Good corporate governance is about creating lasting shareholder value. Nothing aligns corporate and shareholder interests quite like business success.

Directors are ultimately responsible for ensuring the company has a sound long-term business strategy. Setting the right strategy is fundamental for business success. At Maple Leaf Foods, we discuss strategy at every Board meeting. Every year, we oversee an exhaustive review of competitive positioning and strategy for every business unit.

In 2006, we wrestled with the critical problem of how currency and industry changes were impacting our earnings and global competitiveness. In the spring, to tackle this issue, management initiated the most comprehensive strategic review since the current Company was formed 12 years ago. We examined every aspect of our protein businesses to determine how best to tap the underlying value of our people, assets, brands, and market positions.

After much scrutiny and debate, it was clear that the best path to generate earnings growth was to build on Maple Leaf's core strengths in further processed, value-added meats and meals, which complements our highly successful bakery business. These businesses are bound together by an excellent track record in product innovation, a depth of experience in consumer packaged goods, and regional, national and international market and brand leadership.

The Board was fully engaged at every step in this critical course correction, bringing the diversity of experience from their distinguished careers to bear in the search for the right solution. The outcome is a new strategic direction that goes well beyond managing the currency issue alone. It will result in a leaner, more focussed and more profitable Company, connecting with customers and consumers in market segments where we can improve our margins and control our destiny.

I thank the directors for overseeing a difficult renewal process. Their business expertise and grasp of global economics, coupled with a willingness to speak up and get involved, were essential to the final outcome. We are confident, as fellow shareholders, that Maple Leaf's new strategic direction will result in strong growth, sustainable profitability and enhanced shareholder value.

Sincerely,

G. Wallace F. McCain
Chairman