City of Dryden Reaches Tax Agreement with Domtar

DRYDEN, Ontario

The Corporation of the City of Dryden and Domtar Corporation (NYSE: UFS) (TSX: UFS) today announced a comprehensive agreement settling all outstanding municipal taxation matters from 2009 to 2016.

“After years of having this issue outstanding, a decision was made by this Mayor and Council to resolve this matter by working cooperatively with one of our largest employers, Domtar. Through positive, goal-orientated negotiation, we are pleased to announce the matter has been resolved,” said Nick Beyak, Interim Chief Administrator at the City of Dryden. “Domtar recognized the current fiscal situation at the City. Also, Mayor and Council were practical, and understanding of Domtar’s position, while still keeping the interests of the citizens of Dryden as their top priority. I believe this is a win-win settlement for all concerned, and the City looks forward to a long, prosperous relationship with Domtar.”

“We are very pleased to have reached this agreement with the City and we appreciate the recent efforts made to bring this important matter to a conclusion,” said Jim Blight, General Manager of the Dryden Pulp Mill. “We believe this agreement addresses the City’s immediate financial constraints while recognizing the mill’s need for competitive industrial taxes over the long-term.”

Under the terms of the agreement, the tax refund owed by the City of Dryden to Domtar is reduced from $7.9 million to $6.65 million. In addition, Domtar will waive appeals underway for the 2013-2016 period. The City will cap Domtar’s industrial taxes in 2017 and 2018 at the 2016 level. It will also pass and publicize a broad, direction-setting resolution outlining the City’s long-term goal to reduce the industrial taxes per ton to the average among Domtar’s competitors to support the competitiveness of the Dryden mill.

About the City of Dryden
Drydenis located in the Kenora District of Northwestern Ontario on Wabigoon Lake midway between Thunder Bay, Ontario and Winnipeg, Manitoba on the TransCanada Highway. The City has a diversified economic base comprised of industry, a large retail and service sector, a growing mining sector and a thriving tourism base. Dryden is well connected by highway and air, and has first class health care, educational and recreational facilities. Dryden is surrounded by the unspoiled, rugged beauty of a pristine wilderness, freshwater lakes and spectacular vistas, which is why Dryden is called “The Wilderness City”. Dryden offers something for everyone – the perfect blend of opportunities to raise a family, launch a business or enjoy retirement. For more information see www.dryden.ca.

About Domtar
Domtar is a leading provider of a wide variety of fiber-based products including communication, specialty and packaging papers, market pulp and absorbent hygiene products. With over 10,000 employees serving more than 50 countries around the world, Domtar is driven by a commitment to turn sustainable wood fiber into useful products that people rely on every day. Domtar’s annual sales are approximately $5.3 billion and its common stock is traded on the New York and Toronto Stock Exchanges. Domtar’s principal executive office is in Fort Mill, South Carolina. To learn more, visit www.domtar.com.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160620006490/en/

FOR MORE INFORMATION
DOMTAR INC.
Bonny Skene, 807-223-9035
Regional Public Affairs Manager
or
CORPORATION OF THE CITY OF DRYDEN
Nick Beyak, 807-223-1194
Interim Chief Administrative Officer
nbeyak@dryden.ca