Exhibit 99.1

March 1, 2007

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NOVA Chemicals Corporation

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ANNUAL INFORMATION FORM

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TABLE OF CONTENTS

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|TRADEMARKS                                      |                                                                          | 2   
|FORWARD-LOOKING INFORMATION                     |                                                                          | 3   
|THE CORPORATION                                 |                                                                          | 4   
|HISTORICAL DEVELOPMENT                          |                                                                          | 4   
|                                                | NOVA Chemicals Corporation                                               |     
|                                                | Development of NOVA Chemicals' Plastics and Chemical Businesses          |     
|                                                | Developments Since January 1, 2004                                       |     
|ANTICIPATED DEVELOPMENTS IN 2007                |                                                                          | 7   
|SUBSIDIARIES OF NOVA CHEMICALS                  |                                                                          | 9   
|BUSINESS                                        |                                                                          | 10  
|                                                | General                                                                  |     
|                                                | Properties and Production Facilities                                     |     
|                                                | Product Flow Chart                                                       |     
|                                                | Facility Profile (Olefins/Polyolefins)                                   |     
|                                                | Facility Profile (Performance Styrenics)                                 |     
|                                                | Facility Profile (STYRENIX)                                              |     
|                                                | Olefins/Polyolefins                                                      |     
|                                                | Performance Styrenics                                                    |     
|                                                | STYRENIX                                                                 |     
|DISTRIBUTION OF PRODUCTS                        |                                                                          | 20  
|COMPETITION                                     |                                                                          | 21  
|CYCLICALITY                                     |                                                                          | 21  
|INTELLECTUAL PROPERTY                           |                                                                          | 22  
|                                                | Patents, Licenses and Trademarks                                         |     
|                                                | Technology and Licensing                                                 |     
|                                                | Research and Development                                                 |     
|RESPONSIBLE CARE® AND ENVIRONMENTAL REGULATIONS |                                                                          | 25  
|EMPLOYEE AND LABOR RELATIONS                    |                                                                          | 27  
|FOREIGN OPERATIONS                              |                                                                          | 27  
|LEGAL PROCEEDINGS                               |                                                                          | 27  
|RISK FACTORS                                    |                                                                          | 27  
|DIVIDENDS                                       |                                                                          | 32  
|DESCRIPTION OF CAPITAL STRUCTURE                |                                                                          | 32  
|                                                | Common Shares                                                            |     
|                                                | First Preferred Shares                                                   |     
|                                                | Second Preferred Shares                                                  |     
|CREDIT RATINGS                                  |                                                                          | 33  
|MARKET FOR SECURITIES                           |                                                                          | 35  
|                                                | Common Shares                                                            |     
|                                                | Transfer Agent and Registrar                                             |     
|DIRECTORS AND OFFICERS                          |                                                                          | 35  
|                                                | Directors                                                                |     
|                                                | Executive Officers                                                       |     
|REPORT OF THE AUDIT, FINANCE AND RISK COMMITTEE |                                                                          | 38  
|                                                | Fees Billed by Ernst & Young LLP                                         |     
|                                                | Additional Information Relating to the Audit, Finance and Risk Committee |     
|INTERESTS OF EXPERTS                            |                                                                          | 40  
|ADDITIONAL INFORMATION                          |                                                                          | 40  

TRADEMARKS

|LOGO | ® is a registered trademark of NOVA Brands Ltd.; authorized use/utilisation autorisée.
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Advanced
SCLAIRTECH, NOVACAT and SCLAIRTECH are trademarks of NOVA Chemicals.

ARCEL®,
DYLARK®, DYLITE®, NAS®, ULTRA LOW® and ZYNTAR® are registered trademarks of NOVA Chemicals Inc. and IMx is
a trademark of NOVA Chemicals Inc.

EPS
Silver® is a registered trademark of NOVA Chemicals (International) S.A. in the European Community and a trademark of NOVA Chemicals Inc. in North America.

SCLAIR®
is a registered trademark of NOVA Chemicals Corporation in Canada and of NOVA Chemicals (International) S.A. elsewhere; authorized use/utilisation
autorisée.

STYROSUN®
is a registered trademark of NOVA Chemicals Inc. in the United States and Mexico and of NOVA Chemicals (International) S.A. elsewhere.

SURPASS®
is a registered trademark of NOVA Chemicals Corporation in Canada and of NOVA Chemicals (International) S.A. elsewhere.

ZYLAR®
is a registered trademark of NOVA Chemicals (Canada) Ltd./NOVA Chimie (Canada) Ltée; authorized use/utilisation autorisée.

Responsible
Care® is a registered trademark of the Canadian Chemical Producers' Association in Canada and is a registered service mark of the American Chemistry Council, Inc. in the
United States.

Responsible
Care Management System® is a registered service mark of the American Chemistry Council, Inc.

TPF
ThermoPlastic Flowforming is a trademark of LRM Industries, LLC.

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INFORMATION CONTAINED IN THIS ANNUAL INFORMATION FORM IS GIVEN AS AT DECEMBER 31, 2006, EXCEPT AS SPECIFICALLY NOTED OTHERWISE.

ALL AMOUNTS IN THIS ANNUAL INFORMATION FORM ARE EXPRESSED IN UNITED STATES DOLLARS, EXCEPT AS SPECIFICALLY NOTED OTHERWISE.

FORWARD-LOOKING INFORMATION

This Annual Information Form contains forward-looking statements with respect to NOVA Chemicals. By their nature, forward-looking statements require NOVA
Chemicals to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions, forecasts, conclusions and projections will not prove to be accurate,
that NOVA Chemicals' assumptions may not be correct and that actual results may differ materially from such predictions, forecasts, conclusions or projections. Forward-looking statements for the time
periods beyond 2007 involve longer-term assumptions and estimates than forward-looking statements for 2007 and are consequently subject to greater uncertainty. NOVA Chemicals cautions
readers of this Annual Information Form not to place undue reliance on its forward-looking statements as a number of factors could cause actual results, conditions, actions or events to differ
materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements.

The
words "believe," "expect," "plan," "intend," "estimate," or "anticipate" and similar expressions, as well as future or conditional verbs such as "will," "should," "would," and
"could" often identify forward-looking statements. Specific forward-looking statements contained in this Annual Information Form include, among others, statements regarding:
strategic alternatives with respect to NOVA Chemicals' STYRENIX business unit, and NOVA Chemicals' status following any transaction involving that unit; NOVA Chemicals'
expectations with respect to cost savings and how such savings will be achieved; changes in the demand for NOVA Chemicals' products, including its Performance Products;
NOVA Chemicals' expectations with respect to downstream business ventures; its competitive advantages and ability to compete successfully; NOVA Chemicals' expectations with respect to
the timing and amounts of capacity expansions; its beliefs about expansion of ethane extraction capabilities in Alberta; NOVA Chemicals' expectations regarding ethylene and styrene monomer
chain capacity additions in North America and ethylene and polyethylene additions on a global basis; its beliefs about renewing collective bargaining agreements; its environmental capital
expenditures; NOVA Chemicals' intentions with respect to paying dividends; its level of debt; and general economic conditions.

With
respect to forward-looking statements contained in this Annual Information Form, NOVA Chemicals has made assumptions regarding, among other things: future oil,
natural gas, natural gas liquids and benzene prices; its ability to obtain raw materials; its ability to market products successfully to its anticipated customers; the impact of increasing
competition; and its ability to obtain financing on acceptable terms. Some of NOVA Chemicals' assumptions are based upon internal estimates and analyses of current market conditions and trends,
management plans and strategies, economic conditions and other factors and are necessarily subject to risks and uncertainties inherent in projecting future conditions and results.

Some
of the risks that could affect NOVA Chemicals' future results and could cause results to differ materially from those expressed in NOVA Chemicals'
forward-looking statements include: commodity chemicals price levels (which depend, among other things, on supply and demand for these products, capacity utilization and substitution rates
between these products and competing products); feedstock availability and prices; operating costs; terms and availability of financing; technology developments; currency exchange rate fluctuations;
starting up and operating facilities using new technology; realizing synergy and cost savings targets; NOVA Chemicals' ability to implement its business strategy; meeting time and budget
targets for significant capital investments; avoiding unplanned facility shutdowns; safety, health and environmental risks associated with the operation of chemical plants and marketing of chemical
products, including transportation of these products; public perception of chemicals and chemical end-use products; the impact of competition; changes in customer demand, including customer acceptance
of NOVA Chemicals' Performance Products; changes in, or the introduction of new laws and regulations relating to NOVA Chemicals' business, including environmental, competition and
employment laws; loss of the services of any of NOVA Chemicals' executive officers; uncertainties associated with the North American, South American, European and Asian economies; terrorist
attacks; severe weather and other risks detailed from time to time in the publicly filed disclosure documents and securities commission reports of NOVA Chemicals. The information contained in
this Annual Information Form, including the information provided under the heading "Risk Factors," identifies additional factors that could affect NOVA Chemicals' operating results
and performance.

NOVA Chemicals'
forward-looking statements are expressly qualified in their entirety by this cautionary statement. In addition, the forward-looking statements are made
only as of the date of this Annual Information Form, and except as required by applicable law, NOVA Chemicals undertakes no obligation to update publicly these forward-looking
statements to reflect new information, subsequent events or otherwise.

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THE CORPORATION

NOVA Chemicals' principal business is the production and marketing of plastics and chemicals. NOVA Chemicals operates an Olefins/Polyolefins
business unit that produces and markets ethylene, polyethylene, higher-value polyethylene that NOVA Chemicals refers to as its polyethylene Performance Products and a variety of chemical and
energy products (commonly known as co-products). NOVA Chemicals also operates a Performance Styrenics business unit that produces and markets Expandable Polystyrene ("EPS") as well as
higher-value styrenic polymers, which it refers to as its styrenic polymer Performance Products. NOVA Chemicals' non-core commodity styrenics business unit, STYRENIX, produces and
markets styrene monomer and solid polystyrene ("SPS") in North America and, through its European styrenic polymer 50:50 joint venture with INEOS, SPS and EPS in Europe.

NOVA Chemicals'
polymer products are used in a wide range of applications, including rigid and flexible packaging, containers, plastic bags, plastic pipe, consumer electronics,
building and construction materials, automotive components, housewares and other industrial and consumer goods. Including its equity interest in Lyondell's propylene oxide/styrene monomer ("PO/SM")
facility, NOVA Chemicals manufactures its products at 13 sites in North America. NOVA Chemicals' joint venture with INEOS has an additional five facilities in Europe, including a
contract for capacity at a manufacturing facility in Wingles, France.

NOVA Chemicals
is a global company organized under the federal laws of Canada, with its registered office and Canadian operating center located at
1000 - 7th Avenue S.W., Calgary, Alberta, Canada T2P 5L5, and an executive office and United States operating center located at 1555 Coraopolis Heights
Road, Moon Township, Pennsylvania, United States 15108. NOVA Chemicals maintains a website at www.novachemicals.com. The information on NOVA Chemicals' website is
not a part of this Annual Information Form.

Where
used in this Annual Information Form, "NOVA Chemicals" or "the Corporation" means NOVA Chemicals Corporation alone or together with its subsidiaries and affiliates,
depending on the context in which such terms are used.

HISTORICAL DEVELOPMENT

NOVA Chemicals Corporation

NOVA Chemicals' predecessor, NOVA Corporation of Alberta, was incorporated in 1954 by Special Act of the Legislative Assembly of the Province of
Alberta. On May 10, 1994, NOVA Corporation of Alberta filed articles of arrangement under the Business Corporations Act of Alberta (the "Act") to complete a reorganization pursuant to
which it became a wholly owned subsidiary of NOVA Corporation ("NOVA"), changed its name to NOVA Gas Transmission Ltd. and its common shareholders became the common shareholders of NOVA.
At the same time, NOVA also became the parent corporation of Novacor Chemicals Ltd. and NOVA Gas International Ltd. Novacor Chemicals Ltd.'s name was changed to
NOVA Chemicals Ltd. in March 1996.

On
July 2, 1998, NOVA and TransCanada PipeLines Limited ("TransCanada") completed a merger of equals by way of a plan of arrangement (the "Arrangement") under the Act. Under the
terms of the Arrangement, shareholders of NOVA exchanged each NOVA common share for 0.52 of a TransCanada common share. As part of the Arrangement, TransCanada distributed to its common shareholders,
including all of the former common shareholders of NOVA, all of the common shares of NOVA on the basis of 0.2 of a NOVA common share for each TransCanada common share. At the time of the distribution
of NOVA common shares, the only material asset of NOVA was all of the common shares of NOVA Chemicals Ltd.

As
a result of the Arrangement, NOVA continued to conduct the commodity plastics and chemical businesses through NOVA Chemicals Ltd., and TransCanada began to conduct the energy
services businesses formerly carried on by NOVA, through NOVA's former subsidiaries, NOVA Gas Transmission Ltd. and NOVA Gas International Ltd. The disclosure in this Annual Information
Form relates only to the plastics and chemical businesses currently conducted by NOVA Chemicals and formerly conducted by NOVA.

On
December 31, 1998, NOVA Chemicals Ltd. changed its name to NOVA Chemicals Corporation. Effective January 1, 1999, NOVA Chemicals Corporation
amalgamated with NOVA under the Act and the resulting corporation adopted the name NOVA Chemicals Corporation.

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On
April 14, 2004, NOVA Chemicals Corporation was continued under the Canada Business Corporations Act.

Development of NOVA Chemicals' Plastics and Chemical Businesses



Developments Since January 1, 2004



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ANTICIPATED DEVELOPMENTS IN 2007



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SUBSIDIARIES OF NOVA CHEMICALS

The following list includes all material subsidiaries of NOVA Chemicals and indicates their respective jurisdictions of incorporation, continuance or
organization. All of the voting securities of each material subsidiary are held directly or indirectly by NOVA Chemicals:

|Name                                                    |  | Jurisdiction    
|------------------------------------------------------- |  | ----------------
|NOVA Chemicals (Canada) Ltd./NOVA Chimie (Canada) Ltée. |  | Canada          
|NOVA Chemicals Inc.(1)                                  |  | Delaware, U.S.A.
|NOVA Chemicals (International) S.A.                     |  | Switzerland     
|Novacor Chemicals Investments B.V.                      |  | The Netherlands 
|NOVA Chemicals Quimica Holdings, S.L.                   |  | Spain           
|NOVA Investments (U.S.) Inc.                            |  | Delaware, U.S.A.
|NOVA Petrochemicals Ltd.                                |  | Alberta, Canada 

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The following chart summarizes NOVA Chemicals' simplified corporate structure showing principal operating entities and jurisdictions of
incorporation, continuance or organization (dotted lines signify an indirect holding):

LOGO

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BUSINESS

General

NOVA Chemicals' principal business is the production and marketing of plastics and chemicals. NOVA Chemicals operates an Olefins/Polyolefins
business unit that produces and markets ethylene, polyethylene, higher-value polyethylene that NOVA Chemicals refers to as its polyethylene Performance Products and a variety of chemical and
energy products (commonly known as co-products). NOVA Chemicals also operates a Performance Styrenics business unit that produces and markets EPS as well as higher-value styrenic
polymers, which it refers to as its styrenic polymer Performance Products. NOVA Chemicals' non-core commodity styrenics business unit, STYRENIX, produces and markets styrene monomer
and SPS in North America and, through NOVA Innovene, its European styrenic polymer 50:50 joint venture with INEOS, SPS and EPS in Europe.

Ethylene
and styrene monomer are basic chemicals used to manufacture a wide variety of polymers and other chemical products. In North America, NOVA Chemicals produces polyethylene
and styrenic polymers, primarily from its internal ethylene and styrene monomer production. NOVA Chemicals also has an interest in Lyondell's PO/SM facility in Channelview, Texas and an
associated long-term styrene monomer processing agreement to acquire styrene monomer from Lyondell on the U.S. Gulf Coast, and styrene monomer purchase arrangements and swaps with Shell in
Europe and other parties in Europe and North America. The long-term styrene monomer processing agreement associated with NOVA Chemicals' interest in Lyondell's PO/SM facility in
Channelview, Texas that produces styrene monomer as a co-product of propylene oxide production provides sufficient styrene monomer supply for the operation of NOVA Chemicals'
Performance Styrenics business unit. The remainder of NOVA Chemicals' styrene monomer production capacity in North America is part of its non-core STYRENIX business unit. Ethylene
and styrene monomer production in excess of NOVA Chemicals' internal consumption requirements is sold to third parties. In addition, NOVA Chemicals is engaged in various swap
transactions with other producers of ethylene and styrene monomer where it has limited or no ethylene or styrene monomer production capability.

NOVA Chemicals
produces the following sub-varieties of polyethylene: high-density polyethylene ("HDPE"), low-density polyethylene ("LDPE") and linear low-density polyethylene
("LLDPE"). The styrenic polymers that NOVA Chemicals produces include SPS and EPS. In addition, NOVA Chemicals develops, manufactures and markets Performance Products. These Performance
Products include SURPASS® and some SCLAIR® polyethylene resins made with Advanced SCLAIRTECH technology and ARCEL, DYLARK® and ZYLAR styrenic polymer resins.
Polyethylene, styrenic polymers and polyethylene and styrenic Performance Products are used in a wide range of applications including rigid and flexible packaging, containers, plastic bags, plastic
pipe, consumer electronics, building and construction materials, automotive components, housewares and other industrial and consumer goods.

Properties and Production Facilities

Including its interest in Lyondell's PO/SM facility, NOVA Chemicals' products are manufactured at 13 sites in North America. All production
facilities are owned by NOVA Chemicals (except the Channelview, Texas facility, in which NOVA Chemicals has an interest, and the E3 production facility at Joffre, Alberta, in respect of
which NOVA Chemicals and Dow each own 50%). With the exception of its Belpre, Ohio facility and the Channelview facility, NOVA Chemicals owns the land on which its production facilities
are located. In addition to NOVA Chemicals' manufacturing sites, NOVA Innovene produces styrenic polymers at five sites in Europe, including a contract for capacity at a manufacturing
facility in Wingles, France.

In
addition to its production facilities, NOVA Chemicals leases or owns approximately 594,000 square feet of office space in numerous locations, mostly in North America.
Its registered office and Canadian operating center is located in Calgary, Alberta. Its United States operating center and executive offices are located in Moon Township, Pennsylvania.

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The
following show NOVA Chemicals' plastics and chemical product flow and production facilities.

Product Flow Chart

GRAPHIC

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Facility Profile (Olefins/Polyolefins)

|                                                       |  |                                   |  |                                                                    |   |                      |  | 2006 Rated Capacity |          
|------------------------------------------------------ |  | --------------------------------- |  | ------------------------------------------------------------------ | - | -------------------- |  | ------------------- | ---------
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|1.                                                     |  | Joffre, Alberta                   |  | Ethane/Propane                                                     |   | Ethylene (E1)        |  | 1,600               |          
|                                                       |  |                                   |  | Ethane/Propane                                                     |   | Ethylene (E2)        |  | 1,800               |          
|                                                       |  |                                   |  | Ethane                                                             |   | Ethylene (E3)(1)     |  | 1,400               |          
|                                                       |  |                                   |  |                                                                    |   | Co-products          |  | 830                 | (2)      
|                                                       |  |                                   |  | Ethylene                                                           |   | LLDPE (PE1)          |  | 1,400               |          
|                                                       |  |                                   |  |                                                                    |   | LLDPE & HDPE (PE2)   |  | 850                 |          
|2.                                                     |  | Corunna, Ontario                  |  | Crude Oil, Condensates, Ethane, Butane, Propane, Naphtha, Gas Oils |   | Ethylene
Co-products |  | 1,850
4,700         | (3)(2)(3)
|3.                                                     |  | St. Clair River,
Corunna, Ontario |  | Ethylene                                                           |   | HDPE                 |  | 395                 |          
|4.                                                     |  | Mooretown, Ontario                |  | Ethylene                                                           |   | HDPE                 |  | 505                 |          
|                                                       |  |                                   |  |                                                                    |   | LDPE                 |  | 325                 |          
|TOTAL ETHYLENE PRODUCTION CAPACITY (Design Production) |  | 6,650                             |  | 3,016                                                              | *
|TOTAL POLYETHYLENE PRODUCTION CAPACITY                 |  | 3,475                             |  | 1,576                                                              |  

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Facility Profile (Performance Styrenics)

|                                            |    |     |                       |     |                   |  |                        | 2006 Rated Capacity
|------------------------------------------- | -- | --- | --------------------- | --- | ----------------- |  | ---------------------- | -------------------
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|Styrene Monomer                             |    |     |                       |     |                   | 
|                                            | 1. |     | Channelview, Texas(1) |     | Benzene, Ethylene |  | Styrene Monomer        |                    
|TOTAL STYRENE MONOMER PRODUCTION CAPACITY   |    | 400 |                       | 181
|Styrenic Polymers                           |    |     |                       |     |                   |  |                        |                    
|                                            | 1. |     | Monaca, Pennsylvania  |     | Styrene Monomer   |  | ARCEL, EPS and DYLARK  |                    
|                                            | 2. |     | Belpre, Ohio(2)       |     | Styrene Monomer   |  | NAS, DYLARK FG and SPS |                    
|                                            | 3. |     | Painesville, Ohio     |     | Styrene Monomer   |  | EPS                    |                    
|TOTAL STYRENIC POLYMERS PRODUCTION CAPACITY |    | 885 |                       | 402

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Facility Profile (STYRENIX)

|                                          |    |       |                            |       |                   |  |                       | 2006 Rated Capacity
|----------------------------------------- | -- | ----- | -------------------------- | ----- | ----------------- |  | --------------------- | -------------------
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|Styrene Monomer                           |    |       |                            |       |                   | 
|                                          | 1. |       | Bayport, Texas             |       | Benzene, Ethylene |  | Styrene Monomer       |                    
|                                          | 2. |       | Sarnia, Ontario            |       | Benzene, Ethylene |  | Styrene Monomer       |                    
|TOTAL STYRENE MONOMER PRODUCTION CAPACITY |    | 2,650 |                            | 1,202
|SPS                                       |    |       |                            |      
|                                          | 1. |       | Decatur, Alabama           |       | Styrene Monomer   |  | SPS                   |                    
|                                          | 2. |       | Montréal, Québec           |       | Styrene Monomer   |  | SPS                   |                    
|                                          | 3. |       | Springfield, Massachusetts |       | Styrene Monomer   |  | SPS                   |                    
|TOTAL SPS PRODUCTION CAPACITY             |    | 875   |                            | 397  
|NOVA INNOVENE Styrenic Polymers(2)        |    |       |                            |       |                   | 
|                                          | 1. |       | Breda, The Netherlands     |       | Styrene Monomer   |  | EPS, SPS and STYROSUN |                    
|                                          | 2. |       | Marl, Germany              |       | Styrene Monomer   |  | EPS and SPS           |                    
|                                          | 3. |       | Ribécourt, France          |       | Styrene Monomer   |  | EPS and EPS Silver    |                    
|                                          | 4. |       | Trelleborg, Sweden         |       | Styrene Monomer   |  | SPS                   |                    
|                                          | 5. |       | Wingles, France(3)         |       | Styrene Monomer   |  | EPS and SPS           |                    
|TOTAL NOVA INNOVENE STYRENIC POLYMERS     |    | 1,960 | *                          | 890  

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Olefins/Polyolefins

NOVA Chemicals' Olefins/Polyolefins core business unit produces ethylene and polyethylene. As part of the ethylene production process, and in the preparation of
feedstocks for this process, NOVA Chemicals also produces a number of co-products.

The
Joffre, Alberta site is integrated with AEGS, which connects large-scale ethane extraction plants to NOVA Chemicals' ethylene crackers. The Joffre feedstock pipeline is also
integrated with the Joffre site and connects natural gas liquids production and storage facilities in Fort Saskatchewan, Alberta to the Joffre site. Ethylene is fed directly to onsite
polyethylene production.

The
Corunna, Ontario ethylene facility is connected to multiple pipeline systems that, in conjunction with the facility's flexi-cracker capabilities, enable
NOVA Chemicals to optimize its feedstock slate. The Corunna facility provides ethylene by pipeline to NOVA Chemicals' polyethylene production facilities in Mooretown, Ontario and its
St. Clair River site in Corunna, Ontario, and to its styrene monomer plant in Sarnia, Ontario. In addition, NOVA Chemicals utilizes rail and marine transport to transport feedstocks.

For
financial reporting purposes, NOVA Chemicals has three reportable segments as part of its Olefins/Polyolefins business unit: Joffre Olefins, Corunna Olefins and Polyethylene.
The Olefins/Polyolefins business unit's consolidated revenue for 2006 was $4.3 billion (2005: $3.6 billion), which represented approximately 63%

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(2005: 61%)
of NOVA Chemicals' total revenue (before intersegment eliminations). In 2006, Joffre Olefins revenue was $1.7 billion (2005: $1.7 billion), Corunna
Olefins revenue was $2.0 billion (2005: $1.4 billion) and Polyethylene revenue was $1.9 billion (2005: $1.6 billion), which represented approximately 31%
(2005: 36%), 35% (2005: 30%) and 34% (2005: 34%), respectively, of the Olefins/Polyolefins business unit's total revenue (before intersegment eliminations).



NOVA Chemicals has annual production capacity of approximately 6,700 mmlbs of ethylene (excluding Dow's share of E3). Ethylene is a commodity
chemical that NOVA Chemicals produces through thermal cracking of various feedstocks, a process that uses high temperatures to break down the carbon chains. The feedstocks used to produce
ethylene are natural gas liquids and crude oil derived feedstocks including ethane, naphtha, propane, butane and gas oils. The two most common feedstocks used by NOVA Chemicals are ethane and,
to a lesser extent, naphtha. Ethylene is used in the manufacture of polyethylene, styrene monomer, styrenic polymers and polyvinyl chloride, as well as chemical intermediates such as ethylene oxide,
ethylene glycol, ethylene dichloride and vinyl acetate.

NOVA Chemicals
produces ethylene at two locations, Joffre, Alberta and Corunna, Ontario.



NOVA Chemicals has three ethylene production facilities at Joffre, Alberta: E1, E2 and E3 (E3 is 50% owned by Dow). Since July 2004,
NOVA Chemicals has shared the ethylene produced at E3 with Dow at a 50:50 ratio. These three plants have an annual production capacity of approximately 1,600, 1,800 and
2,800 mmlbs of ethylene (including Dow's share of E3 production), respectively, for a total combined capacity of 6,200 mmlbs. The combined co-product production capacity of
E1, E2 and E3 is approximately 830 mmlbs per year.

Approximately
43% of the ethylene produced at these facilities (excluding Dow's share of E3 production) is used internally to support NOVA Chemicals' Joffre polyethylene
production and the rest is sold to third parties. Third party sales are facilitated through a variety of medium to long-term contracts. These contracts typically contain pricing mechanisms
that include a cost recovery component and a
market-based component. A tolling arrangement permits a third party to use a portion of E1 ethylene production capacity until the end of 2008.

All
of the ethylene plants at the Joffre site use ethane as their primary feedstock. Ethane is typically supplied under contracts with the owners of natural gas liquids extraction and
fractionation plants located in Alberta. Most of these supply agreements have 10 to 20 years remaining on the initial term with the possibility of renewal by the parties. The price
NOVA Chemicals pays under these agreements consists of two components: (1) a fee to cover an agreed upon portion of the costs of plant operation and return on invested capital
(this component may be fixed or vary with production) and (2) the cost to replace the energy content of the ethane extracted from the gas stream (this component varies with the price of natural
gas; NOVA Chemicals may pay the owner for replacement natural gas or purchase or swap natural gas to physically replace the energy content of the ethane). NOVA Chemicals supplements its
ethane supplies through spot purchases.

NOVA Chemicals
has enhanced its ethane feedstock availability through the development of third-party sources. One third-party source of ethane is from the
ethane extraction facility adjacent to the Joffre site, which extracts natural gas liquids from the natural gas used as fuel for both NOVA Chemicals' Joffre site and Dow's Prentiss, Alberta
site. A second source of incremental ethane is from modifications made to existing extraction plants. These modifications enable the extraction of additional volumes of ethane from the same volume of
natural gas.

NOVA Chemicals
has the flexibility to use propane in addition to ethane for a portion of the Joffre feedstock requirements. Propane can be transported to Joffre by the Joffre
feedstock pipeline owned by Taylor.

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NOVA Chemicals continuously looks for opportunities to expand feedstock flexibility and supply to enhance operational flexibility and support longer-term growth
opportunities. The Alberta government recently announced that it intends to provide incentives that will encourage chemical companies to expand ethane extraction facilities in the province, while
maintaining current globally competitive costs. The government has said that it expects the Alberta ethane extraction regulations to be finalized and implemented during 2007. NOVA Chemicals
will assess the impact of these regulations and hopes to take advantage of them to increase ethane extraction in Alberta.

Virtually
all of the ethane requirements for the Joffre site are transported via AEGS. Under a long-term transportation agreement, NOVA Chemicals has the right to ship
ethane on AEGS. NOVA Chemicals has also signed an operating agreement with Fort Chicago, the owner of AEGS. Under this agreement, NOVA Chemicals is responsible for the physical
operation of AEGS, while Fort Chicago has responsibility for all commercial aspects of AEGS operations.

As
part of the ethylene production process at Joffre, NOVA Chemicals produces approximately 830 mmlbs of co-products per year. Co-products, other
than hydrogen and carbon dioxide, are shipped by railcar to markets in Alberta, Ontario and the U.S. Gulf Coast.

Historically,
NOVA Chemicals managed part of its ethylene supply balance by transferring ethylene from Joffre to Corunna, Ontario via the Cochin Pipeline System, an open
access multi-product common carrier liquids pipeline. However, in March 2006, the owners of the Cochin Pipeline System announced plans to reduce operating pressure of the Cochin Pipeline System
for safety reasons and, due to its higher vapor pressure, to suspend ethylene shipments immediately until further notice. Due to the substantial completion of the modernization upgrades at its
Corunna, Ontario olefins facility, NOVA Chemicals is able to supply its Ontario polyethylene plants with ethylene from its flexi-cracker in Corunna, Ontario and is not affected in any material
way by the suspension of ethylene shipments on the Cochin Pipeline System.



The Corunna, Ontario olefins facility, located near Sarnia, Ontario, has an annual production capacity of approximately 1,850 mmlbs of ethylene and
900 mmlbs of propylene, pending completion of a series of modernization upgrades in April 2007. In both cases, capacity is dependent on feedstock mix. The Corunna olefins facility has the
flexibility to process a wide range of hydrocarbon feedstocks including crude oil,
condensates, ethane, propane, butane, naphtha and gas oils to produce primary chemicals for use by NOVA Chemicals' downstream operations and for sale to third parties. The feedstock chosen
depends on market conditions and is determined by using a model that calculates the most profitable mix of co-products that can be produced from the optimal feedstock slate. The majority
of ethylene production from the Corunna olefins facility is used internally by NOVA Chemicals to produce polyethylene and styrene monomer.

The
blend of feedstocks processed in the Corunna, Ontario olefins facility determines the range of co-products obtained, with heavier feedstocks such as naphtha producing more
co-products. The facility has a production capacity of approximately 4,700 mmlbs of co-products per year, pending completion of the modernization upgrades.

Feedstocks
for the Corunna, Ontario olefins facility are obtained from a wide variety of sources. A substantial proportion of crude oil, the main feedstock, is sourced from western
Canadian and United States domestic producers and delivered via the Enbridge Inc. ("Enbridge") pipeline system. Condensate, a lighter feedstock than crude oil, yields a higher proportion of
olefins versus fuel oil co-products. Crude oil and condensate feedstocks are also sourced from outside Canada with delivery via pipeline from Portland, Maine. From Portland, Maine,
feedstock deliveries connect to Enbridge's pipeline in Montréal, Québec, providing Corunna with purchasing flexibility and less reliance on western Canadian crude and
condensates. Ethane, propane, butane and naphtha are sourced from western Canadian and local producers as well as United States sources, principally by pipeline.

15

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Co-products are produced in the ethylene manufacturing process and can be grouped into two categories: chemical co-products and energy
co-products. Chemical co-products include propylene, benzene, and butadiene  building blocks that are used to make items such as tires,
carpet and clothing fibers, or household goods. Energy co-products include gasoline additives and fuel oil. The profitability of co-products depends on energy prices and the
supply and demand balance for each co-product. Co-product production depends on the feedstock mix. Total capacity volumes of co-products are approximately
5,500 mmlbs per year and vary depending on feedstock. The majority of co-products produced at NOVA Chemicals' Joffre, Alberta and Corunna, Ontario facilities are sold to
third parties. However, some co-products are consumed internally by NOVA Chemicals either as fuel or for the production of other products produced by NOVA Chemicals (for example,
benzene, a co-product produced at the Corunna flexi-cracker is transported by pipeline from this facility to the Sarnia, Ontario styrene monomer facility and is used in the production of
styrene monomer by the STYRENIX business unit).



NOVA Chemicals has annual production capacity of approximately 3,500 mmlbs of polyethylene. Polyethylene is produced through the polymerization of
ethylene. NOVA Chemicals produces polyethylene from ethylene supplied from its Joffre, Alberta and Corunna, Ontario facilities at three locations in Canada: Joffre, Alberta; St. Clair
River, Corunna, Ontario; and Mooretown, Ontario.

NOVA Chemicals'
has two polyethylene plants located at Joffre, Alberta, PE1 and PE2. PE1 has an annual production capacity of approximately 1,400 mmlbs and produces LLDPE
from ethylene supplied from E1, E2 and E3. PE1 utilizes gas-phase process technology originally licensed from UCC. The licenses from UCC are fully paid. Accordingly, NOVA Chemicals pays
no royalties for the use of this technology and independently sustains and develops this technology as used in NOVA Chemicals' facilities. PE2 has a design capacity of 850 mmlbs
per year. PE2 uses Advanced SCLAIRTECH technology to produce NOVA Chemicals' polyethylene Performance Products.

In
June 1994, NOVA Chemicals purchased DuPont's Canadian polyethylene business. Assets of the business included a polyethylene plant located at the St. Clair River site in
Corunna, Ontario, the proprietary SCLAIRTECH technology and a global SCLAIRTECH technology licensing business. Ethylene feedstock is supplied from the Corunna olefins facility. In May 2004,
NOVA Chemicals shut down the A-line at this facility, which eliminated LLDPE capacity of 275 mmlbs per year. The remaining B-line currently has annual HDPE
production capacity of approximately 395 mmlbs.

NOVA Chemicals'
two polyethylene plants located near Mooretown, Ontario have an annual production capacity of approximately 830 mmlbs. Ethylene feedstock is supplied
from the Corunna, Ontario olefins facility. One of these plants uses the gas-phase process technology originally licensed from UCC to produce HDPE and the other plant uses high pressure process
technology, also originally licensed from UCC, to produce LDPE. The license from UCC for the high pressure process technology is fully paid.



After acquiring SCLAIRTECH technology in 1994, NOVA Chemicals further developed the technology and, in December 1996, announced that it had developed
Advanced SCLAIRTECH technology. Advanced SCLAIRTECH solution-phase technology yields polyethylene Performance Products that NOVA Chemicals believes provide several advantages over standard
polyethylene resins, such as clarity and toughness in end-use products manufactured by NOVA Chemicals' customers.

Advanced
SCLAIRTECH technology used at PE2 includes two proprietary catalyst systems. The Ziegler-Natta ("Z-N") catalyst introduced in 2001 is used to make
NOVA Chemicals' SCLAIR line of polyethylene products. These are octene-based polyethylene grades for film applications. In 2003, NOVA Chemicals commercialized a single-site
catalyst using Advanced SCLAIRTECH technology and introduced a series of new polyethylene products under the brand SURPASS resins. SURPASS resins have been commercialized for film, rotational molding
and thin wall injection molding applications. By the end of 2006, sales of Performance

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Product
SCLAIR and SURPASS resins represented approximately 60% of NOVA Chemicals' Advanced SCLAIRTECH technology plant, PE2, production capacity with the balance of polyethylene production
being sold in commodity applications.



In the third quarter of 2001, a predecessor of INEOS Canada Partnership commissioned a linear alpha olefins plant on NOVA Chemicals' Joffre, Alberta site.
NOVA Chemicals supplies ethylene to the linear alpha olefins plant and receives linear alpha olefins for use by NOVA Chemicals' polyethylene facilities. This contract contains a pricing
mechanism that includes a cost recovery component and a market-based component, which results in NOVA Chemicals receiving linear alpha olefins at a competitive cost, which, in turn, contributes to the
cost efficiencies of the large-scale Joffre site.



In June 2000, ATCO Power Canada Ltd. ("ATCO"), an affiliate of EPCOR Utilities Inc. ("EPCOR") and NOVA Chemicals opened a natural gas-fired
cogeneration power plant with a nominal installed peak capacity of 450 megawatts at NOVA Chemicals' production site at Joffre, Alberta. The power plant supplies the electrical and steam
needs for the entire Joffre site, with excess power sold to Alberta's provincial power grid. The three companies jointly own the cogeneration facility, with ATCO serving as the facility operator. The
respective interests of the parties are 40% for each of ATCO and EPCOR and 20% for NOVA Chemicals.

Performance Styrenics

NOVA Chemicals' Performance Styrenics core business unit includes NOVA Chemicals' EPS and styrenic polymer Performance Products assets, its interest in
Lyondell's PO/SM facility in Channelview, Texas and NOVA Chemicals' interests in downstream development ventures for end-use consumer and industrial applications.

The
long-term styrene monomer processing agreement associated with NOVA Chemicals' interest in Lyondell's PO/SM facility provides sufficient styrene monomer supply for the
operation of NOVA Chemicals' Performance Styrenics business unit.

Performance
Styrenics revenue was $421 million in 2006 (2005: $392 million), which represented approximately 6% (2005: 7%) of NOVA Chemicals' total
revenue (before intersegment eliminations).



NOVA Chemicals produces EPS at its Beaver Valley site at Monaca, Pennsylvania and at its Painesville, Ohio facility. Total rated production capacity of
370 mmlbs per year ranks NOVA Chemicals as the largest EPS producer in North America. EPS resins are used in applications such as foam cups, noodle bowls, takeout and ice cream
containers, insulation board and foam packaging. NOVA Chemicals' EPS cup and container resin is sold under the trademark DYLITE®.



As part of the Shell acquisition in January 2000, NOVA Chemicals acquired an EPS production plant and two EPS molding plants in Chile. The plants
produce small volumes of molded products for the South American fish packaging, housing and construction markets. NOVA Chemicals ceased production of EPS at its Quilicura, Chile facility in
January 2006. NOVA Chemicals still operates EPS molding plants in Quilicura and El Tepual, Chile.



NOVA Chemicals produces styrenic polymer Performance Products at its Monaca, Pennsylvania and Belpre, Ohio facilities. NOVA Chemicals also uses
third-parties to compound styrenic polymer Performance

17

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Products
at those parties' sites. In addition to ARCEL and DYLARK resins that are discussed below, current sales in the styrenic polymer Performance Products business are in NAS and ZYLAR
(high-clarity styrene acrylic copolymers and blends or alloys thereof, respectively). During 2006, NOVA Chemicals discontinued internal compounding of its ZYLAR resins and entered
into tolling arrangements with outside compounders for these resins.



NOVA Chemicals' Beaver Valley site in Monaca, Pennsylvania produces ARCEL resins, which contain polystyrene and polyethylene. This expandable bead is sold
into the protective packaging market. NOVA Chemicals expanded the capacity to produce ARCEL resin at its Beaver Valley site in 2006. In addition to producing ARCEL moldable foam resins at its
Beaver Valley site, in September 2005, NOVA Chemicals entered into a long-term agreement with Ningbo Chang-Qiao Engineering Plastics Co., Ltd., an
affiliate of Loyal, to provide new finishing capacity for ARCEL moldable foam resin near Shanghai, China. The start up of this facility was announced during the third quarter of 2006.

The
Beaver Valley site also produces DYLARK resins that are modified, styrene-based polymers that provide ease of processing, performance at elevated temperatures and foam
adhesion for use in instrument panels and other parts for the global automotive industry. In addition, NOVA Chemicals produces DYLARK FG resin, which the Corporation believes provides
significant opportunities in the food packaging and food service industries. DYLARK FG resin, which is produced at NOVA Chemicals' Belpre, Ohio site, combines low-temperature
toughness with high-temperature rigidity for superior freezer-to-microwave performance in food packaging applications.



NOVA Chemicals attempts to leverage its intellectual property and market expertise by entering into strategic relationships with downstream partners.
Examples of these business opportunities include the following:



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In
addition to the sale of the finished products manufactured by these development ventures, NOVA Chemicals licenses certain of its proprietary technology, such as its lightweight
concrete EPS technology. NOVA Chemicals strategy with respect to these business and licensing opportunities is to capture more of the value through the chain in addition to the manufacturing
and sale of raw plastics.

STYRENIX

STYRENIX includes NOVA Chemicals' styrene monomer and SPS assets in North America as well as its interest in the European styrenic polymer
50:50 joint venture with INEOS. NOVA Chemicals operates STYRENIX as a separate non-core business unit with limited corporate support and overhead.

For
financial reporting purposes, NOVA Chemicals has three reportable segments as part of its STYRENIX business unit: Styrene Monomer, North American Solid Polystyrene and NOVA
Innovene European Joint Venture. The STYRENIX business unit's consolidated revenue for 2006 was $2.2 billion (2005: $1.9 billion), which represented approximately 31%
(2005: 32%) of NOVA Chemicals' total revenue (before intersegment eliminations). In 2006, Styrene Monomer revenue was $1.9 billion (2005: $1.8 billion), North
American Solid Polystyrene revenue was $500 million (2005: $545 million) and NOVA Innovene European Joint Venture revenue was $672 million
(2005: $616 million), which represented approximately 62% (2005: 61%), 16% (2005: 18%) and 22% (2005: 21%), respectively, of the STYRENIX business unit's total
revenue (before intersegment eliminations).



Styrene monomer is produced from benzene and ethylene. NOVA Chemicals produces styrene monomer by the process of alkylation of ethylene with benzene to
produce ethylbenzene and then dehydrogenation of ethylbenzene. NOVA Chemicals satisfies a portion of its requirements for ethylene and benzene internally and enters into arrangements with third
parties for the remainder. All of the ethylene and approximately half of the benzene requirements for the Sarnia, Ontario styrene monomer facility are supplied by pipeline from NOVA Chemicals'
Corunna, Ontario olefins facility. The balance of benzene feedstock is obtained from nearby petroleum refineries. Except for some ethylene obtained through swaps, the balance of ethylene and all
benzene for the Bayport, Texas facility is obtained from external sources.

NOVA Chemicals
has a total rated production capacity of 2,650 mmlbs of styrene monomer per year at sites in Sarnia, Ontario (950 mmlbs) and Bayport, Texas
(1,700 mmlbs). As part of the acquisition of ARCO's styrenics business in 1996, NOVA Chemicals entered into a tolling agreement with Lyondell (as successor to ARCO) for
approximately 400 million additional pounds per year of styrene monomer from the Channelview facilities. This tolling agreement expired in December 2006.

In
October 2005, NOVA Chemicals entered into a contract to supply NOVA Innovene with 50% of its requirements for styrene monomer. While NOVA Chemicals does not produce
styrene monomer in Europe, NOVA Chemicals obtains a portion of its European styrene monomer feedstock required to supply NOVA Innovene at a cost comparable with the local costs of
production through swap agreements with major European styrene monomer producers that have a requirement for styrene monomer feedstock in North America but do not have sufficient styrene
monomer production capabilities in North America. NOVA Chemicals obtains the remainder of its European styrene monomer feedstock required to supply NOVA Innovene through a purchase
agreement with Shell for up to 500 mmlbs per year. This agreement expires in December 2007.

NOVA Chemicals'
STYRENIX business unit's current annual styrene monomer production capacity, together with supply contracts, exceeds its annual internal requirements by
approximately 600 mmlbs per year. This excess is sold to third parties primarily under short-term supply agreements in the merchant styrene monomer market. Until the expiration of the purchase
agreement with Shell, NOVA Chemicals' STYRENIX business unit will continue to have more styrene monomer than it requires for its own SPS production.

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NOVA Chemicals' STYRENIX business unit produces SPS (which is sold in various sub-varieties, including crystal and high-impact) in
North America and, through NOVA Innovene, its joint venture with INEOS, SPS and EPS in Europe.

STYRENIX's
styrenic polymer feedstock requirements can currently be satisfied through internal styrene monomer production. Where styrene monomer is geographically dislocated, the
Corporation may use a series of swap arrangements with other producers to position styrene monomer where STYRENIX needs it. NOVA Chemicals and BASF Corporation are parties to a
medium-term styrene monomer swap arrangement. This contract gives both producers secure supply of styrene monomer to their downstream businesses at producer economics in both North America
and Europe. NOVA Chemicals meets its contractual supply requirement from STYRENIX's existing facilities in North America. During 2005, NOVA Chemicals completed an expansion and
modernization project at its Bayport styrene monomer facility that resulted in approximately 450 mmlbs per year of additional production capacity. Approximately 220 mmlbs per year of
this capacity is committed to BASF Corporation as part of a capacity reservation arrangement made to partly finance the modernization project.



STYRENIX has a total of three SPS manufacturing facilities in North America: Decatur, Alabama; Montréal, Québec; and
Springfield, Massachusetts. NOVA Chemicals' Belpre, Ohio site is included in NOVA Chemicals' Performance Styrenics business. However, STYRENIX receives up to 220 mmlbs per year of
SPS from this facility. NOVA Chemicals' STYRENIX business unit's total SPS production capacity for North America (including capacity from the Belpre facility) is 1,095 mmlbs per year,
consisting of both crystal and impact polystyrene.

Crystal
polystyrene end-use applications include CD jewel boxes, food packaging, one-time-use foodservice ware (cups/plates/bowls/utensils), medical applications,
quick-service/convenience packaging and insulation. Impact polystyrene resins are used in applications such as office/desk supplies, small appliances, industrial spools, bathroom
accessories, electronics housings, food packaging and one-time-use foodservice ware.



On October 1, 2005, NOVA Chemicals merged its European styrenic polymer business into a 50:50 joint venture with Innovene, BP's commodity
chemicals business. The joint venture is named NOVA Innovene. On December 16, 2005, United Kingdom-based INEOS announced that it had acquired Innovene. Including a contract for
capacity at the Wingles, France facility, NOVA Innovene has five facilities in Europe with total rated annual styrenic polymer production capacity of approximately 1,960 mmlbs.
NOVA Innovene is the largest producer of SPS in Europe, with an aggregate capacity of 1,200 mmlbs per year produced at facilities in Breda, The Netherlands; Marl, Germany; Wingles,
France (this facility will not be transferred to NOVA Innovene until 2007); and Trelleborg, Sweden.

NOVA Innovene
has the capability to produce EPS at four of its five European sites, with aggregate annual capacity of approximately 770 mmlbs, making it the top European
EPS producer.

DISTRIBUTION OF PRODUCTS

NOVA Chemicals' products are marketed primarily through its sales force, with support from established distributors, agents and traders. Canadian products
are sold into the United States primarily through NOVA Chemicals' wholly owned subsidiary, NOVA Chemicals Inc., for resale through distribution arrangements.
NOVA Chemicals' wholly owned subsidiary, NOVA Chemicals (International) S.A., sells in Europe and Asia either directly or through distribution arrangements. Distribution
agreements among NOVA Chemicals' affiliates provide for arm's length pricing.

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The
following table summarizes, for the years ended December 31, 2006, 2005 and 2004, the geographic segments in which NOVA Chemicals sells its products and the percentage
of sales in each segment:

|                  |  | Percentage of Sales,
Year Ended December 31 |  
|----------------- |  | ------------------------------------------- | -
|
|
|Canada            |  | 35                                          | %
|United States     |  | 42                                          | %
|Europe and Others |  | 23                                          | %

No
significant portion of NOVA Chemicals' business is dependent upon a single customer. Sales to Canadian and United States federal, state, provincial and local governmental
bodies account for less than 1% of annual sales.

In
total, NOVA Chemicals has negotiated contracts that contain cost-recovery mechanisms and a market-indexed component, for the sale of approximately
2,000 mmlbs per year of ethylene.

As
part of NOVA Chemicals' ethylene production process, and in the preparation of feedstocks for this process, a number of co-products are also manufactured.
Co-products are shipped to markets in Alberta, Ontario and the U.S. Gulf Coast.

Effective
April 2003, NOVA Chemicals and Helm AG entered into a sales and marketing agreement for styrene monomer in Europe. The agreement includes the transfer to
Helm AG of substantially all sales and marketing activities for NOVA Chemicals' existing European styrene monomer merchant sales. This agreement expires at the end of 2007 and
NOVA Chemicals does not intend to renew it.

In
connection with the joint venture agreement with INEOS, NOVA Chemicals entered into a non-competition agreement and an exclusive distribution agreement with
NOVA Innovene effective October 1, 2005. These agreements require all sales in Europe of NOVA Chemicals' styrenic polymers, including styrenic polymer Performance Products
(excluding DYLARK automotive resins), be made through NOVA Innovene. NOVA Chemicals and NOVA Innovene also have reciprocal agreements that require all sales in North America of
NOVA Innovene's styrenic polymers be made through NOVA Chemicals.

NOVA Chemicals
leases approximately 5,000 rail hopper cars from various companies for use in transportation and delivery of its polyethylene and styrenic polymer products
to customers in North America. Trucks are used for distributing products sold in bags and boxes and smaller loads of bulk products. Marine vessels are used to transport bulk product and
products sold in bags and boxes, mostly to Asia. NOVA Chemicals does not own or lease trucks or ships, but does pay transportation fees under short-term arrangements.

COMPETITION

NOVA Chemicals competes with other chemical producers on the basis of price, service, product quality, performance and deliverability. Among
NOVA Chemicals' competitors are some of the world's largest plastics and chemical companies and major integrated oil companies that are larger and have greater financial resources. Some also
have their own raw material resources. The keys to competing successfully in this industry are scale of facilities, low-cost feedstocks and differentiated product and process technologies.

Prices
for NOVA Chemicals' standard chemical and polymer products are determined in part by market factors, such as supply/demand balances and feedstock costs, that are beyond
NOVA Chemicals' control.
NOVA Chemicals generally sells these products at prevailing market prices but, on occasion, products are sold based on negotiated prices.

CYCLICALITY

NOVA Chemicals' historical operating results reflect the cyclical and volatile nature of the commodity plastics and chemical businesses. The markets for
the products manufactured by the Corporation's Olefins/Polyolefins, Performance Styrenics and STYRENIX business units historically experience alternating periods of inadequate capacity and tight
supply, causing prices and profit margins to increase, followed by periods of

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oversupply
resulting from capacity additions. Prolonged oversupply leads to declining capacity utilization rates, prices and profit margins. Because NOVA Chemicals derives nearly all of its
revenue from sales of these products, its operating results are more sensitive to this cyclical nature than many of its competitors that have more diversified businesses. Currently, known ethylene and
styrene monomer chain capacity additions in North America over the next several years are limited. On a global basis, while large ethylene and polyethylene additions in the Middle East and Asia
have been announced, these projects continue to experience delays due to shortness of labor and construction materials. Accordingly, NOVA Chemicals does not expect all new global capacity to
start up within the announced timeframes. The primary driver of cyclical upswings in the ethylene and styrenics sectors is generally the combination of limited supply growth and improved demand
growth, which is driven by sustained Gross Domestic Product and industrial production growth.

Cyclicality
is exacerbated by volatility in feedstock prices. In response to higher feedstock prices and other market factors, commodity plastics and chemical producers will generally
announce price increases. However, the implementation of announced price increases depends on many factors, including market conditions, the supply/demand balance for a particular product and
feedstock costs, which may be beyond NOVA Chemicals' control.

INTELLECTUAL PROPERTY

Patents, Licenses and Trademarks

NOVA Chemicals owns directly, or licenses from affiliates, a large number of patents in Canada, the United States and other countries.
NOVA Chemicals also owns, or licenses through a wholly owned subsidiary, a number of trademarks, which are used to identify various chemical and plastic products. While these patents and
trademarks constitute valuable assets, NOVA Chemicals does not regard any single patent or trademark as being material to its operations as a whole.

During
2006, 172 patent applications were filed in the name of NOVA Chemicals or its subsidiaries worldwide. These include divisional and continuation patent applications
as well as national and regional patent applications (which may result in more than one issued patent). 49 of the applications were in the Olefins/Polyolefins business unit, 120 were in
the Performance Styrenics business unit and three were in the STYRENIX business unit. Worldwide, during 2006, 84 patents were issued to NOVA Chemicals or its subsidiaries, 62 in
the Olefins/Polyolefins business unit, 20 in the Performance Styrenics business unit and two in the STYRENIX business unit.

In
connection with the NOVA Innovene joint venture, NOVA Chemicals granted a royalty-free license to NOVA Innovene for all of the intellectual property
that NOVA Chemicals used to manufacture its products in Europe before NOVA Innovene began operations. The license generally covers all of NOVA Chemicals' commodity SPS and EPS
products and related technologies that it manufactured or had under development in Europe. With the exception of EPS Silver resins and STYROSUN polystyrene, NOVA Chemicals' styrenic
polymer Performance Products are not licensed to the NOVA Innovene joint venture.

Technology and Licensing

NOVA Chemicals actively supports all of its technologies to maintain its competitive position, including technologies developed by NOVA Chemicals
and those licensed from third parties. Some of the technologies licensed from third parties are subject to certain restrictions on use.

NOVA Chemicals
was initially a licensee of the technology used in its manufacturing operations. Over the past decade, NOVA Chemicals has acquired a variety of business
units with associated technology assets in areas including process and catalyst technology, as well as polymer technologies. In addition, NOVA Chemicals has expanded its research and
development activities. The result is a technology portfolio with more than 750 patents, new margin-enhancing process technologies such as Advanced SCLAIRTECH technology, new
proprietary single-site catalyst positions and a wide range of Performance Products in both styrenic polymers (such as ARCEL resins) and polyethylene (such as SURPASS resins).

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NOVA Chemicals has two key, internally developed, technologies for the production of polyethylene  SCLAIRTECH
technology and Advanced SCLAIRTECH technology. In addition to these technologies, NOVA Chemicals conducts research and development on other polyethylene technologies including
gas-phase and high-pressure technology.

NOVA Chemicals
acquired its proprietary SCLAIRTECH technology and a global SCLAIRTECH technology licensing business from DuPont in 1994. NOVA Chemicals operates one
production facility utilizing SCLAIRTECH technology near Corunna, Ontario that produces SCLAIR HDPE resins. In addition, NOVA Chemicals currently licenses its SCLAIRTECH technology to numerous
chemical companies that utilize it at 10 plants worldwide.

In
2001, NOVA Chemicals began commercial operation of its new, proprietary Advanced SCLAIRTECH technology for the production of polyethylene. The first step in the introduction of
this technology was to utilize a proprietary Z-N catalyst to manufacture new polyethylene products. In 2002, a line of new, Z-N catalyzed, octene-based SCLAIR resins was
launched intended for polyethylene Performance Products film applications.

In
April 2003, NOVA Chemicals announced the commercial introduction of its first polyethylene resins produced with Advanced SCLAIRTECH technology and utilizing its new
proprietary single-site catalyst. NOVA Chemicals manufactures and sells these polyethylene resins under the brand name SURPASS resins. SURPASS resins, which are part of polyethylene
Performance Products, have been commercialized for film, rotational molding and thin wall injection molding applications.

During
2006, NOVA Chemicals continued to focus on developing and commercializing polyethylene Performance Products using Advanced SCLAIRTECH technology, including those used in
film, injection molding and rotational molding. In this regard, NOVA Chemicals commercialized two new grades of SURPASS polyethylene resins formulated to provide outstanding performance in
demanding frozen food
packaging applications. These new SURPASS resins for food packaging tubs and lids provide a complete solution for the packaging of ice cream and other frozen foods that require impact resistance at
extremely cold temperatures. NOVA Chemicals also commercialized SURPASS resins that were developed for blown film applications requiring premium toughness without sacrificing processability.
These new SURPASS resins can be used in a broad range of applications that require extra toughness, such as produce and frozen food packaging, or protective film for the transportation of mobile homes
and boats. Polyethylene Performance Products manufactured using Advanced SCLAIRTECH technology that were introduced during the last two years now account for over 25% of the total sales of resins
manufactured using Advanced SCLAIRTECH technology.

During
2006, NOVA Chemicals also commercialized a new polyethylene resin, FP120-DD, that has been designed to meet the strict requirements of the medical packaging market.
NOVA Chemicals expects this new polyethylene resin to enable it to expand its position in this growing market.

In
2006, NOVA Chemicals also announced the commercial availability of the world's first one-piece polyethylene dumpster, the first application to emerge from the
Corporation's "Rotomolding Network." The new plastic dumpsters, which are manufactured by Nuwave Container LLC, utilize SURPASS resins and are marketed by Rehrig Pacific Company. Organized by
NOVA Chemicals, the Rotomolding Network, a group of rotational molders located throughout North America, was created to drive growth in the rotomolding industry by expanding markets for
existing applications for SURPASS resins and by generating new applications that are currently made from other materials such as steel or glass.



NOVA Chemicals has developed three key proprietary families of catalyst technologies for polyethylene production. The first is a family of proprietary
single-site catalysts for Advanced SCLAIRTECH technology and other polymer technologies including gas-phase polyethylene. These single-site catalysts impart unique
properties and create products that compete with many metallocene-based polyethylene products. The second family of catalysts includes proprietary Z-N catalysts used for
SCLAIRTECH technology and Advanced SCLAIRTECH technology. Finally, the NOVACAT family of catalysts was developed by NOVA Chemicals and its catalyst development partner, INEOS, for
use in gas-phase polyethylene. NOVACAT catalysts have been

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commercialized
on NOVA Chemicals' gas-phase plant, PE1, in Joffre, Alberta. NOVACAT catalysts provide enhanced throughput, product range and properties when compared to traditional
Z-N catalysts in commercial gas-phase polyethylene production facilities. The NOVACAT family of catalysts is currently being run on several different
gas-phase technologies by NOVA Chemicals and licensees.

During
2006, NOVA Chemicals and INEOS completed their development work on the NOVACAT catalyst portfolio. Variants of the catalyst are now available for the manufacture of
conventional and performance LLDPE and narrow molecular weight HDPE.



NOVA Chemicals owns or has the rights to a significant portfolio of styrenics technology, in the fields of both polymer production and styrenic polymer
applications. Prior to 1999, NOVA Chemicals licensed technology from a number of other companies and also developed its own technology for the polymerization of styrene monomer. As part of the
Huntsman and Shell acquisitions, NOVA Chemicals acquired additional access to a broad range of styrenic product and process technology, as well as knowledge in polystyrene and styrenic polymer
Performance Products. The technologies acquired include the one-step Shell process technology for EPS and polystyrene manufacturing and compounding technology relating to a number of
polystyrene Performance Products.

NOVA Chemicals'
key styrenic polymer Performance Products include both foamed styrenic polymers and rigid styrenic polymers. The foamed styrenic polymers include ARCEL moldable
foam resins that are sold into the protective packaging market, EPS Silver resins that are sold primarily into the European construction and building marketplace and DYLITE premium cup and
container grade resins used for EPS cups and, with NOVA Chemicals' IMx technology, to make unique in-mold labeled cups with outstanding graphics. The rigid styrenic polymers include ZYLAR clear
acrylic copolymer resins for use in the food packaging and consumer goods industries and DYLARK resins for use in the automotive industry and food packaging and food services industry.

In
2006, NOVA Chemicals made two announcements concerning its EPS technology. First, in March 2006, NOVA Chemicals announced the commercial availability of its first
ULTRA LOW® pentane EPS product. ULTRA LOW EPS technology delivers pentane levels below 4%, enabling business growth for EPS molders that are constrained by increasingly rigorous emissions
standards. Second, in July 2006, NOVA Chemicals announced the commercial availability of enhanced EPS resins that deliver superior performance in ICF applications. ICFs made with
NOVA Chemicals' EPS 35MB-ICF resins enable significant molding cycle time improvements and provide outstanding strength in residential, commercial and industrial construction
projects. NOVA Chemicals also announced the commercial introduction of foamable DYLARK FG resins for microwavable packaging. Designed for take-out food containers and home meal
replacement packaging, these foamable DYLARK FG resins provide structural integrity at high temperatures for safe microwave re-heating and feature superior insulation to maintain hot food
temperatures in transit.



In 2006, NOVA Chemicals continued its research and development work, including manufacturing trials, with Edmonton-based Quantiam Technologies Inc.
to develop coating and catalysts technologies for improved
furnace operations in the hydrocarbon steam cracking manufacturing process. If commercialized, these technologies will complement the ANK400 anti-coking technology that
NOVA Chemicals previously developed and licensed to Kubota Corporation in 2002 and which are now used in eight manufacturing facilities throughout the world.

In
2006, NOVA Chemicals developed, in collaboration with the University of Petroleum, China; University of Stuttgart, Germany; and the Alberta Energy Research Institute, Canada,
two catalytic processes for the conversion of heavy oil fractions to lighter components such as olefins and paraffins. If commercialized, these technologies could enable the transformation of low cost
Alberta oil sands feedstock to chemical feedstock for olefins production. These emerging technologies are part of NOVA Chemicals' patent portfolio.

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Research and Development

NOVA Chemicals spent $43 million in 2006 (2005: $38 million; 2004: $38 million) on research and development activities.
NOVA Chemicals also spent $8 million in 2006 (2005: $12 million; 2004: $10 million) on technical support and activities relating to improvements of existing products.
NOVA Chemicals' operating budget for 2007 is $41 million for research and development and $9 million for technical support.



NOVA Chemicals' Olefins/Polyolefins business conducts research at the NOVA Chemicals Research & Technology Center ("NRTC") and the
NOVA Chemicals Technical Center, both located in Calgary, Alberta. Both centers are equipped with state of the art facilities for the development of new catalysts, olefin and polyolefin
processes as well as full scale testing of new products. The demonstration plant for Advanced SCLAIRTECH technology is located at the St. Clair River site in Corunna, Ontario and is capable of
testing new catalysts, new polyethylene products and reactor processes.



NOVA Chemicals' operates a technical center located at the Beaver Valley site in Monaca, Pennsylvania. During 2006, NOVA Chemicals closed its
Chesapeake Technology Center and consolidated its United States styrenic technology organization at its Beaver Valley site. The Performance Styrenics business also operates a pilot plant at the
Beaver Valley site. This pilot plant is capable of simulating mass and suspension polymerization, as well as synthesis of EPS and ARCEL resin. The technical center at the Beaver Valley site also has
equipment for the compounding of specialty blends and alloys. The Performance Styrenics business also has computer-aided design engineering resources in Southfield, Michigan to support Performance
Products, automotive applications and customers.

In
December 2003, NOVA Chemicals opened a new styrenics research lab at NRTC. This research lab focuses on the development of new technology platforms for Performance Styrenics by
leveraging the skills and capabilities already in existence at NRTC.

RESPONSIBLE CARE AND ENVIRONMENTAL REGULATIONS

In
1985, NOVA Chemicals adopted the Responsible Care initiative as the basis for its overall safety, health, environment, security and risk program. Responsible Care is a global
chemical industry performance initiative created by the Canadian Chemical Producers' Association ("CCPA") in 1985 and adopted by the American Chemistry Council ("ACC") in the United States in
1988. Responsible Care is currently practiced by chemical industry associations in 52 countries worldwide. Responsible Care requires participants to commit to the responsible management of the
total life cycle of their products. In 2006, the ACC honored NOVA Chemicals as co-winner of their Responsible Care Leadership award in the medium-sized company category. The award
recognizes outstanding leadership and performance under the Responsible Care initiative.

Since
1990, NOVA Chemicals has utilized an internal environment, health and safety audit program to manage regulatory compliance at its operating facilities.
NOVA Chemicals' Responsible Care Audit Program was evaluated by a leading international environment, health and safety consulting firm in January 2002 and December 2004. On the
basis of its review the consultant found that the Audit Program was progressive, soundly designed and effectively implemented, concluding that it was highly rated when compared to other programs with
which the consultant was familiar.

In
2004, NOVA Chemicals became one of the first ACC member companies to complete required audits of the Responsible Care Management System® ("RCMS"). The audit
was conducted by an external accredited audit firm and focused on corporate level (headquarters) Responsible Care systems, procedures and documentation. The audit concluded that NOVA Chemicals
is in compliance with corporate-level RCMS requirements and NOVA Chemicals' U.S. Operating Center was officially certified as RCMS compliant in January 2005.

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In
2006, the CCPA released its final report for the Responsible Care re-verification of NOVA Chemicals. According to the CCPA's final report, "environmental,
health and safety issues  are clearly visible, well understood and entrenched in NOVA Chemicals' management system".

Like
other companies in its industry, NOVA Chemicals is subject to extensive environmental laws and regulations at all levels of government. These laws and regulations concern the
manufacture, processing and importation of certain chemical substances, discharges or releases (whether to air, land or water) and the generation, handling, storage, transportation, treatment,
disposal and clean-up of regulated materials. Although NOVA Chemicals believes that its businesses, operations and facilities are being operated in material compliance with applicable
environmental laws and regulations, the operation of any petrochemical facility and the distribution of chemical products involve the risks of accidental discharges of hazardous materials, personal
injury and property and environmental damage.

United States
and Canadian generally accepted accounting principles require companies to record liabilities associated with future plant decommissioning and site restoration costs
on both active and inactive plants at their fair value based on a discounted value of the expected costs to be paid when the assets are retired. On December 31, 2006, NOVA Chemicals had
$26 million of accumulated reserve for these activities. This accumulated reserve is comprised of approximately $19 million anticipated to be required for the future decommissioning and
site restoration of currently active plant sites, approximately $4 million anticipated to be required for the decommissioning and site restoration of plant sites that have been divested or are
no longer in use and approximately $3 million for dismantling of select assets at operating plant sites.

NOVA Chemicals
reviews its accumulated reserves for decommissioning and site restoration quarterly to determine if adjustments are required. The reserved amount for future
decommissioning and site restoration does not include any deduction for salvage or land value that may be realized, however these will be taken into consideration as the assets are depreciated.
Because these plants may be in operation in excess of 40 years, significant uncertainty exists concerning the nature of the decommissioning and site restoration activities that may be required.
Furthermore, significant judgment is involved in the estimation process, since the degree of natural attenuation, evolution of new technologies and potential future land uses may mitigate future
environmental liabilities and potential costs.

Environmental
capital expenditures for NOVA Chemicals, including pollution abatement and remedial programs, were $8 million in 2006 (2005: $12 million; 2004:
$17 million) and are estimated to be $32 million in 2007. Operating expenses relating to environmental protection were $15 million in 2006 (2005: $13 million; 2004:
$15 million) and are estimated to be $15 million in 2007. Total remedial expenditures to dismantle and remediate discontinued facilities and sites totaled $1 million in 2006
(2005: $1 million; 2004: $2 million). This figure is expected to be $2 million in 2007.

NOVA Chemicals
is active in a number of voluntary environmental initiatives to reduce emissions and wastes from its facilities. In addition to participation in the CCPA's National
Emissions Reduction Masterplan, NOVA Chemicals also participates in Canada's Accelerated Reduction and Elimination of Toxics. NOVA Chemicals is also directly involved in the Canadian
Chemical Industry's Environmental Performance Memoranda of Understanding with the Federal, Ontario and Alberta governments, which is a voluntary program designed to achieve reductions in air emissions
from the chemical industry. Through a greenhouse gas emissions management program, NOVA Chemicals is committed to economically viable solutions to climate change concerns. This includes
NOVA Chemicals participation in the joint venture with ATCO and EPCOR to operate a natural-gas-fired cogeneration power plant at its production site at Joffre, Alberta.
This joint venture has substantially reduced greenhouse gas emissions when compared with supplying the electrical needs of the Joffre site from Alberta's primarily coal-fired electrical
generation facilities.

NOVA Chemicals
participates in the High Production Volume ("HPV") Challenge Program, launched in 1998 in cooperation with the U.S. Environmental Protection Agency and
Environmental Defense Fund. The HPV Challenge Program has greatly accelerated the public availability of hazard screening data and critical information used to evaluate the potential health and
environmental effects of HPV chemicals. This participation is consistent with NOVA Chemicals' Responsible Care commitment, and the resulting research will enable the chemical industry to
contribute to the scientific and public policy debate affecting the industry.

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EMPLOYEE AND LABOR RELATIONS

NOVA Chemicals currently employs approximately 3,330 full-time employees globally, excluding employees of NOVA Innovene.

Collective
bargaining agreements with various unions, covering approximately 500, or 15%, of the approximately 3,300 North American employees, are in place at certain plants
located in Ontario, Massachusetts and Pennsylvania. A collective bargaining agreement involving approximately 45 employees at the STYRENIX business unit's styrene monomer plant in Sarnia,
Ontario was negotiated in 2004 with an expiration date of January 31, 2007. A collective bargaining agreement involving approximately 225 employees at NOVA Chemicals' olefins
plant in Corunna, Ontario was negotiated in 2004 with an expiration date of March 31, 2007. NOVA Chemicals expects to renew both the Sarnia and Corunna agreements through collective
bargaining. A collective bargaining agreement involving approximately 30 employees at the STYRENIX business unit's polystyrene plant at Springfield, Massachusetts was negotiated in 1999 with an
expiration date of September 30, 2007. NOVA Chemicals expects to renew this agreement through collective bargaining. A collective bargaining agreement involving approximately
200 employees at the polystyrene plant at the Beaver Valley site in Monaca, Pennsylvania was re-negotiated in 2006 with an expiration date of May 12, 2009.
NOVA Chemicals engages in continuous dialogue with the unions to address current issues and proactively address potential bargaining items.

NOVA Chemicals
provides medical, health, life insurance, pension plans and other benefits to its employees, which are comparable with other companies in the chemical industry
where its operations are located.

FOREIGN OPERATIONS

Foreign operations are subject to various risks differing from those in Canada and the United States including political events, tax changes, labor difficulties,
price controls and other governmental actions. NOVA Chemicals actively addresses these risks as part of its risk management system.

NOVA Chemicals
sells its products worldwide. NOVA Chemicals has established its international commercial headquarters in Switzerland to coordinate commercial activities
outside of North America and maintains sales support operations globally.

LEGAL PROCEEDINGS

NOVA Chemicals is involved in litigation from time to time in the ordinary course of its business. In management's opinion, none of the litigation that
NOVA Chemicals is currently involved in is material to NOVA Chemicals' financial condition or results of operations.

RISK FACTORS

The cyclicality of commodity plastics and chemical businesses may cause significant fluctuation in NOVA Chemicals' income and cash flow.

NOVA Chemicals' historical operating results reflect the cyclical and volatile nature of commodity plastics and chemical businesses. NOVA Chemicals'
businesses historically experience alternating periods of inadequate capacity and tight supply, causing prices and profit margins to increase, followed by periods of oversupply, resulting from
capacity additions. Prolonged oversupply leads to declining capacity utilization rates, prices and profit margins. The markets for ethylene, polyethylene, styrene monomer and styrenic polymers are
also highly cyclical, resulting in volatile profits and cash flow over the business cycle. Because NOVA Chemicals derives nearly all of its revenue from sales of these products, its operating
results are more sensitive to this cyclical nature than many of its competitors who have more diversified businesses. This cyclicality is exacerbated by volatility in feedstock prices.
NOVA Chemicals cannot provide assurance that pricing or profitability in the future will be comparable to any particular historical period, including the most recent period shown in its
operating results.

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Excess
industry capacity, especially at times when demand is weak, has in the past and may in the future cause NOVA Chemicals and other industry participants to lower production
rates, which can reduce its margins, income and cash flow.

Rising costs of energy and raw materials may result in increased operating expenses and reduced results of operations.

NOVA Chemicals purchases large amounts of energy and raw materials, including natural gas, crude oil and benzene, for its businesses, representing a
substantial portion of its operating expenses. The prices of energy and raw materials have historically been highly volatile and cyclical, and NOVA Chemicals' energy and raw material costs have
fluctuated significantly in recent years. Although certain of NOVA Chemicals' customer contracts are tied to changes in feedstock costs or provide for surcharges if feedstock costs change, many
contracts are tied to market prices. NOVA Chemicals cannot predict whether and to what extent energy and/or raw materials prices will rise in the future or whether and to what extent it will be
able to pass on such cost increases to its customers. Any significant energy and/or raw materials cost increase could have a material adverse effect on NOVA Chemicals' business, results of
operations, financial condition or cash flow.

NOVA Chemicals sells commodity products in highly competitive markets and faces significant price pressure.

NOVA Chemicals sells its products in highly competitive markets. Due to the commodity nature of a majority of its products, and to a lesser degree for
Performance Products, competition in these markets is based primarily on price and to a lesser extent on product performance, product quality, product deliverability and customer service. As a result,
NOVA Chemicals may not be able to protect its market position by product differentiation or pass on cost increases to its customers. Accordingly, increases in raw material costs and other costs
may not necessarily correlate with changes in product prices, either in the direction of the price change or in magnitude. Although NOVA Chemicals strives to maintain or increase its
profitability by reducing costs through improving production efficiency, emphasizing higher margin products and controlling selling and administration expenses, NOVA Chemicals cannot provide
assurance that these efforts will be sufficient to offset fully the effect of any pricing changes on its operating results.

Among
NOVA Chemicals' competitors are some of the world's largest chemical companies and major integrated petroleum companies that have their own raw material resources. Some of
these companies may be able to produce products more economically than NOVA Chemicals. In addition, some of NOVA Chemicals' competitors are larger and have greater financial resources,
which may enable them to invest significant capital into their businesses, including expenditures for research and development. If any of NOVA Chemicals' current or future competitors develop
proprietary technology that enables them to produce products that compete with those of NOVA Chemicals at a significantly lower cost, segments of NOVA Chemicals' technology could be
rendered over time uneconomical or obsolete. The entrance of new competitors into the industry may reduce NOVA Chemicals' ability to capture profit margins in circumstances where capacity
utilization in the industry is decreasing. Further, production from low-cost producers in petroleum-rich countries is increasing in the chemical industry and may expand
significantly in the future. Any of these developments could affect NOVA Chemicals' ability to enjoy higher profit margins during periods of increased demand.

External factors beyond NOVA Chemicals' control can cause fluctuations in demand for NOVA Chemicals' products and in its prices and
margins, which may negatively affect income and cash flow.

External factors can cause significant fluctuations in demand for NOVA Chemicals' products and volatility in the price of raw materials and other operating
costs. Examples of external factors include general economic conditions, including a prolonged economic downturn, competitor actions, technological developments, unplanned facility shutdowns,
international events and circumstances, and governmental regulation.

Demand
for NOVA Chemicals' products is influenced by general economic conditions. A number of NOVA Chemicals' products are highly dependent on durable goods markets, which
are themselves particularly cyclical. If the global economy does not improve, demand for NOVA Chemicals' products and its income and cash flow would be adversely affected.

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NOVA Chemicals
may reduce production, idle a facility for an extended period of time, or discontinue certain products because of high raw material prices, an oversupply of a
particular product, feedstock unavailability and/or lack of demand for that particular product. When NOVA Chemicals decides to reduce or idle production, reduced operating rates are often
necessary for several quarters or, in certain cases, longer and cause NOVA Chemicals to incur costs, including the expenses of the outages and the restart of these facilities.

NOVA Chemicals has a significant amount of debt, which could adversely affect its financial condition.

NOVA Chemicals has a significant amount of indebtedness. As of December 31, 2006, NOVA Chemicals had total indebtedness of approximately
$1.9 billion, including amounts drawn under its credit facilities. Additionally, NOVA Chemicals has approximately $525 million available for borrowing under its three credit
facilities, subject to customary conditions. As of December 31, 2006, NOVA Chemicals had utilized $154 million of the credit facilities, of which $44 million was in the
form of letters of credit. In the first quarter of 2007, as a result of the non-cash restructuring charge taken in connection with the write-down of the STYRENIX business
unit assets, NOVA Chemicals reduced the size of its $375 million secured revolving credit facility to $325 million.

The
level of indebtedness could have important consequences, such as limiting cash flow available for general corporate purposes due to debt service requirements, limiting
NOVA Chemicals' ability to obtain additional debt financing, feedstock, materials or services on advantageous terms in the future due to debt levels or changes in credit ratings, limiting
NOVA Chemicals' flexibility in addressing competitive and other changes in its industry and economic conditions generally due to cash flow restrictions, exposing NOVA Chemicals to risks
inherent in interest rate fluctuations, and increasing NOVA Chemicals' vulnerability to general economic downturns and adverse competitive and industry conditions. These risks, if realized,
could place NOVA Chemicals at a competitive disadvantage compared to any of its competitors that are less leveraged.

In
addition, subject to the restrictions in its credit facilities and indentures, NOVA Chemicals may incur significant additional indebtedness from time to time. If new
debt is added to current debt levels, the related risks described above would intensify. If such debt financing is not available when required or is not available on acceptable terms,
NOVA Chemicals may be unable to grow its business, take advantage of business opportunities, respond to competitive pressures or refinance maturing debt, any of which could have a material
adverse effect on its operating results and financial condition.

Operating problems in NOVA Chemicals' business may adversely affect NOVA Chemicals' income and cash flow.

The occurrence of material operating problems at NOVA Chemicals' facilities may have a material adverse effect on the productivity and profitability of a
particular manufacturing facility, or on NOVA Chemicals' operations as a whole. NOVA Chemicals' income and cash flow are dependent on the continued operation of its various production
facilities. NOVA Chemicals' operations are subject to the usual hazards associated with chemical manufacturing and the related storage and transportation of raw materials, products and wastes,
including pipeline, storage tank and other leaks and ruptures; fires; mechanical failure; labor difficulties; remediation complications; discharges or releases of pollutants, contaminants or toxic or
hazardous substances or gases and other environmental risks; explosions; chemical spills; unscheduled downtime; transportation interruptions; and inclement weather and natural disasters.

Some
of these hazards may cause personal injury and loss of life, severe damage to or destruction of property and equipment and environmental damage, and may result in suspension of
operations and the imposition of civil, regulatory or criminal penalties. Furthermore, NOVA Chemicals is also subject to present and future claims with respect to workplace exposure, workers'
compensation and other matters. NOVA Chemicals carries insurance against potential operating hazards which is consistent with industry norms. If NOVA Chemicals were to incur a
significant liability that was not covered by insurance, it could significantly affect NOVA Chemicals' productivity, profitability and financial position.

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NOVA Chemicals is exposed to costs arising from environmental compliance, cleanup and adverse litigation, which may have a substantial adverse
effect on NOVA Chemicals' business, financial condition, operating results and cash flow.

NOVA Chemicals is subject to extensive federal, provincial, state and local environmental laws and regulations concerning the manufacture, processing and
importation of certain chemical substances, air emissions, water discharges and the generation, handling, storage, transportation, treatment, disposal and clean up of regulated substances.
NOVA Chemicals' operations involve the risk of accidental discharges or
releases of toxic or hazardous materials, personal injury, property and environmental damage. Furthermore, applicable environmental laws and regulations are complex, change frequently and provide for
substantial fines, regulatory penalties and criminal sanctions in the event of non-compliance. In addition, substantial costs can sometimes result from orders that require rectification of
environmental conditions. NOVA Chemicals cannot provide assurance that it will not incur substantial costs or liabilities as a result of such occurrences or the enforcement of
environmental laws.

Risk
of substantial environmental costs and liabilities is inherent in NOVA Chemicals' business, as it is with other companies engaged in similar businesses. Also,
NOVA Chemicals has liabilities and obligations arising in connection with discontinued operations, and has specific contractual obligations with respect to pre-closing environmental
conditions at certain facilities divested by predecessor companies. Environmental investigations and remedial work have commenced at most locations and provision has been made in
NOVA Chemicals' financial statements to cover the estimated costs of remediation of discontinued sites. NOVA Chemicals has incurred, and may incur in the future, environmental costs and
liabilities and has made provisions in its financial statements for known matters. Nevertheless, NOVA Chemicals cannot provide assurance that it will not incur substantial costs and liabilities
resulting from future events or unknown circumstances which exceed its reserves or will be material.

From
time to time, NOVA Chemicals has entered into consent agreements or been subject to administrative orders for pollution abatement or remedial action. Under some environmental
laws, NOVA Chemicals may be subject to strict and under certain circumstances, joint and several liability for the costs of environmental contamination on or from its properties, and at
off-site locations where NOVA Chemicals disposed of or arranged for disposal or treatment of hazardous substances, and may also incur liability for related damages to natural resources.
NOVA Chemicals has been named as a potentially responsible party under the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980, or its state equivalents, at
several third-party sites. NOVA Chemicals cannot provide assurance that significant costs will not be incurred.

NOVA Chemicals could incur significant costs to comply with the Kyoto Protocol or other greenhouse gas emission reduction requirements, which in
turn could reduce NOVA Chemicals' operating results and cash flow.

The Kyoto Protocol to the United Nations Framework Convention on Climate Change took effect during the first quarter of 2005. As a result of the Canadian
government's decision to ratify the Kyoto Protocol, Canada is required to reduce its greenhouse gas emissions by 6% below 1990 levels during the years 2008 through 2012 and legally binding greenhouse
gas emission reduction targets will be imposed on NOVA Chemicals' operations in Canada. In view of the uncertainty of how and when implementation will occur, NOVA Chemicals cannot
estimate compliance costs or whether they will be material.

NOVA Chemicals' business may be adversely affected by risks associated with international operations.

Although NOVA Chemicals reports its results in U.S. dollars, it conducts a significant portion of its business outside the United States, and is
subject to risks normally associated with international operations. These risks include the need to convert currencies that NOVA Chemicals may receive as payment for its products into
currencies required to pay its debt, or into currencies with which NOVA Chemicals purchases raw materials or pays for services, which could result in a gain or loss depending on fluctuations in
exchange rates. Fluctuations in exchange rates can also affect the relative competitive position of a particular manufacturing facility, as well as NOVA Chemicals' ability to market its
products successfully in other markets. Other risks of international operations include trade barriers, tariffs, exchange controls, national and regional labor strikes, social and

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political
risks, general economic risks, required compliance with a variety of foreign laws, including tax laws and the difficulty of enforcing agreements and collecting receivables through foreign
legal systems.

Interruptions in NOVA Chemicals' supply of raw materials could adversely affect NOVA Chemicals' business.

NOVA Chemicals purchases large amounts of raw materials, including crude oil, natural gas and benzene, for its businesses. If temporary shortages due to
disruptions in supply caused by weather, transportation, production delays or other factors require NOVA Chemicals to secure its raw materials from sources other than its current suppliers,
NOVA Chemicals cannot provide assurance that it will be able to do so on terms as favorable as its current terms or at all.

NOVA Chemicals may be subject to losses that are not covered by insurance.

NOVA Chemicals carries comprehensive liability and property (including fire and extended perils) insurance on all of its facilities, with deductibles and
other policy specifications and insured limits customarily carried in NOVA Chemicals' industry for similar properties. NOVA Chemicals' insurance costs have increased recently. In
addition, some types of losses, such as losses resulting from war or acts of terrorism are not insured. NOVA Chemicals determines coverage limits based on what it believes to be a reasonable
maximum foreseeable loss scenario for its operations. In the event that an uninsured loss or a loss in excess of insured limits occurs, NOVA Chemicals may not be reimbursed for the cost to
replace capital invested in that property, nor insured for the anticipated future revenues derived from the manufacturing activities conducted at that property, while NOVA Chemicals could
remain obligated for any mortgage indebtedness or other financial obligations related to the property. Any such loss could adversely affect NOVA Chemicals' business, results of operations or
financial condition.

NOVA Chemicals has made and may continue to make investments in entities that it does not control.

NOVA Chemicals has established joint ventures and made minority interest investments designed to increase its vertical integration, enhance customer
service and increase efficiencies in its marketing and distribution in the United States and other markets. NOVA Chemicals' principal joint ventures and minority investments include
NOVA Innovene, NOVIDESA, LRM, NOVA Chemicals' 50:50 joint venture with Dietrich, E3 and the Joffre Co-Generation Plant. NOVA Chemicals does not control
these entities.

NOVA Chemicals'
inability to control entities in which it invests may affect its ability to receive distributions from those entities or to implement its business plan fully. The
incurrence of debt or entry into other agreements by an entity not under NOVA Chemicals' control may result in restrictions or prohibitions on that entity's ability to pay dividends or make
other distributions to NOVA Chemicals. Even where these entities are not restricted by contract or by law from making distributions to NOVA Chemicals, NOVA Chemicals may not be
able to influence the occurrence or timing of such distributions. In addition, if any of the other investors in a non-controlled entity fails to observe its commitments, that entity may
not be able to operate according to its business plan or NOVA Chemicals may be required to increase its level of commitment. If any of these events were to transpire, NOVA Chemicals'
business, results of operations or financial condition could be adversely affected.

Labor disputes could have an adverse effect on NOVA Chemicals' business.

As of December 31, 2006, NOVA Chemicals had approximately 3,330 employees globally. Approximately 500, or 15%, of its North American
employees are represented by unions under four separate collective bargaining agreements. If NOVA Chemicals is unable to negotiate acceptable contracts with these unions upon expiration of an
existing contract or other employees were to become unionized, NOVA Chemicals could experience work stoppages, a disruption in operations or higher labor costs, which could have an adverse
effect on business, financial condition, results of operations or cash flow.

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NOVA Chemicals' business is dependent on its intellectual property. If NOVA Chemicals' patents are declared invalid or its trade secrets
become known to its competitors, its ability to compete may be adversely affected.

Proprietary protection of NOVA Chemicals' processes, apparatuses and other technology is important to NOVA Chemicals' business. Consequently,
NOVA Chemicals relies on judicial enforcement for protection of its patents. While a presumption of validity exists with respect to patents issued to NOVA Chemicals in the United States
and Canada, there can be no assurance that any of NOVA Chemicals' patents will not be challenged, invalidated or circumvented. Furthermore, if any pending patent application filed by
NOVA Chemicals does not result in an issued patent, then the use of any such intellectual property by NOVA Chemicals' competitors could have an adverse effect on NOVA Chemicals'
businesses, financial condition, results of operations or cash flow. Additionally, NOVA Chemicals' competitors or other third parties may obtain patents that restrict or preclude
NOVA Chemicals' ability to produce or sell its products lawfully in a competitive manner, which could have an adverse effect on business, financial condition, results of operations
or cash flow.

NOVA Chemicals
also relies upon unpatented proprietary know-how and continuing technological innovation and other trade secrets to develop and maintain its competitive
position. While it is NOVA Chemicals' policy to enter into confidentiality agreements with its employees and third parties to protect its intellectual property, these confidentiality agreements
may be breached and, consequently, may not provide meaningful protection for NOVA Chemicals' trade secrets or proprietary know-how, or adequate remedies may not be available in the
event of an unauthorized use or disclosure of such trade secrets and know-how. In addition, others could obtain knowledge of such trade secrets through independent development or other
access by legal means. Although NOVA Chemicals does not regard any single patent or trademark as being material to its operations as a whole, the failure of its patents or confidentiality
agreements to protect its processes, apparatuses, technology, trade secrets or proprietary know-how could have an adverse effect on its business, financial condition, results of operations
or cash flow.

DIVIDENDS

Historically, NOVA Chemicals has paid quarterly dividends on its common shares at the rate of Cdn. $0.10 per share, representing an aggregate of
Cdn. $0.40 per share annually. In 2006, NOVA Chemicals paid Cdn. $33 million in dividends on its common shares. There are currently no material contractual restrictions on
NOVA Chemicals' ability to declare and pay dividends on its common shares. The declaration and payment of dividends is at the discretion of the Board of Directors of NOVA Chemicals,
which will consider
earnings, capital requirements, the financial condition of NOVA Chemicals and other relevant factors. It is, however, the Corporation's current intention to retain most of its earnings
to support current operations and reduce debt, and to continue to pay dividends at historic levels.

NOVA Chemicals
has paid the following dividends on its common shares during the preceding three years:

|              |      |  | Dividends per share
|------------- | ---- |  | -------------------
|
|Common Shares | Cdn. |  | $                  

DESCRIPTION OF CAPITAL STRUCTURE

NOVA Chemicals is authorized to issue an unlimited number of common shares, first preferred shares and second preferred shares. Currently, only common
shares are issued and outstanding.

Common Shares

Each common share has one vote. The holders of the common shares are entitled to attend and vote at all meetings of shareholders except meetings of only the
holders of another class or series of shares of the Corporation. In addition, subject to the preferential rights attaching to any shares of the Corporation ranking in priority to the common shares,
the holders of the common shares are entitled to receive any dividends that may be declared by the Board of Directors on the common shares. Subject to the rights of the holders of shares of the
Corporation ranking in priority to the common shares, the holders of the common shares are entitled to

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participate
rateably amongst themselves and rateably with the holders of any shares ranking on a parity with the common shares in any distribution of the remaining property of the Corporation in the
event of the dissolution, liquidation or winding-up of NOVA Chemicals or any other distribution of its property amongst its shareholders for the purposes of winding-up
its affairs.

In
May 1999, NOVA Chemicals' shareholders approved a shareholder rights plan where one right was issued for each outstanding common share. The rights remain attached to the shares
and are not exercisable until the commencement or announcement of a takeover bid for NOVA Chemicals' common shares or until a person acquires 20% or more of NOVA Chemicals' common
shares. The rights plan, as amended and restated, was reconfirmed by shareholders in April 2005. The plan expires in May 2009.

First Preferred Shares

Subject to the following and to applicable law, the first preferred shares as a class are not entitled to receive notice of, attend or vote at meetings of the
shareholders of the Corporation. The first preferred shares may from time to time be issued in one or more series, and the Board of Directors may fix from time to time before such issue the number of
first preferred shares that is to comprise each series and the designation, rights, privileges, restrictions and conditions attaching to each series of first preferred shares, including any voting
rights, the rate or amount of dividends or the method of calculating dividends, the dates of payment thereof, the terms and conditions of redemption, purchase and conversion, if any, and any sinking
fund or other provisions. If issued, the first preferred shares of each series will, with respect to the payment of dividends and the distribution of assets on return of capital in the event of
liquidation, dissolution or winding-up of NOVA Chemicals, whether voluntary or involuntary, or any other return of capital or distribution of the assets of the Corporation amongst
its shareholders for the purpose of winding-up its affairs, have preference over the common shares, the second preferred shares and over any other shares of the Corporation ranking by
their terms junior to the first preferred shares of the series. The first preferred shares of any series may also be given such other preferences over the common shares, the second preferred shares
and any other shares ranking junior to such first preferred shares as may be established by the Board of Directors.

Second Preferred Shares

Subject to the following and to applicable law, the second preferred shares as a class are not entitled to receive notice of, attend or vote at meetings of the
shareholders of the Corporation. The second preferred shares may from time to time be issued in one or more series, and the Board of Directors may fix from time to time before such issue the number of
second preferred shares that is to comprise each series and the designation, rights, privileges, restrictions and conditions attaching to each series of second preferred shares, including any voting
rights, the rate or amount of dividends or the method of calculating dividends, the dates of payment thereof, the terms and conditions of redemption, purchase and conversion, if any, and any sinking
fund or other provisions. The second preferred shares of each series will, with respect to the payment of dividends and the distribution of assets on return of capital in the event of liquidation,
dissolution or winding-up of NOVA Chemicals, whether voluntary or involuntary, or any other return of capital or distribution of the assets of the Corporation amongst its
shareholders for the purpose of winding-up its affairs, have preference over the common shares and over any other shares of the Corporation ranking by their terms junior to the second
preferred shares of the series. The second preferred shares of any series may also be given such other preferences over the common shares and any other shares ranking junior to such second preferred
shares as may be established by the Board of Directors.

CREDIT RATINGS

NOVA Chemicals has outstanding 7.4% medium term notes due 2009, 7.85% senior notes due 2010, 6.5% senior notes due 2012, senior floating rate
(six-month LIBOR plus 3.125%) notes due 2013, 7.875% debentures due 2025 and 7.25% debentures due 2028. NOVA Chemicals' notes and debentures have been rated B+ (stable)
by Standard & Poor's Corporation ("S&P"), Ba3 (negative) by Moody's Investor Service, Inc. ("Moody's"), BB (negative) by Dominion Bond Rating Service ("DBRS") and
BB- (stable) by Fitch Ratings Ltd. ("Fitch") (each a "Rating Agency").

33

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Credit
ratings are intended to provide investors with an independent measure of credit quality of an issue of securities. Rating for debt instruments are presented in ranges by each of
the Rating Agencies. The highest quality of securities are rated AAA, in the case of S&P, DBRS and Fitch, or Aaa, in the case of Moody's. The lowest quality of securities are rated D, in the case of
S&P, DBRS and Fitch, or C, in the case of Moody's.

According
to the S&P rating system, notes rated BB, B, CCC, CC, and C are regarded as having significant speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such notes will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions. Notes rated B are
more vulnerable to nonpayment than obligations rated BB, but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial or economic
conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation. The ratings from AA to CCC may be modified by the
addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.

According
to the Moody's rating system, notes which are rated Ba are judged to have speculative elements; their future cannot be considered as well-assured. Often the
protection of interest and principal payments may be very moderate, and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this
class. Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.

According
to the DBRS rating system, notes rated BB are speculative and non-investment grade, where the degree of protection afforded interest and principal is uncertain,
particularly during periods of economic recession. Entities in the BB range typically have limited access to capital markets and additional liquidity support. In many cases, deficiencies in critical
mass, diversification, and competitive strength are additional negative considerations. Each rating category from AA to C is denoted by the subcategories high and low. The absence of either a high or
low designation indicates the rating is in the middle of the category.

According
to the Fitch rating system, notes rated BB indicate that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time.
However, business or financial alternatives may be available to allow financial commitments to be met. The ratings from AA to CCC may be modified by a plus (+) or minus (-)
sign to show relative standing within the major rating categories.

The
credit ratings accorded to the notes by the Rating Agencies are not recommendations to purchase, hold or sell the notes inasmuch as such ratings do not comment as to market price or
suitability for a particular investor. There is no assurance that any rating will remain in effect for any given period of time or that any rating will not be revised or withdrawn entirely by a Rating
Agency in the future if in its judgment circumstances so warrant.

34

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MARKET FOR SECURITIES

Common Shares

NOVA Chemicals' outstanding common shares are listed on the Toronto and New York stock exchanges ("TSX" and "NYSE", respectively). The following
table sets forth the price range and volume of securities traded on the TSX and NYSE for each month in 2006:

|               |  | TSX |               | NYSE
|-------------- |  | --- | ------------- | ----
|
|
|
|January 2006   |  | $   | 35.00 - 40.09 |     
|February 2006  |  | $   | 36.95 - 41.25 |     
|March 2006     |  | $   | 31.25 - 37.96 |     
|April 2006     |  | $   | 31.30 - 35.11 |     
|May 2006       |  | $   | 33.15 - 38.90 |     
|June 2006      |  | $   | 29.50 - 34.10 |     
|July 2006      |  | $   | 30.81 - 35.32 |     
|August 2006    |  | $   | 32.61 - 36.02 |     
|September 2006 |  | $   | 34.10 - 38.08 |     
|October 2006   |  | $   | 32.51 - 36.29 |     
|November 2006  |  | $   | 32.54 - 34.48 |     
|December 2006  |  | $   | 31.24 - 34.09 |     

Transfer Agent and Registrar

The transfer agent and registrar for NOVA Chemicals' common shares is CIBC Mellon Trust Company at its principal office in Calgary, Alberta.

DIRECTORS AND OFFICERS

As a group, based on information provided to NOVA Chemicals by each director and executive officer, all directors and executive officers of
NOVA Chemicals beneficially owned, directly or indirectly, or exercised
control or direction over 707,031 common shares of NOVA Chemicals as at February 8, 2007, representing approximately 0.80% of the outstanding common shares.

Directors

The following table sets forth as of December 31, 2006, in alphabetical order, the name of each director of NOVA Chemicals, his or her residence,
principal occupation(s) during the five preceding years and the period during which he or she has served as a director of NOVA Chemicals or its predecessors. The terms of office of all of the
directors of NOVA Chemicals expire at the termination of the 2007 annual and special meeting, or until a successor is elected or appointed. Other than Mr. Newall and
Mrs. Rennie, who have decided to not stand for re-election, each of the directors has been nominated for election to serve as a director for a further one year period ending at the
termination of the 2008 annual meeting. On February 8, 2007, Mr. Christopher Daniel Pappas, the Corporation's Chief Operating Officer, was appointed to the Board of Directors.

|Name and Residence                              |  | Period during which a director of NOVA Chemicals or its predecessor |  | Principal Occupation
During the Preceding Five Years(1)                                                          
|----------------------------------------------- |  | ------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------
|JERALD ALLEN BLUMBERG(2)(3)(4)
Colorado, U.S.A. |  | Since February 15, 2000                                             |  | Retired Executive Vice President of E.I. du Pont de Nemours and Company (science company)                        
|DR. FRANK PETER BOER(3)(5)
Florida, U.S.A.      |  | Since February 21, 1991                                             |  | President and Chief Executive Officer, Tiger Scientific Inc. (science and technology, consulting and investments)
|                                                |  |                                                                     |  |                                                                                                                  

35

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|JACQUES BOUGIE, O.C.(5)(6)(7)
Québec, Canada                  |  | Since June 14, 2001                               |  | Retired President and Chief Executive Officer, Alcan Inc. (international aluminum company)                                                                                                                                                                                                                                      
|------------------------------------------------------------- |  | ------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|DR. JOANNE VANISH CREIGHTON(3)(5)
Massachusetts, U.S.A.       |  | Since June 14, 2001                               |  | President and Professor of English, Mount Holyoke College (higher education)                                                                                                                                                                                                                                                    
|ROBERT EMMET DINEEN, JR.(2)(6)
New York, U.S.A.               |  | Since July 2, 1998                                |  | Of counsel, Shearman & Sterling LLP, Attorneys-at-Law. Prior to January 2006, Senior Partner, Shearman & Sterling LLP                                                                                                                                                                                                           
|LOUIS YVES FORTIER, C.C., Q.C.(2)(5)
Québec, Canada           |  | Since July 2, 1998                                |  | Chairman and Senior Partner, Ogilvy Renault, Barristers and Solicitors                                                                                                                                                                                                                                                          
|KERRY LLOYD HAWKINS(3)(6)
Manitoba, Canada                    |  | Since July 2, 1998                                |  | Retired President of Cargill Limited and Chief Executive Officer of Canadian operations, Cargill Limited (grain handling, transportation and processing of agricultural products). Prior to December 2005, President of Cargill Limited and
Chief Executive Officer of Canadian Operations, Cargill Limited                     
|JEFFREY MARC LIPTONPennsylvania, U.S.A.                       |  | Since April 18, 1996                              |  | President and Chief Executive Officer, NOVA Chemicals                                                                                                                                                                                                                                                                           
|ARNOLD MARTIN LUDWICK(5)(6)
Québec, Canada                    |  | Since February 15, 2000                           |  | Retired Deputy Chairman, Claridge Inc. (investment holding company). Prior to December 2002, Deputy Chairman, Claridge Inc.                                                                                                                                                                                                     
|JAMES MALCOLM
EDWARD (TED) NEWALL, O.C.(2)(7)
Alberta, Canada |  | Since August 13, 1991                             |  | Chairman of the Board,
NOVA Chemicals                                                                                                                                                                                                                                                                                           
|JANICE GAYE RENNIE, F.C.A.(3)(6)
Alberta, Canada              |  | April 1991  December 2004; since January 1, 2006 |  | Independent investor, director and business advisor. From September 2004 to September 2005, Senior Vice President of Human Resources and Organizational Effectiveness, EPCOR Utilities Inc. (energy and energy-related services and
products). Prior to September 2004, Principal, Rennie and Associates (investment management)
|                                                              |  |                                                   |  |                                                                                                                                                                                                                                                                                                                                 

36

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|JAMES MARK STANFORD, O.C.(2)(3)
Alberta, Canada |  | Since December 3, 1999 |  | President, Stanford Resource Management Inc. (investment management)
|----------------------------------------------- |  | ---------------------- |  | --------------------------------------------------------------------

|Notes: |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------ | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       | (1) | Information with respect to the principal occupations of each director is based on information furnished to NOVA Chemicals.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       | (2) | Member of the Corporate Governance Committee of the Board of Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | (3) | Member of the Human Resources Committee of the Board of Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | (4) | Mr. Blumberg was formerly a director of Burlington Industries, Inc., which declared bankruptcy under Chapter 11 of the U.S. Bankruptcy Code in 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | (5) | Member of the Public Policy and Responsible Care Committee of the Board of Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | (6) | Member of the Audit, Finance and Risk Committee of the Board of Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | (7) | Messrs. Bougie and Newall served as directors of Novelis Inc. ("Novelis") during 2005 and for a portion of 2006. During 2006, Mr. Newall resigned from the board of directors and Mr. Bougie did not stand for reelection. In
their capacities as directors of Novelis, Messrs. Bougie and Newall were subject to management cease trade orders issued by certain of the Canadian provincial securities administrators against the directors and officers of Novelis by reason of
Novelis' default in filing its interim unaudited financial statements for the period ended September 30, 2005. The cease trade orders were issued in December 2005 and precluded Messrs. Bougie and Newall from trading in securities of
Novelis until the conditions in the orders were met. The conditions in the orders were met after the first quarter of 2006 and, therefore, the cease trade orders are no longer in effect.

Executive Officers

The following table sets forth, in alphabetical order, the name of each executive officer of NOVA Chemicals, his residence, present positions within
NOVA Chemicals and his principal occupations during the five preceding years.

|Name and Residence                            |  | Present Principal Occupation                                       |  | Principal Occupation
During The Preceding Five Years                                                                                                                                                                                                                                     
|--------------------------------------------- |  | ------------------------------------------------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|JEFFREY MARC LIPTONPennsylvania, U.S.A.       |  | President and Chief Executive Officer                              |  | President and Chief Executive Officer, NOVA Chemicals                                                                                                                                                                                                                                    
|LAWRENCE ALLAN MACDONALDPennsylvania, U.S.A.  |  | Senior Vice President and Chief Financial Officer                  |  | Senior Vice President and Chief Financial Officer, NOVA Chemicals                                                                                                                                                                                                                        
|JACK STEPHEN MUSTOEPennsylvania, U.S.A.       |  | Senior Vice President, Chief Legal Officer and Corporate Secretary |  | Senior Vice President, Chief Legal Officer and Corporate Secretary, NOVA Chemicals; prior to September 2006, Senior Vice President, Legal, General Counsel and Corporate Secretary, NOVA Chemicals; prior to April 2004, Senior Vice President,
Legal and General Counsel, NOVA Chemicals
|CHRISTOPHER DANIEL PAPPASPennsylvania, U.S.A. |  | Senior Vice President and Chief Operating Officer                  |  | Senior Vice President and Chief Operating Officer, NOVA Chemicals; prior to September 2006, Senior Vice President and President, Styrenics, NOVA Chemicals                                                                                                                               

37

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REPORT OF THE AUDIT, FINANCE AND RISK COMMITTEE

The Audit, Finance and Risk Committee ("AFR Committee"), whose members are Messrs. Hawkins (Chairman), Bougie, Dineen and
Ludwick and Mrs. Rennie, is governed by a mandate, a copy of which is attached as Annex 1 to this Annual Information Form and which can also be accessed at www.novachemicals.com.
NOVA Chemicals has also adopted a Code of Ethics for the Chief Executive Officer and senior financial officers, including the Chief Financial Officer, which can be accessed at
www.novachemicals.com. All of the AFR Committee members are "independent" as that term is defined in the Canadian securities administrators' Multilateral Instrument
52-110  Audit Committees ("Multilateral Instrument 52-110"), and the U.S. Securities and Exchange Commission (the "SEC") rules and
the New York Stock Exchange listing standards. All members are considered to be "financially literate" for purposes of Multilateral Instrument 52-110, and each of
Messrs. Hawkins and Ludwick and Mrs. Rennie have been determined to be an "audit committee financial expert" in accordance with SEC rules. Mrs. Rennie serves on the audit
committees of four other public companies. The Board has determined that such service does not impair her ability to serve effectively on the AFR Committee of NOVA Chemicals. Mrs. Rennie
is not standing for re-election at the 2007 annual and special meeting.

The AFR Committee assists the Board of Directors in fulfilling its oversight responsibilities relating to: the integrity of the Corporation's financial
statements; the financial reporting process; the systems of internal accounting and financial controls; the independent auditor's qualifications and independence; the performance of the internal and
external auditors; risk management processes; pension and savings plans; and compliance by the Corporation with ethics policies and legal and regulatory requirements. In fulfilling its oversight
responsibilities, the AFR Committee reviewed the audited financial statements with management including a discussion of the quality, not just the acceptability, of the accounting principles,
the reasonableness of significant judgments and the clarity of disclosures in the financial statements. The AFR Committee reviewed with Ernst & Young LLP, the independent
auditors, their judgments as to the quality, not just the acceptability, of NOVA Chemicals' accounting principles and such other matters as are required to be discussed with the
AFR Committee under generally accepted auditing standards and standards of the Public Company Accounting Oversight Board, including the matters to be discussed in accordance with Statement of
Auditing Standards No. 61. In addition, the AFR Committee has discussed with the independent auditors the auditors' independence from management and NOVA Chemicals including the matters
in the written disclosures required by the Independence Standards Board Standard No. 1 and concluded that Ernst & Young LLP is independent in accordance with this standard
and the Canadian standards for auditor independence.

The AFR Committee discussed with NOVA Chemicals' internal and independent auditors the overall scope and plans for their respective audits. The
AFR Committee meets with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of NOVA Chemicals'
internal controls, and the overall quality of NOVA Chemicals' financial reporting.

In reliance on the reviews and discussions referred to above, the AFR Committee recommended to the Board of Directors (and the Board of Directors has approved)
that the audited consolidated financial statements be included in the Annual Report on Form 40-F for the year ended December 31, 2006 for filing with
the SEC.

| | BY THE AUDIT, FINANCE AND RISK COMMITTEE   
| | -------------------------------------------
| | K.L. Hawkins (Chairman)J. BougieR.E. Dineen

The
above report of the AFR Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Information Form into any filing under
the U.S. Securities Act of 1933 or the U.S. Securities Exchange Act of 1934, except to the extent that NOVA Chemicals specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such acts.

38

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Fees Billed by Ernst & Young LLP

The following fees were billed to NOVA Chemicals by Ernst & Young LLP and approved by the Board of Directors during the prior two years:

|                   |  | 2006 |           | 2005
|------------------ |  | ---- | --------- | ----
|Audit Fees         |  | $    | 2,305,534 |     
|Audit-Related Fees |  |      | 194,834   |     
|Tax Fees           |  |      | 680,718   |     
|All Other Fees     |  |      | 2,024     |     
|                   |  |      |           |     
|Total Fees         |  | $    | 3,183,110 |     
|                   |  |      |           |     

Audit
fees include fees for the audit of the consolidated financial statements of NOVA Chemicals, the external auditor's reporting on the effectiveness of internal
controls over financial reporting, statutory audits of subsidiaries, review of quarterly reports, provision of consent letters and comfort letters in connection with certain regulatory matters, review
of prospectuses and French translation of the consolidated financial statements. Fee amounts for 2006 are based on invoices relating to the 2006 year end audit that have been received and those
expected to be billed.

Audit-related
fees include fees for services that are related to the audit of the consolidated financial statements. These services include the audit of financial statements for
NOVA Chemicals' pension plans and non-statutory audits of subsidiaries and affiliates, and consultation on accounting and disclosure matters.

Tax
fees include fees for the preparation of income tax returns, value-added tax returns, and customs filings for NOVA Chemicals and its subsidiaries, preparation of income tax
returns and provision of tax advice to expatriate employees, and advice on tax-related matters.

All
other fees consisted primarily of online data base services.

Additional Information Relating to the Audit, Finance and Risk Committee

As noted above, the AFR Committee is currently composed of Messrs. Hawkins, Bougie, Dineen and Ludwick and Mrs. Rennie. Mrs. Rennie is not
standing for re-election at the 2007 annual and special meeting. Mr. Hawkins, Chairman of the AFR Committee, graduated from North Dakota State University with a degree in business
economics. In December 2005, he retired as the President of Cargill Limited and Chief Executive Officer of its Canadian operations. In his capacity at Cargill Limited, Mr. Hawkins had
supervisory responsibility for the finance function. Mr. Bougie graduated from the University of Montreal with a law degree and with a degree in business administration. Mr. Bougie is
the past President and Chief Executive Officer of Alcan Inc. Mr. Dineen graduated cum laude from Syracuse University with an LL.B. and from Brown University with a B.A. He is of counsel
to the law firm of Shearman & Sterling LLP and has extensive expertise in public finance transactions and specializes in U.S. and international private banking and financial
transactions. Mr. Ludwick graduated from the University of Manitoba with a B.A., was a member of the Institute of Chartered Accountants of Manitoba from 1962-2000, and earned
his M.B.A. from the Harvard University Graduate School of Business Administration. Mr. Ludwick is the retired President, Chief Executive Officer and Deputy Chairman of Claridge Inc.

The
Board of Directors approves, on the recommendation of the AFR Committee, all fees paid to the external auditors. In addition, in accordance with applicable rules regarding
audit committees, including Multilateral Instrument 52-110, the AFR Committee reviews and approves (in advance) the scope and related fees for all non-audit services
which are to be provided by the external auditors. In considering whether to approve non-audit services, the AFR Committee considers whether the provision of these non-audit
services may impact the objectivity and independence of the external auditor and, in respect of non-audit services provided by Ernst & Young LLP in 2006, the
AFR Committee has concluded that it does not.

39

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INTERESTS OF EXPERTS

The audited consolidated financial statements of NOVA Chemicals as at and for the years ended December 31, 2006, 2005 and 2004 filed with Canadian
securities administrators were audited by Ernst & Young LLP, Chartered Accountants.

Ernst &
Young LLP, Chartered Accountants, are independent in accordance with the Rules of Professional Conduct of the Institute of Chartered Accountants of Alberta and have
complied with the SEC's rules on auditor independence.

ADDITIONAL INFORMATION

Additional information relating to NOVA Chemicals is filed with Canadian securities administrators. Additional information, including directors' and
officers' remuneration and indebtedness, principal holders of NOVA Chemicals' securities and securities authorized for issuance under equity compensation plans, is contained in
NOVA Chemicals' Management Proxy Circular with respect to the 2007 Annual and Special Meeting of Shareholders. Additional financial information is provided in the audited consolidated
financial statements of NOVA Chemicals as at and for the years ended December 31, 2006, 2005 and 2004, together with the auditors' report thereon, and management's discussion and
analysis included in NOVA Chemicals' 2006 Annual Report. All of this information can be accessed through the System for Electronic Document Analysis and Retrieval (SEDAR) at
www.sedar.com.

Copies
of Board and Committee mandates and other corporate governance documents are available at www.novachemicals.com. In addition, the AFR Committee Mandate is attached to this Annual
Information Form as Annex 1.

40

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ANNEX 1    AUDIT, FINANCE AND RISK COMMITTEE MANDATE

|Creation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Pursuant to Article Three of the General By-law of NOVA Chemicals Corporation (the "Corporation"), a committee of the directors to be known as the "Audit, Finance and Risk Committee" (the "Committee") is established.                                                                                                                                                                                                                                                                                                                   
|Purpose                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|The Committee is appointed by the Board to assist the Board in fulfilling its oversight responsibility relating to: the integrity of the Corporation's financial statements; the financial reporting process; the systems of internal accounting and
financial controls; the external auditor's qualifications and independence; the performance of the internal and external auditors; risk management processes; pension and savings plans; and compliance by the Corporation with ethics policies and legal
and regulatory requirements.
|Committee Membership                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Composition of the Committee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Appointment and Term of Members                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Financial Literacy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Independence                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

A-1

---



|Appointment of Chairman and Secretary |  | e) |  | The Board or, if it does not do so, the members of the Committee, must appoint one of their members as a Chairman. If the Chairman of the Committee is not present at any meeting of the Committee, the Chairman of the meeting must be chosen by the
Committee from the Committee members present. The Chairman presiding at any meeting of the Committee has a deciding vote in case of deadlock. The Committee must also appoint a Secretary who need not be a director;
|------------------------------------- |  | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Use of Outside Experts                |  | f) |  | Where Committee members believe that, to properly discharge their fiduciary obligations to the Corporation, it is necessary to obtain the advice of independent legal, accounting, or other experts, the Chairman shall, at the request of the Committee,
engage the necessary experts at the Corporation's expense. The Board must be kept apprised of both the selection of the experts and the experts' findings through the Committee's regular reports to the Board;  
|Meetings                             
|Time, Place and Procedure of Meetings |  | a) |  | The time, place and procedure of Committee meetings shall be determined by Committee members, provided that:                                                                                                                                                                                                                                                                                                                                                               
|Quorum                                |  |    |  | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Quarterly Meetings                    |  |    |  | ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Notice of Meetings                    |  |    |  | iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Waiver of Notice                      |  |    |  | iv)                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Attendance of External Auditors       |  |    |  | v)                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Calling a Meeting                     |  |    |  | vi)                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Committee Determines Attendees        |  |    |  | vii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Reports to the Board                  |  | b) |  | The Committee shall make regular reports to the Board.                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                      |  |    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

A-2

---



|Duties and Responsibilities of the Committee
|--------------------------------------------
|1.                                          
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            
|                                            

A-3

---



|2. |  | Risk Management and Internal Control
|-- |  | ------------------------------------
|   |  | Risk Management Policies*           
|   |  |                                     
|   |  |                                     
|   |  |                                     
|   |  |                                     
|   |  | Adequacy of Internal Controls       
|   |  |                                     
|   |  |                                     
|   |  | Risk Management Processes           
|   |  | Financial Risk Management           
|3. |  | External Auditors                   
|   |  | Appointment and Remuneration of     
|   |  | External Auditors*                  
|   |  |                                     
|   |  |                                     
|   |  |                                     
|   |  | Independence of External Auditors   
|   |  |                                     
|   |  |                                     

A-4

---



|   |  |                                                      |  |    |  | ii)                                                                                                                                                                                                                                                                                                                                                                                                      |  | any material issues raised by the most recent internal quality control review, peer review of the firm or any investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried
out by the firm;
|-- |  | ---------------------------------------------------- |  | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |  |                                                      |  |    |  | iii)                                                                                                                                                                                                                                                                                                                                                                                                     |  | any steps taken to deal with any such issues; and                                                                                                                                                                                                                         
|   |  |                                                      |  |    |  | iv)                                                                                                                                                                                                                                                                                                                                                                                                      |  | all relationships between the external auditors and the Corporation;                                                                                                                                                                                                      
|   |  |                                                      |  |    |  | The Committee will actively engage in a dialogue with the external auditor with respect to whether the firm's quality controls are adequate, and whether any of the disclosed relationships or non-audit services may impact the objectivity and
independence of the external auditor. The Committee shall present its conclusion with respect to the independence of the external auditor to the Board;
|   |  | Rotation of Senior Audit Partner                     |  | e) |  | Ensure the rotation of senior audit personnel who have primary responsibility for the audit work, as required by law;                                                                                                                                                                                                                                                                                   
|   |  | Remuneration of External Auditors                    |  | f) |  | Review and approve (in advance) the scope and related fees for all auditing services and non-audit services permitted by regulation which are to be provided by the external auditor for non-audit services which are approved by the Committee prior to
completion of the audit;                                                                                                                       
|   |  |                                                      |  |    |  | The Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant preapprovals of audit and permitted non-audit services, provided that decisions of such subcommittee
to grant preapprovals shall be presented to the full Committee at its next scheduled meeting;                                                  
|   |  | Restrictions on Hiring Employees of External Auditor |  | g) |  | Ensure the establishment of policies relating to the Corporation's hiring of employees or former employees of the external auditor, if such individuals have participated in the audit of the Corporation, as required by law;                                                                                                                                                                          
|   |  | Meeting with Auditors and Management                 |  | h) |  | The Committee should meet with the external and internal auditors without management present and discuss any issues related to performance of the audit work, any restrictions, and any significant disagreement with management. The Committee should
also meet separately with management to discuss any issues raised by the auditors;                                                               
|4. |  | Internal Audit                                       |  |    |  |                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                           
|   |  | Mandate and Appointment of Internal Audit            |  | a) |  | i)                                                                                                                                                                                                                                                                                                                                                                                                       |  | review and approve the mandate of the internal audit function including internal audit's purpose, authority, and responsibility,                                                                                                                                          
|   |  |                                                      |  |    |  | ii)                                                                                                                                                                                                                                                                                                                                                                                                      |  | approve whether the internal audit activity should be outsourced and if outsourced approve the supplier, and                                                                                                                                                              
|   |  |                                                      |  |    |  | iii)                                                                                                                                                                                                                                                                                                                                                                                                     |  | review the appointment and replacement of the senior internal audit executive, if there is no outsourced provider;                                                                                                                                                        
|   |  | Internal Audit Plans                                 |  | b) |  | Review and approve the annual Internal Audit Plan and objectives, the degree of coordination with the external auditor, and the extent to which the planned audit scope can be relied upon to detect weaknesses in internal controls, fraud, and other
illegal acts;                                                                                                                                    
|   |  | Internal Audit Responsibilities                      |  | c) |  | Discuss with management and the external auditor the internal audit department's responsibilities, budget, and staffing and any recommended changes in the scope of internal audit;                                                                                                                                                                                                                     
|   |  |                                                      |  |    |  |                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                           

A-5

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|   |  | Audit Findings and Recommendations                                             |  | d) |  | Review the significant control issues identified in internal audit reports issued to management and the responses and actions taken by management to address weaknesses in controls;                                                                                                                      
|-- |  | ------------------------------------------------------------------------------ |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. |  | Pension and Savings Plans                                                     
|   |  | Statements of Pension Investment Policy and Procedures                         |  | a) |  | Review and approve the Corporation's Statement of Investment Principles and Beliefs, and the Statements of Investment Procedures;                                                                                                                                                                         
|   |  | Pension Funding                                                                |  | b) |  | Approve funding decisions for the retirement plans in accordance with actuarial reports and legal requirements in the applicable jurisdictions;                                                                                                                                                           
|   |  | Amendments to Plans for Changes in Benefit Levels                              |  | c) |  | Review and approve amendments to savings and retirement plans for changes in benefits provided under the plans, other than administrative or legislative changes;                                                                                                                                         
|   |  | Appointment of Auditors, Actuaries, and Investment Managers                    |  | d) |  | Approve the recommendations of the officers of the Corporation regarding the reappointment or appointment of auditors and recommendations of the Pension and Savings Plan Committees regarding appointment of investment managers and actuaries of the
savings plans and retirement plans, as appropriate;
|   |  | Savings and Retirement Plan Financial Statements                               |  | e) |  | Receive confirmation from management that the annual financial statements of the savings plans, retirement plans, and related trust funds, have been prepared and filed as required by applicable regulations;                                                                                            
|   |  | Pension and Savings Plans Committees Reports*                                  |  | f) |  | Review and recommend for approval by the Board, the annual Pension Committee Reports on the operation and administration of savings and retirement plans and trust funds;                                                                                                                                 
|   |  | Mandates of the Pension and Savings Plan Committees and Appointment of Members |  | g) |  | Review and approve the mandates of the Pension and Savings Plans Committees (to be approved jointly with the Human Resources Committee of the Board), any amendments thereto, and the appointment or re-appointment of pension and savings plan committee
members as provided in the mandates;            
|   |  | Delegation to the Pension and Savings Plan Committees                          |  | h) |  | Approve the delegation of certain responsibilities to members of the Pension and Savings Plans Committees;                                                                                                                                                                                                
|   |  | Actuarial Reports and Funding Assumptions                                      |  | i) |  | Review the actuarial reports on retirement plans as required by applicable regulations, any special actuarial reports, and the funding assumptions to be used in preparing the reports;                                                                                                                   
|   |  | Accounting Assumptions                                                         |  | j) |  | Review and approve, at least annually, the accounting assumptions used for disclosure of liabilities for retirement plans and post-retirement liabilities;                                                                                                                                                
|6. |  | General Duties                                                                 |  |    |  |                                                                                                                                                                                                                                                                                                           
|   |  | Business Conduct Policy Compliance                                             |  | a) |  | Obtain reports at least annually from the Chief Compliance Officer on the Corporation's and its subsidiary/foreign affiliated entities' conformity with applicable legal and ethical compliance programs (e.g., the Corporation's Business Conduct
Policy);                                               
|   |  | Code of Ethics                                                                 |  | b) |  | Ensure that the Corporation has adopted a code of ethics for senior financial officers and review at least annually a report from the CEO and CFO of their assessment of the ethical culture and control environment in the finance function;                                                             
|   |  |                                                                                |  |    |  |                                                                                                                                                                                                                                                                                                           

A-6

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| |  | Compliance Reporting Process  |  | c) |  | Ensure that a process and procedure has been established by the Corporation for receipt, retention and treatment of complaints regarding non-compliance with the Corporation's Business Conduct Policy, violations of laws or regulations, or concerns
regarding accounting, internal accounting controls or auditing matters. The Committee must ensure that procedures for receipt of complaints allow for confidential, anonymous submission of complaints from employees;
| |  | ----------------------------- |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Regulatory Matters            |  | d) |  | Discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any published reports which raise material issues regarding the Corporation's compliance policies;                                                                                                                                                                                                                                                       
| |  | Mandate Review*               |  | e) |  | Review and recommend for approval changes considered advisable based on the Committee's assessment of the adequacy of this Mandate. Such review will occur on an annual basis and the recommendations, if any, will be made to the Board in accordance
with the procedure set out in the Corporate Governance Committee mandate;                                                                                                                                             
| |  | Annual Performance Evaluation |  | f) |  | The Committee will conduct an annual evaluation of its performance as a committee and report the results to the Board.                                                                                                                                                                                                                                                                                                                                                       

*
Board approval required

A-7

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