ANNEX I

Schedule of Canada

SECTOR: Agriculture

SUB-SECTOR:

INDUSTRY CLASSIFICATION:

TYPE OF RESERVATION: National Treatment (Article 1102)

LEVEL OF GOVERNMENT: Federal

LEGAL CITATION: Farm Credit Act, R.S.C. 1985, c. F-2

as amended by R.S.C. 1985, c. 1 (4th

Supp.); S.C. 1991, c. 5, 53

Farm Credit Regulations, C.R.C. 1978,

c. 644 as amended by SOR/81-560;

SOR/82-495; SOR/83-198

DESCRIPTION: Investment

Loans by the Farm Credit Corporation

may be made only to:

(a) individuals who are Canadian

citizens or permanent residents;

(b) farming corporations controlled

by Canadian citizens or permanent

residents; or

(c) cooperative farm associations,

all of whose members are Canadian

citizens or permanent residents.

DURATION: Indeterminate

=============================================================================

ANNEX I

Schedule of Canada

SECTOR: All Sectors

SUB-SECTOR:

INDUSTRY CLASSIFICATION:

TYPE OF RESERVATION: National Treatment (Article 1102)

Performance Requirements (Article 1106)

Senior Management (Article 1107)

LEVEL OF GOVERNMENT: Federal

LEGAL CITATION: Investment Canada Act, R.S.C. 1985, c.

28, as amended by S.C.1988, c. 65

Investment Canada Regulations,

SOR/85-611, as amended by SOR/189-69

An Act to Amend the Investment Canada

Act, (Bill C-89, introduced in

Parliament on 18 June 1992)

DESCRIPTION: Investment

1. Under the Investment Canada Act,

the following acquisitions of Canadian

businesses by "non-Canadians" are

subject to review by Investment

Canada:

(1) all direct acquisitions of

Canadian businesses with assets

of $5 million or more;

(2) all indirect acquisitions of

Canadian businesses with assets

of $50 million or more; and

(3) indirect acquisitions of Canadian

businesses with assets between $5

million and $50 million which

represent more than 50 percent of

the value, calculated in the

prescribed manner, of the assets

of all the entities the control

of which is being acquired,

directly or indirectly, in the

transaction in question.

2. "Canadian business", "Canadian"

and "non-Canadian" are defined in the

Investment Canada Act. A "non-

Canadian" is an individual, government

or agency thereof or an entity which

is not "Canadian".

3. In addition, specific

acquisitions or new businesses in

designated types of business

activities related to Canada's

cultural heritage or national

identity, which are normally

notifiable, may be reviewed if the

Governor in Council authorizes a

review in the public interest.

4. Investments subject to review

under the Investment Canada Act are

not to be implemented unless the

Minister responsible for the

Investment Canada Act advises the

applicant that the investment is

likely to be of net benefit to Canada.

Such a determination is made in

accordance with six factors described

in the Act.

5. These factors are summarized as

follows:

(a) the effect of the investment on

the level and nature of economic

activity in Canada, including the

effect on employment, on the

utilization of parts, components

and services produced in Canada,

and on exports from Canada;

(b) the degree and significance of

participation by Canadians in the

investment;

(c) the effect of the investment on

productivity, industrial

efficiency, technological

development and product

innovation in Canada;

(d) the effect of the investment on

competition within any industry

or industries in Canada;

(e) the compatibility of the

investment with national

industrial, economic and cultural

policies, taking into

consideration industrial,

economic and cultural policy

objectives enunciated by the

government or legislature of any

province likely to be

significantly affected by the

investment; and

(f) the contribution of the

investment to Canada's ability to

compete in world markets.

6. In making a net benefit

determination, the Minister, through

Investment Canada, may review plans

under which the applicant demonstrates

the net benefit to Canada of the

proposed acquisition. An applicant

may also submit undertakings to the

Minister in connection with any

proposed acquisition which is the

subject of review. In the event of

noncompliance with an undertaking by

an applicant, the Minister may seek a

court order directing compliance or

any other remedy authorized under the

Act.

7. The establishment or acquisition

of Canadian businesses by non-

Canadians, other than those described

above, are to be notified to the

agency administering the Act,

Investment Canada.

8. Review of "acquisition of

control", as defined in the Investment

Canada Act, of a Canadian business by

an American or Mexican will take place

if the value of the gross assets of

the Canadian business is not less than

the applicable thresholds, effective

on the date of entry into force of

this Agreement and adjusted on each

anniversary thereof. The calculation

of the applicable review threshold is

set out in the Duration section below.

9. The review threshold applicable

to American and Mexican investors is

higher than those set out above.

However, this higher review threshold

does not apply in the following

sectors: uranium production and

ownership of uranium producing

properties; oil and gas; financial

services; transportation services and

cultural businesses.

10. Indirect "acquisitions of

control", as defined in the Investment

Canada Act, of Canadian businesses by

"American" and "Mexican" investors are

not reviewable. Notwithstanding the

definition of "investor of a Party" in

Chapter Eleven, only investors who are

nationals, or entities controlled by

nationals, (as defined in the

Investment Canada Act) of the United

States or Mexico, may benefit from the

higher review threshold.

11. Notwithstanding Article 1106(1),

Canada reserves the right to impose

requirements, or enforce any

commitment or undertaking, in

connection with the establishment,

acquisition, expansion, conduct or

operation of an investment of an

investor of another Party for the

transfer of technology, production

process or other proprietary knowledge

to a national or enterprise,

affiliated to the transferor, in

Canada, in connection with the review

of an acquisition of an investment

pursuant to the Investment Canada Act.

12. Except for requirements,

commitments or undertakings related to

technology transfer as set out above,

Article 1106(1) shall apply to

requirements, commitments or

undertakings imposed or enforced under

the Investment Canada Act. However,

Article 1106(1) shall not be construed

to apply to any requirement,

commitment or undertaking imposed or

enforced in connection with a review

under the Investment Canada Act, to

locate production, carry out research

and development, employ or train

workers, or to construct or expand

particular facilities, in Canada.

DURATION: Paragraphs 10, 11 and 12 of the

Description setting out Canada's

reservations and commitments with

respect to Articles 1102, 1106(1),

and 1138 shall govern.

For American and Mexican investors,

the applicable threshold for the

review of a direct acquisition of

control of a Canadian business shall

be:

(a) for the twelve month period

commencing on the date of entry

into force of this Agreement,

such monetary amount as

determined in accordance with

Annex 1607.3 of the Canada-United

State Free Trade Agreement;

(b) commencing on the first

anniversary of the date of entry

into force of this Agreement, the

monetary amount for the preceding

year multiplied by an annual

adjustment representing the

increase in nominal Gross

Domestic Product, as set out

below.

The calculation of the annual

adjustment shall be determined in

January of each year after 1994 using

the most recently available data as

published by Statistics Canada and

using the following formula:

Ann ual Adjustment =

Current nominal GDP at market

prices

---------------------------------

----------------------Previous

year nominal GDP at market prices

"Current nominal GDP at market prices"

means the arithmetic mean of the

nominal Gross Domestic Product at

market prices for the most recent four

consecutive quarters (seasonally

adjusted at annual rates).

"Previous year nominal GDP at market

prices" means the arithmetic mean of

the nominal Gross Domestic Product at

market prices for the four consecutive

quarters (seasonally adjusted at

annual rates) for the comparable

period in the year preceding the year

used in calculating the "current

nominal GDP at market prices".

The amounts determined in this manner

shall be rounded to the nearest

million dollars.

=============================================================================

ANNEX I

Schedule of Canada

SECTOR: All Sectors

SUB-SECTOR:

INDUSTRY CLASSIFICATION:

TYPE OF RESERVATION: National Treatment (Article 1102)

Senior Management (Article 1107)

LEVEL OF GOVERNMENT: Federal

Provincial

LEGAL CITATION:

DESCRIPTION: Investment

When selling or disposing of its

equity interests in, or the assets of,

an existing state enterprise or an

existing governmental entity, Canada

and each province reserve the right to

prohibit or impose limitations on the

ownership of such interests or assets,

and on the ability of owners of such

interests or assets to control any

resulting enterprise, by investors of

another Party or non-Party or their

investments. In addition, Canada and

each province reserve the right to

adopt or maintain any measure relating

to the nationality of senior

management or members of the board of

directors.

For the purposes of this reservation:

(a) any measure maintained, or

adopted after the entry into

force of this Agreement,

prohibiting or imposing

limitations on the ownership of

equity interests or assets or

nationality requirements

described in this reservation

shall be deemed to be an existing

measure; and

(b) "state enterprise" means an

enterprise owned or controlled

through ownership interests by

Canada or a province and includes

an enterprise established after

the date of entry into force of

this Agreement solely for the

purposes of selling or disposing

of equity interests in, or the

assets of, an existing state

enterprise or governmental

entity.

DURATION:

The Description shall govern on entry

into force of this Agreement.

Indeterminate.

=============================================================================

ANNEX I

Schedule of Canada

SECTOR: All Sectors

SUB-SECTOR:

INDUSTRY CLASSIFICATION:

TYPE OF RESERVATION: National Treatment (Article 1102)

LEVEL OF GOVERNMENT: Federal

LEGAL CITATION: Canada Business Corporations Act,

R.S.C. 1985, C. I-44, as amended by

R.S.C. 1985, c. 27 (2nd Supp.), R.S.C.

1985, c. 1 (4th Supp.); S.C. 1990, c.

17; S.C. 1991, c. 45, 46, 47

Canada Corporations Act, R.S.C. 1970,

C. C-32, as amended by R.S.C. 1970, c.

C-10 (1st Supp.); S.C. 1970-71-72, c.

43, 63; S.C. 1972, c. 17; S.C.

1974-75-76, c. 33; S.C. 1978-79, c.

11; S.C. 1985, c. 26; S.C. 1986, c.

26, 35

Canada Business Corporations Act

Regulations SOR/79-316, as amended by

SOR/79-513, SOR/79-728, SOR/80-873,

SOR/81-3, SOR/81-189, SOR/81-868,

SOR/82-187, SOR/83-511, SOR/83781,

SOR/83-817, SOR/85-384, SOR/86-365,

SOR/86-366, SOR/86-421, SOR/86-983,

SOR/87-248, SOR/87-629, SOR/8863,

SOR/88-491, SOR/89-159, SOR/89-323,

SOR/90-660, SOR/91-567

DESCRIPTION: Investment

The cited laws and regulations permit

constraints to be placed on issue,

transfer and ownership of shares in

federally incorporated business

corporations. The object is to permit

corporations to meet Canadian

ownership requirements, under certain

laws as prescribed in the regulations,

in sectors where such ownership is

required as a condition to operate.

In order to maintain certain

"Canadian" ownership levels,

corporations are permitted to sell

shareholders' shares without the

consent of those shareholders, and to

purchase the corporation's own shares

on the open market. "Canadian" is

defined in the regulations.

DURATION:

Indeterminate

=============================================================================

ANNEX I

Schedule of Canada

SECTOR: All Sectors

SUB-SECTOR:

INDUSTRY CLASSIFICATION:

TYPE OF RESERVATION: Senior Management (Article 1107)

LEVEL OF GOVERNMENT: Federal

LEGAL CITATION: Canada Business Corporations Act,

R.S.C. 1985, c. I-44 as amended R.S.C.

1985, c. 27 (2nd Supp.), R.S.C. 1985,

c. 1 (4th Supp.); S.C. 1990, c. 17;

S.C. 1991, c. 45, 46, 47

Canada Business Corporations Act

Regulations, SOR/79-316, as amended

SOR/79-513, SOR/79-728, SOR/80-873,

SOR/81-3, SOR/81-189, SOR/81-868,

SOR/82-187, SOR/83-511, SOR/83-781,

SOR/83-817, SOR/85-384, SOR/86-365,

SOR/86-366, SOR/86-421, SOR/86-983,

SOR/87-248, SOR/87-629, SOR/88-63,

SOR/88-491, SOR/89-159, SOR/89-323,

SOR/90-660, SOR/91-567

Canada Corporations Act, R.S.C. 1970,

c. C-32

Special Acts of Parliament

incorporating specific companies

DESCRIPTION: Investment

The Canada Business Corporations Act

requires that a simple majority of

members of the board of directors, or

of a committee thereof, of a

federally-incorporated company must be

resident Canadians. For the purposes

of the Act the term "resident

Canadian" is defined as an individual

who is a Canadian citizen ordinarily

resident in Canada, a citizen who is a

member of a class as set out in the

regulations, or a permanent resident

as defined in the Immigration Act

except a person who has been

ordinarily resident in Canada for more

than one year after he became eligible

to apply for Canadian citizenship.

In the case of a holding corporation,

not more than 1/3 of the directors

need be resident Canadians if the

earnings in Canada of the holding

corporation and its subsidiaries are

less than 5% of the gross earnings of

the holding corporation and its

subsidiaries.

Under the Canada Corporations Act, a

simple majority of the elected

directors of a Special Act corporation

must be residents of Canada and

citizens of a Commonwealth country.

This requirement applies to every

joint stock company incorporated

subsequent to 22 June 1869 by any

Special Act of Parliament and any

subsequent amendments to such Acts.

DURATION: Indeterminate

=============================================================================

ANNEX I

Schedule of Canada

SECTOR: All Sectors

SUB-SECTOR:

INDUSTRY CLASSIFICATION:

TYPE OF RESERVATION: National Treatment (Article 1102)

LEVEL OF GOVERNMENT: Federal

LEGAL CITATION: Citizenship Act, R.S.C. 1985, c. C-29

as amended by R.S.C. 1985 c. 28 (1st

Supp.); c. 30 (3rd Supp.); c. 44 (3rd

Supp.); c. 28 (4th Supp.)

Foreign Ownership of Land Regulations,

SOR/79-416; SOR/79-514; SOR/80-156;

SOR/82-544

DESCRIPTION: Investment

Under the Citizenship Act, a province

is authorized to prohibit or restrict

acquisitions of real property located

in that province by non-Canadians.

The Foreign Ownership of Land

Regulations are made pursuant to the

Citizenship Act and the Alberta

Agricultural and Recreational Land

Ownership Act. In Alberta, an

ineligible person or foreign owned or

controlled corporation may only hold

an interest in controlled land

consisting of not more than 2 parcels

containing, in the aggregate, not more

than 20 acres. An "ineligible

person" is (1) an individual who is

not a Canadian citizen or permanent

resident; (2) a foreign government or

agency thereof; or (3) a corporation

incorporated elsewhere than in Canada.

"Controlled land" means land in

Alberta but does not include (1) land

other than land owned by the Crown;

(2) land within a city, town, new

town, village, or summer village and

(3) mines or minerals.

DURATION: Indeterminate

=============================================================================

ANNEX I

Schedule of Canada

SECTOR:

SUB-SECTOR:

INDUSTRY CLASSIFICATION:

TYPE OF RESERVATION: National Treatment (Article 1102)

LEVEL OF GOVERNMENT: Federal

LEGAL CITATION: Air Canada Public Participation Act,

R.S.C. 1985, c. 35 (4th Supp.)

Canada Development Corporation

Reorganization Act, S.C. 1985, c. 49

Petro-Canada Public Participation Act,

S.C. 1991, c. 10

Canadian Arsenals Limited Divestiture

Authorization Act, S.C. 1986, c. 20

Cooperative Energy Act, S.C.

1980-81-82-83, c. 108

Eldorado Nuclear Limited

Reorganization and Divestiture Act,

S.C. 1988, c. 41

Nordion and Theratronics Divestiture

Authorization Act, S.C. 1990, c. 4

DESCRIPTION: Investment

Non-residents may not own more than a

specified percentage of the voting

shares of the corporation to which

each Act applies. For each company the

restrictions are as follows:

Air Canada: 25%

Canada Development Corporation: 25%

Petro-Canada Inc: 25%

Canadian Arsenals Limited: 25%

Eldorado Nuclear Limited: ownership

not restricted but voting rights

restricted to 25% of votes cast at

meetings

Nordion Limited: 25%

Theratronics Limited: 49%

Cooperative Energy Corporation: 49%

Non-resident is defined in the cited

laws to generally mean:

(a) an individual, other than a

Canadian citizen, who is not

ordinarily resident in Canada;

(b) a corporation incorporated,

formed or otherwise organized

outside Canada;

(c) the government of a foreign state

or any political subdivision

thereof, or a person empowered to

perform a function or duty on

behalf of such a government;

(d) a corporation that is controlled

directly or indirectly by

non-residents as defined in any

of paragraphs (a) to (c);

(e) a trust (i) established by a

non-resident as defined in any of

paragraphs (b) to (d), other than

a trust for the administration of

a pension fund for the benefit of

individuals a majority of whom

are residents, or (ii) in which

non-residents as defined in any

of paragraphs (a) to (d) have

more than fifty per cent of the

beneficial interest; or

(f) a corporation that is controlled

directly or indirectly by a trust

described in paragraph (e).

DURATION: Indeterminate

=============================================================================

ANNEX I

Schedule of Canada

SECTOR: All Sectors

SUB-SECTOR:

INDUSTRY CLASSIFICATION:

TYPE OF RESERVATION: Local Presence (Article 1205)

LEVEL OF GOVERNMENT: Federal

LEGAL CITATION: Export and Import Permits Act, R.S.C.,

1985, c. E-19

DESCRIPTION: Cross-Border Services

Only natural persons ordinarily

resident in Canada, enterprises having

their head office in Canada or branch

offices in Canada of a foreign

enterprise may apply for and be issued

import or export permits or a transit

authorization certificate for goods

and related services subject to

controls pursuant to regulations of

the Export and Import Permits Act.

DURATION: Indeterminate

=============================================================================

ANNEX I

Schedule of Canada

SECTOR: Automotive

SUB-SECTOR:

INDUSTRY CLASSIFICATION:

TYPE OF RESERVATION:

LEVEL OF GOVERNMENT: Performance Requirements (Article 1106)

Federal

LEGAL CITATION: Canada-United-States Free Trade

Agreement Implementation Act

DESCRIPTION: Investment

Article 1106(3) shall not apply to the

granting of waivers of customs duties

conditioned, explicitly or implicitly,

upon the fulfillment of performance

requirements by those manufacturers of

automotive goods:

(a) set out in Part One of Annex

1002.1 of the Canada - United-

States Free Trade Agreement, in

accordance with the headnote to

that Part; and

(b) for the applicable periods

specified in Article 1002(2) and

(3) of the Canada - United-States

Free Trade Agreement to those

manufacturers of automotive goods

set out in Parts Two and Three,

respectively, of Annex 1002.1 of

that Agreement.

DURATION: (a) Indeterminate

(b) For Part Two, until January 1,

1998; and for Part Three, until

January 1, 1996 or such earlier

date specified in existing

agreements between Canada and the

recipient of the waiver.

=============================================================================

ANNEX I

Schedule of Canada

SECTOR: Business Service Industries

SUB-SECTOR: Customs Brokerages and Brokers

INDUSTRY CLASSIFICATION: SIC 7794 Customs Brokerages and Brokers

TYPE OF RESERVATION: National Treatment (Articles 1102, 1202)

Local Presence (Article 1205)

Senior Management (Article 1107)

LEVEL OF GOVERNMENT: Federal

LEGAL CITATION: Customs Act, R.S.C., 1985, c. 41 (2nd Supp.)

Customs Brokers Licensing Regulations,

SOR/86-1067

DESCRIPTION: Cross-Border Services and Investment

1. To be a licensed customs broker

in Canada, an individual must be a

Canadian citizen or permanent

resident.

2. To be a licensed customs

brokerage in Canada:

(a) a corporation must be

incorporated in Canada with a

majority of its directors being

Canadian citizens or permanent

residents; and

(b) a partnership must be composed of

persons who are Canadian citizens

or permanent residents, or

corporations incorporated in

Canada with a majority of their

directors being Canadian citizens

or permanent residents.

DURATION: Indeterminate

=============================================================================

ANNEX I

Schedule of Canada

SECTOR: Business Service Industries

SUB-SECTOR: Duty Free Shops

INDUSTRY CLASSIFICATION: SIC 6599 Other Retail Stores, Not

Elsewhere Classified

TYPE OF RESERVATION: National Treatment (Articles 1102, 1202)

Local Presence (Article 1205)

LEVEL OF GOVERNMENT: Federal

LEGAL CITATION: Customs Act, R.S.C., 1986, c.1 (2nd Supp.)

Duty Free Shop Regulations,

SOR/86-1072, as amended

DESCRIPTION: Cross-Border Services and Investment

1. To be a licensed duty free shop

operator at a land border crossing in

Canada, an individual must:

(a) be a Canadian citizen or

permanent resident;

(b) be of good character;

(c) be principally resident in

Canada; and

(d) have resided in Canada for at

least 183 days of the year

preceding the year of application

for the licence.

2. To be a licensed duty free shop

operator at a border crossing in

Canada, a corporation must:

(a) be incorporated in Canada; and

(b) have all of its shares

beneficially owned by Canadian

citizens or permanent residents

who meet the requirements of

paragraph 1.

DURATION: Indeterminate

=============================================================================

ANNEX I

Schedule of Canada

SECTOR: Business Service Industries

SUB-SECTOR: Examination Services relating to the

Export and Import of Cultural Property

INDUSTRY CLASSIFICATION: SIC 990 Other Services

TYPE OF RESERVATION: Local Presence (Article 1205)

LEVEL OF GOVERNMENT: Federal

LEGAL CITATION: Cultural Property Export and Import

Act, R.S.C. 1985, c. C-51

DESCRIPTION: Cross-Border Services

For purposes of the Cultural Property

Export and Import Act an "expert

examiner" of cultural property must be

either a natural person who ordinarily

resides in Canada or a corporation

that has its head office in Canada or

maintains one or more establishments

in Canada to which employees employed

in connection with the business of the

corporation ordinarily report for

work.

DURATION: Indeterminate

=============================================================================

ANNEX I

Schedule of Canada

SECTOR: Business Service Industries

SUB-SECTOR: Patent Agents and Agencies

INDUSTRY CLASSIFICATION: SIC 7499 Other Financial

Intermediaries, Not

Elsewhere Classified

(Limited to Holders of

Intellectual Property

Rights)

TYPE OF RESERVATION: National Treatment (Article 1202)

Local Presence (Article 1205)

LEVEL OF GOVERNMENT: Federal

LEGAL CITATION: Patent Act, R.S.C., 1985, c. P-4

Patent Rules, CRC, Vol. XIII, c. 1250,

p.10053

Patent Cooperation Treaty Regulations,

SOR/89-453

DESCRIPTION: Cross-Border Services

1. To be able to represent persons

in the presentation and prosecution of

applications for patents or in other

business before the Patent Office, a

patent agent must be a resident of

Canada and registered by the Patent

Office.

2. To prosecute an application for a

patent in Canada a registered patent

agent who is not a resident of Canada

must appoint a registered patent agent

who is a resident of Canada as an

associate to prosecute the

application.

3. Any firm may be added to the

patent register provided that it has

at least one member who is also on the

register.

DURATION: Indeterminate