**Exhibit 99.3**

 

**Annual Information Form for the year ended December 31,2009, dated March 10, 2010**

 

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**TELUS Corporation**

**Annual Information Form**

**for the year ended December 31, 2009**

** **

**March 10, 2010**

 

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** **
| **CAUTION REGARDING FORWARD-LOOKING STATEMENTS**            | **3**  |
|-------------------------------------------------------------|--------|
| **CORPORATE STRUCTURE**                                     | **4**  |
| **GENERAL DEVELOPMENT OF THE  BUSINESS**                    | **6**  |
| **DESCRIPTION OF THE BUSINESS AND  GENERAL DEVELOPMENTS**   | **7**  |
| **EMPLOYEE RELATIONS**                                      | **8**  |
| **RISK FACTORS**                                            | **9**  |
| **LEGAL PROCEEDINGS AND  REGULATORY ACTIONS**               | **9**  |
| **FOREIGN OWNERSHIP RESTRICTIONS**                          | **10** |
| **REGULATION**                                              | **11** |
| **COMPETITION**                                             | **13** |
| **DIVIDENDS DECLARED**                                      | **13** |
| **CAPITAL  STRUCTURE OF TELUS**                             | **13** |
| **RATINGS**                                                 | **17** |
| **MARKET  FOR SECURITIES**                                  | **19** |
| **DIRECTORS  AND OFFICERS**                                 | **20** |
| **INTERESTS  OF EXPERTS**                                   | **23** |
| **AUDIT COMMITTEE**                                         | **23** |
| **MATERIAL  CONTRACTS**                                     | **25** |
| **TRANSFER  AGENTS AND REGISTRARS**                         | **26** |
| **ADDITIONAL INFORMATION**                                  | **26** |
| **APPENDIX  A: TERMS OF REFERENCE FOR THE AUDIT COMMITTEE** | **27** |

 

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# ** **

# **CAUTION REGARDING FORWARD-LOOKING STATEMENTS**

# ** **

*This document and the Company’sAnnual Management’s Discussion & Analysis for the year ended December 31,2009 (“ MD&A”) contain forward-looking statements about expected futureevents and financial and operating performance of TELUS Corporation (TELUS orthe Company, and where the context of the narrative permits, or requires, itssubsidiaries). By their nature, forward-looking statements require the Companyto make assumptions, and forward-looking statements are subject to inherentrisks and uncertainties. There is significant risk that assumptions,predictions and other forward-looking statements will not prove to be accurate.Readers are cautioned not to place undue reliance on forward-looking statementsas a number of factors could cause future performance, conditions, actions orevents to differ materially from the targets, expectations, estimates orintentions expressed. Except as required by law, the Company disclaims anyintention or obligation to update or revise any forward-looking statements, andreserves the right to change, at any time at its sole discretion, its currentpractice of updating annual targets and guidance. Targets for 2010 andassumptions are described in Section 1.5 of the MD&A.*

 

*Factorsthat could cause actual performance to differ materially include, but are notlimited to:*

 

*Competition**(including more active pricecompetition; the expectation that new wireless competitors will launch orexpand services in 2010 using advanced wireless services (AWS) spectrum;industry growth rates including wireless penetration gain; actual networkaccess line losses; TELUS TV and wireless subscriber additions experience;variability in wireless average revenue per unit (ARPU) as well as variabilityin subscriber acquisition and retention costs that are dependent on subscriberloading and retention volumes, smartphone sales and subsidy levels, and TELUSTV installation costs); economic growth and fluctuations (includingstrength and persistence of the economic recovery in Canada, and pensionperformance, funding and expenses); capital expenditure levels in 2010and beyond (due to the Company’s wireline broadband initiatives, fourthgeneration (4G) wireless deployment strategy, and any new Industry Canadawireless spectrum auctions); financing and debt requirements (includingability to carry out refinancing activities); tax matters (including accelerationor deferral of required payments of significant amounts of cash taxes); humanresource developments (including collective bargaining in the TELUS**Québec**region and for a nationalcollective agreement expiring in late 2010); business integrations andinternal reorganizations (including ability to successfully implement costreduction initiatives and realize expected savings)**;**technology**(including reliance on systems andinformation technology, broadband and wireless technology options and roll-outplans, choice of suppliers and suppliers’ ability to maintain and service theirproduct lines, expected technology and evolution path and transition to 4Gtechnology, expected future benefits and performance of high-speed packetaccess (HSPA) / long-term evolution (LTE) wireless technology, successfuldeployment and operation of new wireless networks and successful introductionof new products (such as new HSPA devices), new services and supportingsystems; and successful upgrades of TELUS TV technology); regulatoryapprovals and developments (including the incumbent local exchange carriers’(ILECs’) obligation to serve; utilization of funds in the ILECs’ deferralaccounts; interpretation and application of tower sharing and roaming**rules; the design and impact offuture spectrum auctions (including the cost of acquiring the spectrum); thepossibility of Industry Canada changing annual spectrum fees to a market-basedapproach;**andpossible changes to foreign ownership restrictions); process risks(including conversion of legacy systems and billing system integrations, andimplementation of large complex enterprise deals that may be adversely impactedby available resources and degree of co-operation from other serviceproviders); health, safety and environmental developments; litigationand legal matters; business continuity events (includinghuman-caused and natural threats); any**future acquisitions ordivestitures**;**and other risk factorsdiscussed herein or in the MD&A and listed from time to time in TELUS’ reportsand public disclosure documents including its annual report and other filingswith securities commissions in Canada (on SEDAR at sedar.com) and in itsfilings in the United States, including Form 40-F (on EDGAR at**sec.gov**).*

 

*For furtherinformation, see*Section 10:Risks and risk management in the MD&A*.*

 

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# ** **

# **CORPORATESTRUCTURE**

# ** **

***Name,Address and Incorporation***

 

TELUS was incorporated under the *Company Act* (British Columbia) (the BC Company Act) on October 26,1998 under the name BCT.TELUS Communications Inc. (BCT).  On January 31, 1999, pursuant to acourt-approved plan of arrangement under the *CanadaBusiness Corporations Act* among BCT, BC TELECOM Inc. (BC TELECOM)and the former Alberta-based TELUS Corporation (TC), BCT acquired all of theshares of BC TELECOM and TC in exchange for common shares and non-voting sharesof BCT, and BC TELECOM was dissolved.  OnMay 3, 2000, BCT changed its name to TELUS Corporation and in February 2005,the Company transitioned under the *Business Corporations Act*(British Columbia), successor to the BC Company Act. TELUS maintains itsregistered office at Floor 21, 3777 Kingsway, Burnaby, British Columbia (B.C.)and its executive office at Floor 8, 555 Robson Street, Vancouver, B.C.

 

***IntercorporateRelationships and TELUS Subsidiaries***

 

As of December 31, 2009, theonly material subsidiary of TELUS was TELUS Communications Inc. (TCI), beingthe only subsidiary which owned assets that constitute more than 10 per cent ofthe consolidated assets of TELUS as at December 31, 2009 and thatgenerated sales and operating revenues that exceed 10 per cent of theconsolidated sales and operating revenues of TELUS for the year ended December 31,2009.

 

TELUS’ wireline and wireless businesseswere formerly located in TCI and TELE-MOBILE Company (TELE-MOBILE),respectively.  In 2005, TELUS announcedthe merger of those segments into a single operating structure (thewireline-wireless merger).  This waspartly effected by way of a legal entity restructure on March 1, 2006 (the2006 legal entity restructure), at which time TELUS combined its wireline andwireless businesses into TELUS Communications Company (TCC).  TCC is a partnership organized underthe laws of B.C. whose partners are TCI and TELE-MOBILE.  Immediately prior to the 2006 legal entityrestructure, 3817873 Canada Inc., a partner in TELE-MOBILE, was continued intoAlberta as 1219723 Alberta ULC.

 

As part of a year-end internalreorganization in 2008, Emergis Inc. (Emergis), a TELUS subsidiary acquired in January 2008,became a partner of TELE-MOBILE. In addition, TELUS Services Inc. and TELUSCommunications (Québec) Inc. converted their shareholding in TCI from preferredshares to ordinary shares.

 

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The following organization chartsets forth the relationships between these subsidiaries and partnerships, aswell as their respective jurisdictions of incorporation or establishment andTELUS ownership as at December 31, 2009:

 

 

In this Annual Information Form,references to TELUS or the Company are to TELUS Corporation and all of itssubsidiaries and partnerships as a whole, except where it is clear that theseterms mean only TELUS Corporation.

 

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# ** **

# **GENERALDEVELOPMENT OF THE BUSINESS**

# ** **

TELUS is a leadingnational telecommunications company in Canada, offering a wide range ofwireline and wireless communications products and services including data,voice and entertainment.  In 2009, TELUS**generated $9.6 billion in revenue and had12 million subscriber connections including 6.52 million wirelesssubscribers, 4.05 million wireline network access lines, 1.22 million Internetsubscribers and 170,000 TELUS TV subscribers.

 

***Three Year History***

 

During the three-year periodended December 31, 2009, TELUS undertook a number of acquisitions,internal reorganizations and business development opportunities.

 

A key focus for TELUS in2009 was its investment in broadband networks and services to enhance itscompetitive position and support future growth opportunities. The Company alsocontinued to implement an array of initiatives that are expected to improveefficiency and reduce costs, including: rationalizing external supplierspending; simplifying processes and decommissioning uneconomic products;reducing staffing levels, freezing management compensation increases andcontaining benefit costs;  consolidatingsome business units; leveraging business process outsourcing and off-shoring;and reducing and controlling expenses operation-wide.

 

In November 2009,TELUS successfully launched its new national advanced wireless network based onthe latest version of high-speed packet access (HSPA) technology, facilitatedby network sharing agreements with Bell Canada.

 

In September 2009,TELUS acquired Black’s Photo Corporation, a national imaging and digital retailcompany for $28 million ($26 million net of cash acquired).  This investment was made with a view toenhancing the Company’s distribution of wireless products and services acrossCanada and particularly in the province of Ontario.

 

In June 2009, toexpand the addressable market for TELUS TV, TELUS announced that it wasoffering satellite TV service under the TELUS brand in Alberta and B.C.,thereby expanding TELUS TV coverage to over 90% of the population in thoseprovinces.

 

For additional details onthese 2009 developments and other events or conditions that influenced theCompany’s general development, see MD&A*Section 2.2Strategic imperatives,*as well as progress on the Company’spriorities for 2009 in MD&A *Section 3: Keyperformance drivers.*

 

In2008, TELUS purchased the remaining interests in Ambergris Solutions Inc.(TELUS International Philippines), in which TELUS first acquired a controllinginterest in 2005.

 

Also in 2008, the Companyacquired a direct 29.99% economic interest in Transactel Barbados Inc.(Transactel), a business process outsourcing and call centre company withfacilities in three Central American countries, for $19 million.  Additional contingent consideration couldbecome payable depending upon Transactel’s earnings for the year ending December 31,2011.  The investment was made with aview to enhancing the Company’s business process outsourcing capacity,particularly regarding Spanish-language capabilities.

 

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In2007, TELUS and Emergis, a business process outsourcer specializing in thehealthcare and financial services sectors, entered into a support agreementpursuant to which TELUS agreed to make an all-cash offer to acquire by way of atake over bid all the outstanding common shares of Emergis at $8.25 pershare.  In 2008, a wholly-ownedsubsidiary of TCI purchased all of the common shares of Emergis.  The approximate total purchase price of theEmergis common shares was $743 million.

 

For a review of theevents and conditions that influenced the Company’s general development during2007 and 2008 and how the Company’s business developed over those two years,see the discussion in MD&A*Section 1.2 Canadianeconomy and telecommunications industry and Section 2.2 Vision andStrategy,*as well as progress on the Company’s priorities for therelevant year in MD&A *Section 3: Keyperformance drivers,*contained**in the 2007and 2008 annual MD&A, respectively*.*

 

# **DESCRIPTIONOF THE BUSINESS AND GENERAL DEVELOPMENTS**

# ** **

***Organization***

 

TELUS is one of the largesttelecommunications companies in Canada.  The Company has two reportable segments: wireline andwireless. During 2005 and 2006, the Company’swireline and wireless operations were integrated to leverage the convergence ofwireline and wireless technology, provide integrated solutions differentiatingTELUS from its competitors and to improve operating efficiency andeffectiveness.  TELUS continues its practice of separate financialreporting of wireline and wireless segments. Segmentation is based on similarities in technology,the technical expertise required to deliver the products and services, customercharacteristics, the distribution channels used and regulatory treatment.

 

The services and products of theCompany are primarily delivered through three customer-facing business units:

 

·                  ConsumerSolutions, which provides wireline and wireless data, voice, Internet andentertainment services to households and individuals in Canada.

 

·                  BusinessSolutions, which delivers innovative wireline and wireless data, voice,Internet and business process outsourcing solutions to small and medium-sizedbusinesses and entrepreneurs, and brings customized wireline and wireless voiceand data, IP, Information Technology (IT) and e.business solutions to largemultinational, corporate and public sector customers.  TELUS focuses on five key business verticalsin the business market — the public sector, healthcare, financial services,energy and telecom wholesale.  TELUSoperates global contact centre solutions in English, Spanish and Frenchlanguages in Canada, and through TELUS International, the Philippines,Guatemala, El Salvador, Panama, and Nevada, U.S.A.

 

·                  TELUSQuébec, which focuses on the unique needs of the Quebec marketplace by offeringbusinesses and consumers comprehensive and integrated wireless and wirelinetelecommunications solutions, including data, Internet and voice.

 

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These customer facing businessunits receive essential support from the enabling business units — BusinessTransformation and Technology Operations and Technology Strategy, as well asfrom the supporting business units — Finance and Corporate Strategy (whichincludes regulatory affairs and government relations) and Human Resources(which includes corporate communications and enterprise services).

 

***Business Overview***

 

TELUS Corporation provides a fullrange of telecommunications products and services. The Company is the largestincumbent telecommunications provider in Western Canada and also provides data,IP, voice and wireless services to Central and Eastern Canada. TELUS earns themajority of its revenue from access to, and the use of, the Company’s telecommunicationsinfrastructure, or from providing products and services that facilitate accessto and usage of this infrastructure.

 

TELUS’ strategic intent is to unleash the power of the Internet todeliver the best solutions to Canadians at home, in the workplace and on themove. TELUS’ strategy for growth is to focus on its core telecommunicationsbusiness in Canada supported by international contact centre and outsourcingcapabilities.

 

The Company developed six strategic imperatives almost ten years ago thatmanagement believes remain relevant. A consistent focus on the imperativesguides the Company’s actions and contributes to the achievement of itsfinancial goals. Despite economic challenges in 2009, and changing regulatoryand competitive environments, management believes the focus on the imperativespositions the Company for future growth. The Company’s strategic imperativesand new initiatives undertaken in 2009 are discussed in further detail inMD&A *Section 2.2 Strategic imperatives.*

 

The markets that the Companyaddresses and its principal competition are discussed in MD&A *Section 4.1 Principal markets addressed and competition*.The Company’s products and services are described in MD&A *Section 1.6 TELUS Segments at a glance*.  The Company’s operational resources,including people, brand and services, and technology, systems and property arediscussed in MD&A *Section 4.2**Operational resources*.

 

For financial information for thetwo most recently completed financial years with respect to the wireline andwireless performance of the Company, see MD&A *Section 5.4Wireline segment*and *Section 5.5 Wirelesssegment. *A description of theimpacts on TELUS of the Canadian economic environment and thetelecommunications industry can be found in the MD&A *Section 1.2Canadian economy and telecommunications industry. *As well, the cyclical or seasonaltrends that have impacted the wireline and wireless business are described inthe MD&A *Section 5.2 Summary of quarterlyresults and fourth quarter recap.*

 

For information on TELUS’ socialand environmental policies see MD&A *Section 10.8 Health,safety and environment.*

 

# **EMPLOYEERELATIONS**

# ** **

At December 31,2009, TELUS employed approximately 36,400 employees, including approximately8,700 employees in TELUS International. Approximately 13,400 employees wereunionized (9,500 in the wireline segmentand 3,900 in the wireless segment).

 

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TELUS and itsaffiliates are signatories to six collective agreements.  The largest, expiring on November 19,2010, is with the Telecommunications Workers Union (“TWU”), coveringapproximately 11,800 clerical, operator services and technical employees in thewireline and wireless segments across Canada. In the province of Quebec, TELUS employees in the wireline segment arecovered by collective agreements with the Syndicat Québécois des employés deTELUS (“SQET”), which covers approximately 1,000 trades, clerical and operatorservices employees and expired on December 31, 2009, and the Syndicat desagents de maîtrise de TELUS (“SAMT”), covering approximately 500 employees andexpiring on December 31, 2011.  TheSAMT also represents a small number of employees in the wireless segment undera separate collective agreement.

 

TELUSSourcing Solutions Inc. (“TSSI”) is a signatory to collective agreements withthe BC Government and Services Employees’ Union (“BCGEU”) and the CanadianUnion of Public Employees (“CUPE”).  Thecontract with the BCGEU covers approximately 60 employees and expires on March 31,2010 and the contract with CUPE covers approximately 40 employees and expireson December 31, 2010.

 

***Collectivebargaining***

 

Collective bargaining in theTELUS Québec region to renew the collective agreement with the Syndicat québécois des employés de TELUS (SQET) continues into2010.  The SQET agreement expired on December 31,2009.

 

Thecollective agreement between TSSI and BCGEU will expire on March 31, 2010.  Negotiationsto collective bargaining are expected to commence in the first half of 2010.

 

The collective agreementbetween TELUS and the TWU will expire on November 19, 2010.  Negotiations to renew this collectivebargaining agreement are expected to commence in the third quarter of 2010.

 

# **RISKFACTORS**

# ** **

The riskfactors in TELUS’ MD&A *Section 10 Risks andrisk management*are hereby incorporated by reference.  The MD&A is available at http:///sedar.com.

 

# **LEGALPROCEEDINGS AND REGULATORY ACTIONS**

# ** **

The legal proceedings described inMD&A *Section 10.9 Litigation and legal matters*arehereby incorporated by reference.  Inaddition, there have not been any (a) penalties or sanctions imposedagainst the Company by a court relating to securities legislation or by asecurities regulatory authority during the most recently completed financialyear, (b) penalties or sanctions imposed by a court or regulatory bodyagainst the Company that would likely be considered important to a reasonableinvestor in making an investment decision, or (c) settlement agreementsentered into by the Company before a court relating to securities legislationor with a securities regulatory authority during the most recently completedfinancial year.

 

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# ** **

# **FOREIGNOWNERSHIP RESTRICTIONS**

# ** **

Certain subsidiaries of TELUS orpartnerships in which TELUS has a controlling interest, are Canadian carriers,holders of radio authorizations or licences, and holders of broadcastinglicences, and are required by the Telecommunications Act (Canada) (theTelecommunications Act), the Radiocommunication Act (Canada) (theRadiocommunication Act) and a Direction to the CRTC (Ineligibility ofNon-Canadians) given under the Broadcasting Act (Canada) (the Broadcasting Act)to be Canadian-owned and controlled. Each of the Canadian carriers, under the Telecommunications Act, isconsidered to be Canadian-owned and controlled as long as: (a) not lessthan 80 per cent of the members of its board of directors are individualCanadians; (b) Canadians beneficially own not less than 80 per cent of itsissued and outstanding voting shares; and (c) it is not otherwisecontrolled in fact by persons who are not Canadians.  Substantially the same rules apply underthe Radiocommunication Act and the Broadcasting Act.  TELUS has filed with the CRTC the requisitedocumentation affirming TCC’s status as a Canadian carrier. TELUS furtherintends that TCC will remain controlled by TELUS and that it will ensure thatTCC remains “Canadian” for the purposes of these ownership requirements.

 

The Canadian TelecommunicationsCommon Carrier Ownership and Control Regulations (the “Ownership and ControlRegulations”), made under the Telecommunications Act further provide that inorder for a company that holds shares in a carrier to be considered Canadian,not less than 66-2/3 per cent of the issued and outstanding voting shares ofthat company must be owned by Canadians and that such company must nototherwise be controlled in fact by non-Canadians.  Accordingly, not less than 66-2/3 per cent ofthe issued and outstanding voting shares of TELUS must be owned by Canadiansand TELUS must not otherwise be controlled in fact by non-Canadians.  To the best of TELUS’ knowledge, Canadiansbeneficially own and control in the aggregate not less than 66-2/3 per cent ofthe issued and outstanding Common Shares of TELUS and TELUS is not otherwisecontrolled in fact by non-Canadians.

 

The Ownership and ControlRegulations provide Canadian carriers and carrier holding companies, such asTELUS, with the time and ability to rectify ineligibility resulting frominsufficient Canadian ownership of voting shares.  Under the Ownership and Control Regulations,such companies may restrict the issue, transfer and ownership of shares, ifnecessary, to ensure that they and their subsidiaries remain qualified undersuch legislation.  For such purposes, inparticular but without limitation, a company may, in accordance with theprovisions contained in such regulations:

 

(i)                                     refuse to accept any subscription for any voting shares;

 

(ii)                                  refuse to allow any transfer of voting shares to be recordedin its share register;

 

(iii)                               suspend the rights of a holder of voting shares to vote at ameeting of its shareholders; and

 

(iv)                              sell, repurchase or redeem any voting shares.

 

To ensure that TELUS remainsCanadian and that any subsidiary of TELUS, including TCC, is and continues tobe eligible to operate as a telecommunications common carrier under theTelecommunications Act, to be issued radio authorizations or radio licences asa radiocommunications carrier under the Radiocommunication Act, or to be issued

 

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broadcastinglicences under the Broadcasting Act, provisions substantially similar to theforegoing have been incorporated into TELUS’ Articles permitting the directorsto make determinations to effect any of the foregoing actions.

 

The Federal Government Throne Speech on March 3, 2010 and the FederalBudget on March 4, 2010 signalled an intention to consider opening thetelecommunications services sector to further foreign investment. At present,this contemplated relaxation of the ownership and control regime appears to beconfined to satellite providers and would require the enactment of legislation.It is not clear what, if any, further changes to the ownership and controlregime might occur. There is a risk that government may consider a phased in approachto liberalization that would allow increased flexibility for carriers with lessthan 10% national market share or allow for more access to foreign capital inupcoming spectrum auctions expected in 2011-2012.

 

It is also possible the government may be considering changes to theInvestment Canada and Telecommunications Acts to provide it more flexibility indetermining when to allow ownership arrangements deemed to be in the publicinterest. There is no assurance that resolution of uncertainty over interpretationof existing laws and regulations concerning foreign ownership restrictions thatTELUS is subject to, or the manner in which they may be changed, will bebeneficial to TELUS. TELUS does not oppose the removal of the foreign ownershiprestrictions, provided that liberalization is implemented on a fair andsymmetrical basis for all telecommunications carriers, including broadcastdistribution undertakings.

 

The risk factor related to foreignownership restrictions described in MD&A *Section 10.3Regulatory*is hereby incorporated by reference.

 

# **REGULATION**

# ** **

***General***

 

Theprovision of telecommunications services and broadcasting services in Canada isregulated by the Canadian Radio-television and Telecommunications Commission(the CRTC) pursuant to the Telecommunications Act and the Broadcasting Act,respectively.  In addition, the provisionof cellular and other wireless services using radio spectrum is also subject toregulation and licensing by Industry Canada pursuant to the RadiocommunicationAct.

 

TheTelecommunications Act gives the CRTC the power to regulate the provision oftelecommunications services, and to forbear from regulating (i.e. not subjectto rate regulation) certain services or classes of services if they are subjectto a degree of competition which is sufficient to protect the interests ofcustomers.  However, even when the CRTCforbears from price regulation in respect of a service, it can continue toregulate these services for certain other matters such as network access andinterconnection.

 

SeeMD&A *Section 10.3 Regulatory*for furtherdetails related to regulation generally and specifically in relation toregulatory developments that could have a material impact on TELUS’ operatingprocedures, costs and revenues.

 

***Regulation ofwireless services***

 

The use ofradio spectrum is subject to regulation and licensing by Industry Canadapursuant to the Radiocommunication Act, which is administered by IndustryCanada.  All of TELUS’ wirelesscommunications services depend on the use of radio frequencies.  While economic regulation of wirelessservices falls under CRTC jurisdiction, wireless services have, generally, beensubject to regulatory forbearance.

 

TheMinister of Industry has the authority to suspend or revoke radio spectrumlicences if the licence holder has contravened the Radiocommunication Act,regulations or terms and conditions of its licence and after giving the holderof the licence a reasonable opportunity to make representations.  Licence revocation is rare; licences areusually renewed upon expiration.  SeeMD&A *Section 10.3 Regulatory*for furtherdetails related to regulation generally and specifically in relation toradiocommunication licences regulated by Industry Canada.

 

***Radiocommunicationsspectrum licences***

 

TELUS holdsradiocommunication spectrum licences and authorizations for a variety ofwireless services and applications, both mobile and fixed.  TELUS holds significant 1.9 GHz PCS spectrumthroughout Canada, is the leading holder of 800 MHz SMR/ESMR 

 

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spectrum inall of the major Canadian markets, and holds 25 MHz of cellular 800 MHzspectrum in Alberta, B.C. and eastern Québec. TELUS also was successful in obtaining AWS spectrum licences for anaverage of approximately 16 MHz covering a national footprint in the IndustryCanada spectrum auction in 2008.  Inaddition, TELUS holds various radio spectrum licences for fixed services in the24/38 GHz, 2.3/3.5 GHz band throughout Canada, paging services, and other miscellaneouswireless services.  See MD&A *Section 10.3 Regulatory*for further details related toregulation generally and specifically in relation to future availability andcost of wireless spectrum and radiocommunication licences regulated by IndustryCanada.

 

***Broadcastingservices***

 

The Broadcasting Act governs all types of broadcasting activitiesincluding commercial off-air radio and television broadcasting, the operationof other programming services such as specialty and pay television, as well asthe distribution of television services through cable or satelliteundertakings.

 

The Broadcasting Act and its regulations give the CRTC the authority toissue licences for specific categories of broadcasting undertakings and toregulate the content provided and rates charged by each category ofbroadcasting undertaking.  In August 1996,the federal government issued its policy under which “telecommunications commoncarriers” (as defined in the Telecommunications Act) would be allowed to applyfor broadcasting distribution undertaking (BDU) licences to provide cabletelevision service.  In 1997, the CRTCconfirmed that new entrant BDUs, including telecommunications common carriers,would not be rate regulated and would not have an obligation to serve.  However, the CRTC confirmed that new entrantswould have to meet all the same content and carriage obligations as incumbentBDUs.

 

TELUS has been licensed by the CRTC to operate Class 1 RegionalBDUs in each of B.C., Alberta and Québec utilizing its IP facilities.  TELUS also holds a national licence tooperate a video-on-demand programming service. All of TELUS’ services are fully digital and thus benefit from the moreflexible regulatory regime regarding BDU packaging established by the CRTC inits Digital Migration Framework.

 

SeeMD&A *Section 10.3 Regulatory*for furtherdetails related to regulation generally and specifically in relation to TELUS’broadcasting distribution undertakings and CRTC review of new media andinternet traffic management practices.

 

# **COMPETITION**

 

TELUSexpects continued strong competition in the wireline and wireless businesses inall principal markets and geographic areas.  See MD&A *Section 4.1 Principalmarkets addressed and competition*for a summary of the competitiveenvironment in each of TELUS’ principal markets and geographic areas.  Also refer to MD&A *Section 10.1Competition*for further details on the risks associated with suchcompetitive environment.

 

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# **DIVIDENDS DECLARED**

# ** **

The dividendsper Common Share and Non-Voting Share declared with respect to each quarter byTELUS, during the three-year period ended December 31, 2009, are shownbelow:

 
| **Quarter ended****(1)** | ** ** | **2009** | ** ** | **2008** | ** ** | **2007** | ** ** |
|--------------------------|------------|----------|------------|----------|------------|----------|------------|
| March 31            |       | $        | 0.475      |     | $          | 0.45     |       | $ | 0.375 |   |
| June 30             |       | $        | 0.475      |     | $          | 0.45     |       | $ | 0.375 |   |
| September 30        |       | $        | 0.475      |     | $          | 0.45     |       | $ | 0.375 |   |
| December 31         |       | $        | 0.475      |     | $          | 0.475    |       | $ | 0.45 |   |

 

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(1) Paid on the first business day ofthe next month.

 

TELUS’ Board of Directors reviews its dividend rate quarterly.  TELUS’quarterly dividend rate will depend on an ongoing assessment of free cash flowgeneration and financial indicators including leverage, dividend yield andpayout ratio.  The Company’s dividend payoutratio target guideline is 45 per cent to 55 per cent of sustainable netearnings, on a prospective basis.

 

# **CAPITAL STRUCTURE OF TELUS**

 

The authorized capital ofTELUS consists of 4,000,000,000 shares, divided into: 1) 1,000,000,000 CommonShares without par value; 2) 1,000,000,000 Non-Voting Shares without par value;3) 1,000,000,000 First Preferred shares without par value, issuable in seriesand; 4) 1,000,000,000 Second Preferred shares without par value, issuable inseries.  The Common Shares and Non-VotingShares are listed for trading on the Toronto Stock Exchange and the Non-Voting Sharesare listed for trading on the New York Stock Exchange.  See “Market for Securities”.

 

***TELUS CommonShares and TELUS Non-Voting Shares***

 

Subject to the prior rights of the holders of First Preferred sharesand Second Preferred shares, the Common Shares and the Non-Voting Shares areentitled to participate equally with each other with respect to the payment ofdividends and the distribution of assets of TELUS on the liquidation,dissolution or winding up of TELUS.

 

Neither the Common Shares nor the Non-Voting Shares can be subdivided,consolidated, reclassified or otherwise changed unless the other class ischanged in the same manner.

 

The holders of the Common Shares are entitled to receive notice of,attend, be heard and vote at any general meeting of the shareholders of TELUSon the basis of one vote per Common Share held. The holders of Non-Voting Shares are entitled to receive notice of,attend and be heard at all general meetings of the shareholders of TELUS andare entitled to receive all notices of meetings, information circulars andother written information from TELUS that the holders of Common Shares areentitled to receive from TELUS, but are not entitled to vote at such generalmeetings unless otherwise required by law. Holders of Common Shares are entitled to vote by a separate resolutionfor each director rather than a slate.

 

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In order to ensure that the holders of the Non-Voting Shares canparticipate in any offer which is made to the holders of the Common Shares (butis not made to the holders of Non-Voting Shares on the same terms), whichoffer, by reason of applicable securities legislation or the requirements of astock exchange on which the Common Shares are listed, must be made to all orsubstantially all the holders of Common Shares who are in any province ofCanada to which the requirement applies (an Exclusionary Offer), each holder ofNon-Voting Shares will, for the purposes of the Exclusionary Offer only, bepermitted to convert all or part of the Non-Voting Shares held into anequivalent number of Common Shares during the applicable conversionperiod.  In certain circumstances(namely, the delivery of certificates, at specified times, by holders of 50 percent or more of the issued and outstanding Common Shares to the effect thatthey will not, among other things, tender to such Exclusionary Offer or make anExclusionary Offer), these conversion rights will not come into effect.

 

If all of theTelecommunications Act, the Radiocommunication Act and the Broadcasting Actare changed so that there is no restriction on any non-Canadians holding CommonShares, holders of Non-Voting Shares will have the right to convert all or partof their Non-Voting Shares into Common Shares on a one for one basis, and TELUSwill have the right to require holders of Non-Voting Shares who do not makesuch an election to convert such shares into an equivalent number of CommonShares.

 

TELUS will provide notice to each holder of Common Shares before ageneral meeting of shareholders at which holders of Non-Voting Shares will beentitled to vote as a class.  In suchevent, holders of Common Shares will have the right to convert all or part ortheir Common Shares into Non-Voting Shares on a one for one basis provided andto the extent that TELUS and its subsidiaries remain in compliance with theforeign ownership provisions of the TelecommunicationsAct, the Radiocommunication Act and the Broadcasting Act.

 

The Common Shares are subject to constraints on transfer to ensureTELUS’ ongoing compliance with the foreign ownership provisions of the Telecommunications Act, theRadiocommunication Act and the Broadcasting Act.  As well, holders of Common Shares will havethe right, if approved by the Board of Directors of TELUS, to convert CommonShares into Non-Voting Shares in order that TELUS be in compliance with theforeign ownership provisions of the TelecommunicationsAct, the Radiocommunication Act and the Broadcasting Act.

 

In all other respects, each Common Share and each Non-Voting Share havethe same rights and attributes.

 

***First Preferredshares***

 

The FirstPreferred shares may be issued from time to time in one or more series, eachseries comprising the number of shares, and having attached thereto the designation,rights, privileges, restrictions and conditions which the board of directors ofTELUS determines by resolution and subject to filing an amendment to the Noticeof Articles and Articles of TELUS.  Noseries of First Preferred shares may have attached thereto the right to vote atany general meeting of TELUS or the right to be convertible into orexchangeable for Common Shares.  Exceptas required by law, the TELUS holders of the First Preferred shares as a class arenot entitled to receive notice of, attend or vote at any meeting of theshareholders of TELUS.  The FirstPreferred shares rank prior to 

 

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the SecondPreferred shares, Common Shares and Non-Voting Shares with respect to priorityin payment of dividends and in the distribution of assets in the event ofliquidation, dissolution or winding up of TELUS.

 

***Second Preferredshares***

 

The SecondPreferred shares may be issued from time to time in one or more series, eachseries comprising the number of shares, and having attached thereto thedesignation, rights, privileges, restrictions and conditions, which the boardof directors of TELUS determines by resolution and subject to filing anamendment to the Notice of Articles and Articles of TELUS. No series of SecondPreferred shares may have attached thereto the right to vote at any generalmeeting of TELUS or the right to be convertible into or exchangeable for CommonShares.  Except as required by law, theholders of the Second Preferred shares as a class are not entitled to receivenotice of, attend or vote at any meeting of the shareholders of TELUS.  The Second Preferred shares rank, subject tothe prior rights of the holders of the First Preferred shares, prior to theCommon Shares and Non-Voting Shares with respect to priority in payment ofdividends and in the distribution of assets in the event of liquidation,dissolution or winding up of TELUS.

 

***TELUS RightsPlan***

 

The current shareholder rights plan (the InitialRights Plan) will expire on March 20, 2010.  The Board of Directors of TELUSapproved a new shareholder rights plan (the New Rights Plan) in March 2010,which terms are substantially the same as the terms of the Initial Rights Plan.The Company has received the approval of the Toronto Stock Exchange withrespect to the New Rights Plan, subject to shareholder ratification within sixmonths of adoption. The New Rights Plan issued one right (a Series ARight) in respect of each Common Share outstanding as at such date and issuedone right (a Series B Right) in respect of each Non-Voting Shareoutstanding as of such date.  The RightsPlan has a term of just over nine years, subject to shareholder confirmationevery three years.  Each Series ARight or Series B Right, other than those held by an Acquiring Person (asdefined in the Rights Plan) and certain of its related parties, entitles theholder in certain circumstances following the acquisition by an AcquiringPerson of 20 per cent or more of the Common Shares of TELUS (otherwise thanthrough the “Permitted Bid” requirements of the Rights Plan) to purchase fromTELUS $320 worth of Common or Non-Voting Shares for $160 (i.e. at a 50 per centdiscount) respectively.

 

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# **RATINGS**

 

Ratings information contained in MD&A *Section 7-Liquidity and capital resources*to *Section 7.7- Credit Ratings*is hereby incorporated by reference.  TELUS’ MD&A is available at sedar.com.  Credit ratings are not recommendations topurchase, hold or sell securities and do not address the market price orsuitability of a specific security for a particular investor.  In addition, real or anticipated changes inthe rating assigned to a security will generally affect the market value of thatsecurity.  There can be no assurance thata rating will remain in effect for any given period of time or that a ratingwill not be revised or withdrawn entirely by a rating agency in the future.

 

Adescription of the rating categories applied to TELUS as at December 31,2009 from each agency is below.  Theoutlook or trend for TELUS from four agencies was stable.

 
| **Institution** | ** ** | **Rating**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | ** ** | **Outlook**                                                                                                                                                                                                                                                                                                                                                                                                                |
|-----------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Fitch**       |       | “BBB” ratings indicate that there is currently  expectation of low credit risk. The capacity for payment of financial  commitments is considered adequate but adverse changes in circumstances and  economic conditions are more likely to impair this capacity. This is the  lowest investment grade category.

 

The modifiers “+” or “-” may be appended to ratings  “AA” to “CCC” to denote relative status within major rating categories.                                                                                                                                                                                                      |       | An Outlook  indicates the direction a rating is likely to move over a one to two-year  period. Outlooks may be positive, stable or negative. A positive or negative  Rating Outlook does not imply a rating change is inevitable. Similarly,  ratings for which outlooks are ‘stable’ could be upgraded or downgraded  before an outlook moves to positive or negative if circumstances warrant such  an action. |
| ** **      |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       |                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **DBRS**        |       | Long-term debt rated “A” is  of satisfactory credit quality. Protection of interest and principal is still  substantial, but the degree of strength is less than that of AA rated  entities.

 

While “A” is a respectable  rating, entities in this category are considered to be more susceptible to  adverse economic conditions and have greater cyclical tendencies than  higher-rated securities.

 

Long-term debt rated “BBB” is  of adequate credit quality. Protection of interest and principal is  considered acceptable, but the entity is fairly susceptible to adverse  changes in financial and economic conditions, or there may be other adverse |       | Each DBRS rating category is appended with one of three  rating trends - “Positive”, “Stable”, or “Negative”. The rating trend helps  to give the investor an understanding of DBRS’s opinion regarding the outlook  for the rating in question. However, the investor must not assume that a  positive or negative trend necessarily indicates that a rating change is  imminent.      |

 

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| **Institution**  | ** ** | **Rating**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | ** ** | **Outlook**                                                                                                                                                                                                                                                                                                                                                                   |
|------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **       |       | conditions present which  reduce the strength of the entity and its rated securities.

 

The ratings from “AA” to  “CCC” are denoted by the subcategories “high” and “low”. The absence of  either a “high” or “low” designation indicates the rating is in the “middle”  of the category.

 

DBRS’ short-term debt rating scale is meant to give an  indication of the risk that a borrower will not fulfill its near-term debt  obligations in a timely manner. The ratings range from R-1 (high) to D. Short-term debt  rated R-1 (low) is of satisfactory credit quality. The overall strength and  outlook for key liquidity, debt, and profitability ratios is not normally as  favourable as with higher rating categories, but these considerations are  still respectable. Any qualifying negative factors that exist are considered  manageable, and the entity is normally of sufficient size to have some  influence in its industry. |       |                                                                                                                                                                                                                                                                                                                                                                          |
| ** **       |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |       |                                                                                                                                                                                                                                                                                                                                                                          |
| **S&P**      |       | An obligator rated ‘BBB’ exhibits adequate protection parameters.  However, adverse economic conditions or changing circumstances are more  likely to lead to a weakened capacity of the obligor to meet its financial  commitments.

 

An obligor rated ‘A’ has strong capacity to meet its financial  commitments but is somewhat more susceptible to the adverse effects of  changes in circumstances and economic conditions than obligors in  higher-rated categories.

 

The ratings from ‘AA’ to ‘CCC’ may be modified by the addition of a  plus or minus sign to show relative standing within the major rating  categories.                                                                                                                                                                                                                                                                                                                                                |       | Rating outlooks assess the potential direction of a long term credit  rating over the intermediate term (typically six months to two years). An  outlook is not necessarily a precursor to a rating change or CreditWatch  placement. Outlooks may be positive, negative, stable, or developing and they  accompany all long-term credit ratings except those on CreditWatch. |
| ** **       |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |       |                                                                                                                                                                                                                                                                                                                                                                          |
| **Moody’s** |       | Obligations rated “Baa” are  subject to moderate credit risk. They are                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       | Moody’s also provides a rating outlook which is an opinion regarding  the likely                                                                                                                                                                                                                                                                                         |

 

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| **Institution** | ** ** | **Rating**                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | ** ** | **Outlook**                                                                                                                                                                                                                                                                                                                                                                                                 |
|-----------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **      |       | considered medium-grade and  as such may possess certain speculative characteristics.

 

Moody’s appends numerical modifiers 1, 2, and 3 to each generic  rating classification from ‘Aa’ through ‘Caa’. The modifier 1 indicates that the obligation ranks  in the higher end of its generic rating category; the modifier 2 indicates a  mid-range ranking; and the modifier 3 indicates a ranking in the lower end of  that generic rating category. |       | direction of a rating over the medium term. Where assigned, rating  outlooks fall into the following four categories: Positive (POS), Negative  (NEG), Stable (STA), and Developing (DEV — contingent upon an event.

 

Ratings Under Review (RUR) designation  indicates that the issuer has one or more ratings under review for possible  change, and thus overrides the outlook designation. |

 

# **MARKET FOR SECURITIES**

 

TELUS’Common Shares and Non-Voting Shares are listed on the Toronto Stock Exchange(TSX) under “T” and “T.A” respectively and the TELUS Non-Voting Shares arelisted on the New York Stock Exchange under “TU”.  Monthly share prices and volumes for 2009 arelisted below:

 

***TSX — Common andNon-Voting Shares***

 
| ** ** | ** ** | **Common Shares** | ** ** | **Non-Voting Shares** | ** ** |
|------------|------------|-------------------|------------|-----------------------|------------|
| **Month**  | ** ** | **High($)**       | ** ** | **Low($)**            | ** ** | **Volume** | ** ** | **High($)** | ** ** | **Low($)** | ** ** | **Volume** | ** ** |
| January    |       | 37.50             |       | 33.17                 |       | 13,580,916 |   | 35.15 |   | 31.59 |   | 7,349,642 |   |
| February   |       | 35.26             |       | 31.19                 |       | 13,649,159 |   | 33.31 |   | 29.32 |   | 7,452,180 |   |
| March      |       | 35.95             |       | 30.63                 |       | 14,724,191 |   | 34.48 |   | 29.18 |   | 9,124,553 |   |
| April      |       | 36.50             |       | 29.12                 |       | 21,886,587 |   | 34.99 |   | 27.69 |   | 13,755,163 |   |
| May        |       | 32.57             |       | 29.12                 |       | 17,976,643 |   | 31.50 |   | 27.41 |   | 11,147,646 |   |
| June       |       | 33.11             |       | 30.13                 |       | 16,930,861 |   | 31.78 |   | 29.00 |   | 6,794,306 |   |
| July       |       | 31.95             |       | 29.68                 |       | 15,957,176 |   | 30.89 |   | 28.65 |   | 6,363,854 |   |
| August     |       | 34.34             |       | 30.76                 |       | 14,082,829 |   | 32.85 |   | 29.66 |   | 6,399,574 |   |
| September  |       | 36.05             |       | 32.29                 |       | 14,894,822 |   | 34.50 |   | 31.28 |   | 7,477,701 |   |
| October    |       | 34.59             |       | 32.41                 |       | 12,492,810 |   | 33.38 |   | 30.42 |   | 7,003,572 |   |
| November   |       | 34.99             |       | 32.78                 |       | 13,454,502 |   | 33.36 |   | 30.90 |   | 5,251,146 |   |
| December   |       | 35.50             |       | 31.56                 |       | 19,928,371 |   | 34.08 |   | 30.51 |   | 5,607,472 |   |

 

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***NYSE —Non-Voting Shares***

 
| **Month** | ** ** | **High ($U.S.)** | ** ** | **Low ($U.S.)** | ** ** | **Volume** | ** ** |
|-----------|------------|------------------|------------|-----------------|------------|------------|------------|
| January   |       | 29.74            |       | 25.08           |       | 4,930,539  |       |
| February  |       | 27.14            |       | 23.53           |       | 4,133,109  |       |
| March     |       | 27.64            |       | 22.46           |       | 5,276,386  |       |
| April     |       | 28.20            |       | 23.00           |       | 5,636,950  |       |
| May       |       | 28.48            |       | 23.00           |       | 3,065,621  |       |
| June      |       | 29.29            |       | 25.11           |       | 2,564,762  |       |
| July      |       | 28.57            |       | 24.69           |       | 2,164,557  |       |
| August    |       | 30.39            |       | 27.52           |       | 2,266,066  |       |
| September |       | 32.05            |       | 28.25           |       | 2,322,687  |       |
| October   |       | 31.32            |       | 28.59           |       | 2,702,557  |       |
| November  |       | 31.74            |       | 29.04           |       | 2,163,990  |       |
| December  |       | 32.39            |       | 28.75           |       | 2,441,039  |       |

 

# **DIRECTORS AND OFFICERS**

 

***Directors***

 

Thenames, municipalities of residence and principal occupations of the directorsof TELUS, the date each such person became a director of TELUS and committeemembership are as set out below. Currently, there are 13 directors on the TELUS Board.  Each was elected at TELUS’ annual meeting on May 7,2009 except for William MacKinnon, who joined the Board on August 5,2009.  Each director’s term of officewill expire immediately after the upcoming annual and special general meetingin May 2010.

 
| **Directors  of TELUS  (Name and municipality of residence)** | ** ** | **Director  since****(1)** | ** ** | **Principal occupation**                                                           |
|---------------------------------------------------------------|------------|----------------------------|------------|------------------------------------------------------------------------------------|
|                                                          |       |                       |       |                                                                               |
| R.H.  (Dick) Auchinleck (4 - Chair) (5) 

Calgary,  Alberta   |       | 2003                       |       | Corporate  Director                                                                |
|                                                          |       |                       |       |                                                                               |
| A. Charles Baillie (3 -  Chair) (5) 

Toronto, Ontario        |       | 2003                       |       | Chair,  Alberta Investment Management Corporation (pension investment corporation) |
|                                                          |       |                       |       |                                                                               |
| Micheline  Bouchard (3)(5) 

Montréal,  Québec |       | 2004                       |       | Corporate  Director                                                                |
|                                                          |       |                       |       |                                                                               |
| R.  John Butler (3) (4) 

Edmonton,  Alberta             |       | 1995                       |       | Counsel,  Bryan & Company

(law  firm)                                         |
|                                                          |       |                       |       |                                                                               |
| Brian  A. Canfield

Point  Roberts, Washington                |       | 1989                       |       | Chair,  

TELUS  Corporation                                                       |

 

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| **Directors  of TELUS  (Name and municipality of residence)**           | ** ** | **Director  since****(1)** | ** ** | **Principal occupation**                                                                 |
|-------------------------------------------------------------------------|------------|----------------------------|------------|------------------------------------------------------------------------------------------|
| Pierre Y. Ducros(3)(4) 

Montréal, Québec                |       | 2005                       |       | President  of P. Ducros & Associés Inc. 

(investment  and administration firm) |
|                                                                    |       |                       |       |                                                                                     |
| Darren  Entwistle 

Vancouver,  B.C.                                    |       | 2000                       |       | President  and Chief Executive Officer, TELUS Corporation                                |
|                                                                    |       |                       |       |                                                                                     |
| Ruston E.T. Goepel (4)(5) 

Vancouver, B.C.                        |       | 2004                       |       | Senior  Vice President, Raymond James Financial Ltd. (investment firm)                   |
|                                                                    |       |                       |       |                                                                                     |
| John  S. Lacey (2) 

Thornhill,  Ontario                                |       | 2000                       |       | Chairman,  Advisory Board, Tricap Restructuring Fund (investment fund)                   |
|                                                                    |       |                       |       |                                                                                     |
| William  (Bill) MacKinnon(2) 

Etobicoke,  Ontario                      |       | 2009                       |       | Corporate  Director                                                                      |
|                                                                    |       |                       |       |                                                                                     |
| Brian  F. MacNeill (2 - Chair) 

Calgary,  Alberta                      |       | 2001                       |       | Corporate  Director                                                                      |
|                                                                    |       |                       |       |                                                                                     |
| Ronald P. Triffo (2) 

Edmonton, Alberta                           |       | 1995                       |       | Chairman, Stantec Inc. 

(engineering company)                                           |
|                                                                    |       |                       |       |                                                                                     |
| Donald (Don) Woodley (4) (5 – Chair) 

Mono Township, Ontario |       | 1998                       |       | Corporate Director                                                                       |

 

----

(1)            TELUS or its predecessors

(2)            Member of Audit Committee

(3)            Member of Human Resources andCompensation Committee

(4)            Member of Corporate GovernanceCommittee

(5)            Member of Pension Committee

 

All of thedirectors of TELUS have held the principal occupations set forth above orexecutive positions with the same companies or firms referred to, or withaffiliates or predecessors thereof, for the past five years except as follows:Micheline Bouchard was President and CEO, ART Advanced Research TechnologiesInc. from 2002 to July 2006; Bill MacKinnon was ChiefExecutive Officer of KPMG Canada from April 1999 to December 2008;Brian MacNeill was Chair and a director of Petro-Canada from 2000 to 2009; andDon Woodley was interim CEO and President of GENNUM Corporation from November 2005to September 2006.

 

***ExecutiveOfficers***

 

The name,municipality of residence and present and principal occupations of each of theexecutive officers of TELUS, as of March 10, 2009, are as follows:

 

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| **Executive Officers of TELUS**

**(Name and municipality of residence)** | ** ** | **Position held with TELUS**                                      |
|--------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------|
| Darren  Entwistle  Vancouver, B.C.                                                                           |       | President  and Chief Executive Officer                                           |
|                                                                                                         |       |                                                                             |
| Robert G. McFarlane  Vancouver, B.C.                                                                         |       | Executive  Vice President and Chief Financial Officer                            |
|                                                                                                         |       |                                                                             |
| Josh Blair

Vancouver, B.C.                                                                                  |       | Executive  Vice President, Human Resources                                       |
|                                                                                                         |       |                                                                             |
| François  Côté  Montréal, Québec                                                    |       | Executive  Vice President and President, TELUS Quebec and TELUS Health Solutions |
|                                                                                                         |       |                                                                             |
| Joe M. Natale  Toronto, Ontario                                                                              |       | Executive  Vice President and President, Consumer Solutions                      |
|                                                                                                         |       |                                                                             |
| Karen  RadfordCalgary,  Alberta                                                                              |       | Executive  Vice President and President, Business Solutions                      |
|                                                                                                         |       |                                                                             |
| Kevin A. Salvadori

Vancouver, B.C.                                                                          |       | Executive  Vice President, Business Transformation and Technology Operations     |
|                                                                                                         |       |                                                                             |
| Eros  Spadotto

Toronto,  Ontario                                                                            |       | Executive  Vice President, Technology Strategy                                   |

 

All of the executiveofficers of TELUS have held their present positions or other executivepositions with the Company during the past five years or more, except asfollows: Josh Blair was Vice President, Learning and Development from January 2004to February 2006, Senior Vice-President, Human Resources Strategy andBusiness Support from February 2006 to November 2007 and ActingExecutive Vice President, Human Resources from November 2007 to May 2008;and François Côté was President and Chief Executive Officer of Emergis Inc.from November 2004 to January 2008, and then President and GeneralManager of the Company’s Emergis Business Unit — Business Solutions from January 2008to June 2009.

 

***TELUS sharesheld by directors and executive officers***

 

As at March 1, 2010,the directors and executive officers of TELUS, as a group, beneficially owned,directly or indirectly, or exercised control or direction over 318,712 CommonShares, which represented approximately 0.18 per cent of the outstanding CommonShares and 390,660 Non-Voting Shares, which represented approximately 0.27 percent of the outstanding Non-Voting Shares.

 

***Cease tradeorders, bankruptcies, penalties or sanctions***

 

Other than as disclosed, for the 10years ended March 10, 2010, TELUS is not aware that any current directoror executive officer of TELUS had been a director or executive officer of anyissuer which, while that person was acting in that capacity, or within a yearof that

 

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person ceasing to act in thatcapacity, became bankrupt or made a proposal under any legislation relating tobankruptcy or insolvency or was subject to or instituted any proceedings,arrangement or compromise with creditors or had a receiver, receiver manager ortrustee appointed to hold its assets.  InMarch 2006, John Lacey was appointed to the board of directors of StelcoInc. (Stelco) as a nominee of Tricap Management Limited (Tricap).  Stelco had filed for bankruptcy protectionunder the CCAA in January 2004.  Mr. Lacey’sappointment as a director was part of a court supervised restructuring, fromwhich Stelco emerged on March 31, 2006 and pursuant to which Tricap hadthe right to appoint four of Stelco’s nine directors.  Charles Baillie was formerly a director ofDana Corporation, which filed for bankruptcy in March 2006 under Chapter11 of the U.S. Bankruptcy Code.  Heceased to be director when the company emerged from bankruptcy on February 1,2008.  Robert G. McFarlane was a directorof Ascalade Communications Inc. (Ascalade) until his resignation in February 2008.  In March 2008, Ascalade filed forbankruptcy protection under the CCAA.

 

Other than as disclosed,for the 10 years ended March 10, 2010, TELUS is not aware that any currentdirector or executive officer of TELUS had been a director, chief executiveofficer or chief financial officer of any issuer which was the subject of acease trade or similar order while that person was acting in that capacity, orwas subject to such an order issued after the director or executive officerceased to be a director, chief executive officer or chief financial officer andresulted from an event that occurred while that person was acting in thatcapacity, or any order which denied such company access to any exemption undersecurities legislation for a period of more than 30 consecutive days.  On June 14, 2006, and at the request ofCognos Incorporated (Cognos), the Ontario Securities Commission (OSC) issued acease trade order against all directors of Cognos, including Pierre Ducros, inconnection with a delay in filing its annual report with Canadianregulators.  The delay was related to areview by the United States Securities and Exchange Commission (SEC) of the wayCognos allocated revenue between post-contract customer support and licencefees.  The OSC lifted the cease tradeorder on August 3, 2006 after the SEC concluded that it did not object toCognos’ revenue recognition policy.  Mr. Ducrosceased to be a director of Cognos in February 2008 after its acquisitionby IBM.

 

# **INTERESTS OF EXPERTS**

# ** **

Deloitte &Touche LLP, Chartered Accountants, are the auditors of the Company and areindependent within the meaning of the Rules of Professional Conduct of theInstitute of Chartered Accountants of British Columbia.

 

# **AUDIT COMMITTEE**

# ** **

The Audit Committee of the Company supports theBoard in fulfilling its oversight responsibilities regarding the integrity ofthe Company’s accounting and financial reporting, internal controls anddisclosure controls, legal and regulatory compliance, ethics policy andtimeliness of filings with regulatory authorities, the independence andperformance of the Company’s external and internal auditors, the management ofthe Company’s risk, credit worthiness, treasury plans and financial policy andwhistleblower 

 

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and complaint procedures.  A copy of the AuditCommittee’s Terms of Reference is attached as Appendix A to this AnnualInformation Form.

 

Thecurrent members of the Audit Committee are Brian F. MacNeill (Chair), JohnLacey, William MacKinnon and Ronald P. Triffo. Each member of the Audit Committee is independent and financiallyliterate within the meaning of Multilateral Instrument 52-110 “Audit Committees”and the Board has determined that Brian MacNeill is an audit committeefinancial expert and has accounting or related financial managementexpertise.  The following lists therelevant education and experience of the members of TELUS’ Audit Committee thatis relevant to his or her role on the committee.

 

**Brian MacNeill** chairs the Audit Committee.  He holds a Bachelor of Commerce from MontanaState University and has over 35 years of experience in accounting havingearned his Certified Public Accounting designation (California) and hisChartered Accountant designation (Canada). In 1995, Mr. MacNeill was made a Fellow of the CharteredAccountants of Alberta.  Mr. MacNeillserved as Chair of Petro-Canada from 2000 to 2009. He also served as ChiefExecutive Officer of Enbridge Inc. from 1990 until his retirement in 2001.  Prior to that, he served as Chief OperatingOfficer of Enbridge and held numerous financial positions with various Canadiancompanies.

 

**John Lacey**isChairman of the Advisory Board of Tricap. Mr. Lacey was previously theChairman of the board of directors of Alderwoods Group, Inc., anorganization operating funeral homes and cemeteries within North America, untilNovember 2006. Mr. Lacey has completed the Program for ManagementDevelopment at Harvard Business School.

 

**Bill MacKinnon**is the former Chief Executive Officer of KPMG Canada,serving from April 1999 to December 31, 2008. He first joined KPMGCanada in 1971, serving the company in numerous roles of increasing leadershipfor 37 years, including his membership on the Board of Directors of each ofKPMG Canada, KPMG International and KPMG Americas. Mr. MacKinnon obtaineda Bachelor of Commerce with Honours from the University of Manitoba in1967.  He became a chartered accountantin 1971 and obtained his FCA designation from the Institute of CharteredAccountants of Ontario in 1994.

 

**Ronald P. Triffo**is the Chairman and a director of StantecInc., an engineering and international professional services company where heserved in various executive management positions for more than 25 years. Mr. Triffoobtained a Bachelor of Applied Science from the University of Manitoba and anMSc (Engineering) from the University of Illinois.  He is the Chairman of the Alberta Innovates –Technology Solutions and the past Chairman of ATB Financial.

 

***Audit,audit-related and non-audit services***

 

Allrequests for non-prohibited audit, audit-related and non-audit servicesprovided by TELUS’ external auditor and its affiliates to TELUS are required tobe pre-approved by the Audit Committee of TELUS’ Board of Directors.  To enable this, TELUS has implemented aprocess by which all requests for services involving the External Auditor arerouted for review by the VP Risk Management and Chief Internal Auditor to validatethat the requested service is a non-prohibited service and to verify that thereis a compelling business reason for the request.  If the request passes this review, it is then

 

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forwardedto the Chief Financial Officer for further review.  Pending the Chief Financial Officer’saffirmation, the request is then presented to the Audit Committee for itsreview, evaluation and pre-approval or denial at its next scheduled quarterlymeeting.  If the timing of the request isurgent, it is provided to the Audit Committee Chair for his or her review,evaluation and pre-approval or denial on behalf of the Audit Committee (withthe full committee’s review at the next scheduled quarterly meeting).  Throughout the year, the Audit Committeemonitors the actual versus approved expenditure for each of the approvedrequests. 

 

Thefollowing table is a summary of billing by Deloitte & Touche LLP, asexternal auditors of TELUS, during the period from January 1, 2009 to December 31,2009:

 
| **Type of work**   | ** ** | **Deloitte & Touche** | ** **    | **%**      | ** ** |
|--------------------|------------|--------------------------------|---------------|------------|------------|
| Audit fees         |       | $                              | 3,744,786     |       | 95.8       |   |
| Audit-related fees |       | $                              | 162,500       |       | 4.2        |   |
| Tax fees           |       | —                         |          | —     |       |
| All other fees     |       | —                         |          | —     |       |
| **Total**          | ** ** | **$**                          | **3,907,286** | ** ** | **100**    | ** ** |

 

Thefollowing table is a summary of billing by Deloitte & Touche LLP, asexternal auditors of TELUS, during the period from January 1, 2008 to December 31,2008:

 
| **Type of work**   | ** ** | **Deloitte & Touche** | ** **    | **%**      | ** ** |
|--------------------|------------|--------------------------------|---------------|------------|------------|
| Audit fees         |       | $                              | 3,783,672     |       | 94.3       |   |
| Audit-related fees |       | $                              | 184,500       |       | 4.6        |   |
| Tax fees           |       | $                              | 45,410        |       | 1.1        |   |
| All other fees     |       | —                         |          | —     |       |
| **Total**          | ** ** | **$**                          | **4,013,582** | ** ** | **100**    | ** ** |

 

# **MATERIAL CONTRACTS**

 

Please see the section entitled TELUSRights Plan on page 15 of this document for a description of the Company’sshareholder rights plan.

 

In addition, TCI is a party to athree year agreement (expiry May 2012) with an arm’s-length securitizationtrust associated with a major Schedule I bank, under which TCI is able tosell an interest in certain of its trade receivables up to a maximum of$500 million. As a result of selling the interest in certain of the tradereceivables on a fully serviced basis, a servicing liability is recognized onthe date of sale and is, in turn, amortized to earnings over the expected lifeof the trade receivables.  TCI isrequired to maintain at least a BBB (low) credit rating by DBRS Ltd. or thesecuritization trust may require the sale program to be wound down. Thenecessary credit rating was exceeded by three levels at A (low) as of March 10,2010.

 

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# **TRANSFER AGENTS AND REGISTRARS**

# ** **

The Company’s transferagent and registrar is Computershare Trust Company of Canada.  Computershare maintains the Company’sregisters at 600, 530 - 8th Avenue SW, Calgary, Alberta T2P 3S8.

 

# **ADDITIONAL INFORMATION**

# ** **

Additionalinformation relating to TELUS may be found on SEDAR at sedar.com andEDGAR at sec.gov.  Additionalinformation regarding directors’ and officers’ remuneration, indebtedness andoptions to purchase securities, is contained in the TELUS information circular tobe dated March 12, 2010 for the annual and special general meeting to beheld on May 5, 2010.  Additionalfinancial information is provided in the Company’s consolidated financialstatements and MD&A for the year ended December 31, 2009.  All of the above information can also befound at telus.com.

 

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# **APPENDIX A:  TERMS OF REFERENCE FORTHE AUDIT COMMITTEE**

# ** **

The Board has established an Audit Committee (the Committee) to assistthe Board in fulfilling its oversight responsibilities regarding the integrityof the Company’s accounting and financial reporting, the Company’s internalcontrols and disclosure controls, the Company’s legal and regulatorycompliance, the Company’s ethics policy and timeliness of filings withregulatory authorities, the independence and performance of the Company’sexternal and internal auditors, the management of the Company’s risks, theCompany’s credit worthiness, treasury plans and financial policy and theCompany’s whistleblower and complaint procedures.

 

**1.****                                     ****MEMBERSHIP**

 

1.1                                 TheCommittee will have a minimum of three members, including the chair of theCommittee.  The Board, upon therecommendation of the Corporate Governance Committee, will appoint and removethe members of the Committee by a majority vote.  The members will sit on the Committee at thepleasure of the Board.

 

1.2                                 TheBoard, upon the recommendation of the Corporate Governance Committee, willappoint the chair of the Committee from the Committee’s members by a majorityvote.  The chair of the Committee willhold such position at the pleasure of the Board.

 

1.3                                 Allmembers of the Committee will be Independent Directors.

 

1.4                                 Allmembers of the Committee will be financially literate, as defined in accordancewith applicable securities laws and standards of the stock exchanges on whichthe Company’s securities are listed.

 

1.5                                 Atleast one member of the Committee will be an audit committee financial expert,as defined in accordance with applicable securities laws, and at least onemember of the Committee will have accounting or related financial managementexpertise, as defined in accordance with applicable securities laws.

 

**2.****                                     ****MEETINGS**

 

2.1                                 TheCommittee will meet at least once each quarter and otherwise as necessary.  Any member of the Committee may call meetingsof the Committee.

 

2.2                                 Alldirectors of the Company, including management directors, may attend meetingsof the Committee provided, however, that no director is entitled to vote atsuch meetings and is not counted as part of the quorum for the Committee if heor she is not a member of the Committee.

 

2.3                                 Notwithstandingsection 2.2 above, the Committee will, as a regular feature of each regularlyscheduled meeting, hold an in-camera session with the external auditors andseparately with the internal auditors, without management or managementdirectors present.  The Committee may,however, hold other in-camera sessions with such members of management presentas the Committee deems appropriate.

 

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2.4                                 TheCorporate Secretary or his or her nominee will act as Secretary to theCommittee.

 

2.5                                 TheCommittee will report to the Board on its meetings and each member of the Boardwill have access to the minutes of the Committee’s meetings, regardless ofwhether the director is a member of the Committee.

 

2.6                                 Theexternal auditors of the Company will receive notice of every meeting of theCommittee and may request a meeting of the Committee be called by notifying thechair of the Committee of such request.

 

**3.****                                     ****QUORUM**

 

The quorum necessary for the transaction of business at Committeemeetings will be a majority of the members of the Committee.  A quorum once established is maintained even ifmembers of the Committee leave the meeting prior to conclusion.

 

**4.****                                     ****DUTIES**

 

The Board hereby delegates to the Committee the following duties to beperformed by the Committee on behalf of and for the Board:

 

## ***4.1***                               Financial Reporting

## *** ***

Priorto public disclosure, the Committee will review and recommend to the Board, andwhere applicable, to the boards of the Company’s subsidiaries which arereporting issuers, for approval:

 

a)                                      the annual audited consolidated financialstatements and interim unaudited consolidated financial statements of theCompany and those of its subsidiaries that are reporting issuers, as defined inaccordance with applicable securities laws;

 

b)                                     the interimand annual management’s discussion and analysis of financial condition andresults of operations (MD&A) of the Company and those of its subsidiariesthat are reporting issuers, as defined in accordance with applicable securitieslaws;

 

d)                                     earnings press releases and earningsguidance, if any;

 

e)                                      Management’sStatement on Financial Reporting; and

 

f)                                        all othermaterial financial public disclosure documents of the Company and those of itssubsidiaries that are reporting issuers, including prospectuses, press releaseswith financial results and the Annual Information Form.

 

## ***4.2***                               External Auditors

## *** ***

Theexternal auditors will report directly to the Committee and the Committee will:

 

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a)                                      appoint theexternal auditors, subject to the approval of the shareholders, and determinethe compensation of the external auditors;

 

b)                                     oversee thework of the external auditors and review and approve the annual audit plan ofthe external auditors, including the scope of the audit to be performed and thedegree of co-ordination between the plans of the external and internalauditors.  The Committee will discusswith the internal auditors, the external auditors and management, the adequacyand effectiveness of the disclosure controls and internal controls of theCompany and elicit recommendations for the improvement of such controls orparticular areas where new or more detailed controls or procedures are desirable.  Particular emphasis will be given to theadequacy of internal controls to prevent or detect any payments, transactionsor procedures that might be deemed illegal or otherwise improper;

 

c)                                      meetregularly with the external auditors without management present and ask theexternal auditors to report any significant disagreements with managementregarding financial reporting, the resolution of such disagreements and anyrestrictions imposed by management on the scope and extent of the auditexaminations conducted by the external auditors;

 

d)                                     pre-approveall audit, audit-related and non-audit services to be provided to the Companyor any of its subsidiaries, by the external auditors (and its affiliates), inaccordance with applicable securities laws;

 

e)                                      annuallyreview the qualifications, expertise and resources and the overall performanceof the external audit team and, if necessary, recommend to the Board thetermination of the external auditors or the rotation of the audit partner incharge;

 

f)                                        at leastannually, obtain and review a report by the external auditors describing: thefirm’s internal quality-control procedures; any material issues raised by themost recent internal quality control review, or peer review of the firm, or byany inquiry or investigation by governmental or professional authorities,within the preceding five years, respecting one or more independent auditscarried out by the firm, and any steps taken to deal with such issues; and allrelationships between the external auditors and the Company;

 

g)                                     annuallyassess and confirm the independence of the external auditors and require theexternal auditors to deliver an annual report to the Committee regarding itsindependence, such report to include disclosure regarding all engagements (andfees related thereto) by the Company and relationships which may impact theobjectivity and independence of the external auditors;

 

h)                                     require theexternal auditors to deliver an annual acknowledgement in writing to theCommittee that the shareholders, as represented by the Board and the Committee,are its primary client;

 

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i)                                         reviewpost-audit or management letters, containing recommendations of the externalauditors and management’s response;

 

j)                                         reviewreports of the external auditors; and

 

k)                                      pre-approvethe hiring of employees and former employees of current and former auditors inaccordance with applicable securities laws and TELUS policies.

 

Notwithstanding section 4.2(d) above, theCommittee may delegate the pre-approval of audit, audit-related and non-auditservices to any one member of the Committee, provided, however, a report ismade to the Committee on any pre-approval of such services at the Committee’sfirst scheduled meeting following the pre-approval.

 

## ***4.3***                               Internal Auditors

## *** ***

## ***The internal auditors will reportfunctionally to the Committee and administratively to the Chief FinancialOfficer and the Committee will:***

## *** ***

## ***a)***                                      review and approve management’s appointment,termination or replacement of the Chief Internal Auditor;

## *** ***

## ***b)***                                     oversee the work of the internal auditors includingreviewing and approving the annual internal audit plan and updates thereto;

## *** ***

## ***c)***                                      review the report of the internal auditors on thestatus of significant internal audit findings, recommendations and management’sresponses and review any other reports of the internal auditors; and

## *** ***

## ***d)***                                     review the scope of responsibilities andeffectiveness of the internal audit team, its reporting relationships,activities, organizational structure and resources, its independence frommanagement, its credentials and its working relationship with the externalauditors.

## *** ***

The internal auditors will report quarterly to theCommittee on the results of internal audit activities and will also have directaccess to the chair of the Committee when the internal auditors determine it isnecessary.

 

## ***4.4***                               Whistleblower, Ethics and Internal Controls Complaint Procedures

## *** ***

The Committee will ensure that theCompany has in place adequate procedures             for:

 

a)                                      the receipt, retention and treatment ofcomplaints received by the Company regarding accounting, internal controls orauditing matters; and

 

b)                                     the confidential, anonymous submission byemployees of the Company of concerns regarding questionable accounting orauditing matters.

 

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TheCEO or CFO will report to the Committee, and the Committee will review suchreports, on any fraud, whether or not material, that involves management orother employees who have a significant role in the Company’s internalcontrols.  Where the CEO, CFO and/or theChief Internal Auditor are named in a complaint, the Director of Ethics andInternal Controls will speak directly with the Chair of the Committee.

 

TheChief Internal Auditor will report to the Committee, and the Committee willconsider such reports, on the results of the investigation of whistleblower,ethics and internal controls complaints.

 

**4.5****                              ****Accounting and FinancialManagement**

 

TheCommittee will review:

 

a)                                      with management and the externalauditors, the Company’s major accounting policies, including the impact ofalternative accounting policies and key management estimates and judgments thatcould materially affect the financial results and whether they should bedisclosed in the MD&A;

 

b)                                     emerging accounting issues and theirpotential impact on the Company’s financial reporting;

 

c)                                      significant judgments, assumptions andestimates made by management in preparing financial statements;

 

d)                                     the evaluation by either the internal orexternal auditors of management’s internal control systems, and management’sresponses to any identified weaknesses;

 

e)                                      the evaluation by management of theadequacy and effectiveness in the design and operation of the Company’sdisclosure controls and internal controls for financial reporting;

 

f)                                        audits designed to report on management’srepresentations on the effectiveness and efficiency of selected projects,processes, programs or departments;

 

g)                                     management’s approach for safeguardingcorporate assets and information systems, the adequacy of staffing of keyfinancial functions and their plans for improvements; and

 

h)                                     internal interim and post implementationreviews of major capital projects.

 

**4.6****                              ****Credit Worthiness, Treasury Plansand Financial Policy**

 

TheCommittee will review with management:

 

a)                                      the Company’s financial policies andcompliance with such policies;

 

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b)                                     the credit worthiness of the Company;

 

c)                                      the liquidity of the Company; and

 

d)                                     important treasury matters includingfinancing plans.

 

**4.7****                              ****Legal/Regulatory Matters andEthics**

 

TheCommittee will review:

 

a)                                      with management, the external auditorsand legal counsel, any litigation, claim or other contingency, including anytax assessment, that could have a material effect upon the financial positionor operating results of the Company;

 

b)                                     annually, management’s relationships andcompliance with regulators, and the accuracy and timeliness of filings withregulatory authorities;

 

c)                                      annually, the ethics policy, management’sapproach to business ethics and corporate conduct and the program used bymanagement to monitor compliance with the policy; and

 

d)                                     quarterly reports from the ChiefCompliance Officer on legal and regulatory compliance activities.

 

**4.8****                              ****Risk Management**

 

TheCommittee will:

 

a)                                      consider reports on the annual enterprisebusiness risk assessment and updates thereto;

 

b)                                     consider reports on the businesscontinuity disaster recovery plan(s) for the Company;

 

c)                                      consider reports on the insurancecoverage of the Company;

 

d)                                     consider reports on financial riskmanagement including derivative exposure and policies;

 

e)                                      monitor, on behalf of the Board, theCompany’s compliance with environmental legislation and the adequacy of theCompany’s environmental budget expenditures;

 

f)                                        monitor, on behalf of the Board, theCompany’s health and safety policies and receive and review regular reportsconcerning the Company’s health and safety programs, policies and results fromthe Chief Internal Auditor and the Chief Compliance Officer;

 

g)                                     review and recommend to the Board forapproval environmental policies and procedure guidelines and any amendments orchanges thereto;

 

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h)                                     report to the Board, and requiremanagement to report to the Committee, on environmental matters each quarter;and

 

i)                                         review other risk management matters asfrom time to time the Committee may consider suitable or the Board mayspecifically direct.

 

### ***4.9***                               Other

### *** ***

TheCommittee will review:

 

a)                                      the expenses of the Chair of the Boardand CEO and will assess the Company’s policies and procedures with respect tothe Executive Leadership Team members’ expense accounts and perquisites,including their use of corporate assets;

 

b)                                     the proposed disclosure concerning theCommittee to be included in the Company’s Annual Information Form toverify, among other things, that it is in compliance with applicable securitieslaw requirements;

 

c)                                      significant related party transactionsand actual and potential conflicts of interest relating thereto to verify theirpropriety and that disclosure is appropriate;

 

d)                                     the disclosure policy of the Company; and

 

e)                                      and evaluate, at least once annually, theadequacy of these Terms of Reference and the Committee’s performance, andreport its evaluation and any recommendations for change to the CorporateGovernance Committee.

 

The Committee will also have such other duties andresponsibilities as are delegated to it and review such other matters as, fromtime to time, are referred to it by the Board.

 

### ***5.***                                      Authority

### *** ***

TheCommittee, in fulfilling its mandate, will have the authority to:

 

a)                                      engage and set compensation forindependent counsel and other advisors;

 

b)                                     communicate directly with the ChiefFinancial Officer, internal and external auditors, Chief Compliance Officer andChief General Counsel;

 

c)                                      delegate tasks to Committee members orsubcommittees of the Committee; and

 

d)                                     access appropriate funding as determinedby the Committee to carry out its duties.

 

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