##### 



United States
SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549
 
 
 Amendment
No. 1
to
 
 FORM F-4
 REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
 
 STANTEC INC.
 (Exact name of Registrant as specified in its charter)
 CANADA
    
    8711
    
    Not Applicable(State or Other Jurisdiction of
    
    (Primary Standard Industrial
    
    (IRS EmployerIncorporation or Organization)
    
    Classification Code Number)
    
    Identification Number)
 10160  112 Street, Edmonton, Alberta, Canada, T5K 2L6, (780) 917-7000
(Address, including zip code, and telephone number, including area code, of Registrants principal executive offices) Jeffrey S. Lloyd
Vice President, Secretary and General Counsel
10160  112 Street,
Edmonton, Alberta, Canada, T5K 2L6
(780) 917-7000 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: Christopher J. Cummings, Esq.Shearman & Sterling LLP
    
    C.N. Franklin Reddick III, Esq.Commerce Court West
    
    Akin Gump Strauss Hauer &
Feld LLP.199 Bay Street, Suite 4405
    
    2029 Century Park East,
22ndFloorToronto, ON, Canada M5L 1E8
    
    Los Angeles, CA 90067(416) 360-8484
    
    (310) 728-3204
 Approximate date of commencement of proposed sale of the securities to the public:As
promptly as practicable after this Registration Statement becomes effective and upon consummation
of the transactions described in the enclosed prospectus. If this Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for
the same offering. If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same
offering. 
 
 
 The registrant hereby amends this Registration Statement on such date or dates as may be
necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission acting pursuant to said Section 8(a), may
determine.




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##### 



|The information in
this proxy statement/prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. The proxy statement/prospectus is not an offer to
sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not
permitted.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




SUBJECT TO COMPLETION, DATED
JUNE 23, 2005










To the Shareholders of The Keith Companies, Inc.:














KEITHS BOARD OF DIRECTORS HAS APPROVED THE MERGER AND
UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS OF KEITH VOTE
FOR THE APPROVAL OF THE MERGER AGREEMENT AND ITS
TERMS.






PLEASE READ THIS DOCUMENT CAREFULLY, INCLUDING THE
SECTION DESCRIBING RISK FACTORS BEGINNING ON
PAGE 15.





IT IS IMPORTANT TO VOTE YOUR SHARES, IN PERSON OR BY PROXY,
BECAUSE THE FAILURE TO VOTE WILL HAVE THE SAME EFFECT AS A VOTE
AGAINST THE MERGER. Whether or not you plan to attend the
special meeting, please submit your proxy promptly by
completing, dating and returning your proxy card in the enclosed
envelope. Returning the proxy card does not deprive you of your
right to attend the special meeting and vote in person.







| |                                                  
| | -------------------------------------------------
| | We look forward to your support.                 
| | Sincerely,                                       
|
| | Aram H. Keith                                    
| | Chairman of the Board and Chief Executive Officer

Neither the Securities and Exchange Commission nor any state
or Canadian provincial or territorial securities regulatory
authority has approved or disapproved the securities to be
issued in connection with the merger or determined if this proxy
statement/prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.






---



##### 



THE KEITH COMPANIES, INC.





NOTICE OF SPECIAL MEETING OF SHAREHOLDERS





TO BE HELD ON
[                    ],
2005











| |                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) the approval of the Agreement and Plan of Merger and
    Reorganization, dated as of April 14, 2005, as amended
    May 9, 2005, among Stantec Inc., Keith and Stantec
    Consulting California Inc., a wholly-owned subsidiary of
    Stantec, a copy of which is attached as Appendix A to the
    enclosed proxy statement/prospectus; and
|
| | (2) to transact such other business as may properly come
    before the special meeting, including authority to adjourn or
    postpone the special meeting to another time and place for the
    purpose of soliciting additional proxies.                                                                                                       









KEITHS BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
YOU VOTE IN FAVOR OF THE PROPOSAL TO APPROVE THE MERGER
AGREEMENT AND ITS TERMS.















Whether or not you plan to attend the special meeting, we
encourage you to read the proxy statement/prospectus and submit
your proxy as soon as possible. It is important that your shares
be represented at the special meeting. A FAILURE TO VOTE HAS THE
SAME EFFECT AS VOTING AGAINST THE MERGER. Whether or not you
plan to attend the special meeting, please submit your proxy
promptly by completing, dating and returning your proxy card in
the enclosed envelope. You may revoke your proxy at any time
until it is voted by a later dated proxy or by attending the
special meeting and voting in person.





Please do not send any stock certificates you may have at
this time.





Our principal executive offices are located at 19 Technology
Drive, Irvine, California 92618. Our telephone number is
(949) 923-6001.







| |                                   
| | ----------------------------------
|
| | By Order of the Board of Directors
|
|
| |                                   
|
| | Gary C. Campanaro                 
|
| | Secretary                         











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##### 



Table of Contents





|                                                                                                         |  |      |    | 
|-------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                         |  | Page |   
|                                                                                                         |  |      |   
|Additional Information                                                                                   |  |      | 1  | 
|Presentation of Financial and Other Information                                                          |  |      | 2  | 
|Exchange Rate Data                                                                                       |  |      | 2  | 
|Questions and Answers About the Merger                                                                   |  |      | 3  | 
|Summary                                                                                                  |  |      | 8  | 
|The Companies                                                                                            |  |      | 8  | 
|Comparative Per Share Market Price and Exchange Rate Data                                                |  |      | 9  | 
|The Merger                                                                                               |  |      | 9  | 
|The Special Meeting                                                                                      |  |      | 10 | 
|The Merger Agreement                                                                                     |  |      | 10 | 
|Other Agreements                                                                                         |  |      | 10 | 
|Recommendation of Keiths Board of Directors                                                             |  |      | 10 | 
|Opinion of Keiths Financial Advisor                                                                     |  |      | 10 | 
|Interests of Keith and Stantec Executive Officers and Directors
    in the Merger                        |  |      | 11 | 
|Material U.S. Federal Income Tax Consequences                                                            |  |      | 11 | 
|Material Canadian Federal Income Tax Consequences                                                        |  |      | 12 | 
|Accounting Treatment of the Merger                                                                       |  |      | 12 | 
|Regulatory Matters Related to the Merger                                                                 |  |      | 13 | 
|No Solicitation                                                                                          |  |      | 13 | 
|Conditions to the Merger                                                                                 |  |      | 13 | 
|Termination                                                                                              |  |      | 14 | 
|Termination Fee                                                                                          |  |      | 14 | 
|Comparison of Shareholder Rights                                                                         |  |      | 14 | 
|Risk Factors                                                                                             |  |      | 15 | 
|Forward-Looking Statements                                                                               |  |      | 27 | 
|Selected Historical and Pro Forma Consolidated Financial Data of
    Stantec Inc.                        |  |      | 29 | 
|Selected Historical Consolidated Financial Data of The Keith
    Companies, Inc.                         |  |      | 30 | 
|Comparative Per Share Data                                                                               |  |      | 31 | 
|Dividends                                                                                                |  |      | 32 | 
|Comparative Per Share Market Price                                                                       |  |      | 32 | 
|Managements Discussion and Analysis of the Financial
    Condition and Results of Operations of Stantec |  |      | 34 | 
|Description of Stantecs Business                                                                        |  |      | 47 | 
|Management of Stantec                                                                                    |  |      | 56 | 
|Information Concerning the Special Meeting                                                               |  |      | 67 | 
|Keith Special Meeting                                                                                    |  |      | 67 | 
|Date, Time and Place                                                                                     |  |      | 67 | 
|Purpose of the Special Meeting                                                                           |  |      | 67 | 
|Record Date; Voting Power                                                                                |  |      | 67 | 
|Required Vote; Quorum; How to Vote                                                                       |  |      | 67 | 
|Revocation of Proxy                                                                                      |  |      | 68 | 






---



##### 






|                                                                                                                                                                  |                                                                                       |      |     |     | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | ---- | --- | --- | 
|                                                                                                                                                                  |                                                                                       | Page |    
|                                                                                                                                                                  |                                                                                       |      |    
|                                                                                                                                                                  | Exchange of Share Certificates                                                        |      |     | 69  | 
|                                                                                                                                                                  | Questions About Voting Your Shares                                                    |      |     | 69  | 
|                                                                                                                                                                  | Miscellaneous                                                                         |      |     | 69  | 
|The Merger                                                                                                                                                        |                                                                                       |      | 70  |    
|                                                                                                                                                                  | Background of The Merger                                                              |      |     | 70  | 
|                                                                                                                                                                  | Recommendation of the Keith Board of Directors                                        |      |     | 75  | 
|                                                                                                                                                                  | Reasons for Keiths Board Recommendation                                              |      |     | 75  | 
|                                                                                                                                                                  | Opinion of Keiths Financial Advisor                                                  |      |     | 77  | 
|                                                                                                                                                                  | Reasons for Stantecs Board Recommendation                                            |      |     | 83  | 
|                                                                                                                                                                  | Interests of Keiths and Stantecs Executive Officers
    and Directors in the Merger |      |     | 84  | 
|                                                                                                                                                                  | Material U.S. Federal Income Tax Consequences of the Merger                           |      |     | 86  | 
|                                                                                                                                                                  | Material Canadian Federal Income Tax Consequences of the Merger                       |      |     | 93  | 
|                                                                                                                                                                  | Anticipated Accounting Treatment                                                      |      |     | 94  | 
|                                                                                                                                                                  | Regulatory Matters Related to the Merger                                              |      |     | 95  | 
|                                                                                                                                                                  | Merger Fees, Costs and Expenses                                                       |      |     | 95  | 
|                                                                                                                                                                  | Dissenters Rights                                                                    |      |     | 95  | 
|                                                                                                                                                                  | Stock Exchange Listing                                                                |      |     | 97  | 
|                                                                                                                                                                  | Resale of Stantec Common Shares                                                       |      |     | 97  | 
|The Merger Agreement                                                                                                                                              |                                                                                       |      | 98  |    
|                                                                                                                                                                  | Structure of the Merger                                                               |      |     | 98  | 
|                                                                                                                                                                  | Effective Time and Closing of the Merger                                              |      |     | 98  | 
|                                                                                                                                                                  | Surviving Corporation Governing Documents, Officers and Directors                     |      |     | 98  | 
|                                                                                                                                                                  | Merger Consideration                                                                  |      |     | 98  | 
|                                                                                                                                                                  | Representations and Warranties                                                        |      |     | 99  | 
|                                                                                                                                                                  | Conduct of Business Pending the Merger                                                |      |     | 101 | 
|                                                                                                                                                                  | Additional Agreements                                                                 |      |     | 102 | 
|                                                                                                                                                                  | Conditions to the Merger                                                              |      |     | 104 | 
|                                                                                                                                                                  | Termination, Amendment and Waiver                                                     |      |     | 106 | 
|                                                                                                                                                                  | General Provisions                                                                    |      |     | 106 | 
|Other Agreements                                                                                                                                                  |                                                                                       |      | 107 |    
|Beneficial Ownership of Securities                                                                                                                                |                                                                                       |      | 108 |    
|Description Of Stantec Share Capital                                                                                                                              |                                                                                       |      | 109 |    
|Comparison of Shareholders Rights                                                                                                                                |                                                                                       |      | 110 |    
|Experts                                                                                                                                                           |                                                                                       |      | 123 |    
|Legal Matters                                                                                                                                                     |                                                                                       |      | 124 |    
|Shareholder Proposals                                                                                                                                             |                                                                                       |      | 124 |    
|Enforceability of Civil Liabilities                                                                                                                               |                                                                                       |      | 124 |    
|Where You Can Find More Information                                                                                                                               |                                                                                       |      | 125 |    
|Index to Consolidated Financial Statements                                                                                                                        |                                                                                       |      | F-1 |    
|Appendix A  Agreement and Plan of Merger among
    Stantec, Stantec Consulting California Inc. and Keith, dated as
    of April 14, 2005, as amended May 9, 2005 |                                                                                       |      | A-1 |    
|Appendix B  Opinion of Bear, Stearns & Co.
    Inc.                                                                                                              |                                                                                       |      | B-1 |    
|Appendix C  Stockholders Support Agreement                                                                                                                       |                                                                                       |      | C-1 |    
|Appendix D  Dissenters Rights and Procedures                                                                                                                    |                                                                                       |      | D-1 |    






---



##### 



Additional Information







|                                                                                                                                                     |  |                                                                                                                             |  |                                                                                                                                     
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------
|The Keith Companies, Inc.
    19 Technology Drive
    Irvine, California, USA 92618-2334
    Phone: (949) 923-6001
    Attention: Investor Relations |  | Stantec Inc.
    10160-112 Street
    Edmonton, Canada, T5K 2L6
    Phone: (780) 917-7000
    Attention: Investor Relations |  | The Altman Group, Inc.
    1275 Valley Brook Avenue
    Lyndhurst, NJ 07071
    Phone: (201) 806-2205
    Attention: Charlotte Brown






In order to receive
timely delivery of requested documents in advance of the special
meeting, you should make your request no later than
[                    ],
2005.












---



##### 



Presentation of Financial and Other Information








Exchange Rate Data










|           |  |                          |        |  |      |     |        |      |  |     |        |  |  |      |        |  |  |     |        | 
|---------- |  | ------------------------ | ------ |  | ---- | --- | ------ | ---- |  | --- | ------ |  |  | ---- | ------ |  |  | --- | ------ | 
|           |  | Years Ended December 31, |       
|           |  |                          |       
|           |  | 2000                     |        |  | 2001 |     |        | 2002 |  |     | 2003   |  |  | 2004 |       
|           |  |                          |        |  |      |     |        |      |  |     |        |  |  |      |       
|Average(1) |  | US$                      | 0.6725 |  |      | US$ | 0.6443 |      |  | US$ | 0.6368 |  |  | US$  | 0.7186 |  |  | US$ | 0.7701 | 






|    |                                                                                               
|--- | ----------------------------------------------------------------------------------------------
|(1) | The average of the exchange rates on the last day of each month
    during the year indicated.




|     |  |           |        |  |           |     |        |           |  |     |            |  |  |            |        |  |          |     |        |  |  |     |        | 
|---- |  | --------- | ------ |  | --------- | --- | ------ | --------- |  | --- | ---------- |  |  | ---------- | ------ |  | -------- | --- | ------ |  |  | --- | ------ | 
|     |  | Month     |       
|     |  |           |       
|     |  | Dec. 2004 |        |  | Jan. 2005 |     |        | Feb. 2005 |  |     | March 2005 |  |  | April 2005 |        |  | May 2005 |    
|     |  |           |        |  |           |     |        |           |  |     |            |  |  |            |        |  |          |    
|High |  | US$       | 0.8434 |  |           | US$ | 0.8346 |           |  | US$ | 0.8134     |  |  | US$        | 0.8322 |  |          | US$ | 0.8233 |  |  | US$ | 0.8082 | 
|Low  |  | US$       | 0.8063 |  |           | US$ | 0.8050 |           |  | US$ | 0.7962     |  |  | US$        | 0.8024 |  |          | US$ | 0.7957 |  |  | US$ | 0.7872 | 




2



---



##### 



Questions and Answers About the Merger





The following questions and answers are intended to address
briefly some commonly asked questions regarding the special
meeting and the merger. These questions and answers may not
address all questions that may be important to you as a Keith
shareholder. Please refer to the more detailed information
contained elsewhere in this proxy statement/prospectus and the
appendixes attached to this proxy statement/prospectus.








Unless otherwise stated or the context otherwise requires,
all references in this proxy statement/prospectus to
Stantec, we, us, and
our are to Stantec Inc. and its subsidiaries; all
references to Keith are to The Keith Companies, Inc.
and its subsidiaries and all references to Stantec Consulting
are to Stantec Consulting California Inc.










|    |                                  
|--- | ---------------------------------
|Q1: | What am I being asked to vote on?









|    |                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A1: | You are being asked to vote to approve the Agreement and Plan of
    Merger and Reorganization and its terms, which is referred to in
    this proxy statement/prospectus as the merger agreement, dated
    as of April 14, 2005, as amended May 9, 2005, among
    Stantec, Keith and Stantec Consulting, a newly formed,
    wholly-owned subsidiary of Stantec. If the merger is completed,
    Keith will no longer be a public company.









|    |                                                           
|--- | ----------------------------------------------------------
|Q2: | What consideration will be paid in connection with merger?









|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A2: | The merger consideration to be paid by Stantec includes a fixed
    amount of cash equal to US$11.00 per share of Keith common
    stock, as well as Stantec common shares, which as of
    June 20, 2005, had a value of approximately US$11.59. The
    number of shares that Stantec will issue as merger consideration
    is partly fixed and partly variable. The fixed component is
    equal to 0.23 Stantec common shares per share of Keith common
    stock. The variable component is equal to an amount of Stantec
    common shares equal to US$5.50 per share of Keith common stock,
    based on the 20-day average trading price of Stantec common
    shares prior to the merger. As a consequence, the actual number
    of Stantec common shares that will be issued in the merger and
    that you may receive as merger consideration is not known at
    this time. Based on the closing sale price of Stantec common
    shares and the U.S. dollar-Canadian dollar exchange rate as of
    June 20, 2005, 0.23 Stantec common shares had a value of
    approximately US$6.09 and US$5.50 equaled approximately
    0.21 Stantec common shares.









| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The 20-day average trading price of Stantec common shares means
    the simple average of the daily weighted average sales price of
    Stantec common shares on the Toronto Stock Exchange, as reported
    by Bloomberg L.P., for each of the 20 consecutive trading days
    ending on, and including, the second trading day prior to the
    merger. The weighted average sales price for each trading day is
    converted from Canadian dollars to U.S. dollars at the inverse
    of the noon buying rate quoted by the Federal Reserve Bank of
    New York on such trading day.









|    |                                   
|--- | ----------------------------------
|Q3: | What will I receive in the merger?









|    |                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------
|A3: | You will have the right to select the form of merger
    consideration you will receive by electing one of the following
    options:






| |                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | Option 1:a mix of cash and Stantec common shares;                                                                                                                                                                
|
|
|
| | Option 2:all Stantec common shares; or                                                                                                                                                                           
|
|
|
| | Option 3:all cash.                                                                                                                                                                                               
|
|
| | Because Stantec will pay a fixed amount of cash and will issue a
    specific amount of shares in connection with the merger, the
    actual consideration you will receive will not be known until
    after all

3



---



##### 






| |                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | shareholder elections have been made. Once all elections have
    been made, the following procedure will be used to determine the
    actual form of merger consideration that you will receive:






| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (1) | If you elect Option 1 (a mix of cash and Stantec common shares),
    you will receive US$11.00 and the amount of Stantec common
    shares described in answer 2 above, regardless of the number of
    Keith shareholders that elect this option.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
|
|
| | (2) | If you elect Option 2 (all Stantec common shares) you will
    receive 0.23 Stantec common shares per share of Keith common
    stock plus a variable amount of Stantec common shares equal to
    US$16.50 per share of Keith common stock, based on the 20-day
    average trading price of Stantec common shares. However, if the
    number of Stantec common shares that Keith shareholders elect to
    receive is greater than the total number of Stantec common
    shares that Stantec is required to issue, then you will receive
    a proportionate allocation of Stantec common shares and cash
    based on the formula set out in Section 2.01(e) of the merger
    agreement.
|
|
|
| | (3) | If you elect Option 3 (all cash) you will receive US$16.50 cash
    plus cash equal to the value of 0.23 Stantec common shares,
    based on the 20-day average trading price of Stantec common
    shares. However, if the amount of cash that Keith shareholders
    elect to receive is greater than the total amount of cash that
    Stantec is required to pay, then you will receive a
    proportionate allocation of cash and Stantec common shares based
    on the formula set out in Section 2.01(f) of the merger
    agreement.                                                                                                                                                 
|



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | Based on the closing sale price of Stantec common shares and the
    U.S. dollar-Canadian dollar exchange rate as of June 20,
    2005, for each share of Keith common stock a holder who elects
    to receive (1) a mix of cash and Stantec common shares will
    receive US$11.00 and approximately 0.44 Stantec common
    shares, (2) all Stantec common shares will receive
    approximately 0.85 Stantec common shares and (3) all
    cash will receive approximately US$22.59, subject to pro rata
    adjustment in the case of (2) and (3).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
|
|
| | If you do not make an election, you will be deemed to have
    elected, and will receive, Option 1, a mix of cash and Stantec
    common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
|
|
| | You will not receive any fractional Stantec common shares in the
    merger. Instead, Stantec will pay you cash for any fractional
    Stantec common share you would have otherwise received, taking
    into account all shares of Keith common stock you own.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
|
|
| | If, for some reason, the merger would not qualify as a tax-free
    reorganization under the provisions of Section 368(a) of
    the United States Internal Revenue Code of 1986, as amended,
    referred to in this proxy statement/prospectus as the Code,
    Stantec has the option, at its sole discretion, to complete the
    merger by paying cash merger consideration of US$22.00 per share
    of Keith common stock rather than the merger consideration
    described above. In such circumstances, you would receive
    US$22.00 in cash for each and every share of Keith common stock
    you own. In the event that Stantec exercises this option, Keith
    and Stantec will recirculate a revised proxy statement/
    prospectus and resolicit the vote of Keith shareholders to
    approve the merger. If the merger does not qualify as a tax-free
    reorganization and Stantec does not exercise its option to pay
    all cash, Keith will not be obligated to consummate the merger.
    Furthermore, in such situation Stantec and Keith will not
    consummate the merger without recirculating a revised proxy
    statement/ prospectus and resoliciting the vote of Keith
    shareholders to approve the merger.
|






|    |                                                                 
|--- | ----------------------------------------------------------------
|Q4: | How does the Keith board of directors recommend that I
    vote?









|    |                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------
|A4: | The Keith board of directors unanimously recommends that you
    vote FOR approval of the merger agreement and
    its terms.




4



---



##### 








|    |                                                                                                 
|--- | ------------------------------------------------------------------------------------------------
|Q5: | Why is the Board of Directors recommending that I vote for
    approval of the merger agreement?









|    |                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A5: | The board of directors of Keith believes the merger
    consideration is fair and that the merger is in the best
    interests of Keith stockholders. For a more detailed explanation
    of the beliefs of the board of directors of Keith, see The
    Merger  Keiths Reasons for the Merger.









|    |                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------
|Q6: | What vote of Keiths shareholders and what vote of
    Stantec shareholders is required in connection with the
    merger?









|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A6: | Approval of the merger agreement requires the affirmative vote
    of the holders of at least a majority of Keiths
    outstanding common stock. Aram H. Keith, Margie R. Keith and The
    Aram H. Keith and Margie R. Keith Revocable Trust entered into a
    Stockholders Support Agreement pursuant to which the
    shareholders granted Stantec an irrevocable proxy to vote their
    shares of Keith common stock, representing approximately 17% of
    the outstanding shares of Keith common stock, in favor of the
    merger. No vote of Stantec shareholders is required (or will be
    sought) in connection with the merger.









|    |                               
|--- | ------------------------------
|Q7: | What happens if I do not vote?









|    |                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A7: | IF YOU DO NOT VOTE YOUR SHARES, THAT WILL BE THE EQUIVALENT OF A
    VOTE AGAINST APPROVAL OF THE MERGER AGREEMENT AND, THEREFORE,
    WILL BE THE SAME AS A VOTE AGAINST THE MERGER.









|    |                                               
|--- | ----------------------------------------------
|Q8: | When do you expect the merger to be completed?









|    |                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A8: | We expect to complete the merger as promptly as practicable
    after we receive approval of Keith shareholders at the special
    meeting. We currently anticipate closing the transaction in the
    third calendar quarter of 2005.









|    |                          
|--- | -------------------------
|Q9: | What do I need to do now?









|    |                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A9: | After carefully reading and considering the information
    contained in the proxy statement/prospectus, please fill out,
    sign and date the proxy card, and then mail your signed proxy
    card in the enclosed prepaid envelope as soon as possible so
    that your shares may be voted at the special meeting.









|     |                                                                                               
|---- | ----------------------------------------------------------------------------------------------
|Q10: | If my shares are held in street name by my
    broker, will my broker vote my shares for me?









|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A10: | You should instruct your broker to vote your shares. Please
    check with your broker and follow the voting procedures your
    broker provides. Your broker will advise you whether you may
    submit voting instructions by telephone or internet. If you do
    not instruct your broker, your broker will generally not have
    the discretion to vote your shares without your instructions.
    Because approval of the merger agreement requires an affirmative
    vote of the holders of at least a majority of the outstanding
    shares of Keith common stock, these so-called broker
    non-votes, where the broker does not vote for or against
    approval of the merger agreement, have the same effect as votes
    cast against approval of the merger agreement. See The
    Special Meeting  Required Vote; Quorum; How to
    Vote.









|     |                                                                   
|---- | ------------------------------------------------------------------
|Q11: | May I change my vote after I have mailed my signed proxy
    card?









|     |                                                                                                                                                                                                                                                                                                                                                                                         
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A11: | Yes. You may change your vote at any time before your proxy is
    voted at the special meeting. You can do this in several ways.
    You can send a written notice stating that you want to revoke
    your proxy, or you can complete and submit a new proxy card. If
    you choose either of these methods, you must submit your notice
    of revocation or your new proxy card to:









| |                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------
| | The Altman Group, Inc. 
     1275 Valley Brook Avenue 
     Lyndhurst, NJ 07071 
     Phone: (201) 806-2205 
     Attention: Charlotte Brown




5



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##### 





| |                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | You can also attend the special meeting and vote in person.
    Simply attending the special meeting, however, will not revoke
    your proxy; you must vote at the special meeting.
|
|
| | If you have instructed a broker to vote your shares, you must
    follow the voting procedures received from your broker to change
    your vote.                                   






|     |                                                       
|---- | ------------------------------------------------------
|Q12: | If I want to attend the special meeting, what do I do?









|     |                                                                                                                                         
|---- | ----------------------------------------------------------------------------------------------------------------------------------------
|A12: | You must come to 19 Technology Drive, Irvine, California 92618,
    at 10:30 a.m. Pacific Time, on
    [                    ],
    2005.









|     |                                            
|---- | -------------------------------------------
|Q13: | Should I send in my stock certificates now?









|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A13: | No. If the merger is completed and you hold any Keith stock
    certificates, you will receive written instructions for
    exchanging those Keith stock certificates for the merger
    consideration. You may not have received any stock certificates
    because your shares of Keith common stock were directly
    registered. The written instructions you will receive will
    advise you what to do if your shares were directly registered.









|     |                                            
|---- | -------------------------------------------
|Q14: | What if I cannot find my stock certificate?









|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A14: | There will be a procedure for you to elect to receive your
    merger consideration even if you lost one or more of your Keith
    stock certificates. This procedure, however, may take time to
    complete. In order to ensure that you will be able to receive
    your merger consideration promptly after the merger is
    completed, if you cannot locate your Keith stock certificates
    after looking for them carefully, we urge you to contact
    Keiths transfer agent, U.S. Stock Transfer Corporation, as
    soon as possible and follow the procedure for replacing your
    Keiths stock certificates. U.S. Stock Transfer
    Corporation, can be reached at 1-800-835-8778, or you can write
    to U.S. Stock Transfer Corporation at the following address:
    1745 Gardena Avenue, Glendale, CA 91204-2991.









|     |                                                  
|---- | -------------------------------------------------
|Q15: | Can I dissent and require appraisal of my shares?









|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A15: | Dissenters rights will be available under Chapter 13
    of the California Corporations Code, referred to in this proxy
    statement/prospectus as the CCC, for Keith shareholders in
    connection with the merger if demands for payment are made with
    respect to 5% or more of the outstanding Keith common stock. In
    general, to preserve their dissenters rights, Keith
    shareholders who wish to exercise these rights must:






| |   |                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | deliver a written demand to Keith for purchase of their shares
    of Keith common stock, which must be received by Keith no later
    than the date of the special meeting;
|
|
|
| |  | vote their shares of Keith common stock AGAINST
    approval of the merger proposal;                                                                                      
|
|
|
| |  | continuously hold their shares of Keith common stock from the
    date they make the demand through the closing of the merger; and                                          
|
|
|
| |  | comply with the other provisions of Chapter 13 of the CCC.                                                                                                                  
|



| |                                                                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | If, after the effective time of the merger, that shareholder
    withdraws or otherwise loses the right to demand purchase of its
    shares of Keith common stock, those shares shall be treated as
    if they had been converted as of the effective time of the
    merger into the right to receive the merger consideration. See
    The Merger  Dissenters Rights
    beginning on page 95.
|
|
|
| | The text of the CCC governing dissenters rights is
    attached to this proxy statement/prospectus as Appendix D.
    Your failure to comply with the procedures described in
    Appendix D will result in the loss of your dissenters
    rights.                                                                                                                                                 
|

6



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##### 








|     |                                                                                                             
|---- | ------------------------------------------------------------------------------------------------------------
|Q16: | Are there risks that I should consider in deciding whether to
    vote for approval of the merger agreement?









|     |                                                                                                                                                                                                                             
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A16: | Yes. We have set forth in the section entitled Risk
    Factors beginning on page 15 of this proxy
    statement/prospectus a number of risk factors that you should
    consider carefully in connection with the merger.









|     |                                                                                                               
|---- | --------------------------------------------------------------------------------------------------------------
|Q17: | Will Keith common stock continue to be traded on the Nasdaq
    National Market after the merger is completed?









|     |                                                                                                                                                                                                                                            
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A17: | No. If the merger is consummated, Keith common stock will
    no longer be listed for trading on the Nasdaq National Market.
    However, Stantec has applied to list Stantec common shares for
    trading on the New York Stock Exchange.









|     |                                                                  
|---- | -----------------------------------------------------------------
|Q18: | Who can help answer my additional questions about the
    merger?









|     |                                                                                     
|---- | ------------------------------------------------------------------------------------
|A18: | If you have questions about the merger, you should contact any
    of the following:







|                                                                                                                                                     |  |                                                                                                                             |  |                                                                                                                                     
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------
|The Keith Companies, Inc.
    19 Technology Drive
    Irvine, California, USA 92618-2334
    Phone: (949) 923-6001
    Attention: Investor Relations |  | Stantec Inc.
    10160-112 Street
    Edmonton, Canada, T5K 2L6
    Phone: (780) 917-7000
    Attention: Investor Relations |  | The Altman Group, Inc.
    1275 Valley Brook Avenue
    Lyndhurst, NJ 07071
    Phone: (201) 806-2205
    Attention: Charlotte Brown




7



---



##### 



Summary
 This summary highlights selected information from this proxy
statement/ prospectus. It does not contain all of the
information that may be important to you. You should carefully
read this entire proxy statement/ prospectus and the other
documents to which this document refers for a more complete
understanding of the matters being considered at the special
meeting. See Where You Can Find More Information About
Stantec and Keith.
 Unless otherwise stated or the context otherwise requires,
all references to Stantec, we,
us, and our are to Stantec Inc. and its
subsidiaries; all references to Keith are to The
Keith Companies, Inc. and its subsidiaries; all references to
Stantec Consulting are to Stantec Consulting
California Inc.; and all references to merger
agreement are to the Agreement and Plan of Merger and
Reorganization between Stantec, Stantec Consulting and Keith
dated as of April 14, 2005, as amended May 9, 2005.
 The Companies
 Stantec Inc.
     Stantec Consulting California Inc.   The Keith Companies, Inc.


8



---



##### 



Comparative Per Share Market Price and Exchange Rate Data.
   
 Stantec
    
    KeithCommon Shares
    
    Common StockAt April 14, 2005
    
    US$
    23.15
    
    
    US$
    16.85At
    [             ]
    
    US$
    [
    ]
    
    US$
    [
    ] 
 The Merger


9



---



##### 



The Special Meeting
 When and Where.
 Purpose of the Special Meeting.
 
 Record Date; Voting Power.
 
 
 Required Vote.
 
 The Merger Agreement
  Other Agreements
    Recommendation of Keiths Board of Directors
   
 Opinion of Keiths Financial Advisor


10



---



##### 



Interests of Keith and Stantec Executive Officers and
    Directors in the Merger


11



---



##### 



Material U.S. Federal Income Tax Consequences
 
  
 
  
 Material Canadian Federal Income Tax Consequences


12



---



##### 



Accounting Treatment of the Merger
  Regulatory Matters Related to the Merger
 
 U.S. Antitrust Laws.
 
 
 No Solicitation
 
  Conditions to the Merger
   
    Keiths shareholders having affirmatively voted to approve
    the merger agreement by the requisite vote;
    the Toronto Stock Exchange having approved the listing of the
    Stantec common shares to be issued in connection with the merger
    (Stantec has received conditional approval to list such Stantec
    common shares on the Toronto Stock Exchange);
    the registration statement of which this proxy statement/
    prospectus is a part having been declared effective under the
    Securities Act of 1933, and no stop order or proceeding
    seeking a stop order being pending by or before the Securities
    and Exchange Commission; and
    no injunction, order or other legal restraint or prohibition
    preventing the consummation of the merger being in effect and no
    statute, rule, regulation or order by any U.S. or foreign
    governmental entity being in effect which makes the consummation
    of the merger illegal.   
    the other party having performed in all material respects its
    obligations under the merger agreement and its representations
    and warranties in the merger agreement being true and correct as
    of the closing of the merger, except for failures to be true and
    correct that would not reasonably be expected to have a material
    adverse effect (as defined in the merger agreement);
    there shall not have been a material adverse change in the
    business of the other party since the date of the merger
    agreement;


13



---



##### 




    the other party shall have delivered an officers
    certificate attesting to compliance of such other party with its
    representations, warranties and covenants under the merger
    agreement and to the absence of a material adverse change in
    such other partys business; and
    each party having received an opinion from its U.S. tax
    counsel that:  
 
    the merger will qualify as a reorganization within the meaning
    of Section 368(a) of the Code. 
   
    Keith shall have deposited with the Exchange Agent for the
    benefit of the holders of Keith common stock the lesser of
    (1) US$18,000,000 and (2) the maximum amount of cash
    that would not preclude the merger from qualifying as a
    reorganization within the meaning of Section 368(a) of the
    Code;
    Keith shall have at least US$40,000,000 of cash or cash
    equivalents, less the amount of cash deposited with the Exchange
    Agent;
    the number of dissenting shares shall be less than 5% of
    the issued and outstanding shares of Keith common stock; and
    Keith shall have terminated its existing 401(k) plan.  Termination
   
    the merger is not consummated by December 31, 2005, unless
    the party seeking to terminate the merger agreement has failed
    to comply with the merger agreement and that failure has been
    the cause of, or resulted in, the failure of the merger to occur
    on or before December 31, 2005;
    Keith shareholders fail to adopt the merger agreement at the
    special meeting; or
    the other party breaches its representations, warranties,
    covenants or agreements contained in the merger agreement;
    provided, however, that the non-breaching party may not
    terminate the agreement prior to the expiration of 15 days
    from the date that notice of the breach is provided to such
    other party and as long as such other party is exercising its
    best efforts to cure the breach.  Termination Fee
  Comparison of Shareholder Rights


14



---



##### 



Risk Factors





In addition to the other information included or incorporated
by reference into this proxy statement/ prospectus, including
the matters addressed under the caption Forward-Looking
Statements, you should carefully consider the matters
described below in evaluating an investment in Stantec common
shares offered by this proxy statement/ prospectus.





Risk Factors Relating to the Merger





You cannot be certain of the
value of merger consideration that you will receive in the
merger.









| |                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) a mix of cash and stock equal to (A) US$11.00 in
    cash, (B) 0.23 common shares of Stantec and (C) that
    number of Stantec common shares equal to US$5.50, based on
    the 20-day average trading price of Stantec common shares prior
    to the merger;
|
| | (2) all Stantec common shares equal to (A) 0.23
    Stantec common shares and (B) that number of Stantec common
    shares equal to US$16.50, based on the 20-day average
    trading price of Stantec common shares prior to the
    merger; or                   
|
| | (3) all cash equal to (A) US$16.50 and (B) cash
    equal to the value of 0.23 common shares, based on the
    20-day average trading price of Stantec common shares prior to
    the merger.                                                                      



















| |   |                                                                            
| | - | ---------------------------------------------------------------------------
| |  | changes in the business, operations or prospects of Stantec or
    Keith;  
|
| |  | changes in economic conditions and the outlook for economic
    conditions;
|
| |  | market reaction to the proposed merger; and                                
|
| |  | the timing of the consummation of the merger.                              

15



---



##### 







| |                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------
| | Failure to complete the merger could negatively impact the
    price of Keith common stock and Keiths future business and
    operations.





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | failure to complete the merger may seriously harm
    investors and analysts perception of Keiths
    underlying business and prospects which could seriously harm
    Keiths stock price;                                                                                                                                                                                                                                     
|
| |  | the price of the Keith common stock, which currently reflects a
    premium as a result of the proposed merger, may decline to price
    ranges similar to, or below, those that existed prior to the
    announcement of the merger;                                                                                                                                                                                              
|
| |  | costs related to the merger, such as legal, accounting,
    financial advisory and financial printing fees must be paid by
    Keith, even if the merger is not completed;                                                                                                                                                                                                                                                         
|
| |  | Keith may be required to pay Stantec a termination fee of
    US$3.0 million plus its expenses, if the merger agreement
    is terminated in certain circumstances;                                                                                                                                                                                                                                                                
|
| |  | the diversion of Keiths managements attention from
    the day-to-day business of Keith and the unavoidable disruption
    to Keiths employees and its relationships with customers
    may, in turn, detract from Keiths ability to grow revenue
    and minimize costs and lead to a loss of market position that
    Keith could be unable to regain;                                                                       
|
| |  | Keith management may not pursue operating plans and acquisitions
    and other opportunities that could be beneficial to Keith;                                                                                                                                                                                                                                                                                                    
|
| |  | the announcement of the merger could have an adverse effect on
    Keiths revenue in the near-term if customers delay, defer
    or cancel contracts pending resolution of the merger; if this
    were to occur, Keiths results of operations and quarterly
    revenue could be substantially below the expectations of market
    analysts and could cause a reduction in the trading price of the
    Keith common stock; and
|
| |  | Keith would not realize the benefits it expects to receive by
    being part of a combined company with Stantec, as well as the
    potentially enhanced financial and competitive position Keith
    believes would result from the merger.                                                                                                                                                                                       





| |                                                                                                         
| | --------------------------------------------------------------------------------------------------------
| | An election to receive all shares or all cash may not
    result in a payment in all shares or all cash.



16



---



##### 







| |                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The fairness opinion provided by Bear Stearns was given as
    of the date of the merger agreement and does not reflect
    subsequent changes in circumstances.











| |                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------
| | The fairness opinion provided by Bear Stearns is based on
    various assumptions and is subject to various
    limitations.





| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Keiths shareholders may receive a lower return on
    their investment after the merger.





| |                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Stantec and Keith may experience difficulties in
    integrating Keiths business with the existing operations
    of Stantec and so may not realize the anticipated benefits of
    the merger.



17



---



##### 





| |                                                                                                          
| | ---------------------------------------------------------------------------------------------------------
| | Uncertainties associated with the merger or Stantec as a
    new owner may cause Keith to lose customers.











| |                                                                            
| | ---------------------------------------------------------------------------
| | Uncertainties associated with the merger may cause a loss
    of employees.














| |                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Keiths directors and officers have conflicts of
    interest in recommending the merger to Keiths shareholders
    and may have different interests than you in approving the
    merger agreement.








| |   |                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------
| |  | future employment arrangements;                                                                                 
|
| |  | severance benefits in the merger;                                                                               
|
|
| |  | receipt of unvested Stantec restricted common shares in exchange
    for unvested Keith restricted common stock;
|
|
| |  | acceleration of the vesting of stock options as a result of the
    merger; and                                 
|
| |  | indemnification against certain liabilities arising both before
    and after the merger.                       














| |                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Stantec is governed by the laws of Canada and a
    substantial portion of its assets are, and many of its directors
    and officers reside, outside of the United States. As a result,
    it may not be possible for shareholders to enforce civil
    liability provisions of the securities laws of the
    United States in Canada.














| |                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Stantec expects to maintain its status as a foreign
    private issuer under the rules and regulations of the SEC
    and, thus, will be exempt from a number of rules under the
    Securities Exchange Act of 1934 and will be permitted to file
    less information with the SEC than a company incorporated in the
    United States.









18



---



##### 










| |                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Stantec common shares are not currently listed on any U.S.
    stock exchange or quotation system and its listing application
    may not be approved. As a result, there may not be a liquid
    market for Stantecs common shares in the United
    States.











| |                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------
| | The merger agreement contains provisions that may
    discourage other companies from trying to acquire Keith for
    greater merger consideration.






Risks Related to Stantecs Business







| |                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may be unsuccessful in our goal to increase the size
    and profitability of our operations, which could lead to a
    reduction in our market share and our competitiveness as our
    industry consolidates.






19



---



##### 





| |                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------
| | If we are unable to effectively manage our growth, we may
    experience a decline in our revenue and profitability.
















| |                                                                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | From time to time, we have pursued and may continue to
    pursue and invest in business opportunities that are not
    directly within our core competencies. These new business
    opportunities may require a disproportionate amount of
    managements time to develop profitably and may not perform
    as expected.











| |                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may be unable to secure the additional capital required
    to fund our acquisition strategy, which could lead to a
    reduction in our market share and our competitiveness.








20



---



##### 








| |                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| | The professional consulting services industry is highly
    competitive, which could have a negative impact on our profit
    margins and our market share.

















| |                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------
| | Economic downturns could have a negative impact on our
    businesses as our clients may curtail investment in
    infrastructure projects.

















| |                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A significant portion of our revenue is derived from
    clients in the real estate industry. Consequently, our business
    could suffer materially if there is a downturn in the real
    estate market.








| |   |                                                                                         
| | - | ----------------------------------------------------------------------------------------
| |  | changes in employment levels and other general economic
    conditions;                 
|
| |  | changes in interest rates and in the availability, cost and
    terms of financing;     
|
| |  | the impact of present or future environmental, zoning or other
    laws and regulations;
|
| |  | changes in real estate tax rates and assessments and other
    operating expenses;      
|
| |  | changes in levels of government infrastructure spending and
    fiscal policies; and    
|
| |  | natural or manmade disasters and other factors which are beyond
    our control.        



21



---



##### 








| |                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We derive significant revenue from contracts with
    government agencies. Any disruption in government funding or in
    our relationship with those agencies could adversely affect our
    business.
















| |                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may have difficulty in attracting and retaining
    qualified professionals, which may harm our reputation in the
    marketplace and restrict our ability to implement our business
    strategy.





| |                                                                                                    
| | ---------------------------------------------------------------------------------------------------
| | If we are unable to engage qualified subcontractors, we
    may lose projects, revenue and clients.





| |                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------
| | The nature of our business exposes us to potential
    liability claims and contract disputes, which may reduce our
    profits.



22



---



##### 







| |                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our insurance may not cover all claims for which we may be
    liable and expenses related to insurance coverage may adversely
    impact our profitability.














| |                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we experience delays and/ or defaults in customer
    payments, we could suffer liquidity problems or we could be
    unable to recover our expenditures.








| |                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We bear the risk of cost overruns in a significant number
    of our contracts. We may experience reduced profits or, in some
    cases, losses under these contracts if costs increase above our
    estimates.



23



---



##### 










| |                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------
| | Our backlog is subject to unexpected adjustments and
    cancellations and is, therefore, an uncertain indicator of our
    future earnings.











| |                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Because we report our results in Canadian dollars and a
    substantial portion of our revenue and expenses are recorded in
    U.S. dollars, our results are subject to currency exchange
    risk.





















| |                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may not be able to adequately protect our intellectual
    property, which could force us to take costly protective
    measures such as litigation.






24



---



##### 





| |                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Adverse weather conditions and natural or other disasters
    may cause a delay or elimination of our net revenue which
    otherwise would have been recognized and adversely affect our
    profitability.














| |                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | One of our primary competitive advantages is our
    reputation and experience. If our reputation is damaged due to
    client dissatisfaction, our ability to win additional business
    may be materially damaged.






Risks Related to Stantec Common Shares







| |                                                                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Because Stantecs business is more diverse than
    Keiths in terms of geographic presence and professional
    service offerings, Stantecs share price could be impacted
    by different factors than those that affect the price of Keith
    common stock.

















| |                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our share price has historically been subject to
    volatility. As a result, the price of our common shares may
    decrease in the future due to a number of company and industry
    specific or general economic factors.




















25



---



##### 









| |                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------
| | Our share price could be adversely affected if a large
    number of our common shares are offered for sale or sold.





| |                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we need to sell or issue additional common shares and/
    or incur additional debt to finance future acquisitions, your
    stock ownership could be diluted and our results of operations
    could be adversely affected.









26



---



##### 



Forward-Looking Statements














| |   |                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | difficulties in integrating Stantec and Keith and in achieving
    anticipated cost savings and growth opportunities;                                                                                                                                
|
| |  | difficulties in implementing Stantecs business strategy,
    including difficulties in the identification of suitable
    acquisition candidates, satisfactory completion of acquisitions
    and the successful integration of acquisition targets;
|
| |  | the inability to secure additional capital financing to fund our
    acquisition growth strategy.                                                                                                                                                    
|
| |  | increase in competition by United States, Canadian and
    international competitors;                                                                                                                                                                
|
| |  | the impact of adverse economic conditions and future
    catastrophic events;                                                                                                                                                                        
|
| |  | delays, cancellations, or suspension of, or changes in the scope
    of, existing contracts;                                                                                                                                                         
|
| |  | changes in the level of government funding for infrastructure
    projects both within North America and abroad;                                                                                                                                     
|
| |  | limited availability of qualified professional personnel and
    qualified subcontractors;                                                                                                                                                           
|
| |  | loss of key employees or customers due to the merger;                                                                                                                                                                                                
|
| |  | future litigation or regulatory action;                                                                                                                                                                                                              
|
| |  | delays or defaults in customer payments for services performed;                                                                                                                                                                                      
|
| |  | cost overruns on fixed-price, guaranteed maximum price, or unit
    price contracts;                                                                                                                                                                 
|
| |  | exposure to risks inherent in doing business in countries other
    than Canada and the United States;                                                                                                                                               
|
| |  | fluctuation in interest rates and exchange rates;                                                                                                                                                                                                    
|
| |  | protection of intellectual property;                                                                                                                                                                                                                 
|
| |  | adverse changes in future results of operations, liquidity and
    financial position; and                                                                                                                                                           
|
| |  | fluctuations in the market price of Keith common stock or
    Stantec common shares.                                                                                                                                                                 



27



---



##### 





28



---



##### 






Selected Historical and Pro Forma Consolidated Financial Data
of Stantec Inc.
























|                          |                                               |                                                           |    |            |                              |  |    |            |           |  |      |            |  |      |    |            |      |  |    |            |  |  |      |            |  |      |    |            |  |  |    |            |  |  |    |            | 
|------------------------- | --------------------------------------------- | --------------------------------------------------------- | -- | ---------- | ---------------------------- |  | -- | ---------- | --------- |  | ---- | ---------- |  | ---- | -- | ---------- | ---- |  | -- | ---------- |  |  | ---- | ---------- |  | ---- | -- | ---------- |  |  | -- | ---------- |  |  | -- | ---------- | 
|                          |                                               | Years Ended December 31,                                  |    |            | Three Months Ended March 31, | 
|                          |                                               |                                                           |    |            |                              | 
|                          |                                               |                                                           |    | Pro Forma  |                              |  |    |            | Pro Forma | 
|                          |                                               | 2000                                                      |    |            | 2001                         |  |    | 2002       |           |  | 2003 |            |  | 2004 |    |            | 2004 |  |    | 2004       |  |  | 2005 |            |  | 2005 |   
|                          |                                               |                                                           |    |            |                              |  |    |            |           |  |      |            |  |      |    |            |      |  |    |            |  |  |      |            |  |      |   
|                          |                                               | (In thousands of Canadian dollars, except for share data) |   
|Statement of Income Data: |                                               |                                                           |    |            |                              |  |    |            |           |  |      |            |  |      |    |            |      |  |    |            |  |  |      |            |  |      |    |            |  |  |    |           
|                          | Gross revenue                                 |                                                           | C$ | 265,568    |                              |  | C$ | 356,942    |           |  | C$   | 428,456    |  |      | C$ | 459,942    |      |  | C$ | 520,879    |  |  | C$   | 658,619    |  |      | C$ | 117,317    |  |  | C$ | 141,144    |  |  | C$ | 175,293    | 
|                          | Net revenue                                   |                                                           |    | 221,263    |                              |  |    | 298,772    |           |  |      | 365,148    |  |      |    | 391,396    |      |  |    | 449,151    |  |  |      | 575,657    |  |      |    | 103,566    |  |  |    | 119,133    |  |  |    | 150,913    | 
|                          | Income before income taxes                    |                                                           |    | 20,867     |                              |  |    | 27,306     |           |  |      | 33,095     |  |      |    | 39,628     |      |  |    | 44,660     |  |  |      | 54,639     |  |      |    | 8,896      |  |  |    | 10,362     |  |  |    | 12,323     | 
|                          | Net income                                    |                                                           |    | 11,226     |                              |  |    | 15,370     |           |  |      | 20,192     |  |      |    | 25,070     |      |  |    | 30,190     |  |  |      | 36,070     |  |      |    | 5,658      |  |  |    | 6,735      |  |  |    | 7,937      | 
|                          | Earnings per share  diluted                  |                                                           |    | 0.76       |                              |  |    | 0.88       |           |  |      | 1.07       |  |      |    | 1.31       |      |  |    | 1.59       |  |  |      | 1.58       |  |      |    | 0.30       |  |  |    | 0.35       |  |  |    | 0.34       | 
|                          | Weighted average shares outstanding  diluted |                                                           |    | 14,851,022 |                              |  |    | 17,378,646 |           |  |      | 18,799,484 |  |      |    | 19,118,016 |      |  |    | 19,007,289 |  |  |      | 22,867,289 |  |      |    | 19,176,483 |  |  |    | 19,424,308 |  |  |    | 23,284,308 | 







|                    |                                                                           |                                    |    |                 |      |  |           |         |  |  |      |         |  |      |    |         |      |  |    |         |  |  |    |         |  |  |    |         | 
|------------------- | ------------------------------------------------------------------------- | ---------------------------------- | -- | --------------- | ---- |  | --------- | ------- |  |  | ---- | ------- |  | ---- | -- | ------- | ---- |  | -- | ------- |  |  | -- | ------- |  |  | -- | ------- | 
|                    |                                                                           |                                    |    | As of March 31, |     
|                    |                                                                           | As of December 31,                 |    |                 |      | 
|                    |                                                                           |                                    |    |                 |      |  | Pro Forma |        
|                    |                                                                           | 2000                               |    |                 | 2001 |  |           | 2002    |  |  | 2003 |         |  | 2004 |    |         | 2005 |  |    | 2005    | 
|                    |                                                                           |                                    |    |                 |      |  |           |         |  |  |      |         |  |      |    |         |      |  |    |         | 
|                    |                                                                           | (In thousands of Canadian dollars) |   
|Balance Sheet Data: |                                                                           |                                    |    |                 |      |  |           |         |  |  |      |         |  |      |    |         |      |  |    |         |  |  |    |         |  |  |    |        
|                    | Total assets                                                              |                                    | C$ | 179,161         |      |  | C$        | 217,492 |  |  | C$   | 299,001 |  |      | C$ | 326,575 |      |  | C$ | 362,100 |  |  | C$ | 344,719 |  |  | C$ | 576,764 | 
|                    | Total long-term debt, including current portion and
    bank indebtedness |                                    |    | 26,375          |      |  |           | 39,518  |  |  |      | 62,256  |  |      |    | 61,726  |      |  |    | 33,975  |  |  |    | 28,527  |  |  |    | 119,483 | 
|                    | Net assets                                                                |                                    |    | 92,233          |      |  |           | 107,450 |  |  |      | 151,426 |  |      |    | 160,528 |      |  |    | 189,056 |  |  |    | 197,084 |  |  |    | 305,249 | 
|                    | Capital stock                                                             |                                    |    | 60,259          |      |  |           | 61,555  |  |  |      | 83,973  |  |      |    | 84,281  |      |  |    | 87,656  |  |  |    | 88,138  |  |  |    | 199,275 | 




29



---



##### 



Selected Historical Consolidated Financial Data of The Keith
Companies, Inc.













|                           |                                                             |                                                                          |     |                    |           |  |     |           |        |  |      |           |        |      |     |           |        |  |     |           |        |  |     |           |        |  |     |           |        | 
|-------------------------- | ----------------------------------------------------------- | ------------------------------------------------------------------------ | --- | ------------------ | --------- |  | --- | --------- | ------ |  | ---- | --------- | ------ | ---- | --- | --------- | ------ |  | --- | --------- | ------ |  | --- | --------- | ------ |  | --- | --------- | ------ | 
|                           |                                                             |                                                                          |     | Three Months Ended |          
|                           |                                                             | Years Ended December 31,                                                 |     |                    | March 31, | 
|                           |                                                             |                                                                          |     |                    |           | 
|                           |                                                             | 2000                                                                     |     |                    | 2001      |  |     | 2002      |        |  | 2003 |           |        | 2004 |     |           | 2004   |  |     | 2005      |       
|                           |                                                             |                                                                          |     |                    |           |  |     |           |        |  |      |           |        |      |     |           |        |  |     |           |       
|                           |                                                             | (U.S. dollars in thousands, except for share data)                       |    
|Statement of Income Data : |                                                             |                                                                          |     |                    |           |  |     |           |        |  |      |           |        |      |     |           |        |  |     |           |        |  |     |           |        |  |     |          
|                           | Gross revenue                                               |                                                                          | US$ | 57,835             |           |  | US$ | 74,314    |        |  | US$  | 106,487   |        |      | US$ | 99,950    |        |  | US$ | 105,346   |        |  | US$ | 24,496    |        |  | US$ | 27,838    |       
|                           |                                                             |                                                                          |     |                    |           |  |     |           |        |  |      |           |        |      |     |           |        |  |     |           |       
|                           |                                                             | Net revenue                                                              |     |                    | 53,381    |  |     |           | 66,844 |  |      |           | 91,598 |      |     |           | 90,744 |  |     |           | 96,754 |  |     |           | 22,463 |  |     |           | 25,907 | 
|                           | Costs of revenue                                            |                                                                          |     | 34,118             |           |  |     | 42,655    |        |  |      | 59,286    |        |      |     | 58,359    |        |  |     | 60,363    |        |  |     | 14,482    |        |  |     | 16,117    |       
|                           |                                                             |                                                                          |     |                    |           |  |     |           |        |  |      |           |        |      |     |           |        |  |     |           |       
|                           |                                                             | Gross profit                                                             |     |                    | 19,263    |  |     |           | 24,189 |  |      |           | 32,312 |      |     |           | 32,385 |  |     |           | 36,391 |  |     |           | 7,981  |  |     |           | 9,790  | 
|                           | Selling, general and administrative expenses                |                                                                          |     | 11,078             |           |  |     | 14,330    |        |  |      | 19,535    |        |      |     | 21,070    |        |  |     | 23,013    |        |  |     | 5,591     |        |  |     | 6,843     |       
|                           |                                                             |                                                                          |     |                    |           |  |     |           |        |  |      |           |        |      |     |           |        |  |     |           |       
|                           |                                                             | Income from operations                                                   |     |                    | 8,185     |  |     |           | 9,859  |  |      |           | 12,777 |      |     |           | 11,315 |  |     |           | 13,378 |  |     |           | 2,390  |  |     |           | 2,947  | 
|                           | Interest (expense) income, net                              |                                                                          |     | (310               | )         |  |     | 289       |        |  |      | 431       |        |      |     | 264       |        |  |     | 481       |        |  |     | 69        |        |  |     | 186       |       
|                           | Other income (expense), net                                 |                                                                          |     | 44                 |           |  |     | (54       | )      |  |      | 625       |        |      |     | 259       |        |  |     | 46        |        |  |     | (1        | )      |  |     | 14        |       
|                           |                                                             |                                                                          |     |                    |           |  |     |           |        |  |      |           |        |      |     |           |        |  |     |           |       
|                           |                                                             | Income before provision for income taxes and
    discontinued operations |     |                    | 7,919     |  |     |           | 10,094 |  |      |           | 13,833 |      |     |           | 11,838 |  |     |           | 13,905 |  |     |           | 2,458  |  |     |           | 3,147  | 
|                           | Provision for income taxes                                  |                                                                          |     | 3,199              |           |  |     | 3,916     |        |  |      | 5,397     |        |      |     | 4,617     |        |  |     | 5,468     |        |  |     | 959       |        |  |     | 1,202     |       
|                           |                                                             |                                                                          |     |                    |           |  |     |           |        |  |      |           |        |      |     |           |        |  |     |           |       
|                           |                                                             | Income from continuing operations                                        |     |                    | 4,720     |  |     |           | 6,178  |  |      |           | 8,436  |      |     |           | 7,221  |  |     |           | 8,437  |  |     |           | 1,499  |  |     |           | 1,945  | 
|                           | Loss from discontinued operations, net of income taxes      |                                                                          |     |                   |           |  |     | 329       |        |  |      | 628       |        |      |     |          |        |  |     | 430       |        |  |     |          |        |  |     |          |       
|                           |                                                             |                                                                          |     |                    |           |  |     |           |        |  |      |           |        |      |     |           |        |  |     |           |       
|                           |                                                             | Net income                                                               |     | US$                | 4,720     |  |     | US$       | 5,849  |  |      | US$       | 7,808  |      |     | US$       | 7,221  |  |     | US$       | 8,007  |  |     | US$       | 1,499  |  |     | US$       | 1,945  | 
|                           |                                                             |                                                                          |     |                    |           |  |     |           |        |  |      |           |        |      |     |           |        |  |     |           |       
|                           | Earnings per share from continuing
    operations  diluted |                                                                          | US$ | 0.89               |           |  | US$ | 0.87      |        |  | US$  | 1.07      |        |      | US$ | 0.91      |        |  | US$ | 1.05      |        |  | US$ | 0.19      |        |  | US$ | 0.24      |       
|                           | Earnings per share  diluted                                |                                                                          | US$ | 0.89               |           |  | US$ | 0.82      |        |  | US$  | 0.99      |        |      | US$ | 0.91      |        |  | US$ | 1.00      |        |  | US$ | 0.19      |        |  | US$ | 0.24      |       
|                           | Weighted average shares outstanding  diluted               |                                                                          |     | 5,299,679          |           |  |     | 7,092,505 |        |  |      | 7,868,877 |        |      |     | 7,957,344 |        |  |     | 8,039,457 |        |  |     | 8,004,901 |        |  |     | 8,119,308 |       







|                    |                                             |                             |     |        |           |  |     |        |  |  |      |        |  |      |     |        |      |  |     |        |  |  |     |        | 
|------------------- | ------------------------------------------- | --------------------------- | --- | ------ | --------- |  | --- | ------ |  |  | ---- | ------ |  | ---- | --- | ------ | ---- |  | --- | ------ |  |  | --- | ------ | 
|                    |                                             | As of December 31,          |     |        |          
|                    |                                             |                             |     |        | March 31, | 
|                    |                                             | 2000                        |     |        | 2001      |  |     | 2002   |  |  | 2003 |        |  | 2004 |     |        | 2005 | 
|                    |                                             |                             |     |        |           |  |     |        |  |  |      |        |  |      |     |        |      | 
|                    |                                             | (U.S. dollars in thousands) |    
|Balance Sheet Data: |                                             |                             |     |        |           |  |     |        |  |  |      |        |  |      |     |        |      |  |     |        |  |  |     |       
|                    | Working capital                             |                             | US$ | 7,343  |           |  | US$ | 38,781 |  |  | US$  | 39,613 |  |      | US$ | 47,416 |      |  | US$ | 55,472 |  |  | US$ | 57,315 | 
|                    | Total assets                                |                             |     | 33,312 |           |  |     | 71,492 |  |  |      | 82,226 |  |      |     | 87,536 |      |  |     | 97,969 |  |  |     | 99,008 | 
|                    | Total debt, excluding issuable common stock |                             |     | 5,745  |           |  |     | 1,912  |  |  |      | 70     |  |      |     |       |      |  |     |       |  |  |     |       | 
|                    | Total shareholders equity                  |                             |     | 18,239 |           |  |     | 53,733 |  |  |      | 63,612 |  |      |     | 71,962 |      |  |     | 81,921 |  |  |     | 84,153 | 




30



---



##### 



Comparative Per Share Data















|                                              |                            |                   |    |       |                    |  |    |       | 
|--------------------------------------------- | -------------------------- | ----------------- | -- | ----- | ------------------ |  | -- | ----- | 
|                                              |                            | Year Ended        |    |       | Three Months Ended | 
|                                              |                            | December 31, 2004 |    |       | March 31, 2005     | 
|                                              |                            |                   |    |       |                    | 
|Statement of Operations Data:                 |                            |                   |    |       |                    |  |    |      
|Net income from operations per diluted share: |                            |                   |    |       |                    |  |    |      
|                                              | Stantec                    |                   | C$ | 1.59  |                    |  | C$ | 0.35  | 
|                                              | Keith                      |                   | C$ | 1.37  |                    |  | C$ | 0.29  | 
|                                              | Stantec pro forma          |                   | C$ | 1.58  |                    |  | C$ | 0.34  | 
|                                              | Keith merger equivalent(1) |                   | C$ | 0.74  |                    |  | C$ | 0.16  | 
|Balance Sheet Data:                           |                            |                   |    |       |                    |  |    |      
|Net book value per diluted share:             |                            |                   |    |       |                    |  |    |      
|                                              | Stantec                    |                   | C$ | 9.95  |                    |  | C$ | 10.15 | 
|                                              | Keith                      |                   | C$ | 13.32 |                    |  | C$ | 12.71 | 
|                                              | Stantec pro forma          |                   |    |       |                    |  | C$ | 13.11 | 
|                                              | Keith merger equivalent(1) |                   |    |       |                    |  | C$ | 6.16  | 












|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Keith merger equivalent per diluted share represents the
    Stantec pro forma per share amount that is attributable to one
    share of Keith common stock that has been exchanged for 0.47
    Stantec common shares calculated as described above. As the
    holders of Keith common stock will receive a combination of cash
    and Stantec common shares, the exchange ratio excludes the cash
    portion of the merger consideration.




31



---



##### 



Dividends




Comparative Per Share Market Price







|                                      |  |         |       |  |       |    |       |      |  |     |       |  |  |     |       | 
|------------------------------------- |  | ------- | ----- |  | ----- | -- | ----- | ---- |  | --- | ----- |  |  | --- | ----- | 
|                                      |  | Stantec |       |  | Keith |   
|                                      |  |         |       |  |       |   
|                                      |  | High    |       |  | Low   |    |       | High |  |     | Low   | 
|                                      |  |         |       |  |       |    |       |      |  |     |       | 
|Quarter Ended                         |  |         |       |  |       |    |       |      |  |     |       |  |  |     |       | 
|June 30, 2005 (through June 20, 2005) |  | C$      | 32.99 |  |       | C$ | 27.65 |      |  | US$ | 22.25 |  |  | US$ | 16.25 | 
|March 31, 2005                        |  | C$      | 29.25 |  |       | C$ | 24.50 |      |  | US$ | 17.43 |  |  | US$ | 15.25 | 
|December 31, 2004                     |  | C$      | 26.48 |  |       | C$ | 20.35 |      |  | US$ | 18.75 |  |  | US$ | 13.60 | 
|September 30, 2004                    |  | C$      | 27.15 |  |       | C$ | 20.60 |      |  | US$ | 15.49 |  |  | US$ | 13.25 | 
|June 30, 2004                         |  | C$      | 29.39 |  |       | C$ | 24.20 |      |  | US$ | 14.89 |  |  | US$ | 13.50 | 
|March 31, 2004                        |  | C$      | 27.39 |  |       | C$ | 22.20 |      |  | US$ | 14.86 |  |  | US$ | 13.45 | 
|December 31, 2003                     |  | C$      | 23.48 |  |       | C$ | 19.11 |      |  | US$ | 14.46 |  |  | US$ | 11.55 | 
|September 30, 2003                    |  | C$      | 21.48 |  |       | C$ | 17.55 |      |  | US$ | 13.39 |  |  | US$ | 9.85  | 
|June 30, 2003                         |  | C$      | 20.15 |  |       | C$ | 15.50 |      |  | US$ | 11.16 |  |  | US$ | 9.23  | 
|March 31, 2003                        |  | C$      | 18.24 |  |       | C$ | 14.50 |      |  | US$ | 13.00 |  |  | US$ | 9.00  | 
|                                     
|Year Ended                            |  |         |       |  |       |    |       |      |  |     |       |  |  |     |       | 
|December 31, 2004                     |  | C$      | 29.39 |  |       | C$ | 20.35 |      |  | US$ | 18.75 |  |  | US$ | 13.25 | 
|December 31, 2003                     |  | C$      | 23.48 |  |       | C$ | 14.50 |      |  | US$ | 14.46 |  |  | US$ | 9.00  | 
|December 31, 2002                     |  | C$      | 20.50 |  |       | C$ | 12.87 |      |  | US$ | 16.15 |  |  | US$ | 8.91  | 
|December 31, 2001                     |  | C$      | 14.25 |  |       | C$ | 7.25  |      |  | US$ | 26.00 |  |  | US$ | 7.26  | 
|December 31, 2000                     |  | C$      | 8.00  |  |       | C$ | 5.25  |      |  | US$ | 8.50  |  |  | US$ | 3.06  | 




32



---



##### 








|                  |  |         |       |  |       |    |       |      |  |     |       |  |  |     |       | 
|----------------- |  | ------- | ----- |  | ----- | -- | ----- | ---- |  | --- | ----- |  |  | --- | ----- | 
|                  |  | Stantec |       |  | Keith |   
|                  |  |         |       |  |       |   
|                  |  | High    |       |  | Low   |    |       | High |  |     | Low   | 
|                  |  |         |       |  |       |    |       |      |  |     |       | 
|May 31, 2005      |  | C$      | 30.70 |  |       | C$ | 28.02 |      |  | US$ | 21.56 |  |  | US$ | 20.35 | 
|April 30, 2005    |  | C$      | 29.45 |  |       | C$ | 27.65 |      |  | US$ | 21.33 |  |  | US$ | 16.25 | 
|March 31, 2005    |  | C$      | 29.25 |  |       | C$ | 27.32 |      |  | US$ | 17.35 |  |  | US$ | 16.40 | 
|February 28, 2005 |  | C$      | 28.00 |  |       | C$ | 24.61 |      |  | US$ | 17.15 |  |  | US$ | 15.25 | 
|January 31, 2005  |  | C$      | 26.40 |  |       | C$ | 24.50 |      |  | US$ | 17.43 |  |  | US$ | 16.70 | 
|December 31, 2004 |  | C$      | 26.48 |  |       | C$ | 24.25 |      |  | US$ | 18.49 |  |  | US$ | 16.35 | 






33



---



##### 



Managements Discussion and Analysis of the Financial
Condition and Results of Operations of Stantec


The following discussion is based upon, should be read in
conjunction with and is qualified by our consolidated financial
statements and the accompanying notes included elsewhere in this
proxy statement/ prospectus. Our financial statements have been
prepared in accordance with Canadian GAAP, which differ from
financial statements prepared in accordance with U.S. GAAP.
For a further discussion of these differences, see note 21
to our audited financial statements included elsewhere in this
proxy statement/ prospectus. The following discussion includes
certain forward-looking statements. For a discussion of
important factors, including the continuing development of our
business and other factors which could cause actual results to
differ materially from the results referred to in the
forward-looking statements, see Risk Factors and
Forward-Looking Statements.


Overview




Geographic Diversification.


Practice Area Specialization.


Life Cycle Solutions.




34



---



##### 





Key Performance Drivers




People.






Industry Environment/ Market Opportunities. Engineering News
Record,


Acquisition and Integration.


35



---



##### 









Financing.




Market Penetration.


2004 Highlights




|                                                          |  |                |                       |   |                 |  |      |  
|--------------------------------------------------------- |  | -------------- | --------------------- | - | --------------- |  | ---- | -
|Measure                                                   |  | Expected Range |                       |   | Result Achieved | 
|                                                          |  |                |                       |   |                 | 
|Debt to equity ratio(1)                                   |  |                | At or below 0.5 to 1  |   |                 |  | <0.0 |  
|Return on equity(2)                                       |  |                | At or above 14        | % |                 |  | 17.3 | %
|Net income as % of net revenue                            |  |                | At or above 5         | % |                 |  | 6.7  | %
|Gross margin as % of net revenue                          |  |                | Between 52 and 54     | % |                 |  | 54.2 | %
|Administrative and marketing expenses as % of net revenue |  |                | Between 39 and 41     | % |                 |  | 40.9 | %
|Effective income tax rate                                 |  |                | Between 36.5 and 37.5 | % |                 |  | 32.4 | %






|    |                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Debt to equity ratio is calculated as long-term debt plus
    current portion of long-term debt plus bank indebtedness less
    cash, all divided by shareholders equity.
|   
|(2) | Return on equity is calculated as net income for the year
    divided by average shareholders equity over each of the
    last four quarters.                            

Earnings per share.


36



---



##### 



Effective income tax rate.


Growth by acquisition.


Investment in costs and estimated earnings in excess of
billings and in accounts receivable.


Divestitures. tm


Property sale.





Results of Operations
















First Quarter 2005 Compared to First Quarter
2004
















|                                           |  |                                   |            |  |      |  |            | 
|------------------------------------------ |  | --------------------------------- | ---------- |  | ---- |  | ---------- | 
|                                           |  | Quarter Ended March 31,           |           
|                                           |  |                                   |           
|                                           |  | 2005                              |            |  | 2004 | 
|                                           |  |                                   |            |  |      | 
|                                           |  | (in millions of Canadian dollars, |           
|                                           |  | except per share data)            |           
|Gross revenue                              |  |                                   | 141.1      |  |      |  | 117.3      | 
|Net income                                 |  |                                   | 6.7        |  |      |  | 5.7        | 
|Earnings per share  basic                 |  |                                   | 0.36       |  |      |  | 0.31       | 
|Earnings per share  diluted               |  |                                   | 0.35       |  |      |  | 0.30       | 
|Cash dividends declared per common share   |  |                                   |           |  |      |  |           | 
|Total assets  as at March 31              |  |                                   | 344.7      |  |      |  | 323.4      | 
|Outstanding common shares  as at March 31 |  |                                   | 18,933,019 |  |      |  | 18,464,818 | 
|Outstanding share options  as at March 31 |  |                                   | 1,006,499  |  |      |  | 1,323,666  | 




37



---



##### 














|                                          |  |                         |        |  |            |  |        |               |  |  |       |   
|----------------------------------------- |  | ----------------------- | ------ |  | ---------- |  | ------ | ------------- |  |  | ----- | --
|                                          |  | Quarter Ended March 31, |       
|                                          |  |                         |       
|                                          |  | Percentage of Net       |        |  |           
|                                          |  | Revenue                 |        |  | Percentage | 
|                                          |  |                         |        |  | Increase   | 
|                                          |  | 2005                    |        |  | 2004       |  |        | 2005 vs. 2004 | 
|                                          |  |                         |        |  |            |  |        |               | 
|Gross revenue                             |  |                         | 118.5% |  |            |  | 113.3% |               |  |  | 20.3  | % 
|Net revenue                               |  |                         | 100.0% |  |            |  | 100.0% |               |  |  | 15.0  | % 
|Direct payroll costs                      |  |                         | 45.7%  |  |            |  | 45.9%  |               |  |  | 14.6  | % 
|Gross margin                              |  |                         | 54.3%  |  |            |  | 54.1%  |               |  |  | 15.5  | % 
|Administrative and marketing expenses     |  |                         | 43.0%  |  |            |  | 42.3%  |               |  |  | 17.0  | % 
|Depreciation of property and equipment    |  |                         | 2.3%   |  |            |  | 2.5%   |               |  |  | 5.3   | % 
|Amortization of intangible assets         |  |                         | 0.2%   |  |            |  | 0.1%   |               |  |  | 73.7  | % 
|Net interest expense                      |  |                         | 0.1%   |  |            |  | 0.7%   |               |  |  | (88.9 | )%
|Foreign exchange losses                   |  |                         | 0.1%   |  |            |  | 0.0%   |               |  |  | n/a   |   
|Share of income from associated companies |  |                         | 0.1%   |  |            |  | 0.1%   |               |  |  | (45.6 | )%
|Income before income taxes                |  |                         | 8.7%   |  |            |  | 8.6%   |               |  |  | 16.5  | % 
|Income taxes                              |  |                         | 3.0%   |  |            |  | 3.1%   |               |  |  | 12.0  | % 
|Net income for the period                 |  |                         | 5.7%   |  |            |  | 5.5%   |               |  |  | 19.0  | % 







Gross Revenue.








|                                                                               |  |                     |        |  
|------------------------------------------------------------------------------ |  | ------------------- | ------ | -
|Gross Revenue                                                                  |  | Q1 2005 vs. Q1 2004 |       
|                                                                               |  |                     |       
|                                                                               |  | (in thousands of    |       
|                                                                               |  | Canadian dollars)   |       
|Increase (decrease) in gross revenue due to:                                   |  |                     |        |  
|Acquisitions completed in current and prior two years                          |  | C$                  | 23,209 |  
|Net internal growth                                                            |  |                     | 3,267  |  
|Impact of foreign exchange rates on revenue earned by foreign
    subsidiaries |  |                     | (2,649 | )
|                                                                               |  |                     |       
|Total increase in gross revenue                                                |  | C$                  | 23,827 |  
|                                                                               |  |                     |       















Gross Margin.








Administrative and Marketing Expenses.








Depreciation of Property and Equipment.





38



---



##### 














Amortization of Intangible Assets.








Net Interest Expense.








Income Taxes.








2004 Compared to 2003 and 2002
















|                                              |  |                                   |            |  |      |  |            |      |  |  |            | 
|--------------------------------------------- |  | --------------------------------- | ---------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|                                              |  | 2004                              |            |  | 2003 |  |            | 2002 | 
|                                              |  |                                   |            |  |      |  |            |      | 
|                                              |  | (In millions of Canadian dollars, |           
|                                              |  | except per share data)            |           
|Gross revenue                                 |  |                                   | 520.9      |  |      |  | 459.9      |      |  |  | 428.5      | 
|Net income                                    |  |                                   | 30.2       |  |      |  | 25.1       |      |  |  | 20.2       | 
|Earnings per share  basic                    |  |                                   | 1.63       |  |      |  | 1.37       |      |  |  | 1.12       | 
|Earnings per share  diluted                  |  |                                   | 1.59       |  |      |  | 1.31       |      |  |  | 1.07       | 
|Cash dividends declared per common share      |  |                                   |           |  |      |  |           |      |  |  |           | 
|Total assets                                  |  |                                   | 362.1      |  |      |  | 326.6      |      |  |  | 299.0      | 
|Total long-term debt                          |  |                                   | 34.0       |  |      |  | 44.6       |      |  |  | 62.3       | 
|Outstanding common shares  as at December 31 |  |                                   | 18,871,085 |  |      |  | 18,327,284 |      |  |  | 18,282,720 | 
|Outstanding share options  as at December 31 |  |                                   | 1,071,333  |  |      |  | 1,479,100  |      |  |  | 1,296,200  | 








39



---



##### 










|                                       |  |                           |       |          |                     |  |          |      |  |  |       |    |  |      |        |    |  |  |       |   
|-------------------------------------- |  | ------------------------- | ----- | -------- | ------------------- |  | -------- | ---- |  |  | ----- | -- |  | ---- | ------ | -- |  |  | ----- | --
|                                       |  | Percentage of Net Revenue |       |          | Percentage Increase | 
|                                       |  |                           |       |          |                     | 
|                                       |  |                           |       | 2004 vs. |                     |  | 2003 vs. |     
|                                       |  | 2004                      |       |          | 2003                |  |          | 2002 |  |  | 2003  |    |  | 2002 |       
|                                       |  |                           |       |          |                     |  |          |      |  |  |       |    |  |      |       
|Gross revenue                          |  |                           | 116.0 | %        |                     |  | 117.5    | %    |  |  | 117.3 | %  |  |      | 13.2   | %  |  |  | 7.3   | % 
|Net revenue                            |  |                           | 100.0 | %        |                     |  | 100.0    | %    |  |  | 100.0 | %  |  |      | 14.8   | %  |  |  | 7.2   | % 
|Direct payroll costs                   |  |                           | 45.8  | %        |                     |  | 46.9     | %    |  |  | 47.6  | %  |  |      | 12.0   | %  |  |  | 5.7   | % 
|Gross margin                           |  |                           | 54.2  | %        |                     |  | 53.1     | %    |  |  | 52.4  | %  |  |      | 17.2   | %  |  |  | 8.6   | % 
|Administrative and marketing expenses  |  |                           | 40.9  | %        |                     |  | 39.5     | %    |  |  | 39.9  | %  |  |      | 18.7   | %  |  |  | 6.4   | % 
|Depreciation of property and equipment |  |                           | 2.7   | %        |                     |  | 2.5      | %    |  |  | 2.6   | %  |  |      | 20.9   | %  |  |  | 4.3   | % 
|Amortization of intangible assets      |  |                           | 0.2   | %        |                     |  | 0.2      | %    |  |  | 0.3   | %  |  |      | 0.2    | %  |  |  | (14.3 | )%
|Net interest expense                   |  |                           | 0.6   | %        |                     |  | 0.7      | %    |  |  | 0.7   | %  |  |      | 6.4    | %  |  |  | 0.3   | % 
|Foreign exchange (gains) losses        |  |                           | 0.0   | %        |                     |  | 0.2      | %    |  |  | 0.0   | %  |  |      | (115.3 | )% |  |  | 743.9 | % 
|Share of income from associated        |  |                           |       |          |                     |  |          |      |  |  |       |    |  |      |        |    |  |  |       |   
|companies                              |  |                           | (0.1  | )%       |                     |  | (0.1     | )%   |  |  | (0.1  | )% |  |      | (33.6  | )% |  |  | 63.4  | % 
|Income before income taxes             |  |                           | 9.9   | %        |                     |  | 10.1     | %    |  |  | 9.0   | %  |  |      | 12.7   | %  |  |  | 19.7  | % 
|Income taxes                           |  |                           | 3.2   | %        |                     |  | 3.7      | %    |  |  | 3.5   | %  |  |      | (0.6   | )% |  |  | 12.8  | % 
|Net income                             |  |                           | 6.7   | %        |                     |  | 6.4      | %    |  |  | 5.5   | %  |  |      | 20.4   | %  |  |  | 24.2  | % 






Gross and Net Revenue.


|                                                      |  |               |       |   |               |    |       |  
|----------------------------------------------------- |  | ------------- | ----- | - | ------------- | -- | ----- | -
|                                                      |  | 2004 vs. 2003 |       |   | 2003 vs. 2002 |   
|                                                      |  |               |       |   |               |   
|Gross revenue(in millions of Canadian dollars)        |  |               |       |   |               |    |       |  
|Increase (decrease) due to:                           |  |               |       |   |               |    |       |  
|Acquisitions completed in current and prior two years |  | C$            | 42.3  |   |               | C$ | 41.0  |  
|Net internal growth                                   |  |               | 30.0  |   |               |    | 10.2  |  
|Impact of foreign exchange                            |  |               | (11.3 | ) |               |    | (19.8 | )
|                                                      |  |               |       |   |               |   
|Total increase over prior year                        |  | C$            | 61.0  |   |               | C$ | 31.4  |  
|                                                      |  |               |       |   |               |   

|                                                      |  |               |      |   |               |    |       |  
|----------------------------------------------------- |  | ------------- | ---- | - | ------------- | -- | ----- | -
|                                                      |  | 2004 vs. 2003 |      |   | 2003 vs. 2002 |   
|                                                      |  |               |      |   |               |   
|Net revenue(in millions of Canadian dollars)          |  |               |      |   |               |    |       |  
|Increase (decrease) due to:                           |  |               |      |   |               |    |       |  
|Acquisitions completed in current and prior two years |  | C$            | 36.4 |   |               | C$ | 36.7  |  
|Net internal growth                                   |  |               | 31.3 |   |               |    | 7.0   |  
|Impact of foreign exchange                            |  |               | (9.9 | ) |               |    | (17.4 | )
|                                                      |  |               |      |   |               |   
|Total increase over prior year                        |  | C$            | 57.8 |   |               | C$ | 26.3  |  
|                                                      |  |               |      |   |               |   

40



---



##### 





Gross Margin.


Administrative and Marketing Expenses.


Depreciation of Property and Equipment.


Foreign Exchange (Gains) Losses.


Income Taxes.


41



---



##### 



Liquidity and Capital Resources







































tm





42



---



##### 































43



---



##### 







Contractual Obligations







|                              |  |                                    |         |           |        |    |        |             |           |    |             |  |  |         |        |  |  |    |         | 
|----------------------------- |  | ---------------------------------- | ------- | --------- | ------ | -- | ------ | ----------- | --------- | -- | ----------- |  |  | ------- | ------ |  |  | -- | ------- | 
|                              |  | Payments Due by Period             |        
|                              |  |                                    |        
|                              |  |                                    |         | Less than |        |    |        |             | More than |   
|                              |  | Total                              |         |           | 1 Year |    |        | 2 - 3 Years |           |    | 4 - 5 Years |  |  | 5 Years |       
|                              |  |                                    |         |           |        |    |        |             |           |    |             |  |  |         |       
|                              |  | (In thousands of Canadian dollars) |        
|Long-term debt(1)             |  | C$                                 | 33,975  |           |        | C$ | 12,820 |             |           | C$ | 19,585      |  |  | C$      | 1,459  |  |  | C$ | 111     | 
|Interest on debt(2)           |  |                                    | 2,824   |           |        |    | 1,479  |             |           |    | 1,269       |  |  |         | 76     |  |  |    |        | 
|Other liabilities             |  |                                    | 19,868  |           |        |    | 3,050  |             |           |    | 6,079       |  |  |         | 3,400  |  |  |    | 7,339   | 
|Operating lease commitments   |  |                                    | 207,666 |           |        |    | 29,509 |             |           |    | 50,301      |  |  |         | 34,211 |  |  |    | 93,645  | 
|                              |  |                                    |         |           |        |    |        |             |           |    |             |  |  |         |       
|Total contractual obligations |  | C$                                 | 264,333 |           |        | C$ | 46,858 |             |           | C$ | 77,234      |  |  | C$      | 39,146 |  |  | C$ | 101,095 | 
|                              |  |                                    |         |           |        |    |        |             |           |    |             |  |  |         |       









|    |                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) | Does not include C$90,956,000 of debt expected to be incurred
    under our credit facility in connection with the merger.                                                                                                                                               
|   
|   
|   
|(2) | Based on an estimated average interest rate of 5.42% per year.
    Does not include interest on C$90,956,000 of debt expected to be
    incurred under our credit facility in connection with the merger
    at an expected interest rate of approximately 4.1% per year.
|   

Off-Balance Sheet Arrangements










Market Risk




Currency.


44



---



##### 





Interest Rate.


Critical Accounting Estimates




Revenue Recognition and Cost Estimates on Contracts.


Goodwill.





Provision for Doubtful Accounts.





45



---



##### 






Self-insured Liabilities.





Outlook














46



---



##### 



Description of Stantecs Business


General






Geographic Diversification.


Practice Area Specialization.


Life Cycle Solutions.






47



---



##### 















Business Units
















| |                                                      
| | -----------------------------------------------------
| | 1. architecture & interior design;                   
|
| | 2. buildings engineering;                            
|
| | 3. facilities planning & operations;                 
|
| | 4. program & project management;                     
|
| | 5. strategic management;                             
|
| | 6. environmental infrastructure;                     
|
| | 7. environmental management;                         
|
| | 8. bio/pharmaceuticals;                              
|
| | 9. manufacturing/ industrial;                        
|
| | 10. power resources & chemicals;                     
|
| | 11. infrastructure management & pavement engineering;
|
| | 12. transportation infrastructure;                   
|
| | 13. transportation planning & traffic engineering;   
|
| | 14. planning & landscape architecture;               
|
| | 15. urban land engineering;                          
|
| | 16. surveys; and                                     
|
| | 17. quality control/assurance.                       

48



---



##### 



Consulting Services








Buildings Market Segment.




Environment Market Segment.




| |   |                                            
| | - | -------------------------------------------
| |  | assimilative capacity                      
|
| |  | wastewater collection systems              
|
| |  | municipal & industrial wastewater treatment
|
| |  | infiltration & inflow/ CSO                 
|
| |  | odor and corrosion control                 
|
| |  | wastewater pumping                         
|
| |  | water treatment                            
|
| |  | water storage                              
|
| |  | distribution systems                       
|
| |  | water reclamation & reuse                  

49



---



##### 





| |   |                                         
| | - | ----------------------------------------
| |  | environmental site management           
|
| |  | environmental assessment                
|
| |  | water resources management              
|
| |  | heritage and natural resource assessment
|
| |  | waste management                        
|
| |  | risk assessment                         
|
| |  | health and safety                       
|
| |  | air quality assessment                  
|
| |  | ecotoxicology and GLP testing           
|
| |  | microbiology laboratory                 






Industrial Market Segment.








Transportation Market Segment.







50



---



##### 








Urban Land Market Segment.





Acquisitions







|     |  |                            |  |                                            |  |                 
|---- |  | -------------------------- |  | ------------------------------------------ |  | ----------------
|Year |  | Business Acquired          |  | Services Provided                          |  | Location        
|     |  |                            |  |                                            |  |                 
|2004 |  | The Sear-Brown Group, Inc. |  | engineering, planning, and architectural   |  | New York, Ohio, 
|     |  |                            |  | services                                   |  | Pennsylvania    
|     |  |                            |  |                                            |  | and Puerto Rico 
|2004 |  | GBR Architects Limited     |  | architectural design services              |  | Manitoba        
|2004 |  | Dunlop Architects Inc.     |  | architectural design services              |  | Ontario         
|2004 |  | Shaflik Engineering Ltd.   |  | electrical engineering services            |  | British Columbia
|     |  |                            |  | specializing in traffic and sport facility |  |                 
|     |  |                            |  | lighting                                   |  |                 
|2003 |  | Ecological Services Group  |  | environmental management services          |  | Ontario         
|     |  | Inc.                       |  |                                            |  |                 
|2003 |  | APAI Architecture Inc.     |  | architectural design services              |  | British Columbia
|2003 |  | Optimum Energy             |  | engineering management consulting          |  | Alberta         
|     |  | Management Inc.            |  | services                                   |  |                 
|2003 |  | Inner Dimension Design     |  | interior design services                   |  | Saskatchewan    
|     |  | Associates Inc.            |  |                                            |  |                 
|2002 |  | McCartan Consulting Ltd.   |  | mechanical engineering services            |  | Saskatchewan    
|2002 |  | Webster & Simmonds         |  | surveying services                         |  | Ontario         
|     |  | Surveying Ltd.             |  |                                            |  |                 
|2002 |  | Cosburn Patterson Mather   |  | engineering and planning services          |  | Ontario         
|     |  | Limited                    |  | specializing in the land development and   |  |                 
|     |  |                            |  | real estate industry                       |  |                 
|2002 |  | GKO Design Consultants     |  | consulting services specializing in        |  | Alberta         
|     |  | Inc.                       |  | energy, resources, chemicals and           |  |                 
|     |  |                            |  | pharmaceuticals                            |  |                 
|2002 |  | M.R.S.F.M. Holdings Ltd.   |  | civil and structural engineering           |  | British Columbia
|     |  | (Graeme & Murray           |  | consulting services                        |  |                 
|     |  | Consultants Ltd.)          |  |                                            |  |                 
|2002 |  | GeoViro Engineering Ltd.   |  | environmental consulting services          |  | British Columbia




51



---



##### 






|     |  |                        |  |                                      |  |                 
|---- |  | ---------------------- |  | ------------------------------------ |  | ----------------
|Year |  | Business Acquired      |  | Services Provided                    |  | Location        
|     |  |                        |  |                                      |  |                 
|2002 |  | Site Consultants, Inc. |  | civil and environmental engineering, |  | North Carolina  
|     |  |                        |  | land use planning and surveying      |  |                 
|     |  |                        |  | services                             |  |                 
|2002 |  | English Harper Reta    |  | architectural design services        |  | California      
|     |  | Architects             |  |                                      |  |                 
|2002 |  | The RPA Group Limited  |  | project management services          |  | Ontario, Alberta
|     |  |                        |  |                                      |  | and British     
|     |  |                        |  |                                      |  | Columbia        
|2002 |  | Beak International     |  | specialist environmental consulting  |  | Ontario         
|     |  | Incorporated           |  | services                             |  |                 










Foreign Operations




Risk Management








52



---



##### 









Competition












Backlog




Research and Development




53



---



##### 



Intellectual Property




Organizational Structure







|                                                                        |  |               |       |     |                 |                  
|----------------------------------------------------------------------- |  | ------------- | ----- | --- | --------------- | -----------------
|                                                                        |  | Percentage of |       |     | Jurisdiction of
|Subsidiary                                                              |  | Voting Shares |       |     | Incorporation  
|                                                                        |  |               |       |     |                
|659243 B.C. Ltd.                                                        |  |               | 100   |     |                 | British Columbia 
|0714993 B.C. Ltd.                                                       |  |               | 100   |     |                 | British Columbia 
|0715004 B.C. Ltd.                                                       |  |               | 100   |     |                 | British Columbia 
|0715007 B.C. Ltd.                                                       |  |               | 100   |     |                 | British Columbia 
|3053837 Nova Scotia Company                                             |  |               | 100   |     |                 | Nova Scotia      
|APAI Architecture Inc.                                                  |  |               | 100   |     |                 | British Columbia 
|Architectura Inc.                                                       |  |               | 0     | (1) |                 | Alberta          
|Dunlop Murphy Hilgers Architects Inc.                                   |  |               | 50    |     |                 | Ontario          
|GKO Power Engineering Ltd.                                              |  |               | 100   |     |                 | Alberta          
|International Insurance Group Inc.                                      |  |               | 100   |     |                 | Barbados         
|J. Muller International  Stanley Joint Venture
    Inc.                |  |               | 30    |     |                 | New Brunswick    
|Pentacore ADA Consulting, LLC                                           |  |               | 100   |     |                 | Nevada           
|Planning & Stantec Limited                                              |  |               | 50    |     |                 | Trinidad & Tobago
|Project Delivery Holdings LLC                                           |  |               | 100   |     |                 | New York         
|SB K-12 Architecture and Engineering, P.C.                              |  |               | 0     | (1) |                 | New Jersey       
|S.B. Long Island Architecture, Engineering and Land Surveying,
    P.C. |  |               | 0     | (1) |                 | New York         
|SEA, Incorporated                                                       |  |               | 100   |     |                 | Nevada           
|Spink Corporation, The                                                  |  |               | 100   |     |                 | California       
|SSBV Consultants Inc.                                                   |  |               | 33.33 |     |                 | British Columbia 
|Stantec Architecture Inc.                                               |  |               | 0     | (1) |                 | North Carolina   
|Stantec Architecture Ltd.                                               |  |               | 0     | (1) |                 | Canada           
|Stantec Consulting Associates P.C.                                      |  |               | 0     | (1) |                 | New York         
|Stantec Consulting California Inc.                                      |  |               | 100   |     |                 | California       
|Stantec Consulting Caribbean Ltd.                                       |  |               | 100   |     |                 | Barbados         
|Stantec Consulting Inc.                                                 |  |               | 100   |     |                 | Arizona          
|Stantec Consulting International Ltd.                                   |  |               | 100   |     |                 | Canada           
|Stantec Consulting Ltd.                                                 |  |               | 100   |     |                 | Canada           
|Stantec Consulting Services Inc.                                        |  |               | 100   |     |                 | New York         
|Stantec Engineering (Puerto Rico) P.S.C.                                |  |               | 0     | (1) |                 | Puerto Rico      
|Stantec Facilities Ltd.                                                 |  |               | 100   |     |                 | Alberta          
|Stantec Geomatics Ltd.                                                  |  |               | 50    | (1) |                 | Alberta          
|Stantec Holdings (Delaware) II Inc.                                     |  |               | 100   |     |                 | Delaware         
|Stantec Holdings Ltd.                                                   |  |               | 100   |     |                 | Alberta          




54



---



##### 



|                                          |  |               |     |  |                 |         
|----------------------------------------- |  | ------------- | --- |  | --------------- | --------
|                                          |  | Percentage of |     |  | Jurisdiction of
|Subsidiary                                |  | Voting Shares |     |  | Incorporation  
|                                          |  |               |     |  |                
|Stantec International Enterprises Limited |  |               | 100 |  |                 | Bahamas 
|Stantec International Limited             |  |               | 100 |  |                 | Barbados
|Stantec Technology International Inc.     |  |               | 100 |  |                 | Delaware
|Teshmont Consultants Inc.                 |  |               | 50  |  |                 | Canada  






|    |                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | We have entered into an agreement with respect to 100% of the
    voting shares of this subsidiary that allows us to direct
    control over any disposition of the voting shares of this
    subsidiary.

Employees






Properties




Legal Proceedings




















55



---



##### 



Management of Stantec




Executive Officers and Directors




|                                 |  |     |    |  |          |                                                
|-------------------------------- |  | --- | -- |  | -------- | -----------------------------------------------
|Name                             |  | Age |    |  | Position
|                                 |  |     |    |  |         
|Ronald Triffo                    |  |     | 66 |  |          | Chairman of the Board                          
|Anthony P. Franceschini          |  |     | 54 |  |          | President, Chief Executive Officer and Director
|Neilson A. Dutch Bertholf, Jr. |  |     | 72 |  |          | Director                                       
|Robert J. Bradshaw               |  |     | 57 |  |          | Director                                       
|E. John (Jack) Finn              |  |     | 73 |  |          | Director                                       
|William D. Grace                 |  |     | 69 |  |          | Director                                       
|Susan E. Hartman                 |  |     | 54 |  |          | Director                                       
|Robert R. Mesel                  |  |     | 69 |  |          | Director                                       
|Donald W. Wilson                 |  |     | 48 |  |          | Vice President & Chief Financial Officer       
|Jeffrey S. Lloyd                 |  |     | 40 |  |          | Vice President, Secretary & General Counsel    

Directors


Ronald Triffo


Anthony P. Franceschini


Neilson A. Dutch Bertholf, Jr.


Robert J. Bradshaw


56



---



##### 



E. John (Jack) Finn


William D. Grace


Susan E. Hartman


Robert R. Mesel




Other Executive Officers


Donald W. Wilson


57



---



##### 





Jeffrey S. Lloyd


Committees of the Board




Audit Committee








| |   |                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | reviewing and recommending for approval to the board, the annual
    audited financial statements and other continuous disclosure
    documents, including:



| |                                                                            
| | ---------------------------------------------------------------------------
| | a) the financial content of the annual report,                             
|
| | b) the annual management information circular and proxy
    materials,     
|
| | c) the annual information form, and                                        
|
| | d) the management discussion and analysis section of the
    annual report;



| |   |                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | reviewing and authorizing the release of the quarterly unaudited
    financial statements including management discussion and
    analysis, quarterly interim report to shareholders and quarterly
    press release of our earnings;                         
|
| |  | reviewing and recommending for approval to the board, all
    financial statements, financial reports, and the financial
    content of prospectuses, and any other reports requiring board
    approval prior to being submitted to any regulatory authority;

58



---



##### 





| |   |                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | reviewing the Chief Executive Officer and Chief Financial
    Officer certification of annual and interim disclosure;                                                                                                                                                                                    
|
| |  | discussing with management our major financial risk exposures
    and the steps management has taken to monitor and control such
    exposures;                                                                                                                                                          
|
| |  | reviewing with management on an annual basis, our obligations
    pursuant to guarantees that have been issued and material
    obligations that have been entered into, and the manner in which
    these guarantees and obligations have been, or should be,
    disclosed in the financial statements.
|
| |  | reviewing and assessing, in conjunction with management and the
    external auditor:                                                                                                                                                                                                                    



| |                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------
| | a) the appropriateness of our accounting policies and
    financial reporting practices, and considering any available
    alternatives;
|
| | b) any significant proposed changes in financial reporting
    and accounting policies and practices to be adopted by us;               
|
| | c) any new or pending developments in accounting and
    reporting standards that may affect or impact Stantec; and                     
|
| | d) the key estimates and judgments of management that may
    be material to our financial reporting;                                   



| |   |                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | assessing the performance of the external auditor and
    considering whether to recommend its annual appointment to the
    board for ultimate recommendation to the shareholders;                                           
|
| |  | reviewing, approving and executing the annual engagement letter
    with the external auditor;                                                                                                                                
|
| |  | approving the engagement of the external auditor for all
    non-audit services and the fees for such services, and
    considering whether any non-audit service compromises the
    independence of the external audit work;
|
| |  | reviewing all fees paid to the external auditor for audit
    services and, if appropriate, recommending the fees for board
    approval;                                                                                     
|
| |  | reviewing with the external auditor the results of the annual
    audit examination;                                                                                                                                          
|
| |  | reviewing any litigation, claim or other contingency, including
    tax assessments, that could have a material effect upon our
    financial position or operating results;                                                  
|
| |  | reviewing annually, or as required, the appropriateness of the
    system of internal controls and approval policies and practices
    concerning the expenses of our officers;                                               
|
| |  | reviewing and approving the expense accounts of our board chair
    and the chief executive officer;                                                                                                                          
|
| |  | reviewing the adequacy of our insurance program;                                                                                                                                                                              
|
| |  | reviewing and determining the disposition of any complaints
    received under our Whistle Blower Policy  Complaint
    Resolution Process; and                                                                              
|
| |  | reviewing and determining the disposition of any complaints
    received from our shareholders or any regulatory body.                                                                                                        



Corporate Governance and
Compensation Committee




59



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##### 







Corporate Governance Matters




| |   |                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------
| |  | developments in the area of corporate governance generally;                                                   
|
| |  | composition and size of the board;                                                                            
|
| |  | appropriate candidates for nomination to the board;                                                           
|
| |  | providing an orientation and education program for new directors;                                             
|
| |  | evaluating the performance of the board, any committees, and
    individual directors;                        
|
| |  | considering and approving any requests by an individual director
    to engage outside experts at our expense.

Compensation Matters




| |   |                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | compensation policies reflecting the rationale for each element
    of executive pay, including the link between compensation and
    performance and the level of competitiveness of the total
    compensation package;
|
| |  | administration of our Employee Share Option Plan;                                                                                                                                                                        
|
| |  | executive management compensation, including bonuses, stock
    options, pensions and benefits;                                                                                                                          
|
| |  | compensation for the Chief Executive Officer;                                                                                                                                                                            
|
| |  | senior management performance reviews;                                                                                                                                                                                   
|
| |  | succession plans for executive management positions.                                                                                                                                                                     



Compensation of Directors










60



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##### 









| |   |                                                                            
| | - | ---------------------------------------------------------------------------
| |  | 1,600 DSUs a year (400 per quarter);                                       
|
| |  | An additional C$1,500 per quarter if they chair a board
    committee; and 
|
| |  | C$1,800 for every board meeting or board committee meeting they
    attend.



|                                 |  |          
|-------------------------------- |  | ---------
| Chairman compensation          |  | C$150,000
| Chair and meeting fees         |  | C$114,600
| DSUs (valued at date of issue) |  | C$257,840

Executive Compensation


Summary Compensation
Table







|                            |                          |      |      |                     |        |        |                  |              |  |           |            |         |  |              |       |         |  |    |          |           |  
|--------------------------- | ------------------------ | ---- | ---- | ------------------- | ------ | ------ | ---------------- | ------------ |  | --------- | ---------- | ------- |  | ------------ | ----- | ------- |  | -- | -------- | --------- | -
|                            |                          |      |      |                     |        |        |                  | Long-Term    |  |           |           
|                            |                          |      |      |                     |        |        |                  | Compensation |  |           |           
|                            |                          |      |      |                     |        | Awards |                  |              | 
|                            |                          |      |      | Annual Compensation |        |        |                  |              |  |          
|                            |                          |      |      |                     |        |        | Securities under |              |  | All Other |           
|Name and Principal Position |                          | Year |      |                     | Salary |        |                  | Bonus(1)     |  |           | Options(2) |         |  | Compensation |      
|                            |                          |      |      |                     |        |        |                  |              |  |           |            |         |  |              |      
|A.P. Franceschini           |                          |      | 2004 |                     |        | C$     | 375,004          |              |  | C$        | 844,350    |         |  |              | nil   |         |  | C$ | 9,000(3  | )        
|                            | President & CEO          |      |      | 2003                |        |        | C$               | 367,793      |  |           | C$         | 717,338 |  |              |       | 150,000 |  |    | C$       | 11,250(4  | )
|                            |                          |      | 2002 |                     |        | C$     | 250,000          |              |  | C$        | 748,705    |         |  |              | nil   |         |  | C$ | 6,500(3  | )        
|D.W. Wilson                 |                          |      | 2004 |                     |        | C$     | 224,030          |              |  | C$        | 250,000    |         |  |              | 5,000 |         |  | C$ | 69,439(5 | )        
|                            | Vice President & CFO     |      |      | 2003                |        |        | C$               | 196,165      |  |           | C$         | 195,000 |  |              |       | 6,500   |  |    | C$       | 5,500(3   | )
|                            |                          |      | 2002 |                     |        | C$     | 183,787          |              |  | C$        | 116,212    |         |  |              | 7,000 |         |  | C$ | 5,176(3  | )        
|R.L. Alarie                 |                          |      | 2004 |                     |        | C$     | 233,649          |              |  | C$        | 350,000    |         |  |              | 5,000 |         |  | C$ | 3,750(3  | )        
|                            | Executive Vice-President |      |      | 2003                |        |        | C$               | 196,165      |  |           | C$         | 230,000 |  |              |       | 6,000   |  |    | C$       | 5,500(3   | )
|                            | Stantec Consulting Ltd.  |      |      | 2002                |        |        | C$               | 175,013      |  |           | C$         | 200,000 |  |              |       | 9,000   |  |    | C$       | 200,631(6 | )
|M.E. Jackson                |                          |      | 2004 |                     |        | C$     | 218,460          |              |  | C$        | 250,000    |         |  |              | 5,000 |         |  | C$ | 5,869(3  | )        
|                            | Senior Vice President    |      |      | 2003                |        |        | C$               | 176,542      |  |           | C$         | 205,000 |  |              |       | 8,000   |  |    | C$       | 5,100(3   | )
|                            | Stantec Consulting Ltd.  |      |      | 2002                |        |        | C$               | 165,009      |  |           | C$         | 135,000 |  |              |       | 8,000   |  |    | C$       | 200,255(7 | )
|W.B. Lester                 |                          |      | 2004 |                     |        | C$     | 230,994          |              |  | C$        | 350,000    |         |  |              | 5,000 |         |  | C$ | 6,192(3  | )        
|                            | Executive Vice President |      |      | 2003                |        |        | C$               | 220,664      |  |           | C$         | 350,000 |  |              |       | 7,000   |  |    | C$       | 6,000(3   | )
|                            | Stantec Consulting Ltd.  |      |      | 2002                |        |        | C$               | 225,000      |  |           | C$         | 325,000 |  |              |       | 12,000  |  |    | C$       | 5,500(3   | )









|    |                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) | Represents bonuses earned and calculated in respect of the
    indicated financial year.                                                                                                                                            
|   
|   
|   
|(2) | Options to purchase our common shares. See below for further
    information regarding option grants and exercises during the
    most recently completed financial 2 year.                                                         
|   
|   
|   
|(3) | Represents a payment to the executive officers registered
    retirement savings/employee share purchase plan.                                                                                                                     
|   
|   
|   
|(4) | Represents a payment to Mr. Franceschinis registered
    retirement savings/employee share purchase plan (C$9,000) and a
    service award (C$2,250)                                                                               
|   
|   
|   
|(5) | Represents a payment to Mr. Wilsons registered
    retirement savings/employee share purchase plan (C$5,980) and a
    payout of vacation time that Mr. Wilson had accrued but not
    taken during his time at Stantec (C$63,459).
|   

61



---



##### 





|    |                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(6) | Represents a payment to Mr. Alaries registered
    retirement savings/employee share purchase plan (C$5,176) and a
    performance payment arising in connection with the acquisition
    of PEL Group Inc. by Stantec Consulting Ltd. in 1997 (C$195,455). 
|   
|   
|   
|(7) | Represents a payment to Mr. Jacksons registered
    retirement savings/employee share purchase plan (C$4,800) and a
    performance payment arising in connection with the acquisition
    of PEL Group Inc. by Stantec Consulting Ltd. in 1997 (C$195,455).
|   

Option Grants For Stantec Common Shares in Fiscal Year Ended
December 31, 20041


|                  |  |            |      |            |                 |  |       |                         |            |                |               |  |            |      |       |  |  |  |                   | 
|----------------- |  | ---------- | ---- | ---------- | --------------- |  | ----- | ----------------------- | ---------- | -------------- | ------------- |  | ---------- | ---- | ----- |  |  |  | ----------------- | 
|                  |  |            |      |            |                 |  |       | Market Value of         |            |                |              
|                  |  |            |      | % of Total |                 |  |       |                         | Securities |                |               | 
|                  |  |            |      | Options    |                 |  |       |                         | Underlying |                |               | 
|                  |  | Securities |      |            | Granted         |  |       |                         |            | Options on the |               |  |           
|                  |  | under      |      |            | to Employees in |  |       |                         |            | Date of Grant  |               |  | Expiration |     
|Name              |  | Options(1) |      |            | Financial Year  |  |       | Price (C$/Common Share) |            |                | (C$/Security) |  |            | Date |      
|                  |  |            |      |            |                 |  |       |                         |            |                |               |  |            |      |      
|A.P. Franceschini |  |            | Nil  |            |                 |  | 0.00% |                         |            |                | N/A           |  |            |      | N/A   |  |  |  | N/A               | 
|D.W. Wilson       |  |            | 5000 | (2)        |                 |  | 2.99% |                         |            | C$             | 24.50         |  |            | C$   | 24.50 |  |  |  | December 14, 2011 | 
|R.L. Alarie       |  |            | 5000 | (2)        |                 |  | 2.99% |                         |            | C$             | 24.50         |  |            | C$   | 24.50 |  |  |  | December 14, 2011 | 
|M.E. Jackson      |  |            | 5000 | (2)        |                 |  | 2.99% |                         |            | C$             | 24.50         |  |            | C$   | 24.50 |  |  |  | December 14, 2011 | 
|W.B. Lester       |  |            | 5000 | (2)        |                 |  | 2.99% |                         |            | C$             | 24.50         |  |            | C$   | 24.50 |  |  |  | December 14, 2011 | 






|    |                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Options granted under our Employee Share Option Plan to purchase
    our common shares.                                                                                
|   
|(2) | 1,667 options are exercisable on December 14, 2005, 1,667
    options are exercisable on December 14, 2006, and 1,666
    options are exercisable on December 14, 2007.

Aggregated Option Exercises During the Most Recently
Completed Financial Year and


Financial Year-End Option Values


|                  |  |              |         |           |          |    |                        |                            |  |              |                            |  |  |    |                       | 
|----------------- |  | ------------ | ------- | --------- | -------- | -- | ---------------------- | -------------------------- |  | ------------ | -------------------------- |  |  | -- | --------------------- | 
|                  |  |              |         |           |          |    |                        | Value of Unexercised       | 
|                  |  |              |         | Aggregate |          |    | Unexercised Options at |                            |  | In-the-Money |                           
|                  |  | Securities   |         |           | Value    |    |                        | Financial Year End         |  |              | Options at the Fiscal      | 
|                  |  | Acquired on  |         |           | Realized |    |                        | (#)                        |  |              | Year End(1)                | 
|Name              |  | Exercise (#) |         |           | (C$)     |    |                        | Exercisable/ Unexercisable |  |              | Exercisable/ Unexercisable | 
|                  |  |              |         |           |          |    |                        |                            |  |              |                            | 
|A.P. Franceschini |  |              | 240,000 |           |          | C$ | 4,214,000              |                            |  |              | 112,000 / 90,000           |  |  | C$ | 1,732,060 / C$210,300 | 
|D.W. Wilson       |  |              | Nil     |           |          |    | nil                    |                            |  |              | 26,335 / 11,665            |  |  | C$ | 493,258 / C$61,582    | 
|R.L. Alarie       |  |              | 4,700   |           |          | C$ | 70,560                 |                            |  |              | 5,000 / 12,000             |  |  | C$ | 46,900 / C$67,760     | 
|M.E. Jackson      |  |              | Nil     |           |          |    | nil                    |                            |  |              | 8,001 / 12,999             |  |  | C$ | 78,516 / C$71,064     | 
|W.B. Lester       |  |              | 39,000  |           |          | C$ | 690,200                |                            |  |              | 2,334 / 13,666             |  |  | C$ | 12,790 / C$83,390     | 






|    |                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------
|(1) | The closing price of our common shares on the Toronto Stock
    Exchange on December 31, 2004 was C$26.48.

Employee Share Option Plan








62



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##### 





Terms of the Plan


















63



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##### 



Shares Reserved and Options
Granted




|                                                                                                                                             |  |         |           |   |             |  |           |           |  |  |               |   |  |  |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | ------- | --------- | - | ----------- |  | --------- | --------- |  |  | ------------- | - |  |  | ------- | -
|                                                                                                                                             |  |         |           |   |             |  |           | Options   | 
|                                                                                                                                             |  | Plan    |           |   | Options     |  |           | Options   |  |  | Available for |  
|                                                                                                                                             |  | Maximum |           |   | Outstanding |  |           | Exercised |  |  | Future Grant  |  
|                                                                                                                                             |  |         |           |   |             |  |           |           |  |  |               |  
|Balance as of March 21, 2005 (prior to proposed change)                                                                                      |  |         | 1,754,938 |   |             |  | 1,012,833 |           |  |  | 697,365       |   |  |  | 44,740  |  
|Percentage of common shares outstanding as of March 21,
    2005 (prior to proposed change)                                                  |  |         | 9.27      | % |             |  | 5.35      | %         |  |  | 3.68          | % |  |  | 0.24    | %
|Balance as of March 21, 2005 (after proposed change, based
    upon number of issued and outstanding common shares as of
    March 21, 2005) |  |         | 1,892,718 |   |             |  | 1,012,833 |           |  |  | 0             |   |  |  | 879,885 |  
|Percentage of common shares outstanding as of March 21,
    2005 (after proposed change)                                                     |  |         | 10.00     | % |             |  | 5.35      | %         |  |  | 0             | % |  |  | 4.65    | %

Equity Compensation Plan Information





|                                                       |  |                            |           |  |                           |                                |       |                             |  |  |          |  
|------------------------------------------------------ |  | -------------------------- | --------- |  | ------------------------- | ------------------------------ | ----- | --------------------------- |  |  | -------- | -
|                                                       |  |                            |           |  |                           | Number of Securities Remaining |      
|                                                       |  |                            |           |  |                           | Available for Future Issuance  |      
|                                                       |  | Number of Securities to    |           |  | Weighted-average Exercise |                                |       | under Equity Compensation   | 
|                                                       |  | be Issued upon Exercise of |           |  | Price of Outstanding      |                                |       | Plans (Excluding Securities | 
|                                                       |  | Outstanding Options        |           |  | Options                   |                                |       | Reflected in Column (a))    | 
|Plan Category                                          |  | (a)                        |           |  | (b)                       |                                |       | (c)                         | 
|                                                       |  |                            |           |  |                           |                                |       |                             | 
|Equity compensation plans approved by security holders |  |                            | 1,033,833 |  |                           | C$                             | 13.63 |                             |  |  | 44,740(1 | )












|    |                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | This number is equal to the maximum number of options to
    purchase common shares authorized to be issued under the Stantec
    Employee Share Option Plan (1,754,938) less 676,365 options
    which have been exercised over the life of the Stantec Employee
    Share Option Plan less the 1,033,833 options outstanding as
    at January 31, 2005.




Employment Agreements


Anthony P.
Franceschini




|                  |  |              |       |  |              |  |                 |             |  |  |                 | 
|----------------- |  | ------------ | ----- |  | ------------ |  | --------------- | ----------- |  |  | --------------- | 
|Number of Options |  | Strike Price |       |  | Vesting Date |  |                 | Expiry Date | 
|                  |  |              |       |  |              |  |                 |             | 
|30,000            |  | C$           | 16.10 |  |              |  | January 3, 2004 |             |  |  | January 3, 2010 | 
|30,000            |  | C$           | 18.85 |  |              |  | January 3, 2005 |             |  |  | January 3, 2011 | 
|30,000            |  | C$           | 21.60 |  |              |  | January 3, 2006 |             |  |  | January 3, 2012 | 
|30,000            |  | C$           | 24.35 |  |              |  | January 3, 2007 |             |  |  | January 3, 2013 | 
|30,000            |  | C$           | 27.10 |  |              |  | January 3, 2008 |             |  |  | January 3, 2013 | 



64



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##### 









Donald W. Wilson














Raymond L. Alarie














65



---



##### 





Mark E. Jackson














W. Barry Lester
















66



---



##### 



Information Concerning the Special Meeting


Keith Special Meeting




Date, Time and Place





Purpose of the Special Meeting






| |   |                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------
| |  | has unanimously determined that the merger is fair to and in the
    best interests of Keith and its shareholders;          
|
| |  | has unanimously approved and declared advisable the merger
    agreement; and                                               
|
| |  | unanimously recommends that Keith common shareholders vote
    FOR the approval of the merger agreement and
    its terms;









Record Date; Voting Power













Required Vote; Quorum; How to Vote


Required Vote.





Because the required vote of the shareholders with respect to
the merger agreement is based upon the total number of
outstanding shares of Keith common stock, the failure to submit
a proxy card (or to vote in person at the special meeting) or
the abstention from voting by a shareholder will have the same
effect as a vote against approval of the merger agreement and
against the merger. Brokers holding shares of Keith common stock
as nominees will not have discretionary authority to vote those
shares in the absence of instructions from the beneficial owners
of those shares, so the failure to provide voting instructions
to your broker will also have the same effect as a vote against
the merger.





67



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##### 





Quorum.





How to Vote.

























Revocation of Proxy






| |   |                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------
|
| |  | sending a written notice to the proxy solicitation agent stating
    that the earlier proxy is revoked;                           
|
|
|
| |  | submitting a proxy bearing a later date (using a new proxy card
    and following the instructions provided on the proxy card); or
|
|
| |  | attending the special meeting, revoking your proxy and voting in
    person.                                                      



68



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##### 



Expenses of Solicitation










Exchange of Share Certificates


You should not send stock certificates with your proxies.




Questions About Voting Your Shares







|                                                                                                                                                                         |  |                                                                                                                                     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------
|The Keith Companies, Inc.
    19 Technology Drive
    Irvine, California, USA 92618-2334
    Phone: (949) 923-6001 Fax: (949) 923-6026
    Attention: Investor Relations |  | The Altman Group, Inc.
    1275 Valley Brook Avenue
    Lyndhurst, NJ 07071
    Phone: (201) 806-2205
    Attention: Charlotte Brown




Miscellaneous










69



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##### 



The Merger


Background of The Merger
























70



---



##### 

























71



---



##### 









































72



---



##### 













| |   |                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the significant number of conditions to Stantecs
    performance of its obligations at closing;                                                                                                       
|
| |  | the absence of a requirement that Keith receive a tax opinion
    from its counsel as a condition to Keiths performance of
    its obligations at closing;                                            
|
| |  | the requirement that the Stantec common stock be listed on the
    New York Stock Exchange or the Nasdaq National Market as a
    condition to Stantecs performance of its obligations at
    closing;
|
| |  | the requirement that key members of Keith management execute
    employment agreements as a condition to Stantecs
    performance of its obligations at closing;                                      
|
| |  | the treatment of the outstanding stock options and restricted
    shares of Keith;                                                                                                                     
|
| |  | a requirement that Keith have a minimum cash balance at closing
    of at least US$48 million;                                                                                                         
|
| |  | the limitation on Keiths ability to terminate the
    agreement in response to an unsolicited acquisition proposal
    with superior terms; and                                                       
|
| |  | the obligation to pay Stantecs expenses in addition to a
    break-up fee in the event the agreement was terminated in
    certain circumstances by Keith.                                            





73



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##### 















74



---



##### 







Recommendation of the Keith Board of Directors






Reasons for Keiths Board Recommendation






| |   |                                                                                                                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | the current state of Keiths business, including the fact
    that continued expansion and geographic and industry
    diversification, each of which was considered essential to
    protect its competitive position, would require significant
    future investment in the expansion of its operations,
    infrastructure, technology platform and managerial team;
|
|
| |  | Keiths prospects and strategic objectives to expand its
    market share and diversify its service offerings, which are
    limited by a shortage of attractive acquisition targets meeting
    Keiths acquisition criteria, expansion opportunities and
    qualified employees;                                                                                     
|
| |  | Keiths dependence on the residential real estate market in
    California and the fact that a decline in demand in this market
    sector could have a disproportionate effect on its net revenues
    and profitability;                                                                                                                                              
|
| |  | the range of possible benefits to Keith shareholders of
    continuing to operate independently and the timing and the
    likelihood of accomplishing growth and diversification of
    Keiths service offerings by                                                                                                                                                   

75



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##### 



| |   |                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | operating independently, and the Keith board of directors
    assessment that the merger with Stantec presented a superior
    alternative to continuing to operate independently; and
|
| |  | the limited attention of the public market to small
    capitalization stocks outside the technology sector, such as
    Keith.                                                        





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | the fact that as of April 13, 2005, the trading day prior
    to approval of the merger by the Keith board of directors, the
    value of the merger consideration represented a premium of
    approximately US$4.87, or 28.6% over the US$17.00 closing sale
    price for Keith common stock as reported on the Nasdaq National
    Market on April 13, 2005;                                                                                                                                                                                                                                                                                                                                                                          
|
|
| |  | managements review of the companies which might be
    expected to be interested in acquiring Keith and
    managements discussion with several companies regarding
    their interest in an acquisition and the preliminary discussion
    by members of the Keith senior management with certain of these
    potential acquirors and the lack of any offers to acquire Keith,
    all of which led the board to believe that the likelihood of
    obtaining a superior offer, either through an auction or
    otherwise, was outweighed by the benefits to the Keith
    shareholders of the merger;                                                                                                                               
|
|
| |  | geographic and industry diversification achieved by a
    combination with Stantec would reduce Keiths exposure to
    cyclicality within the residential real estate service sector;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
|
| |  | the financial presentation and written opinion of Bear Stearns
    to the Keith board of directors to the effect that, as of
    April 14, 2005, and based on the qualifications,
    assumptions, limitations and other matters set forth in its
    written opinion, the consideration to be received by the public
    shareholders of Keith pursuant to the merger agreement is fair,
    from a financial point of view, to those holders (the full text
    of this opinion, which sets forth the assumptions made,
    procedures followed, matters considered and limitations on the
    review undertaken by Bear Stearns in connection with the
    opinion, is attached as Appendix B to this proxy statement/
    prospectus);
|
| |  | the likelihood that the proposed acquisition would be
    consummated, in light of the conditions to the parties
    obligations to complete the merger and the reputation and
    financial capabilities of Stantec;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | the extensive arms-length negotiations between Stantec and
    Keith, leading the board to believe that the merger
    consideration offered by Stantec represented the highest amount
    Stantec would agree to pay and that the terms of the merger
    agreement and related documents, including the parties
    representations, warranties and covenants, and the conditions to
    their respective obligations, were as favorable to Keith as
    Stantec would be willing to accept;                                                                                                                                                                                                                                           
|
|
| |  | the potential for synergies between Stantec and Keith, which
    include diversification of service offerings and geographic
    coverage, Keiths opportunity to integrate Stantecs
    more advanced enterprise reporting and management technology
    systems and other overhead cost savings, that could lead to
    improved prospects for growth and revenue generation at Stantec,
    which would benefit former Keith shareholders;                                                                                                                                                                                                                                                                                            
|
|
| |  | the fact that pursuant to the merger agreement, Keith is not
    prohibited from responding in the manner provided in the merger
    agreement to certain alternative proposals which the Keith board
    of directors determines may constitute a superior offer and
    where Keiths board of directors determines in good faith,
    after consultation with independent legal counsel, that failure
    to respond would cause the members of the Keith board of
    directors to breach their fiduciary duties under applicable
    law; and                                                                                                                                                                                        
|
| |  | the fact that the provisions of the merger agreement allow
    Keiths board of directors, under certain circumstances to
    withdraw its recommendation for the approval of the merger or
    terminate the merger agreement if it is presented with a
    superior proposal.                                                                                                                                                                                                                                                                                                                                                                                                                                                           

76



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##### 







| |   |                                                                                                                                                                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | the risk that the announcement and pendency of the merger could
    have a material adverse impact on Keiths business and
    operations;                                                                                                                                                                                                                                   
|
|
|
| |  | the risk that the merger may not be completed if either
    Keiths or Stantecs legal counsel were not to deliver
    a tax opinion which is a condition to each of Keiths and
    Stantecs obligation to complete the merger;                                                                                                                                            
|
|
|
| |  | the risk that the merger may not be completed if the Stantec
    common shares to be issued in the merger are not listed on
    either the New York Stock Exchange or the Nasdaq National
    Market, which is a condition to Keiths obligation to
    complete the merger;                                                                                                 
|
|
|
| |  | the risk that the merger may not be completed if the other
    conditions to Stantecs obligation to complete the merger
    are not satisfied and the right of Stantec to terminate the
    merger agreement under certain circumstances;                                                                                                                                   
|
|
| |  | the fact that the restrictions contained in the merger agreement
    on Keiths rights to solicit superior proposals, as well as
    the US$3.0 million termination fee plus reimbursement of
    certain Stantec expenses under certain circumstances, presents
    an additional cost to any other potential acquiror which might
    be interested in acquiring Keith; and
|
| |  | the interests that certain of Keith directors and executive
    officers may have with respect to the merger in addition to
    their interests as Keith shareholders generally, as described in
    The Merger  Interests of Keiths and
    Stantecs Executive Officers and Directors in the
    Merger.                                                               

Opinion of Keiths Financial Advisor












| |   |                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------
| |  | reviewed certain publicly available historical financial
    statements and other business and financial information of Keith
    and Stantec;

77



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##### 





| |   |                                                                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | reviewed certain operating and financial data concerning Keith
    and Stantecs business and prospects prepared by the
    managements of Keith and Stantec, respectively;
|
| |  | discussed Keiths business, operations, historical
    financial results, a range of projected financial results and
    future prospects with senior executives of Keith; 
|
| |  | reviewed certain projections for Stantec for the year ended
    December 31, 2005 published by certain equity research
    analysts;                                       
|
| |  | discussed Stantecs business, operations, historical and
    projected financial results and future prospects with senior
    executives of Stantec and Keith;             
|
| |  | reviewed the historical prices, trading multiples and trading
    volumes for Keiths common stock and Stantecs common
    stock;                                         
|
| |  | reviewed publicly available financial data, stock market
    performance data and trading multiples of companies generally
    comparable to Keith and Stantec;            
|
| |  | reviewed the financial terms, to the extent publicly available,
    of certain mergers and acquisitions transactions involving
    companies generally comparable to Keith;
|
| |  | performed discounted cash flow sensitivity analyses based on the
    range of projected financial results for Keith furnished to it
    by senior executives of Keith;     
|
| |  | reviewed the potential pro forma impact of the merger on
    Stantecs financial results, financial condition and
    capitalization;                                      
|
| |  | reviewed the financial terms and conditions of the merger
    agreement; and                                                                                               
|
| |  | performed such other studies, analyses, inquiries and
    investigations as it deemed appropriate.                                                                         









78



---



##### 







| |                            
| | ---------------------------
| | Comparable Company Analysis











|                                     |  |                             |  |               
|------------------------------------ |  | --------------------------- |  | --------------
|Name                                 |  | Location                    |  | Trading Symbol
|                                     |  |                             |  |               
|Chicago Bridge & Iron Company N.V.   |  | The Netherlands             |  | NYSE: CBI     
|Granite Construction Incorporated    |  | Westonville, California     |  | NYSE: GVA     
|Jacobs Engineering Group Inc.        |  | Pasadena, California        |  | NYSE: JEC     
|Michael Baker Corporation            |  | Moon Township, Pennsylvania |  | AMEX: BKR     
|Shaw Group, Inc.                     |  | Baton Rouge, Louisiana      |  | NYSE: SGR     
|Tetra Tech, Inc.                     |  | Pasadena, California        |  | NASDAQ: TTEK  
|TRC Companies, Inc.                  |  | Windsor, CT                 |  | NYSE: TRR     
|URS Corporation                      |  | San Francisco, California   |  | NYSE: URS     
|Washington Group International, Inc. |  | Boise, Idaho                |  | NASDAQ: WGII  






|                                                               |  |          |      |  |      |  |      |        |  |  |               |  |  |  |      | 
|-------------------------------------------------------------- |  | -------- | ---- |  | ---- |  | ---- | ------ |  |  | ------------- |  |  |  | ---- | 
|                                                               |  | Keith(1) |      |  | Mean |  |      | Median |  |  | Harmonic Mean | 
|                                                               |  |          |      |  |      |  |      |        |  |  |               | 
|Price to 2005 estimated earnings per share                     |  |          | 18.9 |  |      |  | 17.9 |        |  |  | 16.6          |  |  |  | 16.9 | 
|Price to 2006 estimated earnings per share                     |  |          | 17.1 |  |      |  | 16.0 |        |  |  | 15.3          |  |  |  | 15.6 | 
|Price to 2005 estimated enterprise value/ EBITDA
    per share |  |          | 8.0  |  |      |  | 7.4  |        |  |  | 6.8           |  |  |  | 7.1  | 
|Price to 2006 estimated enterprise value/ EBITDA
    per share |  |          | 7.1  |  |      |  | 6.6  |        |  |  | 6.2           |  |  |  | 6.3  | 












|    |                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Based on merger consideration of US$21.87 per share, which
    in turn was based on the closing price of the Stantec common
    stock on April 14, 2005 assuming an exchange rate of C$1.00
    to US$0.808.














| |                               
| | ------------------------------
| | Precedent Transaction Analysis



79



---



##### 





|                  |  |                                  |  |                                       
|----------------- |  | -------------------------------- |  | --------------------------------------
|Announcement Date |  | Acquiror                         |  | Target                                
|                  |  |                                  |  |                                       
|12/10/2003        |  | CH2M Hill Companies, Ltd.        |  | Lockwood Greene Engineers, Inc.       
|12/19/2002        |  | EMCOR Group, Inc.                |  | Consolidated Engineering Services Inc.
|11/20/2001        |  | MACTEC, Inc.                     |  | Law Companies Group, Inc.             
|03/31/2001        |  | American Capital Strategies Ltd. |  | Weston Solutions, Inc.                
|03/24/2000        |  | MACTEC, Inc.                     |  | Harding Lawson Associates Group, Inc. 
|05/10/1999        |  | IT Group, Inc.                   |  | EMCON                                 
|05/05/1999        |  | URS Corporation                  |  | Dames & Moore Group                   
|05/03/1999        |  | Investor Group                   |  | Isolux-Wat SA                         






|                                 |  |          |      |   |      |  |      |        |  |  |               |   |  |  |      | 
|-------------------------------- |  | -------- | ---- | - | ---- |  | ---- | ------ |  |  | ------------- | - |  |  | ---- | 
|                                 |  | Keith(1) |      |   | Mean |  |      | Median |  |  | Harmonic Mean |  
|                                 |  |          |      |   |      |  |      |        |  |  |               |  
|Price to Premium, One Week Prior |  |          | 27.1 | % |      |  | 29.1 | %      |  |  | 33.3          | % |  |  | NM   | 
|Enterprise Value to LTM Revenue  |  |          | 1.42 | x |      |  | 0.42 |        |  |  | 0.40          |   |  |  | 0.32 | 
|Enterprise Value to LTM EBITDA   |  |          | 9.0  | x |      |  | 5.6  |        |  |  | 4.2           |   |  |  | 4.5  | 
|Equity Value to LTM Net Income   |  |          | 21.9 | x |      |  | 22.8 |        |  |  | 15.6          |   |  |  | 15.3 | 












|    |                                                    
|--- | ---------------------------------------------------
|(1) | Based on merger consideration of US$21.87 per share








| |                                          
| | -----------------------------------------
| | Discounted Cash Flow Sensitivity Analysis



80



---



##### 








|                                  |       |                               |     |       |  |  |      |       |  |  |      |       |  |  |      |       | 
|--------------------------------- | ----- | ----------------------------- | --- | ----- |  |  | ---- | ----- |  |  | ---- | ----- |  |  | ---- | ----- | 
|                                  |       | 2006-2008 Revenue Growth Rate |    
|                                  |       |                               |    
|2006-2008 Operating Margin(1),(2) |       |                               | 8.0 | %     |  |  | 10.0 | %     |  |  | 12.0 | %     |  |  | 14.0 | %    
|                                  |       |                               |     |       |  |  |      |       |  |  |      |      
|                                  | 10.0% |                               | $   | 15.52 |  |  | $    | 15.90 |  |  | $    | 16.31 |  |  | $    | 16.72 | 
|                                  | 12.0% |                               | $   | 17.42 |  |  | $    | 17.90 |  |  | $    | 18.41 |  |  | $    | 18.93 | 
|                                  | 14.0% |                               | $   | 19.32 |  |  | $    | 19.90 |  |  | $    | 20.51 |  |  | $    | 21.14 | 
|Perpetual Growth Rate(2),(3)      |       |                               | 8.0 | %     |  |  | 10.0 | %     |  |  | 12.0 | %     |  |  | 14.0 | %    
|                                  |       |                               |     |       |  |  |      |       |  |  |      |      
|                                  | 3.00% |                               | $   | 16.96 |  |  | $    | 17.42 |  |  | $    | 17.90 |  |  | $    | 18.39 | 
|                                  | 3.25% |                               | $   | 17.18 |  |  | $    | 17.66 |  |  | $    | 18.15 |  |  | $    | 18.65 | 
|                                  | 3.50% |                               | $   | 17.42 |  |  | $    | 17.90 |  |  | $    | 18.41 |  |  | $    | 18.93 | 
|                                  | 3.75% |                               | $   | 17.66 |  |  | $    | 18.16 |  |  | $    | 18.68 |  |  | $    | 19.22 | 
|                                  | 4.00% |                               | $   | 17.92 |  |  | $    | 18.44 |  |  | $    | 18.97 |  |  | $    | 19.52 | 
|Discount Rate(1),(3)              |       |                               | 8.0 | %     |  |  | 10.0 | %     |  |  | 12.0 | %     |  |  | 14.0 | %    
|                                  |       |                               |     |       |  |  |      |       |  |  |      |      
|                                  | 14.5% |                               | $   | 16.36 |  |  | $    | 16.78 |  |  | $    | 17.23 |  |  | $    | 17.69 | 
|                                  | 14.0% |                               | $   | 16.86 |  |  | $    | 17.32 |  |  | $    | 17.79 |  |  | $    | 18.28 | 
|                                  | 13.5% |                               | $   | 17.42 |  |  | $    | 17.90 |  |  | $    | 18.41 |  |  | $    | 18.93 | 
|                                  | 13.0% |                               | $   | 18.03 |  |  | $    | 18.55 |  |  | $    | 19.09 |  |  | $    | 19.65 | 
|                                  | 12.5% |                               | $   | 18.72 |  |  | $    | 19.28 |  |  | $    | 19.85 |  |  | $    | 20.45 | 









|    |                                        
|--- | ---------------------------------------
|   
|(1) | Assumes a perpetual growth rate of 3.5%
|   
|   
|   
|(2) | Assumes a discount rate of 13.5%       
|   
|   
|   
|(3) | Assumes an operating margin of 12.0%   
|   



| |                               
| | ------------------------------
| | Relative Contribution Analysis





81



---



##### 







| |                               
| | ------------------------------
| | Pro Forma Transaction Analysis











82



---



##### 















Reasons for Stantecs Board Recommendation






| |   |                                                                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the combination of Stantec and Keith will make up one of the
    most diversified design firms in North America and represents a
    significant step toward Stantecs goal to become a top 10
    global design firm;                                                                                               
|
| |  | Stantec and Keith are complementary in terms of services and
    geography and have similar corporate cultures;                                                                                                                                                                                                      
|
| |  | the acquisition serves Stantecs objective of being a top
    tier service provider in each market it serves;                                                                                                                                                                                                        
|
| |  | the combination of Stantecs and Keiths urban land
    groups will create a leading service provider for the land
    development market in North America, with a significant presence
    in California, Nevada, Arizona, Alberta and Ontario, each a fast
    growing region with strong land development markets;
|
| |  | the addition of Keith will increase Stantecs
    U.S. operations by about 70% and will provide a solid
    foundation in California, one of the largest markets in North
    America;                                                                                                                               
|
| |  | Keiths strong presence in California will provide a
    significant opportunity to cross-sell Stantecs public
    sector services in transportation and environment market
    segments and position Stantec for further growth in California;                                                                     
|
| |  | Keith has a history of profitability; and                                                                                                                                                                                                                                                                            
|
| |  | the acquisition of Keith is expected to be accretive to
    Stantecs earnings.                                                                                                                                                                                                                                      

83



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##### 





Interests of Keiths and Stantecs Executive
Officers and Directors in the Merger




Stockholders Support Agreement.


Letter Agreement.





Change in Control Agreements.





84



---



##### 














Vested Stock Options.








Unvested Stock Options.








Unvested Restricted Stock.





Representation on Stantecs Board of Directors.


Officers of Stantec.


Representation on the Surviving Corporations Board of
Directors.


85



---



##### 



Officers of the Surviving Corporation.


Stantecs Directors and Executive Officers.


Indemnification and Insurance.


Material U.S. Federal Income Tax Consequences of the
Merger














| |   |                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an individual who is a citizen or resident of the United States
    for U.S. federal income tax purposes;                                                                                                                                                                                                                                           
|
| |  | a corporation, or any entity treated as a corporation for
    U.S. federal income tax purposes, created or organized
    under the laws of the United States, any state thereof or the
    District of Columbia;                                                                                                                                    
|
| |  | an estate that is subject to U.S. federal income tax
    regardless of its source; or                                                                                                                                                                                                                                                               
|
| |  | a trust if (1) a U.S. court is able to exercise
    primary supervision over the administration of the trust and one
    or more U.S. persons have the authority to control all
    substantial decisions of the trust, or (2) the trust has a
    valid election in effect to be treated as a U.S. person for
    U.S. federal income tax purposes.











86



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##### 







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | banks, insurance companies and financial institutions;                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | tax-exempt organizations;                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | mutual funds;                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | persons that have a functional currency other than the
    U.S. dollar;                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | traders in securities who elect to apply a mark-to-market method
    of accounting;                                                                                                                                                                                                                                                                                                                                                                
|
| |  | dealers in securities or foreign currency;                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | holders of Keith common stock who acquired their Keith common
    stock in connection with Keiths stock option plans or in
    other compensatory transactions;                                                                                                                                                                                                                                                                                   
|
| |  | holders of Keith common stock who hold their common stock as
    part of a hedge, straddle, constructive sale, conversion
    transaction or other integrated investment;                                                                                                                                                                                                                                                                          
|
| |  | Except to the extent discussed below, U.S. Holders of Keith
    common stock who will hold 5% or more of either the total voting
    power or the total value of the outstanding stock of Stantec
    after the merger, determined after taking into account ownership
    under the applicable attribution rules of the Code and Treasury
    regulations (referred to in this proxy statement/ prospectus as
    5% transferee shareholders); and
|
| |  | holders who will hold 10% or more of Stantec equity either
    directly, indirectly through one or more entities, or as a
    result of certain constructive ownership rules of the Code,
    following the merger;                                                                                                                                                                                                                                









EACH HOLDER OF KEITH COMMON STOCK SHOULD CONSULT THEIR TAX
ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES OF THE
MERGER TO SUCH HOLDER.




| |           
| | ----------
| | The Merger

















87



---



##### 





















Exchange of Keith Common Stock Solely for Stantec Common
Shares.


Exchange of Keith Common Stock for Cash and Stantec Common
Shares.




| |   |                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the sum of the amount of cash and the fair market value, as of
    the date of the merger, of the Stantec common shares received by
    the U.S. Holder, minus the adjusted tax basis of the Keith
    common stock surrendered in exchange therefor, or
|
| |  | the amount of cash received by the U.S. Holder in the
    merger (excluding cash received in lieu of fractional Stantec
    common shares, which is discussed below).                                                                                   



88



---



##### 


















Exchange of Keith Common Stock Solely for Cash.





Vested Stock Options.


89



---



##### 





1 2 1 2




Unvested Stock Options.


Unvested Restricted Stock.


90



---



##### 














Cash Received in Lieu of Fractional Shares.








Cash Received Pursuant to the Exercise of Dissenters
Rights.





Reporting Requirements and Backup Withholding.




















| |                              
| | -----------------------------
| | The Reverse-Subsidiary Merger



91



---



##### 













| |                                   
| | ----------------------------------
| | Ownership of Stantec Common Shares




Distributions on Stantec Common Shares.

















92



---



##### 



Disposition of Stantec Common Shares.


Passive Foreign Investment Company Rules.





Information Reporting and Backup Withholding.





Material Canadian Federal Income Tax Consequences of the
Merger






93



---



##### 







| |                                 
| | --------------------------------
| | Conversion of Keith Common Stock





| |                                   
| | ----------------------------------
| | Dividends on Stantec Common Shares





| |                                     
| | ------------------------------------
| | Disposition of Stantec Common Shares











Anticipated Accounting Treatment






94



---



##### 





Regulatory Matters Related to the Merger








Merger Fees, Costs and Expenses




Dissenters Rights






















95



---



##### 











| |   |                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | state the number of shares of Keith common stock the dissenting
    shareholder holds of record;                                                                                                                                                                                          
|
| |  | contain a statement of what the dissenting shareholder claims to
    be the fair market value of the shares as of April 14,
    2005, the last trading day before the announcement of the
    merger, without giving effect to any appreciation or
    depreciation due to the merger; and
|
| |  | be received by Keith no later than the date of the special
    meeting to vote on the merger.                                                                                                                                                                                             







| |   |                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a statement of the price determined by the Keith board of
    directors to represent the fair market value of the shares;                                                                   
|
| |  | a brief description of the procedure that the shareholder must
    follow, if the shareholder desires to exercise dissenters
    rights; and                                               
|
| |  | a copy of sections 1300, 1301, 1302, 1303 and 1304 of
    Chapter 13 of the CCC (which sets out the procedures that
    must be followed to perfect a shareholders
    dissenters rights).







96



---



##### 









Stock Exchange Listing












Resale of Stantec Common Shares





U.S. Resale Requirements.





Canadian Resale Requirements. Securities Act


97



---



##### 



The Merger Agreement


The following is a summary of selected provisions of the
merger agreement. While Keith and Stantec believe this
description covers the material terms of the merger agreement,
it may not contain all the information that is important to you,
and it is qualified in its entirety by reference to the merger
agreement, which is incorporated by reference in its entirety
and attached to this proxy statement/ prospectus as
Appendix A. We urge you to read the merger agreement in its
entirety. In the event of any discrepancy between the terms of
the merger agreement and the following summary, the merger
agreement will control.


Structure of the Merger






Effective Time and Closing of the Merger




Surviving Corporation Governing Documents, Officers and
Directors


Surviving Corporation Governing Documents.


Surviving Corporation Officers and Directors.


Merger Consideration


Conversion of Keith Common Stock.




| |                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) US$11.00 cash, 0.23 Stantec common shares,
    referred to as the fixed ratio stock, and that number of Stantec
    common shares equal to US$5.50 divided by the 20-day average
    trading price of Stantec common shares on the Toronto Stock
    Exchange; or
|
| | (ii) the fixed ratio stock, and that number of Stantec
    common shares equal to US$16.50 divided by the
    average 20-day trading price of Stantec common shares on
    the Toronto Stock Exchange; or                                                            
|
| | (iii) cash equal to the sum of (A) US$16.50 and
    (B) the product of 0.23 and the average 20-day trading
    price of Stantec common shares, referred to as the cash payment.                                                                                      



98



---



##### 



















Reverse-Subsidiary Merger.


Fractional Shares.


Stock Options.


Restricted Stock.


Representations and Warranties






| |   |                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | incorporation, valid existence and qualification to do business
    of Keith and each of its subsidiaries;                                                                                                                                                                                                                                                                                                
|
| |  | corporate authorization and validity of the merger agreement and
    the inapplicability of takeover statutes to the merger;                                                                                                                                                                                                                                                                              
|
| |  | capitalization of Keith;                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | the absence of any conflict of the merger agreement with
    Keiths articles of incorporation or bylaws, with
    applicable laws or with any material agreement to which Keith or
    any of its subsidiaries is a party and, subject to certain
    exceptions set forth in the merger agreement, the absence of
    governmental consents, filings and approvals necessary to
    complete the merger;
|
| |  | the approval by Keiths board of directors of the merger
    agreement and the recommendation of the merger agreement by
    Keiths board of directors to Keiths shareholders and
    the vote required by the shareholders of Keith to complete the
    merger;                                                                                                                                        
|
| |  | the proper filing of documents with the Securities and Exchange
    Commission, referred to as the SEC;                                                                                                                                                                                                                                                                                                   

99



---



##### 





| |   |                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the general accuracy of financial statements and the absence of
    undisclosed liabilities;                                                                        
|
| |  | accounts receivable, accounts payable, work in progress, accrued
    project liabilities and revenue recognition;                                                   
|
| |  | the adequacy of internal control over financial reporting;                                                                                                          
|
| |  | the receipt of the opinion of the financial advisor as to the
    fairness, from a financial point of view, of the merger
    consideration to Keiths shareholders;
|
| |  | the absence of material changes or events in the business of
    Keith since December 31, 2004;                                                                     
|
| |  | the absence of material pending or threatened litigation
    outstanding against Keith or any of its subsidiaries;                                                  
|
| |  | employee benefit plans;                                                                                                                                             
|
| |  | labor and employment matters;                                                                                                                                       
|
| |  | title to leased real property and to assets;                                                                                                                        
|
| |  | ownership and validity of intellectual property rights;                                                                                                             
|
| |  | tax matters and the payment of taxes;                                                                                                                               
|
| |  | various environmental matters, including compliance with
    environmental laws;                                                                                    
|
| |  | validity and effect of, and absence of defaults under, material
    contracts;                                                                                      
|
| |  | adequacy of insurance;                                                                                                                                              
|
| |  | customers and suppliers;                                                                                                                                            
|
| |  | interested party transactions; and                                                                                                                                  
|
| |  | brokers and finders fees related to the merger.                                                                                                                   





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | incorporation, valid existence and qualification to do business
    of Stantec and Stantec Consulting;                                                                                                                                                                                                                                                                                                                  
|
| |  | corporate authorization and validity of the merger agreement;                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Stantecs capitalization;                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | the absence of any conflict of the merger agreement with
    Stantecs or Stantec Consultings articles of
    incorporation or bylaws, with applicable laws or with any
    agreement to which Stantec or Stantec Consulting is a party and,
    subject to certain exceptions set forth in the merger agreement,
    the absence of governmental consents, filings and approvals
    necessary to complete the merger;
|
| |  | Stantecs and Stantec Consultings possession of all
    permits and regulatory approvals required to conduct its
    business, and compliance by Stantec and Stantec Consulting with
    all applicable foreign, federal, state and local laws;                                                                                                                                                                        
|
| |  | the proper filing of documents with the Alberta Securities
    Commission;                                                                                                                                                                                                                                                                                                                                              
|
| |  | the general accuracy of financial statements and the absence of
    undisclosed liabilities;                                                                                                                                                                                                                                                                                                                            
|
| |  | accounts receivable, accounts payable, work in progress, accrued
    project liabilities and revenue recognition;                                                                                                                                                                                                                                                                                                       
|
| |  | the adequacy of internal control over financial reporting;                                                                                                                                                                                                                                                                                                                                                              
|
| |  | the absence of material pending or threatened litigation
    outstanding against Stantec or Stantec Consulting;                                                                                                                                                                                                                                                                                                         

100



---



##### 





| |   |                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | approval of the merger agreement by the sole shareholder of
    Stantec Consulting and the absence of any requisite vote of
    Stantecs shareholders to consummate the transactions
    contemplated by the merger agreement;                                                           
|
| |  | Stantec Consultings operations;                                                                                                                                                                                                                                                          
|
| |  | tax matters;                                                                                                                                                                                                                                                                              
|
| |  | approval of the merger and the merger agreement by the board of
    directors of each of Stantec and Stantec Consulting and approval
    by the board of directors of Stantec of the registration and
    listing of Stantec common shares to be issued in connection with
    the merger;
|
| |  | the absence of material changes or events in the business of
    Stantec;                                                                                                                                                                                                                 
|
| |  | absence of ownership of Keith shares by Stantec or any of its
    subsidiaries;                                                                                                                                                                                                           
|
| |  | brokers and finders fees related to the merger;                                                                                                                                                                                                                                         
|
| |  | ownership and validity of intellectual property rights; and                                                                                                                                                                                                                               
|
| |  | various environmental matters, including compliance with
    environmental laws.                                                                                                                                                                                                          





| |   |                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | general economic, political or regulatory conditions or
    securities markets in general that do not have a
    disproportionate effect on Keith or Stantec, as applicable;
|
| |  | the industry in which Stantec and Keith operate that does not
    have a disproportionate effect on Keith or Stantec, as
    applicable; or                                 
|
| |  | the public announcement or consummation of the transactions
    contemplated by the merger agreement.                                                                       

Conduct of Business Pending the Merger


Conduct of Keiths Business Pending Merger.




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | operate other than in the ordinary course of business and
    consistent with past practice;                                                                                                                                                                                                                                                                                                                                                   
|
| |  | change or amend its articles of incorporation or bylaws;                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | (1) issue any shares of capital stock, or any options,
    warrants, convertible securities or rights to acquire any shares
    of such capital stock or any other ownership interest (except
    for issuances of Keith common stock issuable pursuant to
    Keiths stock awards outstanding on the date of the merger
    agreement) or (2) sell, pledge, dispose of, grant or
    encumber any material assets of Keith or any subsidiary;
|
| |  | split, combine or reclassify any of its capital stock or
    purchase or otherwise acquire any of its capital stock (other
    than in connection with the cashless exercise of Keith stock
    options outstanding on the date of the merger agreement);                                                                                                                                                                                      
|
| |  | declare, set aside, make or pay any dividend or other
    distribution, payable in cash, stock, property or otherwise,
    with respect to any of its capital stock, except for dividends
    by any direct or indirect wholly-owned subsidiary to Keith or
    any other wholly-owned subsidiary;                                                                                                                                             

101



---



##### 





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | hire any additional employees other than in the ordinary course
    of business or increase the compensation payable or to become
    payable or the benefits provided to its directors, officers or
    employees, except for increases in the ordinary course of
    business in salaries or wages of employees of Keith or any
    subsidiary who are not directors or officers of Keith or any
    subsidiary, or grant any severance or termination pay to, or
    enter into any employment or severance agreement with, any
    director, officer or other employee of Keith or of any
    subsidiary, or establish or amend any arrangement for the
    benefit of any current or former director, officer, employee or
    consultant;
|
| |  | (1) acquire any corporation or other business organization
    or any material amount of assets; (2) incur any
    indebtedness for borrowed money or issue any debt securities or
    become responsible for the obligations of any person, or make
    any loans or advances, or grant any security interest in any of
    its assets except in the ordinary course of business and
    consistent with past practice; (3) enter into any material
    contract; (4) authorize certain capital expenditures; or
    (5) enter into or amend any contract, agreement, commitment
    or arrangement with respect to any matter set forth in this
    paragraph;                                                                               
|
| |  | implement or adopt any change in its accounting principles,
    practices or methods, other than as is consistent with or as may
    be required by law, GAAP or regulatory guidelines;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | make any tax election or settle or compromise any material
    United States federal, state, local or non-United States income
    tax liability;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | discharge any obligation other than the discharge of liabilities
    (1) reflected or reserved against on the consolidated
    balance sheet of Keith and its subsidiaries as of March 31,
    2005; (2) subsequently incurred in the ordinary course of
    business and consistent with past practice, or
    (3) subsequently incurred not in the ordinary course of
    business which will not exceed US$100,000;                                                                                                                                                                                                                                                                                                                         
|
| |  | amend or consent to the termination of any material contract, or
    amend, waive, modify or consent to the termination of
    Keiths or any subsidiarys rights thereunder;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | commence or settle any material litigation; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | announce an intention, enter into any formal or informal
    agreement or otherwise make a commitment, to do any of the
    foregoing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         



Conduct of Stantecs Business Pending Merger.


Additional Agreements


Registration Statement; Proxy Statement.


102



---



##### 







Shareholder Meeting.


Employee Benefit Matters.


Indemnification and Directors and Officers
Insurance.


Obligations of Stantec Consulting.


Consents of Accountants.





Listing.





103



---



##### 



Stantecs Board of Directors.


No Solicitation of Transactions.


Plan of Reorganization.


Keith Contribution.


Restricted Stock.


Conditions to the Merger




Conditions to Each Partys Obligation to Effect the
Merger.




| |   |                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the registration statement having been declared effective under
    the Securities Act and no stop order or proceeding seeking a
    stop order being pending by or before the SEC;                                                                                                                     
|
| |  | Keiths shareholders having affirmatively voted to approve
    the merger agreement by the requisite vote;                                                                                                                                                                                              
|
| |  | no order preventing the consummation of the merger being in
    effect;                                                                                                                                                                                                                                 
|
|
| |  | any waiting period applicable to the consummation of the merger
    under the Hart-Scott-Rodino Antitrust Improvements Act of
    1976, as amended, referred to as the HSR Act, having expired or
    having been terminated, such waiting period having been
    terminated effective May 20, 2005; and
|
|
|
| |  | the Stantec common shares to be issued in the merger having been
    authorized for listing on the Toronto Stock Exchange. Stantec
    has received conditional approval to list such Stantec common
    shares on the Toronto Stock Exchange.                                                          
|

104



---



##### 



Conditions to Obligations of Stantec and Stantec
Consulting.




| |   |                                                                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the representations and warranties of Keith being true and
    correct when made and as of the effective time;                                                                                                                                                                                                                                        
|
| |  | Keith having performed in all material respects all of its
    obligations under the merger agreement;                                                                                                                                                                                                                                                
|
| |  | all consents, approvals and authorizations legally required to
    be obtained to consummate the merger having been obtained from
    all governmental authorities;                                                                                                                                                                                   
|
| |  | no material adverse effect as defined in the merger agreement
    having occurred with respect to Keith;                                                                                                                                                                                                                                              
|
| |  | Keith having deposited with the exchange agent for the benefit
    of the holders of Keith shares the lesser of
    (a) US$18,000,000 and (b) the maximum amount of cash
    that would not preclude the merger from qualifying as a
    reorganization within the meaning of Section 368(a) of the
    Code;                                         
|
| |  | Keith having at least US$40,000,000 of cash or cash equivalents
    on deposit (less the amount of cash deposited with the exchange
    agent);                                                                                                                                                                                                       
|
| |  | the number of dissenting shares being less than 5% of the issued
    and outstanding Keith shares;                                                                                                                                                                                                                                                    
|
| |  | prior to the effective time, the termination and cancellation of
    Keiths plan qualified under Section 401(k) of the
    Code; however, the board of directors of Keith will not
    terminate and cancel the 401(k) plan if Stantec provides written
    notice to that effect to Keith at least two (2) days prior
    to the effective time; and
|
|
| |  | Stantec having received the opinion of Shearman &
    Sterling LLP, counsel to Stantec, to the effect that, for
    U.S. federal income tax purposes, the merger will qualify
    as a reorganization within the meaning of Section 368(a) of
    the Code.                                                                                           
|

Conditions to Obligations of Keith.




| |   |                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the representations and warranties of Stantec and Stantec
    Consulting being true and correct when made and as of the
    effective time;                                                                                                                   
|
| |  | Stantec and Stantec Consulting having performed in all material
    respects all of their obligations under the merger agreement;                                                                                                                             
|
| |  | No material adverse effect as defined in the merger agreement
    having occurred with respect to Stantec;                                                                                                                                                    
|
|
| |  | Keith having received the opinion of Akin Gump Strauss
    Hauer & Feld, counsel to Keith, to the effect that, for
    U.S. federal income tax purposes, the merger will qualify
    as a reorganization within the meaning of Section 368(a) of
    the Code;
|
|
| |  | the Stantec common shares to be issued in the merger having been
    authorized for listing or quotation on the U.S. exchange.                                                                                                                                

105



---



##### 



Termination, Amendment and Waiver


Termination.




| |   |                                                   
| | - | --------------------------------------------------
| |  | by mutual written consent of Stantec and Keith; or
|
| |  | by either Stantec or Keith if:                    



| |   |                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the effective time has not occurred on or before
    December 31, 2005;                                                                                                                                                                                                                            
|
| |  | Keiths shareholders fail to approve and adopt the merger
    agreement at the special meeting; or                                                                                                                                                                                                 
|
| |  | the other party breaches any representation, warranty, covenant
    or agreement such that the terminating partys closing
    conditions are not satisfied and the breach is either not
    reasonably capable of being cured or has not been cured within
    15 days after notice of the breach;



| |   |               
| | - | --------------
| |  | by Stantec if:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (1) Keiths board of directors withdraws, modifies or
    changes in a manner adverse to Stantec its recommendation of the
    approval and adoption of the merger agreement, (2) the
    board of directors of Keith recommends to the shareholders of
    Keith a competing transaction or enters into any letter of
    intent or any agreement accepting any competing transaction,
    (3) Keith fails to include in the proxy statement the
    recommendation of Keiths board of directors in favor of
    the approval and adoption of the merger agreement and the
    merger, (4) the board of directors of Keith fails to
    reaffirm its recommendation in favor of the approval and
    adoption of the merger agreement and the approval of the merger
    within five business days after Stantec requests in writing that
    such recommendation be reaffirmed, (5) through the fault of
    Keith, the merger is not, prior to December 15, 2005,
    submitted for the approval of the holders of Keith common stock
    at the special meeting, (6) Keith intentionally breaches
    its obligations under Additional Agreements  No
    Solicitation of Transactions, or (7) a tender offer
    or exchange offer for 15% or more of the outstanding shares of
    capital stock of Keith is commenced, and Keiths board of
    directors fails to recommend against acceptance of such tender
    offer or exchange offer by its shareholders within 10 days
    (each of the foregoing being referred to as a triggering event);



| |   |                                                                  
| | - | -----------------------------------------------------------------
| |  | by Keith in order to accept a superior proposal of a third party.

Effect of Termination.


Fees and Expenses.


General Provisions


Non-Survival of Representations and Warranties.


Governing Law.


106



---



##### 



Other Agreements


Stockholders Support Agreement




















Letter Agreement




Confidentiality Agreement










107



---



##### 



Beneficial Ownership of Securities






|                                                |  |                   |           |  |                  |  |     |              |  |  |               |  |  |  |     |  
|----------------------------------------------- |  | ----------------- | --------- |  | ---------------- |  | --- | ------------ |  |  | ------------- |  |  |  | --- | -
|                                                |  | Before the Merger |           |  | After the Merger | 
|                                                |  |                   |           |  |                  | 
|                                                |  | Number of         |           |  | Percentage of    |  |     | Number of    |  |  | Percentage of | 
|                                                |  | Shares            |           |  | Class            |  |     | Shares       |  |  | Class         | 
|                                                |  | Beneficially      |           |  | Beneficially     |  |     | Beneficially |  |  | Beneficially  | 
|Name of Beneficial Owner(1)(2)                  |  | Owned             |           |  | Owned            |  |     | Owned        |  |  | Owned         | 
|                                                |  |                   |           |  |                  |  |     |              |  |  |               | 
|Ronald Triffo                                   |  |                   | 617,091   |  |                  |  | 3.2 | %            |  |  | 617,091       |  |  |  | 2.7 | %
|Anthony P. Franceschini                         |  |                   | 332,025   |  |                  |  | 1.7 | %            |  |  | 332,025       |  |  |  | 1.4 | %
|Aram H. Keith(3)                                |  |                   |          |  |                  |  |    |              |  |  | 640,385       |  |  |  | 2.8 | %
|Neilson A. Dutch Bertholf, Jr.                |  |                   | 10,000    |  |                  |  | *   |              |  |  | 10,000        |  |  |  | *   |  
|Robert J. Bradshaw                              |  |                   | 55,000    |  |                  |  | *   |              |  |  | 55,000        |  |  |  | *   |  
|E. John (Jack) Finn                             |  |                   | 29,000    |  |                  |  | *   |              |  |  | 29,000        |  |  |  | *   |  
|William D. Grace                                |  |                   | 18,000    |  |                  |  | *   |              |  |  | 18,000        |  |  |  | *   |  
|Susan E. Hartman                                |  |                   |          |  |                  |  |    |              |  |  |              |  |  |  |    |  
|Robert R. Mesel                                 |  |                   | 2,500     |  |                  |  | *   |              |  |  | 2,500         |  |  |  | *   |  
|Donald W. Wilson                                |  |                   | 79,783    |  |                  |  | *   |              |  |  | 79,783        |  |  |  | *   |  
|Jeffrey S. Lloyd                                |  |                   | 23,683    |  |                  |  | *   |              |  |  | 23,683        |  |  |  | *   |  
|Raymond L. Alarie                               |  |                   | 14,248    |  |                  |  | *   |              |  |  | 14,248        |  |  |  | *   |  
|Mark E. Jackson                                 |  |                   | 23,194    |  |                  |  | *   |              |  |  | 23,194        |  |  |  | *   |  
|W. Barry Lester                                 |  |                   | 15,709    |  |                  |  | *   |              |  |  | 15,709        |  |  |  | *   |  
|All directors and executive officers as a group |  |                   | 1,220,233 |  |                  |  | 6.4 | %            |  |  | 1,860,618     |  |  |  | 8.1 | %






|  |                        
|- | -----------------------
|* | Indicates less than 1%.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Unless otherwise provided, the address for each Beneficial
    Owner is 10160  112 Street, Edmonton, Alberta,
    Canada T5K 2L6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(2) | Unless otherwise noted, each person has sole voting and
    investment power over the shares listed opposite his or her name.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(3) | Stantec has agreed that, upon consummation of the merger, it
    will appoint Aram H. Keith, currently Chairman and Chief
    Executive Officer of Keith, to the Stantec board of directors.
    Mr. Keith has indicated that he intends to elect to receive
    a mix of cash and Stantec common shares as merger consideration
    in exchange for the 1,374,217 shares of Keith common stock
    he beneficially owns. Based on the closing sale price of Stantec
    common shares on the Toronto Stock Exchange on May 6, 2005,
    it is estimated that the Aram H. Keith and Margie R. Keith
    Revocable Trust, of which Aram H. Keith is a trustee, will
    receive US$15,116,387 and 640,385 Stantec common shares as
    merger consideration.

108



---



##### 



Description Of Stantec Share Capital












Preferred Shares


pari passu


Common Shares




109



---



##### 



Comparison of Shareholders Rights


General






| |   |                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------
| |  | the laws of California, particularly the California Corporations
    Code, referred to in this proxy statement/ prospectus as the CCC; 
|
| |  | Keiths Amended and Restated Articles of Incorporation,
    referred to in this proxy statement/ prospectus as Keiths
    charter; and
|
| |  | Keiths Amended and Restated bylaws, referred to in this
    proxy statement/ prospectus as Keiths bylaws.                            





| |   |                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------
| |  | the Canada Business Corporations Act, referred to in this proxy
    statement/ prospectus as the CBCA;                                   
|
| |  | Stantecs Restated Articles of Incorporation, which are
    referred to in this proxy statement/ prospectus as
    Stantecs charter; and
|
| |  | Stantecs bylaws, which are referred to in this proxy
    statement/ prospectus as Stantecs bylaws.                                     









Classes and Series of Capital Stock




| |      
| | -----
| | Keith





| |        
| | -------
| | Stantec



Annual Meetings of Shareholders




| |      
| | -----
| | Keith



110



---



##### 





| |        
| | -------
| | Stantec



Special Meetings of Shareholders




| |      
| | -----
| | Keith





| |        
| | -------
| | Stantec



Quorum of Shareholders




| |      
| | -----
| | Keith





| |        
| | -------
| | Stantec



111



---



##### 



Shareholder Action Without a Meeting




| |      
| | -----
| | Keith





| |        
| | -------
| | Stantec



Shareholder Nominations and Proposals




| |      
| | -----
| | Keith





| |        
| | -------
| | Stantec



Access to Corporate Records, Financial Statements and Related
Matters




| |      
| | -----
| | Keith



112



---



##### 







| |        
| | -------
| | Stantec



Charter Amendments




| |      
| | -----
| | Keith





| |   |                                                                                                                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Certain increases or decreases in the aggregate number of
    authorized shares of such class;                                                                                                                                                                                                                   
|
| |  | An exchange, reclassification, or cancellation of all or part of
    the shares of such class, including a reverse stock split but
    excluding a stock split;                                                                                                                                                  
|
| |  | An exchange, or right of exchange, of all or part of the shares
    of another class into the shares of such class;                                                                                                                                                                                              
|
| |  | A change in the rights, preferences, privileges or restrictions
    of the shares of such class;                                                                                                                                                                                                                 
|
| |  | Creation of a new class of shares having rights, preferences or
    privileges prior to the shares of such class, or an increase in
    the rights, preferences or privileges or the number of
    authorized shares of any class having rights, preferences or
    privileges prior to the shares of such class;
|
| |  | In the case of preferred shares, the division of the shares of
    any class into series having different rights, preferences,
    privileges or restrictions or the authorization of the board of
    directors to do so; and                                                                                   
|
| |  | Cancellation of dividends on the shares of such class which have
    accrued but have not been paid.                                                                                                                                                                                                             



| |        
| | -------
| | Stantec



113



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##### 





Bylaw Amendments




| |      
| | -----
| | Keith





| |        
| | -------
| | Stantec



Vote on Sale or Lease of Assets




| |      
| | -----
| | Keith





| |        
| | -------
| | Stantec



Vote on Extraordinary Corporate Actions




| |      
| | -----
| | Keith





114



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##### 









| |        
| | -------
| | Stantec



Preemptive Rights




| |      
| | -----
| | Keith





| |        
| | -------
| | Stantec



Dissent Rights




| |      
| | -----
| | Keith





| |   |                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | were not, immediately prior to the reorganization, listed on a
    national securities exchange or designated as a Nasdaq National
    Market security (not including any shares with respect to which
    there exists any restriction on transfer imposed by the
    corporation or by any law or regulation);

115



---



##### 





| |   |                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | were outstanding on the date for determination of shareholders
    entitled to vote on the reorganization and were not voted in
    favor of the reorganization;
|
| |  | the dissenting shareholder has demanded that the corporation
    purchase at their fair market value; and                                                       
|
| |  | the dissenting shareholder has submitted to be endorsed with a
    statement that the shares are dissenting shares.                                             



| |        
| | -------
| | Stantec





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | any amalgamation with another corporation (other than with
    certain affiliated corporations);                                                                                                                                                                                                                                                                                                                        
|
| |  | an amendment to a corporations charter to add, change or
    remove any provisions restricting or constraining the issue,
    transfer or ownership of shares;                                                                                                                                                                                                                                                         
|
| |  | an amendment to a corporations charter to add, change or
    remove any restriction upon the business or businesses that such
    corporation may carry on;                                                                                                                                                                                                                                                            
|
| |  | a continuance under the laws of another jurisdiction;                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | a sale, lease or exchange of all or substantially all the
    property of a corporation other than in the ordinary course of
    business;                                                                                                                                                                                                                                                                              
|
| |  | a going-private transaction or a squeeze-out transaction;                                                                                                                                                                                                                                                                                                                                                               
|
| |  | a court order permitting a shareholder to dissent in connection
    with an application to the court for an order approving an
    arrangement proposed by a corporation; or                                                                                                                                                                                                                                            
|
| |  | certain amendments to a corporations charter that require
    a separate class or series vote, provided that a shareholder is
    not entitled to dissent if an amendment to a corporations
    charter is effected by a court order approving a reorganization
    or by a court order made in connection with an action for an
    oppression remedy, unless dissent rights are granted or ordered
    by the court.



Stock Repurchases




| |      
| | -----
| | Keith





| |        
| | -------
| | Stantec



116



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##### 



Number and Qualification of Directors




| |      
| | -----
| | Keith





| |        
| | -------
| | Stantec





Filling Vacancies on the Board of Directors




| |      
| | -----
| | Keith





117



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##### 





| |        
| | -------
| | Stantec



Removal of Directors




| |      
| | -----
| | Keith





| |        
| | -------
| | Stantec



Transactions with Directors and Officers




| |      
| | -----
| | Keith







| |        
| | -------
| | Stantec





| |   |                                                                                                
| | - | -----------------------------------------------------------------------------------------------
| |  | the director or officer disclosed his interest in accordance
    with the CBCA;                
|
| |  | the contract or transaction was approved by the
    directors; and                             
|
| |  | the contract or transaction was reasonable and fair to Stantec
    at the time it was approved.



118



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##### 



Director and Officer Liability and Indemnification




| |      
| | -----
| | Keith









| |   |                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In respect of any claim as to which the person is adjudged to be
    liable to the corporation in the performance of that
    persons duty to the corporation and its shareholders,
    unless the court determines that the person is entitled to
    indemnity for expenses;                                                                                                                       
|
| |  | Amounts paid in settling or otherwise disposing of a pending
    action without court approval;                                                                                                                                                                                                                                                                                                       
|
| |  | Expenses incurred in defending a pending action which is settled
    or otherwise disposed of without court approval;                                                                                                                                                                                                                                                                                 
|
| |  | Where it appears that indemnification would be inconsistent with
    a provision of the articles, bylaws, a resolution of the
    shareholders, or an agreement in effect at the time of the
    accrual of the alleged cause of action asserted in the
    proceeding in which the expenses were incurred or other amounts
    were paid, which prohibits or otherwise limits
    indemnification; or
|
| |  | Where it appears that indemnification would be inconsistent with
    any condition expressly imposed by a court in approving a
    settlement.                                                                                                                                                                                                                                                        





| |   |                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A majority vote of a quorum consisting of directors who are not
    parties to the proceeding;                                                                                                  
|
| |  | If such a quorum of directors is not obtainable, by independent
    legal counsel in a written opinion;                                                                                         
|
| |  | Approval of the shareholders with the shares owned by the person
    to be indemnified not being entitled to vote; or                                                                           
|
| |  | The court in which the proceeding is or was pending upon
    application made by the corporation, the agent, the attorney or
    other person rendering services in connection with the defense.



119



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##### 







| |        
| | -------
| | Stantec





| |                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) that person acted honestly and in good faith with a
    view to the best interests of the corporation; and                                                                                               
|
| | (2) in the case of a criminal or administrative action or
    proceeding that is enforced by a monetary penalty, that person
    had reasonable grounds for believing that his or her conduct was
    lawful.









Fiduciary Duties of Directors




| |      
| | -----
| | Keith





| |        
| | -------
| | Stantec



120



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Derivative Action




| |      
| | -----
| | Keith





| |                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1) The plaintiff was a shareholder of the corporation at
    the time of the transaction of which he or she complains. The
    CCC provides that any shareholder who does not meet this
    requirement may nevertheless be allowed, in the discretion of
    the court, to maintain the action if:



| |   |                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | there is a strong prima facie case in favor of the claim
    asserted on behalf of the corporation;                                                    
|
| |  | no other similar action has been or is likely to be instituted;                                                                                        
|
| |  | the plaintiff acquired the shares before there was disclosure to
    the public or to the plaintiff of the wrongdoing of which
    plaintiff complains;
|
| |  | unless the action can be maintained the defendant may retain a
    gain derived from defendants willful breach of a fiduciary
    duty;               
|
| |  | the requested relief will not result in unjust enrichment of the
    corporation or any shareholder of the corporation; and                            



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2) The plaintiff alleges in the complaint with
    particularity plaintiffs efforts to secure from the board
    the action plaintiff desires, or the reasons for not making such
    effort, and alleges further that plaintiff has either informed
    the corporation or the board in writing of the ultimate facts of
    each cause of action against each defendant or delivered to the
    corporation or the board a true copy of the complaint which
    plaintiff proposes to file.



| |        
| | -------
| | Stantec





| |   |                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the complainant has given reasonable notice to the directors of
    the corporation or its subsidiary of the persons intention
    to apply to the court if the directors of the corporation or its
    subsidiary do not bring, diligently prosecute or defend or
    discontinue the action;
|
| |  | the person is acting in good faith; and                                                                                                                                                                                                                                                        
|
| |  | it appears to be in the interests of the corporation or its
    subsidiary that the action be brought, prosecuted, defended or
    discontinued.                                                                                                                                               



Oppression Remedy




| |      
| | -----
| | Keith



121



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| |        
| | -------
| | Stantec





| |   |                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------
| |  | any act or omission of a corporation or an affiliate effects a
    result;                                           
|
| |  | the business or affairs of a corporation or an affiliate are or
    have been carried on or conducted in a manner; or
|
| |  | the powers of the directors of a corporation or an affiliate are
    or have been exercised in a manner,             







| |   |                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------
| |  | a present or former registered holder or beneficial owner of
    securities of a corporation or any of its affiliates;
|
| |  | a present or former officer or director of a corporation or any
    of its affiliates;                                
|
| |  | the Director under the CBCA; and                                                                                      
|
| |  | any other person who in the discretion of the court is a proper
    person to make such application.                  



Anti-Takeover and Ownership Provisions




| |      
| | -----
| | Keith





| |        
| | -------
| | Stantec





| |   |                                                            
| | - | -----------------------------------------------------------
| |  | acquires, sells, leases, transfers or disposes of an asset;
|
| |  | acquires or issues treasury securities;                    
|
| |  | assumes or transfers a liability; or                       
|
| |  | borrows money from or lends money;                         



122



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##### 







| |   |                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | more detailed disclosure in the proxy material sent to security
    holders in connection with a related party transaction;                                            
|
| |  | the preparation of a formal valuation of the subject matter of
    the related party transaction and any non-cash consideration
    offered for the subject matter; and
|
| |  | the inclusion of a summary of the valuation in the proxy
    material.                                                                                                 



Voluntary Dissolution




| |      
| | -----
| | Keith





| |   |                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A corporation as to which an order for relief has been entered
    under Chapter 7 of the federal bankruptcy law;                                                                                                            
|
| |  | A corporation which has disposed of all of its assets and has
    not conducted any business for a period of five years
    immediately preceding the adoption of the resolution electing to
    dissolve the corporation; or
|
| |  | A corporation which has issued no shares.                                                                                                                                                                                    





| |        
| | -------
| | Stantec



Experts






123



---



##### 





Legal Matters










Shareholder Proposals




Enforceability of Civil Liabilities




124



---



##### 



Where You Can Find More Information





















|                                        |  |                                                                
|--------------------------------------- |  | ---------------------------------------------------------------
|The Keith Companies, Inc. SEC Filings   |  | Date                                                           
|                                        |  |                                                                
|Annual Report on Form 10-K              |  | Year ended December 31, 2004, as filed on March 10,
    2005   
|Quarterly Report on Form 10-Q           |  | Quarter ended March 31, 2005, as filed on May 10, 2005         
|Current Report on Form 8-K              |  | Filed on February 14, 2005, April 18, 2005 and
    May 26, 2005
|Schedule 14A Definitive Proxy Statement |  | Filed on April 12, 2005                                        






Documents incorporated by reference are available from us
without charge upon request to:





|                                                                                                                                                         |  |                                                                                                                             |  |                                                                                                                                     
|-------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------
|The Keith Companies, Inc.
    19 Technology Drive
    Irvine, California, USA
    92618-2334
    Phone: (949) 923-6001
    Attention: Investor Relations |  | Stantec Inc.
    10160-112 Street
    Edmonton, Canada, T5K 2L6
    Phone: (780) 917-7000
    Attention: Investor Relations |  | The Altman Group, Inc.
    1275 Valley Brook Avenue
    Lyndhurst, NJ 07071
    Phone: (201) 806-2205
    Attention: Charlotte Brown




125



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##### 



In order to ensure timely delivery, any request should be
submitted no later than
[                    ],
2005. If you request any incorporated documents from us, we will
mail them to you by first class mail, or another equally prompt
means, within one business day after we receive your request.




126



---



##### 



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


STANTEC INC.





|                                                                                                                       |  |      |      | 
|---------------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|                                                                                                                       |  | Page |     
|                                                                                                                       |  |      |     
|Report of Independent Registered Public Accounting Firm                                                                |  |      | F-2  | 
|Consolidated Balance Sheets as at December 31, 2004 and
    December 31, 2003                                          |  |      | F-3  | 
|Consolidated Statements of Income and Retained Earnings for the
    Years Ended December 31, 2004, 2003 and 2002       |  |      | F-4  | 
|Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2004, 2003 and 2002                         |  |      | F-5  | 
|Notes to Consolidated Financial Statements                                                                             |  |      | F-6  | 
|Consolidated Balance Sheets as at March 31, 2005
    (unaudited) and December 31, 2004                                 |  |      | F-25 | 
|Consolidated Statements of Income and Retained Earnings for the
    Quarters Ended March 31, 2005 and 2004 (unaudited) |  |      | F-26 | 
|Consolidated Statements of Cash Flows for the Quarters Ended
    March 31, 2005 and 2004 (unaudited)                   |  |      | F-27 | 
|Notes to Consolidated Financial Statements (unaudited)                                                                 |  |      | F-28 | 
|Unaudited Pro Forma Condensed Consolidated Financial Statements                                                        |  |      | F-32 | 
|Unaudited Pro Forma Condensed Consolidated Balance Sheet as at
    March 31, 2005                                      |  |      | F-33 | 
|Unaudited Pro Forma Condensed Consolidated Statement of Income
    for the Three Months Ended March 31, 2005           |  |      | F-34 | 
|Unaudited Pro Forma Condensed Consolidated Statement of Income
    for the Year Ended December 31, 2004                |  |      | F-35 | 
|Notes to Unaudited Pro Forma Condensed Consolidated Financial
    Statements                                           |  |      | F-36 | 




F-1



---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM












| |                      
| | ---------------------
| | /s/ Ernst & Young LLP
| |                      
| | Chartered Accountants









F-2



---



##### 



STANTEC INC.


(Incorporated under the laws of Canada)


CONSOLIDATED BALANCE SHEETS


|                                                                                                        |  |                           |         |   |              |  |         |  
|------------------------------------------------------------------------------------------------------- |  | ------------------------- | ------- | - | ------------ |  | ------- | -
|                                                                                                        |  | As at                     |         |   | As at        | 
|                                                                                                        |  | December 31,              |         |   | December 31, | 
|                                                                                                        |  | 2004                      |         |   | 2003         | 
|                                                                                                        |  | $                         |         |   | $            | 
|                                                                                                        |  |                           |         |   |              | 
|                                                                                                        |  | (In thousands of Canadian |        
|                                                                                                        |  | dollars)                  |        
|ASSETS[note 7]                                                                                         
|Current                                                                                                 |  |                           |         |   |              |  |         |  
|Cash and cash equivalents                                                                               |  |                           | 37,890  |   |              |  | 7,343   |  
|Accounts receivable, net of allowance for doubtful accounts of
    $21,095 in 2004
    ($16,952  2003) |  |                           | 112,476 |   |              |  | 87,101  |  
|Costs and estimated earnings in excess of billings                                                      |  |                           | 40,861  |   |              |  | 67,094  |  
|Income taxes recoverable                                                                                |  |                           |        |   |              |  | 6,921   |  
|Prepaid expenses                                                                                        |  |                           | 4,165   |   |              |  | 3,246   |  
|Future income tax assets [note 14]                                                                      |  |                           | 8,532   |   |              |  | 5,924   |  
|Other assets [note 6]                                                                                   |  |                           | 4,831   |   |              |  |        |  
|                                                                                                        |  |                           |         |   |              | 
|                                                                                                        |  |                           | 208,755 |   |              |  | 177,629 |  
|Property and equipment [note 3]                                                                         |  |                           | 48,262  |   |              |  | 67,670  |  
|Goodwill [note 4]                                                                                       |  |                           | 84,694  |   |              |  | 69,696  |  
|Intangible assets [note 5]                                                                              |  |                           | 6,278   |   |              |  | 5,112   |  
|Future income tax assets [note 14]                                                                      |  |                           | 6,357   |   |              |  | 3,487   |  
|Other assets [note 6]                                                                                   |  |                           | 7,754   |   |              |  | 2,981   |  
|                                                                                                        |  |                           |         |   |              | 
|                                                                                                        |  |                           | 362,100 |   |              |  | 326,575 |  
|                                                                                                        |  |                           |         |   |              | 
|                                                                                                       
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                   
|Current                                                                                                 |  |                           |         |   |              |  |         |  
|Bank indebtedness [note 7]                                                                              |  |                           |        |   |              |  | 17,151  |  
|Accounts payable and accrued liabilities                                                                |  |                           | 78,718  |   |              |  | 68,796  |  
|Billings in excess of costs and estimated earnings                                                      |  |                           | 18,832  |   |              |  | 16,882  |  
|Income taxes payable                                                                                    |  |                           | 5,732   |   |              |  |        |  
|Current portion of long-term debt [note 8]                                                              |  |                           | 12,820  |   |              |  | 13,416  |  
|Future income tax liabilities [note 14]                                                                 |  |                           | 10,653  |   |              |  | 10,802  |  
|                                                                                                        |  |                           |         |   |              | 
|                                                                                                        |  |                           | 126,755 |   |              |  | 127,047 |  
|Long-term debt [note 8]                                                                                 |  |                           | 21,155  |   |              |  | 31,159  |  
|Other liabilities [note 9]                                                                              |  |                           | 16,818  |   |              |  | 1,459   |  
|Future income tax liabilities [note 14]                                                                 |  |                           | 8,316   |   |              |  | 6,382   |  
|                                                                                                        |  |                           |         |   |              | 
|                                                                                                        |  |                           | 173,044 |   |              |  | 166,047 |  
|                                                                                                        |  |                           |         |   |              | 
|Commitments and contingencies [notes 10 and 11]                                                         |  |                           |         |   |              |  |         |  
|                                                                                                       
|Shareholders equity                                                                                    |  |                           |         |   |              |  |         |  
|Share capital [note 12]                                                                                 |  |                           | 87,656  |   |              |  | 84,281  |  
|Contributed surplus [note 12]                                                                           |  |                           | 2,544   |   |              |  | 1,842   |  
|Cumulative translation account [note 13]                                                                |  |                           | (19,018 | ) |              |  | (13,861 | )
|Retained earnings                                                                                       |  |                           | 117,874 |   |              |  | 88,266  |  
|                                                                                                        |  |                           |         |   |              | 
|                                                                                                        |  |                           | 189,056 |   |              |  | 160,528 |  
|                                                                                                        |  |                           |         |   |              | 
|                                                                                                        |  |                           | 362,100 |   |              |  | 326,575 |  
|                                                                                                        |  |                           |         |   |              | 

See accompanying notes


F-3



---



##### 



STANTEC INC.


CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS


|                                             |  |                                   |         |   |          |  |         |          |  |  |         |  
|-------------------------------------------- |  | --------------------------------- | ------- | - | -------- |  | ------- | -------- |  |  | ------- | -
|                                             |  | Year                              |         |   | Year     |  |         | Year     | 
|                                             |  | Ended                             |         |   | Ended    |  |         | Ended    | 
|                                             |  | Dec. 31,                          |         |   | Dec. 31, |  |         | Dec. 31, | 
|                                             |  | 2004                              |         |   | 2003     |  |         | 2002     | 
|                                             |  | $                                 |         |   | $        |  |         | $        | 
|                                             |  |                                   |         |   |          |  |         |          | 
|                                             |  | (In thousands of Canadian dollars |        
|                                             |  | except per share amounts)         |        
|Income                                       |  |                                   |         |   |          |  |         |          |  |  |         |  
|Gross revenue                                |  |                                   | 520,879 |   |          |  | 459,942 |          |  |  | 428,456 |  
|Less subconsultant and other direct expenses |  |                                   | 71,728  |   |          |  | 68,546  |          |  |  | 63,308  |  
|                                             |  |                                   |         |   |          |  |         |          | 
|                                            
|Net revenue                                  |  |                                   | 449,151 |   |          |  | 391,396 |          |  |  | 365,148 |  
|Direct payroll costs                         |  |                                   | 205,513 |   |          |  | 183,471 |          |  |  | 173,609 |  
|                                             |  |                                   |         |   |          |  |         |          | 
|Gross margin                                 |  |                                   | 243,638 |   |          |  | 207,925 |          |  |  | 191,539 |  
|                                            
|Administrative and marketing expenses        |  |                                   | 183,739 |   |          |  | 154,788 |          |  |  | 145,515 |  
|Depreciation of property and equipment       |  |                                   | 11,986  |   |          |  | 9,912   |          |  |  | 9,502   |  
|Amortization of intangible assets            |  |                                   | 927     |   |          |  | 925     |          |  |  | 1,079   |  
|Net interest expense [note 8]                |  |                                   | 2,805   |   |          |  | 2,637   |          |  |  | 2,630   |  
|Foreign exchange (gains) losses              |  |                                   | (94     | ) |          |  | 615     |          |  |  | 73      |  
|Share of income from associated companies    |  |                                   | (385    | ) |          |  | (580    | )        |  |  | (355    | )
|                                             |  |                                   |         |   |          |  |         |          | 
|Income before income taxes                   |  |                                   | 44,660  |   |          |  | 39,628  |          |  |  | 33,095  |  
|                                             |  |                                   |         |   |          |  |         |          | 
|                                            
|Income taxes[note 14]                        |  |                                   |         |   |          |  |         |          |  |  |         |  
|Current                                      |  |                                   | 18,065  |   |          |  | 10,050  |          |  |  | 12,949  |  
|Future                                       |  |                                   | (3,595  | ) |          |  | 4,508   |          |  |  | (46     | )
|                                             |  |                                   |         |   |          |  |         |          | 
|                                             |  |                                   | 14,470  |   |          |  | 14,558  |          |  |  | 12,903  |  
|                                             |  |                                   |         |   |          |  |         |          | 
|                                            
|Net income for the year                      |  |                                   | 30,190  |   |          |  | 25,070  |          |  |  | 20,192  |  
|Retained earnings, beginning of the year     |  |                                   | 88,266  |   |          |  | 64,240  |          |  |  | 44,690  |  
|Shares repurchased [note 12]                 |  |                                   | (582    | ) |          |  | (1,044  | )        |  |  | (642    | )
|                                             |  |                                   |         |   |          |  |         |          | 
|Retained earnings, end of the year           |  |                                   | 117,874 |   |          |  | 88,266  |          |  |  | 64,240  |  
|                                             |  |                                   |         |   |          |  |         |          | 
|                                            
|Earnings per share[note 15]                  |  |                                   |         |   |          |  |         |          |  |  |         |  
|Basic                                        |  |                                   | 1.63    |   |          |  | 1.37    |          |  |  | 1.12    |  
|Diluted                                      |  |                                   | 1.59    |   |          |  | 1.31    |          |  |  | 1.07    |  

See accompanying notes


F-4



---



##### 



STANTEC INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                                          |  |                                    |          |   |          |  |          |          |  |  |          |  
|----------------------------------------------------------------------------------------- |  | ---------------------------------- | -------- | - | -------- |  | -------- | -------- |  |  | -------- | -
|                                                                                          |  | Year                               |          |   | Year     |  |          | Year     | 
|                                                                                          |  | Ended                              |          |   | Ended    |  |          | Ended    | 
|                                                                                          |  | Dec. 31,                           |          |   | Dec. 31, |  |          | Dec. 31, | 
|                                                                                          |  | 2004                               |          |   | 2003     |  |          | 2002     | 
|                                                                                          |  | $                                  |          |   | $        |  |          | $        | 
|                                                                                          |  |                                    |          |   |          |  |          |          | 
|                                                                                          |  | (In thousands of Canadian dollars) |         
|CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES                                            |  |                                    |          |   |          |  |          |          |  |  |          |  
|Cash receipts from clients                                                                |  |                                    | 568,897  |   |          |  | 465,114  |          |  |  | 437,354  |  
|Cash paid to suppliers                                                                    |  |                                    | (169,573 | ) |          |  | (156,460 | )        |  |  | (128,148 | )
|Cash paid to employees                                                                    |  |                                    | (313,321 | ) |          |  | (274,444 | )        |  |  | (257,667 | )
|Dividends from equity investments                                                         |  |                                    | 300      |   |          |  |         |          |  |  | 175      |  
|Interest received                                                                         |  |                                    | 6,426    |   |          |  | 2,710    |          |  |  | 3,970    |  
|Interest paid                                                                             |  |                                    | (8,639   | ) |          |  | (4,462   | )        |  |  | (6,122   | )
|Income taxes paid, net                                                                    |  |                                    | (6,739   | ) |          |  | (15,565  | )        |  |  | (13,453  | )
|                                                                                          |  |                                    |          |   |          |  |          |          | 
|Cash flows from operating activities[note 16]                                             |  |                                    | 77,351   |   |          |  | 16,893   |          |  |  | 36,109   |  
|                                                                                          |  |                                    |          |   |          |  |          |          | 
|CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES                                            |  |                                    |          |   |          |  |          |          |  |  |          |  
|Business acquisitions, including cash acquired and bank
    indebtedness assumed [note 2] |  |                                    | (18,845  | ) |          |  | (6,046   | )        |  |  | (17,409  | )
|Cash of joint venture held for sale                                                       |  |                                    |         |   |          |  | (369     | )        |  |  |         |  
|Purchase of investments held for self-insured liabilities                                 |  |                                    | (9,562   | ) |          |  |         |          |  |  |         |  
|Proceeds on disposition of investments                                                    |  |                                    | 55       |   |          |  | 195      |          |  |  | 2,158    |  
|Proceeds on disposition of Technology segment                                             |  |                                    | 1,014    |   |          |  |         |          |  |  |         |  
|Proceeds on disposition of subsidiary                                                     |  |                                    |         |   |          |  |         |          |  |  | 1,856    |  
|Purchase of property and equipment                                                        |  |                                    | (17,488  | ) |          |  | (28,713  | )        |  |  | (17,444  | )
|Proceeds on disposition of property and equipment                                         |  |                                    | 34,672   |   |          |  | 1,444    |          |  |  | 1,612    |  
|                                                                                          |  |                                    |          |   |          |  |          |          | 
|Cash flows used in investing activities                                                   |  |                                    | (10,154  | ) |          |  | (33,489  | )        |  |  | (29,227  | )
|                                                                                          |  |                                    |          |   |          |  |          |          | 
|CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES                                            |  |                                    |          |   |          |  |          |          |  |  |          |  
|Repayment of long-term debt                                                               |  |                                    | (35,546  | ) |          |  | (20,592  | )        |  |  | (18,619  | )
|Proceeds from long-term borrowings                                                        |  |                                    | 13,960   |   |          |  |         |          |  |  | 30,540   |  
|Net change in bank indebtedness financing                                                 |  |                                    | (17,151  | ) |          |  | 17,151   |          |  |  | (14,671  | )
|Repurchase of shares for cancellation [note 12]                                           |  |                                    | (720     | ) |          |  | (1,392   | )        |  |  | (880     | )
|Proceeds from issue of share capital [note 12]                                            |  |                                    | 3,490    |   |          |  | 651      |          |  |  | 18,484   |  
|                                                                                          |  |                                    |          |   |          |  |          |          | 
|Cash flows from (used in) financing activities                                            |  |                                    | (35,967  | ) |          |  | (4,182   | )        |  |  | 14,854   |  
|                                                                                          |  |                                    |          |   |          |  |          |          | 
|                                                                                         
|Foreign exchange loss on cash held in foreign currency                                    |  |                                    | (683     | ) |          |  | (1,081   | )        |  |  | (60      | )
|                                                                                          |  |                                    |          |   |          |  |          |          | 
|                                                                                         
|Net increase (decrease) in cash and cash equivalents                                      |  |                                    | 30,547   |   |          |  | (21,859  | )        |  |  | 21,676   |  
|Cash and cash equivalents, beginning of the year                                          |  |                                    | 7,343    |   |          |  | 29,202   |          |  |  | 7,526    |  
|                                                                                          |  |                                    |          |   |          |  |          |          | 
|Cash and cash equivalents, end of the year                                                |  |                                    | 37,890   |   |          |  | 7,343    |          |  |  | 29,202   |  
|                                                                                          |  |                                    |          |   |          |  |          |          | 

See accompanying notes


F-5



---



##### 



STANTEC INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




|   |                                           
|-- | ------------------------------------------
|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Generally Accepted Accounting Principles






Principles of consolidation






Cash and cash equivalents




Investments




F-6



---



##### 





Property and equipment







|                             |  |  |       |     |  |                                                                                                                         
|---------------------------- |  |  | ----- | --- |  | ------------------------------------------------------------------------------------------------------------------------
|Engineering equipment        |  |  | 20% - | 30% |  | declining balance                                                                                                       
|Business information systems |  |  |       |     |  | straight-line over 3 to 5 years                                                                                         
|Office equipment             |  |  | 20% - | 30% |  | declining balance                                                                                                       
|Automotive equipment         |  |  | 30%   |     |  | declining balance                                                                                                       
|Leasehold improvements       |  |  |       |     |  | straight-line over term of lease plus one renewal period to a
    maximum of 15 years or the improvements economic life
|Buildings                    |  |  | 4% -  | 5%  |  | declining balance                                                                                                       




Leases






Goodwill and intangible assets










Long-lived assets




Accrual and investments held for self-insured liabilities










F-7



---



##### 





Forward contracts




Non-interest bearing debt




Fair value of financial instruments




Credit risk




Interest rate risk




Revenue recognition






F-8



---



##### 





Employee benefit plans




Foreign currency translation






Stock-based compensation and other stock-based payments




Income taxes




Earnings per share




F-9



---



##### 



Allowance for doubtful accounts






|   |                      
|-- | ---------------------
|2. | BUSINESS ACQUISITIONS





























F-10



---



##### 





|                                               |  |              |        |   |              |  |        |  
|---------------------------------------------- |  | ------------ | ------ | - | ------------ |  | ------ | -
|                                               |  | December 31, |        |   | December 31, | 
|                                               |  | 2004         |        |   | 2003         | 
|                                               |  | $000s       |        |   | $000s       | 
|                                               |  |              |        |   |              | 
|Cash consideration                             |  |              | 12,432 |   |              |  | 4,300  |  
|Promissory notes                               |  |              | 1,487  |   |              |  | 3,375  |  
|                                               |  |              |        |   |              | 
|Purchase price                                 |  |              | 13,919 |   |              |  | 7,675  |  
|                                               |  |              |        |   |              | 
|Assets and liabilities acquired at fair values |  |              |        |   |              |  |        |  
|Bank indebtedness assumed                      |  |              | (6,413 | ) |              |  | (1,746 | )
|Non-cash working capital                       |  |              | 6,057  |   |              |  | 3,578  |  
|Property and equipment                         |  |              | 3,211  |   |              |  | 1,337  |  
|Investments  other                            |  |              | 87     |   |              |  | 44     |  
|Goodwill                                       |  |              | 18,425 |   |              |  | 3,848  |  
|Intangible assets                              |  |              | 2,158  |   |              |  | 1,344  |  
|Other liabilities                              |  |              | (1,642 | ) |              |  | -      |  
|Long-term debt                                 |  |              | (8,414 | ) |              |  | (646   | )
|Future income taxes                            |  |              | 450    |   |              |  | (84    | )
|                                               |  |              |        |   |              | 
|Net assets acquired                            |  |              | 13,919 |   |              |  | 7,675  |  
|                                               |  |              |        |   |              | 





|   |                       
|-- | ----------------------
|3. | PROPERTY AND EQUIPMENT

|                             |  |                   |        |             |                   |        |              |  |             |        |  |  |        |  |              |        |  |  |        | 
|---------------------------- |  | ----------------- | ------ | ----------- | ----------------- | ------ | ------------ |  | ----------- | ------ |  |  | ------ |  | ------------ | ------ |  |  | ------ | 
|                             |  | December 31, 2004 |        |             | December 31, 2003 |       
|                             |  |                   |        |             |                   |       
|                             |  |                   |        | Accumulated |                   |        |              |  | Accumulated |       
|                             |  | Cost              |        |             |                   |        | Depreciation |  |             | Cost   |  |  |        |  | Depreciation |       
|                             |  | $000s            |        |             |                   |        | $000s       |  |             | $000s |  |  |        |  | $000s       |       
|                             |  |                   |        |             |                   |        |              |  |             |        |  |  |        |  |              |       
|Engineering equipment        |  |                   | 33,622 |             |                   |        |              |  | 19,058      |        |  |  | 27,261 |  |              |        |  |  | 12,257 | 
|Business information systems |  |                   | 9,681  |             |                   |        |              |  | 1,796       |        |  |  | 7,223  |  |              |        |  |  | 328    | 
|Office equipment             |  |                   | 19,953 |             |                   |        |              |  | 7,519       |        |  |  | 17,654 |  |              |        |  |  | 6,017  | 
|Automotive equipment         |  |                   | 4,254  |             |                   |        |              |  | 2,578       |        |  |  | 3,406  |  |              |        |  |  | 1,850  | 
|Leasehold improvements       |  |                   | 11,994 |             |                   |        |              |  | 2,031       |        |  |  | 6,570  |  |              |        |  |  | 1,386  | 
|Buildings                    |  |                   | 1,901  |             |                   |        |              |  | 594         |        |  |  | 27,191 |  |              |        |  |  | 1,553  | 
|Land                         |  |                   | 433    |             |                   |        |              |  |            |        |  |  | 1,756  |  |              |        |  |  |       | 
|                             |  |                   |        |             |                   |        |              |  |             |        |  |  |        |  |              |       
|                             |  |                   | 81,838 |             |                   |        |              |  | 33,576      |        |  |  | 91,061 |  |              |        |  |  | 23,391 | 
|                             |  |                   |        |             |                   |        |              |  |             |        |  |  |        |  |              |       
|Net book value               |  |                   |        |             |                   | 48,262 |              |  |             |        |  |  |        |  |              | 67,670 |  |  |        | 
|                             |  |                   |        |             |                   |        |              |  |             |        |  |  |        |  |              |       

[note 9].




F-11



---



##### 





|   |         
|-- | --------
|4. | GOODWILL

|                                                |  |              |        |   |              |  |        |  
|----------------------------------------------- |  | ------------ | ------ | - | ------------ |  | ------ | -
|                                                |  | December 31, |        |   | December 31, | 
|                                                |  | 2004         |        |   | 2003         | 
|                                                |  | $000s       |        |   | $000s       | 
|                                                |  |              |        |   |              | 
|Goodwill, beginning of year                     |  |              | 69,696 |   |              |  | 72,423 |  
|Current year acquisitions                       |  |              | 18,006 |   |              |  | 5,047  |  
|Additional purchase price payments              |  |              |       |   |              |  | 925    |  
|Other purchase price adjustments                |  |              | 419    |   |              |  | (2,124 | )
|Impact of foreign exchange on goodwill balances |  |              | (3,427 | ) |              |  | (6,575 | )
|                                                |  |              |        |   |              | 
|Goodwill, end of year                           |  |              | 84,694 |   |              |  | 69,696 |  
|                                                |  |              |        |   |              | 



|   |                  
|-- | -----------------
|5. | INTANGIBLE ASSETS

|                        |  |                   |       |  |                   |  |              |  |  |          |       |  |  |  |              |  |  |  |       |  |  |  |       | 
|----------------------- |  | ----------------- | ----- |  | ----------------- |  | ------------ |  |  | -------- | ----- |  |  |  | ------------ |  |  |  | ----- |  |  |  | ----- | 
|                        |  | December 31, 2004 |       |  | December 31, 2003 | 
|                        |  |                   |       |  |                   | 
|                        |  | Gross             |       |  |                   |  | Gross        |  |  |         
|                        |  | Carrying          |       |  |                   |  | Accumulated  |  |  | Carrying |       |  |  |  | Accumulated  | 
|                        |  | Amount            |       |  |                   |  | Amortization |  |  | Amount   |       |  |  |  | Amortization | 
|                        |  | $000s            |       |  |                   |  | $000s       |  |  | $000s   |       |  |  |  | $000s       | 
|                        |  |                   |       |  |                   |  |              |  |  |          |       |  |  |  |              | 
|Client relationships    |  |                   | 6,859 |  |                   |  |              |  |  |          | 1,195 |  |  |  | 5,626        |  |  |  |       |  |  |  | 691   | 
|Contract backlog        |  |                   | 339   |  |                   |  |              |  |  |          | 290   |  |  |  | 905          |  |  |  |       |  |  |  | 901   | 
|Other intangible assets |  |                   | 750   |  |                   |  |              |  |  |          | 185   |  |  |  | 266          |  |  |  |       |  |  |  | 93    | 
|                        |  |                   |       |  |                   |  |              |  |  |          |       |  |  |  |              |  |  | 
|                        |  |                   | 7,948 |  |                   |  |              |  |  |          | 1,670 |  |  |  | 6,797        |  |  |  |       |  |  |  | 1,685 | 
|                        |  |                   |       |  |                   |  |              |  |  |          |       |  |  |  |              |  |  | 
|Carrying amount         |  |                   |       |  |                   |  | 6,278        |  |  |          |       |  |  |  |              |  |  |  | 5,112 |  |  |  |       | 
|                        |  |                   |       |  |                   |  |              |  |  |          |       |  |  |  |              |  |  | 





|   |             
|-- | ------------
|6. | OTHER ASSETS

|                                                                          |  |              |        |  |              |  |       | 
|------------------------------------------------------------------------- |  | ------------ | ------ |  | ------------ |  | ----- | 
|                                                                          |  | December 31, |        |  | December 31, | 
|                                                                          |  | 2004         |        |  | 2003         | 
|                                                                          |  | $000s       |        |  | $000s       | 
|                                                                          |  |              |        |  |              | 
|Investments held for self-insured liabilities                             |  |              | 9,562  |  |              |  |      | 
|Investment in associated companies                                        |  |              | 1,909  |  |              |  | 1,844 | 
|Investments  other                                                       |  |              | 1,114  |  |              |  | 1,137 | 
|                                                                          |  |              |        |  |              | 
|                                                                          |  |              | 12,585 |  |              |  | 2,981 | 
|Less current portion of investments held for self-insured
    liabilities |  |              | 4,831  |  |              |  |      | 
|                                                                          |  |              |        |  |              | 
|                                                                          |  |              | 7,754  |  |              |  | 2,981 | 
|                                                                          |  |              |        |  |              | 





|   |                  
|-- | -----------------
|7. | BANK INDEBTEDNESS



F-12



---



##### 



[note 8].






|   |               
|-- | --------------
|8. | LONG-TERM DEBT

|                                         |  |              |        |  |              |  |        | 
|---------------------------------------- |  | ------------ | ------ |  | ------------ |  | ------ | 
|                                         |  | December 31, |        |  | December 31, | 
|                                         |  | 2004         |        |  | 2003         | 
|                                         |  | $000s       |        |  | $000s       | 
|                                         |  |              |        |  |              | 
|Non-interest bearing note payable        |  |              | 111    |  |              |  | 102    | 
|Other non-interest bearing notes payable |  |              | 7,862  |  |              |  | 14,436 | 
|Bank loan                                |  |              | 23,997 |  |              |  | 19,186 | 
|Mortgages payable                        |  |              | 1,765  |  |              |  | 10,609 | 
|Other                                    |  |              | 240    |  |              |  | 242    | 
|                                         |  |              |        |  |              | 
|                                         |  |              | 33,975 |  |              |  | 44,575 | 
|Less current portion                     |  |              | 12,820 |  |              |  | 13,416 | 
|                                         |  |              |        |  |              | 
|                                         |  |              | 21,155 |  |              |  | 31,159 | 
|                                         |  |              |        |  |              | 











F-13



---



##### 





|           |  |        |        | 
|---------- |  | ------ | ------ | 
|           |  | $000s |       
|           |  |        |       
|2005       |  |        | 12,820 | 
|2006       |  |        | 10,968 | 
|2007       |  |        | 8,617  | 
|2008       |  |        | 1,459  | 
|2009       |  |        |       | 
|Thereafter |  |        | 111    | 
|           |  |        |       
|           |  |        | 33,975 | 
|           |  |        |       





|   |                  
|-- | -----------------
|9. | OTHER LIABILITIES

|                                                     |  |              |        |  |              |  |       | 
|---------------------------------------------------- |  | ------------ | ------ |  | ------------ |  | ----- | 
|                                                     |  | December 31, |        |  | December 31, | 
|                                                     |  | 2004         |        |  | 2003         | 
|                                                     |  | $000s       |        |  | $000s       | 
|                                                     |  |              |        |  |              | 
|Provision for self-insured liabilities               |  |              | 5,236  |  |              |  | 2,410 | 
|Deferred gain on sale leaseback                      |  |              | 7,073  |  |              |  |      | 
|Lease inducement benefits                            |  |              | 4,742  |  |              |  | 1,902 | 
|Lease liabilities on exit activity                   |  |              | 2,817  |  |              |  |      | 
|                                                     |  |              |        |  |              | 
|                                                     |  |              | 19,868 |  |              |  | 4,312 | 
|Less current portion included in accrued liabilities |  |              | 3,050  |  |              |  | 2,853 | 
|                                                     |  |              |        |  |              | 
|                                                     |  |              | 16,818 |  |              |  | 1,459 | 
|                                                     |  |              |        |  |              | 

[note 11].




F-14



---



##### 





|    |            
|--- | -----------
|10. | COMMITMENTS



|           |  |        |         | 
|---------- |  | ------ | ------- | 
|           |  | $000s |        
|           |  |        |        
|2005       |  |        | 29,509  | 
|2006       |  |        | 26,551  | 
|2007       |  |        | 23,750  | 
|2008       |  |        | 17,952  | 
|2009       |  |        | 16,259  | 
|Thereafter |  |        | 93,645  | 
|           |  |        |        
|           |  |        | 207,666 | 
|           |  |        |        



|    |              
|--- | -------------
|11. | CONTINGENCIES











|    |              
|--- | -------------
|12. | SHARE CAPITAL

Authorized


|                                                                                                        |  | 
|------------------------------------------------------------------------------------------------------- |  | 
|Unlimited common shares, with no par value.                                                             |  | 
|Unlimited preferred shares issuable in series with attributes
    designated by the Board of Directors. |  | 

Common shares issued and outstanding


|                                                                        |  |               |            |   |                     |  |        |             |  |  |            |   |  |             |        |   |      |  |            |   |  |  |        |   |  |   |       |   |  |  |       |   |  |  |       |  
|----------------------------------------------------------------------- |  | ------------- | ---------- | - | ------------------- |  | ------ | ----------- |  |  | ---------- | - |  | ----------- | ------ | - | ---- |  | ---------- | - |  |  | ------ | - |  | - | ----- | - |  |  | ----- | - |  |  | ----- | -
|                                                                        |  | Capital Stock |            |   | Contributed Surplus | 
|                                                                        |  |               |            |   |                     | 
|                                                                        |  | 2004          |            |   | 2003                |  |        | 2002        |  |  | 2004       |   |  | 2003        |        |   | 2002 | 
|                                                                        |  |               |            |   |                     |  |        |             |  |  |            |   |  |             |        |   |      | 
|                                                                        |  | # of Shares   |            |   | $                   |  |        | # of Shares |  |  | $          |   |  | # of Shares |        |   | $    |  |            | $ |  |  | $      |   |  | $ |      
|(in thousands of dollars except share amounts)                          |  |               |            |   |                     |  |        |             |  |  |            |   |  |             |        |   |      |  |            |   |  |  |        |   |  |   |      
|Balance, beginning of the year                                          |  |               | 18,327,284 |   |                     |  | 84,281 |             |  |  | 18,282,720 |   |  |             | 83,973 |   |      |  | 16,846,340 |   |  |  | 61,555 |   |  |   | 1,842 |   |  |  | 1,247 |   |  |  | 1,205 |  
|Share options exercised for cash                                        |  |               | 573,101    |   |                     |  | 3,490  |             |  |  | 119,264    |   |  |             | 651    |   |      |  | 29,300     |   |  |  | 148    |   |  |   |       |   |  |  |       |   |  |  |       |  
|Shares repurchased under normal course issuer bid                       |  |               | (29,300    | ) |                     |  | (134   | )           |  |  | (74,700    | ) |  |             | (343   | ) |      |  | (54,600    | ) |  |  | (235   | ) |  |   | (4    | ) |  |  | (5    | ) |  |  | (3    | )
|Shares issued on acquisitions                                           |  |               |           |   |                     |  |       |             |  |  |           |   |  |             |       |   |      |  | 261,680    |   |  |  | 3,712  |   |  |   |       |   |  |  |       |   |  |  |       |  
|Shares issued under public offering, net of share issue costs           |  |               |           |   |                     |  |       |             |  |  |           |   |  |             |       |   |      |  | 1,200,000  |   |  |  | 18,793 |   |  |   |       |   |  |  |       |   |  |  |       |  
|Reclassification of fair value of stock options previously
    expensed |  |               |            |   |                     |  | 19     |             |  |  |            |   |  |             |       |   |      |  |            |   |  |  |       |   |  |   | (19   | ) |  |  |      |   |  |  |      |  
|Stock-based compensation expense                                        |  |               |            |   |                     |  |        |             |  |  |            |   |  |             |        |   |      |  |            |   |  |  |        |   |  |   | 725   |   |  |  | 600   |   |  |  | 45    |  
|                                                                        |  |               |            |   |                     |  |        |             |  |  |            |   |  |             |        |   |      |  |            |   |  |  |        |   |  |   |      
|Balance, end of the year                                                |  |               | 18,871,085 |   |                     |  | 87,656 |             |  |  | 18,327,284 |   |  |             | 84,281 |   |      |  | 18,282,720 |   |  |  | 83,973 |   |  |   | 2,544 |   |  |  | 1,842 |   |  |  | 1,247 |  
|                                                                        |  |               |            |   |                     |  |        |             |  |  |            |   |  |             |        |   |      |  |            |   |  |  |        |   |  |   |      

F-15



---



##### 







Share options






|                                 |  |             |           |          |      |  |       |             |          |  |           |   |  |             |       |  |   |  |           |   |  |  |       | 
|-------------------------------- |  | ----------- | --------- | -------- | ---- |  | ----- | ----------- | -------- |  | --------- | - |  | ----------- | ----- |  | - |  | --------- | - |  |  | ----- | 
|                                 |  | 2004        |           |          | 2003 |  |       | 2002        |         
|                                 |  |             |           |          |      |  |       |             |         
|                                 |  |             |           | Weighted |      |  |       |             | Weighted |  |           |   |  | Weighted    |      
|                                 |  |             |           | Average  |      |  |       |             | Average  |  |           |   |  | Average     |      
|                                 |  |             |           | Exercise |      |  |       |             | Exercise |  |           |   |  | Exercise    |      
|                                 |  |             |           | Price    |      |  |       |             | Price    |  |           |   |  | Price       |      
|                                 |  | # of Shares |           |          | $    |  |       | # of Shares |          |  | $         |   |  | # of Shares |       |  | $ | 
|                                 |  |             |           |          |      |  |       |             |          |  |           |   |  |             |       |  |   | 
|Share options, beginning of year |  |             | 1,479,100 |          |      |  | 9.28  |             |          |  | 1,296,200 |   |  |             | 6.09  |  |   |  | 1,188,500 |   |  |  | 5.10  | 
|Granted                          |  |             | 167,000   |          |      |  | 24.50 |             |          |  | 307,500   |   |  |             | 21.29 |  |   |  | 137,000   |   |  |  | 14.50 | 
|Exercised                        |  |             | (573,101  | )        |      |  | 6.09  |             |          |  | (119,264  | ) |  |             | 5.46  |  |   |  | (29,300   | ) |  |  | 5.04  | 
|Cancelled                        |  |             | (1,666    | )        |      |  | 18.40 |             |          |  | (5,336    | ) |  |             | 12.62 |  |   |  |          |   |  |  |      | 
|                                 |  |             |           |          |      |  |       |             |          |  |           |   |  |             |       |  |   | 
|Share options, end of the year   |  |             | 1,071,333 |          |      |  | 13.34 |             |          |  | 1,479,100 |   |  |             | 9.28  |  |   |  | 1,296,200 |   |  |  | 6.09  | 
|                                 |  |             |           |          |      |  |       |             |          |  |           |   |  |             |       |  |   | 



|                    |               |  |                     |          |             |         |          |          |       |  |        |             |         |          |       |  |         |  |  |  |       | 
|------------------- | ------------- |  | ------------------- | -------- | ----------- | ------- | -------- | -------- | ----- |  | ------ | ----------- | ------- | -------- | ----- |  | ------- |  |  |  | ----- | 
|Options Outstanding |               |  | Options Exercisable |         
|                    |               |  |                     |         
|                    |               |  |                     | Weighted |             |         |          |          |      
|                    |               |  |                     | Average  |             |         | Weighted |          |       |  |        | Weighted    |        
|Range of            |               |  |                     |          | Remaining   |         |          | Average  |       |  |        |             | Average |         
|Exercise            |               |  |                     |          | Contractual |         |          | Exercise |       |  | Shares |             |         | Exercise |      
|Prices              |               |  | Outstanding         |          |             | Life in |          |          | Price |  |        | Exercisable |         |          | Price | 
|$                   |               |  | #                   |          |             | Years   |          |          | $     |  |        | #           |         |          | $     | 
|                    |               |  |                     |          |             |         |          |          |       |  |        |             |         |          |       | 
|                    | 3.50 -  3.60  |  |                     |          | 373,000     |         |          |          | 1.8   |  |        |             | 3.56    |          |       |  | 373,000 |  |  |  | 3.56  | 
|                    | 5.20 -  7.00  |  |                     |          | 108,100     |         |          |          | 1.1   |  |        |             | 6.07    |          |       |  | 108,100 |  |  |  | 6.07  | 
|                    | 14.50 - 18.85 |  |                     |          | 176,733     |         |          |          | 7.6   |  |        |             | 15.51   |          |       |  | 107,822 |  |  |  | 14.95 | 
|                    | 21.00 - 27.10 |  |                     |          | 413,500     |         |          |          | 6.8   |  |        |             | 23.14   |          |       |  | 52,167  |  |  |  | 21.00 | 
|                    |               |  |                     |          |             |         |          |          |       |  |        |             |         |          |       | 
|                    | 3.50 - 27.10  |  |                     |          | 1,071,333   |         |          |          | 4.2   |  |        |             | 13.34   |          |       |  | 641,089 |  |  |  | 7.32  | 
|                    |               |  |                     |          |             |         |          |          |       |  |        |             |         |          |       | 



F-16



---



##### 







|                                                    |  |            |      |  |            |  |      |                  |  |  |            |  |  |  |      | 
|--------------------------------------------------- |  | ---------- | ---- |  | ---------- |  | ---- | ---------------- |  |  | ---------- |  |  |  | ---- | 
|                                                    |  | 2004       |      |  | 2003       |  |      | 2002             | 
|                                                    |  |            |      |  |            |  |      |                  | 
|                                                    |  | Granted at |      |  | Granted at |  |      | Granted in       |  |  | Granted at | 
|                                                    |  | market     |      |  | market     |  |      | excess of market |  |  | market     | 
|                                                    |  |            |      |  |            |  |      |                  |  |  |            | 
|Risk-free interest rate (%)                         |  |            | 4.07 |  |            |  | 4.48 |                  |  |  | 5.04       |  |  |  | 4.35 | 
|Expected hold period to exercise (years)            |  |            | 6.0  |  |            |  | 6.2  |                  |  |  | 9.1        |  |  |  | 6.0  | 
|Volatility in the price of the Companys shares (%) |  |            | 26.1 |  |            |  | 27.4 |                  |  |  | 28.5       |  |  |  | 17.5 | 
|Dividend yield                                      |  |            | 0.0  |  |            |  | 0.0  |                  |  |  | 0.0        |  |  |  | 0.0  | 
|Weighted average fair value per option              |  |            | 8.46 |  |            |  | 7.40 |                  |  |  | 6.04       |  |  |  | 4.19 | 



|    |                               
|--- | ------------------------------
|13. | CUMULATIVE TRANSLATION ACCOUNT



|                                                  |  |        |         |   |        |  |         |        |  |  |       |  
|------------------------------------------------- |  | ------ | ------- | - | ------ |  | ------- | ------ |  |  | ----- | -
|                                                  |  | 2004   |         |   | 2003   |  |         | 2002   | 
|                                                  |  | $000s |         |   | $000s |  |         | $000s | 
|                                                  |  |        |         |   |        |  |         |        | 
|Cumulative translation account, beginning of year |  |        | (13,861 | ) |        |  | 1,966   |        |  |  | 2,807 |  
|Current year deferred translation adjustment      |  |        | (5,157  | ) |        |  | (15,827 | )      |  |  | (841  | )
|                                                  |  |        |         |   |        |  |         |        | 
|Cumulative translation account, end of year       |  |        | (19,018 | ) |        |  | (13,861 | )      |  |  | 1,966 |  
|                                                  |  |        |         |   |        |  |         |        | 



|    |             
|--- | ------------
|14. | INCOME TAXES



|                                               |                                                                               |                         |      |      |      |  |      |      |     |  |      |      |     | 
|---------------------------------------------- | ----------------------------------------------------------------------------- | ----------------------- | ---- | ---- | ---- |  | ---- | ---- | --- |  | ---- | ---- | --- | 
|                                               |                                                                               | 2004                    |      |      | 2003 |  |      | 2002 |    
|                                               |                                                                               | %                       |      |      | %    |  |      | %    |    
|                                               |                                                                               |                         |      |      |      |  |      |      |    
|Income tax expense at statutory Canadian rates |                                                                               |                         | 34.7 |      |      |  | 36.8 |      |     |  | 39.3 |     
|Increase (decrease) resulting from:            |                                                                               |                         |      |      |      |  |      |      |     |  |      |     
|                                               | Loss (income) from associated companies accounted for on the
    equity basis |                         |      | (0.3 | )    |  |      | (0.6 | )   |  |      | (0.3 | )  
|                                               | Rate differential on foreign income                                           |                         |      | (2.0 | )    |  |      | 0.6  |     |  |      | (0.1 | )  
|                                               | Non-deductible expenses:                                                      |                         |      |      |      |  |      |      |     |  |      |      |    
|                                               |                                                                               | Meals and entertainment |      |      | 1.4  |  |      |      | 1.4 |  |      |      | 1.8 | 
|                                               |                                                                               | Stock compensation      |      |      | 0.6  |  |      |      | 0.6 |  |      |      |    | 
|                                               | Non-taxable foreign income net of non-creditable withholding
    taxes        |                         |      | (1.3 | )    |  |      | (1.6 | )   |  |      | (2.4 | )  
|                                               | Other                                                                         |                         |      | (0.7 | )    |  |      | (0.5 | )   |  |      | 0.7  |    
|                                               |                                                                               |                         |      |      |      |  |      |      |    
|                                               |                                                                               |                         | 32.4 |      |      |  | 36.7 |      |     |  | 39.0 |     
|                                               |                                                                               |                         |      |      |      |  |      |      |    

F-17



---



##### 





|                                                               |  |              |        |  |              |  |       | 
|-------------------------------------------------------------- |  | ------------ | ------ |  | ------------ |  | ----- | 
|                                                               |  | December 31, |        |  | December 31, | 
|                                                               |  | 2004         |        |  | 2003         | 
|                                                               |  | $            |        |  | $            | 
|                                                               |  |              |        |  |              | 
|Future income tax assets                                       |  |              |        |  |              |  |       | 
|Differences in timing of deductibility of expenses             |  |              | 9,434  |  |              |  | 6,060 | 
|Loss carryforwards                                             |  |              | 2,316  |  |              |  | 2,051 | 
|Share issue and other financing costs                          |  |              | 237    |  |              |  | 431   | 
|Tax cost of property and equipment in excess of carrying value |  |              | 684    |  |              |  | 645   | 
|Deferred gain on sale of building                              |  |              | 1,518  |  |              |  |      | 
|Other                                                          |  |              | 700    |  |              |  | 224   | 
|                                                               |  |              |        |  |              | 
|                                                               |  |              | 14,889 |  |              |  | 9,411 | 
|Less current portion                                           |  |              | 8,532  |  |              |  | 5,924 | 
|                                                               |  |              |        |  |              | 
|                                                               |  |              | 6,357  |  |              |  | 3,487 | 
|                                                               |  |              |        |  |              | 

|                                                               |  |              |        |  |              |  |        | 
|-------------------------------------------------------------- |  | ------------ | ------ |  | ------------ |  | ------ | 
|                                                               |  | December 31, |        |  | December 31, | 
|                                                               |  | 2004         |        |  | 2003         | 
|                                                               |  | $000s       |        |  | $000s       | 
|                                                               |  |              |        |  |              | 
|Future income tax liabilities                                  |  |              |        |  |              |  |        | 
|Cash to accrual adjustments on acquisition of US subsidiaries  |  |              | 2,091  |  |              |  | 508    | 
|Differences in timing of taxability of revenues                |  |              | 7,702  |  |              |  | 9,955  | 
|Carrying value of property and equipment in excess of tax cost |  |              | 5,025  |  |              |  | 2,970  | 
|Carrying value of intangible assets in excess of tax cost      |  |              | 2,016  |  |              |  | 1,996  | 
|Other                                                          |  |              | 2,135  |  |              |  | 1,755  | 
|                                                               |  |              |        |  |              | 
|                                                               |  |              | 18,969 |  |              |  | 17,184 | 
|Less current portion                                           |  |              | 10,653 |  |              |  | 10,802 | 
|                                                               |  |              |        |  |              | 
|                                                               |  |              | 8,316  |  |              |  | 6,382  | 
|                                                               |  |              |        |  |              | 



|     |  |        |       | 
|---- |  | ------ | ----- | 
|     |  | $000s |      
|     |  |        |      
|2006 |  |        | 22    | 
|2007 |  |        | 325   | 
|2008 |  |        | 1,454 | 
|2009 |  |        | 66    | 
|2010 |  |        | 636   | 
|2014 |  |        | 1,013 | 
|     |  |        |      
|     |  |        | 3,516 | 
|     |  |        |      





F-18



---



##### 





|    |                   
|--- | ------------------
|15. | EARNINGS PER SHARE



|                                                                                             |  |              |            |  |              |  |            |              |  |  |            | 
|-------------------------------------------------------------------------------------------- |  | ------------ | ---------- |  | ------------ |  | ---------- | ------------ |  |  | ---------- | 
|                                                                                             |  | December 31, |            |  | December 31, |  |            | December 31, | 
|                                                                                             |  | 2004         |            |  | 2003         |  |            | 2002         | 
|                                                                                             |  | #            |            |  | #            |  |            | #            | 
|                                                                                             |  |              |            |  |              |  |            |              | 
|Basic shares outstanding                                                                     |  |              | 18,499,598 |  |              |  | 18,329,960 |              |  |  | 17,987,358 | 
|Share options (dilutive effect of 1,041,333 options;
    2003  1,419,100; 2002  1,296,200) |  |              | 507,691    |  |              |  | 788,056    |              |  |  | 812,126    | 
|                                                                                             |  |              |            |  |              |  |            |              | 
|Diluted shares outstanding                                                                   |  |              | 19,007,289 |  |              |  | 19,118,016 |              |  |  | 18,799,484 | 
|                                                                                             |  |              |            |  |              |  |            |              | 



|    |                                               
|--- | ----------------------------------------------
|16. | CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES



|                                                             |                                                                |        |        |        |        |  |         |         |   |  |        |        |  
|------------------------------------------------------------ | -------------------------------------------------------------- | ------ | ------ | ------ | ------ |  | ------- | ------- | - |  | ------ | ------ | -
|                                                             |                                                                | 2004   |        |        | 2003   |  |         | 2002    |  
|                                                             |                                                                | $000s |        |        | $000s |  |         | $000s  |  
|                                                             |                                                                |        |        |        |        |  |         |         |  
|CASH FLOWS FROM OPERATING ACTIVITIES                         |                                                                |        |        |        |        |  |         |         |   |  |        |       
|Net income for the year                                      |                                                                |        | 30,190 |        |        |  | 25,070  |         |   |  | 20,192 |       
|Add (deduct) items not affecting cash:                       |                                                                |        |        |        |        |  |         |         |   |  |        |       
|                                                             | Depreciation of property and equipment                         |        |        | 11,986 |        |  |         | 9,912   |   |  |        | 9,502  |  
|                                                             | Amortization of intangible assets                              |        |        | 927    |        |  |         | 925     |   |  |        | 1,079  |  
|                                                             | Future income tax                                              |        |        | (3,595 | )      |  |         | 4,508   |   |  |        | (46    | )
|                                                             | Loss on dispositions of investments and property and equipment |        |        | (504   | )      |  |         | 57      |   |  |        | 89     |  
|                                                             | Stock-based compensation expense                               |        |        | 894    |        |  |         | 706     |   |  |        | 45     |  
|                                                             | Share of income from equity investments                        |        |        | (385   | )      |  |         | (580    | ) |  |        | (355   | )
|Dividends from equity investments                            |                                                                |        | 300    |        |        |  |        |         |   |  | 175    |       
|                                                             |                                                                |        |        |        |        |  |         |         |  
|                                                             |                                                                |        | 39,813 |        |        |  | 40,598  |         |   |  | 30,681 |       
|                                                             |                                                                |        |        |        |        |  |         |         |  
|Change in non-cash working capital accounts:                 |                                                                |        |        |        |        |  |         |         |   |  |        |       
|                                                             | Accounts receivable                                            |        |        | (1,542 | )      |  |         | (1,252  | ) |  |        | 8,174  |  
|                                                             | Costs and estimated earnings in excess of billings             |        |        | 30,218 |        |  |         | (35,239 | ) |  |        | (4,673 | )
|                                                             | Prepaid expenses                                               |        |        | 496    |        |  |         | 113     |   |  |        | 29     |  
|                                                             | Accounts payable and accrued liabilities                       |        |        | (4,589 | )      |  |         | 13,944  |   |  |        | 4,576  |  
|                                                             | Billings in excess of costs and estimated earnings             |        |        | 1,600  |        |  |         | 4,951   |   |  |        | (2,147 | )
|                                                             | Income taxes payable/recoverable                               |        |        | 11,355 |        |  |         | (6,222  | ) |  |        | (531   | )
|                                                             |                                                                |        |        |        |        |  |         |         |  
|                                                             |                                                                |        | 37,538 |        |        |  | (23,705 | )       |   |  | 5,428  |       
|                                                             |                                                                |        |        |        |        |  |         |         |  
|Cash flows from operating activities                         |                                                                |        | 77,351 |        |        |  | 16,893  |         |   |  | 36,109 |       
|                                                             |                                                                |        |        |        |        |  |         |         |  
|Income taxes paid during the year in accordance with US GAAP |                                                                |        | 10,530 |        |        |  | 18,142  |         |   |  | 14,143 |       
|                                                             |                                                                |        |        |        |        |  |         |         |  

F-19



---



##### 





|    |               
|--- | --------------
|17. | JOINT VENTURES



|                                              |  |                  |       |  |              |  |     |              |  |  |     | 
|--------------------------------------------- |  | ---------------- | ----- |  | ------------ |  | --- | ------------ |  |  | --- | 
|                                              |  | Percentage Owned |      
|                                              |  |                  |      
|                                              |  | December 31,     |       |  | December 31, |  |     | December 31, | 
|                                              |  | 2004             |       |  | 2003         |  |     | 2002         | 
|                                              |  | %                |       |  | %            |  |     | %            | 
|                                              |  |                  |       |  |              |  |     |              | 
|yyC.T. Joint Venture                          |  |                  | 20    |  |              |  | 20  |              |  |  | 20  | 
|Lockerbie Stanley Inc.                        |  |                  | n/a   |  |              |  | n/a |              |  |  | 50  | 
|Stantec  S&L Partnership                     |  |                  | 50    |  |              |  | 50  |              |  |  | 50  | 
|Colt Stantec Joint Venture                    |  |                  | 50    |  |              |  | 50  |              |  |  | 50  | 
|Edmonton International Airports Joint Venture |  |                  | 33    |  |              |  | 33  |              |  |  | n/a | 
|Pine Creek Consultants Joint Venture          |  |                  | 33    |  |              |  | 33  |              |  |  | n/a | 
|Dunlop Joint Ventures                         |  |                  | 33-80 |  |              |  | n/a |              |  |  | n/a | 





|                                        |  |              |       |   |              |  |        |              |  |  |        |  
|--------------------------------------- |  | ------------ | ----- | - | ------------ |  | ------ | ------------ |  |  | ------ | -
|                                        |  | December 31, |       |   | December 31, |  |        | December 31, | 
|                                        |  | 2004         |       |   | 2003         |  |        | 2002         | 
|                                        |  | $000s       |       |   | $000s       |  |        | $000s       | 
|                                        |  |              |       |   |              |  |        |              | 
|Statements of income:                   |  |              |       |   |              |  |        |              |  |  |        |  
|Gross revenue                           |  |              | 1,186 |   |              |  | 11,949 |              |  |  | 11,174 |  
|Subconsultant and other direct expenses |  |              | 894   |   |              |  | 9,611  |              |  |  | 12,529 |  
|Administrative and marketing expenses   |  |              | 217   |   |              |  | 776    |              |  |  | 277    |  
|                                        |  |              |       |   |              |  |        |              | 
|Net income for the year                 |  |              | 75    |   |              |  | 1,562  |              |  |  | (1,632 | )
|                                        |  |              |       |   |              |  |        |              | 
|Balance sheets:                         |  |              |       |   |              |  |        |              |  |  |        |  
|Current assets                          |  |              | 3,445 |   |              |  | 1,547  |              |  |  | 4,374  |  
|                                        |  |              |       |   |              |  |        |              | 
|Current liabilities                     |  |              | 2,822 |   |              |  | 1,583  |              |  |  | 5,516  |  
|                                        |  |              |       |   |              |  |        |              | 
|Statements of cash flows:               |  |              |       |   |              |  |        |              |  |  |        |  
|Cash flows used in operating activities |  |              | (274  | ) |              |  | (86    | )            |  |  | (425   | )
|                                        |  |              |       |   |              |  |        |              | 



|    |                      
|--- | ---------------------
|18. | SEGMENTED INFORMATION





F-20



---



##### 









Geographic information


|              |  |          |         |              |            |  |         |          |              |  |            |  |  |              |         |  |            |  |         |  |  |  |         | 
|------------- |  | -------- | ------- | ------------ | ---------- |  | ------- | -------- | ------------ |  | ---------- |  |  | ------------ | ------- |  | ---------- |  | ------- |  |  |  | ------- | 
|              |  |          |         | Property and |            |  |         |          | Property and |  |            |  |  | Property and |        
|              |  |          |         | Equipment,   |            |  |         |          | Equipment,   |  |            |  |  | Equipment,   |        
|              |  |          |         | Goodwill,    |            |  |         |          | Goodwill,    |  |            |  |  | Goodwill,    |        
|              |  | Gross    |         |              | Intangible |  |         | Gross    |              |  | Intangible |  |  | Gross        |         |  | Intangible | 
|              |  | Revenues |         |              | Assets     |  |         | Revenues |              |  | Assets     |  |  | Revenues     |         |  | Assets     | 
|              |  | 2004     |         |              | 2004       |  |         | 2003     |              |  | 2003       |  |  | 2002         |         |  | 2002       | 
|              |  | $000s   |         |              | $000s     |  |         | $000s   |              |  | $000s     |  |  | $000s       |         |  | $000s     | 
|              |  |          |         |              |            |  |         |          |              |  |            |  |  |              |         |  |            | 
|Canada        |  |          | 325,844 |              |            |  | 86,731  |          |              |  | 290,413    |  |  |              | 104,088 |  |            |  | 238,774 |  |  |  | 76,882  | 
|United States |  |          | 190,362 |              |            |  | 52,032  |          |              |  | 161,655    |  |  |              | 37,815  |  |            |  | 180,296 |  |  |  | 51,509  | 
|International |  |          | 4,673   |              |            |  | 471     |          |              |  | 7,874      |  |  |              | 575     |  |            |  | 9,386   |  |  |  | 596     | 
|              |  |          |         |              |            |  |         |          |              |  |            |  |  |              |         |  |            | 
|              |  |          | 520,879 |              |            |  | 139,234 |          |              |  | 459,942    |  |  |              | 142,478 |  |            |  | 428,456 |  |  |  | 128,987 | 
|              |  |          |         |              |            |  |         |          |              |  |            |  |  |              |         |  |            | 



Customers






|    |                  
|--- | -----------------
|19. | FORWARD CONTRACTS





|    |                  
|--- | -----------------
|20. | SUBSEQUENT EVENTS



F-21



---



##### 







|    |                                                       
|--- | ------------------------------------------------------
|21. | UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES





|   |                                    
|-- | -----------------------------------
|a. | Net income and comprehensive income













Statement of Comprehensive Income


|                                                                                          |                                                                                           |        |         |        |        |  |         |         |   |  |        |      |  
|----------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | ------ | ------- | ------ | ------ |  | ------- | ------- | - |  | ------ | ---- | -
|                                                                                          |                                                                                           | 2004   |         |        | 2003   |  |         | 2002    |  
|                                                                                          |                                                                                           | $000s |         |        | $000s |  |         | $000s  |  
|                                                                                          |                                                                                           |        |         |        |        |  |         |         |  
|Net income under Canadian and US GAAP                                                     |                                                                                           |        | 30,190  |        |        |  | 25,070  |         |   |  | 20,192 |     
|Other comprehensive income, net of tax:                                                   |                                                                                           |        |         |        |        |  |         |         |   |  |        |     
|                                                                                          | Unrealized foreign exchange loss on translation of
    self-sustaining foreign operations |        |         | (5,157 | )      |  |         | (15,827 | ) |  |        | (841 | )
|                                                                                          |                                                                                           |        |         |        |        |  |         |         |  
|Comprehensive income                                                                      |                                                                                           |        | 25,033  |        |        |  | 9,243   |         |   |  | 19,351 |     
|                                                                                          |                                                                                           |        |         |        |        |  |         |         |  
|Accumulated other comprehensive income, beginning of year                                 |                                                                                           |        | (13,861 | )      |        |  | 1,966   |         |   |  | 2,807  |     
|Unrealized foreign exchange loss on translation of
    self-sustaining foreign operations |                                                                                           |        | (5,157  | )      |        |  | (15,827 | )       |   |  | (841   | )   
|                                                                                          |                                                                                           |        |         |        |        |  |         |         |  
|Accumulated other comprehensive income, end of year                                       |                                                                                           |        | (19,018 | )      |        |  | (13,861 | )       |   |  | 1,966  |     
|                                                                                          |                                                                                           |        |         |        |        |  |         |         |  

F-22



---



##### 





|   |                           
|-- | --------------------------
|b. | Other disclosures required



| |                                            
| | -------------------------------------------
| | i) Accounts payable and accrued liabilities

|                                 |  |              |        |  |              |  |        | 
|-------------------------------- |  | ------------ | ------ |  | ------------ |  | ------ | 
|                                 |  | December 31, |        |  | December 31, | 
|                                 |  | 2004         |        |  | 2003         | 
|                                 |  | $000s       |        |  | $000s       | 
|                                 |  |              |        |  |              | 
|Trade accounts payable           |  |              | 21,651 |  |              |  | 17,806 | 
|Employee and payroll liabilities |  |              | 37,188 |  |              |  | 31,276 | 
|Accrued liabilities              |  |              | 19,879 |  |              |  | 19,714 | 
|                                 |  |              |        |  |              | 
|                                 |  |              | 78,718 |  |              |  | 68,796 | 
|                                 |  |              |        |  |              | 



| |                                    
| | -----------------------------------
| | ii) Allowance for doubtful accounts

|                                |  |        |        |   |        |  |        |        |  |  |        |  
|------------------------------- |  | ------ | ------ | - | ------ |  | ------ | ------ |  |  | ------ | -
|                                |  | 2004   |        |   | 2003   |  |        | 2002   | 
|                                |  | $000s |        |   | $000s |  |        | $000s | 
|                                |  |        |        |   |        |  |        |        | 
|Balance, beginning of year      |  |        | 16,952 |   |        |  | 17,316 |        |  |  | 15,755 |  
|Acquired balances               |  |        | 5,294  |   |        |  | 651    |        |  |  | 2,616  |  
|Provision for doubtful accounts |  |        | 6,632  |   |        |  | 4,544  |        |  |  | 3,512  |  
|Deductions                      |  |        | (7,152 | ) |        |  | (4,221 | )      |  |  | (4,453 | )
|Impact of foreign exchange      |  |        | (631   | ) |        |  | (1,338 | )      |  |  | (114   | )
|                                |  |        |        |   |        |  |        |        | 
|Balance, end of year            |  |        | 21,095 |   |        |  | 16,952 |        |  |  | 17,316 |  
|                                |  |        |        |   |        |  |        |        | 



| |                                       
| | --------------------------------------
| | iii) Income (loss) before income taxes

|         |  |        |        |   |        |  |        |        |  |  |        |  
|-------- |  | ------ | ------ | - | ------ |  | ------ | ------ |  |  | ------ | -
|         |  | 2004   |        |   | 2003   |  |        | 2002   | 
|         |  | $000s |        |   | $000s |  |        | $000s | 
|         |  |        |        |   |        |  |        |        | 
|Domestic |  |        | 48,111 |   |        |  | 36,583 |        |  |  | 37,548 |  
|Foreign  |  |        | (3,451 | ) |        |  | 3,045  |        |  |  | (4,453 | )
|         |  |        |        |   |        |  |        |        | 
|Total    |  |        | 44,660 |   |        |  | 39,628 |        |  |  | 33,095 |  
|         |  |        |        |   |        |  |        |        | 



| |                       
| | ----------------------
| | iv) Income tax expense

|                    |  |        |        |   |        |  |        |        |  |  |        |  
|------------------- |  | ------ | ------ | - | ------ |  | ------ | ------ |  |  | ------ | -
|                    |  | 2004   |        |   | 2003   |  |        | 2002   | 
|                    |  | $000s |        |   | $000s |  |        | $000s | 
|                    |  |        |        |   |        |  |        |        | 
|Current tax expense |  |        |        |   |        |  |        |        |  |  |        |  
|Domestic            |  |        | 17,724 |   |        |  | 9,474  |        |  |  | 13,968 |  
|Foreign             |  |        | 341    |   |        |  | 576    |        |  |  | (1,019 | )
|                    |  |        |        |   |        |  |        |        | 
|Total               |  |        | 18,065 |   |        |  | 10,050 |        |  |  | 12,949 |  
|                    |  |        |        |   |        |  |        |        | 
|Future tax expense  |  |        |        |   |        |  |        |        |  |  |        |  
|Domestic            |  |        | (566   | ) |        |  | 3,532  |        |  |  | 470    |  
|Foreign             |  |        | (3,029 | ) |        |  | 976    |        |  |  | (516   | )
|                    |  |        |        |   |        |  |        |        | 
|Total               |  |        | (3,595 | ) |        |  | 4,508  |        |  |  | (46    | )
|                    |  |        |        |   |        |  |        |        | 
|Total tax expense   |  |        |        |   |        |  |        |        |  |  |        |  
|Domestic            |  |        | 17,158 |   |        |  | 13,006 |        |  |  | 14,438 |  
|Foreign             |  |        | (2,688 | ) |        |  | 1,552  |        |  |  | (1,535 | )
|                    |  |        |        |   |        |  |        |        | 
|Total               |  |        | 14,470 |   |        |  | 14,558 |        |  |  | 12,903 |  
|                    |  |        |        |   |        |  |        |        | 

F-23



---



##### 








| |                            
| | ---------------------------
| | v) Self-insured liabilities







|                           |  |        |       |  |        |  |       | 
|-------------------------- |  | ------ | ----- |  | ------ |  | ----- | 
|                           |  | 2004   |       |  | 2003   | 
|                           |  | $000s |       |  | $000s | 
|                           |  |        |       |  |        | 
|Balance, beginning of year |  |        | 2,410 |  |        |  |      | 
|Current year provision     |  |        | 2,826 |  |        |  | 2,410 | 
|                           |  |        |       |  |        | 
|Balance, end of year       |  |        | 5,236 |  |        |  | 2,410 | 
|                           |  |        |       |  |        | 









| |                        
| | -----------------------
| | vi) Long term contracts








|   |                                         
|-- | ----------------------------------------
|c. | Effects of new accounting pronouncements







| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | i) Comprehensive Income  New section 1530
    becomes effective for our fiscal 2007 year end and
    establishes standards for the reporting and display of
    comprehensive income. Unrealized gains on the translation of our
    self-sustaining foreign operations will be included in
    comprehensive income. Currently these items are reflected in our
    cumulative translation account.                                                                                                                                                                                                                                                                                                                                                        
|
|
|
| | ii) Financial Instruments  Recognition and
    Measurement  New section 3855 becomes effective
    for our fiscal 2007 year end and provides standards for the
    classification of financial instruments and the related
    interest, dividends, gains and losses. This section will impact
    the classification of the Companys investments held for
    self-insured liabilities and will require the company to revalue
    certain investments to fair value with the resulting unrealized
    gains or losses being reflected through other comprehensive
    income until realized when the gains or losses will be
    recognized in net income. This new standard is not expected to
    have a material effect on the results of operations.
|
|
|
| | iii) Variable Interest Entities  Accounting
    Guideline 15 is effective for our interim period ending
    March 31, 2005. As the Company currently consolidates its
    interests in variable entities, there will be no impact on the
    financial reporting of the Company other than to amend a policy
    note  principles of consolidation to include the
    consolidation of variable interest entities.                                                                                                                                                                                                                                                                                                                                         
|



|    |                    
|--- | -------------------
|22. | COMPARATIVE FIGURES



F-24



---



##### 






STANTEC INC.








UNAUDITED CONSOLIDATED BALANCE SHEETS








|                                                                                                        |  |                   |         |   |             |  |         |  
|------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | - | ----------- |  | ------- | -
|                                                                                                        |  | March 31          |         |   | December 31 | 
|                                                                                                        |  | 2005              |         |   | 2004        | 
|                                                                                                        |  | $                 |         |   | $           | 
|                                                                                                        |  |                   |         |   |             | 
|                                                                                                        |  | (In thousands of  |        
|                                                                                                        |  | Canadian dollars) |        
|                                                                                                        |  | (Unaudited)       |        
|ASSETS                                                                                                  |  |                   |         |   |             |  |         |  
|Current                                                                                                 |  |                   |         |   |             |  |         |  
|Cash and cash equivalents                                                                               |  |                   | 18,850  |   |             |  | 37,890  |  
|Accounts receivable, net of allowance for doubtful accounts of
    $19,198 in 2005
    ($21,095  2004) |  |                   | 104,816 |   |             |  | 112,476 |  
|Costs and estimated earnings in excess of billings                                                      |  |                   | 44,031  |   |             |  | 40,861  |  
|Income taxes recoverable                                                                                |  |                   | 3,915   |   |             |  |        |  
|Prepaid expenses                                                                                        |  |                   | 3,462   |   |             |  | 4,165   |  
|Future income tax assets                                                                                |  |                   | 8,647   |   |             |  | 8,532   |  
|Other assets                                                                                            |  |                   | 4,755   |   |             |  | 4,831   |  
|                                                                                                        |  |                   |         |   |             | 
|                                                                                                        |  |                   | 188,476 |   |             |  | 208,755 |  
|Property and equipment                                                                                  |  |                   | 49,649  |   |             |  | 48,262  |  
|Goodwill                                                                                                |  |                   | 85,752  |   |             |  | 84,694  |  
|Intangible assets                                                                                       |  |                   | 6,053   |   |             |  | 6,278   |  
|Future income tax assets                                                                                |  |                   | 5,693   |   |             |  | 6,357   |  
|Other assets                                                                                            |  |                   | 9,096   |   |             |  | 7,754   |  
|                                                                                                        |  |                   |         |   |             | 
|                                                                                                        |  |                   | 344,719 |   |             |  | 362,100 |  
|                                                                                                        |  |                   |         |   |             | 
|                                                                                                       
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                    |  |                   |         |   |             |  |         |  
|Current                                                                                                 |  |                   |         |   |             |  |         |  
|Accounts payable and accrued liabilities                                                                |  |                   | 62,656  |   |             |  | 78,718  |  
|Billings in excess of costs and estimated earnings                                                      |  |                   | 19,422  |   |             |  | 18,832  |  
|Income taxes payable                                                                                    |  |                   |        |   |             |  | 5,732   |  
|Current portion of long-term debt (note 3)                                                              |  |                   | 9,507   |   |             |  | 12,820  |  
|Future income tax liabilities                                                                           |  |                   | 10,015  |   |             |  | 10,653  |  
|                                                                                                        |  |                   |         |   |             | 
|                                                                                                        |  |                   | 101,600 |   |             |  | 126,755 |  
|Long-term debt (note 3)                                                                                 |  |                   | 19,020  |   |             |  | 21,155  |  
|Other liabilities                                                                                       |  |                   | 18,780  |   |             |  | 16,818  |  
|Future income tax liabilities                                                                           |  |                   | 8,235   |   |             |  | 8,316   |  
|                                                                                                        |  |                   |         |   |             | 
|                                                                                                        |  |                   | 147,635 |   |             |  | 173,044 |  
|                                                                                                        |  |                   |         |   |             | 
|Shareholders Equity                                                                                    |  |                   |         |   |             |  |         |  
|Share capital (note 4)                                                                                  |  |                   | 88,138  |   |             |  | 87,656  |  
|Contributed surplus (note 4)                                                                            |  |                   | 2,740   |   |             |  | 2,544   |  
|Cumulative translation account                                                                          |  |                   | (18,336 | ) |             |  | (19,018 | )
|Retained earnings                                                                                       |  |                   | 124,542 |   |             |  | 117,874 |  
|                                                                                                        |  |                   |         |   |             | 
|                                                                                                        |  |                   | 197,084 |   |             |  | 189,056 |  
|                                                                                                        |  |                   |         |   |             | 
|                                                                                                        |  |                   | 344,719 |   |             |  | 362,100 |  
|                                                                                                        |  |                   |         |   |             | 







See accompanying notes





F-25



---



##### 






STANTEC INC.








UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED
EARNINGS








|                                                        |  |                         |            |   |      |  |            |  
|------------------------------------------------------- |  | ----------------------- | ---------- | - | ---- |  | ---------- | -
|                                                        |  | For the quarter ended   |           
|                                                        |  | March 31                |           
|                                                        |  |                         |           
|                                                        |  | 2005                    |            |   | 2004 | 
|                                                        |  | $                       |            |   | $    | 
|                                                        |  |                         |            |   |      | 
|                                                        |  | (In thousands of        |           
|                                                        |  | Canadian dollars except |           
|                                                        |  | per share amounts)      |           
|                                                        |  | (Unaudited)             |           
|INCOME                                                  |  |                         |            |   |      |  |            |  
|Gross revenue                                           |  |                         | 141,144    |   |      |  | 117,317    |  
|Less subconsultant and other direct expenses            |  |                         | 22,011     |   |      |  | 13,751     |  
|                                                        |  |                         |            |   |      | 
|Net revenue                                             |  |                         | 119,133    |   |      |  | 103,566    |  
|Direct payroll costs                                    |  |                         | 54,439     |   |      |  | 47,540     |  
|                                                        |  |                         |            |   |      | 
|Gross margin                                            |  |                         | 64,694     |   |      |  | 56,026     |  
|Administrative and marketing expenses                   |  |                         | 51,262     |   |      |  | 43,809     |  
|Depreciation of property and equipment                  |  |                         | 2,764      |   |      |  | 2,624      |  
|Amortization of intangible assets                       |  |                         | 238        |   |      |  | 137        |  
|Net interest expense                                    |  |                         | 75         |   |      |  | 674        |  
|Foreign exchange losses                                 |  |                         | 61         |   |      |  | 11         |  
|Share of income from associated companies               |  |                         | (68        | ) |      |  | (125       | )
|                                                        |  |                         |            |   |      | 
|Income before income taxes                              |  |                         | 10,362     |   |      |  | 8,896      |  
|                                                        |  |                         |            |   |      | 
|Income taxes                                            |  |                         |            |   |      |  |            |  
|Current                                                 |  |                         | 3,828      |   |      |  | 4,420      |  
|Future                                                  |  |                         | (201       | ) |      |  | (1,182     | )
|                                                        |  |                         |            |   |      | 
|                                                        |  |                         | 3,627      |   |      |  | 3,238      |  
|                                                        |  |                         |            |   |      | 
|Net income for the period                               |  |                         | 6,735      |   |      |  | 5,658      |  
|                                                        |  |                         |            |   |      | 
|Retained earnings, beginning of period                  |  |                         | 117,874    |   |      |  | 88,266     |  
|Net income for the period                               |  |                         | 6,735      |   |      |  | 5,658      |  
|Shares repurchased (note 4)                             |  |                         | (67        | ) |      |  | (355       | )
|                                                        |  |                         |            |   |      | 
|Retained earnings, end of period                        |  |                         | 124,542    |   |      |  | 93,569     |  
|                                                        |  |                         |            |   |      | 
|Weighted average number of shares outstanding  basic   |  |                         | 18,917,670 |   |      |  | 18,373,983 |  
|                                                        |  |                         |            |   |      | 
|Weighted average number of shares outstanding  diluted |  |                         | 19,424,308 |   |      |  | 19,176,483 |  
|                                                        |  |                         |            |   |      | 
|Shares outstanding, end of period                       |  |                         | 18,933,019 |   |      |  | 18,464,818 |  
|                                                        |  |                         |            |   |      | 
|Earnings per share                                      |  |                         |            |   |      |  |            |  
|Basic                                                   |  |                         | 0.36       |   |      |  | 0.31       |  
|                                                        |  |                         |            |   |      | 
|Diluted                                                 |  |                         | 0.35       |   |      |  | 0.30       |  
|                                                        |  |                         |            |   |      | 







See accompanying notes





F-26



---



##### 






STANTEC INC.








UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS








|                                                                                          |  |                       |         |   |      |  |         |  
|----------------------------------------------------------------------------------------- |  | --------------------- | ------- | - | ---- |  | ------- | -
|                                                                                          |  | For the quarter ended |        
|                                                                                          |  | March 31              |        
|                                                                                          |  |                       |        
|                                                                                          |  | 2005                  |         |   | 2004 | 
|                                                                                          |  | $                     |         |   | $    | 
|                                                                                          |  |                       |         |   |      | 
|                                                                                          |  | (In thousands of      |        
|                                                                                          |  | Canadian dollars)     |        
|                                                                                          |  | (Unaudited)           |        
|CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES                                            |  |                       |         |   |      |  |         |  
|Cash receipts from clients                                                                |  |                       | 151,134 |   |      |  | 124,568 |  
|Cash paid to suppliers                                                                    |  |                       | (53,263 | ) |      |  | (43,866 | )
|Cash paid to employees                                                                    |  |                       | (92,124 | ) |      |  | (82,241 | )
|Dividends from equity investments                                                         |  |                       | 250     |   |      |  | 200     |  
|Interest received                                                                         |  |                       | 1,264   |   |      |  | 1,747   |  
|Interest paid                                                                             |  |                       | (1,321  | ) |      |  | (2,360  | )
|Income taxes paid                                                                         |  |                       | (13,475 | ) |      |  | (2,066  | )
|                                                                                          |  |                       |         |   |      | 
|Cash flows used in operating activities                                                   |  |                       | (7,535  | ) |      |  | (4,018  | )
|                                                                                          |  |                       |         |   |      | 
|CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES                                            |  |                       |         |   |      |  |         |  
|Business acquisitions, including cash acquired and bank
    indebtedness assumed (note 2) |  |                       | (700    | ) |      |  |        |  
|Purchase of investments held for self-insured liabilities                                 |  |                       | (1,726  | ) |      |  |        |  
|Proceeds on disposition of investments                                                    |  |                       | 432     |   |      |  |        |  
|Purchase of property and equipment                                                        |  |                       | (4,151  | ) |      |  | (4,750  | )
|Proceeds on disposition of property and equipment                                         |  |                       | 2       |   |      |  | 33      |  
|                                                                                          |  |                       |         |   |      | 
|Cash flows used in investing activities                                                   |  |                       | (6,143  | ) |      |  | (4,717  | )
|                                                                                          |  |                       |         |   |      | 
|CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES                                            |  |                       |         |   |      |  |         |  
|Repayment of long-term debt                                                               |  |                       | (5,882  | ) |      |  | (6,275  | )
|Net change in bank indebtedness financing                                                 |  |                       |        |   |      |  | 15,342  |  
|Repurchase of shares for cancellation (note 4)                                            |  |                       | (83     | ) |      |  | (439    | )
|Proceeds from issue of share capital (note 4)                                             |  |                       | 440     |   |      |  | 855     |  
|                                                                                          |  |                       |         |   |      | 
|Cash flows from (used in) financing activities                                            |  |                       | (5,525  | ) |      |  | 9,483   |  
|                                                                                          |  |                       |         |   |      | 
|Foreign exchange gain on cash held in foreign currency                                    |  |                       | 163     |   |      |  | 53      |  
|                                                                                          |  |                       |         |   |      | 
|Net increase (decrease) in cash                                                           |  |                       | (19,040 | ) |      |  | 801     |  
|Cash, beginning of period                                                                 |  |                       | 37,890  |   |      |  | 7,343   |  
|                                                                                          |  |                       |         |   |      | 
|Cash, end of period                                                                       |  |                       | 18,850  |   |      |  | 8,144   |  
|                                                                                          |  |                       |         |   |      | 







See accompanying notes





F-27



---



##### 






STANTEC INC.








NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








1.     GENERAL ACCOUNTING
POLICIES
















Principles of Consolidation
















2.     BUSINESS ACQUISITIONS





























F-28



---



##### 














|                                               |  |        |     |   |        |  |      |  
|---------------------------------------------- |  | ------ | --- | - | ------ |  | ---- | -
|                                               |  | 2005   |     |   | 2004   | 
|                                               |  | $000s |     |   | $000s | 
|                                               |  |        |     |   |        | 
|Cash consideration                             |  |        | 700 |   |        |  |     |  
|Promissory notes, due 2004 through 2007        |  |        | 105 |   |        |  | (205 | )
|                                               |  |        |     |   |        | 
|Purchase price                                 |  |        | 805 |   |        |  | (205 | )
|                                               |  |        |     |   |        | 
|Assets and liabilities acquired at fair values |  |        |     |   |        |  |      |  
|Non-cash working capital                       |  |        | 263 |   |        |  | 71   |  
|Property and equipment                         |  |        | (9  | ) |        |  |     |  
|Goodwill                                       |  |        | 606 |   |        |  | (276 | )
|Future income taxes                            |  |        | (55 | ) |        |  |     |  
|                                               |  |        |     |   |        | 
|Net assets acquired                            |  |        | 805 |   |        |  | (205 | )
|                                               |  |        |     |   |        | 















3.     LONG-TERM DEBT








|                                         |  |          |        |  |             |  |        | 
|---------------------------------------- |  | -------- | ------ |  | ----------- |  | ------ | 
|                                         |  | March 31 |        |  | December 31 | 
|                                         |  | 2005     |        |  | 2004        | 
|                                         |  | $000s   |        |  | $000s      | 
|                                         |  |          |        |  |             | 
|Non-interest-bearing note payable        |  |          | 114    |  |             |  | 111    | 
|Other non-interest-bearing notes payable |  |          | 4,227  |  |             |  | 7,862  | 
|Bank loan                                |  |          | 22,236 |  |             |  | 23,997 | 
|Mortgages payable                        |  |          | 1,750  |  |             |  | 1,765  | 
|Other                                    |  |          | 200    |  |             |  | 240    | 
|                                         |  |          |        |  |             | 
|                                         |  |          | 28,527 |  |             |  | 33,975 | 
|Less current portion                     |  |          | 9,507  |  |             |  | 12,820 | 
|                                         |  |          |        |  |             | 
|                                         |  |          | 19,020 |  |             |  | 21,155 | 
|                                         |  |          |        |  |             | 




















F-29



---



##### 






4.     SHARE CAPITAL








|                                                                        |  |               |            |   |        |             |        |         |  |  |            |      |  |        |        |   |        |  |       |   |  |  |       |  
|----------------------------------------------------------------------- |  | ------------- | ---------- | - | ------ | ----------- | ------ | ------- |  |  | ---------- | ---- |  | ------ | ------ | - | ------ |  | ----- | - |  |  | ----- | -
|                                                                        |  | Capital Stock |            |   |        |             |       
|                                                                        |  |               |            |   |       
|                                                                        |  |               |            |   |        | Contributed |       
|                                                                        |  | 2005          |            |   | 2004   |             |        | Surplus | 
|                                                                        |  |               |            |   |        |             |        |         | 
|                                                                        |  | Common        |            |   |        |             | Common |         |  |  |            | 2005 |  |        | 2004   |  
|                                                                        |  | Shares        |            |   |        |             | Shares |         |  |  |            |      |  |        |        |  
|                                                                        |  | #             |            |   | $000s |             |        | #       |  |  | $000s     |      |  | $000s |        |   | $000s | 
|                                                                        |  |               |            |   |        |             |        |         |  |  |            |      |  |        |        |   |        | 
|Balance, beginning of year                                              |  |               | 18,871,085 |   |        |             | 87,656 |         |  |  | 18,327,284 |      |  |        | 84,281 |   |        |  | 2,544 |   |  |  | 1,842 |  
|Share options exercised for cash                                        |  |               | 64,834     |   |        |             | 440    |         |  |  | 155,434    |      |  |        | 855    |   |        |  |      |   |  |  |      |  
|Stock-based compensation expense                                        |  |               |            |   |        |             |        |         |  |  |            |      |  |        |        |   |        |  | 254   |   |  |  | 178   |  
|Shares repurchased under normal course issuer bid                       |  |               | (2,900     | ) |        |             | (15    | )       |  |  | (17,900    | )    |  |        | (83    | ) |        |  | (1    | ) |  |  | (1    | )
|Reclassification of fair value of stock options previously
    expensed |  |               |            |   |        |             | 57     |         |  |  |            |      |  |        |       |   |        |  | (57   | ) |  |  |      |  
|                                                                        |  |               |            |   |        |             |        |         |  |  |            |      |  |        |        |   |        | 
|Balance, as at March 31                                                 |  |               | 18,933,019 |   |        |             | 88,138 |         |  |  | 18,464,818 |      |  |        | 85,053 |   |        |  | 2,740 |   |  |  | 2,019 |  
|                                                                        |  |               |            |   |        |             |        |         |  |  |            |      |  |        |        |   |        | 























5.     SEGMENTED INFORMATION
























Geographic information








|              |  |                       |         |              |                       |  |         |          |              |  |            |  |  |  |         | 
|------------- |  | --------------------- | ------- | ------------ | --------------------- |  | ------- | -------- | ------------ |  | ---------- |  |  |  | ------- | 
|              |  | For the quarter ended |         |              | For the quarter ended | 
|              |  | March 31, 2005        |         |              | March 31, 2004        | 
|              |  |                       |         |              |                       | 
|              |  |                       |         | Property and |                       |  |         |          | Property and | 
|              |  |                       |         | Equipment,   |                       |  |         |          | Equipment,   | 
|              |  |                       |         | Goodwill,    |                       |  |         |          | Goodwill,    | 
|              |  | Gross                 |         |              | Intangible            |  |         | Gross    |              |  | Intangible | 
|              |  | Revenues              |         |              | Assets                |  |         | Revenues |              |  | Assets     | 
|              |  | $000s                |         |              | $000s                |  |         | $000s   |              |  | $000s     | 
|              |  |                       |         |              |                       |  |         |          |              |  |            | 
|Canada        |  |                       | 86,916  |              |                       |  | 88,372  |          |              |  | 78,944     |  |  |  | 103,351 | 
|United States |  |                       | 53,156  |              |                       |  | 52,616  |          |              |  | 36,615     |  |  |  | 38,673  | 
|International |  |                       | 1,072   |              |                       |  | 466     |          |              |  | 1,758      |  |  |  | 492     | 
|              |  |                       |         |              |                       |  |         |          |              |  |            | 
|              |  |                       | 141,144 |              |                       |  | 141,454 |          |              |  | 117,317    |  |  |  | 142,516 | 
|              |  |                       |         |              |                       |  |         |          |              |  |            | 




F-30



---



##### 






6.     EMPLOYEE FUTURE BENEFITS
















7.     SUBSEQUENT EVENTS
















8.     COMPARATIVE FIGURES













F-31



---



##### 



STANTEC INC.


UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS




















F-32



---



##### 



STANTEC INC.


UNAUDITED PRO FORMA CONDENSED


CONSOLIDATED BALANCE SHEET





As at March 31, 2005








|                                                   |  |                                    |         |   |          |   |         |             |  |          |              |   |  |  |    |   |  |   |         |  
|-------------------------------------------------- |  | ---------------------------------- | ------- | - | -------- | - | ------- | ----------- |  | -------- | ------------ | - |  |  | -- | - |  | - | ------- | -
|                                                   |  |                                    |         |   |          |   |         | Pro Forma   | 
|                                                   |  | Stantec                            |         |   | Keith    |   |         | Pro Forma   |  |          | Consolidated |  
|                                                   |  | US GAAP                            |         |   | US GAAP  |   |         | Adjustments |  |          | US GAAP      |  
|                                                   |  |                                    |         |   |          |   |         |             |  |          |              |  
|                                                   |  | (note 2)                           |         |   | (note 3) |   |         |             |  | (note 4) |              |   | 
|                                                   |  | (In thousands of Canadian dollars) |        
|ASSETS                                            
|Current                                            |  |                                    |         |   |          |   |         |             |  |          |              |   |  |  |    |   |  |   |         |  
|Cash and cash equivalents                          |  | $                                  | 18,850  |   |          | $ | 9,944   |             |  | $        | (3,237       | ) |  |  | (b | ) |  |   |         |  
|                                                   |  |                                    |        |   |          |   |        |             |  |          | 90,956       |   |  |  | (c | ) |  |   |         |  
|                                                   |  |                                    |        |   |          |   |        |             |  |          | (109,806     | ) |  |  | (d | ) |  | $ | 6,707   |  
|Available for sale securities                      |  |                                    | 4,755   |   |          |   | 38,944  |             |  |          |             |   |  |  |    |   |  |   | 43,699  |  
|Accounts receivable                                |  |                                    | 104,816 |   |          |   | 19,872  |             |  |          |             |   |  |  |    |   |  |   | 124,688 |  
|Costs and estimated earnings in excess of billings |  |                                    | 44,031  |   |          |   | 14,621  |             |  |          |             |   |  |  |    |   |  |   | 58,652  |  
|Other current assets                               |  |                                    | 16,024  |   |          |   | 2,359   |             |  |          |             |   |  |  |    |   |  |   | 18,383  |  
|                                                   |  |                                    |         |   |          |   |         |             |  |          |              |   |  |  |   
|Total current assets                               |  |                                    | 188,476 |   |          |   | 85,740  |             |  |          | (22,087      | ) |  |  |    |   |  |   | 252,129 |  
|Property and equipment                             |  |                                    | 49,649  |   |          |   | 5,645   |             |  |          | (687         | ) |  |  | (d | ) |  |   | 54,607  |  
|Goodwill                                           |  |                                    | 85,752  |   |          |   | 28,019  |             |  |          | (28,019      | ) |  |  | (d | ) |  |   |         |  
|                                                   |  |                                    |        |   |          |   |        |             |  |          | 148,609      |   |  |  | (d | ) |  |   | 234,361 |  
|Intangible assets                                  |  |                                    | 6,053   |   |          |   |        |             |  |          | 13,338       |   |  |  | (d | ) |  |   | 19,391  |  
|Other long-term assets                             |  |                                    | 14,789  |   |          |   | 900     |             |  |          | 587          |   |  |  | (e | ) |  |   | 16,276  |  
|                                                   |  |                                    |         |   |          |   |         |             |  |          |              |   |  |  |   
|Total assets                                       |  |                                    | 344,719 |   |          |   | 120,304 |             |  |          | 111,741      |   |  |  |    |   |  |   | 576,764 |  
|                                                   |  |                                    |         |   |          |   |         |             |  |          |              |   |  |  |   
|                                                  
|LIABILITIES AND SHAREHOLDERS EQUITY              
|Current                                            |  |                                    |         |   |          |   |         |             |  |          |              |   |  |  |    |   |  |   |         |  
|Bank indebtedness                                  |  |                                    |        |   |          |   |        |             |  |          | 90,956       |   |  |  | (c | ) |  |   | 90,956  |  
|Accounts payable and accrued liabilities           |  |                                    | 62,656  |   |          |   | 12,039  |             |  |          | 759          |   |  |  | (d | ) |  |   |         |  
|                                                   |  |                                    |        |   |          |   |        |             |  |          | 7,892        |   |  |  | (d | ) |  |   |         |  
|                                                   |  |                                    |        |   |          |   |        |             |  |          | 1,677        |   |  |  | (e | ) |  |   | 85,023  |  
|Other current liabilities                          |  |                                    | 38,944  |   |          |   | 4,057   |             |  |          |             |   |  |  |    |   |  |   | 43,001  |  
|                                                   |  |                                    |         |   |          |   |         |             |  |          |              |   |  |  |   
|Total current liabilities                          |  |                                    | 101,600 |   |          |   | 16,096  |             |  |          | 101,284      |   |  |  |    |   |  |   | 218,980 |  
|Long-term debt                                     |  |                                    | 19,020  |   |          |   |        |             |  |          |             |   |  |  |    |   |  |   | 19,020  |  
|Other long-term liabilities                        |  |                                    | 27,015  |   |          |   | 1,954   |             |  |          | 4,546        |   |  |  | (d | ) |  |   | 33,515  |  
|                                                   |  |                                    |         |   |          |   |         |             |  |          |              |   |  |  |   
|Total liabilities                                  |  |                                    | 147,635 |   |          |   | 18,050  |             |  |          | 105,830      |   |  |  |    |   |  |   | 271,515 |  
|                                                   |  |                                    |         |   |          |   |         |             |  |          |              |   |  |  |   
|Shareholders equity                               |  |                                    |         |   |          |   |         |             |  |          |              |   |  |  |    |   |  |   |         |  
|Share capital                                      |  |                                    | 88,138  |   |          |   | 10      |             |  |          | (10          | ) |  |  | (d | ) |  |   |         |  
|                                                   |  |                                    |        |   |          |   |        |             |  |          | (1,090       | ) |  |  | (e | ) |  |   |         |  
|                                                   |  |                                    |        |   |          |   |        |             |  |          | 112,227      |   |  |  | (d | ) |  |   | 199,275 |  
|Additional paid in capital                         |  |                                    | 2,740   |   |          |   | 59,395  |             |  |          | (59,395      | ) |  |  | (d | ) |  |   | 2,740   |  
|Deferred stock compensation                        |  |                                    |        |   |          |   | (1,637  | )           |  |          | (1,335       | ) |  |  | (d | ) |  |   | (2,972  | )
|Retained earnings                                  |  |                                    | 124,542 |   |          |   | 44,486  |             |  |          | (3,237       | ) |  |  | (b | ) |  |   |         |  
|                                                   |  |                                    |        |   |          |   |        |             |  |          | (41,249      | ) |  |  | (d | ) |  |   | 124,542 |  
|Accumulated other comprehensive income             |  |                                    | (18,336 | ) |          |   |        |             |  |          |             |   |  |  |    |   |  |   | (18,336 | )
|                                                   |  |                                    |         |   |          |   |         |             |  |          |              |   |  |  |   
|Total shareholders equity                         |  |                                    | 197,084 |   |          |   | 102,254 |             |  |          | 5,911        |   |  |  |    |   |  |   | 305,249 |  
|                                                   |  |                                    |         |   |          |   |         |             |  |          |              |   |  |  |   
|Total liabilities and shareholders equity         |  |                                    | 344,719 |   |          |   | 120,304 |             |  |          | 111,741      |   |  |  |    |   |  |   | 576,764 |  
|                                                   |  |                                    |         |   |          |   |         |             |  |          |              |   |  |  |   






F-33



---



##### 






STANTEC INC.








UNAUDITED PRO FORMA CONDENSED








CONSOLIDATED STATEMENT OF INCOME








For the three months ended March 31, 2005








|                                                     |  |                                                             |         |   |          |   |        |                       |  |              |         |   |  |  |     |  |  |   |         |  
|---------------------------------------------------- |  | ----------------------------------------------------------- | ------- | - | -------- | - | ------ | --------------------- |  | ------------ | ------- | - |  |  | --- |  |  | - | ------- | -
|                                                     |  |                                                             |         |   |          |   |        |                       |  | Pro Forma    |        
|                                                     |  | Stantec                                                     |         |   | Keith    |   |        |                       |  | Consolidated |        
|                                                     |  | US GAAP                                                     |         |   | US GAAP  |   |        | Pro Forma Adjustments |  |              | US GAAP |  
|                                                     |  |                                                             |         |   |          |   |        |                       |  |              |         |  
|                                                     |  | (note 2)                                                    |         |   | (note 3) |   |        |                       |  | (note 4)     |         |   | 
|                                                     |  | (In thousands of Canadian dollars except per share amounts) |        
|INCOME                                               |  |                                                             |         |   |          |   |        |                       |  |              |         |   |  |  |     |  |  |   |         |  
|Gross revenue                                        |  | $                                                           | 141,144 |   |          | $ | 34,149 |                       |  | $            |        |   |  |  |     |  |  | $ | 175,293 |  
|Less subconsultant and other direct expenses         |  |                                                             | 22,011  |   |          |   | 2,369  |                       |  |              |        |   |  |  |     |  |  |   | 24,380  |  
|                                                     |  |                                                             |         |   |          |   |        |                       |  |              |         |   |  |  |    
|Net revenue                                          |  |                                                             | 119,133 |   |          |   | 31,780 |                       |  |              |        |   |  |  |     |  |  |   | 150,913 |  
|Costs of revenue                                     |  |                                                             |        |   |          |   | 19,771 |                       |  |              | (19,771 | ) |  |  | (g) |  |  |   |        |  
|Direct payroll costs                                 |  |                                                             | 54,439  |   |          |   |       |                       |  |              | 14,100  |   |  |  | (g) |  |  |   | 68,539  |  
|                                                     |  |                                                             |         |   |          |   |        |                       |  |              |         |   |  |  |    
|Gross margin                                         |  |                                                             | 64,694  |   |          |   | 12,009 |                       |  |              | 5,671   |   |  |  |     |  |  |   | 82,374  |  
|Administrative and marketing expenses                |  |                                                             | 51,262  |   |          |   | 8,394  |                       |  |              | 5,061   |   |  |  | (g) |  |  |   |         |  
|                                                     |  |                                                             |         |   |          |   |        |                       |  |              | 58      |   |  |  | (i) |  |  |   | 64,775  |  
|Depreciation of property and equipment               |  |                                                             | 2,764   |   |          |   |       |                       |  |              | 610     |   |  |  | (g) |  |  |   | 3,374   |  
|Amortization of intangible assets                    |  |                                                             | 238     |   |          |   |       |                       |  |              | 909     |   |  |  | (f) |  |  |   | 1,147   |  
|Net interest expense (income)                        |  |                                                             | 75      |   |          |   | (228   | )                     |  |              | 932     |   |  |  | (h) |  |  |   | 779     |  
|Other income, net                                    |  |                                                             | (7      | ) |          |   | (17    | )                     |  |              |        |   |  |  |     |  |  |   | (24     | )
|                                                     |  |                                                             |         |   |          |   |        |                       |  |              |         |   |  |  |    
|Income before income taxes                           |  |                                                             | 10,362  |   |          |   | 3,860  |                       |  |              | (1,899  | ) |  |  |     |  |  |   | 12,323  |  
|Income tax expense                                   |  |                                                             | 3,627   |   |          |   | 1,474  |                       |  |              | (715    | ) |  |  | (j) |  |  |   | 4,386   |  
|                                                     |  |                                                             |         |   |          |   |        |                       |  |              |         |   |  |  |    
|Net income                                           |  |                                                             | 6,735   |   |          |   | 2,386  |                       |  |              | (1,184  | ) |  |  |     |  |  |   | 7,937   |  
|                                                     |  |                                                             |         |   |          |   |        |                       |  |              |         |   |  |  |    
|Earnings per share                                   |  |                                                             |         |   |          |   |        |                       |  |              |         |   |  |  |     |  |  |   |         |  
|Basic earnings per share                             |  |                                                             | 0.36    |   |          |   |        |                       |  |              |         |   |  |  |     |  |  |   | 0.35    |  
|Diluted earnings per share                           |  |                                                             | 0.35    |   |          |   |        |                       |  |              |         |   |  |  |     |  |  |   | 0.34    |  
|Weighted average number of common shares outstanding |  |                                                             |         |   |          |   |        |                       |  |              |         |   |  |  |     |  |  |   |         |  
|Basic                                                |  |                                                             | 18,918  |   |          |   |        |                       |  |              | 3,778   |   |  |  | (k) |  |  |   | 22,696  |  
|Diluted                                              |  |                                                             | 19,424  |   |          |   |        |                       |  |              | 3,860   |   |  |  | (k) |  |  |   | 23,284  |  












F-34



---



##### 



STANTEC INC.


UNAUDITED PRO FORMA CONDENSED


CONSOLIDATED STATEMENT OF INCOME


For the year ended December 31, 2004





|                                                     |  |                                                             |         |   |          |   |         |                       |  |              |         |   |  |  |     |  |  |   |         |  
|---------------------------------------------------- |  | ----------------------------------------------------------- | ------- | - | -------- | - | ------- | --------------------- |  | ------------ | ------- | - |  |  | --- |  |  | - | ------- | -
|                                                     |  |                                                             |         |   |          |   |         |                       |  | Pro Forma    |        
|                                                     |  | Stantec                                                     |         |   | Keith    |   |         |                       |  | Consolidated |        
|                                                     |  | US GAAP                                                     |         |   | US GAAP  |   |         | Pro Forma Adjustments |  |              | US GAAP |  
|                                                     |  |                                                             |         |   |          |   |         |                       |  |              |         |  
|                                                     |  | (note 2)                                                    |         |   | (note 3) |   |         |                       |  | (note 4)     |         |   | 
|                                                     |  | (In thousands of Canadian dollars except per share amounts) |        
|INCOME                                               |  |                                                             |         |   |          |   |         |                       |  |              |         |   |  |  |     |  |  |   |         |  
|Gross revenue                                        |  | $                                                           | 520,879 |   |          | $ | 137,740 |                       |  | $            |        |   |  |  |     |  |  | $ | 658,619 |  
|Less subconsultant and other direct expense          |  |                                                             | 71,728  |   |          |   | 11,234  |                       |  |              |        |   |  |  |     |  |  |   | 82,962  |  
|                                                     |  |                                                             |         |   |          |   |         |                       |  |              |         |   |  |  |    
|Net revenue                                          |  |                                                             | 449,151 |   |          |   | 126,506 |                       |  |              |        |   |  |  |     |  |  |   | 575,657 |  
|Costs of revenue                                     |  |                                                             |        |   |          |   | 78,925  |                       |  |              | (78,925 | ) |  |  | (g) |  |  |   |        |  
|Direct payroll costs                                 |  |                                                             | 205,513 |   |          |   |        |                       |  |              | 58,989  |   |  |  | (g) |  |  |   | 264,502 |  
|                                                     |  |                                                             |         |   |          |   |         |                       |  |              |         |   |  |  |    
|Gross margin                                         |  |                                                             | 243,638 |   |          |   | 47,581  |                       |  |              | 19,936  |   |  |  |     |  |  |   | 311,155 |  
|Administrative and marketing expenses                |  |                                                             | 183,739 |   |          |   | 30,089  |                       |  |              | 17,350  |   |  |  | (g) |  |  |   |         |  
|                                                     |  |                                                             |         |   |          |   |         |                       |  |              | 599     |   |  |  | (i) |  |  |   | 231,777 |  
|Depreciation of property and equipment               |  |                                                             | 11,986  |   |          |   |        |                       |  |              | 2,586   |   |  |  | (g) |  |  |   | 14,572  |  
|Amortization of intangible assets                    |  |                                                             | 927     |   |          |   |        |                       |  |              | 3,874   |   |  |  | (f) |  |  |   | 4,801   |  
|Net interest expense (income)                        |  |                                                             | 2,805   |   |          |   | (629    | )                     |  |              | 3,729   |   |  |  | (h) |  |  |   | 5,905   |  
|Other income, net                                    |  |                                                             | (479    | ) |          |   | (60     | )                     |  |              |        |   |  |  |     |  |  |   | (539    | )
|                                                     |  |                                                             |         |   |          |   |         |                       |  |              |         |   |  |  |    
|Income before income taxes                           |  |                                                             | 44,660  |   |          |   | 18,181  |                       |  |              | (8,202  | ) |  |  |     |  |  |   | 54,639  |  
|Income tax expense                                   |  |                                                             | 14,470  |   |          |   | 7,149   |                       |  |              | (3,050  | ) |  |  | (j) |  |  |   | 18,569  |  
|                                                     |  |                                                             |         |   |          |   |         |                       |  |              |         |   |  |  |    
|Net income                                           |  |                                                             | 30,190  |   |          |   | 11,032  |                       |  |              | (5,152  | ) |  |  |     |  |  |   | 36,070  |  
|                                                     |  |                                                             |         |   |          |   |         |                       |  |              |         |   |  |  |    
|Earnings per share                                   |  |                                                             |         |   |          |   |         |                       |  |              |         |   |  |  |     |  |  |   |         |  
|Basic earnings per share                             |  |                                                             | 1.63    |   |          |   |         |                       |  |              |         |   |  |  |     |  |  |   | 1.62    |  
|Diluted earnings per share                           |  |                                                             | 1.59    |   |          |   |         |                       |  |              |         |   |  |  |     |  |  |   | 1.58    |  
|Weighted average number of common shares outstanding |  |                                                             |         |   |          |   |         |                       |  |              |         |   |  |  |     |  |  |   |         |  
|Basic                                                |  |                                                             | 18,500  |   |          |   |         |                       |  |              | 3,778   |   |  |  | (k) |  |  |   | 22,278  |  
|Diluted                                              |  |                                                             | 19,007  |   |          |   |         |                       |  |              | 3,860   |   |  |  | (k) |  |  |   | 22,867  |  






F-35



---



##### 



STANTEC INC.


NOTES TO UNAUDITED PRO FORMA CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS




|   |                      
|-- | ---------------------
|1. | Basis of Presentation






























|   |                                                                         
|-- | ------------------------------------------------------------------------
|2. | Conversion of Stantecs Historical Financial
    Statements to U.S. GAAP














|   |                                                                              
|-- | -----------------------------------------------------------------------------
|3. | Conversion of Keiths Historical Financial Statements
    to Canadian Dollars









F-36



---



##### 



STANTEC INC.


NOTES TO UNAUDITED PRO FORMA CONDENSED


CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


THE KEITH COMPANIES, INC.


CONSOLIDATED BALANCE SHEET DATA





As at March 31, 2005








|                                                                                             |  |                           |        |   |           |  |         |  
|-------------------------------------------------------------------------------------------- |  | ------------------------- | ------ | - | --------- |  | ------- | -
|                                                                                             |  | U.S. GAAP                 |        |   | U.S. GAAP | 
|                                                                                             |  | US$                       |        |   | C$        | 
|                                                                                             |  |                           |        |   |           | 
|                                                                                             |  | (In thousands of dollars) |       
|ASSETS                                                                                       |  |                           |        |   |           |  |         |  
|Current assets                                                                               |  |                           |        |   |           |  |         |  
|Cash and cash equivalents                                                                    |  |                           | 8,184  |   |           |  | 9,944   |  
|Available-for-sale securities, at fair value                                                 |  |                           | 32,050 |   |           |  | 38,944  |  
|Contracts and trade receivables, net of allowance for doubtful
    accounts of
    US $1,119 |  |                           | 16,354 |   |           |  | 19,872  |  
|Costs and estimated earnings in excess of billings                                           |  |                           | 12,033 |   |           |  | 14,621  |  
|Prepaid expenses and other current assets                                                    |  |                           | 1,941  |   |           |  | 2,359   |  
|                                                                                             |  |                           |        |   |           | 
|Total current assets                                                                         |  |                           | 70,562 |   |           |  | 85,740  |  
|Equipment and leasehold improvements, net                                                    |  |                           | 4,646  |   |           |  | 5,645   |  
|Goodwill                                                                                     |  |                           | 23,059 |   |           |  | 28,019  |  
|Other assets                                                                                 |  |                           | 741    |   |           |  | 900     |  
|                                                                                             |  |                           |        |   |           | 
|Total assets                                                                                 |  |                           | 99,008 |   |           |  | 120,304 |  
|                                                                                             |  |                           |        |   |           | 
|                                                                                            
|LIABILITIES AND SHAREHOLDERS EQUITY                                                        
|Current liabilities                                                                          |  |                           |        |   |           |  |         |  
|Trade accounts payable                                                                       |  |                           | 1,293  |   |           |  | 1,571   |  
|Accrued employee compensation                                                                |  |                           | 5,151  |   |           |  | 6,259   |  
|Current portion of deferred tax liabilities                                                  |  |                           | 1,661  |   |           |  | 2,018   |  
|Other accrued liabilities                                                                    |  |                           | 3,464  |   |           |  | 4,209   |  
|Billings in excess of costs and estimated earnings                                           |  |                           | 1,678  |   |           |  | 2,039   |  
|                                                                                             |  |                           |        |   |           | 
|Total current liabilities                                                                    |  |                           | 13,247 |   |           |  | 16,096  |  
|Deferred tax liabilities                                                                     |  |                           | 1,125  |   |           |  | 1,367   |  
|Accrued rent                                                                                 |  |                           | 483    |   |           |  | 587     |  
|                                                                                             |  |                           |        |   |           | 
|Total liabilities                                                                            |  |                           | 14,855 |   |           |  | 18,050  |  
|                                                                                             |  |                           |        |   |           | 
|Shareholders equity                                                                         |  |                           |        |   |           |  |         |  
|Common stock                                                                                 |  |                           | 8      |   |           |  | 10      |  
|Additional paid-in-capital                                                                   |  |                           | 48,881 |   |           |  | 59,395  |  
|Deferred stock compensation                                                                  |  |                           | (1,347 | ) |           |  | (1,637  | )
|Retained earnings                                                                            |  |                           | 36,611 |   |           |  | 44,486  |  
|                                                                                             |  |                           |        |   |           | 
|Total shareholders equity                                                                   |  |                           | 84,153 |   |           |  | 102,254 |  
|                                                                                             |  |                           |        |   |           | 
|Total liabilities and shareholders equity                                                   |  |                           | 99,008 |   |           |  | 120,304 |  
|                                                                                             |  |                           |        |   |           | 




F-37



---



##### 



STANTEC INC.


NOTES TO UNAUDITED PRO FORMA CONDENSED


CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)





THE KEITH COMPANIES, INC.








CONSOLIDATED STATEMENT OF INCOME DATA








For the Three Months Ended March 31, 2005








|                                             |  |                           |        |  |           |  |        | 
|-------------------------------------------- |  | ------------------------- | ------ |  | --------- |  | ------ | 
|                                             |  | U.S. GAAP                 |        |  | U.S. GAAP | 
|                                             |  | US$                       |        |  | C$        | 
|                                             |  |                           |        |  |           | 
|                                             |  | (In thousands of dollars) |       
|INCOME                                       |  |                           |        |  |           |  |        | 
|Gross revenue                                |  |                           | 27,838 |  |           |  | 34,149 | 
|Subcontractor costs                          |  |                           | 1,931  |  |           |  | 2,369  | 
|                                             |  |                           |        |  |           | 
|Net revenue                                  |  |                           | 25,907 |  |           |  | 31,780 | 
|Costs of revenue                             |  |                           | 16,117 |  |           |  | 19,771 | 
|                                             |  |                           |        |  |           | 
|Gross profit                                 |  |                           | 9,790  |  |           |  | 12,009 | 
|Selling, general and administrative expenses |  |                           | 6,843  |  |           |  | 8,394  | 
|                                             |  |                           |        |  |           | 
|Income from operations                       |  |                           | 2,947  |  |           |  | 3,615  | 
|Interest income, net                         |  |                           | 186    |  |           |  | 228    | 
|Other income, net                            |  |                           | 14     |  |           |  | 17     | 
|                                             |  |                           |        |  |           | 
|Income before provision for income taxes     |  |                           | 3,147  |  |           |  | 3,860  | 
|Provision for income taxes                   |  |                           | 1,202  |  |           |  | 1,474  | 
|                                             |  |                           |        |  |           | 
|Income from continuing operations            |  |                           | 1,945  |  |           |  | 2,386  | 
|                                             |  |                           |        |  |           | 




THE KEITH COMPANIES, INC.


CONSOLIDATED STATEMENT OF INCOME DATA


For the Year Ended December 31, 2004


|                                             |  |                           |         |  |           |  |         | 
|-------------------------------------------- |  | ------------------------- | ------- |  | --------- |  | ------- | 
|                                             |  | U.S. GAAP                 |         |  | U.S. GAAP | 
|                                             |  | US$                       |         |  | C$        | 
|                                             |  |                           |         |  |           | 
|                                             |  | (In thousands of dollars) |        
|INCOME                                       |  |                           |         |  |           |  |         | 
|Gross revenue                                |  |                           | 105,346 |  |           |  | 137,740 | 
|Subcontractor costs                          |  |                           | 8,592   |  |           |  | 11,234  | 
|                                             |  |                           |         |  |           | 
|Net revenue                                  |  |                           | 96,754  |  |           |  | 126,506 | 
|Costs of revenue                             |  |                           | 60,363  |  |           |  | 78,925  | 
|                                             |  |                           |         |  |           | 
|Gross profit                                 |  |                           | 36,391  |  |           |  | 47,581  | 
|Selling, general and administrative expenses |  |                           | 23,013  |  |           |  | 30,089  | 
|                                             |  |                           |         |  |           | 
|Income from operations                       |  |                           | 13,378  |  |           |  | 17,492  | 
|Interest income, net                         |  |                           | 481     |  |           |  | 629     | 
|Other income, net                            |  |                           | 46      |  |           |  | 60      | 
|                                             |  |                           |         |  |           | 
|Income before provision for income taxes     |  |                           | 13,905  |  |           |  | 18,181  | 
|Provision for income taxes                   |  |                           | 5,468   |  |           |  | 7,149   | 
|                                             |  |                           |         |  |           | 
|Income from continuing operations            |  |                           | 8,437   |  |           |  | 11,032  | 
|                                             |  |                           |         |  |           | 

F-38



---



##### 



STANTEC INC.


NOTES TO UNAUDITED PRO FORMA CONDENSED


CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |                                      
|-- | -------------------------------------
|4. | Pro Forma Assumptions and Adjustments




























|                                                         |  |        |         |  |        |  |         | 
|-------------------------------------------------------- |  | ------ | ------- |  | ------ |  | ------- | 
|                                                         |  | In US  |         |  | In C   | 
|                                                         |  | $000s |         |  | $000s | 
|                                                         |  |        |         |  |        | 
|Cash consideration                                       |  |        | 90,368  |  |        |  | 109,806 | 
|Share consideration (3,860,000 of Stantec common shares) |  |        | 92,359  |  |        |  | 112,227 | 
|Estimated transaction costs                              |  |        | 625     |  |        |  | 759     | 
|                                                         |  |        |         |  |        | 
|Total purchase consideration                             |  |        | 183,352 |  |        |  | 222,792 | 
|                                                         |  |        |         |  |        | 












F-39



---



##### 



STANTEC INC.


NOTES TO UNAUDITED PRO FORMA CONDENSED


CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|                                                          |  |        |         |   |        |  |         |  
|--------------------------------------------------------- |  | ------ | ------- | - | ------ |  | ------- | -
|                                                          |  | In US  |         |   | In C   | 
|                                                          |  | $000s |         |   | $000s | 
|                                                          |  |        |         |   |        | 
|Assets and liabilities acquired:                          |  |        |         |   |        |  |         |  
|Cash and cash equivalents                                 |  |        | 5,520   |   |        |  | 6,707   |  
|Available for sale securities                             |  |        | 32,050  |   |        |  | 38,944  |  
|Accounts receivable                                       |  |        | 16,354  |   |        |  | 19,872  |  
|Costs and estimated earnings in excess of billings        |  |        | 12,033  |   |        |  | 14,621  |  
|Other current assets                                      |  |        | 1,941   |   |        |  | 2,359   |  
|Property and equipment                                    |  |        | 4,081   |   |        |  | 4,958   |  
|Other long-term assets                                    |  |        | 741     |   |        |  | 900     |  
|Goodwill                                                  |  |        | 122,301 |   |        |  | 148,609 |  
|Intangible assets                                         |  |        | 10,977  |   |        |  | 13,338  |  
|Accounts payable and accrued liabilities                  |  |        | (16,403 | ) |        |  | (19,931 | )
|Other current liabilities including deferred income tax   |  |        | (3,339  | ) |        |  | (4,057  | )
|Other long-term liabilities including deferred income tax |  |        | (5,349  | ) |        |  | (6,500  | )
|Deferred stock compensation                               |  |        | 2,445   |   |        |  | 2,972   |  
|                                                          |  |        |         |   |        | 
|Net assets acquired                                       |  |        | 183,352 |   |        |  | 222,792 |  
|                                                          |  |        |         |   |        | 






















| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Client relationships  C$8,809,000
    (US$7,250,000)  the amount allocated was based on the
    present value of the after tax profit component in identified
    existing Keith client revenue streams (net of related customer
    contract backlog) less after tax contributory charges for
    working capital, capital assets, workforce and software, grossed
    up for tax savings. The amortization term is estimated to be
    10 years based on an evaluation of the duration of the
    Keith client relationships.
|
|
|
| |  | Contract backlog  C$3,801,000
    (US$3,128,000)  the amount allocated was based on the
    present value of the after tax profit component represented in
    existing contract backlog less after tax contributory charges
    for working capital, capital assets, workforce and software,
    grossed up for tax                                                                                                                                                                                                           
|

F-40



---



##### 



STANTEC INC.


NOTES TO UNAUDITED PRO FORMA CONDENSED


CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |   | savings. The amortization term is estimated to be 18 months
    which is based on the term over which contract backlog has
    historically been completed; and                                                                                                                                                                                                                                                                                                                 
|
|
|
| |  | Value of favorable premise leases  C$728,000
    (US$599,000)  the amount allocated was based on the
    present value of after tax cash flows for the difference between
    the actual lease rates and the fair value lease rates as
    determined by comparable properties that were on the market at
    the time the assessment was completed, grossed up for tax
    savings. The amortization period of 47 months was based on
    the terms of the underlying leases.
|

















































F-41



---



##### 



STANTEC INC.


NOTES TO UNAUDITED PRO FORMA CONDENSED


CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


































F-42



---



##### 



Appendix A


Agreement and Plan of Merger and Reorganization


NOTICE





The merger agreement has been included to provide you with
information regarding its terms. The merger agreement contains
representations and warranties Stantec and Keith made to each
other. The assertions embodied in Keiths representations
and warranties are qualified by information in a confidential
disclosure schedule that Keith has provided to Stantec in
connection with signing the merger agreement. You should not
rely on the representations and warranties as characterizations
of the actual state of facts, since they are modified in
important part by the underlying disclosure schedule. This
disclosure schedule contains potential non-public information.
Moreover, information concerning the subject matter of the
representations and warranties may have changed since the date
of the agreement, which subsequent information may or may not be
fully reflected in the companies public disclosure. While
Stantec and Keith do not believe that the Keith disclosure
schedule contains information securities laws require them to
publicly disclose other than information that has already been
disclosed, the disclosure schedule does contain information that
modifies, qualifies and creates exceptions to the
representations and warranties set forth in the attached merger
agreement.





A-1



---



##### 





AGREEMENT AND PLAN OF MERGER AND REORGANIZATION


among


STANTEC INC.,


STANTEC CONSULTING CALIFORNIA INC.


and


THE KEITH COMPANIES, INC.


Dated as of April 14, 2005






---



##### 



TABLE OF CONTENTS





|                                                                  |  |                                              |  |      |    | 
|----------------------------------------------------------------- |  | -------------------------------------------- |  | ---- | -- | 
|                                                                  |  |                                              |  | Page |   
|                                                                  |  |                                              |  |      |   
|ARTICLE I
    The Merger                                         
|Section 1.01.                                                     |  | The Merger                                   |  |      | 1  | 
|Section 1.02.                                                     |  | Effective Time; Closing                      |  |      | 1  | 
|Section 1.03.                                                     |  | Effect of the Merger                         |  |      | 2  | 
|Section 1.04.                                                     |  | Articles of Incorporation; By-laws           |  |      | 2  | 
|Section 1.05.                                                     |  | Directors and Officers                       |  |      | 2  | 
|ARTICLE II
    Conversion of Securities; Exchange of Certificates
|Section 2.01.                                                     |  | Conversion of Securities                     |  |      | 2  | 
|Section 2.02.                                                     |  | Exchange of Certificates                     |  |      | 5  | 
|Section 2.03.                                                     |  | Stock Transfer Books                         |  |      | 7  | 
|Section 2.04.                                                     |  | Company Stock Options                        |  |      | 7  | 
|Section 2.05.                                                     |  | Company Restricted Stock                     |  |      | 7  | 
|Section 2.06.                                                     |  | [Reserved]                                   |  |      | 7  | 
|Section 2.07.                                                     |  | Dissenting Shares                            |  |      | 8  | 
|Section 2.08.                                                     |  | [Reserved]                                   |  |      | 8  | 
|Section 2.09.                                                     |  | Affiliates                                   |  |      | 8  | 
|ARTICLE III
    Representations and Warranties of the Company    
|Section 3.01.                                                     |  | Organization and Qualification; Subsidiaries |  |      | 8  | 
|Section 3.02.                                                     |  | Articles of Incorporation and By-laws        |  |      | 9  | 
|Section 3.03.                                                     |  | Capitalization                               |  |      | 9  | 
|Section 3.04.                                                     |  | Authority Relative to This Agreement         |  |      | 10 | 
|Section 3.05.                                                     |  | No Conflict; Required Filings and Consents   |  |      | 10 | 
|Section 3.06.                                                     |  | Permits; Compliance                          |  |      | 10 | 
|Section 3.07.                                                     |  | SEC Filings; Financial Statements            |  |      | 11 | 
|Section 3.08.                                                     |  | Absence of Certain Changes or Events         |  |      | 12 | 
|Section 3.09.                                                     |  | Absence of Litigation                        |  |      | 12 | 
|Section 3.10.                                                     |  | Employee Benefit Plans                       |  |      | 12 | 
|Section 3.11.                                                     |  | Labor and Employment Matters                 |  |      | 14 | 
|Section 3.12.                                                     |  | Real Property; Title to Assets               |  |      | 15 | 
|Section 3.13.                                                     |  | Intellectual Property                        |  |      | 15 | 
|Section 3.14.                                                     |  | Taxes                                        |  |      | 15 | 
|Section 3.15.                                                     |  | Environmental Matters                        |  |      | 16 | 
|Section 3.16.                                                     |  | [Reserved]                                   |  |      | 16 | 
|Section 3.17.                                                     |  | Material Contracts                           |  |      | 16 | 
|Section 3.18.                                                     |  | Insurance                                    |  |      | 17 | 
|Section 3.19.                                                     |  | Board Approval; Vote Required                |  |      | 17 | 
|Section 3.20.                                                     |  | Customers and Suppliers                      |  |      | 18 | 
|Section 3.21.                                                     |  | [Reserved]                                   |  |      | 18 | 
|Section 3.22.                                                     |  | Interested Party Transactions                |  |      | 18 | 
|Section 3.23.                                                     |  | Opinion of Financial Advisor                 |  |      | 18 | 
|Section 3.24.                                                     |  | Brokers                                      |  |      | 18 | 




i



---



##### 






|                                                                       |  |                                                        |  |      |    | 
|---------------------------------------------------------------------- |  | ------------------------------------------------------ |  | ---- | -- | 
|                                                                       |  |                                                        |  | Page |   
|                                                                       |  |                                                        |  |      |   
|                                                                      
|ARTICLE IV
    Representations and Warranties of Parent and Merger Sub
|Section 4.01.                                                          |  | Corporate Organization                                 |  |      | 18 | 
|Section 4.02.                                                          |  | Articles of Incorporation and By-Laws                  |  |      | 18 | 
|Section 4.03.                                                          |  | Capitalization                                         |  |      | 19 | 
|Section 4.04.                                                          |  | Authority Relative to This Agreement                   |  |      | 19 | 
|Section 4.05.                                                          |  | No Conflict; Required Filings and Consents             |  |      | 19 | 
|Section 4.06.                                                          |  | Permits; Compliance                                    |  |      | 20 | 
|Section 4.07.                                                          |  | ASC Filings; Financial Statements                      |  |      | 20 | 
|Section 4.08.                                                          |  | Absence of Certain Changes or Events                   |  |      | 21 | 
|Section 4.09.                                                          |  | Absence of Litigation                                  |  |      | 22 | 
|Section 4.10.                                                          |  | Stockholder Vote                                       |  |      | 22 | 
|Section 4.11.                                                          |  | Operations of Merger Sub                               |  |      | 22 | 
|Section 4.12.                                                          |  | Taxes                                                  |  |      | 22 | 
|Section 4.13.                                                          |  | Board Approval                                         |  |      | 22 | 
|Section 4.14.                                                          |  | [Reserved]                                             |  |      | 22 | 
|Section 4.15.                                                          |  | Ownership of Company Common Stock                      |  |      | 22 | 
|Section 4.16.                                                          |  | Brokers                                                |  |      | 22 | 
|Section 4.17.                                                          |  | Intellectual Property                                  |  |      | 23 | 
|Section 4.18.                                                          |  | Environmental Matters                                  |  |      | 23 | 
|ARTICLE V
    Conduct of Business Pending the Merger                  
|Section 5.01.                                                          |  | Conduct of Business by the Company Pending the Merger  |  |      | 23 | 
|Section 5.02.                                                          |  | Conduct of Business by Parent Pending the Merger       |  |      | 25 | 
|ARTICLE VI
    Additional Agreements                                  
|Section 6.01.                                                          |  | Registration Statement; Proxy Statement                |  |      | 25 | 
|Section 6.02.                                                          |  | Company Stockholders Meeting                          |  |      | 26 | 
|Section 6.03.                                                          |  | Access to Information; Confidentiality                 |  |      | 26 | 
|Section 6.04.                                                          |  | No Solicitation of Transactions                        |  |      | 27 | 
|Section 6.05.                                                          |  | Employee Benefit Matters                               |  |      | 28 | 
|Section 6.06.                                                          |  | Directors and Officers Indemnification and Insurance |  |      | 29 | 
|Section 6.07.                                                          |  | Notification of Certain Matters                        |  |      | 29 | 
|Section 6.08.                                                          |  | Company Affiliates                                     |  |      | 29 | 
|Section 6.09.                                                          |  | Further Action; Reasonable Best Efforts                |  |      | 30 | 
|Section 6.10.                                                          |  | Plan of Reorganization                                 |  |      | 30 | 
|Section 6.11.                                                          |  | Obligations of Merger Sub                              |  |      | 31 | 
|Section 6.12.                                                          |  | Consents of Accountants                                |  |      | 31 | 
|Section 6.13.                                                          |  | Listing                                                |  |      | 31 | 
|Section 6.14.                                                          |  | Subsequent Financial Statements                        |  |      | 31 | 
|Section 6.15.                                                          |  | Public Announcements                                   |  |      | 31 | 
|Section 6.16.                                                          |  | Board of Directors of Parent                           |  |      | 31 | 
|Section 6.17.                                                          |  | Company Contribution                                   |  |      | 31 | 
|Section 6.18.                                                          |  | Unvested Company Restricted Stock                      |  |      | 31 | 




ii



---



##### 






|                                                   |  |                                                            |  |      |    | 
|-------------------------------------------------- |  | ---------------------------------------------------------- |  | ---- | -- | 
|                                                   |  |                                                            |  | Page |   
|                                                   |  |                                                            |  |      |   
|                                                  
|ARTICLE VII
    Conditions to the Merger          
|Section 7.01.                                      |  | Conditions to the Obligations of Each Party                |  |      | 32 | 
|Section 7.02.                                      |  | Conditions to the Obligations of Parent and Merger Sub     |  |      | 32 | 
|Section 7.03.                                      |  | Conditions to the Obligations of the Company               |  |      | 33 | 
|ARTICLE VIII
    Termination, Amendment and Waiver
|Section 8.01.                                      |  | Termination                                                |  |      | 34 | 
|Section 8.02.                                      |  | Effect of Termination                                      |  |      | 35 | 
|Section 8.03.                                      |  | Fees and Expenses                                          |  |      | 35 | 
|Section 8.04.                                      |  | Amendment                                                  |  |      | 36 | 
|Section 8.05.                                      |  | Waiver                                                     |  |      | 36 | 
|ARTICLE IX
    General Provisions                 
|Section 9.01.                                      |  | Non Survival of Representations, Warranties and Agreements |  |      | 36 | 
|Section 9.02.                                      |  | Notices                                                    |  |      | 36 | 
|Section 9.03.                                      |  | Certain Definitions                                        |  |      | 37 | 
|Section 9.04.                                      |  | Severability                                               |  |      | 41 | 
|Section 9.05.                                      |  | Entire Agreement; Assignment                               |  |      | 42 | 
|Section 9.06.                                      |  | Parties in Interest                                        |  |      | 42 | 
|Section 9.07.                                      |  | Specific Performance                                       |  |      | 42 | 
|Section 9.08.                                      |  | Governing Law                                              |  |      | 42 | 
|Section 9.09.                                      |  | Headings                                                   |  |      | 42 | 
|Section 9.10.                                      |  | Counterparts                                               |  |      | 42 | 
|Section 9.11.                                      |  | Waiver of Jury Trial                                       |  |      | 42 | 




iii



---



##### 



Agreement Parent Merger Sub Company


CCC Merger


Company Board Transactions


Parent
Board


Stockholder Support Agreement


Code




ARTICLE I


THE MERGER


Section The
Merger. Surviving
Corporation


Section Effective
Time; Closing. Certificate of Merger Effective Time Closing


1



---



##### 



Section Effect
of the Merger.


Section Articles
of Incorporation; By-laws.






Section Directors
and Officers.


ARTICLE II


CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES


Section Conversion
of Securities.


Company Common Stock Shares




| |                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) (A) 0.23 common shares, without par value, of
    Parent (Parent Common Stock) (the
    Fixed Ratio Stock) and (B) that number
    of shares of Parent Common Stock equal to US$16.50 divided by
    the Average Stock Price (the Floating Ratio
    Stock and, together with the Fixed Ratio Stock, the
    Exchange Stock); or
|
| | (ii) cash equal the sum of (A) US$16.50 and
    (B) the product of (x) 0.23 and (y) Average Stock
    Price (the Cash Payment); or                                                                                                                                                                                                        
|
| | (iii) (A) US$11.00, (B) the Fixed Ratio Stock and
    (C) that number of Parent Common Stock equal to US$5.50
    divided by the Average Stock Price (the US$5.50
    Stock and, together with the Fixed Ratio Stock, the
    Mixed Election Stock); or                                                                                 
|
| | (iv) such other combination of shares of Parent Common
    Stock and cash determined in accordance with
    Section 2.01(e) or Section 2.01(f)                                                                                                                                                                                              

Merger Consideration Average Stock Price


2



---



##### 



TSX


Aggregate Stock Amount Aggregate Cash
Amount






| |                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) cash per Share equal the Cash Payment (a Cash
    Election); or                                                                                                                                                        
|
| | (ii) the number of shares, or fraction thereof, of Parent
    Common Stock per Share equal to the Exchange Stock (a
    Stock Election); or                                                                                
|
| | (iii) the Mixed Consideration per Share,
    which consists of US$11.00 in cash and the Mixed Election Stock
    (a Mixed Election, and together with the Cash
    Election and the Stock Election, the
    Elections);

Form of Election Holder
Representative provided


Mixed Election Share


Stock Election Share provided however




| |                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) a number of shares (the Pro Rata Number of
    Shares) of Parent Common Stock equal to the quotient
    determined by (A) the difference of the Aggregate Stock
    Amount minus the number of shares of Parent Common Stock to be
    issued in exchange for Mixed Election Shares, divided by
    (B) the number of Stock Election Shares; and

3



---



##### 





| |                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii) an amount in cash equal to the product of (A) the
    difference of (x) the Exchange Stock, minus (y) the
    Pro Rata Number of Shares, multiplied by (B) the Average
    Stock Price;

Cash Election Share provided however




| |                                                                                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) an amount in cash (the Pro Rata Amount of
    Cash) equal to the quotient determined by (A) the
    difference of the Aggregate Cash Amount minus the amount of cash
    to be paid in exchange for Mixed Election Shares, divided by
    (B) the number of Cash Election Shares; and
|
| | (ii) a number of shares of Parent Common Stock equal to the
    quotient of (A) the difference of (x) the Cash
    Payment, minus (y) the Pro Rata Amount of Cash, divided by
    (B) the Average Stock Price;                                                                             



Election Deadline










| |                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) Parent or the Company receives written notice from its
    counsel specified in Article VII to the effect that such
    counsel is unlikely to be able to deliver a tax opinion required
    pursuant to Section 7.02(l) or Section 7.03(e), as the
    case may be, on the date of the Effective Time; and

4



---



##### 





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii) instead of depositing the Aggregate Cash Amount and
    the Aggregate Stock Amount in accordance with
    Section 2.02(a), Parent deposits, or causes to be deposited
    (including as contemplated by Section 7.02(f)), with the
    Exchange Agent (as defined below), for the benefit of the
    holders of Shares, for exchange in accordance with this
    Article II through the Exchange Agent, cash in an amount
    equal to US$22.00 per Share,

Reverse-Subsidiary Merger


Section Exchange
of Certificates.


Exchange Agent. Exchange Agent Exchange Fund


Exchange Procedures. Certificates


5



---



##### 



Distributions with Respect to Unexchanged Shares of
Parent Common Stock.


No Further Rights in Company Common Stock.


No Fractional Shares.


Adjustments to Merger Consideration.


Termination of Exchange Fund.


6



---



##### 



No Liability.


Withholding Rights.


Lost Certificates.


Section Stock
Transfer Books.


Section Company
Stock Options. Company Stock
Options Company Stock Option Plans Unvested
Options Option
Consideration Option Exchange Fund


Section Company
Restricted Stock. Company
Restricted Stock


Section [Reserved].


7



---



##### 



Section Dissenting
Shares.


Dissenting Shareholder Dissenting Shares Potential Dissenting Shares Potential Dissenting Shareholder




Section [Reserved]


Section Affiliates.


ARTICLE III


REPRESENTATIONS AND WARRANTIES OF THE COMPANY


Company
Disclosure Schedule


Section Organization
and Qualification; Subsidiaries.


Subsidiary


8



---



##### 
















Section Articles
of Incorporation and By-laws.





Section Capitalization.


Company Preferred
Stock Company
Stock Awards




9



---



##### 





Section Authority
Relative to This Agreement.


Section No
Conflict; Required Filings and Consents.


Law





Governmental
Authority Blue Sky Laws HSR Act








Section Permits;
Compliance. Company
Permits





10



---



##### 





Section SEC
Filings; Financial Statements.


SEC Company SEC
Reports Securities
Act Exchange Act


GAAP


2004 Balance Sheet








11



---



##### 





bona fide










Section Absence
of Certain Changes or Events.


Section Absence
of Litigation. Action


Section Employee
Benefit Plans.


ERISA


12



---



##### 



Plans


Multiemployer Plan Multiple Employer Plan




IRS






13



---



##### 



Non-U.S. Benefit Plan




| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) all employer and employee contributions to each
    Non-U.S. Benefit Plan required by law or by the terms of
    such Non-U.S. Benefit Plan have been made, or, if
    applicable, accrued in accordance with normal accounting
    practices, and a pro rata contribution for the period prior
    to and including the date of this Agreement has been made or
    accrued;                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| | (ii) the fair market value of the assets of each funded
    Non-U.S. Benefit Plan, the liability of each insurer for
    any Non-U.S. Benefit Plan funded through insurance or the
    book reserve established for any Non-U.S. Benefit Plan,
    together with any accrued contributions, is sufficient to
    procure or provide for the benefits determined on any ongoing
    basis (actual or contingent) accrued to the date of this
    Agreement with respect to all current and former participants
    under such Non-U.S. Benefit Plan according to the actuarial
    assumptions and valuations most recently used to determine
    employer contributions to such Non-U.S. Benefit Plan, and
    no Transaction shall cause such assets or insurance obligations
    to be less than such benefit obligations; and
|
| | (iii) each Non-U.S. Benefit Plan required to be
    registered has been registered and has been maintained in good
    standing with applicable regulatory authorities. Each
    Non-U.S. Benefit Plan has been operated in full compliance
    with all applicable non-United States laws.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

Section Labor
and Employment Matters.






14



---



##### 





Section Real
Property; Title to Assets.


Leased Real
Property Leases




Section Intellectual
Property. Company
Owned Intellectual Property Company Licensed Intellectual Property


Section Taxes.


15



---



##### 





Section Environmental
Matters. Environmental
Permits


Section [Reserved].


Section Material
Contracts.


Material
Contracts




| |                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) each material contract (as such term is
    defined in Item 601(b)(10) of Regulation S-K of the
    SEC) with respect to the Company and its Subsidiaries;                                                                                                                                                                                                                                                                 
|
| | (ii) each contract and agreement which is likely to involve
    consideration of more than US$5,000,000, in the aggregate, in
    any 12-month period;                                                                                                                                                                                                                                                                           
|
| | (iii) any employment or consulting agreement or any other
    written agreement with any other officer, employee or consultant
    with annual compensation in excess of US$100,000 or which
    includes a change of control provision or provides for severance
    obligations upon termination;                                                                                                                              
|
| | (iv) all management contracts (excluding contracts
    (i) for employment or (ii) which involve consideration
    of less than US$100,000 in any 12-month period or
    (iii) which are terminable with no more than 90 days
    notice without payment of a termination fee), including any
    contracts involving the payment of royalties or other amounts
    calculated based upon the revenues or income of the Company or

16



---



##### 



| |                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | any Subsidiary or income or revenues related to any product of
    the Company or any Subsidiary to which the Company or any
    Subsidiary is a party;                                                                                                                                                                                                           
|
| | (v) all contracts and agreements with any Governmental
    Authority to which the Company or any Subsidiary is a party that
    are not for professional services or not otherwise in the
    ordinary course of business;                                                                                                                                        
|
| | (vi) all contracts and agreements that limit, or purport to
    limit, the ability of the Company or any Subsidiary to compete
    in any line of business or in any geographic area;                                                                                                                                                                             
|
| | (vii) all material contracts or arrangements that result in
    any person or entity holding a power of attorney from the
    Company or any Subsidiary that relates to the Company, any
    Subsidiary or their respective businesses, excluding any power
    of attorney entered into in the ordinary course of business
    consistent with past practice; and
|
| | (viii) all other contracts and agreements, whether or not
    made in the ordinary course of business, which the breach,
    non-performance, amendment, termination or the absence of would,
    individually, have a Company Material Adverse Effect.                                                                                                           





Section Insurance. Insurance Policies


Section Board
Approval; Vote Required.






17



---



##### 



Section Customers
and Suppliers.


Section [Reserved].


Section Interested
Party Transactions.


Section Opinion
of Financial Advisor.


Section Brokers.


ARTICLE IV


REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB


ASC


Section Corporate
Organization.





Section Articles
of Incorporation and By-Laws.





18



---



##### 



Section Capitalization.


Parent Preferred Stock Parent Stock Option
Plans









Section Authority
Relative to This Agreement.








Section No
Conflict; Required Filings and Consents.







19



---



##### 







Section Permits;
Compliance. Parent Permits


Section ASC
Filings; Financial Statements.


ASC Parent Reports




20



---



##### 



Canadian GAAP


Parent 2004 Balance
Sheet









bona fide





bona fide








Section Absence
of Certain Changes or Events.


21



---



##### 



Section Absence
of Litigation.





Section Stockholder
Vote.





Section Operations
of Merger Sub.


Section Taxes.


Section Board
Approval.


Section [Reserved].


Section Ownership
of Company Common Stock.


Section Brokers.


22



---



##### 



Section Intellectual
Property. Parent Owned
Intellectual Property Parent
Licensed Intellectual Property


Section Environmental
Matters.


ARTICLE V


CONDUCT OF BUSINESS PENDING THE MERGER


Section Conduct
of Business by the Company Pending the Merger.








23



---



##### 























24



---



##### 









Section Conduct
of Business by Parent Pending the Merger.








ARTICLE VI


ADDITIONAL AGREEMENTS


Section Registration
Statement; Proxy Statement.


Company Stockholders Meeting Proxy Statement Registration Statement


Company
Recommendation




25



---



##### 









Section Company
Stockholders Meeting.


Section Access
to Information; Confidentiality.




26



---



##### 



Confidentiality Agreement






Section No
Solicitation of Transactions.






Change in the Company
Recommendation


27



---



##### 



Notice of Superior Proposal


Competing Transaction


Superior Proposal


Section Employee
Benefit Matters.


28



---



##### 





Section Directors
and Officers Indemnification and Insurance.










Section Notification
of Certain Matters. provided, however


Section Company
Affiliates.


Company Affiliate


29



---



##### 







Section Further
Action; Reasonable Best Efforts. provided


Section Plan
of Reorganization.








30



---



##### 





Section Obligations
of Merger Sub.


Section Consents
of Accountants.


Section Listing. NYSE Nasdaq U.S. Exchange


Section Subsequent
Financial Statements.


Section Public
Announcements.


Section Board
of Directors of Parent. Company Designated Director


Section Company
Contribution.


Section Unvested
Company Restricted Stock.


31



---



##### 



ARTICLE VII


CONDITIONS TO THE MERGER


Section Conditions
to the Obligations of Each Party.




| |                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) Registration Statement. The Registration
    Statement shall have been declared effective by the SEC under
    the Securities Act and no stop order suspending the
    effectiveness of the Registration Statement shall have been
    issued by the SEC and no proceeding for that purpose shall have
    been initiated by the SEC.
|
| | (b) Company Stockholder Approval. This Agreement
    shall have been approved and adopted by the requisite
    affirmative vote of the stockholders of the Company in
    accordance with the CCC and the Companys Articles of
    Incorporation.                                                                                       
|
| | (c) No Order. No Governmental Authority shall have
    enacted, issued, promulgated, enforced or entered any law, rule,
    regulation, judgment, decree, executive order or award (an
    Order) which is then in effect and has the effect of
    making the Merger illegal or otherwise prohibiting consummation
    of the Merger. 
|
| | (d) U.S. Antitrust Approvals and Waiting
    Periods. Any waiting period (and any extension thereof)
    applicable to the consummation of the Merger under the HSR Act
    shall have expired or been terminated.                                                                                                                       
|
| | (e) TSX Listing. The shares of Parent Common Stock
    to be issued in the Merger shall have been authorized for
    listing on the TSX, subject to official notice of issuance.                                                                                                                                                         

Section Conditions
to the Obligations of Parent and Merger Sub.




| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) Representations and Warranties. The
    representations and warranties of the Company contained in this
    Agreement shall have been true and correct when made and shall
    be true and correct as of the Effective Time, with the same
    force and effect as if made as of the Effective Time (other than
    such representations and warranties as are made as of another
    date which shall be true and correct as of such date), except
    where the failure to be so true and correct (without giving
    effect to any limitations or qualification as to
    materially (including the word material)
    or Company Material Adverse Effect set forth
    therein) would not, individually or in the aggregate, have a
    Company Material Adverse Effect.
|
| | (b) Agreements and Covenants. The Company shall have
    performed or complied in all material respects with all
    agreements and covenants required by this Agreement to be
    performed or complied with by it on or prior to the Effective
    Time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | (c) Officer Certificate. The Company shall have
    delivered to Parent a certificate, dated the date of the
    Closing, signed by the Chief Executive Officer of the Company,
    certifying as to the satisfaction of the conditions specified in
    Sections 7.02(a), 7.02(b) and 7.02(e).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | (d) Consents. All consents, approvals and
    authorizations legally required to be obtained to consummate the
    Merger shall have been obtained from and made with all
    Governmental Entities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| | (e) Material Adverse Effect. No Company Material
    Adverse Effect shall have occurred since the date of this
    Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | (f) Company Contribution. The Company shall have
    deposited, or shall have caused to be deposited, with the
    Exchange Agent for the benefit of the holders of the Company
    Common Stock the lesser of (i) $18,000,000 and
    (ii) the maximum amount of cash that would not preclude the
    Merger from qualifying as a reorganization within the meaning of
    Section 368(a) of the Code.                                                                                                                                                                                                                                                                                                                                                                               

32



---



##### 





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (g) Company Cash Balance. The Company shall have at
    least $40,000,000 of cash on deposit in cash or cash
    equivalents, less the amount of cash deposited with the Exchange
    Agent pursuant to Section 2.04 and Section 7.02(f).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | (h) Dissenting Shares. The number of Dissenting
    Shares shall be less than 5% of the issued and outstanding
    Shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (i) Cancellation of Company 401(k) Plan. Prior to
    the Effective Time, the Company Board shall have duly adopted a
    resolution providing for the termination and cancellation, as of
    the day immediately preceding the date on which the Effective
    Time occurs, of the Companys Plan qualified under
    Section 401(k) of the Code (the 401(k)
    Plan) and provided a certified copy of such resolution
    to Parent, which is reasonably satisfactory to Parent.
    Notwithstanding the foregoing, the Board of Directors of the
    Company shall not act to terminate and cancel the 401(k) Plan if
    Parent provides written notice to that effect to the Company at
    least two (2) days prior to the Effective Time.                                                                                                                                                                                                                                                                   
|
| | (j) Taxes. Subject to Section 2.01(k), Parent
    shall have received the opinion of Shearman & Sterling
    LLP, counsel to Parent, based upon representations of Parent and
    the Company, and normal assumptions, to the effect that, for
    federal income tax purposes, the Merger will qualify as a
    reorganization within the meaning of Section 368(a) of the
    Code and that each of Parent, Merger Sub and the Company will be
    a party to the reorganization within the meaning
    Section 368(b) of the Code, which opinion shall not have
    been withdrawn or modified in any material respect. The issuance
    of such opinion shall be conditioned on receipt by
    Shearman & Sterling LLP of representation letters from
    each of Parent and Company contemplated in Section 6.10.
    Each such representation letter shall be dated on or before the
    date of such opinion and shall not have been withdrawn or
    modified in any material respect as of the Effective Time.

Section Conditions
to the Obligations of the Company.




| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) Representations and Warranties. The
    representations and warranties of Parent and Merger Sub
    contained in this Agreement shall have been true and correct
    when made and shall be true and correct as of the Effective
    Time, with the same force and effect as if made as of the
    Effective Time (other than such representations and warranties
    as are made as of another date which shall be true and correct
    as of such date), except where the failure to be so true and
    correct (without giving effect to any limitations or
    qualification as to materially (including the word
    material) or Parent Material Adverse
    Effect set forth therein) would not, individually or in
    the aggregate, have a Parent Material Adverse Effect.                                                                      
|
| | (b) Agreements and Covenants. Parent and Merger Sub
    shall have performed or complied in all material respects with
    all agreements and covenants required by this Agreement to be
    performed or complied with by it on or prior to the Effective
    Time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | (c) Material Adverse Effect. No Parent Material
    Adverse Effect shall have occurred since the date of this
    Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | (d) Officer Certificate. Parent shall have delivered
    to the Company a certificate, dated the date of the Closing,
    signed by the President or any Vice President of Parent,
    certifying as to the satisfaction of the conditions specified in
    Sections 7.03(a), 7.03(b) and 7.03(c).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| | (e) Taxes. Subject to Section 2.01(k), the
    Company shall have received the opinion of Akin Gump Strauss
    Hauer & Feld LLP, counsel to the Company, based upon
    representations of Parent and the Company, and normal
    assumptions, to the effect that, for federal income tax
    purposes, the Merger will qualify as a reorganization within the
    meaning of Section 368(a) of the Code and that each of
    Parent, Merger Sub and the Company will be a party to the
    reorganization within the meaning Section 368(b) of the
    Code, which opinion shall not have been withdrawn or modified in
    any material respect. The issuance of such opinion shall be
    conditioned on receipt by Akin Gump Strauss Hauer &
    Feld LLP of representation letters from each of Parent and
    Company contemplated in Section 6.10. Each such

33



---



##### 



| |                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | representation letter shall be dated on or before the date of
    such opinion and shall not have been withdrawn or modified in
    any material respect as of the Effective Time.                                                        
|
| | (f) U.S. Exchange Listing. The shares of Parent
    Common Stock to be issued in the Merger shall have been
    authorized for listing or quotation, as the case may be, on the
    U.S. Exchange, subject to official notice of issuance.

ARTICLE VIII


TERMINATION, AMENDMENT AND WAIVER


Section Termination.




provided however






Terminating Company
Breach provided however


Terminating Parent Breach provided however


provided however


Company Triggering
Event


34



---



##### 





Section Effect
of Termination. provided however


Section Fees
and Expenses.




















| |                                                                                    
| | -----------------------------------------------------------------------------------
| | (i) if Parent shall terminate this Agreement pursuant to
    Section 8.01(c); or   
|
| | (ii) if the Company shall terminate this Agreement pursuant
    to Section 8.01(g);

Fee




35



---



##### 



Section Amendment. provided however


Section Waiver.


ARTICLE IX


GENERAL PROVISIONS





Section Non
Survival of Representations, Warranties and Agreements.








Section Notices.









| |                             
| | ----------------------------
| | Stantec Inc.                
| | 10160  112 Street          
| | Edmonton, Alberta T5K 2L6   
| | Canada                      
| | Attention: Jeffrey S. Lloyd 
| | Facsimile No: (780) 917-7330
| | Email: jlloyd@stantec.com   





| |                                         
| | ----------------------------------------
| | Shearman & Sterling LLP                 
| | Commerce Court West                     
| | Suite 4405, P.O. Box 247                
| | Toronto, Canada M5L 1E8                 
| | Attention: Christopher J. Cummings, Esq.
| | Facsimile No: (416) 360 2958            
| | Email: ccummings@shearman.com           

36



---



##### 







| |                              
| | -----------------------------
| | The Keith Companies, Inc.    
| | 19 Technology Drive          
| | Irvine, CA 92618             
| | U.S.A.                       
| | Attention: Aram H. Keith     
| | Facsimile No: (949) 923-6026 
| | Email: aram.keith@keithco.com





| |                                           
| | ------------------------------------------
|
| | Akin Gump Strauss Hauer & Feld LLP        
|
|
| | 2029 Century Park East                    
|
|
| | Suite 2400                                
|
|
| | Los Angeles, CA 90067-3012                
|
|
| | Attention: C.N. Franklin Reddick III, Esq.
|
|
| | Facsimile No: (310) 229 1001              
|
|
| | Email: freddick@akingump.com              
|




Section Certain
Definitions.







affiliate


beneficial owner


business day


Company Material Adverse Effect provided however


control controlled by under common
control with





Environmental Laws





37



---



##### 






Hazardous Substances





Intellectual Property


knowledge


knowledge


liens


Parent Material Adverse Effect provided however


person


subsidiary


Taxes


38



---



##### 










|                                       |  |                        |             |    
|-------------------------------------- |  | ---------------------- | ----------- | ---
|Defined Term                           |  | Location of Definition |            
|                                       |  |                        |            
|Action                                 |  |                        | §3.09       |    
|affiliate                            |  |                        | §2.09       |    
|Aggregate Cash Amount                  |  |                        | §2.01       | (b)
|Aggregate Stock Amount                 |  |                        | §2.01       | (b)
|ASC                                    |  |                        | §4.07       | (a)
|Average Stock Price                    |  |                        | §2.01       | (a)
|Agreement                              |  |                        | Preamble    |    
|Blue Sky Laws                          |  |                        | §3.05       | (b)
|Canadian GAAP                          |  |                        | §4.07       | (b)
|Cash Election                          |  |                        | §2.01       | (e)
|Cash Election Share                    |  |                        | §2.01       | (e)
|Cash Payment                           |  |                        | §2.01       | (a)
|CCC                                    |  |                        | Recitals    |    
|Certificate of Merger                  |  |                        | §1.02       |    
|Certificates                           |  |                        | §2.02       | (b)
|Change in the Company Recommendation   |  |                        | §6.04       | (c)
|Closing                                |  |                        | §1.02       |    
|Code                                   |  |                        | Recitals    |    
|Company                                |  |                        | Preamble    |    
|Company Affiliate                      |  |                        | §6.08       |    
|Company Board                          |  |                        | Recitals    |    
|Company Common Stock                   |  |                        | §2.01       | (a)
|Company Designated Director            |  |                        | §6.16       |    
|Company Disclosure Schedule            |  |                        | Article III |    
|Company Licensed Intellectual Property |  |                        | §3.13       | (a)
|Company Owned Intellectual Property    |  |                        | §3.13       | (a)
|Company Permits                        |  |                        | §3.06       |    
|Company Preferred Stock                |  |                        | §3.03       | (a)
|Company Recommendation                 |  |                        | §6.01       | (b)
|Company Restricted Stock               |  |                        | §2.05       |    
|Company SEC Reports                    |  |                        | §3.07       | (a)
|Company Stock Awards                   |  |                        | §3.03       | (a)
|Company Stock Options                  |  |                        | §2.04       | (a)
|Company Stock Option Plans             |  |                        | §2.04       | (a)
|Company Stockholders Meeting          |  |                        | §6.01       | (a)
|Company Triggering Event               |  |                        | §8.01       |    
|Competing Transaction                  |  |                        | §6.04       | (d)
|Confidentiality Agreement              |  |                        | §6.03       | (b)
|Dissenting Shareholder                 |  |                        | §2.07       | (a)
|Dissenting Shares                      |  |                        | §2.07       | (a)
|Effective Time                         |  |                        | §1.02       |    




39



---



##### 






|                            |  |                        |          |    
|--------------------------- |  | ---------------------- | -------- | ---
|Defined Term                |  | Location of Definition |         
|                            |  |                        |         
|Election Deadline           |  |                        | §2.01    | (i)
|Elections                   |  |                        | §2.01    | (c)
|Environmental Permits       |  |                        | §3.15    |    
|ERISA                       |  |                        | §3.10    | (a)
|Exchange Act                |  |                        | §3.07    | (a)
|Exchange Agent              |  |                        | §2.02    | (a)
|Exchange Fund               |  |                        | §2.02    | (a)
|Exchange Stock              |  |                        | §2.01    | (a)
|Expenses                    |  |                        | §8.03    | (a)
|Fee                         |  |                        | §8.03    | (b)
|Fixed Ratio Stock           |  |                        | §2.01    | (a)
|Floating Ratio Stock        |  |                        | §2.01    | (a)
|Form of Election            |  |                        | §2.01    | (c)
|Forward LLC Merger          |  |                        | §2.01    | (l)
|GAAP                        |  |                        | §3.07    | (b)
|Governmental Authority      |  |                        | §3.05    | (b)
|Holder Representative       |  |                        | §2.01    | (c)
|HSR Act                     |  |                        | §3.05    | (b)
|Insurance Policies          |  |                        | §3.18    |    
|IRS                         |  |                        | §3.10    | (a)
|Law                         |  |                        | §3.05    | (a)
|Leased Real Property        |  |                        | §3.12    | (a)
|Leases                      |  |                        | §3.12    | (a)
|Material Contracts          |  |                        | §3.17    | (a)
|Merger                      |  |                        | Recitals |    
|Merger Consideration        |  |                        | §2.01    | (a)
|Merger LLC                  |  |                        | §2.01    | (l)
|Merger Sub                  |  |                        | Preamble |    
|Mixed Consideration         |  |                        | §2.01    | (c)
|Mixed Election              |  |                        | §2.01    | (c)
|Mixed Election Share        |  |                        | §2.01    | (d)
|Mixed Election Share        |  |                        | §2.01    | (a)
|Multiemployer Plan          |  |                        | §3.10    | (b)
|Multiple Employer Plan      |  |                        | §3.10    | (b)
|Non-U.S. Benefit Plan       |  |                        | §3.10    | (g)
|Notice of Superior Proposal |  |                        | §6.04    | (c)
|Nasdaq                      |  |                        | §6.13    |    
|NYSE                        |  |                        | §6.13    |    
|Option Consideration        |  |                        | §2.04    |    
|Option Exchange Fund        |  |                        | §2.04    |    
|Order                       |  |                        | §7.01    | (c)
|Parent                      |  |                        | Preamble |    
|Parent Board                |  |                        | Recitals |    
|Parent Common Stock         |  |                        | §2.01    | (a)




40



---



##### 






|                                      |  |                        |          |    
|------------------------------------- |  | ---------------------- | -------- | ---
|Defined Term                          |  | Location of Definition |         
|                                      |  |                        |         
|Parent Licensed Intellectual Property |  |                        | §4.17    |    
|Parent Owned Intellectual Property    |  |                        | §4.17    |    
|Parent Permits                        |  |                        | §4.06    |    
|Parent Preferred Stock                |  |                        | §4.03    | (a)
|Parent Reports                        |  |                        | §4.07    | (a)
|Parent Stock Option Plans             |  |                        | §4.03    | (a)
|Parent 2004 Balance Sheet             |  |                        | §4.07    | (c)
|Plans                                 |  |                        | §3.10    | (a)
|Potential Dissenting Shareholder      |  |                        | §2.07    | (a)
|Potential Dissenting Shares           |  |                        | §2.07    | (a)
|Pro Rata Amount of Cash               |  |                        | §2.01    | (f)
|Pro Rata Number of Shares             |  |                        | §2.01    | (e)
|Proxy Statement                       |  |                        | §6.01    | (a)
|Registration Statement                |  |                        | §6.01    | (a)
|Representatives                       |  |                        | §6.03    | (a)
|Reverse-Subsidiary Merger             |  |                        | §2.01    | (k)
|SEC                                   |  |                        | §3.07    | (a)
|Securities Act                        |  |                        | §3.07    | (a)
|Significant Subsidiary                |  |                        | §6.04    | (d)
|Shares                                |  |                        | §2.01    | (a)
|Stock Election                        |  |                        | §2.01    | (c)
|Stock Election Share                  |  |                        | §2.01    | (e)
|Stockholder                           |  |                        | Recitals |    
|Subsidiary                            |  |                        | §3.01    | (a)
|Superior Proposal                     |  |                        | §6.04    | (e)
|Support Agreement                     |  |                        | Recitals |    
|Surviving Corporation                 |  |                        | §1.01    |    
|Terminating Company Breach            |  |                        | §8.01    | (e)
|Terminating Parent Breach             |  |                        | §8.01    | (f)
|Transactions                          |  |                        | Recitals |    
|TSX                                   |  |                        | §2.01    | (a)
|Unvested Options                      |  |                        | §2.04    |    
|U.S. Exchange                         |  |                        | §6.13    |    
|2004 Balance Sheet                    |  |                        | §3.07    | (c)
|401(k) Plan                           |  |                        | §7.02    | (i)
|US$5.50 Stock                         |  |                        | §2.01    | (a)




Section Severability.


41



---



##### 



Section Entire
Agreement; Assignment.


Section Parties
in Interest.


Section Specific
Performance.


Section Governing
Law.


Section Headings.


Section Counterparts.


Section Waiver
of Jury Trial.


42



---



##### 







| |             
| | ------------
| | STANTEC INC.



| |    |                            
| | -- | ---------------------------
| | By | /s/ Anthony P. Franceschini

| |                                          
| | -----------------------------------------
| |                                          
| | Name:         Anthony
    P. Franceschini

| |        |                
| | ------ | ---------------
| | Title: | President & CEO



| |    |                     
| | -- | --------------------
| | By | /s/ Jeffrey S. Lloyd

| |                                   
| | ----------------------------------
| |                                   
| | Name:         Jeffrey
    S. Lloyd

| |        |                                            
| | ------ | -------------------------------------------
| | Title: | Vice President, Secretary & General Counsel



| |                                   
| | ----------------------------------
| | STANTEC CONSULTING CALIFORNIA INC.



| |    |                            
| | -- | ---------------------------
| | By | /s/ Anthony P. Franceschini

| |                                          
| | -----------------------------------------
| |                                          
| | Name:         Anthony
    P. Franceschini

| |        |          
| | ------ | ---------
| | Title: | President



| |    |                     
| | -- | --------------------
| | By | /s/ Michael Slocombe

| |                                      
| | -------------------------------------
| |                                      
| | Name:         Michael
    J. Slocombe

| |        |          
| | ------ | ---------
| | Title: | Secretary



| |                      
| | ---------------------
| | KEITH COMPANIES, INC.



| |    |                  
| | -- | -----------------
| | By | /s/ Aram H. Keith

| |                                
| | -------------------------------
| |                                
| | Name:         Aram
    H. Keith

| |        |    
| | ------ | ---
| | Title: | CEO



| |    |                   
| | -- | ------------------
| | By | /s/ Gary Campanaro

| |                                 
| | --------------------------------
| |                                 
| | Name:         Gary
    Campanaro

| |        |          
| | ------ | ---------
| | Title: | Secretary

43



---



##### 



EXHIBIT 6.08


FORM OF AFFILIATE LETTER FOR


AFFILIATES OF THE COMPANY














Company Rules and
Regulations Commission Act Merger
Agreement Parent Merger Sub Merger


Parent
Shares Company Shares














---



##### 







| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN
    A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
    SECURITIES ACT OF 1933 APPLIES. THE SHARES REPRESENTED BY THIS
    CERTIFICATE MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH THE TERMS
    OF AN AGREEMENT DATED APRIL 14, 2005 BETWEEN THE REGISTERED
    HOLDER HEREOF AND PARENT, A COPY OF WHICH AGREEMENT IS ON FILE
    AT THE PRINCIPAL OFFICES OF PARENT.





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
    REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED
    FROM A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH
    RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933
    APPLIES. THE SHARES HAVE BEEN ACQUIRED BY THE HOLDER NOT WITH A
    VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
    THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 AND MAY
    NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
    ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
    OF THE SECURITIES ACT OF 1933.





| |                  
| | -----------------
|
| | Very truly yours,
|
|
| |                  
|
| | Name:            
|






























|    | 
|--- | 
|By: | 






















---



##### 



AMENDMENT AGREEMENT


Amendment Agreement Parent Merger Sub Company


WITNESSETH:















Dissenting Shares





Entire
Agreement.


Severability.


Counterparts.




---



##### 



Governing
Law.






| |             
| | ------------
| | STANTEC INC.



| |    |                            
| | -- | ---------------------------
| | By | /s/ Anthony P. Franceschini

| |                              
| | -----------------------------
| |                              
| | Name: Anthony P. Franceschini
| | Title:  President & CEO      



| |    |                     
| | -- | --------------------
| | By | /s/ Jeffrey S. Lloyd

| |                                                        
| | -------------------------------------------------------
| |                                                        
| | Name: Jeffrey S. Lloyd                                 
| | Title:  Secretary, Vice President & General
    Counsel
|
|
| | STANTEC CONSULTING CALIFORNIA INC.                     



| |    |                            
| | -- | ---------------------------
| | By | /s/ Anthony P. Franceschini

| |                              
| | -----------------------------
| |                              
| | Name: Anthony P. Franceschini
| | Title:  President            



| |    |                     
| | -- | --------------------
| | By | /s/ Michael Slocombe

| |                          
| | -------------------------
| |                          
| | Name: Michael Slocombe   
| | Title:  Secretary        
|
|
| | THE KEITH COMPANIES, INC.



| |    |                  
| | -- | -----------------
| | By | /s/ Aram H. Keith

| |                                
| | -------------------------------
| |                                
| | Name: Aram H. Keith            
| | Title:  Chief Executive Officer



| |    |                   
| | -- | ------------------
| | By | /s/ Gary Campanaro

| |                     
| | --------------------
| |                     
| | Name: Gary Campanaro
| | Title:  Secretary   



---



##### 






Appendix B








OPINION OF BEAR, STEARNS & CO. INC.





B-1



---



##### 



April 14, 2005


The Board of Directors


The Keith Companies, Inc.


19 Technology Drive Irvine, CA 92618












| |   |                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | § | reviewed the Merger Agreement;                                                                                                                                                                                                                                                                          
|
| | § | reviewed the Companys Annual Reports to Shareholders and
    Annual Reports on Form 10-K for the years ended
    December 31, 2002, 2003 and 2004, its preliminary results
    for the quarter ended March, 31, 2005 and its Current Reports on
    Form 8-K for the three years ended the date hereof;
|
| | § | reviewed Stantecs Proxy Circular, Annual Information Form
    and Annual Reports to Shareholders for the years ended
    December 31, 2002, 2003 and 2004 and its interim financial
    reports for the three years ended the date hereof;                                                             
|
| | § | reviewed certain operating and financial information relating to
    the Companys business and prospects, including an
    operating budget for the year ended December 31, 2005, as
    prepared and provided to us by the Companys management;                                                      



Form of Fairness Opinion Letter


B-2



---



##### 













| |   |                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | § | met with certain members of the Companys senior management
    to discuss the Companys business, operations, historical
    financial results, a range of projected financial results and
    future prospects;
|
| | § | reviewed certain operating and financial information relating to
    Stantecs business and prospects, as prepared and provided
    to us by Stantecs management;                                               
|
| | § | reviewed certain projections for Stantec for the year ended
    December 31, 2005, published by certain equity research
    analysts, selected by us following discussions with
    Stantecs senior management; 
|
| | § | met with certain members of senior management of Stantec and the
    Company to discuss Stantecs business, operations,
    historical and projected financial results and future prospects;                     
|
| | § | reviewed the historical prices, trading multiples and trading
    volumes of the shares of Company Common Stock and Stantec Common
    Stock;                                                                    
|
| | § | reviewed publicly available financial data, stock market
    performance data and trading multiples of companies which we
    deemed generally comparable to the Company and Stantec;                            
|
| | § | reviewed the terms of recent mergers and acquisitions of
    companies which we deemed generally comparable to the Company;                                                                                      
|
| | § | performed discounted cash flow sensitivity analyses based on the
    ranges of projected financial results for the Company furnished
    to us by the Companys senior management;                               
|
| | § | reviewed the pro forma financial results, financial condition
    and capitalization of Stantec giving effect to the Merger; and                                                                                 
|
| | § | conducted such other studies, analyses, inquiries and
    investigations as we deemed appropriate.                                                                                                               







Form of Fairness Opinion Letter


B-3



---



##### 























|                             | 
|---------------------------- | 
|Very truly yours,            | 
|                            
|Bear, Stearns &
    Co. Inc. | 



|    |                          | 
|--- | ------------------------ | 
|By: | /s/ Neil B. Morganbesser | 

|                         | 
|------------------------ | 
|                         | 
|Senior Managing Director | 



Form of Fairness Opinion Letter


B-4



---



##### 



Appendix C


STOCKHOLDERS SUPPORT AGREEMENT


C-1



---



##### 



EXECUTION COPY


STOCKHOLDERS SUPPORT AGREEMENT


Agreement Parent Purchaser Stockholder Stockholders


Trust








| |    |                                                                                                                                                                        
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | Representations and Warranties of the Stockholders. Each
    Stockholder hereby, jointly and severally, represents and
    warrants to Parent and Purchaser as follows:



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | The Trust is a trust duly organized, validly existing and in
    good standing under the laws of the State of California. The
    Trust has all necessary power and authority to execute and
    deliver this Agreement and to perform its obligations hereunder.
    The execution and delivery of this Agreement by the Trust and
    the performance by the Trust of its obligations hereunder have
    been duly and validly authorized by all necessary action, and no
    other proceedings on the part of the Trust are necessary to
    authorize this Agreement or to perform its obligations
    hereunder. This Agreement has been duly executed and delivered
    by the Trust and, assuming the due authorization, execution and
    delivery by Parent and Purchaser, constitutes the legal, valid
    and binding obligation of the Trust, enforceable against the
    Trust in accordance with its terms, except as such
    enforceability may be limited by applicable bankruptcy
    insolvency and similar laws affecting creditors rights
    generally and general principles of equity (whether considered
    in a proceeding at law or equity).



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | The execution and delivery of this Agreement by the Trust do
    not, and the performance of this Agreement by the Trust will
    not, (A) conflict with or violate the organizational
    documents of the Trust, (B) assuming that all consents,
    approvals, authorizations and other actions described in
    subsection (c) have been obtained and all filings and
    obligations described in subsection (c) have been made,
    conflict with or violate any Law applicable to the Trust or by
    which any property or asset of the Trust is bound or affected,
    or (C) result in any breach of or constitute a default (or
    an event which, with notice or lapse of time or both, would
    become a default) under, or give to others any right of
    termination, amendment, acceleration or cancellation of, or
    result in the creation of a Lien or other encumbrance on

C-2



---



##### 



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | any property or asset of the Trust pursuant to, any note, bond,
    mortgage, indenture, contract, agreement, lease, license,
    permit, franchise or other instrument or obligation.                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (c) | The execution and delivery of this Agreement by each Stockholder
    does not, and the performance of this Agreement by each
    Stockholder will not, require any consent, approval,
    authorization or permit of, or filing with or notification to,
    any Governmental Authority, except for applicable requirements,
    if any, of the Securities Act of 1933, as amended, the Exchange
    Act and the HSR Act.                                                                                                                                                                                                                          
|
| | (d) | With respect to Aram H. Keith and Margie R. Keith (each an
    Individual), this Agreement has been duly
    executed and delivered by each Individual and, assuming the due
    authorization, execution and delivery by Parent and Purchaser,
    constitutes the legal, valid and binding obligation of each
    Individual, enforceable against each Individual in accordance
    with its terms, except as such enforceability may be limited by
    applicable bankruptcy insolvency and similar laws affecting
    creditors rights generally and general principles of
    equity (whether considered in a proceeding at law or equity).
|
| | (e) | Except for shares of Company Common Stock held directly by the
    Trust, the Individuals do not own, either directly or
    beneficially, any shares of Company Common Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | Grant of Proxy. Each Stockholder, by this Agreement, with
    respect to his, her or its Shares, hereby agrees, and to secure
    such agreement, grants an irrevocable proxy to Parent (and
    agrees to execute such documents or certificates evidencing such
    proxy as Parent may reasonably request) to vote, at any meeting
    of the stockholders of the Company, and in any action by written
    consent of the stockholders of the Company, all of such
    Stockholders Shares (i) in favor of the approval and
    adoption of the Merger Agreement and approval of the Merger,
    (ii) against any action, agreement or transaction (other
    than the Merger Agreement or the Merger) or proposal (including
    any Superior Proposal) that would result in a breach of any
    covenant, representation or warranty or any other obligation or
    agreement of the Company under the Merger Agreement or that
    could result in any of the conditions to the Companys
    obligations under the Merger Agreement not being fulfilled, and
    (iii) in favor of any other matter necessary to the
    consummation of the Merger and considered and voted upon by the
    stockholders of the Company. Each Stockholder further agrees to
    cause such Stockholders Shares to be voted in accordance
    with the foregoing. THIS PROXY IS IRREVOCABLE AND SECURES THE
    PERFORMANCE BY THE STOCKHOLDERS OF THE DUTIES SET FORTH HEREIN.
    Each Stockholder acknowledges receipt and review of a copy of
    the Merger Agreement.
|
| | 3. | Transfer of Shares. Each Stockholder agrees that he, she
    or it shall not, directly or indirectly, (a) sell, assign,
    transfer (including by operation of law), lien, pledge, dispose
    of or otherwise encumber any of the Shares or otherwise agree to
    do any of the foregoing, (b) deposit any Shares into a
    voting trust or enter into a voting agreement or arrangement or
    grant any proxy or power of attorney with respect thereto that
    is inconsistent with this Agreement, (c) enter into any
    contract, option or other arrangement or undertaking with
    respect to the direct or indirect acquisition or sale,
    assignment, transfer (including by operation of law) or other
    disposition of any Shares or (d) take any action that would
    make any representation or warranty of such Stockholder herein
    untrue or incorrect in any material respect or have the effect
    of preventing or disabling the Stockholder from performing his,
    her or its obligations hereunder.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | 4. | No Solicitation of Transactions. None of the Stockholders
    shall, directly or indirectly, (a) solicit, initiate or
    encourage the submission of, any Competing Transaction or
    (b) participate in any discussions or negotiations
    regarding, or furnish to any person, any information with
    respect to, or otherwise cooperate in any way with respect to,
    or assist or participate in, facilitate or encourage, any
    unsolicited proposal that constitutes, or may reasonably be
    expected to lead to, a Superior Proposal; provided, however,
    that nothing in this Section 3 shall prevent Aram H.
    Keith, in his capacity as a director and executive officer of
    the Company from, engaging in any activity permitted pursuant to
    Section 6.04 of the Merger Agreement. Each Stockholder
    shall, and shall                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

C-3



---



##### 



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | direct his, her or its representatives and agents to,
    immediately cease and terminate any discussions or negotiations
    with any parties that may be ongoing with respect to any
    Competing Transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | 5. | Information for Proxy Statement/ Prospectus; Disclosure.
    Each Stockholder authorizes and agrees to permit Parent and
    Purchaser to publish and disclose in the Proxy Statement/
    Prospectus and related filings under the securities laws such
    Stockholders identity and ownership of Shares and the
    nature of his, her or its commitments, arrangements and
    understandings under this Agreement and any other information
    required by applicable Law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | 6. | Termination. The obligations of the Stockholders under
    this Agreement shall terminate upon the earlier of (i) the
    Effective Time and (ii) upon the termination of the Merger
    Agreement. Nothing in this Section 7 shall relieve any
    party of liability for any breach of this Agreement occurring
    prior to the time of such termination.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | 7. | Miscellaneous. Notwithstanding anything to the contrary
    contained herein, no action of a Stockholder in his, her or its
    capacity as a director or executive officer of the Company shall
    constitute a breach of this Agreement. Except as otherwise
    provided herein, all costs and expenses incurred in connection
    with this Agreement and the transactions contemplated hereby
    shall be paid by the party incurring such costs and expenses,
    whether or not the transactions contemplated hereby are
    consummated; all notices, requests, claims, demands and other
    communications hereunder shall be in writing and shall be given
    (and shall be deemed to have been duly given upon receipt) by
    delivery in person, by telecopy, e-mail or by registered or
    certified mail (postage prepaid, return receipt requested) to
    the respective parties at their addresses as specified on the
    signature page(s) of this Agreement; if any term or other
    provision of this Agreement is invalid, illegal or incapable of
    being enforced by any rule of law or public policy, all other
    conditions and provisions of this Agreement shall nevertheless
    remain in full force and effect so long as the economic or legal
    substance of the transactions contemplated hereby is not
    affected in any manner materially adverse to any party; this
    Agreement and the Merger Agreement constitute the entire
    agreement among the parties with respect to the subject matter
    hereof and supersede all prior agreements and undertakings, both
    written and oral, among the parties, or any of them, with
    respect to the subject matter hereof; this Agreement shall not
    be assigned (whether pursuant to a merger, by operation of law
    or otherwise), except that Parent may assign all or any of its
    rights and obligations hereunder to any affiliate of Parent,
    provided, however, that no such assignment shall
    relieve the assigning party of its obligations hereunder if such
    assignee does not perform such obligations; this Agreement shall
    be binding upon and inure solely to the benefit of each party
    hereto, and nothing in this Agreement, express or implied, is
    intended to or shall confer upon any other person any right,
    benefit or remedy of any nature whatsoever under or by reason of
    this Agreement; the parties hereto agree that irreparable damage
    would occur in the event any provision of this Agreement was not
    performed in accordance with the terms hereof and that the
    parties shall be entitled to specific performance of the terms
    hereof, in addition to any other remedy at law or in equity;
    this Agreement shall be governed by, and construed in accordance
    with, the laws of the State of California applicable to
    contracts executed in and to be performed in that State; this
    Agreement may be executed and delivered (including by facsimile
    transmission) in one or more counterparts, and by the different
    parties hereto in separate counterparts, each of which when
    executed shall be deemed to be an original but all of which
    taken together shall constitute one and the same agreement; from
    time to time, at the request of Parent, in the case of any
    Stockholder, or at the request of the Stockholders, in the case
    of Parent and Purchaser, and without further consideration, each
    party shall execute and deliver or cause to be executed and
    delivered such additional documents and instruments and take all
    such further action as may be reasonably necessary or desirable
    to give effect to the rights, duties and obligations of the
    parties set forth in this Agreement; each of the parties
    hereto hereby waives to the fullest extent permitted by
    applicable law any right it may have to a trial by jury with
    respect to any litigation directly or indirectly arising out of,
    under or in connection with this agreement.

C-4



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##### 







| |             
| | ------------
| | Stantec Inc.



| |     |                                
| | --- | -------------------------------
| | By: | /s/ Anthony P.
    Franceschini

| |                                  
| | ---------------------------------
| |                                  
| | Name:     Anthony P. Franceschini

| |        |                
| | ------ | ---------------
| | Title: | President & CEO



| |     |                     
| | --- | --------------------
| | By: | /s/ Jeffrey S. Lloyd

| |                           
| | --------------------------
| |                           
| | Name:     Jeffrey S. Lloyd

| |        |                                            
| | ------ | -------------------------------------------
| | Title: | Vice President, Secretary & General Counsel



| |                                       
| | --------------------------------------
| | Stantec Consulting
    California Inc.



| |     |                                
| | --- | -------------------------------
| | By: | /s/ Anthony P.
    Franceschini

| |                                  
| | ---------------------------------
| |                                  
| | Name:     Anthony P. Franceschini

| |        |          
| | ------ | ---------
| | Title: | President



| |     |                            
| | --- | ---------------------------
| | By: | /s/ Michael J.
    Slocombe

| |                              
| | -----------------------------
| |                              
| | Name:     Michael J. Slocombe

| |        |          
| | ------ | ---------
| | Title: | Secretary



| |                                                      
| | -----------------------------------------------------
| | Aram H. Keith and
    Margie R. Keith Revocable Trust



| |     |                  
| | --- | -----------------
| | By: | /s/ Aram H. Keith

| |                          
| | -------------------------
| |                          
| | Aram H. Keith, as Trustee



| |     |                                  
| | --- | ---------------------------------
| | By: | /s/ Margie R.
    Keith  Trustee

| |                            
| | ---------------------------
| |                            
| | Margie R. Keith, as Trustee
|
| | /s/ Aram H. Keith          
| |                            
| | Aram H. Keith              
|
| | /s/ Margie R. Keith        
| |                            
| | Margie R. Keith            

C-5



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##### 



EXHIBIT A


LIST OF STOCKHOLDERS





|                                                                             |  |                             |           | 
|---------------------------------------------------------------------------- |  | --------------------------- | --------- | 
|                                                                             |  | Number of Shares of Company |          
|                                                                             |  | Common Stock Owned          |          
|Name of Stockholder                                                          |  | Beneficially                |          
|                                                                             |  |                             |          
|ARAM H. KEITH AND MARGIE R. KEITH REVOCABLE TRUST DATED
    OCTOBER 23, 1989 |  |                             | 1,366,217 | 
|ARAM H. KEITH                                                                |  |                             | 1,366,217 | 
|MARGIE R. KEITH                                                              |  |                             | 1,366,217 | 




C-6



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Appendix D


DISSENTERS RIGHTS AND PROCEDURES


D-1



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##### 



CALIFORNIA CORPORATIONS CODE


SECTION 1300-1313


DISSENTERS RIGHTS








| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Which were not immediately prior to the reorganization or
    short-form merger either (A) listed on any national
    securities exchange certified by the Commissioner of
    Corporations under subdivision (o) of Section 25100 or
    (B) listed on the National Market System of the NASDAQ Stock
    Market, and the notice of meeting of shareholders to act upon
    the reorganization summarizes this section and
    Sections 1301, 1302, 1303 and 1304; provided, however, that
    this provision does not apply to any shares with respect to
    which there exists any restriction on transfer imposed by the
    corporation or by any law or regulation; and provided, further,
    that this provision does not apply to any class of shares
    described in subparagraph (A) or (B) if demands for
    payment are filed with respect to 5 percent or more of the
    outstanding shares of that class.
|
| | (2) | Which were outstanding on the date for the determination of
    shareholders entitled to vote on the reorganization and
    (A) were not voted in favor of the reorganization or,
    (B) if described in subparagraph (A) or (B) of
    paragraph (1) (without regard to the provisos in that
    paragraph), were voted against the reorganization, or which were
    held of record on the effective date of a short-form merger;
    provided, however, that subparagraph (A) rather than
    subparagraph (B) of this paragraph applies in any case
    where the approval required by Section 1201 is sought by
    written consent rather than at a meeting.                                                                                                                                                                                                                                                         
|
| | (3) | Which the dissenting shareholder has demanded that the
    corporation purchase at their fair market value, in accordance
    with Section 1301.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | (4) | Which the dissenting shareholder has submitted for endorsement,
    in accordance with Section 1302.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        







D-2



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D-3



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##### 























| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | The corporation abandons the reorganization. Upon abandonment of
    the reorganization, the corporation shall pay on demand to any
    dissenting shareholder who has initiated proceedings in good
    faith under this chapter all necessary expenses incurred in such
    proceedings and reasonable attorneys fees.                                                                                                                                    
|
| | (b) | The shares are transferred prior to their submission for
    endorsement in accordance with Section 1302 or are
    surrendered for conversion into shares of another class in
    accordance with the articles.                                                                                                                                                                                                                                             
|
| | (c) | The dissenting shareholder and the corporation do not agree upon
    the status of the shares as dissenting shares or upon the
    purchase price of the shares, and neither files a complaint or
    intervenes in a pending action as provided in Section 1304,
    within six months after the date on which notice of the approval
    by the outstanding shares or notice pursuant to subdivision
    (i) of Section 1110 was mailed to the shareholder.

D-4



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##### 





| |     |                                                                                                                                                   
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------
| | (d) | The dissenting shareholder, with the consent of the corporation,
    withdraws the shareholders demand for purchase of the
    dissenting shares.













D-5



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##### 






Who Can Help Answer Your Questions





















To ensure timely delivery prior to the Keith
special meeting, any request for documents should be received by
[                    ],
2005.


[                    ]




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##### 



PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. Indemnification of Officers and Directors Under the Canada Business Corporations Act(the CBCA), a corporation may indemnify a present
or former director or officer of such corporation or another individual who acts or acted at the
corporations request as a director or officer, or an individual acting in a similar capacity, of
another entity, against all costs, charges and expenses, including an amount paid to settle an
action or satisfy a judgment, reasonably incurred by the individual in respect of any civil,
criminal, administrative, investigative or other proceeding in which the individual is involved
because of that association with the corporation or other entity. The corporation may advance
moneys to the director, officer or other individual for the costs, charges and expenses of any such
proceeding. The corporation may not indemnify an individual unless the individual acted honestly
and in good faith with a view to the best interests of the corporation, or, as the case may be, to
the best interests of the other entity for which the individual acted as director or officer or in
a similar capacity at the corporations request and, in the case of a criminal or administrative
action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds
for believing that the individuals conduct was lawful. The individual shall repay any moneys
advanced to him or her if he or she does not fulfill the above conditions. Such indemnification
and advances may be made in connection with a derivative action only with court approval. Such
individual is entitled to indemnification or advances from the corporation as a matter of right in
respect of all costs, charges and expenses reasonably incurred by him in connection with the
defence of any civil, criminal, administrative, investigative or other proceeding to which he is
subject by reason of being or having been a director or officer of the corporation or another
entity as described above if the individual was not judged by the court or other competent
authority to have committed any fault or omitted to do anything that the individual ought to have
done and if the individual fulfils the conditions set forth above. The bylaws of Stantec Inc. (the Registrant) provide that, subject to the CBCA, the
Registrant shall indemnify a director or officer of the Registrant, a former director or officer of
the Registrant, or another individual who acts or acted at the Registrants request as a director
or officer, or an individual acting in a similar capacity, of another entity against all costs,
charges and expenses, including an amount paid to settle an action or satisfy a judgment,
reasonably incurred by the individual in respect of any civil, criminal, administrative,
investigative or other proceeding in which the individual is involved because of that association
with the Registrant or other entity if: (a) the individual acted honestly and in good faith with a
view to the best interests of the Registrant or, as the case may be, to the best interests of the
other entity for with the individual acted as a director or officer or in a similar capacity at the
Registrants request; and (b) in the case of a criminal or administrative action or proceeding that
is enforced by a monetary penalty, the individual had reasonable grounds for believing that his or
her conduct was lawful. The Registrant shall advance the necessary moneys to a director, officer
or other individual for the costs, charges and expenses of a proceeding referred to previously.
The individual shall repay the moneys if the individual does not fulfill the previously named

conditions. The Registrant shall also indemnify such person in such other circumstances as the
CBCA permits or requires. The Registrant maintains directors and officers liability insurance which insures the
directors and officers of the Registrant and its subsidiaries against certain losses resulting from
any wrongful act committed in their official capacities for which they become obligated to pay to
the extent permitted by applicable law. Insofar as indemnification for liabilities arising under the Securities Act may be permitted
to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions,
the Registrant has been informed that, in the opinion of the U.S. Securities and Exchange
Commission, such indemnification is against public policy as expressed in the Securities Act and is
therefore unenforceable. The exhibits listed in the exhibits index, appearing elsewhere in this registration statement,
have been filed as part of this registration statement.




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##### 



ITEM 21. Exhibits and Financial Statement Schedules (a) The following documents are exhibits to the registration statement. 
 ExhibitNumber
    
    Description of Document2.1*
    
    Agreement and Plan of Merger and Reorganization, dated as of April 14, 2005, as amended
May 9, 2005, among Stantec Inc., The Keith Companies, Inc. and Stantec Consulting
California Inc., a wholly-owned subsidiary of Stantec Inc. (attached as Appendix A to
the proxy statement/prospectus which is part of this Registration Statement).3.1*
    
    Articles of Incorporation of Stantec Inc.3.2*
    
    Bylaws of Stantec Inc.4.1*
    
    Form of Stantec Inc. common share certificate.5.1**
    
    Opinion of Fraser Milner Casgrain LLP as to the legality of the securities being
registered.8.1**
    
    Opinion of Shearman & Sterling LLP as to certain U.S. federal income tax matters.8.2**
    
    Opinion of Akin Gump Strauss Hauer & Feld LLP as to certain U.S. federal income tax
matters.10.1*
    
    Employment Agreement, dated as of
January 31, 2005, between Stantec Consulting Ltd. and
Raymond L. Alarie.10.2*
    
    Contract Amending Agreement, dated
as of February 27, 2003, between Stantec Inc. and
Anthony P. Franceschini.10.3*
    
    Employment Agreement, dated as of
January 1, 2003, between Stantec Inc. and Anthony P.
Franceschini.10.4*
    
    Employment Agreement, dated as of
December 19, 2002, between Stantec Consulting Ltd. and
W. Barry Lester.10.5*
    
    Employment Agreement, dated as of
October 31, 2001, between Stantec Consulting Ltd. and Mark
Jackson.10.6*
    
    Employment Agreement, dated as of
October 31, 2001, between Stantec Consulting Ltd. and
Jeffrey S. Lloyd.10.7*
    
    Employment Agreement, dated as of
October 31, 2001, between Stantec Consulting Ltd. and
Donald W. Wilson10.8**
    
    Credit Agreement, dated
June 21, 2004, between Stantec Inc. and Canadian Imperial Bank of
Commerce21.1*
    
    Subsidiaries of Stantec Inc.23.1**
    
    Consent of Ernst & Young LLP  Independent Registered Public Accounting Firm.23.2**
    
    Consent of KPMG LLP  Independent Registered Public Accounting Firm.23.3**
    
    Consent of Fraser Milner Casgrain LLP (included in Exhibit 5.1).23.4**
    
    Consent of Shearman & Sterling LLP (included in Exhibit 8.1).23.5**
    
    Consent of Akin Gump Strauss Hauer & Feld LLP (included in Exhibit 8.2).23.6*
    
    Consent of Bear, Stearns & Co. Inc. (included in Exhibit 99.4).24.1*
    
    Powers of Attorney (included on the signature page of this Registration Statement).99.1*
    
    Form of proxy card for the special meeting of shareholders of The Keith Companies, Inc.99.2*
    
    Form of Letter to the shareholders of The Keith Companies, Inc. (included in the proxy
statement/prospectus which is part of this Registration Statement).99.3*
    
    Form of Notice of Special Meeting of shareholders of The Keith Companies, Inc.
(included in the proxy statement/prospectus which is part of this Registration
Statement).99.4***
    
    Consent of Aram H. Keith.
 
 
   *
    
    Previously filed.
    
    The registrant hereby agrees to furnish to the
Commission a copy of any omitted schedule to the Merger Agreement.**
    
    Filed herewith.***
    
    To be filed by amendment. 
 (b) Financial statement schedules are omitted because they are not applicable or the required
information is shown in the consolidated financial statements of Stantec Inc. and the notes
thereto. (c) The opinion of Bear, Stearns & Co. Inc. is incorporated as Appendix B to the proxy
statement/prospectus which is part of this Registration Statement. II - 2




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##### 



ITEM 22. Undertakings 
 The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:  (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;(ii) To reflect in the prospectus any facts or events arising after the effective date of
the registration statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the information in the
registration statement. Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering price set forth in the
Calculation of Registration Fee table in the effective registration statement;(iii) To include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to such
information in the registration statement; (2) That, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering. (4) To file a post-effective amendment to the registration statement to include any financial
statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a
continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of
the Act need not be furnished, providedthat the registrant includes in the prospectus, by means of
a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and
other information necessary to ensure that all other information in the prospectus is at least as
current as the date of those financial statements. The undersigned registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act of 1933, each filing of the registrants annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plans annual report pursuant to section 15(d) of the Securities Exchange
Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof. 
 The undersigned registrant hereby undertakes as follows: that prior to any public reoffering
of the securities registered hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to reofferings by persons
who may be deemed underwriters, in addition to the information called for by the other Items of the
applicable form. The registrant undertakes that every prospectus (i) that is filed pursuant to the paragraph
immediately preceding, or (ii) that purports to meet the requirements of section 10(a)(3) of the
Securities Act of 1933 and is used in connection with an offering of securities subject to Rule
415, will be filed as part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fideoffering thereof. Insofar as indemnification for liabilities under the Securities Act of 1933 may be permitted
to directors, officers and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed
in the Securities Act of 1933 and will be governed by the final adjudication of such issue. The undersigned registrant hereby undertakes: (i) to respond to requests for information that
is incorporated by reference into the proxy statement/prospectus pursuant to Item 4, 10(b), 11, or
13 of this form, within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means; and (ii) to arrange or provide for a
facility in the U.S. for the purpose of responding to such requests. The undertaking in
subparagraph (i) above includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding to the request. The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all
information concerning a transaction, and the company being acquired involved therein, that was not
the subject of and included in the registration statement when it became effective. II - 3




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##### 



SIGNATURES 
 Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused
this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Edmonton, Province of Alberta, Canada, on
June 23, 2005. 
 STANTEC INC.
(Registrant)By:
    
    /s/   Jeffrey S. LloydName:
    
    Jeffrey S. LloydTitle:
    
    Vice President, Secretary and
General Counsel




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##### 



Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates indicated. 
 *
Anthony P. Franceschini
    
    President, Chief Executive Officer and
Director
(principal executive officer)
    
    June 23, 2005*
Donald W. Wilson
    
    Vice President and Chief Financial Officer
(principal financial and accounting officer)
    
    June 23, 2005*
Ronald Triffo
    
    Chairman of the Board of Directors
    
    June 23, 2005*
Neilson A. Bertholf, Jr.
    
    Director
    
    June 23, 2005*
Robert J. Bradshaw
    
    Director
    
    June 23, 2005*
E. John Finn
    
    Director
    
    June 23, 2005*
William D. Grace
    
    Director
    
    June 23, 2005*
Susan E. Hartman
    
    Director
    
    June 23, 2005*
Robert R. Mesel
    
    Director
    
    June 23, 2005*By:            /s/   Jeffrey S. LloydAttorney-in-Fact







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##### 



AUTHORIZED REPRESENTATIVE 
 Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the Authorized
Representative has signed this Registration Statement, solely in its capacity as the duly
authorized representative of Stantec Inc. on June 23, 2005. 
 
 STANTEC CONSULTING INC.By:
    
    /s/ Michael J. SlocombeName: Michael J. SlocombeTitle: Secretary




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##### 



EXHIBIT INDEX 
 ExhibitNumber
    
    Description of Document2.1*
    
    Agreement and Plan of Merger and Reorganization, dated as of April 14, 2005, as amended
May 9, 2005, among Stantec Inc., The Keith Companies, Inc. and Stantec Consulting
California Inc., a wholly-owned subsidiary of Stantec Inc. (attached as Appendix A to
the proxy statement/prospectus which is part of this Registration Statement).3.1*
    
    Articles of Incorporation of Stantec Inc.3.2*
    
    Bylaws of Stantec Inc.4.1*
    
    Form of Stantec Inc. common share certificate.5.1**
    
    Opinion of Fraser Milner Casgrain LLP as to the legality of the securities being
registered.8.1**
    
    Opinion of Shearman & Sterling LLP as to certain U.S. federal income tax matters.8.2**
    
    Opinion of Akin Gump Strauss Hauer & Feld LLP as to certain U.S. federal income tax
matters.10.1*
    
    Employment Agreement, dated as of January, 2005, between Stantec Consulting Ltd. and
Raymond L. Alarie.10.2*
    
    Contract Amending Agreement, dated as of February 27, 2003, between Stantec Inc. and
Anthony P. Franceschini.10.3*
    
    Employment Agreement, dated as of January 1, 2003, between Stantec Inc. and Anthony P.
Franceschini.10.4*
    
    Employment Agreement, dated as of December 19, 2002, between Stantec Consulting Ltd.
and W. Barry Lester.10.5*
    
    Employment Agreement, dated as of
October 31, 2001, between Stantec Consulting Ltd. and
Mark Jackson.10.6*
    
    Employment Agreement, dated as of
October 31, 2001, between Stantec Consulting Ltd. and
Jeffrey S. Lloyd.10.7*
    
    Employment Agreement, dated as of October 31, 2001, between Stantec Consulting Ltd. and
Donald W. Wilson.10.8**
    
    Credit Agreement, dated as of June 21, 2004 between Stantec Inc. and Canadian Imperial
Bank of Commerce.21.1*
    
    Subsidiaries of Stantec Inc.23.1**
    
    Consent of Ernst & Young LLP  Independent Registered Public Accounting Firm.23.2**
    
    Consent of KPMG LLP  Independent Registered Public Accounting Firm.23.3**
    
    Consent of Fraser Milner Casgrain LLP (included in Exhibit 5.1).23.4**
    
    Consent of Shearman & Sterling LLP (included in Exhibit 8.1).23.5**
    
    Consent of Akin Gump Strauss Hauer & Feld LLP (included in Exhibit 8.2).23.6*
    
    Consent of Bear, Stearns & Co. Inc.24.1*
    
    Powers of Attorney (included on the signature page of this Registration Statement).99.1*
    
    Form of proxy card for the special meeting of shareholders of The Keith Companies, Inc.99.2*
    
    Form of Letter to the shareholders of The Keith Companies, Inc. (included in the proxy
statement/prospectus which is part of this Registration Statement).99.3*
    
    Form of Notice of Special Meeting of shareholders of The Keith Companies, Inc.
(included in the proxy statement/prospectus which is part of this Registration
Statement).99.4***
    
    Consent of Aram H. Keith.
 
 
   *
    
    Previously filed.
    
    The registrant hereby agrees to furnish to the
Commission a copy of any omitted schedule to the Merger Agreement.**
    
    Filed herewith.***
    
    To be filed by amendment.