Exhibit 99.3

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the fourth quarter and year ended

December 31, 2021

CONTENTS

GENERAL INFORMATION	2
FORWARD-LOOKING STATEMENTS	2
SELECTED FINANCIAL DATA AND HIGHLIGHTS	3
ABOUT TFI INTERNATIONAL	4
CONSOLIDATED RESULTS	5
SEGMENTED RESULTS	8
LIQUIDITY AND CAPITAL RESOURCES	15
OUTLOOK	19
SUMMARY OF EIGHT MOST RECENT QUARTERLY RESULTS	20
NON-IFRS FINANCIAL MEASURES	20
RISKS AND UNCERTAINTIES	27
CRITICAL ACCOUNTING POLICIES AND ESTIMATES	40
CHANGES IN ACCOUNTING POLICIES	41
CONTROLS AND PROCEDURES	41

Management’s Discussion and Analysis

GENERAL INFORMATION

The following is TFI International Inc.’s management discussion and analysis (“MD&A”). Throughout this MD&A, the terms “Company”, “TFI International” and “TFI” shall mean TFI International Inc., and shall include its independent operating subsidiaries. This MD&A provides a comparison of the Company’s performance for its three-month period and year ended December 31, 2021 with the corresponding three-month period and year ended December 31, 2020 and it reviews the Company’s financial position as of December 31, 2021. It also includes a discussion of the Company’s affairs up to March 14, 2022, which is the date of this MD&A. The MD&A should be read in conjunction with the audited consolidated financial statements and accompanying notes as at and for the year ended December 31, 2021.

In this document, all financial data are prepared in accordance with the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) unless otherwise noted. All amounts are in United States dollars (U.S. dollars), and the term “dollar”, as well as the symbol “$”, designate U.S. dollars unless otherwise indicated. Variances may exist as numbers have been rounded. This MD&A also uses non-IFRS financial measures. Refer to the section of this report entitled “Non-IFRS Financial Measures” for a complete description of these measures.

The Company’s audited consolidated financial statements have been approved by its Board of Directors (“Board”) upon recommendation of its audit committee on March 14, 2022. Prospective data, comments and analysis are also provided wherever appropriate to assist existing and new investors to see the business from a corporate management point of view. Such disclosure is subject to reasonable constraints for maintaining the confidentiality of certain information that, if published, would probably have an adverse impact on the competitive position of the Company.

Additional information relating to the Company can be found on its website at www.tfiintl.com. The Company’s continuous disclosure materials, including its annual and quarterly MD&A, annual and quarterly consolidated financial statements, annual report, annual information form, management proxy circular and the various press releases issued by the Company are also available on its website, or directly through the SEDAR system at www.sedar.com, or through the EDGAR system at www.sec.gov/edgar.shtml.

FORWARD-LOOKING STATEMENTS

The Company may make statements in this report that reflect its current expectations regarding future results of operations, performance and achievements. These are “forward-looking” statements and reflect management’s current beliefs. They are based on information currently available to management. Words such as “may”, “might”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”, “to its knowledge”, “could”, “design”, “forecast”, “goal”, “hope”, “intend”, “likely”, “predict”, “project”, “seek”, “should”, “target”, “will”, “would” or “continue” and words and expressions of similar import are intended to identify these forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and those presently anticipated or projected.

The Company wishes to caution readers not to place undue reliance on any forward-looking statements which reference issues only as of the date made. The following important factors could cause the Company’s actual financial performance to differ materially from that expressed in any forward-looking statement: the highly competitive market conditions, the Company’s ability to recruit, train and retain qualified drivers, fuel price variations and the Company’s ability to recover these costs from its customers, foreign currency fluctuations, the impact of environmental standards and regulations, changes in governmental regulations applicable to the Company’s operations, adverse weather conditions, accidents, the market for used equipment, changes in interest rates, cost of liability insurance coverage, downturns in general economic conditions affecting the Company and its customers, credit market liquidity, and the Company’s ability to identify, negotiate, consummate and successfully integrate business acquisitions.

The foregoing list should not be construed as exhaustive, and the Company disclaims any subsequent obligation to revise or update any previously made forward-looking statements unless required to do so by applicable securities laws. Unanticipated events are likely to occur. Readers should also refer to the section “Risks and Uncertainties” at the end of this MD&A for additional information on risk factors and other events that are not within the Company’s control. The Company’s future financial and operating results may fluctuate as a result of these and other risk factors.

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Management’s Discussion and Analysis

SELECTED FINANCIAL DATA AND HIGHLIGHTS

(unaudited) (in thousands of U.S. dollars, except per share data)	Three months ended December 31									Years ended December 31
	2021			2020			2019*			2021			2020			2019*
Revenue before fuel surcharge		1,888,423			1,048,147			883,717			6,468,785			3,484,303			3,477,576
Fuel surcharge		252,491			73,859			105,315			751,644			296,831			425,969
Total revenue		2,140,914			1,122,006			989,302			7,220,429			3,781,134			3,903,545
Adjusted EBITDA1		318,466			193,538			163,397			1,076,479			699,589			649,021
Operating income		214,979			117,122			92,784			889,185			416,567			382,868
Net income		144,139			86,328			57,955			664,361			275,675			244,225
Adjusted net income1		148,620			93,357			60,085			498,348			299,763			253,583
Net cash from operating activities		190,333			164,928			133,262			855,351			610,862			500,496
Free cash flow1		120,749			134,715			78,053			700,889			544,644			347,698
Per share data
EPS – diluted		1.52			0.91			0.70			6.97			3.03			2.86
Adjusted EPS – diluted1		1.57			0.98			0.72			5.23			3.30			2.97
Dividends		0.27			0.23			0.20			0.96			0.80			0.74
As a percentage of revenue before fuel surcharge
Adjusted EBITDA margin1		16.9	%		18.5	%		18.5	%		16.6	%		20.1	%		18.7	%
Depreciation of property and equipment		3.5	%		4.2	%		5.1	%		3.5	%		4.9	%		4.9	%
Depreciation of right-of-use assets		1.7	%		2.1	%		2.2	%		1.7	%		2.3	%		2.2	%
Amortization of intangible assets		0.7	%		1.3	%		1.4	%		0.9	%		1.4	%		1.4	%
Operating margin1		11.4	%		11.2	%		10.5	%		13.7	%		12.0	%		11.0	%
Adjusted operating ratio1		89.0	%		89.1	%		90.2	%		89.4	%		88.5	%		89.8	%

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar. In 2019, the Company classified amounts as from discontinued operations, the amounts shown for 2019 throughout this MD&A are from continuing operations.

Q4 Highlights

• Fourth quarter operating income of $215.0 million increased 84% from $117.1 million the same quarter last year, benefitting from a continuing rebound in economic activity and transportation demand following 2020’s pandemic-related weakness, as well as contributions from acquisitions, cost reductions enacted in response to the pandemic, strong execution across the organization, and an asset-light approach.

• Net income of $144.1 million increased 67% compared to $86.3 million in Q4 2020. Diluted earnings per share (diluted “EPS”) of $1.52 also increased 67%, compared to $0.91 in Q4 2020.

• Adjusted net income¹, a non-IFRS measure, of $148.6 million increased 59% compared to $93.4 million in Q4 2020.

• Adjusted diluted EPS¹, a non-IFRS measure, of 1.57 increased 60% compared to $0.98 in Q4 2020.

• Net cash from operating activities of $190.3 million increased 15% compared to $164.9 million in Q4 2020.

• Free cash flow¹, a non-IFRS measure, of $120.7 million decreased 10% compared to $134.7 million in Q4 2020.

• The Company’s reportable segments performed as follows:

o Package and Courier operating income increased 25% to $36.7 million;

o Less-Than-Truckload operating income increased 244% to $84.0 million;

o Truckload operating income increased 15% to $61.8 million; and

o Logistics operating income increased 24% to $32.9 million.

• On December 16, 2021, the Board of Directors of TFI declared a quarterly dividend of $0.27 per share, compared to the $0.23 (CAD $0.29) per share dividend declared in Q4 2020.

• During the quarter, TFI International acquired Gunter Transportation, SGT 2000, D&D Sexton, Laser Transport, F.K.D. Contracting and selected assets of Waca Bulk Systems.

This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS financial measures” section below.

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Management’s Discussion and Analysis

ABOUT TFI INTERNATIONAL

Services

TFI International is a North American leader in the transportation and logistics industry, operating across the United States, Canada and Mexico through its subsidiaries. TFI International creates value for shareholders by identifying strategic acquisitions and managing a growing network of wholly-owned operating subsidiaries. Under the TFI International umbrella, companies benefit from financial and operational resources to build their businesses and increase their efficiency. TFI International companies service the following reportable segments:

• Package and Courier;

• Less-Than-Truckload (“LTL”);

• Truckload (“TL”);

• Logistics.

Seasonality of operations

The activities conducted by the Company are subject to general demand for freight transportation. Historically, demand has been relatively stable with the first quarter generally the weakest. Furthermore, during the harsh winter months, fuel consumption and maintenance costs tend to rise.

Human resources

As at December 31, 2021, the Company had 29,539 employees in TFI International’s various business segments across North America. This compares to 16,753 employees as at December 31, 2020. The year-over-year increase of 12,884 is attributable to business acquisitions that added 15,545 employees offset by rationalizations affecting 2,661 employees mainly in the LTL segment. The Company believes that it has a relatively low turnover rate among its employees in Canada, and a normal turnover rate in the U.S. comparable to other U.S. carriers, and that its employee relations are very good.

Equipment

The Company believes it has the largest trucking fleet in Canada and a significant presence in the U.S. market. As at December 31, 2021, the Company had 13,384 tractors, 50,091 trailers and 9,428 independent contractors. This compares to 7,867 tractors, 25,520 trailers and 9,901 independent contractors as at December 31, 2020.

Facilities

TFI International’s head office is in Montréal, Québec and its executive office is in Etobicoke, Ontario. As at December 31, 2021, the Company had 576 facilities, as compared to 366 facilities as at December 31, 2020. Of these, 246 are located in Canada, including 160 and 86 in Eastern and Western Canada, respectively. The Company also had 318 facilities in the United States and 12 facilities in Mexico. In the last twelve months, 220 facilities were added from business acquisitions, and terminal consolidation decreased the total number of facilities by 10, mainly in the TL segment. In Q4 2021, the Company closed 2 sites.

Customers

The Company has a diverse customer base across a broad cross-section of industries with no single client accounting for more than 5% of consolidated revenue. Because of its customer diversity, as well as the wide geographic scope of the Company’s service offerings and the range of segments in which it operates, a downturn in the activities of an individual customer or customers in a particular industry would not be expected to have a material adverse impact on operations. The Company has forged strategic partnerships with other transport companies in order to extend its service offerings to customers across North America.

Revenue by Top Customers' Industry (49% of total revenue)
Retail	34%
Manufactured Goods	15%
Building Materials	9%
Automotive	8%
Metals & Mining	7%
Services	6%
Food & Beverage	6%
Chemicals & Explosives	5%
Forest Products	3%
Energy	2%
Waste Management	1%
Others	4%

(For the year ended December 31, 2021)

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Management’s Discussion and Analysis

CONSOLIDATED RESULTS

This section provides general comments on the consolidated results of operations. A more detailed analysis is provided in the “Segmented Results” section.

2021 business acquisitions

In line with its growth strategy, the Company acquired ten businesses during 2021.

On January 29, 2021, TFI International acquired Fleetway Transport Inc. (“Fleetway”). Based out of Brantford, Ontario, Fleetway is a full service provider of truckload and heavy-haul transportation solutions and logistics services.      

On April 30, 2021, TFI International completed the acquisition of UPS Ground Freight, Inc.’s (“UPS Freight”) the less-than-truckload (LTL) and dedicated truckload (TL) divisions of United Parcel Service, Inc. (NYSE: UPS). The LTL business, representing approximately 90% of the acquired business now independently operates under the new name of “TForce Freight”.  

On June 1, 2021, TFI International acquired Procam International (“Procam”). Based in Quebec, Procam provides bulk transportation services primarily in the northeastern region of Canada and the United States.

On July 2, 2021, TFI International acquired Driving Force Decks International Ltd (“Driving Force”). Based in Abbotsford, British Columbia, Driving Force provides flat deck services through their asset-light, scalable model.

On July 16, 2021, TFI International acquired Tombro Trucking Limited (“Tombro”). Based out of Milton, Ontario, Tombro provides flat deck services primarily hauling freight such as brick, block, and precast.

On October 1, 2021, TFI International acquired Gunter Transportation Ltd. (“Gunter”). Based out of Woodstock, Ontario, Gunter provides flatbed trucking serving wood products, pre-cast concrete, metals, equipment and specialty products.

On October 3, 2021, TFI International acquired SGT 2000 Inc. (“SGT”). Based in Quebec, SGT provides truckload, logistics, warehousing and vehicle rental services throughout North America.

On November 26, 2021, TFI International acquired D&D Sexton (“D&D”). Based in Carthage, Missouri, D&D specializes in refrigerated transportation providing both long-haul over-the-road services as well as local and shuttle operations.  

On November 26, 2021, TFI International acquired Laser Transport Inc. (“Laser”). Based out of Windsor, Ontario, Laser provides truckload, warehousing and distribution services.

On December 10, 2021, TFI International acquired F.K.D. Contracting (Alta) Ltd. (“FKD”). Based out of western Canada, F.K.D. offers bulk tank transportation.

Revenue

For the three months ended December 31, 2021, total revenue was $2,140.9 million, up 91%, or $1,018.9 million, from Q4 2020. The increase was mainly attributable to the contribution from business acquisitions of $961.6 million and from an increase of $57.4 million from existing operations, which included an increase in fuel surcharge revenue of $61.3 million. The average exchange rate used to convert TFI International’s revenue generated in CAD dollars increased this quarter (to US$0.7935) compared to the same quarter last year (US$0.7667) resulting in a positive currency impact of $16.6 million.

For the year ended December 31, 2021, total revenue was $7.22 billion, up 91%, or $3.44 billion, from 2020. The increase was mainly attributable to the contribution from business acquisitions of $3.11 billion and from an increase of $334.2 million from existing operations, which included an increase in fuel surcharge revenue of $144.0 million.

Operating expenses

For the three months ended December 31, 2021, the Company’s operating expenses increased by $921.1 million, to $1,925.9 million, up from $1,004.9 million in Q4 2020. The increase is attributable to $886.6 million from business acquisitions, and the remaining cost increase from existing operations is in line with the increase in revenue from existing operations.

For the three months ended December 31, 2021, material and services expenses, net of fuel surcharge, decreased by 8.4 percentage points of revenue before fuel surcharge compared to the same period last year due mainly to the impact from business acquisitions.  

For the three months ended December 31, 2021, personnel expense increased 144% to $598.6 million from $245.4 million in Q4 2020. The increase is attributed almost entirely to the impact from business acquisitions of $338.0 million.

5

Management’s Discussion and Analysis

Other operating expenses, which are primarily comprised of costs related to office and terminal rent, taxes, heating, telecommunications, maintenance and security and other general administrative expenses, increased by $74.4 million for the three months ended December 31, 2021 as compared to the same period last year, attributable primarily to the impact from business acquisitions of $67.6 million.

For the year ended December 31, 2021, the Company’s operating expenses increased by $2.97 billion from $3.36 billion in 2020 to $6.33 billion in 2021. The increase is mainly attributable to $2.69 billion from business acquisitions. The operating expenses from existing operations as a percentage of total revenue decreased from 89.6% to 88.1%. The decrease is due to operating improvements, better fleet utilization and lower material and service expenses in the Company’s existing operations, and one time reductions to the pension costs of $15.1 million, despite a mark-to-market expense on DSUs of $22.9 million, a reduction in the contribution from the Canada Emergency Wage Subsidy Program of $40.0 million, and business acquisition transaction costs of $8.7 million.

Operating income

For the three months ended December 31, 2021, TFI International’s operating income rose by $97.9 million to $215.0 million as compared to $117.1 million in the same quarter in 2020. The increase was driven primarily by $75.0 million related to business acquisitions. The operating margin as a percentage of revenue before fuel surcharge of 11.4% compared to 11.2% in Q4 2020

For the year ended December 31, 2021, TFI International’s operating income rose by $472.6 million to $889.2 million as compared to $416.6 million in 2020. The increase is primarily attributable to the impact from business acquisitions $411.7 million, which includes a $193.5 million bargain purchase gain. The operating margin as a percentage of revenue before fuel surcharge of 13.7% increased compared to 12.0% in the prior year.

Finance income and costs

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31		Years ended December 31
Finance costs (income)	2021	2020	2021	2020
Interest expense on long-term debt	12,393	7,287	45,953	34,967
Interest expense on lease liabilities	3,403	3,072	13,521	12,443
Interest income and accretion on promissory note	(1,573)	(277)	(2,187)	(1,051)
Net change in fair value and accretion expense of contingent considerations	1,571	141	1,932	224
Net foreign exchange (gain) loss	(939)	373	(1,471)	(1,237)
Net change in fair value of interest rate derivatives	—	(488)	—	(488)
Net impact of early repayment of contingent consideration	—	—	(1,469)	—
Others	6,586	5,274	16,739	9,052
Net finance costs	21,441	15,382	73,018	53,910

Interest expense on long-term debt

Interest expense on long-term debt for the three-month period ended December 31, 2021 was $5.1 million higher than the same quarter last year. The increase is mainly attributable to a higher average debt level, based on the month-end debt levels, of $1.58 billion for Q4 2021 compared to an average debt level of $0.94 billion in Q4 2020.

Net foreign exchange gain or loss and net investment hedge

The Company designates as a hedge a portion of its U.S. dollar denominated debt held against its net investments in U.S. operations. This accounting treatment allows the Company to offset the designated portion of foreign exchange gain (or loss) of its debt against the foreign exchange loss (or gain) of its net investments in U.S. operations and present them in other comprehensive income. Net foreign exchange gains or losses recorded in income or loss are attributable to the translation of the U.S. dollar portion of the Company’s credit facilities not designated as a hedge and to the translation of other financial assets and liabilities denominated in currencies other than the functional currency. For the three-month period ended December 31, 2021, a gain of $1.8 million of foreign exchange variations (a gain of $1.5 million net of tax) was recorded to other comprehensive income as it relates to the translation of the debt in the net investment hedge. For the three-month period ended December 31, 2020, a gain of $7.2 million of foreign exchange variations (a gain of $6.2 million net of tax) was recorded to other comprehensive income as it relates to the translation of the debt in the net investment hedge.

For the year ended December 31, 2021, a loss of $17.9 million of foreign exchange variations (a loss of $15.5 million net of tax) was recorded to other comprehensive income as it relates to the translation of the debt in the net investment hedge. For the year ended December 31, 2020, a loss of $2.3 million of foreign exchange variations (a loss of $2.0 million net of tax) was recorded to other comprehensive income as it relates to the translation of the debt in the net investment hedge.

Net change in fair value of derivatives and cash flow hedge

The fair values of the Company’s derivative financial instruments, which are used to mitigate foreign exchange and interest rate risks, are subject to market price fluctuations in foreign exchange and interest rates.

6

Management’s Discussion and Analysis

The Company previously designated the interest rate derivatives as a hedge of the variable interest rate instruments. Therefore, the effective portion of changes in fair value of the derivatives was recognized in other comprehensive income. For the three-month period and year ended December 31, 2021, the Company did not have any cash flow hedge positions. For the three-month period ended December 31, 2020, a $2.6 million loss on change in fair value of interest rate derivatives (a loss of $1.9 million net of tax) was entirely designated as cash flow hedge and recorded to other comprehensive income as a change in the fair value of the cash flow hedge.

For the year ended December 31, 2020, a cumulative loss of $0.5 million on change in fair value of interest rate derivatives (a loss of $0.5 million net of tax) was designated as cash flow hedge and recorded to other comprehensive income as a change in the fair value of the cash flow hedge.

Other Financial Expenses

For the three-month period ended December 31, 2021, other financial expenses increased $1.3 million to $6.6 million as compared to $5.3 million in the prior year period. For the year ended December 31, 2021, other financial expenses increased $7.7 million to $16.7 million as compared to $9.1 million in the prior year period. The increase for the year is attributable to recurring bank charges and transaction fees primarily from the business acquisitions of DLS Worldwide (renamed “TFWW”), in 2020, and TForce Freight in 2021.

Income tax expense

For the three months ended December 31, 2021, the Company’s effective tax rate was 19.0%. The income tax expense of $62.3 million reflects a $24.9 million favorable variance versus an anticipated income tax expense of $87.2 million based on the Company’s statutory tax rate of 26.5%. The favorable variance is mainly due to favorable variations from tax deductions and tax exempt income of $28.3 million partially offset by a negative variation of $2.5 million for rate differential between jurisdictions.

For the year ended December 31, 2021, the Company’s effective tax rate was 18.7%. The income tax expense of $189.9 million reflects a $79.5 million favorable variance versus an anticipated income tax expense of $269.5 million based on the Company’s statutory tax rate of 26.5%. The favorable variance is mainly due to the tax exempt bargain purchase gain recorded on the acquisition of UPS Freight which resulted in a favorable variance of $85.8 million. This is partially offset by a negative variation of $7.1 million for non deductible expenses.

Net income and adjusted net income

(unaudited) (in thousands of U.S. dollars, except per share data)	Three months ended December 31			Years ended December 31
	2021	2020	2019*	2021	2020	2019*
Net income	144,139	86,328	56,680	664,361	275,675	233,677
Amortization of intangible assets related to business acquisitions	13,127	13,786	12,511	50,498	47,623	48,293
Net change in fair value and accretion expense of contingent    considerations	1,571	141	55	1,932	224	199
Net change in fair value of derivatives	—	(488)	—	—	(488)	—
Net foreign exchange (gain) loss	(939)	373	665	(1,471)	(1,237)	220
Gain on sale of business	—	(306)	—	—	(306)	—
Bargain purchase gain	—	—	—	(193,549)	(4,008)	(8,014)
Gain on sale of land and buildings and assets held for sale	(6,645)	(2,206)	(6,373)	(12,190)	(11,893)	(21,580)
(Gain) loss on disposal of intangible assets	(5)	—	—	1	—	—
U.S. Tax Reform	—	(1,072)	—	—	4,451	—
Net impact from discontinued operations	—	—	1,302	—	—	10,548
Tax impact of adjustments	(2,628)	(3,199)	(4,755)	(11,234)	(10,278)	(9,760)
Adjusted net income1	148,620	93,357	60,085	498,348	299,763	253,583
Adjusted EPS – basic1	1.60	1.00	0.74	5.36	3.36	3.04
Adjusted EPS – diluted1	1.57	0.98	0.72	5.23	3.30	2.97

*Recasted for change in presentation currency from Canadian dollar to U.S. dollar. The 2019 Net income presented above includes the impact of discontinued operations. The impact from the discontinued operations is included as an adjustment.

For the three months ended December 31, 2021, TFI International’s net income was $144.1 million as compared to $86.3 million in Q4 2020. The Company’s adjusted net income¹, a non-IFRS measure, which excludes items listed in the above table, was $148.6 million as compared to $93.4 million in Q4 2020, an increase of 59% or $55.3 million. Adjusted EPS, fully diluted, increased by $0.59 to $1.57 from $0.98 in Q4 2020.

For the year ended December 31, 2021, TFI International’s net income was $664.4 million as compared to $275.7 million in 2020. The Company’s adjusted net income¹, a non-IFRS measure, which excludes items listed in the above table, was $498.3 million as compared to $299.8 million in 2020, an increase of 141% or $388.7 million. Adjusted EPS, fully diluted, increased by $1.93 to $5.23 from $3.30 in 2020.

¹ This is a non-IFRS. For the reconciliation, refer to the “Non-IFRS financial measures” section below.

7

Management’s Discussion and Analysis

SEGMENTED RESULTS

To facilitate the comparison of business level activity and operating costs between periods, the Company compares the revenue before fuel surcharge (“revenue”) and reallocates the fuel surcharge revenue to materials and services expenses within operating expenses. Note that “Total revenue” is not affected by this reallocation.

Selected segmented financial information

(unaudited) (in thousands of U.S. dollars)	Package and Courier	Less- Than-Truckload	Truckload	Logistics	Corporate	Eliminations	Total
Three months ended December 31, 2021
Revenue before fuel surcharge1	150,074	822,911	506,432	427,561	—	(18,555)	1,888,423
% of total revenue2	8%	44%	27%	20%			100%
Adjusted EBITDA3	43,496	141,189	111,848	42,465	(20,532)	—	318,466
Adjusted EBITDA margin3,4	29.0%	17.2%	22.1%	9.9%			16.9%
Operating income (loss)	36,713	103,449	61,803	32,869	(19,855)	—	214,979
Operating margin3,4	24.5%	12.6%	12.2%	7.7%			11.4%
Total assets less intangible assets3	186,116	2,031,994	1,362,007	292,026	88,059	—	3,960,202
Net capital expenditures3	5,926	46,986	15,113	192	20	—	68,237
Three months ended December 31, 2020
Revenue before fuel surcharge1	154,094	141,081	438,135	322,319	—	(7,482)	1,048,147
% of total revenue2	15%	14%	42%	29%			100%
Adjusted EBITDA3	35,934	37,084	101,383	35,809	(16,672)	—	193,538
Adjusted EBITDA margin3,4	23.3%	26.3%	23.1%	11.1%			18.5%
Operating income (loss)	29,401	24,464	53,604	26,462	(16,809)	—	117,122
Operating margin3,4	19.1%	17.3%	12.2%	8.2%			11.2%
Total assets less intangible assets3	194,631	404,074	1,193,730	272,592	34,564		2,099,591
Net capital expenditures3	2,533	5,415	22,955	83	225	—	31,211
YTD December 31, 2021
Revenue before fuel surcharge1	560,147	2,440,640	1,901,157	1,620,926	—	(54,085)	6,468,785
% of total revenue2	9%	39%	30%	23%			100%
Adjusted EBITDA3	134,845	415,641	431,181	169,005	(74,193)	—	1,076,479
Adjusted EBITDA margin3,4	24.1%	17.0%	22.7%	10.4%			16.6%
Operating income (loss)	108,440	482,754	230,189	142,794	(74,992)	—	889,185
Operating margin3,4	19.4%	19.8%	12.1%	8.8%			13.7%
Total assets less intangible assets3	186,116	2,031,994	1,362,007	292,026	88,059	—	3,960,202
Net capital expenditures3	14,445	52,703	69,177	316	141	—	136,782
YTD December 31, 2020
Revenue before fuel surcharge1	481,490	522,851	1,584,837	923,456	—	(28,331)	3,484,303
% of total revenue2	14%	15%	46%	25%			100%
Adjusted EBITDA3	104,019	138,361	383,155	113,885	(39,831)	—	699,589
Adjusted EBITDA margin3,4	21.6%	26.5%	24.2%	12.3%			20.1%
Operating income (loss)	78,753	87,950	206,346	84,459	(40,941)	—	416,567
Operating margin3,4	16.4%	16.8%	13.0%	9.1%			12.0%
Total assets less intangible assets3	194,631	404,074	1,193,730	272,592	34,564	—	2,099,591
Net capital expenditures3	16,673	11,673	41,781	288	349	—	70,764

¹ Includes intersegment revenue.

² Segment revenue including fuel surcharge and intersegment revenue to consolidated revenue including fuel surcharge and intersegment revenue.

³ This is a non-IFRS measures. For a reconciliation, refer to the “Non-IFRS financial measures” section below.

⁴ As a percentage of revenue before fuel surcharge.

8

Management’s Discussion and Analysis

Package and Courier

(unaudited)	Three months ended December 31				Years ended December 31
(in thousands of U.S. dollars)	2021	%	2020	%	2021	%	2020	%
Total revenue	177,368		167,555		641,449		529,155
Fuel surcharge	(27,294)		(13,461)		(81,302)		(47,665)
Revenue	150,074	100.0%	154,094	100.0%	560,147	100.0%	481,490	100.0%
Materials and services expenses (net of fuel    surcharge)	60,636	40.4%	72,115	46.8%	243,786	43.5%	220,741	45.8%
Personnel expenses	39,060	26.0%	39,821	25.8%	154,820	27.6%	133,552	27.7%
Other operating expenses	6,905	4.6%	6,234	4.0%	26,762	4.8%	23,145	4.8%
Depreciation of property and equipment	3,297	2.2%	3,168	2.1%	12,392	2.2%	11,539	2.4%
Depreciation of right-of-use assets	3,300	2.2%	3,210	2.1%	13,109	2.3%	12,871	2.7%
Amortization of intangible assets	186	0.1%	248	0.2%	903	0.2%	947	0.2%
(Gain) loss on sale of rolling stock and equipment	(23)	-0.0%	(10)	-0.0%	(59)	-0.0%	43	0.0%
Gain on derecognition of right-of-use assets	-	-	0	0.0%	(7)	-0.0%	(10)	-0.0%
Gain on sale of land and buildings and assets    held for sale	-	-	(93)	-0.1%	—	-	(91)	-0.0%
Loss on disposal of intangible assets	-	-	—	-	1	0.0%	—	-
Operating income	36,713	24.5%	29,401	19.1%	108,440	19.4%	78,753	16.4%
Adjusted EBITDA1	43,496	29.0%	35,934	23.3%	134,845	24.1%	104,019	21.6%
Return on invested capital1		25.3%		18.2%

¹ This is a non-IFRS measure. For a reconciliation, refer to the “Non-IFRS financial measures” section below.

Operational data
(unaudited)	Three months ended December 31				Years ended December 31
(Revenue in U.S. dollars)	2021	2020	Variance	%	2021	2020	Variance	%
Revenue per pound (including fuel)	$0.43	$0.40	$0.03	7.5%	$0.44	$0.36	$0.08	21.6%
Revenue per pound (excluding fuel)	$0.36	$0.36	$                     —	—	$0.39	$0.33	$0.06	16.7%
Revenue per shipment (excluding fuel)	$6.11	$5.88	$0.23	3.9%	$6.21	$5.67	$0.53	9.4%
Tonnage (in thousands of metric tons)	187	192	(5)	-2.6%	656	658	(2)	-0.3%
Shipments (in thousands)	24,581	26,185	(1,604)	-6.1%	90,257	84,854	5,403	6.4%
Average weight per shipment (in lbs.)	16.77	16.16	0.61	3.8%	16.03	17.09	(1.06)	-6.2%
Vehicle count, average	1,139	1,008	131	13.0%	1,069	1,023	46	4.5%
Weekly revenue per vehicle (incl. fuel, in thousands of U.S. dollars)	$11.98	$12.79	$(0.81)	-6.2%	$11.54	$9.95	$1.59	16.0%

Revenue

For the three months ended December 31, 2021, revenue was $150.1 million, down by $4.0 million, or 2.6%, from $154.1 million in Q4 2020. This decrease is attributable to a 6.1% decrease in shipments offset by a 3.9% increase in revenue per shipment (excluding fuel surcharge) which was driven by a 3.8% increase in average weight per shipment due to increases in business-to-business volumes. The decrease in shipments is attributable to demarketing of low yield business-to-consumer deliveries and a general reduction in business-to-consumer volume with a few major e-commerce clients. Market capacities continue to be tight, resulting in increased pricing and an ongoing shift towards higher-quality freight, leading to strong yield improvement as reflected by the increase in revenue per pound.

For the year ended December 31, 2021, revenue increased by $78.6 million, or 16.3%, from $481.5 million in 2020 to $560.1 million in 2021. This increase is attributable to a 9.4% increase in revenue per shipment combined with a 6.4% increase in shipments related to higher e-commerce volume that remains strong and increases in business-to-business volume which has mostly recovered.

Operating expenses

For the three months ended December 31, 2021, materials and services expenses, net of fuel surcharge revenue, decreased $11.5 million, or 15.9%, mostly due to higher fuel surcharge revenue offset by a $1.1 million increase in subcontractor costs and a $0.7 million increase in fuel cost. This is due to the proactive management of volume and network capacities to avoid volume related cost overruns and service deviations. Other operating expenses increased $0.7 million or 10.8%, primarily due to increased facilities and security costs.

For the twelve-months ended December 31, 2021, materials and services expenses, net of fuel surcharge revenue, increased $23.0 million due to a $43.7

million increase in sub-contractor costs driven by increased volume and fuel cost paid to sub-contractors, partially offset by higher fuel surcharge revenue. Personnel expenses, as a percentage of revenue slightly decreased from 27.7% in 2020 to 27.6% in 2021, despite a $4.4 million reduction in Canada Emergency Wage Subsidy. Other operating expenses increased $3.6 million in 2021, mainly due to a $1.7 million increase in facility related costs and a $1.2 million increase in IT and security costs.

9

Management’s Discussion and Analysis

Operating income

Operating income for the three months ended December 31, 2021, increased by $7.3 million, or 24.9%, compared to the fourth quarter of 2020. The

operating margin of 24.5% in the fourth quarter of 2021 was an improvement compared to 19.1% for the same period in 2020. This year-over-year

increase in operating income was driven primarily by an increase in fuel surcharge revenue. The impact of business reopenings and shifts in customer composition is being closely monitored to focus on driving yield and margin.

The return on invested capital increased 710 basis points, from 18.2% in the twelve months ended December 31, 2020, to 25.3% in the twelve months ended December 31, 2021. This is primarily due to the increase in operating income over the same period.

For the twelve-month period ended December 31, 2021, operating income increased by $29.7 million, from $78.8 million in 2020 to $108.4 million in 2021 driven by organic growth and a consistent focus on improving the quality of freight.

Less-Than-Truckload

(unaudited)	Three months ended December 31				Years ended December 31
(in thousands of U.S. dollars)	2021	%	2020	%	2021	%	2020	%
Total revenue	959,546		157,628		2,815,390		589,235
Fuel surcharge	(136,635)		(16,547)		(374,750)		(66,384)
Revenue	822,911	100.0%	141,081	100.0%	2,440,640	100.0%	522,851	100.0%
Materials and services expenses (net of fuel    surcharge)	274,166	33.3%	67,140	47.6%	848,273	34.8%	252,334	48.3%
Personnel expenses	348,237	42.3%	33,338	23.6%	1,022,214	41.9%	116,257	22.2%
Other operating expenses	60,196	7.3%	3,587	2.5%	155,992	6.4%	16,593	3.2%
Depreciation of property and equipment	25,846	3.1%	4,886	3.5%	73,242	3.0%	19,407	3.7%
Depreciation of right-of-use assets	9,398	1.1%	5,546	3.9%	33,050	1.4%	22,555	4.3%
Amortization of intangible assets	2,495	0.3%	2,179	1.5%	9,768	0.4%	8,392	1.6%
Bargain Purchase Gain	—	0.0%	—	0.0%	(181,549)	-7.4%	—	0.0%
Gain on sale of rolling stock and equipment	(842)	-0.1%	(62)	-0.0%	(907)	-0.0%	(519)	-0.1%
Gain on derecognition of right-of-use assets	(35)	-0.0%	(6)	-0.0%	(573)	-0.0%	(175)	-0.0%
(Gain) loss on sale of land and buildings and assets    held for sale	1	0.0%	9	0.0%	(1,624)	-0.1%	57	0.0%
Operating income	103,449	12.6%	24,464	17.3%	482,754	19.8%	87,950	16.8%
Adjusted EBITDA1	141,189	17.2%	37,084	26.3%	415,641	17.0%	138,361	26.5%

¹ This is a non-IFRS measure. For a reconciliation, refer to the “Non-IFRS financial measures” section below.

10

Management’s Discussion and Analysis

Operational data
(unaudited)	Three months ended December 31				Years ended December 31
(Revenue in U.S. dollars)	2021	2020	Variance	%	2021	2020	Variance	%
U.S. LTL
Revenue (in thousands of dollars)1	568,761	625	568,136	NM	1,586,228	2,692	1,583,537	NM
Adjusted Operating Ratio2	89.4%	87.7%			90.1%	88.2%
Revenue per hundredweight (excluding fuel)1	$29.20	-	$29.20		$28.52	-	$28.52
Revenue per shipment (excluding fuel)1	$310.97	-	$310.97		$299.91	-	$299.91
Tonnage (in thousands of tons)1	974	-	974		2,781	-	2,781
Shipments (in thousands)1	1,829	-	1,829		5,289	-	5,289
Average weight per shipment (in lbs)1	1,065	-	1,065		1,052	-	1,052
Average length of haul (in miles)1	1,110	-	1,110		1,089	-	1,089
Vehicle count, average4	4,583	8	4,575	NM	4,866	8	4,858	NM
Return on invested capital2,3	-	-
Canadian LTL
Revenue (in thousands of dollars)	144,697	141,081	3,616	2.6%	556,891	522,842	34,049	6.5%
Adjusted Operating Ratio2	78.3%	82.7%			79.9%	83.2%
Revenue per hundredweight (excluding fuel)	$11.13	$10.15	$0.98	9.7%	$10.80	$9.77	$1.03	10.5%
Revenue per shipment (excluding fuel)	$223.30	$215.72	$7.58	3.5%	$222.40	$213.06	$9.34	4.4%
Tonnage (in thousands of tons)	650	695	(45)	-6.5%	2,579	2,675	(96)	-3.6%
Shipments (in thousands)	648	654	(6)	-0.9%	2,504	2,454	50	2.0%
Average weight per shipment (in lbs)	2,006	2,125	(119)	-5.6%	2,060	2,180	(120)	-5.5%
Average length of haul (in miles)	791	811	(20)	-2.5%	773	818	(45)	-5.5%
Vehicle count, average	810	894	(84)	-9.4%	837	910	(73)	-8.0%
Return on invested capital2	17.8%	13.6%
1 Operational statistics exclude figures from Ground Freight Pricing (“GFP”).
2  This is a non-IFRS measure. For a reconciliation please refer to the “Non-IFRS Financial Measures” section below.
3 The Return on invested capital for the U.S. LTL is not disclosed as complete annual information is not yet available.
4  The vehicle count, average for the year ended December 31, 2021 was adjusted to calculate the average since the acquisition of UPS Freight on April 30, 2021.

Revenue

For the three months ended December 31, 2021, revenue increased by $681.8 million to $822.9 million. This increase is mainly due to business acquisitions, including the LTL operations of UPS Freight, that contributed $681.3 million of revenue.  In the U.S. LTL, the Company has identified hundreds of low yield accounts and has implemented actions on selected accounts to increase the quality of the freight, with a focus on freight that fits the network and that the Company can serve efficiently.  In addition, the Company has implemented increases in its accessorial revenue to further improve the yield.  All those actions led to a 3.2% increase in U.S. based LTL revenue per shipment (excluding fuel) when compared to the third quarter of 2021.  Revenue for the Canadian LTL segment increased $3.6 million.  This increase in revenue is due to a 3.5% increase in revenue per shipment (excluding fuel) partially offset by a 3.1% decrease in shipments.  The year-over-year decrease in shipments is mostly attributable to the landslides and floods that hit British Columbia in the second part of the quarter. The increase in revenue per shipment is the result of a 9.7% increase in revenue per hundredweight partially offset by a 5.6% decrease in average weight per shipment. Continuous improvement to shipment profile and focus on improving the quality of freight drove the yield improvement versus 2020.

For the year ended December 31, 2021, LTL revenue excluding fuel surcharge increased $1,917.8 million relative to the same prior year period, to $2,440.6 million.  The increase is mainly attributable to business acquisitions contributions of $1,896.3 million. The revenue from existing operations increased $21.5 million, or 4%, compared to the prior year.

Operating expenses

For the three months ended December 31, 2021, materials and services expenses, net of fuel surcharge revenue, increased $207.0 million, including $216.7 million of increase attributable to business acquisitions, offset by $11.5 million higher fuel surcharge revenue in the rest of the LTL segment. Personnel expenses increased $314.9 million, with $312.1 million coming from business acquisitions and $2.8 million, or 8% from existing operations. Other operating expenses increased by $56.6 million due primarily to business acquisitions.

For the year ended December 31, 2021, materials and services expenses, net of fuel surcharge revenue, increased by $595.9 million, with $615.9 attributable to business acquisitions offset by a decrease of $19.9 million, or 8%, for the remaining operations mostly due to a $26.3 million increase in fuel surcharge revenue, partially offset by an increase in fuel cost.  Personnel expenses increased $906.0 million of which $884.6 million is from business

11

Management’s Discussion and Analysis

acquisitions,a $15.2 million reduction in credits received from the Canada Emergency Wage Subsidy and a $5.4 million increase in direct labor cost.  Other operating expenses increased $139.4 million when compared to 2020, all related to business acquisitions.

Operating income

Operating income for the three months ended December 31, 2021, increased by $79.0 million to $103.5 million.  This increase includes a $73.5 million contribution from business acquisitions.  Adjusted operating ratio, a non-IFRS Measure, of the Canadian LTL operations improved to 78.3% in the fourth quarter of 2021 as compared to 82.7% in the same quarter in 2020.  With the focus on improving freight profile by identifying shipments that fits the Company’s network, US LTL operations, mostly represented by the UPS Ground Freight acquisition, achieved an 89.4% adjusted operating ratio, a non-IFRS measure, in the fourth quarter of 2021 because of immediate actions to improve the quality of freight, yield, and operational efficiency and cost structure.

The return on invested capital, a non-IFRS measure, of our Canadian based LTL segment was 17.8% in the fourth quarter of 2021, a 4.2% increase from 13.6% in the fourth quarter of 2020. The increase was mostly related to materially higher operating income, partially reduced because of higher invested capital.

For the year ended December 31, 2021, operating income increased $394.8 million due to contributions from business acquisitions of $371.5 million and an increase of $23.3 million, or 26.5%, from existing operating.  Despite a negative impact from a $15.2 million reduction in the Canada Emergency Wage Subsidy, the LTL operations were able to increase operating income by improving quality of revenue while maintaining the focus on cost control and route optimization.

Truckload

(unaudited)	Three months ended December 31				Years ended December 31
(in thousands of U.S. dollars)	2021	%	2020	%	2021	%	2020	%
Total revenue	584,009		477,262		2,162,752		1,748,359
Fuel surcharge	(77,577)		(39,127)		(261,595)		(163,522)
Revenue	506,432	100.0%	438,135	100.0%	1,901,157	100.0%	1,584,837	100.0%
Materials and services expenses (net of fuel    surcharge)	221,538	43.7%	188,660	43.1%	823,645	43.3%	654,220	41.3%
Personnel expenses	160,351	31.7%	135,911	31.0%	604,041	31.8%	503,242	31.8%
Other operating expenses	19,193	3.8%	14,323	3.3%	66,468	3.5%	52,337	3.3%
Depreciation of property and equipment	35,652	7.0%	34,986	8.0%	137,301	7.2%	136,859	8.6%
Depreciation of right-of-use assets	15,087	3.0%	10,055	2.3%	52,680	2.8%	32,229	2.0%
Amortization of intangible assets	5,960	1.2%	5,171	1.2%	21,580	1.1%	19,891	1.3%
Gain on sale of business	—	0.0%	(306)	-0.1%	—	0.0%	(306)	-0.0%
Gain on sale of rolling stock and equipment	(6,338)	-1.3%	(2,129)	-0.5%	(23,747)	-1.2%	(7,785)	-0.5%
Gain on derecognition of right-of-use assets	(160)	-0.0%	(13)	-0.0%	(431)	-0.0%	(332)	-0.0%
Gain on sale of land and buildings and assets held for    sale	(6,649)	-1.3%	(2,127)	-0.5%	(10,569)	-0.6%	(11,864)	-0.7%
Gain on disposal of intangible assets	(5)	-0.0%	—	-	—	0.0%	—	-
Operating income	61,803	12.2%	53,604	12.2%	230,189	12.1%	206,346	13.0%
Adjusted EBITDA1	111,848	22.1%	101,383	23.1%	431,181	22.7%	383,155	24.2%

12

Management’s Discussion and Analysis

Operational data	Three months ended December 31				Years ended December 31
(unaudited)	2021	2020	Variance	%	2021	2020	Variance	%
U.S. based Conventional TL
Revenue (in thousands of U.S. dollars)	186,988	161,476	25,512	15.8%	734,027	632,590	101,437	16.0%
Adjusted operating ratio	95.5%	91.5%			93.3%	92.0%
Total mileage (in thousands)	83,335	86,427	(3,092)	-3.6%	348,870	349,349	(479)	-0.1%
Tractor count, average	3,447	2,932	515	17.6%	3,294	2,949	345	11.7%
Trailer count, average	11,984	11,005	979	8.9%	11,751	10,938	813	7.4%
Tractor age	3.1	2.2	0.9	42.7%	3.1	2.2	0.9	42.7%
Trailer age	7.9	6.6	1.3	19.7%	7.9	6.6	1.3	19.7%
Number of owner operators, average	391	560	(169)	-30.1%	468	509	(42)	-8.1%
Return on invested capital1	5.3%	5.3%
Canadian based Conventional TL
Revenue (in thousands of U.S. dollars)	73,786	58,497	15,288	26.1%	250,177	206,418	43,759	21.2%
Adjusted operating ratio	88.4%	85.2%			87.9%	86.3%
Total mileage (in thousands)	26,467	23,095	3,372	14.6%	92,236	89,212	3,024	3.4%
Tractor count, average	728	623	105	16.9%	640	606	34	5.5%
Trailer count, average	3,401	2,809	592	21.1%	2,884	2,796	88	3.1%
Tractor age	4.1	2.5	1.6	64.5%	4.1	2.5	1.6	64.5%
Trailer age	7.5	5.9	1.6	27.4%	7.5	5.9	1.6	27.4%
Number of owner operators, average	324	314	10	3.3%	306	302	4	1.5%
Return on invested capital1	10.9%	11.4%
Specialized TL
Revenue (in thousands of U.S. dollars)	247,641	219,093	28,549	13.0%	923,683	749,655	174,028	23.2%
Adjusted operating ratio	84.6%	86.9%			84.8%	84.6%
Tractor count, average	2,356	2,314	43	1.8%	2,329	2,096	233	11.1%
Trailer count, average	7,029	6,619	410	6.2%	6,773	6,251	522	8.3%
Tractor age	4.0	4.0	(0.0)	-0.8%	4.0	4.0	(0.0)	-0.8%
Trailer age	12.7	12.9	(0.2)	-1.9%	12.7	12.9	(0.2)	-1.9%
Number of owner operators, average	1,168	1,132	36	3.2%	1,114	1,115	(1)	-0.1%
Return on invested capital1	11.2%	9.9%
1 This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS Financial Measures” section below.

During Q4 2021, Gunter, SGT, Laser, D&D and FKD were acquired and incorporated in the Truckload segment.

Revenue

For the three months ended December 31, 2021, revenue increased by $68.3 million, or 16%, from $438.1 million in Q4 2020 to $506.4 million in Q4 2021. This increase was mainly due to contributions from business acquisitions of $83.7 million, partially offset by a decrease in revenue from existing operations of $15.4 million. For U.S. based conventional TL, revenue increased by $25.5 million, or 15.8%, compared to prior year period. The increase was due primarily to $48.8 million in revenue from the business acquisition of TForce Freight’s TL division, offset by a decline in revenue from existing U.S. based conventional TL operations. The strong pricing and tight capacity in the U.S. market led to a 14.0% improvement year over year in revenue per mile. Miles per tractor declined by 12.3%, which is attributable to unseated tractors resulting from limited driver availability. For the three months ended December 31, 2021, the average unseated tractors percentage in the U.S. based conventional TL existing operations increased by 286 bps, from 13.1% in the fourth quarter of 2020 to 15.9% in 2021, despite a 15% reduction in the tractor fleet. For Canadian based conventional TL operations, revenue increased by $15.3 million, or 26.1%, compared to the same prior year period. The increase was due to a 7.7% improvement in revenue per tractor, driven by a 5.5% improvement in revenue per mile and a 2.0% improvement in miles per tractor. For Specialized TL, revenue increased by $28.5 million, or 13.0%, compared to the prior year period, primarily from contributions from business acquisitions of $23.9 million.

For the year ended December 31, 2021, TL revenue increased by $316.3 million, or 20%, from $1,584.8 million in 2020 to $1,901.2 million in 2021. This increase is mainly due to contributions from business acquisitions of $269.7 million and an increase in revenue from existing operations of $46.7 million.

Operating expenses

For the three months ended December 31, 2021, operating expenses, net of fuel surcharge, increased by $60.1 million or 16%, from $384.5 million in 2020 to $444.6 million in 2021. The business acquisitions contributed $85.2 million to the increase of operating expenses, net of fuel surcharge, which was offset by a decrease in operating expenses, net of fuel surcharge, from existing operations, due to the Company’s cost control efforts.

For the year ended December 31, 2021, TL operating expenses, net of fuel surcharge, increased by $292.5 million or 21%, from $1,378.5 million in 2020 to $1,671.0 million in 2021. Business acquisitions accounted for $263.5 million of this increase. The Company continues to improve its cost structure and

13

Management’s Discussion and Analysis

increase the efficiency and profitability of its existing fleet and network of independent contractors.In U.S. based conventional truckload, as a result of the assets acquired in the business acquisition of TForce Freight’s TL division, the Company is evaluating its level of excess equipment.

Operating income

For the three months ended December 31, 2021, the TL segment’s operating ratio remained at 87.8%, comparable to the fourth quarter of 2020. Operating income for the TL segment was $61.8 million for the three months ended December 31, 2021, up from $53.6 million in the same prior year period. This includes a $2.1 million operating loss generated by TForce Freight’s TL division.

For the year ended December 31, 2021, operating income in the TL segment increased by $23.8 million, or 12%, from $206.3 million in 2020 to $230.2 million in 2021. The increase is primarily due to the contribution from business acquisitions of $6.1 million and increased efficiency in existing operations, despite a $18.5 million reduction in credits received from the Canada Emergency Wage Subsidy.

The return on invested capital, a non-IFRS measure, for U.S. based and Canadian based Conventional TL was 5.3% and 10.9%, respectively, compared to 5.3% and 11.4%, respectively, for the same prior year period, reflecting relatively steady income generated on the same levels of assets deployed. The return on invested capital, a non-IFRS measure, for the Specialized TL segment increased to 11.2% as compared to 9.9% in the same prior year period due primarily to an increase in operating income.

Logistics

(unaudited)	Three months ended December 31				Years ended December 31
(in thousands of U.S. dollars)	2021	%	2020	%	2021	%	2020	%
Total revenue	441,086		327,689		1,662,072		945,130
Fuel surcharge	(13,525)		(5,370)		(41,146)		(21,674)
Revenue	427,561	100.0%	322,319	100.0%	1,620,926	100.0%	923,456	100.0%
Materials and services expenses (net of fuel    surcharge)	323,164	75.6%	241,798	75.0%	1,223,846	75.5%	668,225	72.4%
Personnel expenses	29,419	6.9%	24,381	7.6%	116,523	7.2%	93,579	10.1%
Other operating expenses	32,443	7.6%	19,983	6.2%	111,742	6.9%	48,012	5.2%
Depreciation of property and equipment	375	0.1%	596	0.2%	1,581	0.1%	2,336	0.3%
Depreciation of right-of-use assets	3,442	0.8%	3,138	1.0%	13,943	0.9%	13,204	1.4%
Amortization of intangible assets	5,776	1.4%	5,608	1.7%	22,684	1.4%	17,889	1.9%
Bargain purchase gain	—	—	—	—	(12,000)	-0.7%	(4,008)	-0.4%
Loss on sale of rolling stock and equipment	70	0.0%	368	0.1%	70	0.0%	373	0.0%
Gain on derecognition of right-of-use assets	—	—	(20)	-0.0%	(260)	-0.0%	(618)	-0.1%
Loss on sale of land and building	3	0.0%	5	0.0%	3	0.0%	5	0.0%
Operating income	32,869	7.7%	26,462	8.2%	142,794	8.8%	84,459	9.1%
Adjusted EBITDA1	42,465	9.9%	35,809	11.1%	169,005	10.4%	113,885	12.3%
Return on invested capital1		19.9%		15.3%

¹ This is a non-IFRS measure. For a reconciliation, refer to the “Non-IFRS financial measures” section below.

Revenue

For the three months ended December 31, 2021, revenue increased by $105.2 million, or 33%, from $322.3 million in Q4 2020 to $427.6 million in Q4 2021. This increase was mainly due to business acquisition contributions of $79.2 million, primarily from the acquisition of DLS Worldwide during the fourth quarter of 2020, and to an increase of $26.1 million, or 8%, compared to the same prior year period, mainly coming from the 3PL volume improvement.

For the year ended December 31, 2021, revenue increased by 697.5 million, or 76%, from $923.5 million in 2020 to $1,620.9 million. The increase is attributable to the contribution from business acquisitions of $628.3 million and $69.2 million, or 7%, from 3PL existing operations.

Approximately 77% (2020 – 71%) of the Logistics segment’s revenues in the quarter were generated from operations in the U.S. and approximately 23% (2020 – 29%) were generated from operations in Canada and Mexico.

Operating expenses

For the three months ended December 31, 2021, total operating expenses, net of fuel surcharge increased by $98.8 million, or 33%, relative to the same prior year period, from $295.9 million to $394.7 million. Business acquisitions accounted for $76.4 million of this increase with the remaining increase of $22.4 million from existing operations. The operating expenses, net of fuel surcharge, from existing operations increased due to an increase of $17.6 million in materials and services expenses (net of fuel surcharge) related to revenue growth and to other operating expenses of $4.4 million mostly due to IT costs and agent commission related to higher 3PL revenue.

14

Management’s Discussion and Analysis

For the year ended December 31, 2021, total operating expenses, net of fuel surcharge increased by $639.2 million, or 76%, from $839.0 million to $1,478.1 million. Business acquisitions accounted for $594.2 million and total operating expenses, net of fuel surcharge increased by $45.0 million for existing operations drivenprimarily from a materials and services expenses (net of fuel surcharge) increaseof $46.0 million related to revenue growth.

Operating income

Operating income for the three months ended December 31, 2021, increased by $6.4 million, or 24%, from $26.5 million to $32.9 million. The increase was from a contribution from business acquisitions of $2.8 million and from operating margin improvements from existing operations of $3.6 million, mainly as a result of better quality revenue and margin improvement in our the 3PL US businesses.

For the year ended December 31, 2021, operating income increased by $58.3 million, or 69%. The increase was from a contribution from business acquisitions of $34.1 million and from operating margin improvements from existing operations accounting for an improvement of $24.2 million.

The return on invested capital¹, a non-IFRS measure, increased to 21.5% from 15.3% in the same prior year period. This increase is due primarily to organic growth and operating margin expansion in existing operations.

LIQUIDITY AND CAPITAL RESOURCES

Sources and uses of cash

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31				Years ended December 31
	2021		2020		2021		2020
Sources of cash:
Net cash from operating activities		190,333		164,928		855,351		610,862
Proceeds from sale of property and equipment		22,508		23,949		92,842		52,116
Proceeds from sale of assets held for sale		10,503		6,248		19,869		24,480
Net variance in cash and bank indebtedness		44,164		273,791		—		—
Net proceeds from long-term debt		71,161		—		736,030		—
Proceeds from the issuance of common shares		—		—		—		425,350
Proceeds from the sale of business		—		2,351		—		2,351
Others		42,969		3,128		64,589		48,142
Total sources		381,638		474,395		1,768,681		1,163,301
Uses of cash:
Purchases of property and equipment		101,578		60,693		268,656		142,710
Business combinations, net of cash acquired		94,845		244,053		1,008,131		327,650
Net variance in cash and bank indebtedness		—		—		22,168		6,528
Net repayment of long-term debt		—		116,153		—		484,247
Repayment of lease liabilities		32,035		22,408		115,336		82,587
Dividends paid		21,406		18,434		85,386		67,604
Repurchase of own shares		106,863		—		198,153		38,021
Others		24,911		12,654		70,851		13,954
Total usage		381,638		474,395		1,768,681		1,163,301

Cash flow from operating activities

For the year ended December 31, 2021, net cash from operating activities increased by 40% to $855.4 million from $610.9 million in 2020. This $244.5 million increase is attributable to an increase in net income of $388.7 million, an increase in add backs from depreciation and amortization of $93.8 million, and an increase in provisions net of payments of $14.0 million, net of an increase in income taxes paid of $50.7 million and the exclusion of the bargain purchase gain of $193.5 million. The increase in taxes paid is attributable primarily to exceeding estimated performance in 2020, and greater tax installments made in 2021 than 2020 due to higher expected profits.

Refer to the section “Non-IFRS financial measures”.

15

Management’s Discussion and Analysis

Cash flow used in investing activities

Property and equipment

The following table presents the additions of property and equipment by category for the three-month periods and years ended December 31, 2021 and 2020.

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31					Years ended December 31
	2021		2020			2021			2020
Additions to property and equipment:
Purchases as stated on cash flow statements		101,578		60,693			268,656			142,710
Non-cash adjustments		1,017		(283	)		(1,483	)		104
		102,595		60,410			267,173			142,814
Additions by category:
Land and buildings		11,939		5,055			36,902			19,331
Rolling stock		85,868		52,744			217,080			112,645
Equipment		4,788		2,611			13,191			10,838
		102,595		60,410			267,173			142,814

The Company invests in new equipment to maintain its quality of service while minimizing maintenance costs. Its capital expenditures reflect the level of reinvestment required to keep its equipment in good order and to maintain a strategic allocation of its capital resources. The increase in additions in 2021 compared to 2020 is due to the reduction of capital expenditures during the beginning of the pandemic in 2020.The procurement of equipment remained difficult in 2021 as manufacturing and supply chain challenges resulted in delays in receiving equipment.

In the normal course of activities, the Company constantly renews its rolling stock equipment generating regular proceeds and gain or loss on disposition. The following table indicates the proceeds and gains or losses from sale of property and equipment and assets held for sale by category for the three-month periods and years ended December 31, 2021 and 2020.

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31						Years ended December 31
	2021			2020			2021			2020
Proceeds by category:
Land and buildings		10,592			6,053			19,222			23,877
Rolling stock		22,394			24,078			93,411			52,468
Equipment		25			66			78			251
		33,011			30,197			112,711			76,596
Gains (losses) by category:
Land and buildings		6,638			2,132			11,978			11,877
Rolling stock		7,309			2,275			25,176			8,375
Equipment		(169	)		(368	)		(320	)		(471	)
		13,778			4,039			36,834			19,781

Business acquisitions

For the year ended December 31, 2021, cash used in business acquisitions, net of cash acquired, totalled $1,008.1 million to acquire ten businesses. Refer to the section of this report entitled “2021 business acquisitions” and further information can be found in note 5 of the December 31, 2021 audited consolidated financial statements.

Cash flow used in financing activities

Debt

On January 13, 2021, the Company received $500 million in proceeds from the issuance and sale of an aggregate amount of $500 million of unsecured senior notes consisting of four tranches maturing between January 2029 and January 2036 and bearing interest between 3.15% and 3.50%.

On July 2, 2021, the Company received $100 million in proceeds from the issuance of new debt taking the form of unsecured senior notes consisting of two tranches maturing on July 2, 2029 and July 2, 2033, bearing fixed interest of 2.87% and 3.34%.

On July 14, 2021, the Company received $30 million in proceeds from the issuance of new debt taking the form of unsecured senior notes consisting of two tranches maturing on July 14, 2029 and July 14, 2033, bearing fixed interest of 2.89% and 3.37%.

The three debt instruments described above are subject to certain covenants regarding the maintenance of financial ratios. These are the same covenants as required by the Company’s syndicated revolving credit agreement as described in note 26(f) of the 2021 audited consolidated financial statements.

16

Management’s Discussion and Analysis

On August 16, 2021, the Company extended its credit facility until August 16, 2025. Under the new extension, CAD availability is increased by CAD $1 0 million and USD availability increased by USD $50 million. Based on certain ratios, the interest rate will be the sum of the banker’s acceptance rate, or Libor rate on US$ denominated debt, plus an applicable margin, which can vary between 113 basis points and 175 basis points. The applicable margin on the credit facility is currently 1.25%. The Company is subject to certain covenants regarding the maintenance of financial ratios. These are the same covenants as previously required by the Company’s revolving credit facility agreement and described in note 26(f) of the 2021audited consolidated financial statements.

Common shares

On February 13, 2020, the Company issued 6,900,000 common shares in the United States and Canada as part of its initial public offering in the United States raising net proceeds of $217.6 million.

On August 11, 2020, the Company issued 5,060,000 common shares in the United States and Canada raising net proceeds of $207.8 million.

NCIB on common shares

Pursuant to the renewal of the normal course issuer bid (“NCIB”), which began on November 2, 2021 and ending on November 1, 2022, the Company is authorized to repurchase for cancellation up to a maximum of 7,000,000 of its common shares under certain conditions. As at December 31, 2021, and since the inception of this NCIB, the Company has repurchased and cancelled 1,000,000 common shares.  

For the year ended December 31, 2021, the Company repurchased 2,157,862 common shares (as compared to 1,542,155 during the same period in 2020) at a weighted average price of $91.83 per share (as compared to $24.64 in the prior year period) for a total purchase price of $198.2 million (as compared to $38.0 million the prior year period).

Free cash flow¹

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31									Years ended December 31
	2021			2020			2019*			2021			2020			2019*
Net cash from operating activities		190,333			164,928			133,262			855,351			610,862			500,496
Additions to property and equipment		(102,595	)		(60,410	)		(89,073	)		(267,173	)		(142,814	)		(263,698	)
Proceeds from sale of property and equipment		22,508			23,949			20,785			92,842			52,116			71,754
Proceeds from sale of assets held for sale		10,503			6,248			13,079			19,869			24,480			39,146
Free cash flow1		120,749			134,715			78,053			700,889			544,644			347,698

*Recasted for change in presentation currency from Canadian dollar to U.S. dollar.

The Company's objectives when managing its cash flow from operations are to ensure proper capital investment in order to provide stability and competitiveness for its operations, to ensure sufficient liquidity to pursue its growth strategy, and to undertake selective business acquisitions within a sound capital structure and a solid financial position.

For the year ended December 31, 2021, TFI International generated free cash flow of $700.9 million, compared to $544.6 million in 2020, which represents a year-over-year increase of $156.2 million, or 29%. The $244.5 million increase in net cash from operating activities is attributable to an increase in net income of $388.7 million, an increase in add backs from depreciation and amortization of $93.8 million, and an increase in provisions net of payments of $14.0 million, net of an increase in income taxes paid of $50.7 million and the exclusion of the bargain purchase gain of $193.5 million. The additions to property and equipment increased by $124.4 million as compared to the same prior year period as a result of implementing delayed capital expenditures from 2020. The proceeds from the sale of property and equipment and assets held for sale increased by $36.1 million as compared to the prior year, due to the replenishment of the fleet.

Free cash flow conversion¹, which measures the level of capital employed to generate earnings, for the year ended December 31, 2021, of 87.3% compares to 89.9% in the same prior year period, as net capital expenditures in 2020 were delayed.

Based on the December 31, 2021, closing share price of $112.11, the free cash flow¹ generated by the Company in the preceding twelve months ($700.9 million, or $7.61 per share outstanding) represented a yield of 6.8%.

¹ This is a non-IFRS measure. Refer to the “Non-IFRS financial measures” section below.

17

Management’s Discussion and Analysis

Financial position

(unaudited) (in thousands of U.S. dollars)	As at December 31, 2021		As at December 31, 2020
Intangible assets		1,792,921		1,747,663
Total assets, less intangible assets1		3,960,202		2,099,591
Long-term debt		1,608,094		872,544
Lease liabilities		429,206		355,986
Shareholders' equity		2,220,311		1,788,612

¹ This is a non-IFRS measure. Refer to the reconciliation in “Non-IFRS financial measures” below.

Compared to December 31, 2020, the Company’s total assets, total assets less intangible assets, lease liabilities and long-term debt increased, as a result of the acquisition of TForce Freight and the new debt of $500 million issued during the first quarter of 2021, and $130 million issued during the third quarter of 2021. The proceeds of the new debt were partially used to repay existing revolver debt and the remaining amount was being held as cash and used to finance the acquisition of TForce Freight.

Contractual obligations, commitments, contingencies and off-balance sheet arrangements

The following table indicates the Company’s contractual obligations with their respective maturity dates at December 31, 2021, including future interest payments.

(unaudited) (in thousands of U.S. dollars)	Total		Less than 1 year		1 to 3 years		3 to 5 years		After 5 years
Unsecured revolving facility – August 2025		242,283		—		—		242,283		—
Unsecured term loan – June 2022		324,444		324,444		—		—		—
Unsecured debenture – December 2024		158,265		—		158,265		—		—
Unsecured senior notes – December 2026 to 2036		780,000		—		—		—		780,000
Conditional sales contracts		107,888		39,142		52,410		16,062		274
Lease liabilities		429,206		115,344		169,258		73,094		71,510
Interest on debt and lease liabilities		308,844		47,999		79,342		59,599		121,904
Total contractual obligations		2,350,930		526,929		459,275		391,038		973,688

On January 13, 2021, the Company received $500 million in proceeds from new debt taking the form of unsecured senior notes consisting of four tranches maturing between January 2029 and January 2036 and bearing interest between 3.15% and 3.50%.

On July 2, 2021, the Company received $100 million in proceeds from the issuance of a new debt taking the form of unsecured senior notes consisting of two tranches maturing on July 2, 2029 and July 2, 2033, bearing fixed interest of 2.87% and 3.34%.

On July 14, 2021, the Company received $30 million in proceeds from the issuance of a new debt taking the form of unsecured senior notes consisting of two tranches maturing on July 14, 2029 and July 14, 2033, bearing fixed interest of 2.89% and 3.37%.

On April 30, 2021, the Company acquired UPS Freight, recording $100.9 million of lease liabilities.

The unsecured term loan of $324.4 million is recognized as a current liability as it matures less than a year. The Company has adequate available liquidity through its revolving credit facilities, $797.9 million as at December 31, 2021, to repay the unsecured term loan.

The following table indicates the Company’s financial covenants to be maintained under its credit facility. These covenants are measured on a consolidated rolling twelve-month basis and are calculated as prescribed by the credit agreement which, among other things, requires the exclusion of the impact of the new standard IFRS 16 Leases:

Covenants	Requirements	As at December 31, 2021
Funded debt-to- EBITDA ratio [ratio of total debt, net of cash, plus letters of credit and some other long-term liabilities to earnings before interest, income tax, depreciation and amortization (“EBITDA”), including last twelve months adjusted EBITDA from business acquisitions]	< 3.50		1.51
EBITDAR Coverage Ratio [ratio of EBITDAR (EBITDA before rent and including last twelve months adjusted EBITDAR from business acquisitions) to interest and net rent expenses]	> 1.75		5.59

As at December 31, 2021, the Company had $47.4 million of outstanding letters of credit ($29.5 million on December 31, 2020).

As at December 31, 2021, the Company had $87.5 million of purchase commitments and $13.2 million of purchase orders that the Company intends to enter into a lease that is expected to materialize within a year (December 31, 2020 – $117.1 million and $44.1 million, respectively).

18

Management’s Discussion and Analysis

Dividends and outstanding share data

Dividends

The Company declared $24.9 million in dividends, or $0.27 per common share, in the fourth quarter of 2021. The Board of Directors approved a quarterly dividend of $0.27 per outstanding common share of the Company’s capital, for an expected aggregate payment of $24.7 million to be paid on April 15, 2022, to shareholders of record at the close of business on March 31, 2022.

Outstanding shares and share-based awards

A total of 92,152,893 common shares were outstanding as at December 31, 2021 (December 31, 2020 – 93,397,985). There was no material change in the Company’s outstanding share capital between December 31, 2021 and March 14, 2022.

As at December 31, 2021, the number of outstanding options to acquire common shares issued under the Company’s stock option plan was 2,060,960 (December 31, 2020 – 2,982,514) of which 1,705,284 were exercisable (December 31, 2020 – 2,111,364). Each stock option entitles the holder to purchase one common share of the Company at an exercise price based on the volume-weighted average trading price of the Company’s shares for the last five trading days immediately preceding the effective date of the grant.

As at December 31, 2021, the number of restricted share units (‘’RSUs’’) granted under the Company’s equity incentive plan to its senior employees was 271,704 (December 31, 2020 – 299,075). On February 8, 2021, the Board of Directors approved the grant of 78,122 RSUs under the Company’s equity incentive plan. In addition, on April 27, 2021, the Company granted 12,924 RSUs to the Board of Directors in accordance with the changes made to director compensation. The RSUs will vest in February of the third year following the grant date. Upon satisfaction of the required service period, the plan provides for settlement of the award through shares.

As at December 31, 2021, the number of performance share units (‘’PSUs’’) granted under the Company’s equity incentive plan to its senior employees was 225,765 (December 31, 2020 –147,121). On February 8, 2021, the Board of Directors approved the grant of 78,122 PSUs under the Company’s equity incentive plan. The PSUs will vest in February of the third year following the grant date. Upon satisfaction of the required service period, the plan provides for settlement of the award through shares.

Legal proceedings

The Company is involved in litigation arising from the ordinary course of business primarily involving claims for bodily injury and property damage. It is not feasible to predict or determine the outcome of these or similar proceedings. However, the Company believes the ultimate recovery or liability, if any, resulting from such litigation individually or in total would not materially adversely nor positively affect the Company’s financial condition or performance and, if necessary, has been provided for in the financial statements.

OUTLOOK

The North American economy continued its gradual recovery during 2021, following the 2020 onset of the COVID-19 pandemic. By the end of the fourth quarter, most end markets served by TFI International had fully recovered and many surpassed pre-pandemic strength. While most economists continue to forecast positive GDP growth for 2022, macro uncertainty has recently increased due to the war in Ukraine, and the economy faces the prospect of continued high inflation, high fuel costs, rising interest rates, global supply chain challenges, persistent labor shortages, and the possibility of additional variants of the virus that causes COVID-19.

TFI International has successfully navigated macro challenges over the past two years and management remains vigilant in its monitoring for new potential risks including geopolitical risks related to rising tensions in eastern Europe. With specific regard to TFI International, macro risks include rapidly rising fuel costs, additional variants and the potential economic disruption they could cause, supply chain disruption, driver availability and higher wages. As in the past, factors such as these may cause additional rounds of declining freight volumes and higher costs, adversely affect TFI’s operating companies and the markets they serve. Additional uncertainties include but are not limited to policy changes surrounding international trade, environmental mandates and changes to the tax code in any jurisdictions in which TFI International operates.

Management believes the Company is positioned well for continued solid operational and financial performance in 2022 due to its focus on efficiency and its lean cost structure, partially reflecting cost reduction measures enacted in 2020 in response to the pandemic, as well as a longstanding focus on profitability, efficiency, improving density, strong customer service, optimizing pricing, driver retention, and the rationalization of assets to avoid internal overcapacity. TFI also continues to have material synergy opportunities related to 2021’s acquisition of UPS Freight (now TForce Freight). In addition, the company remains well positioned to benefit from the expansion of e-commerce, which provides both growth and margin expansion opportunities for its P&C and Logistics business segments, and from potential future strength in the industrial economy which benefits its Specialized TL and LTL businesses.

Assuming no significant worsening of North American economic conditions, TFI International’s favorable positioning, which was significantly enhanced by last year’s acquisition of UPS Freight, should enable the Company to produce continued strong results. Longer term, regardless of the operating environment, management’s goal is to build shareholder value through consistent adherence to its operating principles, including the intense customer

19

Management’s Discussion and Analysis

focus exhibited by its many dedicated professionals, its asset-light approach to the business, continual efforts to enhance efficiencies including a focus on “freight that fits” its valuable network, a keen focus on free cash flow generation, and maintaining strong liquidity and a conservative balance sheet.

SUMMARY OF EIGHT MOST RECENT QUARTERLY RESULTS

(in millions of U.S. dollars, except per share data)
	Q4’21		Q3’21		Q2’21		Q1’21		Q4’20		Q3’20		Q2’20		Q1’20
Total revenue		2,140.9		2,094.0		1,836.7		1,148.8		1,122.0		936.1		798.5		924.5
Adjusted EBITDA1		318.5		296.4		285.4		176.2		193.5		189.4		167.6		149.1
Operating income		215.0		192.8		310.3		101.7		117.1		117.0		95.1		87.3
Net income		144.1		132.8		251.1		66.9		86.3		83.1		50.5		55.8
EPS – basic		1.56		1.43		2.69		0.72		0.92		0.91		0.58		0.66
EPS – diluted		1.52		1.40		2.63		0.70		0.91		0.90		0.57		0.65
Adjusted net income1		148.6		138.9		137.2		73.6		93.4		87.5		67.2		52.6
Adjusted EPS -    diluted1		1.57		1.46		1.44		0.77		0.98		0.94		0.76		0.61

¹ This is a non-IFRS measure. For a reconciliation refer to the “Non-IFRS financial measures” section below.

The differences between the quarters are mainly the result of seasonality (softer in Q1) and business acquisitions. The decline in Q2 2020 is due to COVID-19 related business interruptions.

NON-IFRS FINANCIAL MEASURES

Financial data have been prepared in conformity with IFRS, including the following measures:

Operating expenses: Operating expenses include: a) materials and services expenses, which are primarily costs related to independent contractors and vehicle operation; vehicle operation expenses, which primarily include fuel, repairs and maintenance, vehicle leasing costs, insurance, permits and operating supplies; b) personnel expenses; c) other operating expenses, which are primarily composed of costs related to offices’ and terminals’ rent, taxes, heating, telecommunications, maintenance and security and other general administrative expenses; d) depreciation of property and equipment, depreciation of right-of-use assets, amortization of intangible assets and gain or loss on the sale of rolling stock and equipment, on derecognition of right-of use assets, on sale of business and on sale of land and buildings and assets held for sale; e) bargain purchase gain; and f) impairment of intangible assets.

Operating income (loss): Net income or loss before finance income and costs and income tax expense, as stated in theconsolidated financial statements.

This MD&A includes references to certain non-IFRS financial measures as described below. These non-IFRS financial measures are not standardized financial measures under IFRS used to prepare the financial statements of the Company to which the measures relate and might not be comparable to similar financial measures disclosed by other issuers. Accordingly, they should not be considered in isolation, in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with IFRS. The terms and definitions of non-IFRS measures used in this MD&A and a reconciliation of each non-IFRS measure to the most directly comparable IFRS measure are provided below.

Adjusted net income: Net income or loss excluding amortization of intangible assets related to business acquisitions, net change in the fair value and accretion expense of contingent considerations, net change in the fair value of derivatives, net foreign exchange gain or loss, impairment of intangible assets, bargain purchase gain, gain or loss on sale of land and buildings, assets held for sale and sale of business, gain or loss on the disposal of intangible assets and U.S. Tax Reform. In presenting an adjusted net income and adjusted EPS, the Company’s intent is to help provide an understanding of what would have been the net income and earnings per share in a context of significant business combinations and excluding specific impacts and to reflect earnings from a strictly operating perspective. The amortization of intangible assets related to business acquisitions comprises amortization expense of customer relationships, trademarks and non-compete agreements accounted for in business combinations and the income tax effects related to this amortization. Management also believes, in excluding amortization of intangible assets related to business acquisitions, it provides more information on the amortization of intangible asset expense portion, net of tax, that will not have to be replaced to preserve the Company’s ability to generate similar future cash flows. The Company excludes these items because they affect the comparability of its financial results and could potentially distort the analysis of trends in its business performance. Excluding these items does not imply they are necessarily non-recurring. See reconciliation on page 7.

Adjusted earnings per share (adjusted “EPS”) - basic: Adjusted net income divided by the weighted average number of common shares.

Adjusted EPS - diluted: Adjusted net income divided by the weighted average number of diluted common shares.

Adjusted EBITDA: Net income before finance income and costs, income tax expense, depreciation, amortization, impairment of intangible assets, bargain purchase gain, and gain or loss on sale of land and buildings, assets held for sale, sale of business, and gain or loss on disposal of intangible assets. Management believes adjusted EBITDA to be a useful supplemental measure. Adjusted EBITDA is provided to assist in determining the ability of the Company to assess its performance.

20

Management’s Discussion and Analysis

Segmented adjusted EBITDArefers to operating income (loss)before depreciation, amortization, impairment of intangible assets, bargain purchase gain, gain or loss on sale of business, land and buildings, and assets held for sale and gain or loss on disposal of intangible assets. Management believes adjusted EBITDA to be a useful supplemental measure. Adjusted EBITDAis provided to assist in determining the ability of the Company to assess its performance.

Consolidated adjusted EBITDA reconciliation:

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31			Years ended December 31
	2021	2020	2019*	2021	2020	2019*
Net income	144,139	86,328	57,955	664,361	275,675	244,225
Net finance costs	21,441	15,382	15,552	73,018	53,910	62,107
Income tax expense	49,399	15,412	19,277	151,806	86,982	76,536
Depreciation of property and equipment	65,294	43,753	44,721	225,007	170,520	168,720
Depreciation of right-of-use assets	31,190	21,618	19,508	112,782	80,496	77,326
Amortization of intangible assets	13,653	13,557	12,757	55,243	48,213	49,701
Gain on sale of business	—	(306)	—	—	(306)	—
Bargain purchase gain	—	—	—	(193,549)	(4,008)	(8,014)
(Gain) loss on sale of land and buildings	9	5	(8)	19	6	(9)
Gain loss on sale of assets held for sale	(6,654)	(2,211)	(6,365)	(12,209)	(11,899)	(21,571)
Loss on sale of intangible assets	(5)	—	—	1	—	—
Adjusted EBITDA	318,466	193,538	163,397	1,076,479	699,589	649,021

*Recasted for change in presentation currency from Canadian dollar to U.S. dollar.

Segmented adjusted EBITDA reconciliation:

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31		Years ended December 31
	2021	2020	2021	2020
Package and Courier
Operating income	36,713	29,401	108,440	78,753
Depreciation and amortization	6,783	6,626	26,404	25,357
Gain on sale of land and buildings	—	(1)	—	—
Gain on sale of assets held for sale	—	(92)	—	(91)
Loss on disposal of intangible assets	—	—	1	—
Adjusted EBITDA	43,496	35,934	134,845	104,019
Less-Than-Truckload
Operating income	103,449	24,464	482,754	87,950
Depreciation and amortization	37,739	12,611	116,060	50,354
Bargain purchase gain	—	—	(181,549)	—
Loss on sale of land and buildings	6	1	16	1
(Gain) loss on sale of assets held for sale	(5)	8	(1,640)	56
Adjusted EBITDA	141,189	37,084	415,641	138,361
Truckload
Operating income	61,803	53,604	230,189	206,346
Depreciation and amortization	56,699	50,212	211,561	188,979
Gain on sale of business	—	(306)	—	(306)
Gain on sale of assets held for sale	(6,649)	(2,127)	(10,569)	(11,864)
Gain on disposal of intangible assets	(5)	—	—	—
Adjusted EBITDA	111,848	101,383	431,181	383,155
Logistics
Operating income	32,869	26,462	142,794	84,459
Depreciation and amortization	9,593	9,342	38,208	33,429
Bargain purchase gain	—	—	(12,000)	(4,008)
Loss on sale of land and buildings	3	5	3	5
Adjusted EBITDA	42,465	35,809	169,005	113,885
Corporate
Operating loss	(19,855)	(16,809)	(74,992)	(40,941)
Depreciation and amortization	(677)	137	799	1,110
Adjusted EBITDA	(20,532)	(16,672)	(74,193)	(39,831)

Adjusted EBITDA margin is calculated as adjusted EBITDA as a percentage of revenue before fuel surcharge.

Free cash flow: Net cash from operating activities less additions to property and equipment plus proceeds from sale of property and equipment and assets held for sale. Management believes that this measure provides a benchmark to evaluate the performance of the Company in regard to its ability to meet capital requirements. See reconciliation on page 17.

21

Management’s Discussion and Analysis

Free cash flowconversion: Adjusted EBITDA less net capital expenditures, divided by the adjusted EBITDA. Management believes that this measure provides a benchmark to evaluate the performance of the Company in regard to its ability to convert its operating profit into free cash flow.

Free cash flowconversion reconciliation:

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31		Years ended December 31
	2021	2020	2021	2020
Net income	144,139	86,328	664,361	275,675
Net finance costs	21,441	15,382	73,018	53,910
Income tax expense	49,399	15,412	151,806	86,982
Depreciation of property and equipment	65,294	43,753	225,007	170,520
Depreciation of right-of-use assets	31,190	21,618	112,782	80,496
Amortization of intangible assets	13,653	13,557	55,243	48,213
Gain on the sale of business	—	(306)	—	(306)
Bargain purchase gain	—	—	(193,549)	(4,008)
Loss on sale of land and buildings	9	5	19	6
Gain on sale of assets held for sale	(6,654)	(2,211)	(12,209)	(11,899)
(Gain) loss on sale of intangible assets	(5)	—	1	—
Adjusted EBITDA	318,466	193,538	1,076,479	699,589
Net capital expenditures	(68,237)	(31,211)	(136,782)	(70,764)
Adjusted EBITDA less net capital expenditures	250,229	162,327	939,697	628,825
Free cash flow conversion	78.6%	83.9%	87.3%	89.9%

Total assets less intangible assets: Management believes that this presents a more useful basis to evaluate the return on the productive assets. The excluded intangibles relate primarily to intangibles assets acquired through business acquisitions.

(unaudited) (in thousands of U.S. dollars)	Package and Courier		Less- Than-Truckload		Truckload		Logistics		Corporate		Eliminations		Total
As at December 31, 2021
Total assets		379,881		2,220,598		2,317,615		746,638		88,391		-		5,753,123
Intangible assets		193,765		188,604		955,608		454,612		332		-		1,792,921
Total assets less intangible assets		186,116		2,031,994		1,362,007		292,026		88,059		-		3,960,202
As at December 31, 2020
Total assets		387,919		593,653		2,100,900		729,690		35,092		-		3,847,254
Intangible assets		193,288		189,579		907,170		457,098		528		-		1,747,663
Total assets less intangible assets		194,631		404,074		1,193,730		272,592		34,564		-		2,099,591

22

Management’s Discussion and Analysis

Net capital expenditures: Additions to rolling stock and equipment, net of proceeds from the sale of rolling stock and equipment and assets held for sale excluding property. Management believes that this measure illustrates the recurring net capital expenditures which is required for the respective period.

(unaudited) (in thousands of U.S. dollars)	Package and Courier			Less- Than-Truckload			Truckload			Logistics			Corporate		Eliminations	Total
Three months ended December 31, 2021
Additions to rolling stock		4,794			47,680			33,394			-			-			85,868
Additions to equipment		1,112			1,620			1,801			235			20			4,788
Proceeds from the sale of rolling stock		20			(2,313	)		(20,075	)		(26	)		-			(22,394	)
Proceeds from the sale of equipment		-			(1	)		(7	)		(17	)		-			(25	)
Net capital expenditures		5,926			46,986			15,113			192			20			68,237
Three months ended December 31, 2020
Additions to rolling stock		1,571			6,107			45,008			58			-			52,744
Additions to equipment		1,014			89			1,211			72			225			2,611
Proceeds from the sale of rolling stock		(52	)		(781	)		(23,256	)		11			-			(24,078	)
Proceeds from the sale of equipment		-			-			(8	)		(58	)		-			(66	)
Net capital expenditures		2,533			5,415			22,955			83			225			31,211
YTD ended December 31, 2021
Additions to rolling stock		11,569			55,087			150,282			142			-			217,080
Additions to equipment		3,125			2,655			6,897			373			141			13,191
Proceeds from the sale of rolling stock		(246	)		(5,024	)		(87,995	)		(146	)		-			(93,411	)
Proceeds from the sale of equipment		(3	)		(15	)		(7	)		(53	)		-			(78	)
Net capital expenditures		14,445			52,703			69,177			316			141			136,782
YTD ended December 31, 2020
Additions to rolling stock		11,799			13,680			86,950			216			-			112,645
Additions to equipment		5,382			1,558			3,299			250			349			10,838
Proceeds from the sale of rolling stock		(504	)		(3,556	)		(48,305	)		(103	)		-			(52,468	)
Proceeds from the sale of equipment		(4	)		(9	)		(163	)		(75	)		-			(251	)
Net capital expenditures		16,673			11,673			41,781			288			349			70,764

Operating margin is calculated as operating income (loss) as a percentage of revenue before fuel surcharge.

Adjusted operating ratio: Operating expenses before gain on sale of business, bargain purchase gain, and gain or loss on sale of land and buildings and assets held for sale, and gain or loss on disposal of intangible assets (“Adjusted operating expenses”), net of fuel surcharge revenue, divided by revenue before fuel surcharge. Although the adjusted operating ratio is not a recognized financial measure defined by IFRS, it is a widely recognized measure in the transportation industry, which the Company believes provides a comparable benchmark for evaluating the Company’s performance. Also, to facilitate the comparison of business level activity and operating costs between periods, the Company compares the revenue before fuel surcharge (“revenue”) and reallocates the fuel surcharge revenue to materials and services expenses within operating expenses.

Consolidated adjusted operating ratio reconciliation:

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31			Years ended December 31
	2021	2020	2019*	2021	2020	2019*
Operating expenses	1,925,935	1,004,884	896,248	6,331,244	3,364,567	3,520,677
Gain on sale of business	—	306	—	—	306	—
Bargain purchase gain	—	—	—	193,549	4,008	8,014
Gain (loss) on sale of land and building	(9)	(5)	8	(19)	(6)	9
Gain on sale of assets held for sale	6,654	2,211	6,365	12,209	11,899	21,571
Gain (loss) on disposal of intangible assets	5	—	—	(1)	—	—
Adjusted operating expenses	1,932,585	1,007,396	902,621	6,536,982	3,380,774	3,550,271
Fuel surcharge revenue	(252,491)	(73,859)	(105,315)	(751,644)	(296,831)	(425,969)
Adjusted operating expenses, net of fuel surcharge revenue	1,680,094	933,537	797,306	5,785,338	3,083,943	3,124,302
Revenue before fuel surcharge	1,888,423	1,048,147	883,717	6,468,785	3,484,303	3,477,576
Adjusted operating ratio	89.0%	89.1%	90.2%	89.4%	88.5%	89.8%

*Recasted for changes in presentation currency from Canadian dollar to U.S. dollar.

23

Management’s Discussion and Analysis

Less-Than-Truckload and Truckload reportable segments adjusted operating ratio reconciliation and Truckload operating segments reconciliations:

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31		Years ended December 31
	2021	2020	2021	2020
Less-Than-Truckload
Total revenue	959,546	157,628	2,815,390	589,235
Total operating expenses	856,097	133,164	2,332,636	501,285
Operating income	103,449	24,464	482,754	87,950
Operating expenses	856,097	133,164	2,332,636	501,285
Bargain purchase gain	—	—	181,549	—
Gain (loss) on sale of land and buildings and assets held for sale	(1)	(9)	1,624	(57)
Adjusted operating expenses	856,096	133,155	2,515,809	501,228
Fuel surcharge revenue	(136,635)	(16,547)	(374,750)	(66,384)
Adjusted operating expenses, net of fuel surcharge revenue	719,461	116,608	2,141,059	434,844
Revenue before fuel surcharge	822,911	141,081	2,440,640	522,851
Adjusted operating ratio	87.4%	82.7%	87.7%	83.2%
Less-Than-Truckload - Revenue before fuel surcharge
U.S. based LTL	680,212	625	1,889,611	2,692
Canadian based LTL	144,697	141,081	556,891	522,842
Eliminations	(1,998)	(625)	(5,862)	(2,683)
	822,911	141,081	2,440,640	522,851
Less-Than-Truckload - Fuel surcharge revenue
U.S. based LTL	108,275	-	281,110	-
Canadian based LTL	28,598	16,547	94,166	66,384
Eliminations	(238)	-	(526)	-
	136,635	16,547	374,750	66,384
Less-Than-Truckload - Operating income (loss)
U.S. based LTL	72,077	77	369,027	317
Canadian based LTL	31,372	24,387	113,727	87,633
	103,449	24,464	482,754	87,950
U.S. based LTL
Operating expenses*	716,410	548	1,801,694	2,375
Bargain purchase gain	-	-	181,549	-
Loss on sale of land and buildings and assets held for sale	(7)	-	(17)	-
Adjusted operating expenses	716,403	548	1,983,226	2,375
Fuel surcharge revenue	(108,275)	-	(281,110)	-
Adjusted operating expenses, net of fuel surcharge	608,128	548	1,702,116	2,375
Revenue before fuel surcharge	680,212	625	1,889,611	2,692
Adjusted operating ratio	89.4%	87.7%	90.1%	88.2%
Canadian based LTL
Operating expenses*	141,923	133,241	537,330	501,593
Gain (loss) on sale of land and buildings and assets held for sale	6	(9)	1,641	(57)
Adjusted operating expenses	141,929	133,232	538,971	501,536
Fuel surcharge revenue	(28,598)	(16,547)	(94,166)	(66,384)
Adjusted operating expenses, net of fuel surcharge	113,331	116,685	444,805	435,152
Revenue before fuel surcharge	144,697	141,081	556,891	522,842
Adjusted operating ratio	78.3%	82.7%	79.9%	83.2%

* Operating expenses excluding intra LTL eliminations

24

Management’s Discussion and Analysis

Less-Than-Truckload and Truckload reportable segments adjusted operating ratio reconciliation and Truckload operating segments reconciliations (continued):

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31						Years ended December 31
	2021			2020			2021			2020
Truckload
Total revenue		584,009			477,262			2,162,752			1,748,359
Total operating expenses		522,206			423,658			1,932,563			1,542,013
Operating income		61,803			53,604			230,189			206,346
Operating expenses		522,206			423,658			1,932,563			1,542,013
Gain on sale of business		—			306			—			306
Gain on sale of land and buildings and assets held for sale		6,649			2,127			10,569			11,864
Adjusted operating expenses		528,855			426,091			1,943,132			1,554,183
Fuel surcharge revenue		(77,577	)		(39,127	)		(261,595	)		(163,522	)
Adjusted operating expenses, net of fuel surcharge revenue		451,278			386,964			1,681,537			1,390,661
Revenue before fuel surcharge		506,432			438,135			1,901,157			1,584,837
Adjusted operating ratio		89.1	%		88.3	%		88.4	%		87.7	%
Truckload - Revenue before fuel surcharge
U.S. based Conventional TL		186,988			161,476			734,027			632,590
Canadian based Conventional TL		73,786			58,497			250,177			206,418
Specialized TL		247,641			219,093			923,683			749,655
Eliminations		(1,983	)		(931	)		(6,730	)		(3,826	)
		506,432			438,135			1,901,157			1,584,837
Truckload - Fuel surcharge revenue
U.S. based Conventional TL		33,864			19,006			122,134			81,222
Canadian based Conventional TL		9,414			4,798			29,043			19,408
Specialized TL		34,485			15,244			110,930			63,018
Eliminations		(186	)		79			(512	)		(126	)
		77,577			39,127			261,595			163,522
Truckload - Operating income
U.S. based Conventional TL		15,070			13,722			55,464			51,857
Canadian based Conventional TL		8,565			8,673			30,367			28,337
Specialized TL		38,168			31,209			144,358			126,152
		61,803			53,604			230,189			206,346
U.S. based Conventional TL
Operating expenses*		205,782			166,760			800,697			661,955
Gain on sale of land and buildings and assets held for sale		6,643			—			6,643			1,103
Adjusted operating expenses		212,425			166,760			807,340			663,058
Fuel surcharge revenue		(33,864	)		(19,006	)		(122,134	)		(81,222	)
Adjusted operating expenses, net of fuel surcharge revenue		178,561			147,754			685,206			581,836
Revenue before fuel surcharge		186,988			161,476			734,027			632,590
Adjusted operating ratio		95.5	%		91.5	%		93.3	%		92.0	%
Canadian based Conventional TL
Operating expenses*		74,635			54,622			248,853			197,489
Gain on sale of land and buildings and assets held for sale		—			—			17			—
Adjusted operating expenses		74,635			54,622			248,870			197,489
Fuel surcharge revenue		(9,414	)		(4,798	)		(29,043	)		(19,408	)
Adjusted operating expenses, net of fuel surcharge revenue		65,221			49,824			219,827			178,081
Revenue before fuel surcharge		73,786			58,497			250,177			206,418
Adjusted operating ratio		88.4	%		85.2	%		87.9	%		86.3	%
Specialized TL
Operating expenses*		243,958			203,128			890,255			686,521
Gain on sale of business		—			306			—			306
Gain on sale of assets held for sale		6			2,127			3,909			10,761
Adjusted operating expenses		243,964			205,561			894,164			697,588
Fuel surcharge revenue		(34,485	)		(15,244	)		(110,930	)		(63,018	)
Adjusted operating expenses, net of fuel surcharge revenue		209,479			190,317			783,234			634,570
Revenue before fuel surcharge		247,641			219,093			923,683			749,655
Adjusted operating ratio		84.6	%		86.9	%		84.8	%		84.6	%

25

Management’s Discussion and Analysis

Return on invested capital (“ROIC”):Management believes ROIC at the segment level is a useful measure in the efficiency in the use of capital funds. The Company calculates ROIC as segment operating income net of exclusions, after tax, divided by the segment average invested capital. Operating income net of exclusions, after tax, is calculated as the trailing twelve months of operating income before bargain purchase gain, gain or loss on the sale of land and buildings and assets held for sale, and amortization of intangible assets, after tax using the statutory tax rate of the Company. Average invested capital is calculated as total assets excluding intangibles, net of trade and other payables, current taxes payable and provisions averaged between the beginning and ending balance over a twelve-month period.

Return on invested capital segment reconciliation:
(unaudited) (in thousands of U.S. dollars)	As at December 31
	2021			2020
Package and Courier
Operating income		108,440			78,753
(Gain) loss on sale of land and buildings		—			—
Gain on sale of assets held for sale		—			(91	)
Amortization of intangible assets		903			947
Operating income, net of exclusions		109,343			79,609
Income tax		26.5	%		26.5	%
Operating income net of exclusions, after tax		80,367			58,513
Intangible assets		193,765			193,288
Total assets, excluding intangible assets		186,116			194,631
less: Trade and other payables, income taxes payable and provisions		(65,438	)		(66,793	)
Total invested capital, current year		314,443			321,126
Intangible assets, prior year		193,288			190,135
Total assets, excluding intangible assets, prior year		194,631			180,902
less: Trade and other payables, income taxes payable and provisions, prior year		(66,793	)		(49,963	)
Total invested capital, prior year		321,126			321,074
Average invested capital		317,785			321,100
Return on invested capital		25.3	%		18.2	%
Less-Than-Truckload - Canadian based LTL
Operating income		113,727			87,633
Gain on sale of assets held for sale		(1,640	)		56
Amortization of intangible assets		9,004			8,392
Operating income, net of exclusions		121,091			96,081
Income tax		26.5	%		26.5	%
Operating income net of exclusions, after tax		89,002			70,620
Intangible assets		182,084			189,579
Total assets, excluding intangible assets		373,655			403,549
less: Trade and other payables, income taxes payable and provisions		(74,241	)		(76,608	)
Total invested capital, current year		481,498			516,520
Intangible assets, prior year		189,579			188,448
Total assets, excluding intangible assets, prior year		403,549			406,488
less: Trade and other payables, income taxes payable and provisions, prior year		(76,608	)		(74,156	)
Total invested capital, prior year		516,520			520,780
Average invested capital		499,009			518,650
Return on invested capital		17.8	%		13.6	%
Truckload - U.S. based Conventional TL
Operating income		55,464			51,857
Gain on sale of assets held for sale		(6,643	)		(1,103	)
Amortization of intangible assets		7,206			7,067
Operating income, net of exclusions		56,027			57,821
Income tax		26.5	%		26.5	%
Operating income net of exclusions, after tax		41,180			42,498
Intangible assets		311,195			317,145
Total assets, excluding intangible assets		593,049			540,648
less: Trade and other payables, income taxes payable and provisions		(117,621	)		(95,275	)
Total invested capital, current year		786,623			762,518
Intangible assets, prior year		317,145			320,425
Total assets, excluding intangible assets, prior year		540,648			578,459
less: Trade and other payables, income taxes payable and provisions, prior year		(95,275	)		(67,963	)
Total invested capital, prior year		762,518			830,921
Average invested capital		774,571			796,720
Return on invested capital		5.3	%		5.3	%

26

Management’s Discussion and Analysis

Return on invested capital segment reconciliation (continued):
(unaudited) (in thousands of U.S. dollars)	As at December 31
	2021			2020
Truckload - Canadian based Conventional TL
Operating income		30,367			28,337
Gain on sale of land and buildings		—			(8	)
Gain on sale of assets held for sale		(17	)		—
Amortization of intangible assets		2,124			2,081
Operating income, net of exclusions		32,474			30,410
Income tax		26.5	%		26.5	%
Operating income net of exclusions, after tax		23,868			22,351
Intangible assets		104,947			96,737
Total assets, excluding intangible assets		169,197			121,407
less: Trade and other payables, income taxes payable and provisions		(28,473	)		(24,839	)
Total invested capital, current year		245,671			193,305
Intangible assets, prior year		96,737			96,909
Total assets, excluding intangible assets, prior year		121,407			124,428
less: Trade and other payables, income taxes payable and provisions, prior year		(24,839	)		(21,569	)
Total invested capital, prior year		193,305			199,768
Average invested capital		219,488			196,537
Return on invested capital		10.9	%		11.4	%
Truckload - Specialized TL
Operating income		144,358			126,152
Gain on sale of land and buildings		—			—
Gain on sale of assets held for sale		(3,910	)		(13,583	)
Amortization of intangible assets		12,250			10,194
Operating income, net of exclusions		152,698			122,763
Income tax		26.5	%		26.5	%
Operating income net of exclusions, after tax		112,233			90,231
Intangible assets		539,466			493,287
Total assets, excluding intangible assets		599,761			531,677
less: Trade and other payables, income taxes payable and provisions		(81,776	)		(83,225	)
Total invested capital, current year		1,057,451			941,739
Intangible assets, prior year		493,287			443,245
Total assets, excluding intangible assets, prior year		531,677			503,682
less: Trade and other payables, income taxes payable and provisions, prior year		(83,225	)		(63,649	)
Total invested capital, prior year		941,739			883,278
Average invested capital		999,595			912,509
Return on invested capital		11.2	%		9.9	%
Logistics
Operating income		142,794			84,459
Loss on sale of land and buildings		3			5
Amortization of intangible assets		22,683			17,889
Bargain Purchase gain		(12,000	)		(4,008	)
Operating income, net of exclusions		153,480			98,345
Income tax		26.5	%		26.5	%
Operating income net of exclusions, after tax		112,808			72,284
Intangible assets		454,612			457,098
Total assets, excluding intangible assets		292,026			272,592
less: Trade and other payables, income taxes payable and provisions		(199,967	)		(144,305	)
Total invested capital, current year		546,671			585,385
Intangible assets, prior year		457,098			262,691
Total assets, excluding intangible assets, prior year		272,592			159,152
less: Trade and other payables, income taxes payable and provisions, prior year		(144,305	)		(61,560	)
Total invested capital, prior year		585,385			360,283
Average invested capital		566,028			472,834
Return on invested capital		19.9	%		15.3	%

27

Management’s Discussion and Analysis

RISKS AND UNCERTAINTIES

The Company’s future results may be affected by a number of factors over many of which the Company has little or no control. The following discussion of risk factors contains forward-looking statements. The following issues, uncertainties and risks, among others, should be considered in evaluating the Company’s business, prospects, financial condition, results of operations and cash flows.

Competition. The Company faces growing competition from other transporters in Canada, the United States and Mexico. These factors, including the following, could impair the Company’s ability to maintain or improve its profitability and could have a material adverse effect on the Company’s results of operations:

• the Company competes with many other transportation companies of varying sizes, including Canadian, U.S. and Mexican transportation companies;

• the Company’s competitors may periodically reduce their freight rates to gain business, which may limit the Company’s ability to maintain or increase freight rates or maintain growth in the Company’s business;

• some of the Company’s customers are other transportation companies or companies that also operate their own private trucking fleets, and they may decide to transport more of their own freight or bundle transportation with other services;

• some of the Company’s customers may reduce the number of carriers they use by selecting so-called “core carriers” as approved service providers or by engaging dedicated providers, and in some instances the Company may not be selected;

• many customers periodically accept bids from multiple carriers for their shipping needs, and this process may depress freight rates or result in the loss of some of the Company’s business to competitors;

• the market for qualified drivers is highly competitive, particularly in the Company’s growing U.S. operations, and the Company’s inability to attract and retain drivers could reduce its equipment utilization and cause the Company to increase compensation, both of which would adversely affect the Company’s profitability;

• economies of scale that may be passed on to smaller carriers by procurement aggregation providers may improve their ability to compete with the Company;

• some of the Company’s smaller competitors may not yet be fully compliant with recently-enacted regulations which may allow such competitors to take advantage of additional driver productivity;

• advances in technology, such as advanced safety systems, automated package sorting, handling and delivery, vehicle platooning, alternative fuel vehicles, autonomous vehicle technology and digitization of freight services, may require the Company to increase investments in order to remain competitive, and the Company’s customers may not be willing to accept higher freight rates to cover the cost of these investments;

• the Company’s competitors may have better safety records than the Company or a perception of better safety records, which could impair the Company’s ability to compete;

• some high-volume package shippers, such as Amazon.com, are developing and implementing in-house delivery capabilities and utilizing independent contractors for deliveries, which could in turn reduce the Company’s revenues and market share;

• the Company’s brand names may be subject to adverse publicity (whether or not justified) and lose significant value, which could result in reduced demand for the Company’s services;

• competition from freight brokerage companies may materially adversely affect the Company’s customer relationships and freight rates; and

• higher fuel prices and, in turn, higher fuel surcharges to the Company’s customers may cause some of the Company’s customers to consider freight transportation alternatives, including rail transportation.

Regulation. In Canada, carriers must obtain licenses issued by provincial transport boards in order to carry goods inter-provincially or to transport goods within any province. Licensing from U.S. and Mexican regulatory authorities is also required for the transportation of goods in Canada, the United States, and Mexico. Any change in or violation of existing or future regulations could have an adverse impact on the scope of the Company’s activities. Future laws and regulations may be more stringent, require changes in the Company’s operating practices, influence the demand for transportation services or require the Company to incur significant additional costs. Higher costs incurred by the Company, or by the Company’s suppliers who pass the costs onto the Company through higher supplies and materials pricing, could adversely affect the Company’s results of operations.

In addition to the regulatory regime applicable to operations in Canada, the Company is increasing its operations in the United States, and is therefore increasingly subject to rules and regulations related to the U.S. transportation industry, including regulation from various federal, state and local agencies, including the Department of Transportation (“DOT”) (in part through the Federal Motor Carrier Safety Administration (“FMCSA”)), the Environmental Protection Agency (“EPA”) and the Department of Homeland Security. Drivers must, both in Canada and the United States, comply with safety and fitness regulations, including those relating to drug and alcohol testing, driver safety performance and hours of service. Weight and dimensions, exhaust emissions and fuel efficiency are also subject to government regulation. The Company may also become subject to new or more restrictive regulations relating to fuel efficiency, exhaust emissions, hours of service, drug and alcohol testing, ergonomics, on-board reporting of operations, collective bargaining, security at ports, speed limitations, driver training and other matters affecting safety or operating methods.

In the United States, there are currently two methods of evaluating the safety and fitness of carriers: the Compliance, Safety, Accountability

28

Management’s Discussion and Analysis

(“CSA”) program, which evaluates and ranks fleets on certain safety-related standards by analyzing data from recent safety events and investigation results, and the DOT safety rating, which is based on an on-site investigation and affects a carrier’s ability to operate in interstate commerce. Additionally, the FMCSA has proposed rules in the past that would change the methodologies used to determine carrier safety and fitness.

Under the CSA program, carriers are evaluated and ranked against their peers based on seven categories of safety-related data. The seven categories of safety-related data currently include Unsafe Driving, Hours-of-Service Compliance, Driver Fitness, Controlled Substances/Alcohol, Vehicle Maintenance, Hazardous Materials Compliance and Crash Indicator (such categories known as “BASICs”). Carriers are grouped by category with other carriers that have a similar number of safety events (i.e. crashes, inspections, or violations) and carriers are ranked and assigned a rating percentile or score. If the Company were subject to any such interventions, this could have an adverse effect on the Company’s business, financial condition and results of operations. As a result, the Company’s fleet could be ranked poorly as compared to peer carriers. There is no guarantee that the Company will be able to maintain its current safety ratings or that it will not be subject to interventions in the future. The Company recruits first-time drivers to be part of its fleet, and these drivers may have a higher likelihood of creating adverse safety events under CSA. The occurrence of future deficiencies could affect driver recruitment in the United States by causing high-quality drivers to seek employment with other carriers or limit the pool of available drivers or could cause the Company’s customers to direct their business away from the Company and to carriers with higher fleet safety rankings, either of which would materially adversely affect the Company’s business, financial condition and results of operations. In addition, future deficiencies could increase the Company’s insurance expenses. Additionally, competition for drivers with favorable safety backgrounds may increase, which could necessitate increases in driver-related compensation costs. Further, the Company may incur greater than expected expenses in its attempts to improve unfavorable scores.

In December 2016, the FMCSA issued a final rule establishing a national clearinghouse for drug and alcohol testing results and requiring motor carriers and medical review officers to provide records of violations by commercial drivers of FMCSA drug and alcohol testing requirements. Motor carriers in the United States will be required to query the clearinghouse to ensure drivers and driver applicants do not have violations of federal drug and alcohol testing regulations that prohibit them from operating commercial motor vehicles. The final rule became effective on January 4, 2017, with a compliance date of January 6, 2020. In December 2019, however, the FMCSA announced a final rule extending by three years the date for state driver’s licensing agencies to comply with certain requirements. The December 2016 commercial driver’s license rule required states to request information from the clearinghouse about individuals prior to issuing, renewing, upgrading or transferring a commercial driver’s license. This new action will allow

states’ compliance with the requirement, which was set to begin January 2020, to be delayed until January 2023. The compliance date of January 2020 remained in place for all other requirements set forth in the clearinghouse final rule, however. Upon implementation, the rule may reduce the number of available drivers in an already constrained driver market. Pursuant to a new rule finalized by the FMCSA, effective November 2021, states are required to query the clearinghouse when issuing, renewing, transferring, or upgrading a commercial drivers license and must revoke a driver’s commercial driving privileges if such driver is prohibited from driving a motor vehicle for one or more drug or alcohol violations.

In addition, other rules have been proposed or made final by the FMCSA, including (i) a rule requiring the use of speed-limiting devices on heavy-duty tractors to restrict maximum speeds, which was proposed in 2016, and (ii) a rule setting out minimum driver training standards for new drivers applying for commercial driver’s licenses for the first time and to experienced drivers upgrading their licenses or seeking a hazardous materials endorsement, which was made final in December 2016 with a compliance date in February 2020 (FMCSA officials delayed implementation of the final rule by two years). In July 2017, the DOT announced that it would no longer pursue a speed limiter rule, but left open the possibility that it could resume such a pursuit in the future. In May 2021, however, a bill was reintroduced in the U.S. House of Representatives that would require commercial motor vehicles with gross weight exceeding 26,000 pounds to eb equipped with a speed limiting device, prohibiting speeds greater than 65 miles per hour. Whether the bill will become law is uncertain. The effect of these rules, to the extent they become effective, could result in a decrease in fleet production and/or driver availability, either of which could materially adversely affect the Company’s business, financial condition and results of operations.

The Company’s subsidiaries with U.S. operating authority currently have a satisfactory DOT rating, which is the highest available rating under the current safety rating scale. If the Company’s subsidiaries with U.S. operating authority were to receive a conditional or unsatisfactory DOT safety rating, it could materially adversely affect the Company’s business, financial condition and results of operations as customer contracts may require a satisfactory DOT safety rating, and a conditional or unsatisfactory rating could materially adversely affect or restrict the Company’s operations and increase the Company’s insurance costs.

The FMCSA has proposed regulations that would modify the existing rating system and the safety labels assigned to motor carriers evaluated by the DOT. Under regulations that were proposed in 2016, the methodology for determining a carrier’s DOT safety rating would be expanded to include the on-road safety performance of the carrier’s drivers and equipment, as well as results obtained from investigations. Exceeding certain thresholds based on such performance or results would cause a carrier to receive an unfit safety rating. The proposed regulations were withdrawn in March 2017, but the FMCSA noted that a similar process may be initiated in the future. If similar regulations were enacted and the Company were to receive an unfit or other negative

29

Management’s Discussion and Analysis

safety rating, the Company’s business would be materially adversely affected in the same manner as if it received a conditional or unsatisfactory safety rating under the current regulations. In addition, poor safety performance could lead to increased risk of liability, increased insurance, maintenance and equipment costs and potential loss of customers, which could materially adversely affect the Company’s business, financial condition and results of operations. The FMCSA has also indicated that it is in the early phasesof a new study on the causation of large truck crashes. Although it remains unclear whether such a study will ultimately be completed, the results of such study could spur further proposed and/or final rules regarding safety and fitness in the United States.

From time to time, the FMCSA proposes and implements changes to regulations impacting hours-of-service.  Such changes can negatively impact the Company’s productivity and affect its operations and profitability by reducing the number of hours per day or week the Company’s U.S. drivers and independent contractors may operate and/or disrupt the Company’s network.  However, in August 2019, the FMCSA issued a proposal to make changes to its hours-of-service rules that would allow U.S. truck drivers more flexibility with their 30-minute rest break and with dividing their time in the sleeper berth.  It also would extend by two hours the duty time for U.S. drivers encountering adverse weather, and extend the shorthaul exemption by lengthening the drivers’ maximum on-duty period from 12 hours to 14 hours.  In June 2020, the FMCSA adopted a final rule substantially as proposed, which became effective in September 2020.  Certain industry groups have challenged these rules in U.S. courts, and it remains unclear what, if anything, will come from such challenges. Any future changes to U.S. hours-of-service regulations could materially and adversely affect the Company’s operations and profitability.

The U.S. National Highway Traffic Safety Administration, the EPA and certain U.S. states, including California, have adopted regulations that are aimed at reducing tractor emissions and/or increasing fuel economy of the equipment the Company uses. Certain of these regulations are currently effective, with stricter emission and fuel economy standards becoming effective over the next several years. Other regulations have been proposed in the United States that would similarly increase these standards. U.S. federal and state lawmakers and regulators have also adopted or are considering a variety of other climate-change legal requirements related to carbon emissions and greenhouse gas emissions.  These legal requirements could potentially limit carbon emissions within certain states and municipalities in the United States. Certain of these legal requirements restrict the location and amount of time that diesel-powered tractors (like the Company’s) may idle, which may force the Company to purchase on-board power units that do not require the engine to idle or to alter the Company’s drivers’ behavior, which might result in a decrease in productivity and/or an increase in driver turnover. All of these regulations have increased, and may continue to increase, the cost of new tractors and trailers and may require the Company to retrofit certain of its tractors and trailers, may increase its maintenance costs, and could impair equipment productivity

and increase the Company’s operating costs, particularly if such costs are not offset by potential fuel savings. The occurrence of any of these adverse effects, combined with the uncertainty as to the reliability of the newly-designed diesel engines and the residual values of the Company’s equipment, could materially adversely affect the Company’s business, financial condition and results of operations. Furthermore, any future regulations that impose restrictions, caps, taxes or other controls on emissions of greenhouse gases could adversely affect the Company’s operations and financial results. The Company cannot predict the extent to which its operations and productivity will be impacted by any future regulations. The Company will continue monitoring its compliance with U.S. federal and state environmental regulations.

In March 2014, the U.S. Ninth Circuit Court of Appeals (the “Ninth Circuit”) held that the application of California state wage and hour laws to interstate truck drivers is not pre-empted by U.S. federal law. The case was appealed to the U.S. Supreme Court, which denied certiorari in May 2015, and accordingly, the Ninth Circuit decision stood. However, in December 2018, the FMCSA granted a petition filed by the American Trucking Associations determining that federal law pre-empts California’s wage and hour laws, and interstate truck drivers are not subject to such laws.  The FMCSA’s decision was appealed by labor groups and multiple lawsuits were filed in U.S. courts seeking to overturn the decision. I January 2021, however, the Ninth Circuit upheld the FMCSA’s determination that U.S. federal law does pre-empt California’s meal and rest break laws, as applied to drivers of property-carrying commercial motor vehicles. Other current and future U.S. state and local wage and hour laws, including laws related to employee meal breaks and rest periods, may vary significantly from U.S. federal law. Further, driver piece rate compensation, which is an industry standard, has been attacked as non-compliant with state minimum wage laws.  As a result, the Company, along with other companies in the industry, is subject to an uneven patchwork of wage and hour laws throughout the United States. In addition,the uncertainty with respect to the practical application of wage and hour laws are, and in the future may be, resulting in additional costs for the Company and the industry as a whole, and a negative outcome with respect to any of the above-mentioned lawsuits could materially affect the Company.  If U.S. federal legislation is not passed pre-empting state and local wage and hour laws, the Company will either need to continue complying with the most restrictive state and local laws across its entire fleet in the United States, or revise its management systems to comply with varying state and local laws. Either solution could result in increased compliance and labor costs, driver turnover, decreased efficiency and increased risk of non-compliance. In April 2016, the Food and Drug Administration (“FDA”) published a final rule establishing requirements for shippers, loaders, carriers by motor vehicle and rail vehicle, and receivers engaged in the transportation of food, to use sanitary transportation practices to ensure the safety of the food they transport as part of the FSMA.  This rule sets forth requirements related to (i) the design and maintenance of equipment used to transport food, (ii) the measures taken during food

30

Management’s Discussion and Analysis

transportation to ensure food safety, (iii) the training of carrier personnel in sanitary food transportation practices, and (iv) maintenance and retention of records of written procedures, agreements, and training related to the foregoing items.  These requirements took effect for larger carriers in April 2017 and apply to the Company when it acts as a carrier or as a broker. If the Company is found to be in violation of applicable laws or regulations related to the FSMA or if the Company transports food or goods that are contaminated or are found to cause illness and/or death, the Company could be subject to substantial fines, lawsuits, penalties and/or criminal and civil liability, any of which could have a material adverse effect on the Company’s business, financial condition, and results of operations.

Changes in existing regulations and implementation of new regulations, such as those related to trailer size limits, emissions and fuel economy, hours of service, mandating ELDs and drug and alcohol testing in Canada, the United States and Mexico, could increase capacity in the industry or improve the position of certain competitors, either of which could negatively impact pricing and volumes or require additional investments by the Company. The short-term and long-term impacts of changes in legislation or regulations are difficult to predict and could materially adversely affect the Company’s results of operations.

The right to continue to hold applicable licenses and permits is generally subject to maintaining satisfactory compliance with regulatory and safety guidelines, policies and laws. Although the Company is committed to compliance with laws and safety, there is no assurance that it will be in full compliance with them at all times. Consequently, at some future time, the Company could be required to incur significant costs to maintain or improve its compliance record.

United States and Mexican operations. A significant portion of the Company’s revenue is derived from operations in the United States and transportation to and from Mexico. The Company’s international operations are subject to a variety of risks, including fluctuations in foreign currencies, changes in the economic strength or greater volatility in the economies of foreign countries in which the Company does business, difficulties in enforcing contractual rights and intellectual property rights, compliance burdens associated with export and import laws, theft or vandalism, and social, political and economic instability. The Company’s international operations could be adversely affected by restrictions on travel. Additional risks associated with the Company’s international operations include restrictive trade policies, imposition of duties, changes to trade agreements and other treaties, taxes or government royalties by foreign governments, adverse changes in the regulatory environments, including in tax laws and regulations, of the foreign countries in which the Company does business, compliance with anti-corruption and anti-bribery laws, restrictions on the withdrawal of foreign investments, the ability to identify and retain qualified local managers and the challenge of managing a culturally and geographically diverse operation. The Company cannot guarantee compliance with all applicable laws, and violations could result in substantial fines, sanctions, civil or criminal penalties, competitive or reputational harm, litigation or regulatory action and other

consequences that might adversely affect the Company’s results of operations.

The current United States Presidential Administration provided informal guidance that it is in favor of certain changes to U.S. tax law, including increasing the corporate tax rate from its current rate of 21%. In the event that the corporate tax rate is increased, the Company’s financial position, and financial results from its United States operations may be adversely affected.

The implementation of tariffs or quotas or changes to certain trade agreements could, among other things, increase the costs of the materials used by the Company’s suppliers to produce new revenue equipment or increase the price of fuel. Such cost increases for the Company’s revenue equipment suppliers would likely be passed on to the Company, and to the extent fuel prices increase, the Company may not be able to fully recover such increases through rate increases or the Company’s fuel surcharge program, either of which could have a material adverse effect on the Company’s business.

The United States-Mexico-Canada Agreement (“USMCA”) entered into effect in July 2020.  The USMCA is designed to modernize food and agriculture trade, advance rules of origin for automobiles and trucks, and enhance intellectual property protections, among other matters, according to the Office of the U.S. Trade Representative.  It is difficult to predict at this stage what could be the impact of the USMCA on the economy, including the transportation industry.  However, given the amount of North American trade that moves by truck it could have a significant impact on supply and demand in the transportation industry, and could adversely impact the amount, movement and patterns of freight transported by the Company.

The U.S. Department of Treasury has broad authority to issue regulations and interpretative guidance that may significantly impact how the Company will apply the law and impact the Company’s results of operations in future periods. The timing and scope of such regulations and interpretative guidance are uncertain. In addition, there is a risk that states within the United States or foreign jurisdictions may amend their tax laws in response to these tax reforms, which could have a material adverse effect on the Company’s results.

In addition, if the Company is unable to maintain its Free and Secure Trade (“FAST”) and U.S. Customs Trade Partnership Against Terrorism (“C-TPAT”) certification statuses, it may have significant border delays, which could cause its cross-border operations to be less efficient than those of competitor carriers that obtain or continue to maintain FAST and C-TPAT certifications.

Operating Environment and Seasonality. The Company is exposed to the following factors, among others, affecting its operating environment:

• the Company’s future insurance and claims expense, including the cost of its liability insurance premiums and the number and dollar amount of claims, may exceed historical levels, which would

31

Management’s Discussion and Analysis

require the Company to incur additional costs and could reduce the Company’s earnings;

• a decline in the demand for used revenue equipment could result in decreased equipment sales, lower resale values and lower gains (or recording losses) on sales of assets;

• tractor and trailer vendors may reduce their manufacturing output in response to lower demand for their products in economic downturns or shortages of component parts, including the current shortage of semiconductors and other components and supplies, such as steel, which may materially adversely affect the Company’s ability to purchase a quantity of new revenue equipment that is sufficient to sustain its desired growth rate and negatively impact the Company’s financial results if it incurs higher costs to purchase tractors and trailers; and

• increased prices for new revenue equipment, design changes of new engines, reduced equipment efficiency resulting from new engines designed to reduce emissions, or decreased availability of new revenue equipment.

The Company’s tractor productivity decreases during the winter season because inclement weather impedes operations and some shippers reduce their shipments after the winter holiday season. Revenue may also be adversely affected by inclement weather and holidays, since revenue is directly related to available working days of shippers. At the same time, operating expenses increase and fuel efficiency declines because of engine idling and harsh weather creating higher accident frequency, increased claims and higher equipment repair expenditures. The Company may also suffer from weather-related or other unforeseen events such as tornadoes, hurricanes, blizzards, ice storms, floods, and fires, which may increase in frequency and severity due to climate change, as well as other man-made disasters. These events may disrupt fuel supplies, increase fuel costs, disrupt freight shipments or routes, affect regional economies, damage or destroy the Company’s assets or adversely affect the business or financial condition of the Company’s customers, any of which could materially adversely affect the Company’s results of operations or make the Company’s results of operations more volatile.

General Economic, Credit, and Business Conditions. The Company’s business is subject to general economic, credit, business and regulatory factors that are largely beyond the Company’s control, and which could have a material adverse effect on the Company’s operating results.

The Company’s industry is subject to cyclical pressures, and the Company’s business is dependent on a number of factors that may have a material adverse effect on its results of operations, many of which are beyond the Company’s control. The Company believes that some of the most significant of these factors include (i) excess tractor and trailer capacity in the transportation industry in comparison with shipping demand; (ii) declines in the resale value of used equipment; (iii) limited supply and increased cost of new and used equipment; (iv) recruiting and retaining qualified drivers; (v) strikes, work stoppages or work slowdowns at the Company’s facilities or at customer, port, border

crossing or other shipping-related facilities; (vi) compliance with ongoing regulatory requirements; (vii) increases in interest rates, fuel taxes, tolls and license and registration fees; and (vii) rising healthcare and insurance and claims costs in the United States; and (ix) the impact of the COVID-19 pandemic.

The Company is also affected by (i) recessionary economic cycles, which tend to be characterized by weak demand and downward pressure on rates; (ii) changes in customers’ inventory levels and in the availability of funding for their working capital; (iii) changes in the way in which the Company’s customers choose to source or utilize the Company’s services; and (iv) downturns in customers’ business cycles, such as retail and manufacturing, where the Company has significant customer concentration. Economic conditions may adversely affect customers and their demand for and ability to pay for the Company’s services. Customers encountering adverse economic conditions represent a greater potential for loss and the Company may be required to increase its allowance for doubtful accounts.

Economic conditions that decrease shipping demand and increase the supply of available tractors and trailers can exert downward pressure on rates and equipment utilization, thereby decreasing asset productivity. The risks associated with these factors are heightened when the economy is weakened. Some of the principal risks during such times include:

• the Company may experience a reduction in overall freight levels, which may impair the Company’s asset utilization;

• freight patterns may change as supply chains are redesigned, resulting in an imbalance between the Company’s capacity and assets and customers’ freight demand;

• the Company may be forced to accept more loads from freight brokers, where freight rates are typically lower, or may be forced to incur more non-revenue generating miles to obtain loads;

• the Company may increase the size of its fleet during periods of high freight demand during which its competitors also increase their capacity, and the Company may experience losses in greater amounts than such competitors during subsequent cycles of softened freight demand if the Company is required to dispose of assets at a loss to match reduced freight demand;

• customers may solicit bids for freight from multiple trucking companies or select competitors that offer lower rates in an attempt to lower their costs, and the Company may be forced to lower its rates or lose freight; and

• lack of access to current sources of credit or lack of lender access to capital, leading to an inability to secure credit financing on satisfactory terms, or at all.

The Company is subject to cost increases that are outside the Company’s control that could materially reduce the Company’s profitability if it is unable to increase its rates sufficiently. Such cost increases include, but are not limited to, increases in fuel and energy prices, driver and office employee wages, purchased transportation costs, taxes, interest rates, tolls, license and registration fees, insurance premiums and claims, revenue equipment and related maintenance,

32

Management’s Discussion and Analysis

and tires and other components. Strikes or other work stoppages at the Company’s service centres or at customer, port, border or other shipping locations, deterioration of Canadian, U.S. or Mexican transportation infrastructure and reduced investment in such infrastructure, or actual or threatened armed conflicts or terrorist attacks, efforts to combat terrorism, military action against a foreign state or group located in a foreign state or heightened security requirements could lead to wear, tear and damage to the Company’s equipment, driver dissatisfaction, reduced economic demand, reduced availability of credit, increased prices for fuel or temporary closing of the shipping locations or borders between Canada, the United States and Mexico. Further, the Company may not be able to appropriately adjust its costs and staffing levels to meet changing market demands. In periods of rapid change, it is more difficult to match the Company’s staffing level to its business needs.

The Company’s operations, with the exception of its brokerage operations, are capital intensive and asset heavy. If anticipated demand differs materially from actual usage, the Company may have too many or too few assets. During periods of decreased customer demand, the Company’s asset utilization may suffer, and it may be forced to sell equipment on the open market or turn in equipment under certain equipment leases in order to right size its fleet. This could cause the Company to incur losses on such sales or require payments in connection with equipment the Company turns in, particularly during times of a softer used equipment market, either of which could have a material adverse effect on the Company’s profitability.

Although the Company’s business volume is not highly concentrated, its customers’ financial failures or loss of customer business may materially adversely affect the Company. If the Company were unable to generate sufficient cash from operations, it would need to seek alternative sources of capital, including financing, to meet its capital requirements. In the event that the Company were unable to generate sufficient cash from operations or obtain financing on favorable terms in the future, it may have to limit its fleet size, enter into less favorable financing arrangements or operate its revenue equipment for longer periods, any of which could have a materially adverse effect on its profitability.

Coronavirus and its variants (“COVID-19”) outbreak or other similar outbreaks. The recent outbreak of COVID-19, and any other outbreaks of contagious diseases or other adverse public health developments, could have a materially adverse effect on the Company’s financial condition, liquidity, results of operations, and cash flows. The outbreak of COVID-19 has resulted in governmental authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, increased border and port controls and closures, and shutdowns. There is considerable uncertainty regarding such measures and potential future measures, including vaccine, testing and masks mandates, all of which could limit the Company’s ability to meet customer demand, as well as reduce customer demand. Furthermore, government vaccine, testing, and mask mandates may increase the Company’s turnover and make recruiting more difficult, particularly among the Company’s driver personnel.

Certain of the Company’s office personnel have been working remotely, which could disrupt to a certain extent the Company’s management, business, finance, and financial reporting teams. The Company may experience an increase in absences or terminations among its driver and non-driver personnel due to the outbreak of COVID-19, which could have a materially adverse effect on the Company’s operating results.  Further, the Company’s operations, particularly in areas of increased COVID-19 infections, could be disrupted resulting in a negative impact on the Company’s operations and results.  

The outbreak of COVID-19 has significantly increased uncertainty. Risks related to a slowdown or recession are described in the Company’s risk factor titled “General Economic, Credit and Business Conditions”.

Short-term and long-term developments related to COVID-19 have been unpredictable and the extent to which further developments could impact the Company’s operations, financial condition, access to credit, liquidity, results of operations, and cash flows is highly uncertain. Such developments may include the geographic spread and duration of the virus, the distribution and availability of vaccines, vaccine hesitancy, the severity of the disease and the actions that may be taken by various governmental authorities and other third parties in response to the outbreak.

In November 2021, the U.S. Department of Labor’s Occupational Safety and Health Administration (“OSHA”) published an emergency temporary standard requiring all employers within the U.S. with over 100 employees to ensure that their employees are fully vaccinated or, in the alternative, to ensure that all unvaccinated employees return a negative COVID-19 test at least once a week before coming to work. However, the United States Supreme Court blocked this emergency temporary standard from coming into effect.

Effective January 2022, the Canadian government is prohibiting unvaccinated foreigners, including U.S. citizens, from crossing the border. Effective January 2022, the U.S. Government is prohibiting unvaccinated foreigners, including Canadian citizens, from crossing the U.S.-Canada border and the U.S.-Mexico border. The effect of these border requirements, in addition to any other vaccine, testing, or mask mandates that go into effect may, amongst other things, (i) cause the Company’s employees to go to smaller employers, especially if any future mandates are only subject to larger employers, or leave the trucking industry altogether, (ii) result in logistical issues, increased expenses, and operational issues resulting from ensuring compliance with such mandates, such as the costs of arranging for COVID-19 tests for the Company’s unvaccinated employees, especially for the Company’s unvaccinated drivers, (iii) result in increased costs relating to recruiting and training of drivers, and (iv) result in decreased revenue and other operational issues if we are unable to recruit and retain drivers. Any such vaccine, testing, or mask mandate that is interpreted as to apply to commercial drivers would significantly reduce the pool of drivers available to us and the industry as a whole, exacerbating the current driver shortage even further. Accordingly, any vaccine, testing,

33

Management’s Discussion and Analysis

or mask mandate, to the extent that it goes into effect, may have a material adverse effect on the Company’s  business, the Company’s operations, and the Company’s financial condition and position.

Interest Rate Fluctuations. Future cash flows related to variable-rate financial liabilities could be impacted by changes in benchmark rates such as Bankers’ Acceptance or London Interbank Offered Rate (Libor). In addition, the Company is exposed to gains and losses arising from changes in interest rates through its derivative financial instruments carried at fair value.

Currency Fluctuations. The Company’s financial results are reported in U.S. dollars and a large portion of the Company’s revenue and operating costs are realized in currencies other than the U.S. dollar, primarily the Canadian dollar. The exchange rates between these currencies and the U.S. dollar have fluctuated in recent years and will likely continue to do so in the future. It is not possible to mitigate all exposure to fluctuations in foreign currency exchange rates. The results of operations are therefore affected by movements of these currencies against the U.S. dollar.

Price and Availability of Fuel. Fuel is one of the Company’s largest operating expenses. Diesel fuel prices fluctuate greatly due to factors beyond the Company’s control, such as political events, commodity futures trading, currency fluctuations, natural and man-made disasters, terrorist activities and armed conflicts, any of which may lead to an increase in the cost of fuel. Fuel prices are also affected by the rising demand for fuel in developing countries and could be materially adversely affected by the use of crude oil and oil reserves for purposes other than fuel production and by diminished drilling activity. Such events may lead not only to increases in fuel prices, but also to fuel shortages and disruptions in the fuel supply chain. Because the Company’s operations are dependent upon diesel fuel, significant diesel fuel cost increases, shortages or supply disruptions could have a material adverse effect on the Company’s business, financial condition and results of operations.

While the Company has fuel surcharge programs in place with a majority of the Company’s customers, which historically have helped the Company offset the majority of the negative impact of rising fuel prices, the Company also incurs fuel costs that cannot be recovered even with respect to customers with which the Company maintains fuel surcharge programs, such as those associated with non-revenue generating miles or time when the Company’s engines are idling. Moreover, the terms of each customer’s fuel surcharge program vary from one division to another, and the recoverability for fuel price increases varies as well. In addition, because the Company’s fuel surcharge recovery lags behind changes in fuel prices, the Company’s fuel surcharge recovery may not capture the increased costs the Company pays for fuel, especially when prices are rising. This could lead to fluctuations in the Company’s levels of reimbursement, such as has occurred in the past. There can be no assurance that such fuel surcharges can be maintained indefinitely or that they will be fully effective.

Insurance. The Company’s operations are subject to risks inherent in the transportation sector, including personal injury, property damage, workers’ compensation and employment and other issues. The Company’s future insurance and claims expenses may exceed historical levels, which could reduce the Company’s earnings. The Company subscribes for insurance in amounts it considers appropriate in the circumstances and having regard to industry norms. Like many in the industry, the Company self-insures a significant portion of the claims exposure related to cargo loss, bodily injury, workers’ compensation and property damages. Due to the Company’s significant self-insured amounts, the Company has exposure to fluctuations in the number or severity of claims and the risk of being required to accrue or pay additional amounts if the Company’s estimates are revised or claims ultimately prove to be in excess of the amounts originally assessed. Further, the Company’s self-insured retention levels could change and result in more volatility than in recent years.

The Company holds a fully-fronted policy of CAD $10 million limit per occurrence for automobile bodily injury, property damage and commercial general liability for its Canadian Insurance Program, subject to certain exceptions. The Company retains a deductible of US $2.25 million for certain U.S. subsidiaries on their primary US $5 million limit policies for automobile bodily injury and property damage, also subject to certain exceptions, and a 50% quota share deductible for the US $5 million limit in excess of US $5 million. The Company retains a deductible of US $1 million on its primary US $5 million limit policy for certain U.S. subsidiaries for commercial general liability. The Company retains deductibles of up to US $1 million per occurrence for workers’ compensation claims. The Company’s liability coverage has a total limit of US $100 million per occurrence for both its Canadian and U.S. divisions.

Although the Company believes its aggregate insurance limits should be sufficient to cover reasonably expected claims, it is possible that the amount of one or more claims could exceed the Company’s aggregate coverage limits or that the Company will chose not to obtain insurance in respect of such claims. If any claim were to exceed the Company’s coverage, the Company would bear the excess, in addition to the Company’s other self-insured amounts. The Company’s results of operations and financial condition could be materially and adversely affected if (i) cost per claim or the number of claims significantly exceeds the Company’s coverage limits or retention amounts; (ii) the Company experiences a claim in excess of its coverage limits; (iii) the Company’s insurance carriers fail to pay on the Company’s insurance claims; (iv) the Company experiences a significant increase in premiums; or (v) the Company experiences a claim for which coverage is not provided, either because the Company chose not to obtain insurance as a result of high premiums or because the claim is not covered by insurance which the Company has in place.

The Company accrues the costs of the uninsured portion of pending claims based on estimates derived from the Company’s evaluation of the nature and severity of individual claims and an estimate of future claims development based upon historical claims development trends.

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Management’s Discussion and Analysis

Actual settlement of the Company’s retained claim liabilities could differ from its estimates due to a number of uncertainties, including evaluation of severity, legal costs and claims that have been incurred but not reported. Due to the Company’s high retained amounts, it has significant exposure to fluctuations in the number and severity of claims. If the Company were required to accrue or pay additional amounts because its estimates are revised or the claims ultimately prove to be more severe than originally assessed, its financial condition and results of operations may be materially adversely affected.

Employee Relations. With the acquisition of UPS Freight and prior Canadian acquisitions, the Company has a substantial number of unionized employees in the U.S. and Canada. Although the Company believes that its relations with its employees are satisfactory, no assurance can be given that the Company will be able to successfully extend or renegotiate the Company’s current collective agreements as they expire from time to time or that additional employees will not attempt to unionize.

The unionization of the Company’s employees in additional business units, adverse changes in terms under collective bargaining agreements, or actual or threatened strikes, work stoppages or slow downs, could have a material adverse effect on the Company’s business, customer retention, results of operations, financial condition and liquidity, and could cause significant disruption of, or inefficiencies in, its operations, because:

• restrictive work rules could hamper the Company’s ability to improve or sustain operating efficiency or could impair the Company’s service reputation and limit its ability to provide certain services;

• a strike or work stoppage could negatively impact the Company’s profitability and could damage customer and employee relationships;

• shippers may limit their use of unionized trucking companies because of the threat of strikes and other work stoppages;

• the Company could fail to extend or renegotiate its collective agreements or experience material increases in wages or benefits;

• disputes with the Company’s unions could arise; and

• an election and bargaining process could divert management’s time and attention from the Company’s overall objectives and impose significant expenses.

The Company’s collective agreements have a variety of expiration dates, to the last of which is in September 2024. In a small number of cases, the expiration date of the collective agreement has passed; in such cases, the Corporation is generally in the process of renegotiating the agreement. The Company cannot predict the effect which any new collective agreements or the failure to enter into such agreements upon the expiry of the current agreements may have on its operations.

The Company has limited experience with unionized employees in the U.S. There may be additional risks related to the increased number of unionized U.S. employees from the acquisition of UPS Freight. The

impact the Company’s unionized operations could have on non-unionized operations is uncertain.

Drivers. Increases in driver compensation or difficulties attracting and retaining qualified drivers could have a material adverse effect on the Company’s profitability and the ability to maintain or grow the Company’s fleet.

Like many in the transportation sector, the Company experiences substantial difficulty in attracting and retaining sufficient numbers of qualified drivers. The trucking industry periodically experiences a shortage of qualified drivers. The Company believes the shortage of qualified drivers and intense competition for drivers from other transportation companies will create difficulties in maintaining or increasing the number of drivers and may negatively impact the Company’s ability to engage a sufficient number of drivers, and the Company’s inability to do so may negatively impact its operations. Further, the compensation the Company offers its drivers and independent contractor expenses are subject to market conditions, and the Company may find it necessary to increase driver and independent contractor compensation in future periods.

In addition, the Company and many other trucking companies suffer from a high turnover rate of drivers in the U.S. TL market. This high turnover rate requires the Company to continually recruit a substantial number of new drivers in order to operate existing revenue equipment. Driver shortages are exacerbated during periods of economic expansion, in which alternative employment opportunities, including in the construction and manufacturing industries, which may offer better compensation and/or more time at home, are more plentiful and freight demand increases, or during periods of economic downturns, in which unemployment benefits might be extended and financing is limited for independent contractors who seek to purchase equipment, or the scarcity or growth of loans for students who seek financial aid for driving school. In addition, enrollment at driving schools may be further limited by COVID-19 social distancing requirements, vaccine, testing, and mask mandates, and other regulatory requirements that reduces the number of eligible drivers. The lack of adequate tractor parking along some U.S. highways and congestion caused by inadequate highway funding may make it more difficult for drivers to comply with hours of service regulations and cause added stress for drivers, further reducing the pool of eligible drivers. The Company’s use of team-driven tractors for expedited shipments requires two drivers per tractor, which further increases the number of drivers the Company must recruit and retain in comparison to operations that require one driver per tractor. The Company also employs driver hiring standards, which could further reduce the pool of available drivers from which the Company would hire. If the Company is unable to continue to attract and retain a sufficient number of drivers, the Company could be forced to, among other things, adjust the Company’s compensation packages, increase the number of the Company’s tractors without drivers or operate with fewer trucks and face difficulty meeting shipper demands, any of which could adversely affect the Company’s growth and profitability.

35

Management’s Discussion and Analysis

Independent Contractors. The Company’s contracts with U.S. independent contractors are governed by U.S. federal leasing regulations, which impose specific requirements on the Company and the independent contractors. If more stringent state or U.S. federal leasing regulations are adopted, U.S. independent contractors could be deterred from becoming independent contractor drivers, which could materially adversely affect the Company’s goal of maintaining its current fleet levels of independent contractors.

The Company provides financing to certain qualified Canadian independent contractors and financial guarantees to a small number of U.S. independent contractors. If the Company were unable to provide such financing or guarantees in the future, due to liquidity constraints or other restrictions, it may experience a decrease in the number of independent contractors it is able to engage. Further, if independent contractors the Company engages default under or otherwise terminate the financing arrangements and the Company is unable to find replacement independent contractors or seat the tractors with its drivers, the Company may incur losses on amounts owed to it with respect to such tractors.

Pursuant to the Company’s fuel surcharge program with independent contractors, the Company pays independent contractors with which it contracts a fuel surcharge that increases with the increase in fuel prices. A significant increase or rapid fluctuation in fuel prices could cause the Company’s costs under this program to be higher than the revenue the Company receives under its customer fuel surcharge programs.

U.S. tax and other regulatory authorities, as well as U.S. independent contractors themselves, have increasingly asserted that U.S. independent contractor drivers in the trucking industry are employees rather than independent contractors, and the Company’s classification of independent contractors has been the subject of audits by such authorities from time to time. U.S. federal and state legislation has been introduced in the past that would make it easier for tax and other authorities to reclassify independent contractors as employees, including legislation to increase the recordkeeping requirements for those that engage independent contractor drivers and to increase the penalties for companies who misclassify their employees and are found to have violated employees’ overtime and/or wage requirements. The most recent example being the Protecting the Rights to Organize (“PRO”) Act, which was passed by the U.S. House of Representatives and received by the U.S. Senate in March 2021 and remains with the U.S. Senate’s Committee on Health, Education, Labor, and Pensions.  The PRO Act proposes to apply the “ABC Test” (described below) for classifying workers under Federal Fair Labor Standards Act claims.   It is unknown whether any of the proposed legislation will become law or whether any industry-based exemptions from any resulting law will be granted. Additionally, U.S. federal legislators have sought to abolish the current safe harbor allowing taxpayers meeting certain criteria to treat individuals as independent contractors if they are following a long-standing, recognized practice, to extend the U.S. Fair Labor Standards Act to independent contractors and to impose notice requirements based on employment or independent contractor status and fines for

failure to comply. Some U.S. states have put initiatives in place to increase their revenue from items such as unemployment, workers’ compensation and income taxes, and a reclassification of independent contractors as employees would help states with this initiative. Further, courts in certain U.S. states have issued decisions that could result in a greater likelihood that independent contractors would be judicially classified as employees in such states.

In September 2019, California enacted a new law, A.B. 5 (“AB5”), that made it more difficult for workers to be classified as independent contractors (as opposed to employees).  AB5 provides that the three-pronged “ABC Test” must be used to determine worker classifications in wage order claims.  Under the ABC Test, a worker is presumed to be an employee and the burden to demonstrate their independent contractor status is on the hiring company through satisfying all three of the following criteria: (a) the worker is free from control and direction in the performance of services; (b) the worker is performing work outside the usual course of the business of the hiring company; and (c) the worker is customarily engaged in an independently established trade, occupation, or business.  How AB5 will be enforced is still to be determined. In January 2021, however, the California Supreme Court ruled that the ABC Test could apply retroactively to all cases not yet final as of the date the original decision was rendered, April 2018.  While it was set to enter into effect in January 2020, a U.S. federal judge in California issued a preliminary injunction barring the enforcement of AB5 on the trucking industry while the California Trucking Association (“CTA”) moves forward with its suit seeking to invalidate AB5. The Ninth Circuit rejected the reasoning behind the injunction in April 2021, ruling that AB5 is not pre-empted by U.S. federal law, but granted a stay of the AB5 mandate in June 2021 (preventing its application and temporarily continuing the injunction) while the CTA petitioned the United States Supreme Court (the “Supreme Court”) to review the decision. In November 2021, the Supreme Court requested that the U.S. solicitor general weigh in on the case. The injunction will remain in place until the Supreme Court makes a decision on whether to proceed in hearing the case. While the stay of the AB5 mandate provides temporary relief to the enforcement of AB5, it remains unclear how long such relief will last, and whether the CTA will ultimately be successful in invalidating the law. It is also possible AB5 will spur similar legislation in states other than California, which could adversely affect the Company’s results of operations and profitability.

U.S. class action lawsuits and other lawsuits have been filed against certain members of the Company’s industry seeking to reclassify independent contractors as employees for a variety of purposes, including workers’ compensation and health care coverage. In addition, companies that use lease purchase independent contractor programs, such as the Company, have been more susceptible to reclassification lawsuits, and several recent decisions have been made in favor of those seeking to classify independent contractor truck drivers as employees. U.S. taxing and other regulatory authorities and courts apply a variety of standards in their determination of independent contractor status. If the independent contractors with whom the Company contracts are

36

Management’s Discussion and Analysis

determined to be employees, the Company would incur additional exposure under U.S. federal and state tax, workers’ compensation, unemployment benefits, labor, employment and tort laws, including for prior periods, as well as potential liability for employee benefits and tax withholdings, and the Company’s business, financial condition and results of operations could be materially adversely affected. The Company has settled certain class action cases in Massachusetts and California in the past with independent contractors who alleged they were misclassified.

Acquisitions and Integration Risks. Historically, acquisitions have been a part of the Company’s growth strategy. The Company may not be able to successfully integrate acquisitions into the Company’s business, or may incur significant unexpected costs in doing so. Further, the process of integrating acquired businesses may be disruptive to the Company’s existing business and may cause an interruption or reduction of the Company’s business as a result of the following factors, among others:

• loss of drivers, key employees, customers or contracts;

• possible inconsistencies in or conflicts between standards, controls, procedures and policies among the combined companies and the need to implement company-wide financial, accounting, information technology and other systems;

• failure to maintain or improve the safety or quality of services that have historically been provided;

• inability to retain, integrate, hire or recruit qualified employees;

• unanticipated environmental or other liabilities;

• risks of entering new markets or business offerings in which we have had no or only limited prior experience;

• failure to coordinate geographically dispersed organizations; and

• the diversion of management’s attention from the Company’s day-to-day business as a result of the need to manage any disruptions and difficulties and the need to add management resources to do so.

Given the nature and size of UPS Freight, as well as the structure of the acquisition as a carveout from UPS, the acquisition of UPS Freight presents the following risks, in addition to risks noted elsewhere in these risk factors:

• a large portion of the business of UPS Freight prior to the acquisition was with affiliates of UPS. While there are transportation service agreements in effect with such affiliates of UPS, such affiliates may decide to reduce or eliminate business with the Company in the future and we have limited contractual protections to prevent the loss of such business;

• some of the information and operating systems of UPS Freight were integrated with UPS prior to the acquisition. The Company is in the process of transitioning such systems and could experience disruptions during the transition or difficulty or delay in building its systems and personnel to operate them;

• the Company had limited experience in the U.S. LTL market prior to the acquisition and we may be unsuccessful in integrating UPS Freight and operating it profitably;

• given the size and complexity of the acquired U.S. LTL operations of UPS Freight, management’s attention may be diverted from other areas of the Company; and

• the Company acquired a substantial number of unionized U.S. employees in the acquisition and unionized employees present significant risks.

Anticipated cost savings, synergies, revenue enhancements or other benefits from any acquisitions that the Company undertakes may not materialize in the expected timeframe or at all. The Company’s estimated cost savings, synergies, revenue enhancements and other benefits from acquisitions are subject to a number of assumptions about the timing, execution and costs associated with realizing such synergies. Such assumptions are inherently uncertain and are subject to a wide variety of significant business, economic and competition risks. There can be no assurance that such assumptions will turn out to be correct and, as a result, the amount of cost savings, synergies, revenue enhancements and other benefits the Company actually realizes and/or the timing of such realization may differ significantly (and may be significantly lower) from the ones the Company estimated, and the Company may incur significant costs in reaching the estimated cost savings, synergies, revenue enhancements or other benefits. Further, management of acquired operations through a decentralized approach may create inefficiencies or inconsistencies.

Many of the Company’s recent acquisitions have involved the purchase of stock of existing companies. These acquisitions, as well as acquisitions of substantially all of the assets of a company, may expose the Company to liability for actions taken by an acquired business and its management before the Company’s acquisition. The due diligence the Company conducts in connection with an acquisition and any contractual guarantees or indemnities that the Company receives from the sellers of acquired companies may not be sufficient to protect the Company from, or compensate the Company for, actual liabilities. The representations made by the sellers expire at varying periods after the closing. A material liability associated with an acquisition, especially where there is no right to indemnification, could adversely affect the Company’s results of operations, financial condition and liquidity.

The Company continues to review acquisition and investment opportunities in order to acquire companies and assets that meet the Company’s investment criteria, some of which may be significant. Depending on the number of acquisitions and investments and funding requirements, the Company may need to raise substantial additional capital and increase the Company’s indebtedness. Instability or disruptions in the capital markets, including credit markets, or the deterioration of the Company’s financial condition due to internal or external factors, could restrict or prohibit access to the capital markets and could also increase the Company’s cost of capital. To the extent the Company raises additional capital through the sale of equity, equity-linked or convertible debt securities, the issuance of such securities could result in dilution to the Company’s existing shareholders. If the Company raises additional funds through the issuance of debt securities, the terms of such debt could impose additional restrictions

37

Management’s Discussion and Analysis

and costs on the Company’s operations. Additional capital, if required, may not be available on acceptable terms or at all. If the Company is unable to obtain additional capital at a reasonable cost, the Company may be required to forego potential acquisitions, which could impair the execution of the Company’s growth strategy.

The Company routinely evaluates its operations and considers opportunities to divest certain of its assets. In addition, the Company faces competition for acquisition opportunities. This external competition may hinder the Company’s ability to identify and/or consummate future acquisitions successfully. There is also a risk of impairment of acquired goodwill and intangible assets. This risk of impairment to goodwill and intangible assets exists because the assumptions used in the initial valuation, such as interest rates or forecasted cash flows, may change when testing for impairment is required.

There is no assurance that the Company will be successful in identifying, negotiating, consummating or integrating any future acquisitions. If the Company does not make any future acquisitions, or divests certain of its operations, the Company’s growth rate could be materially and adversely affected. Any future acquisitions the Company does undertake could involve the dilutive issuance of equity securities or the incurring of additional indebtedness.

Growth. There is no assurance that in the future, the Company’s business will grow substantially or without volatility, nor is there any assurance that the Company will be able to effectively adapt its management, administrative and operational systems to respond to any future growth.  Furthermore, there is no assurance that the Company’s operating margins will not be adversely affected by future changes in and expansion of its business or by changes in economic conditions or that it will be able to sustain or improve its profitability in the future.

Environmental Matters. The Company uses storage tanks at certain of its Canadian and U.S. transportation terminals. Canadian and U.S. laws and regulations generally impose potential liability on the present and former owners or occupants or custodians of properties on which contamination has occurred, as well as on parties who arranged for the disposal of waste at such properties. Although the Company is not aware of any contamination which, if remediation or clean-up were required, would have a material adverse effect on it, certain of the Company’s current or former facilities have been in operation for many years and over such time, the Company or the prior owners, operators or custodians of the properties may have generated and disposed of wastes which are or may be considered hazardous. Liability under certain of these laws and regulations may be imposed on a joint and several basis and without regard to whether the Company knew of, or was responsible for, the presence or disposal of these materials or whether the activities giving rise to the contamination was legal when it occurred. In addition, the presence of those substances, or the failure to properly dispose of or remove those substances, may adversely affect the Company’s ability to sell or rent that property. If the Company incurs liability under these laws and regulations and if it cannot identify other parties which it can compel to contribute to its expenses and who are

financially able to do so, it could have a material adverse effect on the Company’s financial condition and results of operations. There can be no assurance that the Company will not be required at some future date to incur significant costs or liabilities pursuant to environmental laws, or that the Company’s operations, business or assets will not be materially affected by current or future environmental laws.

The Company’s transportation operations and its properties are subject to extensive and frequently-changing federal, provincial, state, municipal and local environmental laws, regulations and requirements in Canada, the United States and Mexico relating to, among other things, air emissions, the management of contaminants, including hazardous substances and other materials (including the generation, handling, storage, transportation and disposal thereof), discharges and the remediation of environmental impacts (such as the contamination of soil and water, including ground water). A risk of environmental liabilities is inherent in transportation operations, historic activities associated with such operations and the ownership, management and control of real estate.

Environmental laws may authorize, among other things, federal, provincial, state and local environmental regulatory agencies to issue orders, bring administrative or judicial actions for violations of environmental laws and regulations or to revoke or deny the renewal of a permit. Potential penalties for such violations may include, among other things, civil and criminal monetary penalties, imprisonment, permit suspension or revocation and injunctive relief. These agencies may also, among other things, revoke or deny renewal of the Company’s operating permits, franchises or licenses for violations or alleged violations of environmental laws or regulations and impose environmental assessment, removal of contamination, follow up or control procedures.

Environmental Contamination. The Company could be subject to orders and other legal actions and procedures brought by governmental or private parties in connection with environmental contamination, emissions or discharges. If the Company is involved in a spill or other accident involving hazardous substances, if there are releases of hazardous substances the Company transports, if soil or groundwater contamination is found at the Company’s current or former facilities or results from the Company’s operations, or if the Company is found to be in violation of applicable laws or regulations, the Company could be subject to cleanup costs and liabilities, including substantial fines or penalties or civil and criminal liability, any of which could have a materially adverse effect on the Company’s business and operating results.

Key Personnel. The future success of the Company will be based in large part on the quality of the Company’s management and key personnel. The Company’s management and key personal possess valuable knowledge about the transportation and logistics industry and their knowledge of and relationships with the Company’s key customers and vendors would be difficult to replace. The loss of key personnel could have a negative effect on the Company. There can be no

38

Management’s Discussion and Analysis

assurance that the Company will be able to retain its current key personnel or, in the event of their departure, to develop or attract new personnel of equal quality.

Dependence on Third Parties. Certain portions of the Company’s business are dependent upon the services of third-party capacity providers, including other transportation companies. For that portion of the Company’s business, the Company does not own or control the transportation assets that deliver the customers’ freight, and the Company does not employ the people directly involved in delivering the freight. This reliance could cause delays in reporting certain events, including recognizing revenue and claims. These third-party providers seek other freight opportunities and may require increased compensation in times of improved freight demand or tight trucking capacity. The Company’s inability to secure the services of these third parties could significantly limit the Company’s ability to serve its customers on competitive terms. Additionally, if the Company is unable to secure sufficient equipment or other transportation services to meet the Company’s commitments to its customers or provide the Company’s services on competitive terms, the Company’s operating results could be materially and adversely affected. The Company’s ability to secure sufficient equipment or other transportation services is affected by many risks beyond the Company’s control, including equipment shortages in the transportation industry, particularly among contracted carriers, interruptions in service due to labor disputes, changes in regulations impacting transportation and changes in transportation rates.

Loan Default. The agreements governing the Company’s indebtedness, including the Credit Facility and the Term Loan, contain certain restrictions and other covenants relating to, among other things, funded debt, distributions, liens, investments, acquisitions and dispositions outside the ordinary course of business and affiliate transactions. If the Company fails to comply with any of its financing arrangement covenants, restrictions and requirements, the Company could be in default under the relevant agreement, which could cause cross-defaults under other financing arrangements. In the event of any such default, if the Company failed to obtain replacement financing or amendments to or waivers under the applicable financing arrangement, the Company may be unable to pay dividends to its shareholders, and its lenders could cease making further advances, declare the Company’s debt to be immediately due and payable, fail to renew letters of credit, impose significant restrictions and requirements on the Company’s operations, institute foreclosure procedures against their collateral, or impose significant fees and transaction costs. If debt acceleration occurs, economic conditions may make it difficult or expensive to refinance the accelerated debt or the Company may have to issue equity securities, which would dilute share ownership. Even if new financing is made available to the Company, credit may not be available to the Company on acceptable terms. A default under the Company’s financing arrangements could result in a materially adverse effect on its liquidity, financial condition and results of operations. As at the date hereof, the Company is in compliance with all of its debt covenants and obligations.

Credit Facilities. The Company has significant ongoing capital requirements that could affect the Company’s profitability if the Company is unable to generate sufficient cash from operations and/or obtain financing on favorable terms.  The trucking industry and the Company’s trucking operations are capital intensive, and require significant capital expenditures annually.  The amount and timing of such capital expenditures depend on various factors, including anticipated freight demand and the price and availability of assets.  If anticipated demand differs materially from actual usage, the Company’s trucking operations may have too many or too few assets.  Moreover, resource requirements vary based on customer demand, which may be subject to seasonal or general economic conditions.  During periods of decreased customer demand, the Company’s asset utilization may suffer, and it may be forced to sell equipment on the open market or turn in equipment under certain equipment leases in order to right size its fleet.  This could cause the Company to incur losses on such sales or require payments in connection with such turn ins, particularly during times of a softer used equipment market, either of which could have a materially adverse effect on the Company’s profitability.

The Company’s indebtedness may increase from time to time in the future for various reasons, including fluctuations in results of operations, capital expenditures and potential acquisitions. The agreements governing the Company’s indebtedness, including the Credit Facility and the Term Loan, mature on various dates, ranging from 2022 to 2036. There can be no assurance that such agreements governing the Company’s indebtedness will be renewed or refinanced, or if renewed or refinanced, that the renewal or refinancing will occur on equally favorable terms to the Company. The Company’s ability to pay dividends to shareholders and ability to purchase new revenue equipment may be adversely affected if the Company is not able to renew the Credit Facility or the Term Loan or arrange refinancing of any indebtedness, or if such renewal or refinancing, as the case may be, occurs on terms materially less favorable to the Company than at present. If the Company is unable to generate sufficient cash flow from operations and obtain financing on terms favorable to the Company in the future, the Company may have to limit the Company’s fleet size, enter into less favorable financing arrangements or operate the Company’s revenue equipment for longer periods, any of which may have a material adverse effect on the Company’s operations.

Increased prices for new revenue equipment, design changes of new engines, decreased availability of new revenue equipment and future use of autonomous tractors could have a material adverse effect on the Company’s business, financial condition, operations, and profitability.

The Company is subject to risk with respect to higher prices for new equipment for its trucking operations.  The Company has experienced an increase in prices for new tractors in recent years, and the resale value of the tractors has not increased to the same extent.  Prices have increased and may continue to increase, due to, among other reasons, (i) increases in commodity prices; (ii) U.S. government regulations applicable to newly-manufactured tractors, trailers and diesel engines; (iii) the pricing discretion of equipment manufacturers; and (iv)

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Management’s Discussion and Analysis

component and supply chain issues that limit availability of new equipment and increase prices.  Increased regulation has increased the cost of the Company’s new tractors and could impair equipment productivity, in some cases, resulting in lower fuel mileage, and increasing the Company’s operating expenses.  Further regulations with stricter emissions and efficiency requirements have been proposed that would further increase the Company’s costs and impair equipment productivity.  These adverse effects, combined with the uncertainty as to the reliability of the vehicles equipped with the newlydesigned diesel engines and the residual values realized from the disposition of these vehicles could increase the Company’s costs or otherwise adversely affect the Company’s business or operations as the regulations become effective.  Over the past several years, some manufacturers have significantly increased new equipment prices, in part to meet new engine design and operations requirements.  Furthermore, future use of autonomous tractors could increase the price of new tractors and decrease the value of used non-autonomous tractors.  The Company’s business could be harmed if it is unable to continue to obtain an adequate supply of new tractors and trailers for these or other reasons.  As a result, the Company expects to continue to pay increased prices for equipment and incur additional expenses for the foreseeable future.

Tractor and trailer vendors may reduce their manufacturing output in response to lower demand for their products in economic downturns or shortages of component parts.  Currently, tractor and trailer manufacturers are experiencing significant shortages of semiconductor chips and other component parts and supplies, including steel, forcing many manufacturers to curtail or suspend their production, which has led to a lower supply of tractors and trailers, higher prices, and lengthened trade cycles, which could have a material adverse effect on the Company’s business, financial condition, and results of operations, particularly the Company’s maintenance expense and driver retention.

The Company has certain revenue equipment leases and financing arrangements with balloon payments at the end of the lease term equal to the residual value the Company is contracted to receive from certain equipment manufacturers upon sale or trade back to the manufacturers.  If the Company does not purchase new equipment that triggers the trade-back obligation, or the equipment manufacturers do not pay the contracted value at the end of the lease term, the Company could be exposed to losses equal to the excess of the balloon payment owed to the lease or finance company over the proceeds from selling the equipment on the open market.

The Company has trade-in and repurchase commitments that specify, among other things, what its primary equipment vendors will pay it for disposal of a certain portion of the Company’s revenue equipment.  The prices the Company expects to receive under these arrangements may be higher than the prices it would receive in the open market.  The Company may suffer a financial loss upon disposition of its equipment if these vendors refuse or are unable to meet their financial obligations under these agreements, it does not enter into definitive agreements that reflect favorable equipment replacement or trade-in terms, it fails to or is unable to enter into similar arrangements in the future, or it does not

purchase the number of new replacement units from the vendors required for such trade-ins.

Used equipment prices are subject to substantial fluctuations based on freight demand, supply of used trucks, availability of financing, presence of buyers for export and commodity prices for scrap metal.  These and any impacts of a depressed market for used equipment could require the Company to dispose of its revenue equipment below the carrying value.  This leads to losses on disposal or impairments of revenue equipment, when not otherwise protected by residual value arrangements.  Deteriorations of resale prices or trades at depressed values could cause losses on disposal or impairment charges in future periods.

Difficulty in obtaining goods and services from the Company’s vendors and suppliers could adversely affect its business.

The Company is dependent upon its vendors and suppliers for certain products and materials.  The Company believes that it has positive vendor and supplier relationships and it is generally able to obtain acceptable pricing and other terms from such parties.  If the Company fails to maintain positive relationships with its vendors and suppliers, or if its vendors and suppliers are unable to provide the products and materials it needs or undergo financial hardship, the Company could experience difficulty in obtaining needed goods and services because of production interruptions, limited material availability or other reasons.  As a consequence, the Company’s business and operations could be adversely affected.

Customer and Credit Risks. The Company provides services to clients primarily in Canada, the United States and Mexico. The concentration of credit risk to which the Company is exposed is limited due to the significant number of customers that make up its client base and their distribution across different geographic areas. Furthermore, no client accounted for more than 5% of the Company’s total accounts receivable for the year ended December 31, 2021. Generally, the Company does not have long-term contracts with its major customers. Accordingly, in response to economic conditions, supply and demand factors in the industry, the Company’s performance, the Company’s customers’ internal initiatives or other factors, the Company’s customers may reduce or eliminate their use of the Company’s services, or may threaten to do so in order to gain pricing and other concessions from the Company.

Economic conditions and capital markets may adversely affect the Company’s customers and their ability to remain solvent. The customers’ financial difficulties can negatively impact the Company’s results of operations and financial condition, especially if those customers were to delay or default in payment to the Company. For certain customers, the Company has entered into multi-year contracts, and the rates the Company charges may not remain advantageous.

Availability of Capital. If the economic and/or the credit markets weaken, or the Company is unable to enter into acceptable financing arrangements to acquire revenue equipment, make investments and

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Management’s Discussion and Analysis

fund working capital on terms favorable to it, the Company’s business, financial results and results of operations could be materially and adversely affected. The Company may need to incur additional indebtedness, reduce dividends or sell additional shares in order to accommodate these items. A decline in the credit or equity markets and any increase in volatility could make it more difficult for the Company to obtain financing and may lead to an adverse impact on the Company’s profitability and operations.

Information Systems. The Company depends heavily on the proper functioning, availability and security of the Company’s information and communication systems, including financial reporting and operating systems, in operating the Company’s business. The Company’s operating system is critical to understanding customer demands, accepting and planning loads, dispatching equipment and drivers and billing and collecting for the Company’s services. The Company’s financial reporting system is critical to producing accurate and timely financial statements and analyzing business information to help the Company manage its business effectively. The Company receives and transmits confidential data with and among its customers, drivers, vendors, employees and service providers in the normal course of business.

The Company’s operations and those of its technology and communications service providers are vulnerable to interruption by natural disasters, such as fires, storms, and floods, which may increase in frequency and severity due to climate change, as well as other events beyond the Company’s control, including cybersecurity breaches and threats, such as hackers, malware and viruses, power loss, telecommunications failure, terrorist attacks and Internet failures. The Company’s systems are also vulnerable to unauthorized access and viewing, misappropriation, altering or deleting of information, including customer, driver, vendor, employee and service provider information and its proprietary business information. If any of the Company’s critical information systems fail, are breached or become otherwise unavailable, the Company’s ability to manage its fleet efficiently, to respond to customers’ requests effectively, to maintain billing and other records reliably, to maintain the confidentiality of the Company’s data and to bill for services and prepare financial statements accurately or in a timely manner would be challenged. Any significant system failure, upgrade complication, cybersecurity breach or other system disruption could interrupt or delay the Company’s operations, damage its reputation, cause the Company to lose customers, cause the Company to incur costs to repair its systems, pay fines or in respect of litigation or impact the Company’s ability to manage its operations and report its financial performance, any of which could have a material adverse effect on the Company’s business.

Litigation. The Company’s business is subject to the risk of litigation by employees, customers, vendors, government agencies, shareholders and other parties. The outcome of litigation is difficult to assess or quantify, and the magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time. The cost to defend litigation may also be significant. Not all claims are covered by the

Company’s insurance, and there can be no assurance that the Company’s coverage limits will be adequate to cover all amounts in dispute. In the United States, where the Company has growing operations, many trucking companies have been subject to class-action lawsuits alleging violations of various federal and state wage laws regarding, among other things, employee classification, employee meal breaks, rest periods, overtime eligibility, and failure to pay for all hours worked. A number of these lawsuits have resulted in the payment of substantial settlements or damages by the defendants. The Company may at some future date be subject to such a class-action lawsuit. In addition, the Company may be subject, and has been subject in the past, to litigation resulting from trucking accidents. The number and severity of litigation claims may be worsened by distracted driving by both truck drivers and other motorists. To the extent the Company experiences claims that are uninsured, exceed the Company’s coverage limits, involve significant aggregate use of the Company’s self-insured retention amounts or cause increases in future funded premiums, the resulting expenses could have a material adverse effect on the Company’s business, results of operations, financial condition and cash flows.

Internal Control. Beginning with the year ended December 31, 2021, the Company is required, pursuant to Section 404 of the U.S. Sarbanes-Oxley Act, to furnish a report by management on the effectiveness of its internal control over financial reporting. In addition, the Company’s independent registered public accounting firm must report on its evaluation of the Company’s internal control over financial reporting. The Company has identified material weaknesses as at December 31, 2021 in the Company’s internal control over financial reporting related to Information technology general controls and the order to cash process. As a result of these material weaknesses, the Company has concluded that it did not maintain effective disclosure controls and procedures and internal controls over financial reporting. Further, Company’s independent registered public accounting firm has issued an adverse opinion indicating that the Company has not maintained effective internal control over financial reporting as at December 31, 2021. The Company’s management team has begun taking action to develop a remediation plan for these material weaknesses, and while the Company expects to remediate these in fiscal 2022, the Company cannot be certain when the remediation will be completed. If the Company fails to fully remediate these material weaknesses or fails to maintain effective internal controls in the future, it could result in a material misstatement of the Company’s financial statements, which could cause investors to lose confidence in the Company’s financial statements and cause the trading price of the Common Shares to decline.

Material Transactions. The Company has acquired numerous companies pursuant to its acquisition strategy and, in addition, has sold business units, including the sale in February 2016 of its then-Waste Management segment for CAD $800 million.  The Company buys and sells business units in the normal course of its business.  Accordingly, at any given time, the Company may consider, or be in the process of

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Management’s Discussion and Analysis

negotiating, a number of potential acquisitions and dispositions, some of which may be material in size.  In connection with such potential transactions, the Company regularly enters into non-disclosure or confidentiality agreements, indicative term sheets, non-binding letters of intent and other similar agreements with potential sellers and buyers, and conducts extensive due diligence as applicable.  These potential transactions may relate to some or all of the Company’s four reportable segments, that is, TL, Logistics, LTL, and Package and Courier.  The Company’s active acquisition and disposition strategy requires a significant amount of management time and resources. Although the Company complies with its disclosure obligations under applicable securities laws, the announcement of any material transaction by the Company (or rumours thereof, even if unfounded) could result in volatility in the market price and trading volume of the Common Shares. Further, the Company cannot predict the reaction of the market, or of the Company’s stakeholders, customers or competitors, to the announcement of any such material transaction or to rumours thereof.

Dividends and Share Repurchases. The payment of future dividends and the amount thereof is uncertain and is at the sole discretion of the Board of Directors of the Company and is considered each quarter.  The payment of dividends is dependent upon, among other things, operating cash flow generated by the Company, its financial requirements for operations, the execution of its growth strategy and the satisfaction of solvency tests imposed by the Canada Business Corporations Act for the declaration and payment of dividends.  Similarly, any future repurchase of shares by the Company is at the sole discretion of the Board of Directors and is dependent on the factors described above.  Any future repurchase of shares by the Company is uncertain.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions about future events. These estimates and the underlying assumptions affect the reported amounts of assets and liabilities, the disclosures about contingent assets and liabilities, and the reported amounts of revenues and expenses. Such estimates include establishing the fair value of intangible assets related to business combinations, determining estimates and assumptions related to impairment tests for goodwill, determining estimates and assumptions related to the accrued benefit obligation, and determining estimates and assumptions related to the evaluation of provisions for self-insurance and litigations. These estimates and assumptions are based on management’s best estimates and judgments. Key drivers in critical estimates are as follows:

Fair value of intangible assets related to business combinations

• Projected future cashflows

• Acquisition specific discount rate

• Attrition rate established from historical trends

Impairment tests for goodwill

• Discount rates

• Forecasted revenue growth, operating margin, EBITDA margin as well as capital expenditures

• Comparable public company EBITDA multiples

Accrued benefit obligation

• Discount rates

• Salary growth

• Mortality tables

Self-Insurance and litigations

• Historical claim experience, severity factors affecting the amounts ultimately paid, and current and expected levels of cost per claims

• Third party evaluations

Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. Actual results could differ from these estimates. Changes in those estimates and assumptions resulting from changes in the economic environment will be reflected in the financial statements of future periods.

CHANGES IN ACCOUNTING POLICIES

Adopted during the period

The following new standards, and amendments to standards and interpretations, are effective for the first time for interim periods beginning on or after January 1, 2021 and have been applied in preparing the audited consolidated financial statements:

Interest Rate Benchmark Reform – Phase 2

(Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and  IFRS 16)

These new standards did not have a material impact on the Company’s audited consolidated financial statements.

To be adopted in future periods

The following new standards and amendments to standards are not yet effective for the year ended December 31, 2021, and have not been applied in preparing the audited consolidated financial statements:

Classification of Liabilities as Current or Non-current (Amendments to IAS 1)

Onerous Contracts – Cost of fulfilling a Contract (Amendments to IAS 37)

Definition of Accounting Estimates (Amendments to IAS 8)

Further information can be found in note 3 of the December 31, 2021 audited consolidated financial statements.

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Management’s Discussion and Analysis

CONTROLS AND PROCEDURES

In compliance with the provisions of Canadian Securities Administrators’ National Instrument 52-109 and the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company has filed certificates signed by the President and Chief Executive Officer (“CEO”) and by the Chief Financial Officer (“CFO”) that, among other things, report on:

• their responsibility for establishing and maintaining disclosure controls and procedures and internal control over financial reporting for the Company; and

• the design of disclosure controls and procedures and the design of internal controls over financial reporting.

Disclosure controls and procedures

The President and Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), have designed disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act), or have caused them to be designed under their supervision, in order to provide reasonable assurance that:

• material information relating to the Company is made known to the CEO and CFO by others; and

• information required to be disclosed by the Company in its filings, under applicable securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation.

As at December 31, 2021, an evaluation was carried out under the supervision of the CEO and CFO, of the design and operating effectiveness of the Company’s disclosure controls and procedures. Based on this evaluation, the CEO and CFO concluded that due to the material weaknesses in our internal control over financial reporting as described below in Management’s Annual Report on Internal Controls over Financial Reporting, the Company’s disclosure controls and procedures were not effective as of December 31, 2021.

Management’s Annual Report on Internal Controls over Financial Reporting

The CEO and CFO have also designed internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act), or have caused them to be designed under their supervision, in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

As at December 31, 2021, an evaluation was carried out, under the supervision of the CEO and the CFO, of the effectiveness of the Company’s internal control over financial reporting. Based on this evaluation, the CEO and the CFO concluded that material weaknesses exist, as described below, and due to these material weaknesses, the Company’s internal control over financial reporting is not effective as of December 31, 2021. The control framework used to design the Company’s internal controls over financial reporting is based on the criteria set forth by the Committee of Sponsoring Organizations of the

Treadway Commission (COSO) on Internal Control – Integrated Framework (2013 framework). A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that  a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In connection with the Company’s evaluation of internal controls over financial reporting, the following control deficiencies were considered to be material weaknesses:

• IT General Controls: The Company had an aggregation of control deficiencies within its information technology (IT) general controls across multiple systems supporting the Company’s business processes, including deficiencies relating to user access controls, change management, and high-privileged access. The Company concluded that process-level automated controls and manual controls that are dependent on information from affected IT systems, where risks could not be mitigated, were ineffective because they could have been adversely impacted by the IT general control deficiencies; and

• Order to Cash Process: Due to the material weakness described above, automated controls and manual controls that are dependent on information from affected IT systems around the order to cash process, which encompasses billing and pricing sub processes were found to not be effective. In addition, there was inadequate review and documentation of manual process level controls.

Notwithstanding these material weaknesses, management has concluded that the Company’s Audited consolidated financial statements as at and for the year ended December 31, 2021 present fairly, in all material respects, the Company’s financial position, results of operations, changes in equity and cash flows in accordance with IFRS. These material weaknesses did not have an impact on the Company’s financial reporting and as a result, there were no material adjustments to the Company’s audited consolidated financial statements for the year ended December 31, 2021 and there were no changes to previously released financial results. However, because the material weaknesses create a reasonable possibility that a material misstatement to our financial statements would not be prevented or detected on a timely basis, we concluded that as of December 31, 2021 the internal control over financial reporting was not effective.

The effectiveness of internal controls over financial reporting as of December 31, 2021 has been audited by KPMG LLP, the Company’s registered public accounting firm that audited the consolidated financial statements and is included with the Company’s consolidated financial statements. KPMG LLP’s adverse opinion, as stated in their report, is that the Company has not maintained effective internal control over financial reporting as of December 31, 2021.  

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Management’s Discussion and Analysis

Limitation on scope of design

As permitted under the relevant securities rules, the Company has limited the scope of its evaluation of disclosure controls and procedures and internal control over financial reporting to exclude controls, policies and procedures of UPS Freight (now TForce Freight) as it was acquired not more than 365 days before the end of the financial period to which the CEO and CFO certificates relate. For the year ended December 31, 2021, TForce Freight constituted 39.1% of current assets, 27.8% of long term assets, 21.1% of current liabilities, 17.6% of long term liabilities, 31.8% of total revenue, and 18.5% of net income.

The Company is required to and will include TForce Freight in its disclosure controls and procedures and internal controls over financial reporting beginning in the second quarter of 2022.

Remediation plan

Management has initiated, and continues to implement remediation measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions include:

• Additional training for control performers and reviewers;

• Procuring additional resources to assist with the remediation, including hiring of subject experts and leveraging consultants where necessary;

• Implementing an IT management review and testing plan to monitor IT general controls with a specific focus on systems supporting our financial reporting processes; and

• Enhanced quarterly reporting on the remediation measures to the Audit Committee of our Board of Directors.

While remediation of key controls related to the IT general controls and the order to cash process are expected to be completed in fiscal year 2022, the Company cannot be certain when the remediation will be completed. The material weaknesses will not be considered fully remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in internal controls over financial reporting

Other than the material weaknesses described above, the remediation process described above, and the implementation of controls related to TForce Freight, there were no changes to the Company’s internal controls over financial reporting during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

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