The Board shall elect annually from among its members an Audit Committee comprised of not less than 3 directors. Each member of the Audit Committee must be:

• a director of the Corporation;
• independent (within the meaning of sections 1.4 and 1.5 of Multilateral Instrument 52-110 - Audit Committees); and
• financially literate (within the meaning of section 1.6 of Multilateral Instrument 52-110 - Audit Committees).

In order to be considered to be an independent director for the purposes of membership on the Committee, a director must have been determined by the Board to be independent in accordance with all applicable regulatory requirements.

The Board will appoint one member of the Committee as Chairman. Any member of the Audit Committee may be removed or replaced at any time by the Board of Directors, and a member shall cease to be a member of the Committee upon ceasing to be independent.

Meetings

The Committee shall meet at least four times per year and whenever deemed necessary by the Chairman of the Committee or at the request of a Committee member or the Corporation's external or internal auditor. The Committee Chairman shall prepare and/or approve an agenda in advance of each meeting. Reasonable notification of meetings, which may be held in person, by telephone or other communication device, shall be sent to the members of the Committee, the external auditor and any additional attendees as determined by the Chairman. The external auditor has the right to appear before and be heard at any meeting of the Committee. Upon the request of the external auditor, the Chairman of the Committee shall convene a meeting of the Committee to consider any matters which the auditor believes should be brought to the attention of the directors or shareholders of the Corporation. Meetings will be scheduled to permit timely review of Committee materials. A majority of the Committee will constitute a quorum. Minutes of each meeting will be prepared by the person designated by the Committee to act as secretary and will be kept by the Corporate Secretarial Department.

Reporting

The Committee shall report to the Board of Directors of the Corporation on such matters and questions relating to the financial position of the Corporation as the Board of Directors may from time to time refer to the Committee. A summary of all meetings will be provided to the Board of Directors by the Committee Chairman. Supporting schedules and information reviewed by the Committee will be available for examination by any director upon request. The external auditor and the VP Internal Audit and Risk Management shall report directly to the Committee. The Committee is expected to maintain free and open communication with the Corporation's external auditor, internal auditor and management. This communication shall include private sessions, at least annually, with each of these parties.

Responsibilities and Authority

The Committee relies on the expertise and knowledge of management and the internal and external auditors in carrying out its oversight responsibilities. Management of the Corporation is responsible for determining that the Corporation’s financial statements are complete, accurate and in accordance with generally accepted accounting principles. The external auditor is responsible for auditing the Corporation’s financial statements.

The Committee shall have the power to conduct or authorize investigations into any matters within the Committee’s scope of responsibilities. The Committee shall have the authority to retain independent counsel, accountants or other outside advisors as it determines necessary to permit it to carry out its duties, to set and pay the compensation for any advisors employed by the Committee, and to communicate directly with the internal and external auditors.

The Committee shall:

• Recommend to the Board of Directors:

• Be directly responsible for overseeing the work of the external auditor engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attestation services for the Corporation, including the resolution of disagreements between management and the external auditor regarding financial reporting.
• Pre-approve all non-audit services to be provided to the Corporation or its subsidiaries by the external auditor of the Corporation or its subsidiaries.  The Committee may delegate to one or more of its members the authority to grant pre-approvals provided that any pre-approvals so granted are presented in writing to the Committee at the next regularly scheduled meeting. The Committee will ensure that relevant policies and procedures are in place to manage this process and comply with all applicable regulatory requirements.
• Review the Corporation’s annual and interim financial statements, AIF, MD&A and annual and interim earnings press releases before this information is publicly disclosed.
• As delegated by the Board, review and approve the interim financial statements, MD&A and earnings press releases before this information is publicly disclosed.
•  Be satisfied that adequate procedures are in place for the review of the Corporation’s disclosure of financial information extracted or derived from the Corporation’s financial statements, and periodically assess the adequacy of such procedures. This would include an annual review of the ATCO Disclosure Policy.
• Establish procedures for:

• Ensure the Corporation has implemented appropriate systems of internal control over financial reporting and that these systems are operating effectively;
• Ensure the internal audit function has been effectively carried out and the internal auditors have adequate resources;
• Review and approve the Corporation’s hiring policies regarding partners, employees and former partners and employees of the present and former external auditors of the Corporation;
• Review and reassess annually the adequacy of this Mandate and recommend any proposed changes to the Board for approval;
• Confirm that disaster recovery plans are in place.

The members of the Committee, for the purpose of performing their duties, have the right to inspect all the books and records of the Corporation and its subsidiary entities and to discuss such books and records in any manner relating to the financial position of the Corporation and its subsidiary entities with the officers, employees and external auditors of the Corporation and its subsidiary entities.