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$20 Million Investment and Creation of Almost 400 Jobs Over the Next Five Years

Industrial Alliance is Growing and so is its Head Office

Quebec City,

News Release

Mock-up of the expanded building

Plan of the new building

The President and Chief Executive Officer of Industrial Alliance Insurance and Financial Services, Yvon Charest, is pleased to announce a $20 million investment in construction and equipment to expand the company’s head office in Sillery. This expansion is made necessary by the strong growth experienced by Industrial Alliance, whose business plan provides for the creation of almost 400 jobs in Quebec over the next five years.
Quebec´s Deputy Premier and Minister for Economy and Finance, Bernard Landry; announced Industrial Alliance´s participation in the ten-year tax holiday for major investment projects. Industrial Alliance qualifies for this program, since over a 36-month period, the Company´s payroll should increase by $15 million and it expects to create almost 400 jobs in the next five years.

"Industrial Alliance has to expand because it is growing," stated Mr. Charest. "The head office expansion work, due to rapid development and the creation of jobs foreseen over the next few years, reflects the dynamism of our company and its desire to maintain its position as an industry leader."

Mr. Landry underlined the importance of the investment announced today by Industrial Alliance: "This investment confirms the in-depth transformation taking place in Quebec City, which is succeeding both in the new economy and in more traditional, but equally important sectors, such as financial services and insurance. The government will continue to support and encourage this success, with tools such as the tax holiday for major projects."

The Mayor of Sillery, Paul Shoiry, mentioned that the expansion of Industrial Alliance´s head office and the anticipated creation of a number of jobs in the Quebec City region was excellent news. "This expansion will create jobs in the construction sector and will provide major economic spin-off for various companies in the region. This announcement confirms the great importance of Industrial Alliance in Quebec City´s economy."

The seventh largest life and health insurance company in Canada, Industrial Alliance is at the head of a major financial group operating across Canada. Industrial Alliance has been listed on the Toronto Stock Exchange for nearly a year and is a part of the prestigious TSE 300. The company’s market capitalization has more than doubled in the last year and has now reached $1.3 billion, placing Industrial Alliance amongst the 100 largest public companies in Canada.

Founded over a century ago, Industrial Alliance employs 2,100 people, 750 of whom work at its head office in Sillery. To these we may add the Company´s 1,200 career agents in 51 offices throughout Quebec, along with thousands of brokers who each day offer the Company´s products to their clients. Since 1995, the Company’s managed assets have jumped 77% (to close to $14 billion currently) and its insurance and annuity premium income has also increased by 75%.

Third expansion
This is the third addition to Industrial Alliance´s head office since its construction in 1951. The first expansion took place in 1958 and the second in 1976.

The current expansion project includes the construction of a new three-storey wing, in addition to the main floor – adding close to 95,000 square feet to the existing 161,000 square feet, an increase of 59% in overall surface area. The new wing will be constructed behind the head office, on the present site of an outdoor parking lot. The height of this addition, from the ground up, will be 17 metres, as against the 10 metres of the current building.

The project also calls for the construction of two floors of underground parking, which will provide spaces for close to 216 vehicles.

Respecting our environment
The expansion work should take about 12 months. Management has already taken steps to minimize the impact the work will have on traffic using Saint-Louis Road right in front of the head office building and on residents in the surrounding areas. Traffic signs have been planned in conjunction with the City of Sillery authorities.

Industrial Alliance respects the environment and has called upon a number of experts to ensure that the project will blend in with the current building and landscape design. The art deco architecture of the head office building will therefore be maintained. Moreover, the trees (including two magnificent American elms) and the lawn will continue to enhance its value.

The Industrial Alliance Group is among the most solid financial institutions in the country, where it exercises incontestable leadership in the fields of insurance and financial services. The Group has operations across Canada through the parent company, Industrial Alliance (Sillery) and its subsidiaries, including IA Pacific Life (Vancouver) and National Life of Canada (Toronto). The seventh largest life insurance company in Canada, the Group has almost $14 billion in assets and managed funds. The parent company´s Internet address is: www.inalco.com.

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You can find more information about the expansion of Industrial Alliance´s head office on our web site at www.inalco.com, in the “Industrial Alliance” section under the “Press Releases” tab.

For information:
André Ménard
Director, Public Relations
(418) 684-5286

PROJECT TO EXPAND INDUSTRIAL ALLIANCE’S HEAD OFFICE
Outline

Head Office:
Built in 1951
Expanded a first time in 1958
Expanded a second time in 1976

Size of the current building:
161,000 square feet

Addition in square feet:
95,000 square feet

Cost:
$20 million in construction and equipment

Nature of the expansion:
The new section will include three floors plus the ground floor

Architectural plan:
The project will blend in with the original design

Beginning of work:
January 22

Duration of the work:
12 months

Parking spaces:
216 underground spaces and 131 additional spaces overall Studies made:
Sound level studies
Sunlighting studies
Environmental studies (trees and lawn)