Domtat and Government of Saskatchewan Split on Memorandum of Understanding with Domtar

Montreal, Quebec, Canada, 30 November 2007 -- /PRNewswire/ -- 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 12 September 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 Domtar's options regarding the Prince Albert facilities.

Consequently, Domtar will terminate all work being done on this project.

Domtar Corporation (NYSE/TSX: UFS) 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, technical, and specialty papers, as well as its full line of environmentally and socially responsible papers. 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

Source: Domtar Corporation