<PAGE>
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 40-F

                [ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

              [X] ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2001       Commission File Number 0-29536

                                ---------------
                                AT&T CANADA INC.

           (Exact name of each registrant as specified in its charter)
                                ---------------

     CANADA                         4813                       43-1656187
(Province or other       (Primary Standard Industrial       (I.R.S. Employer
 jurisdiction of          Classification Code Number)     Identification Number)
 incorporation or
  organization)

                           200 WELLINGTON STREET WEST,
                                   SUITE 1600
                                TORONTO, ONTARIO
                                     M5V 362
                                 (416) 345-2000
   (Address and telephone number of Registrants' principal executive offices)

                              PUGLISI & ASSOCIATES
                          850 LIBRARY AVENUE, SUITE 204
                             NEWARK, DELAWARE 19715
                                 (302) 738-6680
      (Name, address and telephone number of agent for service of process)

               Securities registered or to be registered pursuant
                          to Section 12(b) of the Act.

TITLE OF EACH CLASS                    NAME OF EACH EXCHANGE ON WHICH REGISTERED
      None                                             None

               Securities registered or to be registered pursuant
                          to Section 12(g) of the Act.

               Class B Deposit Receipts representing a beneficial
               interest in Class B Non-Voting Shares, no par value

              Securities for which there is a reporting obligation
                      pursuant to Section 15(d) of the Act.

                                      None

                 For annual reports, indicate by check mark the
                       information filed with this Form:

[X] Annual information form             [  ] Audited annual financial statements

       Indicate the number of outstanding shares of each of the issuer's
        classes of capital or common stock as of the close of the period
                         covered by the annual report.

                          72,140 Class A Voting Shares
                       236,924 Class A Deposit Receipts 1
                      100,501,234 Class B Non-Voting Shares
                     100,501,234 Class B Deposit Receipts 2
                              ---------------------
         Indicate by check mark whether the Registrant by filing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
(the "Exchange Act"). If "Yes" is marked, indicate the filing number assigned to
the Registrant in connection with such Rule.

                            Yes        No X
                               ----      ---

1  The Class A Deposit Receipts represent a beneficial interest in 236,924 of
   the 309,064 Class A voting Shares referred to above.

2  The Class B Deposit Receipts represent a beneficial interest of 100,501,234
   Class B Non-voting Shares referred to above.

<PAGE>

                                                                               2

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days.

                            Yes X      No
                               ---       ---

<PAGE>


                                   UNDERTAKING

         The Registrant undertakes to make available, in person or by telephone,
representatives to respond to inquiries made by the Commission staff, and to
furnish promptly, when requested to do so by the Commission staff, information
relating to: the securities registered pursuant to Form 40-F; the securities in
relation to which the obligation to file an annual report on Form 40-F arises;
or transactions in said securities.




<PAGE>

                                                                               4

                                    SIGNATURE

         Pursuant to the requirements of the Exchange Act, the Registrant
certifies that it meets all of the requirements for filing on Form 40-F and has
duly caused this annual report to be signed on its behalf of the undersigned,
thereto duly authorized.


Registrant:                AT&T Canada Inc.


By:                        /s/ Scott Ewart
                           -------------------------------------------
Name and Title:            Senior Vice President, General Counsel and
                           Secretary, Chief Privacy Officer


Date:                      May 16, 2002





<PAGE>

                                                                               5

                                  EXHIBIT LIST


Exhibit                     Description
-------                     -----------

99.1                        Consent of KPMG LLP


<Page>


--------------------------------------------------------------------------------

                                AT&T CANADA INC.

                                  MAY 10, 2002



                             ANNUAL INFORMATION FORM



--------------------------------------------------------------------------------



<PAGE>



                                TABLE OF CONTENTS

1.       INCORPORATION........................................................1
2.       GENERAL DEVELOPMENT OF THE BUSINESS..................................2
3.       NARRATIVE DESCRIPTION OF THE BUSINESS................................8
         THE COMPANY..........................................................8
         AT&T CANADA'S AREAS OF OPERATION.....................................8
         RECENT DEVELOPMENTS..................................................9
         STRATEGIC BUSINESS COMBINATION......................................10
         CORPORATE STRATEGY..................................................11
         NETWORK FACILITIES..................................................13
         SERVICE OFFERINGS...................................................14
         SALES AND MARKETING.................................................15
         CUSTOMERS...........................................................17
         CUSTOMER CARE.......................................................17
         PROPERTIES..........................................................17
         GOVERNMENT REGULATION...............................................17
         EMPLOYEES...........................................................18
         LEGAL PROCEEDINGS...................................................19
         INTELLECTUAL PROPERTY AND NON-COMPETITION...........................19
4.       SELECTED CONSOLIDATED FINANCIAL DATA................................21
5.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS...............................................22
6.       MARKET FOR SECURITIES...............................................22
7.       DIRECTORS AND OFFICERS..............................................22
8.       ADDITIONAL INFORMATION..............................................30




                                       2

<PAGE>


         In this Annual Information Form, unless the context otherwise indicates
references to "AT&T Canada" or the "Company" refer to AT&T Canada Inc. and its
subsidiaries and references to the consolidated financial statements refer to
the consolidated financial statements of AT&T Canada Inc., the notes thereto and
the auditors' report thereon for the year ended December 31, 2001. 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 AT&T CANADA'S ACTUAL FUTURE EXPERIENCE INVOLVING ANY ONE OR MORE OF SUCH
MATTERS. THE OPERATIONS AND RESULTS OF AT&T CANADA'S TELECOMMUNICATIONS BUSINESS
MAY BE SUBJECT TO THE EFFECT OF OTHER RISKS AND UNCERTAINTIES. FACTORS WHICH
COULD CAUSE RESULTS OR EVENTS TO DIFFER MATERIALLY FROM CURRENT EXPECTATIONS
INCLUDE BUT ARE NOT LIMITED TO, THE IMPACT OF THE TRANSACTIONS CONTEMPLATED BY
THE DEPOSIT RECEIPT AGREEMENT (AS DEFINED BELOW) UPON AT&T CANADA; THE IMPACT OF
THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION'S ("CRTC")
DECISION CONCERNING THE REVIEW OF THE PRICE CAPS REGIME FOR LOCAL SERVICES
EXPECTED IN MAY 2002; EXISTING GOVERNMENT REGULATIONS AND CHANGES IN, OR THE
FAILURE TO COMPLY WITH, GOVERNMENT REGULATIONS; THE SIGNIFICANT INDEBTEDNESS OF
THE COMPANY; THE COMPANY'S LEVEL OF LIQUIDITY; THE LEVEL OF EXPENDITURES
NECESSARY TO EXPAND OPERATIONS, INCREASE THE NUMBER OF CUSTOMERS, 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 AT&T CANADA'S STRATEGIES WILL
YIELD THE EXPECTED BENEFITS, SYNERGIES AND GROWTH PROSPECTS; THE ABILITY TO
DISPOSE OF OR MONETIZE ASSETS; THE ABILITY TO INCREASE REVENUES FROM BUSINESS
SEGMENTS OTHER THAN VOICE SERVICES (SUCH AS DATA AND INTERNET SERVICES); THE
COMPANY'S ABILITY TO ACCESS MARKETS, DESIGN EFFECTIVE FIBRE OPTIC ROUTES,
INSTALL CABLE AND FACILITIES, INCLUDING SWITCHING ELECTRONICS, INTERCONNECT TO
THE INCUMBENT LOCAL EXCHANGE CARRIERS' (THE "ILECS") NETWORKS, SATISFY THE
OBLIGATIONS IMPOSED ON COMPETITIVE LOCAL EXCHANGE CARRIERS (THE "CLECS") BY THE
CRTC AND OBTAIN RIGHTS-OF-WAY, BUILDING ACCESS RIGHTS AND ANY REQUIRED
GOVERNMENTAL 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; 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.


1.       INCORPORATION

         AT&T Canada Inc. was incorporated as MetroNet Communications Corp.
("MetroNet") under the laws of the Province of Alberta and was subsequently
continued under the laws of Canada. MetroNet changed its name to AT&T Canada
Inc. coincident with the completion of the strategic business combination of
MetroNet, AT&T Canada Corp. and ACC TelEnterprises Company ("ACC
TelEnterprises") effective June 1, 1999 pursuant to a plan of arrangement (the
"Arrangement" or the "Strategic Business Combination"). AT&T Canada Inc. is a
holding company which conducts its telecommunications business through its
operating subsidiary AT&T Canada Corp. (formerly AT&T Canada Long Distance
Services Company) and AT&T Canada Corp.'s wholly-owned subsidiary, AT&T Canada
Telecom Services Company (formerly MetroNet Communications Group Inc.).

<PAGE>

         AT&T Canada Inc.'s registered and principal office is located at 200
Wellington Street West, Toronto, Ontario, Canada M5V 3G2.

         As a result of the Arrangement, the public shareholders of AT&T Canada
Inc. indirectly own approximately 69% of the equity and AT&T Corp. ("AT&T")
indirectly acquired approximately 31% of the equity of the combined business. In
addition, in a related transaction completed prior to the Arrangement, AT&T
indirectly acquired approximately 23% of the voting shares of AT&T Canada Inc.
Subsequent to the completion of the Arrangement, British Telecommunications plc
("BT") indirectly acquired approximately 30% of AT&T's indirect equity and
voting interests in AT&T Canada, representing approximately 9% and 7%,
respectively of the Company's total equity and voting interests. On April 1,
2002, AT&T acquired BT's indirect investment in AT&T Canada.


                                [FLOW CHART]


2.       GENERAL DEVELOPMENT OF THE BUSINESS

SUMMARY OF SIGNIFICANT DEVELOPMENTS SINCE 1999.


2002

BUSINESS DEVELOPMENTS

MAY:              On May 9, 2002, an oppression application was filed against
                  the Company and its directors by certain investment community
                  professionals. The Company will vigorously defend against this
                  action which it believes is without merit and based on
                  groundless allegations.

                  On May 1, 2002, the board of directors of the Company approved
                  a number of cost

                                       2

<PAGE>

                  reduction initiatives to bring the Company's cost structure in
                  line with current revenue. These initiatives will result in a
                  reduction of approximately 1,000 personnel and reduced capital
                  spending in 2002. The Company will record a provision for the
                  costs associated with these initiatives in the second quarter
                  of 2002.

APRIL:            On April 1, 2002, AT&T completed the acquisition of BT's
                  indirect investment in the Company as part of the decision
                  to unwind Concert, its global joint venture with BT.

MARCH:            On March 14, 2002, the Company announced that it has appointed
                  a committee of its board of directors to work with management
                  to address complex issues facing the Company in the
                  foreseeable future. Such issues include a significant
                  regulatory decision expected to be released on or before May
                  31, 2002, the effect of AT&T satisfying its obligations under
                  the Deposit Receipt Agreement between the Company, AT&T and
                  CIBC Mellon Trust Company as trustee (the "Deposit Receipt
                  Agreement"), and the impact of these events on the operating
                  and financial circumstances of the Company. In addition, the
                  committee appointed independent financial advisors to evaluate
                  various scenarios regarding the issues, opportunities and
                  alternatives for the Company.

                  On March 15, 2002, a group of more than 20 investors holding
                  more than U.S. $1 billion of the Company's Senior Notes
                  announced that they have organized as an "ad hoc committee" to
                  express their concerns about the Company's business operations
                  and financial prospects.


FINANCING

         In February, the Company announced that it had repurchased for
approximately $100 million all of the outstanding accounts receivable sold into
the securitization program established in July, 2001. The securitization program
has not been terminated and may be resumed in the future if certain conditions
are satisfied. The securitization agreement included the requirement that the
Company maintain an investment grade credit rating from both Moody's Investor
Services Inc. ("Moody's") and Standard & Poor's Rating Services ("Standard &
Poor's").

         On February 22, 2002, Standard & Poor's downgraded the Company's senior
unsecured debt to BB. On February 27, 2002, Moody's downgraded the Company's
senior unsecured debt to Ba3. On March 22, 2002, Moody's downgraded the
Company's senior unsecured debt further to B3.

         On May 1, 2002, the Senior Credit Facility was amended, reducing the
total facility from $600 million to $400 million. The total amount drawn on May
1, 2002 was $200 million. The revolving term facility component was reduced to
$325 million from $525 million. The $75 million operating facility component was
unchanged. Further draws are permitted as follows: $100 million is available
under the revolving term facility upon delivery of a business plan, following
the release of the CRTC "Price Cap" decision that demonstrates compliance with
the covenants under the Senior Credit Facility and is approved by lenders
representing two-thirds of the amount committed; and a further $100 million is
available under the revolving term facility upon the approval of each lender.
The amendment also requires that the Company unwinds a sufficient amount of its
cross currency interest rate swaps to generate cash proceeds of at least $100
million. Under the amendment, the maximum allowable out-of-the-money
mark-to-market position on the Company's hedged position has been set at $100
million.

         The Company believes that the disclosure in note 2 of the consolidated
financial statements for the year ended December 31, 2001 does not constitute an
impermissable qualification under the Senior Credit Facility and the lenders
have agreed not to assert or otherwise claim that such disclosure constitutes an
impermissable qualification for the 2001 consolidated financial statements. This

                                       3

<Page>

amendment does not affect the interpretation by either the Company or the
lenders of the definition of impermissable qualification in any future period.


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 calls 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 will also become 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, the Company acquired all of the issued and
                  outstanding shares of 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
                  $58.420 million was paid on closing, comprised of $13.754
                  million in cash and $44.666 million, represented by 967,355
                  Class B Deposit Receipts of the Company. In addition,
                  acquisition costs of $950,000 were incurred. The vendors have
                  the potential to earn up to an additional $30.0 million
                  contingent upon the attainment by June 30, 2002 of certain
                  specified performance targets. Any earned contingent
                  consideration is payable over the three-year period ending
                  June 30, 2004 and will be recorded once the contingent amount
                  is determinable.

                  The Company 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

                                       4

<PAGE>

                  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 the Company, 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, which is currently on appeal to the
                  Federal Court of Canada, rejects 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 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.


FINANCING:

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

                  In July, the Company signed a securitization agreement, giving
                  the Company the ability to sell certain of its accounts
                  receivable on a revolving basis. The Company 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,

                                       5

<PAGE>


                  Quebec. This brought to 27 the number of markets served with
                  full service Competitive Local Exchange Carrier ("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 the Company's regulated cost
                  structure in long distance services starting January 1, 2001
                  resulted from the CRTC's ruling.

OCTOBER:          The Company 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:             The Company 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:              The Company 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 the Company's Class B Deposit Receipts and $50 million in
                  cash.

APRIL:            The Company exercised its right to acquire the remaining 49%
                  of the issued and outstanding capital stock of Netcom Canada
                  Holding Inc. ("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:            The Company 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:          The Company 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

                                       6

<PAGE>

                 business customers' telecommunications services. The purchase
                 price for TigerTel was $70.0 million in cash.


FINANCINGS:

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

1999
----

BUSINESS DEVELOPMENTS:

DECEMBER:         The Company created a co-branded  portal with Microsoft
                  Canada to deliver customized Canadian content to its dedicated
                  and dial-up customer base.

NOVEMBER:         The Company merged the internet divisions of AT&T Canada,
                  Netcom Canada, MetroNet and ACC TelEnterprises to form a new
                  business unit, AT&T Canada Internet and E-Business Services.

                  The Company purchased 21 400Mhz blocks of local multi-point
                  communications service ("LMCS") spectrum in tier two
                  communities along its national backbone.

OCTOBER:          AT&T Canada Inc. effected a two-for-one stock split of its
                  Class A Voting Shares and its Class B Non-Voting Shares.

AUGUST:           AT&T transferred all of its direct and indirect interests in
                  AT&T Canada Inc. and AT&T Canada Corp. to JVI General
                  Partnership ("JVI"), in which AT&T acquired a 70% interest and
                  BT acquired a 30% interest. Immediately thereafter, JVI
                  transferred all of its direct and indirect interests in AT&T
                  Canada Inc. and AT&T Canada Corp. to AT&T Canada Holdings
                  Limited Partnership, of which JVI is the limited partner,
                  holding 99% of the interests therein and AT&T Canada GP LLC is
                  the general partner holding 1% of the interests therein.

JULY:             Moody's Investors Service, Inc. ("Moody's") and Standard &
                  Poor's Rating Services ("S&P") raised their ratings of AT&T
                  Canada Inc. to Baa3 and BBB, respectively, following the
                  completion of the Arrangement.

                  The Company activated a 4,475 kilometre segment of its
                  national broadband fibre optic network.

JUNE:             A strategic business combination of AT&T Canada Corp.,
                  MetroNet and ACC TelEnterprises was effected by way of an
                  arrangement transaction.

MAY:              AT&T Canada Corp. and ACC TelEnterprises sold their
                  residential long distance customer bases and certain
                  associated assets to 3362426 (Primus) Canada Inc.

MARCH:            MetroNet acquired a 51% interest in Netcom Canada.

                  MetroNet entered into an agreement to complete a strategic
                  business combination of AT&T Canada Corp., MetroNet and ACC
                  TelEnterprises.

FEBRUARY:         MetroNet announced it had signed a memorandum of understanding
                  with Nortel Networks to purchase its OC-192 (10 Gbps) SONET
                  and Dense-Wavelength Division

                                       7

<PAGE>


                  Multiplexing (D-WDM) solutions as the core backbone system for
                  its national and cross-border fibre-optic network.

JANUARY:          MetroNet purchased intercity fibre connecting Vancouver, BC
                  with Seattle, Washington from Starcom Service Corp.


FINANCINGS:

                  In December, the Company entered into a $600 million bank
                  facility with a syndicate of various financial institutions
                  (the "Senior Credit Facility"), replacing its existing senior
                  credit facility.

                  In September, AT&T Canada Inc. completed two note offerings
                  with aggregate gross proceeds of approximately $886 million
                  including US$500 million principal amount of 7.65% Senior
                  Notes due 2006 and $150 million principal amount of 7.15%
                  Senior Notes due 2004.


3.       NARRATIVE DESCRIPTION OF THE BUSINESS

                                   THE COMPANY

         AT&T Canada is Canada's largest competitive national broadband business
services provider and competitive local exchange carrier and a leading provider
of Internet and E-Business solutions. Created in June 1999 from the strategic
combination of AT&T Canada Corp., MetroNet and ACC TelEnterprises, the Company
has brought together the country's first and largest CLEC and Canada's largest
competitive provider of long distance services to business customers. In 2001,
the Company had revenues of approximately $1.5 billion.

         The Company is focused principally on the business market of the
telecommunications services industry. AT&T Canada estimates that it holds an 11%
share of the Canadian business telecommunications market from its data, local,
Internet and E-Business solutions services, and from its long distance services.
With its extensive local and long distance facilities and interconnection
arrangements, the Company estimates that it is capable of serving approximately
85% of the Canadian business telecommunications market. Its strategic
relationships and interconnection agreements with other international service
providers, particularly AT&T, allow the Company to provide global voice, data,
Internet and E-Business solutions to its business and government customers and
leverage the Company for future growth in the telecommunications industry.

         The Company has deployed an advanced fibre-optic network and digital
switching platforms creating a state-of-the-art intracity local and intercity
national long-haul fibre network which provides an extensive platform of
applications and services with international reach. The Company's local,
facilities-based network is currently operational in 29 of Canada's largest
cities with direct connection to approximately 3,300 buildings and approximately
510,000 local access lines in service. The intercity network, as of December 31,
2001, spans 14,001 route kilometres (8,700 route miles).

                        AT&T CANADA'S AREAS OF OPERATION

         The Company operates in the Canadian telecommunications industry, which
has continued to experience significant changes, challenges and opportunities.
Intense competition and a downturn in the economy has lead to the failure of a
number of CLEC's. Recent regulatory decisions, most notably a change in the
contribution regime, were important steps towards more balanced competition.

                                       8
<PAGE>


         The decision in the "Price Cap" proceeding before the CRTC, which is
expected on or before May 31, 2002, may require the Company to re-evaluate its
plans and growth assumptions in the local and related telecommunications market.

         AT&T Canada believes that the Canadian telecommunications services
industry provides growth opportunities for the Company. IDC Canada and
Lemay-Yates Associates estimate that the Canadian business telecommunication
industry had revenue of approximately $14 billion in 2001. IDC Canada and
Lemay-Yates Associates also estimate that between 2001 and 2005, the business
market of the telecommunications services industry will grow approximately 8%
per annum and the data, Internet and E-Business markets will grow by
approximately 13% per annum.

MARKET SIZE BY SEGMENT ($ IN MILLIONS)

<TABLE>
<CAPTION>
                                                             PERCENTAGE OF TOTAL
MARKET SEGMENT                         2001 MARKET SIZE            MARKET
--------------                         ----------------      -------------------
<S>                                    <C>                   <C>
Business
    Local Voice....................        $  4,300                   31%
    Long Distance Voice...........            3,000                   21%
    Data, Internet & E-Business...            6,700                   48%
                                            -------                  ----
Total Market.......................         $14,000                  100%
                                            =======                  ====
</TABLE>
Source:  IDC Canada and Lemay-Yates Associates

         The Company's decision to build a network in a new area or extend the
Company's network in an existing area is based on a number of factors, including
demographic, economic, competitive and telecommunications demand characteristics
of the area; availability of rights-of-way; actual and potential competitors;
and the potential for the Company to cluster additional networks in the region.
Once AT&T Canada determines that a geographic area presents an attractive
opportunity the Company begins discussions with city officials, right-of-way
holders and potential customers and then performs customer, competitive and
regulatory analyses and makes detailed financial estimates of the costs of
constructing a network including the cost of fibre optic cable, transmission and
other electronic equipment, and costs related to switching, engineering,
building entrance requirements and right-of-way acquisition.

         Although the Company has a significant national presence, it may
continue to expand its operations in areas where it has established one or more
networks, by constructing or leasing networks in adjacent areas to leverage its
investment in existing networks, switches and telecommunications equipment. The
Company's objective is to establish a cost-effective and operationally efficient
cluster of networks in various geographic areas, focusing on maximizing the
number of total on-net lines and facilities in each area.

                               RECENT DEVELOPMENTS

         Please refer to "General Development of the Business" above for a
discussion relating to the general business developments of the Company,
including developments since December 31, 2001.


                         STRATEGIC BUSINESS COMBINATION

         The Company is the result of the Strategic Business Combination which
was consummated on June 1, 1999. Pursuant to the Strategic Business Combination
and related transactions, AT&T indirectly acquired approximately 23% of the
voting shares of AT&T Canada Inc. and a non-voting equity interest in the
combined business of approximately 31%. AT&T's initial investment, and any
further investment

                                       9

<PAGE>

in the Company is limited by specific Canadian foreign ownership restrictions.
Subject to certain conditions, AT&T has agreed to purchase, or arrange for
another entity to purchase, all of the voting and equity interests in the
Company, to the extent permitted by the removal (or the removal in part) of such
Canadian foreign ownership restrictions.

         More specifically, AT&T has agreed, subject to the condition precedent
that the Canadian foreign ownership restrictions have been removed on or before
June 30, 2003, to purchase or to cause an affiliated entity to purchase, all of
the shares of AT&T Canada not owned by AT&T or its affiliates at a price equal
to the greater of $37.50 per share (increased at a rate of 16% per annum
compounded quarterly, after June 30, 2000) and the appraised fair market value.
In the event that foreign ownership restrictions are lifted, in whole or in
part, on or before June 30, 2003, AT&T is obligated to purchase or to arrange
for a third party affiliated with AT&T to purchase the outstanding shares of the
Company up to the extent permitted by law subject to certain limitations in the
Deposit Receipt Agreement. At any time prior to July 1, 2003, AT&T may elect to
purchase or cause to be purchased, by any third party, all of the outstanding
shares. In the event that, by June 30, 2003 (i) foreign ownership restrictions
are not amended so as to allow AT&T to acquire all of the outstanding shares,
and (ii) AT&T has not elected to purchase or arrange for a third party to
purchase the outstanding shares of the Company, the Company will be put up for
auction upon and subject to the terms of the Deposit Receipt Agreement, and AT&T
would be required to make whole the shareholders of the Company on a per share
basis for the difference between (i) the greater of the accreted minimum price
and the appraised fair market value of the shares, and (ii) the proceeds
received by such holders from the auction.

                               CORPORATE STRATEGY

         AT&T Canada's corporate strategy is focused on increasing its
telecommunications market share in Canada by offering businesses value added,
seamless local and long distance voice, data, Internet and E-Business solutions.
To achieve this objective, the Company has adopted a dual strategy of leveraging
its facilities across Canada and forming strategic partnerships and alliances
internationally. An additional element of the Company's strategy is to expand
beyond its core telecommunications business to include fully managed services
and E-Business solutions. AT&T's relationship with the Company provides
strategic advantages associated with offering AT&T's technology, brand and
expertise to Canadian customers.

         Within the framework of the Company's broad corporate strategy are a
number of specific strategic elements.

BUSINESS CUSTOMER FOCUS

         The Company targets its branded and bundled offerings to the small,
medium and large business and governmental sectors, including approximately
1,200 US based multi-national corporations with a significant presence in
Canada. The Company aims to increase penetration through both direct sales teams
and indirect channels. The Company utilizes its relationship with AT&T to offer
a North American service to business customers and, through AT&T's global
relationships, to elsewhere in the world. The Company's product suite is
designed to offer a range of services to businesses across all regions of the
country and to provide customized network solutions for large business and
government accounts. IDC Canada and Lemay-Yates estimate that between 2001 and
2005, the business market of the telecommunications services industry will grow
approximately 8% per annum and the data, Internet and E-Business markets will
grow by approximately 13% per annum.

BUNDLED OFFERINGS

         The Company provides a full suite of products including integrated
voice, data, Internet and E-Business solutions which it believes will enable it
to quickly penetrate its markets and build and maintain

                                       10

<PAGE>

customer loyalty. As an early entrant into and the most significant player in
the competitive local market, the Company believes that it is well positioned to
target customers who are looking for an alternative to the ILECs. The Company
also benefits from cross selling new services to its large existing base of
business customers.

NATIONAL PRESENCE WITH UNIFORM SERVICES

         By providing uniform services and technology in its markets across the
country, the Company delivers consistent customer solutions to address customer
requirements as well as technology platforms. The Company's strategy enables
customers to utilize products with consistent features, functionality and
"look-and-feel" in markets across Canada (and through AT&T, in the US as well).
Separate ownership and geographic segregation of the incumbent carriers has
resulted in an inconsistent evolution of products and services between
individual markets, thereby creating an opportunity for the Company to
differentiate itself by providing a national uniform service. This strategy has
been applied by the Company in each of its service offerings.

SUPERIOR CUSTOMER CARE

         The Company believes that its customer care services are a distinct
competitive advantage. These Services are delivered through the Company's
state-of-the-art systems and uniform technologies. 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 who 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.

LEVERAGE NATIONAL FIBRE-BASED NETWORK

         The Company's national network is a key element in targeting
high-volume, high-margin business customers. The Company believes that a
national fibre-based network creates the basis on which customized, technical
solutions can be developed and deployed.

         The Company continually leverages technological advances in networking
and transport protocols (Frame Relay, ATM, IP, MPLS and SONET) and optical
electronics to optimize the efficiency, integration, scalability and evolution
of its network. The Company also leverages its relationships and partnerships
with leading equipment manufacturers, which enable it to develop and deploy
leading edge, "evolvable" network technologies rapidly and cost effectively
across its own network and the networks of its customers.

E-BUSINESS SOLUTIONS

         The Company offers a range of E-Business solutions to its medium and
large business customers. These solutions include implementation of software
applications and web-based software tools, consulting, systems integration,
enhanced web hosting and Internet security services. The Company's strategy is
to leverage its existing customer base for opportunities to sell a comprehensive
suite of higher-margin E-Business solutions. With the acquisition of MONTAGE in
2001 and DMC in 2000, now operating as a division of the Company through
Montage.DMC, the Company is a Canadian leader in providing blue-chip companies
with E-Business integration services.

MANAGED SERVICES

         The Company manages the enterprise networks of its Managed Services
clients to reduce the complexity of the customer's business operations, reduce
the requirement for technical staff in-house, and

                                       11

<PAGE>

shorten the time required to add increased network capacity or add new service
features in order to allow clients to focus on their core business. The Company
assists its customers in the provision and life cycle management of their
telecommunications networks and business applications. The Company's Managed
Services initiative is an aggressive strategy, in that it utilizes the Company's
current network offerings and allows for greater influence in shaping clients'
networking decisions. The Company has established a dedicated organization and
operations centre focused on building this higher level partnership. This centre
allows for the management of client router based networks, LANs, servers and the
management of critical client applications. Through Managed Services, the
Company is no longer merely a provider of commodity bandwidth, but a value added
consultative partner.

ALLIANCES

AT&T ALLIANCE

         AT&T Canada has access to certain AT&T trade-marks and/or technology
for a range of wireline telecom services including long distance services, local
services, dedicated and dial-up Internet access for businesses, residential
low-speed Internet access, electronic commerce and payphone services. With some
restrictions, AT&T Canada also retains the right to market unlicensed and
unbranded services, and to have such services included on the customer's bill.
See "Intellectual Property" below.

         AT&T Canada's links with AT&T and its international partners provides
opportunities to leverage high growth cross-border and international traffic, as
well as to attract new Canadian business customers who value international
reach.

ROGERS WIRELESS ALLIANCE

         AT&T Canada Corp. and Rogers Wireless Communications Inc. ("Rogers
Wireless") have entered into an arrangement designed to accelerate the bundling
and joint marketing of wired and wireless services for Canadian business
customers.

                               NETWORK FACILITIES

         The Company's telecommunications network consists of: (1) CLEC and Data
Facilities; (2) Broadband Long Haul Network; and (3) Internet Service Provider
Network. The Company's extensive local and long distance facilities and
interconnection arrangements allow the Company to serve approximately 85% of the
Canadian business telecom market.

CLEC AND DATA FACILITIES

         The Company is Canada's largest national CLEC. It operates highly
advanced, reliable and extensive local networks in Canada's largest cities.
Local facilities are currently operational in 29 of Canada's largest markets.

         As of December 31, 2001, the Company had 4,723 intra city fibre route
kilometres (2,935 miles) and 301,359 intracity fibre strand kilometres (187,259
miles) and had accessed 3,313 buildings (includes buildings on-net combined with
96 co-located facilities). The Company also uses 38 GHz wireless technology in
Toronto, Montreal, Calgary, Edmonton, Vancouver, Ottawa and Quebec City. This
enables fast turn up of new access capacity when necessary to meet customer
requirements.

         In 1999, the Company was a successful bidder in Industry Canada's
auction for 24 GHz spectrum allowing the Company to provide 400 MHz of
fixed-wireless, broadband spectrum in 21 mid-size markets in Canada. This
footprint would cover approximately 24% of the population and approximately 18%
of all business access lines in Canada. This new access capability will enable
the Company to cost

                                       12

<PAGE>

effectively increase its addressable market while further leveraging the
investments in its fibre optic local and long haul networks. The 21 markets are
all either on the outskirts of existing AT&T Canada facilities-based market
clusters, or represent additional markets passed by the Company's broadband long
haul fibre network route where the economics of building local fibre networks
are prohibitive. In 2001, the Company successfully completed both technical and
market trials and vendor selection for this technology.

         The Company has built a nation-wide Frame Relay, ATM and IP network,
connecting thousands of business locations across the country to address
opportunities in the data market. The Company's data network includes 108 Frame
Relay switches, 695 ATM switches and 25,857 high speed data ports (as at
December 31, 2001), which offers the reach and reliability required by large
business customers.

BROADBAND LONG DISTANCE NETWORK

         The local networks and population centers across Canada are connected
by an extensive facilities-based, long haul broadband network. As at December
31, 2001, this broadband, long haul network spanned 14,001 route kilometres
(8,700 route miles) and 200,090 (124,336 miles) inter city fibre strand
kilometres.

         The network extends to the United States via seven strategic
cross-border points located near Seattle, Spokane, Minneapolis, Chicago,
Detroit, Buffalo and Champlain. The core backbone system for the national and
cross-border fibre network utilizes OC-48 and OC-192 SONET technology. The
network backbone is designed to optimize transport and delivery of AT&T Canada's
current suite of services and support IP, data and voice offerings well into the
future. Owning the network from end-to-end also allows the Company greater
control over service and quality while at the same time enhancing service
turn-up and new product deployment cycle times.

         The network backbone is being equipped with the latest Dense-Wavelength
Division Multiplexing (D-WDM) technology, enabling up to 32 wavelengths of
OC-192 bandwidth. This will provide up to 320 Gigabits of capacity, the
equivalent of over 4 million simultaneous voice conversations occurring over a
single pair of fibre strands. This new technology is expected to reduce bit
error rates up to 1,000 times versus the previous generation of SONET
technologies, thereby reducing costly and time-consuming network overhead.

INTERNET SERVICE PROVIDER NETWORK

         A comprehensive Internet Service Provider (ISP) Network has resulted
from the integration of MetroNet, Netcom Canada and AT&T Canada facilities. The
network leverages the extensive fibre optic network in and between major
metropolitan areas across Canada, delivering a wide range of high-speed Internet
access options ranging from fractional DS-1 to ATM-based interconnections of up
to 45 Mbps.

         The ISP Network includes 55 points of presence (POPs) across the major
markets and is configured with multiple links to the US Internet backbone. As of
December 31, 2001, AT&T Canada had roughly 147,000 dial-up Internet subscribers
and approximately 4,368 dedicated access business customers.

                                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.

                                       13

<PAGE>


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 and are the first available from a national provider.

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 and calling cards, as well as a variety of other enhanced
long distance services and features.

DATA SERVICES

         Data services connect data, video and voice networks to establish
private networks 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), managed WAN, managed LAN,
ATM, Virtual Private Network (VPN), Private Line, Virtual POP and private
network dial-up. Using the relationship with AT&T, AT&T Canada 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. AT&T Canada 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 and
database software.

         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.

E-BUSINESS SOLUTIONS

         E-Business solutions help customers automate their business processes
using web-based technologies, and applications such as Oracle ERP systems and
others. AT&T Canada's E-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.

                                       14

<PAGE>

                               SALES AND MARKETING

         AT&T Canada's sales and marketing programs focus on optimising
utilisation of its network assets by targeting customers within its network
footprint. AT&T Canada 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, AT&T Canada 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 a more junior Account Manager and
various product and solution specialists, including sales engineers. The direct
sales force is motivated and compensated with a compensation plan comprised of a
competitive base salary and variable compensation directly linked to
productivity. The variable compensation is comprised of bookings, customer
satisfaction and retention of revenue. The direct sales organization as of
December 31, 2001 was made up of approximately 800 personnel and is spread
across Canada to match the market demand. The direct sales force operates in
both the Retail and Wholesale markets. On May 1, 2002 the board of directors of
the Company approved a number of cost reduction initiatives to bring the
Company's cost structure in line with current revenue. These initiatives will
result in a reduction of approximately 1,000 personnel, including a substantial
number of sales personnel, in 2002.

         The direct sales force is complimented 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
compliment 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 will
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. The agent
program will be refined to encourage the growth of the Company's larger and more
successful agents and a reduction of agents who are less focused on the Company.

         In addition to the agent program, the Company will continue to support
its Affinity program with national organizations who offer the Company's
services to their members. The membership of these organizations typically
reside within the small business community. Complimenting the Affinity channel,
the Company will continue to approach the market through telesales. 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

         AT&T Canada is focusing on all major markets, including small, medium
and large business and government retail customers in Canada's main business
centres, all of which are within the Company's geographic areas of operation.

         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

                                       15

<PAGE>

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 AT&T Canada and its services among prospective customers
within buildings that are added to the Company's network. The Company also
targets customers located in geographical areas that can be serviced from a
co-located central office.

         AT&T Canada believes that the small to medium-sized business market is
generally underserved by the ILECs in terms of account management, technical
support and customer service. In addition, the Company believes that customers
within this market are likely to buy packaged telecommunications solutions from
a single source provider.

         The Company also has significant penetration in the large-sized
business and government customers, drawing on its reputation as an alternative
to the ILECs. AT&T Canada is a market leader in this market in such services as
Frame Relay and Advanced Toll Free Calling. 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. AT&T Canada 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, 2001, the Company had over 100,000 business
customers. Total billing of the Company's top 10 customers account for
approximately 13% of the $1,545 million in revenues for the year ended December
31, 2001, with no single customer accounting for more than 10% of total
revenues.

                                  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.

                                   PROPERTIES

         As of December 31, 2001, AT&T Canada owned 15 buildings in locations
across the country representing approximately 414,759 square feet. In addition,
AT&T Canada leases and occupies office and hub space in markets where it does
not own any buildings.

         AT&T Canada Inc. has granted security interests in its assets,
including its real property interests and its network equipment, to its secured
lenders.

                                       16

<PAGE>

                              GOVERNMENT REGULATION

OVERVIEW OF CANADIAN TELECOMMUNICATIONS SERVICES INDUSTRY

         The Canadian telecommunications industry continued to experience
significant changes, challenges and opportunities during the course of 2001.
Recent regulatory decisions, most notably the change in the contribution regime,
were important steps towards more balanced competition. Throughout the course of
2001 the CRTC continued the pattern established in the contribution decision
(Decision 2000-745) and issued a number of decisions that reflected the need to
modify the competitive framework and reduce the prices AT&T Canada and other
competitive entrants pay to the incumbent telephone companies for services and
facilities.

         Of note in this regard are CRTC Decisions 2001-238 and 2000-694 and
Order 2001-500. In the first two decisions the CRTC reduced the recurring and
non-recurring charges for unbundled loops by 30% and 47%, respectively and in
Order 2001-500 the CRTC cut the prices competitive long distance service
providers pay for 800 database queries by 50%. As well, in Decision 2001-238,
the CRTC redefined the basis for establishing the contribution requirement used
to subsidize basic local service in high cost serving areas. This has resulted
in a two-thirds reduction in the national subsidy requirement that in turn has
translated into a two-thirds reduction in AT&T Canada's contribution payments
for 2002. Telus Inc. has appealed this Decision 2001-238 back to the CRTC
requesting that the reduction in both the subsidy requirement and recurring
rates for unbundled loops be reversed.

RECENT CRTC DECISIONS AND PROCEEDINGS

PRICE CAP REGULATION

         The Company actively participated in several regulatory proceedings
conducted by the Canadian Radio-television and Telecommunications Commission
("CRTC") during 2001. The most significant was the "Price Cap" proceeding,
initiated to review the framework for local competition. In that proceeding, the
Company argued that the existing framework is out of balance and favours the
incumbent providers at the expense of competitive providers. The Company
proposed changes to the framework that would help create balance and competitive
neutrality in the marketplace. Fundamental to the Company's proposal is the
reduction in cost of facilities and services that competitive providers purchase
from the incumbents, through the establishment of a "Facilities Based Carrier"
("FBC") rate. The Company believes that adoption of the FBC rate proposal,
together with other suggested improvements related to pricing flexibility and
quality of service, would ensure that customers continue to benefit from
competition by allowing facilities based competitors to compete fairly with the
incumbent providers. The Price Cap proceeding ended in November 2001 and a
decision is expected on or before May 31, 2002.

         Should this and the future decisions of the CRTC fail to recognize and
remedy the existing imbalance favouring the incumbent providers, the
sustainability and the benefits of competition could be threatened. There is no
assurance that the CRTC will accept the Company's proposals and the Company
cannot predict the ultimate impact that the CRTC's decision and any future
decisions will have. As stated during the course of the proceeding, should the
CRTC not take this opportunity to establish a framework for effective
competition in the local telecommunications market and thereby reduce the
Company's regulatory costs, the Company will need to re-evaluate its plans and
growth assumptions in this and related telecommunications markets.

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 rights-of-way agreements between carriers and municipalities and
other public authorities. The decision is positive from the perspective of AT&T

                                       17

<PAGE>

Canada and other carriers as it provides more balanced terms of 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, the Halifax Regional
Municipality, the Cities of Ottawa and Toronto, the City of Calgary and the City
of Vancouver have been granted leave to appeal the CRTC's decision by the
Federal Court of Appeal. The appeal is expected to be heard in September 2002
and a favourable decision for the Appellants would have a material negative
impact on AT&T Canada.

         In March 2001 AT&T Canada applied to the CRTC to have the principles of
that decision imposed on existing municipal access agreements between AT&T
Canada and the City of Toronto. The CRTC subsequently issued a public notice to
examine the applicability of the principles of this decision on all existing
municipal agreements. A decision is not expected prior to the ultimate
resolution of the appeal.

                                    EMPLOYEES

         As at December 31, 2001, the Company had approximately 5,168 employees.
Of this total, 975 employees were union members and were covered by a collective
bargaining agreement. The union employees are presently represented by two
unions, the Canadian Auto Workers ("CAW") Local 2000 and the United Steelworkers
of America ("USWA") TC Local 1976. In connection with the construction and
maintenance of its fibre optic networks, the Company uses third-party
contractors, some of whose employees may be represented by unions covered by
collective bargaining agreements. In addition, the Company is currently being
assisted by a number of consultants.

         Historically, AT&T Canada Corp.'s relations with its unionized
employees have been positive. AT&T Canada and 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 and expire
December 31, 2003.

         On May 1, 2002 the board of directors of the Company approved a number
of cost reduction initiatives to bring the Company's cost structure in line with
current revenue. These initiatives will result in a reduction of approximately
1,000 personnel in 2002.

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.

STOCK OPTION PLAN

         The Company's Stock Option Plan (the "Plan") is the cornerstone of its
long term compensation strategy for executives. The purpose of the Plan is to
provide employees, including the Chief Executive Officer and other executive
officers, with compensation generally at a level competitive with that of
comparable organizations, and to align the interests of executives with those of
outside shareholders. In keeping with the Company's compensation strategy of
focusing the attention of its executive officers on long-term strategic
objectives, the Company provides incentives to members of the executive team
with

                                       18

<PAGE>

stock options to purchase Class B Non-Voting Shares in accordance with the
terms of the Plan and vesting provisions. The intent is to encourage those
individuals who can most affect the long-term future of the Company to direct
their efforts to increasing long-term shareholder value. Options are granted by
the Company's Board of Directors on the recommendation of the Human Resources
and Compensation Committee for the purchase of a set number of Class B
Non-voting Shares at an exercise price equal to the closing price of the
securities on the Toronto Stock Exchange on the day preceding the grant. Options
vest over a three year period, beginning one year after the date of their grant,
and expire in five years. Alternate vesting or full vesting at the date of the
grant may be granted at the discretion of the Human Resources and Compensation
Committee.

EMPLOYEE SHARE OWNERSHIP PROGRAM

         The Employee Share Ownership Plan offers all employees, other than
temporary employees, of the Company the opportunity to purchase securities of
the Company. Consistent with the Company's compensation philosophy, the program
is designed to create shareholder value and allows employees to participate in
the risk and reward of the business as the plan is linked to share price as well
as to the Company's business objectives. Employees may contribute between one to
five percent of their salary to buy units in a single stock mutual fund, the
Company's Stock Fund, which in turn holds only Class B Deposit Receipts and may
also hold certain amounts of cash. The Company contributes the equivalent of 25%
of participant contributions per quarter. The Company's contributions are in
effect made through the issuance of Class B Deposit Receipts. 200,000 Class B
Deposit Receipts have been authorized for issuance for this purpose.

                                LEGAL PROCEEDINGS

         On May 9, 2002, an oppression application was filed against the Company
and its directors by certain investment community professionals. The Company
will vigorously defend against this action which it believes is without merit
and based on groundless allegations.

         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 affect on its financial condition or result of operations.

                    INTELLECTUAL PROPERTY AND NON-COMPETITION

         AT&T Canada Corp. owns or is licensed to use certain technology and
associated intellectual property rights which relate to its services and
business.

         AT&T Canada is principally known by its corporate symbol "AT&T Canada".
The trade-marks include the trade-mark "AT&T", the family of marks including the
trade-mark "AT&T" and other secondary brands. The importance of any individual,
specific trade-mark for AT&T Canada is relative to the revenues derived from the
various services respectively associated with each of the marks. Most of these
marks are registered or the subject of pending trade-mark applications in Canada
and are used on a regular and consistent basis in relation to the services
associated with them. Trade-mark registrations are renewable at various dates in
accordance with the TRADE-MARKS ACT.

         AT&T Canada's trade-mark portfolio consists predominantly of
trade-marks owned by AT&T which are sublicensed to AT&T Canada through AT&T
Canada Enterprises Company ("Enterprises"). They are licensed by way of five
separate branding agreements which licence the marks in four separate fields of
use namely long distance services (voice and data), internet services, payphone
services and local and Centrex services. The fifth agreement amends the four
branding agreements and, among other

                                       19

<PAGE>

things, provides for the execution of new branding agreements for new services.
AT&T Canada has no right to use the trade-marks outside of its businesses in
Canada.

         The AT&T trade-marks and trade-names have also been licensed to: (1)
AT&T Canada Telecom Services for business internet services, specific secured
transaction services, consumer internet services, Centrex services, switched and
private line data and switched and private line voice local services, long
distance services and ancillary services; (2) AT&T Canada Inc. for use in its
corporate name for services associated with holding and promoting stock; and (3)
AT&T Fibre Canada Company for the operation and maintenance of a fibre optic
cable network. All licences are restricted to the territory of Canada.

         AT&T Canada also uses certain technology used in its business under
licence from AT&T. This technology is licensed through a series of written
agreements and arrangements. As of June 1999, AT&T Canada and AT&T also entered
into an agreement pursuant to which AT&T Canada may request to license certain
technology from AT&T by way of a non-exclusive grant of the right to use AT&T
technology deployed by AT&T and its subsidiaries in the United States (exclusive
of certain excluded technology). The technology licensed by AT&T Canada is
licensed solely for use in association with AT&T Canada's services and provides
for, among other things, the sublicensing of the technology to contractors,
customers and to authorized subsidiaries and for the ownership by AT&T Canada of
technology created by AT&T Canada. The technology licensed by AT&T has been
substantially integrated with that of AT&T Canada to provide a seamless network
for customers.

         Except for the original long distance services branding agreement, the
foregoing branding agreements and licences, except in limited circumstances as
provided under the Deposit Receipt Agreement, will end on the earlier of (i)
February 28, 2004; (ii) AT&T owing all or none of the shares of AT&T Canada
pursuant to the Deposit Receipt Agreement; and (iii) termination in accordance
with the terms of the licences, which include rights of Enterprises to terminate
upon certain bankruptcy and insolvency events relating to AT&T Canada. Such
events include any voluntary proceeding commenced by the licensee pursuant to
any of the BANKRUPTCY AND INSOLVENCY ACT (Canada), the COMPANIES CREDITORS
ARRANGEMENT ACT (Canada) or the WINDING UP AND RESTRUCTURING ACT (Canada), or
any other proceeding commenced under such acts which is not diligently contested
or dismissed, withdrawn or permanently stayed within 60 days of commencement.

         To the extent that local voice services, long distance services, data
services, internet services, E-business solutions and other products and
services offered or to be offered by the Company extend beyond those presently
licenced to it by AT&T, amendments to the existing licence agreements may be
required. A process was outlined as part of the 1999 Brand License Agreement to
allow AT&T Canada in certain circumstances to add to the scope of its licenses.
There are no assurances that the Company will be successful in finalizing the
terms and conditions of any such expanded licenses.

         In connection with the Arrangement, AT&T Canada and the AT&T entered
into a Non-Competition Agreement which provides that during the period ending on
the earlier of February 24, 2004 and completion of a transaction as contemplated
by the Deposit Receipt Agreement which results in AT&T and its affiliates owning
all, or, through an auction, none of the shares of AT&T Canada, neither AT&T nor
any of its affiliates would, without the consent of AT&T Canada (other than in
respect of Rogers Cantel Mobile Communications Inc. and its successors and their
affiliates), and subject to specified exceptions, engage, directly or
indirectly, in the provision of any branded services (as defined in such
agreement) in Canada or independently construct, have constructed or acquire a
telecommunications network infrastructure which is competitive in Canada to that
of AT&T Canada. AT&T Canada and AT&T also agreed to treat and cause their
affiliates to treat each other as preferred suppliers of the other's
telecommunications services, particularly in respect of the provision of
underlying telecommunications transport requirements, unless their respective
customers otherwise require, after reasonable efforts have been made to persuade
such customers to use the services of the other or such other's affiliates. Each
of AT&T Canada and AT&T also stated their intention, some as necessary to comply
with existing

                                       20

<PAGE>

contractual arrangements and subject to their respective proportional return and
non-binding practices, to enter into commercial arrangements with each other
within their respective determination, the other offered competitive rates,
quality and other terms of trade.


4.       SELECTED CONSOLIDATED FINANCIAL DATA

         The chart below identifies selected principal information since the
Company's commencement of operations in 1999 through to December 31, 2001.

<TABLE>
<CAPTION>
    YEAR ENDED
    DECEMBER 31                              2001         2000          1999
    -----------                                   -----        ---- ----
                                        (in thousands, except per share amounts)
<S>                                       <C>           <C>            <C>
    Revenue...........................    1,544,721     1,505,378      866,721
    Net Loss..........................     (733,101)     (523,207)      (5,286)
    Net Loss per Share (1) (2)........        (7.45)        (5.48)       (0.06)
    Total Assets......................    4,746,454     4,313,654    4,166,792
    Long-term Debt....................    4,672,738     3,628,465    2,763,565
    Cash Dividend per Share(1)........         0.00          0.00         0.00
</TABLE>
--------------
Notes:

(1) All per share amounts reflect a two-for-one stock split which occurred
    during fourth quarter 1999.

(2) 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. Loss per share for 1999 includes a
    one time accounting gain on the sale of an approximate 31% minority
    interest in a subsidiary to AT&T and integration costs and provision
    for restructuring which had the effect of increasing (decreasing) loss
    per share by ($5.00) and $1.18, respectively.


         The Arrangement was completed on June 1, 1999. In the second half of
1999, AT&T Canada successfully completed the majority of the integration of
MetroNet, AT&T Canada Corp. and ACC TelEnterprises. Steps to integrate people,
products, networks and systems of the companies was taken in a wide range of
areas, including rationalizing product offerings, integrating and cross-training
sales forces, interconnecting networks, initiating the migration of circuits and
lines onto AT&T Canada's facilities, and consolidating back office functions. As
a result of these integration activities, AT&T Canada incurred integration costs
and recorded a provision for restructuring and asset write-downs totalling
$157.8 million.

         The Company has not paid any dividends since its inception and does not
anticipate declaring or paying dividends in the foreseeable future, as it
intends to retain future earnings, if any, for reinvestment in its business and
payment of indebtedness. Any future determination to declare or pay dividends
will be at the discretion of the Board of Directors of AT&T Canada Inc. will be
subject to compliance with the Company's debt financing arrangements and will
depend upon the Company's financial condition, results of operations, capital
requirements and such other factors as the Board of Directors of AT&T Canada
Inc. considers relevant. The Senior Credit Facility prohibits and the indentures
governing certain of the Company's outstanding indebtedness restrict the Company
from declaring or paying dividends.

                                       21

<PAGE>

         The chart below identifies financial information concerning the twelve
quarters ending December 31, 2001.
<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................        $ (733,101)          $(164,638)    $(208,955)     $ (192,033)     $(167,475)
Loss per share (1).....................        $    (7.45)          $   (1.67)    $   (2.11)     $    (1.96)      $  (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 (1).....................        $    (5.48)          $   (1.84)    $   (1.30)     $   (1.27)       $ (1.09)
</TABLE>

<TABLE>
<CAPTION>
                                                  1999            4TH QTR '99    3RD QTR '99    2ND QTR '99     1ST QTR. '99
                                                  ----            -----------    -----------     -----------    ------------
                                                             (in thousands, except per share amounts)
<S>                                            <C>                  <C>           <C>            <C>            <C>
Revenues...............................        $  866,721           $ 347,141     $  331,307     $  147,283       $  40,991
Net Profit (Loss) for the period.......        $   (5,286)          $ (95,173)    $ (201,822)    $  373,562       $ (81,853)
Earnings (Loss) per share (1)..........        $    (0.06)          $   (1.02)    $    (2.16)    $     4.03         $  (.89)
</TABLE>

(1) All per share amounts reflect a two-for-one stock split which occurred
    during fourth quarter 1999.


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" on pages 1 to 21 of
the Annual Report to Shareholders for the year ended December 31, 2001 which
section is incorporated herein by reference. See "Additional Information" below.


6.       MARKET FOR SECURITIES

         AT&T Canada Inc.'s Class B Deposit Receipts are listed on the Toronto
Stock Exchange under the symbol "TEL.B" and on the Nasdaq National Market under
the symbol "ATTC".


7.       DIRECTORS AND OFFICERS

SHARES IN THE COMPANY

         As at May 2, 2002 the directors and executive officers, as a group,
beneficially owned, directly or indirectly, or exercised control over no Class A
Deposit Receipts and 812,780 Class B Deposit Receipts

                                       22

<PAGE>

(representing approximately 0.008% of the Class B Deposit Receipts issued and
outstanding as of May 2, 2002).

         The following is a list of the directors and executive officers of AT&T
Canada Inc. prepared as of May 2, 2002 indicating their names, positions with
the Company and municipalities of residence.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

         As at May 2, 2002, the directors and executive officers of AT&T Canada
Inc., their municipalities of residence, principal occupations and brief
biographies are set forth below. Each of the directors has been elected or
appointed to hold office until the next annual meeting of shareholders on June
18, 2002 or until his or her successor is elected or appointed.
<TABLE>
<CAPTION>
NAME AND MUNICIPALITY OF RESIDENCE        PRINCIPAL OCCUPATION
<S>                                       <C>
Purdy Crawford(1)(8)(10)(11)(12)          Counsel, Osler, Hoskin & Harcourt LLP
Toronto, Ontario
Andre Bureau(2) (11)(12)                  Counsel, Heenan Blaikie
Town of Mount Royal, Quebec
Steven B. Chisholm(3)(8)(9)(12)           Lawyer and Corporate Director
Calgary, Alberta
Lisa de Wilde(4)                          Lawyer and Corporate Director
Toronto, Ontario
Marc G. Fortier(4)(11)                    Lawyer and Corporate Director
Outremont, Quebec
Stephen H. Halperin(1)( 9)(11)            Partner, Goodmans LLP
Toronto, Ontario
Alan D. Horn(5)(8)( 9)(10)                Vice-President, Finance & Chief
Toronto, Ontario                          Financial Officer, Rogers
                                          Communications Inc.
Philip R. Ladouceur(2)(9)(10)(12)         President & COO, DataWire
Toronto, Ontario                          Communication Networks Inc.
John McLennan(1)                          Vice-Chair and Chief Executive
Toronto, Ontario                          Officer, AT&T Canada
James J. Meenan(6)(8)(9)(10)(11)          Chairman, Castek Software Factory Inc.
Toronto, Ontario
David P. Miller(5)                        Vice-President, General Counsel,
Toronto, Ontario                          Rogers Communications Inc.
D. Craig Young(7)(8)(10)(11(12)           Corporate Director
South Barrington, Illinois
</TABLE>
-----------
(1)      Nominee of the Board of Directors in lieu of AT&T pursuant to the
         Shareholders' Agreement in respect of AT&T Canada Inc.
         (the "Shareholders' Agreement")

(2)      Nominee of holders of Class B Deposit Receipts

(3)      Nominee of the Board of Directors pursuant to the Shareholders'
         Agreement

                                       23

<PAGE>


(4)      Nominee of the Board of Directors in lieu of Providence pursuant to the
         Shareholders' Agreement


(5)      Nominee of RCI pursuant to the Shareholders' Agreement


(6)      Nominee of AT&T pursuant to the Shareholders' Agreement


(7)      Nominee of Founding Investors


(8)      Member of Executive Committee


(9)      Member of Audit Committee


(10)     Member of Human Resources and Compensation Committee


(11)     Member of Corporate Governance Committee


(12)     Member of Special Committee


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

<TABLE>
<CAPTION>
NAME                          POSITION
<S>                           <C>
John T. McLennan              Vice Chairman & Chief Executive Officer
Harry W. Truderung            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
Ron Preston                   Executive Vice President, Customer Service
Henry Yip                     Executive Vice President, Network Services
Scott L. Ewart                Senior Vice President, General Counsel, Secretary
                              & Chief Privacy Officer
Judy McLeod                   Senior Vice President, Human Resources
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 AT&T Canada Inc. 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.

                                       24

<PAGE>

ANDRE BUREAU. Mr. Bureau has been a director of AT&T Canada since December 2000.
Mr. Bureau has been a member of the Quebec Bar since 1959 and is a member of the
Canadian Bar Association. Mr. Bureau joined Heenan Blaikie in 1989 as Counsel
after having served as Chairman of the CRTC. Before his CRTC appointment, he was
President & Chief Executive Officer of Cancom, a national multi-channel
satellite entertainment network. For many years, he was associated with
Quebec-based Telemedia Communications Inc., a Canada-wide national
communications company, first as Executive Vice President and later as
President. Mr. Bureau is currently Chairman of Astral Media Inc. He is Chairman
of the Board of Viewer's Choice Canada Inc., Canal Indigo and Chief Executive
Officer & Vice Chairman of the Board of TMN Networks Inc. Mr. Bureau is Director
of several Canadian corporations and organizations such as Microcell
Telecommunications Inc., The Guarantee Company of North America, Radiomedia Inc.
and Chairman of the Board of Trustees of Great Lakes Power Trust. He is also
President, Canadian Chapter, of the International Institute of Communications.

STEVEN B. CHISHOLM. Mr. Chisholm was Senior Vice President, General Counsel &
Corporate Secretary to the Board at Global Metro Networks, Inc. ("Global
Metro"), a builder of dark fibre communication networks in major centres of
business throughout Europe and the United States until September, 2001. He
joined Global Metro in October 2000 from AT&T Canada, where he served as Senior
Vice President, General Counsel and Corporate Secretary. In October 2000, Mr.
Chisholm was appointed to AT&T Canada's Board of Directors. Prior to joining
AT&T Canada, he served as Senior Vice President, General Counsel and Corporate
Secretary at MetroNet from 1997 until the Arrangement. In addition to his
responsibilities as General Counsel and Corporate Secretary, Mr. Chisholm served
on the Company's senior leadership team and executive committees. Prior to
joining MetroNet, Mr. Chisholm was a founding partner of Legge & Chisholm,
Barristers & Solicitors from its inception in 1992. Previously, Mr. Chisholm had
worked at Macleod Dixon, Barristers & Solicitors where he began his career in
1981.

LISA DE WILDE. Ms. De Wilde is a native of Winnipeg and a graduate of McGill
University (B.A. Political Science, LL.B). She has been a director of AT&T
Canada since February, 2002. Ms. de Wilde has been a member of the Law Society
of Upper Canada since 1982. Ms. de Wilde was President and Chief Executive
Officer of Astral Television Networks Inc. from January 1993 until September
2001. Ms. de Wilde has held positions with the CRTC first as Legal Counsel and
then as Director General - Cable, Pay and Specialty Services. Subsequently, she
was a partner in the law firm of Heenan Blaikie. Ms. de Wilde is a Director of
the Toronto International Film Festival and Canadian Women in Communications, is
a member of the Government of Ontario's Task Force on Competitiveness,
Productivity and Economic Progress and the Government of Canada's Canadian
Feature Film Advisory Committee. She has also served on the Board of Directors
of several Canadian organizations such as the Canadian Association of
Broadcasters, Feature Film Project/Canadian Film Centre, AV Preservation Trust
and CTAM Canada.

MARC G. FORTIER. Mr. Fortier is a lawyer and corporate director. From February,
2000 to August, 2001, Mr. Fortier was Vice President World, Energy and Services
Division, Air Liquide S.A. in Paris, France. Before that and since February,
1997, Mr. Fortier was Chairman of the Board and Chief Executive Officer of Air
Liquide Canada Inc. Mr. Fortier became a director of MetroNet in March, 1998 and
of AT&T Canada on June 1, 1999. He resigned from the Board of the Company in
2000, when he ceased to be a Canadian resident and was re-elected in December
2001, after his return to Canada. It was announced on May 10, 2002 that
effective June 6, 2002, Mr. Fortier will be President and CEO of Van Houtte Inc.
From May, 1991 to January, 1997, Mr. Fortier was Chairman of the Board,
President and Chief Executive Officer of Societe generale de financement du
Quebec. During the same period, he was Chairman of the Board of Petromont Inc.
and a director of Domtar Inc., Petresa Canada Inc. and a number of other
companies. Mr. Fortier was called to the Quebec Bar in 1970 and obtained a
Master of Business Administration from the University of Western Ontario in
1972.

STEPHEN H. HALPERIN. Mr. Halperin is a senior partner and a member of the
Executive Committee of Goodmans LLP where he chairs the corporate/securities
practice group. He has practised transactional corporate and securities law,
focusing primarily on domestic and international corporate finance and

                                       25

<PAGE>

mergers and acquisitions, both negotiated and hostile, and involving both
publicly and privately held entities, for more than 20 years. From 1993 to 1999,
Mr. Halperin was an Adjunct Professor at the University of Toronto Law School,
where he taught Advanced Corporate and Securities Law. He is a past member of
the Securities Advisory Committee of the Ontario Securities Commission.

ALAN D. HORN. Mr. Horn is the Vice President, Finance and Chief Financial
Officer of Rogers Communications Inc., Canada's national communications company
engaged in data communications, cable television, high speed internet access,
video retailing and radio and television broadcasting. Mr. Horn joined the
Rogers group of companies in 1990 as President and Chief Operating Officer of
Rogers Telecommunications Limited. A chartered accountant, Mr. Horn was a tax
partner with KPMG from 1984 to 1987. He was then the Executive Vice President of
Vector Inc., a venture capital company. He is also a member of the board of
directors of a number of private and public companies.

PHILIP R. LADOUCEUR. Mr. Ladouceur was appointed President and Chief Operating
Officer of Datawire Communication Networks Inc. in February 2002. He has served
as a Director of Datawire since January 2000. Mr. Ladouceur is also a General
Partner of Rubicon Investment Group, a leveraged buy-out firm. From July 1999 to
November 2000, Mr. Ladouceur served as Executive Chairman of the Board and CEO
of FutureLink Corp., a California based ASP Service Provider. Mr. Ladouceur
served as Chief Executive Officer and as a director of MetroNet from October
1996 to March 30, 1998 and as President of MetroNet from October 1996 to October
1997. He served as Executive Chairman of MetroNet until the merger with AT&T
Canada in June 1999. Mr. Ladouceur has extensive experience in structuring,
financing and managing corporations in the telecommunications, cable television,
information technology, broadcasting and merchant banking industries. Prior to
joining MetroNet, Mr. Ladouceur was Executive Vice President, Operations at Bell
Canada International Inc., from February 1995 to October 1996 where he led key
restructuring efforts and the formation of a major joint venture with IBM
Canada. From October 1992 to February 1995, Mr. Ladouceur was the founding
President and Chief Executive Officer of ISM Information Systems Management
(Alberta) Ltd., ("ISM") a Canadian computer and network management outsourcing
company. Mr. Ladouceur founded, and from June 1990 to October 1992 was the
Managing Director of, HDL Capital Corporation, a Toronto-based merchant bank
which specializes in business turnarounds, management buy-outs, and financing
for medium and small businesses in the telecommunications, technology, software
and retail sector. From 1986 to 1989, Mr. Ladouceur was Senior Vice President,
Finance, Chief Financial Officer and a director of Rogers Communications Inc.,
one of the largest cable, cellular and broadcasting companies in North America.
Mr. Ladouceur is past Chairman of the Competitive Telecommunications Association
of Canada. Mr. Ladouceur serves on several corporate boards, including Datawire
Communication Networks Inc. and ADExact Corporation.

JAMES J. MEENAN. Following a 30 year career with AT&T in the United States, Mr.
Meenan moved to Toronto in 1995 and over the course of the next three years,
successfully established AT&T's presence in Canada. In 1999, he concluded the $6
billion merger of AT&T Canada and MetroNet Communications, creating Canada's
only national, facilities-based, wire-line communications company, providing
long distance, local, Internet and e-commerce services. In January 2001, Mr.
Meenan retired as Vice Chair and Chief Executive Officer of AT&T Canada Corp.
and accepted the position of Chairman of the Board of Castek, a privately held
Canadian software company offering component-based solutions to the financial
services industry. Mr. Meenan is focused on enhancing the company's strategic
focus and evaluating and leading the generation of strategic partnerships,
mergers and alliances in North America and abroad. Along with his Chairmanship
at Castek, Mr. Meenan is also a member of the Board of Directors of Rogers
Wireless Services and an investor and member of the Board of Directors for
Ionex, a US-based supplier of telephone, video and data services for small and
medium sized companies in the United States.

DAVID P. MILLER. Mr. Miller is Vice-President, General Counsel and Secretary of
Rogers Wireless Communications Inc. and previously served as Vice-President and
General Counsel of Rogers Communications Inc. Prior to joining Rogers
Communications Inc. in 1997, Mr. Miller was engaged in

                                       26

<PAGE>

private practice and subsequently held the position of General Counsel of
Lavalin Inc., one of the world's largest international engineering and
construction companies. Mr. Miller graduated with B.Comm., B.C.L. and LL.B.
degrees from McGill University and was called to the Ontario Bar in 1978.

D. CRAIG YOUNG. Mr. Young is a Director of AT&T Canada and previously served as
Vice Chairman & President. Prior to his appointment as Vice Chairman &
President, which occurred at the same time as the Arrangement, Mr. Young was
President & Chief Executive Officer of MetroNet, a position he held since March
1998. Mr. Young has more than 20 years of experience as an entrepreneur and
senior executive in the telecommunications industry. Mr. Young served as
President & Chief Operating Officer of Brooks Fiber Properties Inc. (now
Brooks/WorldCom) from March 1995 to February 1998. Mr. Young previously held
positions as Vice President Sales Operations, Ameritech Custom Business
Services; Vice President Sales & Service Business and Government Services, U S
WEST Communications; Vice President/General Manager, U S WEST Information
Systems; and President of Executone Information Systems. He also serves on the
board of directors of Navigant International, Inc.

EXECUTIVE OFFICERS

JOHN T. MCLENNAN
DIRECTOR, VICE CHAIRMAN & CEO

         Mr. McLennan joined AT&T Canada as Vice Chairman & Chief Executive
Officer in May 2000 and on May 1, 2002, Mr McLennan was appointed to the Board
of Directors of AT&T Canada Inc. Prior to his appointment as Vice Chairman and
Chief Executive Officer of AT&T Canada, 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 United States, with a
primary focus on telecommunications. From 1994 to 1997, Mr. McLennan was
President & Chief Executive Officer of Bell Canada and from 1993 to 1994 Mr.
McLennan was President of Bell Ontario. From 1990 to 1993, Mr. McLennan served
as President & 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 & Chief Executive Officer at Cantel
AT&T Wireless. Mr. McLennan was an Executive Vice President of Mitel
Communications Inc. during its first eight years of existence. Mr. McLennan is
Chancellor of University College of Cape Breton and Chairman of the Cape Breton
Growth Fund. Mr. McLennan is also a member of the Board of Directors of
Hummingbird Communications, Platform Computing Inc. and Amdocs Limited.

HARRY W. TRUDERUNG
PRESIDENT & CHIEF OPERATING OFFICER

         Mr. Truderung joined AT&T Canada as President & Chief Operating Officer
in May 2000. Prior to his appointment to his current position, Mr. Truderung was
President of Telus Mobility, the cellular division of Telus Corporation Inc.
("Telus"). From August 1997 to October 1999 he also served as Executive Vice
President of Telus. Prior to this position, Mr. Truderung held a wide range of
leadership positions in Telus in the areas of sales, marketing, engineering and
venture capital.

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 as Senior Vice President, Sales. Immediately prior to joining AT&T
Canada, he was Senior Vice President of Sales at Telus. Prior to 1999, he held a
series of executive level sales and marketing positions, including, from July
1998 to July 1999, Vice President,

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Sales and Marketing at BCE Media Inc., from October 1996 to June 1998, Vice
President, Accounts at Bell Canada and from September 1995 to September 1996,
Vice President, Sales and Marketing at Bell Canada International.

MIKE KOLOGINSKI
EXECUTIVE VICE PRESIDENT, MARKETING

         Mr. Kologinski is Executive Vice President, Marketing of AT&T Canada, a
position he has held since July 2001. Prior to his appointment to his current
position, Mr. Kologinski was Senior Vice President, Internet & E-Business
Services for AT&T Canada, a position he assumed in October 2000. Prior to this
he was Vice President, Sales & Marketing, for the Internet & E-Business Services
division of AT&T Canada and its predecessor Netcom Canada. Mr. Kologinski was a
founding member of Netcom Canada and from 1995 to 1999, he held the position of
Vice President, Sales Marketing at Netcom Canada. Prior to this, Mr. Kologinski
held a series of 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.

DAVID A. LAZZARATO
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

         Mr. Lazzarato joined AT&T Canada as Executive Vice President & 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 & Chief Financial Officer of BCE Mobile Communications ("Bell
Mobility"), Canada's largest wireless provider, and from 1994 to 1997, he was
Vice President & Controller of BCE Inc. Prior to that, Mr. Lazzarato held the
position of Senior Vice President Finance & 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.

RON PRESTON
EXECUTIVE VICE PRESIDENT, CUSTOMER SERVICE

         Mr. Preston is Executive Vice President, Customer Service of AT&T
Canada. He previously held the position of Senior Vice President, Customer
Service. Prior to this appointment, Mr. Preston was Senior Vice President,
Network for AT&T Canada, a position he held from January 2000. Mr. Preston
became Senior Vice President, Networks Operations & Technology of MetroNet in
October 1997, and prior to that, time served as Vice President, Network
Operations of MetroNet from May 1997 to October 1997. Mr. Preston joined
MetroNet from Bell Canada, Canada's largest ILEC, where he was most recently
Vice President, Operations & Technology Solutions. From January 1995 to October
1996, Mr. Preston was Vice President, Long Distance, responsible for the
management of Bell Canada's long distance and data markets. Mr. Preston has over
27 years of experience with Bell Canada in network operations, network planning
and provisioning, marketing, technology development and sales support. Mr.
Preston is a Professional Engineer and holds a Bachelor of Applied Science
degree from the University of Toronto.

HENRY YIP
EXECUTIVE VICE PRESIDENT, NETWORK SERVICES

         Mr. Yip joined AT&T Canada as 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 ("Telus"), Jones Lightwave Ltd. and Bell Canada.

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Prior to his appointment at AT&T Canada, he spent five years at Telus holding
various executive positions in the Operations area. He is on the board of
several organizations including Global Thermoelectric Inc. and 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.

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

         Mr. Ewart became Senior Vice President, General Counsel & Secretary of
AT&T Canada Inc. in October 2000 and, in March 2001, he became Chief Privacy
Officer of AT&T Canada Inc. 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 from October 1993 to
June 2000. Prior to moving to England, he was Vice President & General Counsel
for Coca-Cola Canada. He was Securities Counsel for Nortel from 1985 to 1989.
Prior to this, he was in private practice. Mr. Ewart is a Fellow of the
Institute of Directors, London, England.

JUDY MCLEOD
SENIOR VICE PRESIDENT, HUMAN RESOURCES

         Ms. McLeod is Senior Vice President, Human Resources of AT&T Canada, a
position she has held since May 1996. In her position, Ms. McLeod is responsible
for compensation, benefits, industrial relations, change management,
recruitment, training, leadership development and internal communications. Prior
to her current role, Ms. McLeod was Vice President, Consumer Operations of
Unitel Communications Inc., a business launched with the opening of long
distance competition in Canada in 1992 and a predecessor company of AT&T Canada
Corp. Ms. McLeod has also held senior positions in Marketing, Customer Service &
Information Technology at AT&T Canada Corp. and its predecessors, as well as at
Bell Canada.

CHRIS PEIRCE
SENIOR VICE PRESIDENT, REGULATORY AND GOVERNMENT AFFAIRS

         Mr. Peirce is Senior Vice President of Regulatory & Government Affairs
at AT&T Canada. 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. Prior to joining AT&T Canada, Mr.
Peirce was Vice President, Strategic Planning with the Canadian Association of
Petroleum Producers (CAPP) from December 1995 to June 1999. 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 United States.
From December 1993 to December 1995, 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. From 1983
to 1993, Mr. Peirce practiced law in Edmonton, Alberta.

MURIEL PRENTICE
SENIOR VICE PRESIDENT & CHIEF INFORMATION OFFICER

         Ms. Prentice is Senior Vice President and Chief Information Officer of
AT&T Canada, 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. Ms. Prentice
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. Prior to joining AT&T

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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 & CORPORATE DEVELOPMENT

         Mr. Prevost is Senior Vice President, Strategy & Corporate Development
of AT&T Canada. Prior to his appointment to his current position, which occurred
coincident with the Arrangement, Mr. Prevost was Vice President, Strategy &
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 &
Business Development at AT&T Canada Enterprises. Prior to joining AT&T Canada
Corp., Mr. Prevost was a senior consultant with Monitor Company for four years.
Prior to joining Monitor, Mr. Prevost worked in the US mutual fund industry, as
well as drafting the original business plan for a start-up, software development
arm of Hewlett-Packard (Canada). Mr. Prevost holds a Bachelor of Commerce (with
Distinction) from the University of Calgary and a Masters degree from Harvard
Business School.

BROCK ROBERTSON
SENIOR VICE PRESIDENT, TREASURY & INVESTOR RELATIONS

         Mr. Robertson is Senior Vice President, Treasury & Investor Relations
of AT&T Canada, a position he assumed in October 2000 after joining the Company
from Call-Net/Sprint Canada. His prior positions at Call-Net/Sprint Canada
include Vice President Treasury and Investor Relations, which he held from
October 1999 to September 2000 and Vice President Treasury, which he held from
September 1993 to September 1999. 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 Bachelors
Degree from the University of Waterloo in Ontario.

DON WELHAM
VICE PRESIDENT, CONTROLLER

         Mr. Welham was appointed Vice President, Controller of AT&T Canada Inc.
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 & Internal Audit. Prior to joining AT&T
Canada, Mr. Welham worked for Price Waterhouse in Toronto and in Cape Town and
Johannesburg, South Africa.


8.       ADDITIONAL INFORMATION

         Additional financial information is provided in the consolidated
financial statements of AT&T Canada Inc. for the years ended December 31,
2001 and 2000 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") contained on pages 1 to 86 inclusive
in the Annual Report to the Shareholders of the Company for the year ended
December 31, 2001. These consolidated financial statements and the
accompanying MD&A were included in the Annual Report which was filed with the
United States Securities and Exchange Commission on May 15, 2002.

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         Additional information including directors' and officers' remuneration
and indebtedness, principal holders of the issuer's securities, options to
purchase securities and interests of insiders in material transactions, where
applicable, is contained in the Company's Management Information Circular to be
dated May 10, 2002 issued in connection with the Annual Meeting of AT&T Canada
Inc.'s shareholders to be held on June 18, 2002.

         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

                  (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.


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