There are currently 4 committees of the Board of Directors: the Audit Committee, the Corporate Governance Committee, the Human Resources Committee, Compensation and Pension Committee and the Environmental, Health and Safety Committee. Each committee operates in accordance with Board-approved terms of reference. The Board may create a new committee or disband a current committee whenever it considers it advisable to do so, provided that the Corporation must always have an Audit Committee.

The Board rotates committee members and committee chairs from time to time as required. In doing so, the Board tries to make use, to the extent possible, of the particular expertise of each of the directors.

Committee chairs, in consultation with members, determine the frequency of meetings for each committee; provided that a committee must at all times comply with its terms of reference. The agenda for each meeting is established by the committee chair in consultation with appropriate members of management and the Corporate Secretary. Each committee reports to the full Board with respect to each of its meetings.

Committee members are appointed annually following the Corporation’s annual general meeting. The Corporate Governance Committee provides recommendations to the Board in respect of all such appointments.

The following is a description of the composition and mandate for each of the Committees of the Board.

The Corporate Governance Committee
The Audit Committee
The Human Resources Committee
The Environmental, Health and Safety Committee

The terms of reference for the Corporate Governance Committee require that it be comprised solely of unrelated directors. The current members of the Committee are D.S. O'Sullivan (Chairman), J.J. Mooney, C.A. Pinette and A.H. Simon. 

The mandate of the Corporate Governance Committee is to enhance corporate performance by assessing and making recommendations regarding Board effectiveness and by establishing a process for identifying, recruiting, appointing and re-appointing directors and providing for the on-going development of current Board members.

A healthy governance culture demands that both management and the Board engage in continuous constructive discussions to delineate their respective roles in changing circumstances. The Corporate Governance Committee monitors the flow of information between the Board and management and, where necessary, makes recommendations on improving these lines of communication.

The Committee met 4 times in person in 2004 in conjunction with regularly scheduled Board meetings and 2 times by telephone. During its meetings, the Committee dealt with various corporate governance matters consistent with its terms of reference contained in the Corporation's Board policy manual. The Board policy manual sets out responsibilities and terms of reference for the directors, the Chairman of the Board, the Chief Executive Officer and the various committees of the Board and includes a review process for the Chairman of the Board, the Chief Executive Officer, the Board, the Board Committees and individual directors. The Committee reviews the Board policy manual from time to time and recommends amendments to its provisions as required.

The Terms of Reference for the Audit Committee require that it be comprised of at least three unrelated directors. The current members of the Committee are A.H. Simon (Chairman), R. Bacarreza, T.S. Howden, D.S. O'Sullivan and M.T. Waites. In addition, Conrad A. Pinette attends meetings of the Audit Committee in his capacity as Chairman of the Board. All Committee members are required to be financially literate and at least one member is required to have accounting or related financial management expertise. Mr. Waites is the designated “financial expert” member of the Committee.

The Committee provides assistance to the Board of Directors in fulfilling its oversight responsibility to the shareholders with respect to the Corporation’s: (a) financial statements; (b) financial reporting process; (c) systems of internal accounting and financial controls; (d) internal audit function; (e) external auditors’ reports; and (f) risk identification, assessment and management program. It is the responsibility of the Committee to maintain an open avenue of communication between itself, the external auditors and the management of the Corporation. In performing its role, the Committee is empowered to investigate any matter brought to its attention, with full access to all books, records, facilities and personnel of the Corporation. It is also empowered to instruct and retain outside counsel or other experts as required.

The Committee met 5 times in 2004 in conjunction with regularly scheduled Board meetings.

Fees paid or accrued by the Corporation and its major business units or subsidiaries for audit and other services provided by Deloitte & Touche LLP (the Corporation’s external auditors) during 2004 were as follows (such amounts were billed in various currencies and converted to Canadian dollars using the exchange rates in existence at the time of billing):

Notes:

1. Audit-related services include: audit of the Corporation’s pension plans, advice on compliance with regulatory pronouncements and services in respect of the Corporation’s business acquisition activities.
    
2. Tax services include: tax compliance reviews, tax planning, review of the tax impact of specific transactions, assistance with inquiries from tax authorities and international relocation advice.
    
3. Other services would include any non audit-related or tax services.

The Committee determined that the provision of the audit-related and tax-related services described above did not compromise the independence of Deloitte & Touche LLP for purposes of performing audit services for the Corporation. In addition, as the Corporation’s auditors, Deloitte & Touche LLP are required to comply with the terms of the Corporation’s “Terms of Reference for External Auditors”.

Recent Regulatory Developments

During 2004, there were a number of new regulatory instruments issued by the Canadian Securities Administrators (the “CSA”) which impacted the Audit Committee and its mandate.

These instruments include:

• Multilateral Instrument 51-109, which requires the Corporation’s Chief Executive Officer and Chief Financial Officer to certify the Corporation’s interim and annual filings;
• Multilateral Instrument 52-110, which contains rules relating to the composition and obligations of audit committees; and
• National Instrument 51-102, which details the continuous disclosure obligations of public companies and indicates what approvals are required in respect of annual and interim financial information filed with regulatory agencies.

In response to these developments, the Audit Committee, both directly and through oversight and direction of management, has taken steps and implemented systems to ensure that the Corporation complies with its obligations under each of these instruments. These steps include:

• ensuring the appropriate level of internal control, analysis and reporting systems are in place to permit the Chief Executive Officer and Chief Financial Officer to provide all necessary certifications of the Corporation’s annual and interim filings. In 2004, the Chief Executive Officer and Chief Financial Officer each certified that the interim and annual filings did not contain a misrepresentation or omission of material fact and that the filings present fairly the Corporation’s financial condition, results of operations and cash flow. In addition, beginning with the 2005 annual filing, the Chief Executive Officer and Chief Financial Officer will also certify the effectiveness of the disclosure controls and procedures the Corporation has in place to ensure all relevant information is disclosed in annual and interim filings; and
• ensuring the composition of the Audit Committee and its mandate satisfy all requirements of Multilateral Instrument 52-110. In this regard, the Audit Committee and the Board are satisfied that all members of the Audit Committee are independent and financially literate. In addition, the Audit Committee’s Terms of Reference and the Terms of Reference for External Auditors are designed to ensure that the Audit Committee satisfies all of its obligations under the Instrument including: recommending to the Board both the firm to serve as external auditor and the compensation to be paid to that firm; overseeing the work of the external auditor; approving all non-audit services to be provided by the auditor; reviewing the Corporation’s interim and annual filings and financial press releases; reviewing the accuracy and adequacy of the Corporation’s public disclosure of financial information; establishing procedures to deal with internal complaints or issues relating to the Corporation’s accounting, internal controls or audit matters; and approving the Corporation’s hiring policy with respect to present or former partners and employees of the Corporation’s auditors.

Enterprise Risk Management

The Corporation is dedicated to a strong risk management culture to protect and enhance shareholder value. As such, the Corporation has adopted an Enterprise Risk Management approach to identifying and evaluating risks. On a regular basis (quarterly for 2004), the Audit Committee reviews the Corporation’s processes with respect to risk assessment and management of key risks, including the Corporation’s major financial risks and exposures and the steps taken to monitor and control such exposures. The Enterprise Risk Management Process involves the identification, by each of the Corporation’s significant operations, of key risks that could impact the achievement of the Corporation’s strategic plan. The management of each of these key risks is monitored closely and disclosed annually in the Corporation’s annual information form. Any changes to the key risks are disclosed on a quarterly basis in the Corporation’s interim financial filings.

For more information regarding the Audit Committee and its mandate, please refer to the section entitled “Audit Committee” in the Corporation’s most recent annual information form.

The current members of the Committee are: J.J. Mooney (Chairman), J.F. Dinning, M.T. Waites and J.M. Willson. The composition and primary mandate of the Human Resources Committee with respect to human resources and compensation matters is described in full in this management proxy circular. In addition, the Committee reviews and approves the succession plan for the Chief Executive Officer and for the executive leadership team; reviews and approves any significant changes to the organizational structure; and reviews engagement of the workforce. The Committee also reviews, with the Corporation’s management pension committee: (a) the pension fund investment strategy; (b) the choice of fund manager(s) for the Corporation’s pension funds; (c) the ongoing performance of the fund manager(s); (d) the design and benefits of the Corporation’s pension plans; and (e) contribution levels and funding status of the Corporation’s pension plans.

The terms of reference for the Environmental, Health and Safety Committee require that it be comprised of at least three directors, at least two of whom must be unrelated directors. The current members of the Committee are: J.M. Willson (Chairman), R. Bacarreza, T.S. Howden, J.F. Dinning and D.W.G. Whitehead.

The mandate of the Committee is to encourage, assist and counsel the management of the Corporation in its drive towards attaining and maintaining a high level of performance in areas relating to the environment and health and safety. The Committee also seeks to ensure, through the management of the Corporation, that the Corporation’s employees and contractors enjoy a safe and healthy workplace.

The Committee pursues the corporate goal of reducing accidents in the workplace through the adoption, monitoring and enforcement of policies and procedures designed to meet or exceed the environmental, health and safety goals which the Corporation has set for itself and applicable regulatory requirements.

The Committee met 5 times in 2004 in conjunction with regularly scheduled Board meetings.