|**Exhibit
99.4**
|----------------

kpmg







Reconciliation to United States GAAP
of

TEMBEC INC.

Years ended September 30, 2006 and
September 24, 2005











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|KPMG LLP                            |  | Telephone |  | (514)
      840-2100
|----------------------------------- |  | --------- |  | --------------------
|Chartered Accountants               |  | Fax       |  | (514)
      840-2187
|600 de
      Maisonneuve Blvd. West |  | Internet  |  | www.kpmg.ca         
|Suite
      1500                    |  |           |  |                     
|Montréal Québec
      H3A 03A       |  |           |  |                     

AUDITORS' REPORT ON RECONCILIATION
TO UNITED STATES GAAP

To the Board of Directors of Tembec
Inc.

On November 15, 2006, we reported
on the consolidated balance sheets of Tembec Inc. (the "Company") as at
September 30, 2006 and September 24, 2005 and on the consolidated statements of
operations, retained earnings (deficit) and cash flows for each of the years in
the two-year period ended September 30, 2006 which are included in the annual
report on Form 40-F. In connection with our audits conducted in accordance with
Canadian generally accepted auditing standards of the aforementioned
consolidated financial statements, we also have audited the related supplemental
note entitled "Reconciliation to United States GAAP" included in the annual
report on Form 40-F. This supplemental note is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
supplemental note based on our audits.

In our opinion, such supplemental
note, when considered in relation to the basic consolidated financial statements
taken as a whole, presents fairly, in all material respects, the information set
forth therein.



KPMG LLP, a Canadian limited liability partnership is the
Canadianmember firm of KPMG
International, a Swiss cooperative.

---

TEMBEC INC.Reconciliation to United States GAAP

Years ended September 30, 2006 and
September 24, 2005 (in millions of dollars, unless otherwise
noted)

---



|                                                                     
|---------------------------------------------------------------------
|                                                                     
|                                                                     
|                                                                     
|Net loss under
      Canadian GAAP                                   
|                                                                     
|Adjustments:                                                         
|Amortization of deferred gain on
      foreign exchange contracts (a)
|Income taxes (b), (c) and
      (i)                                  
|Share in loss of affiliated companies
      (a), (d)                 
|Goodwill impairment charge
      (c)                                 
|Cost of sales (i)                                                    
|Amortization of pre-operating costs
      (d)                        
|Development and pre-operating costs
      (d)                        
|Pension (f)                                                          
|                                                                     
|                                                                     
|Net loss under
      U.S. GAAP                                       
|                                                                     
|                                                                     
|                                                                     
|Loss per share
      (basic and diluted) under U.S. GAAP:            
|Loss from continuing
      operations                                
|Earnings from discountinued
      operations                         
|                                                                     
|Net loss per
      share (basic and diluted) under US GAAP           
|                                                                     

---

TEMBEC INC.Reconciliation to United States GAAP,
Continued

Years ended September 30, 2006 and
September 24, 2005 (in millions of dollars, unless otherwise
noted)

---



The cumulative effect of the
adjustments on the consolidated assets, liabilities and shareholders' equity is
as follows:

|                                                      
|------------------------------------------------------
|                                                      
|                                                      
|                                                      
|Total assets
      under Canadian GAAP                
|Adjustments:                                          
|Fixed assets (c)                                      
|Investments (a), (d), (e)                             
|Proportionate consolidation (e)                       
|Other assets:                                         
|Deferred
      development and pre-operating costs (d)
|Loans to
      employees for share purchases (g)      
|Deferred pension
      costs (f)                      
|Future income
      taxes (b), (c)                    
|                                                      
|                                                      
|                                                      
|                                                      
|Total assets
      under U.S. GAAP                    
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|Total
      liabilities under Canadian GAAP           
|Adjustments:                                          
|Deferred gain on foreign exchange contracts
      (a) 
|Proportionate consolidation (e)                       
|Future income taxes (b), (c)                          
|Pension liabilities (f)                               
|                                                      
|                                                      
|                                                      
|                                                      
|Total
      liabilities under U.S. GAAP               
|                                                      
|                                                      
|Total
      shareholders' equity under Canadian GAAP  
|                                                      
|Total asset
      adjustments                         
|                                                      
|Total liability
      adjustments                     
|                                                      
|                                                      
|Total
      shareholders' equity under U.S. GAAP      
|                                                      

---

TEMBEC INC.Reconciliation to United States GAAP,
Continued

Years ended September 30, 2006 and
September 24, 2005 (in millions of dollars, unless otherwise
noted)

---

Summary of material
differences between Canadian and United States generally accepted accounting
principles (GAAP) (continued):

|(a) | Derivative
      financial instruments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | Prior to September
      28, 2003, under Canadian GAAP, the Company applied hedge accounting for
      derivative financial instruments, which mainly consisted of foreign
      exchange contracts, which were used to hedge future revenue stream.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|    | Effective
      September 28, 2003, as a result of the adoption in Canada of the
      Accounting guideline AcG-13 of the CICA Handbook, the Company began to
      account for its derivative financial instruments using the fair value
      basis. As a result, a deferred gain was recognized at the beginning of the
      fiscal year 2004 and was amortized into earnings in 2004, 2005 and 2006
      based on the original maturity dates of the then outstanding foreign
      exchange contracts.                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    | Under U.S. GAAP,
      such derivative financial instruments did not meet the requirements
      allowing hedge accounting and, consequently, periodic changes in
      unrealized gains and losses on these derivative financial instruments were
      included in earnings based on the change in their current fair value.
      Accordingly, the only difference remaining between Canadian and U.S. GAAP
      in respect of these derivative financial instruments was the amount of the
      deferred gain either recognized in each year or not yet recognized in
      earnings under Canadian GAAP. The outstanding balance of the deferred gain
      and the amount recognized in earnings during these years on such
      derivative financial instruments were reversed out of earnings and
      shareholders equity under U.S. GAAP. At September 30, 2006, all the
      deferred gains have been recognized into income.
|   
|(b) | Income
      taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|    | On October 1,
      2000, Tembec adopted the Canadian accounting recommendations for income
      taxes (CICA Handbook Section 3465). The Canadian accounting
      recommendations essentially harmonize Canadian GAAP with U.S. GAAP. For
      Canadian GAAP, the new standard was applied prospectively. For U.S. GAAP,
      the statement is deemed to be applied since 1992. Prior to 2000, under
      Canadian GAAP, Tembec accounted for income taxes using the deferral
      method. Under U.S. GAAP, income taxes are being provided for by the
      liability method. The tax effect of other reconciling items is also
      included under this caption.                                                                                                                                                                                                                                                                     
|   
|(c) | Income taxes
      related to purchase accounting and goodwill:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   

---

TEMBEC INC.Reconciliation to United States GAAP,
Continued

Years ended September 30, 2006 and
September 24, 2005 (in millions of dollars, unless otherwise
noted)

---

Summary of material differences
between Canadian and United States generally accepted accounting principles
(GAAP) (continued):

|(c) | Income taxes
      related to purchase accounting and goodwill (continued):                                                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(d) | Deferred
      development and pre-operating costs:                                                                                                                                                                                                                                                                                                                                                                     
|   
|    | Under U.S. GAAP,
      certain development and pre-operating costs, capitalized under Canadian
      GAAP, would have been expensed as incurred.                                                                                                                                                                                                                                                                        
|   
|(e) | Joint
      ventures:                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    | Interest in joint
      ventures is accounted for using the proportionate consolidation method
      under Canadian GAAP. Under U.S. GAAP, joint ventures are accounted for
      using the equity method. Earnings recognized by each of the two methods
      are the same. However, a reconciliation to U.S. GAAP of the financial
      statements of the joint ventures may result in additional
      adjustments.
|   
|(f) | Pension
      liabilities:                                                                                                                                                                                                                                                                                                                                                                                              
|   
|    | At September 30,
      2006, $88 million (2005 - $171 million) was recognized as an additional
      minimum pension liability on the balance sheet and in other comprehensive
      income. The amount was recognized under SFAS No. 87 due to an actuarially
      valued minimum accumulated benefit obligation in excess of the fair value
      of the plans assets.                                              
|   
|(g) | Loans to employees
      for share purchases:                                                                                                                                                                                                                                                                                                                                                                           
|   
|    | Under U.S. GAAP,
      loans to employees for share purchases, classified as other assets under
      Canadian GAAP, are reclassified under shareholders' equity.                                                                                                                                                                                                                                                       
|   
|(h) | Comprehensive
      income:                                                                                                                                                                                                                                                                                                                                                                                             
|   
|    | Under U.S. GAAP,
      the Company is required to disclose certain information about
      comprehensive income. This information would be as follows for the years
      ended September 30, 2006 and September 24, 2005:                                                                                                                                                                                              
|   

|                                                          
|----------------------------------------------------------
|                                                          
|                                                          
|Loss under U.S.
      GAAP                                
|Other
      comprehensive (loss) income:                  
|Minimum pension liabilities, net of
      income taxes (f)
|                                                          
|Comprehensive
      loss                                  
|                                                          

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TEMBEC INC.Reconciliation to United States GAAP,
Continued

Years ended September 30, 2006 and
September 24, 2005 (in millions of dollars, unless otherwise
noted)

---



|(h) | Comprehensive income
      (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | At September 30, 2006 and
      September 24, 2005, accumulated other comprehensive loss amounts to $70
      million and $130 million, respectively.                                                                                                                                                                                                                                                                                                                   
|   
|(i) | Research and development tax
      credits:                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|    | Tax credits relating to
      research and development are recognized as a reduction of the related
      expenses, which are part of cost of goods sold. Under US GAAP, those tax
      credits would have been recorded as a reduction of the income tax expense
      or an increase of the income tax recovery. The tax credits relating to
      research and development for the year ended September 30, 2006 amounted to
      $10 million (2005 - $18 million).
|   

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