Finding a healthy balance with communities.

We benefit tremendously from the communities in which we are located. They provide skilled employees, suppliers, infrastructure and the social license to conduct our business. To balance what we gain from communities, we try to give something back in addition to jobs and economic opportunities.

our commitment to communities

We are committed to working in partnership throughout the Americas to help
communities reach their full potential.

Agrium participates in Habitat for Humanity building projects like “The House that Agriculture Built”.

Agrium’s purchases in the community support many local businesses.

Our Dustreat program in Redwater, Alberta helps to reduce environmental impacts in the adjacent community.

Community
meetings provide
a way for
community
members and
employees to
develop
relationships.

opportunities and challenges

• Although regulators provide us with legal approvals, it is our neighbors that grant us our social license to operate. Interacting with community members effectively means more than informing them of our plans. It means community engagement.
• There are numerous charitable organizations to which a company could contribute. More important than simply donating money is building partnerships that generate enduring, positive impacts for people and communities.

actions

Community Engagement
Open and frequent dialogue with our neighbors allows all involved to understand concerns, identify problems and avoid miscommunication. Stakeholders are engaged in a number of ways including print, public meetings, the web, open houses and community advisory group meetings. With these forums for open dialogue, we help protect and steward stakeholder interests.

Agrium believes a decentralized process for implementing community outreach plans puts decision-making in the appropriate place. The Facility Site Managers of our operations across North America work with committees of two or more individuals to administer activities such as neighbor visits, community meetings and community investment programs. Specialists in our Corporate Relations group provide committee members with communications expertise and assistance as required.

Community Advisory Panels at two of our facilities continue to be a key communications venue. These panels facilitate decision-making that better consider community needs and serve to advise us on community related issues. This provides a model for other operations. In 2005, several of our Canadian facilities held open houses to engage their neighbors in the environmental approvals renewal process.

Community Impact
In some communities, Agrium has a significant presence — employing a measurable percentage of the population, creating business opportunities for local suppliers and contributing to the tax base. Several of these benefits are merely a circumstance of existence. They are not because we did somethingspecial. When Agrium goes beyond those typical contributions and considers the long-term sustainability of the community’s economy and local social structure, then we begin to meet corporate social responsibility expectations.

When both Agrium and a host community “invest” in relationships, we support projects and activities that benefit local communities while increasing selfreliance. We focus our efforts in four areas: civic, arts and culture; health and wellness; environmental stewardship; and youth development.

In 2005, we implemented a software tracking system for transparent management of the entire donation process, from requests to approvals. It allows community organizations to submit applications on-line and receive an automatic response. The system ensures the community requests — regardless of size of the organization — are reviewed and assessed on their own merits. It flags applications that do not align with our interests and criteria. And it enables us to respond within two weeks. Applicants will find important information about our donation programs and access to our online application form in the community section of our website.

In addition to helping communities, we see our partnerships as a way to engage employees in leadership development opportunities. In 2004, our Retail business challenged each of its outlets to plan a community outreach program to benefit a local charity or organization, raise customer awareness and involve all employees. Our Retail employees organized and participated in more than 160 community outreach programs in their respective communities. They donated one day of labor for their projects in exchange for a day of pay from Agrium. The programs included park beautification activities, fundraiser cookouts, Habitat for Humanity and the Special Olympics. The program has been extended to 2006 and beyond.

Gypsum Storage Area Extension Spurs Expanded Community Engagement

Community engagement is an ongoing process, not one that we turn off and on. When we needed to extend our phosphogypsum storage area at our Redwater, Alberta site, we engaged the community through our long-standing Community Advisory Panel, comprised of numerous local residents and officials. Throughout 2003-2004, we employed various practices to understand and respond to community concerns about the storage area. We held information sessions with employees and with local elected officials. We obtained input from close neighbors through small meetings and from the wider community through an open house. We used our website to post updates and additional information.

In 2004, we received conditional approval of our extension plans. The regulators asked us to address a number of concerns. We are taking action on:

• Noise — we have modified rail crossings, work schedules and installed silencers.
• Fluoride emissions from the storage area — we are continuing studies, including air and vegetation monitoring, to understand and address potential fluoride impacts. We have submitted an updated emission estimate to Alberta Environment and we are also updating the health risk assessment study for review by Alberta Environment.
• Reclamation — we have submitted our conceptual long-term reclamation plan to Alberta Environment for their review.

We realize ongoing community engagement is essential for the smooth operation of all our facilities. In Redwater, we are working with other industries, municipalities and residents to seek solutions to the issues related to industrial development within Alberta’s Industrial Heartland.

Aboriginal Relations in Ontario

Time and mutual understanding are essential ingredients to developing partnerships with community stakeholders. Our Kapuskasing, Ontario operation is located near an aboriginal community. Since the majority of First Nations’ concerns with this operation are environmental, our environmental specialist at Kapuskasing has been the main point of contact. Our attitude is that this relationship is not just on an ‘as we need something’ basis, it has to be considered more like a lifestyle. We take an informal approach and have frequent communications regarding new service contracts and activities that effect the environment.

growing the next generation — mind, body, spirit

We believe that the next generation benefits from balanced support in areas of mind, body and spirit. Our support of the following youth programs enhance children’s awareness of the nutritional content of food and how healthy soils produce healthy foods. We support these and other activities that keep our youth active, encourage critical thinking, nourish their spirit, and foremost, keep them safe.

We co-sponsor an environmental contest (Caring for the Kenai) in Kenai, Alaska that rewards children for identifying an environmental problem with the Kenai River and developing a solution. We are now looking at replicating this program in other communities where we operate.	Agrium has co-sponsored Progressive Agriculture Safety Day Camps (also known as Farm Safety Day) since 2002. Each year, these camps reach more than 70,000 people who live and work around farms.	In 2005, Agrium introduced Seed Survivor, an interactive curriculumbased display, that teaches children and adults through exploration and play, about the importance of healthy soil and plant nutrients.
The Schoolyard Naturalization Program in Calgary works with school groups and teachers to transform schoolyards into natural classrooms. Each participating class researches, designs and plants its own garden.	In 2005, we worked with the National Arts Centre to establish the Music Ambassador Program to bring classical music to hundreds of Alberta and Saskatchewan classrooms. The program targets rural communities where access to live classical music is often limited.	Agrium supports sports organizations in the areas where we have operations. In 2005, we contributed to more than 100 organizations across North America, giving youth the opportunity, facilities and training they need to stay active.

nutrients for life

Agrium continues to support not-for-profit educational organizations like the Nutrients for Life Foundation and other curriculum experts to provide tools and materials for North American classrooms. These programs help youth learn about agriculture in a way that is fun while empowering them to make healthier lifestyle choices and informed decisions on issues affecting their environment, economy and society.

performance

Community Investment

In 2005, we contributed $1.1-million to charitable and non-profit organizations. Our contributions have increased over the years with our improving financials. As of 2005, we contributed 0.8 percent of our profits before taxes on a five-year rolling basis.

Community Investment Sectors

Our donations are distributed to organizations committed to improving conditions in the four focus areas shown in the chart. Since 2003, we have increased our contributions to the health and wellness, and youth development sectors.

Goods and Services Purchased

In 2005, Agrium made purchases from suppliers of goods and services totaling more than $2.36-billion. Agrium’s annual purchases of goods and services has increased 27 percent since 2003.

Breakdown of Purchases

The largest portion of our purchases is for goods, primarily for resale through our Retail outlets. Raw materials (i.e., natural gas, sulfur) for fertilizer production also comprise a significant portion of our purchases.