##### 



EXHIBIT 99.1
 AGRIUM INC.
 ANNUAL INFORMATION FORM
 Year Ended December 31, 2005
 February 22, 2006
 
 -1-




---



##### 



AGRIUM INC.
ANNUAL INFORMATION FORM
TABLE OF CONTENTS
  Page ReferenceIncorporated byIncorporated by
    
    Reference from theReference from the
    
    2005 ConsolidatedAnnual
    
    2005 Management's
    
    FinancialInformation
    
    Discussion &
    
    Statements andForm
    
    Analysis
    
    Notes theretoItem
    1 
    Cover Page
    
    1Item
    2 
    Table of Contents
    
    2 - 3Item
    3 
    Corporate Structure
    
    43.1
    Name, Address and Incorporation
    
    43.2
    Intercorporate Relationships
    
    4Item
    4 
    General Development of the Business
    
    54.1
    Three Year History
    
    5 - 7Item
    5 
    Description of the Business
    
    75.1
    Business of Agrium
    
    7a.
    Summary
    
    7i.
    Products, Services and Markets
    
    7 - 8
    
    19(1), 22 -
28(2), 29 - 43(3)ii.
    Transportation, Storage and Distribution
    
    8 - 9iii.
    Selected Financial Information
    
    9
    
    
    
    Note 23b.
    Production Methods
    
    9c.
    Competitive Position
    
    9 - 10d.
    New Products
    
    10 - 11e.
    Sources of Raw Materials
    
    11
    
    37 - 38(4), 39
- 40(5), 40 - 41(6)f.
    Intangible Properties
    
    11 - 12g.
    Environmental Protection Requirements
    
    12h.
    Employees
    
    12 - 13i.
    South American Operations
    
    13
    
    23 - 24(7), 42 -
43(8)5.2
    Risk Factors
    
    13 - 16(1)
    Under the heading Our Business & Products.(2)
    Under the heading Our Retail Business.(3)
    Under the heading Our Wholesale Business.(4)
    Under the heading Nitrogen Production
Cost.(5)
    Under the heading Potash Production Cost.(6)
    Under the heading Phosphate Production Cost.(7)
    Under the heading Our Retail Business.(8)
    Under the heading South America Wholesale Results.
  
 -2-




---



##### 



AGRIUM INC.
ANNUAL INFORMATION FORM
TABLE OF CONTENTS (CONTINUED)
 Page ReferenceIncorporated byIncorporated by
    
    Reference from theReference from the
    
    2005 ConsolidatedAnnual
    
    2005 Managements
    
    FinancialInformation
    
    Discussion &
    
    Statements andForm
    
    Analysis
    
    Notes theretoItem
    6 
    Dividends
    
    16Item
    7 
    Description of Capital Structure
    
    167.1
    General Description of Capital Structure
    
    16
    
    54(9)
    
    Note 177.2
    Constraints
    
    167.3
    Ratings
    
    17Item
    8 
    Market for Securities
    
    188.1
    Trading Price and Volume
    
    188.2
    Prior Sales
    
    19Item
    9 
    Escrowed Securities
    
    19Item
    10 
    Directors and Officers
    
    1910.1
    Name, Occupation and Security Holding
    
    19 - 2110.2
    Cease Trade Orders, Bankruptcies, Penalties or Sanctions
    
    2110.3
    Conflicts of Interest
    
    22Item
    11 
    Promoters
    
    22Item
    12 
    Legal Proceedings
    
    22Item
    13 
    Interest of Management and Others in Material Transactions
    
    22Item
    14 
    Transfer Agent, Registrar and Trustees
    
    22Item
    15 
    Experts
    
    2315.1
    Names of Experts
    
    2315.2
    Interests of Experts
    
    23Item
    16 
    Audit Committee
    
    2316.1
    Audit Committee Charter
    
    2316.2
    Composition of the Audit Committee
    
    2316.3
    Relevant Education and Experience of Members of the Audit Committee
    
    23 - 2416.4
    Pre-Approval Policies and Procedures
    
    2516.5
    External Auditor Service Fees (By Category)
    
    25Item
    17 
    Additional Information
    
    25 - 26(9)
    Under the heading Outstanding Shares.
 
 -3-




---



##### 



INTERPRETATION
  ITEM 3  CORPORATE STRUCTURE
 3.1 NAME, ADDRESS AND INCORPORATION
  3.2 INTERCORPORATE RELATIONSHIPS
 Principal Subsidiaries &Associated Companies
    
    Jurisdiction of Incorporation or Organization
    
    OwnershipAGRIUM, a general partnership
    
    Alberta
    
    100%Agrium U.S. Inc.
    
    Colorado
    
    100%Agrium Nitrogen Company
    
    Colorado
    
    100%Crop Production Services, Inc.
    
    Delaware
    
    100%Western Farm Service, Inc.
    
    Delaware
    
    100%Agroservicios Pampeanos S.A.
    
    Argentina
    
    100%Nu-West Industries, Inc.
    
    Delaware
    
    100%Viridian Fertilizers Limited
    
    Canada
    
    100%Profertil S.A.
    
    Argentina
    
    50%Royster-Clark Ltd.
    
    Ontario
    
    98.6%(1)Royster-Clark ULC
    
    Nova Scotia
    
    98.6%(1)Royster-Clark Holdings, Inc.
    
    Delaware
    
    98.6%(1)Royster-Clark, Inc.
    
    Delaware
    
    98.6%(1)
 
 (1) On February 9, 2006 Agrium acquired approximately 98.6 percent of the outstanding
Royster-Clark Ltd. common shares and on February 9, 2006 commenced proceedings to acquire the
remaining common shares of Royster-Clark Ltd. pursuant to compulsory acquisition procedures of the
Business Corporations Act (Ontario). 
 -4-




---



##### 



ITEM 4
 GENERAL DEVELOPMENT OF THE BUSINESS
 4.1 THREE YEAR HISTORY
 2003
     2004
       
 -5-




---



##### 



2005
    AcquisitionsOn February 1, 2005 our Retail segment acquired United Agri Products South American retail
operations, which comprised 18 retail outlets. The acquisition complements Agroservicios
Pampeanos S.A. (ASP), our existing retail business in South America. In contrast to ASP, which
has a sales mix of 70 percent fertilizers and less than 20 percent chemicals, the newly acquired
outlets have a sales mix of over 90 percent chemicals and approximately five percent
fertilizers.On October 12, 2005, we acquired the Western Canadian fertilizer distribution assets of Imperial
Oil consisting of fertilizer storage and distribution assets and associated long-term leases for
land at over 190 independently operated retail locations. Approximately 500,000 tonnes of
fertilizer per year is marketed through these locations and the transaction includes an
exclusive supply agreement with the dealers. We expect to benefit from increased sales in
Western Canada, which has historically provided a high gross margin netback versus other
markets.On January 25, 2006, we completed an $86-million acquisition of Nu-Gros fertilizer technology
and Canadian professional products businesses from subsidiaries of Spectrum Brands Inc.
(Spectrum) pursuant to the terms of a share purchase agreement dated November 22, 2005. This
acquisition provided us with: (a) new products in the controlled release and professional
products markets that complement our existing product lines in these markets; (b) strong
customer relationships based on the Nu-Gro brand; and (c) four production facilities and the
Nu-Gro head office in Brantford, Ontario. This acquisition is beneficial in that it provides us
with new products with strong, stable margins, which are expected to be immediately accretive to
earnings. As part of this transaction, Agrium entered into a multi-year supply arrangement with
Spectrum to supply Spectrums Consumer Business. In addition, Nu-Gros fertilizer technology and
Canadian professional products employees joined Agrium as part of the transaction.On February 9, 2006, we acquired 98.6 percent of the outstanding common shares of Royster-Clark
Ltd. We anticipate we will use approximately $502-million in investment capital to acquire
Royster-Clark in the first half of 2006. This represents the acquisition cost of Royster-Clarks
outstanding common shares, subordinated notes and existing credit facility in the amount of
$109-million, $292-million and $101-million, respectively and does not include transaction
costs. We expect to be able to finance these projects through existing cash balances and cash
provided from operating activities and existing lines of credit as necessary.Royster-Clark is a major retailer distributor of fertilizers, chemicals and seed and provides
agronomic services to farmers principally in the Midwestern and Southeastern U.S. The
acquisition of Royster-Clarks 254 retail farm centers provides a strong strategic fit with very
little market overlap with our existing locations in the Midwestern U.S. The acquisition will
add further geographic and product diversity to our existing 254 facilities located in the U.S.,
Argentina and Chile. The addition of Royster-Clark is expected to increase our U.S. based
retail revenues by over 60 percent and significantly increase our retail net earnings. This is
part of our corporate strategy of increasing the more stable components of our earnings profile,
thereby reducing cyclicality and increasing our bottom-of-the cycle earnings. In addition,
Royster-Clarks distribution terminals will provide storage and throughput capacity to
facilitate the expected increase in importation of nitrogen
fertilizer over time. These higher imports are expected to be required to replace U.S. nitrogen
production capacity curtailed due to high natural gas costs.
 
 -6-




---



##### 



Incremental ExpansionIn 2005 we proceeded on the following significant capital projects:
 
    
    ESN 150 Project, which involves construction of a new coating plant capable of
converting the production from one existing urea granulation train at Carseland to ESN
product. $47-million was expended on the project in 2005; and
    
    Vanscoy potash operation expansion to allow for an additional 310-thousand
tonnes per year of production capacity by 2007. Total project costs expended in 2005
were $16-million.
   
    
    Redemption of the eight percent preferred securities on February 14, 2005 for $175-million;
    
    Repurchase of approximately five million common shares for $98-million through a
normal course issuer bid; and,
    
    Retirement of $126-million of long-term debt.
 ITEM 5
 DESCRIPTION OF THE BUSINESS
 5.1 BUSINESS OF AGRIUM
  a)
    
    SUMMARY
 i)
    
    Products, Services and Markets
 Retail Operating SegmentThrough our 254 retail centres in the U.S., Argentina, and Chile as of December 31,
2005, we provide fertilizers, crop protection products, seeds and agronomic services
to farmers.With our acquisition of Royster-Clark on February 9, 2006, we added extensively to
our retail network in the U.S. Royster-Clark owns and operates 254 retail farm
centres, more than 30 seed processing, fertilizer granulation and fertilizer
blending facilities, and over 70 storage warehouses, distribution terminals and
other storage capacity exceeding one million tonnes. Royster-Clark operates two
small nitrogen manufacturing facilities, which supply nitrogen fertilizers to its
retail distribution business, third-party retailers and industrial customers. The
larger of the two production facilities, the East Dubuque, Illinois nitrogen plant
is currently under a contract for sale.WholesaleWe produce a full range of nutrients including nitrogen, potash and phosphate.
 
 -7-




---



##### 



North America Wholesale Operating SegmentNitrogen-based fertilizers are produced in Alberta, Canada at five plants
located at Carseland, Fort Saskatchewan, Joffre, Redwater and Standard/Granum.
In the U.S., we own and operate four nitrogen-based fertilizer production plants
at Borger, Texas, Kenai, Alaska, Kennewick, Washington and West Sacramento,
California. Sulphur and phosphate-based fertilizers are produced at the Redwater
plant located in Alberta, Canada and at one phosphate-based fertilizer
production facility located in Conda, Idaho, U.S. We have two phosphate rock
mines, which supply the plants at Redwater, Alberta and Conda, Idaho.We own and operate a potash mine and production facility at Vanscoy,
Saskatchewan, Canada.We also own and operate a micronutrient facility at Reese, Michigan, U.S.We have an extensive storage and wholesale distribution network serving Western
Canada, the Pacific Northwest, California, the Midwest Cornbelt and the Great
Plains regions of the U.S.South America Wholesale Operating SegmentWe are a 50 percent participant in the Profertil S.A. joint venture that owns
and operates a world scale nitrogen-based fertilizer plant in Bahia Blanca,
Argentina.
 Specialty Products Operating SegmentThe Specialty Products operating segment was established on January 25, 2006, the
date of our acquisition of Nu-Gro.Fertilizer TechnologyThe Fertilizer Technology business includes the manufacture and sale of
controlled-release nitrogen fertilizers that are sold to the fertilizer industry
worldwide. This segment has numerous exclusive arrangements with distributors
covering 12 countries. Fertilizer Technology products are produced in two production
facilities located in Mobile, Alabama and Courtright, Ontario.Canadian Professional ProductsThis segment manufactures and supplies fertilizer and pest control products to the
professional turf market (golf courses and lawn care companies) as well as
manufactures pest control products for the structural pest control industry (pest
control in residential and commercial structures) in Canada. This segment markets
its products through an extensive network of 12 distributors across Canada. This
segment is split into two divisions: Professional Turf Care and Structural Pest
Control. Canadian Professional Products are produced in two production facilities
located in Putnam, Ontario and Brighton, Ontario.
 For additional information regarding the products, services and markets of our business, see
the discussion under the heading Our Business &
Products on page 19, Our Retail
Business on pages 22 to 28 and Our Wholesale
Business on pages 29 to 43 of the 2005
Managements Discussion & Analysis, which is incorporated herein by reference.
 ii)
    
    Transportation, Storage and DistributionA significant portion of delivered costs of fertilizer products to certain customers is
attributable to transportation. We have entered into various rail, pipeline and other
transportation agreements to provide reliable and competitive transportation services.
We lease approximately 3,200 rail tank and hopper cars, some of which are specially
designed to transport fertilizer products. This fleet is supplemented by
railroad-supplied cars as needed to meet peak-season transportation requirements. We own
atmospheric, pressurized anhydrous ammonia storage, dry product, and liquid product
facilities at
 
 -8-




---



##### 



locations in Western Canada, the Pacific Northwest, California, the
Midwest Cornbelt and the Great Plains regions of the U.S. With the Royster-Clark
acquisition, more than 30 seed processing, fertilizer granulation and fertilizer
blending facilities have been added as well as over 70 storage warehouses, distribution
terminals and other storage capacity exceeding one million tonnes. These facilities,
when combined with storage capability at the production facilities, provide a network of
field and production site storage capacity sufficient to meet customer requirements.iii)
    
    Selected Financial InformationNet sales classified by operating segment and by product category for our two most
recently completed financial years are provided in Note 23 to our 2005 Consolidated
Financial Statements, which Note is incorporated herein by reference.
 b)
    
    PRODUCTION METHODS
 Production methods for our manufactured products are as follows:
 Nitrogen-based fertilizersNitrogen-based fertilizers use nitrogen taken from the air. The nitrogen is reacted
with a hydrogen source, usually natural gas reformed with steam, to produce ammonia.
The ammonia is the feedstock for the production of upgraded nitrogen products,
including urea, ammonium nitrate and urea ammonium nitrate. Urea is produced by
combining ammonia with carbon dioxide and forming liquid urea, which can be further
processed into a solid, granular form. Ammonium nitrate is produced by combining
nitric acid with ammonia into a liquid form, which is then converted to a solid.
Urea ammonia nitrate is a liquid fertilizer and is produced by combining liquid
urea, liquid ammonium nitrate and water.PhosphateThe principal raw materials used in the production of phosphate fertilizers are
phosphate ore, ammonia, sulphuric acid and sulphur. We extract phosphate ore using
surface mining techniques. The ore is mixed with recycled water to form slurry and
then screened to remove coarse materials, washed to remove clay and floated to
remove sand to produce phosphate rock. The phosphate rock is then reacted with
sulphuric acid to produce phosphoric acid. The phosphoric acid is then reacted with
ammonia to form a granular product or concentrated to form liquid product.PotashWe produce potash using conventional mining methods from one-kilometer deep ore
bodies. The mined ore is a mixture of potash, salt and clay. Removing the clay and
salt through a milling process produces saleable potash.
 c)
    
    COMPETITIVE POSITIONThe market for our nitrogen, phosphate, potash and crop production inputs is highly competitive.
Our competitors include other large integrated fertilizer producers, cooperatives, and
divisions of agribusiness companies, regional distributors and independent dealers.Nitrogen-based fertilizer is a global commodity, and customers, including end-users, dealers and
other fertilizer producers and distributors, base their purchasing decisions principally on the
delivered price and availability of the product. The relative cost of, and availability of
transportation for, raw materials and finished products to manufacturing facilities are also
important competitive factors. We compete with a
number of producers in North America and other countries, including state-owned and
government-subsidized entities.Competition in the phosphate and potash fertilizers market is based largely on price,
reliability and deliverability. The relative cost and availability of mines and the efficiency
of production facilities are also important competitive factors. Domestic competitors for
phosphate and potash include a number of large producers. In addition, the production and trade
of phosphate and potash have become increasingly global and a number of foreign competitors
produce phosphate and potash primarily for the export market.
 
 -9-




---



##### 



With the addition of Royster-Clarks retail farm centers, we now have over 500 retail farm
centers located throughout many of the major growing areas in the U.S. We are a major
distributor of fertilizers, chemicals and seed in a highly competitive industry, particularly
with respect to price and service. Our principal competitors in the distribution of crop
production inputs include agricultural co-operatives, national fertilizer producers, major grain
companies and independent distributors and brokers.The professional products business of the Specialty Products segment is Canadas leading
manufacturer and supplier of fertilizer and pest control products to the professional turf
industry and pest control industry, respectively. Our competitors in the professional turf
industry are numerous whereas competition in the pest control industry is more concentrated.d)
    
    NEW PRODUCTSThe Nu-Gro acquisition that closed in January 2006 introduced several new products into our
product line. The following summarizes each new product.Sulphur Coated Urea (SCU®)SCU is a coated, controlled-release nitrogen fertilizer. SCU is produced by applying a coating
of molten sulphur on heated urea granules, then adding an additional polymer to improve the
integrity of the coating. In much the same way as encapsulation permits slow release of
medicines, this double coating provides a physical barrier for the urea, which is then slowly
broken down by moisture, microorganisms and abrasion.Methylene (MU)Nitroform®Nitroform is a reacted, controlled-release nitrogen fertilizer. It is manufactured by reacting
urea with formaldehyde to provide controlled-release nitrogen in carbon-linked polymers, which
last up to 12 months. Its primary use is by professionals for golf courses, lawn care, sports
fields, commercial nurseries and specialty agricultural crops.Nutralene®Nutralene is a reacted, controlled-release nitrogen fertilizer. It is manufactured by reacting
urea with urea formaldehyde concentrate (UFC) to provide controlled-release nitrogen in
carbon-linked polymers, as done when producing Nitroform, but with a wider urea to formaldehyde
ratio.Isobutyraldehyde Urea (IB)IB Nitrogen is a reacted, controlled-release nitrogen fertilizer. It is manufactured by
reacting isobutyraldehyde and urea. It is a very safe nitrogen source to use in high maintenance
turf (e.g. golf greens) and the professional horticultural market.ProTurf® Professional Turf ProductsProTurf brands include Contec and Complete Courser which are high-end homogeneous fertilizers
containing all the nutrients required to provide consistent and even feed. Contec products
provide small, uniform particle sizes allowing them to pass rigorous quality standards and be
used on the finest greens and on
the highest density, low cut fairways. Complete Courses high performance methylene urea for
fairways provides a slow to moderate nitrogen release rate.The quality of ProTurfs blended products is based on Poly-S technology. Poly-S delivers the
durability and performance of a polymer coating at a price comparable to traditional sulphur
coated urea fertilizers. Poly-S technology provides controlled-release rates of nitrogen,
extended residual effects and constant, predictable responses with each application.
 
 -10-




---



##### 



Nu-Spec®Nu-Spec combines proven controlled-release nitrogen fertilizer technology with a patented
process. The product was created to meet the market needs for a homogeneous controlled-release
nitrogen fertilizer product. The Nu-Spec brand includes a variety of granular golf course and
sports turf fertilizers suitable for greens, tees, fairways and turf.Nu-Gro®/Par Ex® Professional Turf Care ProductsThe Nu-Gro and Par Ex brands provide a wide selection of granular nitrogen fertilizers
containing controlled release nitrogen fertilizers such as SCU, Nitroform, Nutralene, and IB
Nitrogen. Premium golf course blends are available in various grades for greens, tees, and
fairways, as well as quality landscape fertilizers and granular pest control products for
domestic and commercial turf care.TurfTec OnlineTurfTec Online is an online nutrient management planning tool designed for use by Nu-Gro
customers to help turf care managers maintain records of turf requirements and manage the
application of Nu-Gro products. The program includes soil testing and irrigation water analysis.
The information is recorded in a web-based, password protected database and can be quickly
organized to assist the development of a fertility program. Not only is this tool invaluable for
record keeping purposes, it ultimately promotes a more efficient use of pest control and
fertilizer products, resulting in a positive impact on the environment.Pest Control ProductsIn the professional division, Nu-Gro markets a variety of pest control products. Primary product
categories include rodenticides, insecticides and bait stations. Rodenticide products include
Rozol, Ratoxin, Rat-X & Strychnine, insecticides include Dursban 2.5G, Pro Insecticide &
Malathion and bait stations Black Cat Mouse & Black Cat Rat.e)
    
    SOURCES OF RAW MATERIALSA discussion of our sources of primary raw materials used in the manufacture of nitrogen-based
fertilizers, phosphate and potash is under the headings Nitrogen Production Cost, Potash
Production Cost, and Phosphate Production Cost on
pages 37 to 38, 39 to 40, and 40 to 41, respectively of the 2005
Managements Discussion & Analysis, which is incorporated herein by reference.f)
    
    INTANGIBLE PROPERTIESThe Specialty Products operating segment has registered and pending trademarks in Canada, the
United States and other countries where its products are sold. The following tables summarizes
its main trademarks:
 TrademarksTrademark
    
    

CountriesSCU®
    
    
    CanadaNitroform®
    
    
    Australia, Bolivia, Canada, Costa Rica, Denmark,
Finland, France, Greece, Ireland, Italy, Japan,
Malaysia, New Zealand, Norway, South Africa, Sweden,
Switzerland, Thailand, United StatesNutralene®
    
    
    Australia, Canada, Denmark, Finland, France, Greece,
Ireland, Japan, Malaysia, New Zealand, Sweden,
Thailand, Turkey, United Kingdom, United States,
International Registration (includes Austria, Bulgaria,
Benelux, China, Croatia, Czech Republic, Egypt, France,
Hungary, Italy, Liechtenstein, Morocco, Poland,
Slovakia, Slovenia, Spain, Switzerland, Ukraine)IB Nitrogen
    
    
    United States
 
 -11-




---



##### 



ProTurf®
    
    
    Canada, United StatesPar Ex®
    
    
    CanadaNu-Spec®
    
    
    Canada, United StatesESN®
    
    
    Australia, Canada, Mexico, United States, New ZealandESN
    
    
    Argentina, European Community (CTM), MalaysiaESN DESIGN
    
    
    Australia, Canada, Mexico, United States, New ZealandESN DESIGN
    
    
    Argentina, European Community (CTM), MalaysiaDURATION®
    
    
    Benelux, Canada, Germany, Japan, South Korea, Malaysia,
Taiwan, Thailand, United StatesDURATION
    
    
    Argentina, MexicoDURATION CR®
    
    
    Canada, United StatesDURATION CR
    
    
    European Community (CTM), MalaysiaSMART NITROGEN
    
    
    Canada, New ZealandSMART NITROGEN
    
    
    European Community (CTM), Malaysia, Mexico, United
States
 While these trademarks constitute valuable assets, we do not regard any single trademark as
being material to our operations as a whole.g)
    
    ENVIRONMENTAL PROTECTION REQUIREMENTSOur operations are subject to a variety of federal, provincial, state and local laws and
regulations, some of which relate to the remediation of existing environmental conditions while
others require that certain work be carried out at the time of plant closure, or when the
specific asset is retired. The most restrictive of these requirements are typically issued to us
in the form of permits, approvals, authorizations and licenses that are intended to protect
employees from injury and illness and the environment and community from harm. The laws and
regulations may limit or regulate operating conditions, rates and efficiency; land, water and
raw material use and management; product storage, quality and transportation; waste storage and
disposal; and, emissions and other discharges. Asset retirement obligations are often
stipulated in our facility operating licenses and permits, although they may also arise from
contractual obligations and other legal requirements then in effect. For facilities with these
stipulations, asset retirement obligations typically involve the removal of the asset,
remediation of any contamination resulting from the use of that asset and reclamation of the
land.h)
    
    EMPLOYEESAs of December 31, 2005 we employed 4,719 people. The breakdown of employees by operating
segment is as follows:
 Operating Segment
    
    Number of EmployeesRetail
    
    
    2,510North American Wholesale
    
    
    1,951South American Wholesale
    
    
    1Corporate
    
    
    257Total
    
    
    4,719
 Subsequent to December 31, 2005 with the acquisition of Nu-Gro, 131 additional employees joined
the Specialty Products operating segment and with the acquisition of Royster-Clark, 1,925
additional employees joined the Retail operating segment.
 
 -12-




---



##### 



Hourly employees at the following plants are represented by labor unions with the contract
expiration date for each plant shown in parenthesis: Fort Saskatchewan, Alberta (December 31,
2006); Kenai, Alaska (March 31, 2008); Vanscoy, Saskatchewan
(April 30, 2006).Approximately 200 employees of Royster-Clark are represented by unions at eight facilities. Of
these, approximately 80 are at the East Dubuque facility. Contract expiration dates range from
June 2006 to August 2008.Management believes that it has good relations with both its unionized and non-unionized
employees.
 i)
    
    SOUTH AMERICA OPERATIONSA description of our operations in South
America is under the headings Our Retail
Business, and South America Wholesale Results on
pages 23 to 28, and pages 42 to 43,
respectively of the 2005 Managements Discussion & Analysis, which is incorporated by reference
herein.
 5.2
    
    RISK FACTORS
  Industry and Product Price VolatilityAgriums operating results will be highly dependent upon conditions in the agricultural
industry, which Agrium cannot control. The agricultural industry can be affected by a number of
factors, the most important of which, for North American markets, are weather patterns and field
conditions (particularly during periods of traditionally high fertilizer consumption),
quantities of fertilizer imported to and exported from North America and current and projected
grain inventories and prices. Canadian and U.S. governmental policies may directly or indirectly
influence the number of acres planted, the level of grain inventories, the mix of crops planted
or crop prices.International market conditions, which are outside of Agriums control, may also significantly
influence Agriums operating results. The international market for fertilizer is influenced by
such factors as the relative value of the U.S. dollar and its impact upon the cost of importing
crop nutrients, foreign agricultural policies, the existence of, or changes in, import or
foreign currency exchange barriers in certain foreign markets and other regulatory policies of
foreign governments, as well as the laws and policies of the U.S., Canada and Argentina
affecting foreign trade and investment. In addition, since crop nutrients are used for
industrial applications, industrial markets and the general economy affect crop nutrients demand
and prices.Due to reduced demand and depressed agricultural industry conditions, Agrium has at various
times suspended production at some of its facilities. If industry oversupply conditions exist,
the price at which Agrium sells its products could decline, which could have an adverse effect
on its business, financial condition and results of operations. The extent to which Agrium
utilizes available capacity at its facilities will cause fluctuations in its results of
operations, as Agrium will incur costs for any temporary or permanent shutdowns of its
facilities.Historically, prices for nitrogen-based fertilizers and phosphate have reflected frequent
changes in supply and demand. As a result, prices for these fertilizer products have been
volatile. To a lesser degree, there is also volatility in the price of potash. The price at
which Agrium sells its products could fall or fluctuate unpredictably in the event of changes in
industry supply and demand conditions. This price volatility may cause Agriums results of
operations to fluctuate and potentially deteriorate.Natural Gas Supply and CostNatural gas is the principal raw material used to produce nitrogen-based fertilizers. In 2005,
natural gas accounted for approximately 86 percent of the cash cost of producing ammonia, the
building block of all nitrogen-based fertilizer. From time to time, a significant rise in the
cost of natural gas, a major component of production costs, has negatively impacted Agriums
gross profits. There can be no assurance that increased manufacturing costs resulting from
increased natural gas costs can be recovered in sale price increases to Agriums customers.
While Agrium financially hedges some portion of its gas supply to reduce risk and volatility, a
significant increase in the cost of natural gas that is not hedged and could not be recovered
through an increase in nitrogen-based fertilizer prices could have a material adverse effect on
Agrium. An extended
  - 13 -




---



##### 



interruption in supply of natural gas to Agriums production facilities could have a material
adverse effect on Agriums business, financial condition or results of operations.In 2004 Agrium settled its dispute with Unocal over gas supply issues for Agriums Kenai, Alaska
facility. The settlement established a definitive gas supply obligation from Unocal to the
Alaskan facility up until October 31, 2005. Agrium has since negotiated with Cook Inlet
producers to supply gas to the facility until October 31, 2006.WeatherWeather conditions have a significant impact on the farm economy and, consequently, on our
operating results. Weather conditions affect the demand for products, which, in turn, has an
impact on our prices. For example, weather patterns such as flood, drought or frost can cause
crop failures that in turn affect the supply of feed and seed and the demand for fertilizer,
marketing of grain products, as well as the demand for crop protectants, seeds and other
agronomic supplies.SeasonalityThe agricultural products business is seasonal and is based upon the planting, growing and
harvesting cycles. Fertilizer inventories must be accumulated in the months prior to the spring
and fall planting seasons, requiring significant storage capacity. Key input costs such as
natural gas may fluctuate significantly between the time the product is manufactured and the
time it is sold. Inventory accumulations may, at times, be financed by short-term borrowings,
which are retired with the proceeds of the sales of such inventory.International OperationsFor the year ended December 31, 2005, Agrium derived approximately 18 percent of its net sales
from customers outside North America. As a result, Agrium is subject to numerous risks and
uncertainties relating to international sales and operations, including:
 
    
    Difficulties and costs associated with complying with a wide variety of complex
laws, treaties and regulations;
    
    Unexpected changes in regulatory environments;
    
    The regulation of the economy in the markets Agrium serves;
    
    Political and economic instability, including the possibility for civil unrest;
    
    Earnings that may be subject to withholding requirements;
    
    Imposition of tariffs, exchange controls or other restrictions; and,
    
    The impact of currency exchange rate fluctuations between the U.S. dollar and other
currencies, particularly the Canadian dollar and the Argentine peso.
 The occurrence of any of the events above in the markets where Agrium operates, particularly in
Argentina, could jeopardize or limit Agriums ability to transact business in those markets and
could adversely affect Agriums revenues and operating results.CompetitionThe market for Agriums nitrogen, phosphate and potash fertilizers and other crop production
inputs is highly competitive. Agriums competitors include other large integrated fertilizer
producers, cooperatives, regional distributors and independent dealers.Nitrogen-based fertilizer is a global commodity and customers base their purchasing decisions
principally on the delivered price and availability of the product. The relative cost of, and
availability of transportation for, raw materials and finished products to manufacturing
facilities are also important competitive factors. Agrium competes with a number of producers
outside of North America including state-owned and government-subsidized entities with access to
greater resources than Agrium. Some of these entities may have access to lower cost or
government-subsidized natural gas supplies, placing Agrium at a competitive disadvantage.
Competition in the phosphate and potash fertilizer market is based largely on price, reliability
and deliverability. The relative cost and availability of mines and the efficiency of production
facilities are also important competitive factors. Domestic competitors for phosphate and potash
include a number of large producers. In addition, the production and trade of phosphate and
potash have become increasingly global and a number of foreign competitors produce phosphate and
potash primarily for the export market. Competition in the retail market is based largely on
price and service.
  - 14 -




---



##### 



Any inability to compete with our competitors may harm our business by lowering our sales and
profits.LegislationThe production, storage, distribution and sale of fertilizers and other agricultural inputs is
heavily regulated. The purpose of this legislation is to protect human health and the
environment. These include design, construction and operations limits as well as air emissions,
water discharges and waste management regulation enforced through site-specific permit and
license requirements at our mining, manufacturing, terminal and retail locations. Strict rules
apply to each mode of transportation (rail, barge and truck) and pertain to vehicle design,
maintenance, inspection, repair and operation. And products must be appropriately packaged,
labeled and registered for use in accordance with each specific jurisdiction in which it is
sold. Overlaying these infrastructure requirements and operational limits, and applicable to
all aspects of our business, are worker protection and security regulations, emergency response
programs and mitigation of contaminated sites. Agrium expends considerable resources in
capital, operating and staffing costs ensuring that these legislative requirements are met.While the cost of adherence to existing legislative requirements is an accepted and largely
beneficial aspect of the business, changes in legislation or the interpretation of existing
legislation can have significant and unintended consequences on the business. For example,
Canada has ratified the Kyoto Protocol and is working on its implementation, including the
compliance framework and targets for large final emitters (LFEs) in the industrial sector. A
number of Agriums Canadian facilities have been identified as LFEs and will be subject to
regulated reductions in greenhouse gas (GHG) emissions in the
2008-2012 timeframe. Given the
energy intensive nature of fertilizer production, nitrogen production in particular, this
creates a risk of additional regulatory burden and compliance costs. Further, in a globally
competitive fertilizer industry there is a risk of an unequal playing field emerging providing a
competitive advantage for nitrogen producers who are not subject to equivalent compliance
measures.Agrium is in the process of cleaning up historic contamination at various properties, including
mining operations of predecessor companies, and also reclaiming certain retired properties. An
environmental remediation liability in the amount of approximately $108-million as of December
31, 2005 has been recorded to provide for estimated remedial costs and an asset retirement
obligation in the amount of approximately $60-million as of December 31, 2005 has been recorded
to provide for estimated costs relating to asset retirement activities. Agrium believes that it
has undertaken and continues to pursue all investigative remedial and reclamation actions at
these sites and records appropriate environmental remediation liabilities and asset retirement
obligations in its consolidated balance sheet. However, there can be no assurance that material
costs or liabilities in excess of the liabilities or obligations will not be incurred in
connection with such cleanup or asset retirement activities or related proceedings, claims,
compliance requests in the future for currently unknown environmental remediation liabilities or
asset retirement obligations.Pesticide
Restrictions 
During fiscal 2003, our industry witnessed continued lobbying efforts by activists to regulate
and reduce the use of pesticides. Many municipalities have reviewed the cosmetic and essential
use of these products as part of their civic agenda. Most support the industry initiative to
ensure that homeowners have the information, education and tools they need to use these
beneficial products safely and responsibly. In March 2003, the Province of Quebec passed a
regulation that will significantly impact the sales mix of these products over the next five
years. On April 1, 2004, Torontos Pesticide By-law came into effect and restricts the outdoor
use of pesticides on public and private property and applies to anyone who uses pesticides
outdoors, including homeowners, renters, lawn care companies, golf courses and property
managers.Permits 
Agrium holds numerous governmental environmental, mining and other permits and approvals
authorizing operations at each of their facilities. A decision by a government agency to deny or
delay issuing a new or renewed permit or approval, or to revoke or substantially modify an
existing permit or approval, could have a material adverse effect on Agriums ability to
continue operations at the affected facility.Trade Regulation 
Agrium is subject to the trade laws and policies of the U.S. and other countries in which it
sells its products, including anti-dumping regulations. There have been a number of anti-dumping
proceedings in the U.S. and Mexico to which various importers of fertilizer products, including
Agrium, have been subject. None of the
  - 15 -




---



##### 



proceedings has resulted in an adverse determination against Agrium. While Agrium believes that
its products are sold at fair prices, there can be no assurance that it will not be the subject
of anti-dumping or other trade regulation proceedings in the future. If Agrium is named in any
such proceedings, any adverse determination could have an adverse effect on its results of
operations.
 Damage to Facilities; Natural
Hazards 
Agriums business is generally subject to a number of risks and hazards, including environmental
hazards, industrial accidents, labor disputes, unusual or unexpected weather conditions, changes
in the regulatory environment and natural phenomena such as floods and earthquakes. Such
occurrences could result in significant interruption of operations, damage to, or destruction of
production facilities, personal injury or death, environmental damage, delays in production,
monetary losses and possible legal liability. Agrium maintains insurance against risks that are
typical in the industry (including business and interruption insurance), but such insurance may
not provide adequate coverage in certain unforeseen circumstances. However, insurance against
certain risks (including certain liabilities for environmental pollution, earthquakes and
terrorist acts) is not generally available to companies within the industry and, if available,
may not be available at acceptable premiums. Although Agrium maintains liability insurance in an
amount which it considers adequate, liabilities might exceed policy limits or Agrium might elect
not to insure itself against such liabilities due to high premium costs or other reasons, in
which event Agrium could incur significant costs that could have a material adverse effect upon
results of operations.
 ITEM 6  DIVIDENDS
   Dividends per Share Paid or PayableCommon Shares2003
    
    $0.112004
    
    $0.112005
    
    $0.11
 ITEM 7  DESCRIPTION OF CAPITAL STRUCTURE
 7.1 GENERAL DESCRIPTION OF CAPITAL STRUCTURE
  7.2 CONSTRAINTS
   - 16 -




---



##### 



7.3 RATINGS
     Dominion Bond Rating
    
    Moody's Investor Service
    
    Standard & Poor'sServiceSenior Unsecured Notes andDebentures
    
    BBB
    
    Baa2
    
    BBBRatings Outlook
    
    Stable
    
    Stable
    
    Stable
  Dominion Bond Rating Service (DBRS)
   Moodys Investor Services (Moodys)
   Standard & Poors (S&P)
     - 17 -




---



##### 





ITEM 8
 MARKET FOR SECURITIES


8.1 TRADING PRICE AND VOLUME






Month
    
    High Price
    
    Low Price
    
    Closing Price
    
    Volume(2005)
    
    ($Canadian)
    
    ($Canadian)
    
    ($Canadian)
    
    (in 000s)January
    
    20.55
    
    17.75
    
    20.16
    
    12,471February
    
    22.36
    
    18.89
    
    22.21
    
    13,915March
    
    23.05
    
    20.48
    
    22.17
    
    12,039April
    
    23.48
    
    20.37
    
    22.50
    
    6,950May
    
    24.42
    
    21.90
    
    23.40
    
    10,391June
    
    26.71
    
    23.45
    
    23.94
    
    20,705July
    
    29.00
    
    24.11
    
    28.00
    
    10,474August
    
    32.66
    
    24.79
    
    25.60
    
    9,836September
    
    27.28
    
    23.62
    
    25.58
    
    12,765October
    
    26.12
    
    22.39
    
    24.93
    
    8,054November
    
    25.54
    
    23.50
    
    23.76
    
    8,275December
    
    26.19
    
    22.84
    
    25.62
    
    5,686




Month
    
    High Price
    
    Low Price
    
    Closing Price
    
    Volume(2005)
    
    ($U.S.)
    
    ($U.S.)
    
    ($U.S.)
    
    (in 000s)January
    
    17.00
    
    14.36
    
    16.14
    
    17,604February
    
    18.10
    
    15.10
    
    18.10
    
    14,413March
    
    18.99
    
    17.04
    
    18.25
    
    13,964April
    
    18.44
    
    16.33
    
    17.80
    
    9,252May
    
    19.70
    
    17.43
    
    18.89
    
    12,029June
    
    21.50
    
    18.87
    
    19.61
    
    12,730July
    
    23.48
    
    19.60
    
    22.87
    
    8,797August
    
    24.53
    
    20.79
    
    21.50
    
    11,978September
    
    22.99
    
    20.19
    
    21.97
    
    11,890October
    
    22.27
    
    19.14
    
    21.21
    
    8,918November
    
    21.59
    
    20.00
    
    20.41
    
    8,142December
    
    22.60
    
    20.16
    
    21.99
    
    7,885




Month
    
    High Price
    
    Low Price
    
    Closing Price
    
    Volume(2005)
    
    ($U.S.)
    
    ($U.S.)
    
    ($U.S.)
    
    (in 000s)January
    
    25.99
    
    25.14
    
    25.21
    
    295February
    
    25.30
    
    25.21
    
    25.22
    
    131


- 18 -




---



##### 



8.2  PRIOR SALES
  ITEM 9  ESCROWED SECURITIES
  ITEM 10  DIRECTORS AND OFFICERS
 10.1  NAME, OCCUPATION AND SECURITY HOLDING
  Year first becameName and
    
    
    Director of theMunicipality of Residence
    
    
    Corporation
    
    Present principal occupation or employmentFrank W. Proto (1)(4)
Regina, Saskatchewan
    
    
    1993
    
    
    Corporate Director. Board Chair of Agrium Inc.Neil Carragher (1)(3)
Toronto, Ontario
    
    
    1996
    
    
    Corporate Director. President, The Corporate
Partnership Ltd. (a mergers and acquisitions
company)Ralph S. Cunningham (1)(2)
Houston, Texas
    
    
    1996
    
    
    Director and Group Executive Vice President
and Chief Operating Officer of Enterprise
Products G.P., L.L.C., the General Partner of
Enterprise Products Partners L.P.D. Grant Devine (3)(4)
Caronport, Saskatchewan
    
    
    1993
    
    
    Corporate Director. Farmer and rancher.
President, Grant Devine Farms and Consulting
Services Ltd.Germaine Gibara (2)(3)
Montreal, Quebec
    
    
    2004
    
    
    Corporate Director. President, Avvio
Management Inc.Susan A. Henry (2)(4)
Ithaca, New York
    
    
    2001
    
    
    Ronald P. Lynch Dean of the College of
Agriculture and Life Sciences and Professor at
Cornell University, Ithaca, New YorkRussell J. Horner (2)(4)
Vancouver, British Columbia
    
    
    2004
    
    
    President & Chief Executive
Officer, Catalyst PaperCorporation (formerly Norske Skog Canada
Limited)Frank W. King (3)(4)
Calgary, Alberta
    
    
    1996
    
    
    Corporate Director. President & Chief
Executive Officer, Metropolitan Investment
Corporation (a private venture capital and
management company)Harry G. Schaefer, FCA(1)(3)
Calgary, Alberta
    
    
    1998
    
    
    Corporate Director and Business AdvisorMichael M. Wilson
Bragg Creek, Alberta
    
    
    2003
    
    
    President & Chief Executive Officer of Agrium
Inc.
 -19-




---



##### 



Year first becameName and
    
    
    Director of theMunicipality of Residence
    
    
    Corporation
    
    Present principal occupation or employmentVictor J. Zaleschuk, CA (1) (2)
Calgary, Alberta
    
    
    2002
    
    
    Corporate Director
 (1)
    
    Member of the Audit Committee.(2)
    
    Member of the Human Resources & Compensation Committee.(3)
    
    Member of Corporate Governance & Nominating Committee.(4)
    
    Member of the Environment, Health & Safety Committee.
  Executive Officers
 Name and Municipality
    
    Position with the Corporationof Residence
    
    And Principal OccupationFrank W. Proto
Regina, Saskatchewan
    
    Board ChairMichael M. Wilson
Bragg Creek, Alberta
    
    President & Chief Executive OfficerStephen G. Dyer
Calgary, Alberta
    
    Vice President, ManufacturingPatrick J. Freeman
Calgary, Alberta
    
    Vice President & TreasurerRichard L. Gearheard
Centennial, Colorado
    
    Senior Vice President, RetailJames M. Grossett
Bragg Creek, Alberta
    
    Senior Vice President, Human ResourcesKevin R. Helash
High River, Alberta
    
    Vice President, Marketing & DistributionAngela S. Lekatsas
Calgary, Alberta
    
    Vice President & Corporate ControllerAndrew K. Mittag
Calgary, Alberta
    
    Senior Vice President, Corporate Development &
StrategyLeslie A. ODonoghue
Calgary, Alberta
    
    Senior Vice President, General Counsel & Corporate
SecretaryChristopher W. Tworek
Calgary, Alberta
    
    Vice President, Supply ManagementBruce G. Waterman
Calgary, Alberta
    
    Senior Vice President, Finance & Chief Financial
Officer
 -20-




---



##### 



Name and Municipality
    
    Position with the Corporationof Residence
    
    And Principal OccupationRon A. Wilkinson
Calgary, Alberta
    
    Senior Vice President, Wholesale
   10.2  CEASE TRADE ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS
  
    
    Was the subject of a cease trade order or similar order or an order that denied
the relevant company access to any exemption under securities legislation for a period
of more than 30 consecutive days;
    
    Was subject to an event that resulted, after the director or executive officer
ceased to be a director or executive officer, in the company being the subject of a
cease trade order or similar order or an order that denied the relevant company access
to any exemption under securities legislation, for a period of more than 30 consecutive
days;
    
    Or within a year of that person ceasing to act in that capacity, became
bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or
was the subject to or instituted any proceedings, arrangement or compromise with
creditors or had a receiver, receiver manager or trustee appointed to hold its assets;
and,
    
    Has individually, within the 10 years prior to February 22, 2006, become
bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency,
or become subject to or instituted any proceedings, arrangement or compromise with
creditors, or had a receiver, receiver manager or trustee appointed to hold the assets
of the director, officer or shareholder.
  
 -21-




---



##### 



10.3  CONFLICTS OF INTEREST
  ITEM 11  PROMOTERS
  ITEM 12  LEGAL PROCEEDINGS
   ITEM 13  INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
  ITEM 14  TRANSFER AGENT, REGISTRAR, AND TRUSTEES
  inquiries@cibcmellon.com  www.cibcmellon.com
 
 -22-




---



##### 



ITEM 15  EXPERTS
 15.1  NAMES OF EXPERTS
  15.2  INTERESTS OF EXPERTS
  ITEM 16  AUDIT COMMITTEE
 16.1  AUDIT COMMITTEE CHARTER
  16.2  COMPOSITION OF THE AUDIT COMMITTEE
  16.3  RELEVANT EDUCATION AND EXPERIENCE OF MEMBERS OF THE AUDIT COMMITTEE
 Name(Director Since)
    
    Principal Occupation and Full Biography
  Mr. Harry G. Schaefer, FCA
 Other Public Directorships
 
    
    Vice Chair and a director of each of TransCanada Pipelines
Limited, an energy transportation company (TSX, NYSE, LSE), and of TransCanada
Corporation, a diversified energy and pipeline company, (TSX,NYSE)
    
    a Trustee of Fording Canadian Coal Trust, a coal mining trust (TSX,
NYSE)
 
   
 -23-




---



##### 



Name(Director Since)
    
    Principal Occupation and Full Biography
  Mr. Neil Carragher, M.Sc.
 Other Public Directorships
 
    
    The Westaim Corporation, a technology company, (TSX, NASDAQ)
    
    NUCRYST Pharmaceuticals Corp., a pharmaceutical technology company
(TSX, NASDAQ)
 
   
  Dr. Ralph S. Cunningham, Ph.D. (Engineering)
 Other Public Directorships
 
    
    EnCana Corporation, an energy company (TSX, NYSE)
    
    Enterprise Products Partners L.P., a midstream energy partnership (NYSE)
    
    TETRA Technologies, Inc., an oil and gas services company (NYSE)
 
   
  Mr. Frank W. Proto, B.A. (Economics)
 Other Public Directorships
 
   
  Mr. Victor J. Zaleschuk, C.A
 Other Public Directorships
 
    
    Nexen Inc., an energy company (TSX, NYSE)
    
    Board Chair and a director of Cameco Corporation, a uranium
company (TSX, NYSE)
 
   
 -24-




---



##### 



16.4  PRE-APPROVAL POLICIES AND PROCEDURES
  16.5  EXTERNAL AUDITOR SERVICE FEES (BY CATEGORY)
  Category
    
    
    
    
    
    
    Year Ended December 31,2004
    
    
    2005Audit Fees(1)
    
    
    
    
    
    $
    678,000
    
    
    $
    777,000Audit-Related Fees(2)
    
    
    
    
    
    
    47,000
    
    
    
    63,000Tax Fees(3)
    
    
    
    
    
    
    206,000
    
    
    
    277,500All Other Fees(4)
    
    
    
    
    
    
    3,000
    
    
    
    56,000Total
    
    
    
    
    
    $
    934,000
    
    
    $
    1,173,500
 (1)
    
    For professional services rendered by KPMG LLP for the audit and review of our financial
statements or services that are normally provided by KPMG LLP in connection with statutory and
regulatory filings or engagements.
 (2)
    
    For assurance and related services by KPMG LLP that are reasonably related to the performance
of the audit or review of our financial statements and are not reported under Audit Fees
above, including audits of the combined financial statements of subsidiaries; consultations
concerning financial accounting and reporting standards; and compliance reports relating to
contractual debt arrangements.
 (3)
    
    For professional services rendered by KPMG LLP for tax compliance, tax advice and tax
planning, including advice relating to the accounts receivable securitization program;
expatriate tax planning services; compliance services relating to exportation tax filings;
review and preparation of tax filings; tax advice relating to potential asset and business
acquisitions/combinations; and other tax planning and compliance services.
 (4)
    
    For services provided by KPMG LLP other than the services reported under Audit Fees,
Audit-Related Fees and Tax Fees above, consisting of miscellaneous corporate reporting and
compliance services.
 ITEM 17  ADDITIONAL INFORMATION
   (a)
    
    When securities of the Corporation are in the course of a distribution pursuant to a short
form prospectus or a preliminary short form prospectus has been filed and respecting a
distribution of its securities;
 (i)
    
    one copy of this annual information form, together with one copy of any document, or
the pertinent pages of any document, incorporated by reference herein;(ii)
    
    one copy of the consolidated financial statements of the Corporation for its most
recently completed financial year, together with the accompanying report of its auditor,
and one copy of any interim financial statements of the Corporation subsequent to the
financial statements for its most recently completed financial year;
 
 -25-




---



##### 



(iii)
    
    one copy of the management proxy circular of the Corporation with respect to its
most recent annual meeting of shareholders that involved the election of directors; and(iv)
    
    one copy of any documents that are incorporated by reference into the preliminary
short form prospectus or the short form prospectus and are not required to be provided
under items (i) to (iii) above; or
 (b)
    
    At any time, one copy of any other documents referred to in items (a) (i), (ii) and (iii)
above.
 www.agrium.com www.sedar.com www.sec.gov
  
 -26-




---



##### 



SCHEDULE 16.1 AGRIUM INC. AUDIT COMMITTEE CHARTER PART I Establishment of Committee  1.
    CommitteeThe Audit Committee (the Committee) is established by the Board of Directors primarily for
the purpose of overseeing the accounting and financial reporting processes of the
Corporation and the reviews and audits of the financial statements of the Corporation.The Audit Committee shall assist the Board of Directors in fulfilling the Boards oversight
responsibilities by monitoring, among other things:  (a)
    the quality and integrity of the financial statements and related disclosure of
the Corporation;(b)
    compliance by the Corporation with legal and regulatory requirements that could
have a material effect upon the financial position of the Corporation and that are not
subject to the oversight of another committee of the Board;(c)
    the independent auditors qualifications and independence; and(d)
    the performance of the Corporations internal audit function and independent
auditor.  2.
    Composition of CommitteeThe Committee shall consist of as many members as the Board shall determine, but in any
event not fewer than three directors, provided that each member of the Committee shall be
determined by the Board to be:  (a)
    an independent director for the purposes of and pursuant to the Corporations
Corporate Governance Guidelines;(b)
    an unrelated and independent director as defined in and for the purposes of
any applicable governance guidelines or listing standards of any stock or securities
exchange upon which the securities of the Corporation are from time to time listed;(c)
    an independent director for the purposes of any applicable corporate,
securities or other legislation or any rule, regulation, instrument, policy, guideline
or interpretation under such legislation; and(d)
    financially literate.  At least one member of the Committee shall have accounting or related financial management
experience or expertise. The Committee shall be entitled to take any action at a meeting of
the Committee in the absence of such member or members.No member of the Committee shall serve on the audit committees of more than two other public
companies, unless the Board determines that such simultaneous service would not impair the
ability of such




---



##### 



member to effectively serve on the Corporations Audit Committee and discloses such
determination in the Corporations annual management proxy circular.  3.
    Appointment of Committee MembersThe members of the Committee shall be appointed by the Board on the recommendation of the
Corporate Governance & Nominating Committee. The members of the Committee shall be
appointed at the time of each annual meeting of Shareholders, and shall hold office until
the next annual meeting, or until they are removed by the Board or until they cease to be
directors of the Corporation. PART II Committee Procedure  4.
    VacanciesWhere a vacancy occurs at any time in the membership of the Committee, it may be filled by
the Board on the recommendation of the Corporate Governance & Nominating Committee and shall
be filled by the Board if the membership of the Committee is fewer than three directors.
The Board may remove and replace any member of the Committee.5.
    Committee ChairThe Board shall appoint a Chair for the Committee. The Chair may be removed and replaced by
the Board.6.
    Absence of ChairIf the Chair is not present at any meeting of the Committee, one of the other members of the
Committee present at the meeting shall be chosen by the Committee to preside at the meeting.7.
    Secretary of CommitteeThe Committee shall appoint a Secretary who need not be a director of the Corporation.8.
    Regular MeetingsThe Chair, in consultation with the Committee members, shall determine the schedule and
frequency of the Committee meetings, provided that the Committee shall meet at least
quarterly. The Committee at any time may, and at each regularly scheduled Committee meeting
shall, meet without management present and shall meet periodically with management, the
Manager, Internal Audit and the independent auditor. The Committee shall also meet
separately with the independent auditor at every regularly scheduled meeting of the
Committee at which the independent auditor is present.9.
    Special MeetingsThe Chair, any two members of the Committee, the Manager, Internal Audit, the independent
auditor or the Chief Executive Officer may call a special meeting of the Committee.10.
    QuorumThree members of the Committee, present in person or by telephone or other telecommunication
device that permits all persons participating in the meeting to speak to each other, shall
constitute a quorum.




---



##### 



11.
    Notice of MeetingsNotice of the time and place of every meeting shall be given in writing or by e-mail or
facsimile communication to each member of the Committee at least 24 hours prior to the time
fixed for such meeting; provided, however, that a member may in any manner waive notice of a
meeting and attendance of a member at a meeting is a waiver of notice of the meeting, except
where a member attends a meeting for the express purpose of objecting to the transaction of
any business on the grounds that the meeting is not lawfully called.12.
    AgendaThe Chair shall develop and set the Committees agenda, in consultation with other members
of the Committee, the Board and management. The agenda and information concerning the
business to be conducted at each Committee meeting shall, to the extent practical, be
communicated to the members of the Committee sufficiently in advance of each meeting to
permit meaningful review.13.
    DelegationThe Committee shall have the power to delegate its authority and duties to subcommittees or
individual members of the Committee as it deems appropriate.14.
    AccessIn discharging its responsibilities, the Committee shall have full access to all books,
records, facilities and personnel of the Corporation.15.
    Attendance of Officers at a MeetingAt the invitation of the Chair of the Committee, one or more officers or employees of the
Corporation may, and if required by the Committee shall, attend a meeting of the Committee.16.
    Procedure, Records and ReportingThe Committee shall fix its own procedure at meetings, keep records of its proceedings and
report to the Board when the Committee may deem appropriate (but not later than the next
meeting of the Board). Without limiting the foregoing, the Committee shall report to the
Board any issues that arise with respect to the quality or integrity of the Corporations
financial statements, the Corporations compliance with legal or regulatory requirements
within the Committees purview, the performance and independence of the Corporations
independent auditors, or the performance of the internal audit function.17.
    Outside Consultants or AdvisorsThe Committee when it considers it necessary or advisable, may retain, at the Corporations
expense, outside consultants or advisors to assist or advise the Committee independently on
any matter within its mandate. The Committee shall have the sole authority to retain or
terminate such consultants or advisors, including the sole authority to approve the fees and
other retention terms for such persons. PART III Mandate of Committee  18.
    Oversight in Respect of Financial Disclosure and Accounting PracticesThe Committee, to the extent required by applicable laws or rules, or otherwise considered
by the Committee to be necessary or appropriate, shall:




---



##### 



(a)
    meet with management and the independent auditor to review and discuss, and to
recommend to the Board for approval prior to public disclosure, the audited annual
financial statements, including reviewing the specific disclosures in managements
discussion and analysis of financial condition and results of operations;(b)
    review, discuss with management and the independent auditor, and recommend to
the Board for approval prior to public disclosure:  (i)
    the annual information form;(ii)
    the portions of the management proxy circular, for any annual
or special meeting of shareholders, containing significant information within
the Committees mandate;(iii)
    all financial statements included in prospectuses or other
offering documents;(iv)
    all prospectuses and all documents which may be incorporated by
reference in a prospectus, other than any pricing supplement issued pursuant to
a shelf prospectus; and(v)
    any significant financial information respecting the
Corporation contained in a material change report.  (c)
    meet with management and the independent auditor to review and discuss, and to
approve prior to public disclosure, the unaudited quarterly financial statements,
including reviewing the specific disclosures in managements discussion and analysis of
financial condition and results of operations, and the quarterly interim reports;(d)
    review, discuss with management and the independent auditor, and approve prior
to public disclosure:  (i)
    any unaudited interim financial statements, other than
quarterly statements; and(ii)
    any audited financial statements, other than annual statements,
required to be prepared regarding the Corporation or its subsidiaries or
benefit plans if required to be made publicly available or filed with a
regulatory agency;  (e)
    review and discuss with management and the independent auditor prior to public
disclosure:  (i)
    each press release that contains significant financial
information respecting the Corporation or contains estimates or information
regarding the Corporations future financial performance or prospects;(ii)
    the type and presentation of information to be included in such
press releases (in particular, the use of pro forma or adjusted non-GAAP
information); and(iii)
    financial information and earnings guidance provided to
analysts and rating agencies;  provided, however, that such discussion may be done generally (consisting of
discussing the types of information to be disclosed and the types of presentations
to be made) and that the Committee need not discuss in advance each instance in
which the Corporation may provide earnings guidance or presentations to rating
agencies;(f)
    receive and review reports from the Corporations Disclosure Committee;(g)
    review with management and the independent auditor major issues regarding
accounting principles and financial statement presentations, including any significant
changes in the




---



##### 



Corporations selection or application of accounting principles, and major issues as
to the adequacy of the Corporations internal controls and any special audit steps
adopted in light of material control deficiencies;(h)
    based on its review with management and the independent auditor, satisfy itself
as to the adequacy of the Corporations procedures that are in place for the review of
the Corporations public disclosure of financial information that is extracted or
derived from the Corporations financial statements, and periodically assess the
adequacy of those procedures;(i)
    review with management and the independent auditor (including those of the
following that are contained in any report of the independent auditor): (1) any
analyses prepared by management or the independent auditor setting forth significant
financial reporting issues and judgments made in connection with the preparation of the
financial statements, including analyses of the effects of alternative GAAP methods on
the financial statements; (2) all critical accounting policies and practices to be used
by the Corporation in preparing its financial statements, (3) all material alternative
treatments of financial information within GAAP that have been discussed with
management, ramifications of the use of these alternative treatments, and the treatment
preferred by the independent auditor, and (4) other material communications between the
independent auditor and management, such as any management letter or schedule of
unadjusted differences;(j)
    review with management and the independent auditor the effect of regulatory and
accounting initiatives as well as off-balance sheet structures and transactions on the
Corporations financial statements;(k)
    review the plans of management, the independent auditor and the Manager,
Internal Audit regarding any significant changes in accounting practices or policies
and the financial and accounting impact thereof;(l)
    review with management, the independent auditor and, if necessary, legal
counsel, any litigation, claim or contingency, including tax assessments, that could
have a material effect upon the financial position of the Corporation, and the manner
in which these matters have been disclosed in the financial statements;(m)
    review disclosures by the Corporations Chief Executive Officer and Chief
Financial Officer during their certification process about any significant deficiencies
in the design or operation of internal controls or material weaknesses therein and any
fraud involving management or other employees who have a significant role in the
Corporations internal controls;(n)
    discuss with management the Corporations material financial risk exposures and
the steps management has taken to monitor and control such exposures, including the
Corporations financial risk assessment and financial risk management policies; and(o)
    periodically meet with management separately from the Manager, Internal Audit,
or the independent auditor to discuss matters within the Committees purview.  19.
    Oversight in Respect of the Independent AuditorSubject to confirmation by the independent auditor of its compliance with Canadian and U.S.
regulatory registration requirements, the Committee shall be directly responsible (subject
to Board confirmation) for the appointment of the independent auditor for the purpose of
preparing or issuing any audit report or performing other audit, review or attest services
for the Corporation, such appointment to be confirmed by the Corporations shareholders at
each annual meeting. The Committee shall also be directly responsible (subject to Board
confirmation) for the approval of fees to be paid to the independent auditor for audit
services, and shall pre-approve the retention of the independent auditor for any permitted
non-audit service. The Committee shall also be directly responsible for the retention and
oversight of the services of the




---



##### 



independent auditor (including resolution of disagreements between management and the
independent auditor regarding financial reporting) for the purpose of preparing or issuing
an audit report or performing other audit, review or attest services for the Corporation.
The independent auditor shall report directly to the Committee.The Committee, to the extent required by applicable laws or rules, or otherwise considered
by the Committee to be necessary or appropriate, shall:  (a)
    review at least annually the independence of the independent auditor,
including the independent auditors formal written statement of independence
delineating all relationships between itself and the Corporation, review all such
relationships, and consider applicable auditor independence standards;(b)
    consider whether, in order to assure continuing auditor independence, there
should be regular rotation of the auditing firm itself;(c)
    ensure the rotation of the lead (or coordinating) audit partner having primary
responsibility for the audit and the audit partner responsible for reviewing the audit
as required by law;(d)
    review at least annually the independent auditors written report on its own
internal quality control procedures; any material issues raised by the most recent
internal quality control review, or peer review, of the independent auditor, or by any
inquiry or investigation by governmental or professional authorities, within the
preceding five years respecting one or more independent audits carried out by the
independent auditor, and any steps taken to deal with such issues;(e)
    review and evaluate the experience, qualifications and performance of the
senior members of the audit team of the independent auditor;(f)
    evaluate annually the performance of the independent auditor, including the
lead partner, taking into account the opinions of management and the Manager, Internal
Audit, and report to the Board on its conclusions regarding the independent auditor and
its recommendation for appointment of the independent auditor for the purpose of
preparing or issuing any report or performing other audit, review, or attest services
for the Corporation;(g)
    meet with the independent auditor prior to the annual audit to review the
planning and staffing of the audit;(h)
    review with the independent auditor the adequacy and appropriateness of the
accounting policies used in preparation of the financial statements;(i)
    periodically meet separately with the independent auditor to review any
problems or difficulties that the independent auditor may have encountered and
managements response, specifically:  (i)
    any difficulties encountered in the course of the audit work,
including any restrictions on the scope of activities or access to requested
information, and any significant disagreements with management; and(ii)
    any changes required in the planned scope of the audit; and(iii)
    the responsibilities, budget, and staffing of the internal
audit function;  and report to the Board on such meetings;(j)
    when applicable, review the annual post-audit or management letter from the
independent auditor and managements response and follow-up in respect of any
identified weakness;




---



##### 



(k)
    inquire regularly of management and the independent auditor whether there have
been any significant issues between them regarding financial reporting or other matters
and how they have been resolved, and intervene in the resolution if required;(l)
    receive and review annually the independent auditors report on managements
evaluation of internal controls and procedures for financial reporting;(m)
    review the engagement reports of the independent auditor on unaudited financial
statements of the Corporation; and(n)
    review and approve the Corporations hiring policies regarding partners and
employees and former partners and employees of the present and former independent
auditor, (as more particularly described in Exhibit A attached hereto, as may be
amended from time to time), including those policies that may have a material impact on
the financial statements, pre-approve the hiring of any partner or employee or former
partner or employee of the independent auditor who was a member of the Corporations
audit team during the preceding three fiscal years and, in addition, pre-approve the
hiring of any partner or employee or former partner or employee of the independent
auditor (within the preceding three fiscal years) for senior positions within the
Corporation, regardless whether that person was a member of the Corporations audit
team.  20.
    Oversight in Respect of Audit and Non-Audit ServicesThe Committee, to the extent required by applicable laws or rules, or otherwise considered
by the Committee to be necessary or appropriate, shall:  (a)
    have the sole authority to pre-approve all audit services (which may entail
providing comfort letters in connection with securities underwritings) and all
permitted non-audit services, provided that the Committee need not approve in advance
non-audit services where:  (i)
    the aggregate amount of all such non-audit services provided to
the Corporation constitutes not more than 5% of the total amount of revenues
paid by the Corporation to the independent auditor during the fiscal year in
which the non-audit services are provided; and(ii)
    such services were not recognized by the Corporation at the
time of the engagement to be non-audit services; and(iii)
    such services are promptly brought to the attention of the
Committee and approved prior to the completion of the audit by the Committee or
by one or more members of the Committee to whom authority to grant such
approvals has been delegated by the Committee;  (b)
    disclose, through the Corporations periodic reports filed with applicable
regulatory agencies, the approval by the Committee of a non-audit service to be
performed by the independent auditor; and(c)
    if the Committee so chooses, delegate to one or more designated members of the
Committee the authority to grant pre-approvals required by this section, provided that
the decision of any member to whom authority is delegated to pre-approve a service
shall be presented to the Committee at its next scheduled meeting.  If the Committee approves an audit service within the scope of the engagement of the
independent auditor, such audit service shall be deemed to have been pre-approved for
purposes of this section.




---



##### 



21.
    Oversight in Respect of the Internal Audit FunctionThe Committee, to the extent required by applicable laws or rules, or otherwise considered
by the Committee to be necessary or appropriate, shall:  (a)
    review the annual audit plans of the Manager, Internal Audit;(b)
    review the significant findings prepared by the Manager, Internal Audit and
recommendations issued by any external party relating to internal audit issues,
together with managements response thereto;(c)
    monitor compliance with the Corporations conflicts-of-interest policies that
may have a material impact on the financial statements;(d)
    review the adequacy of the resources of the Manager, Internal Audit to ensure
the objectivity and independence of the internal audit function;(e)
    consult with management on managements appointment, replacement, reassignment
or dismissal of the Manager, Internal Audit;(f)
    periodically review executive officers expenses and aircraft usage reports;
and(g)
    ensure that the Manager, Internal Audit has access to the Chair, the Chair of
the Board and the Chief Executive Officer, and periodically meet separately with the
Manager, Internal Audit to review any problems or difficulties he or she may have
encountered and specifically:  (i)
    any difficulties that were encountered in the course of the
audit work, including restrictions on the scope of activities or access to
required information, and any disagreements with management;(ii)
    any changes required in the planned scope of the internal
audit; and(iii)
    the internal audit functions responsibilities, budget and
staffing;  and report to the Board on such meetings.  22.
    Oversight in Respect of Legal and Regulatory ComplianceThe Committee, to the extent required by applicable laws or rules, or otherwise considered
by the Committee to be necessary or appropriate, shall:  (a)
    review with the General Counsel the Corporations compliance policies, legal
matters, and any reports or inquiries received from regulators or governmental
agencies that could have a material effect upon the financial position of the
Corporation and that are not subject to the oversight of another committee of the
Board;(b)
    establish procedures for (i) the receipt, retention and treatment of complaints
received by the Corporation regarding accounting, internal accounting controls or
auditing matters and (ii) the confidential, anonymous submissions by employees of the
Corporation of concerns regarding questionable accounting or auditing matters; and(c)
    periodically review the Corporations public disclosure policy.




---



##### 



23.
    Limitations on Oversight FunctionWhile the Committee has the responsibilities and powers set forth in this Charter, it is not
the duty of the Committee to plan or conduct audits or to determine that the Corporations
financial statements are complete and accurate or are in accordance with GAAP. These are
the responsibilities of management and the independent auditor. The Committee, its Chair,
and any of its members who have accounting or related financial management experience or
expertise are members of the Board of the Corporation appointed to the Committee to provide
broad oversight of the financial risk and control related activities of the Corporation, and
are specifically not accountable nor responsible for the day-to-day operation or performance
of such activities. A member or members having accounting or related financial management
experience or expertise, or being designated as an audit committee financial expert, does
not impose a higher degree of individual responsibility or obligation on such member.
Rather, the role of any such members, like the role of all Committee members, is to oversee
the accounting and financial reporting processes and not to certify or guarantee the
accuracy or completeness of the internal or external audit of the Corporations financial
information or public disclosure.24.
    Funding for Audit and Oversight FunctionsThe Committee shall have the sole authority to determine (subject to Board confirmation as
required), and to require the Corporation to fund, (a) appropriate compensation to the
independent auditor engaged for the purpose of preparing or issuing an audit report or
performing other audit, review, or attest services; (b) appropriate compensation to any
advisors to the Committee; and (c) administrative expenses necessary or appropriate to
carrying out the Committees duties.25.
    Annual EvaluationThe Committees performance shall be evaluated annually, in accordance with a process
developed by the Corporate Governance & Nominating Committee and approved by the Board, and
the results of that evaluation shall be reported to the Corporate Governance & Nominating
Committee and to the Board.26.
    Review of Committees CharterThe Committee shall assess the adequacy of this Charter on an annual basis and recommend any
changes to the Board.27.
    Non-Exhaustive ListThe foregoing list of duties is not exhaustive, and the Committee may, in addition, perform
such other functions as may be necessary or appropriate for the performance of its oversight
responsibilities.




---



##### 



EXHIBIT A Hiring Policies regarding Partners and Employees of the Independent Auditor and Certain
of Their Family Members The hiring of current partners and employees or former partners and employees of the
Corporations independent auditor or certain of their family members shall be subject to
Committee approval in advance of hiring in the following circumstances:  (a)
    the hiring, for any position within the Corporation, of anyone who has served
as a partner or employee of the independent auditor and who was a member of the
Corporations audit team during any of the preceding three fiscal years; or(b)
    the hiring, for a senior position within the Corporation (including any
accounting or financial reporting oversight role), of anyone who (i) has served as a
partner or employee of the independent auditor during any of the preceding three fiscal
years, regardless whether that person was a member of the Corporations audit team, or
(ii) has served as a partner or employee of the independent auditor and (A) continues
to influence the independent auditors operations or financial policies, (B) has
capital balances in the independent auditor, or (C) has financial arrangements with the
independent auditor other than a fully funded retirement plan providing the regular
payment of fixed sums; or(c)
    the hiring, for any accounting or financial reporting oversight role within the
Corporation, of the spouse or spousal equivalent, parent, dependent, nondependent
child, or sibling of anyone who, during any of the preceding three fiscal years, has
served as a partner or employee of the independent auditor and who (i) was a member of
the Corporations audit team, (ii) supervised or had direct management responsibility
for the audit (including at all successively senior levels through the independent
auditors chief executive), (iii) evaluated the performance or recommended the
compensation of the audit engagement partner, (iv) provided quality control or other
oversight of the audit, (v) provided 10 or more hours of non-audit services to the
Corporation (or expects so to provide), or (vi) served in the office of the independent
auditor in which the lead audit engagement partner primarily practiced in connection
with the audit. In considering whether to approve a proposed hiring under any of the foregoing
circumstances, the Committee may take into account any advice by the General Counsel of the
Corporation that a proposed hiring is not barred by the independence standards applicable to
independent auditors of issuers of securities listed on the Toronto Stock Exchange or the
New York Stock Exchange. The Committee shall review annually a report by the Chief Financial Officer of the
Corporation of any hiring during the preceding fiscal year of partners and employees of the
Corporations independent auditor not falling within the foregoing circumstances, including
the identity and position within the Corporation of such hired persons.