INFORMATION MEMORANDUM

SHORT-TERM PROMISSORY NOTES

of

SHOPPERS DRUG MART CORPORATION$300,000,000

The Short Form Promissory Notes offered hereby have not been and will not be registered under the United StatesSecurities Act of 1933, as amended (“Securities Act”) and, subject to certain exceptions, may not be offered or soldin the United States or to, or for the account or benefit of, U.S. persons at any time. Terms used above have themeanings given to them by Regulation S under the Securities Act.

This Information Memorandum does not in any way obligate Shoppers Drug Mart Corporation to accept an offer topurchase any of the Short Term Promissory Notes. No person has been authorized to give any information or tomake any representation not contained in this Information Memorandum and, if given or made, such information orrepresentation must not be relied upon as having been authorized.

OCTOBER 14, 2003

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SHOPPERS DRUG MART CORPORATION

Shoppers Drug Mart Corporation (the “Corporation” or “Shoppers”) is the licensor of full-service retaildrug stores operating under the name Shoppers Drug Mart® (Pharmaprix® in Quebec). These stores constitute theonly national drug store group, as well as the largest drug store group in Canada based on number of stores andsystem sales. Shoppers holds the number one or two market share position in prescription sales in most of Canada’smajor metropolitan centres. At June 14, 2003, there were 856 Shoppers Drug Mart/Pharmaprix retail drug storesowned and operated under license by associates (“Associates”). An Associate is a pharmacist owner of acorporation that is licensed to operate a retail drug store at a specific location using the Corporation’s trademarks.The Corporation’s stores are located in prime retail locations, making Shoppers stores among the most convenientretail outlets in Canada. Approximately 76% of all Canadians live within ten kilometres of a Shoppers store. Infiscal 2002, Shoppers stores recorded system sales of approximately $5.439 billion.

The Shoppers Drug Mart® name is one of Canada’s most widely recognized brands. Over a 40-yearperiod, Shoppers has grown steadily through a combination of innovative marketing techniques, new store openingsand acquisitions and its Associate concept. Today, Shoppers is the leading player in Canada’s retail drug storemarketplace and is the number one provider of pharmacy products and services. Over the past five fiscal years, theCorporation has experienced significant growth in its pharmacy business, with sales of prescription drugs growingat a compound annual growth rate of 11.1% per year. During fiscal 2002, prescription drugs accounted forapproximately 46.2% of Shoppers’ system sales.

The Corporation has successfully leveraged its pre-eminent market position in pharmacy and its convenientstore locations to capture a significant share of the market in front store merchandise. Front store sales categoriesinclude over-the-counter medications, health and beauty aids, cosmetics and fragrances, everyday household needsand seasonal products. Shoppers also offers a broad range of high quality private label products marketed under theLife Brand®, Rialto® and Quo® trademarks, and value-added services such as the HealthWatch® program, whichoffers patient counselling on medications and disease management. In addition, the Corporation continues to buildupon its market position through the Shoppers OptimumTM loyalty card program under which there are more than7.2 million cardholders, making this one of the largest loyalty programs in Canada.

In 2000, Shoppers initiated a revitalized capital expenditure program to accelerate new store openings,expand and remodel existing stores and relocate less profitable stores to superior locations. The Corporation’sremodelled and relocated stores have experienced strong improvements in sales and profitability. The Corporationhas continued its new store opening and relocation program, having opened or acquired 57 drug stores, 31 of whichwere relocations, in 2002. During the first half of 2003, the Corporation opened or acquired 17 drug stores, three ofwhich were relocations. The Corporation intends to continue making significant investments in its store base withthe goal of increasing the number and average size of its stores. This will entail opening more larger format stores,some of which will have 12,000 to 14,000 square feet of selling space, and many of which will be convenient, free-standing locations. These larger format stores offer customers greater convenience and a broader selection of frontstore products, while maintaining the high level of service for which Shoppers stores are known.

In addition, the 46 Shoppers Home Health Care® stores owned and operated by Shoppers makes theCorporation the largest Canadian retailer of home health care products and services.

Shoppers was continued under the Canada Business Corporations Act on May 30, 2002. The registeredoffice of the Corporation is located at 243 Consumers Road, Toronto, Ontario M2J 4W8.

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DESCRIPTION OF THE SHORT TERM PROMISSORY NOTES

Principal Amount: The maximum aggregate principal amount of the Notes outstanding at any one time willnot exceed $300 million in Canadian funds or the equivalent amount in any othercurrency.

Purpose of Issue: The net proceeds from the sale of the Notes will be used by the Corporation for workingcapital and other general corporate purposes. Proceeds of the initial issuance of Noteswill be used to refinance existing indebtedness of the Corporation.

Form of Notes: The Notes will be issued in negotiable form, payable to bearer or a named payee and willbe interest-bearing or issued at a discount to mature at the principal amount.

The Notes, at the option of the Corporation, may be issued in “book entry only” form(the “Book Entry Notes”), in which case such Notes must be purchased or transferredthrough participants (“Participants”) in The Canadian Depository for Securities Limited(“CDS”) debt clearing service, which includes securities brokers and dealers, banks andtrust companies. Indirect access to the CDS book entry system is also available to otherinstitutions (“Indirect Participants”) that maintain custodial relationships with aParticipant, either directly or indirectly.

The Corporation will cause Book Entry Notes to be delivered to, and registered in thename of, CDS or its nominee. Each purchaser of a Book Entry Note will receive acustomer confirmation of purchase from the registered dealer from whom such Note ispurchased in accordance with the practices and procedures of that registered dealer.Practices of registered dealers may vary, but generally customer confirmations are issuedpromptly after execution of a customer order.

No holder of Book Entry Notes will be entitled to a certificate or other instrument fromthe Corporation or CDS evidencing that person’s interest in or ownership of such Note,or will be shown on the records maintained by CDS, except through an agent of theholder who is a Participant or an Indirect Participant of CDS. Registration of interests in,and transfers of, Book Entry Notes will only be made through the debt clearing service ofCDS.

Neither the Corporation nor the registered dealers who sell the Notes will assume anyliability for: (a) any aspect of the records relating to the beneficial ownership of the BookEntry Notes held by CDS or the payments relating thereto; (b) maintaining, supervisingor reviewing any records relating to the Book Entry Notes; or (c) any advice orrepresentation made by or with respect to CDS, including those contained in thisInformation Memorandum and relating to the rules governing CDS or any action to betaken by CDS or at the direction of its Participants. The rules governing CDS providethat it acts as the agent and depository for the Participants and CDS has a statutory dutyto enforce payment of the Notes on behalf of the Participants. As a result, Participantsmust look solely to CDS and holders of Book Entry Notes must look solely toParticipants for the payment of the principal and interest on the Book Entry Notes oncesuch payment is made by or on behalf of the Corporation to CDS.

The ability of a holder to pledge Book Entry Notes or take action with respect thereto(other than through a Participant or an Indirect Participant) may be limited due to thelack of physical certificates.

The Corporation will have the option to terminate the book entry system through CDS, inwhich case Notes in certificated form payable to bearer or to the order of a holder thereofwill be issued to holders of Book Entry Notes or their nominees.

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As of the date of this Information Memorandum, only Notes payable in Canadian dollarsare eligible to be Book Entry Notes. Accordingly, Notes payable in currencies other thanCanadian dollars will be issued in certificated form payable to bearer or to a namedpayee. If CDS and its Participants decide to introduce non-Canadian dollar short termpromissory notes into the CDS debt clearing service in the future, Notes in certificatedform will then be issued in “book-entry” form on the same basis as that described abovefor the Book Entry Notes.

The Book Entry Notes will be subject to the Depository Bills and Notes Act (Canada).

Currency andDenominations ofIssuance

The Notes will be issued in lawful money of Canada or the United States or such othercurrencies as the Corporation may from time to time permit. Notes issued in lawfulmoney of Canada or the United States will be issued in multiples of $1,000 subject to aminimum of $100,000 in lawful money of Canada or the equivalent thereof at the date ofissue in any other currency.

Maturities: Not more than 365 days from the date of issue.

Rates: Available upon request from CIBC World Markets Inc., RBC Dominion Securities Inc.,Scotia Capital Inc. and The Toronto-Dominion Bank (the “Dealers”).

Delivery: Subject to confirmation by the Corporation, on applications made prior to 12:00 noonToronto time, Notes in certificated form can be arranged for same-day delivery throughCanadian Imperial Bank of Commerce in Toronto to the purchaser or its agent againstpayment by certified cheque, bank draft or wire transfer. In other principal cities inCanada, delivery will be made by a bank letter of undertaking. Delivery of Book EntryNotes will be made in accordance with the rules established by CDS.

Payment: At maturity, payment of the principal of, and interest on, Notes in certificated form willbe made by or on behalf of the Corporation in the currency of issue at any of thebranches of Canadian Imperial Bank of Commerce or such other Canadian charteredbank designated in the Note. All payments on Book Entry Notes will be made inaccordance with the rules established by CDS. All payments on Book Entry Notes willbe made by the Corporation to the Corporation’s authorized issuing agent which willthen make payments to CDS and such payments will be forwarded by CDS to itsParticipants, by Participants to holders of Book Entry Notes or by Participants to IndirectParticipants and thereafter to holders of Book Entry Notes.

Bank Lines of Credit: The Corporation maintains lines of credit with its bankers in amounts sufficient for itsoperations, including commercial paper activity.

Permissible Purchasers: The Notes have not been registered under the United States of America’s Securities Actof 1933, as amended and are not being offered for sale in the United States of America,its States, political subdivisions, territories or possessions (the “United States”) or to acitizen, national or resident of the United States or a corporation, partnership, trust orother entity organized under the laws of or resident in the United States or to any personpurchasing for a re-sale to, for the account of, or for benefit of, any such person.

Rating: As of the date hereof, Dominion Bond Rating Services Limited has rated the Notes as R-1 (low).

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Eligibility: As outlined and qualified in the opinion of Osler, Hoskin & Harcourt LLP, counsel to theCorporation, which opinion forms part of this Information Memorandum, the Notes are,at the date on which the opinion is provided, either not precluded as investments under orare authorized investments under:

Insurance Companies Act (Canada)Pension Benefits Standards Act, 1985 (Canada)Trust and Loan Companies Act (Canada)Supplemental Pension Plans Act (Québec)An Act respecting insurance (Québec) for an

Insurer incorporated under the laws of theProvince of Québec, other than a guarantee fund

An Act respecting trust companies and savingsCompanies (Québec) for a trust investing itsown funds and funds received as deposits anda savings corporation investing its own funds

Loan and Trust Corporations Act (Ontario)Pension Benefits Act (Ontario)Insurance Act (Ontario)Trustee Act (Ontario)Loan and Corporations Act (Alberta)Employment Pension Plans Act (Alberta)Insurance Act (Alberta)Financial Institutions Act (British Columbia)Pension Benefits Standards Act (British Columbia)The Insurance Act (Manitoba)The Pension Benefits Act (Manitoba)The Trustee Act (Manitoba)Pension Benefits Act (Nova Scotia)Trustee Act (Nova Scotia)Pension Benefits Act (New Brunswick)Trustee Act (New Brunswick)Pension Benefits Act, 1997 (Newfoundland)The Pension Benefits Act, 1992 (Saskatchewan)

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EXTRACT FROM THE BY-LAWS OF SHOPPERS DRUG MART CORPORATION AUTHORIZING BORROWING

BORROWING AND SECURITIES

14 – BORROWING

14.1 Borrowing

Without limit to the powers of the directors as provided in the Act, the directors may from time to time on behalf ofthe Corporation:

(a) borrow money upon the credit of the Corporation;

(b) issue, reissue, sell or pledge debt obligations of the Corporation;

(c) give a guarantee on behalf of the Corporation to secure the performance of an obligation of anyperson; and

(d) mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of theCorporation, owned or subsequently acquired, to secure any obligation of the Corporation.

The directors may from time to time authorize any director or directors, or officer or officers, of the Corporation, tomake arrangements with reference to the money borrowed or to be borrowed as aforesaid, and as to the terms andconditions of the loan thereof, and as to the securities to be given therefor, with power to vary or modify sucharrangements, terms and conditions and to give such additional securities for any moneys borrowed or remainingdue by the Corporation as the directors of the Corporation may authorize, and generally to manage, transact andsettle the borrowing of money by the Corporation.

14.2 Delegation

Subject to restrictions in the Act, the articles and any by-laws, the directors may from time to time delegate to adirector, a committee of directors or an officer of the Corporation or such other person or persons so designated bythe board all or any of the powers of the directors to such extent and in such manner as the directors shall determineat the time of each such delegation.

The undersigned, Bryna Goldberg, Executive Vice President, Legal Affairs, General Counsel and Secretaryof the Corporation (above referred to as the “Corporation”), hereby certifies that the foregoing is a true andcomplete extract of section 14 of by-law No. 1B of Shoppers Drug Mart Corporation, and that it has not beenamended or repealed and is in full force and effect as at the date hereof.

DATED as of October 14, 2003.

Bryna GoldbergBryna GoldbergExecutive Vice President, Legal Affairs, GeneralCounsel and Secretary

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SHOPPERS DRUG MART CORPORATION

Resolution of the Board of Directors Authorizingthe Issue and Sale of Short Term Promissory Notes

''BE IT RESOLVED THAT:

1. Shoppers Drug Mart Corporation (the “Corporation”) is hereby authorized to borrow money or otherwise incurindebtedness from time to time including, but not limited to, the issue and sale of commercial paper in the formof short term promissory notes (the “Notes”), whether in certificated form or “book entry only” form, providedthat (i) each Note shall be issued in a denomination of not less than $100,000 in lawful money of Canada or theequivalent thereof in any other currency; (ii) each Note shall have a maturity date of not more than 365 daysfrom the date of issue; and (iii) the aggregate principal amount of the Notes outstanding at any one time shallnot exceed $300 million in lawful money of Canada or the equivalent amount in any other currency. Thelimitation set forth in this resolution as to the aggregate principal amount of the Notes is directory only andshall not in any way limit the rights of a holder of any Notes.

2. Any two officers of the Corporation who hold the office of Chairman, Chief Executive Officer, ExecutiveVice-President and Chief Financial Officer, Executive Vice-President, Legal Affairs, General Counsel andSecretary, Senior Vice-President, Treasurer, Assistant Treasurer, Senior Vice-President, Finance, Vice-President, Corporate Controller, Vice-President, Retail Accounting or Vice-President, Taxation (an“Authorized Officer”) are hereby authorized and empowered on behalf of the Corporation from time to time toexecute, either by manual, facsimile or electronic signature, and deliver the Notes in such forms and amounts(subject to the limitations expressed in paragraph 1 above) and upon such terms (including maturity dates andrates of interest or discount) as such Authorized Officers may determine, such determination to be conclusivelyevidenced by the execution and delivery thereof by such Authorized Officers, and each such Note shall, in thecase of Notes in certificated form, when authenticated or countersigned by an authorized signatory of anissuing agent of the Corporation and, in the case of Notes in certificated form and Notes in “book entry only”form, executed and delivered on behalf of the Corporation as aforesaid, constitute a valid and bindingobligation of the Corporation notwithstanding that any person whose facsimile signature appears thereon shallnot be an Authorized Officer at the time of the issuance and delivery of such Note.

3. Each Authorized Officer, acting alone, is hereby authorized and directed to do or cause to be done any and allsuch other acts and things (including, without limitation, the selection and appointment of one or more issuingagents and one or more selling agents for the Notes and the preparation and distribution of an informationmemorandum relating to the offering of the Notes) and to execute and deliver any and all agreements,documents, instruments and writings as such Authorized Officer deems necessary or desirable in order (i) tocarry out and give full effect to this resolution; and (ii) after the issuance of the Notes and so long as any Notesare outstanding, to discharge or cause to be discharged all obligations, and to exercise or cause to be exercisedany and all rights, of the Corporation under the Notes and any other agreement or document and under anystatute, rule or regulation of any jurisdiction or authority relating to or governing the Notes.

4. Any and all prior actions of any officers of the Corporation in connection with the matters contemplated by thisand the foregoing resolutions be, and each such action is hereby, approved, ratified, confirmed and adopted inall respects.”

The undersigned, Bryna Goldberg, Executive Vice President, Legal Affairs, General Counsel and Secretary of theCorporation (above referred to as the “Corporation”), hereby certifies that the foregoing is a true and correct copy ofan excerpt of a resolution of the Board of Directors of Shoppers Drug Mart Corporation and that the said resolutionis in full force and effect, unamended, as of the date hereof, and no proceedings have been taken or are pending forrepeal or amendment.

DATED as of October 14, 2003.Bryna GoldbergBryna GoldbergExecutive Vice President, Legal Affairs, GeneralCounsel and Secretary

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Rights of Rescission or Damages for Purchasers in Nova Scotia

Purchasers of Notes resident in the Province of Nova Scotia have the following rights:

Where this Information Memorandum or any amendment hereto or any advertising or sales literature (asdefined in the Securities Act (Nova Scotia)) in respect of the Notes contains a misrepresentation, a purchaser towhom the Information Memorandum has been delivered and who purchases Notes shall be deemed to have reliedupon such misrepresentation if it was a misrepresentation at the time of purchase and the purchaser has a right ofaction for damages against the seller but may elect to exercise a right of rescission against the seller, in which casethe purchaser shall have no right of action for damages against the seller, provided that:

(a) in an action for rescission or damages, the defendant will not be liable if it proves that the purchaserpurchased the Notes with knowledge of the misrepresentation;

(b) in an action for damages, the defendant is not liable for all or any portion of the damages that it proves donot represent the depreciation in value of the Notes as a result of the misrepresentation relied upon; and

(c) in no case shall the amount recoverable under the right of action described herein exceed the price atwhich the Notes were offered.

The right of action for rescission or damages described herein is conferred by section 138 of the SecuritiesAct (Nova Scotia) and is in addition to and without derogation from any right the purchaser may have at law.

Pursuant to section 146 of the Securities Act (Nova Scotia), no action shall be commenced to enforce theright of action conferred by section 138 thereof unless an action is commenced to enforce that right not later than120 days after the date on which payment was made for the Notes or after the date on which the initial payment forthe Notes was made where payments subsequent to the initial payment are made pursuant to a contractualcommitment assumed prior to, or concurrently with, the initial payment.

For the purposes of the Securities Act (Nova Scotia) ''misrepresentation'' means

(i) an untrue statement of material fact, or

(ii) an omission to state a material fact that is required to be stated or that is necessary to make astatement not misleading in light of the circumstances in which it was made.

TOR_P2Z:734502.9 200310141338

Osler, Hoskin & Harcourt LLP

Barristers & SolicitorsBox 50, 1 First Canadian Place, Toronto, Ontario, Canada M5X 1B8T 416·362·2111 F 416·862·6666 osler.com

T O R O N T O O T T A W A C A L G A R Y M O N T R É A L N E W Y O R K

October 14, 2003

Shoppers Drug Mart Corporation243 Consumers RoadToronto, OntarioM2J 4W8

Dear Sirs and Madams:

Re: Issue of Short Term Promissory Notes

We have acted as counsel to Shoppers Drug Mart Corporation (the ''Corporation'') in connection with theauthorization and proposed issue and sale in all provinces of Canada by the Corporation of unsecured negotiableshort term promissory notes (the ''Notes'') having maturity dates not more than 365 days from their respective datesof issue and being in denominations or principal amounts of not less than $100,000 in lawful money of Canada, orthe equivalent thereof at the date of issue in any other currency. The Notes may be issued in certificated form,payable to the bearer or to a specified payee, or may be issued in “book entry only” form. Each Note will also havethe terms more particularly described and referred to in the Corporation's information memorandum (the''Information Memorandum'') dated October 14, 2003 with respect to the proposed sale of the Notes, of which thisopinion forms part and will be in the form of the specimen form of Note included in the Information Memorandum.The Corporation has limited the aggregate principal amount of Notes which may be outstanding at any time to $300million in Canadian funds or the equivalent amount in any other currency and the Notes are not convertible orexchangeable into or accompanied by a right to purchase another security.

We have examined originals or copies, certified or otherwise identified to our satisfaction, of the articles of theCorporation, the by-laws of the Corporation, a certified copy of a resolution passed by the directors of theCorporation relating to the offering of the Notes, the form of the Note set forth in the Information Memorandum,and such other public and corporate records, certificates, statutes, regulations and other documents as we haveconsidered necessary or appropriate for the purposes of this opinion. In such examinations we have assumed thegenuineness of all signatures and the authenticity of all documents submitted to us as originals, the conformity toauthentic originals of all documents submitted to us as certified, notarial or true copies or facsimiles thereof and theveracity of all information contained in such documents. We have further assumed that (i) the Corporation is not a“market intermediary” as such term is defined in the Securities Act (Ontario) and Securities Act (Newfoundland);and (ii) any person or company that offers and sells the Notes in the Province of Manitoba and holds a restrictedregistration under the Securities Act (Manitoba) is authorized to trade in the Notes pursuant to such restrictedregistration.

As to various questions of fact relevant to our opinion which we have not verified independently, we have reliedupon certificates of, or letters from, government officials or the Corporation, or its officers.

As to matters of law in the provinces of Canada other than Ontario, Alberta and Quebéc we have relied uponopinions of counsel in such provinces. To the extent that such opinions are based on any assumption or are madesubject to any limitation or qualification, this opinion is based on the same assumption and is subject to the samelimitation or qualification.

Except to the extent this opinion is rendered in reliance on the opinions of counsel described above, this opinion isrendered solely with respect to the laws of the Provinces of Ontario, Alberta and Quebéc and the federal laws ofCanada applicable therein in effect on the date hereof.

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In expressing the opinions set forth in Paragraph 1 below that the Corporation is a corporation continued under thelaws of Canada, we have relied upon a certificate of compliance issued by Industry Canada dated October 14, 2003.

With respect to the opinion expressed in paragraph 3, the enforceability of the Notes may be limited by (i) anyapplicable bankruptcy, insolvency, reorganization, receivership, moratorium, arrangement or winding-up laws orother similar laws affecting the enforcement of creditors' rights generally; (ii) equitable principles, including theprinciple that equitable remedies such as specific performance and injunction may only be granted in the discretionof the court of competent jurisdiction; (iii) the equitable or statutory power of the court having jurisdiction to stayproceedings before it and the execution of judgments; (iv) the applicable laws regarding limitations of actions; and(v) with respect to Notes payable in a currency other than that of Canada, the Currency Act (Canada), whichprovides that judgment in courts in Canada may be obtained only in Canadian currency.

Based upon and subject to the foregoing, we are of the opinion that:

1. The Corporation is a corporation continued under the laws of Canada.

2. The Corporation has all necessary corporate power to create and issue the Notes and all necessarycorporate action has been taken by the Corporation to authorize the borrowing of money through the saleof the Notes and the creation, issue and delivery of the Notes.

3. The Notes, in the specimen form set forth in the Information Memorandum, when (i) duly executed, eithermanually or by facsimile signature, by any two officers of the Corporation who hold the office ofChairman, Chief Executive Officer, Executive Vice-President and Chief Financial Officer, Executive Vice-President, Legal Affairs, General Counsel and Secretary, Senior Vice President, Treasurer, AssistantTreasurer, Senior Vice-President, Finance, Vice-President, Corporate Controller, Vice-President, RetailAccounting or Vice-President, Taxation; (ii) in the case of Notes in certificated form, authenticated orcountersigned by an authorized signatory of an issuing agent of the Corporation duly appointed by theCorporation; and (iii) delivered by or on behalf of the Corporation for value, will constitute valid andbinding obligations of the Corporation enforceable in accordance with their terms.

4. The French language texts of the Information Memorandum and the specimen form of Note are, in allmaterial respects, complete and proper translations of the respective English language texts thereof. Alllaws of the Province of Québec relating to the use of the French language will have been complied with inconnection with the offer and sale of the Notes provided that (i) purchasers of the Notes in certificatedform receive the Notes in bilingual form; and (ii) prospective purchasers of the Notes have received copiesof the English and French language versions of the Information Memorandum delivered at the same timeor copies of the French language version thereof only or, in the case of individuals so requesting in writing,copies of the English language version only.

5. The Corporation may either directly (other than in Newfoundland and Labrador) or through agents (whichagents, however, must be either properly registered dealers or exempt from registration requirements in thecase of sales of Notes in Manitoba, Ontario, Québec and Newfoundland and Labrador) offer and sell theNotes:

(a) in Alberta, Manitoba, Ontario, Prince Edward Island and Newfoundland and Labrador;

(b) in Nova Scotia:

(i) to the public (other than to individuals);

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(ii) to individuals, provided that the Notes have a rating at or above one of the followingrating categories (each, an "Approved Credit Rating”) issued by a credit ratingorganization shown below (each, an “Approved Credit Rating Organization”) for theNotes or a category that replaces one of the following ratings if:

(A) there has been no announcement of the Approved Credit Rating Organizationthat the rating of the security or instrument to which the approved credit ratingwas given may be down-graded to a rating category that would not be anApproved Credit Rating; and

(B) none of the following Approved Credit Rating Organizations have rated thesecurity or instrument in a rating category that is not an Approved CreditRating:

Approved Credit Rating Organization Approved RatingCBRS ............................................................................................................... A-1Dominion Bond Rating Service Limited ......................................................... R-1-LDuff & Phelps Credit Rating Co...................................................................... D-1Fitch IBCA, Inc. ............................................................................................. A-1Moody’s Investors Service, Inc. ..................................................................... P-1Standard & Poor’s Corporation ...................................................................... A-1Thomson Bank Watch, Inc. ............................................................................ TBW-2

provided that in each case the Information Memorandum is accompanied by a description of theright of action granted by the Securities Act (Nova Scotia) to purchasers in Nova Scotia whopurchase Notes in reliance upon a misrepresentation contained in the Information Memorandum;

(c) in British Columbia, provided that the Notes have a credit rating from one of the following ratingagencies set out below that is equal to or higher than the level indicated below:

Rating Agency RatingDominion Bond Rating Services Limited........................................................... R-1 (low)Moody’s Investor Services, Inc. ......................................................................... P-1Standard & Poor’s Corporation .......................................................................... A-1

and the Corporation or any of its agents offering and selling the Notes (and in addition, the persontrading or acting as an advisor) does not know and ought not reasonably know that the ratingagency referred to herein announced that the credit rating of the Notes may be down-graded to alevel below the level indicated in the table above;

(d) in Saskatchewan, provided that:

(i) the Notes are not convertible or exchangeable into or accompanied by a right to purchaseanother security other than a security described in General Ruling/Order 45-509 of theSaskatchewan Financial Services Commission;

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(ii) the Notes have a rating at or above one of the following rating categories (each an“Approved Credit Rating”) issued by a credit rating organization shown below (each an“Approved Credit Rating Organization”):

Rating Agency RatingDominion Bond Rating Services Limited........................................................... R-1 (low)Fitch IBCA, Duff & Phelps ................................................................................ F-1Moody’s Investor Services, Inc. ......................................................................... P-1Standard & Poor’s Corporation .......................................................................... A-1 (low)

and;

(iii) the Approved Credit Rating Organization has not announced that the credit rating for theNotes has been or may be down-graded to a rating which is below the “Approved CreditRating”;

(e) to the public in Québec; and

(f) in New Brunswick, provided each purchaser purchases as principal and the aggregate acquisitioncost of Notes purchased by such purchaser is not less than $97,000 in Canadian currency or theequivalent thereof in another currency;

without making any filing under, or registering with, any governmental or public body or authoritypursuant to the securities legislation in such provinces, except for the filing of the InformationMemorandum and any other disclosure documents delivered to purchasers with the Commission desvaleurs mobilières du Québec.

6. Subject to the general investment provisions and restrictions of the legislation to which referencehereinafter is made, Notes in the form contained in the Information Memorandum, when duly issued,executed, countersigned and delivered as provided in paragraph 3 of this opinion, are, at the date hereof,investments:

(a) in which the provisions of the Insurance Companies Act (Canada) would not preclude a companyor society (as defined in that Act) from investing its funds, subject to compliance with theinvestment and lending policies, standards and procedures established by the directors of thatcompany or society in accordance with that Act;

(b) in which the provisions of the Insurance Companies Act (Canada) would not preclude a foreigncompany (as defined in that Act) from investing for the purpose of including the Notes among itsassets in Canada vested in trust, subject to compliance with the investment and lending policies,standards and procedures established by that foreign company in accordance with that Act;

(c) in which the provisions of the Trust and Loan Companies Act (Canada) would not preclude acompany (as defined in that Act) from investing its funds, subject to compliance with theinvestment and lending policies, standards and procedures established by the directors of thatcompany in accordance with that Act;

(d) in which the provisions of the Pension Benefits Standards Act, 1985 (Canada) and the Regulationsthereunder would not preclude a pension plan regulated or registered under that Act frominvesting its funds, subject to compliance with the prudent investment standards and the general

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investment provisions of that Act, and, provided that, when required, such an investment is inconformity with any investment policies and procedures established by the administrator of thepension plan pursuant to that Act;

(e) in which the provisions of the Insurance Act (Alberta) and the Regulations thereunder would notpreclude, subject to compliance with the prudent investment standards of that Act, a provincialcompany, as defined under such Act, from investing, provided that such an investment isconsistent with the investment policies and procedures established by the board of directors ofsuch provincial company in accordance with that Act;

(f) in which the provisions of the Employment Pension Plans Act (Alberta) and the Regulationthereunder provide that a pension plan governed by such Act may invest its assets pursuant tosubsection 50(3) of the Regulation thereunder, which subsection incorporates by reference theprovisions of Schedule III to the Pension Benefits Standards Regulations, 1985 (Canada),provided that such an investment is consistent with the investment policies and proceduresestablished by the administrator of the pension plan pursuant to such Act;

(g) in which the provisions of the Loan and Trust Corporations Act (Alberta) and the Regulationsthereunder would not preclude, subject to compliance with the prudent investment standards ofsuch Act, a provincial corporation, as defined under such Act, from investing its funds received asdeposits (excluding funds, other than deposits, held by it as a fiduciary), provided that such aninvestment is consistent with the investment policies and procedures established by suchprovincial corporation in accordance with such Act;

(h) in which the provisions of the Loan and Trust Corporations Act (Ontario) and the Regulationsthereunder, would not, subject to compliance with the prudent investment standards containedtherein, preclude a loan corporation and a trust corporation registered under that Act frominvesting, provided that written procedures to ensure that prudent investment standards areapplied have been established and filed under that Act;

(i) in which the provisions of the Insurance Act (Ontario) states that an insurer (as defined for thepurposes of section 433 of that Act in section 432 thereof) may invest its funds without availingitself for that purpose of the provisions of subsection 433(4) thereof;

(j) in which the provisions of the Pension Benefits Act (Ontario) and the regulations thereunderwould not preclude a pension plan regulated or registered under that Act from investing its ownfunds, subject to compliance with the prudent investment standards and the general investmentprovisions of that Act, and provided that, such an investment is in conformity with any investmentpolicies and procedures established by the administrator of the pension plan pursuant to that Act;

(k) in which the Trustee Act (Ontario) states that a trustee holding trust monies for investment may,by virtue of section 27 thereof, but subject to the provisions of such section, invest such trustmonies;

(l) in which the provisions of An Act respecting insurance (Québec) would not, subject tocompliance with the prudent standards for investment and the general investment provisionscontained therein, preclude an insurer, as defined in such Act, other than a guarantee fund frominvesting; provided, however, that an investment in the Notes is also made in accordance with theinvestment policy adopted by such insurer pursuant to such Act and approved by its board ofdirectors;

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(m) in which the provisions of An Act respecting trust companies and savings companies (Québec)would not, subject to compliance with the prudent standards for investment contained therein,preclude a savings company licensed thereunder from investing, and a trust company licensedthereunder from investing its own funds and deposits it receives, provided that investments madeby a Québec company (as defined in such Act) are made in compliance with the investment policyadopted by such Québec company pursuant to such Act and approved by its board of directors;

(n) in which the provisions of the Supplemental Pension Plans Act (Québec) and the regulationsthereunder would not, subject to compliance with the prudent standards for investment and theprovisions requiring the establishment of written investment policies contained therein, precludethe assets of a pension plan registered pursuant thereto from being invested, provided that suchinvestment, if selected by the pension committee of a pension plan mentioned above or a delegatethereof, is made in conformity with the investment policy adopted for such pension planapplicable at the date of original issue of the Notes in accordance with such Act and provided thatthe investment is made in accordance with the general investment provisions of the Act;

(o) in which the provisions of the Financial Institutions Act (British Columbia) and the regulationsthereunder would not preclude a financial institution (as defined in that Act) that has a businessauthorization (as defined in that Act) from making, provided that:

(i) the investment in the Notes complies with the prudent person standards for investmentdescribed in subsection 136(1) of that Act;

(ii) such financial institution has established a written investment and lending policy whichcomplies with the Act and regulations thereunder.

(iii) the investment by such financial institution in the Notes is consistent with suchinvestment and lending policy;

(iv) such written investment and lending policy has been filed with the Superintendent underthe Act; and

(v) the Corporation is not a related party (as defined in that Act) of such financial institution;

(p) in which the provisions of the Pension Benefits Standards Act (British Columbia) and theregulations thereunder would not preclude a pension plan registered thereunder from investing,provided that the investment in the Notes complies with the reasonable and prudent standardsdescribed in subsection 44(2) of that Act, the administrator of such plan has established and fileda statement of investment policies and procedures which complies with that Act and theregulations thereunder and the investment in the Notes complies with such policies andprocedures, and provided that the investment in the Notes is in the best financial interests of planmembers, former members and other plan beneficiaries;

(q) in which The Insurance Act (Manitoba) would not preclude the surplus funds and reserves of aninsurer incorporated and licensed under the laws of the Province of Manitoba from being invested,subject to compliance with the prudent investment and lending policies, standards and procedurescontemplated by the Insurance Companies Act (Canada) applicable to a company which hasobtained an order under section 53 of the Insurance Companies Act (Canada);

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(r) in which the provisions of The Pension Benefits Act (Manitoba) and the Regulation thereunderwould not preclude the funds of a pension plan regulated thereunder from being invested,provided such funds are invested and loaned only in accordance with sections 6 to 7.2 andSchedule III of the Pension Benefits Standards Regulations, 1985 (Canada);

(s) in which the provisions of The Trustee Act (Manitoba) would not, subject to compliance with theprudent investment standards contained therein, preclude a trustee holding trust funds forinvestment from being invested, subject to any restriction contained in the trust deed creating thetrust in respect of such funds;

(t) not precluded as investments under either the Pension Benefits Act (Nova Scotia) or the TrusteeAct (Nova Scotia), subject in each case to compliance with prudent investment standards and thegeneral investment provisions contained therein and, in certain cases, subject to the satisfaction ofadditional requirements relating to investment or lending policies, standard procedures or goals;

(u) not precluded as investments under either the Pension Benefits Act (New Brunswick) or theTrustees Act (New Brunswick), subject in each case to compliance with prudent investmentstandards and the general investment provisions contained therein and, in certain cases, subject tothe satisfaction of additional requirements relating to investment or lending policies, standardprocedures or goals;

(v) not precluded as investments under either the Pension Benefits Act, 1997 (Newfoundland), subjectto compliance with prudent investment standards and the general investment provisions containedtherein and, in certain cases, subject to the satisfaction of additional requirements relating toinvestment or lending policies, standard procedures or goals; and

(w) in which the provisions of The Pension Benefits Act, 1992 (Saskatchewan) would not preclude apension plan registered under that Act from investing its funds subject to compliance with thequantitative restrictions and prudent investment standards therein and any criteria required to beestablished as policies, goals, procedures or guidelines and any requirement to file such policies,goals, procedures or guidelines.

This opinion is given as of the date hereof and reliance on this opinion as to Notes issued after the date hereof mustbe on the assumption that there has been no change in the law or in the factual matters on which the opinion isbased.

Yours truly,

Osler, Hoskin & Harcourt LLP

JMD/LAS