm in height; $1.00 per filter of more than 8 inches or 203 mm or more; $0.50 per sump type filters for automatic transmissions and $0.25 per aerosol container

COLLECTION FACILITIES

Establishments registered with UOMA NB and UOMA PE to receive from the public, at no cost to them, used oil products governed by the Regulations

Atlantic-AtlantiqueUOMA

Communities, Land and Environment

PRODUCTS$ FUNDS

STANDARD FLOW CYCLEOF FUNDS AND PRODUCTS

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Top row > Mr. Mathieu Poirier – Mr. Jim Metzler – Mr. John Robichaud – Mr. Cory Osmond – Mr. Mike Jennex – Mr. Sheldon Boyd – Mr. Robert Siddall Bottom row > Mr. Albert Girard – Mr. Bill Simpkins – Mrs. Loulia Kouchaji, Vice-chairman – Mr. David Bois, Chairman – Mr. Jean Duchesneau, GM – Mr. Gilles Goddard – Mr. Jean-François Richard Unavailable > Mr. Nick Dufour – Mr. Robert Huberdeau – Mr. John Hughes – Mr. Chris Lesperance – Mr. Jamie Seamans

New name, new brandingFrom a new General Manager, to a name change, to setting-up new committees, a new advertising campaign as well as a new branding, the year 2017 has certainly been one of change for UOMA Atlantic.

Following several meetings and discussions with the board members and the communications committee, we came to the conclusion that it was of the utmost importance to revamp the association’s name and branding. A clearer and easy-to-remember name was therefore adopted. SOGHUOMA became UOMA Atlantic-Atlantique.

The website and logo now have a new look. The website has been created to provide our members and partners an easier and more intuitive access to information. With the website’s new features, it is possible to find a collector or a collection facility by simply entering a postal code. If you are using a mobile device, using geolocation, the website will display the nearest collection facilities from your current location.

A YEAR OF CHANGES FOR UOMA ATLANTIC

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David BoisChairman

Jean DuchesneauGeneral Manager

New advertising campaignIn fall 2017, UOMA ATLANTIC launched its new advertising campaign focusing more on social networks and the internet. According to the feedback and media statistics we’ve gathered, the campaign has been a great success. Congratulations to the team and the communication committee.

Listening to its membersFollowing a survey conveyed amongst national members, UOMA Atlantic is working to modernize the environmental handling charges remittance framework. Always anxious to be at the forefront of making things even easier for its members, UOMA Atlantic is currently working jointly with the other Canadian UOMA associations in elaborating a single-window platform to allow members to deal with all associations using one single web page for their environmental handling charge remittance, follow ups and history of their remittances, audits and environmental compliance reviews follow ups as well as membership registrations.

Setting-up comitteesIn such an important period of change, UOMA ATLANTIC’s board has decided to create three new committees composed of UOMA ATLANTIC’s members and employees in order to manage important matters. We would like to thank every member of these committees for their great involvement in UOMA Atlantic’s success.

Another Successful Year for UOMA AtlanticThe board members and UOMA ATLANTIC’s personnel are very proud of the improvements made to our management framework over the last year, proof that UOMA ATLANTIC embraces change head on by utilizing technology as a tool to face future challenges.

Thanks to the great dedication and professionalism of each of its partners (Board Members, Members, Collectors, Processors, Generators, and Collection Facilities), UOMA ATLANTIC NB and PE continue to deliver financial results and collection rates beyond expectations. Finally, we would like to thank Recycle NB and Prince Edward Island’s Department of Communities, Land and Environment for their continued collaboration with UOMA ATLANTIC.

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Ratings Legend1 Recoverable oil = 70 %2 Percentage of marketed filters Metal filter = 76.20 % Carboard filter = 23.80 % 3 Average weight for marketed filters Metal filter = 0.3987 kg Carboard filter = 0.0765kg4 5 % of oil containers are used more than once / 95 % recoverable 5 Recoverable glycol (antifreeze) = 45 %6 55 % of used oil is burnt legally (recycled) in small furnaces according to study

Zone Legend1 Kings, Queens, Saint John, Sunbury, Westmorland, York2 Kent3 Northumberland4 Carleton, Gloucester, Madawaska, Restigouche, Victoria5 Albert6 Charlotte

Products Meas. Sales Recoverable Collected Collec. %

Burnt/Recycled6

Burnt%

Collected/Recycled %

Object. Recyc NB

Applicable in the Year

Oil litres 14,859,680 10,401,7761 3,728,890 35.8% 5,720,977 55.0% 90.8% 50.0% 2015

Filtersunits 1,435,612 2 1,435,612 965,1093 67.2% 25.0% 2015

kg 472,575 472,575 317,694 67.2% 25.0% 2015

Oil Containerslitres 8,423,683 8,002,499 5,428,6984 59.6% 25.0% 2015

kg 461,102 438,047 261,1494 59.6% 25.0% 2015

Glycol (antifreeze) litres 2,054,397 924,4795 107,482 11.6% 50.0% 2017

Glycol (antifreeze) Containers

litres 1,071,972 1,071,972 291,986 27.2% 50.0% 2017

kg 43,213 43,213 11,770 27.2% 50.0% 2017

Oils

Filters

Containers

Containers

Glycol (antifreeze)

Collection Facilities

Zone RI In litres % RI In kg % RI Oil % Glycol (antifreeze) % Total kg % RI In litres % Commercial Commission Total

1 $0.03 3,054,268 82% $0.80 294,694 68% $2.10 160,832 59% 7,171 59% 168,003 59% $0.35 77,453 72% 60 3 63

2 $0.10 34,259 1% $1.00 13,842 3% $2.25 10,910 4% 490 4% 11,400 4% $0.45 1,565 1% 8 5 13

3 $0.10 45,897 1% $1.00 18,615 4% $2.25 14,402 5% 648 5% 15,050 5% $0.45 3,262 3% 7 4 11

4 $0.06 503,846 14% $0.90 88,756 20% $2.50 73,984 27% 3,324 27% 77,308 27% $0.40 23,468 22% 68 6 74

5 $0.10 33,108 1% $1.00 6,047 1% $2.25 4,752 2% 198 2% 4,950 2% $0.45 690 1% 6 0 6

6 $0.10 57,512 2% $1.00 16,298 4% $2.25 8,610 3% 387 3% 8,997 3% $0.45 1,044 1% 16 3 19

Total $0.037 3,728,890 100% $0.85 438,252 100% $2.25 273,490 100% 12,218 100% 285,708 100% $0.37 107,482 100% 165 21 186

UOMA NB SCOREBOARDSales and Recovery Summary – January to December 2017

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Note: This information is based on remittances received and RIs paid up to March 30, 2018 in relation to 2017.

Products

Environmental Handling Charges

(EHC)

Return Incentives (RI) Net Difference Average RI

per quantity collected

Oils 742,983 138,935 604,048 $0.037/l

Filters 761,929 370,490 391,439 $0.384/un. $1.17/kg

Oil Containers 909,787 616,044 293,743 $0.113/un. $2.36/kg

Processing of Containers - 85,079 (85,079) $0.016/un. $0.30/kg

Glycol (antifreeze) 190,685 39,448 151,237 $0.367/l

Glycol (antifreeze) Containers 107,197 27,246 79,951 $0.093/un. $2.31/kg

2,712,581 1,277,242 1,435,339

Oils

Filters

Containers

Containers

Glycol (antifreeze)


Zone RI In litres % RI In kg % RI Oil % Glycol (antifreeze) % Total kg % RI In litres % Commercial Commission Total

1 $0.03 3,054,268 82% $0.80 294,694 68% $2.10 160,832 59% 7,171 59% 168,003 59% $0.35 77,453 72% 60 3 63

2 $0.10 34,259 1% $1.00 13,842 3% $2.25 10,910 4% 490 4% 11,400 4% $0.45 1,565 1% 8 5 13

3 $0.10 45,897 1% $1.00 18,615 4% $2.25 14,402 5% 648 5% 15,050 5% $0.45 3,262 3% 7 4 11

4 $0.06 503,846 14% $0.90 88,756 20% $2.50 73,984 27% 3,324 27% 77,308 27% $0.40 23,468 22% 68 6 74

5 $0.10 33,108 1% $1.00 6,047 1% $2.25 4,752 2% 198 2% 4,950 2% $0.45 690 1% 6 0 6

6 $0.10 57,512 2% $1.00 16,298 4% $2.25 8,610 3% 387 3% 8,997 3% $0.45 1,044 1% 16 3 19

Total $0.037 3,728,890 100% $0.85 438,252 100% $2.25 273,490 100% 12,218 100% 285,708 100% $0.37 107,482 100% 165 21 186

Members 171 Collectors 7 Processors 9

Year End 2017

UOMA NB SCOREBOARDSales and Recovery Summary – January to December 2017

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Oils

Filters

Containers

Containers

Glycol (antifreeze)


Zone RI In litres % RI In kg % RI Oil % Glycol (antifreeze) % Total kg % RI In litres % Commercial IWMC Total

1 $0.10 152,424 100% $1.00 51,969 100% $2.26 66,420 100% 2,747 100% 69,167 100% $0.45 20,094 100% 24 6 30

Ratings Legend1 Recoverable oil = 70 %2 Percentage of marketed filters Metal filter = 76.20 % Carboard filter = 23.80 % 3 Average weight for marketed filters Metal filter = 0.3987 kg Carboard filter = 0.0765 kg4 The 5 % reusable containers has been removed for PEI 5 Recoverable glycol (antifreeze) = 45 %6 75 % of used oil is burnt legally (recycled) in small furnaces according to study

Zone Legend1 Prince Edward Island

Products Meas. Sales Recoverable Collected Collec. %

Burnt/Recycled6

Burnt%

Collected/Recycled %

Object.UOMA PE

Applicable in the Year

Oils litres 2,067,773 1,447,4411 152,424 10.5% 1,085,581 75.0% 85.5% 50.0% 2015

Filtersunits 253,9012 253,901 114,4453 45.1% 25.0% 2015

kg 83,579 83,579 37,673 45.1% 25.0% 2015

Oil Containerslitres 1,173,565 1,173,565 1,228,0674 104.6% 25.0% 2015

kg 61,845 61,845 64,7174 104.6% 25.0% 2015

Glycol (antifreeze) litres 330,105 148,5475 20,094 13.5% 50.0% 2017

Glycol (antifreeze) Containers

litres 142,019 142,019 64,257 45.2% 50.0% 2017

kg 5,945 5,945 2,690 45.2% 50.0% 2017

UOMA PE SCOREBOARDSales and Recovery Summary – January to December 2017

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Oils

Filters

Containers

Containers

Glycol (antifreeze)


Zone RI In litres % RI In kg % RI Oil % Glycol (antifreeze) % Total kg % RI In litres % Commercial IWMC Total

1 $0.10 152,424 100% $1.00 51,969 100% $2.26 66,420 100% 2,747 100% 69,167 100% $0.45 20,094 100% 24 6 30

Note: This information is based on remittances received and RIs paid up to March 30, 2018 in relation to 2017.

Products

Environmental Handling Charges

(EHC)

Return Incentives (RI) Net Difference Average RI

per quantity collected

Oils 103,389 15,242 88,146 $0.100/l

Filters 133,496 51,969 81,527 $0.454/un. $1.38/kg

Oil Containers 124,741 150,397 (25,656) $0.122/un. $2.32/kg

Processing of Containers - 20,579 (20,579) $0.017/un. $0.30/kg

Glycol (antifreeze) 30,261 9,042 21,219 $0.450/l

Glycol (antifreeze) Containers 14,202 6,180 8,022 $0.096/un. $2.30/kg

406,089 253,410 152,679

Members 107 Collectors 5 Processors 7

Year End 2017

UOMA PE SCOREBOARDSales and Recovery Summary – January to December 2017

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3

4

2

1 5

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Note: For information concerning RI rates for internal collectors processors, please contact UOMA Atlantic.

Map and RI Table

ZONE 1 2 3 4 5 6

Used oil ($/litre) 0.03 0.10 0.10 0.06 0.10 0.10

Used glycol (antifreeze) (45-55) ($/litre) 0.35 0.45 0.45 0.40 0.45 0.45

Used filters ($/kg) 0.80 1.00 1.00 0.90 1.00 1.00

Used oil and used glycol (antifreeze) containers ($/kg)

2.10 2.25 2.25 2.50 2.25 2.25

Aerosols ($/kg) 3.65 3.95 3.95 3.80 3.95 3.95

Zone Legend1 Kings, Queens, Saint John Sunbury, Westmorland, York2 Kent3 Northumberland4 Carleton, Gloucester, Madawaska, Restigouche, Victoria5 Albert6 Charlotte

UOMA NB ZONES

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Note: For information concerning RI rates for internal collectors processors, please contact UOMA Atlantic.

PE Map and RI Table

ZONE 1

Used oil ($/litre) 0.10

Used glycol (antifreeze) (45-55) ($/litre) 0.45

Used filters ($/kg) 1.00

Used oil and used glycol (antifreeze) containers ($/kg) 2.25

Aerosols ($/kg) 3.95

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Zone Legend1 Prince Edward Island

UOMA PEZONES

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• 1439174 Ont Ltd. (NLS Products)

• A & I Products Canada Inc.

• ADF Diesel Montréal Inc.

• Agco Parts Division

• Altrom Auto Group Ltd.

• American Grease Stick Co

• Amsoil Inc.

• April Super Flo Inc.

• Arlyn Enterprises Ltd. DBA Boss Lubricants

• Asalco Inc.

• Atlantic Compressed Air Ltd.

• Atlantic Farm Serv. Inc. / Serv. Agric. Atlant. Inc.

• Atlas Copco Compressors Canada Inc.

• AutoChoice Parts & Paints Ltd.

• Automobile Solutions Americas Inc.

• Autosupply Acquisition Canada Inc.

• Aviall Canada Ltd.

• Baldwin Filters Inc.

• Bass Pro Shops Canada ULC

• Beck Arnley Worldparts Inc.

• BestBuy Distributors Ltd.

• Blue Water Agencies Ltd.

• BMW Canada Inc.

• Bosch Rexroth Canada Corporation

• BP Lubricants USA Inc.

• BP Marine Ltd.

• Brandt Tractor Ltd.

• BRP Inc.

• Campbellton Auto Supply

• Canadian General Filters Ltd.

• Canadian Kawasaki Motors Inc.

• Canadian Tire Corporation

• CarQuest Canada Ltd.

• Castrol Industrial North America Inc.

• Central Tire Service Ltd.

• Champion Laboratories Inc.

• Chevron Canada Limited

• Chicago Pneumatic Tool Company Canada Ltd.

• CNH Industrial

• Cool Distribution Inc.

• Coop Fédérée – Énergie Sonic (La)

• Coop Fédérée (La)

• Costco Wholesale Canada Ltd.

• Crevier Lubrifiants Inc.

• Cummins Eastern Canada

• Daimler Trucks Canada Ltd.

• DAS Companies, Inc.

• Davanac inc.

• Echo Power Equipment (Canada)

• Équipement SMS Inc.

• Fastenal Canada Ltd.

• FCA Canada Inc.

• Ford Motor Company of Canada Ltd.

• Fram Group (Canada) Inc.

• Fullbore Marketing Ltd.

• G.F. Thompson Company Ltd.

• G.K. Industries Ltd.

• Gamma Sales Inc.

• General Motors of Canada Company

• Groupe BMR Inc.

• Groupe Environnemental Labrie Inc.

• Groupe Haris Inc. (Le)

• Hall-Chem MFG Inc.

• Harley-Davidson Canada L.P.

• Hastings Filters

• Henkel Canada Corp.

• Hino Motors Canada, Ltd.

• Home Depot of Canada Inc.

• Home Hardware Stores Limited

• Honda Canada Inc.

• Husqvarna Canada Corp.

• Hyundai Auto Canada Corp.

• Imperial Oil

• Importations Thibault Ltée

• Integrated Distribution Systems LP DBA Wajax Power Systems

Integrated Distribution Systems LP DBA Wajax Power Systems (NS)

• Irving Blending & Packaging

• Isuzu Commercial Truck of Canada Inc.

• ITW Permatex Canada

• Jacques Larochelle Inc.

• John Deere Canada ULC

• Kadex Aero Supply Ltd.

• Kaeser Compresseurs Canada Inc.

• Keystone Automotive Operations of Canada Inc.

• Kia Canada Inc.

• Kimpex Inc.

• King-O-Matic Industries Ltd.

• Kleen-Flo Tumbler Industries Limited

• UOMA NB UOMA PE

UOMA ATLANTIC MEMBERS

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• Klondike Lubricants Corporation

• KTM Canada Inc.

• Kubota Canada Ltd.

• Loblaws Inc.

• Lucas Oil Products (Canada) Company

• Machinerie R. Gagnon Inc.

• Mack Trucks Canada and Volvo Trucks Canada Division

• Mahle Aftermarket Inc.

• Mann+Hummel Filtration Technology Canada ULC

• Marindustrial Inc.

• Matech BTA Inc.

• Mazda Canada Inc.

• Mercedes-Benz Canada Inc.

• MFTA Canada Inc.

• Michaud Petroleum Inc.

• Mitsubishi Motor Sales of Canada Inc.

• Modern Sales Co-Op

• Motion Industries (Canada) Inc.

• Motovan Corporation

• MTD Products

• National Energy Equipment Inc.

• Navistar Canada Inc.

• NCH Canada Inc.

• Nissan Canada Inc.

• Orgill Canada Hardlines ULC

• Paccar Parts, A Division of Paccar of Canada Ltd.

• Parker Canada Division

• Parkland Fuel Corporation

• Partner Technologies Inc.

• Parts Canada Development Co.

• Parts for Trucks Inc.

• Petro-Canada Lubricants Inc.

• Philippe Gosselin & Associés Limitée

• Pièces d’Auto Transit Inc. (Les)

• Pièces de Transmission Unitrans Ltée (Les)

• Polaris Industries Inc.

• Prévost, une division de Groupe Volvo Canada Inc.

• Pro Form Products Ltd.

• Produits Lubri-Delta Inc.

• Prolab Technolub Inc.

• Radiator Specialty Company of Canada Ltd.

• Recochem Inc.

• Ridge Tool Company

• Robco Inc.

• Robert Bosch Inc.

• Rona Inc.

• SC CLS Holdings ULC Complete Lube Supply

• Sears Canada Inc.

• Services Maintech / Maintech Services (Les)

• Shell Canada Products

• Shoreline Lube Distribution Inc.

• Sinto Racing Inc.

• Small Town Lubes

Sobeys Capital Inc.

• Southwestern Petroleum Canada Ltd.

• Spectra Premium Industries

• Spectrum Brands SAP

• State Industrial Products DBA State Chemical Ltd.

• Stihl Ltd.

• Strongco Limited Partnership

• Subaru Canada Inc.

• Suzuki Canada Inc.

• Texas Refinery Corp. of Canada Ltd.

• Textron Off Road

• The Sherwin-Williams Co.

• Toromont Cat (Maritimes)

• Total Canada Inc.

• Toyota Canada Inc.

• UAP Inc.

• Uni-Sélect Eastern Inc.

• Univar Canada Ltd.

• Valvoline Canada a div. of Ashland Canada Corp.

• Vast-Auto Distribution Atlantic Ltd.

• Verco International Inc.

• Vermeer Canada Inc.

• Volkswagen Group Canada Inc.

• Volvo Cars of Canada Corp.

• Wainbee Limited

• Wakefield Canada Inc.

• Walmart Canada Corp.

• Walter Surface Technologies Inc.

• WD-40 Company (Canada) Ltd.

• Worldpac Canada Inc.

• Yamaha Motor Canada Ltd.

• Yvan Brake & Clutch Industrial Parts Ltd.

• UOMA NB UOMA PE

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UOMA Atlantic Board of DirectorsAtlantic Farm Services Inc. (subsidiary of La Coop Fédérée) Jim Metzler

Canadian Fuel Association Bill Simpkins

Global Automakers of Canada Loulia Kouchaji, Vice-chairman

Home Hardware Stores Limited David Bois, Chairman

Mann+Hummel Filtration Technology Canada ULC John Robichaud

Parkland Fuel Corporation Mike Jennex

Parts for Trucks, Inc. Robert Siddall

Petro-Canada Lubricants Inc. Cory Osmond

UOMA Atlantic General Manager Jean Duchesneau, GM

Superline Fuels Nick Dufour

Toromont Cat (Maritimes) Sheldon Boyd

UNI-SELECT EASTERN INC. Chris Lesperance

Wakefield Canada Inc. Robert Huberdeau

Department of Communities, Land and Environment PE John S. Hughes

RECYCLE NB Jamie Seamans

Industry Advisory Committee Oil & Glycol Program (OAG) of New BrunswickAshland, Valvoline Bruce Trethewey

Envirosystems Stan Rich

Home Hardware Stores Limited David Bois

Recycle New Brunswick Elizabeth McDermott, Jamie Seamans

Regional Service Commission (Acadian Peninsula) Gary Leblanc

Retail Council of Canada Jim Cormier

RPM Environnement inc. Bianca Cormier

UOMA Atlantic Jean Duchesneau or Albert Girard

Terrapure Environmental Adam Hayes, Glen Anderson

Employees and Consultants Jean Duchesneau General Manager

Albert Girard Consultant

Jean-François Richard, CPA Controller

Diane Caron Executive Assistant and program coordinator

Mathieu Carrier Executive coordinator

Nathalie Télénis Administrative Assistant - Receptionist

Katy Rosa Accountant technician

Joël Ouimet Inspector responsible of segregation

François Bouliane Communications and Marketing

Auditors

Pricewaterhouse Coopers LLP / s.r.l. / s.e.n.c.r.l.4255, boul. Lapinière, bureau 300 Brossard (Québec) J4Z 0C7

UOMA ATLANTIC COMMITTEES

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1 CPA auditor, CGA, public accountancy permit No.127955

To the Members of ATLANTIC USED OIL MANAGEMENT ASSOCIATION INC. (UOMA Atlantic)We have audited the accompanying financial statements of Atlantic Used Oil Management Association Inc. (UOMA Atlantic), which comprise the balance sheet as at December 31, 2017 and the statements of income, changes in net assets and cash flow for the year then ended, and the related notes, which comprise a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity internal control.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position of the ATLANTIC USED OIL MANAGEMENT ASSOCIATION INC. (UOMA - Atlantic) as at December 31, 2017, and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations.

PricewaterhouseCoopers LLP/s.r.l/s.e.n.c.r.l.

Brossard, April 5, 2018

INDEPENDANTAUDITOR'S REPORT

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REVENUES (appendix A)

2017 2016

Environmental Handling Charges 3,118,670 3,098,828

Registration and renewal 5,600 7,797

Investment income 58,195 26,540

Other revenues 46,255 ―

3,228,720 3,133,165

EXPENSES (appendix A)

Program

Return incentives 1,424,995 1,357,119

Process incentives 105,657 89,769

Collection facilities incentives 7,216 4,300

Advertising and communications 95,859 156,995

Contribution to RECYCLE-NB 162,032 220,000

Contributions to PEI Minister of Environment 5,000 5,000

Management fees (note 3) 103,072 100,987

Office and general expenses 38,331 28,129

Consulting fees 21,150 23,850

Compliance reviews and audits 69,434 76,215

2,032,746 2,062,364

Administration


Legal fees 10,506 13,541

Professional fees 13,610 14,429


Amortization of intangible assets 10,409 12,875

129,165 155,788

EXCESS OF REVENUE OVER EXPENSES 1,066,809 915,013

The accompanying notes are an integral part of the financial statements

INCOMEFor the year ended December 31, 2017

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APPENDIX A – UOMA NB & PE SECTORAL INCOME For the year ended December 31, 2017

REVENUES

New Brunswick (appendix B)

2017

Prince Edward Island

(appendix C) 2017

TOTAL 2017

TOTAL 2016

Environmental Handling Charges 2,712,581 406,089 3,118,670 3,098,828

Registration and renewal 3,400 2,200 5,600 7,797

Investment income 51,588 6,607 58,195 26,540

Other revenues 46,255 ― 46,255 ―

2,813,824 414,896 3,228,720 3,133,165

EXPENSES

Program

Return incentives 1,192,163 232,832 1,424,995 1,357,119

Process incentives 85,079 20,578 105,657 89,769

Collection facilities incentives 5,896 1,320 7,216 4,300

Advertising and communications 83,293 12,566 95,859 156,995

Contribution to RECYCLE-NB 162,032 ― 162,032 220,000

Contribution to PEI Minister of Environment ― 5,000 5,000 5,000

Management fees (note 3) 88,999 14,073 103,072 100,987

Office and general expenses 34,948 3,383 38,331 28,129

Consulting fees 18,504 2,646 21,150 23,850

Compliance reviews and audits 60,448 8,986 69,434 76,215

1,731,362 301,384 2,032,746 2,062,364

Administration

Office and general expenses 15,045 4,727 19,772 25,536

Legal fees 9,036 1,470 10,506 13,541

Professional fees 12,035 1,575 13,610 14,429

Management fees (note 3) 64,647 10,221 74,868 89,407

Amortization of intangible assets 8,952 1,457 10,409 12,875

109,715 19,450 129,165 155,788

EXCESS OF REVENUE OVER EXPENSES 972,747 94,062 1,066,809 915,013

20

REVENUES

2017 2016

Environmental Handling Charges 2,712,581 2,666,629



Other revenues 46,255 ―

2,813,824 2,695,431

EXPENSES

Program

Return incentives 1,192,163 1,138,590


Collection facilities incentives 5,896 3,900


Contribution to RECYCLE-NB 162,032 220,000





1,731,362 1,766,758

Administration


Legal fees 9,036 12,384

Professional fees 12,035 12,085



109,715 133,695

EXCESS OF REVENUE OVER EXPENSES 972,747 794,978

APPENDIX B – UOMA NB INCOME For the year ended December 31, 2017

21

REVENUES

2017 2016

Environmental Handling Charges 406,089 432,199



414,896 437,734

EXPENSES

Program

Return incentives 232,832 218,529


Collection facilities incentives 1,320 400


Contributions to PEI Minister of Environment 5,000 5,000





301,384 295,606

Administration


Legal fees 1,470 1,157

Professionnal Fees 1,575 2,344



19,450 22,093

EXCESS OF REVENUE OVER EXPENSES 94,062 120,035

APPENDIX C – UOMA PE INCOME for the year ended December 31, 2017

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Unrestricted New Brunswick

Unrestricted Prince Edward

Island Reserve Funds

2017

Balance, Beginning of Year 1,476,043 171,212 1,050,000 2,697,255

Excess of revenue over expenses 972,747 94,062 ― 1,066,809

Allocation to reserve fund (500,000) (50,000) 550,000 ―

Balance, End of Year 1,948,790 215,274 1,600,000 3,764,064

Unrestricted New Brunswick

Unrestricted Prince Edward

Island Reserve funds

2016

Balance, Beginning of Year 1,181,065 101,177 500,000 1,782,242

Excess of revenue over expenses 794,978 120,035 ― 915,013

Allocation to reserve fund (500,000) (50,000) 550,000 ―

Balance, End of Year 1,476,043 171,212 1,050,000 2,697,255


CHANGES IN NET ASSETSFor the year ended December 31, 2017

23

ASSETS

2017 2016

Current Assets

Cash 2,304,762 1,655,748

Accounts receivable 847,609 843,443

Prepaid expenses ― 1,287

Current portion of investments ― 550,000

3,152,371 3,050,478

Investments (note 4) 1,277,498 503,086

Intangible assets (note 5) 6,264 14,156

4,436,133 3,567,720

LIABILITIES

Current Liabilities

Accounts payable (note 6) 541,081 683,641

Advances from an organization (note 7) 130,988 186,824

672,069 870,465

NET ASSETS

Unrestricted 2,164,064 1,647,255

Reserve funds

New Brunswick 1,500,000 1,000,000

Prince Edward Island 100,000 50,000

3,764,064 2,697,255

4,436,133 3,567,720


On behalf of the Board:Mr. David Bois, ChairmanMrs Loulia Kouchaji, Vice-Chairman

BALANCE SHEETAt December 31, 2017

24

OPERATING ACTIVITIES

2017 2016

Cash receipts – members 3,166,359 3,102,625

Cash receipts – interest and others 41,590 26,406

Cash paid – service providers (2,292,775) (2,031,499)

915,174 1,097,532

INVESTING ACTIVITIES

Acquisition of intangible assets (2,518) (6,932)

Acquisition of investments (757,806) (551,000)

Cashing of investments 550,000 ―

Advances from an organization (55,836) 132,294

(266,160) (425,638)

Increase in cash and cash equivalents 649,014 671,894

Cash and cash equivalents, beginning of year 1,655,748 983,854

Cash and cash equivalents, end of the year 2,304,762 1,655,748


CASH FLOW For the year ended December 31, 2017

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1 Governing Statute and Nature of BusinessAtlantic Used Oil Management Association Inc. (UOMA Atlantic) (the "organization") was incorporated on November 18, 2013 under Part I of the New Brunswick Companies Act. According to the federal and provincial income tax acts, it is a non-profit organization and is therefore exempt from income taxes.

The organization has the mandate to establish and manage an integrated program of recovery and reclamation for used oils and antifreeze and also for oil, fluid and antifreeze containers in an efficient and responsible manner.

2 Significant Accounting PoliciesThe financial statements were prepared in accordance with Canadian accounting standards for not-for-profit organizations (ASNFPO) and include the following significant accouting policies:

Use of estimatesThe preparation of these financial statements in accordance with ASNPO requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual information could differ from that determined based on these estimates and assumptions. These estimates are reviewed periodically and adjustments are made to income in the year they become known.

Return incentivesReturn incentives expenses are recognized when the lubricating oil and antifreeze and/or containers and filters are collected by a UOMA Atlantic organization's registered Collector.

Processing incentivesProcessing incentives expenses are recognized when the lubricating oil containers are processed by a UOMA Atlantic organization's registered Processor.

Financial instruments Measurement of financial instrumentsThe organization initially measures its financial assets and liabilities at fair value, except for certain non-arm's length transactions. They are subsequently measured at amortized cost, except for investments and advances from an organization, which are measured at cost. Changes in fair value are recognized in excess of revenues over expenses cost, and investments in quoted shares, which are measured at fair value.

ImpairmentFinancial assets measured at cost are tested for impairment when there are indicators of impairment. The amount of the writedown is recognized in excess of revenues over expenses. The previously recognized impairment loss may be reversed to the extent of the improvement, directly or by adjusting the allowance account, provided it is no greater than the amount that would have been reported at the date of the reversal had the impairment not been recognized previously. The amount of the reversal is recognized in excess of revenues over expenses.

InvestmentsInvestments are accounted for at market value.

NOTES TO FINANCIAL STATEMENTS For the year ended December 31, 2016

26

2 Significant Accounting Policies (continued)Cash and cash equivalentsCash and cash equivalents consist of cash and other highly liquid financial instruments with maturities of three months or less from date of purchase. Term deposits with maturities exceeding three months from date of purchase are not included in cash and cash equivalents. They are considered as an investments.

Revenue recognitionRevenue from Environmental Handling Charges are recognized when the lubricating oil and/or oil containers and oil filters are sold by members, based on their remittance forms, except for revenue from prior years received in the current year following a new registration, because Environmental Handling Charges must be remitted retroactively from seven years, and for additional revenue determined following a compliance review. These Environmental Handling Charges are recognized in the year during which they are determined.

Intangible assetsThe website is accounted for at cost and amortized on the basis of its useful life using the straightline method over a three-year period.

Expense allocationThe organization displayed its expenses by functions.

Management fees shared by program and administration functions are allocated proportionally to hours spent as follows:

Program Administration

Management fees from 9% to 90% from 10% to 91%


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3 Management FeesThe organization UOMA Atlantic retains the services of the organization Société de gestion des huiles usagées (SOGHU) for the purposes of assisting UOMA Atlantic in designing, implementating and operating the recovery and reclamation program required to ensure the appropriate recovery and reclamation of the designated products in accordance with the Atlantic provinces legislative and regulatory requirements. For the year ended December 31, 2017, the pro rata used is 86.35% for New Brunswick (86.05% in 2016) and 13.65% for Prince Edward Island (13.95% in 2016).

New Brunswick


TOTAL

2017 $ $ $

Program 88,999 14,073 103,072

Administration 64,647 10,221 74,868

153,646 24,294 177,940

Operating expenses incurred during the year with this organization are as follows:

PROGRAM

Container segregation 8,242 1,303 9,545

Advertising and communication 6,099 964 7,063

Salaries, fringe benefits, and management and administration contracts 60,285 9,533 69,818

Consulting service 377 60 437

Office and general expenses 13,996 2,213 16,209

88,999 14,073 103,072

ADMINISTRATION


Rent 3,889 615 4,504


Depreciation of fixed assets 8,212 1,298 9,510

64,647 10,221 74,868

153,646 24,294 177,940

28

New Brunswick


TOTAL

2016 $ $ $

Program 86,899 14,088 100,987

Administration 76,935 12,472 89,407

163,834 26,560 190,394

Operating expenses incurred during the year with this organization are as follows:

PROGRAM

Container segregation 9,224 1,495 10,719

Advertising and communication 1,329 216 1,545


Consulting service 905 147 1,052


86,899 14,088 100,987

ADMINISTRATION


Rent 5,724 928 6,652


Depreciation of fixed assets 12,084 1,959 14,043

76,935 12,472 89,407

163,834 26,560 190,394


29

4 Investments2017 2016

Term deposits, bearing interest at rates from 2.50% to 2.52%, maturing from April 2020 to June 2021 704,818 1,053,086

Mutual Funds 572,680 ―

1,277,498 1,053,086

Current portion of investments ― 550,000

1,277,498 503,086

5 Intangible Assets2017 2016

AMORTIZABLE CostAccumulated amortization Net value Net value

Website 42,934 36,670 6,264 14,156

6, Accounts Payable

2017 2016

Trade 294,207 427,052

Trade - SOGHU 177,940 190,392

Sales Taxes payable 68,934 66,197

541,081 683,641

7 Advances from an Organization

Cash flow and the current management of UOMA Atlantic and SOGHU were overseen by a common general manager. The advances from an organization consist of expenses assumed relating to the management of the organization, based on an agreement renewable in 2018. These advances are interest-free and do not include terms of repayment. The balance owed is $130,988 as at December 31, 2017 ($186,824 as at December 31, 2016).

8 CommitmentsContribution at Recycle NBUnder the designated material regulation of the Clean Environ ment Act of New Brunswick, the organization must cover annual administrative costs incurred by Recycle NB with regard to oil, oil filters, oil containers, glycol and glycol containers. The estimated amount for 2018 is $165,000.

Contribution to PEI Minister of EnvironmentUnder the Materials Stewardship and Recycling Regulations of the Environmental Protection Act of Prince Edward Island, the organization must pay an annual fee of $5,000.

Management and administration servicesThe organization has reached an agreement with SOGHU that expires on December 31, 2018. Under this agreement, the organization must pay a management fee to SOGHU, calculated on a pro rata basis of total budgeted environmental handling charges for each organization. For the year ended December 31, 2017, the pro rata used is 85.18% for SOGHU (83.04% in 2016)

and 14.82% for UOMA Atlantic (16.96% in 2016).

30

9 Related Party TransactionsIn the regular course of its business, the organization receives Environmental Handling Charges from its members and pays return incentives to Processors. Some members have representatives who are members of the Board of Directors. The members of associations are not included in the following transactions. These transactions are measured at the exchange amount and are subject to the usual commercial conditions of the organization.

During the year, the principal transactions concluded with companies or organization members of the Board of Directors of the organization are as follows:

REVENUE

2017 2016

Environmental Handling Charges 484,680 320,569

Registration and renewal ― 200

The transactions concluded with companies or organizations who are members of the Board of Directors of the organization during the year represents 15.5% of the Environmental Handling Charges (10.3% in 2016).

Finally, accounts receivable include an amount of $84,770 ($75,693 for 2016) to be received from companies managed by members of the Board of Directors.

10 Financial InstrumentsThe organization is exposed to various risks through its financial intruments. The following analysis provides a measure of the organization's risk exposure and concentrations as at December 31, 2017.

Credit riskln the regular course of its operations, the organization monitors the members that did not produce monthly remittance forms and did not remit Environmental Handling Charges.

The organization is not exposed to any significant risk with respect to credit concentration.

Market riskMarket risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk. The organization is exposed to interest rate risk.


1101 Brassard Blvd., Suite 214 / Chambly (Québec) / J3L 5R4 Phone: 1.833.221.8662 (NB) 1.833.222.8662 (PE) Fax: 1.855.497.7505Email: [email protected] / Website: www.UOMA-Atlantic.com

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