Presented by:Kevin J. Clarke,President & CEOBrian Baarda,VP Finance & CFO

May 7, 2013

March 6, 2013

Q2 2016 EARNINGS

PRESENTATIONPresented by:

Joe Nemeth, President & CEO

Frank De Costanzo, SVP & CFO

July 28, 2016

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The presentation and answers to questions today contain forward-looking statements. Forward-looking statements are statementsthat address or discuss activities, events or developments that we expect or anticipate may occur in the future and can beidentified by the use of words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “likely”, “predicts”, “estimates”, “forecasts”,and similar words or phrases or the negative of such words or phrases. These forward-looking statements reflect our currentbeliefs, intentions or expectations based on certain assumptions and estimates, which could prove to be significantly incorrect,including our ability to develop, manufacture and sell new products and services that meet the needs of our customers and gaincommercial acceptance, our ability to continue to sell our products and services in the expected quantities at the expected pricesand expected times, our ability to successfully obtain cost savings from our cost reduction initiatives, our ability to implementbusiness strategies and pursue opportunities, expected cost of goods sold, expected component supply costs and constraints andexpected foreign exchange and tax rates.

While considered reasonable by management, these forward-looking statements are inherently subject to known and unknownrisks and uncertainties and other factors that could cause actual results or events to differ from historical or anticipated results orevents. These risks, uncertainties and other factors include the impact of general economic conditions in the countries in which wedo business, conditions in the capital markets and our ability to obtain financing and refinance existing debt, market conditions anddemand for our products (including declines in advertising and circulation), product selling prices, the implementation of traderestrictions in jurisdictions where our products are marketed, fluctuations in foreign exchange or interest rates, raw material prices(including wood fibre, chemicals and energy), our ability to successfully obtain cost savings from our cost reduction initiatives, theeffect of, or change in, environmental and other governmental regulations, labour relations, the availability of qualified personnel,legal proceedings, the effects of competition from domestic and foreign producers, our ability to implement business strategies andpursue opportunities, the risk of natural disaster and other factors beyond our control.

As a result, no assurance can be given that any of the events or results anticipated by such forward-looking statements will occuror, if they do occur, what benefit they will have on our operations or financial condition. Readers are cautioned not to place unduereliance on these forward-looking statements. We disclaim any intention or obligation to update or revise any forward-lookingstatements, whether as a result of new information, future events or otherwise, except as required by law.

FORWARD-LOOKING STATEMENTS

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Except where otherwise indicated, the financial information in this presentation is determined onthe basis of US GAAP.

“Adjusted EBITDA” is a non-GAAP measure, calculated as operating earnings (loss) plusdepreciation and amortization and impairment. We focus on adjusted EBITDA as we believe thismeasure enables comparison of our results between periods without regard to debt service,income taxes, capital expenditure requirements, and impairment.

“Adjusted EBITDA before specific items”, “net earnings (loss) before specific items”, and “netearnings(loss) per share before specific items” are non-GAAP measures. We use measuresexcluding specific items in evaluating our results between periods without regard to specificitems that adversely or positively affect our adjusted EBITDA and net earnings (loss).

“Free cash flow” is a non-GAAP measure, calculated as adjusted EBITDA after capitalexpenditures, interest and taxes paid, and adjustments to reflect employee future benefitpayments. The closest GAAP measure is cash provided by operating activities less cash usedby investing activities. We report free cash flow as we believe it is useful for investors and otherusers to be aware of this measure so they can better assess our operating performance.

NON-GAAP MEASURES

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Q2 2016 OVERVIEW

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• Financials – Q2 2016 (vs Q1 2016):

• Net loss of $26.6 million (vs net earnings of $16.9 million) • Adjusted EBITDA of negative $5.3 million (vs $17.1 million) • Negative free cash flow was $30.0 million (vs negative $1.7

million)• Liquidity of $74.5 million

• Q2 results challenged by:

• Stronger Canadian dollar • Maintenance outages at Crofton • $2.2 million countervailing duty impact

Q2 2016 OVERVIEW

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• Year to date comparison:

• Successfully managing costs within our control:

• Distribution • Power, fuel, fibre • Chemicals

First Six Months

Operating Loss

($ million)

Adjusted EBITDA

($ million)2016 $(15.9) $11.82015 $(34.3) $(5.2) YOY

Improvement $18.4 $17.0

Q2 2016 OVERVIEW:Operations

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Safety:• Medical Incident Rate (MIR): 1.51 • Lost Time Incident Rate (LTI): 0.60

• MIR improved by 40% compared to prior year average

• LTI improved by 52% compared to prior year average

• Focus: Increased employee involvement in grassroots programs; increased ownership and accountability

Q2 2016 OVERVIEW:Operations

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Operations: • Revitalization-driven cost savings of over $30 million

led by U.S. mills • Operating issues at Crofton:

• Planned and unplanned maintenance ($13.8 million) • Breach in main water supply line ($3.1 million)

• Countervailing duty and legal costs of $2.2 million • 4% hydro-electric rate increase on April 1, 2016

Q2 2016 OVERVIEW:Sales & Markets

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Top-Line Improvement Initiatives: • Strong sales mix of Coated Freesheet and Coated

Groundwood products • Sales of Coated One Side tracking ahead of target• Uncoated freesheet on track for continued growth• Commercialized new 7 point Orion matte product • Ongoing product development and innovation • $1.3 million in supply chain savings

Q2 2016 OVERVIEW:Sales & Markets

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Sustainability Achievements: • Named one of Canada’s Best Corporate Citizens for the

10th consecutive year • Earned Canadian Industry for Energy Conservation

Leadership Award (Powell River G13 Turbine)• Energy Management Insight Award (Crofton ISO 50001)

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FINANCIAL RESULTS

($millions, except per share amounts) Q1 Q2 Q3 Q4 Q1 Q2 Sales $ 479.3 $ 458.4 $ 542.6 $ 510.8 $ 510.4 $ 460.8

Adjusted EBITDA 14.0 (19.2) 38.8 15.1 17.1 (5.3)

Adjusted EBITDA before specific items 16.0 9.7 41.2 19.8 17.7 (1.1)

Adjusted EBITDA margin before specific items 3.3% 2.1% 7.6% 3.9% 3.5% -0.2%

Net earnings (loss) $ 22.2 $ (32.4) $ (12.9) $ (26.3) $ 16.9 $ (26.6)

Net earnings (loss) before specific items (12.6) (13.8) 8.4 (10.0) (5.1) (27.3)

EPS 1.53 (2.23) (0.89) (1.82) 1.17 (1.84) EPS before specific items (0.87) (0.95) 0.58 (0.69) (0.35) (1.88) Average F/X spot rate (USD/CAD) 0.806 0.813 0.768 0.749 0.728 0.776

Average effective F/X rate (USD/CAD) 0.805 0.813 0.763 0.749 0.728 0.776

2015 2016

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ADJUSTED EBITDA RECONCILIATION

(In millions of Canadian dollars) Q1 2016 Q2 2015 2015 YTD

Adjusted EBITDA in comparative period 1 $ 17.1 $ (19.2) $ (5.2) Paper prices (1.7) (17.2) (44.3) Pulp prices 0.6 (8.5) (25.0) Impact of Canadian dollar (12.7) 9.3 27.7 Volume and mix (1.2) 5.4 4.6 Distribution costs (0.6) 5.5 10.2 Furnish and other conversion costs 3.5 11.1 22.2 Power and fuel costs 6.9 9.5 12.2 Labour costs (0.2) (0.6) 3.5 Maintenance costs (9.5) 2.7 8.2 Selling, general and administrative (4.3) (4.8) (2.4) Lower of cost or market impact on inventory, net of inventory change 4.5 4.1 0.5 Inventory valuation (6.2) (7.1) (6.9) Power generation (4.3) 0.5 2.3 Other, net 2.8 4.0 4.2

Adjusted EBITDA in Q2 and YTD 2016 1 $ (5.3) $ (5.3) $ 11.8

1 Refer to section 6, Non-GAAP measures.

FREE CASH FLOW

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($millions)

Adjusted EBITDA 14.0 (19.2) 38.8 15.1 17.1 (5.3)

Interest expense, excluding amortization (11.4) (10.2) (12.4) (11.1) (11.0) (10.9)

Capital expenditures (10.4) (11.1) (2.9) (10.1) (5.1) (10.3)

Income taxes paid - - - - - (0.1)

Employee future benefits, net of funding (0.3) (1.0) (0.1) (5.3) (2.7) (3.4)

Free cash flow $ (8.1) $ (41.5) $ 23.4 $ (11.4) $ (1.7) $ (30.0)

Q2Q1

2016

Q1

2015

Q4Q2 Q3

LIQUIDITY

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($millions) Q1 Q2 Q3 Q4 Q1 Q2

Borrowing base 1 $ 225.0 $ 212.7 $ 225.0 $ 225.0 $ 225.0 $ 226.2

Letters of credit (22.0) (21.8) (22.1) (22.4) (24.4) (24.1)

Net amount drawn (111.3) (114.0) (121.7) (117.1) (125.0) (135.9)

Availablily 91.7 76.9 81.2 85.5 75.6 66.2

Cash on hand 9.9 8.7 5.0 8.3 8.4 8.3

Total liquidity $ 101.6 $ 85.6 $ 86.2 $ 93.8 $ 84.0 $ 74.5

2016

1 The borrowing base at June 30, 2016 includes a reserve of $1.4 million for pension, $2.9 million for creditor insurance deductibles, $2.6 million for landlord waivers, $1.5 million for employee source deductions, $0.3 million related to WorkSafeBC and $3.1 million vacation pay reserve.

2015

PLANNED MAJOR MAINTENANCE SHUTDOWNS IN 2016

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2016 Q1 Q2 Q3 Q4 Total

Mill Location Tonnage

Impact

MtceCost

($mm) Tonnage

Impact

MtceCost

($mm) Tonnage

Impact

MtceCost

($mm) Tonnage

Impact

MtceCost

($mm) Tonnage

Impact

MtceCost

($mm)Alberni

Other – – – – – 0.2 – – – 0.2Boilers – – – – – 0.6 – 1.0 – 1.6

Crofton TMO – – 7,200 3.0 – – – – 7,200 3.0Capital – – 7,900 – – – – – 7,900 –Pulp – – 12,200 4.6 – – – – 12,200 4.6Boilers – 3.8 – – – – – – – 3.8

Powell Boilers – 0.2 – 2.8 – – – – – 3.0

Biron Boilers – – – – – – – 0.1 – 0.1

Rumford Capital – – – – – – 1,500 – 1,500 –Pulp – – – – – – 4,100 8.8 4,100 8.8Boilers – – – – – 3.9 – 2.9 – 6.8Other – – – – – – – 1.0 – 1.0

Total – 4.0 27,300 10.4 – 4.7 5,600 13.8 32,900 32.9

Q2 2016 OVERVIEW:Outlook

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Markets:• Continued secular decline in North American paper

markets• Highlights are Newsprint and pulp pricing, which are

expected to hold up well and continue to trade in a narrow range for the remainder of 2016

Operations: • Seasonally stronger sales demand • Commercialization of new products in growth markets • Reduced maintenance spending • Ramp-up of Revitalization savings

Q&AAppendix

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ADJUSTED EBITDA SENSITIVITIES

($millions) Adjusted EBITDA

Product prices (1), (2) Impact of US$10/t change in price of:

Uncoated Paper $ 6 Coated Paper 12 Newsprint 4 Pulp 4

$ 26

Foreign exchange (3) Impact of $0.01 change in US dollar relative to the Canadian dollar 10

Energy cost sensitivity (1), (4) Impact of 5% change in price of: Natural gas and oil – direct purchases 1 Electricity – direct purchases 8 Coal – direct purchases 1

Freight cost sensitivity Impact of US$5/bbl change in price of West Texas Int. (WTI) Oil 1

Fibre sensitivity (1), (4) Impact of US$5/unit change in the price of wood chips (Bdt) 16

(1) Based on a foreign exchange rate of US$0.78. (2) Based on annualized sales of Q2 2016.

(3) Based on Q2 2016 annualized net cash flows and a foreign exchange movement to US$0.79 from US$0.78 and excluding our hedging program and the impact of the translation of US dollar denominated debt.

(4) Based on annualized Q2 2016 consumption levels.

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SUMMARY OF SEGMENTED FINANCIAL INFORMATION

Numbers for all periods exclude the results of our Snowflake mill which have been classified as discontinued operations.

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($millions, except where otherwise stated) Q1 Q2 Q3 Q4 FY Q1 Q2

Sales (000 MT)Coated 225.9 216.9 253.6 240.7 937.1 237.9 241.7 Uncoated 103.0 108.4 104.9 109.6 425.9 98.9 107.3 Newsprint 81.6 89.8 92.6 82.0 346.0 80.5 73.3 Pulp 84.9 86.0 85.1 89.3 345.3 89.8 69.4 Other 15.1 10.0 34.6 20.3 80.0 35.7 20.7

510.5 511.1 570.8 541.9 2,134.3 542.8 512.4 SalesCoated 244.2 228.5 $ 287.9 $ 273.2 $ 1,033.8 $ 269.7 $ 255.0 Uncoated 94.3 95.5 95.2 97.5 382.5 87.9 90.6 Newsprint 58.0 58.9 63.0 55.6 235.5 56.3 49.9 Pulp 70.5 67.7 70.7 69.9 278.8 70.4 51.7 Other 12.3 7.8 25.8 14.6 60.5 26.1 13.6

479.3 458.4 $ 542.6 $ 510.8 $ 1,991.1 $ 510.4 $ 460.8 Adjusted EBITDACoated (5.2) (19.6) $ 15.1 $ 8.6 $ (1.1) $ 11.3 $ 9.9 Uncoated 10.6 (6.1) 6.3 3.5 14.3 2.2 (3.9)Newsprint 2.9 (5.5) (0.4) (0.1) (3.1) (2.3) (5.4)Pulp 8.0 11.8 18.6 4.2 42.6 11.4 (4.6)Other (2.3) 0.2 (0.8) (1.1) (4.0) (5.5) (1.3)

14.0 (19.2) $ 38.8 $ 15.1 $ 48.7 $ 17.1 $ (5.3)Operating earnings (loss)Coated (10.7) (25.4) $ 9.1 $ 1.9 $ (25.1) $ 6.1 $ 5.3 Uncoated 4.2 (12.2) - (3.2) (11.2) (4.1) (9.6)Newsprint 1.4 (7.4) (2.3) (2.1) (10.4) (4.0) (7.3)Pulp 7.3 11.1 17.9 2.7 39.0 10.8 (5.3)Other (2.5) (0.1) (0.9) (1.5) (5.0) (6.1) (1.7)

(0.3) (34.0) $ 23.8 $ (2.2) $ (12.7) $ 2.7 $ (18.6)

2015 2016

IMPACT OF SPECIFIC ITEMS ON NET EARNINGS (LOSS)

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($millions, except where otherwise stated) Q1 Q2 Q3 Q4 Q1 Q2 LTM

Net earnings (loss) $ 22.2 $ (32.4)

$ (12.9) $ (26.3)

$ 16.9 $ (26.6) $ (48.9)

Specific items, after taxes: - Foreign exchange loss (gain) on long-term debt 27.6 (5.5) 24.0 11.6 (22.6) 0.6 13.6 Bargain purchase price (39.3) (2.9) (1.7) - - - (1.7) Market curtailment - 11.7 - - - - - Crofton oxygen plant outage (insurance recovery) - 4.4 - - (2.7) - (2.7) Rumford recovery boiler upgrade - 11.0 - - - - - Professional fees & duties on countervailing action - 1.1 2.1 4.5 3.3 2.2 12.1 Crofton waterline breach, net of insurance recovery - - - - - 2.0 2.0 Net settlement gain - - - - - (5.5) (5.5) Reduction of deferred tax asset valuation allowance (25.1) (1.9) (3.4) - - - (3.4) Acquisition costs related to US paper mills 1.4 - - - - - - Restructuring costs 0.6 0.7 0.3 0.2 - - 0.5

Net earnings (loss) before specific items $ (12.6) $ (13.8)

$ 8.4 $ (10.0)

$ (5.1) $ (27.3) $ (34.0)

Net earnings (loss) per share before specific items$ (0.87)

$ (0.95)

$ 0.58 $ (0.69)

$ (0.35) $ (1.88) $ (2.34)

Weighted average common shares (millions) 14.5 14.5 14.5 14.5 14.5 14.5 14.5

2015 2016

CAPITALIZATION

December 31,

2015 June 30,

2016 Term loan, due July 31, 2017 $ 16.0 $ 15.1 Senior secured notes, 11.0% due October 30, 2017 (US$260.5

million; December 31, 2015 – US$260.5 million) 355.6 335.0 371.6 350.1 Revolving asset based loan facility of up to $250.0 million

(December 31, 2015 - $225.0 million) due July 31, 2017 115.1 134.3 Capital lease obligations 7.5 6.9 Total debt 494.2 491.3 Less: currenty portion (3.2) (3.2) Total long-term debt $ 491.0 $ 488.1

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($millions)

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