Exhibit
99.2




TABLE OF
      CONTENTSSTANTEC INC.   
      ANNUAL INFORMATION FORM
                  
                  4CORPORATE
      STRUCTURE
                  
                  5Name, Address,
      and Incorporation
                  
                  5Intercorporate
      Relationships
                  
                  5GENERAL DEVELOPMENT OF THE
      BUSINESS
                  
                  8Three-Year
      History
                  
                  8Current
      Trends
                  
                  9DESCRIPTION OF THE
      BUSINESS
                  
                  9Business
      Units
                  
                  10Acquisitions
                  
                  13Research and
      Development
                  
                  15Employees
                  
                  15Competitive
      Conditions
                  
                  15Social or
      Environmental Policies
                  
                  16International
      Operations
                  
                  16Dividend
      Policy
                  
                  17RISK
    FACTORS
                  
                  17Managing Our
      Risks
                  
                  25DESCRIPTION OF CAPITAL
      STRUCTURE
                  
                  26Preferred
      Shares
                  
                  27Common
      Shares
                  
                  27MARKET FOR
      SECURITIES
                  
                  27AUDIT COMMITTEE
      INFORMATION
                  
                  28Audit
      Committee Terms of Reference
                  
                  28Composition of
      the Audit Committee
                  
                  28Preapproval
      Policy
                  
                  29External
      Auditor Service Fees
                  
                  29DIRECTORS AND
      OFFICERS
                  
                  30LEGAL
      PROCEEDINGS
                  
                  33TRANSFER
      AGENT
                  
                  33MATERIAL
      CONTRACTS
                  
                  33INTERESTS OF
      EXPERTS
                  
                  33
 Page
2
 ADDITIONAL
      INFORMATION34APPENDIX I
                    
                    35
 Page
3
 STANTEC INC.
              ANNUAL INFORMATION
      FORMMARCH 27,
  2008
   Caution
Regarding Forward-Looking Statements
 
 Our
public communications often include written or verbal forward-looking statements
within the meaning of the US Private Securities Litigation Reform Act and
Canadian securities law. Forward-looking statements are disclosures regarding
possible events, conditions, or results of operations that are based on
assumptions about future economic conditions and courses of action and include
future-oriented financial information.
 
 Statements
of this type are included in this annual information form (including documents
incorporated by reference) and may be included in filings with Canadian and US
securities regulators or in other communications. Forward-looking statements may
involve, but are not limited to, comments with respect to our objectives for
2008 and beyond, our strategies or future actions, our targets, our expectations
for our financial condition or share price, and the results of or outlook for
our operations or for the Canadian or US economies.
 
 By their
nature, forward-looking statements require us to make assumptions and are
subject to inherent risks and uncertainties. There is significant risk that
predictions and other forward-looking statements will not prove to be accurate.
We caution readers of this document not to place undue reliance on its
forward-looking statements since a number of factors could cause actual future
results, conditions, actions, or events to differ materially from the targets,
expectations, estimates, or intentions expressed in these forward-looking
statements. Assumptions about the performance in 2008 of the Canadian and US
economies and how this performance will affect our business are material factors
we consider in determining our forward-looking statements and are discussed in
the Outlook section of our management’s discussion and analysis for the year
ended December 31, 2007, filed on www.sedar.com and
incorporated by reference.
 
 
 In
addition to the factors set out in the section below, the following factors,
among others, could cause our actual results to differ materially from those
projected in forward-looking statements:
 
 ·
              Global
      capital market activities
 ·
              Interest
      rate and currency value
fluctuations
 ·
              Our
      ability to execute our strategic plans or to complete or integrate
      acquisitions
 ·
              Critical
      accounting estimates
 ·
              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 we
      operate
 ·
              Management
      actions
 ·
              Technological
      changes
 
 We
caution that the foregoing list is not exhaustive of all possible factors and
that other factors could adversely affect our results. Investors and others
should carefully consider these factors, as well as
  Page
4
 other
uncertainties and potential events, and the inherent uncertainty of
forward-looking statements. The forward-looking statements contained herein
represent our expectations as of March 27, 2008, and, accordingly, are
subject to change after such date. Except as may be required by law, we do not
undertake to update any forward-looking statement, whether written or verbal,
that may be made, from time to time, by the organization or on its
behalf.
 
 CORPORATE
STRUCTURE
 
 Name,
Address, and Incorporation
 
 Stantec
Inc. was incorporated under the Canada Business Corporations Act on March 23,
1984, as 131277 Canada Ltd. Our Articles of Incorporation have been amended on
several occasions, namely to change our Company’s name, amend share attributes,
create and delete classes of shares, reorganize our outstanding share capital
and split our common shares on a two-for-one basis, and change the minimum and
maximum number of directors.
 
 On August
15, 1984, the name 131277 Canada Ltd. was changed to Stanley Engineering Group
Inc. and on October 18, 1989, it was changed to Stanley Technology Group Inc. On
March 30, 1994, Stanley Technology Group Inc. amalgamated with
3013901 Canada Limited to continue as Stanley Technology Group Inc. On
October 28, 1998, the name Stanley Technology Group Inc. was changed to Stantec
Inc.
 
 Our head
and principal office and our registered and records office are located at 10160
– 112 Street, Edmonton, Alberta, T5K 2L6.
 
 References
in this annual information form to “Stantec” and the “Company” include, as the
context may require, Stantec Inc. and all or some of the companies in which it
has an interest collectively or one or more of such companies. References in
this annual information form to “our,” “us,” or “we” also refer to “Stantec” in
the contexts explained above.
 
 Intercorporate
Relationships
 
 The
following chart lists, as at December 31, 2007, the intercorporate relationships
among Stantec and Stantec’s subsidiaries, the jurisdiction of incorporation of
the companies, and the percentage of voting and restricted securities held by
Stantec:
 
 STANTEC
INC.
 
 
 SUBSIDIARY
              PERCENTAGE
                OF
      VOTING
                SHARES
              PERCENTAGE
                OF
                RESTRICTED
                SHARES*
              JURISDICTION
      OF
                INCORPORATION
 659243
      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
              Alberta
 Page
5
 SUBSIDIARY
                  PERCENTAGE
                    OF
      VOTING
                    SHARES
                  PERCENTAGE
                    OF
                    RESTRICTED
                    SHARES*
                  JURISDICTION
      OF
                    INCORPORATION
 3102452
      Nova Scotia Company
              100
              n/a
              Nova
      Scotia3221969
      Nova Scotia Company1
              100
              100
              Nova
      ScotiaACCENT
      Engineering Consultants Incorporated2
              40
              n/a
              Nova
      ScotiaAmerex
      International, Inc.
              100
              n/a
              British
      Virgin IslandsAPAI
      Architecture Inc.
              100
              n/a
              British
      ColumbiaArchitectura
      Inc.
              03
              100
              AlbertaBrentcliffe
      Financial Services Inc.4
              100
              n/a
              OntarioBVE
      Development, LLC5
              100
              n/a
              PennsylvaniaColeson
      Power Group Inc.2
              50
              n/a
              New
      BrunswickCPV
      Architects & Engineers Ltd.
              100
              n/a
              British
      ColumbiaDekko
      Studio Inc.4
              100
              n/a
              OntarioFaulknerBrowns
      Chong Partners LLP6
              50
              n/a
              Great
      BritainFFEB
      JV, L.L.C.7
              30
              n/a
              DelawareFlood
      Protection Center, LLC7
              100
              n/a
              KentuckyFuller,
      Mossbarger, Scott & May Engineers, Inc.7
              100
              n/a
              KentuckyGKO
      Power Engineering Ltd.
              100
              n/a
              AlbertaInternational
      Insurance Group Inc.
              100
              n/a
              BarbadosI-Tech
      Group LLC5
              100
              n/a
              New
      YorkJ.
      Muller International • Stanley Joint Venture Inc.
              30
              n/a
              New
      BrunswickLeestown
      Leasing, LLC7
              100
              n/a
              KentuckyMurphy
      Hilgers Architects Inc.4
              100
              n/a
              OntarioNG
      Projects Inc.2
              100
              n/a
              Nova
      ScotiaPentacore
      ADA Consulting, LLC
              100
              n/a
              NevadaPlanning
      & Stantec Limited
              51
              n/a
              Trinidad
      and TobagoProject
      Delivery Holdings LLC
              100
              n/a
              New
      York
 Page
6
 SUBSIDIARY
                PERCENTAGE
                  OF
      VOTING
                  SHARES
                PERCENTAGE
                  OF
                  RESTRICTED
                  SHARES*
                JURISDICTION
      OF
                  INCORPORATION
 RiverMorph,
      LLC7
              100
              n/a
              KentuckySEA,
      Incorporated
              100
              100
              NevadaSSBV
      Consultants Inc.
              33
      1/3
              n/a
              British
      ColumbiaStantec
      Architecture Inc.
              03
              n/a
              North
      CarolinaStantec
      Architecture Ltd.
              03
              n/a
              CanadaStantec
      Consulting Associates P.C.
              03
              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.
              03
              n/a
              MassachusettsStantec
      Consulting Michigan Inc.
              100
              n/a
              MichiganStantec
      Consulting Services Inc.
              100
              100
              New
      YorkStantec
      Delaware LLC8
              100
              n/a
              DelawareStantec
      Delaware II LLC9
              100
              n/a
              DelawareStantec
      Engineering (Puerto Rico) P.S.C.
              03
              n/a
              Puerto
      RicoStantec
      Facilities Ltd.
              100
              n/a
              AlbertaStantec
      Geomatics Ltd.
              503
              100
              AlbertaStantec
      Holdings (Delaware) III Inc.
              100
              100
              DelawareStantec
      Holdings Ltd.
              100
              100
              AlbertaStantec
      Holdings II Ltd.10
              100
              n/a
              AlbertaStantec
      International Enterprises Limited
              100
              100
              BahamasStantec
      International Limited
              100
              n/a
              BarbadosStantec
      Planning and Landscape Architecture, P.C.11
              03
              n/a
              Maine
 Page
7
 SUBSIDIARY
                PERCENTAGE
                  OF
      VOTING
                  SHARES
                PERCENTAGE
                  OF
                  RESTRICTED
                  SHARES*
                JURISDICTION
      OF
                  INCORPORATION
 Stantec
      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
              Incorporated
      on August 30, 2007.
 2
              Acquired
      as part of the acquisition of the Neill and Gunter
      companies.  See the General Development of the Business section
      below and the acquisition section of the Description of the Business on
      page 13.
 3
              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.
 4
              Acquired
      as part of the acquisition of Murphy Hilgers Architects
      Inc.  See the General Development of the Business section below
      and the acquisition section of the Description of the Business on page
      13.
 5
              Acquired
      as part of the acquisition of Vollmer Associates LLP.  See the
      General Development of the Business section below and the acquisition
      section of the Description of the Business on page
  13.
 6
              Acquired
      as part of the acquisition of Chong Partners Architecture,
      Inc.  See the General Development of the Business section below
      and the acquisition section of the Description of the Business on page
      13.
 7
              Acquired
      as part of the acquisition of Fuller, Mossbarger, Scott & May
      Engineers, Inc.  See the General Development of the Business
      section below and the acquisition section of the Description of the
      Business on page 13.
 8
              Incorporated
      on March 20, 2007.
 9
              Incorporated
      on August 30, 2007.
 10
              Incorporated
      on August 29, 2007.
 11
              Incorporated
      on February 8, 2007.
 
 GENERAL
DEVELOPMENT OF THE BUSINESS
 
 Three-Year
History
 
 Since our
initial public offering in 1994, we have acquired a number of firms in Canada
and the United States. The acquisitions completed in 2007 are as
follows:
  March
      2007
              Nicolson
      Tamaki Architects Inc.April
      2007
              Vollmer
      Associates LLPLand Use
      Consultants, Inc.May
      2007
              Geller
      DeVellis Inc.August
      2007
              Trico
      Engineering Consultants, Inc.September
      2007
              Chong Partners
      Architecture, Inc.October
      2007
              Woodlot
      Alternatives, Inc.Neill
      and Gunter IncorporatedNeill and
      Gunter LimitedNeill and
      Gunter (Nova Scotia) LimitedNovember
      2007
              Moore Paterson
      Architects Inc.Murphy Hilgers
      Architects Inc./Brentcliffe Financial ServicesDecember
      2007
              Inc./Dekko
      Studio Inc.Fuller,
      Mossbarger, Scott & May Engineers, Inc. (FMSM)and Leestown
      Leasing, L.L.C.
 Page
8
 On
February 21, 2007, Ivor M. Ruste was appointed to our Board of Directors. Mark
E. Jackson was appointed as senior vice president and chief operating officer on
May 3, 2007.  E. John (Jack) Finn stepped down from the Board of
Directors at the May 3, 2007, annual meeting.
 
 During
2007, we completed 11 acquisitions (see Description of the Business -
Acquisitions for more information).
 
 Effective
May 17, 2006, we subdivided our shares on a two-for-one basis. During 2006, we
completed three acquisitions as described in Description of Business -
Acquisitions.
 
 On August
5, 2005, we began trading on the New York Stock Exchange (NYSE) under the symbol
SXC. In September 2005, we realigned our organizational structure to address
succession planning, provide the foundation for future growth, and incorporate
new staff who joined us with the acquisition of The Keith Companies, Inc. (see
the Description of the Business section for more information).
 
 We also
saw a change in our Board of Directors in November 2005 with the resignation of
Neilson A. “Dutch” Bertholf, Jr. and the appointment of Aram H. Keith. Mr. Keith
was also appointed vice chairman of the Board of Directors at that time. During
2005, we completed three acquisitions (see Description of the Business -
Acquisitions for more information). We also sold our interest in The Spink
Corporation, which, at the time of sale, operated our Sacramento-based land
survey operations only, and divested our operations in Columbia, South Carolina,
and Melville, New York.
 
 Current
Trends
 
 We
compete in the professional consulting services industry. This industry, which
includes engineering, architecture, and environmental sciences consulting, is
highly fragmented. We believe that industry trends continue to create
acquisition opportunities. Our goal is to continue to increase our size and
profitability. This goal will be accomplished partly through the acquisition of
established professional consulting firms in Canada, the United States, and
internationally. Our principal acquisition focus is in selected regions of the
United States and Canada.
 
 DESCRIPTION
OF THE BUSINESS
 
 We
provide professional consulting services in planning, engineering, architecture,
interior design, landscape architecture, surveying and geomatics, environmental
sciences, project management, and project economics for infrastructure and
facilities projects. For the requirements of generally accepted accounting
principles in Canada and the United States, we have one reportable
segment—Consulting Services.
 
 We use a
three-dimensional business model, illustrated as follows, which is built on (1)
geographic diversification, (2) practice area specialization, and (3) provision
of services in all phases of a project’s life cycle. This model allows us to
manage risk while pursuing our objective of continued revenue and earnings
growth.
  Page
9
 
  We
provide services to clients in both the public and private sectors mainly in
North America through integrated and discipline-specific consulting and project
delivery. Our organization structure gives us both the strength and diversity of
a large organization and a strong regional presence to deliver our services
locally. Our Consulting Services business unit focuses on providing total
infrastructure solutions targeted to five practice areas—Buildings, Environment,
Industrial, Transportation, and Urban Land.
 
 Business
Units
 
 Consulting
Services is our principal focus, and we currently operate in three geographic
regions: Canada, the US West, and the US East. Affiliated companies, which
account for less than 1% of our revenue, fall within the responsibilities of
regional management or with the corporate administration group. We balance our
geographic structure and management by also aligning services and management in
the five practice areas noted above.
 
 In 2003,
we realigned our organizational units to better reflect our balanced regional
focus and practice area specialization. The two largest and most mature regional
operating units, Canada West and Canada Central, were further divided into
smaller subregions. In 2005, the regional operating units were reduced from five
to three: Canada, the US East, and the US West. At present, our Canada region
includes the subregions of British Columbia, BC Vancouver, Alberta North &
Central, Alberta Edmonton Capital Region, Alberta South, Saskatchewan, Manitoba,
Ontario West, Ontario GTA (Greater Toronto Area), Ontario East, and Atlantic.
Our US East region includes the New England, Great Lakes, Tri-State,
Mid-Atlantic, South, and Southeast subregions, and our US West region includes
the California South, California Central, California North, Desert, Mountain,
and Pacific Northwest subregions.
 
 The five
practice areas consist of 15 distinct specialist practice areas, including the
following:
 
 1.
              Architecture
 2.
              Buildings
      Engineering
 3.
              Program
      & Project Management
 4.
              Environmental
      Infrastructure
 5.
              Environmental
      Management
 6.
              Environmental
      Remediation
 7.
              Geotechnical
      Engineering
 8.
              Bio/Pharmaceuticals
 Page
10
 9.
              Manufacturing
 10.
              Power
 11.
              Resources
 12.
              Transportation
 13.
              Planning
      & Landscape Architecture
 14.
              Urban
      Land Engineering
 15.
              Surveys/Geomatics
 
 The
business units are managed using a matrix organization structure, which balances
regional operations with Company-wide practice area service
delivery.
 
 The
following chart illustrates the breakdown of gross revenue for 2007 and 2006 for
Consulting Services:
    2007
              2006Units
              (C$000)   
      %
              (C$000)   
      %Consulting
      Services
              $954,619     
      100%
              $816,133    
      100%
 
 We
provide consulting services in eight provinces in Canada, 33 states in the
United States, as well as Puerto Rico and other selected international markets.
International projects generally have been in the water supply, wastewater
treatment, environmental protection, transportation, airports, and health care
sectors, often in countries with developing economies.
 
 Our staff
and system capabilities allow us to undertake infrastructure and facilities
projects of any size. Joint ventures, associations, or subcontract arrangements
are often established to deal with larger projects. As a result, we mitigate our
overall risk by working on several thousand projects each year, none of which
would normally exceed 5% of our revenue.
 
 Our core
capabilities in the Consulting Services area are provided through 15 specialist
practice areas, most of which can generally be grouped into five broad practice
areas: Buildings, Environment, Industrial, Transportation, and Urban Land. Some
specialist practice areas, such as Program & Project Management, are offered
in all five practice areas.
 
 Buildings
Practice Area
 
 We
provide comprehensive solutions for the design of buildings. Typical projects
include hospitals, educational and recreational facilities, research and
technology facilities, airports, office buildings, and commercial centers.
Services are delivered through two specialist practice areas: Architecture and
Buildings Engineering. Our services cover the full range of design and planning
activities from the preconception to the postcompletion of projects and include
project/and program definition, facilities planning, architectural design,
interior design, and structural, mechanical, electrical, and acoustical
engineering. Our projects include new buildings and renovations and expansions
to existing structures. In addition, for existing buildings and facilities, we
provide expertise in building operating systems, performance engineering, and
ongoing tenant improvements. Our clients use us for our sustainable design
expertise and for our ability to maximize the efficiency of a building’s
existing systems and improve its air quality, lighting, and energy
efficiency.
 
 Our
clients in the Buildings practice area include private, institutional, and
commercial building owners and multinational firms, as well as government
agencies and independent authorities, such as airport authorities,
transportation commissions, health authorities, and transit systems, that build,
administer, and operate public buildings.
  Page
11
 Environment
Practice Area
 
 We apply
our specialized knowledge and experience to develop and manage sustainable
solutions for water supply and wastewater disposal for communities and industry;
planning and permitting infrastructure projects; ecosystem restorations; and
soil-structure interaction evaluations. Services are focused in four specialist
practice areas: Environmental Infrastructure, Environmental Management,
Environmental Remediation, and Geotechnical Engineering. The services we provide
in these areas include planning, permitting, design, construction management,
and operations consulting for
 
 ·
              Wastewater
      collection systems
 ·
              Water
      treatment and disposal facilities, including biological/enhanced nutrient
      removal
 ·
              Infiltration
      and inflow/combined and sanitary sewer overflow
  programs
 ·
              Water
      treatment facilities, including advanced water treatment
      technologies
 ·
              Dams
      and reservoirs
 ·
              Water
      distribution systems
 ·
              Water
      reclamation and reuse systems
 ·
              Ecosystem
      restoration programs
 ·
              Channels
      and levees
 
 We also
provide
 
 ·
              Environmental
      assessments
 ·
              Environmental
      site management services
 ·
              Risk
      assessment services
 ·
              Hazardous
      waste remediation services
 ·
              Water
      resources management
 ·
              Watershed
      planning, including flood control
planning
 ·
              Permitting
      and compliance
 ·
              Environmental
      review and documentation
 ·
              Subsurface
      explorations
 ·
              Geologic
      field mapping
 ·
              Geotechnical
      laboratory testing
 ·
              Materials
      investigations
 ·
              Foundation
      and embankment design
 ·
              Seepage
      analysis and dewatering studies
 
 Our
Environment practice area includes multidisciplinary teams of qualified and
experienced engineers, scientists, process specialists, occupational hygienists,
and specialists in environmental regulation and policy.
 
 Industrial
Practice Area
 
 We
provide comprehensive industrial services in five specialist practice areas:
Bio/Pharmaceuticals, Manufacturing, Resources, Power, and Program & Project
Management. Services are provided to clients principally in the private sector
in resources, bio/pharmaceuticals, power generation and transmission, facilities
and infrastructure, maintenance and repair facilities, military facilities,
utilities, renewable energy, mining, forestry, consumer products, food and
beverage, automotive, and general manufacturing areas. Our services to these
clients include programming, planning, engineering, construction management, and
project management. We also provide specialty services, including occupational
health and safety (industrial hygiene and prestart operator safety reviews),
system integration, instrumentation and control, electrical energy and power
management,
  Page
12
 facility
planning and design, industrial engineering, logistics, material handling, and
commissioning. Projects range from the design of pilot versions of new processes
to the design, process verification, equipment and materials procurement, and
project management for the construction of entire industrial plants. Our
Bio/Pharmaceuticals group provides solutions to companies involved in the
discovery, research and development, and manufacturing of a wide range of
pharmaceutical and biotechnology products.
  We
reorganized this practice area as of January 1, 2008. The name of the practice
area was changed from Industrial & Project Management to Industrial. In
addition, the number of specialist practice areas was increased from four to
five.
 
 Transportation
Practice Area
 
 We offer
transportation solutions for the safe and efficient movement of people and goods
primarily to public sector clients. Our core services include project
management, planning, engineering, construction administration, and
infrastructure management related to the transportation sector. We prepare
transportation master plans for communities; conduct transportation investment
studies; plan and design airport, transit, rail, bridge, and highway facilities;
provide administration and support services for the construction of specific
projects; and provide ongoing management planning for the safe and efficient
upkeep of transportation facilities.
 
 Our broad
range of expertise is illustrated by our ability to (1) provide specialized
services such as state-of-the-art simulation modeling; (2) evaluate the
effectiveness of alternative transportation demand and supply management
techniques; (3) prepare investment grade revenue studies for funding
transportation projects; (4) provide public consultation and environmental
assessment skills to build broad public support for infrastructure plans; and
(5) design and implement integrated infrastructure/asset management systems for
all types of transportation infrastructure.  We truly can provide
services through the life cycle of almost any transportation
project.
 
 Urban
Land Practice Area
 
 Services
in the Urban Land practice area include planning, engineering, surveying, and
landscape architecture. These services are provided primarily to the land
development, housing, commercial, retail, and real estate industries. Services
are delivered through three areas of professional practice: Planning &
Landscape Architecture, Urban Land Engineering, and Surveys/Geomatics. We assist
our urban land clients through the entire land development process from
procurement of the land to master planning of the development, engineering and
landscape architectural design, and surveys/geomatics for entitlement and
construction. Services include conceptual planning, urban and land planning,
master development planning, zoning approval, subdivision and entitlement,
boundary and topographic mapping, grading and infrastructure design, landscape
architecture, construction administration, and construction surveying.
 
 Acquisitions
 
 The
following list summarizes the acquisitions we made during the three most
recently completed financial years:
 
 Year
              Business
      Acquired
              Nature of
      Business
 2007
              Chong
      Partners Architecture, Inc.
              Provides
      services in architecture, interior design, and planning, principally in
      California.2007
              Fuller,
      Mossbarger, Scott & May
                Engineers,
      Inc.
                (including
      Leestown Leasing, L.L.C.)
              Provides
      services in civil, environmental, geotechnical, structural, and water
      resources engineering, primarily in Kentucky with additional offices in
      Ohio, Missouri, Indiana, Georgia, and
Tennessee.
 Page
13
 Year
                Business
      Acquired
                Nature of
      Business
 2007
              Geller
      DeVellis Inc.
              Provides
      planning, landscape architecture, and civil engineering services,
      principally in Massachusetts.2007
              Land
      Use Consultants, Inc.
              Provides
      planning, landscape architecture, and civil engineering services,
      principally in Maine.2007
              Moore
      Paterson Architects Inc.
              Provides
      architecture, planning, and project management services to Vancouver
      Island and the Lower Mainland.2007
              Murphy
      Hilgers Architects Inc. (including Brentcliffe Financial Services Inc. and
      Dekko Studio Inc.)
              Provides
      planning and design services in Ontario.2007
              Neill
      and Gunter Incorporated (including Neill and Gunter Limited and Neill and
      Gunter (Nova Scotia) Limited)
              Provides
      consulting engineering services to the industrial sector from principal
      offices in New Brunswick, Nova Scotia, and Maine.2007
              Nicolson
      Tamaki Architects Inc.
              Provides
      architecture services in British Columbia.2007
              Trico
      Engineering Consultants, Inc.
              Provides
      services in civil engineering, surveying, landscape architecture, and
      planning in South Carolina.2007
              Vollmer
      Associates LLP
              Provides
      engineering, architecture, planning, landscape architecture, and survey
      services, principally in the transportation sector in the US
      Northeast.2007
              Woodlot
      Alternatives, Inc.
              Provides
      services in natural resource assessment, permitting, and environmental
      engineering, principally in the US Northeast from its office base in
      Maine.2006
              Carinci
      Burt Rogers Engineering, Inc.
              Provides
      electrical engineering consulting services in Ontario.2006
              Dufresne-Henry,
      Inc.
              Provides
      multidiscipline engineering and consulting services in the New England
      states, New York, and Florida.2006
              ACEx
      Technologies, Inc.
              Provides
      communications system engineering services, principally in the
      transportation sector.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
      multidiscipline engineering and consulting services, principally in the
      urban land sector 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.
 Page
14
 We expect
that the number of acquisitions we complete will fluctuate from time to time
because of the availability of compatible firms on financial terms acceptable to
us. In addition, at any given time we may be focusing our efforts on integrating
previously acquired firms, which may reduce our acquisition
activity.
 
 Generally,
we seek to acquire firms with 50 or more employees that will complement one of
our existing practice areas or regions or add a new practice area or regional
presence. We consider smaller acquisitions in markets in which we have existing
operations.
 
 We add to
our internal growth when existing clients of newly acquired firms are offered
and accept the additional services we provide. Similarly, the services of
acquired firms are cross-marketed to our existing clients. We achieve moderate
cost savings through the sharing of administrative overhead, such as payroll
services, the sharing of office facilities, if possible, and the provision of
insurance and centralized financing, which can generally be provided at lower
rates than smaller firms can obtain.
 
 Research
and Development
 
 We
generally conduct research and development in the context of a client’s specific
project requirements. Most research and development is conducted in the areas of
infrastructure evaluation and management systems, hydraulic modeling of water
and wastewater systems, pavement evaluation and management systems, and
wastewater treatment.
 
 Employees
 
 As at
December 31, 2007, we had approximately 7,800 staff. This total staff number
comprises 4,100 professionals, 2,600 technologists and technicians, and 1,100
support personnel.
 
 We are a
knowledge-based organization and are always seeking talented and skilled
professionals in all of our specialist practice areas. Since the supply of
qualified candidates is sometimes limited, we use various recruitment strategies
to address staffing needs. Examples of our recruitment strategies include an
employee referral bonus program, web site job postings, career fairs, student
programs, and the ability to offer geographic mobility.
 
 Competitive
Conditions
 
 We work
in highly competitive markets and have numerous competitors for all the services
we offer. The number and identity of competitors vary widely with the type of
service we provide. Moreover, for small to medium-sized projects, we compete
with many engineering, architecture, and other professional consulting firms.
For larger projects, there are fewer but still many competitors; however, some
of these competitors have greater financial and other resources than ours.
Although we compete with other large private and public companies in certain
geographic locations, our primary competitors are small to midsize privately
held regional firms in the United States and Canada.
 
 We
believe that our operating structure, our operating philosophy, our enterprise
systems, and the mix and breadth of our professional services differentiate us
from other engineering, architecture, and professional consulting firms.
Furthermore, we focus on small to midsize projects which differentiates us from
some larger competitors.
 Page
15
 The
principal competitive factors in the services we offer are reputation;
experience; breadth and quality of services; technical proficiency; local
offices; competitive total project fees; and service delivery. Given the
expanding demand for the services we provide, it is likely that additional
competitors will emerge. Notwithstanding this increased competition, we believe
that we will retain the ability to compete effectively because of our strengths
and expertise in engineering, architecture, and related professional services
and our track record of service delivery.
 
 We serve
many diverse clients in both the private and public sectors. We seek to
establish ongoing relationships with clients that are likely to produce repeat
business. We are not dependent on any one client or group of clients for our
business. No single client represents more than 5% of total
revenue.
 
 We offer
a range of pricing structures to our clients but primarily offer our services
based on either a fixed- or variable-fee contract with a ceiling or a
time-and-material contract without a stated ceiling. We secure our assignments
primarily based on our expertise and contacts and sometimes on a competitive
bidding process.
 
 Social
or Environmental Policies
 
 We have
adopted an Environment, Health and Safety policy that states that we will carry
out the following:
 
 ·
              Strive
      to identify, assess, and manage the environmental aspects and impacts
      associated with the services and products we
  provide
  ·
              Strive
      to identify and manage the environmental, health, and safety risks and
      hazards to which our employees are
exposed
  ·
              Help
      our 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
  ·
              Monitor
      and enhance the program through inspections, audits, reviews,
      investigations, corrective actions, and other
  processes
  ·
              Encourage
      internal and external communication regarding environmental, health, and
      safety issues
  
 We have
included this policy in our Environment, Health and Safety manual. The manual
sets out a detailed process for ensuring that all employees are familiar with
the policy and that appropriate individuals regularly review environment,
health, and safety matters.
 
 International
Operations
 
 We
conduct a portion of our business outside Canada and the United States.
Specifically, international operations include operating offices in Barbados and
Puerto Rico, as well as ongoing projects in the Caribbean (Barbados, Trinidad,
Tobago, St. Lucia, Grenada, the Bahamas, St. Vincent, Bermuda, and Puerto Rico),
Asia (China, Taiwan, Japan, and India), South America (Peru, Brazil, Paraguay,
and Columbia), and other locations (Cyprus, Mexico, Madagascar, Norway, Kenya,
and Abu Dhabi). Such operations accounted for approximately 1% of our revenues
in 2007. Some of this work involves political risk, contracts with foreign
clients, and working under foreign legal systems.
 Page
16
 Dividend
Policy
 
 We
currently have no plans to pay dividends on our common shares. Instead, we plan
to reinvest our net income to continue our corporate strategy of growth. The
payment of dividends on common shares in the future will depend on our need to
finance growth, our financial condition, and other factors that the Board of
Directors may consider appropriate in the circumstances.
 
 RISK
FACTORS
 
 Like all
professional services firms in the infrastructure and facilities industry, we
are exposed to a number of risks in carrying out the day-to-day activities of
our operations. Although these risk factors are listed in order of seriousness
of outcome, we do not believe that they all have the same risk of
occurrence.
 
 Economic
downturns could have a negative impact on our business since our clients may
curtail investment in infrastructure projects.
 
 Demand
for the services we offer has been, and is expected to continue to be, subject
to significant fluctuations due to a variety of factors beyond our control,
including economic conditions. During economic downturns, the ability of both
private and government entities to make expenditures may decline significantly,
which would have a material adverse effect on our revenue and profitability. We
cannot be certain that economic or political conditions will generally be
favorable or that there will not be significant fluctuations that adversely
affect our industry as a whole or the key markets we target.
 If
we are unable to manage our growth effectively, we may experience a decline in
our revenue and profitability.
 We have
grown rapidly in the last few years, and we intend to pursue further growth
through acquisitions and internal hiring as part of our business strategy.
However, there is a risk that we may not be able to manage our growth
effectively and efficiently. Our inability to manage our growth could cause us
to incur unforeseen costs, time delays, or other negative impacts, any of which
could cause a decline in our revenue and profitability. Our rapid growth has
presented, and will continue to present, numerous administrative and operational
challenges, including the management of an expanding array of engineering and
consulting services, the assimilation of financial reporting systems, increased
pressure on our senior management, and increased demand on our systems and
internal controls. Furthermore, as we expand our service offerings and
geographic presence, we may not be able to maintain the current quality of our
services.
 We may
also encounter difficulties in integrating acquisitions that we do make.
Acquired businesses may not be profitable, because we may not be successful in
generating the same level of operating performance that an acquired company
experienced prior to its acquisition. As well, we may not be able to maintain
our reputation in an acquired company’s geographic area or service offerings,
which may negatively impact our ability to attract and retain clients in those
or other areas. Any of these integration issues could divert management’s
attention from other business activities and impact our ability to grow our
business effectively.
 
 From
time to time, we have pursued and may continue to pursue and invest in business
opportunities that are not directly within our core competencies. These new
business opportunities may require a disproportionate amount of management’s
time to develop profitably and may not perform as expected.
  Page
17
 Acquisitions
may bring us into businesses that we have not previously conducted and expose us
to additional business risks that are different from those we have traditionally
experienced. Consequently, we may depend in part on the knowledge and expertise
of the professional service providers and management teams that we acquire in
order to make these business opportunities profitable. New business
opportunities frequently bring a learning curve that may require substantial
management time, which may create a distraction from our day-to-day business
operations. If these business opportunities do not perform as anticipated or are
not profitable, our earnings during periods of greater learning may be
materially adversely affected, and we may experience a partial or complete loss
of our investment.
 
 Adverse
weather conditions and natural or other disasters may cause a delay or eliminate
net revenue that otherwise would have been realized and thus adversely affect
our profitability.
 
 Our field
activities are generally performed outdoors and may include professional
surveying, resident engineering services, field data surveys and collection,
archeology, plant start-up and testing, and plant operations. Certain weather
conditions and natural or other disasters, such as fires, floods, influenza
pandemics, and similar events, may cause postponements in the initiation and/or
completion of our field activities and may hinder the ability of our office
employees to arrive at work, which may result in a delay or elimination of
revenue that otherwise would have been recognized while certain costs continued
to be incurred. Adverse weather conditions or disasters may also delay or
eliminate our initiation and/or completion of the various phases of work
relating to other engineering services that commence concurrent with or
subsequent to our field activities. Any delay in the completion of our field,
office, and/or other activities may require us to incur additional costs
attributable to overtime work necessary to meet our client’s required schedule.
Due to various factors, a delay in the commencement or completion of a project
may also result in the cancellation of the contract. As a result, our net
revenue and profitability may be adversely affected.
 
 Goodwill
and other intangible assets acquired as a result of our acquisitions represent
substantial portions of our total assets. If our acquired businesses do not
perform as expected, we may be required to write down the value of our goodwill
and other intangible assets, which could have a material adverse effect on our
earnings.
 
 Goodwill
and other intangible assets represent approximately 44.9% of our total assets.
When we acquire a consulting business, a significant portion of the purchase
price for the acquisition is generally allocated to goodwill and other
identifiable intangible assets. The amount of the purchase price allocated to
goodwill is determined by the excess of the purchase price paid by us to acquire
the consulting business over the fair value of the net identifiable assets
acquired. Canadian and US accounting rules require us to perform an annual
impairment test of our goodwill and indefinite life intangible assets. A
deterioration in the operating results of such acquired businesses or the
failure of these businesses to meet our expectations may adversely affect the
carrying value of our goodwill and other indefinite life intangible assets and
could result in an impairment of the goodwill associated with such businesses.
As part of our annual review of goodwill for impairment, we consider the actual
performance of each of our reporting units compared to our expectations and
update our future expectations for such reporting units. An impairment of
goodwill would be recorded as a charge in our income statement, which could have
a material effect on our earnings.
 
 If
we experience delays and/or defaults in customer payments, we could suffer
liquidity problems or be unable to recover our expenditures.
 
 Because
of the nature of our contracts, at times we commit resources to projects prior
to receiving payments from the customer in amounts sufficient to cover
expenditures as they are incurred. Delays in customer payments may require us to
make a working capital investment. If a customer
  Page
18
 defaults
in making payments on a project to which we have devoted significant resources,
it could have a material negative effect on our liquidity as well as on the
results of our operations. In addition, in our experience, clients who withhold
payment are more likely to bring claims against us and have a higher tendency
toward dissatisfaction with the services we provide.
 
 A
significant portion of our revenue is derived from clients in the real estate
industry. Consequently, our business could suffer materially if there were a
downturn in the real estate market.
 
 In 2007,
29.8% (2006 – 34.5%) of our gross revenue was derived from services provided by
our Urban Land practice area, the majority (about 85%) of which arerelated
to residential and commercial real estate development projects. Consequently,
reduced demand in the real estate market would likely have an adverse impact on
our Urban Land practice area. The real estate market, and, therefore, our
business, may be impacted by a number of factors, which may include the
following:
 §
                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 our
      control
 A
significant decrease in the demand for our real estate-related services could
have a material adverse effect on our overall business, including the results of
our operations and liquidity.
 
 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.
 
 Our
rationale for acquiring a firm is, in part, predicated on our ability to
leverage the combined strengths of the two companies to increase our
opportunities and grow our revenue. Integrating an acquired firm’s operations
and staff into our own is a complex endeavor, and we may not be able to complete
the process rapidly or without encountering difficulties. Successful integration
requires, among other things, the assimilation of the firm’s professional
services, sales and marketing operations, and information and software systems
as well as the coordination of employee retention and hiring and training
operations. The diversion of management’s attention to the integration effort
and any difficulties encountered in combining operations could adversely affect
the combined company’s business and prevent it from realizing the anticipated
improvement in professional service offerings, market penetration, and
geographic presence that formed the foundation for the acquisition.
 
 The
nature of our business exposes us to potential liability claims and contract
disputes, which may reduce our profits.
 
 Our
operations are subject to the risk of third-party claims in the normal course of
business, some of which may be substantial. We have been and may in the future
be named as a defendant in legal proceedings where parties may make a claim for
damages or other remedies with respect to our projects or other matters. Any
litigation resulting from our business operations could distract management’s
attention from normal business operations, divert financial resources to the
defense of such claims, or result in significant attorney fees and damage
awards for which we may not be fully insured and which could harm our
reputation. Any of these circumstances could adversely affect our
profitability.
 Page
19
 The
professional consulting services industry is highly competitive, which could
have a negative impact on our profit margins and market share.
 
 The
markets we serve are highly competitive, and we have numerous competitors for
the services we offer. The principal competitive factors include reputation,
experience, breadth and quality of services, technical proficiency, local
offices, competitive total project fees, and service delivery. The number and
identity of competitors vary widely with the type of service we provide. For
small- to medium-sized projects, we compete with many engineering, architecture,
and other professional consulting firms. For larger projects, there are fewer
but still many competitors, and many of these competitors have greater financial
and other resources than we do. Although we compete with other large private and
public companies in certain geographic locations, our primary competitors are
small and midsize, privately held regional firms in the United States and
Canada. Generally, competition places downward pressure on our contract prices
and profit margins. However, such impact is difficult to quantify. Intense
competition is expected to continue in these markets, presenting significant
challenges to our ability to maintain strong growth rates and acceptable profit
margins. If we are unable to meet these competitive challenges, we could lose
market share to our competitors and experience an overall reduction in our
profits. We may not be able to compete successfully with such competitors, and
such competition could cause us to lose customers, increase
expenditures, or reduce pricing, any of which could have a material adverse
effect on our earnings and stock price.
 
 Our
backlog is subject to unexpected adjustments and cancellations and is,
therefore, an uncertain indicator of our future earnings.
 
 As of
December 31, 2007, our backlog was approximately $831 million. However, the
revenue projected in our backlog may not be realized or, if realized, may not
result in profits. Projects may remain in our backlog for an extended
period of time. In addition, project cancellations or scope adjustments may
occur from time to time with respect to contracts reflected in our backlog.
Backlog reductions can adversely affect the revenue and profit we actually
receive from contracts reflected in our backlog. Future project cancellations
and scope adjustments could further reduce the dollar amount of our backlog and
the revenue and profits we actually receive. Finally, poor project or contract
performance could also impact our profits.
 
 If
we need to sell or issue additional common shares and/or incur additional debt
to finance future acquisitions, our share ownership could be diluted and the
results of our operations could be adversely affected.
 
 Our
business strategy is to expand into new markets and enhance our position in
existing markets through the acquisition of complementary businesses. In order
to successfully complete targeted acquisitions or to fund our other activities,
we may issue additional equity securities that could dilute share ownership. We
may also incur additional debt if we acquire another company, and this could
increase our debt repayment obligations, which could have a negative impact on
our future liquidity and profitability.
 
 We
currently have a $250 million credit facility. However, we have no assurance
that debt financing will continue to be available from our current lenders or
other financial institutions on similar terms.
 
 We
may be unsuccessful in our goal to increase the size and profitability of our
operations, which could lead to a reduction in our market share and
competitiveness as our industry consolidates.
 Page
20
 We may
not be able to locate suitable acquisitions or to consummate any such
transactions on terms and conditions that are acceptable to us. As the
professional services industry consolidates, suitable acquisition candidates are
expected to become more difficult to locate and may only be available at prices
or under terms that are less favorable than in the past. In addition, some of
our competitors are much larger than us, have greater financial resources, and
can better afford to pay a premium for potential acquisition candidates. If we
are unable to effectively compete for or locate suitable acquisitions, our
business will not grow in the manner we expect, and we will have difficulty
achieving our growth plan.
 
 We
derive significant revenue from contracts with government agencies. Any
disruption in government funding or in our relationship with those agencies
could adversely affect our business.
 
 The
demand for our services is related to the level of government funding that is
allocated for rebuilding, improving, and expanding infrastructure systems. We
derive a significant amount of our revenue from government or government-funded
projects and expect to continue to do so in the future. Between 30 and 57%
of our gross revenue during the years ended December 31, 2005, through
December 31, 2007, was derived from government or government-funded projects.
Significant changes in the level of government funding could have an unfavorable
impact on our business, financial position, results of operations, and cash
flows.
 
 We
believe that the success and further development of our business depends, in
part, on the continued funding of these government programs and on our ability
to participate in these programs. However, governments may not have available
resources to fund these programs or may not fund these programs even if they
have available financial resources. Some of these government contracts are
subject to renewal or extensions annually, so we cannot be assured of our
continued work under these contracts in the future. In addition, government
agencies can terminate these contracts at their convenience. We may incur costs
in connection with the termination of these contracts and suffer a loss of
business. As well, contracts with government agencies are sometimes subject to
substantial regulation and audit of the actual costs incurred. Consequently,
there may be a downward adjustment to our revenue if accrued recoverable costs
exceed actual recoverable costs.
 
 Because
we report our results in Canadian dollars and a substantial portion of our
revenue and expenses is recorded in US dollars, our results are subject to
currency exchange risk.
 
 Although
we report our financial results in Canadian dollars, a substantial portion of
our revenue and expenses is generated or incurred in US dollars. For the
purposes of financial reporting under Canadian GAAP measures, revenue and
expenses denominated in foreign currencies are translated into Canadian dollars
at the average exchange rates prevailing during the year. We expect to continue
to report our financial results in Canadian dollars in accordance with
Canadian GAAP measures. Therefore, if the Canadian dollar were to
strengthen relative to the US dollar and other currencies, the amount of
net income from our non-Canadian-dollar-denominated business could decrease,
which could have a material adverse effect on our business, financial condition,
and results of operations.
 
 The value
of the Canadian dollar relative to the US dollar is subject to volatility.
For example, the average exchange rates for the years ended December 31, 2007;
December 31, 2006; and December 31, 2005, for C$1.00 were
US$0.93,US$0.88,
and US$0.83, respectively. Furthermore, this volatility may continue in the
future, and, as discussed above, increases in the strength of the Canadian
dollar relative to the US dollar may have a negative impact on the results
of our operations.
 Page
21
 From time
to time, we enter into forward contracts to manage risk associated with net
operating assets outside our US operations denominated in US dollars
(other than with respect to net operating assets that are owned by
US subsidiaries). These derivative contracts, which are not accounted for
as hedges, are marked to market, and any changes in the market value are
recorded in income or expense when they occur. As a result, we may not benefit
from any weakening of the Canadian dollar relative to the
US dollar.
 
 If
we are unable to engage qualified subconsultants, we may lose projects, revenue,
and clients.
 
 We often
contract with outside companies to perform designated portions of the services
we provide to our clients. In 2007 subconsultant costs accounted for
approximately8.6%
(2006 – 8.6%) of our gross revenue. If we are unable to engage qualified
subconsultants, our ability to perform under some of our contracts may be
impeded and the quality of our service may decline. As a consequence, we may
lose projects, revenue, and clients.
 
 Uncertainties
associated with an acquisition or merger or with Stantec as a new owner may
cause an acquired entity to lose customers.
 
 An
acquired company’s customers may, in response to the announcement of the
acquisition, delay or defer decisions concerning their use of the acquired
company’s services because of uncertainties related to the consummation of the
acquisition, including the possibility that the acquisition may not be completed
if all the conditions of the transaction are not fulfilled. This circumstance
could have an adverse effect on our revenue and profitability.
 
 We
bear the risk of cost overruns in a significant number of our contracts. We may
experience reduced profits or, in some cases, losses under these contracts if
costs increase above our estimates.
 
 We
conduct our business under various types of contractual arrangements, most of
which are fee-for-service agreements. However, approximately 70% of the dollar
value of our contracts in 2007 was based on a fixed-fee or time-and-materials
contract with a ceiling on the maximum costs to the client. Under fixed-fee
contracts, we perform services at a stipulated price. Under
time-and-materials contracts with not-to-exceed provisions, we are reimbursed
for the number of labor hours expended at an established hourly rate plus
the cost of materials incurred subject, however, to a stated maximum dollar
amount for the services to be provided. In both of these types of contracts, we
agree to provide our services based on our estimate of the costs a particular
project will involve. These estimates are established in part on cost and
scheduling projections, which may prove to be inaccurate, or circumstances may
arise such as unanticipated technical problems, weaknesses in project
management, difficulties in obtaining permits or approvals, changes in local
laws, or delays beyond our ability to control, that may make our projections
inaccurate. The underestimation of costs for these types of contracts may cause
us to incur losses or result in a project not being as profitable as we
expect. In addition, projects that are not completed on schedule further reduce
profitability because our staff must continue to work on these projects longer
than anticipated, which may prevent them from pursuing and working on new
projects. Projects that are over budget or not on schedule may also lead to
client dissatisfaction.
 
 We
may have difficulty in attracting and retaining qualified staff, which may
affect our reputation in the marketplace and restrict our ability to implement
our business strategy.
 
 We derive
our revenue almost exclusively from services performed by our employees.
Consequently, one of the key drivers of our business is our ability to attract
and retain qualified staff.
  Page
22
 However,
we may not be able to attract and retain the desired number of qualified staff
over the short or long term. There is significant competition for staff with the
skills necessary for providing our services from major and boutique consulting,
engineering, public agency, research, and other professional services firms. Our
inability to attract and retain qualified staff could impede our ability to
secure and complete engagements, in which event we may lose market share and our
revenue and profits could decline. In addition, if our employees were to leave
our Company and become competitors of ours, we could lose other employees and
some of our existing clients who have formed relationships with such former
employees. We could also lose future clients to a former employee as a new
competitor. In either event, we could lose clients and revenue, and our
profitability could decline.
 
 Reliance
on key personnel who may be unable or unwilling to continue their employment may
adversely impact our business.
 
 Our
operations are dependent on the abilities, experience, and efforts of senior
management and other key personnel. If any of these individuals are unable or
unwilling to continue their employment with us, and if we do not have a
well-developed succession plan prior to their departure, our business,
operations, and prospects may be materially adversely affected.
 
 Uncertainties
associated with an acquisition may cause a loss of employees.
 
 The
ability to attract and retain trained professionals is one of the key drivers of
our business and results. Therefore, the success of an acquisition depends in
part on our ability to retain key employees of the acquired firm. Competition
for qualified staff can be very intense. In addition, key employees may depart
because of issues relating to the uncertainty and difficulty of the completion
of the acquisition or integration, or a desire not to remain with the combined
company. Accordingly, we may be unable to retain key employees to the same
extent that we were able to do so in the past.
 
 One
of our primary competitive advantages is our reputation. If our reputation is
damaged due to client dissatisfaction, our ability to win additional business
may be materially damaged.
 Although
we serve many diverse clients and are not dependent on any one client or group
of clients to sustain our business, our reputation for delivering effective and
efficient solutions for complex projects is one of our most valuable business
development assets. The loss of this reputation due to client dissatisfaction
represents a significant risk to our ability to win additional business both
from existing clients and from those with whom we may have dealings in the
future.
 Inadequate
internal controls or disclosure controls may result in events that could
adversely affect our business.
 Inadequate
internal controls or disclosure controls over financial reporting could result
in material misstatement in our financial statements and related public
disclosures. Inadequate controls could also result in system downtime, delayed
processing, inappropriate decisions based on non-current internal financial
information, fraud, or the inability to continue our business
operations.
 If
fraud occurs and remains undetected, we may have a loss of assets or
misstatement in our financial statements.
 Fraud may
occur and remain undetected, resulting in a loss of assets and/or misstatement
in our financial statements and related public disclosures.
 Our
insurance may not cover all claims for which we may be liable, and expenses
related to insurance coverage may adversely impact our
profitability.
 Page
23
 Although
we believe that we have made adequate arrangements for insuring against
potential liability claims, these arrangements may be insufficient to cover any
particular risk. When it is determined that we have liability, we may not be
covered by insurance, or, if covered, the dollar amount of these liabilities may
exceed our policy limits. Our professional liability coverage is on a
“claims-made” basis, covering only claims actually made during the policy period
currently in effect. In addition, even where insurance is maintained for such
exposures, the policies have deductibles resulting in our assuming exposure for
a layer of coverage with respect to any such claims. Any liability not covered
by our insurance, in excess of our insurance limits, or covered by insurance but
subject to a high deductible could result in a significant loss for us, which
may reduce our profits and cash available for operations. Moreover, we may
become subject to liability that cannot be insured against or against which we
may choose not to insure because of high premium costs or for other reasons. Our
expansion into new services or geographic areas could result in our failure to
obtain coverage for these services or areas, or the coverage being offered may
be at a higher cost than our current coverage. Due to the current insurance
environment, we have experienced and may continue to experience an increase in
our insurance premiums. We may not be able to pass these increases on to our
clients in increased billing rates.
 
 Our
share price could be adversely affected if a large number of our common shares
are offered for sale or sold.
 
 There may
be instances in which we negotiate an acquisition where the consideration for
the purchase may include Stantec shares. In the event that the acquired entity’s
shareholders subsequently decide to dispose of Stantec shares following the
acquisition, there could be a large supply of our common shares on the market.
If the supply of our common shares is significantly greater than the associated
demand, the market price of our common shares may significantly decline and may
not recover.
 
 Our share price has historically been
subject to volatility. As a result, the price of our common shares may decrease
in the future due to a number of Company- and industry-specific or general
economic factors.
 
 Our share
price has experienced volatility in the past and will likely be volatile in the
future. For example, the intraday high and low prices for our common shares on
the TSX and New York Stock Exchange (NYSE) during the 52 weeks ended December
31, 2007, were C$39.31 and C$23.70, respectively, and US$39.64and US$20.10,
respectively.
 
 The price
of our common shares may fluctuate substantially in the future due to, among
other things, the following factors: (1) the failure of our quarterly or
annual operating results to meet expectations; (2) the reaction of markets
and securities analysts to announcements and developments involving our Company;
(3) adverse developments in the worldwide, Canadian, or US economy, the
financial markets, or the engineering and consulting services market;
(4) changes in interest rates; (5) announcements by key competitors;
(6) additions or departures of key staff; (7) announcements of legal
proceedings or regulatory matters; or (8) general volatility in the stock
market.
 
 In
addition, the stock market has experienced volatility that has affected the
market prices of the equity securities of many companies and that has often been
unrelated to the operating performance of such companies. A number of other
factors, many of which are beyond our control, could also cause the market price
of our common shares to fluctuate substantially.
 
 We
may not be able to adequately protect our intellectual property, which could
force us to take costly protective measures such as litigation.
 Page
24
 To
establish and protect our intellectual property rights, we rely on a combination
of trademark and trade secret laws, along with licenses, exclusivity agreements,
and other contractual covenants. However, the measures we take to protect our
intellectual property rights may prove inadequate to prevent the
misappropriation of our intellectual property. Litigation may be necessary to
enforce our intellectual property rights or to determine the validity and scope
of the proprietary rights of others. Litigation of this type could result in
substantial costs and the diversion of resources, may result in counterclaims or
other claims against us, and could significantly harm the results of our
operations.
 
 Interruption
to our systems and network infrastructure could adversely impact our ability to
operate.
 
 We rely
heavily on computer information, communications technology, and related systems
in order to properly operate. If we are unable to continually add software and
hardware, effectively upgrade our systems and network infrastructure, and take
other steps to improve the efficiency of and protect our systems, systems
operation could be interrupted or delayed. In addition, our computer and
communications systems and operations could be damaged or interrupted by natural
disasters, telecommunications failures, acts of war or terrorism, computer
viruses, physical or electronic security breaches, or similar events or
disruptions.  Any of these or other events could cause system
interruption, delays, and loss of critical data, could delay or prevent
operations, and may adversely affect our operating results.
 
 Increasing
awareness of environmental factors may result in the cancellation of major
projects by key clients and thus adversely affect our
profitability.
 
 As part
of increasing awareness of global climate change, some experts have suggested
that companies involved in industries that impact the environment may be subject
to litigation from governments, shareholders, or environmental activists. The
cancellation of major projects due to environmental concerns or significant
environmental litigation impacting key clients could affect our future
results.
 
 Managing
Our Risks
 
 We
mitigate our operating, market, and growth and acquisition integration risks
through our business strategy and other measures. As mentioned previously, our
three-dimensional business model based on geographic, practice area, and life
cycle diversification reduces our dependency on any particular industry or
economic sector for our income. To help reduce our susceptibility to
industry-specific and regional economic cycles and to take advantage of
economies of scale in the highly fragmented professional services industry, we
intend to continue to diversify our business both in terms of geographic
presence and service offerings. From the beginning of 2002 to December 31, 2007,
we have completed 35 acquisitions, and we expect to continue to pursue selective
acquisitions of businesses that will enable us to enhance our market penetration
and increase and diversify our revenue base. We also differentiate our Company
from competitors by entering into a diverse range of contracts with a variety of
fee amounts. Focusing on this project mix continues to ensure that we do not
rely on a few large, single projects for our revenue and that no single client
or project accounts for more than 5% of our overall business.
 
 To
address the risk of competition for qualified personnel, we offer a number of
employment incentives, including training programs, access to a plan that
provides the benefit of employee share ownership, and opportunities for
professional development and enhancement, along with compensation plans that we
believe to be competitive, flexible, and designed to reward top performance. In
2007 we completed a number of activities, including the expansion of our Career
Development Center with updated content and new in-house programs and training.
Launched in
  Page
25
 2005, the
center is the on-line source for all our learning, coaching and mentoring, and
professional and career development resources. It provides access to programs
and material on topics such as employee orientation, people skills and
leadership, project management, risk mitigation, business development, and
financial management, among others. During 2007, we also introduced Ready. Set.
Focus!, a revamp of our organization structure and leadership team designed to
increase our senior leaders’ involvement with our clients and projects. As well,
we continue to improve our project manager and leadership portal dashboard
training programs. These programs are intended to make financially related
information more visible in order to assist our operations leadership in
improving performance and decision making. We recognize that through improved
project management across our operations we will increase our ability to deliver
projects on schedule and within budget.
 
 Since our
operations are dependent on the abilities and efforts of senior management and
other key personnel, our Board of Directors and senior leaders are taking the
necessary steps to develop and implement a formal plan of succession for
management.
 
 To
mitigate the risk of fraud, we have various business conduct policies, including
our Code of Ethics, Conflict of Interest, and Whistleblower policies. In
addition, our Internal Audit team reviews opportunities and indicators for fraud
as part of its control evaluation program.
 
 We
maintain insurance coverage for our operations, including policies covering
general liability, automobile liability, environmental liability, workers’
compensation and employers’ liability, directors’ and officers’ liability,
and professional liability. We have a regulated captive insurance company to
insure and fund the payment of any professional liability self-insured
retentions related to claims arising after August 1, 2003. We, or our clients,
also obtain project-specific insurance for designated projects from time to
time. In addition, we invest resources in a risk management team that is
dedicated to providing Company-wide support and guidance on risk avoidance
practices and procedures. One of our practices is to carry out select client
evaluations, including credit risk appraisals, before entering into contract
agreements to reduce the risk of non-payment for our services.
 
 To
address the risk of being unsuccessful in integrating acquired companies, we
have an acquisition and integration program managed by a dedicated acquisition
team. The team supports, or is responsible for, the tasks of identifying and
valuing acquisition candidates, undertaking and coordinating due diligence,
negotiating and closing transactions, and integrating employees and systems
immediately following an acquisition. In addition, for each acquisition a senior
regional or practice leader is appointed to support the integration process. We
also have a coordinated integration plan that involves the implementation of our
Company-wide information technology and financial management systems as well as
provision of “back office” support services from our corporate and regional
offices.
 
 DESCRIPTION
OF CAPITAL STRUCTURE
 
 Our
authorized share capital consists of an unlimited number of preferred shares,
issuable in series, and an unlimited number of common shares, of which, as at
December 31, 2007, no preferred shares and 45,703,935 common shares have been
issued and are outstanding.
 
 Escrowed
Securities and Securities Subject to Contractual Restriction on
Transfer
 
 Designation
      of Class
              Number
      of securities that are
                subject
      to a contractual
                restriction
      on transfer
              Percentage
      of classCommon
              5,792
              0.01%
  Page
26
 The
number of common shares issued and outstanding as at December 31, 2007, includes
5,792 common shares issued in connection with the acquisition of The Keith
Companies, Inc. to former holders of shares of The Keith Companies, Inc. These
shares are subject to restrictions on transfer which mirror the restrictions
previously imposed on the holders of The Keith Companies, Inc. shares (the Keith
restricted shares). In accordance with Canadian GAAP and US GAAP, the Keith
restricted shares are considered to be contingently returnable shares and,
therefore, have not been included in the basic earnings per share calculation
and the outstanding share data information presented in our management’s
discussion and analysis and in the annual financial statements for the year
ended December 31, 2007. As at December 31, 2006, 55,666 Keith restricted
shares were issued and outstanding. During 2007, restrictions were removed
from 22,035 Keith restricted shares, and 27,839 Keith restricted
shares were returned for cancellation, with the result that, as at December 31,
2007, 5,792 Keith restricted shares were issued and outstanding. The
material rights, privileges, restrictions, and conditions attached to the
preferred shares and the common shares (including the Keith restricted shares)
are summarized below.
 
 Preferred
Shares
 
 The
preferred shares may be issued in one or more series, with each series to
consist of such number of shares and to have such rights, privileges,
restrictions, and conditions as may, before the issue thereof, be determined by
our Board of Directors. The holders of the preferred shares as a class are not
entitled to receive notice of or to attend any meeting of our shareholders and
are not entitled to vote at any such meeting, except to approve amendments to
the terms of the preferred shares as a class or as required by law. Each series
of preferred shares will rank pari passu with each other
series of preferred shares with respect to the entitlement to dividends or
distribution of assets in the event of the liquidation, dissolution, or winding
up of Stantec. The preferred shares as a class rank ahead of the common shares
with respect to entitlement to dividends and distribution of assets in the event
of the liquidation, dissolution, or winding up of Stantec.
 
 Common
Shares
 
 The
holders of common shares are entitled to receive, as and when declared by our
Board of Directors, dividends in such amount and in such form as our Board of
Directors may from time to time determine. The holders of the common shares are
entitled to receive notice of and to attend all meetings of our shareholders and
have one vote for each common share held at all such meetings, except for
meetings at which only holders of another specified class or series of our
shares are entitled to vote separately as a class or series. The common shares
rank behind the preferred shares with respect to entitlement to dividends and
distribution of assets in the event of the liquidation, dissolution, or winding
up of Stantec.
 
 MARKET
FOR SECURITIES
 
 Our
common shares are listed for trading on the TSX under the symbol STN and on the
NYSE under the symbol SXC. The intraday trading information on the TSX for the
period from January 1, 2007, to December 31, 2007, is set out in the following
table:
 
 Month
              High
      (C$)
              Low
      (C$)
              Volume*January
              28.86
              23.70
              1,767,100February
              30.20
              26.62
              2,053,700March
              33.00
              28.86
              4,622,100April
              34.68
              30.36
              2,566,600May
              35.22
              32.15
              2,764,200
 Page
27
 June
              36.95
              33.20
              2,141,600July
              36.00
              34.10
              2,514,600August
              34.50
              29.49
              2,424,300September
              35.13
              32.35
              1,906,500October
              36.99
              32.53
              1,672,600November
              37.00
              31.62
              2,395,300December
              39.31
              32.62
              2,177,20029,005,800
 
 * Volume
numbers are rounded to the nearest hundred shares.
 
 The
intraday trading information on the NYSE for the period from January 1, 2007, to
December 31, 2007, is set out in the following table:
 
 Month
              High
      (US$)
              Low
      (US$)
              VolumeJanuary
              24.44
              20.10
              317,600February
              25.97
              22.72
              215,300March
              28.18
              24.55
              303,900April
              30.93
              26.01
              470,700May
              32.88
              29.13
              590,100June
              34.55
              31.65
              667,350July
              34.50
              31.95
              642,900August
              32.68
              27.53
              470,700September
              34.25
              31.60
              330,600October
              38.94
              32.80
              346,800November
              39.04
              32.25
              482,800December
              39.64
              32.26
              618,7505,457,500
 
 * Volume
numbers are rounded to the nearest hundred shares.
 
 AUDIT
COMMITTEE INFORMATION
 
 Audit
Committee Terms of Reference
 
 The
responsibilities and duties of our Audit Committee are set out in the
committee’s Terms of Reference, the text of which is attached as Appendix I to
this annual information form.
 
 Composition
of the Audit Committee
 
 Our Audit
Committee is made up of the following three members: William (Bill) Grace
(Chairman),  Robert Mesel, and Ivor Ruste.
 
 The Board
of Directors believes that the composition of the Audit Committee reflects an
appropriate level of financial literacy and expertise. Each member of the Audit
Committee has been determined by the board to be “independent” and “financially
literate” as such terms are defined under applicable Canadian and US securities
laws. In addition, the board has determined that each of Mr. Grace, Mr. Ruste,
and Mr. Mesel is an “Audit Committee Financial Expert” as such term is defined
in the rules and regulations of the U.S. Securities and Exchange Commission. The
following is a description of the education and experience of each member of the
committee that is relevant to the performance of his responsibilities as a
member of the Audit Committee.
 Page
28
 William
D. Grace is a graduate of the University of Alberta and a Fellow Chartered
Accountant. During his business career, he served as the chief financial officer
with several Alberta corporations.  From 1988 to 1994, he was a managing
partner in the Edmonton office of Price Waterhouse. Mr. Grace is the recipient
of several awards, including the Alberta Achievement Award from the province of
Alberta, the Lifetime Achievement Award from the Alberta Institute of Chartered
Accountants, and the University of Alberta Alumni Award of Excellence. He
currently holds a number of corporate directorships with publicly traded
companies, including the Forzani Group Ltd., Melcor Developments Ltd., BioMS
Medical Corp., Lockerbie & Hole Inc., and with a number of private
companies. He is also the independent chairman of the Edmonton Pipe Industry
Pension Trust and Health & Welfare Funds, and a director of the Mutual Fund
Dealers Association of Canada.  Mr. Grace is a past president of both the
Alberta and Canadian Institutes of Chartered Accountants and has been active
over the past 25 years in numerous community and professional
organizations.
 
 Robert R.
Mesel is an experienced business professional with expertise in business
development, administration, accounting, and finance. Prior to his retirement in
1998, Mr. Mesel was a director and/or trustee for a number of organizations,
including the Financial Executives Institute (Northeast Ohio Chapter), the Ohio
Council for Economic Education, the Greater Cleveland Salvation Army, and
Canisius College. Mr. Mesel completed his bachelor of business administration in
accounting at Canisius College, his master of business administration at State
University of New York at Buffalo, and the advanced management program at
Harvard Business School. He is also the past president of BP Chemicals Inc. and
Chase Brass & Copper Company.
 
 Until
December 31, 2007, Ivor M. Ruste was the vice president, finance for EnCana
Corporation (an unconventional natural gas and integrated oil company)
headquartered in Calgary, Alberta. As of January 1, 2008, Mr. Ruste became
EnCana’s executive vice president and chief risk officer. He has a bachelor of
commerce (with distinction) from the University of Alberta and is a Fellow
Chartered Accountant. From 1998 to 2006, he was the managing partner of the
Edmonton office of KPMG LLP (an international audit, tax, and advisory services
firm) and, just prior to joining EnCana in May 2006, was the Alberta regional
managing partner and vice chair of the KPMG Canada Board of Directors. Mr. Ruste
currently serves on the Board of Governors for the University of Alberta and is
chair of the Audit Committee. Mr. Ruste has been involved over
the past 27 years in numerous other business, community, and professional
activities.
 
 Preapproval
Policy
 
 The Audit
Committee must preapprove the audit and nonaudit services performed by the
independent auditor in order to ensure that the provision of such services does
not impair the auditor’s independence. Unless a type of service to be provided
by the independent auditor has received general preapproval, it will require
specific preapproval by the Audit Committee. Any proposed services exceeding
preapproved cost levels will require specific preapproval by the Audit
Committee.
 
 External
Auditor Service Fees
 
 Aggregate
fees paid to Ernst & Young LLP, our external auditor, during the fiscal
years ended December 31, 2007 and 2006, were as follows:
 Page
29
 
 Category
              
              Note
              
              
              2007
              
              
              2006Audit
      Fees
              
              
              1
              
              
              
              C$1,021,000
              
              
              
              C$1,056,000Audit-Related
      Fees
              
              
              2
              
              
              
              11,000
              
              
              
              0Tax
      Fees
              
              
              3
              
              
              
              695,000
              
              
              
              532,000Total
              
              
              
              
              
              
              C$1,727,000
              
              
              
              C$1,588,000
  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.
 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
 
 The
following table lists the directors of Stantec Inc., current to March 14, 2008,
their municipality of residence, and their principal occupation within the five
preceding years:
  Directors of
Stantec
 
 Name
      and
                Municipality of
      Residence
              Principal
      Occupation
              Director
      sinceROBERT
      J. BRADSHAW1
                Toronto,
      Ontario, Canada
              Chairman,
      Contor Industries Limited (a holding company that acquires manufacturing
      companies)
              1993ANTHONY
      P. FRANCESCHINI
                Edmonton,
      Alberta, Canada
              President
      & CEO of Stantec
              1994WILLIAM
      D. GRACE1,
      2
                Edmonton,
      Alberta, Canada
              Corporate
      Director
              1994SUSAN
      E. HARTMAN1
                Rochester,
      New York, USA
              President
      and CEO of The Hartman Group (a management consulting
firm)
              2004ARAM
      H. KEITH
                Irvine,
      California, USA
              Vice
      Chairman of the Board of Stantec
              2005ROBERT
      R. MESEL2
                Kiawah
      Island, South Carolina, USA
              Corporate
      Director
              2004IVOR
      M. RUSTE2
                Calgary,
      Alberta, Canada
              Executive
      Vice President and Chief Risk Officer,EnCana Corporation
      (an unconventional natural gas and integrated oilsands
      company)
              2007RONALD
      TRIFFO
                Edmonton,
      Alberta, Canada
              Chairman
      of the Board of Stantec
              1985
 
 1      Member
of Corporate Governance and Compensation Committee
 2      Member
of Audit Committee
 Page
30
 All
directors are elected annually. With the exception of Aram H. Keith, who, prior
to September 15, 2005, was the chief executive officer and chairman of the Board
of The Keith Companies, Inc. (an engineering and consulting firm), a position he
held since 1983, and Ivor M. Ruste, who, just prior to joining EnCana
Corporation in May 2006, was the Alberta regional managing partner and vice
chair of the KPMG Canada Board of Directors and who, from 1998 until 2006, was
the managing partner of the Edmonton office of KPMG LLP (an international audit,
tax, and advisory services firm),each of the directors of
Stantec has been engaged for more than five years in their present principal
occupation or in other capacities with the company or organization (or a
predecessor thereof) in which they currently hold their principal
occupation.
 
 William
Grace was a director of WavePOINT Systems Inc. from December 2000 until March
2002. On May 29, 2002, WavePOINT Systems Inc. made an assignment pursuant to the
Bankruptcy and Insolvency Act (Canada), and a trustee in bankruptcy was
appointed.
 
 The
following table lists the executive officers of Stantec, current to March 15,
2008, their municipality of residence, and their principal occupation within the
five preceding years:
  Executive Officers of
Stantec
 
 
 Name
      and
                Municipality
      of Residence
              Principal
      Occupation
              Officer
      Positions Held
 Executive
      Officers of Stantec Inc.RONALD
      TRIFFO
                Edmonton,
      Alberta, Canada
              Chairman
      of the Board
              Chairman
      of the Board of Stantec Inc.ARAM
      H. KEITH
                Irvine,
      California, USA
              Vice
      Chairman of the Board
              Vice
      Chairman of the Board of Stantec Inc.ANTHONY
      P. FRANCESCHINI
                Edmonton,
      Alberta, Canada
              President
      & CEO
              President
      & CEO of Stantec Inc.DONALD
      W. WILSON
                St.
      Albert, Alberta, Canada
              Senior
      Vice President & CFO
              Senior
      Vice President & CFO of Stantec Inc.MARK
      E. JACKSON
                Waterloo,
      Ontario, Canada
              Senior
      Vice President & COO
              Senior
      Vice President & COO of Stantec Inc.JEFFREY
      S. LLOYD
                Edmonton,
      Alberta, Canada
              Vice
      President, Secretary & General Counsel
              Vice
      President, Secretary & General Counsel of Stantec Inc.Other
      Executive Officers
 Page
31
 Name
      and
                    Municipality
      of Residence
                  Principal
      Occupation
                  Officer
      Positions Held
 W.
      PAUL ALLEN
                Elmira,
      Ontario, Canada
              Corporate
      Practice Area Unit Leader, Urban Land
              Senior
      Vice President of certain Stantec Inc. subsidiariesRICHARD
      ALLEN
                Canton,
      Massachusetts, USA
              Regional
      Operating Unit Leader, US East
              Senior
      Vice President of certain Stantec Inc. subsidiariesCARL
      F. CLAYTON
                Edmonton,
      Alberta, Canada
              Corporate
      Practice Area Unit Leader, Transportation
              Senior
      Vice President of certain Stantec Inc. subsidiariesVALENTINO
      DIMANNO
                Calgary,
      Alberta, Canada
              Regional
      Operating Unit Leader, Canada
              Senior
      Vice President of certain Stantec Inc. subsidiariesROBERT
      J. GOMES
                Edmonton,
      Alberta, Canada
              Corporate
      Practice Area Unit Leader, Industrial
              Senior
      Vice President of certain Stantec Inc. subsidiariesJEFFERY
      KISHEL
                Longmont,
      Colorado, USA
              Corporate
      Practice Area Unit Leader, Environment
              Senior
      Vice President of certain Stantec Inc. subsidiariesERIC
      C. NIELSEN
                Santa
      Ana, California, USA
              Regional
      Operating Unit Leader, US West
              Senior
      Vice President of certain Stantec Inc. subsidiariesSTANIS
      I.R. SMITH
                Burnaby,
      British Columbia, Canada
              Corporate
      Practice Area Unit Leader, Buildings
              Senior
      Vice President of certain Stantec Inc.
  subsidiaries
 
 All the
above executive officers have held their present position or other positions
with us for the past five years, except for Aram H. Keith, who, prior to
September 15, 2005, was the chief executive officer and chairman of the Board of
The Keith Companies, Inc. (an engineering and consulting firm); Richard Allen,
who, prior to April 17, 2006, was president and chief executive officer of
Dufresne-Henry, Inc. (an engineering and consulting firm); Jeffery Kishel, who,
prior to November 11, 2006, was senior vice president, Strategic Development and
Client Services of MWH (an engineering and consulting firm); and Eric C.
Nielsen, who, prior to September 15, 2005, was president and chief operating
officer of The Keith Companies, Inc. (an engineering and consulting
firm).
  As a
group, the directors of Stantec Inc. and the executive officers of Stantec, as
at March 14, 2008, beneficially owned, or controlled or directed, directly or
indirectly 1,925,904 (4.22%) of the voting (common) shares of
Stantec.
 Page
32
 LEGAL
PROCEEDINGS
 
 Valerie
Parris versus Sear-Brown - Stantec acquired Sear-Brown in April
2004. Sear-Brown provided design services for a roadway in New York State.
A multivehicle 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.  This matter was tentatively settled among all parties
during mediation in early 2007 for a total settlement pool of
$650,000.  Sear-Brown’s insurer agreed to contribute to the settlement
pool.  The settlement is subject to New York State Surrogate Court
approval, which is pending.
 
 In
addition to the Valerie Parris claim noted above, we have other claims and suits
pending, both by and against us. These are normal and typical to the industries
in which we operate. Where appropriate, these claims have been reported to our
and our predecessors’ insurers, who are in the process of adjusting and/or
defending them. None are expected to have a material effect on our financial
position. The Valerie Parris claim summarized above is included herein
because the amount claimed exceeds 10% of our current assets; however, given the
tentative settlement, the claim is expected to be resolved with no
out-of-pocket cost to Stantec.
 
 TRANSFER
AGENT
 
 Computershare
Trust Company of Canada is our transfer agent at Computershare’s offices in
Calgary, Alberta; Toronto, Ontario; New York, New York; and Denver,
Colorado.
 
 MATERIAL
CONTRACTS
 
 We did
not enter into any material contracts outside the ordinary course of business in
2007. We consider the acquisition of professional services firms to be in the
ordinary course of our business.
 
 INTERESTS
OF EXPERTS
 
 Ernst
& Young LLP, Chartered Accountants, 1800 Scotia 2, Scotia Place, 10060
Jasper Avenue, Edmonton, Alberta, T5J 3R8 are the auditors of the
Corporation.
  The
Corporation’s auditors, Ernst & Young LLP, are independent in accordance
with the Rules of Professional Conduct of the Institute of Chartered Accountants
of Alberta and have complied with the SEC's rules on auditor
independence.
 Page
33
 ADDITIONAL
INFORMATION
 
 Financial
information is provided in our consolidated financial statements and
management’s discussion and analysis for our most recently completed financial
year. Additional information, including directors’ and officers’ remuneration
and indebtedness, the principal holders of our securities, and securities
authorized for issuance under equity compensation plans, is contained in our
management information circular, dated March 14, 2008. Copies of this annual
information form, as well as our latest management information circular and
annual report (which includes our consolidated financial statements and
management’s discussion and analysis) for the year ended December 31, 2007, may
be obtained from our web site at www.stantec.com or by mail on request from the
secretary, 10160 – 112 Street, Edmonton, Alberta, T5K 2L6. You may also access
disclosure documents and any reports, statements, or other information that we
file with the Canadian provincial securities commissions or other similar
regulatory authorities through the Internet on SEDAR at
www.sedar.com.
 
 Edmonton,
Alberta
 March 27,
2008
 GRAPHIC
 JEFFREY
S. LLOYD
 Secretary
 
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34
 APPENDIX
I
 Stantec
Inc.
 Audit
Committee - Terms of Reference (Mandate)
 
 
 
 
 A.         OVERVIEW AND
PURPOSE
  The 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
RESPONSIBILITIES
  Request
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.         MEMBERSHIP
  The
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
I
  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
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  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
I
  (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
  (f)
              any
      other matters which the external auditor should bring to the attention of
      the Committee.
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 APPENDIXI
  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;
  (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
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 APPENDIX
I
 (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.
  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.
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 APPENDIX
I
  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.
  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.






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