---

**Exhibit 99.1**



Tembec Inc.

Annual Information Form

December 16, 2013For the
fiscal year ended September 28, 2013

---

|Annual Information Form
|-----------------------

TABLE OFCONTENTS

ITEM 1 -
    DATE OF ANNUAL
      INFORMATION FORM
    5ITEM 2 -
    CORPORATE STRUCTURE
    5ITEM 3 -
    GENERAL DEVELOPMENT
      OF THE BUSINESS
    73.1
    BUSINESS OVERVIEW
    73.2
    THREE-YEAR HISTORY
    73.3
    TRENDS
    10ITEM 4 -
    NARRATIVE DESCRIPTION
      OF THE BUSINESS
    114.1
    PRINCIPAL OPERATIONS
    114.1.1
    FOREST PRODUCTS SEGMENT
    114.1.2
    SPECIALTY CELLULOSE PULP SEGMENT
    154.1.3
    PAPER PULP SEGMENT
    164.1.4
    PAPER SEGMENT
    174.2
    ENVIRONMENTAL AND
      SOCIAL POLICIES
    184.3
    ENERGY
    204.4
    RESEARCH AND
      DEVELOPMENT
    214.5
    COMPETITION
    214.6
    RISK FACTORS
    21ITEM 5 -
    DIVIDENDS
    
    29ITEM 6 -
    GENERAL DESCRIPTION
      OF CAPITAL STRUCTURE
    306.1
    GENERAL DESCRIPTION OF CAPITAL
      STRUCTURE
    306.2
    RATINGS
    30ITEM 7 -
    MARKET FOR SECURITIES OF THE
      CORPORATION
    31ITEM 8 -
    DIRECTORS AND
      OFFICERS
    318.1
    INFORMATION CONCERNING DIRECTORS
    318.1.1
    INDEPENDENCE
    358.2
    AUDIT COMMITTEE
    358.2.1
    GENERAL
    358.2.2
    CHARTER OF THE AUDIT COMMITTEE
    358.2.3
    RELEVANT EDUCATION AND
      EXPERIENCE OF THE AUDIT COMMITTEE MEMBERS
    368.2.4
    EXTERNAL AUDITOR SERVICE FEES
    378.2.5
    POLICIES AND PROCEDURES FOR THE
      ENGAGEMENT OF NON-AUDIT SERVICES
    378.3
    INFORMATION CONCERNING NON-DIRECTOR
      OFFICERS
    388.4
    CEASE TRADE ORDERS,
      BANKRUPTCIES, PENALTIES AND SANCTIONS
    38ITEM 9 -
    LEGAL PROCEEDINGS
    40ITEM 10 -
    TRANSFER AGENT AND
      REGISTRAR
    40ITEM 11 -
    MATERIAL CONTRACTS
    40ITEM 12 -
    INTERESTS OF EXPERTS
    42ITEM 13 -
    ADDITIONAL INFORMATION
    43DEFINITIONS
    43SCHEDULE A AUDIT COMMITTEE CHARTER
    45


---

|Annual Information Form
|-----------------------

DOCUMENTS INCORPORATED BY REFERENCE

CERTAIN SPECIFICALLY IDENTIFIED PAGES OF THE AUDITED
CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 28, 2013
(THE 2013 FINANCIAL STATEMENTS) AND THE MANAGEMENTS DISCUSSION AND ANALYSIS
DATED NOVEMBER29, 2013 (THE 2013 MD&A), FILED WITH THE SECURITIES
COMMISSION OR SIMILAR AUTHORITY IN EACH OF THE PROVINCES OF CANADA, ARE
INCORPORATED BY REFERENCE INTO AND FORMAN INTEGRAL PART OF THIS ANNUAL
INFORMATION FORM (THE AIF).

GLOSSARY

Unless otherwise noted or the context otherwise indicates,
references to the Corporation in this AIF are to Tembec Inc. References
to Tembec are to, as the context may require, either the Corporation or
Former Tembec, as defined below, or the Corporation or Former Tembec together
with one or more of their respective subsidiaries (the Subsidiaries),
affiliates and its interests in joint ventures and other entities. Reference to
Tembec Industries is to Tembec Industries Inc., a wholly-owned
subsidiary of the Corporation. In addition, unless otherwise defined herein,
certain terms are defined in the Definitions section of this AIF. All dollar
figures are in Canadian dollars unless stated otherwise.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this AIF include
forward-looking statements within the meaning of securities laws. Such
statements relate, without limitation, to the Corporations or managements
objectives, projections, estimates, expectations or predictions of the future
and can be identified by words such as may, will, could, anticipate,
estimate, expect and project, the negative or variation thereof, and
expressions of similar nature. Forward-looking statements are based on certain
assumptions and analyses made by the Corporation in light of its experience,
information available to it and its perception of future developments. The
forward-looking statements contained in this AIF reflect the Corporations
expectations as of the date hereof and are subject to change after such date.
The Corporation disclaims any intention to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise,
unless required by applicable securities legislation.

Such statements are subject to a number of risks and
uncertainties, including, but not limited to:

| | The demand and prices for the products that
      Tembec sells;                                               
| | --------------------------------------------------------------------------------------------------------------
| | Fluctuations in the exchange rate of the
      Canadian dollar to the U.S. dollar and to the euro;            
| | Raw material availability and prices;                                                                         
| | Energy availability and costs;                                                                                
| | Labour availability and labour disruptions;                                                                   
| | The effect and enforcement of environmental and
      other governmental regulations;                         
| | Levels of capital expenditures required to
      maintain and upgrade processes;                              
| | Fluctuations in export taxes and/or volume
      restrictions imposed on lumber exported to the United States;
| | Debt service requirements;                                                                                    
| | Performance of pension fund assets;                                                                           
| | Scope of insurance coverage; and                                                                              
| | First Nations' land claims.                                                                                   

Many of these risks are beyond the control of the Corporation
and, therefore, may cause actual actions or results to materially differ from
those expressed or implied herein. In addition, other risks could adversely
affect Tembec and it is not possible to predict or assess all risks. Tembecs
actual results, performance or achievement could differ materially from those
expressed in, or implied by, these forward-looking statements and, accordingly,
no assurance can be given that any of the events anticipated by the
forward-looking statements will occur, or if any of them do so, what benefits,
including the amount of proceeds, Tembec will derive from them. Except as otherwise indicated, forward-looking statements
do not take into account the effect that transactions or non-recurring or other
special items announced or occurring after the statements are made may have on
Tembecs business. Such statements do not, unless otherwise specified by Tembec,
reflect the impact of dispositions, sales of assets, monetizations, mergers,
acquisitions, combinations or transactions, asset write-downs or other charges
announced or occurring after forward-looking statements are made. The financial
impact of these transactions and non-recurring and other special items can be
complex and depends on the facts particular to each of them, and cannot be
expressed in a meaningful way or in the same way Tembec presents known risks
affecting its business.

|3
|-

---

|Annual Information Form
|-----------------------

IFRS REPORTING

Effective September 26, 2010, the Corporation fully adopted
International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB) as the basis for preparation of
financial information and accounting.

NON-IFRS FINANCIAL MEASURES

The following summarizes non-IFRS financial measures utilized
in the 2013 MD&A. As there is no generally accepted method of calculating
these financial measures, they may not be comparable to similar measures
reported by other companies. Adjusted EBITDA refers to earnings before interest,
income taxes, depreciation, amortization and other items. Since the Corporation
excludes other items such as gains and losses on significant asset disposals,
restructuring charges and custodial costs for permanently idled facilities, it
differs from EBITDA. Adjusted EBITDA does not have any standardized meaning
according to IFRS. The Corporation defines adjusted EBITDA as sales less cost of
sales and selling, general and administrative expenses, meaning it represents
operating earnings before depreciation, amortization and other items. The
Corporation considers adjusted EBITDA to be a useful indicator of the financial
performance of the Corporation, the business segments and the individual
business units. The most comparable financial measure is operating earnings or
loss. A reconciliation of operating earnings to the Corporation's definition of
adjusted EBITDA is provided in the 2013 MD&A.

|4
|-

---

|Annual Information Form
|-----------------------

TEMBEC INC.ANNUAL INFORMATION FORM

|ITEM 1 - | DATE OF ANNUAL INFORMATION FORM
|-------- | -------------------------------

This AIF is dated as of December 16, 2013. Except as otherwise
indicated, the information contained in this AIF is stated as at September 28,
2013.

|ITEM 2 - | CORPORATE STRUCTURE
|-------- | -------------------

On February 29, 2008, the former Tembec Inc. (Former
Tembec), completed a recapitalization transaction (the
Recapitalization).

On January 16, 2008, a new entity, Tembec Arrangement Inc., was
incorporated under the Canada Business Corporations Act to carry on
business as of February 29, 2008 under the name of Tembec Inc. As part of the
Recapitalization, Former Tembec Inc. became Tembec Holdings Inc. and Tembec
Arrangement Inc. changed its name to Tembec Inc. Former Tembec was dissolved
effective December 8, 2010. Additional information relating to the
Recapitalization may be found on SEDAR at www.sedar.com. In this AIF, all references made to
Tembec Inc. or to the Corporation refer to this new Tembec Inc. incorporated on
January 16, 2008, unless specified otherwise. References to Tembec refer to
the Corporation or Former Tembec together with one or more of their respective
subsidiaries.

The Corporations head office is located at Suite 1050, 800
René-Lévesque Blvd. West, Montreal, Québec, H3B 1X9, telephone: 514-871-0137.
Its website address is www.tembec.com.

The chart below depicts Tembecs principal facilities by
industry segment as at the date of this AIF and, where appropriate, the
Subsidiaries or affiliates that own substantially all of the assets of such
operating facilities.

5


---

|Annual Information Form
|-----------------------

CORPORATEORGANIZATIONCHART



|6
|-

---

|Annual Information Form
|-----------------------

|ITEM 3 - | GENERAL DEVELOPMENT OF THE BUSINESS
|-------- | -----------------------------------

|3.1 | BUSINESSOVERVIEW
|--- | ----------------

Tembec is a forest products Company with operations principally
located in Canada and France. Its business segments are forest products,
specialty cellulose pulp, paper pulp and paper.

Tembec can currently produce approximately 880 million board
feet of lumber, 310,000 tonnes of specialty cellulose, 805,000 tonnes of paper
pulp and 420,000 tonnes of paper. A breakdown of production capacities by
operating facility is included in the Segment Review section of the 2013
MD&A. For the fiscal year ended September 28, 2013, Tembec had sales of $1.5
billion, adjusted EBITDA of $98 million, operating earnings of $29 million and a
net loss of $34 million. Tembecs total assets at that date were $1 billion and
it employed approximately 3,500 people. The segmented results and the breakdown
of sales of the Corporations products by geographic areas are included in the
Corporations 2013 Financial Statements.

|3.2 | THREE-YEARHISTORY
|--- | -----------------

The following summarizes major events that have occurred over
the past three years:

Forest Products Segment

In Fiscal 2011, 2012 and 2013,Tembec incurred a series
of production curtailments and shutdowns, ranging from a few weeks to indefinite
periods of time, at various sawmill and engineered wood facilities. These
production curtailments and shutdowns were due to several factors, including low
product pricing resulting from low demand, the high relative value of the
Canadian dollar versus the U.S. dollar, the internal requirement for by-product
chips and the related need to manage inventory levels and working capital.

In Fiscal 2011, Tembec permanently closed its sawmill in
Taschereau, Québec. The facility had been idle since October 2009. The majority
of the log supply was reallocated to Tembecs La Sarre and Bearn sawmills. In
Fiscal 2013, Tembec sold the sawmill located in Taschereau, Québec, for nominal
net proceeds.

In Fiscal 2012, Tembec sold its Toronto (Ontario) hardwood
flooring plant assets, as well as its Muskoka and Vintage brands, for proceeds
of $13 million and closed its hardwood flooring plant located in Huntsville,
Ontario.

In Fiscal 2012, Tembec sold its Elko and Canal Flats sawmills
located in British Columbia and the associated Crown tenures, which consisted of
approximately 1.1 million cubic meters of combined Crown, private land and
contract annual allowable cut, for proceeds of $66 million.

|7
|-

---

|Annual Information Form
|-----------------------

Specialty Cellulose Pulp Segment

In Fiscal 2011, demand for specialty cellulose pulp improved
and remained favorable throughout fiscal 2012 and the mills had no market
related downtime. In Fiscal 2013, both mills operated as planned and no
production curtailments were taken for market conditions. However, demand for
specialty grades was lower and as a result the mills operated at a reduced rate,
producing 16,700 fewer tones than in Fiscal 2012.

In Fiscal 2012, Tembec inaugurated a new steam turbine at its
Tartas mill in France. The green energy investment cost $21 million and
generated significant benefits in terms of energy production, environmental
performance and reduced costs for the Tartas mill.

At the Temiscaming specialty cellulose mill, the Corporation is
making an energy investment of $235 million for the installation of a high
pressure liquor recovery boiler and an electrical turbine, which will result in
the production of an additional 35 megawatts of electricity on average. The
Corporation entered into a Power Purchase Agreement with Hydro Québec as part of
the investment. Part of the Project will be financed with $132.8 million of the
new debt, which consists of loans for an aggregate amount of $92.8 million from
Investissement Québec and a $40 million loan from IPD. The completion of the
boiler portion of the project is scheduled for May 2014 and the start-up of the
turbine should occur in October 2014. Tembec anticipates that the Temiscaming
specialty cellulose project will improve annual adjusted EBITDA by approximately
$48 million. The improvement will include approximately $28 million of
incremental electricity revenues, $7 million of operating and maintenance cost
reduction and $13 million of productivity and margin enhancements associated
with the production increase of 15,000 tonnes of specialty pulp per year. As of
Fiscal 2013 year end, Tembec has spent $137 million on the Project as defined
hereinafter, which has a total estimated cost of $235 million. Tembec has
utilized a total of $60 million of the previously noted $132.8 million of
project financing. Of the remaining $98 million to be spent, $73 million will be
funded by the remaining Project financing and $25 million from the Tembecs
internally generated cash flow.

Paper Pulp Segment

In Fiscal 2011, the unionized employees at Tembecs High Yield
pulp mill in Matane, Québec, went on strike following a breakdown in labour
discussions. Consequently, production activities at the pulp mill were
interrupted and resulted in 127 days of downtime before the mill resumed
operations in mid-September 2011. Total lost annual production was approximately
81,400 tonnes.

In Fiscal 2012, Tembec completed construction of a new
anaerobic treatment facility to produce methane biogas and reduce the use of
fossil fuels at its high-yield pulp mill in Matane, Québec. Funding for the
investment was provided mainly by the Government of Canada with $19.7 million
and the Government of Québec with $6.3 million. The overall project represents a
total gross investment of $29 million - $26 million for the anaerobic facility
and $3 million for the installation of the new electric boiler.

In Fiscal 2012, due to continuing low product prices and the
operations relative cost, the Chetwynd high yield pulp mill was indefinitely
idled. This mill has a rated annual capacity of 240,000 tonnes. Additionally,
during the first half of Fiscal 2012, market-related production curtailments
totaling 27,000 tonnes were taken at the Matane and Temiscaming mills. There was
no market related downtime taken at either mill in Fiscal 2013.

The NBSK pulp mill located in Skookumchuck, BC had no market
related downtime in Fiscal 2011. In Fiscal 2012, the mill absorbed 17 days of
unplanned downtime to repair its recovery boiler. In Fiscal 2013, the pulp mill
had no market related downtime until it was sold in mid-May 2013. The selling
price was $97 million, including $29 million of working capital.

|8
|-

---

|Annual Information Form
|-----------------------

Paper Segment

At the end of Fiscal 2011, the previously idled paper machine
#3 at Kapuskasing, Ontario newsprint mill was deemed to be permanently shut down
and consequently the production capacity of this segment was reduced by 90,000
tonnes. The mill has been operating two machines since that time.

In Fiscal 2012, Tembec sold its newsprint mill and related
assets located in Pine Falls, Manitoba, for nominal net proceeds. The mill had
been idle since September 2009.

The coated bleached board mill no market related downtime in
2011, 2012 and 2013.

Corporate

In Fiscal 2012, Tembec Industries issued an additional US $50
million in aggregate principal amount of 11.25% senior secured notes due in
December 2018 (Additional Notes), bringing the aggregate principal
amount of 2018 Senior Secured Notes issued by Tembec Industries to US$ 305
million. The Additional Notes were sold in a private offering to qualified
institutional buyers as defined in Rule 144A under the Securities Act, and
outside the United States in reliance on Regulation S under the U.S. Securities
Act of 1933 (the Securities Act). In September 2012, Tembec Industries
completed its exchange offer to exchange up to US $50 million in aggregate
principal amount of 11.25% Senior Secured Notes due 2018 registered under the
Securities Act, for any and all of its outstanding US $50 million Additional
Notes, which were issued in transactions exempt from registration under the
Securities Act. This exchange offer followed an undertaking by Tembec Industries
to file an exchange offer registration statement with the U.S. Securities and
Exchange Commission with respect to the Additional Notes issued in February 2012
to allow for the notes to be sold without restrictions on transfer. The proceeds
from the offering, together with cash on hand, were used for general corporate
purposes, as additional liquidity to support Tembecs capital expenditure
initiatives and to pay fees and expenses related to the offering.

The 2018 Senior Secured Notes are senior secured obligations of
Tembec Industries, secured by a first priority lien on certain of the property
and assets of Tembec Industries and certain subsidiaries of the Corporation,
other than receivables, inventory and certain intangibles upon which the note
holders have a second priority lien. The 2018 Senior Secured Notes are
guaranteed by the Corporation and certain of the other Corporations
subsidiaries.

In Fiscal 2011, the Corporation (as Guarantor), and
Tembec Industries, Tembec Enterprises Inc., A.R.C. Resins Corporation and Tembec
General Partnership (as Borrowers), entered into a financing agreement
with GE Canada Finance Holding Company and a syndicate of lenders (ABL
Lenders) for a revolving credit facility of $200 million (ABL
Facility) maturing on March 4, 2016 secured by a first priority charge over
receivables and inventory of the Borrowers. Interest is based on the prime rate
or the bankers acceptance rate, as the case may be. As at September 28, 2013,
the amount available under this facility was $120 million, amount of which $53
million was drawn and $56 million was reserved for letters of credit. In April
2011, the Ontario Court of Appeal rendered a decision in the restructuring
proceedings involving Indalex Limited under the Companies Creditors
Arrangement Act(CCAA).The Court of Appeal held that
defined benefit pension plan deficiency claims had priority over security held
by debtor-in-possession (DIP) lenders in the context of a sale made under a CCAA
proceeding. In the first quarter of Fiscal 2013, the agent for the ABL lenders
syndicate had expressed concern regarding their security position on collateral
related to Ontario operations. In light of the uncertainty surrounding the
decision of the Ontario Court of Appeal, the ABL agent had requested that the
Corporation refrain from making any further draws or utilization of the ABL
Facility until such priority issue is dealt with by the Supreme Court of Canada.
In February 2013, the Supreme Court of Canada overturned the Ontario Court of
Appeals decision. The Supreme Court of Canadas decision has led to a
satisfactory resolution of potential security issues regarding the Corporations
Ontario collateral. As a result, full access to the ABL Facility was effectively
restored. In Fiscal 2013, the Borrowers and the Guarantor on one hand and the
ABL Lenders on the other hand agreed to amend and extend the ABL Facility by one
year. The maturity date of the Facility is set to expire on March 4, 2017. Tembec also negotiated a reduction of
the aggregate resolving loan commitments from $200 million to $175 million and
related adjustments to certain thresholds due to a reduction in the number of
mills it operates.

|9
|-

---

|Annual Information Form
|-----------------------

The Corporations French operations are supported by
receivable factoring agreements. As such, the borrowing base fluctuates
periodically, depending on shipments and cash receipts. As at September 28,
2013, the amount available under such agreements was $28 million, of which $4
million was drawn.

In Fiscal 2012, Tembec, Tembec Industries Inc. and Tembec
Energy L.P. entered into a $75-million loan (the IQ Loan) with
Investissement Québec (IQ), a governmental agency, which will be used
to finance a portion of the total cost of the project to upgrade Tembecs
specialty cellulose manufacturing facility in Temiscaming, Québec which was
initially estimated at $190 million (the Project) but revised to $235
million in Fiscal 2013. The loan is secured by a second ranking charge over the
Projects assets. Tembec has also granted to Investissement Québec a five-year
option starting on the first loan disbursement date to acquire 3 million common
shares of Tembec at a price of $7 per share.

In Fiscal 2013, Tembec, Tembec Industries Inc. and Tembec
Energy L.P. entered into an additional loan in the amount of $17.8 million with
IQ (Additional IQ Loan). The Additional IQ Loan will bear interest at
the same rate as that applicable under the initial $75 million loan entered into
in Fiscal 2012. The loan is secured by a second ranking charge over the
Projects assets. Tembec has also agreed to grant a five year option to IQ to
subscribe for 712,000 common shares of the Corporation at a premium of 30% over
the average trading price of the shares over the five business days prior to the
issuance of the option. The option will be granted on the date of the first
advance under the Additional IQ Loan.

In Fiscal 2012, Tembec Energy L.P. entered into a $30 million
loan (IPD Loan) with Integrated Private Debt Fund III LP
(IPD), which will be used to finance the acquisition of the boiler and
the turbine required in connection with the Project. Tembec intervened to the
IPD Loan to guarantee all obligations of Tembec Energy L.P. thereunder. The IPD
Loan is secured by a first ranking charge over the Projects assets.

In Fiscal 2013,Tembec Energy L.P. has entered into an
amended and restated credit agreement (the Restated Credit Agreement)
with IPD, as Agent for the Projects senior lenders, increasing its credit
facility by $10 million (Increased IPD Facility). The Increased IPD
Facility will be subject to the current general terms and conditions of the
credit facility with IPD. The Increased IPD Facility will be reimbursed in
blended monthly instalments over a period of eight years beginning in November
2014 with a balloon payment to be repaid in October 2022.

Other Developments

In Fiscal 2011, Tembec completed the sale of its hydro-electric
generating assets which have a capacity of approximately 7.4 megawatts, located
in Smooth Rock Falls, Ontario to Gemini-SRF Power Corporation for a total
consideration of $16.5 million.

In Fiscal 2012, Tembec Energy L.P. entered into a long term
power purchase contract with Hydro Québec, acting through its Hydro Québec
Distribution Division. The agreement will allow Tembec to sell to Hydro Québec,
for a 25 year term, up to 50 megawatts of the electricity generated by a new
turbine to be installed at the Temiscaming site as part of the Project.

|3.3 | TRENDS
|--- | ------

Reference is made to the Segment Review section of the 2013
MD&A.

|10
|--

---

|Annual Information Form
|-----------------------

|ITEM 4 - | NARRATIVE DESCRIPTION OF THE BUSINESS
|-------- | -------------------------------------

|4.1 | PRINCIPALOPERATIONS
|--- | -------------------

Tembecs business is centered on the production and sale of
forest, pulp and paper products. The manufacturing assets of Tembec are located
primarily in Canada, with a fairly large presence in the eastern part of the
country, namely, Northeastern Ontario and Northwestern Québec. The lumber and
paper businesses are North American in nature and Tembecs assets in these
segments are located in this market. The pulp businesses are more global in
nature, with Europe and China being the largest consumers. One specialty
cellulose pulp mill is located in France. The other four pulp mills are located
in Canada.

Tembec has approximately 3,500 employees of which 2,700 are
covered by collective bargaining agreements. At the end of Fiscal 2013, there
were 7 agreements covering 26 employees that had expired. During Fiscal 2014,
six (6) collective agreements covering approximately 875 employees will expire.
The remaining contracts expire at various dates up to January 2019.

The following sections provide specifics in relation to each of
Tembecs principal business segments.

|4.1.1 | Forest Products Segment
|----- | -----------------------

The Forest Products Segments principal activity is focused on
the production of SPF lumber. It also produces small amounts of Engineered and
Specialty Wood products. For the fiscal year ended September 28, 2013, the
Forest Products Segment generated consolidated sales of $354 million as compared
to $348 million in Fiscal 2012, adjusted EBITDA of $17 million as compared to a
negative adjusted EBITDA of $16 million in Fiscal 2012 and operating earnings of
$8 million as compared to operating loss of $4 million in Fiscal 2012. The
Forest Products Segments annual sales accounted for approximately 23% of
Tembecs total consolidated sales in Fiscal 2013 as compared to 21% in Fiscal
2012.

|11
|--

---

|Annual Information Form
|-----------------------

The following table summarizes the annual operating levels of
each operating facility by product group:

SPRUCE, PINE, FIR LUMBERLocation and Product
    
    MBFStud LumberLa Sarre, QC
    
    135,000Senneterre, QC
    
    100,000Cochrane, ON
    
    110,000Kapuskasing, ON
    
    105,000Random LumberHearst, ON
    
    160,000Chapleau, ON
    
    135,000Bearn, QC
    
    110,000Finger Joint LumberCranbrook, BC
    
    25,000880,000SPECIALTY WOODLocation and Product
    
    MBFHardwood Lumber - Huntsville, ON
    
    30,000ENGINEERED WOODLocation and ProductEngineered Finger Joint LumberMBFLa
      Sarre, QC
    
    60,000Kirkland
      Lake, ON
    
    30,00090,000


Products and Markets

The Softwood (SPF) lumber sawmills produce various types,
species and grades of lumber which are used primarily for residential and
commercial construction. Higher value SPF lumber products include J-Grade,
TemPlusTM and TemSelectTM and machine stress rated (MSR) grades. Hardwood lumber
is used in a wide variety of applications, including furniture, flooring and
specialty residential and commercial applications. In addition, the Forest
Products Segment produced and shipped approximately 870,000 tonnes of wood chips
in Fiscal 2013, approximately 67% of which were directed to Tembecs pulp and
paper facilities.

The SPF lumber industry is subject to both cyclical and
seasonal fluctuations in demand, which can lead to volatility in prices. North
American solid wood products demand is influenced by the general level of
economic activity, consumer confidence and interest rates. All of the above
impact on housing construction starts, which is generally regarded as the best
indicator of lumber demand. Total North American lumber demand in 2013 was
estimated at 49 billion board feet, with U.S. demand of approximately 40 billion
board feet and the balance being consumed in Canada. U.S. producers currently supply 29
billion board feet, leaving a U.S. domestic shortfall of approximately 11
billion board feet. Canadian producers sold a total of 26 billion board feet,
shipping 11 billion board feet to the U.S. and exporting 6 billion board feet
outside North America. The remaining 9 billion board feet was consumed
domestically in Canada. Tembecs production capacity represents approximately 1%
of North American SPF lumber capacity of 72 billion board feet.

|12
|--

---

|Annual Information Form
|-----------------------

The Forest Products Segment business fosters a highly
diversified customer base. Products are sold by Tembecs own internal sales
force directly to large retailers, industrial end-users and distributors. Tembec
markets most of its solid wood products in North America. In Fiscal 2013, 53% of
Tembecs consolidated sales occurred in Canada and 47% in the United States.

As a result of the significant dependence on the U.S. market,
Tembecs forest products competitiveness is heavily influenced by the relative
strength of the Canadian dollar versus the U.S. dollar. Tembec competes directly
with other Canadian and U.S. producers of SPF lumber. While selling prices,
product quality and customer service are important factors affecting
competition, other factors such as fibre costs, foreign exchange rates and the
2006 Softwood Lumber Agreement (SLA) also have an impact on Tembecs
competitive position. The SLA, which came into force on October 12, 2006,
requires Canadian exporters to the U.S to pay an export tax which varied
inversely with the price of lumber. Effective October 12, 2006, Tembecs Québec
and Ontario sawmills became subject to a combination of export taxes and volume
restraints or quotas that vary depending on the option selected by individual
Canadian provinces. Tembecs Eastern Canadian sawmills located in Ontario were
subject to an average export tax of 1.3% in fiscal 2013. Tembecs Québec
sawmills were subject to an average export tax of 3.8% . The difference in tax
rate is on account for an adverse arbitration award that came into effect in
March 2011. The SLA, which was set to expire on October 12, 2013 was extended
for an additional two years, to October 2015.

Timber Supply

Tembecs Canadian forestry operations are managed by the Forest
Products Group. This includes the harvesting of timber, either directly or
through contractors, and all silviculture and regeneration work required to
ensure a sustainable supply of wood fibre to the manufacturing units. The Forest
Products Group is also responsible for third-party timber purchases and wood
chip production from whole log chippers which are required to supplement total
requirements. Its main objective is the optimization of the flow of timber to
the various manufacturing units.

Tembec seeks to maximize the utilization of timberlands for
which it is responsible through efficient management and by following
sustainable forest management practices so that the timberlands provide a
continuous supply of wood for future needs. Site preparation, planting and
harvesting techniques are continually improved through a variety of methods,
such as research to improve the timber yield of the forests.

As Tembecs forestry activity in Canada is conducted primarily
on Crown lands, the Forest Products Group works closely with provincial
governments to ensure harvesting plans and operations comply with established
laws & regulations.

Québec

The Province of Québec announced reforms to its forest tenure
regime. The reforms became effective in April 2013. As a result of such reforms,
contractual harvest volumes have been reduced by approximately 25%, and were
reallocated to a timber marketing board for sale on the open market, leaving the
remaining 75% committed to current license holders. In furtherance to these
reforms, Tembec has worked with the Ministry of Natural Resources (Québec) to
ensure the best transition to the new Québec Forest Act in 2013. During
the Summer 2013, the Chief Forester of the Province of Québec rendered public
for consultation an update of the forestry allowable harvest volumes for the
various forest management units in the Province of Québec. This data update,
following the consultation process and approval by the Minister, will determine
the 2014-18 annual allowable cut. The Chief Forester is currently completing the
timber supply study and results should be made public in the December 2013
quarter. The Minister of Natural Resources will allocate the allowable harvest
volumes in the March 2014 quarter.

|13
|--

---

|Annual Information Form
|-----------------------

Ontario

Tembecs cutting rights in Ontario are provided principally
through several Sustainable Forest Licenses on Crown land issued by the Ministry
of Natural Resources (Ontario). These licenses expire at different dates and
have 20-year terms and are renewable every five years. Their renewal is based on
satisfactory performance determined by independent audits and approval of the
Ministry of Natural Resources (Ontario). The Province of Ontario has approved
legislation for reforms of its forest tenure regime and where the Ministry of
Natural Resources (Ontario) will facilitate the trial of new tenure systems over
the next 5 years. Tembec will continue to monitor developments and work with the
Ministry of Natural Resources (Ontario) in connection therewith.

Manitoba

In Fiscal 2012, Tembec sold its newsprint mill and related
assets for nominal net proceeds. Tembec has completed all outstanding
obligations related to the Forest Management License currently held by
Tembec.

British Columbia

Tembec currently owns approximately 57,000 hectares of lands in
British Columbia. These lands are located in the East Kootenay region. Tembec is
currently pursuing the sale of several parcels of land and has set an objective
of realizing up to $75 million in land sales by December 2014 (B.C. Land
Sale Initiative). Since the launch of this B.C. Land Sale Initiative,
Tembec sold 1,875 hectares of lands to Jemi Holdings Ltd. for a price of $4.2
million and approximately 7,150 hectares of land to Teck Resources Limited for a
price of $19 million. There can be no assurance that the Corporation will attain
the stated objective or that it will do so within the specified time period.

Timber Resources Availability

Tembec harvests timber under forest tenures held by it in
British Columbia, Ontario and Québec and has a total allowable annual cut (AAC
) of approximately 4.8 million cubic meters. Tembecs Canadian wood fibre
requirements are also met with deliveries from our Freeholds, open market
purchases and exchanges on either a spot or contract basis (Business to
Business).

The following table sets out Tembecs timber resources
available as at September 28, 2013:

CUBIC METERSChetwynd (High Yield Pulp)Forest Licenses (non-replaceable)
    
    335,500Pulpwood Agreement 13
    
    200,000Sub-total  Crown (HYP)
    
    535,500Managed Forests (Free Hold)
    
    73,000Total British Columbia
    
    608,500OntarioSawmillsSustainable Forest Licenses
    
    2,471,800Sub-total
       Crown
    
    2,471,800Free Hold
    
    50,000Business to Business
    
    130,000


|14
|--

---

|Annual Information Form
|-----------------------

Total Ontario
    
    2,651,800QuébecSawmillsWood supply guaranty
    
    897,450Sub-total  Crown (sawmills)
    
    897,450Matane & Témiscaming (HYP)Wood supply guarantee
    
    282,500Sub-total  Crown (HYP)
    
    282,500Total Québec
    
    1,179,950


Stumpage and Other Charges

Provincial authorities impose fees on volumes of wood cut on
Crown lands. These fees are determined under specific mechanisms in each
province. Part of the mandate of the Corporations Forest Resources Management
Group is to ensure that fees charged by the provincial governments reflect the
fair value of the timber being harvested.

|4.1.2 | Specialty Cellulose Pulp
Segment
|----- | --------------------------------

The Specialty Cellulose Pulp segment consists of two
manufacturing facilities, which produce specialty cellulose pulps. The mills
generate lignin as a by-product of the sulphite process, which is sold to third
parties. The Temiscaming mill also includes a facility that produces ethanol as
a by-product that is also sold to third parties. The segment also includes a
stand-alone resin business, which produces powder and liquid phenolic resins at
two operating sites in Québec: Temiscaming and Longueuil. The Corporation also
operates a third facility located in Toledo, Ohio, United States which
manufactures powder and liquid amino-resins. The chemical business also
periodically purchases and re-sells pulp mill by-product chemicals from third
parties.

In Fiscal 2013, the Specialty Cellulose Pulp Segment generated
consolidated sales of $460 million as compared to $507 million in Fiscal 2012,
adjusted EBITDA of $73 million as compared to $95 million in Fiscal 2012 and
operating earnings of $59 million as compared to operating earnings of $84
million in Fiscal 2012.

The following table summarizes the products and current
capacity levels of each facility:

Location and ProductTonnesSpecialty Cellulose PulpTemiscaming, QC  Specialty Cellulose Pulp
    
    160,000Tartas, France  Specialty Cellulose Pulp
    
    150,000310,000


Products and Markets

The specialty cellulose pulp produced at the two pulp mills is
high purity cellulose utilized in a wide variety of specialized products such as
pharmaceuticals, food additives, and industrial chemicals. The Temiscaming
specialty cellulose pulp mill also produces ′′viscose grade pulp, which is
utilized in the production of viscose staple fibre, which in turn is used to
produce rayon for the textile industry.

Tembec markets its specialty pulp on a world-wide basis,
primarily through its own sales force, with a network of offices in Toronto,
Canada, and Dax, France. This is consistent with Tembecs strategy of selling
directly to customers and establishing long-term strategic relationships.
Sales from the Specialty Cellulose Pulp Segment represented approximately 30% of
Tembecs total consolidated sales in Fiscal 2013.

|15
|--

---

|Annual Information Form
|-----------------------

Fibre Supply

The Temiscaming mill purchased approximately305,700
bone dry tonnes of wood chips in fiscal 2013, down from 370,200 in the prior
year. Of this amount, approximately 73% was supplied by the Forest
Products segment, compared to 66% in the prior year. The remaining requirements
were purchased from third parties under contracts and agreements of various
durations. The pulp mill located in Southern France purchased approximately
284,000 bone dry tonnes of wood in Fiscal 2013 as compared to 287,000 bone dry
tonnes in the prior year. The fibre is sourced from many private landowners.

|4.1.3 | Paper Pulp Segment
|----- | ------------------

The Paper Pulp segment consisted of four market pulp
manufacturing facilities. Prior to May 2013, Tembec owned and operated a
chemical softwood kraft (NBSK) paper pulp mill located in Skookumchuck, BC. The
mill had a capacity to produce 270,000 tonnes per year. Its financial results
are included in the segments results for all of fiscal 2012 and for
approximately eight months in fiscal 2013. The remaining three facilities are
hardwood high-yield pulp mills. They produce pulp with a combination of
mechanical and chemical processes. The Company produces hardwood grades made
from maple, aspen and birch. High-yield pulps have a lower tensile and tear
strength than kraft pulps but they offer advantages on bulk and opacity. They
compete against other hardwood or short fibre grades, with Bleached Eucalyptus
Kraft (BEK) being the most prominent. The Chetwynd, BC, mill has been idle since
September 2012 due to relatively low prices resulting from significant new
capacity start-ups of BEK pulp mills in the Southern hemisphere.

In Fiscal 2013, the Paper Pulp Segment generated consolidated
sales of $388 million as compared to $465 million in Fiscal 2012, adjusted
EBITDA of $5 million as compared to negative adjusted EBITDA of $32 million in
Fiscal 2012 and an operating loss of $33 million as compared to an operating
loss of $105 million in Fiscal 2012.

The following table summarizes the products and current
capacity levels of each facility:

Location and ProductHardwood High Yield
    
    TonnesTemiscaming, QC
    
    315,000Matane, QC
    
    250,000Chetwynd, BC1
    
    240,000Total
    
    805,000


Products and Markets

High-yield market pulps have been produced in North America
since the mid-1980s. Initially, most high-yield pulps were manufactured with
softwood and utilized in tissue and towel applications, where their superior
bulk and absorbency are desired characteristics. However, Tembec has always
maintained a strategy of targeting the use of high-yield pulps in paper and
board production. The strategy led to the development of hardwood high-yield
grades made from birch, aspen and maple. Although high-yield pulps are lower
than kraft pulps in tensile and tear strength, they offer advantages in bulk and
opacity.

The global high-yield pulp market totals approximately 5
million tonnes. Canada is the principal producer at 2 million tonnes per year of
capacity, followed by Western Europe at 1 million tonnes. The principal market
is China which consumes 2 million tonnes, followed by other Asian
countries and Western Europe which consume 1 million tonnes each.

_______________________________1 On September
16, 2012, Tembec indefinitely idled its high-yield pulp mill in Chetwynd,
British Columbia due to market related conditions.

|16
|--

---

|Annual Information Form
|-----------------------

Tembec markets its high-yield pulp mainly to Asian and European
destinations, primarily through its own sales force, with a network of offices
in Toronto, Canada, and Dax, France. This is consistent with Tembecs strategy
of selling directly to customers and establishing long-term strategic
relationships. Sales from the Paper Pulp Segment represented approximately
25% of Tembecs total consolidated sales in Fiscal 2013.

Fibre Supply

Tembecs Pulp mills, including the Skookumchuck NBSK pulp mill,
procured 834,500 bone dry tonnes of wood chips in Fiscal 2013. Of this amount,
approximately 20% was supplied by the Forest Products Segment.Theremainder was purchased from third parties under contracts and agreements of
various durations.

|4.1.4 | Paper Segment
|----- | -------------

The Paper Segment currently consists of two facilities with a
total of three paper machines. The mill located in Kapuskasing, Ontario,
produces newsprint on two machines. The facility located in Temiscaming, Québec,
produces multi-ply coated bleached board on one machine. In Fiscal 2012, Tembec
sold its Pine Falls Manitoba Newsprint Mill and related assets. For Fiscal 2013,
the Paper Segment generated consolidated sales of $332 million as compared to
$346 million in Fiscal 2012, adjusted EBITDA of $25 million in Fiscal 2013 as
compared to adjusted EBITDA of $37 million in Fiscal 2012 and operating earnings
of $22 million as compared to operating earnings of $35 million in Fiscal
2012.

The following table summarizes the products and current
capacity levels of each facility:

Location and ProductTonnesCoated Bleached
      BoardTemiscaming,
      QC
    
    180,000NewsprintKapuskasing,
      ON
    
    240,000


Products and Markets

Tembecs coated bleached board sales focus is on lightweight,
fully bleached coated board used in commercial printing. Target markets include
book cover, directory cover, lightweight premium packaging and coated
linerboard. The board is sold primarily in North America through its own sales
force located in the U.S. and Canada. Board is also sold to merchants and large
commercial printers.

Newsprint is used primarily for the publication of daily
newspapers. It is generally considered to be a commodity product, having a
uniform definition and few distinct differences. Newsprint demand is driven
primarily by the requirements of daily newspapers. Canadian manufacturers of
newsprint are very dependent on export markets, particularly the U.S. market. In
calendar year 2013, total North American newsprint demand is expected to be
approximately 4.5 million tonnes with the U.S. market consuming approximately
3.7 million tonnes. Another 2.0 million tonnes will be shipped to export markets
outside North America. U.S. capacity is 2.6 million tonnes while Canadian
newsprint capacity is 4.3 million tonnes of the approximate total 6.9 million
tonnes of capacity in North America. Tembecs newsprint capacity represents
approximately 3.5% of total North American production capacity.

|17
|--

---

|Annual Information Form
|-----------------------

The focus of the Paper Segment is the North American market
which accounted for 94% of consolidated sales in Fiscal 2013, with the U.S.
representing 74%of consolidated sales. For Fiscal 2013, the Paper
Segment represented 22% of the Corporations consolidated sales.

Fibre Supply

The Paper Segments newsprint mill purchased 234,400 bone dry
tonnes of virgin fibre in the last fiscal year, of which approximately 81% was
internally sourced.

The coated bleached board mill utilizes a combination of
chemical kraft high yield pulps to produce a three-ply sheet. During Fiscal
2013, the mill utilized 61,600 tonnes of high-yield pulp supplied by the
Temiscaming mill.

|4.2 | ENVIRONMENTAL ANDSOCIALPOLICIES
|--- | -------------------------------

Tembec is committed to demonstrating responsible stewardship of
resources and continuous improvement of its environmental performance. Tembecs
objectives are to:

| | Maintain compliance with its corporate
      principles and environmental policy;                                
| | -----------------------------------------------------------------------------------------------------------------
| | Comply with all applicable environmental
      legislation and continually improve its environmental performance;
| | Integrate sustainable development into its
      business and operating plans;                                   
| | Respond effectively to environmental issues;
      and                                                           
| | Maintain recognized environmental
      certifications as required.                                              

Tembecs environmental policy is available on the Corporations
website at www.tembec.com.

Environmental Management System:

These objectives have been incorporated into the Tembec
Environmental Management System (EMS), which minimizes the impact of
manufacturing activities and forest operations on the environment. The EMS is
administered in accordance with ISO 14001 standard and Tembecs specific
environmental requirements.

In 2013, a certifiable EMS is in place in our manufacturing and
forest operations. Each year, Tembec fully reviews all progress accomplished
through its EMS to ensure continuous improvement in its environmental
performance.

Every business unit must implement the EMS. Internal audits are
conducted on all EMS procedures to ensure compliance with ISO 14001 and Tembecs
environmental requirements. Tembecs operating pulp manufacturing and Québec
forest operations are certified to the ISO 14001 standard. Also, audits are
conducted at each site to ensure compliance with all applicable laws and
regulations.

Integration of the OHSAS-18001 Health and Safety through the
EMS (ISO 14001) Environmental System

The implementation of the OHSAS 18001 Health and Safety
Management System continues across Tembec. The majority of our mills continue to
maintain the system in place and perform internal audits regularly. Tembec will
continue to monitor the implementation for those who are not at 100%.

Environmental Performance

Tembec has developed environmental performance indicators to
continually monitor the progress of each of its business units towards the
achievement of EMS as well as regulatory standards.

|18
|--

---

|Annual Information Form
|-----------------------

On the whole, Tembecs environmental performance is in
compliance with statutory and regulatory requirements governing atmospheric
emissions, effluent and solid waste. In fact, through its EMS, Tembec exceeds in
many cases statutory and regulatory requirements.

Over the years, Tembec has implemented voluntary measures to
protect the environment. Since 1990, Tembec has been taking action to
significantly reduce its greenhouse gas emissions, and has actively supported
and promoted the Kyoto Protocol. Tembec has established specific objectives and
targets to reduce energy consumption and greenhouse gas emissions at its mills,
and has set goals to improve biomass recovery as a source of energy.

Tembecs initiatives, including those described above, have
already led to significant improvements in its overall environmental
performance. Moreover, the implementation of Tembecs EMS at all sites will
ensure continuous improvement of Tembecs environmental performance in
accordance with its strong commitment to environmental protection and
sustainable development.

In Fiscal 2013, Tembec spent approximately $5,335,000 on
capital projects as part of its commitment to continuously improve its
environmental performance as per its policy and to comply with applicable
environmental requirements.

Forest Certification

The portfolio of Forest Stewardship Council (FSC)
forest management certificates held by Tembec in Canada consists of seven
certified forests across more than 9.3 million hectares forming a substantial
base of certified wood supply for company facilities. Further, Tembec is a
partner with other forest industry companies on lands managed by third parties.
FSC certification on these lands contributes an additional 1 million hectares of
FSC certified forest to Tembecs wood supply portfolio. As a leader in the
achievement of FSC forest certification in Canada, Tembec is active in renewing
forest certificates consistent with the five year anniversary date. In 2013,
Tembec and the Ministry of Natural Resources in Québec worked collaboratively to
maintain FSC certification consistent with the implementation of the new forest
regime.

Assessment of external fibre supply sources is guided by
Tembecs Fibre Procurement Policy (2006). Tembec provides evidence of Chain of
Custody certification to customers to enable them to produce and label their own
products as certified. All of Tembec facilities are linked to a corporate
multi-site FSC chain of custody and FSC Controlled Wood system. Several company
facilities additionally have Program for Endorsement of Forest Certification
(PEFC) Chain of Custody (COC) certification. These independent
third party audited systems ensure Tembec fibre procurement personnel source
fibre from known sources with certainty and assurance.

Forest conservation, as an integral component of well managed
forests, is a key theme for the Tembec Forest Resources Management
(FRM) Group. The identification and conservation of habitat of rare,
threatened and endangered species is a strong priority across Tembecs Canadian
Boreal operations. Detailed engagement with government, First Nations and
environmental organizations regarding the conservation of woodland caribou in
Ontario continued in 2013. Tembec, municipal representatives, First Nations and
environmental organizations presented a woodland caribou conservation plan to
the Ontario government in June 2012. Work to implement this plan will continue
through 2014.

Tembec is a signatory to the Canadian Boreal Initiative and the
Canadian Boreal Forest Agreement. Both initiatives bring non-government
interests together to identify strategies to advance forest conservation
initiatives and support world leading forest management practices in the
Canadian Boreal forest region. Tembecs boreal forest tenures are included in
the scope of these agreements and Tembec FRM personnel lead Tembecs
participation.

|19
|--

---

|Annual Information Form
|-----------------------

Advocating for a strengthened integration of Ecosystem-Based
Management (EBM) principles in forest management is a strong focus for
Tembecs forest management group in Québec. Tembec continued its ongoing
involvement in EBM projects in the Abitibi Region of the Boreal Forest and in
the Mixed Forest of the Temiscaming Region.

First Nations Policy

As part of sustainable forest management and corporate social
responsibility, Tembec recognizes its operations in Canada take place on
territories on which Aboriginal People assert rights and interests. Tembec has
adopted a First Nations Policy, the purpose of which is to build and maintain
relationships with Aboriginal communities located in the vicinity of Tembecs
operations. Tembecs policy addresses such priorities as capacity building,
employment, information-sharing, business relations and measures to harmonize
traditional land use and forestry operations.

To accommodate the traditional activities of the communities
during forestry planning and operations, Tembec has concluded agreements with
many First Nations including, in Ontario, the Missanabie Cree First Nation, the
Taykwa Tagamou Nation, the Northeast Superior Regional Chiefs Forum (comprised
of six First Nations which are the Brunswick House First Nation, the Chapleau
Cree First Nation, the Hornepayne First Nation, the Michipicoten First Nation,
the Missanabie Cree First Nation and Pic Mobert First Nation), and in Québec,
the Timiscaming First Nation, the Wolf Lake First Nation, the Eagle Village
First Nation, the Lac Simon First Nation, the Pikogan First Nation and the Long
Point First Nation. In addition Tembec and Grand Council of the Cree (Québec)
have signed a communication protocol pertaining to the undertaking of Forest
Stewardship Council (FSC) certification on the Paix des Braves territory and
Tembec and Moose Cree First Nation (Ontario) have a Memorandum of Understanding
(MOU) in place. While each agreement is unique, the agreements generally provide
for identification of areas of concern, development of measures to harmonize
Tembecs interests with those of aboriginal groups, outline communications
protocols and provide dispute resolution processes. Tembec also may provide
financial support to assist the community in engaging resource management
expertise.

|4.3 | ENERGY
|--- | ------

Tembec is committed to operating energy efficient plants and to
making full use of its forest resources. To this end, Tembec converts waste
pulping liquors, mill effluent and biomass wastes into renewable energy through
various processes. Tembec also plans to further improve its capacity to convert
these wastes. In Fiscal 2013, Tembec generated approximately 17,000,000
Gigajoules of renewable energy, which represents approximately 59% of Tembecs
total energy consumption. This includes generating 470,000 MWhrs of electricity,
or 23% of our total consumption.

Temiscaming and Kapuskasing

Both the Temiscaming and Kapuskasing mill complexes utilize
biomass boilers fired on bark, sawdust and shavings to generate approximately
5.5% of their total electricity consumption.

Chapleau

The Chapleau cogeneration facility sells the bulk of its power
to Hydro One. Steam is then fed to the sawmill kilns to dry lumber. The Chapleau
cogeneration facility consumes residual biomass from the sawmill and the
surrounding region.

|20
|--

---

|Annual Information Form
|-----------------------

Tartas

The Tartas mill burns both waste sulphite liquor and biomass at
its cogeneration facility. Since the commissioning of its new turbine, the
Tartas mill has become a net exporter of electricity, generating approximately
83% of its needs.

Other Green Energy

Tembec also converts effluent to energy through two operating
anaerobic effluent treatment plants. Current methane consumption is
approximately 132,000 GJ/year (Temcell I & II). Commissioning of a third
anaerobic effluent installation at the Matane mill is underway and will result
in incremental methane generation. Methane is used to offset fossil fuel
purchases in pulp dryers. Recovered biomass is also sold to third parties for
cogeneration purposes.

|4.4 | RESEARCH ANDDEVELOPMENT
|--- | -----------------------

Tembec considers research and development (R&D)
essential to its growth and to its long-term ability to compete successfully on
world markets. Tembecs mission of minimizing costs and encouraging innovation
while protecting the environment is backed by its history of continued research
investment. R&D activities are carried out with specialized research
centers, Canadian and foreign universities, strategic equipment and technology
developers, in conjunction with in-house development and trials. The R&D
thrust is a crucial aspect of Tembecs activities, enabling Tembec to continue
meeting its customers and other key stakeholders ever-growing expectations.
Recent research efforts have been focused on further enhancing Tembecs already
sound environmental practices, improving delivered fiber costs, developing
value-added products and exploiting waste to energy opportunities.

|4.5 | COMPETITION
|--- | -----------

The lumber, pulp and paper industries are essentially commodity
markets in which producers compete primarily on the basis of price. In addition,
since the majority of Tembecs lumber, pulp and paper production is directed to
export markets, it competes on a worldwide basis against many producers with
approximately the same or larger capacity. In export markets, Tembec generally
competes with U.S., Latin American, Asian and Scandinavian producers. Some of
Tembecs competitors have lower energy and labor costs and fewer environmental
and governmental regulations to comply with than Tembec does. Others are larger
in size, allowing them to achieve greater economies of scale. Also, some of
Tembecs foreign competitors may benefit fromincentives given by
foreign governments, which may ultimately adversely affect Tembecs competitive
position.

|4.6 | RISKFACTORS
|--- | -----------

The following information is a summary of certain risk factors
relating to the business of Tembec and is qualified in its entirety by reference
to, and must be read in conjunction with, information appearing elsewhere in
this AIF and in the 2013 MD&A.

Demand and prices for Tembecs products are cyclical, which
could have a material adverse effect on its business, financial condition and
results of operations.

Demand and prices for most lumber, pulp and paper products are
cyclical and are influenced by a variety of factors. These factors include
periods of excess product supply due to industry capacity increases, periods of
decreased demand due to generally reduced economic activity or product-specific
activity, inventory de-stocking by customers and fluctuations in currency
exchange rates. Tembec has in the past, and may in the future, decide to
schedule production curtailments and shutdowns as a result of weak economic
conditions, reduced demand for its products, lack of economically viable
fibre, declining demand for newsprint, reduced market prices and other factors.
If global economic conditions were to deteriorate in the future, prolonged
curtailments of production or extended shutdowns could have a material adverse
effect on its business, financial condition and results of operations. In
addition, the relatively high fixed cost component of certain manufacturing
processes, specifically in pulp and paper, requires producers to operate
facilities with target efficiency in the 80-85% range even when demand is not
sufficient to absorb all of the output. This excess production may saturate the
market and have a negative impact on product prices, further increasing the
inherent cyclicality of the industry.

|21
|--

---

|Annual Information Form
|-----------------------

Tembec does not currently engage in hedging transactions to
mitigate the impact of price volatility. However, even if Tembec were to engage
in hedging transactions, there can be no assurance that such transactions would
eliminate the risks of demand and price cyclicality and their impact on Tembecs
business, financial condition and results of operations.

Tembec is exposed to the risk of exchange rate fluctuations.

Revenues for most of Tembecs products are affected by
fluctuations in the relative exchange rates of the U.S. dollar and the euro as
compared to the Canadian dollar. The prices for many of Tembecs products,
including those that Tembec sells in Canada and Europe, are generally driven by
prices referenced in U.S. dollars. Tembec generates approximately 900 million of
U.S. dollar denominated sales annually from its Canadian operations. As a
result, any decrease in the value of the U.S. dollar and the euro relative to
the Canadian dollar reduces the amount of revenues Tembec realizes on its sales
in local currency. In addition, because Tembecs business units purchase the
majority of their production materials in local currency, fluctuations in
foreign exchange rates can significantly affect a units relative profitability
when compared to competing manufacturing sites in other currency jurisdictions.

Direct U.S. dollar purchases of raw materials, supplies and
services provide a partial offset to the impact of exchange rate fluctuations on
sales. To further reduce the risks associated with exchange rate fluctuations,
Tembec has a policy which permits hedging up to 50% of its anticipated U.S.
dollar receipts for up to 36 months in duration. Notwithstanding such policy,
Tembec does not currently engage in hedging transactions to mitigate the impact
of exchange rate fluctuations. However, if Tembec were to engage in such
transactions, there can be no assurance that it will be able to do so on
commercially reasonable terms or at all, or that such transactions will reduce
the risks associated with such fluctuations.

The availability of, and prices for, wood fibre
significantly impact Tembecs business.

Fibre is the most important raw material for the production of
wood products, pulp and paper. Regulatory developments and environmental
litigation have caused, and may cause in the future, significant reductions in
the amount of timber available for commercial harvest in Canada, thereby
increasing prices for alternative sources of wood fibre. The availability of
harvested timber may further be limited by natural and man-made events. In
addition, future domestic or foreign legislation, litigation advanced by
Aboriginal groups and litigation concerning the use of timberlands, the
protection of endangered species, the promotion of forest diversity and the
response to and prevention of wildfires could also affect timber supplies.

In Canada, virgin fibre or timber is sourced primarily from
Crown lands. In fiscal 2013, approximately 95% of Tembecs virgin fibre and
timber requirements were sourced from Crown lands. Tembecs current agreements
with provincial authorities grant timber tenure for terms varying from 5 to 25
years and may be subject to renewals every five years. These agreements contain
commitments with respect to sustainable forest management, silvicultural work,
forest and soil renewal, as well as cooperation with other forest users. The
price and availability of Tembecs fibre depends, in large part, on Tembecs
ability to replace or renew these agreements on acceptable terms or enter into
acceptable alternative fibre supply arrangements with provincial authorities.
The terms of any replacement, renewal or alternative arrangement are based on
legislative and regulatory provisions as well as governmental policy. Therefore,
changes in legislation, regulatory regimes or policy in the provinces in which
Tembec operates, may reduce the availability of fibre and increase costs through the imposition of additional and more stringent
harvesting, rehabilitation and silvicultural standards or the alteration of fee
structures. There can be no assurance that Tembecs agreements with provincial
authorities for the supply of fibre will be renewed, extended or replaced in the
future on acceptable terms, or at all, or that the amount of timber that Tembec
is allowed to harvest will not decrease.

|22
|--

---

|Annual Information Form
|-----------------------

Additionally, evolving tenure legislation and regulation may
have an impact on Tembecs access to fibre. The province of British Columbia
reformed its forest tenure regime in 2006 and, in July 2010 implemented a timber
pricing mechanism by which stumpage fees increasingly resemble a market pricing
system. This system may exert upward pressure on timber pricing in the mid-term,
thereby reducing profitability. Similarly, the Province of Québec recently
reformed its tenure regime. In Québec, pursuant to this new tenure regime,
contracted harvest volumes have been reduced by approximately 25% with such
volume, being reallocated to a timber marketing board for sale on the open
market and socio-economic development projects. Also, Québecs new regime
removes from commercial parties, such as Tembec, authority over forest planning
and harvesting. Accordingly, Tembec may be unable to ensure that the fibre
processed at its Québec mills benefits from its current certifications, such as
those provided by the Canadian Forest Stewardship Council, or FSC.

The Province of Ontario also recently reformed its tenure
system with amendments that came into force in June 2011, but that will only be
implemented over the next five to seven years. Similar to the Québec regime, in
Ontario, new local Crown corporations (Local Forest Management Corporations)
will manage forest planning and market harvesting rights and enhanced
sustainability. Forest Licenses to manage Crown forests may be issued to
corporations formed by groups of mills and/or harvester companies. Ontario is
also moving towards a timber pricing system driven by competitive markets.
Availability of fibre and prices could be materially affected by forest tenure
reform in the provinces of British Columbia, Québec and Ontario. It is too early
to assess these and other possible effects of the reforms in British Columbia,
Québec and Ontario. To the extent the availability of fibre from Crown lands is
insufficient, Tembec will be required to increase its purchases of fibre on the
open market. Further, even if sufficient fibre is available from these Crown
lands, there can be no assurance that fibre will be available at prices that
will allow Tembec to operate its mills at desired and/or profitable levels of
production.

In addition to sourcing its fibre requirements from Crown
lands, Tembec also sources a significant amount of fibre by purchasing from
third parties pursuant to contracts and agreements of various durations and on
the open market. Tembecs dependence on external sources of fibre could increase
materially in the future as a result of, among other things, the factors
discussed above, which may limit the availability of timber Tembec harvests from
Crown lands. Fibre is a commodity and prices historically have been cyclical.
Fibre pricing is also subject to regional market influences, and Tembecs cost
of fibre may increase in particular regions in which it operates due to market
shifts in those regions. Tembecs more geographically diversified competitors
may not be affected to the same degree by such regional price volatility. Any
sustained increase in fibre prices, whether sourced from Crown lands or from
third parties, could materially increase Tembecs operating costs and thereby
materially reduce Tembecs operating margins to the extent that Tembec cannot
pass through equivalent increases in the prices for its products to its
customers. Additionally, if one or more of Tembecs major suppliers of fibre
stops selling to Tembec, Tembecs financial condition and operating results may
suffer.

Tembec is dependent on the supply of certain raw materials.

As noted above, Tembec depends on the supply of fibre. Tembec
also depends on the supply of other raw materials used in its production
facilities, including certain chemicals. Any disruption in the supply of any of
these raw materials could affect Tembecs ability to manufacture its products
and meet customer demand in a timely manner, which could thereby harm Tembecs
reputation and its results of operations. In addition, any material increase in
the cost of these raw materials could have a negative impact on Tembecs
profitability.

In addition, natural and man-made events, including forest
fires, adverse weather conditions, insect infestation, tree disease, ice storms,
prolonged drought, flooding, periodically affect the industry in which Tembec
operates.

|23
|--

---

|Annual Information Form
|-----------------------

The occurrence of any of these events could have a material
adverse effect on the availability of, and could significantly increase prices
for, raw materials.

Tembec relies heavily on third parties, typically railroads or
trucks, to transport its manufactured products and to deliver the necessary raw
materials for its production processes. If any of Tembecs transportation
providers were to fail to deliver these raw materials or manufactured products
in a timely manner and Tembec were unable to find a comparable transportation
provider in a timely manner, its reputation and customer relationships could be
adversely affected, and it may be unable to sell such products at full value, or
at all. In addition, if any of Tembecs transportation providers were to cease
operations or cease doing business with Tembec, it may be unable to replace them
at a reasonable cost.

Reductions in the availability of energy supplies or an
increase in energy costs may increase Tembecs operating costs.

Tembec is affected by the cost of natural gas and electricity.
Natural gas and electricity are important components of mill costs, especially
for high-yield pulp mills, newsprint and paper mills. For fiscal 2013, purchased
energy costs totalled approximately $94 million, 50% of which was
electricity, which accounted for 8% of the total cost of sales. The price and
availability of natural gas and electricity are influenced by a number of
factors that are often beyond Tembecs control, including mechanical failures,
weather, political factors and unanticipated or sudden increases in demand.
While Tembec purchases electricity primarily from large public utilities at
rates set by regulatory bodies, in certain other jurisdictions, electricity is
deregulated, which can lead to greater price volatility.

Tembec purchases its electricity, natural gas and other fossil
fuel requirements at market rates. To mitigate the effect of price fluctuations
on its financial performance, Tembec employs several tactics, including securing
longer term supply agreements and operational curtailments in periods of high
prices. Tembec does not currently hold any electricity or natural gas derivative
commodity contracts. If Tembec is unable to continue to purchase its natural gas
and electricity requirements for its operations on commercially reasonable
terms, Tembecs operations could be disrupted and its business, financial
condition and results of operations could be materially adversely affected.

Tembec may not be able to successfully renegotiate its
collective agreements with its unionized employees, which could affect its labor
costs and operations.

As of September 28, 2013, Tembec had approximately 2,700 hourly
paid employees covered by collective agreements. Collective agreements governing
approximately 875 unionized employees will be under negotiation in the next
fiscal year. There is a risk, however, that Tembec may not be able to negotiate
collective agreements on acceptable terms. If Tembec is not able to renegotiate
its collective agreements, it could face a strike or work stoppage or be
obligated to pay higher wages and more benefits to union members. Any disruption
in the operations of Tembec or higher ongoing labor costs could have a material
adverse effect on its business, financial condition and results of operations.

Furthermore, at many of Tembecs facilities, as well as those
of the North American industry as a whole, reductions in employment levels due
to technological and process improvements have resulted in a workforce with
longer average years of service. This increases the cost of pensions and
benefits.

Tembec is subject to the risk of substantial environmental
liability and limitations on its operations brought about by the requirements of
environmental laws and regulations.

Tembec is subject to various federal, state, provincial and
local environmental, health and safety laws and regulations concerning such
issues as air emissions, wastewater discharges, solid and hazardous materials
and waste handling and disposal, forestry operations, endangered species,
landfill operation and closure, and the investigation and remediation of
contamination. These laws and regulations are increasingly stringent. While
Tembec believes that its facilities are and will continue to be in material
compliance with all applicable environmental laws and regulations, the risks of substantial
additional costs and liabilities related to compliance with such laws and
regulations are an inherent part of its business.

|24
|--

---

|Annual Information Form
|-----------------------

| |     |                   
| | --- | ------------------
| | (i) | Marathon Pulp Inc.

Tembec Industries was subject to a number of orders issued by
the Ministry of the Environment (Ontario) (MOE) in connection with the
operation of a mill located in Marathon, Ontario, owned by Marathon Pulp Inc.
(MPI). MPI, formerly a joint venture between Tembec Industries and
Kruger Inc., filed a notice of intention to make a proposal under the Canada
Bankruptcy and Insolvency Act in February 2009. MPI was deemed bankrupt in
March of that year. The MOE issued the orders primarily on the alleged ground
that Tembec Industries had management and control of the site or business of MPI
at the site (MPI Site). The orders compelled Tembec Industries to,
among other matters, safeguard the MPI Site from immediate environmental harm;
to monitor, record and report on contamination at the MPI Site; to develop and
execute plans to close waste disposal sites and an industrial lagoon; to
remediate existing contamination at the MPI Site; to address mercury and
polychlorinated biphenyls contaminated sediments in the harbour
("Harbour") adjacent to the MPI Site; and to provide financial assurance
of approximately $4.8 million for the performance of the work.

Tembec Industries appealed the MOE orders to the Environmental
Review Tribunal ("ERT") and vigorously contested the MOE orders. Tembec
Industries sought stays of the MOE orders pending the hearing of the appeals,
but the ERT was only able to grant partial stays. Tembec Industries was
compelled to comply with the unstayed portions of the MOE orders. As of
September 2013, Tembec Industries has spent a total of $17 million to effect
this compliance, including legal costs and a provision for future site
remediation obligations.

On September 7, 2011, Tembec Industries, without admission of
liability, reached a settlement with the MOE regarding the MPI Site and the
Harbour, which remained subject to a certain number of conditions, all of which
were met by December 23, 2011. Other parties to the settlement included Ball
Packaging Products Canada Corp. (Ball) and Georgia Pacific LLC
(GP), two corporations with previous involvement at the MPI Site. The
settlement contemplated (i) financial contribution by Ball and GP towards
remediation work regarding the Harbour and the MPI Site, and (ii) the
undertaking by Tembec Industries to develop and implement remediation and
closure plans in connection with specifically identified environmental concerns
and facilities and to conduct ongoing monitoring activities. Tembec Industries
also agreed to effect periodic monitoring activities for a period of up to 25
years. Annual monitoring costs are not expected to be material.

In Fiscal 2013, a court ordered that ownership of the MPI site,
including the mill, lands and related assets, be vested in SSPM Pontiac L.P.
(SSPM). As part of this transaction, SSPM undertakes to implement all
required remediation and closure work on the MPI site, to assume all liabilities
and obligations arising from or relating to the MPI Site and to provide
financial assurance to the MOE. Closing is expected to occur in the first
quarter of Fiscal 2014, at which time registration of SSPMs ownership will be
registered against title to the Mill Site. Also, as part of this transaction,
the MOE will release the financial assurance of approximately $4.8 million that
Tembec Industries had posted with the MOE for the performance of the remediation
work. In the event that conditions surface which are not contemplated in the
settlement agreement, any or all of Tembec, Ball and GP could be exposed to
additional expenses. Such further expenses could have a material adverse effect
on Tembecs business, financial condition and results of operations.

| | (ii) | Other Environmental
Matters
| | ---- | ---------------------------

In addition to costs and liabilities relating to compliance
with environmental laws and regulations, Tembec could become liable for
environmental conditions at sites where it is currently operating, sites it
formerly owned or operated and sites at which its wastes have been disposed.
Tembecs operations produce wastes, including hazardous waste, which must be
properly disposed of under applicable environmental laws. These laws can impose
clean up liability on generators of hazardous waste and other substances that
are shipped off-site for disposal, regardless of fault or the legality of the
disposal activities. Other laws may require Tembec to investigate and remediate
contamination at its properties, including contamination that was caused in
whole or in part by third parties. While Tembec believes that it can
comply with environmental legislation and regulatory requirements and that the
costs of doing so have been included within its budgeted cost estimates, it is
possible that such compliance will prove to be more limiting and costly than
anticipated as new laws, more stringent enforcement of existing requirements, or
discovery of currently unknown conditions could result in additional costs and
limitations on Tembecs operations.

|25
|--

---

|Annual Information Form
|-----------------------

In addition to potential clean up liability, Tembec may become
subject to enforcement actions and sanctions and substantial monetary fines and
penalties for violations of applicable laws, regulations or administrative
conditions. Tembec may also be subject from time to time to legal proceedings
brought by private parties or governmental agencies with respect to
environmental matters, including matters involving alleged property damage or
personal injury.

Future greenhouse gas/carbon legislation or regulations
could increase Tembecs costs of compliance with environmental laws and
regulations.

The federal government of Canada has indicated its intent to
regulate priority air pollutants and greenhouse gases (GHGs) under the
Canada Clean Air Act and the Canadian Environmental Protection
Act. The forest products sector is expected to be one of the targeted
sectors for regulation under both acts. The priority air pollutants include
particulate matter, sulphur oxides (SOx) and greenhouse gases. Under
the proposed targets, Tembecs mills may be required to reduce air pollutants,
such as particulate matter, SOx emissions and GHGs. The cost of making any such
reductions is currently unknown. Québec has already passed legislation
establishing frameworks to reduce GHGs through cap-and-trade systems. Only the
Corporations Temiscaming site in Québec is subject to these new regulatory
standards. Additionally, Canadian federal laws and the laws of the provinces of
Québec, Ontario and British Columbia already impose mandatory GHG reporting
requirements on facilities that emit carbon dioxide equivalent (CO2e)
beyond certain thresholds.

Certain provinces have also implemented carbon taxes. In
British Columbia, the carbon tax is a consumer tax imposed on all businesses and
individuals who purchase or use fuel in the province, or burn combustibles for
heat or energy. The tax rates, from July 1, 2012 to June 30, 2013, are based on
$25 per tonne of CO2 emissions from the combustion of each fuel. The tax rate
increased by $5 per tonne and is now $30 per tonne. Québec introduced a carbon
tax in 2007, although at a smaller rate, requiring energy producers,
distributors and refiners in the province to pay about $200-million a year in
taxes until 2013. In 2013, the Temiscaming site in Québec should not be subject
to the carbon tax; however, it will fall under the new cap and trade regime at a
cost roughly equivalent to the old carbon tax.

The enactment of Canadian federal and other provincial climate
change regulation may depend on regulatory initiatives undertaken in the United
States. The United States has indicated its intention to introduce environmental
legislation and/or regulation and implement policies to reduce GHG emissions.
The U.S. Environmental Protection Agency (the EPA) issued a rule that
requires monitoring and reporting of GHG emissions annually by operators of
large emitters. The EPA also issued a final rule regulating GHG emissions from
new and modified large sources of GHG. However, since the U.S. Congress has not
enacted a cap-and-trade program, the Canadian government has followed suit and
no emission caps are expected in the near future. It is too early to determine
the overall impact that U.S. and Canadian federal or provincial regulations
and/or initiatives will have on Tembec when they come into effect.

Additional regulatory initiatives may be implemented in other
jurisdictions to address GHG emissions and other climate-change-related
concerns. If such initiatives are implemented and to the extent Tembec operates
or offers its products for sale in affected jurisdictions, it may be required to
incur additional capital expenditures, operating costs or mitigating expenses,
such as carbon taxes or other charges, to comply with any such initiatives.
Tembec cannot assure that the increased costs associated with compliance of
future environmental laws and regulations will not have a material adverse
effect on its business, financial condition and results of operations.

|26
|--

---

|Annual Information Form
|-----------------------

Significant capital expenditures requirements could have an
adverse impact on Tembecs business, financial condition and results of
operations.

The production of lumber, pulp and paper is capital intensive.
The Corporation estimates that it must invest approximately $35 million to $40
million per year on capital expenditures to avoid degradation of its current
operations. As the majority of the funding is provided by cash flow from
operations, there can be no assurance that the funds will be available to meet
all of the Corporations capital expenditure needs. Failure to reinvest can lead
to older equipment that is less productive, less reliable and more costly to
maintain and operate. The risk of technological obsolescence also increases.
Capital expenditure projects can be large in scale, requiring the Corporation to
maintain and/or acquire expertise in the design, planning and execution of major
capital projects. There are inherent risks in the capital expenditure process,
including the potential for project cost overruns, new equipment that does not
perform to anticipated or projected levels, a lengthy start-up period and
disruptions to normal operations. Due to relatively low operating cash flow
generation over the last several years, the Corporation has limited capital
expenditures. This has led to a backlog of capital expenditure projects in
many operating facilities. Failure by the Corporation to proceed with the
capital expenditures necessary to avoid a degradation of its current operations
could have an adverse impact on the Corporations business, financial condition
and results of operations.

Project Risk

The Corporation is undertaking an energy investment, the
Project, which was initially estimated at $190 million, but was revised to $235
million in Fiscal 2013, for the installation of a high pressure liquor recovery
boiler and a steam turbo-generator, which will result in the production of an
additional 35 megawatts of electricity on average. The Corporation entered into
a Power Purchase Agreement with Hydro Québec as part of the investment. Part of
the Project will be financed with $132.8 million of new debt, which consists of
$92.8 million in loans from Investissement Québec and a $40 million loan from
IPD.

These Project related credit facilities contain terms and
conditions specific to the Project, including Project completion commitments. If
general economic conditions were to deteriorate significantly or if the
Corporation was unable to meet the terms of the new Project related credit
facilities, or if future operating performance is significantly below
expectations, the Corporation may have to reduce or defer its capital
expenditure plans, including the Project, which could have an adverse impact on
Tembecs business, financial condition and results of operations.

Restrictions on trade through tariffs, quotas or other trade
barriers could adversely affect the ability of Tembec to access markets outside
Canada.

Tembecs financial results are highly dependent on its ability
to sell its products outside of Canada. Although Tembecs manufacturing
operations are located primarily in Canada, sales to the Canadian market
represented only 19% of its consolidated sales in fiscal 2013. Tariffs, quotas
and other trade barriers that reduce or prohibit the movement of Tembecs
products across international borders constitute an ongoing significant risk.

Since October 12, 2006, as a result of the Softwood Lumber
Agreement, all Tembecs sawmills are subject to an export tax on shipments to
the U.S., while Québec and Ontario sawmills are also subject to an export quota.
Effective October 12, 2006, Tembecs Québec and Ontario sawmills became subject
to a combination of export taxes and volume restraints or quotas that vary
depending on the option selected by individual Canadian provinces. Tembecs
eastern Canadian sawmills, located in Québec and Ontario, were subject to export
quota limitations. Additionally, Tembecs Ontario sawmills were subject to an
average export tax of 1.3% in fiscal 2013. Tembecs Québec sawmills were subject
to an average export tax of 3.8% . The difference in tax rate is an
account of an adverse arbitration award that came into effect in March 2011. The
tax and quotas may adversely affect Tembecs competitive cost position. China
has recently imposed antidumping duties on viscose grade pulp imports. The
impact of these duties on Tembecs ability to access the Chinese market is still
being assessed as of the date of this AIF.

|27
|--

---

|Annual Information Form
|-----------------------

If new tariffs or quotas are created, or if existing tariffs
increase or quotas decrease, there can be no assurance that Tembec will be able
to effectively access foreign markets, which could have a material adverse
effect on Tembecs volume of sales and financial results.

Tembecs substantial debt could adversely affect its
financial condition and prevent it from fulfilling its obligations under its
outstanding indebtedness.

Tembec has a substantial amount of debt, which requires
significant interest and principal payments. There is no assurance that Tembecs
business will generate sufficient cash flow from operations in the future to
service Tembecs debt and meet its other ongoing obligations.

Tembecs principal term debt does not require periodic payments
for principal amortization. As the entire principal amount of US$305 million
will become due in December 2018, it is possible Tembec will not have the
required funds/liquidity to repay the principal due. Tembec may require access
to the public or private debt markets to issue new debt instruments to replace
or partially replace the existing term loan. There is no assurance that Tembec
will be able to refinance this loan on commercially acceptable terms.

The credit agreements covering Tembecs revolving and term debt
contain terms and conditions that may limit managements ability to act in
certain circumstances. This may place restrictions on Tembecs ability to incur
additional indebtedness, to create liens or other encumbrances, to make certain
payments and investments and to sell or otherwise dispose of assets and merge or
consolidate with other entities. A failure to comply with the obligations
contained in the credit agreements governing Tembecs debt could result in
acceleration of the related debt and acceleration of debt under other
instruments that contain cross acceleration or cross default provisions.

Significant changes in pension fund investment performance
or assumptions relating to pension costs, as well as increased funding
contributions, may have a material effect on Tembecs pension
obligations, the funded status of its pension plans and its pension costs.

The funded status of Tembecs pension plans is dependent upon
many factors, including changes to the level of benefits provided by the plans,
the future performance of assets set aside in trusts for these plans, the level
of interest rates used to determine obligations and minimum funding levels,
actuarial assumptions and any changes in governmental laws and regulations.
Declines in the market value of the securities and other investments held by the
plans and changes in interest rates could materially reduce the funded status of
the plans and affect the level of pension expense and required
contributions.

Tembec may not have adequate insurance for potential
liabilities.

Tembec maintains insurance to cover many of its potential
losses, and it is subject to various self-retentions and deductibles under its
insurance. Actual or claimed defects in the products Tembec distributes may give
rise to claims against it for losses and expose it to claims for damages.
Tembecs insurance may be inadequate or unavailable to protect it in the event
of a claim or its insurance coverage may be cancelled or otherwise terminated.
Tembec faces the following additional risks under its insurance coverage: (i) it
may not be able to continue to obtain insurance on commercially reasonable terms
or at all; (ii) it may be faced with types of liabilities that will not be
covered by its insurance, such as damages from environmental contamination or
terrorist attacks; (iii) the dollar amount of any liabilities may exceed its
policy limits; and (iv) it may incur losses from interruption of its business
that exceed its insurance coverage.

In addition, in the ordinary course of business, Tembec becomes
the subject of various claims, lawsuits and administrative proceedings seeking
damages or other remedies concerning its commercial operations, products,
employees and other matters, including occasional claims by individuals alleging
exposure to hazardous materials as a result of its products or operations. Some
of these claims relate to the activities of businesses that Tembec has sold, and some relate to the activities of
businesses that Tembec has acquired, even though these activities may have
occurred prior to the acquisition of such businesses. Even a partially uninsured
claim, if successful and of significant size, could have a material adverse
effect on Tembecs business, financial condition and results of operations. To
mitigate risk associated with insurance coverage, Tembec reviews its strategy
annually and assesses the various insurance products available to achieve better
coverage at the lowest cost possible.

|28
|--

---

|Annual Information Form
|-----------------------

Aboriginal land claims may affect Tembecs
operations.

Aboriginal groups have claimed substantial portions of land in
various provinces over which they claim aboriginal title or in which they have a
traditional interest. Canadian courts have recognized that aboriginal people may
possess rights in respect of land used or occupied by their ancestors and have
encouraged the federal and provincial governments and aboriginal people to
resolve rights claims through the negotiation of treaties.

Tembec operates in territories in which aboriginal people
assert rights and interests. To accommodate the traditional activities of the
communities during forestry planning and operations, Tembec has concluded
agreements with many First Nations including, in Ontario, the Missanabie Cree
First Nation, the Taykwa Tagamou Nation, the Northeast Superior Regional Chiefs
Forum (comprised of six First Nations which are the Brunswick House First
Nation, the Chapleau Cree First Nation, the Hornepayne First Nation, the
Michipicoten First Nation, the Missanabie Cree First Nation and Pic Mobert First
Nation), and in Québec, the Timiscaming First Nation, the Wolf Lake First
Nation, the Eagle Village First Nation, the Lac Simon First Nation, the Pikogan
First Nation and the Long Point First Nation. In addition Tembec and Grand
Council of the Cree (Québec) have a signed a communication protocol pertaining
to the undertaking of Forest Stewardship Council (FSC) certification on the Paix
des Braves territory and Tembec and Moose Cree First Nation have a Memorandum of
Understanding (MOU) in place. While each agreement is unique, the agreements
generally provide for identification of areas of concern, development of
measures to harmonize Tembecs interests with those of aboriginal groups,
outline communications protocols and provide dispute resolution processes.
Tembec also may provide financial support to assist the community in engaging
resource management expertise.

Tembec cannot predict whether future aboriginal land claims
will affect its ability to harvest timber from its current sources, or its
ability to renew or secure other sources in the future. Furthermore, any failure
to reach an agreement, conflict or disagreement with an aboriginal group could
have a material adverse effect on its operations.

|ITEM 5 - | DIVIDENDS
|-------- | ---------

The Corporation has not paid dividends on any of its shares
since its incorporation. There is currently no restriction preventing the
Corporation from paying dividends, other than as described below, nor any
specific dividend policy. The Corporation is essentially dependent on its
operating subsidiaries to generate the funds required for any dividend payment.
The indenture dated as of August 17, 2010 (Indenture) which governs the
2018 Senior Secured Notes contains certain restrictions on the payment of
dividends. Reference is made to the section on Limitation on Restricted Payments
of the Indenture, which was filed on SEDAR on August 27, 2010 and may be found
at www.sedar.com. The ABL Facility (as this
expression is defined under Item 11 below) also contains certain restrictions on
the payment of dividends. Reference is made to the Restrictive Payments
section of the ABL Facility, which was filed on SEDAR and may be found at
www.sedar.com.

|29
|--

---

|Annual Information Form
|-----------------------

|ITEM 6 - | GENERAL DESCRIPTION OF CAPITAL STRUCTURE
|-------- | ----------------------------------------

|6.1 | GENERALDESCRIPTION OFCAPITALSTRUCTURE
|--- | -------------------------------------

The Corporation is authorized to issue an unlimited number of
common shares and an unlimited number of Class A preferred shares.

The holders of common shares are entitled to one vote for each
common share held, at any meeting of shareholders of the Corporation, other than
meetings of the holders of another class of shares, and to receive dividends and
to share in the remaining properties and assets in the event of liquidation,
dissolution or winding up of the Corporation.

As at December 16, 2013, there were 100,000,000 common shares
issued and outstanding. The Class A preferred shares may be issued in one or
more series, each series to consist of such number of shares as may be fixed by
the board of directors of the Corporation. The Board may further fix the
designation, rights, privileges, instructions and conditions attaching to, each
series of preferred shares including, without limitation, any voting rights,
dividends, terms and conditions of redemption, purchase and conversion or other
provisions. As at December 16, 2013, there were no preferred shares issued or
outstanding.

|6.2 | RATINGS
|--- | -------

Pursuant to the previously noted issuance of the 2018 Senior
Secured Notes, Moodys Investors Service, Inc. (Moodys) assigned a B3 rating to
the 2018 Senior Secured Notes t and the same level for the Corporations
corporate credit rating. Standard and Poors (S&P) assigned a Long Term
Issuer Credit Rating of B- to the 2018 Senior Secured Notes as well as to the
Corporations corporate credit rating. On February 15, 2013, S&P downgraded
its rating to CCC+ and changed the outlook to Developing. On February 8, 2013,
Moodys changed its outlook from stable to negative.

Moodys credit ratings are on a long-term debt rating scale
that ranges from Aaa to C, which represents the range from highest to lowest
quality of such securities rated. According to the Moodys rating system, an
obligation rated B3 is considered to be speculative and is subject to high
credit risk. Moody applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through Caa in its corporate bond rating system. The
modifier 1 indicates that the issue ranks in the higher end of its generic
rating category, the modifier 2 indicates a mid-range ranking and the modifier 3
indicates that the issue ranks in the lower end of its generic rating category.

S&Ps credit ratings are on a long-term debt rating scale
that ranges from AAA to D, which represents the range from highest to lowest
qualities of such securities rated. According to the S&Ps rating system, an
obligation rated CCC is: currently vulnerable to nonpayment, and is dependent
upon favorable business, financial, and economic conditions for the obligor to
meet its financial commitment on the obligation. In the event of adverse
business, financial, or economic conditions, the obligor is not likely to have
the capacity to meet its financial commitment on the obligation. The ratings
from AA to CCC may be modified by the addition of a + or  sign to show relative
standing within the major rating categories.

Moodys also assigns Speculative Grade Liquidity Ratings
(SGL ratings) to corporations having a long term speculative rating.
These SGL ratings are opinions of an issuers ability to generate cash from
internal sources and the availability from external sources of committed
financing, in relation to its cash obligations over the coming 12 months. It is
on a scale between SGL-1 (the best) and SGL-4 (the worst). Moodys assigned the
Corporation a SGL-2 rating. According to Moodys rating system, issuers rated
SGL-2 possess good liquidity; they are likely to meet their obligations over the
coming 12 months through internal resources but may rely on external sources of
committed financing. The issuers ability to access committed sources of
financing is highly likely based on Moodys evaluation of near-term covenant
compliance.

|30
|--

---

|Annual Information Form
|-----------------------

The credit ratings assigned to the Corporation by the rating
agencies are not a recommendation to buy, sell or hold securities of the
Corporation and may be subject to revision or withdrawal at any time by the
credit rating agencies.

|ITEM 7 - | MARKET FOR SECURITIES OF THE CORPORATION
|-------- | ----------------------------------------

The Corporations common shares are listed on the Toronto Stock
Exchange under the symbol TMB. The following table sets forth the market price
range, in Canadian dollars, and trading volumes of the Corporations common
shares on the Toronto Stock Exchange each month since September 29, 2012.

COMMON SHARESFiscal Year fromSeptember 29, 2012to
    
    
    
    
    
    
    
    Close
    
    
    TradingSeptember 28, 2013
    
    High
    
    
    Low
    
    
    Price
    
    
    VolumesOctober 2012
    
    2.57
    
    
    2.05
    
    
    2.26
    
    
    2,671,009November 2012
    
    2.52
    
    
    1.70
    
    
    2.26
    
    
    4,837,829December 2012
    
    3.03
    
    
    2.13
    
    
    3.00
    
    
    3,736,118January 2013
    
    3.36
    
    
    2.70
    
    
    2.94
    
    
    4,297,720February 2013
    
    3.10
    
    
    2.89
    
    
    3.01
    
    
    3,741,306March 2013
    
    3.60
    
    
    3.00
    
    
    3.30
    
    
    2,775,423April 2013
    
    3.56
    
    
    2.70
    
    
    3.38
    
    
    2,548,208May 2013
    
    3.47
    
    
    2.73
    
    
    2.80
    
    
    2,105,845June 2013
    
    3.03
    
    
    2.51
    
    
    2.67
    
    
    1,083,415July 2013
    
    2.87
    
    
    2.29
    
    
    2.38
    
    
    1,967,246August 2013
    
    2.52
    
    
    2.20
    
    
    2.40
    
    
    834,556Sept. 1 to 28, 2013
    
    2.65
    
    
    2.36
    
    
    2.41
    
    
    477,550


|ITEM 8 - | DIRECTORS AND OFFICERS
|-------- | ----------------------

The directors of the Corporation (the Directors) are
elected annually to hold office until the next annual meeting or until a
successor is elected or appointed.

|8.1 | INFORMATIONCONCERNINGDIRECTORS
|--- | ------------------------------

The Board of Directors of the Corporation is composed of 11
members. The chairman of the Board and the majority of Directors and members of
Board committees are independent, except for the Environment, Health &
Safety Committee, which is composed of four members, two of which are
independent and two who are not considered independent, namely, Mr. James M.
Lopez (the President and Chief Executive Officer of the Corporation) and Mr.
Michel J. Dumas (Executive Vice President, Finance and Chief Financial Officer
of the Corporation).

Set forth below is information pertaining to the Directors of
the Corporation based on data furnished by the Directors. The information with
respect to ownership of common shares includes those shares for which such
persons have voting power or investment power. Voting power and investment power
are not shared with others unless specifically stated. All holdings information
presented below is given as of September 28, 2013.

NORMAN M. BETTS, New Brunswick (Canada). Mr. Betts is an
Associate Professor at the Faculty of Business Administration, University of New
Brunswick. He is also the former Finance Minister and Minister of Business with the Province of New Brunswick. Mr. Betts chairs the audit
committees of Tanzanian Royalty Exploration Corp., Adex Mining Inc. and 49 North
Resources Inc.

|31
|--

---

|Annual Information Form
|-----------------------

Mr. Betts was a Director of Former Tembec from January 2005
until February 29, 2008 and is a Director of the Corporation since February 29,
2008. He serves as chairman of the Audit Committee and Member of the Capital
Expenditure Committee2.

Mr. Betts owns 146 common shares, 258 stock options and
118,618 vested deferred share units related to common shares of the
Corporation.

JAMES E. BRUMM, New York (United States of America).
Currently, Mr. Brumm is President of Glastonbury Commons, Ltd., a consulting
firm. He is also an Advisor to Mitsubishi Corporation of Japan. At Mitsubishi
International Corporation (MIC), the North American subsidiary of Mitsubishi
Corporation, Mr. Brumm previously served as Executive Vice President and General
Counsel and served as a Director of both MIC and its parent company Mitsubishi
Corporation. Mr. Brumm is a member of the Boards of Visitors of Columbia
University Law School and and is a board member of First Peoples Worldwide, an
organization supporting indigenous peoples communities. Mr. Brumm is also Vice
Chair of the board The International Crane Foundation.

Mr. Brumm was a Director of Former Tembec from April 1999 until
February 29, 2008 and is a director of the Corporation since February 29, 2008.
He serves as member of the Corporate Governance and Human Resources Committee.

Mr. Brumm owns 2,263 common shares, 3,121 stock options, and
117,098 vested deferred share units related to common shares of the
Corporation.

JAMES N. CHAPMAN,Connecticut (United States of
America). Mr. Chapman is non-executive Advisory Director of SkyWorks Capital,
LLC, an aircraft management services company, which he joined in December 2004.
Prior to SkyWorks, he was associated with Regiment Capital Advisors, LP, an
investment advisor based in Boston specializing in high yield investments, which
he joined in January 2003. Mr. Chapman serves as a member of the board of
directors of the public companies AerCap Holdings NV and Tower International,
Inc. In addition, Mr. Chapman is a member of the board of directors of some
private companies. Mr. Chapman was a director of Anchor Glass Container
Corporation from August 2002 to March 2006, as well as Chrysler LLC from
September 2007 to April 2009 and American Media Inc. from March 2009 to January
2011.

Mr. Chapman has been a Directorof the Corporation since
February 29, 2008 and serves as a member of the Corporate Governance and Human
Resources Committee, as well as the Special Committee for Strategic Purposes.

Mr. Chapman owns 0 common shares, 0 stock options, and
116,264 vested deferred share units of the Corporation.

JAMES V. CONTINENZA, Minnesota (United States of
America). Mr. Continenza is currently Chairman of the Board of Eastman Kodak
Company and has served in senior leadership roles at a number of companies. Mr.
Continenza currently serves on the boards of directors of The Berry Company,
LLC, Blaze Recycling, LLC, Neff Rental, LLC, Portola Packaging, Inc., Southwest
Georgia Ethanol, LLC, and previously served on the boards of directors of Anchor
Glass Container Corp, Inc., Arch Wireless, Inc., Hawkeye Renewables, LLC, MAXIM
Crane Works, Inc., Microcell Telecommunications, Inc., Rath Gibson, Inc., Rural
Cellular Corp, Inc., and U.S. Mobility, Inc.

_____________________________
2 The Capital Expenditure Committee was dissolved on
November 21, 2013.

|32
|--

---

|Annual Information Form
|-----------------------

Mr. Continenza has been a Directorof the Corporation
since February 29, 2008 and serves as a member of the Corporate Governance and
Human Resources Committee, the Special Committee for Strategic Purposes, as well
as the Capital Expenditure Committee3.

Mr. Continenza owns 0 common shares, 0 stock options, and
323,240 vested deferred share units of the Corporation.

MICHEL J. DUMAS,Ontario (Canada). Mr. Dumaswas
named Executive Vice President, Finance and Chief Financial Officer of the
Corporation in 1997. Mr. Dumas joined the Corporation in 1985 as Controller for
the high-yield pulp mill in Temiscaming, Québec. In 1991, he became Vice
President, Finance and Chief Financial Officer of Spruce Falls Inc., an
affiliate of the Corporation. Mr. Dumas has also acted as a Director of various
subsidiaries of the Corporation.

Mr. Dumas has been a Director of the Corporation since January
27, 2011 and is a member of the Environment, Health & Safety Committee.

Mr. Dumas owns 61,653common shares, 13,542
stock options and 110,169 deferred share units of the Corporation.

JACQUES LEDUC,Québec (Canada). Mr. Leduc is a Director
of Terrestar Corporation since April 2006. He is a co-founder and managing
partner of Trio Capital Inc., a private equity and venture capital firm that he
started in January 2006, which invests primarily in telecommunications and new
media. He is also Chief Financial Officer and Treasurer of Terrestar Solutions
Inc. since November 2009. He served as Chief Financial Officer of Microcell
Telecommunications Inc., a nationwide wireless operator in Canada from February
2001 through November 2004, and as Vice President Finance and Director Corporate
Planning from January 1995 to February 2001. Mr. Leduc is a Chartered
Accountant.

Mr. Leduc has been a Director of the Corporation since January
27, 2011 and is a member of the Audit Committee and Chairman of the Capital
Expenditure Committee4.

Mr. Leduc owns 0 common shares, 0 stock options, and 47,912
vested deferred share units of the Corporation.

JAMES M. LOPEZ, Ontario (Canada). Mr. Lopez was
appointed President and Chief Executive Officer in January 2006 and has been a
Director of the Corporation since January 2006. Prior to being named President
and Chief Executive Officer, Mr. Lopez served as Executive Vice President and
President of the Corporations Forest Products Segment from August 2003 to
January 2006. From 1999 to August 2003, Mr. Lopez was Executive Vice President,
Forest Resource Management Group of Tembec. Mr. Lopez also holds a seat on the
board of directors of the Forest Products Association of Canada (FPAC) and is a
co-chairman of the Bi-National Softwood Lumber Council and Softwood Lumber Board
between Canada and the United States. He is a member of the board of directors
of FP Innovations and he sits on the Presidents Board of Advisors for
California University of Pennsylvania.

Mr. Lopez was a Director of Former Tembec from January 2006
until February 29, 2008 and a Director of the Corporation since February 29,
2008. He is a member of the Environment, Health & Safety Committee.

_____________________________
3 The Capital Expenditure Committee was dissolved on
November 21, 2013. 4 The Capital Expenditure Committee was
dissolved on November 21, 2013.

|33
|--

---

|Annual Information Form
|-----------------------

Mr. Lopez owns 66,480 common shares 16,281 stock options and
341,127 deferred share units of the Corporation.

PIERRE LORTIE,Québec (Canada). Mr. Lortie is Senior
Business Advisor at the law firm Dentons LLP. He is also a director of Canam
Group Inc. and Element Financial Corporation. Mr. Lortie also served as
President of the Transition Committee of the Agglomeration of Montreal from its
inception in June 2004 to the end of its mandate in December 2005. Mr. Lortie
served as President and Chief Operating Officer of Bombardier Transportation,
Bombardier Capital, Bombardier International, and as President of Bombardier
Aerospace, Regional Aircraft. He has also served as Chairman of Canadas Royal
Commission on Electoral Reform and Party Financing. He has been Chairman of the
Board, President and Chief Executive Officer of Provigo Inc., President and
Chief Executive Officer of the Montreal Stock Exchange and a Senior Partner of
Secor Inc.

Mr. Lortie has been a Director of the Corporation since January
27, 2011 and is a member of the Environment, Health & Safety Committee, as
well as the Pension Committee5.

Mr. Lortie owns 20,000 common shares, 0 stock options, and
47,912 vested deferred share units of the Corporation.

FRANCIS M. SCRICCO, Massachusetts (United States of
America). Mr. Scricco retired in November 2008 from Avaya Inc., a global
provider of communications systems and software for enterprises where, since
February 2007, he was the Senior Vice President, Manufacturing Logistics and
Procurement. Prior to that, he was President of Avaya Global Services.
Additionally, Mr. Scricco was formerly President and Chief Executive Officer of
Arrow Electronics Inc. one of the worlds largest distributors of electronic
components and computer products, as well as Inglis Ltd., Whirlpool
Corporations Canadian subsidiary. Mr. Scricco is Chairman of the Board of
Directors of Visteon Corporation a Director of Masonite Inc. and is a Director
of one private company. Mr. Scricco began his career at The Boston Consulting
Group and was also previously a General Manager at General Electric.

Mr. Scricco has been a Director of the Corporation since
February 29, 2008 and serves as chairman of the Corporate Governance and Human
Resources Committee, and Member of the Pension Committee5.

Mr. Scricco owns 100,000 common shares, 0 stock options and
116,264 vested deferred share units of the Corporation.

DAVID J. STEUART, Ontario (Canada). Mr. Steuart worked
37 years in the pulp and paper industry in senior executive positions, most
recently from August 1998 to December 2006 with Bowater Incorporated as
President, Pulp Division and as Senior Vice President. Mr. Steuart is a past
Chairman of the Ontario Forest Industries Association. From September 1993 to
July 1998, Mr. Steuart was President of the Pulp Division at Avenor Inc.

Mr. Steuart has been a Director of the Corporation since
February 29, 2008, serves as chairman of the Environment, Health and Safety
Committee.

Mr. Steuart owns 0 common shares, 0 stock options and
116,264 vested deferred share units of the Corporation.

LORIE WAISBERG, Ontario (Canada). Mr. Waisberg is a
corporate director. Between August 2000 and October 2002, Mr. Waisberg served as
Executive Vice President, Finance and Administration for Co-Steel Inc., a steel
manufacturing company. From 1974 to August 2000, he was a partner at the Toronto
office Goodmans LLP, a Canadian law firm. Mr. Waisberg is Chairman and a trustee
of Chemtrade Logistics Income Fund and a director of Chantrell Ventures Corp., Metalex Ventures Limited, Primary
Energy Recycling Corporation and U.S. Silver and Gold Inc., all publicly traded
companies in Canada.

_____________________________
5 The Pension Committee was dissolved on November
21, 2013.

|34
|--

---

|Annual Information Form
|-----------------------

Mr. Waisberg has been a Director of the Corporation since
February 29, 2008 and is a member of the Audit Committee and Chairman of the
Pension Committee6.

Mr. Waisberg owns 4,000 common shares, 0 stock options and
116,264 vested deferred share units of the Corporation.

|8.1.1 | Independence
|----- | ------------

The Corporation considers that all Directors, except Messrs.
Lopez and Dumas, qualify as independent Directors within the meaning of National
Instrument 58-101 Disclosure of Corporate Governance Practices and all
Audit Committee members qualify as independent within the meaning of National
Instrument 52-110  Audit Committees.Mr. James M. Lopez is President and
Chief Executive Officer of the Corporation and Mr. Michel J. Dumas is Executive
Vice President, Finance and Chief Financial Officer of the Corporation, and are,
therefore, not considered independent.

|8.2   | AUDITCOMMITTEE
|----- | --------------
|      |               
|8.2.1 | General       

The Corporation has an Audit Committee which currently consists
of Messrs. Norman M. Betts (chairman), Jacques Leduc and Lorie Waisberg. All the
members of the Audit Committee are considered independent and financially
literate within the meaning of National Instrument 52-110  Audit
Committees with Messrs. Betts and Leduc possessing the professional
designation of Chartered Accountant.

|8.2.2 | Charter of the Audit
Committee
|----- | ------------------------------

The mandate of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities and as such reviews the
financial reporting process, the system of internal control and management of
financial risks, the audit process, the attestation process regarding internal
controls and the Corporations process for monitoring compliance with laws and
regulations and its own corporate policies. In performing its duties, the
committee maintains effective working relationships with the Board of Directors,
management and internal and external auditors. The Audit Committee charter is
attached hereto as Schedule A and is also posted on Tembecs website at
www.tembec.com.

_____________________________
6 The Pension Committee was dissolved on November
21, 2013.

|35
|--

---

|Annual Information Form
|-----------------------

|8.2.3 | Relevant Education and Experience of the Audit
      Committee Members
|----- | ----------------------------------------------------------------------

The following is a brief summary of the education and
experience of each member of the Audit Committee that is relevant to the
performance of his responsibilities as a member of the Audit Committee,
including any education or experience that has provided the member with an
understanding of the accounting principles used by the Corporation to prepare
its annual and interim financial statements.

Name of Audit Committee
      Member
    
    Relevant Education and ExperienceNorman
      M. Betts
    
    Mr. Betts is a Fellow Chartered Accountant and received a
      doctor of philosophy degree in management, with a concentration in
      accounting and finance from Queens University. He is an Associate
      Professor at the Faculty of Business Administration, University of New
      Brunswick. He was made a Fellow of the New Brunswick Institute of
      Chartered Accountants in 2001. He is also the former Finance Minister and
      Minister of Business with the Province of New Brunswick.
      Mr. Betts chairs the audit committees of Tanzanian
      Royalty Exploration Corp., Adex Mining Inc. and 49 North Resources Inc.Jacques Leduc
    
    Mr. Leduc is a Chartered Accountant and holds a Master of
      Business Administration degree from HEC Montreal and a bachelor's degree
      in Business Administration from the Université du Québec à Montreal and
      was admitted by the Canadian Institute of Chartered Accountants in 1986.
      
      Mr. Leduc is Chief Financial Officer and Treasurer of
      Terrestar Solutions Inc. since November 2009. He served as Chief Financial
      Officer of Microcell Telecommunications Inc., a nationwide wireless
      operator in Canada from February 2001 through November 2004, and as Vice
      President Finance and Director Corporate Planning from January 1995 to
      February 2001.Lorie Waisberg
    
    Mr. Waisberg has participated in numerous continuing
      education programs regarding accounting issues. While practicing law for
      30 years with Goodmans LLP, he provided legal advice on a wide range of
      accounting issues. In addition, Mr. Waisberg was retained as an expert
      witness on the role and responsibilities of boards and audit committees in
      relation to financial statements. Furthermore, Mr. Waisberg served as
      Executive Vice President of Co-Steel Inc. where the Chief Financial
      Officer reported to him and he was the principal liaison for internal and
      external audit.
      
      For over 30 years, Mr. Waisberg has served on the audit
      committee of several publicly traded entities. He currently serves as the
      chair of the audit committee of the public company Metalex Ventures
      Limited and also serves on the audit committee of the public company U.S.
      Silver and Gold Inc.


|36
|--

---

|Annual Information Form
|-----------------------

|8.2.4 | External Auditor Service
Fees
|----- | -----------------------------

The following table shows fees paid to KPMG LLP in Canadian
dollars in the past two fiscal years for various services provided to the
Corporation:

Year Ended
    
    
    Year EndedSeptember 29, 2012
    
    
    September 28, 2013Audit Fees
    $
    1,292,000
    
    $
    978,500Audit-Related Fees
    $
    75,000
    
    $
    76,000Tax Fees
    $
    106,000
    
    $
    159,000Total
    $
    1,473,000
    
    $
    1,213,500


Audit Fees

These fees include professional services rendered by the
external auditors for statutory audits of the annual financial statements and
for other audits.

Audit-Related Fees

These fees include professional services that reasonably relate
to the performance of the audit or review of Tembecs financial statements.
These services include accounting consultations related to accounting, financial
reporting or disclosure matters not classified as Audit Services; assistance
with understanding and implementing new accounting and financial reporting
guidance from rulemaking authorities; financial audits of employee benefit
plans; agreed upon or expanded procedures related to accounting records required
to respond to or comply with financial, accounting or regulatory reporting
matters.

Tax Fees

These fees include professional services for tax compliance,
tax advice and tax planning. These services include review of tax returns,
assistance with tax audits, capital structure, corporate transactions and other
special purpose mandates approved by the Audit Committee.

|8.2.5 | Policies and Procedures for the Engagement of
      Non-Audit Services
|----- | ----------------------------------------------------------------------

The Corporations Audit Committee has adopted the Pre-Approval
Policy and Procedures for Non-Audit Services Provided by External Auditors (as
defined in the External Auditor Services and Fees Policy) which sets forth the
procedures and the conditions pursuant to which these services proposed to be
performed by external auditors are pre-approved. Under the terms of the policy,
the Audit Committee has delegated to the Chairman of the Audit Committee
pre-approval authority for Non-Audit Services not previously approved by the
Audit Committee which involve the payment of fees not in excess of $50,000. Any
service approved by the Chairman is reported to the Audit Committee at its next
meeting subsequent to such pre-approval.

|37
|--

---

|Annual Information Form
|-----------------------

|8.3 | INFORMATIONCONCERNINGNON-DIRECTOR PRINCIPALOFFICERS
|--- | ---------------------------------------------------

Non-Director Principal Officers
    
    Office with the Corporation
    
    Province/State and Country
      of ResidenceRéginald Bastien
    
    Corporate Controller
    
    Québec, CanadaChris Black(1)
    
    Executive Vice President,
      President, Paper Pulp Group
    
    Ontario, CanadaLinda Coates
    
    Vice President, Human Resources
      and Corporate Affairs
    
    Ontario, CanadaPaolo Dottori
    
    Vice President, Energy,
      Environment and Technology
    
    Ontario, CanadaPatrick LeBel
    
    Vice President, General Counsel
      and Corporate Secretary
    
    Québec, CanadaMarcus Moeltner
    
    Vice President, Business
      Development
    
    Ontario, CanadaStephen J. Norris
    
    Treasurer
    
    Québec, CanadaMahendra Patel
    
    Vice President, Engineering,
      Purchasing and Services
    
    Ontario, CanadaChristian Ribeyrolle
    
    Executive Vice President,
      President, Specialty Cellulose Group and President, Tembec France SAS
    
    Longues, FranceDennis Rounsville (2)
    
    Executive Vice President, President, Forest Products Group
    
    B.C., Canada


(1) As of October 15, 2013, Mr. Black has taken
additional responsibilities as Executive Vice President, Forest Products, Paper
and Paper Pulp Group. (2)Mr. Rounsville ceased to act as an
Officer of Tembec as of October 15, 2013.

During the past five years, each of the non-Director principal
officers of the Corporation (the Principal Officers) have been engaged
in their present principal occupations or in other executive capacities of the
Corporation or with related or affiliated companies, except for Patrick LeBel
who, from September 2006 to December 2009 was Senior Counsel for Tembec, Marcus
Moeltner who from May 2008 to January 2011 was Vice President, Corporate
Development of Tembec and from January 2005 to May 2008 was Vice President,
Finance of Grant Forest Products Inc., Réginald Bastien who from January 1998 to
September 2011 was Director of Taxation of Tembec and Linda Coates who from May
2011 to July 2012 was Vice President, Communications and Public Affairs, and
from January 2007 to April 2011 was a consultant in communications and public
affairs, Christian Ribeyrolle who from January 2008 to May, 2009 was Commercial
Director, Specialty Cellulose for Tembec, and from May, 2009 to January, 2013
was Senior Vice President, Specialty Cellulose for Tembec. As at September 28,
2013, the Directors and Principal Officers beneficially owned, as a group, or
exercised control or direction over, directly or indirectly, approximately
358,788 common shares representing approximately 0.36% of the common shares
outstanding.

|8.4 | Cease Trade Orders, Bankruptcies, Penalties and
      Sanctions
|--- | ---------------------------------------------------------------

To the knowledge of the Corporation and based on the
information furnished by the Directors and the executive officers, none of the
directors or the executive officers of the Corporation: (a) is, as at the date
of this AIF, or has been within 10 years before the date of this AIF, a
director, chief executive officer or chief financial officer of any corporation
that: (i) while the Director or executive officer was acting in that capacity
was subject to a cease trade order (or an order similar to a cease trade order,
including a management cease trade order) or an order that denied the relevant
corporation access to any exemption under securities legislation, that was in
effect for a period of more than 30 consecutive days; or (ii) was subject to a
cease trade or similar order or an order that denied the relevant corporation
access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was
issued after the Director or executive officer ceased to be a director, chief
executive officer or chief financial officer and which resulted from an event
that occurred while the Director or executive officer acted as director, chief
executive officer or chief financial officer; (b) is, as at the date of this
AIF, or has been within the 10 years before the date of this AIF, a director or
executive officer of any corporation that: while the Director or executive
officer was acting as director or executive officer or within one year of that
person ceasing to act in that capacity, became bankrupt, made a proposal under
any legislation relating to bankruptcy or insolvency or was subject to or
instituted any proceedings, arrangement or compromise with creditors or had a
receiver, receiver manager or trustee appointed to hold its assets; or (c) has,
within 10 years before the date of this AIF, become bankrupt, made a proposal
under any legislation relating to bankruptcy or insolvency, or become subject to
or instituted any proceedings, arrangement or compromise with creditors, or had
a receiver, receiver manager or trustee appointed to hold his assets, except
that:

|38
|--

---

|Annual Information Form
|-----------------------

|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|i)    |  | Messrs. Norman M. Betts, James E. Brumm, James M. Lopez
      were directors of Former Tembec and Tembec Industries Inc. for varying
      periods of time immediately prior to the completion of the
      Recapitalization and Michel J. Dumas was a director of Tembec Industries
      Inc. prior to the Recapitalization;                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|ii)   |  | Mr. Rounsville was executive officer of Former Tembec and
      Tembec Industries Inc. for varying periods of time immediately prior to
      the completion of the Recapitalization;                                                                                                                                                                                                                                                             
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|iii)  |  | At the request of Tembec, Mr. James M. Lopez and Mr.
      Michel J. Dumas were directors of Marathon Pulp Inc. when it was declared
      bankrupt after failing to file a proposal within 30 days of filing a
      notice of intention to file a proposal under the Bankruptcy and
      Insolvency Act(Canada) (the "BIA") in March 2009;                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|iv)   |  | At the request of Tembec, Mr. Michel J. Dumas was a
      director of Gestion Papiers Gaspésia Inc. and its subsidiary, Papiers
      Gaspésia Inc., when they filed for protection under (the "CCAA") in
      January 2004. On July 4, 2005, the plan of arrangement submitted by
      Papiers Gaspésia Inc. and Papiers Gaspésia Limited Partnership to their
      creditors was homologated by the Court and has been fully
    implemented;
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|v)    |  | At the request of Tembec, Mr. Michel J. Dumas was a
      director of Jager Building Systems Inc. when it filed a voluntary
      assignment in bankruptcy under the BIA in September 2008;                                                                                                                                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|vi)   |  | At the request of Tembec, Mr. Michel J. Dumas was a
      director of Temlam Inc. when it filed a voluntary assignment in bankruptcy
      under the BIA in September 2008;                                                                                                                                                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|vii)  |  | Mr. Betts was a director of Starfield Resources Inc. when
      it filed a notice of intention to make a proposal to its creditors under
      the BIA in March 2013;                                                                                                                                                                                                                                                                             
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|viii) |  | Mr. James N. Chapman was a director of Anchor Glass
      Container Corporation when it filed for bankruptcy in August 2005 due to
      high natural gas prices and excess leverage;                                                                                                                                                                                                                                                             
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|ix)   |  | Mr. James N. Chapman was a director of Chrysler LLC when
      it filed for protection from its creditors under Chapter 11 of the United
      States Bankruptcy Code in April 2009;                                                                                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|x)    |  | Mr. James N. Chapman was a director of American Media
      Inc. when it filed for voluntary petitions for relief under Chapter 11 of
      the United States Bankruptcy Code in November 2010;                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|xi)   |  | Mr. Jacques Leduc was an executive officer of Microcell
      Telecommunications Inc. when it filed for and received protection under
      the CCAA in January 2003;                                                                                                                                                                                                                                                                             

|39
|--

---

|Annual Information Form
|-----------------------

|xii)  |  | Mr. Jacques Leduc is a director of Terrestar Corporation
      since April 2006 and is Chief Financial Officer and Treasurer of Terrestar
      Solutions Inc. and Terrestar Networks (Canada) Inc. since November 2009.
      Terrestar Corporation, Terrestar Networks (Canada) Inc. and Terrestar
      Networks Holdings (Canada) Inc. filed for and received protection under
      Chapter 11 of the United States Bankruptcy Code on October 19,
  2010;
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|xiii) |  | Mr. Lorie Waisberg was a director of McWatters Mining
      Inc. when it initiated insolvency proceedings in 2001 and in 2004.
      Canadian securities regulators issued cease trade orders by reason of
      McWatters Mining Inc.s failure to file required financial statements. The
      cease trade orders are no longer in effect and McWatters Mining Inc. has
      emerged from bankruptcy;                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|xiv)  |  | Mr. Lorie Waisberg was a director of FMF Capital Group
      Ltd. when a subsidiary of FMF Capital Group Ltd., of which Mr. Waisberg
      was not a director, conveyed its assets to a trustee to facilitate the
      orderly wind-up of its business in May 2007.                                                                                                                                                                                           

None of the proposed nominees for election as Directors of the
Corporation has been subject to: (i) any penalties or sanctions imposed by a
court relating to securities legislation or by a securities regulatory authority
or has entered into a settlement agreement after December 31, 2000 with a
securities regulatory authority; or (ii) any other penalties or sanctions
imposed by a court or regulatory body that would likely be considered important
to a reasonable security holder in deciding whether to vote for the proposed
Director.

|ITEM 9 - | LEGAL PROCEEDINGS
|-------- | -----------------

Tembec is involved in various legal proceedings relating to
contracts, commercial disputes, taxes, environmental issues, employment and
workers compensation claims and other matters. The Corporation periodically
reviews the status of these proceedings with both inside and outside counsel.
The Corporation believes that the ultimate disposition of these matters will not
have a material adverse effect on its financial position.

|ITEM 10 - | TRANSFER AGENT AND REGISTRAR
|--------- | ----------------------------

Tembecs transfer agent and registrar is Computershare Trust
Company of Canada. The register of transfers of the common shares of Tembec
maintained by Computershare Trust Company of Canada is located at its offices in
Montreal, Québec

|ITEM 11 - | MATERIAL CONTRACTS
|--------- | ------------------

On August 17, 2010 Tembec Industries entered into an Indenture
with Wilmington Trust FSB which governs the 2018 Senior Secured Notes issued by
Tembec Industries in an aggregate principal amount of US$255 million. On
February 23, 2012, Tembec Industries issued an additional US$50 million in 2018
Senior Secured Notes, bringing the aggregate principal amount of 2018 Senior
Secured Notes issued by Tembec Industries to US$305 million. The 2018 Senior
Secured Notes are guaranteed by the Corporation and certain of the Corporations
subsidiaries. The Indenture requires compliance with certain terms and
conditions that could in certain circumstances restrict the ability of the
Corporation or its subsidiaries to incur additional indebtedness, to encumber or
dispose of its assets or make certain payments or distributions. The Indenture
also includes cross default provisions which may deem the Corporation and
certain of its subsidiaries in default under the Indentures if one or more of
them were to default on their obligations under other agreements. Reference is
made to the Indenture, which was filed on SEDAR and may be found at www.sedar.com.

On March 4, 2011, the Corporation, as Guarantor, and Tembec
Industries, Tembec Enterprises Inc., A.R.C. Resins Corporation and Tembec GP, as
Borrowers, entered into together with the ABL Lenders, the ABL Facility, which
is a revolving credit facility of $200 million maturing in February, 2016
secured by a first priority charge over receivables and inventories of the
Borrowers (ABL Facility). Interest is based on the prime rate or the bankers acceptances rate, as the case may be. As at
September 28, 2013, the amount available under this facility was $120 million,
amount of which $53 million was drawn and $56 million was reserved for letters
of credit. This facility requires compliance with certain covenants that could
in certain circumstances restrict the ability of the Corporation or its
subsidiaries to incur additional indebtedness, to encumber or dispose of its
assets or make certain payments or distributions. The ABL Facility also includes
cross default provisions which may deem the Borrowers and the Guarantor in
default under the ABL Facility if one or more of them were to default on their
obligations under other agreements. In Fiscal 2013, the Borrowers and the
Guarantor on one hand and the ABL Lenders on the other hand agreed to amend and
extend the ABL Facility by one year. The maturity date of the Facility is set to
expire on March 4, 2017. Tembec also negotiated a reduction of the aggregate
resolving loan commitments from $200 million to $175 million and related
adjustments to certain thresholds due to a reduction in the number of mills it
operates. Reference is made to the ABL Facility, which was filed on SEDAR and
may be found at www.sedar.com.

|40
|--

---

|Annual Information Form
|-----------------------

On March 9, 2012 Tembec, Tembec Industries and Tembec Energy
L.P. entered into a $75-million loan, the IQ Loan, with Investissement Québec, a
governmental agency, which will be used to finance a portion of the total cost
of the Project which was initially estimated at $190 million, but revised to
$235 million in Fiscal 2013. The loan bears interest at a rate of 5.5%
compounded yearly and is secured by a second ranking charge over the Projects
assets. The loan shall be reimbursed in equal monthly payments over a period of
12 years starting 36 months after the initial loan disbursement and is subject
to compliance with certain covenants and undertakings customary with such types
of loans. Tembec has also granted to Investissement Québec a five-year option
starting on the first loan disbursement date to acquire three million common
shares of Tembec at a price of $7 per share. The IQ Loan also includes cross
default provisions which may deem Tembec, Tembec Industries and Tembec Energy
L.P. in default under the IQ Loan if any of them were to default on their
obligations under other agreements. Reference is made to the IQ Loan which was
filed on SEDAR and may be found at www.sedar.com.

On March 16, 2012 Tembec Energy L.P., entered into a long-term
power purchase contract with Hydro-Québec acting through its Hydro-Québec
Distribution division. The agreement will allow Tembec Energy L.P. to sell to
Hydro-Québec, for a 25-year term, up to 50 megawatts of the electricity
generated by a new turbine to be installed at its Temiscaming mill at green
energy rates of $106 MW/hour, indexed annually with Consumer Price Index. (CPI)
Reference is made to the power purchase contract which was filed on SEDAR and
may be found at www.sedar.com.

On June 29, 2012, Tembec Energy L.P. entered into a $30 million
loan, the IPD Loan with Integrated Private Debt Fund III LP (IPD),
which will be used to finance the acquisition of the boiler and the turbine
required in connection with the Project. Tembec intervened to the Loan to
guarantee all obligations of Tembec Energy LP thereunder. The IPD Loan is
secured by a first ranking change over all the Projects assets. The interest
rate on the IPD Loan will be the greater of 6.35% and the yield on equivalent
terms Government of Canada bonds plus 4.25% at the date the funds are advanced.
The loan shall be reimbursed in blended monthly instalments over a period of
eight years beginning approximately 24 months after the initial advance, with a
balloon payment of $12 million to be repaid at the end of the ten-year term
period and is subject to compliance with certain covenants and undertakings
customary with such types of loans. The IPD Loan also includes cross default
provisions which may deem Tembec and Tembec Energy L.P. in default under the IPD
Loan if any of them were to default on their obligations under other agreements.
Reference is made to the IPD Loan, which was filed on SEDAR and may be found at
www.sedar.com.

On May 16, 2013, Tembec entered into a asset purchase agreement
for the sale of its NBSK pulp mill and related assets and liabilities located in
Skookumchuck, British Columbia to an affiliate of Paper Excellence Canada
Holdings Corporation for a purchase price of $97 million, including $29 million
in working capital. Reference is made to the asset purchase agreement which was
filed on SEDAR and may be found at www.sedar.com.

|41
|--

---

|Annual Information Form
|-----------------------

On December 13, 2012, the Corporation adopted and entered into
a shareholder rights plan agreement with Computershare Trust Company of Canada
(the "Shareholder Rights Plan). The adoption of the Shareholder Rights
Plan was approved, ratified and confirmed by the shareholders on January 31,
2013. The purpose of the Shareholder Rights Plan is to provide the Corporation
with sufficient time to explore and develop alternatives formaximizing shareholder value in the event of a take-over bid of
the Corporation and to encourage fair treatment of all shareholders by providing
them with an equal opportunity to participate in a take-over bid. The
Shareholder Rights Plan, unless terminated in accordance with its terms, will
expire following the date of the Corporation's annual meeting of shareholders to
be held in year 2016. Copies of the Shareholder Rights Plan are available under
the Corporation's profile at www.sedar.com or
upon request to the Secretary of the Corporation at 800 René-Lévesque Blvd.
West, Suite 1050, Montreal, Québec, H3B 1X9 (facsimile: (514) 871-1980).

On September 6, 2013, Tembec, Tembec Industries Inc. and Tembec
Energy L.P. entered into an additional loan in the amount of $17.8 million with
IQ, the Additional IQ Loan to finance a portion of the costs overruns of the
Project. The Additional IQ Loan will bear interest at the same rate as that
applicable under the initial $75 million loan entered into in Fiscal 2012 and is
secured by a second priority charge over the Projects assets. The Additional IQ
Loan shall be reimbursed in equal monthly payments over a period of four years
starting in April 2016, and is subject to compliance with certain covenants and
undertakings customary with such types of loans. Tembec has also agreed to grant
a five year option to IQ to subscribe for 712,000 common shares of the
Corporation at a premium of 30% over the average trading price of the shares
over the five business days prior to the issuance of the option.The IQ
Loan also includes cross default provisions which may deem Tembec, Tembec
Industries and Tembec Energy L.P. in default under the Additional IQ Loan if any
of them were to default on their obligations under other agreements. Reference
is made to the IQ Loan which was filed on SEDAR and may be found at www.sedar.com.

On September 19, 2013,Tembec Energy L.P. has entered
into an amended and restated credit agreement with IPD, the Restated Credit
Agreement as Agent for the Projects senior lenders, increasing its credit
facility by $10 million, the Increased IPD Facility to finance a portion of the
costs overruns of the Project. Tembec intervened to the Restated Credit
Agreement to guarantee all obligations of Tembec Energy LP thereunder. The
Increased IPD Facility will be subject to the current general terms and
conditions of the credit facility with IPD. The Increased IPD Facility will be
reimbursed in blended monthly instalments over a period of eight years beginning
in November 2014 with a balloon payment of $12 million to be repaid in October
2022 and is subject to compliance with certain covenants and undertakings
customary with such types of loans. The Restated Credit Facility also includes
cross default provisions which may deem Tembec and Tembec Energy L.P. in default
under the Restated Credit Agreement if any of them were to default on their
obligations under other agreements. Reference is made to the Restated Credit
Agreement, which was filed on SEDAR and may be found at www.sedar.com.

|ITEM 12 - | INTERESTS OF EXPERTS
|--------- | --------------------

KPMG LLP are the external auditors of the Corporation who
prepared the Independent Auditors' Report to the shareholders dated November 29,
2013, with respect to the 2013 Financial Statements consisting of consolidated
balance sheets as of September 28, 2013 and September 29, 2012 and the
consolidated statements of net earnings (loss), comprehensive earnings (loss),
changes in shareholders equity and cash flows for the years then ended. KPMG
LLP is independent with respect to Tembec within the meaning of the applicable
rules and related interpretations prescribed by the relevant professional bodies
in Canada and any applicable legislation.

|42
|--

---

|Annual Information Form
|-----------------------

|ITEM 13 - | ADDITIONAL INFORMATION
|--------- | ----------------------

Additional information relating to Tembec, including the
documents incorporated by reference in this AIF, may be found on SEDAR at
www.sedar.com.

Additional information, including Directors and Executive
Officers remuneration and indebtedness, principal holders of the Corporations
securities and securities authorized for issuance under equity compensation
plans, where applicable is contained in the Management Information Circular
prepared in connection with the Annual General Meeting of Shareholders of the
Corporation to be held on January 30, 2014. Additional financial information is
provided in the Corporations 2013 Financial Statements and 2013 MD&A.

DEFINITIONS

Adjusted EBITDA  Earnings before interest, income
taxes, depreciation, amortization and other items.

ADMT Air Dryed Metric Tonne.

BIA Bankruptcy and Insolvency Act (Canada).

Biomass  Bark and residual wood waste used as fuel to
operate cogeneration facilities or boilers.

Board feet  The plural of board foot; a board foot is
calculated by multiplying 1 x 12 x 12 = 1 foot board measure gross count.
Lumber is then finished (planed/sanded) to a smaller size and sold based on the
original gross count. The difference between gross size and net size is
approximately 72%.

Capacity  The number of units which can be produced in
a year based on operating with the normal number of shifts and maintenance
interruptions.

Cogeneration  Generation of both power and steam in an
industrial power plant.

Effluent  Outflowing waste discharge from a pulp and
paper mill.

Hectare  2.471 acres.

ISO-14001 is an independent third party certification
that confirms that Tembecs internal Environmental Management system meets
internationally accepted standards for protecting environmental values, and that
the system is properly maintained and applied by Tembec.

Measurements

Tonne  metric ton  1,000
kilograms or 2,204 pounds (1.1023 tons).

MBF  One thousand board feet
(see board feet).

NBSK northern bleached softwood kraft pulp.

Newsprint  A printing paper whose major use is in
newspapers. It is made largely from groundwood or mechanical pulp.

|43
|--

---

|Annual Information Form
|-----------------------

Pulp the generic term describing the fibres derived
from wood. Pulp can result from a variety of pulping processes including
cooking, refining, grinding or the processing and cleaning (de-inking) of waste
paper. Pulp can be either in a wet or dry state. Types of pulp include:

Kraft pulp  chemical pulp
produced by an alkaline cooking process using sodium sulphate.

High-yield pulp  pulp produced
by a combined chemical, thermal and refining process.

Specialty cellulose pulp 
chemical pulp produced by an acid cooking process which can be either ammonia,
sodium or calcium based.

Wood chips- Small pieces of wood used to make pulp. The
wood chips are produced either from wood waste in a sawmill or a log
merchandiser or from pulp wood cut specifically for this purpose. Wood chips are
generally uniform in size and are larger and coarser than sawdust.

|44
|--

---

|Annual Information Form
|-----------------------

SCHEDULE A AUDIT COMMITTEE CHARTER

TEMBEC INC.

I.OVERALL PURPOSE / OBJECTIVES

The Audit Committee (the Committee)
will assist the Board of Directors (the Board) of Tembec Inc.
(the Corporation) in fulfilling its oversight responsibilities.
The Committee will review the financial reporting process, the system of
internal control and management of financial risks, the audit process, the
attestation process regarding internal controls and the Corporations process
for monitoring compliance with laws and regulations and its own corporate
policies. In performing its duties, the Committee will maintain effective
working relationships with the Board, management, and the internal and external
auditors. The Corporation shall ensure that appropriate funding is provided to
the Committee to compensate the auditors and any other advisors engaged by the
Committee, as well as for ordinary administrative expenses.

Subject to any power (i) conferred to
the Committee under the Corporations by-laws or any applicable laws, rules or
regulations (including those of any stock exchange), or (ii) otherwise assigned
to the Committee by resolution of the Board of Directors, the Committee shall
have no decision-making authority other than as specifically contemplated in
this Charter.

II.COMPOSITION

The Committee shall consist of not
fewer than three directors, each of whom shall be independent, as defined in
applicable securities legislation. All members of the Committee shall be
financially literate, as defined in applicable securities legislation. Members
of the Committee shall be appointed by the Board and shall serve at the pleasure
of the Board. Unless a chairman is appointed by the Board, the members of the
Committee will select its chairman (the Chairman).

III.MEETINGS

The Committee shall meet at least four
times annually. The Committee shall meet at least quarterly with the external
auditors and at least annually with the internal auditors to discuss any matters
that the Committee believes should be discussed, including privately held
conversations. Meetings of the Committee may be called by its Chairman or the
chairman of the Board, the external auditors or the internal auditors. Minutes
of all meetings of the Committee shall be maintained and submitted as soon as
practicable to the Board. In addition, the Committee will report to the Board on
the Committees activities at the Board meeting following each Committee
meeting.

A majority of Committee members shall
constitute a quorum.

The members of the Committee shall have
the right, for the purposes of discharging the powers and responsibilities of
the Committee, to inspect any relevant records of the Corporation and its
subsidiaries. The Committee shall also have the authority to hire independent
counsel and other advisors at the Corporations expense, if necessary to carry
out its duties and the authority to set and pay the compensation for any
independent counsel or advisor employed by the Committee. The Committee shall
also have the authority to communicate directly with internal and external
auditors.

|45
|--

---

|Annual Information Form
|-----------------------

IV.RESPONSIBILITIES AND DUTIES

The Audit Committee shall:

Documents/Reports Review

| | (1) | Review and reassess the adequacy of this Charter
      annually, report to the Board thereon and ensure that it is reproduced in
      the annual information form on an annual basis and posted in an up-to-date
      format on the Corporations website.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                             
| | (2) | Review and discuss with management and the external
      auditor and, if appropriate, recommend for approval by the Board prior to
      any disclosure:                                                                                                   

| | i.   | interim unaudited financial statements;                                                                                                                                                                                                                                 
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                         
| | ii.  | audited annual financial statements, in conjunction with
      the report of the external auditors; and                                                                                                                                                                 
| |      |                                                                                                                                                                                                                                                                         
| | iii. | all public disclosure documents containing audited or
      unaudited financial information, including managements discussion and
      analysis of financial condition and results of operations, any prospectus
      and annual and interim earnings press releases.
| |      |                                                                                                                                                                                                                                                                         
| | iv.  | This review shall include, where appropriate, an
      examination of:                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                         
| | v.   | the existence and substance of significant accruals,
      estimates, or accounting judgments;                                                                                                                                                                          
| |      |                                                                                                                                                                                                                                                                         
| | vi.  | transactions with related parties and adequacy of
      disclosures; and                                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                         
| | vii. | qualifications, if any, contained in letters of
      representation and the contents of review or audit reports from the
      Corporations external auditors, with respect to the Corporations
      financial statements.                                          

| | (3) | Review any report which accompanies published financial
      statements (to the extent such a report discusses financial condition or
      operating results) for consistency of disclosure with the financial
      statements themselves.                   
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                 
| | (4) | Obtain an explanation from management of all significant
      variances between comparative reporting periods and an explanation from
      management for items which vary from expected or budgeted amounts as well
      as from previous reporting periods.
| |     |                                                                                                                                                                                                                                                                 
| | (5) | Review uncertainties, commitments, and contingent
      liabilities material to financial reporting.                                                                                                                                                            

External Audit

| | (6) | Recommend to the Board the firm to be proposed to the
      Corporations shareholders for appointment or reappointment as external
      auditors and recommend the fees to be paid to the external auditors. The
      external auditors are accountable to the Board and the Committee, as
      representatives of the Corporations shareholders, and the external
      auditors shall confirm same in their annual engagement letter. The
      external auditors must report directly to the Committee.                                                                                                                                                                                                                                                                                             
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (7) | Pre-approve all services to be provided by the external
      auditors to the Corporation or any of its subsidiaries or adopt specific
      policies and procedures for the engagement of such services,
    provided that such pre-approval policies and procedures are
      detailed as to the particular service, the Committee is informed of each
      service and the procedures do not include delegation of the Committee
      responsibilities to management. The Committee may delegate to one or more
      members of the Committee the authority to pre-approve services provided by
      external auditors, provided that such member or members must present any
      such services so approved to the full Committee at its first scheduled
      meeting following such pre-approval.

|46
|--

---

|Annual Information Form
|-----------------------

| | (8)  | On an annual basis, review and discuss a written report
      by the external auditors detailing all factors that might have an impact
      on the auditors independence, including all services provided and fees
      charged by the external auditors.                                                                                                                                                                                                               
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (9)  | Oversee the work, review the performance of the external
      auditors and approve any proposed change of the external auditors. In such
      a case, approve the information required to be disclosed by
      regulations.                                                                                                                                                                                                                                             
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (10) | Approve the scope and plan of the annual audit, of the
      attest services and require the external auditors to review the quarterly
      financial statements and related documents.                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (11) | Review the audit findings and recommendations and
      managements response thereto.                                                                                                                                                                                                                                                                                                                                                                                     
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (12) | Review any analysis prepared by management and/or the
      external auditor setting forth significant financial reporting issues and
      judgements made in connection with the preparation of the financial
      statements, including any analysis of the effects of alternative generally
      accepted accounting principles methods on the financial
  statements.                                                                                               
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (13) | Review annually with the external auditors the
      acceptability and the quality of the implementation of generally accepted
      accounting principles focused on the accounting estimates and judgments
      made by management and their selection of accounting principles.                                                                                                                                                                                        
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (14) | Review any disagreement between management and the
      external auditors regarding financial reporting and, to the extent
      possible, resolve any such disagreements.                                                                                                                                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (15) | At least annually consult with the external auditors out
      of the presence of management about the adequacy of internal controls
      (including the steps to be adopted in light of any material control
      deficiencies), the fullness and accuracy of the financial statements and
      any significant difficulties encountered during the course of the audit,
      including any restrictions on the scope of work or access to required
      information.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (16) | Monitor the rotation of the lead audit partner,
      concurring partner and other audit partners;                                                                                                                                                                                                                                                                                                                                                                         
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (17) | Review and approve the Corporations hiring policies for
      partners, employees and former partners and employees of its present
      external auditors and of its former external
auditors.                                                                                                                                                                                                                                                                           

Internal Audit and Internal Control

| | (18) | Review any decisions related to the need for internal
      auditing, including whether this function should be outsourced and in that
      case, approve the supplier which shall not be the external
  auditors.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                    
| | (19) | Review and approve the appointment or removal of the
      director of internal audit who shall report to a senior officer other than
      the Corporate Controller.                                              
| |      |                                                                                                                                                                                                                    
| | (20) | Approve the mandate of the internal audit function, and
      review annually the internal audit plan and the corresponding
    budgets.                                                                           

|47
|--

---

|Annual Information Form
|-----------------------

| | (21) | Ensure that management has established and maintained
      adequate internal controls and procedures for financial reporting and
      accounting, with particular emphasis on controls over computerized
      systems, and review annually a management assessment of the effectiveness
      of internal controls. In the event of a material deficiency in internal
      controls, the Committee shall work with the external auditors and internal
      auditors to resolve such deficiency.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (22) | Review significant internal audit findings,
      recommendations and managements response.                                                                                                                                                                                                                                                                                                                                                                                                        
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (23) | Ensure the coordination of the work between internal and
      external auditors.                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (24) | Ensure the internal auditor has ongoing access to the
      Chairman as well as all officers of the Corporation, particularly the
      chairman of the Board and the President.                                                                                                                                                                                                                                                                                                                    
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (25) | At least annually, undertake private discussions with
      staff of the internal audit function to establish internal audit
      independence, the level of co-operation received from management, the
      degree of interaction with the external auditor, and any unresolved
      material differences of opinion or disputes.                                                                                                                                                               

Financial Risk Management

| | (26) | Review periodically and inquire of management, the
      internal auditors and the external auditors concerning the financial risk
      or exposures of the Corporation and assess the steps management has taken
      to control such risks. Business financial risks include, but are not
      limited to, risks in the nature of treasury-related risks (including
      foreign exchange risks), information systems-related risks, disclosure
      quality and standards relating to financial
reporting.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Financial Reporting Processes

| | (27) | In consultation with the external auditors and the
      internal auditors, review the integrity and adequacy of the financial
      reporting processes, both internal and external, including procedures for
      review of the Corporations public disclosure of financial information
      extracted or derived from its financial statements.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                      
| | (28) | Consider and approve, if appropriate, changes to the
      accounting principles and practices as recommended by the external
      auditors, management or the internal auditors.                                                                                                                                                                   

Disclosure Policy Oversight

| | (29) | Review, report and, where appropriate, provide
      recommendations to the Board on the Corporations disclosure policy and
      other related policies and procedures, and recommend changes as deemed
      appropriate. The Committee, in performing this task, will review any
      reports on or proposed amendments to the disclosure policy submitted to it
      by the Disclosure Committee.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                         
| | (30) | Assist the Disclosure Committee and the Board in
      interpreting and applying the Corporations disclosure policy and other
      related policies and procedures.                                                                                                                                                                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                                                         
| | (31) | Oversee compliance with the Corporations disclosure
      policy.                                                                                                                                                                                                                                                                                                                                      

Legal compliance and other
responsibilities

| | (32) | Review incidents of fraud, illegal acts, conflicts of
      interest and related-party transactions.                                                                                                                                                                                                                                                    
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                         
| | (33) | Establish procedures for the receipt, retention and
      treatment of complaints received by the Corporation regarding accounting,
      internal accounting controls, or auditing matters, and
  the confidential, anonymous submission by employees of the
      Corporation of concerns regarding questionable accounting or auditing
      matters.

|48
|--

---

|Annual Information Form
|-----------------------

| | (34) | Review claims or potential claims and any other legal
      matters as reported to the Committee that could have an impact on the
      financial statements.                                  
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                
| | (35) | Satisfy itself that the corporate expense policy is being
      enforced in relation to officers of the Corporation.                                                                           
| |      |                                                                                                                                                                                                
| | (36) | Review material matters relating to audits of
      subsidiaries.                                                                                                                              
| |      |                                                                                                                                                                                                
| | (37) | Review, assess and, if appropriate, recommend for
      approval by the Board any and all new borrowings.                                                                                      
| |      |                                                                                                                                                                                                
| | (38) | Perform any other activities consistent with this
      Charter, the Corporations by-laws and policies and governing laws, as the
      Committee or the Board deems necessary or
appropriate.

Remuneration of Committee Members

| | (39) | No member of the Committee may earn fees from the
      Corporation or any of its subsidiaries other than fees for acting as a
      member of the Board or any Board committee (which fees may include cash or
      other in-kind consideration ordinarily available to directors, as well as
      all of the regular benefits that other directors receive). For greater
      certainty, no member of the Committee shall accept, directly or
      indirectly, any consulting, advisory or other compensatory fee from the
      Corporation.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|49
|--

---