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                                AT&T CANADA INC.

                                   MAY 6, 2003



                             ANNUAL INFORMATION FORM


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                                TABLE OF CONTENTS

1.       CORPORATE STRUCTURE..................................................2

2.       GENERAL DEVELOPMENT OF THE BUSINESS..................................5

3.       NARRATIVE DESCRIPTION OF THE BUSINESS...............................13

         THE COMPANY.........................................................13
         RECENT DEVELOPMENTS.................................................16
         SERVICE OFFERINGS...................................................16
         SALES AND MARKETING.................................................17
         CUSTOMERS...........................................................18
         CUSTOMER CARE.......................................................19
         COMPETITION.........................................................19
         PROPERTIES..........................................................20
         GOVERNMENT REGULATION...............................................20
         EMPLOYEES...........................................................22
         LEGAL PROCEEDINGS...................................................23
         INTELLECTUAL PROPERTY...............................................23

4.       SELECTED CONSOLIDATED FINANCIAL DATA................................28

5.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS...........................................30

6.       SHARE CAPITAL.......................................................30

7.       MARKET FOR SECURITIES...............................................35

8.       DIRECTORS AND OFFICERS..............................................35

9.       ADDITIONAL INFORMATION..............................................42


                                       1


<PAGE>

         Pursuant to a Consolidated Plan of Arrangement and Reorganization (the
"PLAN"), a new parent company, AT&T Canada Inc. was incorporated under the
CANADA BUSINESS CORPORATIONS ACT (the "CBCA") in February 2003 and pursuant to
Articles of Reorganization dated April 1, 2003 became the sole shareholder of
AT&T Canada Limited, which prior to April 1, 2003 was called AT&T Canada Inc.

         In this Annual Information Form, unless the context otherwise
indicates, references to "AT&T Canada" refer to AT&T Canada Limited (formerly
AT&T Canada Inc.) and its subsidiaries and references to the consolidated
financial statements refer to the consolidated financial statements of AT&T
Canada Limited, the notes thereto and the auditors' report thereon for the year
ended December 31, 2002. References to "New AT&T Canada" refer to AT&T Canada
Inc. All references to the "Company" unless otherwise provided includes AT&T
Canada and its subsidiaries and as of April 1, 2003, includes New AT&T Canada
and its subsidiaries. Unless indicated otherwise, all dollar references in this
Annual Information Form are to Canadian dollars.

         A NUMBER OF THE MATTERS DISCUSSED HEREIN ARE NOT HISTORICAL OR
CURRENT FACTS, BUT RATHER DEAL WITH POTENTIAL FUTURE CIRCUMSTANCES AND
DEVELOPMENTS. THE DISCUSSION OF SUCH MATTERS IS QUALIFIED BY THE INHERENT
RISKS AND UNCERTAINTIES SURROUNDING FUTURE EXPECTATIONS GENERALLY. SUCH
DISCUSSION MAY MATERIALLY DIFFER FROM NEW AT&T CANADA'S ACTUAL FUTURE
EXPERIENCE INVOLVING ANY ONE OR MORE OF SUCH MATTERS. THE OPERATIONS AND
RESULTS OF NEW AT&T CANADA'S TELECOMMUNICATIONS BUSINESS MAY BE SUBJECT TO
THE EFFECT OF OTHER RISKS AND UNCERTAINTIES, INCLUDING THE IMPLEMENTATION OF
THE TRANSITION TO A NEW BRAND FOR NEW AT&T CANADA; THE IMPLICATIONS OF, TERMS
OF AND DIFFERENCES FROM FORMER COMMERCIAL ARRANGEMENTS REPRESENTED BY NEW
AT&T CANADA'S NEW COMMERCIAL ARRANGEMENTS WITH AT&T CORP. INCLUDING LOSS OF
TECHNICAL SUPPORT AND CAPABILITIES, CUSTOMERS, TRAFFIC AND REVENUE;
COMPETITION IN CANADA WITH AT&T CORP.; COMPETITION WITH THE INCUMBENT LOCAL
EXCHANGE CARRIERS (THE "ILECS"), IN PARTICULAR BELL CANADA AND TELUS CORP.,
EACH OF WHICH HAS SIGNIFICANTLY GREATER RESOURCES THAN NEW AT&T CANADA;
EXISTING GOVERNMENT REGULATIONS AND CHANGES IN, OR THE FAILURE TO COMPLY
WITH, GOVERNMENT REGULATIONS; THE LEVEL OF EXPENDITURES NECESSARY TO SUSTAIN
OPERATIONS, PROVIDE NEW SERVICES, BUILD AND UPDATE NETWORKS AND MAINTAIN OR
IMPROVE QUALITY OF SERVICE; THE AVAILABILITY, TERMS AND COST OF CAPITAL
REQUIRED TO FUND CAPITAL AND OTHER EXPENDITURES; THE DURATION AND EXTENT OF
THE CURRENT ECONOMIC DOWNTURN; THE POSSIBILITY OF FURTHER DETERIORATION IN
THE STATE OF CAPITAL MARKETS AND THE TELECOMMUNICATIONS INDUSTRY; CURRENT
NEGATIVE TRENDS IN GLOBAL MARKET AND ECONOMIC CONDITIONS WHICH IMPACT THE
DEMAND FOR, AND COSTS OF, PRODUCTS AND SERVICES; THE FINANCIAL CONDITION AND
CREDIT RISK OF CUSTOMERS AND UNCERTAINTIES REGARDING COLLECTIBILITY OF
RECEIVABLES; THE RATE OF DECLINE OF PRICES FOR DATA AND VOICE SERVICES;
UNCERTAINTY AS TO WHETHER NEW AT&T CANADA'S STRATEGIES WILL YIELD THE
EXPECTED BENEFITS, SYNERGIES AND GROWTH PROSPECTS; THE ABILITY TO INCREASE
REVENUES FROM BUSINESS SEGMENTS OTHER THAN VOICE SERVICES (SUCH AS DATA AND
INTERNET SERVICES); NEW AT&T CANADA'S ABILITY TO ACCESS MARKETS, DESIGN
EFFECTIVE FIBRE OPTIC ROUTES, INSTALL CABLE AND FACILITIES, INCLUDING
SWITCHING ELECTRONICS, INTERCONNECT TO THE ILECS' NETWORKS, SATISFY THE
OBLIGATIONS IMPOSED ON COMPETITIVE LOCAL EXCHANGE CARRIERS ("CLECS") BY THE
CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION (THE "CRTC") AND
OBTAIN RIGHTS-OF-WAY, BUILDING ACCESS RIGHTS AND ANY REQUIRED GOVERNMENT
AUTHORIZATIONS, FRANCHISES AND PERMITS, ALL IN A TIMELY MANNER, AT REASONABLE
COSTS AND ON SATISFACTORY TERMS AND CONDITIONS; THE INTENSITY OF COMPETITIVE
ACTIVITY, AND ITS RESULTING IMPACT ON THE ABILITY TO RETAIN EXISTING AND
ATTRACT NEW CUSTOMERS, AND THE CONSEQUENT IMPACT ON PRICING STRATEGIES,
REVENUES AND NETWORK CAPACITY; THE ABILITY TO DEPLOY NEW TECHNOLOGIES AND
OFFER NEW PRODUCTS AND SERVICES RAPIDLY AND ACHIEVE MARKET ACCEPTANCE
THEREOF; AND THE IMPACT OF ADVERSE CHANGES IN LAWS OR REGULATIONS OR OF
ADVERSE REGULATORY INITIATIVES OR PROCEEDINGS AND THE ABILITY TO ATTRACT AND
RETAIN QUALIFIED PERSONNEL. GIVEN THESE UNCERTAINTIES, UNDUE RELIANCE SHOULD
NOT BE PLACED ON SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY DISCLAIMS ANY
OBLIGATIONS TO UPDATE ANY SUCH FACTORS OR PUBLICLY ANNOUNCE THE RESULT OF ANY
REVISIONS TO ANY OF THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO
REFLECT FUTURE EVENTS.

<PAGE>

1.       CORPORATE STRUCTURE

OVERVIEW

         New AT&T Canada was incorporated under the CBCA on February 20, 2003
and on April 1, 2003 changed its name from 6067760 Canada Inc. to AT&T Canada
Inc. New AT&T Canada was incorporated in order to become the successor public
company to AT&T Canada Limited (called AT&T Canada Inc. from June 1, 1999 to
March 31, 2003 and MetroNet Communications Corp. prior to June 1, 1999) pursuant
to the Plan under the COMPANIES' CREDITORS ARRANGEMENT ACT (Canada) (the "CCAA")
and the CBCA. AT&T Canada Limited was a publicly traded company which filed,
along with certain of its subsidiaries, for protection from its creditors under
the CCAA on October 15, 2002. The filing under the CCAA occurred following
several months of negotiation with holders of notes of AT&T Canada Limited (the
"NOTES") and was necessitated by the Company's inability to service its debt
requirements. In building out its extensive telecommunications market in Canada,
AT&T Canada had issued significant long-term debt, which as of October 15, 2002
aggregated approximately $4.6 billion. From October 8, 2002, the date of the
closing of the Back-end Transaction (defined below), until the implementation of
the Plan, all of the outstanding Class A Voting Shares and Class B Non-Voting
Shares of AT&T Canada Limited were held by AT&T Corp. and by affiliates of
Brascan Financial Corp. and CIBC Capital Partners. AT&T Corp. also held a 31%
non-voting equity interest in AT&T Canada Corp. Under the Plan, those equity
interests were cancelled.

         Upon the implementation of the Plan, the claims of the holders of Notes
and the claims of certain other creditors of AT&T Canada Limited and its
subsidiaries (collectively, with the holders of the Notes, the "AFFECTED
CREDITORS") were compromised and the Affected Creditors received, on a PRO RATA
basis, 100% of the equity of New AT&T Canada (consisting of Class A Voting
Shares and Class B Limited Voting Shares (collectively, the "NEW SHARES")), and
a payment of cash from a cash pool of approximately $233,000,000 (the "CASH
POOL"). As a result of the Plan, as of April 1, 2003, New AT&T Canada and its
subsidiaries had no long-term public debt.

         AT&T Canada Limited was incorporated under the laws of Alberta as
MetroNet Communications Corp. ("METRONET"). MetroNet was continued under the
CBCA and changed its name to AT&T Canada Inc. pursuant to a 1999 plan of
arrangement and to AT&T Canada Limited under the Plan. AT&T Canada Limited
conducted its business through its operating subsidiary, AT&T Canada Corp., a
Nova Scotia unlimited liability corporation, and through AT&T Canada Corp.'s
wholly-owned subsidiaries, AT&T Canada Telecom Services Company, AT&T Canada
Fibre Company, Netcom Canada Inc. ("NETCOM"), Netcom Canada Holding Inc.("NETCOM
CANADA), 1219404 Ontario Inc., 950545 Ontario Inc., MetroNet Fiber US Inc.,
MetroNet Fiber Washington Inc. Montage.DMC eBusiness Services Inc. and Contour
Telecom Inc. Under the Plan, AT&T Canada Corp. amalgamated with these
subsidiaries (other than MetroNet Fiber US Inc., MetroNet Fiber Washington Inc.
Montage.DMC eBusiness Services Inc. and Contour Telecom Inc.) under the CBCA and
continued as AT&T Canada Corp.


                                       2

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         The corporate structure of New AT&T Canada and its principal
subsidiaries as of April 1, 2003 is as follows:


                                     Public

                                                 100%

                                AT&T Canada Inc.
                               (New AT&T Canada)
                                    (Canada)

                                                 100%

                              AT&T Canada Limited
                           (formerly AT&T Canada Inc.)
                                    (Canada)

                                                 100%

                                AT&T Canada Corp.
                                    (Canada)



PLAN RESTRUCTURING

         On April 1, 2003, the implementation of the Plan effected a
restructuring of the debt, share capital, share ownership and corporate
structure of AT&T Canada Limited and certain of its subsidiaries (collectively,
the "AT&T CANADA COMPANIES"). On implementation of the Plan on April 1, 2003,
the following changes occurred:

-    AT&T Canada Corp. was amalgamated under the CBCA with successor
     corporations of AT&T Canada Telecom Services Company and AT&T Canada Fibre
     Company and with Netcom, Netcom Canada, 1219404 Ontario Inc. and 950545
     Ontario Inc. and continued as AT&T Canada Corp. under the CBCA.

-    The minority equity interest of AT&T Corp. in AT&T Canada Corp. was
     cancelled, resulting in AT&T Canada Corp. becoming a wholly-owned
     subsidiary of AT&T Canada Limited.

-    All direct and indirect equity holdings in AT&T Canada Limited, including
     the Class A Voting Shares and Class B Non-Voting Shares held by AT&T Corp.,
     CIBC Capital Partners and Brascan Financial Corp., were cancelled without
     compensation.

-    New AT&T Canada acquired 10,000 common shares in AT&T Canada Limited (which
     changed its name to AT&T Canada Limited from AT&T Canada Inc.), thereby
     becoming AT&T Canada Limited's sole shareholder.

-    6067760 Canada Inc., which was incorporated to acquire the public debt and
     claims of other Affected Creditors of the AT&T Canada Companies, changed
     its name to AT&T Canada Inc. and amended its articles to delete the private
     company restrictions, add new share conditions creating its Class A


                                       3

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     Voting Shares and Class B Limited Voting Shares, provide for restrictions
     on the issue, ownership or transfer of its shares as contemplated by the
     TELECOMMUNICATIONS ACT (Canada) and the regulations thereunder (the
     "TELECOMMUNICATIONS ACT") and specify other matters which would require
     super-majority approval of the board of directors of New AT&T Canada.

-    The claims of Affected Creditors, which claims aggregated approximately
     $4.7 billion, were exchanged under the Plan for approximately $233 million
     of cash and approximately 1.1 million Class A Voting Shares and
     approximately 18.8 million Class B Limited Voting Shares of AT&T Canada
     Inc.

-    The debt and claims of Affected Creditors acquired by New AT&T Canada,
     were approximately $4.7 billion, were settled by New AT&T Canada with AT&T
     Canada Limited for two intercompany promissory notes of AT&T Canada in the
     amounts of $7,795,644 and $806,225,856.

-    AT&T Canada Limited settled debts of the other AT&T Canada Companies owing
     to AT&T Canada Limited with AT&T Canada Corp. in exchange for two
     intercompany promissory notes of AT&T Canada Corp. in the amounts of
     $455,013,356 and $2,741,724,783.

-    A new shareholder rights plan of New AT&T Canada became effective.

-    An acquisition rights agreement (the "ACQUISITION RIGHTS AGREEMENT") became
     effective, which agreement provides that, among other things, each holder
     of a Class B Limited Voting Share will receive together with each Class B
     Limited Voting Share, one acquisition right (an "ACQUISITION RIGHT"). Upon
     submission of a residency declaration to the transfer agent stating that
     the holder is a Canadian (as defined in the Telecommunications Act), the
     holder of an Acquisition Right may exchange one Acquisition Right together
     with the associated Class B Limited Voting Share, for one Class A Voting
     Share on or prior to December 31, 2004, provided that such holder and the
     persons acting jointly or in concert with such holder would not on exchange
     hold in excess of 10% of the Class A Voting Shares.

-    A new management incentive plan of AT&T Canada Inc. became effective,
     pursuant to which an aggregate of 2,000,000 Class A Voting Shares and Class
     B Limited Voting Shares are authorized for issuance.

-    The board of directors of AT&T Canada Inc. was fixed by the articles at
     nine and the new board of directors of AT&T Canada Inc. was appointed.

-    A new by-law was introduced for AT&T Canada Inc.

-    The AT&T Canada companies were released and were deemed to be released by
     all Affected Creditors from all claims of such Affected Creditors.


2.       GENERAL DEVELOPMENT OF THE BUSINESS

SUMMARY OF SIGNIFICANT DEVELOPMENTS SINCE 2000.


2003

BUSINESS DEVELOPMENTS

May:                 On May 6, 2003, New AT&T Canada announced that it has
                     reached an agreement to sell its subsidiaries, Contour
                     Telecom Inc. and Argos Telecom Inc., to YAK


                                      4


<PAGE>

                     Communications (Canada). The transaction is consistent
                     with New AT&T Canada's corporate strategy to focus on its
                     core businesses. New AT&T Canada will receive cash with
                     respect to the transaction, which is expected to close on
                     July 2, 2003, subject to the satisfaction of certain
                     conditions.

APRIL:               Upon the implementation of the Plan on April 1, 2003, AT&T
                     Canada became a wholly-owned subsidiary of New AT&T Canada
                     and AT&T Canada Corp., the corporation continuing under the
                     CBCA following the amalgamation of AT&T Canada Corp. and
                     certain other subsidiaries, became a wholly-owned
                     subsidiary of AT&T Canada Limited. The Affected Creditors
                     received their PRO RATA share of the Cash Pool and 100% of
                     the New Shares. The Class A Voting Shares and Class B
                     Limited Voting Shares of New AT&T Canada began trading on
                     both the Toronto Stock Exchange and the NASDAQ National
                     Market System.

                     On April 1, 2003, the New AT&T Canada Board of Directors
                     took office and assumed responsibility for the supervision
                     of the Company.

                     The April 1, 2003 implementation of the Plan reduced the
                     amount of the Company's outstanding long-term public debt
                     to zero. See "Plan Restructuring" above for other
                     matters effected on implementation of the Plan on April 1,
                     2003.

                     On April 1, 2003, in connection with the Plan, the Company
                     was required to perform a comprehensive revaluation of its
                     balance sheet under the provisions of the Canadian
                     Institute of Chartered Accountants ("CICA") Handbook
                     Section ("HB") 1625, "Comprehensive Revaluation of Assets
                     and Liabilities" ("FRESH START ACCOUNTING"). Under Fresh
                     Start Accounting, the Company is required to assess the
                     fair value of its recorded and unrecorded assets and
                     liabilities and prepare a "Fresh Start Accounting" balance
                     sheet upon emergence from the Plan. As required by CICA HB
                     1625, the equity value of $581 million, as determined after
                     receipt of advice from independent financial advisors,
                     will be allocated upon Fresh Start Accounting to the
                     assets and liabilities of the Company based on their
                     fair values.

MARCH:               On March 26, 2003, the Federal Cabinet dismissed the
                     Company's May 30, 2002 appeal of the CRTC's Price Cap
                     Decision (as defined below).

                     On March 24, 2003, the Company completed the implementation
                     of expanded telecom services for Quebec-based Transat AT
                     Inc. valued at more than $6 million over three years. The
                     services include Toll-free, Long Distance and Local
                     services as well as a Global Data Network (Business IP
                     Service based on MPLS technology) for Transat locations
                     across Canada, in the United States and France.

                     On March 3, 2003, the Company completed the installation of
                     a high-speed data communication network for 7-Eleven Inc.
                     of Dallas, Texas, fulfilling a contract valued at $7
                     million. The three-year data and equipment service contract
                     includes a Frame Relay network connecting 7-Eleven's 500
                     Canadian stores and its Dallas headquarters.

FEBRUARY:            On February 25, 2003, the Ontario Superior Court of Justice
                     (Commercial List) (the "COURT") and the Bankruptcy Court in
                     the Southern District of New York (the "U.S. COURT") both
                     approved the Plan and extended the Stay Period (as defined
                     below) to the date of the implementation of the Plan.

                     On February 20, 2003, the Plan was approved by Affected
                     Creditors at a meeting held


                                       5

<PAGE>

                     to consider and vote upon the Plan. The Plan was approved
                     by 91% of the Affected Creditors that voted, representing
                     99% of the total value of affected claims of Affected
                     Creditors that were voted at the meeting.

JANUARY:             On January 22, 2003, the AT&T Canada Companies filed the
                     Plan and the related information circular with the Court
                     and mailed these materials to the Affected Creditors in
                     preparation for the February 20, 2003 meeting held to
                     consider and vote upon the Plan.

                     On January 17, 2003, the Company obtained the Meeting Order
                     from the Court which provided for the calling of the
                     meeting of Affected Creditors, the voting procedure for
                     Noteholders and extension of deadlines for the resolution
                     of disputes regarding claims.

                     On January 17, 2003, the Company obtained the Commercial
                     Agreements Ratification Order from the Court which ratified
                     the execution of the new commercial agreements with AT&T
                     Corp.

                     On January 16, 2003, the Company entered into new
                     commercial agreements with AT&T Corp. and certain of its
                     subsidiaries. The new commercial agreements, among other
                     things, require the Company to launch a new brand name by
                     September 9, 2003, and to cease use of the AT&T brand by no
                     later than December 31, 2003. In addition, these agreements
                     provide a timeframe for continuity of the Company's global
                     connectivity, technology platform and product suite, and
                     maintain network ties between the two companies for the
                     benefit of customers. These agreements enable the Company
                     and AT&T Corp. to continue working together on a
                     non-exclusive basis, and provide the Company with the
                     ability to forge additional supplier relationships that
                     will enhance its connectivity and product offerings. Also,
                     these arrangements recognize AT&T Corp.'s ability to serve
                     Canadian customers directly. The Company is also
                     negotiating a master services agreement with AT&T Corp. to
                     allow for the continued use of AT&T Corp. technology and
                     capabilities. If a master services agreement is not
                     executed by June 30, 2003, the Company may be required by
                     AT&T Corp. to cease use of all AT&T Corp. technology and
                     capabilities by June 30, 2004 or earlier. See "Intellectual
                     Property - Commercial Arrangements with AT&T Corp."


                                       6

<PAGE>

2002

BUSINESS DEVELOPMENTS

NOVEMBER:            On November 27, 2002, the Company announced that John A.
                     MacDonald joined as its new President and Chief Operating
                     Officer, replacing Harry Truderung.

                     On November 27, 2002, the Company obtained the Claims
                     Procedure Order approving and implementing a Claims
                     Procedure for the Plan.

                     On November 14, 2002, the AT&T Canada Companies obtained an
                     order from the Court that, among other things, extended the
                     time for the Plan and extended the Stay Period until
                     February 28, 2003.

                     On November 7, 2002, AT&T Canada announced that AT&T Canada
                     and AT&T Corp. were negotiating new commercial
                     arrangements, under which AT&T Canada would become a fully
                     independent, full-service telecommunications provider for
                     business customers operating under a new brand identity.
                     AT&T Canada also announced that it was not expected that
                     AT&T Corp. would maintain an equity interest in AT&T Canada
                     following the completion of AT&T Canada's restructuring.

OCTOBER:             On October 15, 2002, the Company reached an agreement in
                     principle with the financial and legal representatives of a
                     steering committee of the informal committee (the "AD HOC
                     COMMITTEE") representing a significant number of holders of
                     the Notes (the "NOTEHOLDERS") on the terms of financial
                     restructuring which was reflected in the terms of the Plan.

                     On the same date, the Company filed for court protection
                     under the CCAA and was granted an initial order of the
                     Court under the CCAA (the "INITIAL ORDER"). The Initial
                     Order provided for a broad stay of any proceedings (the
                     "STAY PERIOD") against the Company, thereby preventing
                     creditors and other parties from exercising rights to
                     recover amounts owing on October 15, 2002 or any rights
                     arising as a result of the Company initiating CCAA
                     proceedings. The Initial Order also authorized the Company
                     to cease or downsize operations, sell assets, terminate the
                     employment of or temporarily lay off employees, abandon
                     leases, terminate arrangements or agreements. The Initial
                     Order also granted the directors and officers of the
                     Company the benefit of certain segregated funds to protect
                     the directors and officers from all future liabilities.
                     Finally, the Initial Order appointed KPMG Inc. as the
                     monitor of the AT&T Canada Companies.

                     The Company also obtained an order from the U.S. Court to
                     recognize the CCAA proceedings in the United States.

                     On October 8, 2002, in accordance with the deposit receipt
                     agreement dated June 1, 1999 between AT&T Canada, AT&T
                     Corp. and CIBC Mellon Trust Company, as trustee (the
                     "DEPOSIT RECEIPT AGREEMENT") and the waiver notice
                     delivered by AT&T Corp. in accordance with the Deposit
                     Receipt Agreement (the "WAIVER NOTICE"), purchasers
                     designated by AT&T Corp., being Brascan Financial
                     Corporation ("BRASCAN") and CIBC Capital Partners ("CIBC"),
                     acquired all of the outstanding shares of AT&T Canada not
                     already owned by AT&T Corp. or its affiliates for $51.21
                     per share in cash, for an aggregate purchase price of
                     approximately $5.5 billion (the "BACK-END TRANSACTION").
                     Upon completion of the Back-end Transaction, the Company's
                     Class B Deposit Receipts were delisted from The Toronto
                     Stock Exchange and the NASDAQ National Market System. As a
                     result of the Back-end Transaction, AT&T Corp. held a 31%
                     economic interest and a 23% voting interest in AT&T Canada
                     Limited; Tricap Investments Corporation, a wholly-owned
                     subsidiary of Brascan, held a 63% equity interest and a 50%
                     voting interest in AT&T Canada Limited through a


                                       7

<PAGE>

                     wholly-owned subsidiary; and CIBC held a 6% equity interest
                     and a 27% voting interest in AT&T Canada Limited through a
                     wholly-owned subsidiary.

                     On October 2, 2002, certain Noteholders withdrew an
                     oppression application filed against the Company and its
                     Board of Directors on May 9, 2002.

AUGUST:              In August 2002, certain members of the Ad Hoc Committee
                     entered into confidentiality agreements with AT&T Canada
                     (the "CONFIDENTIALITY AGREEMENTS"). Pursuant to the terms
                     of the Confidentiality Agreements, AT&T Canada disclosed
                     confidential non-public information to such persons in
                     order to facilitate discussion of a possible restructuring
                     of AT&T Canada's capital structure.

                     On August 27, 2002, the Company filed an appeal to the
                     Governor in Council (the Federal Cabinet) of the Price Cap
                     Decision.

JULY:                On July 29, 2002, the Company announced it would further
                     reduce its workforce by approximately 270 positions.

                     In July 2002, the Company's Board of Directors formally
                     recognized the Ad Hoc Committee. AT&T Canada and the Ad Hoc
                     Committee began a dialogue with the objective of
                     negotiating a consensual financial restructuring of AT&T
                     Canada. AT&T Canada also entered into discussions with AT&T
                     Corp. to negotiate the basis on which AT&T Corp. would
                     enter into new commercial arrangements with AT&T Canada.

JUNE:                On June 25, 2002, AT&T Corp. delivered the Waiver Notice.
                     Pursuant to the Waiver Notice, AT&T Corp. indicated that it
                     would cause to be acquired pursuant to the Deposit Receipt
                     Agreement all of the issued and outstanding shares of AT&T
                     Canada not already owned by AT&T Corp. or its affiliates.

MAY:                 On May 30, 2002, the CRTC released the Price Cap Decision.
                     The Price Cap Decision reduced, by approximately 8 to 10%,
                     the costs incurred by the Company to utilize ILECs' network
                     facilities and services in order to complete customer
                     connections. A subsequent decision of the CRTC increased
                     the reduction of such costs to approximately 12%. The
                     reductions were significantly less than sought by
                     competitive entrants such as AT&T Canada in the
                     proceeding. See "Government Regulation".

                     On May 9, 2002, an oppression application was filed against
                     the Company and its directors by certain Noteholders of
                     AT&T Canada.

                     On May 2, 2002, AT&T Canada's Board of Directors approved a
                     number of cost reduction initiatives to bring the Company's
                     cost structure in line with current revenue. These
                     initiatives resulted in a reduction of approximately 1,000
                     personnel and reduced capital spending to $144 million in
                     2002.

APRIL:               On April 8, 2002, the Company announced that it won a four
                     and a half year, $7 million contract with Government
                     Telecommunications and Informatics Services (GTIS), a
                     branch of Public Works and Government Services Canada.
                     Under the contract, AT&T Canada deployed a fully redundant
                     optical Dense Wave Division Multiplexing (DWDM) network to
                     interconnect four major data centres in the National
                     Capital Region for GTIS. AT&T Canada also provides ongoing
                     management and maintenance expertise.


                                       8

<PAGE>

                     On April 4, 2002, MONTAGE.DMC, a division of the Company
                     announced that it was awarded a $1.5 million contract by
                     the Department of Foreign Affairs and International Trade
                     (DFAIT) to supply eBusiness services to the Trade
                     Commissioner Service.

MARCH:               On March 15, 2002, a group of more than 20 Noteholders
                     holding more than U.S. $1 billion of the Notes announced
                     that they had organized as an "ad hoc committee" to express
                     their concerns about AT&T Canada's business operations and
                     financial prospects.

                     On March 14, 2002, AT&T Canada announced the appointment of
                     Greenhill & Co., LLC ("GREENHILL") as financial advisors to
                     AT&T Canada. Greenhill was appointed to work with the
                     special committee of the Board of Directors ("SPECIAL
                     COMMITTEE"), the Board of Directors of AT&T Canada and
                     management to evaluate various scenarios regarding the
                     issues, opportunities and alternatives for AT&T Canada.

FEBRUARY:            On February 26, 2002, the AT&T Canada Board of Directors
                     appointed the Special Committee chaired by Mr. Purdy
                     Crawford, to work with management to address the
                     complexities facing AT&T Canada. The Special Committee was
                     given the mandate to:

                     -      examine the details of the then anticipated Price
                            Cap Decision of the CRTC and its impact on the
                            future of AT&T Canada;

                     -      examine the financial position of AT&T Canada
                            relative to all stakeholders, with specific
                            reference to its liquidity, level of capital
                            expenditures and financial prospects;

                     -      receive management's recommendation as to whether
                            any modifications to the approved operating and
                            capital plans were warranted and to consider and
                            assess such recommendations;

                     -      examine options potentially available for the
                            restructuring of AT&T Canada's financial affairs and
                            whether any such options would be appropriate to
                            pursue;

                     -      seek information from and engage in a dialogue with
                            AT&T Corp. with respect to matters relevant to AT&T
                            Canada's circumstances and future prospects; and

                     -      consider and develop an appropriate strategy for
                            communicating with stakeholders, including equity
                            holders and creditors, with respect to issues
                            relating to AT&T Canada's circumstances and
                            prospects.

FINANCING

         On February 20, 2002, AT&T Canada announced that it had repurchased for
approximately $100 million all of the outstanding accounts receivable sold into
the securitization program established in July, 2001. On February 22, 2002,
Standard & Poor's downgraded AT&T Canada's senior unsecured debt to BB. On
February 27, 2002, Moody's downgraded AT&T Canada's senior unsecured debt to
Ba3. On March 22, 2002, Moody's downgraded AT&T Canada's senior unsecured debt
further to B3.

         AT&T Canada elected not to make interest payments on certain of its
Notes, which totalled approximately US$47.8 million, due on September 15, 2002
and approximately $5.4 million due on September 23, 2002. The interest payments
due on September 15, 2002 were: (1) US$38.25 million on a 7.65% US$1 billion
note due on September 12, 2006; and (2) US$9.53 million on a 7.625% US$250
million note due March 15, 2005. The interest payment due on September 23, 2002
was $5.4 million on a


                                       9

<PAGE>

7.15% $150 million note. Under the terms of the indentures governing each of
these series of Notes, AT&T Canada had 30 days from the scheduled interest
payment date to make the required interest payment. Non-payment gave
Noteholders the right to demand accelerated and immediate payment, which
demand the Company could not fulfill in the absence of a successful capital
restructuring.

         On September 25, 2002, AT&T Canada completed the unwinding of its
remaining currency swaps, receiving approximately $85 million in the face amount
of its outstanding Notes in satisfaction of the counterparties' obligations to
the Company.

         As a result of the filing by the AT&T Canada Companies under the CCAA
on October 15, 2002, AT&T Canada was in default under the terms of each of the
series of Notes. The claims of the Noteholders were acquired by New AT&T Canada
on April 1, 2003 and were compromised in accordance with the Plan. See "Plan
Restructuring" above.

         On October 8, 2002, immediately prior to the closing of the Back-end
Transaction, AT&T Canada received additional proceeds of approximately $225
million from the exercise of stock options. $200 million of these proceeds were
used to pay all amounts outstanding under the Company's senior credit facility
(the "SENIOR CREDIT FACILITY") and the Senior Credit Facility was terminated.


2001

BUSINESS DEVELOPMENTS

DECEMBER -           The Company acquired 46 co-locations and associated
SEPTEMBER:           telecommunications equipment of Axxent Inc., an insolvent
                     Canadian CLEC, for $6.2 million. This acquisition enabled
                     the Company to cost-effectively extend its network reach in
                     Ontario, Quebec, Alberta and British Columbia.

AUGUST:              The Company announced the launch of its newest dedicated
                     high-speed access service, Small Office ADSL Internet.
                     Small Office ADSL Internet supports connectivity for
                     multiple users over a single access for email and web
                     browsing, offering affordable high-speed Internet
                     connectivity. With complete connection to AT&T Canada's
                     high-speed national network, Small Office ADSL Internet
                     also offers medium and large sized Virtual Private Network
                     (VPN) customers who have telecommuting employees or branch
                     office locations, the ability to access their LAN through a
                     high-speed connection.

JULY:                The Company announced that it had won a $16 million
                     contract to install and manage a data network for the
                     Canadian Broadcasting Corporation ("CBC"). The agreement
                     called for the implementation and management of an
                     innovative data networking solution that exploits
                     Asynchronous Transfer Mode ("ATM") technology to provide
                     CBC with bandwidth on demand. This solution supports the
                     CBC's requirement to transmit content-rich multimedia
                     applications and programming, which is key in the CBC's
                     goal to provide high quality distinctive programming to
                     Canadians at all times. Interconnection to AT&T Canada's
                     broadband national network provides the CBC with the
                     pan-Canadian coverage they require, while concurrently
                     giving them access to over 280 countries worldwide. Under
                     the terms of the contract AT&T Canada became the CBC's
                     primary provider of high speed Internet service. The
                     Company announced a cost reduction initiative that included
                     the reduction of the workforce by approximately 500 people.

JUNE:                On June 1, 2001, AT&T Canada acquired all of the issued and
                     outstanding shares of


                                       10

<PAGE>

                     MONTAGE eIntegration Inc. ("MONTAGE"). MONTAGE is a
                     Canadian E-Business solutions integrator focused on
                     transforming traditional organizations into connected
                     enterprises through Internet technologies. Consideration
                     of $58.4 million was paid on closing, comprised of $13.8
                     million in cash and $44.7 million, represented by 967,355
                     Class B Deposit Receipts of AT&T Canada. In addition,
                     acquisition costs of $1.0 million were incurred.

                     AT&T Canada acquired the assets of Bird on a Wire Networks,
                     a Canadian managed hosting services provider, for $4.0
                     million. Bird on a Wire Networks' services range from
                     server co-location to complete managed hardware and managed
                     software solutions for hosted Internet applications. The
                     purchase included a state-of-the-art 30,000 square foot
                     data centre. This acquisition strengthened the Company's
                     presence in the managed hosting market.

                     The Company announced the launch of Managed Security
                     Services as a new addition to its Security Solutions
                     product portfolio. Managed Security Services offers a suite
                     of services including 24x7 management, access to the
                     Company's Internet Security products, managed firewall with
                     optional URL filtering and/or virus detection, highly
                     trained engineers and strong partner relationships.

                     MONTAGE.DMC, a division of AT&T Canada, announced that it
                     had been awarded a significant contract by the North
                     Atlantic Treaty Organization for the complete rollout of
                     Oracle financial applications at its 19 member country
                     locations. MONTAGE.DMC will perform the configurations and
                     rollout of the software at each site, allowing NATO to
                     better manage its financial operations.

JANUARY:             On January 25, 2001, the CRTC issued a decision (Decision
                     2001-23) regarding a dispute between Ledcor Industries
                     Limited ("LEDCOR") and the City of Vancouver granting
                     Ledcor permission to construct, maintain and operate
                     transmission facilities in certain street crossings in
                     Vancouver and providing the terms and conditions for access
                     to these crossings. The decision by the CRTC rejected the
                     notion that access fees for public rights-of-way should be
                     at market-based rates and that carriers should be forced to
                     remove facilities and cease operation in the event an
                     agreement expires or is terminated. Instead the CRTC
                     determined that fees charged by a municipality or other
                     public authority for rights-of-way should be set to recover
                     causal costs. The decision was appealed to the Federal
                     Court of Appeal, which appeal was dismissed in December
                     2002. An application for leave to appeal to the Supreme
                     Court of Canada has been filed by various municipalities,
                     and a decision is expected in the first half of 2003.

                     The Company announced that it had been awarded a
                     multi-year, multi-million dollar contract by TD Bank
                     Financial Group to provide a broad array of managed
                     communications services. The five year agreement is
                     expected to be worth over $160 million. The services
                     provided by AT&T Canada will be utilized throughout TD
                     Financial Group's business units, including its major call
                     centres for TD Bank and Canada Trust, TD Visa, and TD
                     Waterhouse Canada. The agreement calls for the provision of
                     intelligent call routing solutions, managed computer
                     telephony integration (CTI) services, as well as local,
                     long distance, toll free, and frame relay communications
                     transport services.


                                       11

<PAGE>

FINANCING:

                     In March, AT&T Canada issued US$500 million principal
                     amount of 7.65% Senior Notes due 2006.

                     In July, AT&T Canada signed a securitization agreement,
                     giving AT&T Canada the ability to sell certain of its
                     accounts receivable on a revolving basis. AT&T Canada sold
                     accounts receivable for initial proceeds of $100 million.

2000

BUSINESS DEVELOPMENTS:

DECEMBER:           The Company launched commercial availability of a full suite
                    of on-net local voice, data and Internet service offerings
                    in six new markets, including Kanata, Vaughan, St.
                    Catharines and Cambridge in Ontario, New Westminister,
                    British Columbia, and Laval, Quebec. This brought to 27 the
                    number of markets served with full service CLEC networks,
                    and with two more under development, represents
                    approximately 85% of the total addressable
                    telecommunications business market in Canada.

NOVEMBER:            On November 30, 2000, the CRTC issued a decision (Decision
                     2000-745), which fundamentally changed the regime under
                     which long distance carriers and long distance resellers
                     paid a contribution to the ILECs and CLECs to subsidize the
                     cost of providing local residential services. In the past,
                     payment of contribution was the sole responsibility of
                     these long distance providers and was charged as a
                     per-minute rate on all switched long distance minutes. The
                     CRTC decision changed the contribution collection mechanism
                     from a per-minute rate to a revenue charge applied to all
                     telecommunications service providers and, with some limited
                     exceptions, to all telecommunications services revenues of
                     a wide base of service providers including providers of
                     local exchange services. A significant reduction to AT&T
                     Canada's regulated cost structure in long distance services
                     starting January 1, 2001 resulted from the CRTC's ruling.

OCTOBER:            AT&T Canada signed a multi-year, multi-million dollar
                    wholesale service agreement with Onsite Access-Canada to
                    provide competitive communications and high-speed Internet
                    services to businesses in Canada.

JULY:                AT&T Canada reduced its ownership in Shared Technologies of
                     Canada Inc. ("STOC") from 70% to 15%. Proceeds on
                     disposition were $16.5 million: $13.6 million received in
                     cash and a receivable of $2.9 million received. STOC also
                     repaid intercompany loans owing of $4.5 million. The
                     disposition generated a gain on sale of $13.0 million
                     before income taxes.

MAY:                 AT&T Canada acquired DMC Inc. ("DMC"), a Canadian-based
                     E-Business and web enablement company specializing in the
                     delivery of electronic commerce applications, enterprise
                     scale Internet and intranet-based solutions, distributed
                     multi-tier client/server systems, and data warehouse
                     solutions for leading Canadian businesses. DMC employed
                     approximately 220 Internet and E-Business professionals and
                     has a client roster that includes many of Canada's largest
                     and most successful businesses. This acquisition was key to
                     the Company's long-term strategy to leverage its existing
                     customer base with opportunities to sell E-Business
                     solutions. The purchase price for DMC was $95.5 million
                     comprised of the issuance of 769,231 of AT&T Canada


                                       12

<PAGE>

                     Class B Deposit Receipts and $50 million in cash.

APRIL:              AT&T Canada exercised its right to acquire the remaining 49%
                    of the issued and outstanding capital stock of Netcom Canada
                    that it did not already own for a purchase price of $67.5
                    million in cash. This purchase simplified the operating
                    relationship between Netcom Canada and the Company.

MARCH:               AT&T Canada acquired Brak Systems Inc. ("BRAK"), a leading
                     Canadian based provider of E-Business security solutions,
                     including security design consulting, installation, managed
                     firewalls, data encryption, anti-viral filtering, intrusion
                     detection and response, security administration and
                     technical support. The purchase price for Brak was $30.2
                     million in cash.

JANUARY:             AT&T Canada acquired TigerTel Inc. ("TIGERTEL"), a Canadian
                     business telecommunications provider that derives the bulk
                     of its revenue from managing telecommunications services by
                     outsourcing the planning, administration and support of
                     business customers' telecommunications services. The
                     purchase price for TigerTel was $70.0 million in cash.

FINANCINGS:

                     In March, AT&T Canada issued US$250 million principal
                     amount of 7.625% Senior Notes due 2005.

3.       NARRATIVE DESCRIPTION OF THE BUSINESS

                                   THE COMPANY

         The Company is the country's largest competitor to the ILECs. With over
18,700 route kilometres of local and long haul broadband fibre optic network and
world class managed service offerings in data, Internet, voice, and IT services,
the Company provides a full range of integrated communications products and
services to help Canadian businesses communicate locally, nationally and
globally.

         The Company and its predecessor companies have provided national
advanced telecommunications services to large and mid-sized Canadian business
customers for over 100 years. Working with Canada's two national railroads
(Canadian National and Canadian Pacific), AT&T Canada (then known as CNCP)
constructed Canada's earliest national telecommunications network to carry data
and video traffic from coast to coast.

         With the deregulation of Canada's long distance voice market in 1992
(switched and dedicated data services having been deregulated earlier), the
Company (then known as Unitel) became the first competitive alternative for this
monopoly service. Funded and utilized by large Canadian businesses looking for
telecom supply alternatives for their complex national and international voice
and data needs, AT&T Canada significantly grew its market share across a wide
range of services (switched long distance, toll free, frame relay, and private
line).

         With the aggressiveness of a new entrant with a national mandate,
network, sales force, product set and management team, AT&T Canada grew rapidly.
By late 1998, AT&T Canada had a broad portfolio of services and clients spanning
all voice and data products, including a capability to manage the underlying
service directly on behalf of a client. This value-added managed service was to
develop into a full-line of infrastructure management capabilities that
complemented AT&T Canada's more traditional (and more commoditized) voice, and
data connectivity services.


                                       13

<PAGE>

         In June 1999, AT&T Canada entered into a business combination with
MetroNet Communications Corp. (Canada's largest CLEC with significant local
access assets and local voice and data products and expertise) and Netcom (one
of Canada's largest Internet Service Providers ("ISPS") with significant
Internet access and web-hosting expertise). As a result of this combination,
AT&T Canada offered a complete set of connectivity products (voice, data, and
Internet for local, long distance and international needs). AT&T Canada's
long-time commercial partner and equity holder at that time, AT&T Corp.,
significantly and seamlessly expanded AT&T Canada's reach to hundreds of
countries worldwide.

         Subsequent organic growth and acquisition efforts added advanced
Internet products such as managed hosting services (providing and managing
servers, operating systems and database software), managed security services
(providing and managing virtual private networks ("VPN"s), firewalls, intrusion
detection, white-hat hacking, training and security audits), . AT&T Canada's
managed services capabilities enable customers to out-source to AT&T Canada
functions such as monitoring, fault isolation, capacity management,
configuration management, performance reporting and vendor management. Currently
the Company's Infrastructure Management portfolio includes managed voice, data
and Internet (networks and elements), hosting, security, storage and
applications capabilities.

         In addition, the Company also has nearly 500 employees deployed in
offering IT professional services to Canadian and international companies,
governments, and agencies. The Company's IT service capabilities include custom
software application development, system automation of business processes and
integration of applications from leading suppliers of Enterprise Resource
Planning ("ERP") and Customer Relationship Management ("CRM") systems (e.g.
Oracle and SAP) with decision support systems (e.g. Business Objects) to
automate customer-company-employee-supplier relationships. This division (known
as MONTAGE.DMC) is Canada's earliest and largest Oracle ERP integrator.

         At a facilities and network architecture level, the Company has a
large, coast-to-coast fibre-based broadband network (OC-192) traversing Canada's
largest communities. Built as a series of protected, self-healing SONET rings,
the backbone network links large local networks in Canada's ten largest urban
areas (spanning 29 communities) and more than 3,300 buildings. In addition to
traditional wired access, the Company also offers fixed point-to-point fixed
wireless, and has successfully trialed (and is licensed in 21 markets for)
point-to-multi-point fixed wireless access.

            AT&T CANADA INC. OPERATIONAL DATA AS AT DECEMBER 31, 2002

FACILITIES
Buildings Accessed                                            3,348
Intracity Fibre Route (km)                                    4,781
Intracity Fibre Strand (km)                                 318,359
Intercity Fibre Route (km)                                   14,001
Intercity Fibre Strand (km)                                 200,090
CLEC City Networks Operational                                   29
Central Office Collocations                                     100
ATM Switches                                                    695
Frame Relay Switches                                            109
Local Voice Switches                                             14

VOLUME
Local Access Lines in Service                               537,940
High Speed Data Ports                                        24,904
LD Revenue Minutes of Use (Qtr) (000's)                   2,052,276
Number of Websites Hosted                                     5,064


                                       14

<PAGE>

Customers (Total Billable Accounts)                         229,645
Full-time Employees                                           4,039

         From a technology standpoint, the Company offers both the latest access
speeds and service capabilities (MPLS IP networks, Gigabit Ethernet, VPN, xDSL),
and Voice-over-IP and is interoperable with the very large existing
installations of traditional Private Line, Frame and ATM networks.

         While products, services, network and technologies were being expanded,
the operating efficiency of the business was also enhanced. The underlying
networks reached world-class levels of performance experience (99.999% uptime);
time to provision a service was cut dramatically, and customer service levels
rose significantly.

         These improvements occurred against a backdrop of intense
telecommunications competition, falling prices and network overcapacity as more
than 20 Canadian telecommunications competitors (CLECs, resellers,
interconnects, ISPs, DSL operators and hosting companies), shrank to five key
telecommunications competitors (often as a result of bankruptcy or
restructuring, although sometimes through consolidation): the two ILECs (Bell
Canada in eastern Canada and TELUS in western Canada), AT&T Canada, Sprint
Canada and a combination of 360 Networks and Group Telecom.

         Overall, the Company has an approximate 11% share of the wireline
telecommunication market in Canada for business customers, although
significantly higher within target customer segments and in key products. The
Company is typically the number two competitor in any given business market
behind the region's ILEC, and ahead of the out-of-territory ILEC. New AT&T
Canada now has additional financial flexibility resulting from a de-leveraged
balance sheet. From a regulatory perspective, material savings have been
realized in the cost to terminate and exchange traffic with the ILECs, and in
the speed of provisioning and cost to use the ILEC network where a service
requires termination outside of a competitor's footprint (known as off-net).
In addition, restrictions on foreign ownership of Canadian telecom assets are
currently under review. See "Government Regulations - Foreign Investment
Restrictions".

         In May and July 2002, AT&T Canada announced operational changes and
cost reduction initiatives under which it has further rationalized its business
to maximize cash flows by narrowing AT&T Canada's focus on key existing target
market segments and leveraging its existing network infrastructure and customer
base. This revised direction of AT&T Canada includes the following operational
changes:

     -    use existing assets more effectively by reassessing, focussing and
          re-deploying network assets, ceasing geographic expansion and
          focussing on-net where AT&T Canada has free capacity;

     -    use its existing customer base more effectively by focussing on
          retaining existing customers, selling bundled products, cross-selling
          additional services and up-selling to meet customer growth
          requirements;

     -    redefine its target market approach by further focussing on
          data/Internet and long distance services for the medium to large-sized
          business market, limiting small-sized business focus to high-end users
          only (typically professional services firms);

     -    focus on customers with national, North American and global
          requirements;

                                       15

<PAGE>

     -    refine its product approach by continuing to leverage its full product
          portfolio, limiting local voice services to businesses with larger
          scale requirements in on-net or collocation territory and focussing
          data and Internet sales on high percentage on-net applications; and

     -    continue to drive and leverage sources of differentiation by offering
          on-net coverage with a full suite of telecommunications services,
          offering global connectivity and managed infrastructure, developing
          world-class customer service and maintaining world-class network
          reliability.

         AT&T Canada has also decreased its capital expenditures to
approximately $140 million on an annual basis (approximately 10% of revenue) in
2002. Future capital expenditures will maintain the core network, enhance its
robustness and that of its operating and support systems and meet incremental
customer requirements.

         On January 16, 2003, AT&T Corp., certain of its affiliates and AT&T
Canada and certain of its affiliates entered into a new license agreement under
which AT&T Canada will transition to a fully independent, full-service Canadian
telecommunications provider for business customers operating under a new brand
identity. Among other things, this agreement requires the Company to launch a
new brand name by September 9, 2003, and to cease use of the AT&T brand by no
later than December 31, 2003. The parties also entered into a framework
agreement which sets forth the principles governing the ongoing commercial
relationships between AT&T Canada and AT&T Corp. AT&T Corp. and AT&T Canada have
expressly agreed that they are now permitted to compete with each other. See
"Intellectual Property".

                               RECENT DEVELOPMENTS

         Please refer to "General Development of the Business" and "Corporate
Structure" above for a discussion relating to the general business developments
of the Company, including developments since December 31, 2002.

                                SERVICE OFFERINGS

         The Company provides a broad and full array of competitively priced
basic and enhanced telecommunications offerings that are marketed on both an
individual and bundled package basis.

LOCAL VOICE SERVICES

         Local voice services allow customers to complete calls in their local
calling areas and to access long distance and cellular networks and the
Internet. The Company's local service portfolio offers a full range of basic and
enhanced local services, including individual business lines, PBX trunks,
Centrex service, and ISDN Basic Rate Interface (BRI) and Primary Rate Interface
(PRI). The Company's local products offer a uniform service across all major
markets in Canada.

LONG DISTANCE SERVICES

         Long distance services connect customers in different calling areas.
The Company's long distance service portfolio includes basic domestic,
cross-border and international outbound long distance, basic and enhanced
toll-free services, calling cards and audio conferencing as well as a variety of
other enhanced long distance services and features.

DATA SERVICES

                                       16

<PAGE>

         Data services connect data, video and voice networks to establish
private connections across office locations and to integrate traffic over highly
secure networks. The Company's data service portfolio includes a full range of
data services provided over a range of access methods, including Frame Relay, IP
enabled Frame or IPVPN's, Transparent LAN (Ethernet), metropolitan area and wide
area Gigabit Ethernet optical networks, managed WAN, managed LAN, ATM, Private
Line, Virtual POP and private network dial-up. Using the relationship with AT&T
Corp. and other global carriers, the Company can provide data services to meet
the needs of domestic, North American and global applications.

INTERNET SERVICES

         Internet services provide connection to the public Internet and a range
of Hosting and Security services. Private IP services are considered to be part
of the data portfolio. The Company provides Internet connectivity through many
different access methods to provide a wide range of services to meet the needs
of businesses of varying size.

         Internet access services include Dial-Up, ISDN, ADSL, DS1, Ethernet and
OC3.

         Hosting services include domain name services, shared hosting services,
co-location of customer provided servers, and full managed hosting services,
including the management of server hardware and certain operating system,
database software and collaboration applications (e.g. MS NT, Unix, Oracle).

         Security solutions include a range of equipment and services, which can
be provided as straight equipment sales, through to complete fully managed
services. Security solutions include firewalls, intrusion detection, virus
filters, URL filters, authentication services, security audits, development of
security policies and other professional services.

IT PROFESSIONAL SERVICES

         E-Business solutions help customers automate their business processes
using web-based technologies, and applications such as Oracle ERP systems and
others. The Company's business solutions include consulting, custom application
development, system integration, project management, and can include the hosting
and management of developed applications, bringing in elements of the AT&T
Canada data and Internet portfolios.

                               SALES AND MARKETING

         The Company's sales and marketing programs focus on optimising
utilisation of its network assets by targeting customers within its network
footprint. The Company focuses on delivering value and quality to its base of
customers and will market additional services to its existing customer base to
seek to expand market share within that base. Leveraging the North American and
global capabilities of AT&T Corp. and other global partners, the Company focuses
on serving the market segment which has international telecommunications
requirements.

         The Company plans to continue its approach to the telecommunications
market through a combination of a direct sales force and various indirect
channels. The focus of development of the direct sales force will be on
motivating and evolving a very focused set of experienced professionals into
markets where the Company has its own facilities and services. The Company is
able to best map client needs to its offerings by combining the relationship
approach of Client Executives with product/solution specialists. The Client
Executive provides a senior relationship lead who is accountable for
relationships at all levels of the client's organization, including the most
senior. The Client Executive is supported by an Account Manager and various
product and solution specialists, including sales engineers. The direct sales
force is motivated and compensated by a competitive base salary and variable
compensation directly linked to productivity. The variable compensation is
comprised of bookings, customer satisfaction and

                                       17

<PAGE>

retention and growth of revenue. The direct sales organization as of December
31, 2002 was made up of approximately 650 personnel and is spread across Canada
to match the market demand. The direct sales force operates in both the Retail
and Wholesale markets.

         The direct sales force is complemented by a collection of indirect
channel methods, consisting of agents, telesales and affinity partners.
Primarily, the Company's established network of AT&T Canada agents will
complement the sales force in the higher end of the Small Business Market and
the General Business Markets for both voice and data products. The agents
represent the Company and offer AT&T Canada services on a variable cost
structure. All agents must pass AT&T Canada training and certification programs.
The Company provides an incentive package for the agents based on what has been
sold and what is retained as an ongoing customer revenue stream.

         In addition to the agent program, the Company will continue to support
its Affinity program with selected national organizations who offer the
Company's services to their members. The membership of these organizations
typically reside within the small business community. Complementing this
Affinity channel, the Company will continue to approach the market through
limited telesales activity. The Company will use telesales as a means to fulfil
its Affinity commitment as well as to selectively target segments for specific
offerings.

RETAIL MARKET

         The Company targets customers in on-net buildings using a combination
of marketing information tools and marketing promotions conducted within such
buildings. For new buildings added to the network, AT&T Canada develops a
comprehensive database of all prospective customers located within the building
including demographic information on the size of the business and industry type.
This information is used to target marketing efforts as well as to forecast
anticipated demand by building or market. In addition to the marketing database,
the Company conducts marketing programs geared to generating awareness of the
Company and its services among prospective customers within buildings that are
added to the Company's network as well as with customers located in geographical
areas that can be serviced from a co-located central office.

         The Company also has significant penetration in the mid and large-sized
business and government customers, drawing on its reputation as a full service
agile competitor to the ILECs. The Company is a leader in various data services,
voice services and security and IT professional services. Relationships with
these customers reinforce AT&T Canada's reputation for delivering reliable, high
quality telecommunications services.

WHOLESALE MARKET

         The Company is targeting large, stable carriers as long-term wholesale
customers. The Company believes that it can effectively capitalize on the
growing and changing wholesale business by being the only national service
provider with both intercity and intracity local facilities in most of Canada's
major centers.

         In contrast with the retail market, which demands packaged solutions,
the wholesale market purchases services on the basis of quality, coverage,
delivery and price. The Company has delivered high levels of network
reliability, route diversity, rapid installation intervals and high levels of
customer service to its target wholesale customers.

                                    CUSTOMERS

         As of December 31, 2002, the Company had over 229,000 billable accounts
with no single account representing more than 10% of total revenues.


                                       18

<PAGE>

                                  CUSTOMER CARE

         The Company believes that its customer care services are a distinct
competitive advantage. The Company offers all customers access to bilingual
customer service centers 24 hours a day, seven days a week, 365 days a year. In
addition, large accounts have dedicated customer service personnel which provide
customers with a single point of contact for all enquiries. The Company offers a
best-in-class service through: (i) superior customer service personnel; (ii) the
deployment of leading edge applications; (iii) customer driven processes; and
(iv) a commitment to quality.

                                   COMPETITION

         New AT&T Canada faces intense competition in all of its markets for its
existing and planned services from, among others, the ILECs, cable companies,
competitive long distance providers, wireless providers, CLECs, Internet service
providers, Centrex resellers and other current and planned telecommunications
providers. AT&T Canada's existing and potential competitors include, without
limitation, BCE Inc. and Bell Canada; TELUS; Call-Net Enterprises Inc., which
operates Sprint Canada; and Bell Nexxia, which is 100% owned by Bell Canada in
combination with Aliant Inc. (the alliance of the four Atlantic Canada ILECs)
and AT&T Corp. New AT&T Canada's ability to compete effectively in the Canadian
telecommunications industry may be adversely effected by continuing
consolidation and expansion amongst its competitors. New AT&T Canada will also
face competition from AT&T Corp. and its affiliates.

         In each of the business areas served by New AT&T Canada, the principal
competitor is the ILEC serving that geographic area. The ILECs have
long-standing relationships with their customers and have historically benefited
from a monopoly over the provision of local switched services, particularly to
residential customers. In addition, the ILECs have financial, marketing,
technical, personnel, regulatory and other resources that exceed those of New
AT&T Canada. There can be no assurance that New AT&T Canada will be successful
in its attempt to offer services in competition with the services offered by the
ILECs.

         Although the ILECs are generally subject to greater pricing and
regulatory constraints than the CLECs, the ILECs have, as a result of the
regulatory framework and especially the Price Cap Decision, achieved increased
pricing flexibility for their local services and maintained control of the
existing Public Switched Telephone Network that CLECs must utilize in order to
compete. Since CLECs do not have competitively neutral access to this existing
ILEC-controlled network and are therefore subject to a significant cost
disadvantage, the ILECs continue to be able to compete against the CLECs solely
on the basis of price. If the ILECs lower rates or engage in substantial volume
and term discount pricing practices for their customers, there would be downward
pressure on certain rates charged by New AT&T Canada, which pressure could
adversely affect New AT&T Canada.

         New AT&T Canada also faces competition from entities utilizing other
communications technologies and may face competition from other technologies
being developed or to be developed in the future. For example, there is a trend
toward the convergence of the telecommunications and cable industries. The
convergence of the telecommunications and the cable industries may add
substantial new competition that could adversely affect the operations and
financial condition of New AT&T Canada.

         Management believes that providers of wireless services will
increasingly offer products that will compete with, and ultimately may replace,
certain wireline telecommunications services, using new wireless technologies.
Competition with providers of wireless telecommunications services may be
intense and may further limit the prices with the level of service and price
that customers demand at which New AT&T Canada can profitably compete.


                                       19

<PAGE>

         The telecommunications industry is subject to rapid and significant
changes in technology with related changes in customer demands, including the
need for new production and services at competitive prices. New AT&T Canada's
ability to compete effectively will depend, to a great extent, on its ability to
anticipate, invest in and implement, or otherwise obtain new technologies. New
AT&T Canada may be unable to do so. Furthermore, there may not be a demand for
any of New AT&T Canada's new products or services, New AT&T Canada may be unable
to deliver its new products and services to the public on a timely and
competitive basis, and New AT&T Canada may have to make additional capital
investments to upgrade or replace its existing technology.

                                   PROPERTIES

         The majority of the office and network space occupied by the Company is
leased. As of December 31, 2002, AT&T Canada owned 15 facilities, primarily for
network equipment, in locations across the country representing approximately
414,759 square feet.

                              GOVERNMENT REGULATION

OVERVIEW OF CANADIAN COMMUNICATIONS SERVICES INDUSTRY

         The Canadian telecommunications industry continued to experience
significant changes, challenges and opportunities during the course of 2002.
Beginning in late 2000 and continuing throughout 2001, the CRTC issued a series
of decisions that better balanced the competitive framework and yielded
significant reductions in the payments made by competitive entrants like AT&T
Canada to the incumbent telephone companies. The CRTC ended this trend on May
30, 2002, in issuing Decision 2003-34 (the "PRICE CAP DECISION"). Although this
decision initially provided an 8% to 10% reduction in the payments AT&T Canada
makes to the large incumbent telephone companies ("TELCO COSTS"), these
reductions were far less than AT&T Canada requested in the proceeding. Further,
the CRTC did not accept the proposition of AT&T Canada that competitive entrants
require much broader cost-based access to the existing network in order to
sustain competition.

         On August 27, 2002, AT&T Canada filed an appeal to the Governor in
Council (the Federal Cabinet) of the Price Cap Decision. In filing its appeal,
AT&T Canada asked Cabinet to endorse the proposition that competitive entrants
be provided with competitively neutral access to the existing ILEC controlled
network. This appeal was dismissed. See "- Recent Regulatory and Government
Proceedings - Federal Cabinet Appeal".

         AT&T Canada has also continued to seek a re-balancing of the regulatory
framework and a lowering of competitor costs through various ongoing proceedings
before the CRTC throughout the latter half of 2002 and into 2003. More recent
decisions of the CRTC over this same period in relation both to reducing
competitor costs and policing of certain anti-competitive activities of the
incumbent telephone companies could foreshadow further reform of existing
competitive inequities in the current framework of regulatory rules.


RECENT REGULATORY AND GOVERNMENT PROCEEDINGS

COMPETITIVE DIGITAL NETWORK ACCESS

         As a result of the negative reaction of competitors to the Price Cap
Decision, the CRTC, on August 9, 2002, initiated its own proceeding to review
and possibly vary certain aspects of the Price Cap Decision and to
specifically examine whether more components of the incumbents' digital
network access services (DNA) should be made available to competitive
entrants at cost-based rates. In addition, on December 23, 2002, the CRTC
issued an interim decision in this proceeding reducing the rates charged to


                                       20

<PAGE>

AT&T Canada and other entrants for some DNA services. Consequently, the
reductions in AT&T Canada telco costs resulting from the Price Cap Decision
have increased to roughly 12%. The review and vary proceeding is expected to
conclude in June 2003 and may result in further reductions to AT&T Canada's
telco costs with consequent material positive impact on the Company.

BUNDLING, AFFILIATE AND WINBACK DECISIONS

         In addition to re-visiting aspects of the Price Cap Decision, the CRTC
has demonstrated a renewed interest in addressing the market behaviour of the
telcos through Decisions 2002-58 and 2002-76 issued in late 2002. These
decisions dealt with the incumbent telephone companies' non-compliance with the
CRTC regulatory rules for bundling and affiliates. The CRTC noted the negative
anti-competitive consequences these activities have had on competitors and
ordered that the incumbents immediately cease offering illegal bundles. By the
end of 2003 the CRTC is expected to rule on appropriate remedies for this
illegal behaviour.

         The CRTC, recognizing the power the incumbent telephone companies have
in the local market, issued Telecom Public Notice 2003-1 on January 15, 2003,
placing a moratorium on ILEC promotions intended to win back customers from
competitive entrants. In March 2003 the CRTC extended this moratorium to include
all incumbent promotions.

         These recent decisions are positive from the Company's perspective as
they appear to demonstrate some commitment by the CRTC to address the inequities
in the competitive framework and to promote competition.

FEDERAL CABINET APPEAL

         On March 26, 2003, the Federal Cabinet dismissed AT&T Canada's appeal
of the Price Cap Decision. The government indicated that the decision to dismiss
was, in part, based on recent efforts by the CRTC to address the inequities in
the regulatory framework. The government enunciated a clear expectation that the
CRTC would continue its `pro-competitive momentum' and indicated that it would
continue to monitor CRTC actions. Notably, the government indicated that the
CRTC should pay particular attention to to the issue of `regulatory lag' and
work to ensure that competitors are not penalized by delays in the regulatory
process.

DECISION ON RIGHTS-OF-WAY

         In January 2001, the CRTC issued a decision (Decision 2001-23) that,
among other things, provided the industry with general guidelines for
establishing new rights-of-way agreements between carriers and municipalities
and other public authorities. The decision was positive from the perspective of
AT&T Canada and other carriers as it reduces the cost of municipal access for
carriers. The CRTC has rejected the notion that carriers should pay annual
access fees to municipalities and has instead limited municipalities to recovery
of their causal costs associated with carriers exercising their right of access.

         The Federation of Canadian Municipalities ("FCM") and various
municipalities appealed the CRTC's decision to the Federal Court of Appeal which
was dismissed in December 2002. In March 2003, the municipalities requested
leave to appeal to the Supreme Court of Canada. Materials in the leave
application have now been filed and the Supreme Court of Canada is expected to
issue its decision as to whether or not to grant leave in the coming months.

         In March 2001, AT&T Canada applied to the CRTC to have the principles
of the right of way decision extended to existing municipal access agreements
such as that existing between AT&T Canada and the City of Toronto. The CRTC
subsequently issued a public notice to examine the applicability of


                                       21

<PAGE>

the principles enunciated in the decision to all existing municipal agreements.
A decision is not expected prior to the ultimate resolution of the FCM appeal.

FOREIGN INVESTMENT RESTRICTIONS

         In November 2002, the federal Minister of Industry, Allan Rock,
initiated a review of the existing foreign investment restrictions applicable to
telecommunications carriers such as the Company by asking the Standing
Parliamentary Committee on Industry, Science and Technology (the "COMMITTEE"),
to hold public hearings and report back on a series of questions on the issue of
the restrictions and their effect on competition in telecommunications. The
Committee held public hearings during February and March of 2003 and tabled its
report in the House of Commons on April 28, 2003. The report recommends removal
of foreign investment restrictions as they relate to telecommunications carriers
such as AT&T Canada. The government will respond to the report in the coming
months.

                                    EMPLOYEES

         As at December 31, 2002, the Company had approximately 4,039 full-time
employees. Throughout the course of 2002, the Company pursued initiatives to
achieve cost savings and bring its cost structure in line with its revenue,
including a workforce reduction of approximately 1,000 positions announced on
May 2, 2002 and a further reduction of approximately 270 positions announced on
July 29, 2002.

         As of December 31, 2002, 847 employees of the Company were union
members and were covered by a collective bargaining agreement. The union
employees of the Company are currently represented by two unions, the Canadian
Auto Workers ("CAW") Local 2000 and the United Steelworkers of America ("USWA")
TC Local 1976. Historically, the Company's relations with its unionized
employees have been positive. The Company and each of its union partners, the
CAW and USWA, successfully negotiated new collective agreements, which were
ratified in December 2000. Both agreements became effective on January 1, 2001.
In 2003, the Company will need to negotiate new collective agreements with its
union partners.

         In connection with the construction and maintenance of its fibre
networks, the Company uses third-party contractors, some of whose employees may
be represented by unions covered by collective bargaining agreements. The
Company is currently being assisted by a number of consultants and expects to
retain the services of similar third-party contractors and various consultants
in the ordinary course of business.

ANNUAL PERFORMANCE-BASED INCENTIVE PAYMENTS

         Performance based compensation (short term incentive) is paid in the
form of a bonus to provide incentives to senior management and other employees
to achieve desired corporate results.

         Performance based compensation is an integral part of the Company's
overall remuneration practices. The Human Resources and Compensation Committee
of the Board of Directors has the discretion to approve a performance bonus pool
to be distributed if the Company reaches previously established targets.
Individual bonuses are awarded by the Human Resources and Compensation Committee
of the Board of Directors and are based on corporate performance and
contribution.

MANAGEMENT INCENTIVE PLAN

         As part of the implementation of the Plan on April 1, 2003, existing
incentive plans and all options and other entitlements granted thereunder were
cancelled without payment of any consideration and a new management incentive
plan (the "MANAGEMENT INCENTIVE PLAN") has been implemented.


                                       22

<PAGE>

         The purpose of the Management Incentive Plan is to advance the
interests of New AT&T Canada and its shareholders by assisting in the retention
of qualified officers and other key employees and consultants of New AT&T Canada
("MANAGEMENT EMPLOYEES"), providing additional performance-based incentives to
such persons and enabling such persons to participate in the future growth and
development of the Company. The Management Incentive Plan permits the grant of
options to purchase shares of New AT&T Canada ("OPTIONS"), share appreciation
rights ("SARS"), restricted share units ("RSUS") and other share-based awards to
Management Employees. The New AT&T Canada Board of Directors or a committee
thereof administers the Management Incentive Plan. An aggregate of 2,000,000 of
Class A Voting Shares and Class B Limited Voting Shares have been reserved for
issuance under the Management Incentive Plan.

         Options, SARs and RSUs granted under the Management Incentive Plan are
non-assignable except as provided therein and Options and SARs will expire not
later than ten years from the date of grant, it being understood that the New
AT&T Canada Board of Directors may provide for the earlier expiration of Options
and SARs. Unless otherwise specified by the New AT&T Canada Board of Directors
at the time of grant and except as otherwise provided in the Management
Incentive Plan, each Option grant vests as to one third on each of the first,
second and third anniversaries of the date of grant. Options also vest
automatically upon a change in control of New AT&T Canada. The exercise prices
for Options and SARs granted under the Management Incentive Plan are set by the
New AT&T Canada Board of Directors in accordance with the requirements of The
Toronto Stock Exchange.

                                LEGAL PROCEEDINGS

         On May 9, 2002, an oppression application was filed against the Company
and its directors by a group of institutional investors holding approximately
$458 million of the Notes. On October 2, 2002 the application was withdrawn in
recognition of the progress that had been achieved in the restructuring
discussions between the Noteholders and the Company.

         As a result of the Company's CCAA filing, a significant portion of the
Company's pending litigation was compromised and, as of April 1, 2003, no longer
exists. Also as a result of the Company's CCAA filing, any claim of an
Affected Creditor against the Company is barred and may no longer be asserted.

         As of April 25, 2003, 87 claims have been received from Affected
Creditors excluding Noteholders. For distribution purposes, as of the same date,
32 claims have been disallowed in their entirety and 47 claims, totalling $43
million, have been allowed by the Company. The remaining 8 claims, totalling
$14.4 million, are in dispute, and will be resolved pursuant to the mechanism
established by the Claims Procedure Order. The aggregate distribution to be made
by the Company to all Affected Creditors will remain unchanged as a result of
the resolution of these disputed claims. Upon implementation of the Plan, claims
of Affected Creditors were compromised and settled. Pursuant to the Plan claims
of Affected Creditors are satisfied by distributions from the Cash Pool and
distributions of the New Shares, which are held in escrow by CIBC Mellon Trust
Company, as escrow agent for the benefit of such Affected Creditors.

         The Company is involved from time to time in various other claims and
law suits incidental to the ordinary course of its business. While no assurance
can be given that these proceedings will be favourably resolved, the Company
does not believe that the outcome of any of these legal proceedings will have a
material adverse effect on its financial condition or result of operations.

                              INTELLECTUAL PROPERTY

COMMERCIAL ARRANGEMENTS WITH AT&T CORP.


                                       23

<PAGE>

NEW BRAND LICENSE AGREEMENT

         On January 16, 2003, AT&T Corp. and AT&T Canada Enterprises Company
("ENTERPRISES"), a subsidiary of AT&T Corp. that holds Canadian rights to
certain intellectual property of AT&T Corp. under license from AT&T Corp., AT&T
Canada and certain of its affiliates (collectively, the "LICENSEE") entered into
a new trade-mark and trade-name license agreement (the "NEW LICENSE Agreement").
The New License Agreement provides the Licensee with the right to use AT&T Corp.
trade-marks and trade-names until the launch of its new brand identity (the
"LAUNCH DATE") which must occur no later than September 9, 2003. As of the
Launch Date, the Licensee must have changed its name to a new corporate name and
will thereafter only use the licensed trade-marks and trade-names in conjunction
with a transition statement until the conversion date (the "CONVERSION DATE")
which will be no later than December 31, 2003, at which time AT&T Canada's
ability to use the AT&T trade-marks and trade-names will cease. The New License
Agreement also contemplates the preparation of a three-stage brand transition
plan which will address the parties' respective rights and obligations
concerning the re-branding of AT&T Canada's business (the "BRAND CONVERSION
PLAN").

         With the exception of the Payphone Services Trade Mark License
Agreement, as amended, made as of August 24, 1998 (the "PAYPHONE SERVICES TRADE
MARK LICENSE AGREEMENT"), which will be reinstated, the New License Agreement
either terminates or confirms the termination of all former branding agreements
between Enterprises, AT&T Canada and its affiliates.

         The Payphone Services Trade Mark License Agreement which licensed
certain AT&T Corp. trade-marks to AT&T Canada for use in association with the
marketing and provision of the operation of payphones for the placement of
telephone calls was reinstated for the sole purpose of transition on such terms
and conditions as agreed to by Enterprises and AT&T Canada in accordance with
the Brand Conversion Plan and consistent with the transition periods in the New
License Agreement. The New License Agreement also provides that any agreement
with Canada Payphone with respect to the use of any AT&T Corp. brand or licensed
trade-marks shall terminate at the time of termination or expiration of the New
License Agreement.

         The New License Agreement grants to the Licensee a non-exclusive,
royalty-free, sub-license to use the licensed trade-marks, trade-names and trade
dress solely in Canada and solely in connection with the marketing, provision
and sale of licensed services and promotional products. The services licensed
under the agreement are the business of providing or selling the following
services in Canada, each as defined in the New License Agreement: (i) voice
and/or data wireline telecommunication services, including local services, long
distance services and IP services; (ii) electronic -- business professional
services; (iii) Internet access services; (iv) Internet hosting services; (v)
Internet security services; (vi) managed applications; (vii) managed hosting
services; (viii) managed network services; (ix) payphone services; (x) ancillary
services; and (xi) in certain circumstances, the activities of a holding company
such as New AT&T Canada. The New License Agreement expressly excludes certain
services from the license grant.

         The licensed promotional products are any goods, products, wares or
services that are used to promote any licensed services and provided free or at
a nominal cost.

         The Licensee is obliged to meet and adhere to certain quality and
marketing specifications for the licensed services and promotional products. If
the Licensee offers any product, service or business that is not a licensed
service or in association with which the licensed trade-marks are not used, such
products, services or business shall be offered only through a wholly-owned
subsidiary of AT&T Canada that does not bear the licensed trade-name or
trade-marks.

         In the event that the Licensee wishes to offer a service for which it
has not been granted a trade-mark and/or trade-name license by Enterprises, the
Licensee may offer such service (the "UNBRANDED


                                       24

<PAGE>

SERVICE"); however, restrictions are placed on invoicing such service with
invoices which include services licensed under the New License Agreement.

         The New License Agreement contemplates the preparation and approval of
a Brand Conversion Plan having three stages. During the first stage, the
Licensee may continue to use the licensed AT&T Corp. trade-marks and
trade-names. The second stage commences at the launch of the new brand identity
on the Launch Date. As of the Launch Date, the Licensee shall have changed its
name to a new corporate name, and shall until the Conversion Date only use the
trade-marks and trade-names licensed under the New License Agreement in
conjunction with a transition statement. During this second stage the Licensee
may only use the transition statement "formerly AT&T Canada Corp." or another
tag line approved by Enterprises solely with its new corporate name. The second
stage terminates no later than the earlier of the Conversion Date or December
31, 2003. During the third stage, after the Conversion Date, the Licensee must
use its new corporate name and brand identity exclusively, subject to
arrangements permitted under the Brand Conversion Plan.

         In connection with the rebranding of New AT&T Canada, the Plan
authorizes New AT&T Canada to change its name without further shareholder
approval.

         Subject to certain exceptions, the Licensee is also permitted to use,
commencing as of the date of the New License Agreement, and terminating 180 days
after termination of the New License Agreement, on an exclusive royalty-free
basis, the domain names and/or URLs in use on the date of execution of the New
License Agreement including the URLs "attcanada.com" and "attcanada.ca" solely
to identify the Licensee in connection with the marketing and provision of the
licensed services.

         If the Licensee complies with the Brand Conversion Plan and with the
New License Agreement, during the term of the New License Agreement and for one
year after the expiration or termination of the New License Agreement,
Enterprises and any of its affiliates have agreed not to adopt, sub-license
and/or use in Canada the corporate name "AT&T Canada Corp.", "AT&T Canada Inc.",
"AT&T Canada Telecom Services Company", or the trade-name "AT&T Canada" on its
own. Notwithstanding the foregoing, at any time, Enterprises and/or its
affiliates may (a) adopt, register and/or use any corporate or trade-name (other
than "AT&T Canada Corp.", "AT&T Canada Inc.", "AT&T Canada Telecom Services
Company" and "AT&T Canada Fibre Company") and/or adopt, register and/or use any
trade-mark, which includes the mark "AT&T" and the term "Canada", provided that
the word "AT&T" does not directly precede "Canada"; and (b) Enterprises may
continue to use any corporate name or trade-name in the manner it has been used
on or before the date of the New License Agreement. After such one year period,
Enterprises and/or its affiliates may adopt, register and/or use the corporate
name "AT&T Canada Corp.", "AT&T Canada Inc.", "AT&T Canada Telecom Services
Company", or adopt, register and/or use in any manner the trade-name or mark
"AT&T Canada" alone or in combination with other words and/or trade-marks.

         AT&T Corp., Enterprises and the Licensee expressly agree that they will
be permitted to compete with each other during and after the term of the New
License Agreement.

         The Licensee may not assign, license or transfer or part with the New
License Agreement or any of its rights or obligations under the agreement
without the prior consent of Enterprises which may be unreasonably withheld,
except to a new holding company which at all times carries on no business other
than the business of a holding company, holding only the shares of AT&T Canada
and the inter-company indebtedness, if any, owing by its affiliates existing on
the date of execution of the agreement or incorporated for the purposes of the
Plan and, if applicable, the shares of another company (other than a Strategic
Competitor (as defined below)) engaged exclusively in the business of providing
the licensed services, and is not a Strategic Competitor of any person other
than AT&T Corp. and its affiliates. New AT&T Canada is such a holding company.
Prior to the implementation of the Plan, New AT&T Canada was obliged to sign and
did sign and deliver a counterpart of the New License Agreement


                                       25

<PAGE>

agreeing to be bound by the New License Agreement as if it were an original
party to such agreement. The Licensee may authorize Persons as its authorized
associate companies to display the licensed trade-marks used by the Licensee for
its licensed services for the purpose of selling such services subject to
certain conditions and limitations set forth in the New License Agreement.

         For the purposes of the New License Agreement and the Framework
Agreement, "Strategic Competitor" means a person (other than AT&T Corp.) who
directly or through one or more of its affiliates is a provider of
Telecommunications Service (as such term is defined in Section 2 of the
Telecommunications Act) where the sale of such services equals at least 10% of
the total annual revenue of such person and/or any one or more of its
affiliates, determined individually or in the aggregate for the most recently
completed fiscal year or whose revenue from the sale of such services exceeds
$10 million determined individually or in the aggregate for the most recently
completed fiscal year.

         The New License Agreement is terminable by Enterprises in the event of,
among other things: failure to comply in a material respect with the marketing
specifications applicable to the licensed trade-name; failure to comply with the
master specifications applicable to the licensed services; the curtailment of
the Licensee's business operations or common carrier status by decisions or
rulings under applicable law; material damage or disparagement of the licensed
trade-marks or trade-names; refusal to permit quality control representatives to
exercise Enterprise's right of inspection; material delay in providing quality
specifications reports; failure to comply with other quality control
obligations; Bankruptcy (as defined in the New License Agreement); purported
assignment, license, sublicense or transfer of the licensed trade-marks,
trade-names or other rights granted under the New License Agreement other than
as may be permitted under the New License Agreement; failure to comply with the
confidentiality provisions of the agreement; failure to comply with the
authorized associate provisions of the agreement; in the event that a Strategic
Competitor (other than New AT&T Canada) acquires, holds, or controls more than
20% of the outstanding aggregate equity of any one or more of the Licensee or
any of its affiliates or the outstanding aggregate equity of the Licensee and
its affiliates (subject to a conditional exception for Contour Telecom
Inc./Telecommunications Contour Telecom Management Corp. and Argos Telecom Inc.)
("STRATEGIC COMPETITOR ACQUISITION"); use of the licensed trade-marks in
association with services/products not constituting licensed services and/or
outside the licensed territory; if any provision of the agreement or the
consummation of the transactions contemplated by the agreement become illegal or
unenforceable under applicable law in any material respect; the failure to
develop, approve and implement the Brand Conversion Plan by Launch (as defined
in the New License Agreement) (unless such failure of approval is as a result of
Enterprises unreasonably withholding its consent); and/or material breach of any
of the Licensee's other obligations under the New License Agreement.
Notwithstanding the foregoing, the New License Agreement shall not be terminable
in the event of a Strategic Competitor Acquisition if any such Strategic
Competitor acquires, holds, or controls more than 20% of the outstanding
aggregate equity in a subsidiary of the Licensee, provided that on the date that
the Strategic Competitor first so acquires, holds or controls such equity the
subsidiary ceases immediately, without the benefit of any transition or cure
rights, any use of any of the licensed trade-marks and to identify itself in any
way as an affiliate of the Licensee or of any of Licensee's other affiliates or
as otherwise being affiliated with any of them.

         The Licensee will have 30 days to cure any breach (unless shorter
periods have been identified), failing which the New License Agreement will
terminate on the Conversion Date without further notice and without any further
rights of transition other than to the extent contemplated under the Brand
Conversion Plan. Notwithstanding the foregoing, there shall be no cure period
where the New License Agreement is terminated as a result of: a Strategic
Competitor Acquisition; Bankruptcy; and failure to develop and have approved the
Brand Conversion Plan by and to implement such plan by launch insofar as it
relates to the change of corporate name of the Licensee and its affiliates.

         The Licensee may in its sole discretion and without cause terminate the
New License Agreement. The New License Agreement contains customary obligations
on the part of the Licensee to cease all use


                                       26

<PAGE>

of the licensed subject matter after termination or expiration. Disputes arising
under the agreement will be resolved pursuant to arbitration provisions
prescribed in the agreement. The New License Agreement provides for a delay in
the time periods prescribed in the Conversion Date and Launch Date in certain
circumstances where notice of termination has been given by Enterprises. Where,
in the definitions of Conversion Date and Launch Date found in the New License
Agreement, a time period is stated to run from notice of termination given by
Enterprises, the time period shall only begin to run after any applicable cure
period has passed and any arbitration commenced by the Licensee disputing the
validity of the notice of termination has been decided in favour of Enterprises,
provided that the Licensee commences any such arbitration within five business
days from the date of notice of termination where no cure period is provided
under the termination provisions of the agreement and otherwise five business
days from the expiry of the applicable cure period. Moreover, the Licensee must
diligently prosecute such proceeding.

         The New License Agreement acknowledges that the Licensee may be unable
in all circumstances where notice of termination is given to immediately remove
the licensed trade-marks from its exterior building signage, its signage on
trucks and on calling cards. The agreement provides that the Licensee shall
forthwith deliver to Enterprises for approval a plan setting out a schedule for
changing such items. Such items shall be changed in any event no later than the
earlier of December 31, 2003 and six months from any notice of termination from
Enterprises.

         The New License Agreement provides for the payment by the Licensee of a
brand fee in the event that the Licensee's breach under the New License
Agreement is not cured by the Licensee within the specified 30 day or shorter
time period given in any written notice of termination provided by Enterprises
prior to June 30, 2003. Unless an arbitrator determines under the arbitration
proceedings that the Licensee was not in breach, the Licensee is obliged to pay
to Enterprises from the expiry of the 30 day or shorter time period to and
including June 30, 2003, a brand fee of US $10,000.00 for each day (or part of a
day) that the Licensee is in breach. If the event giving rise to Enterprise's
notice of termination is not capable of being cured or there is no cure period,
the Licensee shall pay Enterprises such brand fee in respect of each day from
the date of Enterprise's notice of termination to and including June 30, 2003.
Such brand fee will be payable in the aggregate on June 30, 2003.

FRAMEWORK AGREEMENT

         On January 16, 2003, AT&T Corp., Enterprises, AT&T Canada Telecom
Holdings Company and AT&T Communications Holdings (Canada) Corp. (collectively,
"AT&T CORP.") and the AT&T Canada Companies entered into the framework agreement
(the "FRAMEWORK AGREEMENT"). The Framework Agreement sets forth the principles
governing the ongoing commercial relationships between the AT&T Canada Companies
and AT&T Corp. (other than aspects of such relationships which are addressed in
the New License Agreement). The Framework Agreement provides that the existing
capabilities agreement (the "CAPABILITIES AGREEMENT") and the master consulting
services agreement ("MCSA") will terminate on the earlier of the execution and
delivery of a revised MCSA or June 30, 2003. If a revised MCSA is not entered
into by June 30, 2003, absent a written agreement from AT&T Corp. providing
otherwise, all Services (as defined below) currently provided pursuant to the
Capabilities Agreement and the MCSA will terminate on June 30, 2004.

         Under the Framework Agreement, the parties will work together to avoid
any material disruption of services to customers and to each other. It also
provides that all existing arrangements or agreements, except for certain
enumerated agreements (such as the North American Voice Services (NAVS)
Agreement and the Payphone Services Trade Mark License Agreement, such
agreements and any other such surviving agreements, the "SURVIVING AGREEMENTS")
terminate no later than 90 days following the date the Framework Agreement is
entered into. The Surviving Agreements will terminate in accordance with their
terms.


                                       27

<PAGE>

         The parties will use reasonable efforts to execute and deliver a
revised Master Services Agreement ("MSA") by June 30, 2003. The MSA will provide
the terms under which AT&T Corp. will provide the AT&T Canada Companies with
technology and services relating to the continued use of the 4E (Toll Free)
Platform, the 5E (Calling Card) Platform, and the Signalling Platform currently
provided pursuant to the Capabilities Agreement and the MCSA (collectively, the
"SERVICES") and will replace such agreements in their entirety. Any new MSA will
expire no later than December 31, 2005, unless terminated earlier or extended by
mutual consent.

         The parties agree that if, at any time prior to the execution and
delivery of an MSA, a Strategic Competitor Acquisition occurs, then the
provision of Services by AT&T Corp. pursuant to the Capabilities Agreement and
the MCSA will terminate on the earliest of: (i) 15 months after the date of the
announcement of the Strategic Competitor Acquisition provided such announcement
was approved by New AT&T Canada and the AT&T Canada Companies and the Strategic
Competitor Acquisition closes; (ii) nine months after the closing of the
Strategic Competitor Acquisition transaction which gives rise to the Strategic
Competitor Acquisition; or (iii) June 30, 2004.

         The MSA will provide that upon the occurrence of any Strategic
Competitor Acquisition the termination date for the provision of Services will
be accelerated and the time period during which AT&T Corp. will continue to
provide Services thereunder will be reduced, provided that (i) in determining
any such accelerated termination date, AT&T Corp. will take into consideration
the Strategic Competitor's network capability to enable migration and, unless
the parties otherwise agree, (ii) any such acceleration will not result in the
termination of the provision of the services until the earlier of (a) 12 months
after the closing of the Strategic Competitor Acquisition transaction and (b)
December 31, 2005.

4.       SELECTED CONSOLIDATED FINANCIAL DATA

         The chart below identifies selected principal information for the years
ended December 31, 2002, 2001 and 2000. Effective April 1, 2003, AT&T Canada
emerged from CCAA protection and implemented the Plan which resulted in AT&T
Canada no longer having any long-term public debt.
<TABLE>
<CAPTION>

             YEAR ENDED
             DECEMBER 31                               2002         2001 (2)       2000
             -----------                               ----         ----           ----
                                                   (in thousands, except per share amounts)
             <S>                                   <C>             <C>          <C>
             Revenue............................    1,488,145      1,544,721    1,505,378
             Net Loss...........................   (1,831,659)      (745,375)    (523,207)
             Net Loss per Share (1).............       (17.95)         (7.57)       (5.48)
             Total Assets (3)...................    1,687,700      4,763,625    4,329,918
             Long-term Debt (4).................    4,516,824      4,655,077    3,610,923
             Cash Dividend per Share (1)........         0.00           0.00         0.00
</TABLE>

                                       28

<PAGE>

-------------
Notes:

(1)  Loss per share for 2002 includes a writedown of property, plant and
     equipment and goodwill, and workforce reduction and provision for
     restructuring, which had the effect of increasing loss per share by $11.79
     and $0.85, respectively. Loss per share for 2001 includes a pension
     adjustment and workforce reduction costs which had the effect of increasing
     (decreasing) loss per share by ($0.32) and $0.22, respectively. Loss per
     share for 2000 includes integration reserve reversals, which had the effect
     of decreasing loss per share by $0.11.


(2)  Effective January 1, 2002, the Company adopted the CICA Handbook Section
     1650, which eliminates the deferral and amortization of foreign exchange
     gains and losses on long term monetary items, with retroactive restatement.
     Accordingly, the Company's loss for the year ended December 31, 2001 has
     been increased by $12.3 million.


(3)  Effective January 1, 2002, the Company adopted the CICA Handbook Section
     3062, which eliminates the amortization of goodwill and indefinite-life
     intangible assets. Any transitional impairment loss is recognized as a
     charge to opening retained earnings to January 1, 2002. Accordingly, the
     Company's opening deficit at January 1, 2002 has been increased by $1,530.8
     million.


(4)  Effective October 15, 2002, long-term debt was reclassified as liabilities
     subject to compromise.


         AT&T Canada has not paid any dividends since its inception and it is
not anticipated that New AT&T Canada will declare or pay dividends in the near
future, but rather will retain future earnings, if any, for reinvestment in its
business. Any future determination to declare or pay dividends will be at the
discretion of New AT&T Canada's Board of Directors and will be subject to
compliance with any future debt financing arrangements entered into by New AT&T
Canada and will depend upon New AT&T Canada's financial condition, results of
operations, capital requirements and such other factors as New AT&T Canada's
Board of Directors considers relevant.

         The chart below identifies financial information concerning the twelve
quarters ending December 31, 2002.
<TABLE>

                                          2002              4TH QTR `02    3RD QTR `02    2ND QTR `02    1ST QTR. 02
                                          ----              -----------    -----------    -----------    -----------
                                                          (in thousands, except per share amounts)
<S>                                    <C>                   <C>           <C>            <C>            <C>
Revenues............................   $  1,488,145          $ 359,597     $  359,861     $   384,857    $  383,830
Net Loss for the period.............   $ (1,831,659)         $ (63,769)    $ (256,839)    $(1,353,431)   $ (157,619)
Loss per share......................   $     (17.95)         $   (0.60)    $    (2.54)    $    (13.45)   $    (1.57)
</TABLE>

<TABLE>
<CAPTION>
                                          2001              4TH QTR `01    3RD QTR `01    2ND QTR `01    1ST QTR. 01
                                          ----              -----------    -----------    -----------    -----------
                                                          (in thousands, except per share amounts)
<S>                                    <C>                   <C>           <C>            <C>            <C>
Revenues............................    $ 1,544,721          $ 394,469     $ 387,221      $ 375,167      $  387,864
Net Loss for the period (1).........    $  (745,375)         $(170,697)    $(232,475)     $(174,729)     $ (167,475)
Loss per share (1)..................    $     (7.57)         $   (1.74)    $   (2.35)     $   (1.78)     $    (1.73)
</TABLE>

<TABLE>
<CAPTION>
                                          2000              4TH QTR `00    3RD QTR `00    2ND QTR `00    1ST QTR. 00
                                          ----              -----------    -----------    -----------    -----------
                                                          (in thousands, except per share amounts)
<S>                                    <C>                   <C>           <C>            <C>            <C>
Revenues............................    $ 1,505,378          $ 386,302     $ 380,056      $ 374,991      $  364,029
Net Profit (Loss) for the period....    $  (523,207)         $(175,587)    $(123,967)     $(120,845)     $ (102,808)
Loss per share ............ ........    $     (5.48)         $   (1.84)    $   (1.30)     $   (1.27)     $    (1.09)
</TABLE>

(1)  Effective January 1, 2002, the Company adopted the CICA Handbook Section
     1650, which eliminates the deferral and amortization of foreign exchange
     gains and losses on long term monetary items, with retroactive restatement.
     Accordingly, the Company's loss in the year ended December 31, 2001 has
     been increased by $12.3 million, and the loss for the three months ended
     March 31, June 30, September 30 and December 31 have been increased
     (decreased) by nil, ($17.3 million), $23.5 million and $6.1 million,
     respectively.

                                       29

<PAGE>

5.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         Reference is made to the section entitled "Management Discussion and
Analysis of Financial Condition and Results of Operations" for the year ended
December 31, 2002 which section is incorporated herein by reference. See
"Additional Information".


6.       SHARE CAPITAL

         The authorized share capital of New AT&T Canada consists of an
unlimited number of Class A Voting Shares and Class B Limited Voting Shares. The
two classes of shares were created in order to ensure compliance with the
foreign ownership restrictions in the Telecommunications Act. The following
summary describes the rights, privileges, restrictions and conditions that will
attach to the New Shares. The full text of the rights, privileges, restrictions
and conditions of the New Shares is set forth in the articles of New AT&T Canada
(the "ARTICLES").


CLASS A VOTING SHARES

VOTING

         Holders of Class A Voting Shares are entitled to receive notice of and
to attend and vote at all meetings of the shareholders of New AT&T Canada except
meetings at which the holders of a specified class or series (other than the
Class A Voting Shares) are entitled to vote separately as a class as provided in
the CBCA or in the Articles and each Class A Voting Share confers the right to
one vote in person or by proxy at all such meetings.

         Holders of Class A Voting Shares are entitled to elect five of nine
members to the New AT&T Canada Board of Directors, subject to increase in
accordance with the Articles, commencing at such time as holders of Class B
Limited Voting Shares hold less than 50% of New AT&T Canada's equity. See "-
Allocation of the New AT&T Canada Board of Directors".

DIVIDENDS AND DISTRIBUTIONS

         The Class A Voting Shares participate equally with the Class B Limited
Voting Shares with respect to the declaration of any dividends or distributions
if, as and when declared by the New AT&T Canada Board of Directors. All
dividends and distributions declared on the Class A Voting Shares or Class B
Limited Voting Shares shall be declared and paid at the same time, and in equal
amounts, share for share, without any preference or priority of one class over
the other. The declaration and payment of stock dividends in Class A Voting
Shares on Class A Voting Shares and Class B Limited Voting Shares on Class B
Limited Voting Shares or the making or distribution of rights to acquire Class B
Limited Voting Shares to holders of Class B Limited Voting Shares and rights to
acquire Class A Voting Shares to holders of Class A Voting Shares in the same
number per share and at the same exercise price per share will be considered to
be an equivalent declaration and payment of dividends or other distribution, as
applicable, without performance or priority.

LIQUIDATION

         Holders of Class A Voting Shares are entitled to receive the remaining
assets of New AT&T Canada on its winding-up or dissolution in equal amounts,
share for share, with the holders of Class B Limited Voting Shares.


                                       30

<PAGE>

CONVERSION

         The Class A Voting Shares are convertible, at the option of the holders
of the Class A Voting Shares, at any time and from time to time, into Class B
Limited Voting Shares on a share-for-share basis.

COMPLIANCE WITH THE TELECOMMUNICATIONS ACT

         To ensure compliance with the foreign ownership restrictions contained
in the Telecommunications Act, for so long as those restrictions pertain, the
directors of New AT&T Canada shall have the right to sell the Class A Voting
Shares of a holder thereof who is not a Canadian (as such term is defined in the
Telecommunications Act), subject to the provisions of the CBCA and the
Telecommunications Act. In addition, the directors of New AT&T Canada may refuse
to issue a Class A Voting Share, or register the transfer of a Class A Voting
Share, in a circumstance where to do so would result in New AT&T Canada's or any
of its affiliates' or associates' non-compliance with the foreign ownership
restrictions of the Telecommunications Act.

CLASS B LIMITED VOTING SHARES

VOTING

         In order to ensure compliance with the Telecommunications Act, except
for the election of directors or as otherwise provided below or in the CBCA,
holders of Class B Limited Voting Shares are not entitled to vote at any
meetings of the shareholders of New AT&T Canada. The holders of Class B Limited
Voting Shares are entitled to receive notice of and to attend meetings of the
holders of Common Shares. Each Class B Limited Voting Share confers the right to
one vote in person or by proxy at any meeting at which the holders of Class B
Limited Voting Shares are entitled to vote.

         Holders of Class B Limited Voting Shares are entitled to elect four of
the nine members of the New AT&T Canada Board of Directors, subject to reduction
in accordance with the Articles commencing at such time as the holders of the
Class B Limited Voting Shares hold less than 50% of the equity of New AT&T
Canada. See "--Allocation of the New AT&T Canada Board of Directors". Without
limiting the rights of the holders of the Class B Limited Voting Shares under
the CBCA, the holders of the Limited Voting Shares are entitled to vote as a
separate class: (i) upon any matter (including, without limitation, any
consolidation, sub-division or reclassification) that would adversely affect the
equivalence or equal participation of the Class B Limited Voting Shares and the
Class A Voting Shares; (ii) until the earlier of such time as the holders of
Class B Limited Voting Shares are entitled to nominate fewer than four directors
and December 31, 2004, upon any amendment to Schedule III to the Articles, which
Schedule specifies certain matters requiring approval by not less than seven of
the directors including at least four directors of New AT&T Canada elected or
appointed by the holders of Class A Voting Shares; (iii) until the earlier of
such time as the holders of Class B Limited Voting Shares are entitled to
nominate fewer than four directors and December 31, 2004, upon any amendment to
the Articles or the By-Laws of New AT&T Canada that is not approved by at least
seven of the directors including at least four directors of New AT&T Canada
elected or appointed by the holders of Class A Voting Shares; (iv) until the
holders of Class B Limited Voting Shares are entitled to nominate fewer than two
directors, upon an amalgamation pursuant to Section 181 of the CBCA; and (v)
upon any amendment to the Articles to change the number of directors on the New
AT&T Canada Board of Directors.

DIVIDENDS AND DISTRIBUTIONS

         The Class B Limited Voting Shares participate equally with the Class A
Voting Shares with respect to the declaration of any dividends or distributions
if, as and when declared by the New AT&T Canada Board of Directors. All
dividends or distributions declared on the Class B Limited Voting Shares or
Class A Voting Shares shall be declared and paid at the same time, and in equal


                                       31

<PAGE>

amounts, share for share, without any preference or priority of one class over
the other. The declaration and payment of stock dividends in Class B Limited
Voting Shares on Class B Limited Voting Shares and Class A Voting Shares on
Class A Voting Shares or the making or distribution of rights to acquire Class B
Limited Voting Shares to holders of Class B Limited Voting Shares and rights to
acquire Class A Voting Shares to holders of Class A Voting Shares in the same
number per share and at the same exercise price per share will be considered to
be an equivalent declaration and payment of dividends or other distribution, as
applicable, without performance or priority.

LIQUIDATION

         Holders of Class B Limited Voting Shares are entitled to receive the
remaining assets of New AT&T Canada on the winding-up or dissolution, in equal
amounts, share for share, with the holders of Class A Voting Shares.

CONVERSION

         The Class B Limited Voting Shares are convertible, at the option of the
holders of Class B Limited Voting Shares, at any time and from time to time,
into Class A Voting Shares on a share-for-share basis, in the following
circumstances:

     (i)  at any time following the termination of the Acquisition Rights
          Agreement on December 31, 2004, upon provision by a holder of Class B
          Limited Voting Shares of (1) a residency declaration to the Company's
          transfer agent stating that the holder is a Canadian (as such term is
          defined in the Telecommunications Act) and (2) a written notice
          specifying the number of Class B Limited Voting Shares to be
          converted;

     (ii) upon a take-over bid being made for the Class A Voting Shares where no
          equivalent bid is made for the Class B Limited Voting Shares, for the
          purposes of allowing the holders of Class B Limited Voting Shares to
          tender to such bid;

     (iii) automatically upon the removal, in whole or in part, of the Canadian
          ownership and control provisions of Section 16 of the
          Telecommunications Act, but only to the extent of such removal, and
          non-Canadian ownership and control of New AT&T Canada and its
          subsidiaries not otherwise being restricted by law, provided that such
          conversion right is made available on a PRO RATA basis to all holders
          of Class B Limited Voting Shares in the case of a partial removal; or

     (iv) the New AT&T Canada Board of Directors, by resolution, allows the
          conversion of such number of Class B Limited Voting Shares as will
          not, in the opinion of the New AT&T Canada Board of Directors, result
          in New AT&T Canada or any corporation in which New AT&T Canada has an
          ownership interest being in contravention of any law, regulation,
          governmental policy or other legal requirement, including, without
          limitation, the Telecommunications Act, provided that such conversion
          right is made available on a PRO RATA basis to all holders of Class B
          Limited Voting Shares.

         The New AT&T Canada Board of Directors will consider whether
conversions are permitted for the purposes of (iv) above at least annually, but
shall not permit such conversion unless circumstances are such that at the time
of conversion, at least 1% of the then outstanding Class B Limited Voting Shares
can then be converted.

ALLOCATION OF THE NEW AT&T CANADA BOARD OF DIRECTORS


                                       32

<PAGE>

         The New AT&T Canada Board of Directors took office on April 1, 2003
upon the implementation of the Plan. Thereafter, commencing with the first
annual meeting of shareholders held after the Meeting, the holders of Class A
Voting Shares, voting as a class, will be entitled to nominate and elect five
directors to the New AT&T Canada Board of Directors and the holders of Class B
Limited Voting Shares, voting as a class, will be entitled to nominate and elect
four directors to the New AT&T Canada Board of Directors.

         As conversions of Class B Limited Voting Shares to Class A Voting
Shares are anticipated to occur over time, the number of directors elected and
nominated to the New AT&T Canada Board of Directors by holders of Class B
Limited Voting Shares will be reduced according to the percentage of total
equity of New AT&T Canada held by such holders as follows, commencing at such
time as they cease to hold less than 50% of New AT&T Canada's equity:

<TABLE>
<CAPTION>

         -----------------------------------------------------------------------------------------------------
         PERCENTAGE OF TOTAL EQUITY HELD BY                            NUMBER OF DIRECTORS ELECTED BY HOLDERS
         HOLDERS OF CLASS B LIMITED VOTING SHARES                      OF CLASS B LIMITED VOTING SHARES
         -----------------------------------------------------------------------------------------------------
         <S>                                                                            <C>
         Equal to or greater than 50%                                                     4
         -----------------------------------------------------------------------------------------------------
         Equal to or greater than 35% but less than 50%                                   3
         -----------------------------------------------------------------------------------------------------
         Equal to or greater than 20% but less than 35%                                   2
         -----------------------------------------------------------------------------------------------------
         Equal to or greater than 10% but less than 20%                                   1
         -----------------------------------------------------------------------------------------------------
         Less than 10%                                                                    0
         -----------------------------------------------------------------------------------------------------
</TABLE>

         If the holders of the Class B Limited Voting Shares lose the
entitlement to nominate and elect a director or directors in accordance with the
foregoing, the holders of the Class A Voting Shares will correspondingly acquire
the entitlement to elect additional director(s) such that the aggregate number
of directors will equal nine.

         The percentage of equity of New AT&T Canada held by the holders of
Class B Limited Voting Shares will be calculated in accordance with the
provisions of the Articles.

BOARD SUPER-MAJORITY REQUIREMENTS

         Until the earlier of such time as the holders of Class B Limited Voting
Shares are entitled to nominate fewer than four directors or December 31, 2004,
the Articles require the approval of not less than seven of the directors
(including at least four directors elected or appointed by the holders of Class
A Voting Shares) for the following matters:

     -    any material change to the scope or nature of the business or
          operations of New AT&T Canada or any of its subsidiaries considered on
          a consolidated basis;

     -    aggregate capital expenditures of New AT&T Canada and its subsidiaries
          in any calendar year in excess of $195 million;

     -    the incurring by New AT&T Canada or its subsidiaries of funded debt in
          excess of $100 million or the changing of any material terms of any
          material debt incurred;

     -    any material change (in excess of $20 million) to the terms of any
          material agreements entered into by New AT&T Canada or its
          subsidiaries on or before the date of the implementation of the Plan,
          including the commercial agreements with AT&T Corp. or its
          subsidiaries;

                                       33

<PAGE>

     -    any consolidation or merger with another person of New AT&T Canada or
          any of its subsidiaries, the sale or transfer of all or a substantial
          portion of the assets of New AT&T Canada and its subsidiaries (on a
          consolidated basis) to another person or the entering into any other
          similar business combination other than a consolidation, merger, sale
          or transfer of any wholly-owned subsidiary into or to New AT&T Canada
          or another wholly-owned subsidiary of New AT&T Canada;

     -    any sale, lease or transfer of assets by New AT&T Canada or its
          subsidiaries where such assets have a value in excess of $20 million
          in any one transaction or related transactions;

     -    the declaration or payment by New AT&T Canada of any dividends or the
          making of any distributions on its shares or the redemption or
          repurchase of shares or any other securities, except in connection
          with the conversion of Class A Voting Shares into Class B Limited
          Voting Shares or Class B Limited Voting Shares into Class A Voting
          Shares;

     -    any authorization, issue or sale of or agreement of New AT&T Canada to
          issue or sell any Class A Voting Shares or Class B Limited Voting
          Shares, including any issue of or agreement to issue options, rights
          (other than rights issued pursuant to the new shareholder rights plan
          or pursuant to the Acquisition Rights Agreement), conversion or
          exchange privileges to acquire Class A Voting Shares or Class B
          Limited Voting Shares other than (i) the issuance of Class A Voting
          Shares upon the conversion of Class B Limited Voting Shares into Class
          A Voting Shares, or the issuance of Class B Limited Voting Shares upon
          the conversion of Class A Voting Shares into Class B Limited Voting
          Shares (ii) the issuance of shares upon the exercise of outstanding
          options (iii) Class A Voting Shares or Class B Limited Voting Shares
          issued pursuant to the new shareholder rights plan or pursuant to the
          Acquisition Rights Agreement and (iv) the issuance of Class A Voting
          Shares or Class B Limited Voting Shares pursuant to a pre-emptive
          right previously granted to a third party that was approved in
          accordance with this clause;

     -    the entering into by New AT&T Canada of any transactions with any
          current shareholder, director or officer or employee other than
          transactions in the ordinary course of business;

     -    any amendment to the Articles or By-Laws of New AT&T Canada;

     -    the adoption or amendment of any stock option plan, bonus plan,
          management incentive plan or other employee benefit plan of New AT&T
          Canada;

     -    any amendment to the shareholder declarations to be effective as of
          implementation of the Plan under section 146(2) of the CBCA effected
          by New AT&T Canada in respect of AT&T Canada and AT&T Canada in
          respect of AT&T Canada Corp. respecting the constitution of the board
          of directors of each of AT&T Canada and AT&T Canada Corp.,
          respectively. Such declarations will provide that the boards of each
          of New AT&T Canada, AT&T Canada and AT&T Canada Corp. will be
          identical and that at least 80% of the members of the board of
          directors of each company will be resident Canadians.

     -    any delegation of material board authority by New AT&T Canada to a
          committee, such as an executive committee;


                                       34

<PAGE>

     -    any material investment (in excess of $20 million) by New AT&T Canada
          in any other company, partnership, association or other form of joint
          venture;

     -    the guarantee of any liabilities by New AT&T Canada of a third party,
          other than indemnification of directors and officers of New AT&T
          Canada and its subsidiaries in accordance with the CBCA; and

     -    any material transaction by New AT&T Canada outside the normal and
          ordinary course of business.

ACQUISITION RIGHTS AGREEMENT

         On implementation of the Plan, New AT&T Canada established the
Acquisition Rights Agreement with CIBC Mellon Trust Company, as rights agent.
Each holder of a Class B Limited Voting Share will receive together with each
Class B Limited Voting Share, one Acquisition Right which, together with one
Class B Limited Voting Share, will entitle the holder thereof until December 31,
2004 to acquire one Class A Voting Share. Upon submitting to the rights agent
under the Acquisition Rights Agreement the appropriate election form specifying
the number of Class B Limited Voting Shares to be converted, a certificate
representing one Class B Limited Voting Share for each accompanying Acquisition
Right being exercised and a residency declaration to the transfer agent stating
that the holder is a Canadian (as such term is defined in the Telecommunications
Act), the corresponding number of Class A Voting Shares will be issued to the
holder of Class B Limited Voting Shares. No holder of an Acquisition Right will
be issued Class A Voting Shares if and to the extent that, upon such issuance,
such person, together with its associates, affiliates or another person with
whom it is acting jointly or in concert (as such terms are defined in the
Acquisition Rights Agreement), would beneficially own or be deemed to
beneficially own greater than 10% of the issued and outstanding Class A Voting
Shares on the date of issuance.

         Acquisition Rights will be exercisable at any time. The Acquisition
Rights will trade together with the Class B Limited Voting Shares and will be
represented by Class B Limited Voting Share certificates. The Acquisition Rights
will not be separable from the Class B Limited Voting Shares.

7.       MARKET FOR SECURITIES

         The Class A Voting Shares and Class B Limited Voting Shares of AT&T
Canada Inc. are listed on The Toronto Stock Exchange under the symbols TEL.A and
TEL.B, respectively, and are quoted on the NASDAQ National Market System under
the symbols ATTC and ATTCZ, respectively.

8.       DIRECTORS AND OFFICERS

SHARES IN NEW AT&T CANADA

         As at April 25, 2003, the directors and executive officers of the
Company, as a group, did not beneficially own, directly or indirectly, or
exercise control over any of New AT&T Canada's Class A Voting Shares or any of
New AT&T Canada's Class B Limited Voting Shares.

         The following is a list of the directors and executive officers of New
AT&T Canada indicating their names, positions with the Company and
municipalities of residence.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS


                                       35

<PAGE>

         As at April 25, 2003, the directors and executive officers of New AT&T
Canada Inc., their municipalities of residence, principal occupations and brief
biographies are set forth below. Each of the directors has been appointed to
hold office until the next annual meeting of shareholders or until his or her
successor is elected or appointed.

<TABLE>
<CAPTION>

NAME AND MUNICIPALITY OF RESIDENCE                          PRINCIPAL OCCUPATION AND NAME OF EMPLOYER
<S>                                                         <C>
Purdy Crawford (1)(4)(5)..................................  Chairman of the Board of Directors, AT&T Canada Inc.
Toronto, Ontario                                            and Counsel, Osler, Hoskin & Harcourt LLP
John T. McLennan (1)......................................  Vice Chairman of the Board of Directors and Chief Executive
Mahone Bay, Nova Scotia                                     Officer AT&T Canada Inc.
Gerald E. Beasley (2)(3)..................................  Corporate Director
Mississauga, Ontario
William A. Etherington (1)(3)(5)..........................  Corporate Director
Toronto, Ontario
Deryk I. King (2)(4)(5)...................................  Chief Executive Officer
Toronto, Ontario                                            Centrica North America
Ian D. Mansfield (1)(3)(4)(5).............................  Corporate Director
White Rock, British Columbia
Ian M. McKinnon (2)(4)(5).................................  President and Chief Executive Officer
Toronto, Ontario                                            Certicom
Jane Mowat (2)(3).........................................  Business Consultant
Toronto, Ontario
Daniel F. Sullivan (1)(3)(4)..............................  Deputy Chairman and Director
Toronto, Ontario                                            Scotia Capital Inc.
</TABLE>

-----------
(1)      Nominee of the holders of Class A Voting Shares.
(2)      Nominee of the holders of Class B Limited Voting Shares.
(3)      Member of Audit Committee.
(4)      Member of H.R./Compensation Committee.
(5)      Member of Governance Committee.

         New AT&T Canada is managed by a strong leadership team with extensive
experience in the telecommunications industry. The executive officers of New
AT&T Canada are as follows:
<TABLE>
<CAPTION>

NAME                                  POSITION
<S>                                   <C>
John T. McLennan                      Vice Chairman of the Board of Directors & Chief Executive Officer
John A. MacDonald                     President & Chief Operating Officer
Mark Ethier                           Executive Vice President, Sales
Mike Kologinski                       Executive Vice President, Marketing
David A. Lazzarato                    Executive Vice President & Chief Financial Officer
Judy McLeod                           Executive Vice President, Customer Service and Chief Quality Officer
Henry Yip                             Executive Vice President, Network Services
Harold Giles                          Executive Vice President, Leadership Resources & Development
Scott L. Ewart                        Senior Vice President, General Counsel, Secretary & Chief Privacy Officer
</TABLE>

                                       36

<PAGE>

<TABLE>
<CAPTION>

NAME                                  POSITION
<S>                                   <C>
Chris Peirce                          Senior Vice President, Regulatory & Government Affairs
Muriel Prentice                       Senior Vice President & Chief Information Officer
Dean Prevost                          Senior Vice President, Strategy & Corporate Development
Brock Robertson                       Senior Vice President, Treasury & Investor Relations
Don Welham                            Vice President, Controller
</TABLE>


NON-MANAGEMENT DIRECTORS -- BIOGRAPHIES

         PURDY CRAWFORD. Mr. Crawford is Non-Executive Chairman of New AT&T
Canada. and Counsel to the law firm of Osler, Hoskin & Harcourt LLP. He was the
Non-Executive Chairman of Imasco Limited, CT Financial Services Inc., and Canada
Trustco Mortgage Company until February 2000. Mr. Crawford joined Imasco Limited
in 1985 as President & Chief Operating Officer; in 1986 he became Chief
Executive Officer and in 1987 he became Chairman, President & Chief Executive
Officer. Mr. Crawford retired as Chief Executive Officer in 1995 but continued
as Non-Executive Chairman until February, 2000. Prior to joining Imasco, Mr.
Crawford was a senior partner with Osler, Hoskin & Harcourt, practising
primarily in the corporate/commercial area. Mr. Crawford sits on the boards of
several large public companies, both in Canada and the United States. He is
Chancellor Emeritus of Mount Allison University.

         GERALD BEASLEY. Mr. Beasley retired in January 2000 from the Canadian
Imperial Bank of Commerce as Senior Executive Vice President, Risk Management, a
position he had held since 1994. Mr. Beasley joined the Canadian Imperial Bank
of Commerce in 1968 and served in various senior positions in Canada and the
United States. Mr. Beasley is currently the Chairman of Trillium Health Centre
Foundation as well as a director of Enersource Corporation. He has previously
served on the boards of Newcourt Credit Corporation, Edulinx Canada Corporation,
and The Ontario Club.

         WILLIAM A. ETHERINGTON. Mr. Etherington serves as a corporate director.
He retired in October 2001 as Senior Vice-President and Group Executive, Sales
and Distribution, IBM Corporation and Chairman, President and Chief Executive
Officer, IBM World Trade Corporation, having worked with IBM for 37 years. He is
the lead director of the board of directors of the Canadian Imperial Bank of
Commerce and a director of Celestica Inc., Dofasco Inc. and MDS Inc. He is also
a member of the University of Western Ontario, Engineering Sciences Advisory
Council and Campaign Western. Mr. Etherington has served on the boards of IBM
Canada Ltd., IBM Europe Middle East Africa, IBM South Africa, the Conference
Board of Canada, the National Quality Institute and Junior Achievement of
Canada.

         DERYK I. KING. Mr. King is President and Chief Executive Officer of
Centrica North America ("CENTRICA"), a position he has held since December 2000.
Prior to joining Centrica, he was Group Managing Director of PowerGen plc
("POWERGEN") in the United Kingdom. Mr. King joined PowerGen in 1996 after
holding a number of international sales and marketing positions with Air
Products Ltd. and Imperial Chemical Industries Ltd. ("ICI"), including three
years spent working in Japan. He was appointed Managing Director of ICI's global
polyester business in 1992. Mr. King is currently a director of the Consumers'
Waterheater Income Trust.

         IAN D. MANSFIELD. Mr. Mansfield is currently the CEO/Commissioner of
the Canadian Professional Golf Tour. Prior to this appointment, he was President
and Founder of his own firm, Ocean Bluff Consulting Inc. Mr. Mansfield retired
from TELUS Corp. as Executive Vice President and President of TELUS
Communications in October 2000 after a successful and diversified thirty-year
career. In his final years at TELUS, he headed the business development work and
acted as chief negotiator leading to the merger of BC Tel and Alberta-based
TELUS. Mr. Mansfield currently serves on


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the board of directors of Coquitlam Express Hockey Ltd. as co-owner/founder and
the board of directors of the Canadian Professional Golf Tour. He also serves on
the Orca Bay Advisory Council associated with the Vancouver Canucks. He has
completed management studies at Harvard, Banff School of Management, University
of Southern California and the British Columbia Institute of Technology.

         IAN M. MCKINNON. Mr. McKinnon was appointed President and Chief
Executive Officer of Certicom in March of 2002, and is a member of the Certicom
Board of Directors. Mr. McKinnon is a high technology veteran who spent 14 years
in various sales and senior management roles with Digital Equipment Corporation
in both Canada and Singapore from 1981 to 1994. Prior to joining Certicom, he
was CEO with a number of software company turnarounds. He received the Financial
Post Investor Relations Award in 1997 and the Ernst & Young "Entrepreneur of the
Year -- Turnaround Category" Award in 1998 based on his work as President and
CEO with publicly traded Promis Systems Corporation between 1995 and 1999. At
Promis, he grew global market share and revenues while increasing the company's
valuation by 1200%. Mr. McKinnon has an Honours BA from McMaster University and
attended the European Institute of Business Administration (INSEAD).

         JANE MOWAT. Ms. Mowat was the Executive Vice President and Chief
Financial Officer of Centrinity, Inc. ("CENTRINITY") from July 2001 to November
2002. She also served as a director and in the Office of the Chief Executive at
Centrinity. From September 2000 to June 2001, Ms. Mowat was a business
consultant focusing on implementing shareholder value creation strategies.
Previously, Ms. Mowat was the General Manager of IBM Global Financing, a
division of IBM Corporation responsible for the Americas. Prior to that, Ms.
Mowat was a director and Chief Financial Officer of ISM Information System
Management Corporation from 1993 to 1995.

         DANIEL F. SULLIVAN. Mr. Sullivan is Deputy Chairman of Scotia Capital
Inc. ("SCOTIA CAPITAL"). Since joining Scotia Capital in 1968, Mr. Sullivan has
served in several senior positions, including Head of Corporate Finance and
Executive Vice President. Mr. Sullivan is a member of the board of directors of
Camco Inc. and has served as a director of Cadillac Fairview Corporation,
Monarch Development Corporation and Schneider Corporation. He has also served as
Chairman of The Toronto Stock Exchange, the Investment Dealers Association of
Canada and the Board of Governors of St. Michael's Hospital.

EXECUTIVE OFFICERS -- BIOGRAPHIES

JOHN T. MCLENNAN
DIRECTOR, VICE CHAIRMAN OF THE BOARD OF DIRECTORS AND CHIEF EXECUTIVE OFFICER

         Mr. McLennan was appointed as Vice Chairman and Chief Executive Officer
in May, 2000. Prior to his appointment to his current position, Mr. McLennan was
President and founder of his own firm, Jenmark Consulting Inc., specializing in
strategy, finance, and management of technology companies in Canada and the
U.S., with a primary focus on telecommunications. From 1994 to 1997, Mr.
McLennan was President and Chief Executive Officer of Bell Canada and President
of Bell Ontario from 1993 to 1994. From 1990 to 1993, Mr. McLennan served as
president and chief executive officer of BCE Mobile Communications Inc. ("BCE
MOBILE"), and from April 1993 to September 1994 he was Chairman of the Board of
BCE Mobile. Prior to assuming his positions at the Bell Canada group of
companies, Mr. McLennan served as President and Chief Executive Officer at
Cantel AT&T Wireless, Canada's largest wireless services provider. Mr. McLennan
was an Executive Vice President of Mitel Communications Inc. during its first
eight years of rapid growth. Mr. McLennan is also a member of the Board of
Directors of Hummingbird Communications, Platform Computing Inc., and Amdocs
Limited. Mr. McLennan is Chancellor of the University College of Cape Breton as
well as Chairman of the Cape Breton Growth Fund. He graduated from Clarkson
University with B.S. and M.S. degrees in industrial management.

JOHN A. MACDONALD

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PRESIDENT AND CHIEF OPERATING OFFICER

         Mr. MacDonald was appointed President and Chief Operating Officer on
November 27, 2002. Previously he served as President and Chief Executive Officer
of Leitch Technology Corp., a leading provider of high technology products and
solutions to the global broadcasting industry. Prior to that, Mr. MacDonald was
with Bell Canada from 1994 to 1999, serving first as Executive Vice President,
Business Development and Chief Technology Officer before becoming President and
COO in 1998. Mr. MacDonald began his career in 1977 at NBTel, the major supplier
of telecommunications services in New Brunswick, rising to the post of President
and Chief Executive Officer in 1994. Mr. MacDonald is presently a member of the
Board of Directors of Leitch Technology Corp., Rogers Cable, UBS (Unique
Broadband Systems) and Versatel Networks. He is on the advisory board of Galazar
Networks, and is a member of the Federal Government's Advisory Council on
Science and Technology. Previously, Mr. MacDonald chaired the National Selection
Committee for the Federal Government's Smart Communities Program and served on
the Federal Government's Information Highway Advisory Council. Mr. MacDonald
holds a Bachelor of Science in electrical engineering from Dalhousie University
and a Bachelor of Engineering from the Technical University of Nova Scotia.

DAVID A. LAZZARATO
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

         Mr. Lazzarato was appointed Executive Vice President and Chief
Financial Officer in October, 1999. Mr. Lazzarato has over 20 years of
operational finance, telecommunications, general management, and public
accounting experience. From 1997 to 1999, Mr. Lazzarato was Senior Vice
President and Chief Financial Officer of BCE Mobile Communications (Bell
Mobility), Canada's largest wireless provider, and from 1994 to 1997 was Vice
President and Controller of BCE Inc. Prior to that, Mr. Lazzarato held the
position of Senior Vice President Finance and Administration at CAE Electronics
Ltd., a firm recognized as the world leader in the design and production of
commercial and military flight simulators. Mr. Lazzarato is a Chartered
Accountant, holds a Bachelor of Commerce degree from McMaster University and has
completed the Senior Executives Program at M.I.T. and a Telecommunications
Marketing program at INSEAD.

MARK ETHIER
EXECUTIVE VICE PRESIDENT, SALES

         Mr. Ethier was appointed Executive Vice President, Sales, in July,
2000, and is responsible for the Global, National, Named, General Business and
Small Business markets, and Wholesale/Resellers. Mr. Ethier joined AT&T Canada
in April, 2000, and initially was Senior Vice President, Sales. Immediately
prior to joining AT&T Canada, he was Senior Vice President of Sales at Telus,
and prior to 1999, he held a series of executive level sales and marketing
positions at Bell Canada. Born in Ottawa, Ontario, Mr. Ethier graduated from the
University of Ottawa in 1986 with an Honours Bachelor of Commerce (Finance)
degree. He also completed the Financial Masters course with the Royal Bank of
Canada in 1991. Mr. Ethier is based at AT&T Canada's head office in Toronto.

MIKE KOLOGINSKI
EXECUTIVE VICE PRESIDENT, MARKETING

         Mr. Kologinski is Executive Vice President, Marketing. Previously he
was Senior Vice President, Internet and E-Business Services. And prior to that,
he was Vice President, Sales and Marketing, for the Internet and E-Business
Services division of AT&T Canada and its predecessor, Netcom Canada. Mr.
Kologinski held a series of progressively responsible sales and marketing
positions in the Business Services Group of Unitel Communications Inc. and
Call-Net Enterprises Inc. Mr. Kologinski holds an Honours Degree in Industrial
Engineering from the University of Toronto and an MBA from York University.


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JUDY MCLEOD
EXECUTIVE VICE PRESIDENT, CUSTOMER SERVICE AND CHIEF QUALITY OFFICER

         Judy McLeod is Executive Vice President, Customer Service and Chief
Quality Officer , a position she has held since March 2003. In her position,
Judy is responsible for the delivery of all Customer Service processes and for
providing support to AT&T Canada's Quality team to continue the deployment of
AT&T Canada's Quality Management System to the entire Company. Prior to her
current role, Judy was Senior Vice President, Human Resources for the Company.
She has also held senior positions in Marketing, Customer Service and
Information Technology at AT&T Canada. Judy began her career at Bell Canada in
progressively more senior positions in Customer Service, Sales and Marketing.
She is also a director on the boards of several organizations including Canadian
Women in Communications and the Telecommunications Learning Institute.

HENRY C. YIP
EXECUTIVE VICE PRESIDENT, NETWORK SERVICES

         Mr. Yip was appointed Executive Vice President, Network Services in
April 2001. He is a Professional Engineer in the Provinces of Alberta and
Ontario with extensive experience in the telecommunications industry with TELUS
Corporation, Jones Lightwave Ltd. and Bell Canada. Prior to his appointment at
AT&T Canada, he spent five years at the TELUS Corporation holding various
executive positions in the Operations area. He also initiated TELUS' efforts
into the multimedia business as well as created an ASP business in the Geomatics
area. He is a member of the Board of Directors of Global Thermoelectric Inc. and
of the Engineering Science Advisory Council at the University of Western
Ontario. He is the chair of the Wireless Industry Development Working Group for
the Alberta ICT Implementation Committee. Mr. Yip is a graduate of the
University of Western Ontario with a Bachelor's Degree in Electrical Engineering
and of the Advanced Management Program at the Wharton School of Business.

HAROLD GILES
EXECUTIVE VICE PRESIDENT, LEADERSHIP RESOURCES AND DEVELOPMENT

         Mr. Giles is Executive Vice President, Leadership Resources and
Development. Mr. Giles joins AT&T Canada from a career that spans 30 years with
General Electric, six years with Bell Canada and two years as a Consultant for
global companies. At General Electric, he held positions in the Technical and
Operations areas, including Managing Director of a European affiliate and in
senior human resources roles for GE Canada, GE International and other global GE
businesses. At Bell Canada, Harold was Group Vice President of Human Resources
during the transformation of Bell to a competitive entity. For the past two
years, Mr. Giles has been providing consulting services to CEOs in companies
with global operations undergoing competitive changes and new growth
initiatives.

SCOTT L. EWART
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY, CHIEF PRIVACY OFFICER

         Mr. Ewart became Senior Vice President, General Counsel and Secretary
in October 2000. Mr. Ewart was called to the Ontario Bar in 1980 and has 20
years of Corporate, Commercial and Intellectual Property experience in North
America and Europe. Prior to his current appointment, he was Division Counsel
for Coca-Cola Northwest Europe in London, England. Prior to moving to England,
he was Vice President and General Counsel for Coca-Cola Canada. He was
Securities Counsel for Nortel from 1985 to 1989. Prior to this, he was in
private practice. He has extensive high tech experience with Nortel and AT&T
Canada, and extensive intellectual and trade-mark experience with Coca-Cola in
North America and Europe. He has lectured extensively on the protection of
intellectual property rights. He is a member of the Canadian, U.S. and
International Bar Associations, as well as a Fellow of the Institute of


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Directors (London, England). He obtained his Bachelor of Laws degree at The
University of Windsor, Ontario, and completed the Executive Management program
at Yale University.

CHRIS PEIRCE
SENIOR VICE PRESIDENT, REGULATORY AND GOVERNMENT AFFAIRS

         Mr. Peirce is the Senior Vice-President, Regulatory & Government
Affairs. He is responsible for the development and promotion of the
corporation's strategic interests and regulatory and policy positions with
government and relevant regulatory agencies. Mr. Peirce joined AT&T Canada as
Government Relations Vice President in June 1999. He was promoted to the
position of Vice President Government and Regulatory Affairs in 2000 and to his
current position in January 2002. Prior to joining AT&T Canada, Mr. Peirce was
Vice-President, Strategic Planning with the Canadian Association of Petroleum
Producers (CAPP). In this position he was responsible for the Canadian upstream
oil and gas industry's positions on public policy both federally and
provincially as well as in the U.S. Prior to joining CAPP, Mr. Peirce was the
executive assistant to the Honourable Ralph Goodale, then Canada's Minister of
Agriculture and Agri-Food and Chair of the Cabinet Committee for the Economic
Union. Mr. Peirce obtained his Bachelor of Laws degree at Queen's University in
Kingston Ontario, and practised law in Edmonton, Alberta, from 1983-1993.

MURIEL PRENTICE
SENIOR VICE PRESIDENT, CHIEF INFORMATION OFFICER

         Ms Prentice is Senior Vice President and Chief Information Officer a
position she has held since July 2001. In this position, Ms Prentice is
responsible for all business information management solutions, enterprise
project management, computing hardware and internal network infrastructure in
support of the corporations' business needs. She joined AT&T Canada in February
2001 as Vice President, Architecture & Strategy and was instrumental in
formulating the strategy the corporation is now following to integrate its
systems environments. Ms Prentice has more than 30 years of experience in
information technology predominately with high technology and communications
companies. Prior to joining AT&T Canada, Ms Prentice spent 15 years at Nortel
Networks where she held a series of executive level positions and was
instrumental in the deployment of Nortel's Global Supply Chain Management
program. She is a member of the Canadian Information Professionals and the
Canadian Equestrian Federation and actively supports volunteer efforts for the
Hospital for Sick Children.

DEAN PREVOST
SENIOR VICE PRESIDENT, STRATEGY AND CORPORATE DEVELOPMENT

         Mr. Prevost is Senior Vice President, Strategy and Corporate
Development of AT&T Canada Inc. Prior to his appointment to his current
position, Mr. Prevost was Vice President, Strategy and Business Development of
AT&T Canada Corp., a position he assumed in January 1999. In 1997 and 1998, he
held the position of Vice President, Strategy and Business Development at AT&T
Canada Enterprises. Prior to joining AT&T Canada Corp., Mr. Prevost was a senior
consultant with Monitor Company, an international strategy consulting firm,
where he assisted clients in the telecommunication, banking, manufacturing and
retail industries. During his tenure at Monitor, Mr. Prevost specialized in
corporate strategy, mergers and acquisitions, competitive and industry analysis,
as well as market segmentation. Prior to joining Monitor, Mr. Prevost worked in
the US mutual fund industry and drafted the original business plan for a
start-up, software development arm of Hewlett-Packard (Canada). Mr. Prevost
holds a Bachelor of Commerce in Finance from the University of Calgary with
distinction and a Masters of Business Administration from Harvard Business
School.

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BROCK ROBERTSON
SENIOR VICE PRESIDENT, TREASURY AND INVESTOR RELATIONS

         Mr. Robertson is Senior Vice President, Treasury and Investor
Relations, a position he assumed in October 2000. Mr. Robertson was previously
Vice President, Treasury and Investor Relations of Call-Net/Sprint Canada, where
he held a variety of increasingly responsible financial management and corporate
development positions over a period of seven years. Mr. Robertson, who has
considerable expertise in competitive telecom, financial strategy, cross-border
capital markets, and international treasury, brought 17 years of finance and
public accounting experience to AT&T Canada. He is a Chartered Accountant and
holds a degree in mathematics from University of Waterloo in Ontario.

DON WELHAM
VICE PRESIDENT, CONTROLLER

         Mr. Welham was appointed Vice President, Controller of AT&T in February
2000. Prior to this appointment, Mr. Welham was the Controller of AT&T Canada
Corp., a position he assumed in 1995. Mr. Welham has been with AT&T Canada and
its predecessor companies since 1982, holding director positions in Performance
Management, Marketing and Internal Audit. Prior to joining AT&T Canada, Mr.
Welham worked for Price Waterhouse in Toronto and in Cape Town and Johannesburg,
South Africa.

9.       ADDITIONAL INFORMATION

         Additional financial information is provided in the consolidated
financial statements of AT&T Canada Inc. as of December 31, 2002 and 2001and for
the three-year period ended December 31, 2002 and the notes thereto and the
report of the Company's auditors thereon and Management's Discussion and
Analysis of Financial Conditions and Results of Operations thereon ("MD&A")
filed on SEDAR on February 28, 2003. These consolidated financial statements and
the accompanying MD&A were filed with the United States Securities and Exchange
Commission on Form 6-K on EDGAR on February 28, 2003.

         The Company will provide to any company or person, upon request to the
Secretary of the Company:

     (a)  when the securities of the Company are in the course of a distribution
          pursuant to a short form prospectus or a preliminary short form
          prospectus:

          (i)  one copy of the Company's annual information form, together with
               one copy of any document, or the pertinent pages of any document,
               incorporated by reference in the annual information form;

          (ii) one copy of the Company's comparative financial statements for
               its most recently completed financial year for which financial
               statements have been filed, together with the accompanying report
               of the auditor and one copy of the most recent interim financial
               statements of the Company that have been filed for any period
               subsequent to the end of the Company's most recently completed
               financial year;

          (iii) one copy of the management information circular in respect of
               the Company's most recent annual meeting of shareholders that
               involved the election of directors or one copy of any annual
               filing prepared in lieu of that information circular, as
               appropriate; and

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          (iv) one copy of any other documents that are incorporated by
               reference into the preliminary short-form prospectus or the
               short-form prospectus and are not required to provided under (i)
               to (iii) above; or

     (b)  at any other time, one copy of any of the documents referred to in (a)
          (i), (ii) and (iii) above, provided that the Company may require the
          payment of a reasonable charge if the request is made by a person or
          company who is not a security holder of the Company.

         The Secretary of the Company can be contacted at 200 Wellington Street
West, Suite 1600, Toronto, Ontario M5V 3G2.