Board of Directors

The Board of Directors (the "Board") is currently comprised of ten directors. The Board considers on a regular basis its size and composition, each of which has been determined to be appropriate in view of its responsibilities and the risks and strategic direction of the Corporation. The number of directors permits the Board to operate in an efficient and cohesive manner. The Board believes that a diversity of views and experience enhances the ability of the Board as a whole to fulfill its responsibilities to the Corporation. The Board believes that the proportion of management directors to independent directors accurately reflects the ownership of the Corporation.

The management directors are specialists in their field. Independent directors are not required to be specialists in the business of the Corporation but rather to provide the benefits of their business experience, judgment and vision. Three of the proposed eleven directors are considered by the Board to be independent. A director is considered to be unrelated and independent by the Board if the Board determines that the director has no direct or indirect material relationship with the Corporation. A material relationship is a relationship that could, in the view of the Board, be reasonably expected to interfere with the exercise of the director's judgment independent of management. David H. Atkins, Donald C. Lowe and Bruce Day are the independent directors of the Corporation.

The remaining directors of the Board are non-independent as each of these directors holds a management position with the Corporation or its subsidiaries. The management directors of the Board are Brent P. Chapman, George J. Engman, Veronika Hirsch, Stephen C. Johnson, Victor Koloshuk, David G. Mather, Paul J. Perrow and John F.K. Robertson.

The Chairman, Chief Executive Officer ("CEO") and President of the Corporation is Victor Koloshuk. Mr. Koloshuk is a non-independent director of the Board.

The Board recognizes the current trend towards having a majority of "independent" directors but also acknowledges that the Corporation continues to be a largely employee owned company. In order to facilitate the exercise of independent judgment by the Board, the Board will appoint a lead director. One of his principal responsibilities is to oversee the Board processes so that it operates efficiently and effectively in carrying out its duties and to act as a liaison between the Board and management.

To facilitate the Board's exercise of independent judgment in carrying out its responsibilities, the independent directors conduct private sessions, independent of management and non-independent directors. The independent directors of the Board are encouraged by the Chief Executive Officer to hold private sessions as such independent directors deem necessary in the circumstances. The independent directors, at a minimum, conducted private sessions, independent of management and non-independent directors, on a quarterly basis.

None of the independent directors work in the day-to-day operations of the Corporation or any of its subsidiaries, are party to any material contract with the Corporation or any of its subsidiaries or receive any fees from the Corporation or its subsidiaries other than directors' fees and expenses.

Where a director of the Corporation is presently also a director of any other issuer that is a reporting issuer (or the equivalent) in a Canadian jurisdiction or a foreign jurisdiction, the Corporation has disclosed both the director and the other issuer below.

Orientation and Continuing Education

New directors are provided with information on the Corporation and its management and are fully briefed by senior management on the corporate organization and key current issues. The information package includes copies of all the Corporation’s codes and policies. Visits to key operations are also arranged for new directors.

Ongoing training and development of directors consists of similar components, i.e., updated written corporate information and site visits. Individual directors may engage outside advisors with the authorization of the Board. The Board is responsible for overseeing and implementing continuing education programs to assist directors in maintaining the skill and knowledge necessary to meet their obligations as directors, to ensure that their knowledge and understanding of the Corporation’s business remains current, and to ensure their knowledge of legal, regulatory and ethical responsibilities remains up to date. Directors are also encouraged to attend relevant external continuing education programs.

Ethical Business Conduct

The Corporation is committed to conducting its business with the highest standards of business ethics and in accordance with applicable laws, rules and regulators. On August 6, 2003, the Corporation adopted a written Code of Ethics (the "Code") that applies to all directors, officers and employees of the Corporation and sets out specific policies to guide these individuals in the performance of their duties.

The Code sets out in detail the core values and the principles by which the Corporation is governed and addresses topics such as: honest and ethical conduct; conflicts of interest; compliance with applicable laws, rules and regulations and the Corporation's policies and procedures; confidential information; public disclosures; and protection and proper use of company assets. The management of the Corporation is committed to fostering and maintaining a culture of high ethical standards and compliance, and ensuring a work environment that encourages employees to raise concerns to the attention of management and promptly addressing any employee compliance concerns.

The Corporation maintains appropriate records evidencing compliance with the Code. It is ultimately the Board's responsibility for monitoring compliance with the Code. The Board reviews the Code periodically, reviews management's monitoring of compliance with the Code, and if it were necessary, to consult with members of the Corporation's senior management team and Audit Committee, as appropriate, to resolve any reported violations of the Corporation's Code. A copy of the Corporation's Code is available by contacting the Corporation's corporate secretary.

Nomination of Directors

The Compensation, Nominating and Governance Committee is responsible for proposing new candidates for Board nomination. The Compensation, Nominating and Governance Committee selects individuals with the desired background and qualifications, taking into account the needs of the Board at the time. The Compensation, Nominating and Governance Committee is comprised of independent directors to encourage an objective nomination process.

Compensation

In fiscal 2002, the Board appointed a Compensation, Nominating and Governance Committee composed of all independent directors. All decisions relating to the CEO are voted on by the Compensation, Nominating and Governance Committee to ensure the committee follows an objective process for determining compensation. Decisions involving senior executive appointments, remuneration reviews and bonus allocations are recommended by the CEO, but must be approved by the Compensation, Nominating and Governance Committee members.

On an annual basis the Compensation, Nominating and Governance Committee approves and recommends to the Board the Corporation's compensation policies generally, including base salary, annual incentives, long-term incentives, executive perquisites, supplemental benefits and equity-based incentive plans. In reviewing such compensation policies, the Compensation, Nominating and Governance Committee may consider the recruitment, development, promotion, retention and compensation of executives and other employees of the Corporation and any other factors that it deems appropriate.

The Compensation, Nominating and Governance Committee reviews the adequacy and form of director compensation annually. In addition, the Compensation, Nominating and Governance Committee approves and recommends to the Board all forms of compensation to be provided to the CEO and other key executive officers of the Corporation. In reviewing such compensation for recommendation, the Compensation, Nominating and Governance Committee, among other things, evaluates executive officer achievement against corporate goals and objectives, the Corporation's overall performance, shareholder returns, the value of similar incentive awards relative to such targets at comparable companies, awards given in past years, and such other factors as the Compensation, Nominating and Governance Committee deems appropriate and in the best interests of the Corporation. The Compensation, Nominating and Governance Committee is also responsible for proposing goals for the administration of the Corporation's equity-based compensation plans and reviewing their competitiveness and making recommendations regarding the form of compensation for the Board that realistically reflects the responsibilities and risks of these positions. In addition, the Compensation, Nominating and Governance Committee will annually prepare a Report on Executive Compensation that will be disclosed in the annual management information circular prepared in connection with the Corporation's annual meeting of shareholders. For information regarding how the Board determines the compensation for the Corporation's directors and officers please see "Report of the Compensation, Nominating and Governance Committee of the Corporation" and "Compensation of Directors" in this Management Information Circular. During fiscal year 2007, no compensation consultant or advisor was retained by the Corporation.

Assessments

The Board assesses its members and its committees with respect to effectiveness and contribution on an ongoing basis. This assessment process is informal. Every three years, the Board also assesses its members and its committees with respect to effectiveness and contribution using a formal process. If an individual Board member is found or finds that he or she is unable to contribute due to ability, lack of time or commitment, the individual would be expected to either resign or request not to be nominated for re-election.