BFI Canada Reports Strong First Quarter Results

Date: May 13, 2008

Source: BFI Canada Income Fund

BFI Canada Income Fund Announces Results for the Three Months Ended March 31, 2008

BFI Canada Income Fund (the "Fund") (TSX: BFC.UN) reported strong financial results for the three months ended March 31, 2008. All amounts are in thousands of Canadian dollars, unless otherwise stated.

Management Commentary

"We achieved an impressive start to the year, with a strong performance throughout our Company as we intensified our focus on growth opportunities," said Keith Carrigan, Vice Chairman and Chief Executive Officer. "Consolidated revenues grew nearly 34% quarter over quarter, excluding the impact of foreign currency translation, and our organic revenues, which exclude acquisitions and fuel and environmental surcharges, increased 13.3% in Canada and 6.2% in the U.S."

"We were able to accomplish this level of internal improvement despite the harsh weather conditions in eastern Canada and parts of the U.S. northeast, the softness in the U.S. economy, and the recent sharp rise in fuel prices, which is testament to the effectiveness of our bottom-up operational strategies and the stability of the solid waste services industry in general."

Carrigan added, "Our revenue performance in the quarter drove a 14.0% increase in EBITDA, a 25.0% increase excluding the impact of foreign currency translation, and a 20.7% increase in free cash flow available for distribution."

Financial Highlights for the Three Months Ended March 31, 2008

  • Total consolidated revenues increased 20.8% to $244.3 million.

  • Total consolidated revenue growth, excluding the impact of foreign currency translation, was 33.9%.

  • Total EBITDA(A) growth, excluding the impact of foreign currency translation, was 25.0%.

  • Free cash flow available for distribution(B) increased to $39.9 million or 20.7%.

  • The Fund's payout ratio was 78.2%.

  • The Fund's payout ratio excluding the effects of the foreign currency hedge was 79.8%.

Other Highlights for the Three Months Ended March 31, 2008

  • The Fund completed two acquisitions, one in each of the U. S. south and northeast segments.

  • The Fund's Lachenaie landfill received a one year operating extension. Management's efforts to secure a long-term operating permit remain active.

  • The Trustees continue to actively work with management to review the Fund's corporate structure in response to changes to the taxation of income trusts and its related impact on the Fund's continuous improvement and growth strategy. No definitive conclusions have been reached as to the appropriate response to date.


Summarized Financial Highlights

                                                              Three months
                                                                     ended
                                                            March 31, 2008
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Revenues March 31, 2007                                   $        202,300
Organic growth and acquisitions (includes fuel and
 environmental surcharges)                                          68,500
Foreign currency exchange impact                                   (26,453)
---------------------------------------------------------------------------
Revenues March 31, 2008                                   $        244,347
% Revenue growth before foreign currency exchange impact              33.9%
Total revenue growth %                                                20.8%

EBITDA(A) March 31, 2007                                  $         58,672
Organic growth and acquisitions                                     14,643
Foreign currency exchange impact                                    (6,457)
---------------------------------------------------------------------------
EBITDA(A) March 31, 2008                                  $         66,858
% EBITDA(A) growth before foreign currency
 exchange impact                                                      25.0%
Total EBITDA(A) growth %                                              14.0%

Free cash flow available for distribution(B)
 March 31, 2007                                           $         33,090
Organic growth and acquisitions                                      9,934
Foreign currency exchange impact                                    (3,084)
---------------------------------------------------------------------------
Free cash flow available for distribution(B)
 March 31, 2008                                           $         39,940

% Free cash flow available for distribution(B) growth
 before foreign currency exchange impact                              30.0%
Total free cash flow available for distribution(B)
 growth %                                                             20.7%
Free cash flow available for distribution(B)
 without hedge                                            $         39,137
---------------------------------------------------------------------------

Distributions and dividends declared                      $         31,227
---------------------------------------------------------------------------

Payout ratio with foreign currency hedge                              78.2%
---------------------------------------------------------------------------

Payout ratio without foreign currency hedge                           79.8%
---------------------------------------------------------------------------

Foreign Currency Hedge

A significant portion of the Fund's operating results, maintenance capital and landfill expenditures ("maintenance expenditures"), interest on long-term debt, and cash income taxes reported in Canadian dollars, originate in the U.S. Operating expenses, maintenance expenditures, interest on long-term debt, and cash income taxes originating in the U.S. are settled in U.S. dollars generated from U.S. operations which results in a natural cash flow hedge.


Financial Highlights

(in thousands, except per weighted average trust unit and participating
 preferred share ("PPS"))

                                                        Three months ended
                                                                  March 31
---------------------------------------------------------------------------
---------------------------------------------------------------------------
                                                         2008         2007
---------------------------------------------------------------------------
                                                   (unaudited)  (unaudited)
---------------------------------------------------------------------------

Operating results
Revenues                                          $   244,347  $   202,300
Operating expenses                                    147,148      116,630
Selling, general and administration
 expenses ("SG&A")                                     30,341       26,998
---------------------------------------------------------------------------
EBITDA(A)                                              66,858       58,672
Amortization                                           42,577       37,918
Interest on long-term debt                             13,374        9,894
Financing costs                                             -          864
Net loss (gain) on sale of capital assets                  40         (208)
Net loss on financial instruments                       9,047        1,855
Net foreign exchange (gain) loss                         (624)       1,621
Other expenses                                             31            5
---------------------------------------------------------------------------
Income before income taxes and non-controlling
 interest                                               2,413        6,723
---------------------------------------------------------------------------
Income tax recovery                                    (8,061)      (5,792)
Non-controlling interest                                1,698        2,150
---------------------------------------------------------------------------
Net income                                          $   8,776  $    10,365
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Net income per weighted average trust unit, basic
 & diluted                                          $    0.15  $      0.19

Trust units and PPSs outstanding
Weighted average number of trust units outstanding     57,568       53,744
Weighted average number of PPSs outstanding            11,138       11,497
---------------------------------------------------------------------------
Weighted average number of trust units and PPSs
 outstanding                                           68,706       65,241
---------------------------------------------------------------------------
Aggregate number of trust units and PPSs
 outstanding                                           68,706       65,141
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Maintenance and growth expenditures
Maintenance expenditures                            $  10,846  $    12,355
Growth capital and landfill expenditures
 ("growth expenditures")                               12,430       10,184
---------------------------------------------------------------------------
Total maintenance and growth expenditures           $  23,276  $    22,539
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Operating and free cash flow
Cash generated from operating activities            $  42,934  $    28,455
Free cash flow available for distribution(B)        $  39,940  $    33,090
Free cash flow available for distribution(B)
 per weighted average trust unit and PPS            $    0.58  $      0.51

Distributions
Distributions declared, trust units                 $  26,164  $    24,553
Dividends declared, PPSs                                5,063        5,092
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Total distributions and dividends declared          $  31,227  $    29,645
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Total distributions and dividends declared per
 weighted average trust unit and PPS                $    0.45  $      0.45

Management's Discussion

(all amounts are in thousands, except per trust unit, PPS, and foreign currency exchange rate amounts)

Foreign Currency Exchange Rates

The Fund reports its financial results in Canadian dollars. Consequently changes in the foreign currency exchange rate between Canada and the U.S. impacts the translated value of the Fund's U.S. operating results to Canadian dollars. The U.S. segments financial position and operating results have been translated to Canadian dollars applying the following U.S. to Canadian dollar foreign exchange rates:


                                      2008                             2007
           ------------------------------- --------------------------------
           Consolidated       Consolidated Consolidated        Consolidated
                Balance       Statement of      Balance        Statement of
                  Sheet     Operations and        Sheet      Operations and
                             Comprehensive                    Comprehensive
                             Income (Loss)                    Income (Loss)
           ----------------------------- ----------------------------------
                                Cumulative                       Cumulative
                Current  Average   average      Current  Average    average
           ----------------------------- ----------------------------------
December 31                                    $  0.988 $  0.982   $  1.074
March 31       $  1.028 $  1.004  $  1.004     $  1.153 $  1.172   $  1.172
           ----------------------------- ----------------------------------

Readers are reminded that a significant portion of the Fund's financial results originate in the U.S. The impact of foreign currency exchange on the Fund's consolidated results is included in the Fund's MD&A for the three months ended March 31, 2008.


Operating Highlights

                                                Three months ended March 31
---------------------------------------------------------------------------
---------------------------------------------------------------------------
                                      2008             2007     $    Change
---------------------------------------------------------------------------

Revenues                         $ 244,347       $  202,300     $    42,047
---------------------------------------------------------------------------
Canada                           $  85,768       $   73,355     $    12,413
U.S. south                       $  79,816       $   74,535     $     5,281
U.S. northeast                   $  78,763       $   54,410     $    24,353

Operating expenses               $ 147,148       $  116,630     $    30,518
---------------------------------------------------------------------------
Canada                           $  46,544       $   37,667     $     8,877
U.S. south                       $  51,402       $   48,555     $     2,847
U.S. northeast                   $  49,202       $   30,408     $    18,794

SG&A                             $  30,341       $   26,998     $     3,343
---------------------------------------------------------------------------
Canada                           $  11,070       $   10,482     $       588
U.S. south                       $  10,407       $   10,079     $       328
U.S. northeast                   $   8,864       $    6,437     $     2,427

EBITDA(A)                        $  66,858       $   58,672     $     8,186
 --------------------------------------------------------------------------
Canada                           $  28,154       $   25,206     $     2,948
U.S. south                       $  18,007       $   15,901     $     2,106
U.S. northeast                   $  20,697       $   17,565     $     3,132

The discussions to follow are in addition to the impact of foreign currency exchange fluctuations which are detailed in the Fund's MD&A for the three months ended March 31, 2008.

Revenues - Three months ended March 31

The increase in consolidated revenues for the period ended is due in part to organic Canadian and U.S. segment growth, where organic growth excludes the impact of fuel and environmental surcharges, acquisitions, and foreign currency translation. The balance of the increase is attributable to acquisitions and fuel and environmental surcharges. The Fund's U.S. northeast segment continues to experience landfill pricing softness and slightly lower volumes received at its Seneca Meadows landfill. The decline is due to an increase in disposal capacity and an overall economic slowdown in the region.

Operating expenses - Three months ended March 31

Higher total disposal and labour costs are attributable to higher internally collected waste volumes and higher costs to service new and existing customers, contracts, and acquisitions. The balance of the change is due principally to higher vehicle operating costs, including but not limited to fuel and lubricants, and repairs and maintenance expense, partially offset by a decline in insurance expense.

Selling, general and administration expenses - Three months ended March 31

Higher salary expense is due principally to acquisition and organic growth and is the primary reason for the comparative increase. Higher facility, office, and travel expenditures, as a result of acquisition and organic growth, are the primary reasons for the balance of the change.

Free Cash Flow Available for Distribution(B)

Results

Free cash flow available for distribution(B) totalled $39,940 for the three months ended March 31, 2008 versus $33,090 for the comparative period.

Free cash flow available for distribution(B) per weighted average trust unit and PPS for the three months ended March 31, 2008 amounted to $0.58 and is $0.07 higher than the comparative period.


Free Cash Flow Available for Distribution(B) - Cash Flow Approach

-------------------------------------------------------------------------
                                             Three months ended March 31
-------------------------------------------------------------------------
                                              2008       2007     Change
-------------------------------------------------------------------------

Cash generated from operating activities
 (per statement of cash flows)            $ 42,934  $  28,455  $  14,479
-------------------------------------------------------------------------

Operating
Write-off of deferred costs                   (728)       (35)      (693)
Changes in non-cash working capital items   10,579     18,464     (7,885)
Net change in landfill closure and
 post-closure costs                         (2,234)    (2,555)       321
Maintenance expenditures                   (10,846)   (12,355)     1,509

Financing
Amortization of gain on settlement of
 bond forward contracts                         56         56          -
Financing costs                                  -        864       (864)
Effect of foreign currency hedges to
 support Canadian dollar distributions         803        559        244
Realized foreign exchange gain                (624)      (363)      (261)
-------------------------------------------------------------------------
Free cash flow available for
 distribution(B)                         $  39,940  $  33,090  $   6,850
-------------------------------------------------------------------------
-------------------------------------------------------------------------



Free Cash Flow Available for Distribution(B) - Operations Approach

                                               Three months ended March 31
---------------------------------------------------------------------------
                                               2008       2007      Change
---------------------------------------------------------------------------

EBITDA(A)                                 $  66,858  $  58,672  $    8,186
---------------------------------------------------------------------------

Amortization of capitalized landfill asset
 closure and post-closure costs, including
 revisions to estimated cash flows not
 recorded to operating expense               (1,698)    (2,280)        582
Interest on long-term debt                  (13,374)    (9,894)     (3,480)
Management transaction bonuses (other
 expenses)                                      (31)        (5)        (26)
Current income taxes                         (1,828)    (1,663)       (165)
Maintenance expenditures                    (10,846)   (12,355)      1,509
Effect of foreign currency hedges to
 support Canadian dollar distributions          803        559         244
Amortization of gain on settlement of bond
 forward contracts                               56         56           -
---------------------------------------------------------------------------
Free cash flow available for
 distribution(B)                          $  39,940  $  33,090  $    6,850
---------------------------------------------------------------------------
---------------------------------------------------------------------------



Maintenance and Growth Expenditures

                                               Three months ended March 31
---------------------------------------------------------------------------
                                  2008              2007            Change
---------------------------------------------------------------------------

Total                         $ 23,276          $ 22,539          $    737
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Maintenance:
Canada                         $  3,364         $  5,096          $ (1,732)
U.S.                              7,482            7,259               223
---------------------------------------------------------------------------
Total maintenance              $ 10,846         $ 12,355          $ (1,509)
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Growth:
Canada                         $  5,817         $  3,279          $  2,538
U.S.                              6,613            6,905              (292)
---------------------------------------------------------------------------
Total growth                   $ 12,430         $ 10,184          $  2,246
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Maintenance and growth expenditures include amounts accrued for capital and landfill assets received but for which payment remains outstanding.

Maintenance Expenditures

Three months ended March 31, 2008

The Canadian segment decrease is largely attributable to a decline in vehicle and landfill equipment purchases. Landfill equipment purchased in 2007 for the Fund's Lachenaie landfill did not recur in 2008 and represents a portion of the period over period decline. The balance of the decline is principally attributable to vehicles. For 2008 a greater portion of vehicle purchases have been characterized as growth to satisfy the requirements of new contract wins. Accordingly, maintenance expenditures in respect of vehicles will materialize in subsequent periods. The U.S. segment increase is due principally to a larger business base, which is the result of organic and acquisition growth, and increasing costs to purchase maintenance capital. Foreign currency exchange fluctuations partially offset the foregoing.

Growth Expenditures

Three months ended March 31, 2008

Canadian segment residential contract wins which commenced in 2008 exceeded those that commenced in 2007 resulting in an increase in comparative growth expenditures. The timing of landfill expenditures, primarily at the Seneca Meadows landfill is the primary reason for the U.S. segment's decline in growth expenditures.

Distributions

The following table summarizes various details of the Fund's 2008 and 2007 distributions:


                                                Three months ended March 31
---------------------------------------------------------------------------
                          Monthly         Annual                 Percentage
                     distribution   distribution         Total  increase in
                   per trust unit      per trust distributions        total
                          and PPS   unit and PPS       and PPS     distrib-
                         dividend       dividend     dividends       utions
                                                      declared      and PPS
            Period                                                dividends
---------------------------------------------------------------------------

2008 January-March     $   0.1515     $   1.8180  $     31,227         5.3%
---------------------------------------------------------------------------

2007 January-March     $   0.1515     $   1.8180  $     29,645
---------------------------------------------------------------------------



Long-term debt

Summarized details of the Fund's long-term debt facilities are as follows:

                                                    Letters of
                                                   credit (not
                                                   reported as
                                                     long-term
                                                   debt on the
                                 Facility drawn   Consolidated      Current
                       Available    at March 31,       Balance    available
                         lending           2008         Sheets)    capacity
---------------------------------------------------------------------------
Canadian long-term
 debt facilities
 - stated in
 Canadian dollars
Senior secured
 debentures,
 series A           $     47,000     $   47,000      $       -  $         -
Senior secured
 debentures,
 series B           $     58,000     $   58,000      $       -  $         -
Revolving credit
 facility           $    150,000     $   82,000      $  24,953  $    43,047

U.S. long-term debt
 facilities
 - stated in U.S.
 dollars
Term loan           $    195,000     $  195,000      $       -  $         -
Revolving credit
 facility           $    575,000     $  358,000      $ 169,355  $    47,645
IRBs                $    104,000     $  104,000      $       -  $         -

Both the Canadian and U.S. long-term debt facilities have an accordion feature which can increase the available capacity of the Canadian revolving credit facility from $150,000 to $200,000 and the available capacity of the U.S. term loan and revolving credit facility from U.S. $770,000, in aggregate, to U.S. $825,000, in aggregate, subject to certain restrictions.

Definitions of EBITDA and free cash flow available for distribution

(A) All references to "EBITDA" in this press release are to "income before the following" on the consolidated statement of operations and comprehensive income (loss). "Income before the following" excludes some or all of the following: "amortization, interest on long-term debt, financing costs, net gain or loss on sale of capital and landfill assets, net gain or loss on financial instruments, net foreign exchange gain or loss, write-off of deferred financing costs, other expenses, income taxes, and non-controlling interest". EBITDA is a term used by the Fund that does not have a standardized meaning prescribed by Canadian generally accepted accounting principles ("GAAP") and is therefore unlikely to be comparable to similar measures used by other issuers. EBITDA is a measure of the Fund's operating profitability, and by definition, excludes certain items as detailed above. These items are viewed by management as either non-cash (in the case of amortization, certain financing costs, write-off of deferred financing costs, net gain or loss on financial instruments, net foreign exchange gain or loss, and future income taxes) or non-operating (in the case of interest on long-term debt, net gain or loss on sale of capital and landfill assets, certain financing costs, other expenses, current income taxes, and non-controlling interest). EBITDA is a useful financial and operating metric for management, the Fund's Trustees, and its lenders, as it represents a starting point in the determination of free cash flow available for distribution(B). The underlying reasons for exclusion of each item are as follows:

Amortization - as a non-cash item amortization has no impact on the determination of free cash flow available for distribution(B).

Interest on long-term debt - interest on long-term debt is a function of the Fund's debt/equity mix and interest rates; as such, it reflects the treasury/financing activities of the Fund and represents a different class of expense than those included in EBITDA.

Financing costs - financing costs are a function of the Fund's treasury/financing activities and represents a different class of expense than those included in EBITDA.

Net gain or loss on sale of capital and landfill assets - the gain or loss on sale of capital and landfill assets has no impact on the determination of free cash flow available for distribution(B), because proceeds from the sale were either reinvested in other capital or landfill assets or used to repay the Fund's revolving credit facility.

Net gain or loss on financial instruments - as non-cash items, gains or losses on financial instruments have no impact on the determination of free cash flow available for distribution(B).

Net foreign exchange gain or loss - as non-cash items, foreign exchange gains or losses have no impact on the determination of free cash flow available for distribution(B).

Write-off of deferred financing costs - as a non-cash item, write-off of deferred financing costs has no impact on the determination of free cash flow available for distribution(B).

Other expenses - other expenses represent amounts paid to management of the Fund on account of certain acquisitions and are not considered an expense indicative of continuing operations. Accordingly, other expenses represent a different class of expense than those included in EBITDA.

Income taxes - income taxes are a function of tax laws and rates and are affected by matters which are separate from the daily operations of the Fund.

Non-controlling interest - non-controlling interest represents a direct non-controlling equity interest in IESI through PPS holdings. Accordingly, non-controlling interest represents a different class of expense than those included in EBITDA.

EBITDA should not be construed as a measure of income or of cash flows. The reconciling items between EBITDA and net income (loss) are detailed in the consolidated statement of operations and comprehensive income (loss) beginning with "income before the following" and ending with "net income (loss)".

(B) The Fund has adopted a measurement called "free cash flow available for distribution" to supplement net income (loss) as a measure of operating performance. Free cash flow available for distribution is a term which does not have a standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures used by other issuers. The objective of presenting this non-GAAP measure is to calculate the amount which is available for distribution to unitholders and non-controlling interest. PPS holdings are presented as non-controlling interest in the consolidated financial statements; however, management of the Fund has elected to include the shareholdings of the non-controlling interest in the calculation of free cash flow available for distribution as PPSs are entitled to dividends that are economically equivalent to the distributions received by unitholders and PPSs are exchangeable on a one-to-one basis for trust units of the Fund. Details of the calculation are included in the "Other Performance Measures - Free cash flow available for distribution(B)" section of the Fund's MD&A. Free cash flow available for distribution is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to cash flow as a measure of liquidity. All references to "free cash flow available for distribution" in this press release have the meaning set out in this note.

Excess free cash flow available for distribution represents the result of free cash flow available for distribution(B) less distributions and dividends declared.

Forward-looking statements

This document may contain forward-looking statements relating to the Fund's operations or to the environment in which it operates, which are based on the Fund's operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, or are beyond the Fund's control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include those set forth in the Fund's Annual Information Form for the period ended December 31, 2007. Consequently, readers should not rely on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, the Fund cannot assure unitholders that actual results will be consistent with theseforward looking statements, and the Fund disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The Fund, through its operating subsidiaries, is one of North America's largest full-service waste management companies, providing non-hazardous solid waste collection and disposal services for commercial, industrial, municipal and residential customers in five Canadian provinces and ten states in the United States. The Fund serves over 1.8 million customers with vertically integrated collection and disposal assets. The Fund's Canadian segment operates under the BFI Canada brand and is Canada's second largest full-service waste management company providing integrated non-hazardous solid waste collection and landfill disposal services in the provinces of British Columbia, Alberta, Manitoba, Ontario and Quebec. The Canadian segment operates one and owns and operates four landfills, carries on solid waste collection operations in 20 markets and operates four transfer collection stations, seven material recovery facilities and one landfill gas to energy facility. The Fund's U.S. operations provide integrated non-hazardous solid waste collection and landfill disposal services in two geographic regions: the south, consisting of various service areas in Texas, Louisiana, Oklahoma, Arkansas, Mississippi and Missouri, and the northeast, consisting of various service areas in New York, New Jersey, Pennsylvania and Maryland. The U.S. south and northeast segments operate in 38 markets and operates 31 transfer stations, 17 landfills and 10 material recovery facilities, and one transportation operation. The Fund's units are listed on the Toronto Stock Exchange under the symbol BFC.UN. For more information on the Fund, visit www.bficanada.com.

Management will hold a conference call on May 14, 2008 at 8:30 am (EDT) to discuss results for the three months ended March 31, 2008. To access the call, participants should dial 416-644-3421 or 1-800-594-3790 at approximately 8:20 am (EDT). The conference call will also be webcast live at www.bficanada.com and subsequently archived on the BFI Canada website.

A rebroadcast of the call will be available until midnight on May 28, 2008. To access the rebroadcast, dial 416-640-1917 or 1-877-289-8525 and quote the reservation number 21270826#.

BFI CANADA INCOME FUND
Consolidated Balance Sheets
March 31, 2008 (unaudited) and December 31, 2007
(in thousands of dollars)
----------------------------------------------------------------------
                                             March 31,    December 31,
                                                 2008            2007
----------------------------------------------------------------------
ASSETS

CURRENT
 Cash and cash equivalents               $     17,589    $     13,359
 Accounts receivable                          113,175         115,851
 Other receivables                                463             457
 Prepaid expenses                              17,040          15,001
----------------------------------------------------------------------
                                              148,267         144,668

OTHER RECEIVABLES                                 686             761

FUNDED LANDFILL POST-CLOSURE COSTS              6,154           5,976

INTANGIBLES                                   139,324         144,686

GOODWILL                                      637,371         616,534

DEFERRED COSTS                                  7,843           7,306

CAPITAL ASSETS                                420,029         404,900

LANDFILL ASSETS                               656,933         644,711

OTHER ASSETS                                        -           1,670
----------------------------------------------------------------------
                                         $  2,016,607     $ 1,971,212
----------------------------------------------------------------------
----------------------------------------------------------------------

LIABILITIES

CURRENT

 Accounts payable                        $     56,903     $    66,815
 Accrued charges                               57,615          75,355
 Distribution and dividend payable             10,409          10,409
 Income taxes payable                           3,198           2,515
 Deferred revenues                             12,990          12,018
 Landfill closure and post-closure costs        2,730           2,900
----------------------------------------------------------------------
                                              143,845         170,012

LONG-TERM DEBT                                862,330         801,973

LANDFILL CLOSURE AND POST-CLOSURE COSTS        60,355          55,943

OTHER LIABILITIES                              12,661           5,056

FUTURE INCOME TAX LIABILITIES                  51,637          57,668
----------------------------------------------------------------------
                                            1,130,828       1,090,652
----------------------------------------------------------------------

NON-CONTROLLING INTEREST                      248,006         251,371

UNITHOLDERS' EQUITY                           637,773         629,189
----------------------------------------------------------------------
                                         $  2,016,607     $ 1,971,212
----------------------------------------------------------------------
----------------------------------------------------------------------



BFI CANADA INCOME FUND
Consolidated Statements of Operations and Comprehensive Income (Loss)
For the three months ended March 31, 2008 and March 31, 2007
 (unaudited - in thousands of dollars, except net income per trust
 unit amounts)
---------------------------------------------------------------------------
                                                          2008        2007
---------------------------------------------------------------------------
REVENUES                                           $   244,347  $  202,300

EXPENSES

  OPERATING                                            147,148     116,630

  SELLING, GENERAL AND ADMINISTRATION                   30,341      26,998
---------------------------------------------------------------------------

INCOME BEFORE THE FOLLOWING                             66,858      58,672

AMORTIZATION                                            42,577      37,918

INTEREST ON LONG-TERM DEBT                              13,374       9,894

FINANCING COSTS                                              -         864

NET LOSS (GAIN) ON SALE OF CAPITAL ASSETS                   40        (208)

NET LOSS ON FINANCIAL INSTRUMENTS                        9,047       1,855

NET FOREIGN EXCHANGE (GAIN) LOSS                          (624)      1,621

OTHER EXPENSES                                              31           5
---------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES AND
 NON-CONTROLLING INTEREST                                2,413       6,723
---------------------------------------------------------------------------

INCOME TAX EXPENSE (RECOVERY)
 Current                                                 1,828       1,663
 Future                                                 (9,889)     (7,455)
---------------------------------------------------------------------------
                                                        (8,061)     (5,792)
---------------------------------------------------------------------------

INCOME BEFORE NON-CONTROLLING INTEREST                  10,474      12,515

NON-CONTROLLING INTEREST                                 1,698       2,150
---------------------------------------------------------------------------
NET INCOME                                               8,776      10,365

OTHER COMPREHENSIVE INCOME (LOSS)
 Foreign currency translation adjustment                25,972      (5,058)
---------------------------------------------------------------------------
COMPREHENSIVE INCOME                                 $  34,748  $    5,307
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Net income per weighted average trust unit, basic
 & diluted                                           $    0.15  $     0.19

Weighted average number of trust units outstanding
 (thousands), basic                                     57,568      53,744

Weighted average number of trust units outstanding
 (thousands), diluted                                   68,706      65,241



BFI CANADA INCOME FUND
Consolidated Statements of Cash Flows
For the three months ended March 31, 2008 and March 31, 2007
 (unaudited - in thousands of dollars)
---------------------------------------------------------------------------
                                                        Three months ended
---------------------------------------------------------------------------
                                                           2008       2007
---------------------------------------------------------------------------

NET INFLOW (OUTFLOW) OF CASH RELATED TO THE
 FOLLOWING ACTIVITIES
OPERATING
 Net income                                          $    8,776  $  10,365
 Items not affecting cash
  Write-off of deferred costs                               728         35
  Accretion of landfill closure and post-closure
   costs                                                    781        802
  Amortization of intangibles                             8,035      5,196
  Amortization of capital assets                         19,297     15,739
  Amortization of landfill assets                        15,245     16,983
  Net loss (gain) on sale of capital assets                  40       (208)
  Net loss on financial instruments                       9,047      1,855
  Net unrealized foreign exchange loss                        -      1,984
  Future income taxes                                    (9,889)    (7,455)
  Non-controlling interest                                1,698      2,150
 Landfill closure and post-closure expenditures            (245)      (527)
---------------------------------------------------------------------------
                                                         53,513     46,919
 Changes in non-cash working capital items              (10,579)   (18,464)
---------------------------------------------------------------------------
Cash generated from operating activities                 42,934     28,455
---------------------------------------------------------------------------
INVESTING
 Acquisitions                                           (19,053)    (4,305)
 Investment in other receivables                              -       (400)
 Proceeds from other receivables                             69        354
 Funded landfill post-closure costs                        (390)      (348)
 Purchase of capital assets                             (13,537)   (16,846)
 Purchase of landfill assets                             (7,872)    (9,874)
 Proceeds from the sale of capital assets                    83        262
 Investment in deferred costs                            (1,058)      (980)
---------------------------------------------------------------------------
Cash utilized in investing activities                   (41,758)   (32,137)
---------------------------------------------------------------------------
FINANCING
 Proceeds from long-term debt                            65,217     80,352
 Repayment of long-term debt                            (30,617)   (41,234)
 Trust units issued, net of issue costs                       -        (10)
 Distributions and dividends paid to trust
  unitholders and participating preferred shareholders  (31,227)   (29,683)
---------------------------------------------------------------------------
Cash generated from financing activities                  3,373      9,425
---------------------------------------------------------------------------
Effect of foreign exchange changes on foreign
 cash and cash equivalents                                 (319)       138
---------------------------------------------------------------------------
NET CASH INFLOW                                           4,230      5,881

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR             13,359      9,275
---------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD             $   17,589  $  15,156
---------------------------------------------------------------------------
---------------------------------------------------------------------------



BFI CANADA INCOME FUND
Consolidated Statements of Unitholders' Equity, Deficit and Accumulated
 Other Comprehensive Loss
For the three months ended March 31, 2008 and March 31, 2007
 (unaudited - in thousands of dollars)
------------------------------------------------------------------------
                                                      2008         2007
------------------------------------------------------------------------

CONTRIBUTED EQUITY
 Trust units, beginning of year               $  1,006,751  $   908,221
 Issuance of trust units, net of issue costs
  and related tax effect, during the period              -          (10)
 Trust units issued on exchange of PPSs,
  during the period                                      -        8,617
------------------------------------------------------------------------
Trust units, end of period                       1,006,751      916,828
------------------------------------------------------------------------

 Class A units, beginning of year                        -            -
 Class A units issued, during the period                 -            -
------------------------------------------------------------------------
Class A units, end of year                               -            -
------------------------------------------------------------------------
 Treasury units, beginning of year                       -            -
 Trust units acquired by the U.S. LTIP,
  during the period                                 (2,004)           -
 Deferred compensation obligation, during the
  period                                             2,004            -
------------------------------------------------------------------------
 Treasury units, end of period                           -            -
------------------------------------------------------------------------
TOTAL CONTRIBUTED EQUITY                         1,006,751      916,828
------------------------------------------------------------------------

DEFICIT
 Accumulated net income, beginning of year         115,064       83,377
 Accumulated distributions, beginning of year     (363,879)    (260,991)
------------------------------------------------------------------------
 Deficit, beginning of year                        248,815     (177,614)
------------------------------------------------------------------------

 Net income, during the period                       8,776       10,365
 Distributions declared, during the period         (26,164)     (24,553)
------------------------------------------------------------------------
 Accumulated net income, end of period             123,840       93,742
------------------------------------------------------------------------
 Accumulated distributions, end of period         (390,043)    (285,544)
------------------------------------------------------------------------
DEFICIT, END OF PERIOD                            (266,203)    (191,802)
------------------------------------------------------------------------

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
 Accumulated other comprehensive loss,
  beginning of year                               (128,747)     (32,888)
 Foreign currency translation adjustment,
  during the period                                 25,972       (5,058)
------------------------------------------------------------------------
ACCUMULATED OTHER COMPREHENSIVE LOSS, END OF
 PERIOD                                           (102,775)     (37,946)
------------------------------------------------------------------------
DEFICIT AND ACCUMULATED OTHER COMPREHENSIVE
 LOSS, END OF PERIOD                              (368,978)    (229,748)
------------------------------------------------------------------------
UNITHOLDERS' EQUITY                           $    637,773  $   687,080
------------------------------------------------------------------------
------------------------------------------------------------------------

For more information, contact:
BFI Canada Income Fund
Chaya Cooperberg
Director, Investor Relations and Corporate Communications
(416) 401-7729
Email: chaya.cooperberg@bficanada.com
Website: www.bficanada.com.

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