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Exhibit 99.1 AGRIUM INC. ANNUAL INFORMATION FORM Year Ended December 31, 2004 February 9, 2005




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AGRIUM INC.
ANNUAL INFORMATION FORM
TABLE OF CONTENTS Following is a table of contents of the Annual Information Form referencing the applicable
requirements of Form 51-102F2 of the Ontario Securities Commission. Certain portions of this Annual
Information Form are disclosed in Agrium Inc.s Managements Discussion & Analysis and Consolidated
Financial Statements for the year ended December 31, 2004 and are incorporated herein by reference
as noted below. Page ReferenceIncorporated byIncorporated by
    
    
    Reference from theReference from the
    
    
    2004 ConsolidatedAnnual
    
    
    2004 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
    
    
    44.1 Three Year History
    
    
    4  54.2 Significant Acquisitions
    
    
    6Item 5- Description of the Business
    
    
    65.1 Business
of Agrium
    
    
    6a. Summary
    
    
    6i.   Products, Services and Markets
    
    
    6  7
    
    
    
    7  12(1)ii.  Transportation, Storage and Distribution
    
    
    7iii. Selected Financial Information
    
    
    7
    
    
    
    
    
    
    Note 22iv. Production Methods
    
    
    7b. Competitive Position
    
    
    8c. New Products
    
    
    8
    
    
    
    19(2)d. Sources of Raw Materials
    
    
    8
    
    
    
    9  12(3)e. Seasonality
    
    
    8
    
    
    
    25  26(4)f. Environmental Protection Requirements
    
    
    8g. Employees
    
    
    8  9h. South American Operations
    
    
    9
    
    
    
    10  11(5),12  16(6),22  23(7)5.2 Risk Factors
    
    
    9  12
  (1)
    
    Under the heading Our operations, products and services.(2)
    
    Under the heading Nitrogen key operating developments.(3)
    
    Under the heading Wholesale products.(4)
    
    Under the heading Seasonality.(5)
    
    Under the heading Nitrogen.(6)
    
    Under the heading Our key business sensitivities.(7)
    
    Under the heading South America Wholesale. Table of Contents continued on next page




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AGRIUM INC.
ANNUAL INFORMATION FORM
TABLE OF CONTENTS (CONTINUED) Page ReferenceIncorporated byIncorporated by
    
    
    Reference from theReference from the
    
    
    2004 ConsolidatedAnnual
    
    
    2004 Managements
    
    
    FinancialInformation
    
    
    Discussion &
    
    
    Statements andForm
    Analysis
    Notes theretoItem 6
 Dividends and Securities Charges
    
    
    12
    
    
    
    
    
    
    Note 17Item 7
 Description of Capital Structure
    
    
    127.1 General Description of Capital Structure
    
    
    12
    
    
    
    30(8)
    
    
    Note 177.2 Constraints
    
    
    127.3 Ratings
    
    
    12  13Item 8  Market for Securities
    
    
    148.1 Trading Price and Volume
    
    
    14  158.2 Prior Sales
    
    
    15Item 9  Escrowed Securities
    
    
    15Item 10  Directors and Officers
    
    
    1510.1 Name, Occupation and Security Holding
    
    
    15  1710.2 Cease
Trade Orders, Bankruptcies, Penalties or Sanctions
    
    
    17  1810.3 Conflicts of Interest
    
    
    18Item 11  Promoters
    
    
    18Item 12  Legal Proceedings
    
    
    18Item 13  Interest of Management and Others in Material Transactions
    
    
    18Item 14  Transfer Agent, Registrar and Trustees
    
    
    19Item 15  Experts
    
    
    1915.1 Names of Experts
    
    
    1915.2
Interests of Experts
    
    
    19Item 16  Audit Committee
    
    
    1916.1 Audit Committee Charter
    
    
    1916.2 Composition of the Audit Committee
    
    
    1916.3 Relevant Education and Experience
of Members of the Audit Committee
    
    
    20  2116.4 Pre-Approval Policies and Procedures
    
    
    2116.5
External Auditor Service Fees (By Category)
    
    
    21Item 17  Additional Information
    
    
    21  22
  (8)
    
    Under the heading Outstanding shares and preferred securities.




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INTERPRETATION In this Annual Information Form (AIF), unless the context otherwise indicates, Agrium refers to
Agrium Inc., its subsidiaries and any partnership of which Agrium and its subsidiaries are the
partners, and Corporation refers to the corporate entity, Agrium Inc. References to dollars,
$, and U.S.$ are to United States dollars. ITEM 3  CORPORATE STRUCTURE 3.1 NAME, ADDRESS AND INCORPORATION Agrium Inc. was incorporated by Articles of Incorporation under the Canada Business Corporations
Act on December 21, 1992. The Corporations head office and principal place of business is located
at 13131 Lake Fraser Drive S.E., Calgary, Alberta, T2J 7E8. 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 Inc.
    
    Canada
    
    
    100
    %Viridian Fertilizers Limited
    
    Canada
    
    
    100
    %Profertil S.A.
    
    Argentina
    
    
    50
    %Canpotex Limited
    
    Canada
    
    
    331/3
    %
 ITEM 4  GENERAL DEVELOPMENT OF THE BUSINESS 4.1 THREE YEAR HISTORY Between 1998 and 2001, we completed several acquisitions and made significant investments in a
number of projects. Over the past three years, our focus has been on strengthening our balance
sheet, improving our financial flexibility and continuing to improve the competitiveness of our
base business. 2002 In the first half of 2002, our industry was at a low point in the fertilizer cycle. Our key Western
Canadian market was experiencing drought conditions and some of our competitors were undertaking
distress pricing strategies. In late 2002 the fertilizer cycle transitioned to a more profitable
environment. Our key fiscal objective in 2002 was to improve our financial position following a poor year for
the fertilizer industry in 2001. We reduced capital spending to sustaining only, deferring many
projects in order to conserve capital. In March 2002, we raised net proceeds of $106-million of new
equity capital and used the proceeds to repay existing bank indebtedness. We also improved
operating cash flow by reducing non-cash working capital levels by $55-million. In 2002, Union Oil Company of California (Unocal) reduced the supply of natural gas to our Kenai,
Alaska nitrogen facility. We initiated legal proceedings against Unocal in respect of this matter
and in respect of the Earn-out arrangement in our Kenai, Alaska purchase agreement with Unocal.




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2003 The positive turn in the fertilizer cycle that began in late 2002 continued in 2003. Global
fertilizer demand was supported by a tight world grain market. Weather conditions in some of our
key market regions such as Western Canada improved over 2002, but were still not ideal. Our key fiscal objectives in 2003 included improvement in our financial position and effective
control of our fixed costs. In the fourth quarter of 2003, we issued a redemption notice on our
six percent junior subordinated debentures, which resulted in the conversion of the debentures into
common shares in January 2004. We continued to reduce our debt levels in 2003 and increased our
year-end cash position by $91-million compared to 2002. The dispute with Unocal over natural gas supply to our Kenai nitrogen facility continued. Given the
significant uncertainty created by our inability to reach a commercial settlement with Unocal on
reasonable terms and since long-term gas supply contracts had not yet been arranged, we adjusted
the carrying cost of the facility at the end of 2003. This adjustment resulted in a non-cash, after
tax charge of $140-million (before tax charge of $235-million) in our fourth quarter 2003 financial
results. In October 2003, John Van Brunt retired as Chief Executive Officer of the Corporation and Mike
Wilson, Chief Operating Officer of the Corporation, was appointed Chief Executive Officer and
Director of the Corporation. 2004 Except for some volatility in international nitrogen prices in the first quarter, the fertilizer
cycle remained strong throughout 2004. Global fertilizer demand continued to be supported by a
tight world grain market and good global economic growth. Weather conditions in our key market
regions were negatively affected by early winter conditions that impacted crop harvest progress
throughout the fall. Our key objectives in 2004 included stringent focus on controlling costs and maximizing efficiency,
further improvement of our financial position, identification and evaluation of growth
opportunities and resolution of natural gas issues at our Kenai facility. With most of our plants operating at or near capacity and strong industry fundamentals, our 2004
results reflected record net sales, gross profit, and net earnings and our financial position
improved. Cash and cash-equivalents were $425-million at December 31, 2004 compared to $200-million
at December 31, 2003, and record operating cash flow was generated in the amount of $449-million.
Our ratio of debt-to-debt plus equity decreased from 47 percent at December 31, 2003 to 35 percent
at December 31, 2004. Our dispute with Unocal was resolved in 2004 through both an Arbitration Panel ruling made in July
2004 and a negotiated settlement concluded in December 2004. The Arbitration Panel awarded us liquidated damages over gas supply obligations of $37-million plus
interest to the end of April 2004. An additional $13-million was received for the period May to
December 2004. The total liquidated damages recorded for the year totaled $50-million. In December of 2004, we settled the remaining issues in dispute with Unocal. The settlement
establishes a definitive gas supply obligation from Unocal to the Kenai facility up until October
31, 2005. The settlement resulted in a net gain to Agrium of $36-million pre tax or $21-million
after tax. This net gain was reflected in Agriums 2004 financial results and is in addition to the
2004 Arbitration Panel award described above. The settlement allows the Kenai facility to operate at an average rate of 66 percent through to
October 31, 2005. While we remain committed to working with local gas suppliers to develop
alternative sources of supply, the Kenai facility will close in November 2005 unless we obtain
alternate economic gas supplies. As at February 9, 2005, our objectives are to continue the aggressive pursuit and evaluation of a
number of strategic growth opportunities, control costs, support our continued evolution from a
production driven company to a market driven organization and focus on continued excellence in
corporate governance.




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4.2 SIGNIFICANT ACQUISITIONS There were no significant acquisitions during the 2004 financial year and up to February 9, 2005. ITEM 5  DESCRIPTION OF THE BUSINESS 5.1 BUSINESS OF AGRIUM We are a major retailer of agricultural products and services in both United States (U.S.) and
Argentina and a global producer and wholesale marketer of nutrients for agricultural and industrial
markets. Prior to fourth quarter, 2004, we managed and reported our business through four operating
segments and a fifth non-operating segment for corporate and inter-segment eliminations. The four
operating segments were: North America Retail, South America Retail, North America Wholesale and
South America Wholesale. In fourth quarter of 2004, the North America Retail and South America
Retail segments were integrated into one segment, Retail. We began reporting our financial results
under the new structure in the fourth quarter of 2004 and prior years were restated for comparative
purposes. a) SUMMARY  i)
    Products, Services and Markets  Retail Operating SegmentThrough our 206 retail centres in the U.S. as of December 31, 2004, we provide
fertilizers, crop protection products, seeds and services to growers in 22 states.
We also own and operate 21 retail farm centres in Argentina. On February 1, 2005,
we acquired an additional 12 retail farm centres in Argentina together with four
farm centres in Chile and two farm centres in Bolivia.WholesaleWe produce a full range of nutrients including nitrogen, potash and phosphate.  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 five nitrogen-based fertilizer production plants
at Beatrice, Nebraska, 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.




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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.  For additional information regarding the products, services and markets of our
business, see the discussion under the heading Our operations, products and
services on pages seven to 12 of the 2004 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 2,800 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 locations in Western Canada, the Pacific Northwest, California, the
Midwest Cornbelt and the Great Plains regions of the U.S. 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 22 to our 2004 Consolidated
Financial Statements, which Note is incorporated herein by reference.iv)
    Production MethodsProduction 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
sulphur 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.




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b)
    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.c)
    NEW PRODUCTSA discussion of our process-patented controlled release urea fertilizer product, Environmentally
Smart Nitrogen (ESN®), is under the heading Nitrogen key operating developments on page 19 of
the 2004 Managements Discussion and Analysis, which is incorporated by reference herein.d)
    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 heading Wholesale products on pages nine to 12
of the 2004 Managements Discussion & Analysis, which is incorporated herein by reference.e)
    SEASONALITYThe extent that our business is cyclical or seasonal is discussed under the heading
Seasonality on pages 25 to 26 of the 2004 Managements Discussion and Analysis, which is
incorporated by reference herein.f)
    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.g)
    EMPLOYEESAs of December 31, 2004 we employed 4,617 people. In total, 1,927 people are employed in the
North America Wholesale business segment, 2,433 in the Retail business segment, 256 in Corporate
Administration and one person in the South America Wholesale business segment. The other
employees of the South America Wholesale business segment are not included in the total of 4,617
employees as those staff are employees of Profertil and are not employees of Agrium.




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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, 2006); Vanscoy, Saskatchewan (April 30, 2006); Beatrice,
Nebraska (November 16, 2006).Management believes that it has good relations with both its unionized and non-unionized
employees.h)
    SOUTH AMERICA OPERATIONSA description of our operations in South America is under the headings Nitrogen, Our key
business sensitivities and South America Wholesale on pages 10 to 11, pages 12 to 16 and
pages 22 to 23, respectively of the 2004 Managements Discussion & Analysis, which is
incorporated by reference herein.5.2
    RISK FACTORSThe following are certain risk factors relating to the business of Agrium:  Industry and Product Price VolatilityAgriums operating results will be highly dependent upon conditions in the agricultural
industry, which Agrium will not be able to 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. Natural
gas accounts for almost 84 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. 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
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.




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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. It is Agriums intention to close the Alaskan
facility in November of 2005 unless we can obtain alternate economic gas supplies.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, 2004, Agrium derived approximately 20 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;
    Increased government ownership and 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.Any inability to compete with our competitors may harm our business by lowering our sales and
profits.




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Environmental RegulationApplicable environmental legislation regulates health, safety, environmental and land use.
Permits, authorizations or licenses are generally required for the development and operation of
facilities. Environmental legislation also provides for standards, restrictions and prohibitions
on the handling of certain types of substance and for releases, spills or emissions into the
environment of substances.Agrium is subject to numerous environmental laws and regulations in the U.S., Canada and
internationally that regulate certain activities and operations of Agrium and impose liability
for the cleanup of environmental contamination. In addition, legislation may require an
assessment of the environmental impact of a facility prior to the development of a facility and
may also require that certain facility sites be abandoned and reclaimed to the satisfaction of
regulatory authorities. A breach of such legislation may result in possible suspension or
revocation of necessary licenses, permits or authorizations, civil liability and the imposition
of fines and penalties.Agrium incurs and will incur capital expenditures and operating costs due to these laws and
regulations. Agrium cannot predict the operational or financial impact of new or amended laws or
regulations, in particular, increasingly stringent regulations that might restrict the use of
fertilizers in the future.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 $112-million as of December
31, 2004 has been recorded to provide for estimated remedial costs and an asset retirement
obligation in the amount of approximately $52-million as of December 31, 2004 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.PermitsAgrium holds various 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 RegulationAgrium 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. The Argentine government is extending an investigation that began in
2002 into competitive practices in the urea market during the period under study. None of the
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 HazardsAgrium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




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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 AND SECURITIES CHARGES Our present intention is to pay regular dividends on its common shares. A semi-annual cash
dividend of U.S.$0.055 per share has been paid since January 1998. The declaration, amount and
date of payment of dividends is determined by the Board of Directors from time to time and will be
subject to earnings and financial requirements, and other conditions prevailing at that time. During 2005, we issued a redemption notice pursuant to which we will redeem our outstanding
$175-million eight percent junior subordinate debentures for cash on February 14, 2005. The
redemption price will equal the principal amount of the securities plus accrued and unpaid interest
to the date of redemption. During 2003, we issued a redemption notice on the outstanding $50-million six percent junior
subordinated debentures. In January 2004, all holders of the six percent junior subordinated
debentures elected to convert the debentures into common shares at the stated conversion price.
Details of the redemption notice and subsequent conversion are disclosed in Note 17 to the 2004
Consolidated Financial Statements of Agrium, which Note is incorporated herein by reference. The following table sets forth the dividends per share paid or payable on our common shares and
each class of our junior subordinated debentures in each of the last three most recently completed
fiscal years. Dividends per Share Paid or PayableJunior Subordinated DebenturesCommon Shares
    
    
    Six Percent
    
    
    Eight Percent2002
    
    $
    0.11
    
    
    $
    1.50
    
    
    $
    2.002003
    
    $
    0.11
    
    
    $
    1.50
    
    
    $
    2.002004
    
    $
    0.11
    
    
    
    
    
    
    $
    2.00
 ITEM 7  DESCRIPTION OF CAPITAL STRUCTURE 7.1 GENERAL DESCRIPTION OF CAPITAL STRUCTURE Details of the Corporations capital structure are discussed under the heading Outstanding shares
and preferred securities on page 30 of the 2004 Managements Discussion & Analysis and are
disclosed in Note 17 to the Consolidated Financial Statements, which are incorporated herein by
reference. 7.2 CONSTRAINTS There are no constraints imposed on the ownership of our securities to ensure that we have a
required level of Canadian ownership. 7.3 RATINGS Credit ratings are intended to provide investors with an independent measure of credit quality of
an issue of securities and are indicators of the likelihood of payment and of the capacity and
willingness of a company to meet its financial commitment on an obligation in accordance with the
terms of an obligation. There is no assurance that any rating will remain in effect for any given period of time or that
any rating will not be revised or withdrawn entirely by a rating agency in the future if in its
judgment circumstances so warrant. The credit ratings afforded the debt securities by the rating agencies are not recommendations to
purchase, hold, or sell the debt securities inasmuch as such ratings do not comment on market price
or suitability for a particular investor.




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##### 



The following table sets out ratings the Corporation has received in respect of its outstanding
securities from the ratings agencies. Dominion Bond
    
    
    Moodys InvestorRating Service
    
    
    Service
    
    
    Standard
& PoorsSenior Unsecured
Notes and Debentures
    
    BBB
    
    Baa2
    
    BBBJunior Subordinated
Eight Percent
Debentures
    
    Pfd-3y
    
    Baa3
    
    BB+Ratings Outlook
    
    Stable
    
    Stable
    
    Stable
 A description of the rating categories of each of the rating agencies in the table above is set out
below. Dominion Bond Rating Service (DBRS) DBRS has different rating scales for long-term debt and preferred shares. The BBB rating assigned
to the Corporations senior unsecured notes and debentures is the fourth highest of ten rating
categories for long- term debt, which range from AAA to D. DBRS uses high and low designations
on ratings from AA to C to indicate the relative standing of securities being rated within a
particular rating category. The absence of a high or low designation indicates that the
Corporations rating is in the middle of the category. The BBB rating indicates adequate credit
quality. The Pfd-3Y rating assigned to the junior subordinated debentures is the third highest of DBRS six
rating categories for preferred securities. A reference to high or low again reflects the
relative strength within the rating category, with the absence of high or low indicating that
the Corporations rating is in the middle of the category. The Pfd-3Y rating indicates that the
junior subordinated debentures are of adequate credit quality. DBRS also assigned a stable outlook to the ratings, which provides DBRS opinion regarding the
outlook of the ratings. Moodys Investor Services (Moodys) The Baa2 and Baa3 ratings assigned to the Corporations senior unsecured notes and debentures and
to its junior subordinated debentures are each the fourth highest rating of Moodys nine rating
categories for long term debt and preferred securities. Moodys appends numerical modifiers from 1
to 3 on its long-term debt and preferred security ratings, which indicate where the obligation
ranks in its ranking category, with 1 being the highest. Obligations rated Baa are judged to be of
moderate credit quality. Moodys outlook is its assessment regarding the likely direction of the ratings over the medium
term. On February 7, 2005, Moodys revised its outlook on our ratings from negative to stable. Standard & Poors (S&P) The BBB and BB+ ratings assigned to the Corporations senior unsecured notes and debentures and to
its junior subordinated debentures are the fourth and fifth highest rating of S&Ps ten ratings
categories for long-term debt which range from AA to D. Issuers of debt securities rated BBB are
judged to have adequate capacity to meet their financial obligations. Obligations rated BB are
judged to have the current capacity to meet financial commitments but adverse business conditions
would likely impair an issuers capacity to meet its financial commitments. S&P uses
+ or  designations to indicate the relative standing of securities within a
particular rating category. S&P also assigned a stable outlook to the ratings, which is S&Ps assessment of the potential
direction of the rating over the intermediate to long-term.




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##### 



ITEM 8  MARKET FOR SECURITIES 8.1 TRADING PRICE AND VOLUME Our Common Shares trade on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE)
under the symbol: AGU. The Corporations $175-million principal amount of eight percent junior
subordinated debentures are listed on the NYSE under the symbol: AGU Pr. The following table sets out the high and low price and trading volume of the common shares on the
TSX for 2004 on a monthly basis. Month
    
    
    High Price
    
    Low Price
    
    Closing Price
    
    Volume(2004)
    
    
    ($Canadian)
    
    ($Canadian)
    
    ($Canadian)
    
    (in 000s)January
    
    $
    21.81
    
    
    $
    20.06
    
    
    $
    21.12
    
    
    
    8,993,105February
    
    $
    21.48
    
    
    $
    18.81
    
    
    $
    19.98
    
    
    
    10,798,176March
    
    $
    19.99
    
    
    $
    17.55
    
    
    $
    19.36
    
    
    
    11,865,700April
    
    $
    20.02
    
    
    $
    16.47
    
    
    $
    16.90
    
    
    
    17,208,778May
    
    $
    18.25
    
    
    $
    16.26
    
    
    $
    17.90
    
    
    
    6,595,933June
    
    $
    19.60
    
    
    $
    17.76
    
    
    $
    19.55
    
    
    
    10,153,467July
    
    $
    19.70
    
    
    $
    18.12
    
    
    $
    19.00
    
    
    
    5,782,495August
    
    $
    20.65
    
    
    $
    18.20
    
    
    $
    20.53
    
    
    
    7,033,750September
    
    $
    22.68
    
    
    $
    20.00
    
    
    $
    22.45
    
    
    
    9,858,363October
    
    $
    22.76
    
    
    $
    19.55
    
    
    $
    20.30
    
    
    
    5,421,274November
    
    $
    22.25
    
    
    $
    19.61
    
    
    $
    22.25
    
    
    
    6,188,440December
    
    $
    22.25
    
    
    $
    19.15
    
    
    $
    20.25
    
    
    
    9,706,304
 The following table sets out the high and low price and trading volume of the common shares on the
NYSE for 2004 on a monthly basis. Month
    
    
    High Price
    
    Low Price
    
    Closing Price
    
    Volume(2004)
    
    
    ($U.S.)
    
    ($U.S.)
    
    ($U.S.)
    
    (in 000s)January
    
    $
    16.96
    
    
    $
    15.35
    
    
    $
    16.00
    
    
    
    5,437,700February
    
    $
    15.95
    
    
    $
    14.15
    
    
    $
    14.83
    
    
    
    8,218,800March
    
    $
    15.00
    
    
    $
    13.15
    
    
    $
    14.70
    
    
    
    13,169,800April
    
    $
    15.19
    
    
    $
    12.14
    
    
    $
    12.44
    
    
    
    18,453,200May
    
    $
    13.40
    
    
    $
    11.70
    
    
    $
    13.16
    
    
    
    11,252,600June
    
    $
    14.65
    
    
    $
    13.00
    
    
    $
    14.55
    
    
    
    8,027,800July
    
    $
    14.85
    
    
    $
    13.68
    
    
    $
    14.44
    
    
    
    8,435,200August
    
    $
    15.72
    
    
    $
    13.83
    
    
    $
    15.55
    
    
    
    9,754,700September
    
    $
    15.70
    
    
    $
    15.34
    
    
    $
    17.76
    
    
    
    12,210,200October
    
    $
    18.02
    
    
    $
    15.45
    
    
    $
    16.60
    
    
    
    9,003,800November
    
    $
    18.75
    
    
    $
    16.47
    
    
    $
    18.58
    
    
    
    9,750,500December
    
    $
    18.70
    
    
    $
    15.57
    
    
    $
    16.85
    
    
    
    15,045,900




---



##### 



The following table sets out the high and low price and trading volume of the eight percent junior
subordinated debentures on the NYSE for 2004 on a monthly basis. Month
    
    
    High Price
    
    Low Price
    
    Closing Price
    
    Volume(2004)
    
    
    ($U.S.)
    
    ($U.S.)
    
    ($U.S.)
    
    (in 000s)January
    
    $
    25.73
    
    
    $
    25.09
    
    
    $
    25.21
    
    
    
    155,600February
    
    $
    25.42
    
    
    $
    25.15
    
    
    $
    25.41
    
    
    
    74,000March
    
    $
    25.80
    
    
    $
    25.00
    
    
    $
    25.16
    
    
    
    129,500April
    
    $
    25.25
    
    
    $
    24.70
    
    
    $
    24.85
    
    
    
    142,200May
    
    $
    25.03
    
    
    $
    24.05
    
    
    $
    24.97
    
    
    
    203,300June
    
    $
    25.00
    
    
    $
    24.30
    
    
    $
    24.70
    
    
    
    194,900July
    
    $
    25.00
    
    
    $
    24.60
    
    
    $
    24.99
    
    
    
    85,800August
    
    $
    25.53
    
    
    $
    24.94
    
    
    $
    25.39
    
    
    
    142,600September
    
    $
    25.70
    
    
    $
    25.12
    
    
    $
    25.24
    
    
    
    72,900October
    
    $
    25.56
    
    
    $
    25.12
    
    
    $
    25.35
    
    
    
    100,200November
    
    $
    25.81
    
    
    $
    25.32
    
    
    $
    25.60
    
    
    
    102,300December
    
    $
    25.80
    
    
    $
    25.31
    
    
    $
    25.63
    
    
    
    90,300
 8.2 PRIOR SALES In the most recently completed financial year, the Corporation did not issue (a) any shares that
are not listed or quoted on a marketplace or (b) any subordinated debt securities. ITEM 9  ESCROWED SECURITIES To the knowledge of the Corporation, the Corporation has no escrowed securities. ITEM 10  DIRECTORS AND OFFICERS 10.1 NAME, OCCUPATION AND SECURITY HOLDING Information is given below
with respect to each of the current directors, including all current
positions held with the Corporation, present principal occupation and principal occupations during
the last five years. The term of office of each director expires at the end of the 2005 Annual
General Meeting. Name and
    
    Year first became
    
    Present principal occupation or employmentMunicipality of Residence
    
    Director of theCorporationFrank 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
    
    
    Corporate Director.D. Grant Devine (3)(4)
Caronport, Saskatchewan
    
    
    1993
    
    
    Corporate Director. Farmer and rancher.
President, Grant Devine Farms and Consulting Services Ltd.




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##### 



Year first becameName and
    
    Director of theMunicipality of Residence
    Corporation
    
    Present principal occupation or employmentGermaine Gibara (2)(3)
Montreal, Quebec
    
    
    2004
    
    
    Corporate Director. President, Avvio
Management Inc.Susan A. Henry (1)(4)
Ithaca, New York
    
    
    2001
    
    
    Ronald P. Lynch Dean of the College of
Agriculture and Life Sciences and Professor at
Cornell University, Ithaca, New York.Russell J. Horner (2)(4)
Vancouver, British Columbia
    
    
    2004
    
    
    President & CEO, 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 Advisor.Michael M. Wilson
Bragg Creek, Alberta
    
    
    2003
    
    
    President & Chief Executive Officer of Agrium Inc.Victor 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. All directors have held the office and principal occupation identified above for not less than
five years except as follows: Dr. Henry, prior to July, 2000, was Dean of Science at Carnegie
Mellon University; Mr. Wilson, prior to October, 2003, was President & Chief Operating Officer of
the Corporation, prior to October, 2002, was Executive Vice President & Chief Operating Officer of
the Corporation and, prior to August, 2000, was President, Methanol
and Executive Vice President of Methanex Corporation (a
chemical company); Mr. Zaleschuk, prior to June, 2001, was President & Chief Executive Officer of
Nexen Inc. (a natural resource company) and Mr. Horner prior to 2000, was President & Chief
Operating Officer of Norske Skog Canada Limited (a forest products and paper company). Executive Officers Name and Municipality
    
    Position with the Corporationof Residence
    And Principal OccupationFrank W. Proto
Regina, Saskatchewan
    
    Board Chair.Michael M. Wilson
Bragg Creek, Alberta
    
    President & Chief Executive Officer.Dorothy E.A. Bower
Calgary, Alberta
    
    Vice President, Strategic Development & Planning.Patrick J. Freeman
Calgary, Alberta
    
    Vice President & Treasurer.Richard L. Gearheard
Centennial, Colorado
    
    Senior Vice President, Retail.




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##### 



Name and Municipality
    
    Position with the Corporationof Residence
    And Principal OccupationJames M. Grossett
DeWinton, Alberta
    
    Vice President, Human Resources.William C. McClung
Calgary, Alberta
    
    Vice President, Manufacturing.Leslie A. ODonoghue
Calgary, Alberta
    
    Vice President, General Counsel & Corporate
Secretary.Christopher W. Tworek
Calgary, Alberta
    
    Vice President, Supply Management.Bruce G. Waterman
Calgary, Alberta
    
    Senior Vice President, Finance & Chief Financial
Officer.Ronald A. Wilkinson
Calgary, Alberta
    
    Senior Vice President, Wholesale.John D. Yokley
Priddis, Alberta
    
    Senior Vice President.
 All of the officers have held the office and principal occupation identified above or a
substantially similar position for not less than five years with the exception of: Mr. Wilson,
prior to October, 2003, was President & Chief Operating Officer of the Corporation, prior to
October, 2002, was Executive Vice President & Chief Operating Officer of the Corporation, and,
prior to August, 2000, was President, Methanol and Executive Vice President of Methanex Corporation
(a chemical company); Mr. Grossett, prior to April, 2002, was Senior Vice President, Human
Resources at Molson Inc. (a brewing company); Mr. McClung, prior to August, 2003, was Vice
President, Operations of the Corporation; Mr. Waterman, prior to April, 2000, was Vice President
Finance and Chief Financial Officer of Talisman Energy Inc., (a natural resource company); Mr.
Wilkinson, prior to February 2005, was Senior Vice President North America Wholesale, and prior to
October 2004, was Vice President, Operations & Technology of the Corporation and prior to August,
2003, was Director, Technical Services of the Corporation and, prior to May, 2001, was General
Manager, Operations & Marketing of Profertil; and Mr. Yokley, prior to October 2004, was Senior
Vice President, Marketing & Distribution of the Corporation. Directors and officers as a group beneficially own, directly or indirectly, or exercise control or
direction over approximately 240,962 common shares or 0.18 percent of the common shares outstanding
as at December 31, 2004. 10.2 CEASE TRADE ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS No director, executive officer, or shareholder holding a sufficient number of securities of the
Corporation to affect materially the control of the Corporation is as at February 9, 2005, or
within the ten years prior to February 9, 2005, has been, a director or executive officer of any other issuer, that while that person was acting in that capacity:  o
    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;o
    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 trader 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;o
    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;




---



##### 



o
    Has individually, within the 10 years prior to February 9, 2005, 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; Other than as follows:  o
    Mr. King has been a director of Wi-LAN Inc. (Wi-LAN) since 1995. In 1997,
during the course of its initial public offering, Wi-LAN was advised by its legal
counsel that certain of its prior share issuances may have been in contravention of
applicable securities legislation. The management and directors of Wi-LAN had, at the
time of such transactions, believed such transactions to be in compliance with such
legislation. The Board of Directors of Wi-LAN instructed its counsel to inform the
staff of the Alberta Securities Commission (the Commission) of the relevant
circumstances. As a result, the Commission, Wi-LAN and certain of its directors,
including Mr. King, entered into a Settlement Agreement and Undertaking pursuant to
which Wi-LAN agreed to certain restrictions and agreed to pay costs of the
investigation. The directors, including Mr. King, undertook that they would make
themselves aware of the requirements of and would comply with such legislation in the
future, and undertook to the Commission not to sell the securities of Wi-LAN for a
period of 18 months from the date of the Agreement. No director, officer or promoter of the Corporation has, within ten years prior to the date of this
AIF, been subject to any penalties or sanctions imposed by a court or securities regulatory
authority. 10.3 CONFLICTS OF INTEREST To the knowledge of the Corporation, no director or executive officer of the Corporation has an
existing or potential conflict of interest with the Corporation or any of its subsidiaries, joint
ventures or partnerships. ITEM 11  PROMOTERS During the three most recently completed financial years, the Corporation has not utilized the
services of a person or company as a promoter as the term is defined. ITEM 12  LEGAL PROCEEDINGS In July 2001, one of our employees suffered injuries in an automobile accident where he was a
passenger in a truck leased by us. The employee commenced an action in the New York State Supreme
Court against the manufacturer of the truck, the leasing agent, and the party that maintained the
truck. We were brought into the lawsuit by way of third party proceedings in late 2003. The
amount claimed in the action against the defendants is $225-million in general damages and
$500-million in punitive damages. In 2004, the employee commenced a second action in the New York
State Supreme Court against us directly. The amount claimed in the action against us is
unspecified. ITEM 13  INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS To the best of our knowledge, the Corporation confirms that, as of February 9, 2005, there were no
directors or executive officers of the Corporation or an associate or affiliate of a director or
executive officer of the Corporation with a material interest in any transaction within the three
most recently completed financial years or during the current financial year that has materially
affected or will materially affect the Corporation.




---



##### 



ITEM 14  TRANSFER AGENT, REGISTRAR, AND TRUSTEES The transfer agent and registrar for the Corporations common shares is: CIBC Mellon Trust Company
P.O. Box 7010
Adelaide Street Postal Station
Toronto, Ontario, Canada, M5C 2W9
Telephone:
Outside North America (416) 643-5500
Inside North America (800) 387-0825
Email: inquiries@cibcmellon.com
Website: www.cibcmellon.com The Trustee for the Corporations unsecured notes and debentures is: J.P. Morgan Trust Company
N.A.  Image Hub Mail Stop: PIT PAUL
P.O. Box 139007
Dallas, Texas, U.S.
75313 - 9007 The Trustee for the Corporations eight percent junior subordinated debentures is: The Bank of New York
101 Barclay Street, Floor 21W
New York, New York, U.S.
10286 ITEM 15  EXPERTS 15.1 NAMES OF EXPERTS The Consolidated Financial Statements of the Corporation for the year ended December 31, 2004
included in the Corporations 2004 Annual Report filed under National Instrument 51-102 Continuous
Disclosure (NI 51-102) portions of which are incorporated by reference to this AIF, have been
audited by KPMG LLP. 15.2 INTERESTS OF EXPERTS As of February 9, 2005, KPMG LLP and the partners of KPMG LLP do not hold any registered or
beneficial ownership directly or indirectly in the securities of the Corporation or its associates
or affiliates. ITEM 16  AUDIT COMMITTEE 16.1 AUDIT COMMITTEE CHARTER Attached as Schedule 16.1 is the charter for the Corporations Audit Committee. 16.2 COMPOSITION OF THE AUDIT COMMITTEE Members of the Audit Committee are H.G. Schaefer (Chair), Neil Carragher, R.S. Cunningham, F.W.
Proto and V. J. Zaleschuk. Each member of the Audit Committee is independent and financially
literate.   - 19 -




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##### 



16.3 RELEVANT EDUCATION AND EXPERIENCE OF MEMBERS OF THE AUDIT COMMITTEE Name(Director Since)
    
    Principal Occupation and Full BiographyMr. Harry G. Schaefer, FCA
(May 6, 1998)Other Public Directorships
 Vice Chair and a
director of each of TransCanada
Pipelines Limited (an energy
transportation company) and of
TransCanada Corporation (a
holding company), a Trustee of Fording
Canadian Coal Trust (a coal
mining trust).
    
    Mr. Schaefer is a corporate
director, business advisor and the
principal of Schaefer & Associates Ltd.
Mr. Schaefer is the Chair of the Alberta
Chapter of the Institute of Corporate
Directors, and a director of Mount Royal
College Foundation. Mr. Schaefer is the
former Board Chair, from 1991 to 1996, of
TransAlta Utilities Corporation (a
utility company) having served as the
Chief Financial Officer of TransAlta from
1975 to 1993, and the former Board Chair
of Crestar Energy Inc. (an energy
company). Mr. Schaefer was the first
Adjunct Professor at the Faculty of
Business at the University of Calgary,
became a Fellow of the ICAA in 1990, the
first Canadian recipient of the Financial
Executives Institute Distinguished
Service Award in 1993, and a 2004
recipient of a Fellowship Award from the
Institute of Corporate Directors.Mr. Neil Carragher
(December 12, 1996)
    
    Mr. Carragher is the President of
The Corporate Partnership Ltd. (a mergers
and acquisitions company). Mr. Carragher
was formerly a corporate turnaround
specialist and a mergers and acquisitions
advisor.Other Public Directorships
 The Westaim Corporation (a technology company)Dr. Ralph S. Cunningham
(December 12, 1996)Other Public Directorships
 TETRA
Technologies, Inc. (an oil and
gas services company) EnCana Corporation (an
energy company) Enterprise Products GP,
LLC (a midstream energy
partnership)
    
    Dr. Cunningham is the former
President and Chief Executive Officer of
CITGO Petroleum Corporation (an energy
company), former Vice Chairman of
Huntsman Corporation (a chemical
company), former President of Texaco
Chemical Company (an energy company),
former Chairman and Chief Executive
Officer of Clark Oil Refining Corporation
(an energy company), former President of
Tenneco Oil Processing and Marketing (an
energy company), and held a number of
supervisory and management positions at
Exxon Company (an energy company). Dr.
Cunningham is also an Advisory Director
of Pilko & Associates, a Houston, Texas
based management and consulting firm
specializing in advising multi-national
companies on environmental, health &
safety governance and management systems.
Dr. Cunningham holds a Ph.D. in
Engineering.Mr. Frank W. Proto
(March 1, 1993)Other Public Directorships
None
    
    Mr. Proto is Board Chair of Agrium Inc.
and a director of Nelson Group Inc. (an
investment company). Mr. Proto is the
volunteer Chair of the Petroleum
Technology Research Centre at the
University of Regina. Mr. Proto is a
former President and Chief Executive
Officer of Wascana Energy Inc. (an energy
company), a former Chair of SaskEnergy
Inc. (a natural gas distribution and
transmission company) and a former member
of the Canada Newfoundland Offshore
Petroleum Board (a regulatory agency).
He is a former director of Chieftain
Development Ltd. (an energy company),
Century Sales and Service Limited (an
industrial company) and Saskatchewan
Telecommunications Holding Corporation
(SaskTel) (a telecommunications company).




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Name(Director Since)
    
    Principal Occupation and Full BiographyMr. Victor J. Zaleschuk, C.A.
(October 3, 2002)Other Public Directorships
 Nexen Inc. (an
energy company) Board Chair and a
director of Cameco Corporation
(a uranium company).
    
    Mr. Zaleschuk is the former
President and Chief Executive Officer of
Nexen Inc. Prior to becoming President
of Nexen Inc., Mr. Zaleschuk was a Senior
Vice President and Chief Financial
Officer of Nexen Inc. Before joining
Nexen Inc., Mr. Zaleschuk was a senior
financial executive in the energy sector.
Mr. Zaleschuk is a Chartered Accountant.
 16.4 PRE-APPROVAL POLICIES AND PROCEDURES The Audit Committee has delegated to the Chair of the Committee the authority to act on behalf of
the Committee between meetings of the Committee with respect to the pre-approval of audit and
permitted non-audit services provided by KPMG LLP from time to time. The Chair reports on any such
pre-approval at each meeting of the Committee. 16.5 EXTERNAL AUDITOR SERVICE FEES (BY CATEGORY) The following table sets out the fees billed to us by KPMG LLP and its affiliates for professional
services in each of the years ended December 31, 2003 and 2004. During these years, KPMG LLP was
our only external auditor. Category
    

Year Ended December 31,2003
    
    
    2004Audit Fees(1)
    
    $
    562,000
    
    
    $
    678,000Audit-Related Fees(2)
    
    
    97,000
    
    
    
    47,000Tax Fees(3)
    
    
    299,000
    
    
    
    206,000All Other Fees(4)
    
    
    7,000
    
    
    
    3,000Total
    
    $
    965,000
    
    
    $
    934,000
  (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 for North America Retail
Operations for the fiscal years 2003 and 2004; audits of the financial statements for VU
Partnership for the fiscal years 2003 and 2004; 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 Additional information, including directors and officers remuneration and indebtedness, principal
holders of the Corporations securities, options to purchase securities and interest of insiders in
material transactions, where applicable, is provided in the Corporations management proxy circular
for its most recent annual meeting of shareholders that involved the election of directors, and
additional financial information as provided in Agriums Consolidated Financial Statements for its
most recently completed financial year.




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The Corporation will provide to any person, upon request made to the Corporate Secretary of Agrium
Inc., 13131 Lake Fraser Drive S.E., Calgary, Alberta, T2J 7E8:  (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;(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. Additional information
relating to Agrium may be found on our website at www.agrium.com, on the
Canadian Securities Administrators website at www.sedar.com and on the EDGAR section of the United
States Securities and Exchange Commissions website at
www.sec.gov.




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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




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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.




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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:




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(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




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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




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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;




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(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.




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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.




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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.




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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.