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Government of Saskatchewan withdraws from memorandum of understanding with Domtar

Press release from the issuing company

MONTREAL, Nov. 30 2007 - Domtar was informed today that the Government of the Province of Saskatchewan is not prepared to participate in the financing of the redevelopment of the Prince Albert pulp mill as set forth in a Memorandum of Understanding (MOU) signed on September 12, 2007.
Although Domtar recognizes that the Saskatchewan Government remains committed to ensuring the future of northern Saskatchewan's forest resource, the Government's decision to withdraw its support narrows down Domtar's options regarding the Prince Albert facilities.
Consequently, Domtar will terminate all work being done on this project.
Domtar Corporation is the largest integrated producer of uncoated freesheet paper in North America and the second largest in the world based on production capacity, and is also a manufacturer of papergrade pulp. The Company designs, manufactures, markets and distributes a wide range of business, commercial printing, publication as well as technical and specialty papers with recognized brands such as First Choice, Domtar Microprint, Windsor Offset(R), Cougar(R) as well as its full line of environmentally and socially responsible papers, Domtar EarthChoice(R). Domtar owns and operates Domtar Distribution Group, an extensive network of strategically-located paper distribution facilities. Domtar also produces lumber and other specialty and industrial wood products. The Company employs nearly 14,000 people. To learn more, visit www.domtar.com
All statements in this press release that are not based on historical fact are "forward-looking statements". While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under the captions "Forward-Looking Statements" and "Risk Factors" of the prospectuses contained in the registration statement on Form S-4 filed with the SEC. We disclaim any intention to, and undertake no obligation to, update or revise any forward-looking statements contained in this press release.