TORONTO - Canadian Tire (TSX:CTC.A) will build and operate gas stations and convenience stores at 23 service centres along Ontario's two busiest highways under a new deal.
The provincial government and a private company will spend $300 million on renovations to the centres over three years under a new agreement.
Privately owned Host Kilmer Service Centres Inc. won the 50-year contract to maintain and operate the 23 locations across the province.
About 2,500 service centre jobs will be created with the redevelopment over the next three years and about 350 construction jobs will be created at each site.
Under the deal, Host Kilmer will spend $100 million and the province will spend another $200 million to redevelop the locations. Renovations on seven of the service centres have already begun and will see them reopen with Canadian Tire fuel stations and convenience stores, as well as fast-food outlets like A&W (TSX:AW.UN), Burger King and Tim Hortons (TSX:THI).
Previously a number of companies had operated the gas stations at the service centres across the province.
During construction, interim services including parking, portable washrooms, public telephones, water and limited food service will be offered at select locations.
Michael Medline, president of Canadian Tire Automotive, said the company hopes to attract new customers to its stores through the fuel stations.
"For us, this was a once-in-a-generation opportunity to put our brand on the most modern gas bars available on the busiest highways in the country," Medline said in an interview.
"We're going to be able to expose our brand and Canadian Tire Petroleum to current customers and new customers travelling along the highways."
He added the company will give away Canadian Tire money at its gas bars in the hopes of getting people to shop at its retail outlets.
Under the deal, Host Kilmer will share a portion of the revenue generated at the sites with the Ontario government.
Host Kilmer will be solely responsible for maintaining and operating the service centres and pay all costs related to operation, maintenance and repair over the life of the contract.
"By redeveloping the highway service centres, the government is creating and maintaining local jobs, contributing to road safety and economic prosperity, and supporting the development of sustainable facilities across Ontario," Ontario Infrastructure Minister Brad Duguid said in statement.
The Ontario government has faced criticism for the pace of redevelopment of the service centres.
Canadian Tire employs more than 58,000 people at 273 gas stations and 479 retail stores across the country.
