<PAGE>   1
                         [GREAT LAKES POWER INC. LOGO]

                             ANNUAL INFORMATION FORM

                                   May 1, 2001
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
THE COMPANY ............................................................       1

BUSINESS OF THE COMPANY ................................................       2

DEVELOPMENT OF THE BUSINESS ............................................       3

NORTHERN ONTARIO POWER .................................................       4

GREAT LAKES HYDRO INCOME FUND ..........................................       7

OTHER OPERATIONS .......................................................       9

POWER GENERATION OUTLOOK ...............................................      14

POWER GENERATING FACILITIES ............................................      18

INVESTMENT ACTIVITIES ..................................................      19

FINANCING ARRANGEMENTS .................................................      20

ENVIRONMENTAL MANAGEMENT ...............................................      20

CAPITAL BASE AND DIVIDEND POLICY .......................................      22

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

  FINANCIAL CONDITION AND RESULTS OF OPERATIONS ........................      23

CONSOLIDATED FINANCIAL INFORMATION .....................................      23

QUARTERLY OPERATING RESULTS ............................................      24

DIRECTORS AND OFFICERS .................................................      24

SUBSIDIARIES ...........................................................      26

ADDITIONAL INFORMATION .................................................      26
</TABLE>
<PAGE>   3
                                   THE COMPANY

         Great Lakes was formed on March 2, 2001 by the amalgamation under the
Business Corporations Act (Ontario) of Great Lakes Power Inc. and a subsidiary
of Brascan Corporation, pursuant to a going-private transaction approved by the
shareholders of Great Lakes Power Inc. on February 28, 2001. References to the
"Company" or "Great Lakes" include Great Lakes Power Inc. and its predecessors
and subsidiaries unless otherwise indicated or unless the context otherwise
requires. The registered and principal office of Great Lakes is BCE Place, 181
Bay Street, Suite 4400, P.O. Box 762, Toronto, Ontario M5J 2T3.

The primary business of Great Lakes and its subsidiaries is the development and
management of electricity generating facilities in Canada and the United States.
These operations employ 230 people. Great Lakes also holds a portfolio of
financial investments.

Great Lakes conducts its power business through three operating groups:

NORTHERN ONTARIO POWER, a wholly-owned integrated hydroelectric power
generation, transmission and distribution system based in Sault Ste. Marie,
Ontario. This system is the largest independent producer and distributor of
electricity in Ontario.

GREAT LAKES HYDRO INCOME FUND, an unincorporated open-ended trust in which Great
Lakes owns 50% of the trust units. The Fund owns the Maclaren Energy
hydroelectric generation and transmission system in western Quebec and a 50%
interest in the Powell River Energy hydroelectric facilities in southwestern
British Columbia.

OTHER OPERATIONS include the following: a 50% interest in Lake Superior Power,
which owns and operates a natural gas-fired cogeneration plant in Sault Ste.
Marie, Canada; a 65% interest in Valerie Falls Power, which owns a hydroelectric
station in northwestern Ontario; wholly-owned Pontiac Power, which owns two
hydroelectric power stations in western Quebec; a 75% residual interest in
Louisiana HydroElectric Power, which owns and operates a hydroelectric station
and flood and sediment control facility in Louisiana; and wholly-owned Highvale
Power, which owns coal properties in Alberta that provide fuel for thermal
electricity generating stations in that province.

The following table sets forth selected financial information with respect to
Great Lakes as at and for the five years ended December 31, 2000:

<TABLE>
<CAPTION>
millions, except per share amounts                       2000        1999        1998        1997           1996
----------------------------------------------------------------------------------------------------------------
<S>                                                    <C>         <C>         <C>         <C>            <C>
FINANCIAL POSITION
Total assets                                           $2,476      $2,405      $2,256      $2,236         $2,347
Debt                                                      952         890         816         762            836
Capital base:
     Convertible debentures                               248         248         248         248            248
     Common shares                                      1,001         968         936         913            864
                                                       ---------------------------------------------------------
                                                        1,249       1,216       1,184       1,161          1,112
REVENUE AND NET INCOME
Gross revenues                                         $  333      $  286      $  292      $  292         $  268
Net income                                                116         113         104         122(3)         112
Net income per common share(1,2)                       $ 0.92      $ 0.90      $ 0.83      $ 0.97(3)      $ 0.89
Dividends per common share(2)                          $ 0.64        0.64        0.64        0.64           0.61
----------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      Fully diluted.

(2)      Amounts prior to 1998 have been restated to reflect the two-for-one
         stock split announced in March 1998.

(3)      Income for 1997 includes a net investment gain of $12.5 million or
         $0.10 per share on the sale of common shares of Brascan Limited.

Over the past five years, Great Lakes has not incurred any extraordinary income
or expense items, nor has it made any acquisitions requiring full consolidation
of results, other than Pontiac Power, which was acquired in December 1996.


GREAT LAKES POWER INC.                                                         1
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GREAT LAKES POWER INC.                                                         2
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                             BUSINESS OF THE COMPANY

The Company's effective voting and non-voting interests in its principal
subsidiaries as at May 1, 2001 are depicted in abridged form on the following
chart: (1)

                             Great Lakes Power Inc.

<TABLE>
<CAPTION>
           NORTHERN              GREAT LAKES HYDRO INCOME
        ONTARIO POWER                   FUND (50%)                              OTHER OPERATIONS
---------------------------------------------------------------------------------------------------------------
<S>                              <C>                            <C>                         <C>
 NORTHERN ONTARIO POWER 100%          MACLAREN ENERGY           LAKE SUPERIOR POWER              LOUISIANA
                                           100%                         50%                 HYDROELECTRIC POWER
                                                                                                   75%(2)

                                    POWELL RIVER ENERGY         VALERIE FALLS POWER            HIGHVALE POWER
                                            50%                         65%                         100%

                                                                   PONTIAC POWER
                                                                        100%
</TABLE>

(1)  The following abbreviations are used in this document for the Company's
     power operations: Catalyst Old River HydroElectric Limited Partnership
     ("Louisiana HydroElectric Power"), Highvale Power Corporation ("Highvale
     Power"), Great Lakes Hydro Income Fund ("Income Fund"), Hydro-Pontiac Inc.
     ("Pontiac Power"), Lake Superior Power Limited Partnership ("Lake Superior
     Power"), Powell River Energy Inc. ("Powell River Energy") and Valerie Falls
     Power Limited Partnership ("Valerie Falls Power"). The term "Maclaren
     Energy" used in this document refers to the Maclaren Energy hydroelectric
     generating, transmission and distribution system in western Quebec. (See
     also "Subsidiaries" on page 26 of this document.)

(2)  Residual interest


         The following is a summary of Great Lakes' power production base as at
May 1, 2001:

<TABLE>
<CAPTION>
                                                                           Generating     Generating       Installed
                                                      Location              Stations         Units          Capacity
--------------------------------------------------------------------------------------------------------------------
                                                                                                         (megawatts)
<S>                                           <C>                          <C>            <C>              <C>
NORTHERN ONTARIO POWER (1)                        Ontario, Canada              12             22                 327

GREAT LAKES HYDRO INCOME FUND
     Maclaren Energy (1)                           Quebec, Canada              3              10                 238
     Powell River Energy (2,4)                British Columbia, Canada         2               7                  82

OTHER POWER OPERATIONS
     Lake Superior Power (3)                      Ontario, Canada              1               3                 110
     Valerie Falls Power (2)                      Ontario, Canada              1               2                  10
     Pontiac Power (2)                             Quebec, Canada              2               7                  28
     Louisiana HydroElectric Power (2)           Louisiana, U.S.A.             1               8                 192
--------------------------------------------------------------------------------------------------------------------
                                                                               22             59                 987
====================================================================================================================
</TABLE>

(1)  Integrated hydroelectric power generating and transmission systems
(2)  Other hydroelectric stations
(3)  Natural gas-fired cogeneration plant
(4)  Powell River Energy was acquired in February 2001


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GREAT LAKES POWER INC.                                                         3
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         Operating statistics for the Company's power operations as at and for
the five years ended December 31, 2000 are shown below:

<TABLE>
<CAPTION>
                                                    2000             1999             1998             1997             1996
----------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>              <C>              <C>              <C>              <C>
INSTALLED CAPACITY (megawatts)
     Northern Ontario Power                          327              321              319              306              305
     Maclaren Energy                                 238              238               --               --               --
     Lake Superior Power                             110              110              110              110              110
     Valerie Falls Power                              10               10               10               10               10
     Pontiac Power                                    28               28               28               28               28
     Louisiana HydroElectric Power                   192              192              192              192              192
----------------------------------------------------------------------------------------------------------------------------
                  TOTAL                              905              899              659              646              645
============================================================================================================================

ELECTRICITY GENERATION (gigawatt hours)
     Northern Ontario Power                        1,369            1,503              969            1,484            1,801
     Maclaren Energy (1)                           1,554            1,452               --               --               --
     Lake Superior Power (2)                         852              843              820              840              849
     Valerie Falls Power                              51               51               16               45               58
     Pontiac Power (3)                               217              205              166              193              197
     Louisiana HydroElectric Power                   538              810            1,074            1,046              974
----------------------------------------------------------------------------------------------------------------------------
                  TOTAL                            4,581            3,604            3,045            3,608            3,682
============================================================================================================================

ELECTRICITY SALES (gigawatt hours)
     Northern Ontario Power (4)                    2,309            2,341            2,378            2,313            2,270
     Maclaren Energy (1)                           1,573            1,492               --               --               --
     Lake Superior Power (2)                         852              843              820              840              849
     Valerie Falls Power                              51               51               16               45               58
     Pontiac Power (3)                               214              202              164              189              194
     Louisiana HydroElectric Power                   520              780            1,033            1,004              938
----------------------------------------------------------------------------------------------------------------------------
                  TOTAL                            5,519            4,410            4,411            4,391            4,115
============================================================================================================================
</TABLE>

(1)  Acquired in November 1999. Maclaren Energy's electricity generation and
     sales for the last 43 days of 1999 of 191 GWh and 193 GWh, respectively,
     are included in Company totals for that year.
(2)  Includes electricity equivalents of contracted gas sales by Lake Superior
     Power.
(3)  Pontiac Power was acquired in December 1996. Its electricity generation and
     sales in 1996 are not included in Company totals for that year.
(4)  Includes power purchased externally to meet customer demand in the Northern
     Ontario Power service area.


                           DEVELOPMENT OF THE BUSINESS

The Company's primary emphasis since 1990 has been the development and expansion
of its power generating business. In 1992, the Company's name was changed from
Great Lakes Group Inc. to its present name, Great Lakes Power Inc., to reflect
this business emphasis.

In 1990, Louisiana HydroElectric Power completed construction of the 192
megawatt ("MW") Sidney A. Murray, Jr. generating station and flood and sediment
control facility, located on a diversion of the Mississippi River near Vidalia,
Louisiana. The station started producing electrical power that year.

In 1992, Lake Superior Power commenced construction of a 110 MW natural
gas-fired cogeneration plant in Sault Ste. Marie, Ontario, which was completed
and started producing electrical power in 1993.

In 1993, the Company entered into a partnership to develop a 10 MW hydroelectric
generating station near Valerie Falls on the Seine River in northwestern
Ontario. The Valerie Falls Generating Station started producing electrical power
in late 1994 and was officially opened in 1995.

In 1996, the Company acquired Highvale Power, which owns coal properties in
Alberta and sells coal, under long-term royalty agreements, to TransAlta
Utilities Corporation. In 1996, it also acquired Pontiac

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GREAT LAKES POWER INC.                                                         4
<PAGE>   7
Power, which owns two hydroelectric generating stations in western Quebec with a
combined generating capacity of 28 MW.

         In March 1998, the Company implemented a two-for-one stock split, which
increased the number of the Company's common shares from 50,696,967 to
101,393,934. All share and per share information in this Annual Information Form
for periods prior to 1998 reflects this share split on a retroactive basis. In
June 1998, the Company issued US $105 million of 6.57% Series 4 First Mortgage
Bonds due June 2003.

         In July 1999, Great Lakes increased its residual ownership interest in
Louisiana HydroElectric Power from 50% to 75% for an aggregate consideration of
$70 million. In August 1999, Great Lakes issued US $200 million of 8.3% Notes
maturing March 1, 2005. The proceeds were used in part to repay US $125 million
of 8.9% Notes which came due on December 1, 1999.

         In November and December 1999, Great Lakes acquired a 40% interest in
Great Lakes Hydro Income Fund, which at the time owned and continues to own the
Maclaren Energy hydroelectric power generation, transmission and distribution
system in western Quebec, for an aggregate purchase price of $89 million. In May
2000, Great Lakes increased its ownership of the Income Fund from 40% to 50% for
$22 million.

         In December 2000, the Company's major shareholder, Brascan Corporation
("Brascan"), announced a going private transaction in which Brascan and GLP NT
Corporation would become the Company's sole shareholders. Brascan and its
affiliates hold a 74.5% equity interest in GLP NT Corporation. The proposed
transaction took the form of an amalgamation in which the public shareholders
would receive either cash consideration of $19.00 per share or a share exchange
of 0.905 of a Brascan Class A Limited Voting Share per common share of Great
Lakes. Following a review by an Independent Committee of the board of the
Company, the board unanimously recommended in favour of this proposal, which was
approved by the Company's shareholders at a Special Meeting held on February 28,
2001.

         Pursuant to this offer, Brascan acquired the outstanding 4.3 million
publicly held common shares of Great Lakes in exchange for approximately
$250,000 in cash and 3.9 million Class A Limited Voting Shares of Brascan. The
successor private company established on March 2, 2001 carries on the affairs of
the Company under the name Great Lakes Power Inc. As a result of this
transaction, the Company is no longer listed on The Toronto Stock Exchange or on
any other public securities market. The Company continues as a Reporting Issuer
since it has issued public debt in the United States.

         In 2000, Great Lakes announced a $500 million capital investment
program as part of a business plan to double the earnings from its power
business by 2005. This plan includes the development and acquisition of
hydroelectric generating facilities in Canada and the United States. During
2001, construction commenced on two new hydroelectric generating stations, the
45 MW High Falls redevelopment in northern Ontario and the 30 MW Pingston Creek
station in British Columbia, both of which are expected to be completed in the
latter part of 2002. Great Lakes also advised Brascan on the development of new
hydroelectric generating stations in Brazil, two of which started construction
in the first half of 2001.

         On February 2, 2001, the Income Fund acquired a 50% interest in Powell
River Energy in British Columbia, which owns two hydroelectric stations with an
aggregate installed capacity of 82 MW and related transmission facilities having
a total cost of $113 million.


                             NORTHERN ONTARIO POWER

OVERVIEW

         Great Lakes is the largest privately-owned power company in Ontario,
based on the number of gigawatt hours of electricity sold to its customers. It
is one of the lowest-cost electricity producers in Ontario and among the
lowest-cost producers in North America.


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GREAT LAKES POWER INC.                                                         5
<PAGE>   8
         Great Lakes' integrated hydroelectric generation, transmission and
distribution system in northern Ontario ("Northern Ontario Power" or "the
system"), held through wholly-owned Great Lakes Power Limited ("GLPL"), supplies
electricity directly and indirectly to 43,900 customers in the city of Sault
Ste. Marie and other communities in the Algoma District ("Algoma"). It generates
electricity from its 12 wholly-owned hydroelectric generating stations, which
are located on the St. Mary's, Montreal, Michipicoten and Magpie Rivers and have
a total installed capacity of 327 MW. These stations generate, on average,
approximately 65% of the power required to meet the needs of the system's
customers. The balance of the electrical power required to serve its customers
is purchased from Ontario Power Generation Inc. ("OPG").

         Northern Ontario Power's 12 generating stations are operated by remote
control through fibre-optic cable and microwave from a control centre in Sault
Ste. Marie. Power generated is distributed through a network of substations and
transmission lines built, owned and maintained by Great Lakes. Substations on
each river system are linked by 449 miles of 115 and 230 kilovolt ("kV")
transmission lines. The system is interconnected with the Ontario power grid
controlled by the Independent Market Operator at Wawa, Ontario, and via two 230
kV transmission lines at Mississagi, Ontario, 46 miles east of Sault Ste. Marie.
Northern Ontario Power supplies electricity to its direct customers through
1,064 miles of distribution lines. These operations employ 129 people.

DEVELOPMENT OF THE SYSTEM

Directly and through predecessor companies, the Company has provided
hydroelectric power to Sault Ste. Marie and surrounding areas in Algoma since
1916. Hydroelectric power was first developed by Great Lakes on the St. Mary's
River. The people of Sault Ste. Marie and Algoma voted in 1928 to retain Great
Lakes as a private electricity supplier. Great Lakes later acquired and
developed power generating sites on the Michipicoten, Montreal and Magpie Rivers
to become the sole supplier of power in the Algoma district. Since the 1920s,
Great Lakes' customers have repeatedly renewed its franchise, based on its
record of providing reliable and competitively priced hydroelectric power.

MARKET FOR SERVICES

As of December 31, 2000, the system provided electric power to 11,497 customers
directly and 32,396 customers indirectly via PUC Inc. (formerly the Sault Ste.
Marie Public Utilities Commission), which accounted for approximately 31% of the
system's gigawatt hour power sales in 2000. Its two largest industrial
customers, Algoma Steel Inc. and St. Marys Paper, both located in Sault Ste.
Marie, accounted for 36% and 17%, respectively, of gigawatt hour power sales in
2000. The system also supplies power directly to commercial, industrial and
residential customers in areas of Algoma north and east of Sault Ste. Marie,
which together accounted for 16% of gigawatt hour sales in 2000.

         Power sales to the system's main customers are shown below for the two
years ended December 31, 2000:

<TABLE>
<CAPTION>
gigawatt hours                                       2000                   1999
--------------------------------------------------------------------------------
<S>                                                 <C>                    <C>
PUC Inc.                                              722                    716
Algoma Steel                                          821                    844
St. Marys Paper                                       396                    417
Other customers                                       370                    364
--------------------------------------------------------------------------------
                                                    2,309                  2,341
================================================================================
</TABLE>

Power demand is expected to increase moderately in the foreseeable future. On
April 23, 2001, Algoma Steel sought and received protection under the Companies'
Creditors Arrangement Act ("CCAA"). During the period of CCAA protection, Algoma
Steel continues to operate and has made arrangements with Northern Ontario Power
to purchase electricity on a pre-paid basis. St. Marys Paper has invested
recently in new operating facilities and is expected to maintain its power
demands consistent with current levels. Demand from the City of Sault Ste. Marie
is also expected to remain stable. Great Lakes is anticipating an increase in
its customer base from new companies locating within its service area.


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GREAT LAKES POWER INC.                                                         6
<PAGE>   9
Interruptions in, or decreased levels of, demand from these customers may have a
short-term negative impact on power generating operating income. However, Great
Lakes has the ability under its Power Purchase Agreement with OPG, described
below, to reduce the amount of power purchased over time to offset declines in
power sales.

It is expected that the system will continue to provide a relatively stable
level of earnings for Great Lakes. However, income is affected by fluctuations
in water levels resulting from changes in the amount of precipitation in its
watershed area, as lower than average water levels reduce internal power
generation and correspondingly increase the need to purchase higher-cost power
to meet its customers' electricity demands. Over the longer run, changes in
Ontario's electricity market may give rise to new and different sources of
income for Northern Ontario Power, including revenues from its transmission and
distribution operations which are more stable, since they are independent of
water conditions and subject to a new regulatory regime.

PRODUCTIVITY AND RELIABILITY

The Company's power generating management system identifies the system's most
cost-efficient generators for use at any given time to make best use of
available water resources. In 1999, the Company completed the installation of a
new supervisory control and data acquisition system ("SCADA") with
state-of-the-art capabilities for system monitoring and energy management. The
productivity gains from these systems, and further planned improvements to its
system controls should enable the Company to maintain its position as a low-cost
generator of electricity.

Microprocessor and fibre-optic-based relay and tele-control systems are used to
operate the system's stations. Above-grade fibre-optic cables have been
installed for the generating stations on the Michipicoten and Montreal Rivers.
This technology has improved the efficiency of the system's generating
facilities and reliability of its transmission and distribution wires.

The Company has a comprehensive maintenance program to extend the operating life
of its generating facilities and to maintain unit efficiency. This program
includes annual examinations of major items of equipment, intensive reviews of
dams, weirs and spillways every four to five years, and complete overhauls of
generating units as required.

         Great Lakes' returbining program continued in 2000 with the repowering
of three generating units at the Andrews, Hogg and MacKay generating stations,
which added 6 MW of capacity to these stations. This work included replacing the
original turbine runners with new runners that are designed to optimize
efficiency and output while resisting cavitation. Along with related
improvements, this program has since 1995 added a total of 23 MW of capacity,
increasing the system's total installed capacity to 327 MW.

POWER PURCHASE AGREEMENT WITH ONTARIO POWER GENERATION INC.

Pursuant to a power purchase agreement with OPG (formerly part of Ontario
Hydro), dated January 28, 1985 (the "Power Purchase Agreement"), Great Lakes can
currently purchase from OPG up to 190,000 kilowatts in the on-peak period and up
to 275,000 kilowatts in the off-peak period without penalty. If power
requirements exceed 190,000 kilowatts in the on-peak period, Great Lakes is
subject to an excess capacity charge of 25%. Under this agreement, Great Lakes
is currently required to pay for a minimum of 42,250 kilowatts per month.

Under the terms of the Power Purchase Agreement, the system's power rates were
approved by the former Ontario Hydro. Until its restructuring in April 1999,
Ontario Hydro was charged with the responsibility for generating, supplying, and
delivering electricity throughout Ontario and regulated these rates on a basis
generally consistent with that used by public utility boards in various
provinces of Canada. Northern Ontario Power may be affected by changes now under
way in the regulation of Ontario's electrical power industry, as described
further on page 15.

WATER POWER LEASES

An Order-in-Council of the Province of Ontario permitting the use in perpetuity
of 20,000 cubic feet of water per second from the St. Mary's River was issued to
a predecessor company in 1919. In addition,


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GREAT LAKES POWER INC.                                                         7
<PAGE>   10
pursuant to an Order-in-Council passed on December 20, 1978, Great Lakes entered
into a water power agreement with the Province of Ontario for a term of 40
years, commencing September 1, 1982 and ending August 31, 2022, which provides
for the use of additional water from the St. Mary's River, to an amount not to
exceed the amount approved for diversion for power purposes by the International
Joint Commission, the commission responsible, among other things, for governing
international boundary waters.

Great Lakes has entered into water power lease agreements with the Province of
Ontario providing for water rights for Great Lakes' eight generating stations
located on the Montreal and Michipicoten Rivers. These agreements extend or are
renewable to the year 2002. The leases allow the use of the water flow in the
river systems used by Great Lakes to generate power. Great Lakes has commenced
negotiations for a further 30-year term on these leases, which it expects to
conclude successfully in 2001. Great Lakes has also entered into water power
lease agreements, which expire in 2020, providing for water rights for its three
generating stations located on the Magpie River.

DEVELOPMENT OPPORTUNITIES

The former Ontario Hydro, as part of its energy conservation efforts, applied
time-of-use billing which effectively places premium rates on electricity
generated during peak periods. This benefits the operation of Northern Ontario
Power, since its reservoirs can store water during periods of low power demand
and release water for power generation in peak periods when higher rates apply.
This method of billing also presents a number of development and redevelopment
possibilities.

Studies made of the development potential of the Company's four northern Ontario
river systems have indicated a number of projects which could add up to 100 MW
of additional peaking capacity. These include the development of a new 45 MW
hydroelectric generating station to replace the existing 27 MW facility at the
High Falls site on the Michipicoten River. Construction of this $75 million
project commenced in the second quarter of 2001 for expected completion in the
fourth quarter of 2002.

The potential also exists for a pumped storage facility to increase the on-peak
generation of the Montreal River system. In this project, water would be pumped
during off-peak hours from Lake Superior to the Gartshore reservoir, located
within two miles of the lake. It would then be pumped to the MacKay reservoir,
and stored there to replace water used during on-peak hours. In its initial
stage, this facility could add approximately 40 MW to the Montreal River
system's peak generating capacity, with a potential of more than 500 MW of
additional capacity.

Permitting and preliminary engineering are under way for a $25 million
high-voltage transmission interconnection with utilities in the adjacent US
states of Michigan and Wisconsin. This involves building transmission lines with
a capacity of up to 300 MW at 230 kilovolts linking Ontario and these utilities.
This interconnection would greatly enhance the feasibility of the proposed
Montreal River pumped storage facility and other expansions to the system, and
would provide the physical connections to enable the Company to sell its power
in the United States.


                          GREAT LAKES HYDRO INCOME FUND

         Great Lakes owns a 50% interest in Great Lakes Hydro Income Fund, an
unincorporated open-ended trust created in 1999. Great Lakes acquired a 40%
interest in the Income Fund in November and December of 1999 for $89 million and
increased this interest to 50% in May 2000 for $22 million. The other units in
the Income Fund are currently held by the public. The Income Fund's units are
listed for trading on The Toronto Stock Exchange.

         The Income Fund's two operations are the wholly-owned Maclaren Energy
system in Quebec and a 50% interest in Powell River Energy in British Columbia.
The Fund holds its interests in these operations through the wholly-owned Great
Lakes Power Trust.


--------------------------------------------------------------------------------
GREAT LAKES POWER INC.                                                         8
<PAGE>   11
MACLAREN ENERGY

OVERVIEW

         The Maclaren Energy hydroelectric generation, transmission and
distribution system ("Maclaren Energy") is located in western Quebec on the
Lievre River system, a tributary of the Ottawa River. Maclaren Energy was
developed by James Maclaren Industries Inc., a subsidiary of Nexfor Inc.
("Nexfor"), to service the electricity needs of its pulp and paper operations
and other industrial customers. In 1999, Nexfor sold Maclaren Energy to the
Income Fund, retaining 21% of the units in the Fund which it sold in May 2000.

         Maclaren Energy's production base consists of three generating stations
on the Lievre River having a combined generating capacity of 238 MW. The 105 MW
Masson station is located in the town of Masson-Angers just north of the Ottawa
River and 18 miles east of the City of Hull. The Masson Station is the operating
centre for the Maclaren Energy system and, since 1998, for the two Pontiac Power
stations. The 38 MW Dufferin station is located in the City of Buckingham three
miles upstream. One generating unit at the Dufferin Station is scheduled for
returbining in 2001. The uppermost station on the river, the 95 MW High Falls
plant, is located 24 miles north of the Ottawa River.

Water for these power stations is stored primarily at three reservoirs located
upstream on the Lievre River and two of its tributaries, which are owned and
operated by the Government of Quebec. The system also includes five substations
and approximately 30 miles of 120 kV transmission lines. These have four
interconnections with the Quebec power grid and two with the Ontario power grid.
During 2000, the power interconnection at Masson, Quebec was upgraded and
expanded from 240 MW to 400 MW.

PROJECT AGREEMENTS
         In 1999, Great Lakes entered into a Power Agency and Guarantee
Agreement ("PAGA") with the Hydro Fund, expiring in 2019, under which Great
Lakes guarantees that the Hydro Fund will receive the guaranteed price for all
electricity produced and delivered by the Maclaren Energy system, except in
certain limited circumstances. The guaranteed price was initially set at (i)
$37.00 per megawatt hour ("MWh") for 1,065,000 MWh of electricity in any given
year, and (ii) $30.00 per MWh for electricity in excess of 1,065,000 MWh in any
given year. Commencing January 1, 2001, the guaranteed price is subject to an
annual adjustment equal to the lesser of 3% or 40% of the increase in the
Consumer Price Index during the previous year. Great Lakes acts as the Hydro
Fund's exclusive agent in respect of sales of electricity and provides sales,
scheduling, dispatching and transmission services.

         Under the PAGA, a hydrology reserve facility is provided by Great Lakes
to the Income Fund to a maximum amount of $15 million in order to levelize cash
distributions to Income Fund unit holders as a consequence of changes in
hydrology from year to year. The facility is available for a period ending on
the earlier of (i) November 18, 2014, and (ii) the date of the sale of all or
substantially all of the power system. The Income Fund is entitled to draw up to
$5 million per year for such purposes. The facility is unsecured, will bear
interest at the prime rate of a Canadian chartered bank plus 2% and will be
repayable solely from excess revenues of the Hydro Fund in years when
electricity generated and delivered by the power system exceeds 1,418 GWh per
annum or upon the sale of all or substantially all of the power system.

         In 1999, Great Lakes entered into a Management, Operations and
Maintenance Agreement with the Income Fund expiring in 2019, to operate and
maintain the Maclaren Energy system in accordance with prudent business practice
and an approved annual operating plan. In addition, Great Lakes provides the
Income Fund with certain administrative and support services. These services are
provided through Maclaren Energy Inc., a wholly-owned subsidiary of Great Lakes
which employs 40 people.

         Under a Hydraulic Power Lease with the Government of Quebec expiring in
2019, the Income Fund is the lessee of certain publicly-owned hydraulic rights
on the Lievre River and also holds the right to have water stored in the three
upstream reservoirs.


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GREAT LAKES POWER INC.                                                         9
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         In April 2000, the Income Fund completed the offer of $100 million of
First Mortgage Bonds, pursuant to a private placement, with the proceeds used to
repay a bridge loan provided by Nexfor. The offering consisted of three series:
(i) $50 million of 7.33% Series 1 Bonds due 2005; (ii) $25 million of 7.55%
Series 2 Bonds due 2010; and (iii) $25 million of 7.78% Series 3 Bonds due 2015.

POWELL RIVER ENERGY

OVERVIEW

Powell River Energy Inc. ("Powell River Energy") is a Canadian corporation owned
50% by the Income Fund, through its wholly-owned affiliate, the Powell River
Energy Trust, and 50% by Pacifica Paper Inc. ("Pacifica Paper"), both on a fully
diluted basis. In February 2001, Powell River Energy acquired from Pacifica
Paper two hydroelectric generating stations with a combined generating capacity
of 82 MW and related transmission facilities located in city of Powell River,
British Columbia, for cash consideration of $113 million and assumption of a
future income tax liability.

The Powell River Energy facilities were built to provide electricity for the
pulp and paper operations of Pacifica Paper and its predecessors in the city of
Powell River, which is located on the west coast of the British Columbia
mainland approximately 100 miles north of the city of Vancouver. Its production
base consists of two generating stations containing seven generating units with
a total installed capacity of 82 MW and an average annual generation of 520 GWh.

The Powell River generating station comprises three powerhouses containing five
generating units located in the town of Powell River. The Lois Lake generating
station consists of one powerhouse containing two units located 10 miles south
of the Powell River facilities. Water for these stations is stored in two large
lakes created by the dams of the two facilities: Powell Lake, which is
approximately 26 miles in length; and Lois Lake, which together with three
interconnected lakes is approximately 10 miles in length. These lakes have a
total usable water storage of 432,353 cfs days. Power from the Lois Lake
facilities is delivered, via 12 miles of transmission lines owned by Powell
River Energy, to a distribution system in Powell River. These facilities are
also interconnected to the British Columbia power grid.

PROJECT AGREEMENTS

All of the energy generated by Powell River Energy is sold to Pacifica Paper
pursuant to a 10-year "take or pay" agreement dated January 31, 2001. Pacifica
Paper must purchase all the energy delivered on a first priority basis before
purchasing or otherwise receiving any other energy for its mill. Pacifica Paper
is restricted from selling or using the energy from the power facilities other
than at its mill. Pacifica Paper pays $34.95 per MWh, increasing annually by an
amount equal to 20% of the increase in the Consumer Price Index for the year.
Powell River Energy may make the electricity generated by the power facilities
available to others if it is not otherwise needed in the ordinary course of the
mill's business.

Powell River Energy has also entered into an Operations and Maintenance
agreement with Maclaren Energy Services Management Inc., an indirect
wholly-owned subsidiary of Great Lakes, to operate and maintain the Powell River
Energy facilities in accordance with prudent business practice and an approved
annual operating plan.


                                OTHER OPERATIONS

Great Lakes' other operations include Lake Superior Power and Valerie Falls
Power in Ontario, Pontiac Power in Quebec and Louisiana HydroElectric Power in
the United States. Great Lakes also owns coal royalty operations through
Highvale Power in Alberta.

LAKE SUPERIOR POWER

OVERVIEW

Lake Superior Power Limited Partnership ("Lake Superior Power") is a limited
partnership formed in 1991 to develop and operate a 110 MW natural gas-fired
cogeneration plant in Sault Ste. Marie, Ontario. Great


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GREAT LAKES POWER INC.                                                        10
<PAGE>   13
Lakes and Westcoast Energy Inc. ("Westcoast"), a Canadian natural gas
distribution company, are limited partners in the project each holding a 49.5%
interest. The general partner is Lake Superior Power Inc., which holds a 1%
interest in the project. Each of Great Lakes and Westcoast holds a 50% interest
in Lake Superior Power Inc. Net income earned by the partnership is distributed
with the mutual consent of the partners. Great Lakes holds its interests in the
general and limited partnerships through GLPL.

The Lake Superior Power cogeneration plant commenced production in 1993 and
completed its first full year of operation in 1994. It uses two aero-derivative
natural gas-driven turbines to generate electricity. Heat generated by the gas
turbines is captured by two heat-recovery steam generators and the high pressure
steam they produce is in turn used to drive a steam turbine to generate
additional electrical energy. Low pressure steam is also available for sale to
industrial customers. These operations employ 16 people under the management of
Lake Superior Power.

PROJECT AGREEMENTS

Lake Superior Power has entered into gas supply agreements with each of
Petro-Canada Inc. ("Petro-Canada") and Talisman Energy Inc. ("Talisman") for the
purchase of the natural gas required to run the cogeneration turbine engines.
Each agreement is for a term of 15 years which commenced on November 1, 1993,
and is extendible on a year to year basis if mutually agreed by the parties.
Subject to certain minimums and maximums, each agreement provides for the
delivery of natural gas required by Lake Superior Power as determined on a daily
basis. In the event Lake Superior Power fails to purchase certain minimum
amounts of natural gas under either agreement, it may, in certain circumstances,
be obligated to make deficiency payments to the gas suppliers. Under each
agreement, the price for the purchase of the gas is determined according to a
fixed rate schedule which is, in part, based on the price at which power
produced by the plant is being purchased. Lake Superior Power's gas supply
agreement with Talisman provides that if the contract price for the purchase of
natural gas is altered by legislation and the new contract price cannot be
passed on or recovered under the power sales agreement between Lake Superior
Power and OEFC, described below, either party may elect to terminate the
agreement. The gas supply agreement with Petro-Canada provides that upon the
termination of the power sales agreement between Lake Superior Power and OEFC,
the obligations of each party under the agreement will be suspended. If the
power sales agreement with OEFC is not replaced within a 12 month period, the
gas supply agreement will terminate.

Lake Superior Power has entered into 15-year transportation agreements, which
commenced on January 1, 1994, with TransCanada Pipelines Limited ("TransCanada")
and Centra Gas Ontario Inc. ("Centra Gas") for the transportation of natural
gas. TransCanada transports natural gas from Alberta to Sault Ste. Marie on the
Nova and/or Transgas systems, where it is then delivered locally by Centra Gas.

Lake Superior Power is party to a 20-year power sales agreement with Ontario
Electricity Financial Corporation ("OEFC") (formerly part of Ontario Hydro),
which commenced on April 1, 1994 under which OEFC has agreed to purchase all of
the electric power produced by the cogeneration plant according to a fixed price
schedule, subject to OEFC's periodic right to require Lake Superior Power to
curtail production within certain limits. Curtailment beyond these limits is
subject to negotiation and compensation by OEFC. OEFC may terminate the
agreement in certain circumstances, including on 60 days notice in the event
that Lake Superior Power fails to meet certain performance requirements for a
period of 24 consecutive months. Lake Superior Power may elect to reduce the
production of electricity within agreed limits and resell contracted gas
purchases to take advantage of higher gas prices.

Low pressure steam not used to produce electricity is available for sale to
industrial customers. Lake Superior Power is currently able to sell low pressure
steam to St. Marys Paper under an agreement entered into with St. Marys Paper in
October 1994.

The plant systems, equipment and facilities of Lake Superior Power are all
designed for a 110 MW plant. However, the layout of the plant and site space
have been designed to make it possible to double the plant's capacity. This will
be undertaken if and when additional long-term supply contracts can be arranged.


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GREAT LAKES POWER INC.                                                        11
<PAGE>   14
The capital cost of the Lake Superior Power plant was $120 million. The
construction of the plant was initially financed by equal investments of each of
Great Lakes and Westcoast. During 1995, Lake Superior Power arranged $84 million
of limited recourse financing for the facility.

VALERIE FALLS POWER

OVERVIEW

Valerie Falls Power Limited Partnership ("Valerie Falls Power") is a limited
partnership formed in 1993 to develop a 10 MW hydroelectric station on the Seine
River at Valerie Falls, three miles north of Atikokan in northwestern Ontario.
Great Lakes holds a 65% controlling interest in the partnership through GLPL,
the general partner. The other 35% interest in Valerie Falls Power is held by
the limited partner, Seine River Power Inc., a company controlled by a local
business partner. Development of the project was carried out jointly by Great
Lakes and its local partner and, since completion, the project has been managed
and operated by Great Lakes through Northern Ontario Power.

Construction began on the project in 1993. The station was completed and started
producing power in 1994 and was officially opened in 1995. The power plant was
built on a man-made diversion of the Seine River around the site of the former
Steep Rock Iron Mine and contains two 5.0 MW turbine generators.

PROJECT AGREEMENTS

The capital cost of this station was $23 million. Of this amount, $16.5 million
was financed through a term loan facility maturing November 20, 2001, with the
remainder being financed by contributions of each partner. Under the terms of
the loan agreement, all available net income from this project after operating
expenses is applied to pay interest and reduce the principal outstanding under
the loan. Valerie Falls Power has given as security under the credit agreement,
among other things, a fixed and floating charge on all of its assets and an
assignment of its accounts receivable and rights under material contracts and
permits. The term loan also provides for a dry-year facility under which Valerie
Falls Power may, subject to certain conditions, borrow an additional $500,000 on
a revolving basis to make required interest payments under the term loan in the
event that there is a deficiency in the cash flow available for such payments as
a result of low water conditions.

Valerie Falls Power is party to a power sales agreement dated June 1992 with
OEFC for the sale of power produced by the station, which terminates on December
31, 2042. Under the terms of the agreement, OEFC has agreed to purchase all of
the power produced by the plant for 50 years, according to a fixed-price
schedule based, in general, on the Ontario Consumer Price Index. If the plant
fails to produce power for 24 consecutive months, the terms of the agreement
allow OEFC to terminate the agreement upon 60 days written notice.

Under an agreement with the Ministry of Natural Resources, Valerie Falls Power
holds a water power lease agreement and necessary land use rights, including
those for roads and transmission lines, for a term of 50 years expiring in 2044.

PONTIAC POWER

OVERVIEW

         Hydro-Pontiac Inc. ("Pontiac Power") is a Quebec corporation acquired
by Great Lakes in December 1996. Pontiac Power owns two hydroelectric generating
stations on tributaries of the Ottawa River in western Quebec, with a combined
generating capacity of 28 MW. Great Lakes operates these facilities with a staff
of 10 managed by Maclaren Energy Inc.

The 11 MW Waltham station on the Noire River is owned by Waltham Power Company,
Limited Partnership ("Waltham Power") which was formed in 1994 for the purpose
of owning the Waltham station and related project assets. The 17 MW Coulonge
station on the Coulonge River near Fort Coulonge was built in 1994 and is owned
by Coulonge Power Company, Limited Partnership ("Coulonge Power"), which was
formed in 1993 for the purpose of developing and owning the Coulonge station and
related project assets.


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GREAT LAKES POWER INC.                                                        12
<PAGE>   15
Great Lakes, through Pontiac Power, owns 100% of Waltham Power and Coulonge
Power. In each case, Pontiac Power is the general partner and the wholly-owned
subsidiary is the limited partner. Earnings contribution from Pontiac Power was
recognized by the Company effective January 1, 1997.

PROJECT AGREEMENTS

Coulonge Power and Waltham Power have each entered into power contracts with
Hydro-Quebec for the sale of power produced by the Waltham and Coulonge
Stations, respectively. Under these contracts, Hydro-Quebec has agreed to
purchase all of the power produced by these stations at rates which increase
annually according to the increase in the consumer price index for the preceding
year. The contracts have a term of 25 years, commencing December 1, 1995 for
Waltham and December 1, 1994 for Coulonge. Both contracts include a renewal
provision for a further 25 years on completion of the current contracts in 2019
and 2020, respectively.

Under Waltham Power's current agreement with Hydro-Quebec, Hydro-Quebec
purchases all of the power produced by Waltham. Under an agreement between
Ontario Hydro and Hydro-Quebec, the portion of power generated by the Waltham
Station which is surplus to the requirements of its rural customers in Quebec is
transmitted over Pontiac Power's 44 kV interconnection transmission lines to
substations in the City of Pembroke. This power is then wheeled back to
Hydro-Quebec by Ontario Hydro Services Inc., now known as Hydro One Inc.
(formerly part of Ontario Hydro).

Waltham Power and Coulonge Power have each entered into lease agreements with
the government of Quebec which include water and land use rights and the right
to maintain and operate dams on the Noire River (in the case of Waltham Power)
and the Coulonge River (in the case of Coulonge Power) to store water in the
lakes on these rivers in order to regulate the flow of water to the Waltham and
Coulonge stations, respectively. The Waltham lease runs from January 1, 1992 to
December 31, 2011 with a right to renew for a further 20-year term. The Coulonge
lease runs from February 1, 1991 to November 30, 2019 with a right to renew for
a further 15-year term.

Project financing for the 1995 upgrade of the Waltham powerhouse was provided by
a group of Canadian life insurance companies in the form of a $24.2 million
non-recourse loan facility which has a term to maturity of 25 years from
December 1, 1995 and bears interest at 10.985% per annum. Waltham Power has
granted the lenders security in the project assets, including the Waltham power
house, equipment and Waltham Power's rights under material contracts and
permits.

Project financing for the construction of the Coulonge project was provided by a
group of Canadian life insurance companies in the form of a $43 million
non-recourse loan facility which has a term to maturity of 24 years from
December 1, 1994 and bears interest at 10.256% per annum. Coulonge Power has
granted the lenders security in the project assets including the Coulonge power
house, equipment and Coulonge Power's rights under material contracts and
permits.

LOUISIANA HYDROELECTRIC POWER

OVERVIEW

Catalyst Old River HydroElectric, Limited Partnership ("Louisiana HydroElectric
Power" or "the partnership") is a limited partnership formed to develop and
operate a combined hydroelectric generating station and flood and sediment
control facility on a diversion of the Mississippi River near the Town of
Vidalia ("Vidalia"), Louisiana, north of Baton Rouge. Great Lakes holds a 75%
residual interest in the partnership through wholly-owned Catalyst Vidalia
Corporation and Vidalia Holding, LLC, which hold, respectively, a 50% general
partnership interest and a 25% limited partnership interest in Louisiana
HydroElectric Power. Dominion Capital Inc. ("Dominion Capital") holds the
remaining 25% limited partnership interest. Louisiana HydroElectric Power
employs 36 people under the direction of the partnership.

After commencing power production in 1990, the facility was sold to
institutional investors in a sale and leaseback transaction for US $633 million.
Under the transaction, the partnership retained operational responsibilities and
long-term ownership rights.


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GREAT LAKES POWER INC.                                                        13
<PAGE>   16
         The hydroelectric generating station, known as the Sidney A. Murray,
Jr. Generating Station, is located on a man-made channel which diverts water
from the Mississippi River to the Red and Atchafalaya Rivers five miles away.
The station uses the natural difference in elevation between these two river
systems to generate electricity. It contains eight turbines with an installed
capacity of 192 MW, making it one of the largest run-of-the-river stations in
the world. The facility and inflow channel form an integral part of the US Army
Corps of Engineers' flood and sediment control system for the lower Mississippi
River.

PROJECT AGREEMENTS

Substantially all of the power produced by the facility is sold to Entergy
Louisiana, Inc. ("Entergy") under a long-term power sales agreement based on a
predetermined price schedule. The remaining power is sold directly to Vidalia
pursuant to a power sales agreement. Both of these agreements have substantially
similar terms, are on a "pay if delivered" basis and expire on December 31,
2031. Both agreements have been approved by the Louisiana Public Service
Commission. The power sales agreement with Entergy allows the partnership to
designate, subject to certain minimums and maximums, the amount of the annual
output of the station to be sold to Entergy. The partnership may sell up to 94%
of the station's power output to Entergy. Vidalia has agreed to purchase the
remaining 6% of the station's annual output. It is anticipated that the
partnership will elect to have Entergy purchase its maximum entitlement
throughout the term of the Entergy power purchase contract.

The revenues from these sales are expected to exceed the operating costs, annual
capital expenditures and lease principal and interest payments due to the
institutional investors and lenders. Surplus cash flows accrue to the partners.
Under the terms of the sale and leaseback transaction, however, revenues from
the operation of the facility must be deposited in certain trust accounts for
the payment of operation and maintenance costs, lease and royalty payments and
certain other costs. Distributions from these accounts are made annually to the
partners subject to certain requirements to maintain, among other things, a
certain lease coverage ratio and minimum lease reserve accounts.

Louisiana HydroElectric Power is also required to maintain a low-water flow
revolving credit facility with a financial institution in order to meet cash
flow deficiencies which may arise under certain low-water conditions. The
low-water credit facility currently in place has a rolling five-year term that
renews each November unless cancelled by the lender.

The Federal Energy Regulatory Commission ("FERC") license to operate the
facility is held jointly by the partnership and Vidalia. The transmission lines
and the accompanying right-of-way to Entergy's substation are governed by an
agreement with Vidalia dated June 28, 1988. Pursuant to the terms of the
agreement, the partnership leases the facility and the site and has the
exclusive right to maintain and operate the facility. Vidalia has also
covenanted not to transfer any right or interest in the transmission lines to
anyone other than the partnership. The royalties to be paid by the partnership
to Vidalia under these agreements are based on a percentage of gross power
revenues. The percentage gradually increases from 3.75% in 1990 to 11.6% in
2021. In 2022 and thereafter, the percentage is 20%.

The partnership has also entered into an agreement with the US Army Corps of
Engineers (the "Corps") providing for the flow of water required for the
facility. This agreement expires on December 31, 2031. The Corps, which is
responsible for regulating the flow of water between the Mississippi and the
Atchafalaya Rivers, has agreed to cooperate with the partnership to provide
sufficient water to the station, subject to any requirements of the Flood
Control Act of 1954, to enable it to operate. The station must be operated and
maintained by the partnership in accordance with the procedures set forth in the
agreement. The procedures contemplate, among other things, dredging and the
construction of dikes, if necessary, at the partnership's expense. The
partnership has not yet been required to undertake any dredging or to construct
any dikes.

HIGHVALE POWER


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GREAT LAKES POWER INC.                                                        14
<PAGE>   17
OVERVIEW

Highvale Power Corporation ("Highvale Power") was acquired by Great Lakes in
July 1996. It owns 215,000 hectares of freehold lands and 3,900 hectares of
Crown lease lands in central Alberta, which together contain 540 million tonnes
of recoverable coal reserves. The main holdings are in the Wabamum and Magnolia
coalfields near Wabamum Lake, west of the city of Edmonton, and in the
Pickardville-Morinville coalfield north of Edmonton.

Approximately 115 million tonnes of recoverable coal at the Highvale mine in the
Wabamum coalfield have been leased to TransAlta Utilities Corporation
("TransAlta") under renewable royalty agreements expiring in 2005 and 2021,
respectively. The Highvale mine supplies coal to TransAlta's Keephills (766 MW)
and Sundance (1,980 MW) power stations, which together produce approximately 75%
of Alberta's coal-fired energy. The coal supplied by the Highvale mine is
approximately 30% of the total requirement of these two plants. The coal is
mined under contract to TransAlta by Luscar Ltd.

In addition to the coal reserves committed to TransAlta, Highvale Power has
approximately 425 million tonnes of further reserves. Of these, 353 million
tonnes are located at the Wabamum and Magnolia coalfields in the Wabamum Lake
area and are of a quality similar to that mined at the Highvale mine. These
reserves include 170 million tonnes located on freehold lands and 183 million
tonnes located on Crown lease lands. A further 72 million tonnes of coal
reserves are located in freehold lands in the Pickardville-Morinville
coalfields.

PROJECT AGREEMENTS

Highvale Power has entered into two agreements with TransAlta for the sale of
coal in return for royalty payments. The Highvale 1 Agreement, which runs from
1972 to 2005, provides for the sale of coal to a depth of 2,275 feet above sea
level on certain of Highvale Power's lands. Royalty payments are based on annual
coal production plus a predetermined annual purchase payment. The royalty rate
is tied to the highest Alberta Crown royalty rate. This agreement is renewable
in 2005 by mutual agreement. Coal production from the subject lands is expected
to continue to approximately 2012.

         The Highvale 2 Agreement, which runs from 1982 to 2021, provides for
the sale of 27.3 million tonnes of coal. Royalty payments are based on annual
production subject to a take-or-pay annual tonnage of 1.6 million tonnes. The
royalty rate is tied to the Alberta Crown coal royalty rate plus an over-royalty
rate based on a factor which escalates over the life of the lease, adjusted to
the rate of inflation. This agreement is renewable in 2021 by mutual agreement.


                            POWER GENERATION OUTLOOK

STRATEGIC EMPHASIS AND OUTLOOK

The Company will continue to emphasize control over operating and maintenance
costs, explore ways of increasing its customer base and the market for its
hydroelectric power, and examine potential development and redevelopment
projects within its service area. Great Lakes will also continue to work on
developing and operating other projects in North and South America outside its
primary service area where it can apply its long experience in the power
generating business. In pursuing such opportunities, Great Lakes will focus on
small and medium-sized hydroelectric power projects, including projects with
water-storage capacity, and gas-fired cogeneration projects.

Based on industry trends, Great Lakes believes it is well positioned for growth
opportunities that could strengthen its power generating operations. Management
believes that these industry trends favour companies like Great Lakes which have
a good operating history, a low-cost orientation, development expertise and
access to capital.

DEVELOPMENT OPPORTUNITIES

In 2000, Great Lakes announced a $500 million capital investment program, with
the objective of doubling the earnings from its power operations by 2005. As
part of this plan, the Company is exploring opportunities to acquire and develop
additional hydroelectric generating capacity in Canada and


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GREAT LAKES POWER INC.                                                        15
<PAGE>   18
elsewhere in North and South America. In addition to the initiatives described
elsewhere in this Annual Information Form, Great Lakes has entered into a 50/50
partnership with Canadian Hydro Developers Inc. to build the 30 MW Pingston
Creek hydroelectric generating station near Revelstoke in British Columbia. This
$45 million project is expected to be completed in mid-2002.

During 2000, Brascan re-entered the electrical energy business in Brazil through
wholly-owned Brascan Energetica S.A. ("BESA"). Over 15 sites have been
identified for the potential development of new hydroelectric stations,
primarily stations of 30 MW or less located in southern Brazil. Construction
started on two of these projects in the first half of 2001: the 30 MW Passo do
Meio station in the State of Rio Grande do Sul and the 16 MW Pedrinho project in
the State of Parana. Great Lakes is providing advisory services to BESA on the
development of these projects.

GENERAL OPERATING RISKS

The development of projects of the type that Great Lakes undertakes is complex.
There can be no assurances that Great Lakes will be able to obtain new power
sales agreements, overcome any local opposition to the development of new
projects, obtain the necessary site agreements, ensure fuel supply, or obtain
construction contracts, steam sales agreements, licenses and certifications,
environmental and other permits and financing necessary for the successful
development of these projects.

Operating income from hydroelectric power generation fluctuates mainly in
relation to the availability of water in the Company's river systems. In the
case of Northern Ontario Power, higher than average water inflows increase
stored water levels. This enables greater internal power generation which
reduces more expensive external power purchases, resulting in higher earnings.

Algoma Steel, the largest industrial customer of Northern Ontario Power,
accounts for approximately one-third of its operating revenue. Algoma Steel is
currently operating under CCAA protection. Should demand from this customer be
temporarily interrupted, the effect on the Company's profitability would be
substantially offset by a reduction in purchases of higher-priced power and the
sale of any surplus power to the Ontario power grid and other interconnected
power markets.

         While changes in the level of precipitation impact the power generation
of Great Lakes' individual operations, its interests in hydroelectric stations
located in several different watersheds help it balance the financial impact of
these fluctuations. Risk is also reduced through the existence of long-term
power sale contracts with many of Great Lakes' major customers and by insurance
policies that cover fluctuations in precipitation levels below specified minimum
levels.

CHANGES IN THE POWER INDUSTRY

In Canada, over 80% of the electricity generated is provided by large
provincially-owned corporations, such as Hydro-Quebec and Ontario Power
Generation Inc., with the remainder being produced by smaller
investor-controlled corporations or by industrial companies. In the late 1970s
and 1980s, provincial governments, which have legislative authority over the
supply of power and utilities, responded to consumer demand for competitive
electricity tariffs by initiating programs and policies aimed at permitting the
purchase of electricity from independent power producers. In the 1990s, ongoing
customer demand for lower prices and the desire to improve global
competitiveness in the United States, Canada and worldwide led to many
initiatives to restructure the electricity industry from a highly regulated
industry controlled by large vertically integrated Crown-owned utilities to one
which should eventually favour increased competition and promote opportunities
for new market participants. Deregulation of the electricity industry is now
under way or being studied in most provinces in Canada, and a number of
jurisdictions in the United States.

Ontario

In 1995, the Ontario Government established the MacDonald Committee on
Competition in Ontario's Electricity Industry to review the then existing
regulatory regime and the role of the public and private sectors. In November
1997, the Ontario Government released its White Paper entitled "Direction for
Change - Chartering a Course for Competitive Electricity and Jobs in Ontario".
This document embodied


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GREAT LAKES POWER INC.                                                        16
<PAGE>   19
the Ontario Government's restructuring plan to create competitive wholesale and
retail markets for electricity in the year 2000.

The Energy Competition Act, 1998 received Royal Assent in 1998 to, among other
things: (i) end Ontario Hydro's monopoly in electricity supply and introduce a
competitive market; (ii) broaden the mandate of the Ontario Energy Board to
include regulation of the electricity sector and improve gas sector regulation;
and (iii) reorganize Ontario Hydro into its successor commercial corporations.

The process of restructuring Ontario's electricity industry continued on a
number of fronts during 1999. On April 1, 1999, a significant milestone was
reached when Ontario Hydro's five successor companies were established as
follows: Ontario Hydro Services Company Inc. now known as Hydro One Inc.
("HOI"); Ontario Power Generation Inc. ("OPG"); Ontario Electricity Financial
Corporation ("OEFC"); Independent Electricity Market Operator ("IMO"); and
Electrical Safety Authority.

In this corporate restructuring, HOI received the transmission, distribution and
retail assets and OPG received the electricity generating assets. Both companies
were established with commercial capital structures. OEFC is responsible for the
servicing and retiring of the former Ontario Hydro's provincially guaranteed
debt and certain other legacy liabilities. OEFC is also responsible for the
contracts with independent power producers, such as the Company's Valerie Falls
Power and Lake Superior Power operations. The IMO has been set up as a
non-profit corporation responsible for ensuring the reliability and fairness of
the electricity market.

Also on April 1, 1999, the Minister of Energy directed the Ontario Energy Board
("OEB") to implement the Market Power Mitigation Agreement through licence
conditions for OPG, the IMO and OHSC. Included in this agreement is OPG's
requirement to de-control 4,000 MW of tier two capacity within 42 months of
market opening, which, at OPG's discretion, may include up to 1,000 MW of
hydroelectric capacity. In addition, OPG is required to reduce its effective
control of generating capacity in Ontario to not more than 35% within 10 years.

In late May 2000, the OEB issued its decision approving HOI's transmission cost
allocation and rate design to be in effect from the opening of the market. In
June 2000, the Minister of Energy announced that the opening of Ontario's
electricity market would be delayed from the November 2000 target. In late April
2001, the Minister of Energy established a new target planning date for the
opening of Ontario's competitive electricity market as May 2002. This will
require many items of work to be completed by the IMO and OEB prior to market
opening. Some of these items include the finalization of the market rules,
confirmation of market readiness by the IMO and the approval of the provincial
transmission revenue allocation to be approved by the OEB. In addition, the
treatment of Ontario's independent power companies, such as Great Lakes, will
have to be finalized.

         Great Lakes participated in the consultation process leading up to
these changes, and continues to consult with the government on matters of
specific concern to independent power companies in Ontario. Great Lakes has made
specific representations to the Government on matters of particular interest to
the Company. For example, Great Lakes has maintained that it would be unfair for
it and its customers to bear any charges which may be imposed to retire the
residual stranded debt of the former Ontario Hydro, given the Company's long
history of having operated what is essentially a separate power market in
northern Ontario for the distinct benefit of its customers.

         Changes in the present regulatory system could impact the operating
income from the Company's power operations in Ontario in a number of ways.
Increased competition could reduce power prices in the short term and would
enable customers in the Province to seek alternative suppliers. However, the
Company believes that its low-cost structure, which has enabled it to maintain
lower prices than are generally charged elsewhere in Ontario and neighbouring US
jurisdictions, and its strategically located hydroelectric generating
facilities, which can store water for use during periods when higher on-peak
rates apply, should enable it to remain very competitive. A more open and
competitive environment would also enable the Company to seek additional
customers and, over the long run, justify the expansion of its generating base.


--------------------------------------------------------------------------------
GREAT LAKES POWER INC.                                                        17
<PAGE>   20
         Quebec

         In Quebec, the National Assembly assented to Bill 50, an Act Respecting
the Regie de l'energie (the "Act"), on December 23, 1996. The Act outlines the
roles of the various forms of energy in Quebec's development and the means that
will be used to meet the energy needs of Quebec consumers.

         According to the Act, Hydro-Quebec possesses exclusive electric power
distribution rights throughout Quebec, excluding those areas that, on May 13,
1997, were served by a distributor operating a municipal or private electric
distribution system. On that date, the Maclaren Energy System was operated by
Nexfor as a private electric distribution system and, therefore, Hydro-Quebec
does not have exclusive distribution rights within the areas served by the
Maclaren Energy System.

         In May 1997, Hydro-Quebec officially opened its system to wholesale
"wheeling" as a prerequisite for the granting by the Federal Energy Regulatory
Commission of the United States to Hydro-Quebec of a power marketer's license to
compete in the northeast United States electricity markets, which it received on
November 12, 1997. As a result of this action, electricity producers in Quebec
now have the option to sell electricity outside Quebec and to "wheel" it through
Hydro-Quebec's transmission lines at specified rates.

         ADVANTAGES OF HYDROELECTRIC GENERATION

         The Company believes that the unique nature of hydroelectric generation
provides many advantages over other forms of electricity generation. The
advantages of hydroelectric power can be attributed to its high level of
reliability, low operating costs, operational flexibility to meet ongoing base
load electricity needs and peak demands, minimal environmental impacts, and its
reliance on water, a renewable resource.

         Reliability: The equipment involved in producing hydroelectric power
has relatively few moving parts. Since the process does not include combusting
fossil fuels at high temperatures or creating steam, there is minimal wear and
tear on the machinery, which contributes to long life and low maintenance
requirements. Unplanned outage rates for hydroelectric units are among the
lowest in the electricity industry.

         Low Operating Costs: Other than water royalties paid to governmental
authorities, hydroelectric facilities do not have any fuel costs, which can be
significant and highly volatile for fossil-fuelled plants. As well, most
hydroelectric plants can be operated remotely by a single person from a
centralized control centre. Combined with the low maintenance and outstanding
reliability of equipment operating expenses are comparatively low.

         High Operational Flexibility: Hydroelectric plants can adjust quickly
to changes in demand and, depending on the flow of the river and the storage
capacity of the reservoirs, hydroelectric plants can service both the base power
requirements of its customers as well as their peak power requirements.

         Low Environmental Impact: Hydroelectric generation produces virtually
no greenhouse gas emissions or any acid rain, which have major impacts on the
environment. Hydroelectric generation minimizes thermal, chemical, radioactive,
water and air pollution as compared to fossil-fuelled and nuclear generated
power. Instead of producing substantial amounts of residual wastes during the
power generation process, hydroelectric generation simply returns the water to
the river.

SAFETY, HEALTH AND THE ENVIRONMENT

         It is the Company's policy that all of its operating subsidiaries
manage their activities having regard to high standards of safety and the
well-being for their employees, and that they demonstrate care for the
environment through the use of recognized sustainable development practices in
compliance with all relevant laws and regulations. Compliance with this policy
is achieved through developing and implementing managed systems that form an
integral part of the daily business activities of all the Company's operating
subsidiaries. These subsidiaries require compliance with their established
safety, health and environmental practices from all employees, contractors,
agents and others involved in their operations, and provide suitable training to
achieve the desired compliance.


--------------------------------------------------------------------------------
GREAT LAKES POWER INC.                                                        18
<PAGE>   21
Great Lakes continues to act as a mentor in the Ontario Government's Safe
Workplaces, Sound Business project and volunteers as a safety ambassador for the
Workplace Safety Insurance Board. These projects involve senior executives
offering advice and information about their organization's health and safety
knowledge, expertise and experience as a resource for other businesses.

Great Lakes has adopted the Environmental Commitment and Responsibility Program
of the Canadian Electricity Association. In December 2000, the environmental
management systems at its northern Ontario and Maclaren Energy operations were
registered as compliant with the ISO 14001 Environmental Standard. In March
2001, Great Lakes' hydroelectric stations received certification as "low impact
renewable" electricity sources by Canada's Environmental Choice Program ("ECP"),
enabling the Company to use the ECP's "EcoLogo" trademark for electricity
generated from these stations.


--------------------------------------------------------------------------------
GREAT LAKES POWER INC.                                                        19
<PAGE>   22
         The following table contains selected information on the Company's 22
generating stations as at May 1, 2001:


<TABLE>
<CAPTION>
                                                                                                                Average
Name of                            Type                     Installed                    Average   Operating     Annual    Number of
Generating Station                                           Capacity      Storage        Inflow        Head     Energy   Generating
                                                                 (MW)   (cfs days)         (cfs)       (ft.)      (GWh)        Units
------------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>                      <C>         <C>              <C>       <C>           <C>      <C>
NORTHERN ONTARIO POWER

St. Mary's River
FRANCIS H. CLERGUE                 Hydroelectric                 52.2           --       37,000           19      370.9            3
------------------------------------------------------------------------------------------------------------------------------------
Michipicoten River
SCOTT FALLS                        Hydroelectric                 22.2        1,147        2,527           75       95.0            2
HIGH FALLS                         Hydroelectric                 27.0        1,016        2,493          148      162.2            3
MCPHAIL                            Hydroelectric                 11.0        5,546        2,454           47       53.7            2
HOLLINGSWORTH                      Hydroelectric                 23.2      216,336        2,163          114      102.4            1
------------------------------------------------------------------------------------------------------------------------------------
Montreal River
ANDREWS                            Hydroelectric                 45.9          500        1,505          185      154.4            3
HOGG                               Hydroelectric                 17.5        3,145        1,495           77       63.1            1
GARTSHORE                          Hydroelectric                 23.0       12,670        1,490          114       93.2            1
MACKAY                             Hydroelectric                 62.0      205,095        1,479          249      177.2            3
------------------------------------------------------------------------------------------------------------------------------------
Magpie River
MISSION FALLS                      Hydroelectric                 15.0           --          921          117       56.2            1
HARRIS                             Hydroelectric                 12.5           --          918           97       45.5            1
STEEPHILL FALLS                    Hydroelectric                 15.5       44,560          791          136       53.9            1
------------------------------------------------------------------------------------------------------------------------------------
GREAT LAKES HYDRO INCOME
FUND
Maclaren Energy
MASSON                             Hydroelectric                105.0           --        5,779          184      633.0            4
DUFFERIN                           Hydroelectric                 38.0           --        5,754           59      195.0            2
HIGH FALLS                         Hydroelectric                 95.0      544,811        5,445          180      565.0            4
------------------------------------------------------------------------------------------------------------------------------------
Powell River Energy
POWELL RIVER                       Hydroelectric                 46.0      292,450        3,321          285      305.0            5
LOIS LAKE                          Hydroelectric                 36.0      139,903          920          440      216.0            2
------------------------------------------------------------------------------------------------------------------------------------
OTHER POWER OPERATIONS
Lake Superior Power
LAKE SUPERIOR POWER                Natural gas-fired            110.0          n/a          n/a          n/a      839.6            3
                                   cogeneration
------------------------------------------------------------------------------------------------------------------------------------
Valerie Falls Power
VALERIE FALLS                      Hydroelectric                 10.0      127,132        1,400           67       41.8            2
------------------------------------------------------------------------------------------------------------------------------------
Pontiac Power
WALTHAM                            Hydroelectric                 11.0       92,300        1,305          136       71.1            5
COULONGE                           Hydroelectric                 17.0       97,000        2,590          145      118.5            2
------------------------------------------------------------------------------------------------------------------------------------
Louisiana HydroElectric
Power
SIDNEY A. MURRAY, JR               Hydroelectric and flood      192.0           --      102,000      6 to 20      973.2            8
                                   and sediment control
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Includes storage on upstream lakes and reservoirs.

--------------------------------------------------------------------------------
GREAT LAKES POWER INC.                                                        20
<PAGE>   23
GLOSSARY OF TERMS

AVERAGE ANNUAL ENERGY: the total energy generated annually by a power station,
averaged over the last five calendar years of full operation or since the start
of full operation, if less, measured in gigawatt hours (GWh).

AVERAGE INFLOW: the average water flow available for power generation measured
in cubic feet per second (cfs).

GIGAWATT HOUR: one gigawatt hour equals one million kilowatt hours. A kilowatt
hour is equivalent to the energy consumed by a 100 watt light bulb burning for
10 hours.

INSTALLED CAPACITY: the measure of a power station's electric generating
capacity at full production, measured in megawatts (MW).

MEGAWATT: one megawatt equals one thousand kilowatts. A kilowatt is the
electrical energy required to turn on ten 100 watt light bulbs and is equivalent
to 1.34 horsepower.

OPERATING HEAD: the vertical distance that water drops to the tailrace in order
to generate hydroelectric power, measured in feet.

STORAGE: the temporary holding capacity available to store water for later use
in electricity generation, measured in cubic feet per second days (cfs days).


                              INVESTMENT ACTIVITIES

The Company maintains a portfolio of securities, loans receivable and long-term
corporate investments, which are held to generate additional cash flow on a
tax-effective basis. These investments, which are principally in associated
companies, have consistently contributed to Great Lakes' earnings and capital
base. In determining whether to participate in an investment, the Company's
management assesses each opportunity against its investment guidelines which
require investments to earn an acceptable rate of return from dividends or
interest in relation to risk or have the potential for substantial capital
appreciation.

Investment transactions involving companies which are associated with Great
Lakes are completed on normal market terms. Such transactions are reviewed by a
committee of independent directors of Great Lakes comprised of individuals with
investment experience.

Investment income from the Company's preferred shareholdings varies only with
the amount invested as the rate of return is fixed. Other investment income is
sensitive to interest rate changes; however, a similar offsetting sensitivity
exists with a portion of the Company's debt.

SECURITIES PORTFOLIO

The Company's securities portfolio is comprised primarily of preferred shares of
associated companies. The book value of the Company's securities portfolio by
business sector at December 31, 2000 compared to the prior year is summarized
below:

<TABLE>
<CAPTION>
millions                                                2000                1999
--------------------------------------------------------------------------------
<S>                                                     <C>                 <C>
Property                                                $220                $171
Natural resources                                        148                 189
Financial services                                        21                  21
Diversified                                              189                 189
Short-term deposits and other                             83                  76
--------------------------------------------------------------------------------
                                                        $661                $646
================================================================================
</TABLE>

LOANS AND ACCOUNTS RECEIVABLE

The Company's loans and other receivables had a book value of $322 million as at
December 31, 2000 (1999 - $325 million). These included $67 million (1999 - $67
million) of coal royalty receivables relating to the operations of Highvale
Power.


--------------------------------------------------------------------------------
GREAT LAKES POWER INC.                                                        21
<PAGE>   24
LONG-TERM INVESTMENTS

The book values of the Company's principal long-term investments at December 31,
2000 compared to the prior year are shown below:

<TABLE>
<CAPTION>
millions                                                2000                1999
--------------------------------------------------------------------------------
<S>                                                     <C>                 <C>
Trilon Financial Corporation                            $195                $195
Noranda Inc.                                             150                 150
Brascan Corporation                                      112                 112
Other investments                                         79                  78
--------------------------------------------------------------------------------
                                                        $536                $535
================================================================================
</TABLE>

Further information on Great Lakes' long-term investments is contained in the
Company's Annual Financial Report on page 8.

         In addition to the information contained in this Annual Information
Form, Trilon, Noranda and Brascan have prepared their own Annual Information
Forms and Annual Reports containing information specific to their operations.
Copies of these documents may be obtained from securities administrators in each
province of Canada or from the Secretary of the Company.

                             FINANCING ARRANGEMENTS

         The Company finances its operations through bank facilities, a $118
million commercial paper program, term debt in the form of notes, and loans
provided by Brascan.

         In August 1999, the Company issued US $200 million of 8.3% Notes
maturing March 1, 2005. The Notes are senior unsecured obligations of the
Company. The indenture under which the Notes are issued contains certain
limitations on the Company relating to the issuing of debt and preferred shares,
distributions by and transfers to subsidiaries of the Company, the incurring of
liens on the assets of the Company and its subsidiaries, certain sale and
leaseback transactions by the Company, transactions with affiliated and related
persons, mergers, consolidations and certain sales of assets by the Company and
a change of control of the Company. The indenture also requires the maintenance
by the Company of a minimum consolidated net worth.

         Great Lakes Power Limited ("GLPL"), the principal subsidiary through
which the Company conducts its power generating operations in Ontario, has
issued $251 million of First Mortgage Bonds under a $500 million mortgage bond
indenture secured by its northern Ontario hydroelectric generating stations and
related assets. The $95 million of Series 3 Bonds, issued on December 31, 1996,
bear interest at 6.69% and are due December 31, 2001. In May 1998, GLPL issued
US $105 million of Series 4 First Mortgage Bonds to replace the US $105 million
Series 2 Bonds which came due April 7, 1998. The Series 4 Bonds bear interest at
6.57% and are due June 16, 2003. The Series 3 and Series 4 bonds rank equally.

         The security for the Series 3 and Series 4 Bonds consists of a first,
fixed charge on the fixed assets of the Northern Ontario Power system and a
floating charge on all other assets of the system, excluding trade accounts
receivable. GLPL has agreed not to create a lien on these trade accounts
receivable without each of the Series 3 and 4 Bonds being equally secured.

         In addition, GLPL finances its operations through bank facilities and
from loans provided by Brascan. The Company has a policy of hedging its assets
and liabilities from interest rate and foreign exchange fluctuations.


--------------------------------------------------------------------------------
GREAT LAKES POWER INC.                                                        22
<PAGE>   25



                            ENVIRONMENTAL MANAGEMENT

Great Lakes is committed to the environmentally responsible management of its
assets. Developments in the last 15 years have all been subjected to full
environmental assessment studies. Public information meetings have been held in
order to hear concerns and appropriate actions were taken to address those
concerns. Projects constructed prior to this period have been fully audited and
mitigation steps have been instituted, where necessary, to bring all plants to
accepted standards. Expenditures on environmental compliance are minimal due to
the nature of the assets held.

Great Lakes has funded fish stocking activities in the Magpie River and has also
worked for many years with local rod and gun clubs to hatch salmon in the
Michipicoten River. At the Lake Superior Power cogeneration plant in Sault Ste.
Marie, monitoring of air, water and noise is part of an ongoing program of
environmental management. At the Sydney A. Murray, Jr. Generating Station in
Louisiana, studies are being funded to ensure the continued existence of the
Pallid Sturgeon. This fish was previously thought to be close to extinction but
was recently discovered by fishermen in the tailrace area of the plant.

The Company and its operating affiliates continue to monitor environmental
standards and to take a proactive position towards protection of the environment
in all its operational activities.

ENVIRONMENTAL REGULATIONS

The development of hydroelectric resources and the construction and operation of
power projects are subject to extensive federal, provincial and state laws and
regulations adopted for the protection of the environment. The laws and
regulations applicable to Great Lakes' operations primarily involve permits
required for the construction of the projects. These permits often contain
conditions that require the Company to assess environmental impacts, and
mitigate them where possible.

Many of the Company's hydroelectric generating stations were built prior to the
imposition of these more strict environmental laws and regulations. Developments
since approximately 1980 have been subject to an environmental assessment
process, which included public information meetings, full environmental impact
studies, and appropriate actions taken to allay public concerns and
environmental impacts where possible.

Non-compliance with environmental laws and regulations, or conditions contained
in permits and approvals, can result in the imposition of fines or other
penalties. In some cases, environmental laws may also impose clean-up or other
remedial obligations, or the obligation to mitigate environmental impacts from
projects. The following federal and provincial laws are among the more
significant Canadian environmental laws that apply to the Company. Other federal
and provincial laws may also apply, particularly to the development and
construction of power projects, and may impose stricter requirements than those
discussed below.

FISHERIES ACT (CANADA)

This Act prohibits the alteration or destruction of fish habitat, and prohibits
the addition of any substance that may be harmful to any water that may be
inhabited by fish. Permits are required for the construction of hydroelectric
projects which may alter fish habitat. Most recent projects require mitigation,
compensation and monitoring agreements prior to the issuance of a permit to
alter or destroy fish habitat. All the Company's power projects comply with the
Fisheries Act and, where permits were required for the construction or
development of those projects, those permits were obtained. The Company also
believes it is in material compliance with any conditions imposed by the permits
obtained under the Fisheries Act.

ONTARIO WATER RESOURCES ACT

The Ontario Water Resources Act is the main provincial statute regulating the
use of water in Ontario. It prohibits the addition of any substance to the
waters of the province that may impair the quality of the waters. Permits are
required for the construction of hydroelectric projects which regulate the
amount of water contained, minimum flows required downstream, and other matters.
The Company believes it is in

--------------------------------------------------------------------------------
GREAT LAKES POWER INC.                                                        23

<PAGE>   26

material compliance with all its permits under the Ontario Water Resources Act,
and with the other requirements of the Act.

ENVIRONMENTAL PROTECTION ACT (ONTARIO)

The Environmental Protection Act prohibits discharges to land, air and water
that could have an adverse effect on the environment. It also imposes a
requirement for a Certificate of Approval for any construction or equipment that
may discharge a contaminant into any part of the environment other than water.
The Company has obtained all such necessary permits under the Environmental
Protection Act, and is in material compliance both with the Environmental
Protection Act and the permits issued under it.

The Environmental Protection Act also regulates the management and disposal of
waste. The Company's waste generation is not significant, and all wastes are
disposed of in material compliance with the requirements of the Environmental
Protection Act. The Company is not currently subject to any liability of which
it is aware for the disposal of any of its waste.

The use and storage of PCB's, including PCB contaminated oils or transformers
and any PCB wastes, are controlled by regulation, both federally and under the
Environmental Protection Act. The Company complies with that regulation. All
major equipment is free of PCB's, and lesser pieces of equipment, such as rural
transformers, are being tested for PCB's and replaced as part of an ongoing
maintenance program. PCB waste, including out of service equipment, is stored in
two designated PCB storage sites, pursuant to regulation. These sites are
subject to regular reporting requirements and periodic inspection by the Ontario
Ministry of Environment and Energy.

QUEBEC ENVIRONMENTAL AND RESOURCE LEGISLATION

The Environmental Quality Act is Quebec's legislation governing the approval
process for the construction and operation of power projects. It imposes a
requirement for a Certificate of Authorization to be issued by the Ministry of
Environment and Wildlife for works related to existing dams, new dams,
powerplants and power transmission lines.

The granting of hydraulic and water rights requires a lease from the Government
of Quebec to be approved by a Decree issued under the Watercourses Act. In
addition, approval of the plans and specifications for dams, and the use,
management and storage of waters for electricity production, also requires
approval by Decree under the Watercourses Act.

Permits and approvals for power project related activities may also be required
under Quebec's Forest Act, the Regulation Respecting Wildlife Habitat, the Act
Respecting Land in the Public Domain and the Act Respecting the Protection of
Agricultural Land.

The Company believes that its operations in Quebec, conducted through Pontiac
Power, are in material compliance with its permits and all applicable
regulations.

UNITED STATES REGULATORY MATTERS

Louisiana HydroElectric Power is also subject to United States federal and state
regulations. The operating license, provided by FERC, contains conditions for
quantities of water diversion and water quality during dredging of the channel
for the project, for example, that continue during the term of the license. The
Company is in full compliance with those conditions. In addition, the Company is
subject to regulation under both state and federal law with respect to the
quality of discharges for sanitary sewage and its oil/water waste collection
system. The operation is in material compliance with its permits and all
applicable regulations.

                        CAPITAL BASE AND DIVIDEND POLICY

The authorized capital of the Company consists of an unlimited number of Class A
Redeemable Preferred Shares, an unlimited number of Class B Preferred Shares and
an unlimited number of common shares. On the amalgamation of Great Lakes as a
private company on March 2, 2001, the following shares were issued and
outstanding: 10,000 Class B Preferred Shares and 101,383,135 common shares.

--------------------------------------------------------------------------------
GREAT LAKES POWER INC.                                                        24


<PAGE>   27




In March 1998, the Predecessor Company implemented a two-for-one stock split
whereby common shareholders received a special dividend of one common share for
each share held at that time. The common shares of the Company commenced trading
on the two-for-one split basis on February 26, 1998. All share and per share
information in this Annual Information Form for periods prior to 1998 reflects
this share split on a retroactive basis.

It is the policy of the Company to distribute approximately 50% of the current
year's earnings in the form of regular dividends on its common shares. Common
share dividends are paid quarterly in February, May, August and November of each
year. The quarterly dividend was increased from $0.12 to $0.15 per common share
in 1994 and from $0.15 to $0.16 per common share during 1996. Special dividends
are periodically considered and paid from retained earnings in excess of the
Company's needs.

      There exist, in certain circumstances, direct restrictions on the ability
of the Company to pay dividends as well as indirect restrictions, insofar as
there are restrictions on its subsidiaries in making distributions to the
Company. See the description of such restrictions under "Lake Superior Power -
Project Agreements"; "Valerie Falls Power - Project Agreements"; "Louisiana
HydroElectric Power - Project Agreements"; and "Financing Arrangements".


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

      Management's Discussion and Analysis of Financial Condition and Results of
Operations for the year ended or as at December 31, 2000 are included in the
Company's Annual Financial Report at pages 2 to 11 inclusive and are
incorporated herein by reference.




                        CONSOLIDATED FINANCIAL INFORMATION

      The following tables set forth the Company's consolidated balance sheets
and income statements as at and for the five years ended December 31, 2000:

CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
millions                              2000     1999      1998      1997     1996
--------------------------------------------------------------------------------
<S>                                 <C>      <C>       <C>      <C>       <C>
ASSETS
   Securities                        $ 661     $646      $652      $708     $720
   Loans and other receivables         322      325       286       205      153
   Long-term investments               536      535       565       594      767
   Property, plant and equipment       957      899       753       729      707
--------------------------------------------------------------------------------
                                    $2,476   $2,405    $2,256    $2,236   $2,347
================================================================================

LIABILITIES
   Accounts payable                   $ 76     $ 99      $ 54      $ 67     $127
   Mortgage bonds and project loans    394      346       360       336      343

   Term debentures                     559      543       456       426      408
   Bank and other loans                 --       --        --        --       85
                                    --------------------------------------------
                                     1,029      989       870       829      963
Future income tax liability            104      107       109       111      112
</TABLE>
--------------------------------------------------------------------------------
GREAT LAKES POWER INC.                                                        25

<PAGE>   28

<TABLE>
<S>                                 <C>      <C>       <C>      <C>       <C>
Minority shareholders' interests        94       93        93       135      160
CAPITAL BASE                         1,249    1,216     1,184     1,161    1,112
--------------------------------------------------------------------------------
                                    $2,476   $2,405    $2,256    $2,236   $2,347
================================================================================
</TABLE>

--------------------------------------------------------------------------------
GREAT LAKES POWER INC.                                                        26


<PAGE>   29


<TABLE>
<CAPTION>
CONSOLIDATED INCOME STATEMENTS
--------------------------------------------------------------------------------
millions, except per share            2000     1999      1998      1997     1996
amounts
--------------------------------------------------------------------------------
<S>                                 <C>      <C>       <C>       <C>      <C>
INCOME
   Power operations                 $226.8   $187.7    $190.9    $186.8   $167.7
   Long-term investments              48.0     47.4      48.0      47.9     42.9
   Investment and other income        58.7     51.2      53.1      57.0     57.4
                                    --------------------------------------------
                                     333.5    286.3     292.0     291.7    268.0
                                    --------------------------------------------

EXPENSE
   Interest                           79.2     64.4      66.1      63.7     64.9
   Power and fuel costs               69.8     54.1      66.6      58.4     42.1
   Operating                          26.8     19.2      17.3      20.3     21.9
   Depreciation                       20.7     16.7      16.6      15.3     13.3
   Minority interests                  4.6      3.7       5.7       5.0      7.7
   Income and other taxes             16.9     15.1      15.2      19.4     18.8
                                    --------------------------------------------
                                     218.0    173.2     187.5     182.1    168.7
                                    --------------------------------------------

INCOME BEFORE INVESTMENT SOLD        115.5    113.1     104.5     109.6     99.3
   Income from investment sold         --       --        --       12.5(1)  13.0
--------------------------------------------------------------------------------
NET INCOME                          $115.5   $113.1    $104.5    $122.1   $112.3
================================================================================
PER COMMON SHARE (fully
diluted):(2)
   Income before investment sold     $0.92    $0.90     $0.83     $0.87    $0.79

   Net income                        $0.92    $0.90     $0.83  $0.97(1)    $0.89
--------------------------------------------------------------------------------
</TABLE>


(1)  In February 1997, the Company sold its common share interest in Brascan
     Limited for a net gain of $12.5 million or $0.10 per common share.

(2)  Amounts prior to 1998 reflect retroactively the two-for-one common share
     split implemented in March 1998.


                           QUARTERLY OPERATING RESULTS
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
millions, except                                             2000                                         1999
per share amounts                       Dec. 31      Sept. 30   June 30     Mar. 31      Dec. 31    Sept. 30    June 30     Mar. 31
------------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
Gross revenues                         $   91.5    $   76.3    $   86.7    $   79.0    $   67.4    $   67.1    $   74.3    $   77.5

Net income                                 23.9        26.8        32.7        32.1        20.7        28.2        32.2        32.0

Net income
  per common share                     $    0.19   $    0.22   $    0.26   $    0.25   $    0.18   $    0.22   $    0.25   $    0.25
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Great Lakes reported net income of $30.4 million, or $0.24 per common share, for
the three months ended March 31, 2001 compared to $32.1 million, or $0.25 per
common share, for the three months ended March 31, 2000.


                             DIRECTORS AND OFFICERS

Each director holds office until the next annual meeting of shareholders of the
Company or until a successor is appointed. As a result of the going-private
transaction completed on March 2, 2001,

--------------------------------------------------------------------------------
GREAT LAKES POWER INC.                                                        27



<PAGE>   30

none of the directors or officers owns any securities of the Company.
Particulars relating to each director are disclosed in the Company's Annual
Filing of Reporting Issuer dated April 30, 2001 on pages 2 and 3 and are
included herein by reference.

The names and municipalities of residence of the officers of the Company, the
offices currently held by them and their respective occupations during the past
five years are as follows:


<TABLE>
<CAPTION>
Name and
Municipal Residence          Office               Date          Other Principal
                                                  Appointed     Occupations
-----------------------------------------------------------------------------------------
<S>                          <C>                  <C>           <C>
Edward C. Kress              Chairman and Chief   October       Executive
Toronto, Ontario             Executive Officer    1998          Vice-President, Brascan
                                                                Corporation

Harry A. Goldgut             President and Chief  October       Senior Vice-President
Thornhill, Ontario           Operating Officer    1998          and General Counsel,
                                                                Brascan Corporation

Richard Legault,             Executive            April 2001    Senior Vice-President
Gatineau, Quebec             Vice-President                     and Chief
                                                                Financial Officer,
                                                                Brascan Corporation

Michael R. McEwen            Senior               April 2000    President and Chief
Sault Ste. Marie, Ontario    Vice-President,                    Executive
                             Operations                         Officer, Great Lakes
                                                                Power Limited

Colin L. Clark               Vice-President,      April 2000    Vice-President,
Sault Ste. Marie, Ontario    Power Development                  Generation,
                                                                Great Lakes Power
                                                                Limited

Alan V. Dean                 Vice-President       April 1998    Senior Vice-President,
Toronto, Ontario             and Secretary                      Public and Corporate
                                                                Affairs, Brascan
                                                                Corporation

Craig J. Laurie              Vice-President and   April 2001    Vice-President, Finance,
Oakville, Ontario            Chief Financial                    Brascan Corporation
                             Officer

Trevor D. Kerr               Vice-President and   November      Vice-President and
Toronto, Ontario             Treasurer            1994          Treasurer,
                                                                 Brascan Corporation

Lisa W. F. Chu               Controller           April 2001    Controller, Brascan
Richmond Hill, Ontario                                          Corporation
-----------------------------------------------------------------------------------------
</TABLE>

Prior to October 1998, Mr. Kress was President and Chief Executive Officer
of the Company, a position he was appointed to in May 1991. Prior to
October 1998, Mr. Goldgut was Vice-President, Planning, a position he was
appointed to in March 1997, prior to which he was Senior Vice-President,
Jay-M Holdings Ltd., a private investment company. Prior to April 2001,
Mr. Legault was Vice-President, Power Markets, a position he was appointed
to in February 2000. Mr. Legault is also President, Maclaren Energy Inc.,
a position he was appointed to in November 1999, prior to which he was a
Vice-President at James Maclaren Industries Inc., a position he was
appointed to in March 1996. Prior to April 2000, Mr. McEwen was
Vice-President, Operations, a position he was appointed to in September
1996, prior to which he was Plant Manager, Lake Superior Power.

Prior to April 2000, Mr. Clark was and continues to be Vice-President,
Generation for GLPL, a position he was appointed to in November, 1997, prior to
which he was Superintendent of Stations and Metering, Ottawa Hydro Electric
Commission. Prior to April 1998, Mr. Dean was and continues to be Senior
Vice-President, Public and Corporate Affairs, Brascan, a position he was
appointed to in April 1998, prior to which he was Vice-President, Public and
Corporate Affairs of Brascan. Prior to April 2001, Mr. Laurie was Vice President
and Controller, a position he was appointed to in April 2000. Mr. Laurie is also
Vice-President, Finance of Brascan, a position he was appointed to in February
2000, prior to which he was Vice-President and Controller of Trilon. Prior to
April 2001, Ms. Chu was and continues to be controller of Brascan Corporation, a
position she was appointed in February 2001.

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GREAT LAKES POWER INC.                                                        28

<PAGE>   31


                                  SUBSIDIARIES

     The following is a list of active subsidiaries of Great Lakes indicating
the jurisdiction of incorporation and the percentage of voting securities owned,
or over which control or direction is exercised, by the Company:

<TABLE>
<CAPTION>
                                                                   Percentage of
                                                                          Voting
                                                    Jurisdiction      Securities
                                                              of           Owned
Name of Subsidiary                           Note  Incorporation   or Controlled
--------------------------------------------------------------------------------
<S>                                          <C>   <C>             <C>
Great Lakes Power Limited                       1        Ontario             100
  BrasPower Equities Inc.                       2         Quebec             100
  Lake Superior Power Inc.                      2        Ontario              50
  Valerie Falls Power Limited Partnership       2        Ontario              65
  First Toronto Equities Inc.                   2        Ontario             100
Highvale Power Corporation                      1        Alberta             100
Hydro-Pontiac Inc.                              1         Quebec             100
Maclaren Energy Inc.                            1        Ontario             100
--------------------------------------------------------------------------------
</TABLE>

(1)  Held directly by Great Lakes Power Inc.

(2)  Held through Great Lakes Power Limited

     In addition, the Company beneficially owns, or exercises control or
direction over 83% of the non-voting securities of First Toronto Equities Inc.


                             ADDITIONAL INFORMATION

Additional information, including details of directors' and officers'
remuneration and indebtedness to the Company, together with principal holders of
the Company's securities and interests of insiders in material transactions,
where applicable, is contained in the Company's Annual Filing of Reporting
Issuer dated April 30, 2001.

Other financial information about the Company is also contained in the Company's
audited comparative consolidated financial statements for the fiscal year 2000,
provided at pages 12 to 20 in the Company's 2000 Annual Financial Report.

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

(a)  when the securities of the Company are in the course of a distribution
     pursuant to a short form prospectus or a preliminary short form prospectus
     which has been filed in respect of a distribution of its securities:

     (i)  a copy of the Company's latest Annual Information Form, together with
          a copy of any document, or the pertinent pages of any document,
          incorporated therein by reference;

     (ii) a copy of the comparative consolidated financial statements of the
          Company for the Company's most recently completed financial year,
          together with the report of the auditor thereon, Management's
          Discussions and Analysis of Financial Condition and Results of
          Operations, and a copy of any interim financial statements of the
          Company issued subsequent to the annual financial statements;

     (iii) a copy of the Company's Annual Filing of Reporting Issuer; and

     (iv) a copy of any other document or report which is incorporated by
          reference into a preliminary short form prospectus or a short form
          prospectus; or


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GREAT LAKES POWER INC.                                                        29



<PAGE>   32



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


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GREAT LAKES POWER INC.                                                        30