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  EXHIBIT 10.1    
    

 UNRESTRICTED STOCK AWARD AGREEMENT  

 UNDER THE HELICOS BIOSCIENCES CORPORATION

2007 STOCK OPTION AND INCENTIVE PLAN  

			
	Name of Grantee:	 	 
	 	 	

  
	No. of Shares:	 	 
	 	 	

  
	Grant Date:	 	 
	 	 	

  
	Final Acceptance Date:	 	 
	 	 	

  

        Pursuant
to the Helicos BioSciences Corporation 2007 Stock Option and Incentive Plan (the "Plan") as amended through the date hereof, Helicos BioSciences Corporation (the "Company")
hereby grants an Unrestricted Stock Award (an "Award") to the Grantee named above. Upon acceptance of this Award, the Grantee shall receive the number of shares of Common Stock, par value $0.001 per
share (the "Stock") of the Company specified above, subject to the terms and conditions set forth herein and in
the Plan. The Company acknowledges the receipt from the Grantee of consideration with respect to the par value of the Stock in the form of cash, past or future services rendered to the Company by the
Grantee or such other form of consideration as is acceptable to the Administrator. 

        1    Acceptance of Award.    The Grantee shall have no rights with respect to this Award unless he or she shall have
accepted this Award prior to the close of business on the Final Acceptance Date specified above by signing and delivering to the Company a copy of this Award Agreement. Upon acceptance of this Award
by the Grantee, the shares of Unrestricted Stock so accepted shall be issued and held by the Company's transfer agent in book entry form, and the Grantee's name shall be entered as the stockholder of
record on the books of the Company. Thereupon, the Grantee shall have all the rights of a stockholder with respect to such shares, including voting and dividend rights. 

        2    Dividends.    Dividends on Shares of Unrestricted Stock shall be paid currently to the Grantee. 

        3    Incorporation of Plan.    Notwithstanding anything herein to the contrary, this Agreement shall be subject to and
governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan. Capitalized terms in this Agreement shall have the meaning
specified in the Plan, unless a different meaning is specified herein. 

        4    Transferability.    This Agreement is personal to the Grantee, is non-assignable and is not
transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution. 

        5    Tax Obligations.    The Grantee shall make arrangements for payment of any Federal, state, and local taxes
required by law to be paid on account of this Award. 

        6    No Obligation to Continue Service.    Neither the Company nor any Subsidiary is obligated by or as a result of
the Plan or this Agreement to continue the Grantee in service and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any Subsidiary to terminate the
service of the Grantee at any time. 

        7    Notices.    Notices hereunder shall be mailed or delivered to the Company at its principal place of business and
shall be mailed or delivered to the Grantee at the address on file with the Company or, 

in
either case, at such other address as one party may subsequently furnish to the other party in writing. 

							
	 	 	HELICOS BIOSCIENCES CORPORATION
	

 	
 	
By:	
 	
 

 
	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 

The
foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned. 

					
	Dated:	 	 	 	 
	 	 	

  	 	

  Grantee's Signature
	

 	
 	
 	
 	
Grantee's name and address:
	

 	
 	
 	
 	

  
	

 	
 	
 	
 	

  

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  Exhibit 10.1    
    

 LPL INVESTMENT HOLDINGS INC. AND AFFILIATES

2009 CORPORATE EXECUTIVE BONUS PLAN  

Approved
by Compensation Committee on March 31, 2009 

			
	Administrator:	 	The Compensation and Human Resources Committee (the "Committee")
	

Eligible Employees:	
 	
Chief Executive Officer—Mark S. Casady

President and Chief Operating Officer—Esther M. Stearns
	
Awards:	
 	
The maximum award amount that may be paid to the Chief Executive Officer under this Plan for the 2009 calendar year shall be the amount as set forth on Exhibit A hereto.
	

 	
 	
The maximum award amount that may be paid to the President and Chief Operating Officer under this Plan for the 2009 calendar year shall be the amount as set forth on Exhibit A hereto.
	

 	
 	
The maximum award amounts described above shall be subject to reduction as set forth below.
	

 	
 	
Prior to the time that such remuneration, if any, is paid, the Committee shall certify that the criteria established on Exhibit A has been obtained.
	
Power to Reduce Awards:	
 	
The Committee shall have the power, in its sole discretion, to reduce the amount payable to any eligible employee under the Plan.

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  Exhibit 4.1    
    

  

BFI CANADA LTD.  

ANNUAL INFORMATION FORM

FOR THE YEAR ENDED DECEMBER 31, 2008  

March 25, 2009  

 
 

  TABLE OF CONTENTS    
    

			
	 
	 	Page 
	 FORWARD-LOOKING STATEMENTS
	 	1
	 FINANCIAL DISCLOSURE
	 	2
	 THE CORPORATION
	 	2
	 INDUSTRY OVERVIEW
	 	5
	 BUSINESS OF THE BFI CANADA GROUP
	 	8
	 RISK FACTORS
	 	20
	 DISTRIBUTIONS AND CAPITAL STRUCTURE
	 	32
	 MANAGEMENT
	 	34
	 MARKET FOR SECURITIES
	 	38
	 MATERIAL CONTRACTS
	 	38
	 AUDIT COMMITTEE INFORMATION
	 	38
	 INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
	 	40
	 INTERESTS OF EXPERTS
	 	40
	 ADDITIONAL INFORMATION
	 	40
	 SCHEDULE A — AUDIT COMMITTEE CHARTER
	 	i

 

 
 

  BFI CANADA LTD.
  ANNUAL INFORMATION FORM
  FOR THE YEAR ENDED DECEMBER 31, 2008
  DATED MARCH 25, 2009    
    

        The information in this annual information form is given as of March 25, 2009 unless otherwise indicated. 

        All
dollar amounts in this annual information form are stated in Canadian currency unless otherwise indicated. References in this annual information form to tonnes are to metric tonnes
and references to U.S. tons are to imperial tons. One tonne is equal to 1.1023 U.S. tons. This annual information form contains capitalized technical and other terms that are
specific to the operations of BFI Canada Ltd. (the "Corporation") and its subsidiaries and the non-hazardous solid waste management industry. 

 
 

  FORWARD-LOOKING STATEMENTS    
    

        Certain statements in this annual information form are "forward looking statements" that reflect management's expectations regarding
the Corporation's future growth, results of operations, anticipated dividends, performance, business prospects and opportunities. The use of any of the words "anticipate", "continue", "estimate",
"expect", "may", "project", "should", "believe", "could", "foresee", "intend" and similar expressions are intended to identify forward looking statements. Such forward looking statements reflect
management's current beliefs and are based on information currently available to management. Forward looking statements involve significant risks and uncertainties that could cause the Corporation's
results to differ materially from the results expressed or implied by the forward looking statements. These include risks associated with, but not limited to, landfill operations, including the
Corporation's ability to obtain, renew and maintain certain permits, licenses and approvals; leverage, restrictive covenants and capital requirements; downturns in the worldwide economy; the
Corporation's
ability to implement its acquisition strategy; the Corporation's ability to manage the growth of its business; loss of contracts; reliance on third party disposal customers; geographic and customer
concentration; the effects of seasonality and weather; labour and employment matters; fuel cost fluctuations; reliance on key personnel; the Corporation's localized decision-making structure; the
requirement to obtain performance or surety bonds, letters of credit and insurance; uninsured and underinsured losses; the stringent requirements of, and the potential for changes to, applicable
legislation and governmental regulations; compliance with environmental regulations; liabilities resulting from potential environmental contamination; competition; provincial, state and local
government requirements under which landfill alternatives are encouraged; governance arrangements under which certain interest holders may influence control over the BFI Canada Group
(as defined below); foreign exchange exposure; the Corporation's use of accounting estimates and judgments; potential deficiencies in internal control over financial reporting and disclosure
controls and procedures; the fact that the Corporation may issue additional common shares and preferred shares diluting existing shareholders' interests; future sales of common shares by Retained
Interest Holders (as defined below); fluctuations in market conditions; and the uncertainty of future dividend payments and the level thereof. See "Risk
Factors" in this annual information form for a description of these risks, and other risks affecting the BFI Canada Group's business and an investment in the
Corporation's shares. Although the forward looking statements contained in this annual information form are based upon what management believes to be reasonable assumptions, there can be no assurance
that actual results will be consistent with these forward looking statements. These forward looking statements are made as of the date of this annual information form and the Corporation assumes no
obligation to update or revise them to reflect new events or circumstances, except as required by applicable securities laws. 

 
 
 

  FINANCIAL DISCLOSURE    
    

        Please refer to the management's discussion and analysis of the financial condition and results of operations of the Corporation for
the year ended December 31, 2008 for a detailed description of EBITDA and other financial measures used by the Corporation, as successor to BFI Canada Income Fund (the "Fund"). 

 
 

  THE CORPORATION    
    

        BFI Canada Ltd. (the "Corporation") is the successor to the Fund, following the completion of the conversion of
the Fund to a corporate structure by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario) on October 1,
2008, which we refer to in this annual information form as the "Conversion". In connection with the Conversion, securityholders of the Fund received common shares (the "Shares") of the
Corporation in exchange for ordinary trust units (the "Units") of the Fund, and 11,137,744 special voting shares (the "Special Shares") were issued to IESI Corporation ("IESI"),
the former holder of the Fund's Class A Unit that carried indirect voting rights for the former equity investors in IESI (the "Retained Interest Holders"). As a result of the Conversion,
the Corporation owns, directly or indirectly, all of the existing assets and liabilities of the Fund. 

        The
Corporation did not carry on any active business prior to the Conversion, other than executing the arrangement agreement pursuant to which the Conversion was implemented. The board
of directors and senior management of the Corporation is comprised of the former members of the board of trustees of the Fund and senior management of its wholly-owned subsidiaries IESI
Holdings Inc. ("IESI Holdings"), Ridge Landfill Trust, BFI Canada Inc., IESI and their respective subsidiaries, or, collectively, the BFI Canada Group. The head and
principal office of the Corporation is located at 135 Queens Plate Drive, Suite 300, Toronto, Ontario, M9W 6V1. 

        The
following diagram shows the organizational structure of the Corporation on March 25, 2009. For simplification, this diagram omits certain wholly-owned holding or operating
companies.  

  

2

 

Notes: 

	(1)
	The
Corporation was incorporated under the name 1768248 Ontario Limited on May 5, 2008. On September 30, 2008, 1768248 Ontario
Limited changed its name to BFI Canada Ltd.

	(2)
	BFI Canada
Income Fund and Ridge Landfill Trust are expected to be terminated during 2009, so that IESI Holdings will become a direct wholly-owned
subsidiary of the Corporation.

	(3)
	IESI
Holdings Inc. is the successor company from the amalgamation of 6814832 Canada Limited and 4264126 Canada Limited on
October 1, 2008.

	(4)
	BFI Canada Inc.
is the successor company from the amalgamation of BFI Canada Holdings, BFI Canada Inc. and
2114143 Ontario Inc. on October 1, 2008. 

 Existing Structure of the Canadian and U.S. Operating Companies  

 Canadian Operating Companies  

        IESI Holdings was formed by the amalgamation of 4264126 Canada Limited and 6814832 Canada Limited pursuant to the  Canada Business Corporations
Act on October 1, 2008. IESI Holdings is a holding company and indirect subsidiary of the Corporation that wholly
owns BFI Canada Inc., which in turn wholly owns two 

3

 

Canadian
operating subsidiaries incorporated under the laws of Canada, BFI Usine de Triage Lachenaie Ltée ("BFI Usine") and Entreprise Sanitaire F.A.
Ltée. ("F.A."). 

        On
December 19, 2008, IESI Holdings acquired all of the outstanding securities of Ridge (Chatham) Holdings, L.P. and Ridge (Chatham) Holdings G.P. Inc., the
owner and operator of the Ridge landfill, located near Chatham, Ontario. 

        In
this annual information form, "Ridge" refers to Ridge Landfill Trust, Ridge (Chatham) Holdings, L.P. and Ridge (Chatham)
Holdings G.P. Inc., "BFI Canada Inc." refers to BFI Canada Inc. and its direct and indirect subsidiaries,  "BFI Canada" refers
to BFI Canada Inc. and Ridge, representing, collectively, the Canadian operating companies,  "IESI" refers to IESI Corporation and its direct and indirect subsidiaries representing,
collectively, the U.S. operating companies,  "IESI Holdings" refers to IESI Holdings and its Canadian and
U.S. subsidiaries, and the "BFI Canada Group" refers to the collective operations of Ridge, BFI Canada Inc., IESI, IESI
Holdings and their respective subsidiaries. 

 U.S. Operating Companies  

        IESI, which is wholly owned by IESI Holdings, is a holding company that owns Total Waste Systems, Inc., Center Point
Disposal, Inc., and IESI OK Corporation, all of which were incorporated in Oklahoma, IESI MO Corporation, a Missouri corporation, IESI AR Corporation, an Arkansas Corporation, IESI TX
Corporation, a Texas corporation, and the following subsidiaries incorporated under the laws of Delaware: IESI LA Corporation, IESI NJ Corporation, IESI NY Corporation, IESI PA Corporation and Winters
Bros. Waste Systems, Inc. (collectively the "IESI Operating Companies"). All of the IESI Operating Companies, except Total Waste Systems, Inc. and IESI OK Corporation, in turn wholly own
certain U.S. operating subsidiaries as follows: (i) IESI TX Corporation owns the following two Delaware corporations, IESI TX GP Corporation and IESI DE LP Corporation, and
IESI DE LP Corporation is the sole limited partner of IESI TX Landfill, LP, a Texas limited partnership; (ii) IESI NY Corporation owns Seneca Meadows, Inc., incorporated in
New York; (iii) IESI PA Corporation owns IESI PA Bethlehem Landfill Corporation, incorporated in Delaware and IESI Blue Ridge Landfill Corporation, incorporated in Pennsylvania;
(iv) Center Point Disposal, Inc. owns AMD, Inc., incorporated in Oklahoma; (v) IESI MO Corporation owns IESI MO Landfill Corporation, a Missouri corporation and IESI
St. Louis, LLC, a Missouri limited liability company; (vi) IESI LA Corporation owns IESI LA Landfill Corporation, incorporated in Delaware; (vii) IESI LA Landfill
Corporation owns Central Louisiana Waste, LLC, a Louisiana limited liability company, and Coastal Waste Systems, Inc. a Louisiana corporation; (viii) IESI AR Corporation owns IESI
AR Landfill Corporation, a Arkansas corporation; (ix) IESI NJ Corporation owns IESI NJ Recycling Corporation, incorporated in Delaware; and (x) Winters Bros. Waste Systems, Inc.
owns the following New York corporations: Winters Bros. Management Services Corp., Winters Bros. Recycling Corp., Winters Bros. Transfer Station Corp., Winters Brother Recycling East
End, Inc. and the following New York limited liability companies: Winters Waste Services of New York, LLC., Excel Recycling, LLC., Winters MSW Holdings, LLC.,
Winters Holtsville Transfer Station, LLC., Winters Bros. Paper Recycling LLC., and Medford Transfer, LLC, which owns Medford II, LLC., a New York limited liability
company. 

 Amended and Restated Securityholders' Agreement  

        Pursuant to the Conversion, the Corporation issued Special Shares to IESI for the benefit of the holders of the participating preferred
shares of IESI (the "Participating Preferred Shares"). The Special Shares entitle the holder to exercise voting and other rights as shareholder of the Corporation as though the holder held the
number of Shares that would be owned by the holders of the Participating Preferred Shares assuming the exercise in full of the IESI Exchange Rights (as defined below). In particular, the
Special Shares enable the holder to vote on all matters at any meeting (including resolutions in writing) of the holders of Shares and the Special Shares (collectively, the "Voting Shareholders"), on
the basis of one vote for each Share for which the Participating Preferred Shares are exchangeable (the "IESI Exchange Rights"), other than with respect to the election of directors. So long as
the holder of the Special Shares is entitled to designate at least one director of the Corporation as described herein, all votes attaching to the Special Shares and any Shares held by holders of the
Participating Preferred Shares shall be deemed to be voted in favour of the directors nominated for election by the Governance and Nominating Committee, subject to certain conditions under the Amended
and Restated 

4

 

Securityholders'
Agreement (as defined below) and the agreement dated November 28, 2004 between the Fund, certain of its affiliates and IESI, which provided for the combination of the
business carried on by BFI Canada Holdings Inc. ("BFI Canada Holdings") with IESI (the "Transaction"). 

        Upon
the completion of the Conversion, certain existing governance rights of the Retained Interest Holders were modified, so that they are exercised in respect of the Corporation rather
than the Fund and IESI Holdings. These rights are substantially unchanged from the governance rights of the Fund prior to the Conversion, and are set out in the amended and restated securityholders'
agreement dated October 1, 2008 (the "Amended and Restated Securityholders' Agreement") between the Corporation, IESI Holdings and IESI, as trustee on behalf of the Retained Interest
Holders. The Amended and Restated Securityholders' Agreement sets out certain rules with respect to the governance of the Corporation and its subsidiaries and establishes the respective rights of
their securityholders as to board representation, approval rights in respect of certain transactions, exchange rights and related matters. 

        The
Amended and Restated Securityholders' Agreement provides for the composition of the Corporation's board of directors and creates obligations for the parties to nominate and/or vote
for the election of certain representatives to that board. The Amended and Restated Securityholders' Agreement also prescribes the establishment of specified committees of the board and their
respective mandates, as well as the composition of those committees. 

        The
Amended and Restated Securityholders' Agreement provides for a seven member board of directors of the Corporation. The number of members of the board may not be changed so long as
the Retained Interest Holders own at least 10% of the then-outstanding Shares (calculated on a fully diluted basis), including Shares that may be acquired upon exercise of the IESI
Exchange Rights. 

 
 

  INDUSTRY OVERVIEW    
    

        The non-hazardous solid waste management industry comprises the collection, transportation, recycling, transfer and
disposal of non-hazardous solid waste at landfills or other disposal facilities such as incineration or composting facilities. Non-hazardous solid waste is solid waste that is
not comprised of substances considered hazardous under any federal, provincial, state and/or local legislation or regulation applicable to the collection, recycling, transfer and/or disposal of
solid waste. 

 Integrated Services  

        The non-hazardous solid waste management industry involves the collection of non-hazardous solid waste and its
handling or disposal at a landfill site, recycling facility, transfer collection station or other waste disposal facility. Non-hazardous solid waste includes residential waste (including
household and yard waste) and industrial, commercial and institutional waste (including construction and demolition (or "C&D") debris). The principal services offered by the
non-hazardous solid waste management industry are summarized below. 

 Collection  

        Collection of non-hazardous solid waste consists of commercial, industrial and residential collection. Commercial
collection typically involves the use of front-end and rear-end loader trucks to collect waste stored in steel bins for collection that are usually supplied by the waste
collection service provider. Industrial waste collection typically involves the use of roll-off trucks to collect waste stored in large rectangular roll-off containers from
manufacturing businesses or construction and demolition sites. Residential waste collection involves the curbside collection of residential solid waste using rear-end and
side-loader trucks. Residential waste collection services are provided by municipalities and companies that contract either with municipalities or directly with individual homeowners,
homeowners' associations, apartment building owners or similar groups. Once collected, waste or recyclable material is transported to a transfer station or directly to a landfill or a recycling
facility. 

5

 

 Transfer Stations  

        Transfer stations are facilities typically located near residential, commercial and industrial collection routes that are a distance
from the ultimate disposal site. Non-hazardous solid waste is received at the transfer station from collection trucks, sometimes sorted and then transferred in large volumes to landfills,
recycling facilities or other waste disposal facilities. This consolidation reduces the costs associated with transporting the waste and may allow operators to obtain volume discounts on disposal
rates at landfill and other disposal facilities. Transfer stations also facilitate the efficient utilization of collection personnel and equipment by allowing them to focus on collection operations
and spend less time travelling to disposal sites. Transfer stations can handle non-hazardous solid waste received from commercial and residential collection operations and most industrial
waste. Some transfer stations are constructed to receive certain specialized waste, such as C&D debris. 

 Landfills  

        Landfills are the primary waste disposal facilities for all types of non-hazardous solid waste. Landfills must be designed,
permitted, operated and closed in accordance with comprehensive federal, provincial, state and/or local regulations. These regulations also dictate the type of waste that may be received by the
landfill. Landfill operations include excavation of earth, spreading and compacting of waste and covering of waste with earth or other inert material. 

 Other Disposal Facilities  

        Other alternative disposal facilities include incineration or composting facilities. Composting involves processing certain types of
organic materials (leaf and yard wastes, food wastes and other organic matter, including paper, wood and organic sludges) into reusable and non-putrescible soil conditioners and
other products. 

        Incineration
facilities generally accept non-hazardous solid waste and are typically designed to incinerate the waste, often with the process producing electricity
or steam. 

 Recycling  

        Recovery and recycling involve operations in which certain types of waste material (including wood, paper, cardboard, plastic, glass,
aluminium and other metals) are sorted, processed and resold as recycled material. In many jurisdictions, residential, commercial and roll-off customers pay a fee for the removal of
recyclable waste from their premises. After collection and sorting, purchasers generally pay a fluctuating spot market price for recycled materials. Waste for which there is no market is shipped to a
disposal facility, typically a landfill. 

 Industry Characteristics  

        The non-hazardous solid waste management industry is a regionally fragmented and competitive business, requiring
substantial expertise, labour and capital resources. Industry participants compete for collection accounts primarily on the basis of price and quality of service and compete for transfer station and
landfill business on the basis of tipping fees, geographic location and environmental practices. 

 Recession Resistant Characteristics  

        The non-hazardous solid waste management industry meets an essential need of communities and businesses. Waste management
services remain a necessity regardless of the level of economic activity. In the experience of management, revenues from commercial waste collection services generally do not decrease significantly
during periods of slower economic activity because the number of pick-ups required by commercial waste generators does not generally change during such periods. The volume of waste
collected at each commercial waste pick-up may decrease during periods of slower economic activity due to changes in consumption patterns, resulting in decreased disposal costs for hauling
companies. The reduction in tipping volumes will result in decreased revenues for landfill operators. Management also believes that revenues from residential non-hazardous solid waste
management services are not as volume sensitive because the number of households for which collection services are provided does not generally change in periods of slower economic 

6

 

activity.
Revenues from industrial waste collection services are, however, thought to be more closely tied to economic conditions due to the sensitivity of the C&D and manufacturing sectors to changes
in the economy. 

 Vertical Integration  

        Vertical integration in the non-hazardous solid waste management industry, or "internalization", is the collection and
disposal of waste by a waste management company into its own landfill, transfer station, recycling facility or other waste disposal facility. Internalization allows costs to be controlled by avoiding
third party landfill tipping fees and allows for greater asset utilization within the business. Larger operators with greater financial resources, expertise and experience are able to build, through
market development initiatives and acquisitions, vertically integrated, cost-effective operations consisting of collection operations, transfer stations, recycling facilities, landfills or
other waste disposal facilities. Vertically integrated companies can be assured of access to a landfill or other waste disposal facilities on favourable terms and of a steady supply of waste at such
facilities, which is needed in order to economically operate such facilities. Controlling the point of transfer from haulers to landfills has become increasingly important as landfills close and
collected waste is often transported further from collection markets. Generally, the larger and most profitable industry operators are those companies that are vertically integrated in their
operations, and thereby have greater control over their waste stream from collection to disposal. 

 Consolidation  

        The non-hazardous solid waste management industry has undergone significant consolidation and integration in both Canada
and the United States. Management believes that this consolidation will continue, mainly as a result of the ability of larger operators to achieve certain economies of scale, the continued
privatization by government entities of their non-hazardous solid waste collection and disposal services, and cost pressures and landfill closures brought about by regulatory changes and
stringent environmental regulation, enforcement and compliance costs. As a consequence, non-hazardous solid waste management companies are generally operating larger,
longer-term landfills that service larger geographical areas. In addition, these companies are achieving greater internalization from their operations. 

        Despite
ongoing consolidation, the non-hazardous solid waste management industry remains fragmented and regional in nature. Management believes that small, independent
operators present significant opportunities for both new-market and "tuck-in" acquisitions by companies with disciplined acquisition programs, focused management and access to
financial resources. 

 Regulation  

        The non-hazardous solid waste management industry in Canada and the United States is subject to extensive and
changing laws and regulations relating to environmental protection, health, safety, land use, transportation and related matters. These include, among others, laws
and regulations governing the licensing, use, treatment, storage and disposal of solid non-hazardous and hazardous wastes and materials, air quality, water quality, permissible or
mandatory methods of processing waste, location, permitting and expansion of solid waste facilities, greenhouse gas emissions, and the remediation of contamination associated with the release of
hazardous substances. 

        More
stringent industry regulations have caused operating and capital costs to rise. Applicable regulations require more stringent engineering of non-hazardous solid waste
landfills and may require liner systems, leachate collection, treatment and monitoring systems and gas collection and monitoring systems. These ongoing costs are combined with increased financial
reserve requirements for non-hazardous solid waste operators relating to closure and post-closure monitoring. As a result, the number of non-hazardous solid waste
landfills is declining while the average size of each landfill is increasing. 

7

 
 
 

  BUSINESS OF THE BFI CANADA GROUP    
    

 Overview  

        As noted previously, the BFI Canada Group refers to the collective operations of BFI Canada Inc., Ridge, IESI,
IESI Holdings and their respective subsidiaries. 

 Recent Developments  

        On March 6, 2009, the Corporation closed an offering of 8,500,000 Shares for total gross proceeds of $80,750,000. The
Corporation applied the net proceeds of the offering against a portion of the outstanding borrowings under the U.S. Credit Facility (as defined herein). 

        On
October 1, 2008, the Fund completed its conversion from an income fund to a corporate structure by way of a court-approved plan of arrangement under the  Business Corporations Act (Ontario),
pursuant to which the Corporation acquired all of the assets and assumed all of the liabilities of the Fund. On
October 2, 2008, the Shares began trading on the Toronto Stock Exchange (the "TSX") under the symbol "BFC" and, concurrently, the Units were delisted from trading on the TSX. 

        Effective
October 1, 2008, the Corporation entered into a Fourth Amending Agreement to its Fourth Amended and Restated Canadian Credit Agreement. The amending agreement simply
recognizes the structural change from an income trust to a corporation and had no impact on the committed amounts, maturity dates or pricing. 

        Effective
August 18, 2008, the Corporation announced a reduction in monthly cash dividends to $0.04166 per Share, commencing with the dividend payable January 15, 2009 to
holders of record on December 31, 2008. Effective September 19, 2008, the Corporation announced that the Board of Directors approved a special quarterly dividend payable in four equal
amounts of $0.125 per Share commencing on March 31, 2009. 

        Effective
August 6, 2008, the Corporation entered into a Fifth Amendment to its Amended and Restated Revolving Credit and Term Loan Agreement (as so amended, the
"U.S. Credit Facility"). The Fifth Amendment extends the maturity of the U.S. revolving credit facility to January 21, 2012, increases the U.S. revolving credit facility
commitment to US$588.5 million from US$575 million, and decreases the accordion feature from US$50 million to US$36.5 million. In addition, the Fifth Amendment increases
the applicable margin on the pricing grid by one quarter of one percent throughout. All other significant terms remain unchanged. 

        Effective
August 1, 2008, the Corporation remarketed $45 million of IRBs (as defined below). The amended and restated IRBs, which originally bore interest at LIBOR
less an applicable discount, bear interest at 6.625% for a term of five years. 

        Effective
July 30, 2008, the Fund entered into a Third Amending Agreement to its Fourth Amended and Restated Credit Agreement. The Third Amending Agreement increased the Canadian
revolving credit facility commitment from $150 million to $305 million and decreased the accordion feature from $50 million to $45 million. In addition, the Third Amending
Agreement increases the pricing grid by one quarter of one percent and modified one financial covenant. All other significant terms of the agreement remained unchanged by the amendment. 

        On
August 31, 2007, IESI acquired Winters Bros. Waste Systems, Inc. ("Winters Bros."), an integrated non-hazardous solid waste services provider based in
Westbury, New York, for total cash consideration, including acquisition and related costs, of approximately $306 million. Winters Bros. provides collection, transfer and recycling
services to commercial and industrial businesses, residences, municipalities and construction sites, primarily in Long Island and operates eight transfer stations and multiple collection operations. 

        Effective
August 28, 2007, all of the necessary permits for the expansion of the Corporation's Seneca Meadows landfill were obtained. Based on current volumes, management of the
Corporation expects the operating life of the site to extend through 2023. 

        On
April 5, 2007, the Fund closed an offering of 3,565,000 Units, including the full exercise of the over-allotment option, for total gross proceeds of
approximately $93 million. The Fund applied the net proceeds of the offering against advances from its U.S. revolving credit facility. 

8

 

        Effective
March 21, 2007, the Fund entered into a Second Amending Agreement to its Fourth Amended and Restated Credit Agreement. The second amendment increased the total committed
Canadian credit segment to $150 million from $80 million and the total available credit from this facility, subject to lender consent, to $200 million from $120 million.
The maturity date of the agreement was extended to May 30, 2011 from June 20, 2010, and the maturity date remains subject to one year extensions. 

        Effective
March 28, 2007, the Fund entered into a new 15 year agreement for variable rate demand solid waste disposal revenue bonds ("IRBs") in the state of Texas. The IRBs
are made available, to a maximum of US$24 million and are available to fund a portion of landfill construction activities, and equipment, vehicle and container expenditures in the Fund's Texas
operations. The IRBs bear interest at a discount to LIBOR. A portion of the Fund's drawings under this facility was used to repay the Fund's U.S. revolving credit facility with the balance used
to finance landfill construction activities, and equipment, vehicle and container expenditures. 

 BFI Canada  

        BFI Canada is a full-service waste management company providing non-hazardous solid waste collection, transfer,
disposal and recycling services in the provinces of British Columbia, Alberta, Manitoba, Ontario and Québec. It is one of the largest non-hazardous solid waste management
companies in Canada with customers in 20 markets. BFI Canada has 20 collection operations, and owns and operates four landfill sites, six transfer stations, nine recycling
facilities and one landfill gas-to-energy facility. BFI Canada also operates one municipally owned landfill site and one recycling facility. 

        BFI
Canada Inc. was formed by the amalgamation of BFI Canada Inc., BFI Canada Holdings and 2114143 Ontario Inc. pursuant to the  Business Corporations Act (Ontario) on October 1,
 2008. BFI Canada Holdings was established in June 2000, when BFI Canada
Holdings acquired selected assets from
Browning-Ferris Industries Ltd. ("Browning-Ferris Canada") and other Canadian subsidiaries of Allied Waste Industries, Inc. and its affiliates ("Allied"). 

        IESI
Holdings holds the Corporation's indirect interest in the Ridge landfill, located near Chatham, Ontario, through its ownership of all the outstanding securities of Ridge (Chatham)
Holdings, L.P. and Ridge (Chatham) Holdings G.P. Inc., the owner and operator of the Ridge landfill. 

 IESI  

        IESI is one of the leading regional, non-hazardous solid waste management companies in the United States. IESI
provides its services through a network of vertically integrated assets in 40 markets, which include 52 collection operations, 29 transfer stations, 17 landfills,
11 recycling facilities and one transportation operation. Management of IESI believes it is among the top three solid waste management providers in the substantial majority (over 80%) of its
principal service areas. IESI provides collection, transfer, disposal and recycling services in two geographic regions: its South Region, consisting of various service areas in the southern region of
the United States including Texas, Louisiana, Oklahoma, Arkansas, Missouri and Mississippi, and its Northeast Region, consisting of various service areas in the north eastern region of the
United States including New York, New Jersey, Pennsylvania, Maryland and the District of Columbia. 

9

 

  Canadian Operations  

 Collection  

        BFI Canada provides non-hazardous solid waste collection, transfer, disposal and recycling services to a wide variety of
customers, including small, medium and large sized enterprises, single and multi family dwellings, municipalities, government agencies and educational institutions. BFI Canada's collection
operations principally consist of recurring collection and disposal of non-hazardous solid waste, recyclable products, construction debris, industrial facility waste and municipal solid
waste using front-end loader trucks, rear-end loader trucks, roll-off trucks and side-loader trucks. These collection services are generally all
provided from the same facility within each market. BFI Canada typically provides its customers with containers ranging in size from two to 40 cubic yards. Residential collection
occasionally uses container collection methods using both automated and manual side load vehicles. 

        BFI
Canada typically invoices scheduled commercial collection customers in advance of service and unscheduled collection customers in arrears. In addition, municipal contracts are
typically billed in arrears. Fees in its collection segment are determined by a variety of factors, including collection frequency, waste type, volume or weight of the waste collected, type of
equipment and containers furnished, the distance to the disposal or processing facility and the cost of disposal or processing. 

        Collection
contracts typically have a term of three to five years and provide for automatic renewal, subject to certain termination rights in favour of the customer. These contracts
typically provide BFI Canada the option for annual indexed price adjustments and adjustments to cover increases in certain costs. Contracts for the collection of municipal solid waste typically
range from two to five years and generally provide for annual indexed price increases. 

        As
of December 31, 2008, BFI Canada had approximately 721,000 residential customers and 63,000 commercial and industrial customers in British Columbia,
Alberta, Manitoba, Ontario and Québec. No single collection contract or customer is material to the Corporation's results of operations. 

        The
balance of BFI Canada's collection operations include transfer station operations, recycling facilities and compactor rentals. 

 Landfills  

        Landfills are currently the predominant method of disposal for non-hazardous solid waste in Canada. Landfill operations
typically produce the highest EBITDA margins in the non-hazardous solid waste management business, but involve significant risks and costs associated with permitting and compliance with
environmental laws and regulations and higher capital expenditures. BFI Canada owns and operates four landfill sites servicing Southern Ontario, Montreal, Calgary and Winnipeg and their
surrounding communities. BFI Canada also operates the Lethbridge Regional Landfill under a contract with the City of Lethbridge. 

        The
fees charged at landfills, known as "tipping fees", are negotiated rates that vary based on market factors and the type and weight or volume of solid waste deposited and the type and
size of the vehicles used in the transportation of the waste. When using privately owned third party landfills for disposal of its collected waste, BFI Canada typically tries to negotiate
disposal arrangements with the landfill operator to obtain volume discounts. However, when using a government owned landfill, BFI Canada typically is required to pay the set tipping fee
applicable to all similar customers for the site. 

        In
addition to its landfill operations, BFI Canada owns and operates a power generating plant located at its Lachenaie site, which collects landfill gas, cleans the gaseous
residue and then uses the cleaned gas to power reciprocating engines that produce electricity. This plant produces approximately 3.7 megawatts of electrical power annually, the equivalent of
providing the required electricity to approximately 2,500 homes. The electrical power generated at the Lachenaie site is sold to Hydro Québec under a 25 year contract that
commenced in January 1996 at fixed rates per year, with annual increases generally based on a pre-determined formula. 

        Operating
and maintaining a landfill is capital intensive and generally requires performance bonds and letters of credit to secure performance and financial obligations. Because of this,
a steady volume of waste is required over the operating life of the landfill in order to maintain profitable operations, and management 

10

 

believes
these factors favour large, established waste management companies such as BFI Canada. Approximately 42% of the total tonnage received at the four landfills owned by BFI Canada
is derived from disposal of waste collected by BFI Canada, and the balance of the tonnage received is from third party disposal customers. 

 Transfer Stations  

        Currently, BFI Canada operates two transfer stations in the greater Montreal area, one in Hamilton, Ontario, one in Barrie,
Ontario, one in Vaughan, Ontario and one in Lethbridge, Alberta, which are located near many of its collection routes and which receive the solid waste that has been collected by its own and third
party collection vehicles. BFI Canada typically uses subcontractors to transport the waste from its transfer stations to its own or third party landfills. Transfer station fees are generally
based on the cost of processing, transportation and disposal of waste. 

        The
fees charged by BFI Canada at its transfer collection stations are generally based on the type and volume or weight of the waste transferred and the transportation distance to
the landfill. These operations are not material to BFI Canada's results of operations. 

 Recycling  

        BFI Canada's recycling services include collection of recyclable material from residential, commercial and industrial customers, for
which it charges collection and processing fees. At its nine recycling facilities, BFI Canada Inc. provides recovery collection processing services to its collection customers for a
variety of recyclable materials, including newspaper, cardboard, office paper, plastic containers, glass bottles, fibreboard, wood and ferrous and aluminium metals. These materials are sorted,
processed and resold as recycled material. BFI Canada owns seven of the eight recycling facilities it operates. Typically, after separation, these materials are not ready for
re-manufacture into new products, but require additional processing by the re-manufacturer. Revenues at these plants depend on commodity market pricing. No single recycling
contract or customer is significant to BFI Canada's results of operations. 

 Landfill and Environmental Matters  

 Site Life  

        The following tables reflect the estimated remaining operating lives in years for the landfills that are owned or operated under
contractual agreements by BFI Canada, and are based on remaining and probable expansion capacity and projected annual disposal volume, in years, as of December 31, 2007 and December 31,
2008. The estimated remaining operating lives assume the renewal of required operating permits. 

																										
	 
	 	Year Ended December 31, 2007 	 
	 
	 	0 to 5 	 	6 to 10 	 	11 to 20 	 	21 to 30 	 	31 to 40 	 	41 to 50 	 	51+ 	 	Total 	 
	 Owned Landfills
	 	 	1	 	 	—	 	 	1	 	 	1	 	 	1	 	 	—	 	 	—	 	 	4	 
	 Operated Landfills(1)
	 	 	1	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	1	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	2	 	 	—	 	 	1	 	 	1	 	 	1	 	 	—	 	 	—	 	 	5	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

11

 

 

																										
	 
	 	Year Ended December 31, 2008 	 
	 
	 	0 to 5 	 	6 to 10 	 	11 to 20 	 	21 to 30 	 	31 to 40 	 	41 to 50 	 	51+ 	 	Total 	 
	 Owned Landfills
	 	 	1	 	 	—	 	 	2	 	 	—	 	 	1	 	 	—	 	 	—	 	 	4	 
	 Operated Landfills(1)
	 	 	1	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	1	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	2	 	 	—	 	 	2	 	 	—	 	 	1	 	 	—	 	 	—	 	 	5	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	(1)
	The
estimated remaining lives for operated landfills are based on the contractual life, not the life of the site. 

 Available Tonnes  

        The following tables reflect landfill airspace activity for active landfills owned or operated by BFI Canada for the years ended
December 31, 2007 and December 31, 2008. 

																								
	 
	 	Balance as of

December 21,

2006 	 	New

Expansions

Undertaken 	 	Landfills

Acquired, Net

of Divestitures 	 	Permits

Granted 	 	Airspace

Consumed 	 	Changes in

Engineering

Estimates 	 	Balance as of

December 31,

2007 	 
	 Permitted airspace:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 Metric Tonnes (in thousands)
	 	 	23,750	 	 	0	 	 	0	 	 	0	 	 	-2,836	 	 	4,836	 	 	25,750	 
	 	 Number of sites
	 	 	4	 	 	0	 	 	0	 	 	0	 	 	—	 	 	—	 	 	4	 
	 Expansion airspace:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 Metric Tonnes (in thousands)
	 	 	24,600	 	 	0	 	 	0	 	 	0	 	 	0	 	 	-300	 	 	24,300	 
	 	 Number of sites
	 	 	1	 	 	0	 	 	0	 	 	0	 	 	 	 	 	 	 	 	1	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Total available disposal capacity:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 Metric Tonnes (in thousands)
	 	 	48,350	 	 	0	 	 	0	 	 	0	 	 	-2,836	 	 	4,536	 	 	50,050	 
	 	 Number of sites
	 	 	4	 	 	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	4	 

 

																								
	 
	 	Balance as of

December 21,

2007 	 	New

Expansions

Undertaken 	 	Landfills

Acquired, Net

of Divestitures 	 	Permits

Granted 	 	Airspace

Consumed 	 	Changes in

Engineering

Estimates 	 	Balance as of

December 31,

2008 	 
	 Permitted airspace:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 Metric Tonnes (in thousands)
	 	 	25,750	 	 	0	 	 	0	 	 	1,300	 	 	-2,847	 	 	2,047	 	 	26,250	 
	 	 Number of sites
	 	 	4	 	 	0	 	 	0	 	 	0	 	 	—	 	 	—	 	 	4	 
	 Expansion airspace:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 Metric Tonnes (in thousands)
	 	 	24,300	 	 	0	 	 	0	 	 	-1,300	 	 	0	 	 	-1,750	 	 	21,250	 
	 	 Number of sites
	 	 	1	 	 	0	 	 	0	 	 	0	 	 	 	 	 	 	 	 	1	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Total available disposal capacity:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 Metric Tonnes (in thousands)
	 	 	50,050	 	 	0	 	 	0	 	 	0	 	 	-2,847	 	 	297	 	 	47,500	 
	 	 Number of sites
	 	 	4	 	 	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	4	 

 Equipment  

        BFI Canada owns approximately 496 routed waste collection vehicles and approximately 47 units of heavy equipment utilized
in BFI Canada's landfill operations. The average age of BFI Canada's routed waste collection vehicles is between four and five years, and BFI Canada amortizes the costs of its
waste collection vehicles over an eight year period. BFI Canada believes that its vehicles, equipment and operating properties are well maintained and adequate for its current operations.
BFI Canada intends to make investments in additional equipment and property for expansion and replacement of assets and in connection with future acquisitions as needed. 

12

 

 Competitive Strengths  

        Management believes that BFI Canada benefits from the following competitive strengths: 

 Market Focused and Vertically Integrated Operations  

        BFI Canada is a leading non-hazardous solid waste management services company operating in 20 markets throughout
Canada. BFI Canada believes it is among the top three commercial waste management providers in the majority of its principal service areas. BFI Canada Inc. has been successful in
achieving economies of scale by securing collection and hauling contracts from customers located on its existing collection routes. Where possible, the market focused strategy of BFI Canada
includes the ownership of transfer stations and landfills that are strategically close to the city centres in the markets in which BFI Canada operates. This positions the landfills owned by
BFI Canada as the landfills of choice for many private collection operators while allowing BFI Canada to increase internalization rates and EBITDA margins. Management believes that its ability
to internally dispose of a substantial amount of its collected waste provides BFI Canada with an economic advantage over those industry participants that must rely to a greater extent on third
parties for disposal services. During the fiscal year ended December 31, 2008, approximately 58% of BFI Canada's collection volumes were internalized, with waste collected by BFI Canada being
disposed of in landfills owned by BFI Canada and BFI Canada's material recovery collection facilities. In the fiscal year ended December 31, 2008, 42% of the waste disposed in
landfills owned by BFI Canada was from BFI Canada's collection operations, which provide a steady base of volume to economically operate landfill assets. 

 Customer and Geographic Diversification  

        BFI Canada's collection customer base is highly diversified. As of December 31, 2008, BFI Canada had approximately
721,000 residential customers and 63,000 commercial and industrial customers across Canada. BFI Canada's 10 largest commercial and industrial collection customers accounted for
less than 2.1% of its revenues in 2008. No one commercial and industrial customer accounted for more than 1% of BFI Canada's revenues for the year ended December 31, 2008. 

 Long-Term Customer Relationships  

        BFI Canada has established long-term relationships with a large number of organizations, including municipalities and other
governmental agencies, educational institutions, and small, medium and large enterprises. The typical long-term customer contract provides for automatic renewal, subject to certain
termination rights in favour of the customer. These contracts typically provide the option for annual indexed fee adjustments and adjustments to cover increases in certain costs, including fuel,
disposal and transportation costs in favour of BFI Canada. 

 Competition  

        The Canadian non-hazardous solid waste management industry is competitive and highly fragmented. Competition is generally
regional in nature and includes companies that operate on a national scale, smaller local niche companies that service specific segments of the industry, and a large number of small haulers spread
throughout the country in rural and urban areas and in the public and private sectors. Management believes that Waste Management, Inc. ("WMI"), a U.S. based multinational operating in
Canada through its wholly owned subsidiary, Waste Management of Canada Corporation, is the largest non-hazardous solid waste management company in Canada. The only other large national
non-hazardous solid waste management companies operating in Canada are BFI Canada and the Canadian subsidiary of Waste Services Inc. ("Waste Services"). BFI Canada
competes with WMI in most of the largest Canadian cities for collection services and for landfill disposal contracts in Québec and Ontario. BFI Canada competes with Waste
Services for collection services in some markets in British Columbia, Alberta and Ontario. 

        Management
believes that there are many intermediate sized companies operating in the Canadian market. The majority of these companies are privately-owned, local collection service
providers and are located predominantly in Canada's larger urban areas. Other market participants with whom BFI Canada competes are small independent haulers who operate throughout Canada in
both rural and urban areas. These operators are 

13

 

generally
small, family-run businesses, the majority of which operate in local areas and whose operations are generally limited to a niche of the non-hazardous solid waste
management collection segment. 

        BFI
Canada also competes with municipalities that operate their own waste collection services (typically residential collection), that operate their own landfills, and/or control the
disposal of waste collected in their jurisdiction. 

 Employees  

        At December 31, 2008, BFI Canada had 1,284 full-time employees, 533 of whom are covered by
13 collective bargaining agreements. The collective bargaining agreements have terms ranging from three to five years and agreements expire from 2009 to 2011. 

        BFI
Canada has not suffered any loss of production due to work stoppages by its employees since the acquisition of its principal operating assets from Allied on
June 29, 2000. 

 U.S. Operations  

 Collection  

        As of December 31, 2008, IESI provided collection services to more than 840,000 residential customers and approximately
99,000 commercial and industrial customers. 

 Commercial and Industrial  

        IESI provides hand collection and containerized services to a wide variety of commercial and industrial customers. Most commercial and
industrial customers are provided with containers that are designed to be lifted mechanically and either emptied into a collection vehicle's compaction hopper or, in the case of the large
roll-off containers, to be loaded onto the collection vehicle. IESI's standard commercial containers generally range in size from one to eight cubic yards and its roll-off
containers generally range in size from 10 to 40 cubic yards. 

        IESI's
contracts with commercial and industrial customers typically have terms of three to seven years, have renewal options and may not be terminated by the customer prior to the end of
the term without a penalty. IESI's contracts for roll-off containers may provide for temporary services, such as the removal of waste from a construction site, and are typically for
periods of less than one year. IESI's fees from these contracts are generally determined by factors such as collection frequency, type of collection equipment furnished, the distance to the processing
facility or landfill, cost of disposal and type and volume or weight of the waste collected, as well as prevailing local economic conditions. 

 Residential  

        IESI provides residential waste management services under a variety of contractual arrangements, including: (i) contracts with
homeowners' associations, apartment building owners and mobile home park operators; (ii) on a subscription basis with individual households; and (iii) contracts with, or franchises
granted by, municipalities. IESI's municipal contracts and municipal franchises typically
have three to five year terms, subject to renewal options. Most other arrangements for residential services have terms that vary from monthly, for subscription service, to up to three years for
contracts with homeowners' associations. IESI seeks to enter into residential service arrangements where the route density is high. IESI bases its residential collection fees primarily on route
density, the frequency and level of service, the distance to the processing facility or landfill and the cost of processing or disposal. Collection fees are paid either by the municipalities from
their tax revenue or directly by the residents receiving the services. 

 Transfer Stations  

        Currently, IESI operates 29 transfer stations, which are located near many of its collection routes and which receive the
non-hazardous solid waste that has been collected by its own and third party collection vehicles. IESI typically uses subcontractors to transport the waste from its transfer stations to
its own or third party landfills. Transfer station fees are generally based on the cost of processing, transportation and disposal of waste. 

14

 

        In
addition to improving the utilization of collection personnel and equipment, IESI believes that its transfer stations benefit it by concentrating the waste stream from a wider area.
This increases the volume of waste at the landfills that IESI operates. IESI's transfer stations also help it build relationships with the municipalities and private operators that deliver waste to
the transfer stations, which can lead to additional growth opportunities. IESI believes that, as increased regulations and public pressure restrict the development of landfills in urban and suburban
areas, transfer stations will increasingly be used as an efficient means to process and transport waste to landfills and other disposal sites. 

 Landfills  

        IESI owns or operates 17 landfills, three municipal solid waste landfills in its Northeast Region, 11 municipal solid
waste landfills in its South Region, and three C&D landfills in its South Region. 

        IESI
monitors the available permitted disposal capacity of its landfills on a regular basis and evaluates whether to seek to expand this capacity. In making this evaluation, IESI
considers various factors, including the volume of waste disposed of at the landfill, available acreage, the likelihood of obtaining the necessary approvals and permits and the costs associated with
these items. 

 Recycling  

        IESI's recycling services include collection of recyclable materials from residential, commercial and industrial customers, for which
it charges collection and processing fees. IESI's recycling operations also process for sale certain recyclable materials, such as paper, plastics and aluminium, which are marketed as commodities and
are subject to significant price fluctuations. IESI's recycling operations are either separate full-service recycling facilities or are recycling operations operating along with one of our
transfer station operations. 

        To
mitigate some of its exposure to these price fluctuations, IESI has entered into a long-term agreement with Weyerhaeuser Company to purchase some of IESI's recycled office
paper and cardboard. IESI's Seneca Falls, New York landfill has a tire recycling facility that reduces tires into chips which are then used in the construction of drainage blankets for new
disposal cells at the landfill. 

 Landfill and Environmental Matters  

 Site Life  

        The following tables reflect the estimated remaining operating lives in years for the landfills owned or operated under contractual
agreements by IESI, and are based on remaining and probable expansion capacity and projected annual disposal volume, in years, as of December 31, 2007 and December 31, 2008. The
estimated remaining operating lives assume the renewal of required operating permits. 

																										
	 
	 	Year Ended December 31, 2007 	 
	 
	 	0 to 5 	 	6 to 10 	 	11 to 20 	 	21 to 30 	 	31 to 40 	 	41 to 50 	 	51+ 	 	Total 	 
	 Owned Landfills
	 	 	—	 	 	4	 	 	1	 	 	—	 	 	1	 	 	2	 	 	5	 	 	13	 
	 Operated Landfills(1)
	 	 	—	 	 	—	 	 	1	 	 	—	 	 	—	 	 	—	 	 	3	 	 	4	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	—	 	 	4	 	 	2	 	 	—	 	 	1	 	 	2	 	 	8	 	 	17	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

																										
	 
	 	Year Ended December 31, 2008 	 
	 
	 	0 to 5 	 	6 to 10 	 	11 to 20 	 	21 to 30 	 	31 to 40 	 	41 to 50 	 	51+ 	 	Total 	 
	 Owned Landfills
	 	 	—	 	 	4	 	 	—	 	 	2	 	 	2	 	 	—	 	 	5	 	 	13	 
	 Operated Landfills(1)
	 	 	—	 	 	—	 	 	1	 	 	—	 	 	—	 	 	—	 	 	3	 	 	4	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	—	 	 	4	 	 	1	 	 	2	 	 	2	 	 	—	 	 	8	 	 	17	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	(1)
	The
estimated remaining lives for operated landfills are based on the contractual life, not the life of the site. 

15

 

 Available Tons  

        The following tables reflect landfill airspace activity for active landfills owned or operated by IESI for the years ended
December 31, 2007 and December 31, 2008. 

																								
	 
	 	Balance as of

December 21,

2006 	 	New

Expansions

Undertaken 	 	Landfills

Acquired, Net

of Divestitures 	 	Permits

Granted 	 	Airspace

Consumed 	 	Changes in

Engineering

Estimates 	 	Balance as of

December 31,

2007 	 
	 Permitted airspace:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 U.S. Tons (in thousands)
	 	 	89,950	 	 	0	 	 	0	 	 	37,773	 	 	-5,109	 	 	-3,678	 	 	118,936	 
	 	 Number of sites
	 	 	16	 	 	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	16	 
	 Expansion airspace:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 U.S. Tons (in thousands)
	 	 	66,161	 	 	955	 	 	0	 	 	-37,773	 	 	 	 	 	2,776	 	 	32,119	 
	 	 Number of sites
	 	 	9	 	 	2	 	 	0	 	 	-2	 	 	—	 	 	-1	 	 	8	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Total available disposal capacity:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 U.S. Tons (in thousands)
	 	 	156,111	 	 	955	 	 	0	 	 	0	 	 	-5,109	 	 	-902	 	 	151,055	 
	 	 Number of sites
	 	 	16	 	 	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	16	 

 

																								
	 
	 	Balance as of

December 21,

2007 	 	New

Expansions

Undertaken 	 	Landfills

Acquired, Net

of Divestitures 	 	Permits

Granted 	 	Airspace

Consumed 	 	Changes in

Engineering

Estimates 	 	Balance as of

December 31,

2008 	 
	 Permitted airspace:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 U.S. Tons (in thousands)
	 	 	118,936	 	 	0	 	 	0	 	 	848	 	 	-5,171	 	 	9,755	 	 	124,368	 
	 	 Number of sites
	 	 	16	 	 	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	16	 
	 Expansion airspace:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 U.S. Tons (in thousands)
	 	 	32,119	 	 	30,439	 	 	0	 	 	-848	 	 	 	 	 	9,677	 	 	71,387	 
	 	 Number of sites
	 	 	8	 	 	1	 	 	0	 	 	-2	 	 	 	 	 	0	 	 	7	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Total available disposal capacity:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 U.S. Tons (in thousands)
	 	 	151,055	 	 	30,439	 	 	0	 	 	0	 	 	-5,171	 	 	19,432	 	 	195,755	 
	 	 Number of sites
	 	 	16	 	 	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	16	 

 U.S. South  

        IESI's South Region operations serve customers in the states of Texas, Louisiana, Oklahoma, Arkansas, Missouri and Mississippi. By
capitalizing on its management team's extensive experience in acquiring, integrating and operating non-hazardous solid waste management businesses, particularly in the southern
United States, IESI has significantly grown this region over the last thirteen years. IESI has completed over 153 acquisitions in its South Region since 1995. 

        IESI's
South Region currently serves more than 813,000 residential customers and 66,000 commercial and industrial customers. In this region, IESI operates
44 collection operations, 17 transfer stations, 11 solid waste landfills, three C&D landfills and three recycling facilities. A substantial portion of IESI's operations in this
region are fully or partially integrated, which enables IESI to currently internalize approximately 42% of the waste that it handles. IESI has 297 exclusive municipal contracts generating more
than one-third of its South Region's revenue. 

 Facilities and Services  

        IESI seeks to create vertically integrated operations within each market served that include collection, transfer and disposal
services. In addition, IESI attempts to internalize into its own landfills as much of the waste 

16

 

that
it collects as possible. In collection areas where IESI does not currently operate a municipal solid waste landfill or lacks the municipal solid waste landfill capacity necessary to fully service
its transfer stations and collection operations, it has a variety of low cost disposal alternatives, including: 

	•
	negotiating competitive rates through long-term contracts with private operators;   

	•
	obtaining competitive pricing in markets that have numerous disposal options; or   

	•
	utilizing municipal landfills, which generally charge the same disposal rates to all customers. 

        IESI
also implements strategies to increase the amount of waste it internalizes in order to lower its costs by acquiring or permitting additional landfill capacity. 

 U.S. Northeast  

        IESI's Northeast Region services customers located in the states of New York, New Jersey, Pennsylvania, Maryland, and the
District of Columbia and consists of eight collection operations, nine municipal solid waste transfer stations, three C&D transfer stations, three municipal solid waste landfills, five paper recycling
facilities, two C&D recycling facilities, one tire recycling facility and a transportation operation. IESI's Northeast Region operations serve more than 27,000 residential customers and
33,000 commercial and industrial customers. IESI has 24 municipal contracts in the Northeast Region, providing a variety of commercial, roll-off and residential collection
services and transfer station services consisting of transfer and disposal. 

        IESI's
Northeast Region collection and transfer station operations primarily serve the New York City and Long Island markets. The New York City market is the largest solid
waste market of any city in the United States. One of the three municipal solid waste landfills is IESI's Seneca Falls, New York landfill. The Seneca Falls landfill is the largest
landfill in the State of New York, as measured by average daily volume. Under its municipal contracts with New York City, IESI transfers and disposes of up to
1,900 U.S. tons per day of municipal solid waste that New York City collects and deposits at IESI or third party transfer stations. IESI is one of approximately seven companies
that New York City has contracted with to service its collected municipal solid waste. See "Risk Factors — Risks Related to Our
Business — Customer Concentration". IESI's Northeast Region currently internalizes approximately 33% of the total volume of waste that
it handled. 

        IESI
believes that its network of transfer stations in New York City and Long Island markets would be very hard to duplicate because of the scarcity of land and the difficulty of
obtaining permits for transfer stations. IESI has completed over 28 acquisitions in its Northeast Region since 1998. 

 Facilities and Services  

        In the New York City metropolitan area, IESI has collection operations located in the Bronx, New York, Jersey City,
New Jersey, and three collection operations on Long Island. IESI's collection operation also serves customers in Pennsylvania, Baltimore and the District of Columbia. 

        Almost
all of the municipal solid waste, C&D waste and recyclable paper IESI handles from its collection routes in the New York City metropolitan area is transported through its
network of municipal solid waste transfer stations, its C&D transfer stations and its recycling facilities. IESI typically either transports its municipal solid waste from its transfer stations to its
landfills in New York and Pennsylvania, which are located within 100 to 400 miles of New York City or to third party incinerators and third party landfills typically under
contractual arrangements. 

        To
the extent possible and at IESI's discretion, IESI seeks to internalize the municipal solid waste received by its transfer stations into its landfills. C&D debris that both IESI's
collection operations and third parties deliver to its C&D transfer stations is transferred in transfer trailers to IESI's Seneca Falls, New York landfill or a third party landfill on Long
Island, New York. 

        Effective
November 2008, IESI renewed two non-hazardous solid waste management services contracts with New York City for initial terms of three years, with two
one-year renewals, at New York City's option. Under these contracts, IESI transfers and disposes of up to an aggregate of 1,500 U.S. tons per day of municipal solid
waste that New York City collects and delivers to two of IESI's Brooklyn transfer stations. In 

17

 

February 2006,
New York City awarded IESI an additional contract for three years with two one-year renewal options. In February 2009, New York City exercised
the first of its two one-year renewals. The contract is for the disposal of up to 400 tons a day of municipal solid waste collected in Queens. New York City collects the
residential waste and delivers it to a third party transfer station from which the waste is then transported to an IESI landfill. During 2008, New York City delivered average daily volumes of
approximately 1,566 U.S. tons of solid municipal waste to IESI pursuant to the three contracts. 

        The
permitted average daily volume is currently 1,375 U.S. tons for IESI's Bethlehem landfill, 1,700 U.S. tons for IESI's Chambersburg landfill and
6,000 U.S. tons for IESI's Seneca Falls, New York landfill. IESI's Seneca Falls, New York landfill includes a tire recycling facility. 

        IESA's
Seneca Falls, New York and Bethlehem, Pennsylvania landfills have landfill gas recovery systems that transfer methane gas from the landfill to independently-owned
facilities at which the gas is converted into electricity. 

 Competitive Strengths  

 Market Focused and Vertically Integrated Operations  

        IESI is a leading waste management services company in 40 markets located in two geographic regions of the United States.
IESI operates the largest landfill in the State of New York based on average daily volume and believes it is among the top three commercial waste management providers in the substantial
majority of its principal service areas. IESI has been successful in achieving economies of scale by securing collection and hauling contracts from customers located on its existing collection routes.
Increased route density allows for greater asset utilization and therefore higher EBITDA margins. A majority of IESI's acquisitions have been "tuck in" acquisitions, which have allowed IESI to develop
leading positions in the markets in which it operates. In addition, IESI has acquired transfer stations and landfills, resulting in greater internalization rates and higher EBITDA margins. IESI's
integrated network of collection, transfer and disposal assets has allowed IESI to achieve a 38% internalization rate in 2008. In addition, 40% of the waste disposed in IESI's landfills was from its
collection and transfer operations, providing IESI with a steady base of volumes to commercially operate its landfills. 

 Customer and Geographic Diversification  

        IESI's collection base is highly diversified. IESI currently serves more than 840,000 residential customers and approximately
99,000 commercial and industrial customers. No single customer represented more than 2.0% of IESI's revenues in 2008, excluding its municipal contract with New York City, which
represented 6.8%. 

 Long Term Customer Relationships  

        IESI has built a solid base of multi-year municipal contracts that give it the exclusive right to collect municipal solid
waste in a particular municipality for a term of three to five years and provide for automatic renewal, subject to termination rights in favour of the customers. IESI believes that it has been able to
maintain and extend its exclusive municipal contracts because of its high levels of service and performance. 

        During
2008, over one-third of IESI's South Region's revenue was generated from municipal contracts. On November 1, 2008, IESI renewed two non-hazardous
solid waste management services contracts with New York City for initial terms of three years, with two one-year renewals, at New York City's option. Under these contracts,
IESI transfers and disposes of up to an aggregate of 1,500 U.S. tons per day of municipal solid waste that New York City collects and deposits at its transfer stations in
Brooklyn. In February 2006, New York City awarded IESI an additional contract for three years with two one-year renewal options. In February 2009, New York City
exercised the first of its two one-year renewal options. The contract is for the disposal of up to 400 tons a day of municipal solid waste collected in Queens. New York City
collects the residential waste and delivers it to a third party transfer station from which the waste is then transported to an IESI landfill. 

        IESI
provides hand collection and containerized services to a wide variety of commercial and industrial customers. Its contracts with commercial and industrial customers typically have
terms of three to seven years, have renewal options and may not be terminated by the customer prior to the end of the term without a penalty. 

18

 

IESI's
individual market and customer focus enables it to effectively compete with other waste management companies. 

 Competition  

        IESI operates in a highly competitive industry. Entry into certain segments of IESI's business and the ability to operate profitably in
its industry require substantial amounts of capital, regulatory approvals and managerial experience. 

        Competition
in the non-hazardous solid waste management industry comes from a number of large, national, publicly owned companies, including WMI and Republic
Services, Inc., several regional companies, such as Veolia Environmental Services, Waste Connections, Inc. and Casella Waste Systems, Inc., and approximately
27,000 mid-size to small privately owned companies in their respective
markets. Some of IESI's competitors have significantly larger operations and significantly greater financial resources than it has. In addition to national and regional firms and numerous local
companies, IESI competes in a few markets with those municipalities that maintain waste collection or disposal operations. These municipalities may have financial advantages due to their access to
user fees and similar charges, tax revenue and tax-exempt financing, and some control of the disposal of waste collected within their jurisdictions. 

        IESI
competes for collection accounts primarily on the basis of price and the quality of its services. 

        In
each market in which IESI operates a landfill, it competes for landfill business on the basis of disposal costs, geographical location and quality of operations. IESI's ability to
obtain landfill volume may be limited by the fact that integrated collection companies also operate landfills to which they send their waste. 

 Employees  

        As of December 31, 2008, IESI had approximately 2,700 employees. Approximately 614 or 23%, of IESI's employees are
covered by collective bargaining agreements negotiated with six different labour unions. Of IESI's unionized employees, 285 are represented by United Service Workers Union, INJAT, Local 339,
under a contract that will expire on August 31, 2009. Another 256 are represented by Waste Material, Recycling and General Industrial Laborers, Local 108, under a contract that expires
on February 28, 2010. An additional 28 employees are represented by the Private Sanitation Union Local 813 (affiliated with the International Brotherhood of Teamsters) under a contract
that expires on November 30, 2011. Another eight employees are represented by the League of International Federated Employees (Local 890) under a contract that expires on June 30, 2010.
Twenty employees are represented by the Teamsters Union Local 682 (affiliated with the International Brotherhood of Teamsters), under a contract that expires on November 30, 2011. Seventeen
employees are represented by International Union of Operating Engineers, Local 216, under a contract that expired on January 24, 2009. IESI has never experienced a strike or labour stoppage and
management believes that IESI's relationships with its employees are generally good. 

 Properties  

        As of December 31, 2008, IESI operated 52 collection operations, 29 transfer stations, 17 landfills,
11 recycling facilities and one transportation operation in its two regions. IESI leases various offices and facilities, including its principal executive offices in Fort Worth, Texas and its
regional executive offices in Lyndhurst, New Jersey. 

        IESI
owns more than 1,305 waste collection vehicles and 387 support vehicles. The average age for routed collection vehicles is approximately five to six years. IESI also
owns various other equipment, including, carts,
containers, commercial compactors and 327 pieces of heavy equipment used at IESI's landfills, transfer stations, and recycling facilities. IESI believes that its existing facilities and
equipment are adequate for its current operations. 

19

 
 
 

  RISK FACTORS    
    

        Our business, and an investment in our securities, is subject to certain risks, including those described below and those under the
headings "Risks and Uncertainties" and "Outlook" in management's discussion and analysis of the financial condition and results of operations of the Corporation as at and for the year ended
December 31, 2008. If any of the events or developments discussed in these risks actually occur, our business, financial condition or results of operations or the value of our securities could
be adversely affected. Additional risks and uncertainties not currently known to us, or that are currently considered immaterial, may also materially and adversely affect our business, financial
condition and results of operations. 

 Risks Related to Our Business  

 Landfill Operating Permits  

        The BFI Canada Group may not be able to obtain, renew or continue to maintain certain permits, licenses and approvals it will require
to operate its business. 

        The
growth strategy of the BFI Canada Group calls for expanding the total capacity and increasing the volume limits of a number of its facilities. Permits, licenses and approvals
to operate or expand non-hazardous solid waste landfills and transfer stations have become increasingly difficult, time consuming and expensive to obtain. Obtaining permits often takes
years as a result of numerous hearings and the time needed to comply with land use, environmental and other regulatory requirements. Granting of these permits is also often subject to resistance from
citizen groups or other entities. The ability of the BFI Canada Group to continue to sustain its vertical integration strategy will depend on its ability to
maintain its existing operations, establish new landfills and transfer stations, expand its landfills and transfer stations, and increase applicable daily or periodic tonnage allowances. Failure to
obtain the required permits to establish new landfills and transfer stations or expand the permitted capacity of its existing landfills and transfer stations could hinder vertical integration and
impair its business strategy. 

        Even
when granted, permits to expand are often not approved until the remaining permitted disposal capacity of a landfill is very low. If such permits are delayed or the
BFI Canada Group fails to obtain such permits, the BFI Canada Group may have to dispose of collected waste at landfills operated by its competitors or haul the waste long distances at a
higher cost to another of its landfills and it may incur closure costs sooner, or accrue them at a higher rate, or suffer asset impairments. Failure or excessive delays in obtaining permits could
therefore significantly increase BFI Canada Group's waste disposal expenses and have a material adverse effect on its business, financial condition, results of operation and ability to comply
with covenants in available credit facilities and thereby impair its access to capital. 

        In
addition, the BFI Canada Group has material financial obligations to pay closure and post-closure costs in respect of its landfills. The BFI Canada Group has
estimated these costs and made provisions for them, but these costs could exceed current provisions as a result of, among other things, any federal, provincial, state or local government regulatory
action including unanticipated closure and post-closure obligations. The requirement to pay increased closure and post-closure costs could substantially increase expenses for
the BFI Canada Group and cause its net income to decline. For more information on the Corporation's landfill closure and post-closure costs, please refer to the management's
discussion and analysis of the financial condition and results of operations of the Corporation for the year ended December 31, 2008. 

        In
Québec, two major approvals are required before landfill capacity can be used. The first approval is a decree issued by the Executive Council ("Cabinet") of the
Government of Québec. A decree results from satisfactory consideration and review of the proponents' application by the Minister of Sustainable Development, Environment and Parks. The
decree approves the landfill design and overall capacity in principle, and sets forth certain overriding conditions of approval. The decree is binding on the Minister of Sustainable Development,
Environment and Parks when the Minister issues the other approvals, such as the second major approval, a certificate of authorization. A certificate of authorization is required to develop and operate
a landfill and is issued on behalf of the Minister at the regional level pursuant to a further application filed by the operator once the decree is issued. The certificate of authorization typically
includes a more detailed set of conditions than those included in the decree. In the case of both the decree and the certificate of authorization, 

20

 

the
use of the overall capacity may be approved in steps. Recent decrees have provided for approval of five year partial capacity at a time. 

        In
February 2004, BFI Usine received Decree 89-2004 from the Government of Québec to expand the Lachenaie landfill site. The decree approved,
subject to several conditions, an expansion design that was capable of receiving a total projected capacity of 33 million cubic meters. The decree, and the subsequently issued certificate of
authorization, approved a maximum fillable capacity of 6.5 million cubic meters, to be used at a maximum rate of 1.3 million tonnes per year. Public hearings relating to the Lachenaie
landfill were held by the Bureau d'audiences publiques sur l'environnement ("BAPE") in the first
quarter of 2008. In April 2008, BFI Usine received Decree 375-2008 from the Government of Québec which allows a 1.6 million cubic meter (approximately
one year) expansion of the Lachenaie landfill. This decree provided the Government of Québec time to analyse the BAPE report and complete the application for the remaining lifespan of
the landfill. The BAPE's report on the public hearings was submitted in May 2008. 

        Based
on the non-hazardous solid waste received since the issuance of Decree 375-2008 and the certificate of authorization, approximately 6 months of
capacity remains available under the terms of the decrees. The BFI Canada Group has applied for and expects to receive a new decree with respect to the Lachenaie landfill as it has on numerous
previous occasions. The granting of such approvals is entirely within the discretion of the Government of Québec, and there can be no assurance that the relevant approvals will be
granted or, if granted, that they will be on the terms applied for by BFI Usine. In making its decision, the BFI Canada Group expects that the Government of Québec will
consider the Metropolitan Waste Management Plan for the Communauté Métropolitaine de Montréal, which assumes the continuance of BFI Usine operations
in Lachenaie. 

        The
landfill in Calgary, Alberta received a development permit allowing it to operate until December 31, 2010. There are no future lateral or vertical expansion possibilities
available for this site. If the development permit is extended, the operating life of the landfill will be until approximately 2013. There can be no assurance that BFI Canada Inc. will
receive this extension. 

        BFI
Canada Inc. plans to locate and develop a new landfill site in order to continue to service the Calgary market. However, there can be no assurance that
BFI Canada Inc. will be able to locate and develop a new site or obtain the necessary permits in connection therewith. 

        Although
management does not believe that any of the foregoing risks are likely to develop into material issues, there can be no assurance that this will be the case, including with
respect to any permit modifications, or that such developments will not have a material adverse effect on the business, financial condition, operating results and cash flows of the
BFI Canada Group. 

 Leverage, Restrictive Covenants and Capital Requirements  

        The ability of the BFI Canada Group to pay dividends or make other payments or advances will be subject to applicable laws and
contractual restrictions contained in the instruments governing the indebtedness of those entities (including the existing credit facilities). The degree to which the BFI Canada Group is
leveraged could have important consequences to shareholders including: the ability of the Corporation to obtain additional financing for working capital, capital expenditures or acquisitions in the
future may be limited; a significant portion of the Corporation's cash flow from operations may be dedicated to the payment of the principal of and interest on its indebtedness, thereby reducing funds
available for future operations; certain of the Corporation's borrowings will be subject to variable rates of interest, which will expose the Corporation to the risk of increased interest rates; and
the Corporation may be more vulnerable to economic downturns and be limited in its ability to withstand competitor pressures. 

        If
the Corporation undertakes acquisitions or expands its operations, its capital expenditures, including closure, post-closure and remediation expenditures, may increase.
The increase in expenditures may reduce working capital and require financing for working capital deficits. In addition, if the Corporation is required to close a landfill sooner than it currently
anticipates, or if it reduces its estimate of a landfill's remaining available volume, it may be required to incur such costs earlier or accrue liabilities for them at a higher rate. 

        The
cash needs of the Corporation will increase if the expenditures for closure and post-closure monitoring increase above its current reserves taken for these costs.
Expenditures for these costs may increase if any federal, 

21

 

provincial,
state or local government regulatory action is taken to accelerate or otherwise increase such expenditures. These factors, together with those discussed above, could substantially increase
its use of operating cash flows and therefore impair its ability to invest in its existing or new facilities. 

        The
Corporation may need to refinance its available credit facilities or other debt and there can be no assurance that it will be able to do so or be able to do so on terms as favourable
as those presently in place. If the Corporation is unable to refinance these credit facilities or other debt, or is only able to refinance these credit facilities or other debt on less favourable
and/or more restrictive terms, this may have a material adverse effect on the financial position of the Corporation, which may result in changes to the Corporation's dividend policy, including a
reduction of the amount of dividends or their suspension. In addition, the terms of any new credit facility or debt may be less favourable or more restrictive than the terms of the existing credit
facilities or other debt, which may indirectly limit or negatively impact the ability of the Corporation to pay dividends. 

 Downturns in the Worldwide Economy  

        Weakness in the worldwide economy could have a negative effect on the Corporation's operating results, including decreases in the
volume of C&D debris, declines in the volume of waste handled in our landfills and declines in recycled commodity prices. In an economic slowdown, we may also experience the negative effects of
increased competitive pricing pressure, customer turnover, reductions in commercial, industrial and residential waste collection requirements and deterioration in trade receivables collected.
Worsening economic conditions or a prolonged or recurring recession could adversely effect operating results. 

 Acquisition Strategy  

        The BFI Canada Group's growth strategy is based, in part, on its ability to acquire other non-hazardous solid waste
management businesses, particularly transfer stations and landfill operations. The success of this acquisition strategy will depend, in part, on its ability to: 

	•
	identify suitable businesses to buy;   

	•
	negotiate the purchase of those businesses on terms acceptable to it;   

	•
	complete the acquisitions within its expected time frame;   

	•
	improve the results of operations of the businesses that it buys and successfully integrate their operations into its
own; and   

	•
	respond to any concerns expressed by regulators, including anti-trust or competition law concerns. 

        The
BFI Canada Group may fail to properly complete any or all of these steps. The BFI Canada Group may not be able to find appropriate acquisition candidates, acquire those
candidates that it finds, obtain necessary permits or integrate acquired businesses effectively or profitably, and it may experience other impediments to its acquisition strategy. 

        Many
of the BFI Canada Group's competitors are also seeking to acquire collection operations, transfer stations and landfills, including competitors that have greater financial
resources than the BFI Canada Group. Increased competition may reduce the number of acquisition targets available to the BFI Canada Group and may lead to unfavourable terms as part of any
acquisition, including high purchase prices. If acquisition candidates are unavailable or too costly, the BFI Canada Group may need to change its business strategy. 

        The
BFI Canada Group's integration plan for acquisitions will contemplate certain cost savings, including the elimination of duplicative personnel and facilities. Unforeseen
factors may offset the estimated cost savings or other components of its integration plan in whole or in part and, as a result, it may not realize any cost savings or other benefits from future
acquisitions. Further, any difficulties the BFI Canada Group encounters in the integration process could interfere with its operations and reduce its operating margins. Even if the BFI Canada
Group is able to make acquisitions on advantageous terms and is able to integrate them successfully into its operations and organization, some acquisitions may not fulfill its strategy in a given
market due to factors that it cannot control, such as market position or customer base. As a result, operating margins could be less than the BFI Canada Group originally anticipated when it
made those acquisitions. It then may change its strategy with respect to that market or those businesses and decide to sell the operations at a loss, or keep those operations and recognize an
impairment of goodwill, capital or intangible assets/landfill assets. 

22

 

  
        The BFI Canada Group also cannot be certain that it will have enough capital or be able to raise enough capital by issuing equity or debt securities or through other financing
methods on reasonable terms, if at all, to complete the purchases of the businesses that it wants to buy. Acquisitions may increase its capital requirements, and thereby exacerbate the risks mentioned
under "Risk Factors". 

        The
BFI Canada Group's failure to implement its acquisition strategy could have an adverse effect on other aspects of its business strategy and its business in general. For
example, the BFI Canada Group's ability to continue to successfully implement its vertical integration strategy will depend on its ability to identify and acquire or develop additional suitable
landfills, collection operations and transfer stations and obtain necessary permits. 

        The
BFI Canada Group's acquisitions will also involve the potential risk that it will fail to assess accurately all of the pre-existing liabilities of the operations
acquired, including liabilities of the type described under "Risk Factors". 

        The
BFI Canada Group's increased size means that government regulators, such as competition law or anti-trust regulators in Canada or the United States, may
examine its acquisitions more closely. These regulators may object to certain purchases or place conditions on them that would limit their benefit to the BFI Canada Group. 

 Growth  

        The BFI Canada Group may not be able to successfully manage its growth. The BFI Canada Group's growth strategy will place
significant demands on its financial, operational and
management resources. In order to continue its growth, it will need to add administrative, management and other personnel, and make additional investments in operations and systems. The
BFI Canada Group may not be able to find and train qualified personnel, or do so on a timely basis, expand its operations and systems or expand and/or replace landfill capacity to the extent,
and in the time, required. 

 Loss of Contracts  

        The BFI Canada Group may lose contracts, including contracts with municipalities, through competitive bidding or early
termination, which would cause its revenue and profitability to decline. If the BFI Canada Group loses contracts through competitive bidding, early termination or other competitive pressures,
or if counterparties seek to renegotiate existing contracts, it may not be able to replace the lost contract revenue, which will result in a decrease in its revenue. Whether the BFI Canada
Group is the successful bidder for any particular contract is subject to significant uncertainty. 

 Reliance on Third Party Disposal Customers  

        The loss of third party disposal customers could reduce the revenues and profitability of the BFI Canada Group. Approximately
58% of the total tonnage received by the landfills owned by BFI Canada, and 60% of the total tonnage received by IESI's landfills, is derived from disposal of waste received from third party
disposal customers and the balance of the tonnage is collected by BFI Canada Holdings and IESI. Accordingly, the BFI Canada Group will be dependent upon maintaining a certain level of third
party disposal customers at its landfills in order to be able to continue to operate its landfills at profitable levels. Operating and maintaining a landfill is capital intensive and generally
requires performance bonds and letters of credit to secure performance and financial obligations. As a result, a steady volume of waste is required over the operating life of the landfill in order to
maintain profitable operations. 

        There
can be no assurance that the BFI Canada Group will maintain its relationships or continue to provide services to any particular disposal customer at current levels. There
can be no assurance that third party customers will continue to utilize these sites and pay acceptable gate rates that generate acceptable EBITDA margins for the BFI Canada Group. Decreases
could occur if new landfills open, if disposal customers of the BFI Canada Group fail to renew their contracts, if the volume of waste disposed of by customers decreases or if the
BFI Canada Group is unable to increase the gate rates charged to correspond with increasing costs of operations. In addition, new contracts for disposal services entered into by the
BFI Canada Group may not have 

23

 

terms
similar to those contained in current arrangements with customers, in which case revenues and profitability would decline. 

        A
decrease in the amount of waste disposed of at any of the BFI Canada Group's landfills or a decrease in the prices charged by the BFI Canada Group for disposal at its
landfills could have a material adverse effect on the business, financial condition and results of operations. 

 Geographic Concentration  

        The BFI Canada Group's Canadian operations are concentrated in 20 markets in the provinces of British Columbia, Alberta,
Manitoba, Ontario and Québec and are susceptible to those markets' local economies, regulations and seasonal fluctuations. 

        Our
U.S. operations are geographically concentrated in the northeastern and southern United States and susceptible to those regions' local economies, regulations and
seasonal fluctuations. 

        IESI
operates in the following ten states: Texas, Arkansas, Missouri, Oklahoma, Louisiana, Mississippi, New York, New Jersey, Pennsylvania and Maryland, as well as the
District of Columbia. Management estimates that IESI derived more than 35.3% of its revenue during 2007 and 31.8% of its revenue for 2008 from services provided in Texas, and more than 36.2% of its
revenue during 2007 and 41.0% of its revenue for 2008 from services provided in New York. The Winters Bros. acquisition in New York increased the percentage of IESI revenues earned in
2008 in New York State. Accordingly, economic downturns in Texas or New York and other factors affecting such states, such as state regulations affecting the non-hazardous
solid waste management industry or severe weather conditions could have a materially adverse affect on the business, financial condition and results of operations of the BFI Canada Group. In
addition, the costs and time involved in obtaining permits for, and the scarcity of, available landfills in the northeastern United States could make it difficult for the BFI Canada
Group to expand vertically in its Northeast Region. 

        IESI
provides significant C&D debris services in its South Region. The C&D debris market is more cyclical than the municipal solid waste market because it is based on the volume of
construction projects. If IESI's South Region suffers a recession or other economic downturn, IESI would likely experience reduced revenue from its C&D operations in that region. 

 Customer Concentration  

        IESI attributed 8.9% of its revenue in 2007 and 6.8% of its revenue for 2008 to its contracts with New York City. On
November 1, 2008, two of these contracts were renewed by New York City for three years, plus two one-year renewal options, at the City's option. 

        IESI's
contracts with New York City could be terminated by New York City upon ten days' notice. If these contracts are terminated, or not renewed, IESI may not be able to
replace the resulting lost revenue. The loss of New York City as a customer could have a material adverse effect on the business, financial condition and results of operations of the
BFI Canada Group. 

        In
addition, during 2002, New York City announced changes to its solid waste management plan that would include reducing or eliminating the City's reliance on private transfer
stations, such as the ones IESI operates in New York City. While the plan is preliminary and has undergone substantial revision, New York City continues to pursue major changes in its
system for transferring and disposing of residential waste. Since the announcement in 2002, New York City has requested proposals for alternative methods of handling residential waste. IESI has
and will continue to make proposals as requested by the City until the City decides on the final plan and contractor(s). If New York City implements changes to this system, it is possible that
IESI's existing contracts with the City would be modified or not renewed. 

 Weather  

        Seasonality and weather may temporarily affect the BFI Canada Group's revenues and expenses. The BFI Canada Group
generally experiences lower C&D debris volumes during the winter months when the construction industry is less active. Frequent and/or heavy snow and ice storms can affect revenues, primarily from
transfer station and landfill operations, which are volume based, and the productivity of collection 

24

 

operations.
Higher than normal rainfall and more frequent rain storms over a 30 to 90 day period can put additional stress on the construction industry, increased disposal expenses and lowering
the volumes of waste handled in our landfills. 

 Labour Unions  

        Efforts by labour unions to organize employees of the BFI Canada Group could divert management attention and increase operating
expenses. Management cannot predict which, if any, groups of employees may seek union representation in the future or the outcome of any collective bargaining. 

        As
of December 31, 2008, approximately 614, or 23%, of IESI's employees were covered by collective bargaining agreements negotiated with six separate labour unions. Of IESI's
unionized employees, 285 are represented by United Service Workers Union, INJAT, Local 339, under a contract that will expire on
August 31, 2009, and another 256 are represented by Waste Material, Recycling and General Industrial Laborers, Local 108, under a contract that expires on February 28, 2010. IESI
is party to collective bargaining agreements with three other labour unions, expiring in 2010 and 2011. BFI Canada has 13 collective bargaining agreements which have terms ranging from
three to five years, representing approximately 533, or 42%, of BFI Canada's employees. The collective bargaining agreements expire from 2009 to 2011. 

        The
negotiation or renegotiation of these agreements could divert management attention and the terms of any agreements could have an adverse effect on the BFI Canada Group. If the
BFI Canada Group is unable to negotiate acceptable collective bargaining agreements, it may have to wait through "cooling off" periods, which are often followed by union initiated work
stoppages, including strikes. 

 Fuel Costs  

        Fluctuations in fuel costs affect the BFI Canada Group's operating expenses and results. The price and supply of fuel is
unpredictable and fluctuates based on events outside of the BFI Canada Group's control, including geopolitical developments, supply and demand for oil and gas, actions by the Organization of
the Petroleum Exporting Countries and other oil and gas producers, war and unrest in oil producing countries, regional production patterns and environmental concerns. The BFI Canada Group will
need a significant amount of fuel to operate its collection and transfer trucks, and any price escalations or reductions in the supply will increase its operating expenses and could have a negative
impact on its consolidated financial condition, results of operations and cash flows. The BFI Canada Group will from time to time, in accordance with the terms of most of its customer
contracts, attempt to offset increased fuel costs through the implementation of fuel surcharges. However, it may not always be able to pass through all of the increased fuel costs due to the terms of
certain customers' contracts and market conditions. 

 Key Executives  

        The BFI Canada Group depends heavily on the members of its management team and their departure could cause its operating results
to suffer. The future success of the BFI Canada Group, will depend on, among other things, its ability to keep the services of these executives and to hire other highly qualified employees at
all levels. The BFI Canada Group will compete with other potential employers for employees, and it may not be successful in hiring and keeping the services of executives and other employees
that it needs. The loss of the services of, or the inability to hire, executives or key employees by the BFI Canada Group could hinder its business operations and growth. 

 Localized Decision Making  

        The BFI Canada Group depends heavily on the members of its management team and their departure could cause its operating results
to suffer. The future success of the BFI Canada Group will depend on, among other things, its ability to keep the services of these executives and to hire other highly qualified employees at
all levels. The BFI Canada Group will compete with other potential employers for employees, and it may not be successful in hiring and keeping the services of executives and other employees
that it needs. The loss of the services of, or the inability to hire, executives or key employees by the BFI Canada Group could hinder its business operations and growth. 

25

 

 Surety Bonds, Letters of Credit and Insurance  

        If the BFI Canada Group is unable to obtain performance or surety bonds, letters of credit or insurance, it may not be able to
enter into additional solid waste or other collection contracts or retain necessary landfill operating permits. Collection contracts, other municipal contracts and landfill closure and
post-closure obligations may require performance or surety bonds, letters of credit or other financial assurance to secure contractual performance or comply with provincial, state or local
laws or environmental regulations. BFI Canada and IESI, as applicable, have typically satisfied these requirements by posting bonds. In addition, as of December 31, 2008, they had
$54.8 million, and US$156.7 million, respectively, of such bonds in place. Alternatively, the BFI Canada Group may use letters of credit. Closure bonds may become more difficult
or costly to obtain in the future. If the BFI Canada Group were to draw fully upon available credit facilities or were unable to obtain performance or surety bonds or additional letters of
credit in sufficient amounts or at acceptable rates, it could be precluded from entering into additional collection contracts or obtaining or retaining landfill operating permits. Any future
difficulty in obtaining insurance also could impair the ability of the BFI Canada Group to secure future contracts that are conditional upon the contractor having adequate insurance coverage.
Accordingly, the failure of the BFI Canada Group to obtain performance or surety bonds, letters of credit or other financial assurances or to maintain adequate insurance coverage could limit
operations or violate state or local requirements and have a materially adverse effect on the business, financial condition and results of operations. 

 Uninsured and Underinsured Losses  

        The BFI Canada Group seeks to obtain and maintain, at all times, insurance coverage in respect of potential liabilities of the
BFI Canada Group and the accidental loss of value of the
assets of the BFI Canada Group from risks, in those amounts, with those insurers, and on those terms considered appropriate, taking into account all relevant factors including the practices of
owners of similar assets and operations. However, not all risks are covered by insurance, and no assurance can be given that insurance will be available consistently or on an economically feasible
basis or that the amounts of insurance will at all times be sufficient to cover each and every loss or claim that may occur involving the assets or operations of the BFI Canada Group. 

 Legislation and Governmental Regulation  

        The BFI Canada Group is subject to extensive legislation and governmental regulation that may restrict its operations or
increase its costs of operations. 

        The
BFI Canada Group's equipment, facilities and operations are subject to extensive and changing federal, provincial, state and local laws and regulations relating to
environmental protection, health, safety, training, land use, transportation and related matters. These include, among others, laws and regulations governing the use, treatment, transportation,
storage and disposal of solid and hazardous wastes and materials, air quality, water quality, permissible or mandatory methods of processing waste and the remediation of contamination associated with
the release of hazardous substances. In addition, federal, provincial, state and local governments may change the rights they grant to, and the restrictions they impose on, non-hazardous
solid waste management companies, and those changes could restrict the operations and growth of the BFI Canada Group. 

        The
BFI Canada Group's compliance with regulatory requirements is costly. The BFI Canada Group may be required to enhance, supplement or replace its equipment and
facilities and to modify landfill operations and, if it is unable to comply with applicable regulatory requirements, it could be required to close landfills. The BFI Canada Group may not be
able to offset the cost of complying with these requirements. In addition, environmental regulatory changes or an inability to obtain extensions to the life of a landfill could accelerate or increase
accruals or expenditures for closure, final closure and post-closure monitoring and obligate the BFI Canada Group to spend sums in addition to those presently accrued for
such purposes. 

        Extensive
regulations govern the design, operation and closure of landfills. For example, in October 1991, the U.S. Environmental Protection Agency ("EPA") established
minimum federal requirements for solid waste landfills under Subtitle D of The Federal Resource Conservation and Recovery Act of 1976, as amended. If IESI fails to comply with the Subtitle D
regulations, it could be required to undertake investigatory or remedial activities, curtail operations or close a landfill temporarily or permanently, or be subject to monetary penalties. 

26

 

Moreover,
if regulatory agencies fail to enforce the Subtitle D regulations vigorously or consistently, competitors whose facilities do not comply with the Subtitle D regulations or
their state counterparts may obtain an advantage over IESI. The financial obligations of the BFI Canada Group arising from any failure to comply with the Subtitle D regulations could harm its
business and earnings. 

        Certain
of the BFI Canada Group's waste disposal operations traverse state, provincial, county and the Canada/U.S. national boundaries. In the future, the BFI Canada
Group's collection, transfer and landfill operations may be affected by proposed U.S. federal legislation governing interstate shipments of waste. Such proposed federal legislation could
prohibit or limit the disposal of out-of-state waste (including waste from Canada) and may require states, under certain circumstances, to reduce the amount of waste exported
to other states. If this or similar legislation is enacted in states in which IESI operates, it could have material adverse results, including for the IESI landfills that receive a significant portion
of waste originating from out-of-state, and IESI's operations could be negatively affected. In addition, management believes that several states have proposed or have
considered adopting legislation that would regulate the interstate transportation and disposal of waste in the states' landfills. 

        Collection,
transfer and landfill operations for IESI may also be affected by "flow control" legislation. Some states and local governments may enact laws or ordinances directing waste
generated within their jurisdiction to a specific facility for disposal or processing. If this or similar legislation is enacted, state or local governments could limit or prohibit disposal or
processing of waste in transfer stations or landfills or in third party landfills used by IESI. 

        In
1996, the New York City Council enacted Local Law 42, which prohibits the collection, disposal or transfer of commercial and industrial waste without a license issued by the
New York City Business Integrity Commission, formerly known as the Trade Waste Commission (the "Business Integrity Commission"), and requires Business Integrity Commission approval of
all acquisitions or other business combinations in New York City proposed by all licensees. The need for review by the Business Integrity Commission could delay IESI's consummation of
acquisitions in New York City, which could limit its ability to expand its business there. 

        From
time to time, provincial, state or local authorities consider and sometimes enact laws or regulations imposing fees or other charges on waste disposed of at landfills. If any
significant fees are imposed in jurisdictions in which the BFI Canada Group operates and it is not able to pass the fees through to its customers, its operations and profitability could be
negatively affected. 

        The
BFI Canada Group and its senior representatives, managers and other employees must comply with the requirements of federal, provincial and state legislation related to worker
health and safety. These requirements can be onerous and include, in Canada, a requirement that any person that directs (or has the authority to direct) how another person does work or performs
a task must take reasonable steps to prevent bodily harm to any person arising from that work or task. Failure to comply with these requirements may result in criminal or quasi criminal proceedings
and related penalties. 

        The
operational and financial effects discussed above associated with compliance with the laws and regulations and changes thereto to which the BFI Canada Group will be subject
could require it to make material expenditures or otherwise materially adversely affect the way it operates its business, as well as have a material adverse effect on the business, financial condition
and results of operations. 

 Environmental Regulation and Litigation  

        The BFI Canada Group may be subject to legal action relating to compliance with environmental laws, and to civil claims from
parties alleging some harm as a consequence of migrating contamination, odours, and other releases to the environment or other environmental matters (including the acts or omissions of its
predecessors) for which the business may be responsible. It may also be subject to court challenges of its operating permits, as in the Lachenaie case noted above under "Risk
Factors — Risks Related to Our Business — Landfill Operating Permits". 

        Non-hazardous
solid waste management companies are often subject to close scrutiny by federal, provincial, state and local regulators, as well as private citizens, and may be
subject to judicial and administrative proceedings, including proceedings relating to their compliance with environmental and local land use laws. 

27

 

        In
general, environmental laws authorize federal, provincial, state or local environmental regulatory agencies and attorneys general (and in some cases, private citizens) to bring
administrative or judicial actions for violations of environmental laws or to revoke or deny the renewal of a permit. Potential penalties for such violations may include, among other things, civil and
criminal monetary penalties, imprisonment, permit suspension or revocation, and injunctive relief. These agencies and attorneys general may also attempt to revoke or deny renewal of BFI Canada
Group's permits, franchises or licenses for violations or alleged violations of environmental laws or regulations. Under certain circumstances, citizens are also authorized to file lawsuits to compel
compliance with environmental laws, regulations or permits under which the BFI Canada Group will operate and to impose monetary penalties. Surrounding landowners or community groups may also
assert claims alleging environmental damage, personal injury or property damage in connection with BFI Canada Group's operations. 

        From
time to time, the BFI Canada Group has received, and may in the ordinary course of business in the future receive, citations or notices from governmental authorities alleging
that its operations are not in compliance with its permits or certain applicable environmental or land use laws or regulations. The BFI Canada Group will generally seek to work with the
relevant authorities and citizens and citizen groups to resolve the issues raised by these citations or notices. However, the BFI Canada Group may not always be successful in resolving these
types of issues without resorting to litigation or other formal proceedings. Any adverse outcome in these proceedings, whether formal or informal, could result in negative publicity, reduce the demand
for the BFI Canada Group's services and negatively impact its revenue. A significant judgment against the BFI Canada Group, the loss of a significant permit or license or the imposition
of a significant fine could also have a material adverse effect on its financial condition and results of operations. 

        IESI's
future compliance with landfill gas management requirements under the Clean Air Act of 1970, as amended, may require installation of costly equipment, as well as operation and
maintenance costs. 

 Environmental Contamination  

        The BFI Canada Group may have liability for environmental contamination associated with its own current and former facilities as
well as third party facilities. The BFI Canada Group may also be susceptible to negative publicity if it is identified as the source of potential environmental contamination. 

        The
BFI Canada Group could be liable to federal, provincial or state governments or other parties if hazardous (or other regulated or potentially harmful) substances
contaminate or have contaminated its properties, including soil or water under its properties, or if such substances from its properties contaminate or have contaminated the properties of others. The
BFI Canada Group could be liable for this type of contamination even if the contamination did not result from its activities or occurred before the BFI Canada Group owned or operated the
properties. BFI Canada Group also could be liable for such contamination at properties to which it transported such substances or arranged to have hazardous substances transported, treated or
disposed. Certain environmental laws such as the Comprehensive Environmental Response, Compensation and Liability Act, as amended ("CERCLA"), and similar federal, provincial and state laws, impose
joint and several and strict liability in connection with environmental contamination, which means that the BFI Canada Group could have to pay all recoverable damages, even if the
BFI Canada Group did not cause or permit the event, circumstance or condition giving rise to the damages. Moreover, many substances are defined as "hazardous" under CERCLA and their presence,
even in minute amounts, can result in substantial liability. While the BFI Canada Group may seek contribution for these expenses from others, it may not be able to identify who the other
responsible parties are and it may not be able to compel them to contribute to these expenses or they may be insolvent or unable to afford to contribute. If the BFI Canada Group incurs
liability under CERCLA or similar federal, provincial or state laws and if it cannot identify other parties whom it can compel to contribute to its expenses and who are financially able to do so, it
could have a material adverse effect on our financial condition and results of operations. 

        In
addition, the BFI Canada Group has previously acquired, and may in the future acquire, businesses that may have handled and stored, or will handle and store, hazardous
substances, including petroleum products, at their facilities. These businesses may have released substances into the soil or groundwater. They also may have transported or disposed of substances or
arranged to have transported, disposed of or treated substances to or at 

28

 

other
properties where substances were released into soil or groundwater. Depending on the nature of the BFI Canada Group's acquisition of these businesses and other factors, the
BFI Canada Group could be liable for the cost of cleaning up any contamination, and other damages, for which the acquired businesses are liable. Any indemnities or warranties the
BFI Canada Group obtained or obtains in connection with the purchases of these businesses may not suffice to cover these liabilities, due to limited scope, amount or duration, the financial
limitations of the party who gave or gives the indemnity or warranty or other reasons.
Moreover, available insurance does not cover liabilities associated with some environmental issues that may have existed prior to attachment of coverage. 

        The
BFI Canada Group could be subject to legal actions brought by governmental or private parties in connection with environmental contamination or discharges. Any substantial
liabilities associated with environmental contamination, whether to federal, provincial or state environmental authorities or other parties, could have a material adverse effect on the
BFI Canada Group's financial condition and results of operations. 

        The
26-acre currently inactive Tantalo landfill, which is located on the Seneca Falls, New York property, has been identified by the State of New York as an
"Inactive Hazardous Waste Disposal Site". In September 2003, the DEC issued a consent order which requires Seneca Meadows, Inc. to develop a hazardous waste disposal site remedial
program for the landfill. Because the remediation effort is ongoing, the total cost of the remediation is subject to change. In October 2003, IESI purchased a 10 year
"Clean-up Cost Cap Insurance Policy" which provides an additional US$25 million of coverage (with a 10% co-pay) in excess of a self-insured retention for the
estimated remediation costs. As of December 31, 2008, the total Tantalo landfill remediation costs to date had not exceeded the self-insured retention. 

        If
the total cost of expected compliance costs or any remediation substantially exceeds the BFI Canada Group's applicable reserves and insurance coverage, it could have a material
adverse effect on the business, financial condition and results of operations of the BFI Canada Group. 

 Competition  

        Competition could reduce profitability or limit the growth potential of the BFI Canada Group. 

        The
North American non-hazardous solid waste management industry is very competitive, and management expects that increased consolidation in the industry will increase
competitive pressures. Competition may require the BFI Canada Group to discount its prices, which could reduce its revenue and have a material adverse effect on its business, financial
condition and results of operations. 

        The
BFI Canada Group will face competition from several larger and better capitalized competitors and a large number of local and regional competitors. Some of the competitors of
the BFI Canada Group will have significantly larger operations, significantly greater financial resources and greater name recognition or be able or willing to provide or bid their services at
a lower price. Because companies can enter the collection segment of the non-hazardous solid waste management industry with very little capital or technical expertise, there are a large
number of regional and local collection companies in the industry. The BFI Canada Group will face competition from these businesses in the markets and regions it currently serves. Similar
competition may exist in each location into which the BFI Canada Group tries to expand in the
future. In addition to national and regional firms and numerous local companies, the BFI Canada Group will compete in certain markets with those municipalities that maintain waste collection or
disposal operations. These municipalities may have financial advantages due to their access to user fees and similar charges, tax revenue and tax exempt financing, and some control of the disposal of
waste collected within their jurisdictions. 

        In
each market in which the BFI Canada Group operates a landfill, it will compete for solid waste business on the basis of disposal or "tipping" fees, geographical location and
quality of operations. The ability of the BFI Canada Group to obtain solid waste business for its landfills may be limited by the fact that some major collection companies also operate
landfills to which they send their waste. In markets in which the BFI Canada Group does not operate a landfill, its collection operations may operate at a disadvantage to fully integrated
competitors. 

        The
competitors of the BFI Canada Group could also take actions that would hurt its growth strategy, including the support of regulations that could delay or prevent it from
obtaining or maintaining permits. They 

29

 

may
also give financial support to citizen groups that oppose BFI Canada Group's plans to locate, add or expand a disposal or transfer facility at a particular location. 

        An
increase in competition could have an adverse effect on the business, financial condition and results of operations of the BFI Canada Group. 

 Provincial, State and Local Landfill Alternatives  

        Provincial, state and local requirements to reduce landfill disposal by encouraging various alternatives may adversely affect the
BFI Canada Group's ability to operate its landfills at full capacity. 

        Provinces,
states and municipalities increasingly have supported the following alternatives to or restrictions on current landfill disposal: 

	•
	reducing waste at the source, including recycling and composting;   

	•
	incinerating;   

	•
	prohibiting disposal of certain types of waste at landfills; and   

	•
	limiting landfill capacity. 

        Many
provinces and states have enacted, or are currently considering or have considered enacting, laws regarding waste disposal, including: 

	•
	requiring counties, regions and cities and municipalities under their jurisdiction to use waste planning, composting,
recycling or other programs to reduce the amount of waste deposited in landfills; and   

	•
	prohibiting the disposal of yard waste, tires and other items in landfills. 

        These
trends may reduce the volume of waste disposed of in landfills in certain areas, which could lead to the BFI Canada Group's landfills operating at a reduced capacity or
force it to charge lower prices for landfill disposal services. 

 Control of the BFI Canada Group  

        Pursuant to the Amended and Restated Securityholders' Agreement, the Retained Interest Holders are entitled to designate one of the
seven members of the Board of Directors so long as the Retained Interest Holders own at least 10% of the outstanding Shares (calculated on a fully diluted basis), including Shares that may be acquired
upon exercise of the IESI Exchange Rights associated with the Participating Preferred Shares. The Retained Interest Holders will no longer be entitled to designate members of the Board of Directors if
their direct or indirect ownership of Voting Shares (calculated in accordance with the foregoing sentence) falls below 10%. See "The
Corporation — Amended and Restated Securityholders' Agreement" for a description of the Retained Interest Holders' board representation
rights. As a result of their board representation rights, the Retained Interest Holders may be able to influence the outcome of matters submitted to the Board of Directors for approval. The interests
of the Retained Interest Holders and their affiliates may conflict with those of other Shareholders. 

 Foreign Exchange Exposure  

        In the year ending December 31, 2008, approximately 65% of the BFI Canada Group's revenues were denominated in
U.S. dollars. Significant movements in the Canada/US dollar exchange rate will have an impact on the Corporation's Consolidated Balance Sheet and Income Statement. 

 Accounting Estimates  

        The BFI Canada Group will be required to make accounting estimates and judgments in the ordinary course of business. Such
accounting estimates and judgments will affect the reported amounts of its assets and liabilities at the date of the financial statements and the reported amounts of its operating results during the
periods presented. Additionally, the BFI Canada Group will be required to interpret the accounting rules in existence as of the date of the financial statements when the accounting rules are
not specific to a particular 

30

 

event
or transaction. If the underlying estimates are ultimately proven to be incorrect, or if auditors or regulators subsequently interpret the BFI Canada Group's application of accounting
rules differently, subsequent adjustments could have a material adverse effect on its operating results for the period or periods in which the change is identified. Additionally, subsequent
adjustments could require the Corporation to restate its historical financial statements. A restatement of these financial statements could result in a material change in the price of
the Shares. 

 Internal Control Over Financial Reporting and Disclosure Controls and Procedures  

        The BFI Canada Group may face risks if there are deficiencies in its internal control over financial reporting and disclosure
controls and procedures. The Corporation's Board of Directors, in coordination with the audit committee, will be responsible for assessing the progress and sufficiency of internal controls over
financial reporting and disclosure controls and procedures and will make adjustments as necessary. However, these initiatives may not be effective at remedying any deficiencies in internal control
over financial reporting and disclosure controls and procedures. Any deficiencies, if uncorrected, could result in the Corporation's financial statements being inaccurate and in future
adjustments or restatements of its financial statements, which could adversely affect the price of the Shares and the BFI Canada Group's business, financial condition and the results
of operations. 

 Risks Related to an Investment in Shares  

 Dilution of Shareholders  

        The Corporation is authorized to issue an unlimited number of Shares, an unlimited number of Special Shares and an unlimited number of
Preferred Shares issuable in series for that consideration and on those terms and conditions as shall be established by the Board of Directors of the Corporation without the approval of Shareholders.
The Shareholders have no pre-emptive rights in connection with such further issues. The Corporation may make future acquisitions or enter into financings or other transactions involving
the issuance of securities of the Corporation which may be dilutive to existing Shareholders. 

 Future Sales of Shares by Retained Interest Holders  

        Pursuant to the IESI Exchange Rights, all or any part of the Participating Preferred Shares held by the Retained Interest Holders can
be exchanged for Shares at any time, subject to certain conditions. The Corporation has also granted the Retained Interest Holders certain registration rights. If Retained Interest Holders were to
exchange their Participating Preferred Shares for Shares and then sell substantial amounts of their Shares in the public market, the market price of the Shares could decrease. The perception among the
public that these sales will occur could also result in a decrease in the price of the Shares. As of March 25, 2009, the Retained Interest Holders owned Participating Preferred Shares
representing an approximate 14.4% indirect interest in the Corporation. The Amended and Restated Securityholders Agreement provides that any outstanding Preferred Shares must be exchanged for Shares
not later than February 20, 2010. 

 Market Conditions  

        From time to time, the stock market experiences significant price and volume volatility that may affect the market price of the Shares
for reasons unrelated to our performance. The value
of our Shares is also subject to market value fluctuations based upon factors which influence our operations, such as legislative or regulatory developments, competition, technological change and
global capital market activity. 

 Uncertainty of Future Dividend Payments and the Level Thereof  

        Dividends paid by the Corporation may fluctuate. The payment of dividends is subject to the discretion of the Board of Directors, and
the Corporation's dividend policy and the funds available for the payment of dividends from time to time will be dependent upon, among other things, operating cash flows generated by subsidiaries of
the Corporation, general business conditions, financial requirements for the Corporation's operations and to execute its growth strategy, the satisfaction of solvency tests imposed by the OBCA for the
declaration and payment of dividends and other factors that the Board of Directors may in the future consider to be relevant. See "Distributions and Capital
Structure". 

31

 

 

 
 

  DISTRIBUTIONS AND CAPITAL STRUCTURE    
    

        At December 31, 2008, the Corporation had 57,568,637 Shares outstanding and 11,137,744 Shares issuable upon the
exercise of the IESI Exchange Rights by the Retained Interest Holders. As of March 25, 2009, there were 66,068,637 Shares outstanding and 11,137,744 Shares issuable upon the
exercise of the IESI Exchange Rights by the Retained Interest Holders. The Corporation has issued 11,137,744 Special Shares to IESI in connection with the governance rights of the Retained
Interest Holders. See "Special Shares". 

 Dividends and Distributions  

        The dividends and distributions declared by the Corporation and the Fund, prior to the Conversion, for the period commencing with the
distributions declared for December 31, 2006 to December 31, 2008 are set out in the table below. 

											
	Record Date

 
	 	Distribution

per Security 	 	Total

Distribution 	 	Payment Date 	 
	 January 31, 2006
	 	$	0.1415	 	$	7,488,508	 	 	February 15, 2006	 
	 February 28, 2006
	 	$	0.1415	 	$	7,532,502	 	 	March 15, 2006	 
	 March 31, 2006
	 	$	0.1415	 	$	7,586,704	 	 	April 14, 2006	 
	 April 28, 2006
	 	$	0.1415	 	$	7,586,704	 	 	May 15, 2006	 
	 May 31, 2006
	 	$	0.1415	 	$	7,586,704	 	 	June 15, 2006	 
	 June 30, 2006
	 	$	0.1415	 	$	7,586,803	 	 	July 14, 2006	 
	 July 31, 2006
	 	$	0.1415	 	$	7,586,803	 	 	August 15, 2006	 
	 August 31, 2006
	 	$	0.1515	 	$	8,122,973	 	 	September 15, 2006	 
	 September 29, 2006
	 	$	0.1515	 	$	8,122,973	 	 	October 16, 2006	 
	 October 31, 2006
	 	$	0.1515	 	$	8,122,973	 	 	November 15, 2006	 
	 November 30, 2006
	 	$	0.1515	 	$	8,122,973	 	 	December 15, 2006	 
	 December 29, 2006
	 	$	0.1515	 	$	8,122,973	 	 	January 15, 2007	 
	 January 31, 2007
	 	$	0.1515	 	$	8,122,973	 	 	February 15, 2007	 
	 February 28, 2007
	 	$	0.1515	 	$	8,133,405	 	 	March 15, 2007	 
	 March 30, 2007
	 	$	0.1515	 	$	8,178,048	 	 	April 16, 2007	 
	 April 30, 2007
	 	$	0.1515	 	$	8,718,146	 	 	May 15, 2007	 
	 May 31, 2007
	 	$	0.1515	 	$	8,718,146	 	 	June 15, 2007	 
	 June 30, 2007
	 	$	0.1515	 	$	8,718,146	 	 	July 16, 2007	 
	 July 31, 2007
	 	$	0.1515	 	$	8,718,146	 	 	August 15, 2007	 
	 August 31, 2007
	 	$	0.1515	 	$	8,718,146	 	 	September 14, 2007	 
	 September 28, 2007
	 	$	0.1515	 	$	8,718,146	 	 	October 15, 2007	 
	 October 31, 2007
	 	$	0.1515	 	$	8,721,402	 	 	November 15, 2007	 
	 November 30, 2007
	 	$	0.1515	 	$	8,721,487	 	 	December 14, 2007	 
	 December 31, 2007
	 	$	0.1515	 	$	8,721,487	 	 	January 15, 2008	 
	 January 31, 2008
	 	$	0.1515	 	$	8,721,487	 	 	February 15, 2008	 
	 February 29, 2008
	 	$	0.1515	 	$	8,721,487	 	 	March 14, 2008	 
	 March 31, 2008
	 	$	0.1515	 	$	8,721,487	 	 	April 15, 2008	 
	 April 30, 2008
	 	$	0.1515	 	$	8,721,487	 	 	May 14, 2008	 
	 May 30, 2008
	 	$	0.1515	 	$	8,721,649	 	 	June 16, 2008	 
	 June 30, 2008
	 	$	0.1515	 	$	8,721,649	 	 	July 15, 2008	 
	 July 31, 2008
	 	$	0.1515	 	$	8,721,649	 	 	August 15, 2008	 
	 August 29, 2008
	 	$	0.1515	 	$	8,721,649	 	 	September 15, 2008	 
	 September 30, 2008
	 	$	0.1515	 	$	8,721,649	 	 	October 15, 2008	 
	 October 31, 2008
	 	$	0.1515	 	$	8,721,649	 	 	November 17, 2008	 
	 November 28, 2008
	 	$	0.1515	 	$	8,721,649	 	 	December 15, 2008	 
	 December 31, 2008
	 	$	0.0416	6	$	2,398,309	 	 	January 15, 2009	 

        On
August 18, 2008, the Board of Trustees of the Fund announced changes to the distribution policy of the Fund and the expected dividend policy of the Corporation, in order to
direct more cash flow towards 

32

 

investments
in growth that it expects will create value for investors. A monthly dividend of $0.04166 per Share was declared for the month of December 2008. The Corporation's current dividend
policy is to declare and pay quarterly dividends in arrears, at the rate of $0.125 per Share, with the first quarterly dividend payable to holders of record on March 31, 2009 to be paid on
April 15, 2009 with the remaining 2009 quarterly payments to be paid on July 15, 2009, October 15, 2009 and January 15, 2010. Subject to the discretion of the Board of
Directors, the Corporation expects to declare and pay a special quarterly dividend of $0.125 per Share to be paid on April 15, July 15, October 15 and December 31, 2009,
for aggregate expected special dividends in 2009 only of $0.50 per Share. See "Cautionary Note Regarding Forward-Looking Statements". 

        The
amount of any dividends payable by the Corporation will be at the discretion of the Board of Directors, taking into consideration, among other things, its earnings, financial
requirements for its operations, the satisfaction of solvency tests imposed by the Business Corporations Act (Ontario), or the OBCA, for the declaration
and payment of dividends and other conditions existing from time to time. 

 Shares  

        Holders of Shares are entitled to one vote per Share at meetings of the Corporation's Shareholders, to receive dividends if, as and
when declared by the Board of Directors and to receive pro rata the remaining property and assets upon our dissolution or winding-up, subject to the rights of shares having priority
over the Shares (none of which are currently issued and outstanding). 

 Special Shares  

        Pursuant to the Conversion, the Corporation issued 11,137,744 Special Shares to IESI for the benefit of the holders of the
Participating Preferred Shares. Each Special Share carries one vote
at meetings of Shareholders. However, the Special Shares carry no right to receive dividends or to receive the remaining property and assets upon our dissolution or winding-up. 

        The
number of Special Shares outstanding from time to time will be the same as the number of Shares then issuable upon the exercise in full of the rights associated with the
Participating Preferred Shares, or the IESI Exchange Rights, to indirectly exchange the Participating Preferred Shares for common shares pursuant to the Amended and Restated Securityholders'
Agreement. Upon the issuance of Shares pursuant to the IESI Exchange Rights, a corresponding number of Special Shares will be automatically cancelled without further action by the
holder thereof. 

 Preferred Shares  

        Each series of preferred shares shall consist of such number of shares and have such rights, privileges, restrictions and conditions as
may be determined by the Board of Directors prior to the issuance thereof. Holders of preferred shares, except as required by law, will not be entitled to vote at meetings of Shareholders. With
respect to the payment of dividends and distribution of assets in the event of our liquidation, dissolution or winding-up, whether voluntary or involuntary, the preferred shares of each
series shall rank on a parity with the preferred shares of every other series and are entitled to preference over the Shares and any other shares ranking junior to the preferred shares from time to
time and may also be given such other preferences over the Shares and any other shares ranking junior to the preferred shares as may be determined at the time of creation of such series. 

 Directors  

        The Corporation's constating documents provide that the Corporation shall have a minimum of three directors and a maximum of ten
directors. So long as the Retained Interest Holders hold 10% or more of the outstanding Voting Shares, there shall be seven Directors. The Directors supervise the activities and manage the affairs of
the Corporation. 

        Directors
are appointed at each annual meeting of Shareholders to hold office for a term expiring at the close of the next annual meeting. The holder of the Special Shares is entitled to
appoint one or more Directors, subject to certain restrictions described in the Amended and Restated Securityholders' Agreement. In the event 

33

 

that
any Director appointed by the holder of the Special Shares resigns or ceases to serve as Director for any reason during his or her term of office, the resulting vacancy will be filled by another
individual appointed by
the holder of the Special Shares. See also "The Corporation — Amended and Restated Securityholders' Agreement". 

 Book-Entry Only System  

        Registration of interests in and transfers of the Shares are made only through the book-entry only system administered by
CDS (the "Book-Entry Only System"). Shares must be purchased, transferred and surrendered for redemption through a participant in the CDS depository service. All rights of a
Shareholder must be exercised through, and all payments or other property to which the Shareholder is entitled, are made or delivered by, CDS or the CDS participant through which the Shareholder holds
the Shares. Upon purchase of any Shares, the Shareholder will receive only a customer confirmation from the registered dealer which is a CDS participant and from or through which the Shares
are purchased. 

        In
many jurisdictions, the ability of a beneficial owner of Shares to pledge those Shares or otherwise take action with respect to the Shareholder's interest in those Shares (other than
through a CDS participant) may be limited due to the lack of a physical certificate. 

 Registrar and Transfer Agent  

        The Registrar and Transfer Agent for the Shares is Computershare Investor Services Inc., at its principal office in Toronto,
Ontario. The Corporation maintains the register for the Special Shares at its principal office in Toronto, Ontario. 

        The
Corporation has the option to terminate registration of the Shares through the Book-Entry Only System. At all times, in the case of the Special Shares, and upon the
termination of the Book-Entry Only System, in the case of Shares, each holder of Voting Shares or its duly authorized agent nominee will be entitled to receive certificates representing
such Voting Shares in fully registered form. 

 
 

  MANAGEMENT    
    

 Directors and Officers  

        Currently, a seven member Board of Directors is responsible for the management of the Corporation. The Corporation has an Audit
Committee, a Compensation Committee, Governance and Nominating Committee and an Environmental, Health and Safety Committee, and may establish such other committees as the Board of Directors deems
appropriate from time to time. The composition of these board committees is governed by the requirements of the Amended and Restated Securityholders' Agreement. The following table sets out, for each
of the individuals who serve as the Directors and executive officers of the Corporation, the person's name, municipality of residence, position held, principal occupation and Committee memberships.
Each of the 

34

 

Directors
was elected at the Fund's annual and special meeting of Unitholders held on May 13, 2008 for a term expiring at the following annual meeting, or upon the election of
his successor. 

					
	Name and Municipality

of Residence 	 	Offices Held 	 	Principal Occupation 
	KEITH A. CARRIGAN(1)

Caledon, Ontario

Canada	 	Director; Vice-Chairman & Chief Executive Officer, BFI Canada Ltd.; President and Chief Executive Officer, BFI Canada Inc.	 	Vice-Chairman & Chief Executive Officer, BFI Canada Ltd.
	
CHARLES F. FLOOD(1)

Fort Worth, Texas

United States	
 	
Director; President, BFI Canada Ltd.; President and Chief Executive Officer, IESI	
 	
President, BFI Canada Ltd.
	
JOSEPH D. QUARIN

Toronto, Ontario

Canada	
 	
Executive Vice-President, BFI Canada Ltd.; Chief Operating Officer, BFI Canada Inc.	
 	
Chief Operating Officer, BFI Canada Inc.
	
THOMAS J. COWEE

Colleyville, Texas

United States	
 	
Chief Financial Officer, BFI Canada Ltd.; Senior Vice President, Chief Financial Officer, Treasurer and Assistant Secretary, IESI	
 	
Chief Financial Officer, BFI Canada Ltd.
	
WILLIAM CHYFETZ

Toronto, Ontario

Canada	
 	
Vice President, General Counsel and Secretary, BFI Canada Ltd.; Vice President, General Counsel and Secretary, BFI Canada Inc.	
 	
Vice President, General Counsel and Secretary, BFI Canada Ltd.
	
DANIEL M. DICKINSON(1)(2)(3)

Northfield, Illinois

United States	
 	
Director	
 	
Managing Partner, Thayer/Hidden Creek Partners
	
JAMES J. FORESE(4)

Naples, Florida

United States	
 	
Director	
 	
Operating Partner and Chief Operating Officer, Thayer/Hidden Creek Partners
	
DANIEL R. MILLIARD(2)(3)(4)

Port Carling, Ontario

Canada	
 	
Director	
 	
Corporate Director
	
DOUGLAS KNIGHT(2)(3)(4)

Toronto, Ontario

Canada	
 	
Director	
 	
Executive
	
JOSEPH H. WRIGHT(2)(3)(4)

Toronto, Ontario

Canada	
 	
Director; Non-Executive Chairman	
 	
Corporate Director

Notes 

	(1)
	Mr. Charles
F. Flood is the chair of the Environmental, Health and Safety Committee of our board of directors. Mr. Keith A. Carrigan and
Mr. Daniel M. Dickinson are members of the Environmental, Health and Safety Committee.

	(2)
	Mr. Daniel
R. Milliard is the chair of the Governance and Nominating Committee of our board of directors. Mr. Daniel M. Dickinson,
Mr. Joseph H. Wright and Mr. Douglas Knight are members of the Governance and Nominating Committee.

	(3)
	Mr. Daniel
R. Milliard is the chair of the Compensation Committee of our board of directors. Mr. Daniel M. Dickinson, Mr. Joseph H.
Wright and Mr. Douglas Knight are members of the Compensation Committee.

	(4)
	Mr. James
J. Forese is the chair of the Audit Committee of our board of directors. Mr. Joseph H. Wright, Mr. Daniel R. Milliard and
Mr. Douglas Knight are members of the Audit Committee. 

35

 

 Biographies  

        The following are brief profiles of the Directors of the Corporation and the executive officers named above. 

Keith A. Carrigan, Director, Vice-Chairman & Chief Executive Officer, BFI Canada Ltd. 

Mr. Carrigan
has been the President and Chief Executive Officer of BFI Canada Ltd. and its predecessors since the June 2000 acquisition of their assets from Allied Waste
Industries, Inc. and its affiliates ("Allied"). He was responsible for successfully acquiring, assimilating and improving the operations of the BFI Canada Group after the acquisition.
Prior to joining the BFI Canada Group, Mr. Carrigan was involved in the development and/or management of various non-hazardous solid waste management and
recycling businesses. Mr. Carrigan has been involved with the solid waste management industry for most of his career, which spans more than 29 years. Most notably, he was Vice President
of Waste Management, Inc. ("WMI") in the United States, and President of WMI Waste Management of Canada Corporation. 

Charles F. Flood, Director, President, BFI Canada Ltd. 

Mr. Flood
is one of the founders of IESI and has been IESI's Chief Executive Officer, President and a member of IESI's board of directors since IESI's inception. From 1989 to 1995, he was
employed with WMI, as Group President from 1993 to 1995 in the northeastern United States and Canada, Regional Vice President from 1991 to 1993 in the south central United States and as
Vice President of Operations in Texas from 1989 to 1991. Mr. Flood was President of Laidlaw Waste Services' U.S. solid waste operations from 1986 to 1987. Mr. Flood was President
of the United States and Canada solid waste operations for GSX Corporation from 1984 to 1986. Mr. Flood was the Region Vice President of the Southern Region of SCA Services, Inc.,
from 1976 to 1984. Mr. Flood has over 39 years of experience in the solid waste management industry. Mr. Flood has a B.Sc. in education from the University of Miami and is
currently a Director of the Detachable Container Association. Mr. Flood is also a past director and past Chairman for the Environmental Industry Association, the parent of the National Solid
Waste Management Association and Waste Equipment Technology Association. 

Joseph D. Quarin, Executive Vice-President, BFI Canada Ltd. 

Mr. Quarin
has been the Executive Vice President of BFI Canada Ltd. and Chief Operating Officer of BFI Canada Inc. (formerly BFI Canada Holdings) since
September 2005. Prior to then he was Vice President Finance of BFI Canada Holdings from July 2000 to February 2002 and Chief Financial Officer of BFI Canada Holdings
from February 2002 to September 2005. Prior to July 2000, Mr. Quarin was an associate with NB Capital Partners from February 2000 to July 2000, and from
June 1995 to January 2000, Mr. Quarin held various positions, including manager, senior manager and vice president, with KPMG Corporate Finance Inc. Mr. Quarin has
an M.B.A. from the Richard Ivey School of Business, a B.Comm from Queen's University, and is a Chartered Accountant. 

Thomas J. Cowee, Vice President, Chief Financial Officer, BFI Canada Ltd. and Senior Vice President, Chief Financial Officer, Treasurer
and Assistant Secretary, IESI Corporation 

Mr. Cowee
has been Vice President, Chief Financial Officer of IESI Holdings and its predecessors since January 2007, Chief Financial Officer since September 2005 and IESI
Corporation's Chief Financial Officer, Senior Vice President, Treasurer and Assistant Secretary since 2000. From 1997 to 2000, Mr. Cowee was IESI Corporation's Chief Financial Officer, Vice
President, Treasurer and Secretary. From 1995 to 1997, Mr. Cowee was Assistant Corporate Controller of USA Waste Services, Inc. Prior to that, beginning in 1979, Mr. Cowee held
various positions with Waste Management: from 1994 to 1995, Mr. Cowee was Division Vice President and Controller in its Texas operations, and from 1993 to 1994, Mr. Cowee was Vice
President and Regional Controller in its Pennsylvania Hauling Region — East Group. Mr. Cowee has over 27 years of financial management experience in
the solid waste management industry. Mr. Cowee has a B.Sc. in accounting from Ohio State University. 

William Chyfetz, Vice President, General Counsel and Secretary, BFI Canada Ltd. 

Mr. Chyfetz
has been Vice President, General Counsel and Secretary of BFI Canada Ltd. and its predecessors since April 25, 2002. He also held various senior management
positions with BFI Canada and 

36

 

its
predecessors for more than five years prior to BFI Canada Holdings' acquisition of the assets of Browning-Ferris Canada. Mr. Chyfetz has a B.Comm. from McGill University and an LL.B.
from Osgoode Hall Law School. He is also a Chartered Accountant. 

Daniel M. Dickinson, Director 

Mr. Dickinson
has been a member of IESI's board of directors since May 2001. Mr. Dickinson has been employed since 2001 by, and is currently a Managing Partner of, Thayer/Hidden
Creek Partners, a private equity investment firm located in Washington, D.C. Prior to joining Thayer/Hidden Creek Partners, Mr. Dickinson spent 15 years in mergers &
acquisitions, most recently as Co-Head of Global Mergers & Acquisitions at Merrill Lynch. Mr. Dickinson is on the board of directors of Caterpillar Inc.
Mr. Dickinson has a J.D. and an M.B.A. from The University of Chicago and a B.S. in Mechanical Engineering and Materials Science, magna cum laude, from Duke University. 

James J. Forese, Director 

Mr. Forese
has been a member of IESI's board of directors since October 2003. Mr. Forese joined Thayer/Hidden Creek Partners in July 2003 and currently serves as an
Operating Partner and Chief Operating Officer. From 1996 to 2003, Mr. Forese worked for IKON Office Solutions, most recently as the Chairman and Chief Executive Officer. Prior to joining IKON,
Mr. Forese spent 36 years with IBM Corporation, most recently as Chairman of IBM Credit Corporation. In addition, Mr. Forese held numerous other positions during his tenure at IBM
Corporation including as a senior executive with IBM World Trade Europe/Middle East/Africa and IBM World Trade Americas, President of the Office Products Division, Corporate Vice President and
Controller and Corporate Vice President of Finance. Mr. Forese currently serves on the board of directors of Spherion Corporation, as a Non-Executive Chairman. Mr. Forese
earned a B.E.E. in Electrical Engineering from Rensselaer Polytechnic Institute and an M.B.A. from Massachusetts Institute of Technology. 

Daniel R. Milliard, Director 

Mr. Milliard
previously served as President and Chief Executive Officer of Sunwell Technologies Inc. from August 2007 to September 2008, as the Chief Legal and Business
Development Officer at Charles Cole Memorial Hospital from July 2005 to June 2006, the Interim Chief Executive Officer of Natural Convergence Inc. from December 2003 to
May 2004, the Chief Executive Officer of GT Group Telecom Inc. from September 1999 to February 2003 and President, Chief Operating Officer and a director of Hyperion
Communications from May 1992 to March 1999 and from March 1999 to August 1999 Vice Chairman and President. Mr. Milliard is a graduate of The Directors College
Chartered Director program. Mr. Milliard was Chief Executive Officer of GT Group Telecom Inc. which, in June 2002, while Mr. Milliard was acting in that capacity, made a
proposal under the Companies' Creditors Arrangement Act ("CCAA"). GT Group Telecom Inc. emerged from CCAA court protection in February 2003 and was acquired by 360 Networks. 

Joseph H. Wright, Director and Non-Executive Chairman 

Mr. Wright
has been the Managing Partner of Barnagain Capital since February 2001. He was formerly Managing Partner of Crosbie & Company Inc., and prior to that he was
President and Chief Executive Officer for Swiss Bank Corporation (Canada). Mr. Wright is currently the Non-Executive Chairman and Director of the Corporation. He also serves on the
board of directors of ROC Pref Corp. During his professional career Mr. Wright spent 23 years with Citibank as a lending officer, eight and a half years with Burns Fry as an investment
banker and two years as President of Swiss Bank Canada. Mr. Wright was an officer and director of Hip Interactive Inc. from August 2002 until April 2005. Hip
Interactive Inc. was made the subject of bankruptcy proceedings in July 2005, after Mr. Wright ceased to be an officer and director. 

Douglas Knight, Director 

Mr. Knight
is President of St. Joseph Media, Inc. and has held that position since 2006. From 2003 to 2005, Mr. Knight served as Chairman and Chief Executive Officer of
ImpreMedia, LLC in New York. He has also served as Publisher and Chief Executive Officer of The Financial Post and of The Toronto Sun in Toronto. 

37

 

He
is a director of Xstrata Canada Corporation and a trustee of the Governor General's Performing Arts Awards Foundation. Mr. Knight is a graduate of the University of Toronto and has an M.Sc.
from the London School of Economics. 

        The
directors and senior executive officers of the BFI Canada Group and its subsidiaries, as a group, as of March 6, 2009, beneficially own, directly or indirectly, or
exercise control or direction over, approximately 1,625,000 Shares, representing approximately 2.5% of the outstanding Shares. 

 
 

  MARKET FOR SECURITIES    
    

        The Shares are listed and posted for trading on the Toronto Stock Exchange (the "TSX") under the symbol BFC. The price ranges
and trading volume of the Shares and, prior to the Conversion, the Units, in 2008 on the TSX were as follows: 

											
	 
	 	Toronto Stock Exchange 	 
	Month (2008)

 
	 	HIGH ($) 	 	LOW ($) 	 	VOLUME 	 
	 January
	 	$	26.65	 	$	23.49	 	 	3,523,774	 
	 February
	 	$	27.00	 	$	24.04	 	 	1,818,153	 
	 March
	 	$	26.18	 	$	20.71	 	 	3,299,843	 
	 April
	 	$	22.90	 	$	21.05	 	 	3,614,183	 
	 May
	 	$	24.44	 	$	21.61	 	 	2,326,566	 
	 June
	 	$	24.94	 	$	23.12	 	 	1,458,764	 
	 July
	 	$	23.44	 	$	20.02	 	 	2,026,140	 
	 August
	 	$	23.43	 	$	17.02	 	 	6,182,658	 
	 September
	 	$	20.10	 	$	15.51	 	 	4,011,071	 
	 October
	 	$	18.30	 	$	12.06	 	 	4,833,470	 
	 November
	 	$	15.47	 	$	8.62	 	 	3,019,777	 
	 December
	 	$	10.50	 	$	7.50	 	 	4,311,791	 

        The
Special Shares are not listed or quoted on a marketplace. See "Distributions and Capital Structure — Special
Shares". 

 
 

  MATERIAL CONTRACTS    
    

        The following are the only material contracts, other than contracts entered into in the ordinary course of business, which have been
entered into by the Corporation, the Fund and its subsidiaries within the most recently completed fiscal year or before the most recently completed fiscal year but still in force and
in effect: 

	•
	The Arrangement Agreement dated as of August 18, 2008 among the Fund, 6814832 Canada Limited,
4264126 Canada Limited and 1768248 Ontario Limited pursuant to which the Fund, 6814832 Canada Limited, 4264126 Canada Limited and 1768248 Ontario Limited implemented
the Arrangement; and   

	•
	The Amended and Restated Securityholders' Agreement dated October 1, 2008 between the Corporation, IESI Holdings
and IESI, as trustee on behalf of the Retained Interest Holders. 

 
 

  AUDIT COMMITTEE INFORMATION    
    

        The Audit Committee of the Board of Directors is presently comprised of the following members: Mr. Joseph J. Wright,
Mr. James J. Forese, (Chair), Mr. Daniel R. Milliard and Mr. Douglas Knight. The composition of the Audit Committee from time to time shall be consistent with the requirements of
the Amended and Restated Securityholders' Agreement. Each member of the Audit Committee is independent and financially literate within the meaning of applicable securities laws including National
Instrument 52-110 of the Canadian Securities Administrators, as amended from time to time. 

38

 

 Relevant Education and Experience  

        Each member of the Audit Committee has acquired significant financial experience and exposure to accounting and financial issues. 

        Mr. Forese
served as Chairman and Chief Executive Officer of IBM Credit Corporation and Chairman and Chief Executive Officer of IKON Office Solutions for five years.
Mr. Forese also previously held the positions of Corporate Vice President, Finance and Corporate Vice President and Controller with IBM Corporation. He holds an M.B.A. from Massachusetts
Institute of Technology. 

        Mr. Wright
has been the Managing Partner of Barnagain Capital since February 2001. He was formerly Managing Partner of Crosbie & Company Inc., and prior to
that he was President and Chief Executive Officer for Swiss Bank Corporation (Canada). Mr. Wright is currently the Chairman and Director of BFI Canada Ltd. During his professional
career, Mr. Wright spent 23 years with Citibank as a lending officer, approximately nine years with Burns Fry as an investment banker and two years as President of Swiss Bank Canada.
During all of these years he was responsible for review of financial statements and financial analysis. He has served on many audit committees and also served as the chair of four audit committees. 

        Mr. Milliard
previously served as an executive officer of two public companies. He was the Chief Executive Officer of GT Group Telecom Inc. and was at various times Vice
Chairman, President, Chief Operating Officer and a director of Hyperion Communications. Mr. Milliard holds a B.S. in Business Administration, a M.A. in Business and a J.D. in Law.
Mr. Milliard is a graduate of The Directors College Chartered Director program. 

        Mr. Knight
is President of St. Joseph Media, Inc. Mr. Knight has previously served as Chairman and Chief Executive Officer of ImpreMedia, LLC in
New York, Publisher and Chief Executive Officer of The Financial Post and of The Toronto Sun in Toronto. He is a director of Xstrata Canada Corporation and a trustee of the Governor General's
Performing Arts Awards Foundation. Mr. Knight is a graduate of the University of Toronto and has an M.Sc. from the London School of Economics. 

 Pre-Approval Policies and Procedures  

        The Audit Committee has established a policy of pre-approving all non-audit services to be performed for the
Corporation by its external auditors, subject to a review of the compatibility of the non-audit engagement with the external auditors' independence. The Committee may not engage the
external auditors to perform those specific non-audit services proscribed by law or regulation. The Committee may delegate authority to one or more members with respect to the authority to
grant pre-approvals of permitted non-audit services, to the extent permitted by applicable law. 

 Audit Fees  

        Deloitte & Touche LLP billed the Corporation and its subsidiaries $1,599,744 and $1,250,491 for 2008 and 2007,
respectively, for audit services. 

 Audit-Related Fees  

        Deloitte & Touche LLP billed the Corporation and its subsidiaries $94,410 and $96,482 for 2008 and 2007, respectively,
for audit-related services. 

 Tax Fees  

        Deloitte & Touche LLP billed the Corporation and its subsidiaries $292,845 and $283,754 for 2008 and 2007, respectively,
for tax compliance, tax advice and tax planning services. 

 All Other Fees  

        Not applicable. 

39

 

 Audit Committee Charter  

        The charter of the Audit Committee is attached to this annual information form as Schedule A". 

 
 

  INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS    
    

        The completion of the Transaction and the Conversion involved a number of matters that have resulted in ongoing arrangements between
the Fund, as predecessor to the Corporation, its subsidiary entities and the Retained Interest Holders. See "The Corporation — Amended and
Restated Securityholders' Agreement". 

 
 

  INTERESTS OF EXPERTS    
    

        Deloitte & Touche LLP, Chartered Accountants, Licensed Public Accountants, is the auditor of the Corporation and prepared
an auditors' report dated February 26, 2009 in respect of the Corporation's consolidated financial statements with accompanying notes as at and for the years ended December 31, 2008 and
2007. Deloitte & Touche LLP has advised that they are independent with respect to the Corporation within the meaning of the Rules of Professional Conduct of the Institute of Chartered
Accountants of Ontario. 

        Torys LLP
is counsel to the Corporation, and provided a tax opinion relating to the Conversion set out in the management information circular of the Fund dated August 26,
2008 (the "Conversion Circular"). Based on securityholdings as of August 25, 2008, the partners and associates of Torys LLP held less than 1% of the outstanding securities of
the Fund. 

        CIBC World
Markets Inc. ("CIBC World Markets") provided the Board of Trustees of the Fund with a fairness opinion in connection with the Conversion, a copy of which
is attached to the Conversion Circular. Based on securityholdings as of August 18, 2008, the partners and associates of CIBC World Markets held less than 1% of the outstanding securities
of the Fund. CIBC World Markets and certain of its affiliates act as a trader and dealer, both as principal and agent, in major financial markets and, as such, may have had at that date
positions in the securities of the Fund. 

 
 

  ADDITIONAL INFORMATION    
    

        Additional information including the Corporation's directors' and officers' remuneration and indebtedness, principal holders of the
Corporation's securities and securities authorized for issuance under equity compensation plans, if applicable, will be contained in the Corporation's information circular for its next annual meeting
of Shareholders, to be held later in 2009. 

        Additional
financial information is provided in the Corporation's audited consolidated financial statements for the year ended December 31, 2008 and the management's discussion
and analysis related thereto in the Corporation's annual report for the year ended December 31, 2008. 

        You
may access further information about the Corporation including disclosure documents, reports, statements or other information that the Corporation files with the Canadian securities
regulatory authorities through SEDAR at www.sedar.com and on the Corporation's web site at www.bficanada.com. 

40

 
 

  SCHEDULE A — AUDIT COMMITTEE CHARTER    
    

BFI CANADA LTD.  

AUDIT COMMITTEE CHARTER  

Approved
by the Board of Directors

on October 1, 2008 

 

 
 

  BFI CANADA LTD. (the "Corporation")
  AUDIT COMMITTEE CHARTER    
    

1.     RESPONSIBILITY  

The
Audit Committee is responsible for assisting the Board of Directors of the Corporation in fulfilling their oversight responsibilities in relation to: 

	•
	the integrity of the Corporation's financial statements;   

	•
	the Corporation's compliance with legal and regulatory requirements as they relate to the Corporation's financial
statements;   

	•
	the qualifications, independence and performance of the Auditor;   

	•
	internal controls and disclosure controls;   

	•
	the performance of the Corporation's internal audit function; and   

	•
	performing the additional duties set out in this Charter or otherwise delegated to the Audit Committee by
the Board. 

2.     MEMBERS  

The
Board of Directors shall appoint a minimum of three Directors to be members of the Audit Committee of the Corporation. The members of the Audit Committee shall be selected by the Board of
Directors on recommendation of the Governance and Nominating Committee of the Corporation, and shall be selected based upon the following, to the extent that the following are required under
applicable law;  

	•
	each member shall be an Independent Director;   

	•
	each member shall be financially literate or agree to become financially literate within a reasonable period of time
following the member's appointment;   

	•
	at least one member shall have accounting or financial expertise; and   

	•
	at least a majority of the members shall be residents of Canada. 

For
the purpose of this Charter, the term "Independent Director" shall have the meaning attributed thereto in Multilateral Instrument 52-110 Audit
Committees as amended from time to time. The term "financially literate" shall mean the ability to read and understand a balance sheet, an income statement, a cash flow
statement and the notes attached thereto, or such other definition as may be acceptable to the Toronto Stock Exchange from time to time. The term "accounting or related financial experience" shall
mean the ability to analyze and interpret a full set of financial statements, including the notes thereto, in accordance with Canadian Generally Accepted Accounting Principles ("GAAP"), or such other
definition as may be acceptable to the Toronto Stock Exchange from time to time. 

3.     CHAIRMAN  

Each
year, the Board of Directors shall appoint one member to be Chairman of the Audit Committee. If, in any year, either the Board of Directors does not appoint a Chairman, the incumbent Chairman
shall continue in office until a successor is appointed. 

4.     TENURE  

Each
member shall hold office until his or her term as a member of the Audit Committee expires or is terminated. 

ii

 

5.     REMOVAL AND VACANCIES  

Any
member may be removed and replaced at any time by the Board. The Board shall fill vacancies in the Audit Committee by appointment from among the members of the Board. If a vacancy exists on the
Audit Committee, the remaining members may exercise all its powers so long as a quorum remains in office. 

6.     DUTIES  

The
Audit Committee shall have the duties set out below as well as any other duties that are specifically delegated to the Audit Committee by the Board.  

	(a)
	Appointment and Review of Auditor

The
Auditor is ultimately accountable to the Audit Committee as representatives of the shareholders of the Corporation. Accordingly, the Audit Committee shall evaluate and be responsible for the
Corporation's relationship with the Auditor. Specifically, the Audit Committee shall: 

	•
	select, evaluate and nominate the Auditor to be proposed for appointment or reappointment, as the case may be, by the
shareholders or unitholder;   

	•
	review the Auditor's engagement letter;   

	•
	at least annually, obtain and review a report by the auditor describing the auditor's internal quality control procedures
and a report from the auditor confirming that they have been reviewed and are in good standing with the appropriate independent oversight body such as the Canadian Public Accountability Board or the
Public Company Accounting Oversight Board, or other governmental or professional authorities.

 

	(b)
	Confirmation of Independence of Auditor

At
least annually, and before the Auditor issues its report on the annual financial statements, the Audit Committee shall: 

	•
	ensure that the Auditor submits a formal written statement describing all relationships between the Auditor and the
Corporation;   

	•
	discuss with the Auditor any disclosed relationship or services that may affect the objectivity and independence of the
Auditor; and   

	•
	obtain written confirmation from the Auditor that it is objective and independent within the meaning of the Rules of
Professional Conduct/Code of Ethics adopted by the provincial institute or order of Chartered Accountants to which it belongs.

 

	(c)
	Rotation of Engagement Partner/Lead Partners

The
Audit Committee shall, after taking into account the opinions of management, evaluate the performance of the Auditor and the engagement partner/lead partners and shall rotate the engagement
partner/lead partners when required or necessary.  

	(d)
	Pre-Approval of Non-Audit Services

The
Audit Committee shall pre-approve the retaining of the Auditor for any non-audit service, provided that no approval shall be provided for any service that is prohibited
under the rules of the Canadian Public Accountability Board or the Independence Standards of the Canadian Institute of Chartered Accountants. Before the retaining of the Auditor for any
non-audit service, the Audit Committee shall consider the compatibility of the service with the Auditor's independence. The Audit Committee may pre-approve the retaining of the
Auditor for the engagement of any non-audit services by establishing policies and procedures to be followed prior to the appointment of the Auditor for the provision of such
non-audit services. In addition, the Audit Committee may delegate to one or more members the authority to pre-approve the retaining of the Auditor for any non-audit
service to the extent permitted by applicable law. Between scheduled Audit Committee meetings, the Chair of the Audit Committee subject to the policy approved by the Board, is authorized to
pre-approve audit or 

iii

 

non-audit
service engagement fees and terms. At the next Audit Committee meeting, the Chair of the Audit Committee will report to the Audit Committee any such pre-approval
given.  

	(e)
	Communications with Auditor

The
Audit Committee shall meet privately with the Auditor as frequently as the Audit Committee feels is appropriate for the Audit Committee to fulfill its responsibilities (which shall not be less
frequently than quarterly) to discuss any items of concern to the Audit Committee or the Auditor, such as: 

	•
	matters that will be referred to in the Auditor's management letter;   

	•
	whether or not the Auditor is satisfied with the quality and effectiveness of the financial recording procedures
and systems;   

	•
	the extent to which the Auditor is satisfied with the nature and scope of the Auditor's examination.

 

	(f)
	Review of Audit Plan

The
Audit Committee shall review a summary of the Auditor's audit plan in advance for each audit.  

	(g)
	Review of Audit Fees

The
Audit Committee has the direct responsibility for approving the Auditor's fee. In approving the Auditor's fee, the Audit Committee should consider, among other things, the number and nature of
reports issued by the Auditors, the quality of the internal controls, the size, complexity and financial condition of the Corporation and the extent of internal audit and other support provided by the
Corporation to the Auditor.  

	(h)
	Review of Annual Audited Financial Statements

The
Audit Committee shall review the annual audited financial statements, together with the Auditor's report thereon, before recommending them for approval by the Board, to assess whether or not they
present fairly in all material respects in accordance with GAAP the financial condition, results of operations and cash flows of the Corporation. The Audit Committee shall also review the MD&A
relating to the annual audited financial statements. 

In
conducting their review, the Audit Committee should: 

	•
	discuss the annual audited financial statements and MD&A with management and the Auditor;  

	•
	consider the quality of, and not just the acceptability of, the accounting principles applied, the reasonableness of
management's judgments and estimates that have a significant effect upon the financial statements, and the clarity of the disclosures in the financial statements;   

	•
	discuss with the Auditor its report which addresses:  

	–
	all critical accounting policies and practices to be used;   

	–
	all alternative treatments of financial information within GAAP that have been discussed with management of the
Corporation, ramifications of the use of alternative disclosures and treatments, and the treatment preferred by the Auditors; and   

	–
	other material written communication between the Auditor and management of the Corporation, such as any management letter
or schedule of unadjusted differences;   

	•
	discuss any analyses prepared by management or the Auditor that set out significant financial reporting issues and
judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP;   

	•
	discuss the effect of off-balance sheet transactions, arrangements, obligations (including contingent
liabilities) and other relationships with unconsolidated entities or other persons that may have a material current or future effect on the Corporation's financial condition, changes in financial
condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues and expenses; 

iv

 

	•
	consider any changes in accounting practices or policies and their impact on financial statements of the Corporation;  

	•
	discuss with management, the Auditor and, if necessary, legal counsel, any litigation, claim or other contingency,
including tax assessments, that could have a material effect upon the financial position of the Corporation, and the manner in which these matters have been disclosed in the financial statements;  

	•
	discuss with management and the Auditor correspondence with regulators or governmental agencies, employee complaints or
published reports that raise material issues regarding the Corporation's financial statements or accounting policies;   

	•
	discuss with the Auditor any special audit steps taken in light of any material weaknesses in internal control;  

	•
	discuss with the Auditor any difficulties encountered in the course of the audit work, including any restrictions on the
scope of their procedures and access to requested information, accounting adjustments proposed by the Auditor that were not applied (because they were immaterial or otherwise), and significant
disagreements with management;   

	•
	consider any other matter which in its judgment should be taken into account in reaching its recommendation to the Board
concerning the approval of the financial statements;   

	•
	satisfy itself that appropriate accounting policies and practices have been selected and applied consistently; and  

	•
	satisfy itself that management has established appropriate procedures to comply with applicable legislation for the
remittance of taxes, pension monies and employee remuneration.

 

	(i)
	Review of Interim Financial Statements

The
Audit Committee shall also engage the Auditor to review the interim financial statements prior to the Audit Committee's review of such financial statements. The Audit Committee should discuss the
interim financial statements and related MD&A with management and the Auditor and, if satisfied that the interim
financial statements present fairly in all material respects in accordance with GAAP the financial condition, results of operations and cash flows, approve the interim financial statements and review
the related MD&A on behalf of the Board.  

	(j)
	Review of Other Financial Information

The
Audit Committee should generally discuss earnings releases, as well as the nature of financial information and earnings guidance provided to analysts and rating agencies in accordance with the
Corporation's disclosure policy.  

	(k)
	Review of Prospectuses and Other Regulatory Filings

The
Audit Committee shall review all other financial statements of the Corporation that require approval by the Board before they are released to the public, including, without limitation, financial
statements for use in prospectuses or other offering or public disclosure documents and financial statements required by regulatory authorities.  

	(l)
	Review of Internal Audit Function

The
Audit Committee shall review the mandate of the internal audit function, the budget, planned activities and organizational structure of the internal audit function to ensure that it is independent
of management and has sufficient resources to carry out its mandate.  

	(m)
	Relations with Management

The
members shall meet privately with management as frequently as the Audit Committee feels is appropriate to fulfill its responsibilities, which shall not be less frequently than quarterly, to
discuss any areas of concern to the Audit Committee or management. 

v

 

The
Audit Committee shall, subject to regulatory or professional guidelines, recommend to the Board policies relating to hiring former partners or employees of the Auditor who were engaged on the
Corporation's account.  

	(n)
	Oversight of Internal Controls and Disclosure Controls

The
Audit Committee shall review with management the adequacy of the internal controls that have been adopted to safeguard assets from loss and unauthorized use and ensure the accuracy of the
financial records. 

The
Audit Committee shall review with management the controls and procedures that have been adopted to ensure the disclosure of all material information about the Corporation and its subsidiaries that
is required to be disclosed under applicable law or the rules of those exchanges on which securities of the Corporation are listed or quoted.  

	(o)
	Legal Compliance

The
Audit Committee shall review with legal counsel any legal matters that may have a significant effect on the Corporation's financial statements. The Audit Committee should review with legal counsel
material inquiries received from regulators and governmental agencies. The Audit Committee shall review any material matters arising from any known or suspected violation of the Corporation's Code of
Conduct and any material concerns regarding questionable accounting or auditing matters raised through the Corporation's ethics response line.  

	(p)
	Risk Management

The
Audit Committee shall meet periodically with management to discuss the Corporation's policies with respect to risk assessment and management.  

	(q)
	Taxation Matters

The
Audit Committee shall review the status of taxation matters of the Corporation.  

	(r)
	Confirmation from CEO and CFO

The
Audit Committee shall obtain confirmation from the Chief Executive Officer and the Chief Financial Officer (and considering the external auditors' comments, if any, thereon) to their
knowledge that: 

	(i)
	the
audited financial statements, together with any financial information included in the annual management's discussion and analysis and annual information
form, fairly present in all material respects the Corporation's financial condition, results of operations and cash flows, as of the date and for the periods presented in such filings; and

	(ii)
	that
the interim financial statements, together with any financial information included in the interim management's discussion and analysis, fairly present
in all material respects the Corporation's financial condition, results of the operations and cash flows, as of the date and for the periods presented in such filings.

 

	(s)
	Appointment and Replacement of the CFO

The
Audit Committee shall approve the appointment and replacement of the Chief Financial Officer and review with the Chief Financial Officer the appointment and replacement of other members of senior
management who will be involved in financial reporting. 

The
Audit Committee shall, in conjunction with the Governance and Nominating Committee, review succession plans for the Chief Financial Officer and the Controller. 

7.     COMPLAINTS PROCEDURE  

The
Audit Committee shall establish a procedure for the receipt, retention and follow-up of complaints received by the Corporation regarding accounting, internal controls, disclosure
controls or auditing matters 

vi

 

and
a procedure for the confidential, anonymous submission of concerns by employees of the Corporation regarding accounting, internal controls, or auditing matters. 

8.     REPORTING  

The
Audit Committee shall report to the Board on: 

	•
	the Auditor's independence;   

	•
	the performance of the Auditor and the Audit Committee's recommendations regarding the reappointment or termination of
the Auditor;   

	•
	the performance of the internal audit function;   

	•
	the adequacy of the Corporation's internal controls and disclosure controls;   

	•
	the Audit Committee's review of the annual and interim financial statements of the Corporation and any GAAP
reconciliation, including any issues with respect to the quality or integrity of the financial statements, and shall recommend whether or not the Board should approve the financial statements and any
GAAP reconciliation;   

	•
	the Audit Committee's review of the annual and interim MD&A;   

	•
	The Audit Committee's review of the Annual Information Form;   

	•
	the Corporation's compliance with legal and regulatory matters to the extent they affect the financial statements of the
Corporation; and   

	•
	all other material matters dealt with by the Audit Committee. 

9.     REVIEW AND DISCLOSURE  

This
Charter should be reviewed by the Audit Committee at least annually and be submitted to the Governance and Nominating Committee of the Corporation for consideration with such amendments as the
Audit Committee proposes and for recommendation to the Board for approval with such further amendments as the Governance and Nominating Committee proposes. 

This
Charter may also be posted on the Corporation's Web site. 

10.   MEETINGS  

The
time and place at which meetings of the Audit Committee shall be held, and procedures at such meetings shall be determined from time to time by, the Audit Committee, unless otherwise determined by
the by-laws of the Corporation; provided that notice of every such meeting shall be given to the auditors of the Corporation, and provided further that meetings shall be convened whenever
requested by the auditors or any member of the Audit Committee in accordance with the Business Corporations Act (Ontario). 

The
Secretary of the Corporation shall, upon the request of the Audit Committee Chairman, any member of the Audit Committee, the external auditors of the Corporation, the President and Chief Executive
Officer of the Corporation or the Chief Financial Officer of the Corporation, call a meeting of the Audit Committee by letter, telephone, facsimile, telegram or other communication equipment, by
giving at least 48 hours notice, provided that no notice of a meeting shall be necessary if all of the members are present either in person or by means of conference telephone or if those
absent have waived notice or otherwise signified their consent to the holding of such meeting. 

Any
member of the Audit Committee may participate in the meeting of the Audit Committee by means of conference telephone or other communication equipment, and the member participating in a meeting
pursuant to this paragraph shall be deemed, for purposes hereof, to be present in person at the meeting. 

The
Audit Committee may invite such officers, directors and employees of the Corporation and its subsidiaries and the external auditors of the Corporation as it may see fit, from time to time, to
attend at meetings of the Audit Committee. 

vii

 

A
quorum for the transaction of business of the Audit Committee shall consist of two members of the Audit Committee. 

The
Audit Committee shall keep minutes of its meetings which shall be submitted to the Board of Directors of the Corporation. 

The
Audit Committee may, from time to time, appoint any person who need not be a member to act as a secretary at any meeting. 

11.   RETENTION OF EXPERTS  

The
Audit Committee may engage such special legal, accounting or other experts, without Board approval and at the expense of the Corporation, as it considers necessary to perform its duties. 

viii

QuickLinks

Exhibit 4.1

TABLE OF CONTENTS

BFI CANADA LTD. ANNUAL INFORMATION FORM FOR THE YEAR ENDED DECEMBER 31, 2008 DATED MARCH 25, 2009

FORWARD-LOOKING STATEMENTS

FINANCIAL DISCLOSURE

THE CORPORATION

INDUSTRY OVERVIEW

BUSINESS OF THE BFI CANADA GROUP

RISK FACTORS

DISTRIBUTIONS AND CAPITAL STRUCTURE

MANAGEMENT

MARKET FOR SECURITIES

MATERIAL CONTRACTS

AUDIT COMMITTEE INFORMATION

INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

INTERESTS OF EXPERTS

ADDITIONAL INFORMATION

SCHEDULE A — AUDIT COMMITTEE CHARTER

BFI CANADA LTD. (the "Corporation") AUDIT COMMITTEE CHARTER

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