##### 



Annual Information Form
 March 30, 2007




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##### 



TABLE OF CONTENTSSTANTEC INC.   ANNUAL INFORMATION FORM
    
    
    4CORPORATE STRUCTURE
    
    
    5Name, Address and Incorporation
    
    
    5Intercorporate Relationships
    
    
    5GENERAL DEVELOPMENT OF THE BUSINESS
    
    
    7Three-Year History
    
    
    7Current Trends
    
    
    8DESCRIPTION OF THE BUSINESS
    
    
    8Business Units
    
    
    9Consulting Services Business Unit
    
    
    10Acquisitions
    
    
    12Research and Development
    
    
    13Employees
    
    
    13Competitive Conditions
    
    
    14Social or Environmental Policies
    
    
    14Foreign Operations
    
    
    15Dividend Policy
    
    
    15RISK FACTORS
    
    
    15Managing Stantecs Risks
    
    
    24DESCRIPTION OF CAPITAL STRUCTURE
    
    
    24Preferred Shares
    
    
    25Common Shares
    
    
    25MARKET FOR SECURITIES
    
    
    25AUDIT COMMITTEE INFORMATION
    
    
    26Audit Committee Terms of Reference
    
    
    26Composition of the Audit Committee
    
    
    26Pre-Approval Policy
    
    
    27External Auditor Service Fees
    
    
    27DIRECTORS AND OFFICERS
    
    
    28LEGAL PROCEEDINGS
    
    
    31TRANSFER AGENT
    
    
    31MATERIAL CONTRACTS
    
    
    31INTERESTS OF EXPERTS
    
    
    32
 Page 2




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ADDITIONAL INFORMATION
    
    
    32APPENDIX I
    
    
    33APPENDIX II
    
    
    35
 Page 3




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STANTEC INC.
    
    ANNUAL INFORMATION FORM
MARCH 30, 2007
 Caution Regarding Forward-Looking Statements
     
    
    global capital market activities;
    
    interest rate and currency value fluctuations;
    
    the effects of war or terrorist activities;
    
    the effects of disease or illness on local, national or international economies;
    
    the effects of disruptions to public infrastructure, such as transportation, and
communications;
    
    power or water supply disruptions;
    
    industry and worldwide economic and political conditions;
    
    regulatory and statutory developments;
    
    the effects of competition in the geographic and business areas in which Stantec operates;
    
    management actions; and
    
    technological changes.
  Page 4




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CORPORATE STRUCTURE
 Name, Address and Incorporation
     Intercorporate Relationships
  STANTEC INC.
 
 PERCENTAGESUBSIDIARY
    
    PERCENTAGE
    
    OF
    
    JURISDICTION OFOF VOTING
    
    RESTRICTED
    
    INCORPORATIONSHARES
    
    SHARES*455499 B.C. Ltd.
    
    100
    
    n/a
    
    British Columbia659243 B.C. Ltd.
    
    100
    
    n/a
    
    British Columbia0714993 B.C. Ltd.
    
    100
    
    n/a
    
    British Columbia0715004 B.C. Ltd.
    
    100
    
    n/a
    
    British Columbia0715007 B.C. Ltd.
    
    100
    
    n/a
    
    British Columbia1208023 Alberta ULC
    
    100
    
    n/a
    
    Alberta3102452 Nova Scotia Company
    
    100
    
    n/a
    
    Nova ScotiaAmerex International, Inc.
    
    100
    
    n/a
    
    British Virgin IslandsArchitectura Inc.
    
    01
    
    100
    
    Alberta
 Page 5




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PERCENTAGESUBSIDIARY
    
    PERCENTAGE
    
    OF
    
    JURISDICTION OFOF VOTING
    
    RESTRICTED
    
    INCORPORATIONSHARES
    
    SHARES*APAI Architecture Inc.
    
    100
    
    n/a
    
    British ColumbiaCPV Architects & Engineers Ltd.
    
    100
    
    n/a
    
    British ColumbiaDH Testing Services, Inc.2
    
    100
    
    n/a
    
    FloridaJ. Muller International  Stanley
Joint Venture Inc.
    
    30
    
    n/a
    
    New BrunswickGKO Power Engineering Ltd.
    
    100
    
    n/a
    
    AlbertaInternational Insurance Group Inc.
    
    100
    
    n/a
    
    BarbadosPentacore ADA Consulting, LLC
    
    100
    
    n/a
    
    NevadaPlanning & Stantec Limited
    
    51
    
    n/a
    
    Trinidad  and TobagoProject Delivery Holdings LLC
    
    100
    
    n/a
    
    New YorkSEA, Incorporated
    
    100
    
    100
    
    NevadaSSBV Consultants Inc.
    
    33 1/3
    
    n/a
    
    British ColumbiaStantec Architecture Inc.
    
    01
    
    n/a
    
    North CarolinaStantec Architecture Ltd.
    
    01
    
    n/a
    
    CanadaStantec Consulting Associates P.C.
    
    01
    
    n/a
    
    New YorkStantec Consulting Caribbean Ltd.
    
    100
    
    n/a
    
    BarbadosStantec Consulting Inc.
    
    100
    
    100
    
    ArizonaStantec Consulting International Ltd.
    
    100
    
    100
    
    CanadaStantec Consulting Ltd.
    
    100
    
    n/a
    
    CanadaStantec Consulting Massachusetts
P.C.3
    
    01
    
    n/a
    
    MassachusettsStantec Consulting Michigan Inc.
    
    100
    
    n/a
    
    MichiganStantec Consulting Services Inc.
    
    100
    
    100
    
    New YorkStantec Engineering (Puerto Rico)
P.S.C.
    
    01
    
    n/a
    
    Puerto RicoStantec Facilities Ltd.
    
    100
    
    n/a
    
    AlbertaStantec Geomatics Ltd.
    
    501
    
    100
    
    AlbertaStantec Holdings (Delaware) III Inc.
    
    100
    
    100
    
    Delaware
 Page 6




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PERCENTAGESUBSIDIARY
    
    PERCENTAGE
    
    OF
    
    JURISDICTION OFOF VOTING
    
    RESTRICTED
    
    INCORPORATIONSHARES
    
    SHARES*Stantec Holdings Ltd.
    
    100
    
    100
    
    AlbertaStantec International Enterprises
Limited
    
    100
    
    100
    
    BahamasStantec International Limited
    
    100
    
    n/a
    
    BarbadosStantec Technology International Inc.
    
    100
    
    100
    
    DelawareTeshmont Consultants Inc.
    
    50
    
    n/a
    
    CanadaUEI Associates, Inc.
    
    100
    
    n/a
    
    TexasUEI Global I, Inc.
    
    100
    
    n/a
    
    TexasUniversal Energy do Brasil Ltda.
    
    100
    
    n/a
    
    Brazil
 
 *
    
    In the context of this Annual Information Form, Restricted Shares means non-voting
shares in the capital stock of the Company or a subsidiary of the Company, as the case may
be.1
    
    Stantec has entered into an agreement with respect to 100% of the voting shares of this
corporation that allows it to direct control over any disposition of the voting shares of
this corporation.2
    
    Acquired as part of the acquisition of Dufresne-Henry, Inc. See the General Development
of the Business section below and the acquisition section of the Description of the
Business on page 8.3
    
    Incorporated on September 5, 2006. GENERAL DEVELOPMENT OF THE BUSINESS
 Three-Year History
  March 2006
    
    Carinci Burt Rogers Engineering, Inc.April 2006
    
    Dufresne-Henry, Inc.May 2006
    
    ACEx Technologies, Inc.
    Page 7




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Current Trends
  DESCRIPTION OF THE BUSINESS
   Page 8




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Business Units
    1.
    
    Architecture, Interior Design, & Facilities Planning & Operations;2.
    
    Buildings Engineering;3.
    
    Program & Project Management;4.
    
    Environmental Infrastructure;5.
    
    Environmental Management;6.
    
    Bio/Pharmaceuticals;7.
    
    Manufacturing/Industrial;8.
    
    Energy & Resources;9.
    
    Infrastructure Management & Pavement Engineering;
 Page 9




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10.
    
    Transportation;11.
    
    Planning & Landscape Architecture;12.
    
    Urban Land Engineering; and13.
    
    Surveys/Geomatics.
   2006
    
    
    2005Units
    
    
    (C$000)
    
    
    %
    
    
    
    (C$000)
    
    
    %Consulting Services
    
    
    816,133
    
    
    
    100
    %
    
    
    618,020
    
    
    
    100
    %
 Consulting Services Business Unit
    Buildings Practice Area
   Page 10




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Environment Practice Area
  
    
    Assimilative capacity
    
    Wastewater collection systems
    
    Municipal and industrial wastewater treatment
    
    Infiltration and inflow/combined and sanitary sewer overflow
    
    Odor and corrosion control
    
    Wastewater pumping
    
    Water treatment
    
    Water storage
    
    Distribution systems
    
    Water reclamation and reuse
    
    Environmental site management
    
    Environmental assessment
    
    Water resources management
    
    Heritage and natural resource assessment
    
    Waste management
    
    Risk assessment
    
    Health and safety
    
    Air quality assessment
    
    Ecotoxicology and good laboratory practice testing
    
    Microbiology laboratory
  Industrial & Project Management Practice Area
  Page 11




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Transportation Practice Area
    Urban Land Practice Area
  Acquisitions
  Year
    
    Business Acquired
    
    Nature of Business2006
    
    Carinci Burt Rogers
Engineering, Inc.
    
    Provides electrical engineering consulting
services in Ontario.2006
    
    Dufresne-Henry, Inc.
    
    Provides multi-disciplined engineering and
consulting services in the New England states, New
York and Florida.
 Page 12




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Year
    
    Business Acquired
    
    Nature of Business2006
    
    ACEx Technologies, Inc.
    
    Provides communications system engineering
services in California and Texas.2005
    
    CPV Group Architects &
Engineers Ltd.
    
    Provides architecture, interior design and
structural engineering services in Alberta and
British Columbia.2005
    
    The Keith Companies, Inc.
    
    Provides multi-disciplined engineering and
consulting services in California, Oregon, Nevada,
Arizona, Texas, Michigan and Utah.2005
    
    Keen Engineering Co. Ltd.
    
    Provides consulting engineering services
specializing in sustainable mechanical, electrical
and plumbing design for buildings and facilities
in British Columbia, Alberta, Ontario, Washington
and California.2004
    
    The Sear-Brown Group, Inc.
    
    Provides engineering, planning, and architectural
services in New York, Ohio, Pennsylvania and
Puerto Rico.2004
    
    GBR Architects Limited
    
    Provides architectural design services in Manitoba.2004
    
    Dunlop Architects Inc.
    
    Provides architectural design services in Ontario.2004
    
    Shaflik Engineering Ltd.
(asset purchase)
    
    Provides electrical engineering services
specializing in traffic and sport facility
lighting.
    Research and Development
  Employees
  Page 13




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Competitive Conditions
      Social or Environmental Policies
  
    
    Strive to identify, assess and manage the environmental aspects and impacts
associated with the services and products provided by Stantec;
    
    Strive to identify and manage the environmental, health and safety risks and hazards
to which Stantecs employees are exposed;
    
    Help Stantecs employees develop an awareness and understanding of the environment,
health and safety issues relevant to their work;
    
    Strive to comply with legislation, regulations and appropriate industry standards;
 Page 14




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
    
    Monitor and enhance the program through inspections, audits, reviews,
investigations, corrective actions and other processes; and
    
    Encourage internal and external communication regarding environmental, health and
safety issues.
  Foreign Operations
  Dividend Policy
  RISK FACTORS
  Economic downturns could have a negative impact on Stantecs businesses as its clients may curtail
investment in infrastructure projects.
  If Stantec is unable to manage its growth effectively, it may experience a decline in its revenue
and profitability.
  Page 15




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From time to time Stantec has pursued and may continue to pursue and invest in business
opportunities that are not directly within its core competencies. These new business opportunities
may require a disproportionate amount of managements time to develop profitably and may not
perform as expected.
  Adverse weather conditions and natural or other disasters may cause a delay or eliminate net
revenue which otherwise would have been realized and thus adversely affect Stantecs profitability.
  Goodwill and other intangible assets acquired as a result of Stantecs acquisitions represent
substantial portions of its total assets. If Stantecs acquired businesses do not perform as
expected, it may be required to write down the value of its goodwill and other intangible assets,
which could have a material adverse effect on its earnings.
 Page 16




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If Stantec experiences delays and/or defaults in customer payments, it could suffer liquidity
problems or be unable to recover its expenditures.
  A significant portion of Stantecs revenue is derived from clients in the real estate industry.
Consequently, Stantecs business could suffer materially if there is a downturn in the real estate
market.
  
    
    Changes in employment levels and other general economic conditions
    
    Changes in interest rates and in the availability, cost, and terms of financing
    
    The impact of present or future environmental, zoning, or other laws and regulations
    
    Changes in real estate tax rates and assessments and other operating expenses
    
    Changes in levels of government infrastructure spending and fiscal policies
    
    Natural or human-made disasters and other factors that are beyond Stantecs control
  Stantec and an acquired entity may experience difficulties in integrating the acquired entitys
business into the existing operations of Stantec and so may not realize the anticipated benefits of
the acquisition.
  Page 17




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The nature of Stantecs business exposes it to potential liability claims and contract disputes,
which may reduce its profits.
  The professional consulting services industry is highly competitive, which could have a negative
impact on Stantecs profit margins and market share.
  Stantecs backlog is subject to unexpected adjustments and cancellations and is, therefore, an
uncertain indicator of its future earnings.
  Page 18




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If Stantec needs to sell or issue additional Common Shares and/or incur additional debt to finance
future acquisitions, share ownership could be diluted and its results of operations could be
adversely affected.
   Stantec may be unsuccessful in its goal to increase the size and profitability of its operations,
which could lead to a reduction in its market share and competitiveness as its industry
consolidates.
   Stantec derives significant revenue from contracts with government agencies. Any disruption in
government funding or in Stantecs relationship with those agencies could adversely affect its
business.
   Page 19




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Because Stantec reports its results in Canadian dollars and a substantial portion of its revenue
and expenses are recorded in US dollars, its results are subject to currency exchange risk.
    If Stantec is unable to engage qualified subconsultants, it may lose projects, revenue, and
clients.
  Uncertainties associated with an acquisition, merger or with Stantec as a new owner may cause an
acquired entity to lose customers.
  Page 20




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Stantec bears the risk of cost overruns in a significant number of its contracts. Stantec may
experience reduced profits or, in some cases, losses under these contracts if costs increase above
its estimates.
  Stantec may have difficulty in attracting and retaining qualified staff, which may affect its
reputation in the marketplace and restrict its ability to implement its business strategy.
  Uncertainties associated with an acquisition may cause a loss of employees.
  One of Stantecs primary competitive advantages is its reputation and experience. If Stantecs
reputation is damaged due to client dissatisfaction, its ability to win additional business may be
materially damaged.
  Page 21




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Inadequate internal controls or disclosure controls may result in events that could adversely
affect Stantecs business.
  If fraud occurs and remains undetected, Stantec may have a loss of assets or misstatement in its
financial statements.
  Stantecs insurance may not cover all claims for which it may be liable and expenses related to
insurance coverage may adversely impact its profitability.
   Page 22




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Stantecs share price could be adversely affected if a large number of its Common Shares are
offered for sale or sold.
  Stantecs share price has historically been subject to volatility. As a result, the price of
Stantecs Common Shares may decrease in the future due to a number of Company- and
industry-specific or general economic factors.
    Stantec may not be able to adequately protect its intellectual property, which could force it to
take costly protective measures such as litigation.
  Page 23




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Managing Stantecs Risks
    DESCRIPTION OF CAPITAL STRUCTURE
  Page 24




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Preferred Shares
 pari passu
 Common Shares
  MARKET FOR SECURITIES
  Month
    
    
    High (C$)
    
    
    Low (C$)
    
    
    Volume*January
    
    
    
    21.34
    
    
    
    
    19.25
    
    
    
    
    1,420,400February
    
    
    
    23.22
    
    
    
    
    20.07
    
    
    
    
    1,878,500March
    
    
    
    22.10
    
    
    
    
    19.45
    
    
    
    
    2,216,200April
    
    
    
    22.51
    
    
    
    
    21.11
    
    
    
    
    911,600May
    
    
    
    23.75
    
    
    
    
    21.44
    
    
    
    
    1,685,200June
    
    
    
    24.50
    
    
    
    
    20.59
    
    
    
    
    3,690,300July
    
    
    
    21.77
    
    
    
    
    18.50
    
    
    
    
    1,382,900August
    
    
    
    21.25
    
    
    
    
    19.00
    
    
    
    
    1,682,400September
    
    
    
    20.80
    
    
    
    
    19.86
    
    
    
    
    2,080,300October
    
    
    
    23.69
    
    
    
    
    20.01
    
    
    
    
    1,667,700November
    
    
    
    25.84
    
    
    
    
    22.15
    
    
    
    
    1,378,200December
    
    
    
    25.44
    
    
    
    
    22.50
    
    
    
    
    1,969,80021,963,500
  Page 25




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Month
    
    
    High (US$)
    
    
    Low (US$)
    
    
    Volume*January
    
    
    
    18.71
    
    
    
    
    16.60
    
    
    
    
    443,200February
    
    
    
    20.09
    
    
    
    
    17.63
    
    
    
    
    275,200March
    
    
    
    18.78
    
    
    
    
    16.78
    
    
    
    
    207,000April
    
    
    
    19.75
    
    
    
    
    18.20
    
    
    
    
    159,600May
    
    
    
    21.56
    
    
    
    
    19.35
    
    
    
    
    376,000June
    
    
    
    22.26
    
    
    
    
    18.45
    
    
    
    
    275,600July
    
    
    
    19.20
    
    
    
    
    16.33
    
    
    
    
    140,500August
    
    
    
    19.10
    
    
    
    
    16.76
    
    
    
    
    179,800September
    
    
    
    18.65
    
    
    
    
    17.68
    
    
    
    
    109,400October
    
    
    
    21.00
    
    
    
    
    18.05
    
    
    
    
    154,000November
    
    
    
    22.55
    
    
    
    
    19.66
    
    
    
    
    217,300December
    
    
    
    21.88
    
    
    
    
    19.70
    
    
    
    
    362,5002,900,100
  AUDIT COMMITTEE INFORMATION
 Audit Committee Terms of Reference
  Composition of the Audit Committee
    Page 26




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Pre-Approval Policy
  External Auditor Service Fees
  Page 27




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Category
    
    Note
    
    2006
    
    
    2005Audit Fees
    
    1
    
    
    C$1,056,000
    
    
    
    C$754,000Audit-Related Fees
    
    2
    
    
    0
    
    
    
    24,000Tax Fees
    
    3
    
    
    532,000
    
    
    
    898,000Total
    
    
    
    
    C$1,588,000
    
    
    
    C$1,676,000
 
 1  Audit Fees  audit services provided by Ernst & Young LLP for the audit and review of
Stantecs financial statements or services normally provided by Ernst & Young LLP in connection
with statutory and regulatory filings or engagements. Included is C$500,000 related to the fee
for the audit of internal controls.2  Audit-Related Fees  assurance and related services provided by Ernst & Young LLP that are
reasonably related to the performance of the audit or review of the financial statements and
are not reported under Audit Fees.3  Tax Fees  professional services rendered by Ernst & Young LLP for tax compliance, tax
advice and tax planning, including tax advice relating to potential business acquisitions. DIRECTORS AND OFFICERS
  Directors of Stantec
 Name andMunicipality of Residence
    
    Principal Occupation
    
    Director sinceROBERT J. BRADSHAW1Toronto, ON Canada
    
    Chairman, Contor Industries Limited
(a holding company that acquires
manufacturing companies)
    
    
    1993E. JOHN (JACK) FINN2Madison, CT USA
    
    Corporate Director
    
    
    1995ANTHONY P. FRANCESCHINI
Edmonton, AB Canada
    
    President & CEO of Stantec
    
    
    1994WILLIAM D. GRACE1, 2Edmonton, AB Canada
    
    Corporate Director
    
    
    1994SUSAN E. HARTMAN1Rochester, NY USA
    
    President and CEO of The Hartman
Group (a management consulting firm)
    
    
    2004ARAM H. KEITH
Irvine, CA USA
    
    Vice Chairman of the Board of Stantec
    
    
    2005ROBERT R. MESEL2Kiawah Island, SC USA
    
    Corporate Director
    
    
    2004IVOR M. RUSTE2Calgary, AB Canada
    
    Vice President, Finance, EnCana
Corporation (an unconventional
natural gas and integrated oilsands
company)
    
    
    2007
 Page 28




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##### 



Name andMunicipality of Residence
    
    Principal Occupation
    
    Director sinceRONALD TRIFFO
Edmonton, AB Canada
    
    Chairman of the Board of Stantec
    
    
    1985
 
 1
    
    member of Corporate Governance and Compensation Committee2
    
    member of Audit Committee    Executive Officers of Stantec
 Name andMunicipality of Residence
    
    Principal Occupation
    
    Officer Positions HeldExecutive Officers of Stantec Inc.RONALD TRIFFO
Edmonton, AB Canada
    
    Chairman of the Board
    
    Chairman of the Board
of Stantec Inc.ARAM H. KEITH
Irvine, CA USA
    
    Vice Chairman of the Board
    
    Vice Chairman of the
Board of Stantec Inc.ANTHONY P. FRANCESCHINI*
Edmonton, AB Canada
    
    President & CEO
    
    President & CEO of
Stantec Inc.DONALD W. WILSON*
St. Albert, AB Canada
    
    Vice President & CFO
    
    Vice President & CFO
of Stantec Inc.JEFFREY S. LLOYD
Edmonton, AB Canada
    
    Vice President, Secretary &
General Counsel
    
    Vice President,
Secretary & General
Counsel of Stantec
Inc.Other Executive OfficersW. PAUL ALLEN*
Elmira, ON Canada
    
    Corporate Practice Area Unit
Leader, Urban Land
    
    Senior Vice President
of certain Stantec
Inc. subsidiaries
 Page 29




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Name andMunicipality of Residence
    
    Principal Occupation
    
    Officer Positions HeldRICHARD ALLEN*
Canton, MA USA
    
    Regional Operating Unit
Leader, US East
    
    Senior Vice President
of certain Stantec
Inc. subsidiariesCARL F. CLAYTON*
Edmonton, AB Canada
    
    Corporate Practice Area Unit
Leader, Transportation
    
    Senior Vice President
of certain Stantec
Inc. subsidiariesVALENTINO DIMANNO*
Calgary, AB Canada
    
    Regional Operating Unit
Leader, Canada
    
    Senior Vice President
of certain Stantec
Inc. subsidiariesROBERT J. GOMES*
Edmonton, AB Canada
    
    Corporate Practice Area Unit
Leader, Industrial & Project
Management
    
    Senior Vice President
of certain Stantec
Inc. subsidiariesMARK E. JACKSON*
Kitchener, ON Canada
    
    Senior Vice President & COO
    
    Senior Vice President
& COO of certain
Stantec Inc.
subsidiariesJEFFERY KISHEL*Longmont, CO USA
    
    Corporate Practice Area Unit
Leader, Environment
    
    Senior Vice President
of certain Stantec
Inc. subsidiariesERIC C. NIELSEN*
Santa Ana, CA USA
    
    Regional Operating Unit
Leader, US West
    
    Senior Vice President
of certain Stantec
Inc. subsidiariesSTANIS I.R. SMITH*
Burnaby, BC Canada
    
    Corporate Practice Area Unit
Leader, Buildings
    
    Senior Vice President
of certain Stantec
Inc. subsidiaries
 
 *
    
    Member of the Companys Executive Leadership Team.   Page 30




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##### 



LEGAL PROCEEDINGS
 1.
    
    Valerie Parris  Sear-Brown, a company acquired by Stantec in April 2004, provided
design services for a roadway in New York State. A multi-vehicle accident occurred on the
roadway on November 28, 2001 ostensibly as a result of one drivers falling asleep and
rear-ending another vehicle. Ms. Parris advanced a civil claim in New York State on or
about December 1, 2003 alleging, among other things, negligence in the design and
construction of the roadway. Ms. Parris alleges that as a result of the accident, Alonzo
Raynard Parris sustained fatal injuries and his son, Raynard Parris, sustained injury and
mental distress. Sear-Brown is one of a number of defendants in the legal proceeding.
Damages sought total US$43 million. Sear-Browns insurer has responded to the claim. The
allegations against Sear-Brown have been denied and are being contested. One Sear-Brown
entity has been dismissed from the lawsuit on Summary Judgment.2.
    
    Celanese Canada Inc.  This matter has been resolved. Stantec was named as one of 12
defendants in an action issued on June 19, 2003 by Celanese Canada Inc. and Celanese Ltd.
in the Ontario Superior Court of Justice. The following parties were named as defendants:
Murray Demolition Corp.; Canadian Bearings Ltd.; Farrokh Khalili; Abra Projects Ltd.; Gerry
Hamaliuk; Usher Canada, Limited; Caltech Design Inc.; Aphex Imaging Inc.; Hossein
Banijamali; Canadian Petroleum Processing & Equipment Inc.; Stantec Consulting Ltd.; and
Zayanderhood Petrochemical Company.Stantec was retained by one of the other defendants (Caltech Design Inc. based in Calgary)
to provide detailed design engineering and project management services without construction
phase services in relation to decommissioning of Celaneses Edmonton Vinyl Acetate Monomer
Plant. Stantec was named in Celaneses C$110 million suit for alleged breach of proprietary
information/technology and alleged breach of confidentiality agreements. Celanese claimed
that some or all of the defendants misappropriated, without permission, Celaneses property
and proprietary information. Stantecs role was as a subconsultant to Caltech providing
professional consulting services only. Stantec denied any wrongdoing. On May 15, 2006,
Celanese agreed to discontinue its action against Stantec without costs.
  TRANSFER AGENT
  MATERIAL CONTRACTS
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INTERESTS OF EXPERTS
  ADDITIONAL INFORMATION
  
 
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APPENDIX I
 
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APPENDIX II
 Stantec Inc.  Audit Committee  Terms of Reference (Mandate)
 
 A.
    
    OVERVIEW AND PURPOSEThe Audit Committee (the Committee) is appointed by, and responsible to the Board of
Directors (the Board). The Committee approves, monitors, evaluates, advises and makes
recommendations, in accordance with these terms of reference, on matters affecting the
external and internal audits, risk management matters, the integrity of financial reporting
and the accounting control policies and practices of the Corporation. The involvement of the
Committee in overseeing the financial reporting process, including assessing the
reasonableness of managements accounting judgments and estimates and reviewing key filings
with regulatory agencies is an important element of the companys internal control over
financial reporting. The Committee has oversight responsibility for the performance of both
the internal auditors (if any) and the external auditors. The Committee also ensures the
qualifications and independence of the external auditors. The Committee has oversight of the
Corporations compliance with legal and regulatory requirements.It is not the duty of the Committee to plan or conduct audits, or to determine that
the Corporations financial statements are complete, accurate, and in accordance with
generally accepted accounting principles.B.
    
    AUTHORITY AND RESPONSIBILITIESRequest such information and explanations in regard to the accounts of the Corporation as the
Committee may consider necessary and appropriate to carry out its duties and responsibilities.Consider any other matters which, in the opinion of the Committee or at the request of the
Board, would assist the directors to meet their responsibilities.Provide reports and minutes of meetings to the Board.Engage independent counsel and other advisors as may be deemed or considered necessary, and
determine the fees of such counsel and advisors. Receive confirmation from management that
the Corporation has provided for adequate funding for the payment of compensation to the
independent counsel and other advisors.C.
    
    MEMBERSHIPThe members of the Committee shall be composed of three independent directors, appointed by
the Board, all of whom must be financially literate and at least one member shall have
accounting or related financial management expertise and be an audit committee financial
expert as defined in SEC Regulations. For greater clarity, the Board
has adopted the definition of independent director as set out in Multilateral Instrument
52-110 of the Canadian Securities Administrators.
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APPENDIX II
 
 The Chair of the Committee shall be designated by the Board.Attendance by invitation at all or a portion of Committee meetings is determined by the
Committee Chair or its members, and would normally include the CFO of the Corporation,
representatives of the external auditor, the internal auditor, and such other officers or
support staff as may be deemed appropriate.D.
    
    FINANCIAL STATEMENTS AND DISCLOSURES
 1.
    
    Review, and recommend to the Board for approval, the annual audited financial
statements.2.
    
    Review, and recommend to the Board for approval, the following public disclosure
documents:
 (a)
    
    the financial content of the annual report;(b)
    
    the annual management information circular and proxy materials;(c)
    
    the annual information form, including any regulatory requirements
for audit committee reporting obligations;(d)
    
    the management discussion and analysis section of the annual
report; and(e)
    
    the year-end news release on the earnings of the Corporation.
 3.
    
    Review and, if appropriate, to approve and authorize the release of the quarterly
unaudited financial statements including managements discussion and analysis, the
quarterly interim report to shareholders and the quarterly press release on earnings of
the Corporation. However, in the event that there is a significant or extraordinary
matter that, in the opinion of the Committee, should be reviewed by the Board before the
release of such information, then the matter shall be referred to the Board for review.4.
    
    Review with management the procedures that exist for the review of financial
information extracted or derived from financial statements which is publicly disclosed by
the Corporation other than in the documents listed in section 3. above and periodically,
at least annually, assess the adequacy of those procedures.5.
    
    Review, and recommend to the Board for approval, all annual financial statements,
reports of a financial nature, (other than quarterly unaudited financial statements), and
the financial content of prospectuses or any other reports which require approval by the
Board prior to submission thereof to any regulatory authority.6.
    
    Review, and if appropriate, recommend to the Board for approval the Corporations
filings with the U.S. Securities and Exchange Commission.7.
    
    Review the audit committee information required as part of the annual information
form.
 8.
    
    Review with management on an annual basis, the Corporations obligations pursuant
to guarantees that have been issued and material obligations that have been entered into,
and the manner in which these guarantees and obligations have been, or should be,
disclosed in the financial statements.
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APPENDIX II
 9.
    
    Review and assess, in conjunction with management and the external auditor, at
least annually or on a quarterly basis where appropriate or required:
 (a)
    
    the appropriateness of accounting policies and financial reporting
practices used by the Corporation, including alternative treatments that are
available for consideration;(b)
    
    any significant proposed changes in financial reporting and
accounting policies and practices to be adopted by the Corporation;(c)
    
    any new or pending developments in accounting and reporting
standards that may affect or impact on the Corporation;(d)
    
    the impact of the Corporations capital structure on current and
future profitability, and any off-balance sheet structures;(e)
    
    any off-balance sheet structures; and(f)
    
    the key estimates and judgements of management that may be material
to the financial reporting of the Corporation.
 10.
    
    At least annually, request the external auditor to provide their views on the
quality (not just the acceptability) of the Corporations annual and interim financial
reporting. Such quality assessment should encompass judgements about the
appropriateness, aggressiveness or conservatism of estimates and elective accounting
principles or methods and judgements about the clarity of disclosures.11.
    
    Review any litigation, claim or other contingency, including tax assessments, that
could have a material effect upon the financial position or operating results of the
Corporation, and the manner in which these matters have been disclosed in the financial
statements.
 E.
    
    EXTERNAL AUDITOR
 12.
    
    Assess the performance and consider the annual appointment of external auditor for
recommendation to the Board for ultimate recommendation for appointment by the
shareholders.13.
    
    Review, approve and execute the annual engagement letter with the external auditor,
and ensure there is a clear understanding between the Board, the Committee, the external
auditor and management that the external auditor reports directly to the shareholders and
the Board through the Committee. The terms of the engagement letter or the annual audit
plan should include, but not be limited to, the following:
 (a)
    
    staffing;(b)
    
    objectives and scope of the external audit work;(c)
    
    materiality limits;(d)
    
    audit reports required;
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APPENDIX II
 (e)
    
    areas of audit risk;(f)
    
    timetable; and,(g)
    
    the proposed fees.
 14.
    
    Obtain and review a report from the external auditor at least annually regarding
the auditors independence and the professions or audit firm requirements regarding
audit partner rotation.15.
    
    Approve, before the fact, the engagement of the external auditor for all non-audit
services and the fees for such services, and consider the impact on the independence of
the external audit work of fees for such non-audit services.16.
    
    Review all fees paid to the external auditor for audit services and, if
appropriate, recommend their approval to the Board. Receive confirmation from management
that the Corporation has provided for adequate funding for the payment of compensation to
the external auditor.17.
    
    Receive an annual certification from the external auditor that they participate in
the public oversight program established by the Canadian Public Accountability Board
(CPAB) and the standards of the United States Public Company Accounting Board (PCAOB),
and that they are in good standing with the CPAB and the PCAOB.18.
    
    Review a report from the external auditors describing (a) the firms internal
quality control procedures and (b) any material issues raised by the most recent internal
quality control review or peer review of the firm, or by any inquiry or investigation by
governmental or professional authorities within the preceding five years regarding the
audits carried out by the external auditor together with any steps taken to deal with any
such issues.19.
    
    Receive and resolve any disagreements between management and the external auditor
regarding all aspects of the Corporations financial reporting.20.
    
    Review with the external auditor the results of the annual audit examination
including, but not limited to, the following:
 (a)
    
    any difficulties encountered, or restrictions imposed by
management, during the annual audit;(b)
    
    any significant accounting or financial reporting issues;(c)
    
    the auditors evaluation of the Corporations internal controls
over financial reporting and managements evaluation thereon, including internal
control deficiencies identified by the auditor that have not been previously
reported to the Committee;
 (d)
    
    the auditors evaluation of the selection and application of
accounting principles and estimates, and the presentation of disclosures;(e)
    
    the post-audit or management letter or other material written
communications containing any findings or recommendations of the external auditor
including managements response thereto and the subsequent follow-up to any
identified internal accounting control weaknesses; and
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APPENDIX II
 (f)
    
    any other matters which the external auditor should bring to the
attention of the Committee.
 21.
    
    Meet with the external auditor at every meeting of the Committee or as requested by
the auditor, without management representatives present; and to meet with management, at
least annually or as requested by management, without the external auditor present.22.
    
    When there is to be a change in the external auditor, review all issues related to
the change, including the information to be included in the notice of change of auditor
called for under National Instrument 51-102 and the planned steps for an orderly
transition.23.
    
    Review and approve the Corporations hiring policies regarding employees and former
employees of the present and former external auditors of the Corporation.24.
    
    Receive comments from the external auditor on their assessment of the effectiveness
of the Committees oversight of internal control over financial reporting.
 F.
    
    INTERNAL AUDIT
 25.
    
    Review the appointment or termination of the Internal Auditor.26.
    
    Review and approve the internal audit mandate periodically (at least every 3
years).27.
    
    Review and approve the annual audit plan of the internal auditor (where
applicable), and ensure there is a clear understanding between the Board, the Committee,
the internal auditor and management that the internal auditor reports directly to the
Board through the Committee. Receive confirmation from management that the Corporation
has provided for adequate funding for the internal auditor. The terms of the audit plan
should include, but not be limited to, the following:
 (a)
    
    staffing;(b)
    
    objectives and scope of the internal audit work;(c)
    
    materiality limits;(d)
    
    audit reports required;(e)
    
    areas of audit risk;(f)
    
    timetable; and,(g)
    
    the proposed budget.
 28.
    
    Review with the internal auditor the results of their audit examination including,
but not be limited to, the following:
 (a)
    
    any difficulties encountered, or restrictions imposed by
management, during the audit;(b)
    
    any significant accounting or financial reporting issues;
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APPENDIX II
 
 (c)
    
    the auditors evaluation of the Corporations system of internal
accounting controls, procedures and documentation;(d)
    
    the internal audit reports or other material written
communications containing any findings or recommendations of the internal auditor
including managements response thereto and the subsequent follow-up to any
identified internal accounting control weaknesses; and(e)
    
    any other matters which the internal auditor should bring to the
attention of the Committee.
 29.
    
    Meet with the internal auditor at every meeting of the Committee or as requested by
the internal auditor, without management representatives present.
 G.
    
    INTERNAL CONTROLS
 30.
    
    Obtain reasonable assurance, by discussions with and reports from management, the
external auditor and the internal auditors (where applicable), that the accounting
systems are reliable, the system for preparation of financial data reported to the market
is adequate and effective, and that the system of internal controls is effectively
designed and implemented.31.
    
    Review managements annual report on the effectiveness of internal controls and
procedures, as well as quarterly and annual CEO and CFO certificates filed pursuant to
securities regulations.32.
    
    Receive reports from management on all significant deficiencies and material
weaknesses identified by management.33.
    
    Review annually, or as required, the appropriateness of the system of internal
controls and approval policies and practices concerning the expenses of the officers of
the Corporation, including the use of the Corporations assets.34.
    
    Review and approve, on a quarterly after-the-fact basis, the expense accounts of
the Board Chair and the Chief Executive Officer of the Corporation.
 H.
    
    COMPLIANCE/RISK/FRAUD
 35.
    
    Discuss with management the Corporations major risk exposures and the steps
management has taken to monitor and control such exposures, including the Corporations
risk assessment and risk management policies.
 36.
    
    Discuss with management the Corporations policies and procedures designed to
prevent, identify and detect fraud.37.
    
    In accordance with the Corporations Whistle Blower Policy  Complaint Resolution
Process, review and determine the disposition of any complaints or correspondence
received under the policy.38.
    
    Discuss with management the Corporations policies and procedures designed to
ensure an effective compliance and ethics program, including the Corporations code of
ethics.
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APPENDIX II
 
 39.
    
    Discuss with management and the general counsel any legal matters that may have a
material impact on the financial statements or the Corporations compliance requirements.40.
    
    On an annual basis, review the adequacy of the Corporations insurance program.41.
    
    Receive a risk assessment report from management following due diligence, on
acquisitions within North America with an enterprise value of $40 million (Canadian or US
dollars) or greater, and all acquisitions outside North America, make such further
inquiries as considered necessary, and report thereon to the Board. The content of the
risk assessment report will be initially developed by the Committee in conjunction with
management and will be reviewed annually by the Committee.
 I.
    
    OTHER
 42.
    
    Review, as required, any claims of indemnification pursuant to the by-laws of the
Corporation.43.
    
    Receive a quarterly report from the CFO regarding private aircraft use including
itinerary and passenger manifest.44.
    
    Review and determine the disposition of any complaints received from shareholders
or any regulatory body.45.
    
    Conduct a bi-annual assessment of the effectiveness of the Committee and provide a
report thereon to the Board.46.
    
    Review annually the terms of reference for the Committee and recommend any required
changes to the Board.
 J.
    
    MEETINGS
 47.
    
    Regular meetings of the Committee are held at least four times each year.48.
    
    Meetings may be called by the Committee Chair or by a majority of the Committee
members, and usually in consultation with management of the Corporation.49.
    
    Meetings are chaired by the Committee Chair or, in the Chairs absence, by a member
chosen by the Committee from among themselves.50.
    
    A quorum for the transaction of business at any meeting of the Committee is a
majority of the appointed members.51.
    
    The Secretary of the Corporation shall provide for the delivery of notices, agendas
and supporting materials to the Committee members at least five (5) days prior to the
meeting except in unusual circumstances.52.
    
    Meetings may be conducted with members present, or by telephone or other
communications facilities which permit all persons participating in the meeting to hear
or communicate with each other.53.
    
    A written resolution signed by all Committee members entitled to vote on that
resolution at a meeting of the Committee is as valid as one passed at a Committee
meeting.
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APPENDIX II
 
 54.
    
    The Secretary of the Corporation shall be the secretary for the Committee and shall
keep a record of minutes of all meetings of the Committee.55.
    
    Minutes of the meetings of the Committee shall be distributed by the Secretary of
the Corporation to all members of the Committee within seven (7) working days of each
meeting, and shall be submitted for approval at the next regular meeting of the
Committee.
 Page 41