P2
Strategic Analysis & Investment Framework

P2 Last Mile:
Canada Expansion
Opportunity

"The same client. A bigger market. A proven model."

📅 April 2026
🔒 Internal — Confidential
11 Slides
Slide 2 of 11

Executive Summary

🎯 The Opportunity

104

Costco Canada warehouses

Costco Canada has a documented last-mile gap. Customers reporting appliances left at the curb.

  • $180–250M CAD annual delivery market
  • P2 already has the relationship
  • P2 already has the system (Descartes is Canadian)
  • P2 already has the playbook

✅ The Model Works

At $85 CAD/stop with full revenue stack:

Tier 1 Edmonton $597K CAD/yr
Tier 4 Toronto $3.7M CAD/yr
25–32%
EBITDA Margins
$127.75
Revenue/Stop CAD

📞 The Ask

1
Call with Costco Canada
to confirm per-stop rate + MDO platform access

Everything else is execution.

Two confirmation points before committing a dollar:
① Per-stop rate ≥ $75 CAD
② MDO platform confirmed
Slide 3 of 11

The Market Gap

Costco Canada — 104 Warehouses by Province

$47B CAD Costco Canada Revenue
$250M CAD Last-Mile TAM
The Gap: Costco Logistics MDO network is US-centric. Canada relies on 3rd-party carriers. Customer complaints documented — appliances left at the curb.

Competitive Landscape

Primary Competitor
TForce Final Mile
Backed by TFI International
P2's Edge
Same client • Same systems
Descartes is Canadian!
Proven service model

Warehouse Distribution

🇨🇦 Ontario38 (37%)
Quebec22 (21%)
Alberta18 (17%)
BC14 (13%)
Other provinces12 (12%)
Slide 4 of 11

The Full Revenue Picture

Revenue Streams: US Current vs. Canada Target

Revenue Stream US Current Canada (per stop)
Per-stop labor $92–124 USD $85 CAD (target)
Fuel surcharge $6.00–6.50/mile $3.00/mile CAD
4-wall charges $7.50–8.00/unit $7.50 CAD/unit
Fixed weekly fees $2,820–$5,501/wk Scaled to operation
Total revenue per stop ~$165–185 USD ~$128 CAD (~$92 USD)
Fixed weekly fees = nearly pure margin. Warehouse-fixed + weekly-fixed ≈ $15/stop equivalent on top of per-stop labor.

⚠️ Why This Matters

Prior analysis used only per-stop labor rate — this understated the opportunity:

Initial (Incomplete) Model
$95.75 CAD/stop
↓
Corrected (Full Stack)
$127.75 CAD/stop
+33%
higher than initial model

Revenue Components Breakdown

Base per-stop labor $85.00
Fuel surcharge (5mi × $3) $15.00
4-wall charges ($7.50 × 1.7) $12.75
Fixed fees (~$15/stop equiv.) $15.00
Total per stop $127.75 CAD
Slide 5 of 11

Five-Tier Financial Model

Tier Market Stops/Wk Full Revenue/Wk EBITDA/Wk EBITDA% Annual EBITDA
T1 Edmonton 350 $44,712 $11,476 25.7% $597K CAD
T2 Calgary 600 $76,650 $20,715 27.0% $1.08M CAD
T3 Vancouver 1,250 $159,688 $44,850 28.1% $2.33M CAD
T4 ⭐ Toronto 1,750 $223,562 $70,654 31.6% $3.67M CAD
T5 GTA 2,250 $287,438 $68,602 23.9% $3.57M CAD

Annual EBITDA by Tier (CAD)

Capital Required to Launch

Tier 1 Edmonton
~$673K CAD
~$488K USD
Tier 2 Calgary
~$1.09M CAD
~$790K USD
Tier 4 Toronto (Yr 3)
~$2.89M CAD
~$2.1M USD
Break-even rate drops to $70–75 CAD when full revenue stack is modeled — vs. $80 in initial analysis. Margin of safety is wider than it first appeared.
At $85 CAD/stop base rate with full revenue stack (fuel + 4-wall + fixed fees). All figures in CAD.
Slide 6 of 11

Profitability Levers

💰 Revenue Levers
Pull These in Negotiation

🎯 Per-stop rate: Every $5 CAD/stop = $9,100/year per 35 stops/week. Fight for $85–90, not $80.
💰 Fixed weekly fees: Warehouse-fixed + weekly-fixed are nearly pure margin coverage. Scale to operation size, not just stop count.
📦 NSR/special service: Gas hookup, haul-away, assembly = $25–115 CAD per event on top of base. Confirm service spec with Costco Canada.
🔧 4-wall charges: $7.50 CAD/unit × 1.7 ratio = $12.75/stop embedded revenue.

⚙️ Cost Levers
Structural Advantages vs. US

🏥 No employer health insurance: Canadian universal healthcare saves $76–150/employee/month. 10+ drivers = $9–18K/yr savings.
🌾 Alberta labor cost: Min wage frozen at $15.00/hr. 44-hr OT threshold (most forgiving in Canada). Lowest WCB rates.
🚛 Fleet lease vs. buy: Operating lease 24 months = no capital tied up. Transition to ownership once volume is stable.
📍 Stop density: 14–17 stops/truck/day in metro vs. 7–12 currently. Variable cost per stop drops 20–30%.
💱 Natural CAD hedge: Revenue AND most costs in CAD. Currency risk is manageable — at the repatriation layer.

🔩 Operational Levers
Don't Leave on the Table

1. Hire Canadian GM first — local knowledge is worth more than a US relocation.
2. Negotiate warehouse lease before committing to Costco volume — not after.
3. Deploy Samsara + Onfleet from day one ($3K CAD/month at 50 trucks). Don't scale the informal dispatch model.
4. Provincial gas hookup certification (TSSA in ON, Technical Safety BC) = premium service tier justification and rate protection.
Stack the levers: Full revenue stack + Alberta cost structure + metro density = margins competitive with best US markets.
Slide 7 of 11

Tax & Repatriation Strategy — Moving Money Back to St. George

Structure

🇨🇦 P2 Canada Ltd.
(Alberta ULC)
Management Services Fee
+ Dividends (5% WHT)
▼
🇺🇸 Two Phillips Enterprises LLC
(US HoldCo)
Pass-through
▼
👤 Kirk Phillips
(Personal Tax Return)
1

Alberta ULC Structure — Eliminates Double Taxation

Incorporate as an Unlimited Liability Corporation (ULC) in Alberta. Treated as a corporation in Canada (pays Canadian tax) but as a pass-through for US tax purposes. Canadian corporate tax paid in Canada; US taxes flow through to personal return with foreign tax credits offsetting double taxation. Must be done before first Canadian dollar.

2

Management Services Agreement (MSA)

Canadian sub pays US parent for strategic direction, back-office, tech systems, brand license. Defensible arm's-length rate: 2.5–3% of Canadian gross revenue. At Tier 2: $99K–$120K CAD/year to US. At Tier 4: $290K–$350K CAD/year to US. Must be documented + supported by actual services.

3

Dividend Repatriation via Tax Treaty

Canada-US Tax Treaty reduces withholding on dividends from 25% → 5% (qualifying corporate shareholders ≥10%). Foreign tax credits on US return offset Canadian corporate tax already paid. Optimal cadence: quarterly distributions after Canadian tax installments are settled.

4

Capital Cost Allowance (CCA) — Canadian Tax Depreciation

Class 10 vehicles (delivery trucks): 30% declining balance/year. Accelerated Investment Incentive: 1.5× normal first-year CCA. At $3.5M CAD in truck fleet: Year 1 CCA deduction ~$1.6M → reduces Canadian taxable income → less tax to repatriate.

5

Currency Strategy — Keep It Simple

Natural hedge: most revenue AND costs are CAD. Repatriate USD via MSA fee. FX policy: convert CAD surplus monthly at spot rate. At Tier 3+ consider 90-day forward contracts. Budget 2–3% FX friction on repatriated amounts.

Get a cross-border CPA before the first hire. Setup done right = MSA in place from day one + ULC structure that avoids the US LLC double-taxation trap. Cost: $5–15K one-time. Savings: potentially hundreds of thousands over the life of the business.
Slide 8 of 11

"Don't Build Toronto. Earn It."

⚡ Pre-Launch
60–90 Days

Before spending anything:

  • Call with Costco Canada — confirm per-stop rate + MDO platform
  • Confirm Canadian service spec includes gas hookup (TSSA required)
  • Engage cross-border CPA + corporate attorney
  • Incorporate Alberta ULC, execute MSA
  • Draft Canadian employment contract template
Phase 1 — Edmonton
Months 3–18
~$488K USD
  • 350 stops/week, 7 trucks, 17 employees
  • Hire Canadian GM ($90–115K CAD) first
  • Prove: ops, compliance, training, Costco relationship
  • Target EBITDA: $597K CAD/year by month 12–18
🚦 Gate: 6 consecutive months positive EBITDA + operational stability
Phase 2 — Calgary + Scale
Months 18–36
~$790K USD additional
  • Edmonton → grow to Tier 2 scale
  • Launch Calgary simultaneously
  • Edmonton GM becomes regional
  • Combined EBITDA: $1.7M CAD/year
🚦 Gate: Both markets profitable + compliance playbook documented
Phase 3 — Toronto 🏆
Month 36+
~$2.1M USD
  • The prize: $3.67M CAD/year
  • Full mgmt org: GM + Ops + Dispatch + Fleet + HR
  • Vancouver alongside based on Phase 2 capital
  • Montreal: Year 4+ (French infra required)
🛑 STOP Costco Canada rate < $75 CAD/stop (full stack) → Model doesn't work.
⏸ PAUSE Capital unavailable without straining US operations → Wait.
⏸ PAUSE No Canadian GM identified within 90 days of launch decision → Pause.
Slide 9 of 11

Risk Register — Top 10

# Risk Severity Mitigation
1 Gas hookup certification missing (TSSA/BC) 🔴 HIGH Confirm service spec before hiring; partner or hire certified crew
2 Canadian termination law (wrongful dismissal) 🔴 HIGH Written contracts capping to ESA minimums — at hire, not after
3 Per-stop rate below $75 CAD 🔴 HIGH Walk away. Model doesn't work at $70.
4 Quebec expansion (Bill 96 French requirement) 🔴 HIGH No-go for 2+ years. Keep off roadmap until English ops stable.
5 Canadian GM hire failure 🟡 MED Pre-launch recruiting; retain search firm before committing to timeline
6 Union organizing (higher risk in metro Canada) 🟡 MED Pay above market from day one; build culture before you need it
7 CAD/USD depreciation (0.72 → 0.65 scenario) 🟡 MED Natural hedge reduces exposure; MSA fees provide USD floor
8 Vancouver industrial RE availability 🟡 MED Defer Vancouver; Edmonton/Calgary lease market is far easier
9 Costco Canada MDO system different from US 🟡 MED Confirm in pre-launch call; if different, adds 60–90 day tech ramp
10 US operations disrupted by capital deployment 🟢 LOW Tier 1 only requires $488K USD — model doesn't require straining US cash
Slide 10 of 11

The Numbers That Matter

📊 Market

104 Costco Canada Warehouses
$47B CAD Costco Canada Revenue
$250M CAD Last-Mile TAM (high)
$180M CAD Last-Mile TAM (low)

💡 Unit Economics — At $85 CAD/Stop, Full Stack

$127.75 Full Revenue Per Stop (CAD)
~$72 Break-Even Rate (CAD) — vs. $80 initial
25.7% Tier 1 EBITDA Margin
31.6% Tier 4 EBITDA Margin (Best)

🚛 Operations

13.74 US National Benchmark (Stops/Truck/Day)
16.5–17.7 Best US MDOs (Cerritos, Hayward)
15 Canadian Target (Stops/Truck/Day)

💰 Capital at Risk Per Tier

$488K USD Tier 1 Edmonton — Now
$790K USD Tier 2 Calgary — Year 2
$2.1M USD Tier 4 Toronto — Year 3
Slide 11 of 11

Next Steps

📅 This Week Immediate

  1. Schedule call with Costco Canada logistics team — same team you work with in the US.
  2. Engage Canadian cross-border CPA/attorney referral — ask your US CPA for a referral now.
  3. Confirm: does Canadian service spec include gas hookup? (TSSA in ON, Technical Safety BC)
The rate call is the gating item. Nothing else matters until you know if $85 CAD/stop is achievable.

📆 Next 30 Days If Rate ≥ $85 CAD/Stop

  1. Incorporate Alberta ULC + execute MSA with US parent (before any revenue flows).
  2. Begin Canadian GM search — post the role AND engage a search firm simultaneously.
  3. Draft Canadian employment contract template with Canadian counsel.
  4. Scout Edmonton warehouse options — 35,000 sqft at ~$11/sqft NNN.

🗓️ Next 90 Days Launch Prep

  1. Fleet conversion plan — seed with US trucks → CVIP inspection → Canadian registration.
  2. Samsara + Onfleet procurement and configuration — don't skip this.
  3. Canadian payroll system setup — CPP, EI, Alberta WCB.
  4. Target: first driver hired in Canada.
Phase 1 launch target Month 3–4
Break-even at ~$72 CAD/stop
P2 Last Mile — Canada Expansion Analysis · April 2026 · Confidential
The same client. A bigger market. A proven model.