Our 2010 Sustainability and Responsibility Reportsustainabilityreport.timhortons.com/2010/pdf/full...

Making a True DifferenceTM

Our 2010 Sustainability and Responsibility Report

The theme of our report is Making a True DifferenceTM – the way we define sustainability and responsibility at Tim Hortons. We aim to make a true difference for individuals, our communities and the planet – every day. We felt the time was right to communicate our sustainability initiatives and programs in a comprehensive way; therefore, we have chosen to use the Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines as the foundation for our report. Please see our GRI Index for further details. We also look forward to your feedback on our Report and our sustainability programs in general. Please do not hesitate to contact us.

© 2010 Tim Hortons

Page 1 of 1Tim Hortons - 2010 Sustainability and Responsibility Report

Welcome to Tim Horton's very first Sustainability and Responsibility Report. Our report is called Making a True Difference, and I am excited to share it with you. Making a True Difference is more than just the title of our first report, it is the framework that brings together all of our sustainability and responsibility programs and initiatives. At the foundation of Making a True Difference, are the principles we use to help guide us on our sustainability journey: Making a True Difference – Our Guiding Principles

� Do things that make a true difference. � Acknowledge and respect our social, environmental and economic impact. � Honour, respect and support individuals and stakeholders. � Participate with, and build, our communities. � Be honest and transparent in our communications.

These guiding principles help support our overall vision for sustainability – To be a leader in the North American quick service restaurant sector and across all sectors in Canada.To this end, we have made sustainability and responsibility a key corporate strategy for our Company, and since the development of our sustainability and responsibility strategy in 2009, we have made considerable progress. In 2010, our activities were focused on developing effective governance, systems, processes and supporting programs to meet our public commitments, which included establishing:

� Executive accountabilities and Board oversight; � A Board-level Sustainability and Responsibility Policy; � A Business Partner and Supplier Code of Conduct and supporting verification

program; and � A comprehensive sustainability performance management and tracking system.

With respect to our sustainability and responsibility commitments and goals, over the course of 2010, we have been evaluating our performance and looking at opportunities to enhance these commitments. We also assessed what we have learned in our first year of tracking our performance and reviewed upcoming trends and issues. Within the report, we share our next steps, future goals and the initiatives that are already underway. To help guide us on our sustainability journey, we formed an external Sustainability and Responsibility Advisory Council, made up of professionals who are experts in the sustainability issues that are most important to our business and our stakeholders. In 2010, these issues included nutrition, food safety, sustainable coffee, environmental stewardship and supplier codes of conduct. I personally participated in a day-long retreat with our Advisors, and their expertise and insight into these important issues has been truly valuable for our Company. We recognized that although we can take pride in what we have accomplished to date, there is a lot more to be done. Lastly, we developed our report in accordance with the Global Reporting Initiative’s Sustainability Reporting Guidelines, and we are committed to comprehensive and transparent reporting in the years to come. I hope you enjoy our 2010 Sustainability and Responsibility


Report. On behalf of Tim Hortons and our family of Restaurant Owners, I would like to thank you for your support over the years, and we look forward to continuing our sustainability journey with you.

© 2010 Tim Hortons


Making a True Difference Company Profile

The first Tim Hortons® opened in May 1964 in Hamilton, Ontario, and since then, we have become the fourth-largest publicly traded restaurant chain in North America, based on market capitalization, and the largest in Canada. Operating in the quick service sector of the restaurant industry, we appeal to a broad range of consumer tastes, with a menu that includes premium coffee, specialty teas, homestyle soups, fresh sandwiches, wraps, hot breakfast sandwiches and fresh baked goods, including our trademark donuts. Tim Hortons restaurants operate in a variety of formats, including standalone restaurants as well as non-traditional sites and kiosks. We operate in five countries: Canada; United States; Republic of Ireland; United Kingdom; and, Afghanistan. The majority of our international operations are self-serve kiosks through offerings at gas and other convenience store locations, with only a few liscensed as full-serve Tim Hortons restaurants. The Company operated privately until 1995 when Tim Hortons merged with Wendy's International, Inc., giving new focus and impetus to the expansion of the Tim Hortons concept in the United States. In 2006, Wendy’s spun off Tim Hortons as a standalone public company, and in 2009, our U.S. stockholders voted to approve a reorganization to Tim Hortons Inc. (THI) - a Canadian public company. As a result of the reorganization, our common shares are traded on both the Toronto and New York Stock Exchanges under the symbol “THI.” Our head office is located in Oakville, Ontario, Canada. Further details can be found in our Annual Report and Form 10-K.

© 2010 Tim Hortons


Making a True Difference Our Unique Business Model

Since the beginning, we have maintained a highly effective franchise model (more than 99% of our restaurants are franchised). We directly own and operate (without franchisees) only a small number of Company restaurants in Canada and the U.S. Our corporate entity, THI, collaborates with our franchisees (Restaurant Owners) to grow our business and build positive relationships. Our Restaurant Owners typically operate an average of three to four restaurants and have a significant stake in the success of the restaurants they operate. We maintain a controlling interest in the real estate in our restaurant system to ensure brand integrity and control of development. We operate with a “we fit anywhere” concept that allows us to adapt our brand presence to take advantage of non-traditional development opportunities.

© 2010 Tim Hortons


Making a True Difference Our Value Chain

We are leveraging significant levels of vertical integration that exist in our system and continually exploring additional system benefits through further vertical integration opportunities. We have warehouse and distribution operations that supply paper and dry goods to a substantial majority of our Canadian restaurants, and supply frozen baked goods and some refrigerated products to most of our Ontario restaurants. In the U.S., we supply similar products to our system restaurants through third-party distributors. Our operations also include coffee-roasting plants in Rochester, New York, and Hamilton, Ontario. Further details can be found in our Annual Report and Form 10K.

For additional information about our value chain and the boundary of this report.

© 2010 Tim Hortons


Tim Hortons Awards ReceivedTim Hortons won the following awards in 2009-2010:Corporate Culture

Best Corporate Reputation in Canada, Canadian Business Magazine, May 2010One of Canada's 10 Most Admired Corporate Cultures™ by Waterstone Human Capital, 2005-2008, inducted into the Hall of Fame in 2009

Environment

Ontario Waste Minimization Award, Recycling Council of Ontario, 2009

Corporate Reporting

Award of Excellence in Corporate Reporting – Consumer Products, Canadian Institute of Chartered Accountants

Brand

Brand of the Decade, Strategy Magazine, December 2010World’s Hottest Brand Awards, one of 10 leading regional brands, Advertising Age Magazine, June 2010Best Canadian Brands 2010, Interbrand ranking of the Top 25 Canadian Brands, ranked 6th.

© 2010 Tim Hortons

Tim Hortons - 2010 Sustainability and Responsibility Report

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Making a True Difference Governance Our Sustainability and Responsibility Policy includes the structure and supporting processes for effective sustainability and responsibility governance and accountability.

Our Board of Directors governs sustainability and responsibility. The Nominating and Corporate Governance Committee of the Board manages this accountability on behalf of the Board, including oversight of the following sustainability and responsibility matters:

1. Policy development; 2. Creation of sustainability and responsibility strategies, and supporting implementation

and resource plans, including mitigation of risks; and 3. Establishment of organizational sustainability and responsibility commitments, goals

and external reporting.

Management accountability for sustainability and responsibility resides with our executive team. To help optimize the effectiveness of our strategies and programs, one of our executive officers has lead accountability for sustainability and responsibility. Further, an Officer-level executive has day-to-day responsibility for sustainability and responsibility strategy, planning and implementation. A summary of our sustainability and responsibility governance model is provided below:

© 2010 Tim Hortons


Our Making a True Difference logo

Our Making a True Difference logo represents our guiding principles and our firm commitment to individuals, our communities and theplanet – our sustainability pillars.

Each pillar has been designated a colour, a shade that represents the specific attributes of each. The earth tone represents individual,green depicts community and blue denotes the planet.

The circular shape of our logo symbolizes the perpetual nature of sustainability and signifies our continuous focus on sustainabilityinitiatives as our business and the world around us evolve.


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Making a True Difference Objectives and Guiding Principles Our Company and our Restaurant Owners have always had a deep and enduring commitment to the people and the comminuities we serve.

From the very beginning, that commitment has been expressed through a growing number of initiatives – big and small – in communities across North America and, increasingly, in other parts of the world. Today, we remain as passionate as ever about working with the communities we serve, the people within those communities, and – through our environmental work – the planet itself. It's a passion that's fuelled by a simple conviction: that we be not just a good corporate citizen, but an active participant and partner for positive change in the world. Because, behind everything we do, we recognize that we are all part of the same community.

© 2010 Tim Hortons


Making a True Difference Sustainability and Responsibility Process We are managing sustainability and responsibility as a continuous process involving four key focus areas:

Strategy Development and the Assessment of Risks and Opportunities Stakeholder Engagement Materiality Assessment Development of our Commitments and Goals

For details click on the process wheel below:

© 2010 Tim Hortons


Sustainability Strategy Development

2009 and 2010 were important years for sustainability and responsibility at Tim Hortons. In 2009, we began executing our sustainability andresponsibility strategy that we developed and that was approved by our Board of Directors. The development of this strategy involved acomprehensive internal and external assessment that included identifying best practices from both within and outside of the North Americanquick service restaurant sector, as well as identifying and assessing risks and opportunities. The process also included identifyingsustainability activities relevant to our business and brand and assigning priorities to those activities. Analysis conducted as part of thestrategy development process demonstrated that we already had a significant range of activities underway and that a systemic approach tosustainability and responsibility would be beneficial for continued progress.

We also created a three-year roadmap for strategy execution. Highlights of our strategy execution activities to date include, but are notlimited to:

Establishment of governance and oversight for Sustainability and Responsibility with the Company's Board of Directors, includingapproval of our Sustainability and Responsibility Policy;Commitment to using the Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines for our first Sustainability andResponsibility report;Development and communication of our Sustainability and Responsibility Framework – Making a True Difference which hasincluded:

Communication and engagement on Making a True Difference with key stakeholders, including corporate employees,Restaurant Owners, Restaurant Owner Team Members, and guests;Development of overarching commitments with supporting goals that include both qualitative and quantitative keyperformance indicators;Implementation of a leading sustainability data management tracking system to monitor and measure our keyperformance indicators;

Establishment of our environmental baseline with respect to greenhouse gas emissions, energy and water use across ourcorporate facilities (offices, manufacturing operations and distribution network), restaurants, and Tim Horton Children's Foundationcamps;Development and implementation of our Business Partner and Supplier Code of Conduct; andDedication of full-time resources to strategy implementation.

While we have made considerable progress to date, we consider ourselves at the early stages of our sustainability journey. We are excitedabout further executing our strategy and maintaining additional progress in further embedding sustainability and responsibility across ourCompany.

Management of Risks and Opportunities

The assessment and management of risks and opportunities are embedded as part of our sustainability and responsibility strategy,governance framework and supporting implementation plan. Key aspects of our approach include:

The assessment of sustainability and responsibility impacts of major business decisions;The integration of sustainability and responsibility into the Company's Enterprise Risk Management process and internalperformance scorecards;Monitoring our relations with our stakeholders, including our Sustainability and Responsibility Advisory Council of external experts;The assessment of sustainability and responsibility trends and consideration of public policy, consumer, corporate, and generalpublic trends, issues, and developments that may impact the Company.


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Stakeholder Engagement at Tim Hortons

We believe it is important to engage with stakeholders to better understand issues, impacts, risks and opportunities that can affect ourorganization. We therefore engage with a variety of different stakeholder groups through different methods.

Stakeholder Type Engagement Method Frequency

Restaurant Owners Regional Meetings Twice a year

Restaurant Owner Advisory Board1 Three times a year

Restaurant Owner Conference Calls Throughout the year

Restaurant Owner Leadership Symposiums Once a year

Restaurant Owner Opinion Survey Every two years

Founders Group As required

Corporate Employees Company-wide Communications Meetings Twice a year

Biennial Employee Opinion Survey Every two years

Cross-functional Employee Advisory Team(meetings, suggestion boxes and email foremployee concerns)

Quarterly

"Idea Jam!" internal online forum and onlineBulletin Board

Continuous

"THI Talk" Employee Newsletter Quarterly

"Breakfast with the President" Monthly

Senior Management Leadership Symposium Twice a year

Restaurant Team Members Team Member Hotline (phone, email, mail) Continuous

Hospitality Manager Conference Calls Monthly

Manager Symposiums Annually

Guests Guest Services (phone, email, letters) Continuous

Guest Panel Research (focus groups,online)

As required

Investors/Analysts Annual Meeting Annually

Financial Reporting, Investor/Analyst calls Quarterly

Investor enquiries (phone, email, letters) Continuous

Suppliers Face-to-face meetings, phone and email Continuous

Cross-functional meetings to review qualityreports

As required

Industry Events As required

Supplier Symposium Annual

Government(Federal, Provincial/State, Municipal

Face-to-face meetings (e.g., publicmeetings, municipal council meetings etc.),phone and email

As required

Non-governmentalOrganizations/SustainabilityThought Leaders

Face-to-face meetings, phone and email As required

Sustainability and Responsibility AdvisoryCouncil

Annual (pilot in 2010-2011)

Local Communities/Community Organizations Face-to-face meetings, phone and email As required

Industry Associations2 Face-to-face meetings, conferences,workshops, phone and email As required

1 We have national advisory boards of elected Restaurant Owners. The mandate for these boards includes responsibility for matters related tothe Canadian and U.S. advertising funds, respectively, including promotions, operations, and research and development.

2 As a Company, we are members in a number of industry associations that we consider strategic in nature, including: the Canadian Chamberof Commerce; Oakville Chamber of Commerce; Ontario Restaurant Hotel Motel Association (ORHMA); Canadian Restaurant Food Association(CRFA); Canadian Franchise Association (CFA); Women in Foodservice Forum (WFF) – Canadian Chapter; and the National RestaurantAssociation (NRA) – USA.


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Materiality

We followed the Global Reporting Initiative (GRI) G3 Guidelines to determine materiality for our report. We evaluated both internal andexternal factors in defining material topics, which helped us to establish and prioritize our sustainability and responsibility commitments andgoals, our report content and boundary, and the GRI indicators that we deemed important to report.

In order to determine the most critical sustainability and responsibility issues to Tim Hortons and to our stakeholders, we surveyed thefollowing groups in English and French:

Our corporate employeesOur Restaurant OwnersOur restaurant Team Members

We also used input from our business group executives gained through interviews conducted during our strategy development process. Inaddition, we engaged in discussions with a range of external stakeholders that helped establish external trends, such as feedback from ourguests and interactions with investors. The issues that arose as having the greatest perceived impact on our business and on ourstakeholders are:

Individuals

Healthy menu choicesEmployee rights and practicesSupplier Code of Conduct

Communities

Tim Horton Children's FoundationInvestment in local programsTim Hortons Coffee Partnership

The Planet

Reducing litterResponsible packagingOur environmental footprint


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Development of Our Commitments and Goals

In 2009, we used a collaborative approach to develop our initial sustainability and responsibility commitments and goals1. Three main inputswere used which included:

Priorities identified by our comprehensive sustainability strategy and planning;Our assessment of business risks and opportunities; andOur stakeholder engagement results and materiality assessment of our most important sustainability issues.

We review our commitments and goals on an annual basis to maintain their relevancy to our stakeholder expectations and business.

Inputs for Developing our Sustainability Commitments and Goals

1 Our commitments are aspirational, long-term statements related to our most important sustainability and responsibility issues. Our goals aremore tangible, shorter term targets that are focused on improving our performance.


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Guests

Offering menu options that provide our guests with balanced choices. Working to provide a hospitable and welcoming overall experience that makes our guests feel appreciated.

Employees

Championing a culture where people are treated fairly and are given the opportunity to succeed.

Partners

Managing our stakeholder relationships with honesty, transparency and respect.

© 2010 Tim Hortons


IndividualsGuests: Our CommitmentsOffering menu options that provide our guests with balanced choices.Working to provide a hospitable and welcoming overall experience that makes our guests feel appreciated.

Provide menu optionsthat meet or exceednutritional guidelines andeducate our guests onthese products

• We are complying with current and proposedtrans fat regulations across our menu.

• In 2010, we decreased the sodium content

across our soup offering by an average of 22%.

100% response on guestservice enquiries

• From Jan. 1 to Dec. 31, 100% of our guestswho contacted corporate guest servicesreceived a response to their enquiry.

• In 2010, our guest complaints were down 4%

and compliments were up 41%.

Ongoing implementation,communication andmeasurement of ourcomprehensive FoodSafety Plan across allour restaurants

• 100% of our restaurants received one foodsafety audit between March and August of2010.1

1 Due to the timing of our Operations Audit period (Period 1: Sept.–Feb.; Period 2:Mar.–Aug.), we can only report on one complete six-month period in 2010. Full-yearresults will be reported in the 2011 Sustainability and Responsibility Report.

We understand the importance of good nutrition and are committed to offering ourguests a variety of nutritious and great tasting food choicesWe continue to evolve our menu in order to meet our guests’ changing needs and desires byoffering choices that can fit into a healthy lifestyle. Whether it's our coffee, fresh bakedgoods, or our homestyle soups and sandwiches, there is something for everyone.Nutrition Communication InitiativesWe are committed to providing guests with the information required to make healthylifestyle choices.Nutritional information is available to our guests through:

WebsiteNutrition Guide – pdf fileOnline nutrition calculatorFrequently Asked Questions – covers topics such as how to obtainingredient information and how products fit within Canada's Food Guide.FAQs are based on popular guest requests through the toll-free GuestServices line at 1 (888) 601-1616.

In-Store Nutrition GuideWe update our Nutrition Guide annually.It is mandatory for the Nutrition Guide to be displayed in each restaurant.

Toll-Free Guest Services Number/EmailEach Guest Service Representative is trained to answer general nutritionfacts, allergy questions and provide ingredient lists.For guests requiring more in-depth nutritional information or with specialdietary needs beyond the scope of available information, individuals withprofessional nutrition training are available for further assistance. Theseindividuals do not provide dietary advice to treat illness/disease thatshould be provided by a medical professional; however, they are able toanswer more in-depth questions.

In-Store "Healthful Hints" Poster (this poster is optional for restaurants)Sandwiches with less than 8 g fatSoups with less than 3 g fatYogurt and berriesSubstitutionsActivity message

Digital Menu Board MessagesWe highlight the healthier aspects of our popular products on our DigitalMenu Boards.

TraylinersOur Nutrition Guide is printed on all tray backs.

Policies and Training Materials Related to Allergens

Allergy policies/training are covered within the restaurant's:Restaurants/Guests:

Allergen Alert SignsStaff Training:

Food Safety ManualAllergy PosterEmployee HandbookTraining Guides for new products


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Other Nutrition/Regulatory Initiatives

We monitor regulatory and nutrition issues, such as menu calorie labeling (NYC,USA), sodium reduction, trans fat, etc.All products in development are reviewed for the following:

Allergens – all products are reviewed for allergen content.Trans fats – must contain less than 5% trans fat as per the Trans Fat TaskForce guidelines (or less than 0.5 g per serving for U.S. products).Sodium – a sodium reduction plan is in place for specific menu items, suchas soup.

Nutrition information for finished Tim Hortons products is calculated with nutritioninformation provided by suppliers. Laboratory verification for accuracy is alsoperformed.

We Are Trans Fat CompliantAll our products are in compliance with trans fat regulations (both proposed and enacted)and any new products developed must meet the guideline of less than 5% artificial trans fatin Canada (or less than 0.5 g in the U.S.).less

Our Hospitality InitiativeAt our Company, our guests are our number one priority. We strive to provide a hospitableand welcoming overall experience that makes our guests feel appreciated.We began to refocus on our guest experience in Canada at the end of 2008. This focusbecame part of our corporate strategy in 2010. The intent of the strategy is to realign alllevels of our organization on the quality of our guest experience.While we consistently rate the highest overall among companies in our sector, we haveemphasized hospitality to reinforce this performance. We recognize that our guests arelooking for friendly, accurate and fast service for each and every visit at every location.Our tactics have been designed to work towards not only achieving this goal but whereverpossible, we aim to surpass our guests' expectations.We Value Our Guests' Feedback!There are a variety of ways guests can contact us about their experience with us. OurRestaurant Owners continue to work hard to earn customer loyalty every day by deliveringfast, friendly service and fresh quality products at great value; therefore, we encourage allof our guests to reach out by contacting their local restaurant to provide feedback abouttheir experiences.We also encourage our guests to get in touch with us at our corporate offices by telephone,email, mail or fax. Our front-line Guest Relations Associates have the tools, support andtraining to quickly understand and resolve guest concerns. If a guest's matter needs to beresolved by our field team or our restaurant, the Guest Relations team will provide thenecessary information to the appropriate people to ensure that the guest receives aresponse providing next steps and a resolution.We attend to every request or enquiry in a fast, efficient and professional manner. Wereceive over 100,000 guest comments annually by email, phone, letter or fax. Of these,80% are resolved with our guests during their initial call.In terms of the types of communication we receive, approximately 52.5% are complaints,44% are enquiries and 3.5% are compliments. We are proud to say that, in 2010, ourcomplaints were down 4% and compliments were up 41%.Together with our Restaurant Owners, we will continue to focus on meeting the needs andexpectations of our guests.Guest Testimonials:"I wanted to thank you very much for being so guest centered. I emailed you a few daysago asking about a restaurant location and not only did I get a fast response, but I got apersonal phone call and the lady who I spoke to wished me luck! Thank you again. TimHortons is by far one of the leaders in friendly service, going above and beyond theusual care, and reminding us why we are die-hard Tim's lovers! THANK YOU!""I just wanted to say thank you. After the complaint I made earlier this month, Ireturned to the location of the incident. I appreciate what was done to solve thesituation. I appreciate your help in the matter and I'm thankful for your dealing with thesituation in a quick and effective manner. Thank you so much for all of your help!!"less

Food Safety at Tim HortonsOur goal is to make sure that every Team Member is empowered to do the right thing – toensure safe food is provided to each and every guest, every day.Our restaurant-level Food Safety Plan has been formally in place for over 14 years. At ourCompany, food safety includes the systems and Standard Operating Procedures that arecarried out on a daily basis throughout all areas of our restaurants to protect our guests.Our cross-functional teams work diligently every day at our corporate office to ensurefood safety is integrated into the development of our products and operational proceduresfrom the start – before they are introduced to the restaurants. We also support food safetyby striving for optimal restaurant design and equipment selection – finding the right tools toencourage the right behaviours.Our Company's Food Safety Education and TrainingThe Food Safety Team in our corporate Quality Assurance department sets the Food SafetyEducation Standards for our restaurants.Our current Food Safety education classes includeTrainCan's Advanced.fst course and the NationalRestaurant Association Educational Foundation's(NRAEF) ServSafe® course for Canadian andAmerican participants, respectively. Thesenationally recognized food safety educationprograms include the foundational food safetyprinciples that are recognized by health authoritiesand are applicable throughout the food industry. Itis important to us that these courses are highlyrelevant to our business and product base;therefore, we have customized the delivery ofthese courses with our Company's own content andexamples. However, in order to receivecertification, participants must pass anindependently marked exam. Also, our Company'sFood Safety Trainers are required to meet the qualification criteria set forth by TrainCanor NRAEF in order to become registered instructors.Mandatory Re-certificationWe have offered Food Safety education classes since 1996. Since our Food SafetyProgram is so well established across the chain, our focus is on re-certification, which is

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required every five years or more often if required by local legislation.In our system, the following people must be certified in one of our two corporatelyapproved programs at all times:

All Restaurant Owners and operatorsManagersSupervisors and trainers (one trained person must be "in charge" of each shift)Corporate Operations employees who regularly visit the restaurants

Food Safety AuditsOur Food Safety Audit (FSA) is a tool to maintain our high food safety standardsthroughout our chain of restaurants. FSAs are required twice a year in every restaurant andare completed by our corporate District Managers.The FSA reviews food safety components very similar to those that would be reviewedduring a routine inspection by a public health official. Areas of particular focus includefood handler hygiene and practices such as handwashing, time and temperature control,receiving, storage, a review of equipment sanitation and facilities maintenance, as well asongoing food safety training of Team Members within our restaurants.

We are proactive in our monitoring and communications with health authorities acrossNorth America, which keeps us responsive – if a standard increases in one area, wetypically adopt this higher, more protective standard across the chain.less

Provide menu optionsthat meet or exceednutritional guidelines andeducate our guests onthese products

• We are working to ensure there are healthier options availableacross our product categories and to increase communicationof the healthy attributes and options within our menu.

100% response on guestservice enquiries

• Every year we aim for 100% response on enquiries that arereceived by Corporate Guest Services.

Ongoing implementation,communication andmeasurement of ourcomprehensive FoodSafety Plan across allour restaurants

• We will maintain ongoing implementation, communication andmeasurement of our comprehensive Food Safety Plan acrossall our restaurants. This will include 100% of corporateemployees directly involved with restaurant operations whowill receive and maintain up-to-date food safety certification.

© 2010 Tim Hortons

Tim Hortons - 2010 Sustainability and Responsibility Report http://www.bmirstaging.com/th/sr2010/individuals_guests.html

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Sodium Reduction at Tim Hortons

We are committed to reducing sodium in our menu items. To date we have achieved an average 22% reduction across all soup varietiesand are also developing new products with lower sodium.

Variety 2007(mg of sodium/10 oz. portion)

2010(mg of sodium/10 oz. portion) % Reduction

Chicken Noodle 880 770 13%

Hearty Vegetable 1060 930 12%

Vegetable Beef Barley 980 780 20%

Turkey Rice 1000 890 11%

Split Pea with Ham 970 820 16%

Cream of Broccoli 1080 800 24%

Potato Bacon 1260 770 39%

Beef Noodle 1030 870 16%

Minestrone 940 740 21%

Creamy Field Mushroom 1080 870 19%

Chicken Vegetable Rice NA 770 6%

Tomato Parmesan 1600 Discontinued -

Cauliflower Cheese 1100 850 23%

Italian Wedding 1080 820 24%

Clam Chowder 1040 880 15%

Cream of Asparagus 900 830 8%

French Onion NA 960 -

Tomato with Whole Grain Pasta NA 750 -

Average Sodium Reduction 1067 829 22%

We will continue to monitor sodium levels in our products andaim to reduce sodium in other menu items over time.Contribution to Healthy Lifestyles

We offer choices which are…

Low in fat: Low Fat Muffins, Yogurt and Berries, ManyBagels, Soups, English Muffins, OatmealA source of fibre: Chili, Hearty Vegetable Soup, BranMuffins, Whole Grain Muffins, Trail Mix Cookies andOatmealA source of calcium: Yogurt and Berries, Cream ofBroccoli Soup, Ham and Swiss Sandwich


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Tim Hortons University

Our eight-week Management Training Program (internally known as "Tim HortonsUniversity") is managed by our internal Operations Standards Training Department. Ourtwo-day Food Safety courses have been incorporated into Tim Hortons University.

For example, the program also incorporates our online Learning Centre, a video-based"positional training system" that supports the in-class and hands-on training throughout theremainder of the eight-week program. Three training titles are dedicated to Food Safety,including "Understanding Food Safety," "The Safe Food Handler," and "Proper Cleaningand Sanitizing." These progressive learning modules address a wide variety of learningstyles and offer voiceovers and subtitles, and are currently available in English and French.Each title also includes activities that assess behaviours and reinforce understandingbefore one can move on to the next stage in the program.

Our online learning programs are also available to all restaurants in the chain and areintended to support the hands-on training that each management team conducts withemployees in our restaurants. They are designed so that our Team Members are trainedto a level that reflects their roles in our restaurants. Team Members typically completethese modules during their regular work schedules.


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Tim Hortons Was in Compliance with the Voluntary Guidelines Suggested by the CanadianTrans Fat Task Force Three Years in Advance of the June 2009 Deadline.

The Canadian Trans Fat Task Force final report was released to the Minister of Health inJune 2006. The Minister announced that the recommendations of the Task Force were beingadopted by Health Canada in June 2007. Industry was given two years to comply with thetrans fat targets on a voluntary basis. If significant progress was not made within those twoyears, Health Canada would be reviewing regulating the levels.

Through the efforts of our R&D, Marketing, Purchasing and Distribution teams, the majorityof our products were in compliance with the guidelines suggested by the Trans Fat TaskForce in June 2006.


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IndividualsEmployees: Our CommitmentsChampioning a culture where people are treatedfairly and are given the opportunity to suceed.

All permanent corporateemployees to have anIndividual DevelopmentPlan and receive anannual performancereview

• In 2010, 90% of our corporate employees with2+ years of service had development plans.

• 84% of our employees felt their supervisor is

supportive of their development plan. Thisresult is a 20% increase since 2008.

All corporate employeesto be trained in ourStandards of BusinessPractices

• 83% of our corporate employees completed ouronline Standards of Business Practices trainingin 2010.1

A minimum of 90% ofcorporate employees willfeel proud that theywork for our Company

• In 2010, our corporate employee opinion surveyresults showed that 97% of respondents feelproud to work for our Company.

1 The result reflects those who have scored 80% or higher on the final mastery test. Ourshortfall in 2010 is due to new hires, individuals who had the course in progress as ofDecember 31, 2010, and those corporate employees who did not score 80%.

Corporate Employee InitiativesAs of December 31, 2010, Tim Hortons had a total of 1,971 corporate employees acrossCanada and the U.S.Employee EngagementWe believe in a work environment that is caring to employees and values theircontributions. We offer opportunities to participate in: Company-wide communicationsmeetings, Company-sponsored events such as annual staff celebrations, family picnics, golftournaments, BBQs, Tim Horton Children's Foundation Camp Day, and Tim Fit fitnesscentre open houses.At work, we engage our employees in sharing trends in the quick service restaurantindustry that they learn about and making suggestions for Company process improvements,cost savings and environmental initiatives through Idea Jam! Idea Jam! is our internalonline forum that encourages employees to submit suggestions and comment on existingones.Biennially, we administer a comprehensive Employee Opinion Survey to measureemployee engagement, which we define as: pride in working for our Company, pride inour brand, alignment with our Company values, and a sense of contribution toorganizational success. Survey results are reported by functional group, and action plansare developed to address issues of concern. In 2010, 78% of corporate employeesresponded to the survey.Standards of Business Practices

Operating in a fair and ethical manner has always been a core valueat Tim Hortons. Every employee is provided with a copy of theStandards of Business Practices (SOBP) , a document intended toprovide guidelines regarding ethical business practices. In additionto receiving an SOBP booklet and signing it, employees are providedwith more detailed, job-specific information on how to put thesestandards to work.An eLearning module – “Tim Hortons Standards of BusinessPractices” – is the primary delivery mechanism for learning about thestandards we expect everyone to follow. Employees complete this

program annually in order to review the standards and reaffirm their commitment tofollowing the standards. Topics covered include relationships with employees, RestaurantOwners and vendors, conflicts of interest and compliance with copyright and other laws,to name a few.Employees also have four specific methods to seek guidance and report issues of concern:

contacting their direct supervisor or manager;contacting Human Resources;contacting the Ethics Compliance Office directly;contacting our third-party ethics reporting partner, EthicsPoint.

Individual Development PlansIndividual development plans and performance reviews are a part of everyone'sresponsibility and accountability across the Company. Our performance review process isnow semi-annual – with managers and employees reviewing progress and results on keyobjectives and individual development plans. All of our employees are expected to havean individual development plan. To that end, a development planning workshop (offered insmall groups or through online training) is one of the tools our employees use to createSMART development plans – plans that are Specific, Measurable, Attainable, Relevantand Time-bound.Training and DevelopmentWe recognize that by enhancing the knowledge base of our workforce and supporting our


1 of 4 3/30/2011 3:37 PM

employees' ambitions to improve their own knowledge base, we will be a better company.Learning CurriculumExternal Training: Our Human Resourcesdepartment constantly scans the market for newand innovative training programs that willassist employees with their daily routine. Whenwe find a program that we believe will help,we take the necessary steps to bring that courseto our employees or send our employees' to thecourse. We also recognize that employees havetheir own interests and we support employeesattendance at external training events.Internal Training: We offer a wide range of learning and development opportunities thatare designed to sharpen business skills and help each individual learn and develop in newand meaningful ways. Our corporate curriculum continuously evolves. Today, it offersmostly instructor-led workshops and online courses, but we are searching for differentways to provide “bite-sized” development opportunities that are more convenient for ouremployees. Workshops are designed on topics related to compliance (e.g., safety, ethics,business practices, etc.), soft skills (e.g., communication, problem solving, learning tojuggle, etc.) and general awareness (e.g., cultural diversity, the art of coffee, workforcegenerations, Making a True Difference, etc.).Leadership Skills Development: We work in partnership with recognized traininginstitutions such as Sheridan College and the University of Guelph to develop and delivercustomized leadership training to individuals or groups depending on the requirements. Byleveraging our practical experience and their academic knowledge, we know we offer aprogram that improves both individual and business performance.Learning Library: When employees don’t have time to attend a course, but can find thetime to read on their own schedule, we offer our employees a Learning Library full ofresources on a variety of business and personal topics.Tuition ReimbursementIt is our policy to recognize employee-initiated efforts to further their professionaldevelopment outside of work. Therefore, we provide financial assistance to permanentfull-time employees attending courses/programs at accredited educational institutions thatlead to an accredited degree, diploma or certificate and relate to the employee’simmediate position or a position within a reasonable career path.less

Employee BenefitsTo attract, engage and retain great people, we are committed to providing a multi-dimensional rewards program including base pay, benefits, incentive pay opportunities,learning and development opportunities and a great work environment.The following table outlines the benefits available to our permanent and non-permanentemployees:

Benefit Type Permanent Full-Time andPart-Time Employees

Non-PermanentEmployees on a ContractTerm of> 6 Months

Group Benefits Plan • •Employee Assistance Program •

Maternity/Parental LeaveBenefits •

Fitness Subsidy •

Tuition Reimbursement •

Referral Program •

Eligibility for HumanitarianAward •

Sick Leave •

Personal Days • •Service Awards •

Incentive Pay •

Discount Programs for LeadingProducts and Services • •All corporate employees are eligible to join our Company pension plan after completingone year of continuous service. The pension plan is a contributory plan wherein TimHortons contributes 4% of employee base earnings and the employee is required tocontribute 2% of base earnings on a bi-weekly basis. Additional voluntary employeecontributions can be made provided total contributions are within the limits of the IncomeTax Act (Canada).less

Health and SafetyHealth and Safety is an integral part of our Company, and we believe everyone is entitledto a safe, healthy workplace. Part of our operations and culture, our Health and Safety goalis to protect employees, property, the environment and the public. We are committed todeveloping and putting in place appropriate work practices, tools, equipment and trainingso that every employee has the ability to identify hazards and deal with them effectively.Mandatory training sessions are required for different groups within the organization ontopics such as Violence and Harassment Prevention for corporate restaurant TeamMembers, and Biohazard and WHMIS training for some facilities employees.Formal Joint Health and Safety Committees100% of our Canadian corporate and distribution employees are represented in one of the12 formal Joint Health and Safety Committees (JHSC). The majority of JHSC members arecomprised of worker representatives as one of the ways for employees to participate intheir workplace health and safety decision making. The JHSC operates at the site level toconduct regular workplace inspections, identify hazards, recommend corrective actionsand suggest ways to improve workplace health and safety. The committees meet at leastquarterly (more frequently for larger offices) and a copy of the minutes is reviewed bymanagement and posted for all employees to read.

Health, Safety and Wellness AwarenessWe run a number of informal awareness activities throughout the year to keep health, safetyand wellness at the forefront.


2 of 4 3/30/2011 3:37 PM

Annual flu clinics and ad hoc lunch 'n' learns andwellness sessions on various prevention strategies.30-minute awareness talk with Guelph DistributionCentre employees on topics such as Heart Health,Back Health and Wellness Goal Setting.Onsite fitness centers or equipment at Oakville,Guelph and Calgary office locations to promotehealth and wellness of employees.Regional Fitness Subsidy for distribution andregional office employees, as well as employees thatspend most of their time working away from theoffice environment, namely Operations.National incentive programs to promote fitness and health – held three times peryear.“Fit Tips” for corporate employees on our electronic bulletin board.Pandemic Sub-committee to help with health prevention and monitoring of currentpandemic situations. The committee works with a medical consultant.Community Shared Agriculture program in Oakville for organic produce delivery.Online subscription for employees to Moods magazine regarding mental healthissues.

Wellness FairsOur commitment to employees' well-being goes beyond the workplace. We started hostingWellness Days several years ago to raise awareness of wellness initiatives and communityoptions that are available with respect to wellness. It was extremely popular in the headoffice; therefore, we eventually branched out to the regional offices and DistributionCentres. Wellness Day is a one event where external providers promote different wellnessactivities, products and services at our offices and facilities that align with our wellnessphilosophy and program. Current suppliers, such as our Employee Assistance ProgramRepresentative and Benefits Representative also attend. Some examples of otherparticipants include massage therapists, chiropractors, and occupational health nurses whoadminister the Know Your Numbers program, which measures cholesterol and bloodpressure.less

Diversity and InclusionWe value and foster workplaces that are inclusive and welcoming and those that allow ourcurrent and future employees to reach their potential.In our restaurants, one of our greatest strengths is the diversity of the people on each team.Our restaurant Team Members represent a variety of backgrounds, experiences, andpersonalities. These diverse experiences make the Tim Hortons team what we are:positive and inclusive. We're proud to offer a respectful, friendly environment whereenthusiastic people enjoy working together to meet our guests' needs.Corporately, we have chosen to focus our efforts in two areas:

Gender diversityGenerational diversity

These two areas of focus are in addition to our commitment to maintaining meaningful,structured and long-term partnerships with the Aboriginal community.Gender Diversity EffortsResearch shows that male-dominated industries provide particular challenges for women’sadvancement.1 We recognize that women are under-represented in our industry andacknowledge the challenges that potential female leaders face in terms of theiradvancement. Therefore, we have taken a leadership role in establishing the CanadianChapter of the Women in Foodservice Forum (WFF). As active members of the LeadershipCompetency Taskforce, we are supporting the development of a competency model, anassessment tool and learning and development materials. Our corporate employees (bothmale and female) participate in learning events sponsored by the WFF regularly.1 Source: Catalyst Inc., January 2010.Generational Diversity EffortsLike all industries, our leaders will face new challenges in recruiting, rewarding,managing, training, motivating and retaining a multi-generational workforce. To assist inmanaging these challenges and benefiting from the opportunities they present, we arefocused on delivering ongoing learning, including:

An eLearning module “Understanding Workforce Generations” on our LearningManagement System for all employees. Designing a blend of learning sessions to elevate overall awareness and skill levelat the manager level and above.

Cultural DiversityTo foster an understanding of cultural diversity within our Company, we have educationalresources available to corporate employees and restaurant Team Members, including aCultural Diversity eLearning module. In addition, we participate in Equitek EmploymentEquity Solutions’ “Strategic Diversity Sourcing” outreach service to proactively advertiseour corporate career opportunities to diverse qualified candidates (who may not haveaccess to or may be hidden from traditional recruiting resources).Relationship to Restaurant Owners and Team MembersRestaurant Team Members of franchised restaurants are franchise employees, not ouremployees. Within our franchise business model, we supply Restaurant Owners andmanagers a full offering of human resources programs, policies and guidelines to assistthem in running their business. In addition, we provide Restaurant Owners and theirmanagers and Team Members with ongoing human resource support and guidance asrequired.less

All permanent corporateemployees to have anIndividual DevelopmentPlan and receive anannual performance

• We will continue working towards all our permanentcorporate employees having an Individual Development Planand receiving an annual performance review.1


3 of 4 3/30/2011 3:37 PM

review


• We will continue working towards all our corporateemployees being trained in our Standards of BusinessPractices within their first year of employment.


• We are aiming to achieve having a minimum of 95% ofcorporate employees feel proud that they work for ourCompany, and for a minimum of 80% of corporate employeeswho feel that our Company is a good place for them to pursuetheir career goals.1

1 Performance for this goal will be reported every two years in conjunction with ourcorporate Employee Opinion Survey.

© 2010 Tim Hortons


4 of 4 3/30/2011 3:37 PM

IndividualsEmployees: Our CommitmentsChampioning a culture where people are treatedfairly and are given the opportunity to suceed.


• In 2010, 90% of our corporate employees with2+ years of service had development plans.

• 84% of our employees felt their supervisor is

supportive of their development plan. Thisresult is a 20% increase since 2008.


• 83% of our corporate employees completed ouronline Standards of Business Practices trainingin 2010.1


• In 2010, our corporate employee opinion surveyresults showed that 97% of respondents feelproud to work for our Company.

1 The result reflects those who have scored 80% or higher on the final mastery test. Ourshortfall in 2010 is due to new hires, individuals who had the course in progress as ofDecember 31, 2010, and those corporate employees who did not score 80%.

Corporate Employee InitiativesAs of December 31, 2010, Tim Hortons had a total of 1,971 corporate employees acrossCanada and the U.S.Employee EngagementWe believe in a work environment that is caring to employees and values theircontributions. We offer opportunities to participate in: Company-wide communicationsmeetings, Company-sponsored events such as annual staff celebrations, family picnics, golftournaments, BBQs, Tim Horton Children's Foundation Camp Day, and Tim Fit fitnesscentre open houses.At work, we engage our employees in sharing trends in the quick service restaurantindustry that they learn about and making suggestions for Company process improvements,cost savings and environmental initiatives through Idea Jam! Idea Jam! is our internalonline forum that encourages employees to submit suggestions and comment on existingones.Biennially, we administer a comprehensive Employee Opinion Survey to measureemployee engagement, which we define as: pride in working for our Company, pride inour brand, alignment with our Company values, and a sense of contribution toorganizational success. Survey results are reported by functional group, and action plansare developed to address issues of concern. In 2010, 78% of corporate employeesresponded to the survey.Standards of Business Practices

Operating in a fair and ethical manner has always been a core valueat Tim Hortons. Every employee is provided with a copy of theStandards of Business Practices (SOBP) , a document intended toprovide guidelines regarding ethical business practices. In additionto receiving an SOBP booklet and signing it, employees are providedwith more detailed, job-specific information on how to put thesestandards to work.An eLearning module – “Tim Hortons Standards of BusinessPractices” – is the primary delivery mechanism for learning about thestandards we expect everyone to follow. Employees complete this

program annually in order to review the standards and reaffirm their commitment tofollowing the standards. Topics covered include relationships with employees, RestaurantOwners and vendors, conflicts of interest and compliance with copyright and other laws,to name a few.Employees also have four specific methods to seek guidance and report issues of concern:

contacting their direct supervisor or manager;contacting Human Resources;contacting the Ethics Compliance Office directly;contacting our third-party ethics reporting partner, EthicsPoint.

Individual Development PlansIndividual development plans and performance reviews are a part of everyone'sresponsibility and accountability across the Company. Our performance review process isnow semi-annual – with managers and employees reviewing progress and results on keyobjectives and individual development plans. All of our employees are expected to havean individual development plan. To that end, a development planning workshop (offered insmall groups or through online training) is one of the tools our employees use to createSMART development plans – plans that are Specific, Measurable, Attainable, Relevantand Time-bound.Training and DevelopmentWe recognize that by enhancing the knowledge base of our workforce and supporting our


1 of 7 3/30/2011 3:37 PM

employees' ambitions to improve their own knowledge base, we will be a better company.Learning CurriculumExternal Training: Our Human Resourcesdepartment constantly scans the market for newand innovative training programs that willassist employees with their daily routine. Whenwe find a program that we believe will help,we take the necessary steps to bring that courseto our employees or send our employees' to thecourse. We also recognize that employees havetheir own interests and we support employeesattendance at external training events.Internal Training: We offer a wide range of learning and development opportunities thatare designed to sharpen business skills and help each individual learn and develop in newand meaningful ways. Our corporate curriculum continuously evolves. Today, it offersmostly instructor-led workshops and online courses, but we are searching for differentways to provide “bite-sized” development opportunities that are more convenient for ouremployees. Workshops are designed on topics related to compliance (e.g., safety, ethics,business practices, etc.), soft skills (e.g., communication, problem solving, learning tojuggle, etc.) and general awareness (e.g., cultural diversity, the art of coffee, workforcegenerations, Making a True Difference, etc.).Leadership Skills Development: We work in partnership with recognized traininginstitutions such as Sheridan College and the University of Guelph to develop and delivercustomized leadership training to individuals or groups depending on the requirements. Byleveraging our practical experience and their academic knowledge, we know we offer aprogram that improves both individual and business performance.Learning Library: When employees don’t have time to attend a course, but can find thetime to read on their own schedule, we offer our employees a Learning Library full ofresources on a variety of business and personal topics.Tuition ReimbursementIt is our policy to recognize employee-initiated efforts to further their professionaldevelopment outside of work. Therefore, we provide financial assistance to permanentfull-time employees attending courses/programs at accredited educational institutions thatlead to an accredited degree, diploma or certificate and relate to the employee’simmediate position or a position within a reasonable career path.less

Employee BenefitsTo attract, engage and retain great people, we are committed to providing a multi-dimensional rewards program including base pay, benefits, incentive pay opportunities,learning and development opportunities and a great work environment.The following table outlines the benefits available to our permanent and non-permanentemployees:

Benefit Type Permanent Full-Time andPart-Time Employees

Non-PermanentEmployees on a ContractTerm of> 6 Months

Group Benefits Plan • •Employee Assistance Program •

Maternity/Parental LeaveBenefits •

Fitness Subsidy •

Tuition Reimbursement •

Referral Program •

Eligibility for HumanitarianAward •

Sick Leave •

Personal Days • •Service Awards •

Incentive Pay •

Discount Programs for LeadingProducts and Services • •All corporate employees are eligible to join our Company pension plan after completingone year of continuous service. The pension plan is a contributory plan wherein TimHortons contributes 4% of employee base earnings and the employee is required tocontribute 2% of base earnings on a bi-weekly basis. Additional voluntary employeecontributions can be made provided total contributions are within the limits of the IncomeTax Act (Canada).less

Health and SafetyHealth and Safety is an integral part of our Company, and we believe everyone is entitledto a safe, healthy workplace. Part of our operations and culture, our Health and Safety goalis to protect employees, property, the environment and the public. We are committed todeveloping and putting in place appropriate work practices, tools, equipment and trainingso that every employee has the ability to identify hazards and deal with them effectively.Mandatory training sessions are required for different groups within the organization ontopics such as Violence and Harassment Prevention for corporate restaurant TeamMembers, and Biohazard and WHMIS training for some facilities employees.Formal Joint Health and Safety Committees100% of our Canadian corporate and distribution employees are represented in one of the12 formal Joint Health and Safety Committees (JHSC). The majority of JHSC members arecomprised of worker representatives as one of the ways for employees to participate intheir workplace health and safety decision making. The JHSC operates at the site level toconduct regular workplace inspections, identify hazards, recommend corrective actionsand suggest ways to improve workplace health and safety. The committees meet at leastquarterly (more frequently for larger offices) and a copy of the minutes is reviewed bymanagement and posted for all employees to read.


2 of 7 3/30/2011 3:37 PM

Health, Safety and Wellness AwarenessWe run a number of informal awareness activities throughout the year to keep health, safetyand wellness at the forefront.

Annual flu clinics and ad hoc lunch 'n' learns andwellness sessions on various prevention strategies.30-minute awareness talk with Guelph DistributionCentre employees on topics such as Heart Health,Back Health and Wellness Goal Setting.Onsite fitness centers or equipment at Oakville,Guelph and Calgary office locations to promotehealth and wellness of employees.Regional Fitness Subsidy for distribution andregional office employees, as well as employees thatspend most of their time working away from theoffice environment, namely Operations.National incentive programs to promote fitness and health – held three times peryear.“Fit Tips” for corporate employees on our electronic bulletin board.Pandemic Sub-committee to help with health prevention and monitoring of currentpandemic situations. The committee works with a medical consultant.Community Shared Agriculture program in Oakville for organic produce delivery.Online subscription for employees to Moods magazine regarding mental healthissues.

Wellness FairsOur commitment to employees' well-being goes beyond the workplace. We started hostingWellness Days several years ago to raise awareness of wellness initiatives and communityoptions that are available with respect to wellness. It was extremely popular in the headoffice; therefore, we eventually branched out to the regional offices and DistributionCentres. Wellness Day is a one event where external providers promote different wellnessactivities, products and services at our offices and facilities that align with our wellnessphilosophy and program. Current suppliers, such as our Employee Assistance ProgramRepresentative and Benefits Representative also attend. Some examples of otherparticipants include massage therapists, chiropractors, and occupational health nurses whoadminister the Know Your Numbers program, which measures cholesterol and bloodpressure.less

Diversity and InclusionWe value and foster workplaces that are inclusive and welcoming and those that allow ourcurrent and future employees to reach their potential.In our restaurants, one of our greatest strengths is the diversity of the people on each team.Our restaurant Team Members represent a variety of backgrounds, experiences, andpersonalities. These diverse experiences make the Tim Hortons team what we are:positive and inclusive. We're proud to offer a respectful, friendly environment whereenthusiastic people enjoy working together to meet our guests' needs.Corporately, we have chosen to focus our efforts in two areas:

Gender diversityGenerational diversity

These two areas of focus are in addition to our commitment to maintaining meaningful,structured and long-term partnerships with the Aboriginal community.Gender Diversity EffortsResearch shows that male-dominated industries provide particular challenges for women’sadvancement.1 We recognize that women are under-represented in our industry andacknowledge the challenges that potential female leaders face in terms of theiradvancement. Therefore, we have taken a leadership role in establishing the CanadianChapter of the Women in Foodservice Forum (WFF). As active members of the LeadershipCompetency Taskforce, we are supporting the development of a competency model, anassessment tool and learning and development materials. Our corporate employees (bothmale and female) participate in learning events sponsored by the WFF regularly.1 Source: Catalyst Inc., January 2010.Generational Diversity EffortsLike all industries, our leaders will face new challenges in recruiting, rewarding,managing, training, motivating and retaining a multi-generational workforce. To assist inmanaging these challenges and benefiting from the opportunities they present, we arefocused on delivering ongoing learning, including:

An eLearning module “Understanding Workforce Generations” on our LearningManagement System for all employees. Designing a blend of learning sessions to elevate overall awareness and skill levelat the manager level and above.

Cultural DiversityTo foster an understanding of cultural diversity within our Company, we have educationalresources available to corporate employees and restaurant Team Members, including aCultural Diversity eLearning module. In addition, we participate in Equitek EmploymentEquity Solutions’ “Strategic Diversity Sourcing” outreach service to proactively advertiseour corporate career opportunities to diverse qualified candidates (who may not haveaccess to or may be hidden from traditional recruiting resources).Relationship to Restaurant Owners and Team MembersRestaurant Team Members of franchised restaurants are franchise employees, not ouremployees. Within our franchise business model, we supply Restaurant Owners andmanagers a full offering of human resources programs, policies and guidelines to assistthem in running their business. In addition, we provide Restaurant Owners and theirmanagers and Team Members with ongoing human resource support and guidance asrequired.less


3 of 7 3/30/2011 3:37 PM


• We will continue working towards all our permanentcorporate employees having an Individual Development Planand receiving an annual performance review.1


• We will continue working towards all our corporateemployees being trained in our Standards of BusinessPractices within their first year of employment.


• We are aiming to achieve having a minimum of 95% ofcorporate employees feel proud that they work for ourCompany, and for a minimum of 80% of corporate employeeswho feel that our Company is a good place for them to pursuetheir career goals.1

1 Performance for this goal will be reported every two years in conjunction with ourcorporate Employee Opinion Survey.

© 2010 Tim Hortons


4 of 7 3/30/2011 3:37 PM

Tim Hortons Corporate Employee Performance Summary 2010

Performance Indicator Corporate Employees

Number of employees(1) 1,971

Rate of employee turnover(2) 12% ... view full breakdownPercentage of employees covered by collective bargaining agreements 0%

Percentage of total workforce represented in formal joint manager-worker health and

safety committees(3)100%

Rates of injury,(4) lost days(5) and number of work-related fatalities by region Injury rate: 9.6Lost day rate: 10.3Work-related fatalities: None ... view full breakdown

Percentage of employees receiving regular performance and career development

reviews(6)90%

Percentage of employees trained on policies and procedures concerning aspects of humanrights that are relevant to operations

100% of our employees read and sign the Standards of Business Practices when hired andeach year thereafter. 83% of our employees completed the Standards of BusinessPractices training online in 2010.

Total number of incidents of discrimination and actions taken There was one incident of discrimination, which was reviewed, investigated and resolvedthrough our Ethics Resolution Process.

Operations identified as having significant risk for incidents of forced or compulsorylabour, and measures to contribute to the elimination of forced or compulsory labour

None

Percentage of employees trained in organization's anti-corruption policies and procedures 100% of our employees read and sign the Standards of Business Practices when hired andeach year thereafter. 83% of our employees completed the Standards of BusinessPractices training online in 2010.

1 Represents full-time, part-time, and contract employees.2 Permanent employee turnover as a percentage of total headcount.3 R t C di ti l


7 of 7 3/30/2011 3:37 PM

IndividualsPartners: Our CommitmentsManaging our stakeholder relationships withhonesty, transparency and respect.

Pilot a Sustainability andResponsibility AdvisoryCouncil of externalexperts in 2010

• We invited external experts in nutrition, foodsafety, sustainable coffee, waste diversion andenvironment/supply chain to provide guidanceand feedback on how we are doing on our mostimportant issues. Independently facilitatedinterviews and a one-day retreat were part ofthe process.

Issue our firstSustainability andResponsibility Report in2011 using the GlobalReportingInitiative(GRI) G3Sustainability ReportingGuidelines

• We followed the GRI's recommended reportingprocess and have self-declared to the B Levelfor our inaugural report.

Tim Hortons Sustainability and Responsibility Advisory CouncilBackgroundAs part of our stakeholder engagement process, we identified the most importantsustainability and responsibility issues to our Company. These issues helped shape our2010 commitments and goals. As we developed our commitments and goals, we realizedthat independent guidance would be helpful to ensure we reach our goals. We thereforecreated our first external Sustainability and Responsibility Advisory Council.Sustainability and Responsibility Advisory Council Members 2010–2011Our inaugural Advisory Council includes the following experts:Advisor Area of Expertise

Marilyn Lee, Professor, School of Occupational andPublic Health, Ryerson University

Food safety

Jason Potts, Associate and Program Manager,International Institute for Sustainable Development(IISD)

Sustainable coffee, suppliercode of conduct

Peter Robinson, Chief Executive Officer, DavidSuzuki Foundation

Environment, supplier code ofconduct

Jo-Anne St. Godard, Executive Director, RecyclingCouncil of Ontario1

Packaging, waste diversion,recycling, litter

Yvonne Yuan, Associate Professor, School ofNutrition, Ryerson University

Nutrition

1Tim Hortons is a member of the Recycling Council of Ontario.

Tim Hortons Sustainability and Responsibility Advisory Council 2010–2011From left to right: Jo-Anne St. Godard, Yvonne Yuan, Jason Potts, Peter Robinson,Marilyn LeeOur Advisory Council ProcessWe looked to our Advisory Council to provide guidance and feedback on how we aredoing on our most important issues. We asked them to share their honest and unbiasedexpert advice, and to help guide us on the evolution of our Making a True Differenceframework and commitments and goals. Further, we wanted to learn more about bestpractices, emerging trends and innovation, and our reporting process itself. As part of theirrole, our Advisory Council will continue to provide input into our 2011 reporting cycle.We asked Canadian Business for Social Responsibility (CBSR)2 to facilitate our AdvisoryCouncil process. CBSR conducted independent in-person interviews with all our Advisorsbetween September and December 2010. The interviews probed our Advisors'philosophies and orientation towards sustainability and responsibility and theirperceptions of Tim Hortons, and we asked for their feeedback on our performance in theirarea of expertise.CBSR then summarized the output of the interviews and shared it back with the Advisorsand Tim Hortons executives as part of a one-day retreat. The retreat was held in our


1 of 2 3/30/2011 3:38 PM

corporate offices in Oakville, Ontario, and also included a tour of one of our newrestaurants, a Leadership in Energy and Environmental Design (LEED)® certificationcandidate.Key ThemesBelow is a list of key themes and implications that emerged throughout the discussion:Tim Hortons has a tremendous ability to influence.Using its key strengths of brand, community relations, trust, size, and culture, Tim Hortonshas the ability to influence peers, consumers, suppliers and government on sustainabilityand responsibility issues.There is an opportunity for bolder leadership, even if it means some missteps alongthe way.Many companies hesitate to communicate on their innovative sustainability initiatives untilthese initiatives have proven to be successful. This makes it difficult for these companiesto demonstrate leadership. It is also important for a company's reputation as an authenticactor that its progress is shared in a balanced way with stakeholders, celebrating thesuccesses but also sharing the challenges. Tim Hortons has the opportunity to bring theconsumer along with them on their sustainability journey.The key to sustainability and responsibility is ensuring that it is holistic andintegrated into systems.Tim Hortons has already shown evidence of its strong systems, thinking through theintegration of sustainability at multiple touch-points within the organization, from theexecutive level through the rigorous training given to restaurant employees. Forsustainability, it is about using the same systems mindset and ensuring that issues areexamined holistically. Part of integrating something into the system is getting people onboard – currently, regarding sustainability and responsibility, the Board and executiveteam are aligned as well as some Restaurant Owners; however, it is now about appealingto the broader Tim Hortons organization and to guests.Sustainability and responsibility does not mean that Tim Hortons has to redo itsbrand, but rather, further integrate it into Tim Hortons already strong communityprograms and reputation.Tim Hortons has a strong foundation in community relations; sustainability andresponsibility should not be looked at from a separate lens – environmental sustainabilityis also about protecting human life, and communities include protecting the ecosystem.This is a base of responsibility the Company already recognizes through its normalbusiness practices; however, many opportunities exist to enhance and integrate.Sustainability and responsibility initiatives require a long-term view and, sometimes,a leap of faith.Long-term goals often make the greatest impact. The best sustainability and responsibilitydecisions made are ones of a long-term nature, knowing that the business will be aroundfor a long time. When you use shorter time spans, investment decisions are very differentand may not align with the long-term vision. Companies that do make long-term decisionsoften find that when they re-examine their investments a few years later, they are alreadypaying off.

2CBSR is a member-based not-for-profit that works in partnership with Canadianbusinesses, government, NGOs, academia and other stakeholders to advance corporatesocial responsibility in Canada. Tim Hortons has been a member of CBSR since 2008.less

Pilot a Sustainability andResponsibility AdvisoryCouncil of externalexperts in 2010

• We will incorporate our Advisory Council's feedback andrecommendations into our sustainability and responsibilitystrategy as appropriate.

Issue our firstSustainability andResponsibility Report in2011 using the GlobalReporting Initiative(GRI) Guidelines

• We will continue to report to the GRI Guidelines andparticipate in the Carbon Disclosure Project (CDP) in 2011.

© 2010 Tim Hortons

Tim Hortons - 2010 Sustainability and Responsibility Report http://www.bmirstaging.com/th/sr2010/individuals_partners.html

2 of 2 3/30/2011 3:38 PM

GRI Application Level B

We self-declare that our 2010 Sustainability and Responsibility Report meets GRI Application Level B. The GRI Application Level1

system provides organizations with a pathway towards continuous improvement of their sustainability reporting. The Application Levelsreflect the reporting organization's degree of transparency and are intended to motivate reporters to enhance the quality of their reportingover time.

1The GRI Application Levels indicate the extent to which the G3 Guidelines have been applied in sustainability reporting. They communicatewhich part of the Reporting Framework has been addressed – which set of disclosures, varying with the different Levels. The Levels do notgive an opinion on the sustainability performance of the reporting organization, the quality of the report, or on formal compliance with the G3Guidelines. For more information, visit globalreporting.org.


1 of 1 3/30/2011 3:39 PM

Children

Together with our Restaurant Owners (franchisees), we are making a meaningful contribution to the lives of children in our communities.

Community Success

Together with our Restaurant Owners, we are helping make our communities a better place to live in.

Tim Hortons Coffee Partnership

Helping build viable coffee communities.

© 2010 Tim Hortons


CommunitiesChildren: Our CommitmentsTogether with our Restaurant Owners (franchisees), we are making a meaningful contribution to the live of children in our communities.

17,000 economicallydisadvantaged childrenparticipating in TimHorton Children'sFoundation camps andprograms by 2013

• We welcomed 14,654 children betweenJan.1 to Dec. 31 through our Residential, YouthLeadership and Year-round Group Programs.

• Renovations at our camps will allow us to

increase the number of children served, and wecontinue to work on obtaining final approvalsfor a new camp in Manitoba and for a proposedBritish Columbia camp site.

Tim Horton Children’s FoundationThe Tim Horton Children's Foundation was established in 1974. The Foundation wasstarted as a way to honour the great Canadian hockey player Tim Horton, who lovedchildren and always had a desire to help those less fortunate.The Foundation is an independent, non-profit charitable organization committed toproviding a fun-filled camp environment for children from economically disadvantagedhomes. The children served by the Foundation do not generally have access to resourcesand activities that provide them with skills that will help them develop into positive,contributing members of their communities. The goal of Foundation programs is forchildren to attend camp and learn lifelong skills such as self-confidence, a sense ofindependence, and the knowledge that if they try hard they can achieve great things.In the Residential Camp Program, our Restaurant Owners work closely with schools,social service agencies, churches and other youth organizations to select appropriatechildren aged 9 to 12 who otherwise might not have the opportunity to take part in a campexperience. The Tim Horton Children's Foundation covers all costs for each child,including transportation, food and lodging. Highly trained staff, excellent facilities andactivity programs provide all the fun that goes with a first-class children's camp.Since 1975, more than 130,000 children and youth have benefited from one of sixFoundation camps.Core ProgramsThe Tim Horton Children's Foundation provides three core camping programs:Residential Camp Program (ages 9–12 years)The Residential Camp Program is a once-in-a-lifetime opportunity for economicallydisadvantaged children in our communities. These children attend either a 10-day SummerResidential Camp Program or a 7-day Winter Residential Camp Program.Youth Leadership Program (ages 13–18 years)This successive five-level program is for youth who have previously participated in aresidential camp session and have an interest in developing lifelong leadership skills. Thecurriculum of the program is designed to build these skills through an experiential learningapproach focused on topics such as goal-setting, problem solving, teamwork, servicelearning and planning for success.Year Round Group Program (ages 8–18 years)The Year Round Group Program operates throughout the fall, winter and spring for groupsand schools that serve economically disadvantaged children. These groups attend a 3- to7-day residential camp and have the opportunity to partake in all aspects of Foundationactivities.Environmental InitiativesComprehensive environmental programs and initiatives are in place at each of our camps.

Camp Kentahten: Campbellsville, KentuckyCamp Tatamagouche: Tatamagouche, Nova ScotiaOnondaga Farms: St. George, OntarioMemorial Camp: Parry Sound, OntarioCamp Des Voyageurs: Quyon, QuebecChildren's Ranch: Kananaskis, AlbertaView the 2010 THCF Year in Review Report hereless

Funding for the CampsFunding for the Tim Horton Children's Foundation comes primarily from donations fromour Restaurant Owners, suppliers and from public donations collected through counter coinboxes located year-round at our restaurants. Throughout the year, a number of fundraisingevents are also held to increase donations. These include events such as annual golftournaments and banquet dinners.The largest single fundraising event is Camp Day. Camp Day is one day (during the firstweek of the month of June) when our Restaurant Owners donate 100% of their coffeeproceeds, plus other funds raised throughout the 24-hour period, to the Foundation. In2010, Camp Day raised an incredible $9.7 million CAD! We would like to extend a hugethank you to all our Restaurant Owners and their Team Members who continually make thismajor fundraiser so successful!During 2010, our coin boxes raised nearly $8 million across the chain. Thank you to allour valued guests who are willing to spare their change to help send a kid to camp.Tim Hortons Inc. also donated $1 million CAD to the Tim Horton Children's Foundation in2010.For more information on the Tim Horton Children's Foundation, please visit thcf.com.


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17,000 economicallydisadvantaged childrenparticipating in TimHorton Children'sFoundation camps andprograms by 2013

• We will continue working towards 17,000 economicallydisadvantaged children participating in Tim Horton Children'sFoundation camps and programs by 2013.

• Together with our Restaurant Owners, guests and other

supporters, we hope to raise a minimum of $10 million onCamp Day to send kids to camp.

© 2010 Tim Hortons

Tim Hortons - 2010 Sustainability and Responsibility Report http://www.bmirstaging.com/th/sr2010/communities_children.html

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Camp Des Voyageurs Tim HortonQuyon, QuebecOur Quyon camp consists of 60 acres located on Pontiac Bay on theOttawa River approximately 1 hour from Ottawa, Ontario.

Also within our territory is the Gatineau Hills, which is managed by theNational Capital Commission.

Minimizing Impact on the Environment

We recycle our paper, glass, and plastic.We have changed 60% of our lighting from incandescent tofluorescent, and we reinforce "lights turned off" when leaving abuilding to all staff, campers and visiting groups.We have been working on conserving water and have installedlow-flow shower heads, sink aerators, low-flow toilets andwaterless urinals.Once a year, we participate in the Pontiac Municipality Clean-up.We have been recognized as a "Producteur forestier Indépendant," an independent forest producer, since 1997, by planting aminimum of 200 trees per year. Also, in 2006, we planted 4,000 spruce trees on the property.

Future Projects

We are establishing a partnership with the province's ministère de la Faune, ministère des Ressources Naturelles, ministère del'Environnement, Hydro-Québec, et la MRC des Collines to enhance conservation and nature interpretation within the trail system andinformation on the fauna and flora of this region.


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Tim Horton Camp KentahtenCampbellsville, KentuckyTim Horton Camp Kentahten is located in the Green River State Park on50 acres of waterfront property. Our lease is with the U.S. Corps ofEngineers.

Our property is located within the Green River Lake watershed and hasapproximately 1,000 yards of shoreline. The State Park offersapproximately 28 miles of multi-use trails that we use for biking, hiking andaccess to our camper overnight sites.


We currently recycle cardboard, plastic and aluminum andcompost uncooked vegetables, fruit, eggshells and coffeegrinds.With the support of Restaurant Owners from the western NewYork area, we launched a "Think Green" program as a way toreduce energy consumption at camp and educate campers on environmental initiatives. Program elements include, but are notlimited to: recycling and composting, an outdoor nature learning centre, nature interpretation and a weather station. All light fixturesin our camp have energy-efficient compact fluorescent lamps (indoor and outdoor). In addition, the program incorporates theLeave No Trace® concept of outdoor ethics.Campers in our residential camp program earn their “G.R.E.A.T. Beads” in recognition of campers for their achievements. Thisprogram includes a “Green” bead which is awarded for environmental achievements.

Future Projects

We are currently partnering with the State Park to help develop and restore their park trails. All trail development is erosion-strategic due tothe steep incline of the entire camp. This includes the use of switchbacks and erosion bars or simply moving a trail every few years todecrease stress on an area.


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Tim Horton Children's RanchKananaskis, AlbertaThe Tim Horton Children's Ranch is nestled on 150 acres in KananaskisCountry, Alberta. Participants at "the Ranch" have the unique opportunityof experiencing the Canadian Rockies.


We reinforce the Reduce, Reuse, Recycle philosophy, whichresulted in cutting down paper/toner use by 20% in 2010 (45% in2009).Our recycling program has been enhanced to include allrecyclables – now picked up and transported to a local depot.We preserve animal and plant habitat by limiting travel todesignated trailsIn 2010, we initiated a major renovation project to welcome morechildren to the camp. Tree planting and reforestation are someof the enhancements we are making to the camp.We partnered with our local Fire Chief and Forest Management Service to "firesmart" the areas around our buildings. Thisprogram involves the removal of deadfall to reduce the risk of forest fire and provide the opportunity for new growth to flourish.In the area surrounding the camp, selective removal of pine trees was completed by a local logging company as a preventivemeasure against the spread of the debilitating mountain pine beetle. The resulting cut blocks were then reforested with non-pinespecies.As a result of renovations at the Ranch, low-flow toilets and in-floor radiant heating are being used in the new bunkhouses. Inaddition, we have added a new, state-of-the-art waste-water treatment centre at the Camp.


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Tim Horton Memorial CampParry Sound, OntarioThe Tim Horton Memorial Camp is set on 101.42 acres on Lorimer Lake.

Approximately 80 acres of the property is deciduous forest and wetlands,with the camp buildings and residences occupying the remaining land.The Camp also owns a small island on the lake approximately 1 km awaythat is used for overnight camping.


We have a Reduce, Reuse and Recycling program (cardboard,plastics, paper).We are piloting an organic learning garden for children to interactwith that will incorporate our dining hall compost.We have installed motion-sensitive lighting inrestrooms/washhouses and completed "green" renovationssuch as heating system improvements, insulation, doors, andrenewable flooring using eco-friendly materials (i.e. paints).We replaced our outhouses with composting toilets at all of our overnight sites.We have established "no wake zones" and speed limits on motor boats to reduce shoreline erosion.All of our expedition and overnight programs practice Leave No Trace® camping. Wilderness and overnight staff are certifiedLeave No Trace® leaders.We started a partnership with the Friends of Killarney program in 2010 where our Level 4 Youth Leadership wilderness expeditionprograms conduct weekly clean-up projects of remote wilderness sites in Killarney Provincial Park.

Future Projects

We have constructed a yurt shelter on a platform at the north end of our property. This low-impact structure is intended for use as anovernight site for our younger campers. The structure was built on an existing trail on the property, and our vision is to turn the trail into anenvironmental interpretive walk including wildlife and wetland education.


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Tim Horton Onondaga FarmsSt. George, OntarioTim Horton Onondaga Farms is located on 400 acres of rolling hills andwetlands in St. George, Ontario.

Adjacent to private farm owners, approximately 100 acres of the propertyis a managed forest, with a portion of these lands under an activereforestation project. We maintain a working farm with cattle, horses andsheep, and we grow a variety of market vegetables.


We have a recycling program and compost after every meal. Allof our campers assist with the compost program.In 2010, we started an organic vegetable garden. Vegetables aregrown year-round in the greenhouse and in the vegetablegarden.Over 3,000 campers participate in our renewable energyprogram every year.We participate twice a year in cleaning up Glen Morris Road East, and every Earth Day we plant over 200 trees within the BrantCounty community.We have a partnership with the Canadian Chestnut Council, and we are growing over 1,200 American chestnut trees. TheAmerican chestnut is an endangered species.We have a partnership with the Grand River Conservation Authority (GRCA). We have planted 5,000 seeds a year since 2002.The seeds spend a year in the greenhouse then are transferred to our hoop house for two years. In year 3, the trees are plantedon the Farm and throughout the GRCA watershed.We have 22 wetlands on the property that are jointly managed by Onondaga Farms and Ducks Unlimited.Our Lumsden pond is the home of our Trumpeter swan program. This is a recovery program to bring the Trumpeter swans backto Ontario. We have been raising Trumpeter swans since 2002, and we presently have 17 swans on site.Our swans migrate to and from the camp annually and some swans have decided to live at the site year-round.We have a partnership with Bird Studies Canada and maintain 117 wood duck boxes, over 200 blue bird boxes (built yearly byvolunteers) and 5 purple martin houses. Bird Studies Canada monitors the houses annually.Our Taylor Pond is a fully stocked largemouth bass pond. The pond was established in 2004 and we have minnows andChristmas trees placed into the pond every year for food and shelter. The campers participate in a catch-and-release program.We have two plantations of prairie grass on our property; one small plantation is by our Home Office and one large plantation isnear Taylor Pond (6 acres). These naturalized areas create habitats for plants and animals that depend on prairie ecosystems.Tim Horton Onondaga Farms is a recepient of the Grand River Conservation Area's Watershed Award.Onondaga Farms is the host site for the Annual Provincial Envirothon (www.ontarioenvirothon.on.ca).We are proud to maintain five Key Partnerships: Bird Studies Canada (www.bsc-eoc.org); Canadian Wildlife Federation(www.cwf-fcf.org); Ducks Unlimited (www.ducks.ca); Grand River Conservation Authority (www.grandriver.ca); and the OntarioForestry Association (www.oforest.ca).


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Camp TatamagoucheTatamagouche, Nova ScotiaCamp Tatamagouche is located on a 245-acre property situated on theshores of the Northumberland Strait, in Tatamagouche Bay.

The property consists of approximately 125 acres of green fields andmore than 100 acres of woodland.


We have a recycling program for bottles and cardboard and wecompost waste.We use our coffee grinds to make coffee clay, and our campersuse it to make sculptures. We re-use empty cans in our Arts andCrafts Program.During each camp session, we have an Earth Day during whichwe turn out the lights and have a lunch that does not requirepower. We place "green" facts on each table to help educate thecampers.Nova Scotia Power has supplied the camp with energy-efficient light bulbs. A plan is in place to also replace fluorescent lightingballasts.An energy audit was also done, and we plan to complete ecoEnergy retrofits.A few years ago more than 200 trees were damaged by a storm, and since then we have replanted 2,500 seedlings.We use the damaged trees for firewood.We had six bat houses placed around the property to help with mosquito elimination.We won the John Currie Award from the Nova Scotia Department of Natural Resources for the initiatives taken in our natureprogram for campers.


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CommunitiesCommunity Success: Our CommitmentsTogether with our Restaurant Owners, we are helping make our communities a better place.

Invest a minimum of$15 million through ournational, regional andlocal initiatives in 2010

• We invested over $15,098,000 through ournational, regional and local initiatives in 2010.

275,000 childrenparticipating in theTimbits Minor SportsProgram in 2010

• Over 293,000 children participated in ourTimbits Minor Sports Program in 2010.

Implement a meaningful,structured and long-termpartnership with theAboriginal community

• In 2010, 44,759 restaurant Team Memberscompleted awareness training. Since 2009,over 120,000 have completed the training.

Local and National ProgramsThrough our franchise network, we are proud to have developed a number of nationallyrecognized sponsorship programs, such as Timbits Hockey and Timbits Soccer, thatprovide funding for associations to acquire uniforms as well as much needed items thathelp offset costs for parents and volunteers.The Timbits Hockey program began almost 25 yearsago in New Brunswick when one of ourlong-standing Restaurant Owners, Gary O'Neill,provided a set of jerseys to a local team inRiverview. Restaurant Owners from across Canadaheard about the program and also began providingjerseys and sponsorship to minor hockeyassociations across the country. Gary O'Neill'sprogram has grown over the years to the now almost65,000 children wearing Timbits jerseys in their first year of hockey. Our most famousTimbits participant is NHL star Sidney Crosby, who began his hockey career as a Timbitsplayer in Cole Harbour, Nova Scotia, in 1993.We annually invest more than $3,000,000 in children's sports, and we make thiscommitment because we believe it is important that children are able to benefit fromparticipating in sports and have the opportunity to take time out to be a child.Free Skating and SwimmingWe have also developed a Free Holiday Skate program where we rent almost 3,800 hoursof ice time at over 350 local arenas across the country during the holidays. The ice time isoffered to families to use to spend some quality time together at no cost during this specialholiday season. The Free Holiday Skate program continues to grow in popularity, withmany arenas at capacity during the free skates.Similarly, our Free Swim program provides an opportunity for families to enjoy timetogether at the local swimming pool.

Smile CookieOur Smile Cookie Program is a very unique program that raises much needed funds forcharities across the country. Smile Cookie began in Hamilton in 1996 and was initiated bya local Restaurant Owner whose daughter had been treated at Chedoke McMaster Hospital.They were interested in supporting the hospital, so our restaurants in the area baked andsold special cookies with an icing Smiley Face.Like Timbits Minor Sports Program, the Smile Cookie Program hasspread across the chain, and in September 2010, the programenabled donations of $3.38 million to approximately 340 localcommunity organizations.Click here for a list of charitable organizations that received SmileCookie funding by province in 2010.Food DrivesOur annual Tim Hortons food drives are an importantstock replenishment source for local food banksacross the country. Every year, our restaurants acrossthe country promote and participate in a food drivethat asks our guests to drop off a nonperishable fooditem. These items are collected and shipped to localarea food banks. Local restaurants also make a donation of nonperishable food items suchas juice.Tim Hortons Corporate Employees' Donations


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Tim Hortons employees contribute to local community organizations through quarterly"casual days," where donations are taken from staff who wear casual clothing to work.This program is run by a cross-functional volunteer committee of employees called theEmployee Advisory Team.This year we supported the following charities through our casual days:March: United WayJune: Tim Horton Children's FoundationSeptember: Halton Women's PlaceDecember: Fareshare Food BankWe also made a corporate donation to the Oakville United Way.Click here for complete corporate donations summaryless

Aboriginal RelationsOver the past three-and-a-half years we havebeen working on implementing a meaningful,structured and long-term partnership with theAboriginal community. Some of our initiativesare only just beginning and some are well ontheir way.Our Aboriginal relations philosophy, strategyand programs are guided by the followingprinciples:

Our programs must be sustainable;Our programs must have a clear benefit;Our programs must be community based; andOur programs must be supported by the Aboriginal community.

To provide some structure to our guiding principles we have developed an Aboriginalrelations framework that comprises four key areas of focus: 1) Education;2) Empowering Youth; 3) Economic Development; and 4) Employment.EducationWith the assistance of Millbrook First Nations of Truro,Nova Scotia, we developed a comprehensive onlinetraining program for our restaurant-level staff andcorporate personnel. Since 2009, more than 120,000employees have completed the training. Two modulescover workplace diversity and cross-cultural Aboriginalawareness. Topics include: Aboriginal culture,overcoming prejudice, common myths, Aboriginalhistory, treaties, self-government, residential schools,oral tradition, current culture, and recognition ofAboriginal role models.We have sponsored and partnered with Susan Aglukark,a celebrated Inuit leader, singer/songwriter, and Order ofCanada recipient. Susan is the Chair of the Arctic Youthand Children's Foundation (ACYF) and we haveprovided seed capital for "Kajamiit." This is a newACYF initiative that will focus on improving theeducation of youth through enhanced "at-home"homework programs. Community consultations havebegun in Nunavut and Nunavik.On behalf of Tim Hortons, Susan Aglukark has also conducted various motivational andself-esteem-building workshops for Aboriginal youth, having visited Montana First Nation,Kainai Nation, Snuneymuxw First Nation and Chehalis Indian Band.susanaglukark.com

Empowering YouthThe Tim Horton Children's Foundation invites youth, both Aboriginal and non-Aboriginal,to attend one of our six camps throughout the year. To date more than 1300 Aboriginalyouth have attended our camps. We have welcomed the following First Nations and youth-serving organizations from across Canada: Eskasoni First Nation, Pictou Landing FirstNation, Six Nations of the Grand River, Tsuu T'ina Nation, Membertou First Nation,Mi'kmaq First Nation, Heiltsuk First Nation, Native Child & Family Services of Toronto,Niagara Peninsula Aboriginal Area Management Board and The Native YouthAdvancement with Education Hamilton.Late in 2009, we announced a five-year partnership with the Ted Nolan Foundation.Aboriginal youth identified through the Ted Nolan Foundation are taught the SevenGrandfather Teachings, with the support of Elders and facilitators from their communities,at Tim Horton Children's Foundation Camps. In 2010 approximately 150 Aboriginal youthfrom Garden River First Nation and St. Mary's First Nation attended our camps through ourpartnership with the Ted Nolan Foundation.

In February of 2010, the inaugural Inuit Youth Leadership Camp was held at our Camp desVoyageurs in Quyon, Quebec. Inuit youth, from the Ottawa area participated in a program

Tim Hortons - 2010 Sustainability and Responsibility Report http://www.bmirstaging.com/th/sr2010/communities_success.html

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supported by the Tungasuvvingat Inuit and the national leadership of Inuit TapiriitKanatami. The program focus was on celebrating culture and language as well asdeveloping leadership skills. We have hosted over 100 Inuit youth since our firstLeadership Camp.

The Tim Horton Children's Foundation is a founding partner of Outside Looking In (OLI),an innovative program that develops Aboriginal youth leadership, confidence andself-esteem through performing hip hop dance.Founded by Tracee Smith of Missanabie Cree First Nation, OLI is an extensive programthat works in Indigenous communities across Canada, delivering professional danceinstruction over six months. Should youth follow the rules of remaining in school andparticipating fully in all OLI rehearsals, they are invited to travel to Toronto to perform forsold-out audiences at Toronto's St. Lawrence Centre for the Performing Arts.Since its inception, OLI has worked with the communities of Lac La Croix First Nation,Pikangikim First Nation and Wikwemikong Unceded Indian Reserve.

olishow.netMembers of Niagara Peninsula Aboriginal Area ManagementBoard (NPAAMB) have been guests of the Tim Horton OnondagaFarms Children's Foundation Camp since 2007. Each fall they hosta terrific program called "DreamWalkers Gathering." Thisprogram's objective is to provide youth with support andencouragement to stay in school and graduate at the high schoollevel. Aboriginal high school students in grades 9 through 12 fromthe Brantford, Hamilton, St. Catharines and Fort Erie, Ontarioareas participate. Successful speakers from the fields of business,arts, entertainment and sports deliver motivational and provocativemessages, together with a variety of educational activities, to helpstudents set goals and make decisions about education, career and life choices.

We are a founding sponsor of IndigenACTION, an initiative of theAssembly of First Nations (AFN), launched to support and furtherenhance opportunities for Indigenous peoples and communitiesthrough active lifestyles, sport and fitness.IndigenACTION is led by the AFN Youth Council andIndigenACTION Ambassador Waneek Horn Miller, a Mohawkwoman from Kahnawake territory (near Montreal) who competedin the 2000 Olympic Games in Sydney, Australia. The AFN willfacilitate the development of a national strategy, gathering inputfrom a variety of stakeholders. Inviting athletes, sports institutions,

the public and private sectors, AFN will hold national roundtable discussions to identifyopportunities, common goals and objectives. The information collected from theseroundtable discussions will inform a national strategy to support and stabilize new andexisting initiatives and organizations that support young Indigenous athletes, fitness andwell-being in Indigenous communities.afn.caSince 2008, we have been the lead sponsor of Concert for a Cure, presented by the SixNations Community Youth Outreach (SYCYO). A jazz and blues performer himself,community organizer and MC Jace Martin brings together leading musicians and artists toperform for the community of Six Nations of the Grand River. All proceeds raised benefitcommunity members who are suffering from cancer.

We have been supporting Inuit Tapiriit Kanatami (ITK) andTungasuvvingat Inuit (TI), both national organizationsrepresenting the Inuit of Canada, since 2009. We havesponsored signature events such as Taste of the Arctic and theannual golf tournament fundraiser. Many youth, under theleadership of TI, attended our Tim Horton Children'sFoundation Camp Voyageur at Quyon, Quebec. They participated in leadership trainingsessions including a focus on language and culture.

Economic DevelopmentWe have 10 restaurant locations on Aboriginal landsthat fall under sub-lease agreements. In 2011 we willbegin developing restaurants located on reserve lands,owned and operated by an Aboriginal communitymember or organization. We currently have two

restaurants with Indigenous owners. We will conduct a feasibility study to confirm the typeof restaurant that the community can support (be it a kiosk or standard restaurant), ensuringthat the development criteria and business plan requirements of our franchise system aremet. Future restaurant locations will provide an opportunity for employment, managementand economic development opportunities for the Aboriginal community.In December of 2010, we opened for the first time in Iqaluit, Nunavut.


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Located in three Northmart locations, these kiosks offer a limited menu ina self-service format. A traditional ceremony and prayer was offered by alocal Elder to mark the occasion. A charity benefit concert was performedby Susan Aglukark, with all proceeds donated to the local Embrace Lifeyouth-serving organization. With these Iqaluit openings, we now proudlyoperate in every province and territory in Canada.

EmploymentWe have long been recognized asa "first job" employer for youthand a provider of on-the-jobtraining. The fastest-growing youthdemographic in Canada isAboriginal youth. Thecombination of these factors suggests that an opportunity exists for us to be an employer ofchoice for the Aboriginal community. We are continually broadening our understanding ofcross-cultural differences and removing any possible barriers to employment.Understanding recruitment and retention of Aboriginal employees will be an area of focusin 2011. With the assistance of the Aboriginal Human Resource Council, we will beconducting a best practices workshop that will identify strategies for recruitment andretention of Aboriginal community members interested in working at a Tim Hortonsrestaurant.aboriginalhr.caContinued SupportWe are supporting the following key organizations that are dedicated to advancing thewell-being of opportunities for Aboriginal peoples:

As a Board advisor to the Ted NolanFoundation. The Ted Nolan Foundation iscommitted to the healing process to renew andrevitalize the mind, body and spirit of our youngpeople, through a philosophy of a healthylifestyle.tednolanfoundation.com

As a Board member of the Arctic Childrenand Youth Foundation (ACYF). The mission ofthe ACYF is to work at all levels to assistArctic children and youth to attain standards ofliving, education, opportunities and health andwell-being equal to those of other Canadians.acyf.ca

As Patron Board member of the CanadianCouncil for Aboriginal Business (CCAB). TheCCAB is a national non-profit organization thatis dedicated to helping companies increaseemployment, foster positive business relationsand create economic opportunities forAboriginal people, businesses and communitiesacross Canada.ccab.com

less

Invest a minimum of$15 million through ournational, regional andlocal initiatives in 2010

• We will invest a minimum of $15 million through our national,regional and local initiatives in 2011.

• Together with our Restaurant Owners and guests, we hope to

raise $3.5 million for local charities through our SmileCookie Program in 2011.

275,000 childrenparticipating in theTimbits Minor SportsProgram in 2010

• We will continue to significantly invest in keeping childrenactive through our Timbits Minor Sports Program, our holidayFree Skate and Swim and sponsorship programs.

Implement a meaningful,structured and long-termpartnership with theAboriginal community

• We will maintain a meaningful, structured and long-termpartnership with the Aboriginal community.

© 2010 Tim Hortons


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2010 Youth Entrepreneurial Symposium

We were a Gold Sponsor of the 2010 Youth Entrepreneurial Symposium (YES), held in Vancouver, British Columbia and presented by theDreamcatcher Charitable Foundation, the New Relationship Trust and the Canadian Council for Aboriginal Business. Over 200 FirstNations delegates from across Canada came together to share knowledge and learn how to become better entrepreneurs. Teams ofstrangers came together, in the spirit of competition, to create and promote three different and challenging business concepts. For oneproject, the teams had to create a 30-second TV commercial, filmed in one of our restaurants. Professional editors helped with the videopost-production and creation of the final commercials.

YES delegate Adrian Duke reflected on this event:

"Personally, I witnessed timid team members come out of their shell and add invaluable elements to their teams...the element ofcompetition normally brings out the selfish side of people. Instead I experienced compassion, teamwork and sharing. Today First Nationsyouth are on the verge of a great opportunity and this event solidified my belief that we are ready and able to take it on.... YES 2010 was acomplete success; it challenged the Aboriginal leaders of tomorrow to come together and create a brighter future. Thank you YES for theopportunity to be a part of this life-changing experience that I won't soon forget."

newrelationshiptrust.ca


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Tim HortonsCorporate Donations in Response to Natural Disasters

In January 2010, our Company donated $800,000 to UNICEF tohelp children affected by the earthquake in Haiti. The total camefrom a corporate donation of $100,000 and from two weeks ofrestaurant coin box collections, through which our guests raised$700,000.


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Horizons

Horizons was chosen as the signature name to represent Tim Hortons relationship with the Aboriginal community. It reflects a bright future,new interests and experiences, achievement and a quest with no limits.The accompanying graphic brings together a number of importantelements. Central to the logo is a vibrating drum – the Indigenous symbol of communications, ceremony and celebration. Within the drumcircle, the bursting sun signifies strength, opportunity and the energy of life. Mother Earth is represented by the warm colours of the rich soil.The three cultural motifs honour First Nations (Eagle feather), Métis (Infinity symbol) and Inuit (Inukshuk).


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Tim Hortons Tim Hortons Support of the Military

We donate free coffee to soldiers in Kandahar annually on Christmas Day and on Canada Day (July 1). Veterans in uniform are served free coffee at our restaurants in Canada on Remembrance Day. In Kandahar, the Company has waived all fees and operating costs typically associated with a Tim Hortons franchise, and we direct the money from the Kandahar outlet back to military family support programs through the Canadian Forces Personnel and Family Support Services (CFPFSS).


CommunitiesTim Hortons Coffee Partnership: Our CommitmentsHelping build viable coffee communities

2,500 small holderfarmers participating inour Coffee Partnershipprojects in 2010

• In 2010, 1,1591 farmers participated. Since2005, we have had 2,542 farmers participatingin the Partnership.

• Our Brazil project is still in its growth phase

and we expect increased membership in 2011.

10,000 hectares of landunder environmentallyresponsible managementin 2010

• In 2010, our projects represented 2,657hectares.1 Since 2005, we have had 9,212hectares of land under environmentallysustainable management.

• Our Trifinio project came in with less area in

2010 due to a high number of smaller farm sizesthan originally estimated, and our Brazil projectis still in its growth phase. We expect higherland area in 2011.

1 Metric was independently verified by Control Union Certifications in 2010.

Tim Hortons Coffee Partnership helps communities by supporting them in key areas thatwill improve their coffee business and their lives. These key areas include:

Establishing technical training in agronomy to improve the quantity and quality ofcoffee produced;Consulting with farmers to organize with others in their community to reduce theircosts and ensure their coffee gets to market at the best time and at the best price;Providing assistance in education, medical care, and housing improvements; andStrengthening environmental management by educating farmers on sustainablefarming techniques such as recycling water, reducing pesticide usage, andpromoting shade on the coffee farm.

Our Coffee Partnership approach is unique from other coffee initiatives. Together with ourpartner – Hanns R. Neumann Stiftung Foundation (HNRS)1, we are involved in grassrootsprojects that work directly with small holder farmers, local coffee organizations, andgovernment and non-government organizations. Through these projects, the farmers areencouraged to improve farming practices to produce higher quality coffee more efficiently,giving them more control and options for their coffee.

In 2009 we worked with our executing partner and developed a comprehensive set of keyperformance indicators aligned to business, social and environmental factors. In 2010, wehad 32 of our key performance indicators verified by an independent third party. We havelearned a lot during this process, and will continue to enhance our verification programyear to year. We will also leverage this experience when verifying our own BusinessPartner and Supplier Code of Conduct with our coffee sourcing partners.For more information on the Tim Hortons Coffee Partnership, please visit timhortons.com.World Indigenous Business ForumIn October 2010, our President and CEO Don Schroeder spoke at the inaugural WorldIndigenous Business Forum in New York City. Chaired by former AFN National ChiefPhil Fontaine, this meeting focused on global Indigenous business and social issues. Don'spresentation highlighted the work of our Coffee Partnership Program in Central and SouthAmerica.

Don Schroeder speaking at the World Indigenous Business Forum,


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October 20101We work closely with the Hanns R. Neumann Stiftung Foundation (HRNS). Thefocus of the HRNS work is bringing together private-sector partners (primarily coffeeroasters), public-sector partners (donors) and both governmental andnon-governmental organizations, with the goal of contributing to the sustainability ofthe coffee sector. hrnstiftung.org

2,500 small holderfarmers participating inour Coffee Partnershipprojects in 2010

• We hope to achieve a three-year average of 1,500 smallholder farmers participating in our Coffee Partnership in2011.1,2

• We are aiming for 4,500 technical training demonstrations1 for

farmers in 2011 and 95% of farmers to have a farmmanagement plan.1

10,000 hectares of landunder environmentallyresponsible managementin 2010

• We hope to achieve a three-year average of 3,000 hectares ofland under environmentally sustainable management in2011,1,2 which is to include 90% of water recycled and/ortreated on project farms1 and 100% of farmers not usingbanned pesticides.1,3

1 Metric to be independently verified in 2011.2 New goal is a multi-year rolling average due to our current three-year project duration.3 Banned pesticides refers to those pesticides banned under the Stockholm Convention on

Persistent Organic Pollutants (POPs).

© 2010 Tim Hortons

Tim Hortons - 2010 Sustainability and Responsibility Report http://www.bmirstaging.com/th/sr2010/communities_partnership.html

2 of 2 3/30/2011 3:50 PM

Cesar Yanuario Erazo LópezSanto Antônio do Amparo, Brazil

• Yieldofcoffee/hectare(totaland%changeversusbaseline)

• Cost/kilogramofparchment(totaland%change versusbaseline)

• Totalcoffeesoldviaorganizationversusyearone

• Incomegeneratedthroughbulkfinancing

Some of our Business / Individual Performance Indicators:

“One of the biggest advantages of

participating in the project is that I

improved my productivity. In the past

I ran the farm in my own way, and

applied agrochemicals without care.

I was not aware that this was

dangerous for my health and bad for

the environment. The cooperation

among us farmers is also very good.

This year, three of us joined for the

shared transport of fertilizer, which

turned out to be a good bargain for

everybody. The cup quality of my coffee improved in the last

years, the bean is bigger, I am harvesting more coffee and the

fields look better. If I had not gotten assistance, I would not

produce the quantity of coffee I have today. My income

is good. All that I have today, I owe to coffee.”

Armando AndradeVereda Las Juntas, municipality of Santa María

“I was born in this region, as the son

of a coffee farmer. From my parents,

I inherited some coffee trees and

during all my life, I thought that my

future was to stay and work on this

farm. However, after I graduated from

high school, the project offered me

the opportunity to work as a farmer

promoter for 20 months, teaching

my neighbours on sustainable coffee

production. Never had I imagined such

a dramatic change in my life. I worked

myself up to a farmer promoter and now a cupper, and I

appreciate this education and development which still allows

me to continue my farming operation.“

• Total training contacts

• Number of scholarships

• Number of houses improved

• Number of social / cultural events supported

Some of our Social / Community Performance Indicators:

Did You Know? Tim Hortons Teas Are Part of the Ethical Tea Partnership

Tim Hortons is proud that all varieties of tea served in our restaurants, including our brewed and specialty teas*, are sourced from Mother Parkers, a member company of the Ethical Tea Partnership (ETP).

ETP is a non-commercial alliance of international tea companies that share a vision of a thriving global tea sector that is socially just and environmentally sustainable. ETP staff work directly with tea producers to ensure that they meet international labour standards, so that workers are fairly treated, and the environment is protected. All ETP activities, including independent third-party auditing against the ETP standard, are free to producers.

ETP also works with expert partners on projects that improve the sustainability of the tea sector – from improving labour relations and reducing discrimination, to safe management of agrochemicals and adapting to climate change.

Find out more at ethicalteapartnership.org.

Excludes chamomile, honey lemon, peppermint, and apple cinnamon because they are not tea-based.•


Isaias Pleitez AlavaradoSanta Fe, Ocotepeque, Honduras

“Thanks to participating in the project,

I have gotten a better perspective

for my own future: I am hoping to no

longer being dependant on intermediary

traders, and to learn more about how

to market my product... Above all, I

improved my knowledge of efficient

farming: I studied how to analyze my

soil to figure out the adequate use of

fertilizers. Shade trees are a good thing:

they protect the coffee, encourage

long-term quality of the plants and even

reduce the need for fertilizer. We expect

to harvest twice as much this time.

We used to be in another project before, and we did not see

so many visible changes after only 10 months. Now that I have

seen results after such a short time, I really trust the project.”

• Number of trees planted

• Average shade tree density / hectare

• Percent of farmers with a soil management plan

• Percent of water recycled / treated in coffee processing

Some of our Environmental Performance Indicators:

Environmental Stewardship

Reducing the waste we create from all aspects of our business. Reducing the energy, carbon emissions and resources we use in all aspects of our business.

Supply Chain

Ensuring best practices are embedded across our supply chain.

© 2010 Tim Hortons


The Planet Environmental Stewardship: Our Commitments Reducing the waste we create from all aspects of our business Reducing the energy, carbon emissions and resources we use in all aspects of our business

5% reduction in packaging within our supply chain and manufacturing operations by 2012

• We are currently establishing our baseline and working on packaging reduction through individual vendor initiatives.

• We will continue working towards a 5%

reduction in packaging within our supply chain and manufacturing operations by 2012.

Work to achieve a solution so that our paper cup is accepted in recycling and composting systems in local municipalities

• Our cup is now being collected for diversion at over 650 of our restaurant locations.

• In 2010, the number of restaurants with the new

three- or four-stream recycling units totaled 1,165. Having these units in place ensures that restaurants are ready to take paper cups and other paper packaging as soon as markets are secured/confirmed.

5% energy and water use reduction for all our corporate buildings and new restaurant construction by 2011

• We are measuring our performance to 2008 (our baseline year). In 2010, we implemented energy and water conservation initiatives across our manufacturing facilities, Distribution Centres and warehouses.

Register two pilot restaurants for Leadership in Energy and Environmental Design (LEED®) certification in 2010

• We registered three restaurants for LEED® certification (Hamilton ON; Toronto ON; Geddes, NY) in 2010.

5% increase in fuel efficiency for our distribution fleet by 2011

• From 2008–2010, the fuel efficiency of our distribution fleet increased by 2.58%1.

• The focus in 2011 will continue to be on

equipment upgrades and driver behaviour to maximize fuel efficiency.


1 This result includes trucks with our distribution fleet and our camp buses. It excludes our truck refrigeration units at this time.

Environmental Stewardship Introduction We believe we all have a responsibility to protect the environment and that our Company has an opportunity to take a leadership role in our industry. We seek innovative solutions to environmental issues, which includes a commitment to ongoing research and implementation of initiatives pertaining to waste reduction, waste diversion, and energy and water conservation. At Our Restaurants As a restaurant chain that provides packaging to our guests, we acknowledge our role in thedistribution of packaging. We further accept responsibility for sourcing food and beverage packaging that performs well and ensures the health and safety of our guests, while workingtowards effective waste reduction and diversion solutions. For us, waste reduction and diversion means going beyond what we are mandated to do by local, provincial and federal regulations. This includes developing and expanding diversion programs for hot drink cups and other paper packaging, coffee grinds and food waste. Our progress in the area of waste reduction and diversion is thanks to the participation of our guests in the programs we offer and our Team Members who champion the programs at the restaurant level. Reducing waste at the source is a key focus at our restaurants. Our eat-in guests may use ceramic (china) cups, plates and bowls as well as reusable cutlery, thereby avoiding packaging waste. In addition, by offering a 10 cent discount on travel mug refills, we support and encourage further reduction in the use of disposable hot drink cups. These options are promoted through our "Go green, grab a handle" and "Being green is in your hands" messages throughout the year. Compliance Stewardship programs We comply with current stewardship programs and associated fees where such programs are established. Stewardship fee programs are currently in place in Ontario, Quebec and Manitoba. Through fees paid to the various stewardship organizations, we subsidize the costs of municipal recycling programs. Fees are paid on all designated packaging, regardless of whether it is managed in municipal recycling programs. This includes all of our Tim Hortons branded packaging, such as our hot drink cups. Deposit-return programs In areas that do not currently have a stewardship program in place, we participate in deposit-return programs for our branded beverage containers, ensuring fees are paid to the appropriate agencies. We participate in these programs in the following areas: British Columbia, Alberta, Saskatchewan, Quebec, Newfoundland and Labrador, Nova Scotia, New Brunswick, Prince Edward Island, Northwest Territories, Yukon, New York and Maine. Waste audits and waste reduction work plan Annual waste audits allow us to gain a better understanding of our waste streams and opportunities to reduce, reuse and divert waste, while maintaining compliance with government regulations and guidelines. The information from the waste audits forms the basis for our annual Waste Reduction Work Plan. The work plan identifies key areas of waste and our plans to reduce, reuse or divert waste in the year ahead. The Waste Reduction Work Plan is posted on the restaurants' website for each staff member to see upon log-in. Each restaurant is asked to assign the responsibilities and tasks set forth in the work plan to the appropriate on-site team member. In 2010, seven waste audits were undertaken in Ontario. The following graph represents the average waste streams at a standard restaurant with a drive-thru, based on our 2010 waste audits:


This is a representation of total waste and does not depict what is diverted. Moving forward, waste audits will be completed in each province to identify trends in waste generation and reduction opportunities in various geographic locations. Waste Diversion As a contributor to the hot drink cup1 and packaging waste streams, it is a priority to find proper end-of-life solutions for these products. Since the first in-store diversion program for hot drink cups and other paper packaging was implemented in Prince Edward Island in 2000, the program has expanded to offer recycling and composting solutions in parts of Alberta, British Columbia, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, and Newfoundland and Labrador. Recycling and composting programs for our paper packaging expanded to over 650 of our restaurants in 2010. This program includes the waste diversion of a range of our packaging including hot drink cups, soup containers, Timbit and donut boxes, carry-out trays and paper bags. This additional diversion program complements the bottle, can and cardboard recycling already in place at our restaurants. In our quest to divert hot drink cups and other paper packaging from landfill, we have learned that while these items may be recycled and composted, they are not always accepted due to the variations in municipal waste diversion programs and waste industry guidelines. There is no consistent standard as to what must be accepted as part of municipal or commercial programs across Canada or the United States. Essentially, each municipality and waste management company develops a list of items they deem as "acceptable" for recycling or composting. This varies greatly depending on geographic location, costs to collect and process material, available processing facilities and access to end markets (purchasers of recycled materials). Tests and visits to recycling mills and composting operations have confirmed that there is great value in our cup fibre. The polyethylene liner is removed in both types of operations. The remaining fibre is captured and recycled or composted. The variety of rules and standards has made it challenging to implement an enhanced recycling program quickly in all markets for all restaurants. We continue to work with local waste management companies and our Restaurant Owners to resolve challenges and secure opportunities for more diversion programs. In addition to our work in the area of packaging diversion, we are making steady progress in organic waste diversion of coffee grinds and food waste. In 2010, more than 320 restaurants across our chain had organic diversion programs in place. Similar to our enhanced waste diversion programs for paper packaging, organic waste diversion programs are being expanded where feasible. Please visit our Interactive Recycling Map and Anatomy or Our Cup, for more information.1 Hot drink cups include cups for coffee, tea and specialty beverages. Guest and Team Member education When we introduced the packaging and organics diversion programs, we learned that the success of these programs depends on our guests and restaurant Team Members. We have developed communication materials to promote our program to our guests and we educate them about the proper sorting of their waste. This has been helpful in reducing the amount of non-recyclable materials in our recycling units. Our information materials include digital menu board messages and in-store posters and signage. We have also customized our recycling units with photos of our packaging to help make it easier for our guests to appropriately sort their waste and recyclables. With respect to waste management programs, all Team Members are trained extensively on


proper procedures, which includes an online module on waste management. Our Field Operations team visits the restaurants regularly to follow up on the program to ensure it is running smoothly. Corporate Packaging Reduction Initiatives We continually evaluate all packaging to ensure it is sized correctly, is as lightweight as is feasible, and that all goods are packed efficiently. We work with our vendors to upgrade pallet configurations and improve the efficiency of case content to save in logistics and reduce energy. For example, our recent analysis found that by adding one more pouch of bacon with 200 bacon slices to the current case and using a more efficient pallet configuration, we should require 2,063 fewer pallets and 79 fewer trucks to ship the same amount of product. In 2010, we began working with our suppliers and key distribution partners to pilot a program that is testing the feasibility of using reusable plastic corrugated cases to replace corrugated cardboard in our coffee distribution system. If successful, the program is expected to significantly reduce our corrugated cardboard consumption. Collaboration and Outreach During the past year, we collaborated with industry peers at the Starbucks Cup Summit and provided topical presentations at the Food Packaging Institute's spring conference, the Coalition of Resource Recovery's fall food-service packaging meeting, as well as at the Recycling Council of Alberta's Building Tomorrow fall conference. It is our hope that through collaboration and speaking engagements, we may assist our peers, suppliers and the waste management industry address and resolve issues that affect us all in the area of packaging waste. less

Environmental Footprint Reduction InitiativesWe have been focused on reducing our energy, water and waste footprint in various areas of our business. Manufacturing Maidstone Coffee At our Maidstone Coffee Roasting Plants in Ancaster, Ontario, and Rochester, New York, we have installed new technology such as catalytic afterburners. These afterburners prevent the coffee aroma from disseminating into the air within the surrounding community. Our new afterburners typically consume 81% less gas versus older thermal afterburners. Furthermore, we designed our roasters to cycle the afterburners to minimize emissions while optimizing temperature, thereby reducing energy consumption by an additional 6% while maintaining environmental standards and a quality roast.Other initiatives in our coffee roasting plants include:

Installing variable-speed air compressors in Ancaster that are up to 30% more energy efficient than non-variable-speed compressors.

Using high-efficiency industrial battery chargers for the forklift system in Ancaster. Upgrading to high-performance, energy-efficient lighting at both plants. Reducing freight costs and materials usage by changing corrugated cardboard cases

in Rochester. This resulted in 32 fewer shipments each year and 50% fewer back hauls with pallets per year. Corrugated cardboard consumption was reduced by 20%.

Fruition Fruits & Fills The production of icing and fruit-based filling and glaze has typically been water intensive.


In 2008, Fruition Fruits & Fills (Fruition) analyzed its processes and looked for potential improvements through a detailed analysis of its manufacturing process. As of result of this analysis, a number of improvements were made:

Replacing existing plant and warehouse lighting with high-efficiency lighting, plus motion sensors in the warehouse.

Purchasing equipment, such as a dedicated fondant chiller, to reduce water demand and improve product consistency.

Changing our run schedule; for example, when making fondant, production moved from light to dark (from white to maple to chocolate) to eliminate streaking on the equipment, thus reducing waste and water required for cleaning.

Minimizing in-process water use by cleaning at the end of shifts, not during shifts. Identifying internal champions to lead process improvement initiatives, and creating

an innovative staff bonus structure based on specific targets to encourage behavioural changes. Water, waste, natural gas and electricity reduction are some of our targets.

In total, we have achieved water savings of 50% on an intensity basis from 2008 to 2010 at our Maidstone Coffee and Fruition facilities. For a complete breakdown on our intensity-based water usage refer to our Environmental Performance Summary Table. Distribution At our Distribution Centres, we have achieved energy savings of 25% on an intensity basis from 2008 to 2010.

Some of the energy-saving initiatives we have undertaken at our Guelph Distribution Centre include:

Installing new energy-efficient lighting and adding 150 sensors to turn the lights off when there are no employees in an area.

Modifying our conveyors so they only run when there is product on them. Installing “Big Fans” on the ceilings for employee comfort. The Big Fans assist

with heating and cooling and reduce gas consumption. Installing variable-speed drives on some large motors to reduce energy


consumption. Using many rebate programs to assist in the financial payback of these initiatives.

Other Distribution Centres and corporate offices have undertaken energy-saving initiatives as well, including lighting retrofits and installing new equipment such as an on-demand water heater. For a complete breakdown of our intensity-based energy usage refer to our Environmental Performance Summary table. less

2010 Tim Hortons GHG Emissions Our Greenhouse Gas Emissions Our total gross greenhouse gas (GHG) emissions for 2010 were 240,307 tonnes of CO2e1. Not surprisingly, the largest portion of our greenhouse gas emissions is from our restaurants, at 84.6%. Following that, the second largest portion is our distribution fleet at 10.1%. We continually work to reduce our emissions and use our footprint information to inform our environmental strategy and priorities.

For a complete breakdown of our GHG emissions refer to our Environmental Performance Summary Table. Our Drive-Thru Business Drive-thrus are important to our overall business. In most cases, our restaurants that are equipped with a drive-thru have higher sales than restaurants without one, and we work very hard at maintaining industry-leading performance with respect to speed of service and order accuracy at our drive-thru windows. Our performance in these areas is a competitive advantage. Drive-thrus are also important to our guests and are more than a convenience. They have become a necessary service for people with limited mobility, parents with small children, senior citizens and for guests in unfamiliar neighbourhoods late at night or in bad weather. The drive-thru is not exclusive to the quick service restaurant industry. Financial institutions, pharmacies, dry cleaners and other businesses also regard drive-thrus as an important means to improve their customer service and reduce their land use footprint through utilizing smaller parking lots. In recent years, a few municipal governments have challenged us and the entire quick service restaurant industry over emissions from vehicles idling in drive-thrus. To our knowledge, we are the only quick service restaurant company to


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have commissioned independent air quality tests comparing the vehicle exhaust emissions from our restaurants with a drive-thru to those with just a parking lot. Our peer-reviewed research shows that restaurants with drive-thrus do not have greater emissions than those with traditional parking lots and no drive-thru. As part of our focus on continuous improvement, we monitor and investigate new technologies and develop improved planning and design standards as our industry evolves. We will continue to work with scientific experts to research the impact(s) of drive-thrus. Green Building Design We are continually evaluating new technology, design and construction methods to improve the energy and water efficiency of our buildings and to lighten our overall environmental footprint. At the same time, our Restaurant Owners benefit by saving money on the utility costs to operate their restaurants. We pilot and test emerging technologies and, where feasible, introduce them into our standard restaurant designs. For a product or technology to succeed it must meet three key criteria:

1. Is it cost effective? Up-front costs sometimes may be higher but yield significant payback over time.

2. Is it repeatable? New technologies often require other changes to the restaurants that aren't sustainable for us.

3. Will it work? Many ideas work well in residential or large commercial developments but don't meet our needs.

For more information on our green building initiatives, visit our green restaurant design feature. Transportation Efficiency We have a pallet optimization program which reduces the number of trucks needed to transport the same volume of product. For example, we have moved from 20 lb. coffee boxes to 22.5 lb. boxes, which should save 200 truckloads per year. We have implemented a speed control program across our Distribution Centres and reduced the maximum speed of our trucks and Tim Horton Children's Foundation buses to 95 km/hour, which improves fuel efficiency. We have an anti-idling policy for all trucks on our site, which reduces fuel consumption and emissions. We also now use in-cab heaters; this allows the driver to heat the truck cab with the engine coolant, thus the truck engine does not need to run, reducing idling further. Finally, we have improved our route selection process to incorporate reduced distance and travel time, thus reducing kilometers driven and fuel usage. In early 2010, we made a decision to replace a significant portion of our truck fleet with newer models. We ended up replacing 40 2005 trucks with 41 2011 Volvo VNL 64T Day Cabs, out of a total of 105 trucks in our full fleet. These trucks have 2010 EPA-certified engines and I-Shift automated transmission. The Volvo I-Shift transmission improves driver ergonomics and eliminates the need for manual shifting and clutch use, which helps to keep drivers more alert and focused. In the future, we will continue to replace expiring truck units to ensure we get the best possible, most driver-friendly trucks with minimal environmental impacts.


5% reduction in packaging within our supply chain and manufacturing operations by 2012

• We will continue working towards a 5% reduction inpackaging within our supply chain and manufacturing operations by the end of 2012.

Work to achieve a solution so that our paper cup is accepted in recycling and composting systems in local municipalities

• We will continue to work to achieve waste diversion and appropriate end-of-life solutions for our hot beverage cup and other packaging.

5% energy and water use reduction for all our corporate buildings and new restaurant construction by 2011

• We will continue to work towards a 5% energy and water use reduction for all our corporate buildings and new restaurant construction by the end of 2011.

Register two pilot restaurants for Leadership in Energy and Environmental Design (LEED®) certification in 2010

• We registered three restaurants for LEED® certification (Hamilton, Ontario; Regent Park, Toronto, Ontario; Geddes, New York) in 2010.

• We will monitor and assess the performance of our LEED®

pilot restaurants and register an additional five restaurants for Certification in 2011.

5% increase in fuel efficiency for our distribution fleet by 2011

• We will continue to work towards a 5% increase in fuel efficiency for our distribution fleet by the end of 2011.

© 2010 Tim Hortons


The Planet Supply Chain: Our Commitments Ensuring best practices are embedded across our supply chain

Implement our Business Partner and Supplier Code of Conduct and develop a supporting auditing program in 2010

• In 2010, we implemented our BPSCC with our food, equipment and packaging suppliers, and developed a verification program which uses a risk assessment approach to determine those business partners and suppliers to be reviewed.

Develop an independent audit and verification program for our coffee sourcing in 2010. Begin auditing and verification in 2011

• We have developed our BPSCC and verification program to be applicable to our coffee sourcing partners.

• All our coffee sourcing partners have signed

back on our BPSCC.

Animal Welfare New for 2011

• We acknowledge that for our Animal Welfare Program to be successful, procedures, standards and best practices need to be integrated across our business.

• We have had discussions with many of our

stakeholders that have been helpful in providing a broad perspective on animal welfare issues.

Our Business Partner and Supplier Code of Conduct We are committed to sustainable business practices across our supply chain. In 2010 we developed our Business Partner and Supplier Code of Conduct (BPSCC). Our BPSCC was created based on internationally accepted labour standards including the International Labour Organization’s (ILO) core conventions and the United Nations Universal Declaration of Human Rights. During the development stage we also shared draft


documents with some of our key suppliers1 and incorporated their input as appropriate. In the final stage, we ensured alignment with our Standards of Business Practices and Company values. Fundamentally, our BPSCC is built on the principles of respect, fairness and business ethics with regulatory compliance being a minimum standard to do business with us. Our implementation plan included the incorporation of the BPSCC into all new supplier agreements and the commencement of a sign-back campaign for existing business partners and suppliers. Due to the large number of our business partners and suppliers, we took a phased approach to implementation. This approach included commencing implementation with all of our Food, Equipment and Packaging business partners and suppliers (which represent the highest volume and highest risk). In 2010 we also developed a supporting verification program. Developed by our Internal Audit Department, and supported by external experts, the program uses a risk assessment approach to determine those business partners and suppliers to be reviewed. The program received feedback from our key business groups and departments.

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1 We consider “Suppliers” as organizations that provide Tim Hortons goods and services. Our “Business Partners” are organizations with whom we have a unique business relationship. This may include entities such as retail businesses, non-governmental organizations and charities that may or may not supply goods or services.

Independent Verification for Our Coffee Sourcing We have been sourcing our coffee from the same regions since our Company was founded in 1964. These regions include Central and South America. In these regions, the methods used to produce and process coffee are unique and the chain of custody to get the coffee to market is very complex. In some cases, coffee can be traded along its supply chain several times among the producers and processors; therefore, because of these multiple transactions, attempting to verify codes of conduct and practices can be challenging. Verification involves reviewing prescribed standards and practices with suppliers through the supply chain. The figure below illustrates six key levels in the coffee supply chain that are very important to better understand the verification process. They include; Farmers: Organization; Intermediary; Exporter; Importer; and Roaster.

We intend to have an independent party verify our Business Partner and Supplier Code of Conduct (BPSCC) with our coffee sourcing partners as far down our coffee supply chain as feasible. We are targeting the Importer/Exporter levels in 2011. We also believe that the best practices identified from our initial verification process will assist in moving further down the supply chain in future years. less


Animal Welfare at Tim Hortons Animal welfare is an important issue to Tim Hortons, our Restaurant Owners, suppliers, guests and our other stakeholders. We consider animal welfare to apply to all aspects of animal care of the farm animals we source for our food products. While we purchase food products derived from farm animals, we are not directly involved in the raising, handling, transportation, slaughter, or processing of these animals. We have an Animal Welfare Policy and program in place to monitor that the animals within our supply chain are dealt with in accordance with industry guidelines and regulations. Regulatory Compliance It is our expectation that all our business partners and suppliers meet or exceed the established government regulations, standards and recognized industry guidelines for animal welfare. In Canada and the United States, industry and the government have a long history of working together to develop animal welfare standards and maintain enforcement. Throughout the years, these standards and guidelines have become more specific due to increased scientific research on animal behaviour. Compliance with regulations and guidelines is audited and enforced by various agencies and organizations including, but not limited to: the Canadian Food Inspection Agency (CFIA), United States Department of Agriculture (USDA), US Food and Drug Administration (USFDA) and the Professional Animal Auditors Certification Organization (PAACO). Tim Hortons Quality Assurance Auditing Program We have a comprehensive quality assurance audit program in place that includes food safety and animal welfare issues. We audit our suppliers to ensure that they meet or exceed established government regulations and recognized industry guidelines. We employ internal auditors and quality assurance professionals and use accredited third-party professionals that visit our suppliers’ processing facilities to ensure animal welfare regulations are being followed. Continuous Improvement We have a formal animal welfare working group that is made up of professionals from across our company. Our working group’s role is to maintain a focus on continuous improvement with respect to animal welfare issues that affect our Company. We monitor and review science-based research on animal welfare practices, educate our employees, tour farms and processing facilities with our suppliers and engage in dialogue with stakeholders – including individual farmers who are directly responsible for the care of their animals. We acknowledge that for our animal welfare program to be successful, procedures, standards and best practices need to be integrated across our business. Therefore, we have integrated animal welfare requirements into our key supply chain programs, such as our Business Partner and Supplier Code of Conduct. We have also had discussions with many of our stakeholders which has been helpful in providing a broad perspective on animal welfare issues. We will continue to work closely with our suppliers and other stakeholders to evolve our animal welfare program. less

Implement our Business Partner and Supplier Code of Conduct and develop a supporting

• We intend to implement our BPSCC with all of our remaining business partners and suppliers in 2011.


auditing program in 2010

Develop an independent audit and verification program for our coffee sourcing in 2010. Begin auditing and verification in 2011

• We intend to pilot our BPSCC Verification Program in 2011 and amend our procedures as required.

Animal Welfare at Tim Hortons • We will revise and finalize our Animal Welfare Policy in 2011.

© 2010 Tim Hortons


Tim Hortons Is Focused on Continuous Improvement

Our core values provide the spirit of continuous improvement. We introduced "Lean" principles and practices to our organization in 2007. "Lean" is the relentless pursuit of perfection in delivering value to our key stakeholders – our guests, Restaurant Owners, communities, and employees. "Lean" emphasizes the removal of waste from our business. We define waste as any activity that does not provide value, such as overproduction and excess transportation.

In 2010, we focused continuous improvement initiatives on the following value-generating processes: New Product Innovation, New Store Construction and Renovations, and Supply Chain. Sustainability has been embedded at the core team level of each of these business processes; this means that sustainability is considered at the start of new processes and operational initiatives, and evaluated as part of the measures of success.

We focus on seeking opportunities that provide cost, quality, and capacity improvements to our business. For us, continuous improvement is about positive change and enabling our organization to meet the challenges of the marketplace.


GRI Index

Index Description Report Completeness (Full/Partial)1. STRATEGY AND ANALYSIS

Disclosure on Management Approach: We value the role each corporate employee plays across our Company. We strive to be the "Employer of Choice" in our industry, so we create a culture that allows us to attract, train, develop and retain the highest quality talent available. Our Standards of Business Practices outlines our business ethics and compliance programs including an overview of employee relations, occupational health and safety, training and development and inclusion and diversity. Details of these programs are provided in the Individuals/Employees section of this Sustainability and Responsibility Report and are further supported by the following policies:

Health and Safety Policy (Always SAFE), Workplace Harassment, Workplace Violence.

1.1 Executive statement Message from our President and CEO F

1.2 Description of key impacts, risks, opportunities

Sustainability and Responsibility Process (Strategy Development/Risks and Opportunities); 2010 Annual Report 10-K (p. 19-20)

F

2. ORGANIZATIONAL PROFILE

2.1 Name of the organization Tim Hortons Inc. F

2.2 Primary brands, products and/or services Company Profile;2010 Annual Report 10-K (p. 4) F

2.3 Operational structure Company Profile;2010 Annual Report 10-K (p. 8) F

2.4 Location of organization's headquarters 874 Sinclair Road, Oakville, ON, Canada, L6K 2Y1 F

2.5 Countries with major operations Company Profile;2010 Annual Report 10-K (p. 38) F

2.6 Nature of ownership and legal form 2010 Annual Report 10-K (p. 4) F

2.7 Markets served Company Profile;2010 Annual Report 10-K (p. 8, 38) F

2.8 Scale of the reporting organization Employee Practices Performance Summary;2010 Annual Report 10-K (p. 106) F

2.9 Significant changes during the reporting period 2010 Annual Report 10-K (p. 50) F

2.10 Awards received in the reporting period Company Overview/Awards F

3. REPORT PARAMETERS

3.1 Reporting Period January 1, 2010 - December 31, 2010 F


3.2 Date of most previous report Not applicable; 2010 is our first GRI-based Sustainability and Responsibility Report F

3.3 Reporting cycle Annual F

3.4 Contact point for questions regarding the report or its content

Tim FaveriDirector, Sustainability and Responsibility (905) 845-6511 [email protected]

F

3.5 Process for defining report content Sustainability and Responsibility Process (Materiality Assessment) F

3.6 Boundary of the report Tim Hortons Value Chain F

3.7 Limitations on report scope Tim Hortons Value Chain F

3.8 Basis for reporting on joint ventures etc. Tim Hortons Value Chain F

3.9 Data measurement techniques and the bases of calculations, including assumptions

This report, including all data measurement techniques and related estimation methodologies, was developed using the Global Reporting Intitiative (GRI) G3 Guidelines and the World Resources Institute's Greenhouse Gas Protocol.

F

3.10 Restatements of information Not applicable; 2010 is our first GRI-based Sustainability and Responsibility Report F

3.11 Significant changes from previous reporting periods

Not applicable; 2010 is our first GRI-based Sustainability and Responsibility Report F

3.12 GRI Index GRI Index F

3.13 External assurance

We did not seek external assurance for our 2010 Sustainability and Responsibility Report. However, we did utilize the services of Control Union Certifications, an independent certification body, to verify select key performance indicators related to the Tim Hortons Coffee Partnership. Tim Hortons Coffee Partnership/Initiatives/ CUC Verification

F

4. GOVERNANCE, COMMITMENTS AND ENGAGEMENT

4.1 Governance structure of the organization Governance;THI Corporate Governance F

4.2 Executive officer and Board ChairOur Chair of the Board of Directors is not an executive officer of the Company; 2010 Annual Report 10-K (p. 176)

F

4.3 Independent and/or non-executive membersTHI Directors and Executive Officers; THI Board of Directors Governance Guidelines

F

4.4 Shareholder/employee input to Board of Directors THI Annual Meeting and Proxy Materials F

4.5 Compensation link to organizational performance 2010 Annual Report 10-K (p. 175) F

4.6 Conflict of interest avoidance THI Board of Directors Code of BusinessConduct and Ethics F

4.7 Board of Directors qualifications THI Board of Directors Governance Guidelines F

Objectives and Guiding Principles;


4.8 Vision, Mission, Values, Codes of ConductBusiness Partner and Supplier Code of Conduct; Standards of Business Practices

F

4.9 Board of Directors performance oversight Governance F

4.10 Board of Directors performance evaluation THI Board of Directors Governance Guidelines F

4.11 Percautionary principle

Sustainability and Reponsibility Process (Strategy Development/Risks and Opportunities); Supply Chain (Initiatives)

F

4.12 Endorsement of external principles/initiatives

Our BPSCC was created based on internationally accepted labour standards including the International Labour Organization's (ILO) core conventions and the United Nations Universal Declaration of Human Rights. Business Partner and Supplier Code of Conduct

F

4.13 Association memberships Sustainability and Responsibility Process (Stakeholder Engagement) F

4.14 Listing of stakeholders Sustainability and Responsibility Process (Stakeholder Engagement) F

4.15 Stakeholder Engagement

We currently do not have a formal policyregarding stakeholder engagement. However, we consult with a number of our key stakeholder groups on an onging basis as listed in the following link Sustainability and Responsibility Process (Stakeholder Engagement)

F

4.16 Stakeholder Engagement Sustainability and Responsibility Process (Stakeholder Engagement) F

4.17 Stakeholder Engagement

Sustainability and Responsibility Process (Materiality Assessment); Partners/Initiatives (Tim Hortons Sustainability and Responsibility Advisory Council)

F

Index Description Report Completeness (Full/Partial)

1. ECONOMIC

Disclosure on Management Approach: We seek to grow our business by executing strategic and operational plans and initiatives designed to help us achieve both annual and longer-term goals that create shareholder value. We are one of North America's largest developers and franchisors of quick service restaurants, with 3,750 systemwide restaurants. We are North America's fourth-largest publicly-traded restaurant company measured by market capitalization. In Canada, we command an approximately a 41% share of the quick service restaurant traffic. Our 2010 Annual Report to Shareholders and supporting 10-K outline our financial performance across the various dimensions of our business that impact our key sustainability issues, and our strategic growth plan.

EC1 Economic value generated and distributed including revenues,operating costs, employee compensation, donations, retained earnings, and payments to capital providers and governments

2010 Annual Report 10-K (p. 106); Community Success (Initiatives); Corporate Donations Summary

F

EC2 Financial implications of climate change 2010 Annual Report 10-K (p. 20, 23) F

EC3 Coverage of defined benefit plan obligations Employees/Initiatives (Employee Benefits) F

EC4 Significant financial assistance from government None F


EC5 Wage ratios related to local minimum wage Not reported in 2010 -

EC6 Local supplier policy, practices and proportion of spending Not reported in 2010 -

EC7 Senior-level hiring from local community We do not have a formal policy with regards to this indicator. F

EC8 Impact of infrastructure benefits and services for public benefit

Tim Horton Children's Foundation camps occasionally require infrastrcuture upgrades (i.e., roads) to facilitate site access.

F

EC9 Indirect economic impacts Not reported in 2010 -

2. ENVIRONMENTAL

Disclosure on Management Approach: Our environmental priorities are aligned and integrated within our sustainability and responsibility strategy and the Planet pillar of Making a True Difference. Environmental priorities identified during our strategy development process included:

1. Waste reduction and diversion, 2. Energy and water conservation, 3. Transportation efficiency.

Key environmental principles have also guided us over the years:

We will work with all of our key stakeholders including guests, Restaurant Owners, corporate employees, suppliers and governments, to adopt proven environmental best practices in all elements of our business;

We will apply these practices in our daily operations to reduce our environmental footprint and embrace the 4R concept: Rethink, Reduce, Reuse and Recycle – wherever possible;

We will work to make a positive contribution to the environment, such that our behaviours and actions, together, "make a true difference."

Visit our Environmental Matters and Sustainability and Responsibility sections in our Annual Report and 10-K for details.

EN1 Materials used by weight or volume Not reported in 2010 -

EN2 % recycled input materials Not reported in 2010 -

EN3 Direct energy consumption by source Environmental Performance Summary P

EN4 Indirect energy consumption by source Environmental Performance Summary F

EN5 Energy saved through conservationEnvironmental Stewardship/Initiatives (Distribution); 2010 Tim Hortons GHG Emissions

F

EN6 Initiatives to provide energy-efficient or renewable energy based products or services

Environmental Stewardship/Initiatives (Distribution); 2010 Tim Hortons GHG Emissions

EN7 Initiatives to reduce indirect energy consumption and reductions achieved

Environmental Stewardship/Initiatives (Distribution); 2010 Tim Hortons GHG Emissions

F

EN8 Water withdrawal by source Environmental Performance Summary P

EN9 Significant impacts on sources None F


EN10 Water recycled, reused Not reported in 2010 -

EN11 Areas of high biodiversity value

All our corporate and restaurant operations are located in developed areas with the exception of our Tim Horton Children's Foundation camps. Our camps in Alberta and Kentucky are located within, or adjacent to, protected areas. Children/Initiatives (Camp Environmental Initiative Summaries)

F

EN12 Significant impacts on biodiversity

All our corporate and restaurant operations are located in developed areas with the exception of our Tim Horton Children's Foundation camps. Our camps in Alberta and Kentucky are located within, or adjacent to, protected areas. Children/Initiatives (Camp Environmental Initiative Summaries)

F

EN13 Habitats protected and restored

All our corporate and restaurant operations are located in developed areas with the exception of our Tim Horton Children's Foundation camps. Our camps participate in environmental programs related to habitat conservation and protection. Children/Initiatives (Camp Environmental Initiative Summaries)

F

EN14 Plans to manage biodiversity

All our corporate and restaurant operations are located in developed areas with the exception of our Tim Horton Children's Foundation camps. Our camps participate in environmental programs related to biodiversity. Children/Initiatives (Camp Environmental Initiative Summaries)

F

EN16 Direct and indirect GHG emissions by weight Environmental Performance Summary F

EN17 Other relevant indirect GHG emissions Environmental Performance Summary F

EN18 Initiatives to reduce GHG emissionsEnvironmental Stewardship/Initiatives (Distribution); 2010 Tim Hortons GHG Emissions

P

EN1 9 Ozone-depleting emissions Not reported in 2010 -

EN20 NOx, SOx and other air emissions Not reported in 2010 -

EN21 Water discharge by quality and destination Not reported in 2010 -

EN22 Waste by type and disposal method Environmental Stewardship/Initiatives(Compliance) P

EN23 Number and volume of significant spills None F

EN25 Biodiversity impacted by run-off None F

EN26 Mitigation initiatives and environmental impact Environmental Stewardship/Initiatives F

EN27 % of products and packaging reclaimed Not reported in 2010 -


EN28 regulations

None F

EN29 Environmental impacts of transportation Environmental Stewardship/Initiatives (Transportation Efficiency) F

EN30 Environmental protection expenditures andinvestments Not reported in 2010 -

3. LABOUR PRACTICES AND DECENT WORK

Disclosure on Management Approach: We value the role each corporate employee plays across our Company. We strive to be the "Employer of Choice" in our industry, so we create a culture that allows us to attract, train, develop and retain the highest quality talent available. Our Standards of Business Practices outlines our business ethics and compliance programs including an overview of employee relations, occupational health and safety, training and development and inclusion and diversity.Details of these programs are provided in the Individuals/Employees section of this Sustainability and Responsibility Report and are further supported by the following policies:

Health and Safety Policy (Always SAFE), Workplace Harassment, Workplace Violence.

LA1 Workforce by type, contract and region Employee Practices Performance Summary F

LA2 Employee turnover by age, gender and region Employee Practices Performance Summary F

LA3 Benefits provided to full-time and part-time employees Employees/Initiatives (Employee Benefits) F

LA4 Collective bargaining agreements Employee Practices Performance Summary F

LA5 Notice regarding organizational changesWe comply with local legislation as required. We do not have a formal corporate policy regarding this indicator.

F

LA6 Employees represented through health and safety committees Employee Practices Performance Summary F

LA7 Rates of injury, absenteeism and fatalities Employee Practices Performance Summary F

LA8 Education regarding serious diseasesWe provide health, safety and wellness training and education programs. Employees/Initiatives (Health and Safety)

F

LA10 Average hours of training per year per employee Not reported in 2010 P

LA11 Lifelong learning programs Employees/Initiatives (Training and Development) F

LA12 Performance reviews Employees/Our Goals;Employee Practices Performance Summary F

LA13 Composition of governance bodies THI Directors and Executive Officers F

LA14 Ratio of salary of men to women Not reported in 2010 -

4. HUMAN RIGHTS

Disclosure on Management Approach:


Our Standards of Business Practices, along with our five Company Values, provide the Company with the guidelines that we use to evaluate and direct our business activities worldwide. The primary objective of our Standards of Business Practices is to prevent the occurrence of unethical or unlawful behaviour. Every corporate employee is required to be trained on our Standards of Business Practices and it includes guidelines on behaviour on various topics including, but not limited to, human rights issues such as relationships with employees – including harassment, discrimination, workplace safety and violence. Our Chief Risk Officer heads our Ethics and Compliance Office. Another resource available to our employees and other stakeholders is an Ethics Helpline operated by an external provider – EthicsPoint. In support of our Standards of Business Practices, we have developed and implemented a Business Partner and Supplier Code of Conduct (BPSCC). This document was developed based on internationally accepted labour standards including the International Labour Organization's (ILO) core conventions and the Universal Declaration of Human Rights. Failure of our business partners and suppliers to substantially comply with the BPSCC is sufficient cause for us to revoke a business partner or supplier's approved status.

HR1 Investment agreements that have undergone human rights screening Not reported in 2010 -

HR2 Suppliers/contractors that have undergone human rights screening

Supply Chain/Initiatives (Our Business Partner and Supplier Code of Conduct) P

HR3 Hours of employee training on human rights

Policies and procedures related to aspects of human rights relevant to our Company are included within our Standards of Business Practices. Employee Practices Performance Summary

P

HR4 Total number of incidents of discrimination Employee Practices Performance Summary F

HR5 Freedom of association None F

HR6 Child labour

Our Business Partner and Supplier Code of Conduct has provisions for child labour and our related verification program is based on a risk assessment process. Supply Chain/Initiatives (Our Business Partner and Supplier Code of Conduct)

F

HR7 Forced or compulsory labour

Our Business Partner and Supplier Code ofConduct has provisions for forced labour and our related verification program is based on a risk assessment process. Supply Chain/Initiatives (Our Business Partner and Supplier Code of Conduct)

F

5. SOCIETY

Disclosure on Management Approach: Since our Company founders opened the first Tim Hortons restaurant in 1964, the Company and our Restaurant Owners have been passionate about working with the communities we serve, and the individuals within those communities. This is evidenced through our unparalleled commitment to our Tim Horton Children's Foundation, and our host of national and regional programs that enable local Restaurant Owners to engage with their individual communities. Further, our work through the Tim Hortons Coffee Partnership enables small holder coffee farmers in the regions where we source our coffee to lead better lives.

SO 1 Nature, scope, effectiveness of programs that assess andmanage the impacts of operations on communities

Not reported in 2010 -

SO2 Business units analyzed for corruption risk Not reported in 2010 -

SO3 Anti-corruption employee training

Our Company's anti-corruption policies and procedures are included within our Standards of Business Practices. Employee Practices Performance Summary

F

One corporate employee was dismissed as a result of our Ethics Resolution Process. There


SO4 Actions taken against corruption incidentswere no investigations or charges broughtagainst the Company in 2010. F

S05 Participation in policy development and lobbying Corporate Political Participation Policy F

S06 Contributions to political parties. $32,225 in cash political donations in 2010. In-kind donations not reported in 2010.

P

SO 7 Number of legal actions for anti-competitive behaviour, anti-trust, and monopoly practices 2010 Annual Report 10-K (p. 40) F

SO8 Fines and non-monetary sanctions for non-compliance None F

6. PRODUCT RESPONSIBILITY

Disclosure on Management Approach: Our goal is to exceed our guests' expectations every day, in every restaurant. We are committed to continually monitoring our products and services, and we work hard to improve them. Our Standards of Business Practices outlines our business ethics and compliance programs including an overview of our programs for product quality and food safety, and compliance. Details of these programs plus our communication vehicles for our guests are provided in the Individuals/Guests section of this Sustainability and Responsibility Report.

PR1 Life cycle health and safety assessments Guests/Initiatives (Food Safety at Tim Hortons) P PR 2 Non-compliance with regulations and voluntary codes

concerning health and safety We experienced no incidents of health or food safety non-compliance resulting in a fine or warning in 2010.

F

PR 3 Products and services subject to information requirements Guests/Initiatives (Food Safety at Tim Hortons) F

PR 4 Incidents of non-compliance concerning product information and labeling None F

PR5 Guest satisfaction practices We conduct research and surveys on trends in guest satisfaction as required. Guests/Initiatives (Our Hospitality Initiative)

F

PR6 Programs to abide by rules of marketing communications, including advertising, promotion, sponsorship

Not reported in 2010 -

PR 7 Non-compliance with marketing communications laws and regulations None F

PR8 Customer privacy complaints None F

PR9 Fines for non-compliance, laws concerning the provision and use of products/services

None F

© 2010 Tim Hortons


At Tim Hortons, we value your feedback! For feedback on our Sustainability and Responsibility Report: Tim Faveri, Director, Sustainability and Responsibility Tel: 905-845-6511 [email protected] For general inquiries please fill out the Contact Us Form. Our FAQs also provide lots of helpful information. Online: Contact Us Form By Phone: 1-888-601-1616

© 2010 Tim Hortons


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