Exhibit 11.1


                       MILLAR WESTERN FOREST PRODUCTS LTD.

                               (the "Corporation")
                       CODE OF BUSINESS CONDUCT AND ETHICS


     This Code of Business Conduct and Ethics (this "Code") shall apply to the
Corporation's Chief Executive Officer, its Chief Financial Officer and its
Corporate Controller (the "Affected Executives"). The Corporation shall seek and
obtain the commitment of its Chief Executive Officer, its Chief Financial
Officer and its Corporate Controller their agreement to abide by all of the
terms of this Code.

     This Code sets out standards that are reasonably designed to deter
wrongdoing and to promote:

     1.   honest and ethical conduct, including the ethical handling of actual
          or apparent conflicts of interest between personal and corporate
          relationships;

     2.   full, fair, accurate, timely and understandable disclosure in reports
          and documents that the Corporation files with, or submits to the
          Securities and Exchange Commission ("SEC") and in other public
          communications made by the Corporation;

     3.   compliance with applicable governmental laws, rules and regulations;

     4.   prompt internal reporting to the Chairman of the Audit Committee; and

     5.   accountability for adherence to this Code.

Honest and Ethical Conduct
--------------------------

     The Affected Executives shall, in all matters pertaining to their
responsibilities for and on behalf of the Corporation, conduct themselves
honestly and ethically.

     The Affected Executives must avoid situations where personal interests
could conflict with, or even appear to conflict with, the interests of the
Corporation. The Affected Executives owe their first business alliance to the
Corporation. They must avoid outside interests that may impair or appear to
impair the effective performance of their responsibilities to the Corporation.

Full and Fair Disclosure
------------------------

     Because of the notes that the Corporation has issued, the Corporation has
an obligation to make disclosure to the Securities and Exchange Commission
("SEC") and to its noteholders. Information that must be disclosed, as required
by the SEC or by the notes or the trust indenture,

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shall be full, fair, accurate, timely and understandable. Disclosures shall not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading. All information that the Corporation
otherwise elects to make public shall be fair, accurate and understandable.

Compliance
----------

     The Affected Executives shall ensure that all levels of the Corporation and
its businesses comply in all respects with all applicable governmental laws,
rules and regulations.

     When doing business on behalf of the Corporation, the Affected Executives
should always adhere to the spirit as well as the letter of the applicable laws,
rules and regulations and commonly accepted standards of business conduct. The
Affected Executives must avoid activities that could involve or lead to
involvement of the Corporation in any unlawful or improper practice. The
Affected Executives shall instruct all those employees of the Corporation who
are accountable to them, to conduct themselves in a like manner.

Prompt Internal Reporting
-------------------------

     All Affected Executives have a personal responsibility to promptly report
to the Chairman of the Audit Committee, in good faith, any activity on the part
of any other Affected Executives that appears to violate this Code, the laws and
regulations. The Chairman of the Audit Committee shall, promptly take such steps
as he or she deems appropriate, including notifying the Corporation's board of
directors, to correct the violations.

Accountability
--------------

     Abiding by the standards of this Code and underlying policies is a serious
matter. The Corporation will take all reasonable steps to respond appropriately,
promptly and consistently to violations of this Code and prevent further
situations.