Disclosure Policy

Securities laws and stock exchange rules contain strict prohibitions (subject to serious legal sanctions and potential liability for damages in the case of breach) regarding the use and disclosure of non-public information when such information may have a significant impact on the market value of the shares and other market securities of Domtar Inc.

STATEMENT OF POLICY

Domtar's policy is to disclose forthwith all material information under applicable laws and stock exchange rules. Communications to the investing public about Domtar will be timely, factual and accurate, and they will be broadly disseminated in accordance with applicable legal and regulatory requirements.

A Disclosure Policy Committee (the "Committee") is responsible for overseeing Domtar's disclosure practices. The Committee consists of the Chief Executive Officer, the Chief Financial Officer and the General Counsel.

PRINCIPLES OF DISCLOSURE OF MATERIAL INFORMATION

1. Material information will be publicly disclosed immediately via news release with copies to stock exchanges and relevant regulatory authorities. Material information is any information relating to the business and affairs of Domtar that results in, or would reasonably be expected to result in, a significant change in the market price or value of Domtar's securities or that would reasonably be expected to have a significant influence on a reasonable investor's investment decisions. Examples of such material information include: information on earnings and financial results; actual and contemplated acquisition or disposition of material assets; mill, machine or plant closures; contemplated takeovers, mergers, consolidations, amalgamations or reorganizations; contemplated changes in the capital structure, including share or debenture issues, stock splits or stock dividends; or any other changes in the business and affairs of Domtar that could reasonably be expected to materially affect the value of its securities.

2. In certain circumstances, the Committee may determine that such disclosure would be unduly detrimental to Domtar (i.e., if release of the information would prejudice negotiations in a significant transaction), in which case the information will be kept confidential until the Committee determines it is appropriate to publicly disclose. In such circumstances, the General Counsel will cause a confidential material change report to be filed with the applicable securities regulators, and the Committee will periodically review its decision to keep the information confidential (also see "Rumors").

3. Disclosure must include any information the omission of which would make the rest of the disclosure misleading.

4. Unfavorable material information must be disclosed as promptly and completely as favorable information.

5. There shall be no selective disclosure. Previously undisclosed material information must not be disclosed to selected individuals (for example, in a "one-on-one" meeting with an analyst or telephone conversation with an investor). If previously undisclosed material information has been inadvertently disclosed to an analyst or investor, or any other person not bound by an express confidentiality obligation, such information must be broadly disclosed immediately via news release.

6. Disclosure must be corrected immediately if Domtar subsequently learns that earlier disclosure by the company contained a material error at the time it was made.

DESIGNATED SPOKESPERSONS

Domtar designates a limited number of spokespersons responsible for communication with the investment community, regulatory authorities or the media. The President and Chief Executive Officer, the Chief Financial Officer and the Vice-President, Communications and Government Relations are the official spokespersons for Domtar. No other individuals are authorized to act as spokespersons unless specifically designated by the Committee.

Employees who are not authorized spokespersons must not respond under any circumstances to inquiries from the investment community, the media or others unless specifically designated as indicated above. All such inquiries shall be referred to the Vice-President, Communications and Government Relations.

MAINTAINING CONFIDENTIALITY

Any employee privy to confidential information, whether material or not, is prohibited from communicating such information to anyone else, unless it is necessary to do so in the normal course of business. Efforts will be made to limit access to such confidential information to only those who need to know the information, and such persons will be advised that the information is to be kept confidential.

Communication by e-mail leaves a physical track of its passage that may be subject to later decryption attempts. All confidential information being transmitted over the Internet must be secured by the strongest encryption and validation methods available. Where possible, employees should avoid using e-mail to transmit confidential information.

Outside parties privy to undisclosed material information concerning Domtar will be told that they must not divulge such information to anyone else other than in the necessary course of business, and that they may not trade in Domtar's securities until the information is publicly disclosed. Such outside parties will confirm their commitment to non-disclosure in the form of a written confidentiality agreement.

In order to prevent the misuse or inadvertent disclosure of material information, the procedures set forth below should be observed at all time:

1. Documents and files containing confidential information should be kept in a safe place to which access is restricted to individuals who "need to know" that information in the necessary course of business and code names should be used if necessary.

2. Confidential matters should not be discussed in places where the discussion may be overheard, such as elevators, hallways, restaurants, airplanes or taxis. Confidential documents should not be read or displayed in public places and should not be discarded where others can retrieve them.

3. Confidential matters should not be discussed on wireless telephones or other wireless devices.

4. Transmission of documents by electronic means, such as by fax or directly from one computer to another, should be made only where it is reasonable to believe that the transmission can be made and received under secure conditions.

5. No unnecessary copies are to be made and removed from meeting rooms.

6. All unused copies must be properly discarded by shredding them instead of putting them in the recycling or refuse bins.

MEDIA RELATIONS

Domtar is constantly scrutinized by the media and is subject to analyses and interpretations that may be more or less accurate. Domtar wishes to maintain excellent relations with the media, provide them with all relevant information and help them circulate as accurate a picture of Domtar as possible. The information given to the media must be unequivocally in the proper context and not liable to be confusing or misinterpreted.

Following is a list of guidelines concerning Domtar's relations with the media:

1. Communications, be they verbal or written, with the media relative to Domtar must be approved by the Vice-President, Communications and Government Relations prior to disclosure. In the case of communications containing sensitive information, authorization must be obtained from the General Counsel.

2. The release of any strategic figures such as asset values, locations operating losses, cost of raw materials, etc. is prohibited. Some figures given in the wrong context could draw the attention of the competition or lead to questions from the financial community in general. Comments should be limited to data already published in such publications as annual reports, quarterly or interim financial reports and annual information forms to shareholders. This data is public and available to everyone.

3. Most corporate services, operating groups and regional facilities have set up communication programs to inform employees on most issues. Such programs are necessary if employees are to feel associated with Domtar's overall situation and react as a team to the challenges that arise. However, discretion must be exercised on sensitive or confidential information because there is always a possibility that this information could find its way outside of Domtar, often in circumstances and with results that are totally unwanted.

CONFERENCE CALLS

Conference calls will be held for quarterly earnings and major corporate developments after publication of a news release. The corporate spokesperson will provide a cautionary statement with respect to forward-looking information and direct participants to publicly available documents regarding assumptions, sensitivities, etc.

RUMOURS

Domtar does not comment, affirmatively or negatively, on rumors. This also applies to rumors on the Internet. Domtar's spokespersons will respond consistently to those rumors, saying, "It is our policy not to comment on market rumors or speculation." Should a stock exchange request that Domtar make a definitive statement in response to a market rumor that is causing significant volatility in the stock, the Committee will consider the matter and decide whether to make a policy exception. If the rumor is true in whole or in part, Domtar will immediately issue a news release disclosing the relevant material information, except when such disclosure would be unduly detrimental to Domtar (see "Principles of Disclosure of Material Information").

CONTACTS WITH ANALYSTS, INVESTORS AND THE MEDIA

Disclosure in individual or group meetings does not constitute adequate disclosure of information that is considered material non-public information. If Domtar intends to announce material information at an analyst or shareholder meeting or a press conference or conference call, the announcement must be preceded by a news release.

Domtar recognizes that meetings with analysts and significant investors are an important element of Domtar's investor relations program. Domtar will meet with analysts and investors on an individual or small group basis as needed and will initiate contacts or respond to analyst and investor calls in a timely, consistent and accurate fashion in accordance with this Disclosure Policy.

Domtar will provide only non-material information through individual and group meetings, in addition to regular publicly disclosed information, recognizing that an analyst or investor may construct this information into a mosaic that could result in material information. Domtar cannot alter the materiality of information by breaking down the information into smaller, non-material components.

REVIEWING ANALYST DRAFT REPORTS AND MODELS

It is Domtar's policy to review, upon request, analysts' draft research reports or models. Domtar will review the report or model for the purpose of pointing out errors of fact, based on publicly disclosed information. It is Domtar's policy, when an analyst inquires with respect to his estimates, to question an analyst's assumptions if the estimate is a significant outlier (something that is outside the range of estimates) among the range of estimates and/or Domtar's published earnings guidance. Domtar will limit its comments in responding to such inquiries with non-material information. Domtar will not confirm, or attempt to influence, an analyst's opinions or conclusions and will not express comfort with the analyst's model and earnings estimates.

In order to avoid appearing to "endorse" an analyst's report or model, Domtar will provide its comments verbally or will attach a disclaimer to written comments to indicate the report was reviewed only for factual accuracy.

DISTRIBUTING ANALYST REPORTS

Analyst reports are proprietary products of the analyst's firm. Re-circulating a report by an analyst may be viewed as an endorsement of the report by Domtar. For these reasons, Domtar will not provide analyst reports through any means to persons outside of Domtar, nor will it post such information on its Web site. Domtar may provide such reports to its Board of Directors or to its employees for information purposes.

QUIET PERIODS

In order to avoid the potential for selective disclosure or even the perception or appearance of selective disclosure, Domtar will observe a quarterly quiet period, during which Domtar will not initiate or participate in any meetings or telephone contacts with analysts and investors and no earnings guidance will be provided to anyone, other than responding to unsolicited inquiries concerning factual matters. The quiet period commences on the first day of the month following the end of a quarter and ends with the issuance of a news release disclosing quarterly results.

DOMTAR WEB SITE AND PRESENTATIONS

Any new documents that are added to the Domtar Web site and major presentations should be referred for review to the General Counsel and to the Vice-President, Communications and Government Relations, before being posted on the Web site or made public.

COMMUNICATION AND ENFORCEMENT

The Disclosure Policy extends to all employees of Domtar and all its subsidiaries, and to its Board of Directors.

Any questions regarding this policy should be addressed to the General Counsel.

The Secretariat and Law Department is responsible for ensuring compliance with the legal disclosure requirements.