Whistleblower Protection Policy

INTRODUCTION
Domtar Corporation¹ (“Domtar”) is a company rooted in values. We continuously strive to foster a work environment that puts a premium on creativity, innovation, commitment, entrepreneurship, initiative, judgment, discipline, leadership, perseverance, determination, professionalism, integrity and – most importantly – respect for others. These shared values are at the very heart of our success. As a fair-dealing corporate citizen concerned with our standing in the community and the quality of our employees, we are also a strong believer that unethical behaviour can seriously undermine the efforts of all our employees to keep building a company we are proud of.

Given Domtar’s market position, our company now is, more than ever before, being observed by many. As such, it is important that we have common ways of dealing with sensitive issues in order to ensure that our behavior is beyond reproach. Every day, what we do and what we say shapes Domtar’s reputation and impacts our common future.

Our Code of Business Conduct and Ethics is aimed at helping us respect existing laws and regulations, and properly guiding our actions that flow from business decisions, in which good judgment is required.

This policy complements the procedures in our Code of Business Conduct and Ethics as well as our Communications Policy to deal with certain issues and concerns that may arise from time to time.

1. Policy Statement
This policy provides a means whereby a complainant may, in good faith, report issues and/or concerns in connection with a serious violation.

In responding to a complaint, Domtar will act fairly with respect to any individual named in the complaint, the seriousness of the issue raised, the credibility of the information or allegations in the complaint, and the prospects of an effective investigation.

Domtar will not retaliate against any complainant for reporting in good faith serious violations pursuant to this policy. “Good faith” means that a complainant reasonably believes that the complaint is true and has not been made either for personal gain or for any ulterior motive.

2. Nature of Complaints
In accordance with the Sarbanes-Oxley Act, Section 10A(m) of the Securities Exchange Act of 1934 and the listing standards of the New York Stock Exchange, Domtar has adopted the following procedures to facilitate the submission, on a confidential and anonymous basis, of complaints, reports and concerns by any person (“Complainant”) regarding (i) accounting, internal accounting controls, or auditing matters, (ii) actual or potential violations of laws, rules or regulations, and (iii) other suspected wrongdoing, including in connection with the Code of Business Conduct and Ethics (a “serious violation”).

3. Protection of Complainants
This policy and related procedures offer protection from retaliation to Complainants with respect to matters that are, or could give rise to, serious violations, provided the complaint is made:

• in good faith, in a manner that is consistent with Domtar’s values, particularly respect for others;
• in the reasonable belief of the Complainant that the conduct or matter covered by the complaint constitutes, or has the potential to constitute, a serious violation; and
• pursuant to the procedures contained in Section 5 below.

No complaint that satisfies these conditions shall result in any retaliation or threat of retaliation against the Complainant. This means that Domtar and its directors, officers, employees and agents shall not penalize, discharge, demote, suspend, threaten, harass, transfer to an undesirable assignment or location, or otherwise discriminate (collectively, “retaliate” or “retaliation”) against any Complainant for calling attention to suspected illegal or unethical acts. Any act of retaliation shall itself be treated by Domtar as a serious violation of Domtar’s policy and could result in disciplinary action up to and including discharge. This protection extends to anyone providing information in relation to an  investigation, including an internal investigation.

4. Confidentiality
Domtar will treat all complaints by Complainants as confidential and privileged to the fullest extent permitted by law. A Complainant is encouraged to put his/her name to any complaint he/she makes, but it may also be made anonymously, as provided in Section 5 below.

5. How to make a complaint?
Any complaint under this policy must be submitted to the Vice-President, Internal Audit, through one of the following confidential means of communication:

• in person or by telephone to the Vice-President, Internal Audit: 514-848-5141
• toll-free telephone number: 1-866-323-3653
  (Please note there is no caller identification on this telephone number)
• by mail:
  Domtar Corporation
  395 de Maisonneuve Blvd. West
  Montréal, Québec H3A 1L6, Canada
  Attention: Vice-President, Internal Audit (Strictly Confidential)
• by e-mail: whistleblower@domtar.com

Any complaint should provide sufficient, precise, and relevant information pertaining, among others, to dates, places, persons/witnesses, numbers, etc., so that a reasonable investigation can be conducted. If the Complainant wishes to discuss any such matter with the Vice-President, Internal Audit, he/she should indicate this in the submission or message and include a telephone number at which he/she might be contacted if the Vice-President, Internal Audit deems it appropriate. When possible, the Vice-President, Internal Audit shall acknowledge receipt of the complaint to the sender.

6. Investigation
Upon receiving a complaint, the Vice-President, Internal Audit shall immediately register it in a log of complaints and open a file, which file shall be maintained in a secure location to protect the confidentiality of the Complainant. The Vice-President, Internal Audit shall then determine whether the complaint actually pertains to a subject covered under this policy.

If the Vice-President, Internal Audit determines that the complaint is covered by this policy, he/she shall then make an investigation. In conducting the investigation, the Vice-President, Internal Audit may enlist inside or outside legal, accounting, human resources, or other advisors, as appropriate. The Vice-President, Internal Audit shall have access, during an investigation, to all books and records of Domtar. Domtar directors, officers, employees and agents are expected to fully co-operate in the investigation. In conducting any investigation, the Vice-President, Internal Audit shall use reasonable efforts to protect the confidentiality of the Complainant.

Investigations will be conducted as quickly as possible, taking into account the nature and complexity of the complaint and the issues raised therein. The Vice-President, Internal Audit shall retain as a part of the records any and all complaints, reports or concerns and related documentation for a period of no less than seven (7) years from the moment the claim is resolved and file closed.

7. Reporting to the Audit Committee
Each quarter, the Vice-President, Internal Audit shall report to the Audit Committee of the Board of Directors of the Corporation (the “Committee”) and to the external auditors, in the aggregate, the number, the nature, and the outcome of complaints received and investigated under this policy.

Notwithstanding the foregoing, the Vice-President, Internal Audit shall promptly report to the Committee any complaint that may have material consequences for the Corporation.

¹ For the purposes of this policy “Domtar” includes Domtar Corporation and all of its subsidiaries.

September 2007