Quebec Leadership Group January 29, 2014 Hotel Mortagne, Boucherville Host: Erco Mondial

Summary of discussions  Politic overview and Government strategy;  B&E committee highlights;  Competitiveness Scorecard ;  Electricity cost and industrial rates flexibility  Energy Policy;  Manufacturing Strategy;  TDG issues  Chemistry day.  Regional committees  Environment issues  OH&S and SHARE  TransCAER report

Politic overview and Government strategy  Minority government has survived its first year, next budget in spring 2014 will be crucial;  Latest poll, end of December, shows: Position TrendSpan  Liberal at 36% Slow decline 33% %  PQ at 35% Continuous progression 36%28 – 44%  CAQ at 18% Major drop; won’t get back 17% %  QS at 11% Floating votes from PQ-Lib 8%8 - 18%  Government is surfing on cultural debate to remove the focus on bad economic performances  Fails to reach Zero deficit by 1.4 billion $  Lean job creation  Québec Gross Domestic Product ; + 0,9 % in 2012 and + 1,0 % in 2013

B&E committee highlights  Competitiveness; Scorecard ; Québec accounts for about 13% of Canada's industrial chemical manufacturing, but with industrial development set to ramp up across the region, new investments might increase this share. Quebec needs to aggressively pursue energy diversification in addition to tax reform to attract this investment. Major mining development in northern Quebec, development of new hydroelectric power supplies as well as potential new supplies of crude oil from Western Canada provide significant opportunity for chemicals. We recommend the following as priority areas: Reduce corporate taxes for manufacturing to a level of 10%; Reduce the additional administration burden of doing business in Quebec; Pursue manufacturing and energy strategies for the Province to capture the benefits of potential Western crude supply and enable ‘added value’ chemical cluster growth; and Maximize Quebec’s clean energy endowment by placing a particular emphasis on sustaining and growing the electro-chemical industrial cluster.

B&E committee highlights  Electricity cost and industrial rates flexibility: Recent HQ increases and the interference of the Government into the management of the Board of Energy have a major impact on industries; Regardless of 30% of installed capacity surplus HQ invests hundreds of millions in wind energy and cogeneration. Funding is provided again the industrial tariff.  Energy policy: The Government is reluctant to support the development and the exploitation of hydrocarbons; Invisible in the debate about shale gas, line 9 reversal, TransCanada Pipeline (Energy East Pipeline Project) and oil and gas exploration (Old Harry, Anticosti Island)  Chemistry day Communication strategy with goverment officiers and politics.

B&E committee highlights  Manufacturing strategy: Funds and subsidies to held the development of Small industries but nothing for medium and larger scale; Very lean on corporate tax reduction and economic incentives for our business The new strategy open the door to advantage, into government purchasing policy, companies with S.D. practice.  Transportation (TDG): Lac-Mégantic tragedy will have a major impact on government’s regulation, insurance coverage and emergency response plan. Three other accidents involving the transport of crude oil increase the pressure of the population against the oil industry in general

Environmental issues:  Climate changes  Québec Government remains committed to a 20 % GHG overall reduction objective and even more with a stretch to 25%;  California and Quebec cape and trade program and auctions for the sale of carbon credits are officially link since October 1 st 2013;  The first official auction last December show low interest; only 1million tonnes of CO 2 credit at the floor price of 10.75$ get buyers ;  Member companies have received their allocations for the first reporting period (2015) and their impact is evaluated to be acceptable or negligible; in one case a company might be able to sell carbon credit.  Regulation Respecting the charges payable for the use of water under discussion to reduce the economic impact  Meeting with the new ‘Ministre délégué’, follow-up

Environmental issues:  Air quality regulation General guide to application of the Clean Air Regulation  Government Strategy on Sustainable Development BNQ Recognition ICRIQ Classification  Regulation on the Management of Contaminated Sites 3 regulations will be merged together:  Landfills;  Protection and rehabilitation of contaminated sites;  Storage of hazardous wastes; No opening to modify risk management approach for petroleum hydrocarbons, this responsibility having been transferred to Health Ministry in 1996.

OH&S and SHARE activities:  Last meeting: October 31th 2013 at Erco Mondial; Buckingham  Worker’s compensation board classification rate Rate of the ‘’Mutuelle de la chimie’’: 1,20$ in 2014; 6 % decrease vs a 3 % overall decrease; From 1,33 in 2012, 1,26 in 2013; Based on performance.  Next SHARE meeting in Toronto April 16, 2014  Members for outside will be able to participate via webinar

TransCAER  Guideline under revision  Motor carrier evaluation;  Assessment of transportation corridors;  Safety train schedule;  Community awareness.

TransCAER  New standards for rail tank cars  This amendment will also enhance the classification regime for the transport of dangerous goods. Specifically, it requires that the person who classifies a dangerous good before transport keep a record of classification of those goods, as well as a record of the sampling method for crude oil.  Additionally, this proposed regulation adds requirements to the shipping document. The proposed consignor’s certification would appear on the shipping document to certify that the person named on the shipping document has prepared the consignment to the regulations that apply.  Stakeholders will have a 30-day consultation period to comment on the proposed regulations before they are finalized and published in the Canada Gazette, Part II.