Annual Report (foreign Private Issuer) (40-f)

Share Name	Share Symbol	Market	Type
Brookfield Canada Office Properties	NYSE:BOXC	NYSE	Common Stock

	Price Change	% Change	Share Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.00	0.00%	24.96				0	01:00:00

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 40-F

(Check One)

Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934

Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2015 Commission file number: 001-35391

BROOKFIELD CANADA OFFICE PROPERTIES

(Exact name of registrant as specified in its charter)

Canada	6798	Not Applicable
(Province or other jurisdiction	(Primary	(I.R.S. Employer
of incorporation or organization)	Standard	Identification Number)
	Industrial
	Classification
	Code Number
	(if applicable))

Brookfield Place
181 Bay Street, Suite 330
Toronto, Ontario, Canada, M5J 2T3
(416) 359-8555
(Address and Telephone Number of Registrant’s Principal Executive Offices)

Torys LLP

1114 Avenue of the Americas

23^rd Floor

New York, New York 10036-7703

Attention: Andrew J. Beck

(212) 880-6000
(Name, Address (Including Zip Code) and Telephone Number (Including Area Code) of Agent For Service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class		Name of each exchange on which registered
Trust Units		The New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

For annual reports, indicate by check mark the information filed with this Form:

x Annual Information Form

x Audited Annual Financial Statements

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 26,250,344

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

Yes o No o

FORM 40-F

Principal Documents

The following documents, filed as Exhibits 99.1 through 99.2 hereto, are hereby incorporated by reference into this Annual Report on Form 40-F:

	(a)	Annual Information Form for the fiscal year ended December 31, 2015;

	(b)	Management’s Discussion and Analysis of Financial Results for the fiscal year ended December 31, 2015 (attached hereto as Exhibit 99.2); and

	(c)	Consolidated Financial Statements for the fiscal year ended December 31, 2015 (attached hereto as Exhibit 99.2).

ADDITIONAL DISCLOSURE

Certifications and Disclosure Regarding Controls and Procedures

(a)	Certifications. See Exhibits 99.3 to 99.6 to this Annual Report on Form 40-F.

(b)	Disclosure Controls and Procedures.

As of the end of the registrant’s fiscal year ended December 31, 2015, an evaluation of the effectiveness of the registrant’s “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) was carried out by the registrant’s principal executive officer and principal financial officer.

Based upon that evaluation, the registrant’s principal executive officer and principal financial officer have concluded that as of the end of that fiscal year, the registrant’s disclosure controls and procedures were designed at a reasonable assurance level and were effective to provide reasonable assurance that information required to be disclosed by the registrant in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission (“SEC”) rules and forms and (ii) accumulated and communicated to the registrant’s management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

It should be noted that while the registrant’s principal executive officer and principal financial officer believe that the registrant’s disclosure controls and procedures provide a reasonable level of assurance that they are effective, they do not expect that the registrant’s disclosure controls and procedures or internal control over financial reporting will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

(c)	Management’s Annual Report on Internal Control Over Financial Reporting.

The disclosure provided in Management’s Report on Internal Control over Financial Reporting included in the registrant’s audited consolidated financial statements attached hereto as Exhibit 99.2 is incorporated by reference herein.

(d)	Attestation Report of the Registered Public Accounting Firm.

The disclosure provided in the Report of Independent Registered Public Accounting Firm included in the registrant’s audited consolidated financial statements attached hereto as Exhibit 99.2 is incorporated by reference herein.

(e)	Changes in Internal Control over Financial Reporting.

During the fiscal year ended December 31, 2015, there were no changes in the registrant’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Notices Pursuant to Regulation BTR

None.

Audit Committee Financial Experts

The registrant’s board of trustees has determined that Colum Bastable, Paul D. McFarlane and Susan L. Riddell Rose, all members of the registrant’s audit committee, qualify as “independent” (as such term is defined in New York Stock Exchange Listed Company Manual (“NYSE Rules”)) and that Mr. McFarlane is an “audit committee financial expert” (as such term is defined in Form 40-F).

Code of Ethics

The registrant has adopted a “code of ethics” (as that term is defined in Form 40-F), entitled the Code of Business Conduct and Ethics (the “Code of Ethics”), that applies to all trustees, officers and employees.

The Code of Ethics, which complies with the NYSE Rules, is available for viewing on the registrant’s website at www.brookfieldcanadareit.com, and is available without charge in print to any unithholder who requests it. Requests for copies of the Code of Ethics should be made by contacting our Investor Relations department by mail at Brookfield Place, 181 Bay Street, Box 770, Toronto, Ontario M5J 2T3, by calling 1-855-212-8243 or by e-mail to investor.relations@brookfield.com.

All amendments to the Code of Ethics, and all waivers of the Code of Ethics with respect to any trustee, officer or employee of the registrant, will be posted promptly on the registrant’s website.

Principal Accountant Fees and Services

Deloitte LLP (“Deloitte”) is the Independent Registered Public Accounting Firm of the registrant. From time to time, Deloitte has provided consulting and other non-audit services to the registrant and its subsidiaries.

The information set forth under the heading “External Auditor Service Fees (By Category)” under the “Audit Committee Information” section of the registrant’s Annual Information Form for the fiscal year ended December 31, 2015, attached hereto as Exhibit 99.1, is incorporated by reference herein. None of the fees billed by Deloitte in 2015 were for non-audit related services.

The Audit Committee of the board of trustees has determined that the provision of these services is compatible with the maintenance of the independence of Deloitte.

Pre-Approval Policies and Procedures

The registrant has adopted the following policies and procedures with respect to the pre-approval of audit and permitted non-audit services to be provided by Deloitte:

	1.	Deloitte may not be engaged to perform for the registrant, and is prohibited from performing for the registrant, any service enumerated in Section 201(a) of the Sarbanes-Oxley Act of 2002, except as may otherwise be provided by law or regulation.

	2.	Deloitte may perform no services for the registrant, whether associated with audit or non-audit functions, unless the services to be provided have been approved prior to their performance by the registrant’s Audit Committee, except as may otherwise be provided by law or regulation.

The registrant’s Audit Committee has approved a list of services that is sufficiently detailed as to the particular services to be provided to ensure that (i) the Audit Committee knows precisely what services it is being asked to pre-approve; and (ii) it is not necessary for any member of management to make a judgment as to whether a proposed service fits within the pre-approved services.

	4.	The authority to grant any pre-approval sought from the registrant’s Audit Committee has been delegated to the Audit Committee Chairperson, acting alone in respect of services for which estimated fees do not exceed $250,000; provided, however, that no such pre-approval may be granted with respect to any service proposed to be performed for the registrant by Deloitte that either is prohibited pursuant to Section 201(a) of the Sarbanes-Oxley Act of 2002 or otherwise appears reasonably likely to compromise Deloitte’s independence; and provided further, that any pre-approval granted pursuant to this delegation of authority will be reviewed with the Audit Committee at its next regularly scheduled meeting.

	5.	Each person who is in a financial reporting oversight role, and their immediate family members, are prohibited, subject to limited exceptions set forth in applicable rules and/or standards, from obtaining any tax services from Deloitte, irrespective of whether the registrant or such person pays for the services.

Off-Balance Sheet Arrangements

None.

Disclosure of Contractual Obligations

The information provided in the Management’s Discussion and Analysis of Financial Results for the fiscal year ended December 31, 2015, included in Exhibit 99.2 as filed with this Annual Report on Form 40-F, contains the registrant’s disclosure of contractual obligations and is incorporated by reference herein.

Identification of the Audit Committee

The registrant has a separately-designated standing Audit Committee established in accordance with section 3(a)(58)(A) of the Exchange Act. The members of the Audit Committee are: Paul D. McFarlane (Chairman), Colum Bastable and Susan L. Riddell Rose.

Disclosure Pursuant to the Requirements of the New York Stock Exchange.

Independence Requirements

The board of trustees is currently composed of seven trustees. The board of trustees considers that its size and composition is appropriate given the diversity of the registrant’s operations and the need for a variety of experience and backgrounds. The board believes that a combination of individuals that are independent, individuals related to Brookfield Office Properties Inc. ("BPO”) and one individual drawn from management leads to a constructive exchange in board deliberations resulting in objective, well balanced and informed discussion and decision making.

Each member of the board must have an understanding of the registrant’s principal operational and financial objectives, plans and strategies, financial position and performance as well as its performance relative to its principal competitors and must have sufficient time to carry out their duties and not assume responsibilities that would materially interfere with or be incompatible with board membership. Trustees who experience a significant change in their personal circumstances, including a change in their principal occupation, such that they are unable to comply with the preceding sentence, are expected to advise, and submit a written resignation letter to, the Chair of the Governance and Nominating Committee and, if determined appropriate by the board on the recommendation of the Governance and Nominating Committee, the board of trustees shall accept such offer of resignation.

The registrant’s board, with the assistance of the Governance and Nominating Committee, determines whether each board member is independent. In determining independence, the board utilizes the definition of “independent” in the NYSE Rules and in Canadian National Instrument 52-110 “Audit Committees”. In making these determinations, the board examines the results of annual questionnaires completed by each board member, as well as each individual’s circumstances and his or her relationship to us and our affiliates. For a board member to be independent, the board must affirmatively determine that such board member has no material relationship with the registrant and, in the case of audit committee members, such trustee did not receive any consulting, advisory, or other compensatory fee from the registrant except in his or her capacity as a member of the board of trustees or a committee thereof.

The board has a policy that at least a majority of its trustees should be independent trustees in order to ensure that the board’s interests are closely aligned with the interests of the registrant’s unitholders.

The board of trustees has determined that a majority of its trustees are independent, and has classified the seven trustees as follows:

Four independent trustees: Colum Bastable, Roderick D. Fraser, Paul D. McFarlane and Susan L. Riddell Rose. In determining that all of these trustees are independent, the board of trustees considered all relevant facts and circumstances, including that in the normal course of business, the registrant provides real estate and/or services to, and receives rental income and/or services from, companies with whom some of these trustees are affiliated.

Three non-independent trustees: Thomas F. Farley, G. Mark Brown and T. Jan Sucharda. While the board of trustees considers that Messrs. Brown’s and Farley’s interests are fully aligned with the interests of minority unitholders, and that they act independently of management, the applicable rules suggest that they be considered not independent due to their roles (or in the case of Mr. Farley, former role) with the registrant’s majority shareholder, BPO. Mr. Sucharda is not independent because he is a member of senior management of the registrant.

Messrs. Bastable and Farley both serve on the Board of Trustees of Slate Retail REIT.

Presiding Trustee at Meetings of Independent Trustees

The registrant schedules regular executive sessions at which the registrant’s “independent directors” (as that term is defined in the NYSE Rules) meet without management participation. Colum Bastable serves as the chairman at such sessions (the “Independent Designee”).

Communication with Non-Management Trustees

Unitholders may send communications to the registrant’s non-management trustees by writing to Colum Bastable, c/o Secretary, Brookfield Canada Office Properties, Brookfield Place, 181 Bay Street, Suite 330, Toronto, Ontario, Canada, M5J 2T3 or by email to investor.relations@brookfield.com. Communications will be referred to the Independent Designee for appropriate action. The status of all outstanding concerns addressed to the Independent Designee will be reported to the board of trustees as appropriate.

Corporate Governance Guidelines

According to the NYSE Rules, a listed company must adopt and disclose a set of corporate governance guidelines with respect to specified topics. Such guidelines are required to be posted on the registrant’s website. The registrant’s governance practices comply in all significant respects with the NYSE Rules. The Governance Guidelines are available for viewing on the registrant’s website at www.brookfieldcanadareit.com and are available without charge in print to any unitholder who requests them. Requests for copies of the Governance Guidelines should be made by contacting our Investor Relations department by mail at Brookfield Place, 181 Bay Street, Box 770, Toronto, Ontario M5J 2T3, by calling 1-855-212-8243 or by e-mail to investor.relations@brookfield.com.

Board Committee Mandates

The mandates of the registrant’s Audit Committee and Governance and Nominating Committee are each available for viewing on the registrant’s website at www.brookfieldcanadareit.com, and are available in print without charge to any unitholder who requests them. Requests for copies of these documents should be made by contacting our Investor Relations department by mail at Brookfield Place, 181 Bay Street, Box 770, Toronto, Ontario M5J 2T3, by calling 1-855-212-8243 or by e-mail to investor.relations@brookfield.com.

MINE SAFETY DISCLOSURE

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities under the regulation of the Federal Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of 1977, as amended (the “Mine Act”). During the fiscal year ended December 31, 2015, the registrant did not have any mines in the United States subject to regulation by MSHA under the Mine Act.

UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

A. Undertaking.

The registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the SEC staff, and to furnish promptly, when requested to do so by the SEC staff, information relating to: (i) the securities registered pursuant to Form 40-F; (ii) the securities in relation to which the obligation to file an annual report on Form 40-F arises; or (iii) transactions in said securities.

B. Consent to Service of Process.

The registrant has previously filed a Form F-X in connection with the class of securities in relation to which the obligation to file this report arises.

Any change to the name or address of the agent for service of process of the registrant shall be communicated promptly to the SEC by an amendment to the Form F-X referencing the file number of the registrant.

SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 18, 2016.

	BROOKFIELD CANADA OFFICE PROPERTIES


	By:	/s/ Michelle L. Campbell
		Name: Michelle L. Campbell
		Title: Assistant Secretary

EXHIBIT INDEX

Exhibit	Description

99.1	Annual Information Form for the fiscal year ended December 31, 2015

99.2	Management’s Discussion and Analysis of Financial Results for the fiscal year ended December 31, 2015 and the Consolidated Financial Statements for the fiscal year ended December 31, 2015

99.3	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934

99.4	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934

99.5	Section 1350 Certification of Chief Executive Officer

99.6	Section 1350 Certification of Chief Financial Officer

99.7	Consent of Deloitte LLP

Exhibit 99.1

BROOKFIELD CANADA OFFICE PROPERTIES

ANNUAL INFORMATION FORM

March 18, 2016

ANNUAL INFORMATION FORM

TABLE OF CONTENTS

Notes Regarding This AIF	1
Note Regarding Financial Information	1
Forward-Looking Statements	1
Structure	2
Name, Address and Jurisdiction of Formation	2
History	2
Structure of Brookfield Canada Office Properties	3
General Development of the Business	5
Financings and Refinancings	5
Acquisitions and Dispositions	5
Capital Markets	5
Other	6
Business of Brookfield Canada Office Properties	6
Overview	6
Commercial Property Operations	6
Business Strategy	6
Investment Property and Corporate Debt Maturities	7
Primary Markets and Properties	9
Employees	14
Environmental Protection	14
Legal Proceedings	14
Risk Factors	14
Distributions and Distribution Policy	27
Historical Distributions on BOX Trust Units	27
Description of Brookfield Canada Office Properties	27
Authorized Capital and Outstanding Securities	27
Trust Units	27
Special Voting Units	28
Issuance of Trust Units	28
Repurchase of Trust Units	28
Limitations on Non-Resident Ownership of Trust Units	28
Investment Restrictions and Guidelines and Operating Plan	29
Trustees	30
Committees	30
Conflicts of Interest	30
Meetings of Unitholders	31
Amendments to the Declaration of Trust and Other Documents	31
Take-Over Bids	32
Information and Reports	33
Rights of Unitholders	33
Description of Brookfield Office Properties Canada LP	33
General Partner	33
Authorized Capital	34
Offers, Issuer Bids and Take-Over Bids	34
Distributions	35
Investment Restrictions and Guidelines and Operating Policies	35
Allocation of Net Income and Losses	37
Limited Liability	37
Amendments to the Limited Partnership Agreement	37
Ratings	37

Market for Securities	38
Trustees and Management	39
Overview	39
Trustees of BOX	39
Officers	40
Management Agreements	41
Interest of Management and Others in Material Transactions	45
Material Contracts	45
Exchange and Support Agreement	45
BPO Undertaking	46
Exemptive Relief	46
Auditors, Transfer Agent and Registrar	46
Audit Committee Information	47
Relevant Education and Experience	47
Pre-Approval Policies and Procedures	47
External Auditor Service Fees (By Category)	47
Additional Information	48
Appendix A – Commercial Properties by Region	49
Appendix B – Audit Committee Charter	50

Notes Regarding this AIF

In this Annual Information Form (“AIF”), “BOX”, “Brookfield Canada Office Properties”, the “Trust”, “we”, “us” and “our” refers to Brookfield Canada Office Properties, Brookfield Office Properties Canada LP and their direct and indirect subsidiaries, and includes BPO Properties Ltd. (“BPP”) prior to May 1, 2010, unless otherwise noted or the context requires otherwise.

Note Regarding Financial Information

Financial data included in this AIF has been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). All dollar references, unless otherwise stated, are in Canadian dollars. This AIF should be read in conjunction with our management’s discussion and analysis and audited consolidated financial statements and appended notes, each of which appear in our annual report. Unless otherwise indicated, the statistical and financial data contained in this AIF are presented as at December 31, 2015.

Forward-Looking Statements

This AIF, particularly the sections entitled “General Development of the Business” and “Business of Brookfield Canada Office Properties”, contains “forward-looking information” within the meaning of Canadian provincial securities laws and applicable regulations and “forward-looking statements” within the meaning of “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, include statements regarding our operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook, as well as the outlook for the Canadian economy for the current fiscal year and subsequent periods, and include words such as “expects”, “anticipates”, “plans”, “believes”, “estimates”, “seeks”, “intends”, “targets”, “projects”, “forecasts”, “likely” or negative versions thereof and other similar expressions, or future or conditional verbs such as “may”, “will”, “should”, “would” and “could”.

Although the Trust believes that the anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Trust, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.

Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to: risks incidental to the ownership and operation of real estate properties including local estate conditions; the impact or unanticipated impact of general economic, political and market factors in Canada; the ability to enter into new leases or renew leases on favourable terms; business competition; dependence on tenants’ financial condition; uncertainties of real estate development or redevelopment; illiquidity of investments; the behavior of financial markets, including fluctuations in interest rates; equity and capital markets and the availability of equity and debt financing and refinancing within these markets; the use of debt to finance our business; risks relating to our insurance coverage; the possible impact of international conflicts and other developments including terrorist acts; potential environmental liabilities; catastrophic events, such as earthquakes and hurricanes; dependence on management personnel; changes in tax laws and other tax-related risks; the ability to complete and effectively integrate acquisitions into existing operations and the ability to attain expected benefits therefrom; operational and reputational risks; and other risks and factors detailed from time to time in our documents filed with the securities regulators in Canada and the United States.

Caution should be taken that the foregoing list of important factors that may affect future results is not exhaustive. When relying on the Trust’s forward-looking statements or information, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as required by law, the Trust undertakes no obligation to publicly update or revise any forward-looking statements or information, whether written or oral, that may be as a result of new information, future events or otherwise.

| Brookfield Canada Office Properties | 2016 Annual Information Form

STRUCTURE

Name, Address and Jurisdiction of Formation

Brookfield Canada Office Properties is a limited purpose unincorporated, closed ended, real estate investment trust established under and governed by the laws of the Province of Ontario and created pursuant to a declaration of trust dated as of March 19, 2010 as “Brookfield Office Properties Canada”. BOX amended and restated its declaration of trust (the “Declaration of Trust”) to change its name to “Brookfield Canada Office Properties” effective February 24, 2012. Although it is intended that BOX qualify as a “mutual fund trust” pursuant to the Income Tax Act (Canada) (the “Tax Act”), BOX is not a mutual fund under applicable securities laws. Our head and registered office is located at Brookfield Place, 181 Bay Street, Suite 330, Toronto, Ontario, M5J 2T3 (“Brookfield Place”).

History

We were formed in connection with the reorganization of the business of BPP on May 1, 2010 (the “Transaction”) pursuant to which BPP transferred its directly owned office assets to us. We also acquired the interest of Brookfield Office Properties Inc. (“BPO”) in Brookfield Place (the “Brookfield Place Interest”), widely regarded as the top commercial complex in Canada. Pursuant to the Transaction, BPO acquired all of the common equity of BPP that it did not already own and the public common shareholders of BPP received one trust unit for each BPP common share held. Select assets of BPP, including a portfolio of properties held through property-level joint-ventures (collectively, the “Canadian Office Fund”) and certain development properties, as well as certain other assets that we are not permitted to own under rules governing real estate investment trusts (“REITs”), were retained by BPP. Certain of the retained assets were transferred to BOX on December 1, 2011 (see “Canadian Office Fund Acquisition”). Following closing of the Transaction, a subsequent sale by BPO of BOX trust units to the public in November 2010 and subsequent sales by BPO of trust units and special voting units to a subsidiary of parent company Brookfield Property Partners L.P. (“BPY”) in June 2014 and December 2015, respectively, BPY and its affiliates own an aggregate equity interest in BOX of approximately 83%, approximately 57% of which is held indirectly through BPO.

Our major milestones are summarized below.

Gentra Acquisition

Starting in 1997, BPO purchased shares of BPP (formerly Gentra Inc. and Royal Trustco Limited), a Canadian corporation and an owner of commercial properties primarily in the Toronto area, until April 2003, when its equity interest in BPP reached 89%.

Trizec Western Canada Acquisition

In June 2000, we acquired a Western Canadian office portfolio, consisting of four office towers in Calgary and Vancouver. These properties, formerly part of the TrizecHahn portfolio, comprised a total of 3.5 million square feet of prime office, retail and parking space. The portfolio included the flagship Bankers Hall East and West Towers and the Royal Bank Building in downtown Calgary, as well as the Royal Centre in downtown Vancouver.

Acquisition of the Brookfield Place Interest

On May 1, 2010, as part of the Transaction, we acquired from BPO the Brookfield Place Interest for a purchase price equal to approximately $866 million. The purchase price was satisfied by the payment of approximately $100 million in cash, the assumption of debt valued at approximately $342 million and the issuance of approximately 20.3 million Class B limited partnership units of Brookfield Office Properties Canada LP (“Class B LP Units”) valued at approximately $20.88 per unit.

Canadian Office Fund Acquisition

On December 1, 2011, we completed the acquisition from BPO of a 25% interest in nine office assets totaling approximately 6.5 million square feet in Toronto and Ottawa for $362 million. We funded the acquisition through cash of $222 million from existing liquidity and the remainder through the assumption of debt. The acquisition consolidated all but one of BPO’s Canadian operating properties in BOX and added the following nine office buildings to our portfolio:

| Brookfield Canada Office Properties | 2016 Annual Information Form

•

First Canadian Place, Toronto;

•

2 Queen Street East, Toronto;

•

151 Yonge Street, Toronto;

•

Place de Ville I, Ottawa (two buildings);

•

Place de Ville II, Ottawa (two buildings); and

•

Jean Edmonds Towers, Ottawa (two buildings).

Bay Adelaide Centre East

On July 11, 2013, we completed the acquisition from BPO of the Bay Adelaide Centre East development in downtown Toronto for an aggregate total investment of $602 million on an “as-if-completed-and-stabilized basis”. We paid $170 million at closing, and committed to fund an additional $26 million of up-front equity and $350 million from a first mortgage construction loan. Construction was substantially completed in late 2015.

Brookfield Place Calgary East

On October 14, 2014, we acquired the east tower of Brookfield Place Calgary development in downtown Calgary. We purchased the property, upon which a 56-storey, 1.4 million-square-foot premier office tower is currently under construction, from BPY, based on a value of $1.025 billion at stabilization ($966 million net of an imputed return on BOX’s equity investment). BOX acquired the asset on an “as-if-completed-and-stabilized basis” and will retain development obligations including construction, lease-up and financing. Construction is scheduled to be completed in late 2017.

Structure of Brookfield Canada Office Properties

The following chart sets forth our current principal operating structure:

Notes:

(1)

As of March 14, 2016, BPY held units representing an aggregate equity interest in BOX of approximately 83.3% indirectly through its subsidiaries, including BPO.

| Brookfield Canada Office Properties | 2016 Annual Information Form

(2)

External asset and property management services are provided to the Trust by Brookfield Office Properties Management LP, a subsidiary of BPO.

(3)

Holders of Class B LP Units hold one special voting unit for each Class B LP Unit held. The special voting units provide voting rights with respect to BOX to holders of Class B LP Units.

(4)

Interests in the properties in our portfolio are held by Brookfield Office Properties Canada LP as well as various entities directly or indirectly owned by Brookfield Office Properties Canada LP.

Our operating business is carried out by the following principal entities set out below:

Brookfield Office Properties Canada LP holds direct and indirect interests in the properties in our portfolio and carries out all of our property investment and operating activities. Brookfield Office Properties Canada LP is a limited partnership formed under the laws of the Province of Ontario pursuant to a limited partnership agreement that was amended and restated on May 1, 2010 (the “Limited Partnership Agreement”). The head and registered office of Brookfield Office Properties Canada LP is located at Brookfield Place, 181 Bay Street, Suite 330, Toronto, Ontario, M5J 2T3. The general partner of Brookfield Office Properties Canada LP is BOPC GP Inc., a wholly-owned subsidiary of BOX formed under the laws of Canada.

The following table sets forth the name, percentage interest held directly or indirectly and jurisdiction of incorporation of each of the other principal subsidiary entities:

Subsidiary	Jurisdiction of Formation	Percentage Interest	Property (including Percentage Interest if less than 100.0%) /Line of Business
Brookfield Office Properties Canada LP	Ontario	100%	105 Adelaide Street West, Toronto 20-22 Front Street W., Toronto Bay Adelaide Centre, including West below grade, East below grade and North below grade parcels Toronto Exchange Tower & Lands, Toronto (50%) Queen’s Quay Terminal & Lands, Toronto Merivale Pad, Nepean Bankers Court, Calgary (50%)
BOPC COF LP	Ontario	100%	Jean Edmonds Tower, Ottawa (25%) Place de Ville I, Ottawa (25%) Place de Ville II, Ottawa (25%) 2 Queen Street East, Toronto (25%)
Bay Adelaide East LP	Ontario	100%	Bay Adelaide Centre East above grade parcel and Yonge Adelaide parcel, Toronto
BAC Retail Concourse GP	Ontario	100%	Bay Adelaide Centre Retail, Toronto
BOPC FCP LP	Ontario	100%	First Canadian Place, Toronto (25%) Leasehold (100%) and Freehold (50%)
BPO Properties Bloor Yonge LP	Ontario	100%	Hudson’s Bay Centre, Toronto
BP LP	Ontario	100%	Bay Wellington Tower Lands & Buffer Lands, Toronto
Brookfield Place (Wellington) Limited	Canada	100%	Bay Wellington Tower Operating Lease, Toronto
Galleria Concourse Operations Inc.	Ontario	50%	Brookfield Place, Retail and Parking, Head Lease, Toronto
Bankers Hall LP	Alberta	100%	Bankers Hall & Royal Bank Building, Calgary (50%)
Fifth Avenue LP	Alberta	100%	Fifth Avenue Place, Calgary (50%)
SEC LP	Alberta	100%	Suncor Energy Centre, Calgary (50%)
Brookfield Place (Calgary) LP	Alberta	100%	Brookfield Place Calgary West Tower Lands and East Tower, including Bow Parkade

| Brookfield Canada Office Properties | 2016 Annual Information Form

GENERAL DEVELOPMENT OF THE BUSINESS

The significant events affecting our business during the last three financial years and to the date of this AIF are summarized below. We have not repeated the major events referred to above under “Structure – History”.

Financings and Refinancings

On January 9, 2013, we refinanced the debt on Bay Wellington Tower, Toronto for $525 million. The new financing has a seven-year term with a fixed interest rate of 3.244% per annum.

On February 1, 2013, we refinanced the debt on 105 Adelaide Street West, Toronto for $37.5 million. The new financing has a ten-year term with an interest rate of 3.87% per annum.

On May 15, 2013, we extended the $103 million of debt at Hudson’s Bay Centre, Toronto, for an additional two-year period to May 2015 with a fixed interest rate of 2.999% per annum. On May 14, 2015, we extended the facility for an additional year to May 2016 at a rate of bankers’ acceptance plus 140 basis points.

On August 29, 2013, we refinanced the debt at Suncor Energy Centre, Calgary, for $550 million ($275 million at BOX’s ownership). The new financing has a 20-year term at a fixed interest rate of 5.188% per annum.

On August 29, 2013, we extended our $200 million revolving credit facility for an additional two-year term, maturing on August 29, 2017. On October 9, 2014, we upsized our corporate revolver facility by $80 million to $280 million through the addition of two banks and extended the term by one year to August 2018. The interest rate was also reduced from bankers’ acceptance plus 175 basis points to 145 basis points. On May 21, 2015, we further upsized the facility by an additional $70 million to $350 million, and on August 28, 2015, we extended it for an additional two years under the existing financial terms, maturing in August 2020.

On November 18, 2013, we refinanced the debt on Bankers Hall, Calgary, for $300 million. The new mortgage bonds have a fixed rate of 4.377% over a ten-year term.

On December 1, 2014, we closed on the refinancing of the First Canadian Place debt. Net proceeds were $37 million at 100%, or $9 million at 25% ownership. The refinancing has a nine-year term at an interest rate of 3.559%.

On June 10, 2015, we established new financing at Place de Ville I and II for $175 million ($43.8 million at our share). The new financing has a ten-year term maturing June 10, 2025 with a fixed interest rate of 3.752% per annum.

Acquisitions and Dispositions

On January 22, 2015, we sold 151 Yonge St. in Toronto, together with our Canadian Office Fund partners, for $154 million ($38 million at our share).

On September 30, 2015, we sold the HSBC Building (70 York Street) in Toronto for $110 million. The sale generated net proceeds of $67 million.

On February 29, 2016, we sold Royal Centre in Vancouver for $428 million.

Capital Markets

In March 2014, we filed a short form base shelf prospectus with the securities regulatory authorities in all of the provinces and territories of Canada and a registration statement on Form F-10 with the United States Securities and Exchange Commission. This shelf prospectus allows us to issue trust units and debt securities and BPO to sell trust units, in an aggregate amount of up to $750 million.

| Brookfield Canada Office Properties | 2016 Annual Information Form

On November 10, 2015, we announced that the TSX approved our notice of intention to renew our normal course issuer bid. During the twelve month period commencing November 12, 2015 and ending November 11, 2016, we are authorized to purchase on the Toronto Stock Exchange (the “TSX”), the New York Stock Exchange (the “NYSE”) and any alternative Canadian trading system, up to 1,566,602 trust units, representing approximately 10% of our public float.

Other

On April 21, 2014, we declared a 5% increase to the yearly distribution per trust unit from $1.17 to $1.24, effective with the distribution payable on June 13, 2014.

On January 25, 2016, we declared a 6% increase to the yearly distribution per trust unit from $1.24 to $1.31, effective with the distribution payable on April 15, 2016.

BUSINESS OF BROOKFIELD CANADA OFFICE Properties

Overview

BOX’s portfolio is comprised of interests in 26 premier office properties totaling 20.3 million square feet in the downtown cores of Toronto, Calgary and Ottawa. Landmark assets include Brookfield Place in Toronto and Bankers Hall in Calgary. Our development portfolio consists of the Brookfield Place Calgary East development site totaling 1,400,000 square feet. Our trust units trade on the Toronto Stock Exchange (“TSX”) under the symbol “BOX.UN” and on the New York Stock Exchange (“NSYE”) under the symbol “BOXC”. A schedule of our commercial properties by region is set out in Appendix A.

Commercial Property Operations

We own and proactively manage premier properties in dynamic and, in many instances, supply-constrained markets with high barriers to entry, and maintain one of Canada’s most distinguished portfolios of office properties. Our primary markets are the financial, energy and government sectors in the cities of Toronto, Calgary and Ottawa. Our strategy is to concentrate operations within a select number of Canadian gateway cities with attractive tenant bases in order to maintain a meaningful presence and build on the strength of our tenant relationships within these markets.

We focus on the following strategic priorities:

realizing value from our properties through proactive leasing initiatives;

prudent capital management including the refinancing of mature properties; and

acquiring high quality commercial properties in our primary markets for value when opportunities arise.

Business Strategy

Long-Term Lease Profile Limits Market Risk. Our strategy is to sign long-term leases in order to mitigate risk and reduce our overall re-tenanting costs. We typically commence discussions with tenants regarding their space requirements well in advance of the contractual expiration, and although each market is different, the majority of our leases, when signed, extend between five and ten-year terms. We attempt to stagger our lease expiry profile so that we are not faced with disproportionate amounts of space expiring in any one year. As a result of this strategy, approximately 4.9% of our leases, on average, mature annually up to 2020.

Diversified, High Credit Quality Tenants. An important characteristic of our portfolio is the strong credit quality of our tenants. We direct special attention to credit quality, in order to ensure the long-term sustainability of rental revenues through economic cycles.

| Brookfield Canada Office Properties | 2016 Annual Information Form

The following list shows the largest tenants in our portfolio by leased area and their respective credit ratings and lease commitments as at December 31, 2015:

Tenant	Primary Location	Credit Rating⁽¹⁾	Year of Expiry	000’s Sq. Ft.	% of Sq. Ft.⁽²⁾
Government and Related agencies	Toronto, Ottawa	AAA	Various	1,857	10.8%
Suncor Energy Inc.	Calgary	A-	2028	1,332	7.7%
Bank of Montreal	Toronto, Calgary	A+	Various	1,130	6.6%
Deloitte LLP	Toronto, Calgary	Not Rated	Various	724	4.2%
Canadian Natural Resources	Calgary	BBB+	2026	531	3.1%
Imperial Oil	Calgary	AAA	2016	514	3.0%
Royal Bank of Canada	Toronto, Calgary, Vancouver	AA-	Various	475	2.8%
Talisman Energy	Calgary	BBB-	2025	446	2.6%
Enbridge Inc.	Calgary	BBB+	2028	401	2.3%
Bennett Jones LLP	Toronto, Calgary	Not Rated	2027	323	1.9%
CIBC	Toronto, Calgary	A+	Various	311	1.8%
KPMG Management Services Inc.	Toronto	Not Rated	2025	297	1.7%
Osler, Hoskin & Harcourt LLP	Toronto	Not Rated	2030	199	1.1%
Westcoast Energy	Calgary, Vancouver	BBB	2022	187	1.1%
Toronto Stock Exchange	Toronto	Not Rated	2023	185	1.1%
Goodmans LLP	Toronto	Not Rated	2026	182	1.1%
The Bay	Toronto	B+	2019/2020	179	1.0%
Gowlings Canada Inc.	Toronto	Not Rated	2020	170	1.0%
The Manufacturers Life Insurance	Toronto	AA-	2022	169	1.0%
McMillan LLP	Toronto, Vancouver	Not Rated	2022	166	1.0%

Notes:

(1)

From Standard & Poor’s.

(2)

Percentage of total leasable area of commercial properties.

Proactive Leasing Strategy. Our proactive leasing strategy produced total 2015 leasing of approximately 2.1 million square feet for our portfolio. Our vacancy rates are significantly below the market average in almost all of our primary markets. Our total portfolio occupancy rate was 95.8% at December 31, 2015. Increasing occupancy and reducing rollover exposure allows for continued stable cashflow and low levels of capital expenditures and leasing costs.

Acquire high quality properties in our target markets. Our strategy is to opportunistically acquire assets in high growth markets, namely markets where financial services, government and energy sectors drive the market, and assets which exhibit an opportunity to improve or preserve returns through repositioning (through a combination of capital improvements and for shifts in marketing strategy), changes in management focus and re-leasing as existing leases terminate.

Investment Property and Corporate Debt Maturities

Our secured investment property and corporate debt is non-recourse to us, except for the loans at Hudson’s Bay Centre which has limited recourse to the Trust of $15.0 million, and Bay Adelaide East and Brookfield Place Calgary East which have limited recourse of up to $50.0 million and $80.0 million, respectively.

| Brookfield Canada Office Properties | 2016 Annual Information Form

The details of our investment property and corporate debt as at December 31, 2015 are as follows:

		Interest	Maturity	BOX’s Share
	Location	Rate %	Date		(Millions $)	Mortgage Details
Commercial property
Hudson's Bay Centre⁽¹⁾	Toronto	2.24	May 2016		97.3	Limited recourse - floating rate
Bay Adelaide East⁽²⁾	Toronto	2.75	December 2017		260.5	Limited recourse - floating rate
2 Queen St. E.	Toronto	5.64	December 2017		28.6	Non-recourse - fixed rate
Brookfield Place Toronto	Toronto	3.24	January 2020		497.9	Non-recourse - fixed rate
22 Front St. West	Toronto	6.24	October 2020		16.9	Non-recourse - fixed rate
Bankers Court	Calgary	4.96	November 2020		42.3	Non-recourse - fixed rate
Queen's Quay Terminal	Toronto	5.40	April 2021		80.9	Non-recourse - fixed rate
Fifth Avenue Place	Calgary	4.71	August 2021		158.7	Non-recourse - fixed rate
Bay Adelaide West	Toronto	4.43	December 2021		376.5	Non-recourse - fixed rate
Exchange Tower	Toronto	4.03	April 2022		109.0	Non-recourse - fixed rate
105 Adelaide St. West	Toronto	3.87	May 2023		35.1	Non-recourse - fixed rate
Bankers Hall	Calgary	4.38	November 2023		289.8	Non-recourse - fixed rate
First Canadian Place	Toronto	3.56	December 2023		76.8	Non-recourse - fixed rate
Jean Edmonds Towers	Ottawa	6.79	January 2024		15.6	Non-recourse - fixed rate
Place de Ville I	Ottawa	3.75	June 2025		21.0	Non-recourse - fixed rate
Place de Ville II	Ottawa	3.75	June 2025		22.8	Non-recourse - fixed rate
Suncor Energy Centre	Calgary	5.19	August 2033		263.6	Non-recourse - fixed rate

Development
Brookfield Place Calgary East⁽³⁾	Calgary	2.61	November 2017		126.2	Limited recourse - floating rate

Corporate
$350M Corporate Revolver	¾	2.29	August 2020		194.0	Recourse - floating rate
		3.76⁽⁴⁾			2,851.3
Premium on assumed mortgages					1.0
Deferred financing costs					(13.8)
Total		3.76⁽⁴⁾		$	2,838.5

Notes:

(1)

This loan has limited recourse to the Trust for up to $15.0 million.

(2)

This loan has a three-year term from the date of the initial advance, and has limited recourse to the Trust for up to $50.0 million. Two one-year extension options are available provided certain leasing thresholds have been met and no material defaults have occurred. The criteria for the first option to extend the maturity to 2017 has been met as of December 31, 2015.

(3)

This loan has a limited recourse to the Trust for up to $80.0 million. A one-year extension option is available provided certain leasing thresholds have been met and no material defaults have occurred.

(4)

Represents weighted average interest rate at December 31, 2015.

| Brookfield Canada Office Properties | 2016 Annual Information Form

Primary Markets and Properties

The following is a brief overview of the commercial property markets in which we operate as of the date of this AIF and includes discussion of management’s expectations with respect to certain markets which, by its nature, contains certain forward-looking statements. Forward-looking statements require us to make certain assumptions and are subject to inherent risks and uncertainties that could cause actual results or events to differ materially from current expectations. Please refer to the sections “Forward-looking Statements” and “Risk Factors” for a discussion of certain of these risks and uncertainties and material facts and assumptions related to the statements set forth in this section. In this section, total area includes commercial office, retail, storage and parking. The “Form and Percentage of Ownership” column in the tables below refers to the proportionate percentage ownership of BOX.

The following overview includes references to various classes of properties in some of our markets. These classes represent a subjective quality rating of buildings which indicates the competitive ability of each building to attract similar types of tenants. A combination of factors, including rent, building finishes, system standards and efficiency, building amenities, location/accessibility and market perception, are used as relative measures. The difference between each of these classifications varies by market and Class B and C buildings are generally classified relative to Class A buildings. There is no definitive formula for classifying a building, but the general characteristics of each are as follows:

•

Class A: Most prestigious buildings competing for premier office tenants with rents above average for the area. Buildings have high quality standard finishes, state of the art systems, very strong accessibility and a clear market presence. “Class AA” is also used in certain markets to refer to premium buildings at the top end of the Class A category.

•

Class B: Buildings competing for a wide range of tenants with rents in the average range for the area. Building finishes are fair to good for the area and systems are adequate, but the buildings rent for less than Class A buildings.

•

Class C: Buildings competing for tenants requiring functional space at rents below the average for the area and the buildings rent for less than both Class A and Class B buildings.

This rating system is broadly used in the commercial real estate industry.

| Brookfield Canada Office Properties | 2016 Annual Information Form

Toronto, Ontario

The Downtown Toronto office market consists of approximately 71.3 million square feet of space. The Downtown Toronto overall vacancy rate at December 31, 2015 was 4.6%, an 8.0% decrease from 5.0% at year end 2014 and vacancy in Class AA and A markets in the Downtown Toronto financial core was 5.3% at year end 2015, a 5.4% decrease from 5.6% at year end 2014. Our vacancy rate in this market is 7.4%. Absorption in Class AA and A markets in the Downtown Toronto financial core was negative 78,604 square feet during 2015 compared to negative 168,856 square feet during 2014. Our average in-place net rent per square foot in this market was $28.74 per square foot as at December 31, 2015, as compared to the average market net rent of $32.00 per square foot at that time.

Property	Total Area (000’s Sq.Ft.)	Form and Percentage of Ownership	Description
Brookfield Place Toronto			Brookfield Place consists of almost 3.2 million square feet of rentable commercial and parking space comprising two high-rise office towers located in Toronto’s financial core in the block bounded by Bay, Wellington, Yonge and Front Streets. A 90-foot high glass-enclosed galleria integrates the two office towers, the related retail space, the Hockey Hall of Fame and 13 other historical buildings. With direct access to Union Station, the Metro Toronto subway system and Commerce Court, Brookfield Place is a key point of entry in the underground pedestrian walkway system in Toronto.

- Bay Wellington Tower	1,409	100% fee interest.	Built in 1992, the Bay Wellington Tower is a 47-storey tower located on the northern portion of Brookfield Place.

- 22 Front Street - Retail and Parking	144 555	100% fee interest. 50% interest (on a psf basis) in Retail and a 56% interest in Parking. The remaining 50% interest in Retail and 44% interest in Parking is owned by OMERS Realty Corporation.	22 Front Street is one of the 12 surviving historic buildings at the Brookfield Place site that were incorporated as an integral component of the complex’s design and preserved as part of Toronto’s living heritage. This retail, heritage, office and parking complex is located between TD Canada Trust and Bay Wellington Towers and encompasses the office space in the historic and entertainment portions of Brookfield Place. Brookfield Place includes retail on the concourse and main street levels, as well as below-grade parking stalls serving the Brookfield Place complex and the Downtown district.

The Exchange Tower Block			The Exchange Tower Block consists of two office towers - the Exchange Tower and 105 Adelaide - and the retail and parking components of the complex.

- Exchange Tower	1,230	50% leasehold interest in the north parcel (containing a 3-storey building) and a 50% freehold and leasehold interest in the south parcel (which includes the Exchange Tower). The remaining 50% leasehold and freehold interests are held by TTC Pension Fund (25%) and Hospitals of Ontario Pension Fund (25%).	Exchange Tower is located in Toronto’s financial core at the corner of York and King Streets. The office property is integrated with the Toronto financial core and the underground pedestrian network as a component of the Exchange Tower Block. The building was built 1981 and renovated in 1999.

- 105 Adelaide Street West	215	100% leasehold interest and a 25% fee interest in the Canadian Office Fund’s 50% interest. The other 50% freehold interest is owned by a Canadian life insurance company.	105 Adelaide Street West, also known as Northbridge Place, is a 12-storey office property located in the financial core between the Exchange Tower and First Canadian Place. This Class A building was built in 1962 and completely renovated in 1990.

Hudson’s Bay Centre	920	100% leasehold interest and 100% fee interest in certain components.	The Hudson’s Bay Centre comprises an office tower at 2 Bloor Street East, the Bay department store and an extensive retail concourse with a variety of shops and services. Built in 1973 and renovated in 2001, the building is directly above the intersection of two subway lines at the corner of Yonge and Bloor Streets and in close proximity to the Don Valley Expressway.

Queen’s Quay Terminal	511	100% fee interest.	Built in 1926 and renovated in 1983, Queen’s Quay Terminal is located on the waterfront in Downtown Toronto’s financial district. The property also contains condominium units which are owned freehold by other parties.

| Brookfield Canada Office Properties | 2016 Annual Information Form

Property	Total Area (000’s Sq.Ft.)	Form and Percentage of Ownership	Description

Bay Adelaide Centre West Tower	1,598	100% fee interest.	Bay Adelaide West is located in Toronto’s financial core at the corner of Bay and Adelaide Streets. It is a 51-storey office tower and is integrated with the underground pedestrian network. Completed in 2009, Bay Adelaide West was the first major development in the Toronto financial district in over 17 years.

Bay Adelaide Centre East Tower	980	100% fee interest.	Bay Adelaide East, the second phase of the Bay Adelaide Centre project, is a 44-storey office tower. The tower is integrated with Toronto’s underground pedestrian network. Construction was substantially completed in late 2015.

First Canadian Place	2,832	25% leasehold interest to 2023. 12.5% fee interest thereafter.	Located in Downtown Toronto, First Canadian Place is a complex consisting of office, banking, shopping and parking. With 72-stories, the office tower has remained unchallenged as the tallest office building in Canada since it was constructed in 1975.

2 Queen St. E.	535	20.9% fee interest and 4.1% leasehold interest.	2 Queen Street East is situated in Toronto’s financial core and built in 2003. The property’s unique design incorporates an historic 1910 bank branch. The property provides a direct connection to the city’s underground pedestrian walkway and is integrated with the Queen Street subway station.

| Brookfield Canada Office Properties | 2016 Annual Information Form

Calgary, Alberta

The Downtown Calgary office market consists of approximately 41.8 million square feet of space. The Downtown Calgary overall vacancy rate at December 31, 2015 was 18.1%, a 112.9% increase from 8.5% at year end 2014 and vacancy in Class AA and A markets was 14.3% at year end 2015, a 93.2% increase from 7.4% at year end 2014. Our vacancy rate in this market is 2.7%. Absorption in Class AA and A markets in Downtown Calgary was negative 707,469 square feet during 2015 compared to 517,652 million square feet in 2014. Our average in-place net rent per square foot in this market was $32.39 per square foot as at December 31, 2015, as compared to the average market net rent of $26.00 per square foot at that time.

Property	Total Area (000’s Sq.Ft.)	Form and Percentage of Ownership	Description
Bankers Hall	2,643	50% fee interest. The remaining 50% interest is owned by British Columbia Investment Management Corporation ("bcIMC").	Built in 1988, the Bankers Hall complex is comprised of three towers: East Tower, West Tower and the Royal Bank Building. The East and West Towers are twin 52-storey office towers sitting above a 7-storey office/retail podium that integrates the historic Hollingsworth Building and the adjacent 26-storey Royal Bank Building.

Bankers Court	333	50% fee interest. The remaining 50% interest is owned by bcIMC.	Bankers Court, substantially completed in March 2009, is a 15-storey office tower and is directly adjacent to Bankers Hall and connected by sky bridge.

Suncor Energy Centre	2,082	50% fee interest. The remaining 50% interest is owned by ARCI Ltd.	Suncor Energy Centre consists of a two-tower office-retail complex and underground parking garage. The office towers are the 52-storey west tower and the 32-storey east tower. The property is located in the Calgary Central Business District (“CBD”) and is connected to the above-ground pedestrian walkway system. The property was constructed in 1983 and is one of the top three office complexes in Calgary.
Fifth Avenue Place	1,771	50% fee interest. The remaining 50% interest is owned by Alberta Investment Management.	Fifth Avenue Place is comprised of two 35-storey office towers. Fifth Avenue Place, which is connected to the above-ground pedestrian walkway system, was completed in 1981, and since acquisition has undergone a substantial capital investment program.
Brookfield Place Calgary East	1,400	100% fee interest	Brookfield Place Calgary East is a 56-storey office tower currently under development in downtown Calgary. The tower will be integrated with the plus-15 skywalk system and the Calgary LRT on 7^th Ave. Upon completion in late 2017, the office tower will be Western Canada’s tallest building.

| Brookfield Canada Office Properties | 2016 Annual Information Form

Ottawa, Ontario

The Ottawa CBD office market consists of approximately 16.0 million square feet of space. The Ottawa CBD overall vacancy rate at December 31, 2015 was 9.0%, a 5.9% increase from 8.5% at year end 2014 and vacancy in the Class A market in the Ottawa CBD was 6.2% at year end 2015, a 3.1% decrease from 6.4% at year end 2014. Our vacancy rate in this market is 4.7%. Absorption in the Ottawa CBD market for Class A buildings was 90,578 square feet during 2015 compared to 627,466 square feet in 2014. Our average in-place net rent per square foot in this market was $20.43 per square foot as at December 31, 2015, as compared to the average market net rent of $18.00 per square foot at that time.

Property	Total Area (000’s Sq.Ft.)	Form and Percentage of Ownership	Description
Place de Ville I	946	25% leasehold interest.	Place de Ville I is located in the western portion of Ottawa’s Downtown core in the block bounded by Albert Street, Kent Street, Queen Street and Lyon Street. Built in 1974 and renovated in 1994, the property is comprised of two towers (A and B), situated at right angles to each other.

Place de Ville II	924	25% fee interest.	Place de Ville II is located in the western portion of Ottawa’s Downtown core in the block bounded by Sparks Street, Kent Street, Queen Street and Lyon Street. It is comprised of Tower C, a 29-storey building, the Podium, a smaller 4-storey building, a below grade retail service concourse which includes office space, retail outlets, a food court, storage space and, a four-level underground parking facility. The building was built in 1971 and renovated in 1995.

Jean Edmonds Towers	662	25% fee interest.	Jean Edmonds Towers is located in the western portion of Ottawa’s Downtown core in the block bounded by Slater Street, Kent Street, Laurier Avenue West and Bank Street. Built in 1974 and renovated in 1994, the property is comprised of two 20-storey buildings linked at ground level by a 1-storey building which serves as a restaurant. The remaining ground floor premises, situated in the towers themselves, offer retail services.

| Brookfield Canada Office Properties | 2016 Annual Information Form

Employees

BPO provides asset and property management services to us under long-term arrangements. BPO draws on members of its senior management and other individuals from its affiliates to fulfill its obligations to us. We do not have any employees and depend on the management and administration services provided by BPO.

Environmental Protection

Environmental initiatives are a major component of our strategic business plan. Environmental stewardship is a high priority for us and we treat it as a key business objective, along with revenue growth and risk management.

Our objective is to maximize energy and resource efficiency and environmental stewardship at our properties, together with the wellness and safety of our tenants, employees and those that live in the neighborhoods that house our properties.

We achieve this through an integrated strategy based on three principles that are embedded in our corporate culture. These tenets are the foundation of our commitment to environmental responsibility.

(i)

To operate, develop, retrofit, redesign and renovate properties to achieve optimum energy efficiency, occupant satisfaction and reduced carbon emissions.

(ii)

To incorporate innovative environmental strategies in order to achieve best-in-industry environmental performance in all new office developments.

(iii)

To seek best-in-class environmental certifications, actively participate in green industry organizations and support new initiatives that foster the energy and resource-efficient operation of office buildings and environmentally sustainable communities and practices.

Legal Proceedings

We are occasionally named as a party in various claims and legal proceedings which arise during the normal course of our business. We review each of these claims, including the nature of the claim, the amount in dispute or claimed and the availability of insurance coverage. Although there can be no assurance as to the resolution of any particular claim, we do not believe that the outcome of any claims or potential claims of which we are currently aware will have a material adverse effect on us.

Risk Factors

Our strategy is to invest in high-quality commercial properties defined by the certainty of receiving rental payments generated by the tenants of those assets. However, we remain exposed to certain risks specific to our portfolio and those inherent in the commercial property business. Therefore, in evaluating BOX and our business, the following challenges, uncertainties and risks should be considered in addition to the other information contained in this AIF.

Our economic performance and the value of our real estate assets are subject to the risks incidental to the ownership and operation of real estate properties.

Our economic performance, the value of our real estate assets and, therefore, the value of unitholders’ investments are subject to the risks normally associated with the ownership and operation of real estate properties, including but not limited to: downturns and trends in the national, regional and local economic conditions where our properties are located; the cyclical nature of the real estate industry; local real estate market conditions such as an oversupply of office properties, including space available by sublease, or a reduction in demand for such properties; changes in interest rates and the availability of financing; competition from other properties; changes in market rental rates and our ability to rent space on favourable terms; the bankruptcy, insolvency, credit deterioration or other default of our tenants; the need to periodically renovate, repair and re-lease space and the costs thereof; increases in maintenance, insurance and operating costs; civil disturbances, earthquakes and other natural disasters, or terrorist acts or acts of war which may result in uninsured or underinsured losses; the decrease in the attractiveness of our properties to tenants; the decrease in the underlying value of our properties; and certain significant expenditures, including property taxes, maintenance costs, mortgage payments, insurance costs and related charges that must be made regardless of whether or not a property is producing sufficient income to service these expenses.

| Brookfield Canada Office Properties | 2016 Annual Information Form

We are dependent upon the economic conditions of the markets where our properties are located.

We are affected by local, regional, national and international economic conditions and other events and occurrences that affect the markets in which we own properties. A protracted decline in economic conditions will cause downward pressure on our operating margins and asset values as a result of lower demand for space.

A prolonged downturn in the Canadian economy would result in reduced demand for space and number of prospective tenants and will affect the ability of our properties to generate significant revenue. If there is an increase in operating costs resulting from inflation or other factors, we may not be able to offset such increases by increasing rents. Because our portfolio consists primarily of office buildings (as compared to a more diversified real estate portfolio), a decrease in demand for office space could adversely affect our results of operations. Additionally, there are submarkets within our primary markets that are dependent upon a limited number of industries, and a significant downturn in one or more of these industries could also adversely affect our results of operations.

Our inability to enter into renewal or new leases on favorable terms for all or a substantial portion of space that is subject to expiring leases would adversely affect our cash flows and operating results.

Our income-producing properties generate revenue through rental payments made by tenants of the properties. Upon the expiry of any lease, there can be no assurance that the lease will be renewed or the tenant replaced. The terms of any renewal or replacement lease may be less favorable to us than the existing lease. We would be adversely affected, in particular, if any major tenant ceases to be a tenant and cannot be replaced on similar or better terms or at all.

Our competitors may adversely affect our ability to lease our properties which may cause our cash flows and operating results to suffer.

Numerous other developers, managers and owners of office properties compete with us in seeking tenants and management revenues. Some of the properties of our competitors may be newer, better located or better capitalized. These competing properties may have vacancy rates higher than our properties, which may result in their owners being willing to make space available at lower prices than the space in our properties, particularly if there is an oversupply of space available in the market. Competition for tenants could have an adverse effect on our ability to lease our properties and on the rents that we may charge or concessions that we must grant. If our competitors adversely impact our ability to lease our properties, our cash flows and operating results may suffer.

Our ability to realize our strategies and capitalize on our competitive strengths are dependent on our ability to effectively operate our large group of commercial properties, maintain good relationships with tenants and remain well capitalized, and our failure to do any of the foregoing would affect our ability to compete effectively in the markets in which we do business.

Reliance on significant tenants could adversely affect our results of operations.

Many of our properties are occupied by one or more significant tenants and, therefore, our revenues from those properties are materially dependent on the creditworthiness and financial stability of those tenants. Our business would be adversely affected if any of those tenants failed to renew certain of their significant leases, became insolvent, declared bankruptcy or otherwise refused to pay rent in a timely fashion or at all. In the event of a default by one or more significant tenants, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-leasing the property. If a lease of a significant tenant is terminated, it may be difficult, costly and time consuming to attract new tenants and lease the property for the rent and on terms as favourable as the previous lease.

Our tenant base is concentrated heavily in three industries and unfavourable conditions in these industries may adversely impact our financial condition and results of operations.

As part of our strategy is to focus on markets underpinned by the financial services, government and resources and energy industries, a significant downturn in one or more of the industries in which these businesses operate would adversely affect our results of operations. In addition, austerity measures and governmental deficit reduction

| Brookfield Canada Office Properties | 2016 Annual Information Form

programs may lead governments to consolidate and reduce their office space and decrease their workforce, which may reduce demand for office space in the government sector.

We face potential adverse effects from tenant defaults, bankruptcies or insolvencies.

A tenant may experience a downturn in its business, which could cause the loss of that tenant or weaken its financial condition and result in the tenant’s inability to make rental payments when due or, for retail tenants, a reduction in percentage rent payable. If a tenant defaults, we may experience delays and incur costs in enforcing our rights as landlord and protecting our investments.

We cannot evict a tenant solely because of its bankruptcy. In addition, in certain jurisdictions where we own properties, a court may authorize a tenant to reject and terminate its lease. In such a case, our claim against the tenant for unpaid, future rent would be subject to a statutory cap that might be substantially less than the remaining rent owed under the lease. In any event, it is unlikely that a bankrupt or insolvent tenant will pay in full amounts it owes under a lease. The loss of rental payments from tenants and costs of re-leasing would adversely affect our cash flows and results of operations. In the event of a significant number of lease defaults and/or tenant bankruptcies, our cash flow may not be sufficient to pay cash distributions to our unitholders and repay maturing debt and any other obligations.

We face risks associated with the use of debt to finance our business, including refinancing risk.

We incur debt in the ordinary course of our business and therefore are subject to the risks associated with debt financing. These risks, including the following, may adversely affect our financial condition and results of operations. Our cash flow may be insufficient to meet required payments of principal and interest. Payments of principal and interest on borrowings may leave us with insufficient cash resources to pay operating expenses. We may not be able to refinance indebtedness on our properties at maturity due to business and market factors including: disruptions in the capital and credit markets; the estimated cash flow of our properties; the value of our properties; financial, competitive, business and other factors, including factors beyond our control. The terms of a refinancing may not be as favourable as the original terms of the related indebtedness. If we are unable to refinance our indebtedness on acceptable terms, or at all, we may need to dispose of one or more of our properties upon disadvantageous terms. In addition, prevailing interest rates or other factors at the time of refinancing could increase our interest expense, and if we mortgage property to secure payment of indebtedness and are unable to make mortgage payments, the mortgagee could foreclose upon such property or appoint a receiver to receive an assignment of our rents and leases. This may adversely affect our ability to pay distributions or make payments to our unitholders and lenders.

If we are unable to manage our interest rate risk efficiently, our cash flows and operating results may suffer.

Advances under credit facilities and certain property-level mortgage debt bear interest at a variable rate. We may incur further indebtedness in the future that also bears interest at a variable rate or we may be required to refinance our debt at higher rates. In addition, though we attempt to manage interest rate risk, there can be no assurance that we will hedge such exposure effectively or at all in the future. Accordingly, increases in interest rates above that which we anticipate based upon historical trends would adversely affect our cash flows.

Our insurance may not cover some potential losses or may not be obtainable at commercially reasonable rates, which could adversely affect our financial condition and results of operations.

We maintain insurance on our properties in amounts and with deductibles that we believe are in line with what owners of similar properties carry; however, our insurance may not cover some potential losses or may not be obtainable at commercially reasonable rates in the future.

Where properties are insured by our partners, all risk property insurance and rental value coverage is provided with limits that we believe are in line with what owners of similar properties carry.

There also are certain types of risks (such as war, or environmental contamination, such as toxic mold) which are either uninsurable or not economically insurable. Should any uninsured or underinsured loss occur, we could lose our investment in, and anticipated profits and cash flows from, one or more of our properties, and would continue to be obligated to repay any recourse mortgage indebtedness on such properties.

| Brookfield Canada Office Properties | 2016 Annual Information Form

Possible terrorist activity could adversely affect our financial condition and results of operations and our insurance may not cover some losses due to terrorism or may not be obtainable at commercially reasonable rates.

Possible terrorist attacks in the markets where our properties are located may result in declining economic activity, which could reduce the demand for space at our properties, reduce the value of our properties and reduce the financial stability of our tenants by harming the demand for goods and services offered by our tenants. Additionally, terrorist activities could directly affect the value of our properties through damage, destruction or loss.

Our portfolio is concentrated in large metropolitan areas, some of which have been or may be perceived to be subject to terrorist attacks. Many of our properties consist of high-rise buildings, which may also be subject to this actual or perceived threat. Our insurance may not cover some losses due to terrorism or may not be obtainable at commercially reasonable rates.

Our failure to qualify for the REIT Exemption to the SIFT Rules would have adverse consequences.

The Tax Act contains provisions which potentially impose tax on publicly traded trusts and partnerships that are specified investment flow through trusts or partnerships for purposes of the Tax Act (“SIFTs”) and their beneficiaries and partners (the “SIFT Rules”). There is an exemption from the application of the SIFT Rules for trusts that, throughout a taxation year, meet certain specified criteria relating to the nature of their income and investments (the “REIT Exemption”). Trusts that meet the REIT Exemption are excluded from the SIFT trust definition and, therefore, not subject to the SIFT Rules. The determination as to whether BOX qualifies for the REIT Exemption in a particular taxation year can only be made at the end of that taxation year. We expect that BOX will qualify for the REIT Exemption for purposes of the SIFT Rules throughout 2016. However, there can be no assurance in this regard and should BOX fail to qualify for the REIT Exemption, it would have adverse consequences on us, including a negative impact on our realizable cash flows.

We are subject to possible health and safety and environmental liabilities and other possible liabilities.

As an owner and manager of real property, we are subject to various laws relating to environmental matters. These laws could hold us liable for the costs of removal and remediation of certain hazardous substances or wastes present in our buildings, released or deposited on or in our properties or disposed of at other locations. These costs could be significant and would reduce cash available for our business. The failure to remove or remediate such substances could adversely affect our ability to sell our properties or our ability to borrow using real estate as collateral, and could potentially result in claims or other proceedings against us.

The ownership and operation of our assets carry varying degrees of inherent risk or liability related to worker health and safety and the environment, including the risk of government imposed orders to remedy unsafe conditions and potential civil liability. Compliance with health, safety and environmental standards and the requirements set out in our licenses, permits and other approvals are important to our business. We have incurred and will continue to incur significant capital and operating expenditures to comply with health, safety and environmental standards and to obtain and comply with licenses, permits and other approvals and to assess and manage potential liability exposure. Nevertheless, we may be unsuccessful in obtaining or maintaining an important license, permit or other approval or become subject to government orders, investigations, inquiries or other proceedings (including civil claims) relating to health, safety and environmental matters. The occurrence of any of these events or any changes, additions to, or more rigorous enforcement of, health, safety and environmental standards, licenses, permits or other approvals could have a significant impact on our operations and/or result in material expenditures. As a consequence, no assurance can be given that additional environmental and workers’ health and safety issues relating to presently known or unknown matters will not require unanticipated expenditures, or result in fines, penalties or other consequences (including changes to operations) material to our business and operations.

Other laws and regulations govern indoor and outdoor air quality including those that can require the abatement or removal of asbestos-containing materials in the event of damage, demolition, renovation or remodeling and also govern emissions of and exposure to asbestos fibers in the air. The maintenance and removal of lead paint and certain electrical equipment containing polychlorinated biphenyls (PCBs) and underground storage tanks are also regulated by federal and provincial laws. We are also subject to risks associated with human exposure to chemical or biological contaminants such as molds, pollens, viruses and bacteria which, above certain levels, can be alleged to be

| Brookfield Canada Office Properties | 2016 Annual Information Form

connected to allergic or other health effects and symptoms in susceptible individuals. We could incur fines for environmental compliance and be held liable for the costs of remedial action with respect to the foregoing regulated substances or tanks or related claims arising out of environmental contamination or human exposure to contamination at or from our properties.

Environmental laws and regulations can change rapidly and we may become subject to more stringent environmental laws and regulations in the future. Compliance with more stringent environmental laws and regulations could have an adverse effect on our business, financial condition or results of operations.

Regulations under building codes and human rights codes generally require that public buildings, including office buildings, be made accessible to disabled persons. Non-compliance could result in the imposition of fines by the government or the award of damages to private litigants. If we are required to make substantial alterations and capital expenditures in one or more of our properties to comply with these codes, it could adversely affect our financial condition and results of operations.

If we are unable to recover from a business disruption on a timely basis, our financial condition and results of operations would be adversely affected.

Our business is vulnerable to damages from any number of sources, including computer viruses, unauthorized access, energy blackouts, natural disasters, terrorism, war and telecommunication failures. Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business. If we are unable to recover from a business disruption on a timely basis, our financial condition and results of operations would be adversely affected. We may also incur additional costs to remedy damages caused by such disruptions.

Restrictive covenants in current and future indebtedness may limit management’s discretion with respect to certain business matters.

Instruments governing any of our indebtedness or indebtedness of our subsidiaries may contain restrictive covenants limiting our discretion with respect to certain business matters. These covenants could place significant restrictions on, among other things, our ability to create liens or other encumbrances, to pay distributions on our trust units or make certain other payments, investments, loans and guarantees and to sell or otherwise dispose of assets and merge or consolidate with another entity. These covenants could also require us to meet certain financial ratios and financial condition tests. A failure to comply with any such covenants could result in a default which, if not cured or waived, could result in a termination of our distributions and permit acceleration of the relevant indebtedness.

We have no corporate limitation on the amount of debt we can incur.

Our management and board of trustees have discretion under our Declaration of Trust to increase the amount of our outstanding debt. Our decisions with regard to the incurrence and maintenance of debt are based on available investment opportunities for which capital is required, the cost of debt in relation to such investment opportunities, whether secured or unsecured debt is available, the effect of additional debt on existing financial ratios and the maturity of the proposed new debt relative to maturities of existing debt. As a result, we could become more highly leveraged, resulting in increased debt service costs that could adversely affect our cash flows and operating results.

The departure of some or all of our professionals could prevent us from achieving our objectives.

We depend on the diligence, skill and business contacts of BPO’s professionals and the information and opportunities they generate during the normal course of their activities. Our future success depends on the continued service of these individuals, who are not obligated to remain employed by BPO. BPO has experienced departures of key professionals in the past and may do so in the future, and we cannot predict the impact that any such departures would have on its ability to achieve its objectives. The departure of a significant number of BPO’s professionals for any reason, or the failure to appoint qualified or effective successors in the event of such departures, could have a material adverse effect on our ability to achieve our objectives.

| Brookfield Canada Office Properties | 2016 Annual Information Form

If BOX were to be treated as a corporation for U.S. federal income tax purposes, the value of our trust units to U.S. unitholders might be adversely affected.

The value of our trust units to unitholders that are taxable in the United States will depend in part on the treatment of BOX as a partnership for U.S. federal income tax purposes. For BOX to be treated as a partnership for U.S. federal income tax purposes, (i) BOX must not be classified as a corporation under the U.S. federal entity classification rules, (ii) 90% or more of BOX’s gross income for every taxable year must consist of qualifying income, as defined in Section 7704 of the U.S. Internal Revenue Code (the “90% Income Test”), and (iii) BOX must not be required to register, if it were a U.S. corporation, as an investment company under the U.S. Investment Company Act of 1940 and related rules. BOX believes that it is more likely than not to be classified as a partnership for U.S. federal income tax purposes for each year that it is not classified as a corporation under Section 7704 of the U.S. Internal Revenue Code. Moreover, our management and board of trustees intend to manage the affairs of BOX so that BOX will not need to be registered as an investment company if it were a U.S. corporation and so that BOX will satisfy the 90% Income Test in each taxable year. However, BOX may not meet these requirements, or current law may change so as to cause, in either event, BOX to be treated as a corporation for U.S. federal income tax purposes. If BOX were treated as a corporation for U.S. federal income tax purposes, (i) the deemed conversion to corporate status could result in the recognition of gain to U.S. unitholders, if BOX were to have liabilities in excess of the tax basis of its assets; (ii) distributions to U.S. unitholders would be taxable as dividends to the extent of BOX’s earnings and profits; and (iii) BOX could be classified as a “passive foreign investment company” (a “PFIC”, as defined in the U.S. Internal Revenue Code), and such classification could have adverse tax consequences to U.S. unitholders with respect to distributions and gain recognized on the sale of our trust units. Each unitholder that is taxable in the United States should consult an independent tax adviser regarding the consequences to such unitholder of the classification of BOX as a corporation for U.S. federal income tax purposes.

U.S. tax-exempt organizations may face certain adverse U.S. tax consequences from owning our trust units.

Based on our organizational structure and the use of debt by our subsidiaries to acquire property, we expect to generate unrelated business taxable income (“UBTI”, as defined in the U.S. Internal Revenue Code) attributable to debt-financed property. As a result, a portion of our income allocated for U.S. federal income tax purposes to a tax-exempt organization is expected to constitute UBTI to such tax-exempt organization. The potential for income to be characterized as UBTI could make our trust units an unsuitable investment for any unitholder that is a tax-exempt organization for U.S. federal income tax purposes.

Tax gain or loss from the disposition of trust units could be more or less than expected.

If a sale of our trust units by a unitholder is taxable in the United States, such unitholder will recognize gain or loss for U.S. federal income tax purposes equal to the difference between the amount realized and such unitholder’s adjusted tax basis in those trust units. Prior distributions to such a unitholder in excess of the total net taxable income allocated to such a unitholder will have decreased such unitholder’s tax basis in our trust units. Therefore, such excess distributions will increase such unitholder’s taxable gain or decrease such unitholder’s taxable loss when our trust units are sold, and may result in a taxable gain even if the sale price is less than the original cost. Additionally, a portion of the amount realized, whether or not representing gain, could be characterized as ordinary income to such a unitholder.

The BOX structure involves application and interpretation of complex provisions of U.S. federal income tax law for which no clear precedent or authority may be available. The tax characterization of the BOX structure is also subject to potential legislative, judicial, or administrative change and differing interpretations, possibly on a retroactive basis.

The U.S. federal income tax treatment of our U.S. unitholders depends in some instances on determinations of fact and interpretations of complex provisions of U.S. federal income tax law for which no clear precedent or authority may be available. Our U.S. unitholders should be aware that the U.S. federal income tax rules, particularly those applicable to partnerships, are constantly under review by the Congressional tax writing committees and other persons involved in the legislative process, the U.S. Internal Revenue Service (the “IRS”), the U.S. Treasury Department and the courts, frequently resulting in changes which could adversely affect the value of our trust units

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or cause BOX to change the way it conducts its activities. In addition, our management and board of trustees have the discretion under our Declaration of Trust to modify our Declaration of Trust from time to time, without the consent of our unitholders, to address such changes. Any such modifications could have a material adverse impact on our unitholders.

We do not intend to provide certain U.S. tax information to unitholders that are taxable in the United States.

BOX does not intend to provide U.S. tax information (including IRS Schedule K-1 information) to determine a unitholder’s allocable share of BOX’s income, gain, losses, deductions, and credits for U.S. federal income tax purposes. The failure to receive such U.S. tax information could materially and adversely affect a U.S. unitholder’s ability to timely and accurately file a U.S. federal income tax return. In addition, the IRS may require a U.S. unitholder to render statements or provide the information necessary to verify the accuracy of such unitholder’s reporting of its allocable share of our income, gain, loss, deduction, or credit. Each unitholder that is taxable in the United States should consult an independent tax adviser regarding the tax return filing and other consequences to such unitholder in the absence of such U.S. tax information.

The U.S. Congress has considered legislation that could, if enacted, adversely affect our qualification as a partnership for U.S. federal tax purposes under the publicly traded partnership rules. If this or similar legislation were to be enacted and to apply to BOX, then the value of our trust units to U.S. unitholders might be adversely affected.

Over the past several years, a number of legislative proposals have been considered by the U.S. Congress which could have had adverse tax consequences for BOX and its U.S. unitholders. One such proposal would, among other things, prevent BOX from qualifying for treatment as a partnership for U.S. federal tax purposes for taxable years beginning after 2016. If such a proposal were to be enacted into law, or any other change in the tax laws, rules, regulations, or interpretations were to prevent BOX from qualifying for treatment as a partnership for U.S. federal tax purposes under the publicly traded partnership rules, then BOX could be classified as a corporation for U.S. federal tax purposes. Such classification could have adverse tax consequences to U.S. unitholders, as described in the preceding risk factors. Each unitholder that is taxable in the United States should consult an independent tax adviser as to the potential effect of any proposed or future legislation on an investment in BOX.

Our unitholders that are taxable in the United States may be viewed as holding an interest in an entity classified as a PFIC for U.S. federal income tax purposes.

Unitholders that are taxable in the United States may face adverse U.S. tax consequences arising from the ownership of an interest in a PFIC. In general, gain realized by a U.S. unitholder from the sale of stock of a PFIC is subject to tax at ordinary income rates, and an interest charge generally applies. Management believes that BOX is more likely than not to be classified as a partnership for U.S. federal income tax purposes for each year that it is not classified as a corporation under Section 7704 of the U.S. Internal Revenue Code and we currently believe that a U.S. unitholder is unlikely to be regarded as owning an interest in a PFIC solely by reason of owning our trust units for the taxable year ending December 31, 2015. If, contrary to our expectation, BOX were classified as a corporation for U.S. federal income tax purposes, then we believe that BOX would also be classified as a PFIC, based on our organizational structure and our expected income and assets. Each unitholder that is taxable in the United States should consult an independent tax adviser regarding the implications of the PFIC rules for an investment in our trust units.

Because real estate investments are illiquid, we may not be able to sell properties when appropriate or desired.

Large and high quality office properties like the ones that we own can be hard to sell, especially if local market conditions are poor. Such illiquidity could limit our ability to vary our portfolio promptly in response to changing economic or investment conditions. Additionally, financial difficulties of other property owners resulting in distressed sales could depress real estate values in the markets in which we operate in times of illiquidity. These restrictions could reduce our ability to respond to changes in the performance of our investments and could adversely affect our financial condition and results of operations.

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We face risks associated with property acquisitions.

Competition from other well-capitalized real estate investors, including both public REITs and institutional investment funds, may significantly increase the purchase price of, or prevent us from acquiring, a desired property. Acquisition agreements will typically contain conditions to closing, including completion of due diligence to our satisfaction or other conditions that are not within our control, which may not be satisfied. Acquired properties may be located in new markets where we may have limited knowledge and understanding of the local economy, an absence of business relationships in the area or unfamiliarity with local government and applicable laws and regulations. We may be unable to finance acquisitions on favourable terms, or newly acquired properties may fail to perform as expected. We may underestimate the costs necessary to bring an acquired property up to standards established for its intended market position or may be unable to quickly and efficiently integrate new acquisitions into our existing operations. We may also acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities. Each of these factors could have an adverse effect on our results of operations and financial condition.

We do not have sole control over the properties that we own with co-venturers, partners, fund investors or co-tenants or over the revenues and certain decisions associated with those properties, which may limit our flexibility with respect to these investments.

We participate in joint ventures, partnerships, funds and co-tenancies affecting many of our properties. Such investments involve risks not present were a third party not involved, including the possibility that our co-venturers, partners, fund investors or co-tenants might become bankrupt or otherwise fail to fund their share of required capital contributions.

Additionally, our co-venturers, partners, fund investors or co-tenants might at any time have economic or other business interests or goals which are inconsistent with our business interests or goals. In addition, we do not have sole control of certain major decisions relating to these properties, including decisions relating to: the sale of the properties; refinancing; timing and amount of distributions of cash from such properties to us; and capital improvements.

In some instances, although we are the property manager for a joint venture, the joint venture retains joint approval rights over various material matters such as the budget for the property, specific leases and our leasing plan. Moreover, in some of our property management arrangements the other venturer can terminate the property management agreement in limited circumstances relating to enforcement of the property managers’ obligations. In addition, the sale or transfer of interests in some of our joint ventures and partnerships is subject to rights of first refusal or first offer and some joint venture and partnership agreements provide for buy-sell or similar arrangements. Such rights may be triggered at a time when we may not want to sell but may be forced to do so because we may not have the financial resources at that time to purchase the other party’s interest. Such rights may also inhibit our ability to sell our interest in a property or a joint venture or partnership within our desired time frame or on any other desired basis.

We are highly dependent on BPO.

We do not have any employees and depend on the management and administration services provided by BPO. The personnel and support staff that provide services to us are not required to have our management and administration as their primary responsibility or to act exclusively for us. Any failure to effectively manage our operations or to implement our strategy could have a material adverse effect on our operating results. BPO may own or acquire properties for its own account which may be suitable for us or compete with us for tenants and may provide management services to third parties in connection with properties that may compete with us for tenants.

We negotiated our management agreements with BPO in the context of the Transaction. Although we are of the view that the management agreements have been set at market terms and align the interests of BPO with those of other unitholders, certain of the terms, including those relating to termination rights, BPO’s ability to engage in outside activities, including activities that may compete with us and our activities and limitations on liability and indemnification may be less favourable than otherwise might have resulted if the negotiations had involved unrelated parties.

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BPY holds a significant number of our units.

BPY and its affiliates own an aggregate equity interest in BOX of approximately 83%, approximately 57% of which is held indirectly through BPO. For so long as BPY maintains a controlling interest in BOX, it will generally be able to approve matters submitted to a majority vote of the unitholders without the consent of other unitholders, including, among other things, the election of the trustees. BPY will also be able to exercise a controlling influence over any change of control of BOX. As a result of its controlling interest and role as manager, BPO will be able to exercise a controlling influence over the business and affairs, the selection of senior management and the acquisition or disposition of our assets and our access to capital markets. The effect of BPY’s control may limit the price that investors are willing to pay for our trust units. In addition, a sale of trust units by BPY or the perception of the market that a sale may occur may adversely affect the market price of our trust units.

Our relationship with BPY and BPO may give rise to conflicts of interest.

Our relationship with BPY and BPO may give rise to conflicts of interest between us and our unitholders, on the one hand, and BPY and BPO, on the other hand. In certain instances, the interests of BPY and BPO may differ from the our interests and the interest of our unitholders, including with respect to the types of acquisitions made, the timing and amount of distributions, the use of leverage when making acquisitions and the appointment of outside advisors and service providers.

We may suffer reputational harm or a significant loss resulting from fraud, other illegal acts or inadequate or failed internal processes or systems.

Instances of bribery, fraud, accounting irregularities and other improper, illegal or corrupt practices can be difficult to detect and we may suffer a significant loss resulting from fraud, other illegal acts or inadequate or failed internal processes or systems. We operate in different markets and rely on our employees to follow our policies and processes as well as applicable laws in their activities. Risk of illegal acts or failed systems is managed through our infrastructure, controls, systems, policies and people, complemented by central groups focusing on enterprise-wide management of specific operational risks such as fraud, trading, outsourcing, and business disruption, as well as people and systems risks. Failure to manage these risks can result in direct or indirect financial loss, reputational impact, regulatory censure or failure in the management of other risks such as credit or market risk.

There is an increasing global focus on the implementation and enforcement of anti-bribery and corruption legislation, and this focus has heightened the risks that we face in this area. We are subject to a number of laws and regulations governing payments and contributions to public officials or other third parties, including the Canadian Corruption of Foreign Public Officials Act. Different laws that are applicable to us may contain conflicting provisions, making our compliance more difficult. The policies and procedures we have implemented to protect against non-compliance with anti-bribery and corruption legislation may be inadequate. If we fail to comply with these laws and regulations, we could be exposed to claims for damages, financial penalties, reputational harm, incarceration of our employees, restrictions on our operations and other liabilities, which could negatively affect our operating results and financial condition. In addition, we may be subject to successor liability for violations under these laws or other acts of bribery committed by companies in which we or our funds invest.

We participate in transactions and make tax calculations for which the ultimate tax determination may be uncertain.

We participate in many transactions and make tax calculations during the course of our business for which the ultimate tax determination is uncertain. While we believe we maintain provisions for uncertain tax positions that appropriately reflect our risk, these provisions are made using estimates of the amounts expected to be paid based on a qualitative assessment of several factors. It is possible that liabilities associated with one or more transactions may exceed our provisions due to audits by, or litigation with, relevant taxing authorities which may materially affect our financial condition and results of operations.

We may be subject to litigation.

In the ordinary course of our business, we may be subject to litigation from time to time. The outcome of any such proceedings may materially adversely affect us and may continue without resolution for long periods of time. Any litigation may consume substantial amounts of our management’s time and attention, and that time and the devotion of these resources to litigation may, at times, be disproportionate to the amounts at stake in the litigation.

| Brookfield Canada Office Properties | 2016 Annual Information Form

The acquisition, ownership and disposition of real property expose us to certain litigation risks which could result in losses, some of which may be material. Litigation may be commenced with respect to a property we have acquired in relation to activities that took place prior to our acquisition of such property. In addition, at the time of disposition of an individual property, a potential buyer who is passed over in favour of another as part of our efforts to maximize sale proceeds may claim that it should have been afforded the opportunity to purchase the asset or alternatively that such buyer should be awarded due diligence expenses incurred or statutory damages for misrepresentation relating to disclosures made. Similarly, successful buyers may later sue us for losses associated with latent defects or other problems not uncovered in due diligence. We may also be exposed to litigation resulting from the activities of our tenants or their customers.

Negative publicity could damage our reputation and business.

Our ability to attract and retain tenants, investors and employees is impacted by our reputation and the reputation of our affiliates and negative publicity about us or our affiliates can expose us to litigation and regulatory action, damage our reputation, adversely affect our ability to attract and retain tenants and employees, and divert management’s attention from day-to-day operations. Significant harm to our reputation can also arise from employee misconduct, unethical behavior, environmental matters, litigation or regulatory outcomes, failing to deliver minimum or required standards of service and quality, compliance failures, unintended disclosure of confidential information and the activities of our tenants and counterparties, including vendors.

Legislative or regulatory matters could adversely affect our business.

There are many laws and governmental rules and regulations that apply to us and our businesses, including, among others, securities, ethics and privacy laws and regulations. Changes in these laws, rules and regulations, or their interpretation by agencies or the courts, could occur. Non-compliance with applicable laws or rules or regulations, or our inability to keep up with, or adapt to, an ever changing, complex regulatory environment, could result in civil liability, criminal liability and/or sanctions against us, including fines and censures, injunctive relief, suspension or expulsion from a particular jurisdiction or market or the revocation of licenses or charters, any of which could adversely affect our financial condition and results of operations.

Climate change may adversely impact our operations and markets.

There is growing concern from members of the scientific community and the general public that an increase in global average temperatures due to emissions of greenhouse gases and other human activities have or will cause significant changes in weather patterns and increase the frequency and severity of climate stress events. Climate change, including the impact of global warming, creates physical and financial risk. Physical risks from climate change include an increase in sea level and changes in weather conditions, such as an increase in intense precipitation and extreme heat events, as well as tropical and non-tropical storms.

We own buildings in locations that may be particularly susceptible to climate stress events or adverse localized effects of climate change, such as sea-level rise and increased storm frequency or intensity. The occurrence of one or more natural disasters, such as hurricanes, fires, floods, and earthquakes (whether or not caused by climate change), could cause considerable damage to our properties, disrupt our operations and negatively impact our financial performance. To the extent these events result in significant damage to or closure of one or more of our buildings, our operations and financial performance could be adversely affected through lost tenants and an inability to lease or re-lease the space. In addition, these events could result in significant expenses to restore or remediate a property, increases in fuel (or other energy) prices or a fuel shortage and increases in the costs of insurance if they result in significant loss of property or other insurable damage.

The expiration of long-term ground leases could adversely affect our results of operations.

Six of our properties are subject to long-term ground leases and similar arrangements in which the underlying land is owned by a third party and leased to us and any co-venturers or partners. In addition, the ground leases may be subject to periodic rate resets which may fluctuate and may result in significant rental rate adjustments. Under the

| Brookfield Canada Office Properties | 2016 Annual Information Form

terms of a typical ground lease, we and any co-venturers or partners pay rent for the use of the land and are generally responsible for all costs and expenses associated with the building and improvements. Unless the lease term is extended, the land, together with all improvements, will revert to the owner of the land upon the expiration of the lease term. A default under the terms of a ground lease could also result in a loss of the property subject to such ground lease, should we not rectify the default in a reasonable period of time.

The following is a summary of our ground leases:

Building	City	Expiration	Notes
First Canadian Place	Toronto	2023	We own a 12.5% freehold interest and a 25% leasehold interest in the property.
105 Adelaide Street West	Toronto	2043⁽¹⁾	We own a 100% leasehold interest and a 12.5% freehold interest in the property.
Place de Ville I	Ottawa	2065	We own a 25% leasehold interest in the property.
Hudson’s Bay Centre	Toronto	2070	There is one ground lease that covers a portion of this property (approximately 63% by area). We own a 100% leasehold interest in the leasehold parcel and a 100% freehold interest in two freehold parcels.
2 Queen Street East	Toronto	2099	Only a small portion of this property is subject to a ground lease (approximately 16.5% by area). We own a 25% leasehold interest in the leasehold parcel and a 25% interest in the freehold parcel.
Exchange Tower	Toronto	2115⁽²⁾	There is one effective ground lease for a portion of this property (approximately 50% by area). We own a 50% subleasehold interest in the subleasehold parcel and a 50% interest in two freehold parcels.
Notes:
(1) Ground lessee has the option to extend the ground lease for an additional 30 years to 2073.
(2) Ground sublessee has 73 consecutive options to extend the ground sublease, each for a term of 10 years and 6 months, to November 30, 2881.

We are dependent on Brookfield Office Properties Canada LP.

We are dependent on the business of Brookfield Office Properties Canada LP through our ownership of Class A limited partnership units of Brookfield Office Properties Canada LP (“Class A LP Units”). The cash distributions to holders of our trust units are dependent on the ability of Brookfield Office Properties Canada LP to pay distributions on the Class A LP Units. The ability of Brookfield Office Properties Canada LP to pay distributions or make other payments or advances to us may be subject to contractual restrictions contained in any instruments governing the indebtedness of Brookfield Office Properties Canada LP or its subsidiaries, and is also dependent on the ability of Brookfield Office Properties Canada LP’s subsidiaries to pay distributions or make other payments or advances to Brookfield Office Properties Canada LP.

The price of our trust units may be unpredictable and volatile.

The prices at which our trust units trade cannot be predicted. The market price of our trust units could be subject to significant fluctuations in response to variations in quarterly operating results, distributions and other factors beyond our control. In addition, the securities markets have experienced significant price and volume fluctuations from time to time in recent years that often have been unrelated or disproportionate to the operating performance of particular issuers. These broad fluctuations may adversely affect the market price of our trust units. In addition, our perceived creditworthiness may affect the market price or value and the liquidity of our trust units.

Our trust units are not deposits and do not have certain rights that are afforded to holders of common shares under corporate law statutes.

Our trust units are not “deposits” within the meaning of the Canada Deposit Insurance Corporation Act and are not insured under the provisions of that Act or any other legislation. Furthermore, BOX is not a trust company and, accordingly, is not registered under any trust and loan company legislation as it does not carry on or intend to carry on the business of a trust company. In addition, although it is intended that BOX qualifies as a “mutual fund trust” pursuant to the Tax Act, it is not a “mutual fund” as defined by applicable securities laws.

Holders of trust units do not have the statutory rights normally associated with ownership of shares of a corporation including, for example, the right to bring “oppression” or “derivative” actions or the right to dissent and to be paid the fair value of their trust units on the occurrence of certain transactions.

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Our cash distributions are not guaranteed.

The declaration and payment of distributions on our trust units is at the discretion of our trustees, who support a stable and consistent distribution policy. The amount of distributions paid in respect of our trust units depends upon numerous factors, all of which are susceptible to a number of risks and other factors beyond our control. In addition, the composition of cash distributions for tax purposes may change over time and may affect the after tax return for holders of trust units.

Our ability to make distributions or make other payments or advances is subject to applicable laws and contractual restrictions contained in the instruments governing our indebtedness. The degree to which we are leveraged could have important consequences to the holders of our trust units, including: (a) that our ability to obtain additional financing in the future for working capital, capital expenditures or acquisitions may be limited; (b) that a significant portion of our cash flow from operations may be dedicated to the payment of the principal of, and interest on, our indebtedness, thereby reducing funds available for future distributions and causing taxable income for holders of trust units to exceed cash distributions; (c) that certain of our borrowings will be at variable rates of interest, which exposes us to the risk of increased interest rates; and (d) that we may be more vulnerable to economic downturns and be limited in our ability to withstand competitive pressures.

Our trust units are structurally subordinated to our obligations to certain of our creditors.

In the event of our bankruptcy, liquidation or reorganization, holders of certain of our indebtedness and certain trade creditors will generally be entitled to payment of their claims from our assets before any assets are made available for distribution to the holders of our trust units. Our trust units are effectively subordinated to most of the indebtedness and our other liabilities. We are not limited in our ability to incur additional secured or unsecured indebtedness.

Capital expenditures of Brookfield Office Properties Canada LP directly affect cash available for distribution.

The timing and amount of capital expenditures by Brookfield Office Properties Canada LP directly affect the amount of cash available for distribution to holders of our trust units. Distributions to holders may be reduced, or even eliminated, at times when our trustees deem it necessary to make significant capital or other expenditures.

Our distributions may be dependent upon the ability of Brookfield Office Properties Canada LP to fund a portion of its capital expenditures and working capital with cash generated from operations. We may be required to reduce distributions or sell additional trust units in order to accommodate these items. There can be no assurance that sufficient capital will be available on acceptable terms to us for necessary or desirable capital expenditures or that the amount required will be the same as currently estimated.

Our Declaration of Trust limits ownership of our trust units by Non-Residents, which may limit liquidity of our trust units.

The Declaration of Trust imposes various restrictions on unitholders. Persons who are not an individual or corporation who is a resident of Canada nor a Canadian partnership for the purposes of the Tax Act (both, “Non-Residents”) are prohibited from collectively beneficially owning more than 49% of our outstanding trust units on a basic or fully diluted basis. These restrictions may limit (or inhibit the exercise of) the rights of certain persons, including Non-Residents and partnerships, to acquire trust units, to exercise their rights as unitholders and to initiate and complete take-over bids in respect of our trust units. As a result, these restrictions may limit the demand for trust units from certain unitholders and other investors and thereby adversely affect the liquidity and market value of our trust units held by the public.

We may issue additional trust units, which may dilute the interests of our existing unitholders.

The Declaration of Trust authorizes us to issue an unlimited number of trust units for the consideration and on such terms and conditions as are established by our trustees without any approval of our unitholders. Unitholders have no pre-emptive rights in connection with such further issues except as set out in the Exchange and Support Agreement (described under “Material Contracts – Exchange and Support Agreement”). Any further issuance of trust units will dilute the interests of our existing unitholders.

In addition, subject to certain restrictions, Brookfield Office Properties Canada LP is permitted to issue additional partnership units for any consideration and on any terms and conditions. Any further issuance of partnership units

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will dilute the indirect interest of existing holders of trust units in Brookfield Office Properties Canada LP and any further issuance of Class B LP Units will dilute the interests of existing holders of trust units.

Future sales of our trust units could adversely affect the market price of the trust units.

The sale of a substantial number of trust units in the public market or otherwise by BPO or its affiliates or other significant holders of trust units could adversely affect the prevailing market price of our trust units and could impair our ability to raise additional capital through an offering of our equity securities. If BPO or its affiliates or other significant holders of trust units sell a large number of trust units over a short period of time, or if investors anticipate large sales of trust units over a short period of time, this could materially affect the trading price of our trust units.

Liability of unitholders may not be limited.

The Declaration of Trust provides that no unitholder is subject to any liability whatsoever to any person in connection with holding trust units. The Trust Beneficiaries’ Liability Act (Ontario) provides that unitholders are not liable, as beneficiaries of a trust, for any of our or our trustees’ acts, defaults, obligations or liabilities. That statute has not yet been judicially considered and it is possible that reliance on that act by a unitholder could be successfully challenged on jurisdictional or other grounds.

Our trust units may cease to be qualified investments under the Tax Act and BOX may cease to be a mutual fund trust under the Tax Act.

There can be no assurance that our trust units will continue to be qualified investments under the Tax Act for trusts governed by registered retirement savings plans, registered retirement income funds, deferred profit sharing plans, registered education savings plans, registered disability savings plans and tax free savings accounts, each as defined in the Tax Act (collectively “Plans”). The Tax Act imposes penalties or other tax consequences for the acquisition or holding of non-qualified investments for Plans.

The Tax Act contains restrictions relating to the activities and the investments permitted by a mutual fund trust. Currently, a trust will not be considered to be a mutual fund trust if it is established or maintained primarily for the benefit of Non-Residents unless restrictions in respect of its assets are followed. There are restrictions on the ownership of trust units by Non-Residents which are contained in the Declaration of Trust. The Tax Act also contains restrictions on investments and income which must be complied with by closed-end trusts.

We intend to ensure that BOX satisfies the conditions to qualify as a closed-end mutual fund trust by complying with the restrictions in the Tax Act as they are interpreted and applied by the Canada Revenue Agency (the “CRA”). No assurance can be given that BOX will be able to comply with these restrictions at all times. If BOX ceases to qualify as a mutual fund trust under the Tax Act, the income tax considerations could be materially and adversely different in certain respects. There can be no assurance that Canadian federal income tax laws respecting mutual fund trusts, or the ways in which these rules are interpreted and applied by the CRA, may not be changed in a manner which adversely affect BOX and holders of trust units.

We are not, and do not intend to become, regulated as an investment company under the U.S. Investment Company Act of 1940 (and similar legislation in other jurisdictions) and if we were deemed an “investment company” under the U.S. Investment Company Act of 1940, applicable restrictions would make it impractical for us to operate as contemplated.

The U.S. Investment Company Act of 1940 and the rules thereunder (and similar legislation in other jurisdictions) provide certain protections to investors and impose certain restrictions on companies that are registered as investment companies. Among other things, such rules limit or prohibit transactions with affiliates, impose limitations on the issuance of debt and equity securities and impose certain governance requirements. We have not been and do not intend to become regulated as an investment company and we intend to conduct our activities so we will not be deemed to be an investment company under the U.S. Investment Company Act of 1940 (and similar legislation in other jurisdictions). In order to ensure that we are not deemed to be an investment company, we may be required to materially restrict or limit the scope of our operations or plans, we will be limited in the types of acquisitions that we may make and we may need to modify our organizational structure or dispose of assets that we would not otherwise dispose of. Moreover, if anything were to happen which would potentially cause us to be deemed an investment company under the U.S. Investment Company Act of 1940, it would be impractical for us to operate as intended, agreements and arrangements between and among us and BPO would be impaired and our business, financial condition and results of operations would be materially adversely affected. Accordingly, we would

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be required to take extraordinary steps to address the situation, such as the amendment or termination of the Management Agreements (as defined below), the restructuring of the Trust and our subsidiary entities, the amendment of our Declaration of Trust or the termination of our trust, any of which would materially adversely affect the value of our trust units. In addition, if we were deemed to be an investment company under the U.S. Investment Company Act of 1940, we would be taxable as a corporation for U.S. federal income tax purposes, and such treatment would materially adversely affect the value of our trust units.

DISTRIBUTIONS AND DISTRIBUTION POLICY

The declaration and payment of distributions on our trust units is at the discretion of our trustees, who support a stable and consistent distribution policy.

Our current policy is to pay distributions on our trust units monthly and to assess the appropriateness of a change in the amount of our distributions in accordance with changes in reported cash flow. In any event, we intend, subject to our trustees’ discretion, to distribute to our unitholders a sufficient amount of distributions so that we will not have any liability for tax under Part I of the Tax Act in any taxation year.

We have implemented a distribution reinvestment plan which allows certain Canadian resident unitholders to elect to have their cash distributions reinvested in additional trust units. No brokerage commissions or service charges are payable in connection with the purchase of trust units under the distribution reinvestment plan and we pay all administrative costs. The automatic reinvestment of distributions under the distribution reinvestment plan does not relieve holders of trust units of any income tax applicable to such distributions.

Historical Distributions on BOX Trust Units

A complete record of distributions per unit paid on our trust units for the past three years is as follows:

	2015	2014	2013
Per BOX trust unit	$1.24	$1.21	$1.17

DESCRIPTION OF BROOKFIELD CANADA OFFICE PROPERTIES

The following is a summary of the material terms attached to our trust units and certain provisions included in our Declaration of Trust. This summary is qualified in its entirety by reference to all of the provisions of the Declaration of Trust, which is available on SEDAR at www.sedar.com.

Authorized Capital and Outstanding Securities

The Declaration of Trust authorizes the issuance of an unlimited number of two classes of units: “trust units” and “special voting units”. Special voting units are only issued in tandem with the issuance of Class B LP Units. As of March 14, 2016, we had a total of 26,257,667 trust units outstanding and 67,088,022 special voting units outstanding.

The trust units are not “deposits” within the meaning of the Canada Deposit Insurance Corporation Act and are not insured under the provisions of such Act or any other legislation. Furthermore, BOX is not a trust company and, accordingly, is not registered under any trust and loan company legislation as it does not carry on nor does it intend to carry on the business of a trust company.

Trust Units

Each trust unit is transferable and represents an equal, undivided beneficial interest in BOX and any of our distributions, whether of net income, net realized capital gains or other amounts, and, in the event of our termination or winding-up, in our net assets remaining after satisfaction of all liabilities. All trust units rank among themselves equally and rateably without discrimination, preference or priority. Each trust unit entitles the holder thereof to one vote at all meetings of unitholders or in respect of any written resolution of unitholders.

Holders of our trust units are entitled to receive our distributions (whether of net income, net realized capital gains or other amounts) if, as and when declared by our trustees. Upon our termination or winding-up, holders of our trust units will participate equally with respect to the distribution of our remaining assets after payment of all of our liabilities. Such distribution may be made in cash, as a distribution in kind, or both, all as our trustees in their sole

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discretion may determine. Our trust units have no conversion, retraction or redemption rights. No person is entitled, as a matter of right, to any pre-emptive right to subscribe for or acquire any trust unit, except as set out in the Exchange and Support Agreement, or as we otherwise agree pursuant to a binding agreement in writing.

Special Voting Units

Special voting units are only issued in tandem with Class B LP Units and are not transferable separately from the Class B LP Units to which they relate and upon any transfer of Class B LP Units, such special voting units will automatically be transferred to the transferee of the Class B LP Units. As Class B LP Units are exchanged for trust units or purchased for cancellation by Brookfield Office Properties Canada LP, the corresponding special voting units will be cancelled for no consideration.

Each special voting unit entitles the holder thereof to one vote at all meetings of unitholders or in respect of any resolution in writing of unitholders. Except for the right to attend and vote at meetings of our unitholders or in respect of written resolutions of our unitholders, special voting units do not confer upon the holders thereof any other rights. A special voting unit does not entitle its holder to any economic interest in BOX, or to any interest or share in BOX, any of our distributions (whether of net income, net realized capital gains or other amounts) or in any of our net assets in the event of our termination or winding-up.

Issuance of Trust Units

Trust units or rights to acquire trust units or other securities may be created, issued and sold at such times, to such persons, for such consideration and on such terms and conditions as our trustees determine, including pursuant to a rights plan, distribution reinvestment plan, purchase plan or any incentive option or other compensation plan. Trust units will be issued only when fully paid in money, property or past services, and they will not be subject to future calls or assessments, provided that trust units may be issued and sold on an installment basis and we may take security over any such trust units so issued. Where our trustees determine that we do not have available cash in an amount sufficient to pay the full amount of any distribution, the payment may, at the option of our trustees, include or consist entirely of the issuance of additional trust units having a fair market value determined by the trustees equal to the difference between the amount of the distribution and the amount of cash that has been determined by our trustees to be available for the payment of such distribution. These additional trust units will be issued pursuant to applicable exemptions under applicable securities laws, discretionary exemptions granted by applicable securities regulatory authorities or a prospectus or similar filing. The Declaration of Trust also provides that unless our trustees determine otherwise, and subject to all necessary regulatory approvals, immediately after any pro rata distribution of additional trust units to all holders of our trust units as described above, the number of outstanding trust units will automatically be consolidated such that each unitholder will hold after the consolidation the same number of trust units as the unitholder held before the distribution of such additional trust units. In such circumstances, each certificate representing a number of trust units prior to the distribution of additional trust units will be deemed to represent the same number of trust units after the distribution of such additional trust units and the consolidation. If tax is required to be withheld from a unitholder’s share of the distribution, the consolidation will not result in such unitholder holding the same number of trust units. Each such unitholder will be required to surrender the certificates, if any, representing that unitholder’s original trust units in exchange for a certificate representing that unitholder’s post consolidation trust units.

The trustees may refuse to allow the issuance of or to register the transfer of any of our trust units where such issuance or transfer would, in their opinion, adversely affect the treatment of BOX under applicable Canadian tax laws or its qualification to carry on any relevant business. See “– Limitations on Non-Resident Ownership of Trust Units”.

Repurchase of Trust Units

We may, from time to time, purchase all or a portion of our trust units for cancellation at a price per trust unit and on a basis determined by our trustees in accordance with applicable securities laws and stock exchange rules.

Limitations on Non-Resident Ownership of Trust Units

In order for BOX to maintain its status as a mutual fund trust under the Tax Act, it must not be established or maintained primarily for the benefit of Non-Residents. Accordingly, the Declaration of Trust provides that at no time may Non-Residents be the beneficial owners of more than 49% of our trust units on a basic or fully-diluted basis and we have informed our transfer agent and registrar of this restriction. Our trustees may require a registered holder of

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trust units to provide them with a declaration as to the jurisdictions in which beneficial owners of our trust units registered in such holder’s name are resident and as to whether such beneficial owners are Non-Residents (or in the case of a partnership, whether the partnership is Non-Resident). If our trustees become aware, as a result of such declarations as to beneficial ownership or as a result of any other investigations, that the beneficial owners of more than 49% of our trust units on a basic or fully-diluted basis are, or may be, Non-Residents or that such a situation is imminent, our trustees may make a public announcement thereof and will not accept a subscription for trust units from or issue or register a transfer of trust units to a person unless the person provides a declaration in form and content satisfactory to our trustees that the person is not a Non-Resident and does not hold such trust units for the benefit of Non-Residents. If, notwithstanding the foregoing, the trustees determine that more than 49% of our trust units on a basic or fully-diluted basis are held by Non-Residents, our trustees may send or cause to be sent a notice to such Non-Resident holders of our trust units chosen in inverse order to the order of acquisition or registration or in such other manner as our trustees may consider equitable and practicable, requiring them to sell their trust units or a portion thereof within a specified period of not more than 30 days. If the unitholders receiving such notice have not sold the specified number of trust units or provided the trustees with satisfactory evidence that they are not Non-Residents within such period, the trustees may on behalf of such persons sell or cause to be sold such trust units and, in the interim, will suspend the voting and distribution rights attached to such trust units. Upon such sale, the affected holders will cease to be holders of the relevant trust units and their rights will be limited to receiving the net proceeds of sale upon surrender of the certificates, if any, representing such trust units.

Investment Restrictions and Guidelines and Operating Plan

Our investment and operating activities are limited because our operating business is carried out by Brookfield Office Properties Canada LP. The investment restrictions and guidelines and operating policies that apply to Brookfield Office Properties Canada LP are set out under the heading “Description of Brookfield Office Properties Canada LP – Investment Restrictions and Guidelines and Operating Policies”.

Investment Restrictions and Guidelines of BOX

The Declaration of Trust provides that our assets may be invested, directly or indirectly, only in accordance with the following investment restrictions and guidelines:

(i)

subject to (iii), we may invest, directly or indirectly, in:

interests (including fee ownership and leasehold interest) in income producing real property; and

corporations, trusts, partnerships or other persons that principally have interests (including the ownership of leasehold interests) in income producing real property;

(ii)

except for temporary investments held in cash, deposits with a Canadian chartered bank or trust company registered under the laws of Canada or of a province of Canada, short term government debt securities, or receivables under installment receipt agreements or money market instruments of, or guaranteed by, a Canadian bank listed on Schedule I to the Bank Act (Canada) maturing prior to one year from the date of issue or except as permitted pursuant to (i), we may not hold securities other than securities of Brookfield Office Properties Canada LP, BOPC GP Inc., an entity wholly-owned by Brookfield Office Properties Canada LP and/or a subsidiary formed and operated solely for the purpose of holding a particular real property or real properties or managing real property or real properties or some or all of the receivables under installment receipt agreements;

(iii)

we will not make or permit a subsidiary to make any investment, take any action or omit to take any action that would result in:

BOX failing or ceasing to qualify as a “unit trust”, “mutual fund trust” or “real estate investment trust” within the meaning of the Tax Act; or

our trust units being disqualified for investment by Plans; and

(iv)

we may, directly or indirectly, invest in such other assets and conduct such other activities as are consistent with our other investment restrictions and guidelines.

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Operating Plan of Brookfield Canada Office Properties

The Declaration of Trust requires our trustees to establish an operating plan relating to our operations and affairs (which plan is required to comply with the guidelines and policies contained in the Declaration of Trust, including the investment restrictions and guidelines) and to review such operating plan from time to time and modify the same to the extent that the trustees determine that to do so would be prudent and in our best interests and those of our unitholders. Without limiting the generality of the foregoing, the operating plan adopted by our trustees from time to time may include guidelines for valuations, property appraisals, level and type of insurance coverage, means to ensure compliance with environmental legislation and regulations pertaining to our assets and means to ensure compliance with all laws, regulations and policies applicable to our assets or to us.

Trustees

The Declaration of Trust provides that we will have a minimum of five and a maximum of 12 trustees, the majority of whom must be individuals who are residents of Canada for purposes of the Tax Act (“Resident Canadians”). The number of trustees may be increased or decreased within such limits from time to time by our unitholders by ordinary resolution or by our trustees, provided that the trustees may not, between meetings of our unitholders, appoint an additional trustee if, after such appointment, the total number of trustees would be greater than one and one-third times the number of trustees in office immediately following our previous annual meeting of unitholders. If at any time a majority of trustees are Non-Residents because of the death, resignation, adjudicated incompetence, removal or change in circumstances of any trustee who was a Resident Canadian, the remaining trustees, whether or not they constitute a quorum, will appoint a sufficient number of Resident Canadian trustees to comply with the requirement that a majority of our trustees will be at all times Resident Canadians.

The Declaration of Trust provides that, subject to its terms and conditions, our trustees have, without further authorization and free from any control or direction on the part of our unitholders, full, absolute and exclusive power, control and authority over our assets and affairs to the same extent as if the trustees were the sole and absolute beneficial owners of our assets, to do all acts and things as in their sole and absolute judgment and discretion are necessary or incidental to, or desirable for, carrying out any of our purposes or conducting our affairs.

Trustees are elected at each annual meeting of unitholders to hold office for a term expiring at the close of the next annual meeting. The Declaration of Trust provides that a trustee may resign at any time upon written notice to the Chair of the board of trustees or, if there is no Chair, our President. A trustee may be removed at any time with or without cause by an ordinary resolution of our unitholders at a meeting of unitholders or by the written consent of unitholders holding in the aggregate not less than a majority of our outstanding units or with cause by a resolution passed by two-thirds of the other trustees.

The Declaration of Trust provides that our trustees will act honestly and in good faith with a view to our best interests and those of our unitholders and, in connection with that duty, will exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. A trustee will not be liable in carrying out his or her duties under the Declaration of Trust except in cases where a trustee fails to act honestly and in good faith with a view to our best interests and those of our unitholders or to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

Committees

The Declaration of Trust requires that our trustees appoint a Governance and Nominating Committee and an Audit Committee. In addition, the trustees may create such additional committees as they, in their discretion, determine to be necessary or desirable for the purposes of properly governing our affairs. The trustees may not delegate to any committee any powers or authority in respect of which a board of directors of a corporation governed by the Canada Business Corporations Act (the “CBCA”) would not be entitled to delegate.

Conflicts of Interest

The Declaration of Trust provides that conflicts of interest and potential conflicts of interest that are approved by a majority of our independent trustees (within the meaning of the Declaration of Trust) are deemed to be approved by all of our trustees. The Declaration of Trust further provides that our independent trustees may grant approvals for any matters that may give rise to a conflict of interest or potential conflict of interest pursuant to guidelines, policies or procedures adopted by the independent trustees from time to time and if and to the extent that such matters are

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permitted by those guidelines, policies or procedures, no further special approval will be required in connection with such matter permitted thereby.

Meetings of Unitholders

The Declaration of Trust provides that meetings of our unitholders will be called and held annually for the election of our trustees and the appointment of our auditors for the ensuing year, the presentation of our consolidated financial statements for the immediately preceding fiscal year, and the transaction of such other business as our trustees may determine or as may be properly brought before the meeting.

A meeting of our unitholders may be convened by the trustees at any time and for any purpose and must be convened, except in certain circumstances, if requisitioned by the holders of not less than 10% of our units then outstanding by a written requisition. A requisition must state in reasonable detail the business proposed to be transacted at the meeting.

Unitholders may attend and vote at all meetings of our unitholders either in person or by proxy and a proxyholder need not be a unitholder. Two persons present in person or represented by proxy and representing in total at least 10% of the votes attached to all outstanding units will constitute a quorum for the transaction of business at all meetings.

The Declaration of Trust contains provisions as to the notice required and other procedures with respect to the calling and holding of meetings of our unitholders similar to those required under the CBCA.

Amendments to the Declaration of Trust and Other Documents

The Declaration of Trust, except where specifically provided otherwise, may only be amended by the approval of a majority of the votes cast by our unitholders at a meeting called for that purpose or the written approval of our unitholders holding a majority of the outstanding units. Notwithstanding the foregoing, the following amendments will require the approval of at least two-thirds of the votes cast by our unitholders at a meeting of unitholders called for that purpose or the written approval of unitholders holding more than two-thirds of the outstanding units:

(i)

an exchange, reclassification or cancellation of all or part of our trust units or special voting units;

(ii)

the change or removal of the rights, privileges, restrictions or conditions attached to our trust units or special voting units, including, without limitation,

the removal or change of rights to distributions; or

the removal of or change to conversion privileges, redemption privileges, voting, transfer or pre-emptive rights;

(iii)

the creation of new rights or privileges attaching to certain of our trust units or special voting units; and

(iv)

any change to the existing constraints on the issue, transfer or ownership of our trust units or special voting units.

A majority of our trustees may, however, without the approval of our unitholders, make certain amendments to the Declaration of Trust, including amendments for the purpose of:

(i)

ensuring continuing compliance with applicable laws, regulations, requirements or policies of any governmental authority having jurisdiction over the trustees, BOX or the distribution of our trust units or special voting units;

(ii)

providing additional protection or added benefits which are, in the opinion of our trustees, necessary to maintain the rights of our unitholders set out in the Declaration of Trust;

(iii)

removing any conflicts or inconsistencies in the Declaration of Trust or making corrections which are, in the opinion of our trustees, necessary or desirable and not prejudicial to our unitholders;

(iv)

making amendments which are, in the opinion of the trustees, necessary or desirable to remove conflicts or inconsistencies between the disclosure in our management proxy circular filed in connection with the Transaction and the Declaration of Trust;

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(v)

making amendments of a minor or clerical nature or to correct typographical mistakes, ambiguities or manifest errors, which amendments are, in the opinion of our trustees, necessary or desirable and not prejudicial to the unitholders;

(vi)

making amendments which are, in the opinion of the trustees, necessary or desirable as a result of changes in taxation or other laws or accounting standards from time to time which may affect us or our unitholders; or

(vii)

implementing a distribution reinvestment plan or any amendment to such plan.

In no event will our trustees amend the Declaration of Trust if such amendment would amend unitholders’ voting rights or cause BOX to fail to qualify as a “mutual fund trust”, “real estate investment trust” or “unit trust” under the Tax Act.

In addition, we will not agree to or approve any change to the Limited Partnership Agreement or the Exchange and Support Agreement without the approval of at least two-thirds of the votes cast by our unitholders at a meeting of unitholders called for that purpose or the written approval of our unitholders holding more than two-thirds of our outstanding units. Notwithstanding the foregoing, we may agree to or approve any change to the Limited Partnership Agreement or the Exchange and Support Agreement without the approval of our unitholders for the purpose of:

(i)

providing a distribution reinvestment entitlement to the holders of Class B LP Units that is substantially equivalent to the distribution reinvestment entitlement provided by any distribution reinvestment plan to our unitholders;

(ii)

ensuring continuing compliance with applicable laws (including the Tax Act and maintaining the status of BOX as a “unit trust”, “mutual fund trust” and a “real estate investment trust”), regulations, requirements or policies of any governmental authority having jurisdiction over Brookfield Office Properties Canada LP, or over the distribution of Class A LP Units or Class B LP Units;

(iii)

providing additional protection or added benefits which are, in the opinion of our trustees, necessary to maintain the rights of the holders of Class A LP Units or Class B LP Units set out in the Limited Partnership Agreement or the rights of the parties to the Exchange and Support Agreement, as applicable;

(iv)

removing any conflicts or inconsistencies in the Limited Partnership Agreement or the Exchange and Support Agreement or making corrections, including the rectification of any ambiguities, defective provisions, errors, mistakes or omissions, which are, in the opinion of our trustees, necessary or desirable and not prejudicial to the holders of Class A LP Units or Class B LP Units or the parties to the Exchange and Support Agreement, as applicable;

(v)

making amendments which are, in the opinion of our trustees, necessary or desirable to remove conflicts or inconsistencies between the disclosure in our management proxy circular filed in connection with the Transaction and the Limited Partnership Agreement or the Exchange and Support Agreement;

(vi)

making amendments of a minor or clerical nature or to correct typographical mistakes, ambiguities or manifest omissions or errors, which amendments are, in the opinion of our trustees, necessary or desirable and not prejudicial to the holders of Class A LP Units or Class B LP Units or the parties to the Exchange and Support Agreement, as applicable; or

(vii)

making amendments which are, in the opinion of our trustees, necessary or desirable as a result of changes in taxation or other laws or accounting standards that may affect Brookfield Office Properties Canada LP or the holders of Class A LP Units or Class B LP Units.

Take-Over Bids

The Declaration of Trust contains provisions to the effect that if a take-over bid is made for our trust units and not less than 90% of our trust units (including trust units issuable on the exchange of any exchangeable securities, including Class B LP Units, but excluding trust units held at the date of the take-over bid by or on behalf of the offeror or associates or affiliates of the offeror or those acting jointly or in concert with them) are taken up and paid for by

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the offeror, the offeror will be entitled to acquire our trust units held by holders who did not accept the take-over bid on the terms on which the offeror acquired trust units from holders who accepted the take-over bid.

Information and Reports

Prior to each meeting of our unitholders, our trustees will provide to the unitholders (along with notice of the meeting) information similar to that required to be provided to shareholders of a corporation governed by the CBCA.

Rights of Unitholders

The rights of our unitholders and the attributes of our units are established and governed by the Declaration of Trust. Although the Declaration of Trust confers upon a unitholder many of the same protections, rights and remedies as an investor would have as a shareholder of a corporation governed by the CBCA, significant differences exist, some of which are described below.

Many of the provisions of the CBCA respecting the governance and management of a corporation are incorporated in the Declaration of Trust. For example, our unitholders are entitled to exercise voting rights in respect of their holdings of units in a manner comparable to shareholders of a CBCA corporation and to elect our trustees and our auditors. The Declaration of Trust also includes provisions modeled after comparable provisions of the CBCA dealing with the calling and holding of meetings of unitholders and trustees, the quorum for and procedures at such meetings and the right of our unitholders to participate in the decision making process where certain fundamental actions are proposed to be undertaken. The matters in respect of which approval by our unitholders is required under the Declaration of Trust are generally less extensive than the rights conferred on the shareholders of a CBCA corporation, but effectively extend to certain fundamental actions that may be undertaken by our subsidiaries. These approval rights are supplemented by provisions of applicable securities laws that are generally applicable to issuers (whether corporations, trusts or other entities) that are “reporting issuers” or the equivalent or are listed on the TSX.

Unitholders do not have recourse to a dissent right under which shareholders of a CBCA corporation are entitled to receive the fair value of their shares where certain fundamental changes affecting the corporation are undertaken (such as an amalgamation, a continuance under the laws of another jurisdiction, the sale of all or substantially all of its property, a going private transaction or the addition, change or removal of provisions restricting: (a) the business or businesses that the corporation can carry on; or (b) the issue, transfer or ownership of shares). Unitholders similarly do not have recourse to the statutory oppression remedy that is available to shareholders of a CBCA corporation where the corporation undertakes actions that are oppressive, unfairly prejudicial or which disregard the interests of securityholders and certain other parties. Shareholders of a CBCA corporation may also apply to a court for the appointment of an inspector to investigate the manner in which the business of the corporation and its affiliates is being carried on where there is reason to believe that fraudulent, dishonest or oppressive conduct has occurred. The Declaration of Trust does not include a comparable right. The CBCA also permits shareholders to bring or intervene in derivative actions in the name of a corporation or any of its subsidiaries, with the leave of a court. The Declaration of Trust does not include a comparable right.

DESCRIPTION OF BROOKFIELD OFFICE PROPERTIES CANADA LP

The following is a summary of the material terms attached to the Class A LP Units and Class B LP Units and certain other terms included in the Limited Partnership Agreement. This summary is qualified in its entirety by reference to all of the provisions of the Limited Partnership Agreement, which is available on SEDAR at www.sedar.com.

General Partner

BOPC GP Inc. is the general partner of Brookfield Office Properties Canada LP. BOPC GP Inc. is a corporation incorporated under the laws of Canada. BOPC GP Inc. is a direct wholly-owned subsidiary of BOX. The board of directors of BOPC GP Inc. will at all times be comprised of all of the individuals who are from time to time serving as our trustees.

As general partner of Brookfield Office Properties Canada LP, BOPC GP Inc. has full power and exclusive authority to administer, manage, control and operate the operations, affairs and business of Brookfield Office Properties Canada LP and to bind Brookfield Office Properties Canada LP. The Limited Partnership Agreement provides that all material transactions and agreements involving Brookfield Office Properties Canada LP must be approved by BOPC GP Inc.’s board of directors. BOPC GP Inc. is required to exercise its powers and discharge its duties honestly, in good faith and in the best interests of Brookfield Office Properties Canada LP and to exercise the degree of care, diligence and skill

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that a reasonably prudent person would exercise in comparable circumstances. BOPC GP Inc. has unlimited liability for the obligations of Brookfield Office Properties Canada LP.

Authorized Capital

Brookfield Office Properties Canada LP is authorized to issue the general partner interest, an unlimited number of Class A LP Units and Class B LP Units and, subject to certain restrictions, such other classes of partnership interests as BOPC GP Inc. may decide from time to time. We hold all of the outstanding Class A LP Units and BPY and BPO indirectly hold all of the outstanding Class B LP Units.

Class A LP Units

The holders of the Class A LP Units are entitled to receive notice of, to attend and to vote at all meetings of the partners of Brookfield Office Properties Canada LP on the basis of one vote for each unit held. Holders of Class A LP Units are entitled to receive distributions when declared by Brookfield Office Properties Canada LP equal to, on a per unit basis, the amount of distributions declared on the Class B LP Units. In the event of the liquidation, dissolution or winding-up of Brookfield Office Properties Canada LP or any other distribution of the assets of Brookfield Office Properties Canada LP among the holders of the units for the purpose of winding-up its affairs, holders of Class A LP Units will participate equally with the holders of Class B LP Units in any distribution of the assets of Brookfield Office Properties Canada LP.

As long as any Class A LP Units are outstanding, Brookfield Office Properties Canada LP may not, without the approval of the holders of the Class A LP Units, create a new class of interests in Brookfield Office Properties Canada LP that would rank, in any manner, equal to or superior to such Class A LP Units with respect to one or more individual characteristics or rights attaching to the Class A LP Units.

Class B LP Units

Each Class B LP Unit is accompanied by one of our special voting units, which entitles the holder thereof to receive notice of, to attend and to vote at all meetings of our unitholders. Each Class B LP Unit, together with the accompanying special voting unit, has economic and voting rights equivalent in all material respects to one of our trust units.

Except as required by law and in certain specified circumstances where the rights of a holder of Class B LP Units are affected, holders of Class B LP Units are not entitled to vote at meetings of the partners of Brookfield Office Properties Canada LP.

The holders of the Class B LP Units are entitled to receive distributions when declared by Brookfield Office Properties Canada LP. Subject to certain limitations contained in the Limited Partnership Agreement, holders of Class B LP Units are entitled to receive distributions equal to, on a per unit basis, the amount of distributions declared on one of our trust units. In the event of the liquidation, dissolution or winding-up of Brookfield Office Properties Canada LP or any other distribution of the assets of Brookfield Office Properties Canada LP among the holders of the units for the purpose of winding-up its affairs, holders of Class B LP Units and Class A LP Units will participate equally in any distribution of the assets of Brookfield Office Properties Canada LP. A holder of Class B LP Units may not transfer any of its Class B LP Units other than to an affiliate.

The Class B LP Units are exchangeable, on a one-for-one basis (subject to customary anti-dilution provisions) for our trust units at the option of the holder at any time unless such exchange would, in the opinion of our trustees, jeopardize BOX’s status as a “unit trust”, “mutual fund trust” or “real estate investment trust” under the Tax Act. Upon the exchange of Class B LP Units for trust units, the corresponding special voting units will immediately be cancelled without any further action of our trustees.

As long as any Class B LP Units are outstanding, Brookfield Office Properties Canada LP may not, without the approval of the holders of the Class B LP Units, create a new class of interests in Brookfield Office Properties Canada LP which would rank, in any manner, equal to or superior to such Class B LP Units with respect to one or more individual characteristics or rights attaching to the Class B LP Units.

Offers, Issuer Bids and Take-Over Bids

The Declaration of Trust and the Exchange and Support Agreement provide that if an offer, issuer bid (other than an exempt issuer bid), take-over bid (other than an exempt take-over bid) or similar transaction with respect to the trust units is proposed by us or is proposed to us or to holders of our trust units, and is recommended by our trustees, or is

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otherwise effected or to be effected with or without the consent or approval of our trustees, and the Class B LP Units are not exchanged for trust units in accordance with their terms and the Exchange and Support Agreement, we will, to the extent possible in the circumstances, expeditiously and in good faith, take all such commercially reasonable actions and do all such commercially reasonable things as are necessary or desirable to enable and permit holders of those Class B LP Units to participate in such offer to the same extent and on an economically equivalent basis as the holders of our trust units, without discrimination. Without limiting the generality of the foregoing, we will, to the extent possible in the circumstances, expeditiously and in good faith, use commercially reasonable efforts to ensure that holders of Class B LP Units may participate in all such offers without being required to exercise their right to exchange those units (or, if so required, to ensure that any such exchange will be effective only upon, and will be conditional upon, the successful closing of the offer and only to the extent necessary to tender to or deposit under the offer).

Distributions

Brookfield Office Properties Canada LP will distribute to BOPC GP Inc. and to the limited partners holding Class A LP Units and Class B LP Units distributable cash as set out below. Distributions will be made forthwith after BOPC GP Inc. determines the distributable cash of Brookfield Office Properties Canada LP and determines the amount of all costs and expenses incurred by it in the performance of its duties under the Limited Partnership Agreement (the “Reimbursement Distribution Amount”). Distributable cash will represent, in general, all of Brookfield Office Properties Canada LP’s cash on hand that is derived from any source (other than amounts received in connection with the subscription for additional interests in Brookfield Office Properties Canada LP) and that is determined by BOPC GP Inc. not to be required in connection with the business of Brookfield Office Properties Canada LP. The amount will be determined by BOPC GP Inc. in a manner analogous to the manner in which we calculate our distributions. Following that determination, the distributable cash of Brookfield Office Properties Canada LP will be distributed as follows: (a) the Reimbursement Distribution Amount to BOPC GP Inc.; (b) an amount to us sufficient to allow us to pay our expenses (including, without limitation, any fees or commissions payable to agents or underwriters in connection with the sale of our securities) on a timely basis; (c) an amount to BOPC GP Inc. equal to 0.01% of the balance of the distributable cash of Brookfield Office Properties Canada LP; and (d) an amount on each Class A LP Unit and Class B LP Unit to the holders of such units equal to the amount of the distribution declared on each trust unit. The record date and the payment date for any distribution declared on the Class B LP Units will be the same as those for our trust units.

In lieu of receiving all or a portion (the “Selected Amount”) of the distribution declared by Brookfield Office Properties Canada LP, the holders of Class B LP Units may choose to be loaned an amount from Brookfield Office Properties Canada LP equal to the Selected Amount, and to have the distribution of the Selected Amount made to it on the first business day following the end of the fiscal year in which such distribution would otherwise have been made. Each such loan made in a fiscal year will not bear interest and will be due and payable in full on the first business day following the end of the fiscal year during which the loan was made.

Investment Restrictions and Guidelines and Operating Policies

Investment Restrictions and Guidelines of Brookfield Office Properties Canada LP

The Limited Partnership Agreement provides for certain restrictions on investments which may be made by or on behalf of Brookfield Office Properties Canada LP. These investment restrictions and guidelines are set out below:

(i)

Brookfield Office Properties Canada LP may invest, directly or indirectly in: (a) interests in income producing real property; and (b) corporations, trusts, partnerships or other persons which principally have interests in income producing real property (or activities relating or ancillary thereto);

(ii)

Brookfield Office Properties Canada LP may, directly or indirectly, invest in a joint venture arrangement for the purposes of owning interests or investments otherwise permitted to be held by Brookfield Office Properties Canada LP; provided that such joint venture arrangement contains terms and conditions which, in the opinion of BOPC GP Inc., are commercially reasonable including, without limitation, such terms and conditions relating to restrictions on transfer and the acquisition and sale of Brookfield Office Properties Canada LP’s and any joint venturer’s interest in the joint venture arrangement, provisions to provide liquidity to Brookfield Office Properties Canada LP and provisions that limit the liability of Brookfield Office Properties Canada LP to third parties;

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(iii)

except for temporary investments held in cash, deposits with a Canadian chartered bank or trust company under the laws of Canada or a province of Canada, short term government debt securities, or receivables under installment receipt agreements or money market instruments of, or guaranteed by, a Canadian bank listed on Schedule I of the Bank Act (Canada) maturing prior to one year from the date of issue, or except as otherwise permitted herein, Brookfield Office Properties Canada LP shall not hold securities of another issuer unless either (a) such securities derive their value, directly or indirectly, principally from real property, or (b) the principal business of the issuer of the securities is the ownership or operation, directly or indirectly, of real property (in each case as determined by BOPC GP Inc.);

(iv)

Brookfield Office Properties Canada LP may directly or indirectly invest in such other assets or conduct such other activities as are consistent with the other investment restrictions and guidelines of Brookfield Canada Office Properties Canada LP; and

(v)

notwithstanding any other provision set out above, Brookfield Office Properties Canada LP shall not make, nor permit any of its subsidiaries to make, any investment that would result in BOX ceasing to qualify as a “unit trust”, “mutual fund trust” or “real estate investment trust” within the meaning of the Tax Act; or our trust units being disqualified for investment by Plans for the purposes of the Tax Act.

For the purpose of the foregoing restrictions and guidelines, the assets, liabilities and transactions of a subsidiary wholly or partially owned by Brookfield Office Properties Canada LP will be deemed to be those of Brookfield Office Properties Canada LP on a proportionate consolidated basis. In addition, any references in the foregoing to an investment in real property will be deemed to include an investment in a joint venture arrangement that holds real property.

Operating Policies of Brookfield Office Properties Canada LP

The Limited Partnership Agreement provides that the operations and affairs of Brookfield Office Properties Canada LP must be conducted in accordance with the following operating policies and that Brookfield Office Properties Canada LP will not permit any subsidiary to conduct its operations and affairs other than in accordance with the following operating policies:

(i)

title to each real property (or, if applicable, the leasehold or other interest therein) will be held by and registered in the name of Brookfield Office Properties Canada LP, BOPC GP Inc. or a corporation or other entity wholly-owned, directly or indirectly, by Brookfield Office Properties Canada LP or jointly-owned, directly or indirectly, by Brookfield Office Properties Canada LP with joint venturers; provided that where land tenure will not provide fee simple title, Brookfield Office Properties Canada LP, BOPC GP Inc. or a corporation or other entity wholly-owned, directly or indirectly, by Brookfield Office Properties Canada LP or jointly-owned, directly or indirectly, by Brookfield Office Properties Canada LP with joint venturers will hold a land lease as appropriate under the land tenure system in the relevant jurisdiction; and

(ii)

Brookfield Office Properties Canada LP will not directly or indirectly guarantee any indebtedness or liabilities of any kind of an arm’s length third party, except guarantees of indebtedness existing on the effective date of the Transaction and guarantees of indebtedness assumed or incurred by a partnership, limited partnership, co-ownership or other joint venture in which Brookfield Office Properties Canada LP or a subsidiary of Brookfield Office Properties Canada LP is a party and the other party or parties thereto is or are required to give up its or their respective interest in the property of such partnership, limited partnership, co-ownership or other joint venture as a result of such party’s failure to honour its proportionate share of the indebtedness assumed or incurred by the partnership, limited partnership, co-ownership or other joint venture. In addition, Brookfield Office Properties Canada LP will not directly or indirectly guarantee any indebtedness or liabilities of any person if doing so would contravene paragraph (v) of the investment restrictions and guidelines of Brookfield Office Properties Canada LP as set forth above under “– Investment Restrictions and Guidelines and Operating Policies – Investment Restrictions and Guidelines of Brookfield Office Properties Canada LP”.

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For the purpose of the foregoing policies, the assets, liabilities and transactions of a corporation, trust, partnership or other entity in which Brookfield Office Properties Canada LP has an interest will be deemed to be those of Brookfield Office Properties Canada LP on a proportionate consolidated basis. In addition, any references in the foregoing to investment in real property will be deemed to include an investment in a joint venture arrangement.

Allocation of Net Income and Losses

Brookfield Office Properties Canada LP’s income or loss for tax purposes for a fiscal year will, to the extent possible, be allocated to the limited partners in proportion to distributions paid or payable to such limited partners (excluding amounts paid or payable to holders of Class A LP Units sufficient to allow us to pay our expenses) as described above. BOPC GP Inc. will be allocated taxable income equal to the aggregate of: (a) all Reimbursement Distribution Amounts that are paid to it; and (b) an amount equal to 0.01% of the balance of the distributable cash of Brookfield Office Properties Canada LP to the extent it is not taken into account in the determination of the allocation of taxable income. However, if, with respect to a given fiscal year, no cash distribution is made by Brookfield Office Properties Canada LP to its limited partners, the income or loss, as the case may be, for tax purposes of Brookfield Office Properties Canada LP for that fiscal year will be allocated to each person who was a limited partner at any time in such fiscal year in the proportion determined by BOPC GP Inc.

Limited Liability

Brookfield Office Properties Canada LP will operate in a manner so as to ensure, to the greatest extent possible, the limited liability of the limited partners. Limited partners may lose their limited liability in certain circumstances. Brookfield Office Properties Canada LP will indemnify the limited partners against all claims arising from assertions that their respective liabilities are not limited as intended by the Limited Partnership Agreement other than a loss of liability arising as a result of any fraudulent, negligent or wilful act or omission of such limited partner.

Amendments to the Limited Partnership Agreement

BOPC GP Inc. is entitled to amend the Limited Partnership Agreement without notice to or consent of any other partners, to reflect the admission, resignation or withdrawal of any partner, or the assignment by any partner of the whole or any part of such partner’s interest in Brookfield Office Properties Canada LP in accordance with the Limited Partnership Agreement. BOPC GP Inc. is also entitled to make any reasonable decisions, designations or determinations not inconsistent with applicable laws or with the Limited Partnership Agreement which it determines are necessary or desirable in interpreting, applying or administering the Limited Partnership Agreement or in administering, managing or operating Brookfield Office Properties Canada LP.

BOPC GP Inc. is also entitled to amend the Limited Partnership Agreement (including the investment restrictions and guidelines and operating policies of Brookfield Office Properties Canada LP) with the approval of the limited partners holding more than two-thirds of each class of partnership units entitled to vote provided that: (a) except as otherwise provided in the Limited Partnership Agreement, any material change which affects the rights or interests of BOPC GP Inc. must be approved by BOPC GP Inc.; and (b) any material change which affects any limited partner in a manner that is different from the effects on other limited partners will be valid only with the consent of such limited partner.

The Limited Partnership Agreement may not be amended if such amendment would cause BOX to fail or cease to qualify as a “mutual fund trust”, “unit trust” or “real estate investment trust” under the Tax Act. In addition, notwithstanding any other provision in the Limited Partnership Agreement, no amendments may be made to the Limited Partnership Agreement that would: (a) allow any limited partner to take part in the management or the administration of the business of Brookfield Office Properties Canada LP; (b) reduce any limited partner’s interest in Brookfield Office Properties Canada LP; (c) allow any limited partner to exercise control over the business of Brookfield Office Properties Canada LP; (d) change the right of a limited partner to vote at any meeting; or (e) change Brookfield Office Properties Canada LP from a limited partnership to a general partnership.

RATINGS

Our access to financing depends on, among other things, suitable market conditions and the maintenance of suitable long-term credit ratings. Our credit ratings may be adversely affected by various factors, including increased debt levels, decreased earnings, declines in customer demand, increased competition, deterioration in general economic and business conditions and adverse publicity. Any downgrades in our credit ratings may impede our access to capital markets or raise our borrowing rates.

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We are currently rated by two rating agencies, Dominion Board Rating Services Inc. (“DBRS”) and Standard & Poor’s (“S&P”). In February 2016, S&P raised its corporate rating of us to ‘BBB’ from ‘BBB-‘. The following table shows the credit ratings and outlook issued by the rating agencies as of the date hereof:

		DBRS	S&P
Corporate Rating Outlook		BBB (Stable)	BBB (Stable)

DBRS’ corporate credit ratings are on a rating scale that ranges from AAA to D, which represents the range from highest to lowest quality of such securities rated. According to the DBRS rating system, an entity rated “BBB” is of adequate credit quality. The capacity for the payment of financial obligations is considered acceptable. The entity may be vulnerable to future events. The ratings from AA to CCC may be modified by the addition of a (high) or (low) modifier to show relative standing within the major rating categories.

S&P’s corporate credit ratings are on a rating scale that ranges from AAA to D, which represents the range from highest to lowest quality of such securities rated. According to the S&P rating system, an entity rated “BBB” has adequate capacity to meet its financial commitments. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the entity to meet its financial commitments. The ratings from AA to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.

We have paid customary rating fees to each of DBRS and S&P in connection with the above credit ratings. No payments were made in respect of other services provided by each of DBRS and S&P during the last two years.

Credit ratings are intended to provide investors with an independent measure of credit quality of an issue of securities. The credit rating presented is not a recommendation to purchase, hold or sell our securities and does not comment as to market price or suitability of a specific security for a particular investor. Credit ratings may not reflect the potential impact of all risks on the value of securities. There is no assurance that the ratings will remain in effect for any given period or that a rating will not be revised or withdrawn entirely by the rating agency in the future if, in its judgment, circumstances so warrant.

MARKET FOR SECURITIES

Our trust units are listed on the TSX under the symbol “BOX.UN” and on the NYSE under the symbol “BOXC”. The following table sets forth the market price ranges and trading volumes of our trust units on the TSX and the NYSE from January 2015 to December 2015.

	TSX			NYSE
	High ($)	Low ($)	Volume	High (US$)	Low (US$)	Volume
January	28.90	26.85	373,863	23.56	21.85	18,573
February	30.68	28.61	189,645	24.17	22.56	19,976
March	30.44	28.02	211,047	24.43	22.00	24,409
April	29.59	28.13	265,172	23.93	22.70	19,465
May	28.68	27.15	228,566	24.00	22.01	25,812
June	27.61	26.08	332,503	22.09	21.11	27,716
July	27.03	25.66	350,982	21.58	19.78	14,842
August	26.20	23.02	242,775	20.02	17.18	31,734
September	25.12	24.30	252,743	18.96	18.28	15,120
October	28.24	24.39	229,055	21.61	18.40	11,750
November	28.76	25.91	195,285	21.50	19.58	15,989
December	27.74	25.66	209,191	20.71	18.47	9,016

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TRUSTEES AND MANAGEMENT

Overview

Our board of trustees oversees the management of our business and affairs. BPO provides asset and property management services to us under arrangements that were entered into in connection with the Transaction. BPO draws on members of its senior management and other individuals from its affiliates to fulfill its obligations to us. See “– Management Agreements”.

BPO owns, develops and manages premier office properties in the United States, Canada, Australia and Europe. BPO’s portfolio is comprised of interests in 125 properties totaling 90 million square feet in the downtown cores of New York, Washington, D.C., Houston, Los Angeles, Toronto, Calgary, Ottawa, London, Sydney, Melbourne, Perth and Berlin, making it the global leader in the ownership and management of office assets. Landmark properties include the Brookfield Places in Manhattan, Toronto and Perth, Bank of America Plaza in Los Angeles, Bankers Hall in Calgary and Darling Park in Sydney. In providing management services to us, BPO draws on members of its senior management team and its global relationships. Our board of trustees believes that this provides us with a unique competitive advantage and that BPO’s compensation structure, which includes an incentive component, ensures that its interests remain fully aligned with those of other unitholders.

Trustees of BOX

We have seven trustees, four of whom are “independent” trustees, within the meaning of National Instrument 52 110 – Audit Committees, and a majority of whom are resident Canadians. Each of the current trustees will serve until our next annual meeting or until his successor is elected or appointed.

Our trustees all serve as directors of BOPC GP Inc. BOPC GP Inc. is the general partner of Brookfield Office Properties Canada LP, which holds direct and indirect interests in the properties in our portfolio and carries out all of our property investment and operating activities.

The following table sets out: (a) the names of our trustees; (b) the year in which they were first elected as a trustee; and (c) their principal occupation or employment and their five year occupation history.

Name, municipality of residence	Trustee since	Principal Occupation and Five-Year Occupation History

COLUM BASTABLE^(1)(2)(3) Toronto, Ontario, Canada	2010	Mr. Bastable has been Chairman, Cushman & Wakefield Ltd., a commercial real estate broker and consultancy company, since 2009, prior to which he was President and Chief Executive Officer of Cushman & Wakefield LePage Inc., a commercial real estate broker and consultancy company, since 2005.

G. MARK BROWN Dobbs Ferry, New York, U.S.A.	2016	Mr. Brown has been Global Chief Investment Officer of BPO since July 2012. Previously he was Head of Global Strategic Initiatives and Finance of BPO, prior to which he was Senior Vice President, Strategic Initiatives and Finance of BPO since 2005.

THOMAS F. FARLEY Palm Desert, California, U.S.A	2010	Mr. Farley was the President and Global Chief Operating Officer of BPO from June 2011 until May 31, 2014, at which time he retired. Prior to his retirement from BPO, he was BPO’s Chief Executive Officer, Canadian Commercial Operations since January 2009 and President and Chief Operating Officer, Canadian Commercial Operations since 2003.

Roderick D. Fraser, Ph.D., O.C⁽¹⁾⁽³⁾ Kingston, Ontario, Canada	2010	Dr. Fraser has been President Emeritus of the University of Alberta since 2005.

PAUL D. MCFARLANE^(1)(2)(3) Mississauga, Ontario, Canada	2010	Mr. McFarlane is a corporate director. He retired from a Canadian chartered bank in 2002 after more than 40 years of service.

SUSAN L. RIDDELL ROSE^(1)(2)(3) Calgary, Alberta, Canada	2013	Ms. Riddell Rose is President and Chief Executive Officer of Perpetual Energy Inc., a natural gas exploration and development company, and its predecessor, Paramount Energy Trust since 2002.

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Name, municipality of residence	Trustee since	Principal Occupation and Five-Year Occupation History

T. JAN SUCHARDA Toronto, Ontario, Canada	2011	Mr. Sucharda has been our President and Chief Executive Officer since June 2011, prior to which he was BPO’s President and Chief Operating Officer, Canadian Commercial Operations since August 2010, Chief Operating Officer, Canadian Commercial Operations since 2009, and Senior Vice President, Strategic Initiatives since 2006.

Notes:

(1) Member of the Governance and Nominating Committee.
(2) Member of the Audit Committee.

(3) Messrs. Bastable, Fraser and McFarlane and Ms. Riddell Rose are independent trustees.

Officers

The names, municipalities of residence, position held at BOX and the occupation histories of the officers of BOX are set out below. See above for a description of T. Jan Sucharda, President and Chief Executive Officer.

Name, municipality of residence	Position Held	Five-Year Occupation History
BRYAN K. DAVIS Rye, New York, U.S.A.	Chief Financial Officer	Mr. Davis has been our Chief Financial Officer since 2011. Mr. Davis is also the Chief Financial Officer of BPY, a position he assumed in 2015. From 2007 to February 2016, he was also Chief Financial Officer of BPO.

Ian D. Parker Calgary, Alberta, Canada	Chief Operating Officer	Mr. Parker has held his principal occupation since 2014. Prior to that he was Senior Vice President, Asset Management, Western since 2005.

Deborah R. Rogers Toronto, Ontario, Canada	Senior Vice President, Legal Counsel and Secretary	Ms. Rogers has held her principal occupation since March 2015. Prior to that she was SVP Legal, Eastern Canada and Secretary of BOX since 2010, and SVP Legal Counsel, Eastern Canada and Secretary of BPO Properties Ltd. (a former subsidiary of BPO) from 2006 to 2014.

Ryk Stryland Toronto, Ontario, Canada	Senior Vice President, Development	Mr. Stryland has held his principal occupation since 2006.

T. NGA GILGAN Toronto, Ontario, Canada	Senior Vice President, Investments	Ms. Gilgan has held her principal occupation since 2008. Prior to that she was SVP and Controller since September 2005, and VP, Financial Management since January 2002.

MATTHEW CHERRY Rockville Centre, New York, U.S.A.	Vice President, Investor Relations and Communications	Mr. Cherry is also the Vice President, Investor Relations and Communications of BPO, a position he has held since 2014. Prior to that he was Director, Investor Relations and Communications since 2010.

Elliott S. Feintuch Toronto, Ontario, Canada	Vice President, Legal Counsel, Eastern	Mr. Feintuch has held his principal occupation since February 2012, prior to which he was Associate Counsel with BOX since May 2010 and Associate Counsel with BPO since October 2005.

Robert Kiddine Calgary, Alberta , Canada	Vice President, Legal Counsel, Western	Mr. Kiddine has held his principal occupation since January 2015, prior to which he was a commercial real estate lawyer with Burnet, Duckworth & Palmer LLP since 2010.

Amelia Nasrallah-PUMILIA Toronto, Ontario, Canada	Vice President, Legal Counsel, Eastern	Ms. Nasrallah-Pumilia has held her principal occupation since February 2013, prior to which she was Associate Legal Counsel since 2006.

ELIZABETH PHALEN Toronto, Ontario, Canada	Vice President, Legal Counsel, Eastern	Ms. Phalen has held her principal occupation since February 2013, prior to which she was Associate Counsel with BOX since July 2006.

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michael yam Mississauga, Ontario, Canada	Vice President and Controller	Mr. Yam has held his principal occupation since 2011, prior to which he was Controller, Corporate Accounting with BOX since 2007.

Michelle L. campbell New York, New York, U.S.A.	Assistant Secretary	Ms. Campbell is also Vice President, Counsel and Secretary of BPO, a position she has held since 2007.

KEITH HYDE Toronto, Ontario, Canada	Vice President, Taxation	Mr. Hyde has held his principal occupation since January 2015, and is also Vice President, Taxation of BPO, a position he has held since 1988.

Share Ownership

As of the date hereof, the trustees and executive officers of BOX own, directly or indirectly, or exercise control or direction over approximately 18,983 trust units, representing less than 1% of the outstanding trust units. See the information on page 2 of our Management Proxy Circular dated March 14, 2016 under the heading “Principal Holders of Voting Units”, which is incorporated by reference herein and available on SEDAR at www.sedar.com and on our website at www.brookfieldcanadareit.com, for further information regarding our ownership.

Management Agreements

The following is a summary of certain provisions of our Asset Management Agreement and the Property Management Agreement each dated as of May 1, 2010, as amended (collectively, the “Management Agreements”). This summary is qualified in its entirety by reference to all of the provisions of the Management Agreements, which are available on SEDAR at www.sedar.com.

Asset Management Agreement

We have appointed Brookfield Office Properties Management LP (“BOPM LP”), a wholly-owned subsidiary of BPO, to provide us with asset management, regulatory compliance and administrative services (the “Asset Management Services”), including:

(i)

providing advisory, consultation and investment management services;

(ii)

causing or supervising the carrying out of all day-to-day management;

(iii)

identifying, evaluating, recommending and structuring acquisitions or dispositions from time to time and assisting in negotiating the terms of such acquisitions or dispositions;

(iv)

arranging for such administrative, executive and management personnel to be provided to us as is reasonably necessary or appropriate to carry out the Asset Management Services;

(v)

providing development, supervision and coordination services for any new construction projects constituting an addition to or expansion or substantial redevelopment of a property; and

(vi)

providing such administrative and support services as we require.

BOPM LP’s activities are subject to the supervision and direction of our trustees and the board of directors of BOPC GP Inc. BPO causes BOPM LP and BPO’s other subsidiaries to provide the Asset Management Services in accordance with the Asset Management Agreement and to make available such administrative, executive and management personnel of BPO to allow BOPM LP to comply with its obligations under the Asset Management Agreement.

Compensation and Reimbursement

BOPM LP receives:

(i)

a monthly base management fee, calculated in arrears, in an amount equal to one-twelfth of 0.25% of our enterprise value in the applicable fiscal month; and

(ii)

an annual incentive fee, calculated in arrears, in an aggregate amount equal to 15% of our funds from operations per trust unit in excess of $1.33, subject to adjustments for certain transactions affecting our trust units (including the subdivision, split, combination or consolidation of our trust units).

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The aggregate amount of the base management fee and the incentive fee payable in respect of any fiscal year will not exceed 0.5% of the greater of: (a) our enterprise value for the last fiscal month of such fiscal year; and (b) the simple average of our total enterprise value for each fiscal month of such fiscal year.

If and whenever BOPM LP performs development, supervision and coordination services for any new construction projects constituting an addition to or expansion or substantial redevelopment of a property, it will also receive a development fee equal to 10% of the first $2 million of project costs plus 4% of the project costs in excess of $2 million incurred on each project, and for projects with estimated costs of over $20 million, the development fee will be separately negotiated.

BOPM LP is also entitled to be reimbursed for the salaries, licensing and training costs and other remuneration of or any costs relating to the termination or severance of the administrative, executive and management personnel who provide certain administrative and regulatory compliance services.

BOPM LP is reimbursed for all reasonable actual out-of-pocket costs and expenses it incurs in connection with the performance of the Asset Management Services. Except as described above, BOPM LP is not reimbursed for the salaries and other remuneration of or any costs relating to the termination or severance of the administrative, executive and management personnel who provide Asset Management Services or overhead for such persons.

Other Terms

The Asset Management Agreement has an initial term of 10 years and is automatically renewable for further terms of five years each. At least 12 months prior to the end of the initial term and any renewal term, our independent trustees will review the performance of BOPM LP and, if they are not satisfied with the performance by BOPM LP of its obligations under the Asset Management Agreement and determine that it is not in our best interests that the Asset Management Agreement be renewed, they may submit the termination of the Asset Management Agreement to a vote of our unitholders. If such termination is approved by at least a majority of the votes cast by our unitholders, we may terminate the Asset Management Agreement at the end of the then current term, provided that we provide BOPM LP with at least three months’ prior written notice and pay BOPM LP a termination fee equal to the aggregate amount paid to BOPM LP in respect of fees paid in the fiscal year preceding the effective date of the termination. If the agreement is not so terminated, it will automatically be renewed.

We may also terminate the Asset Management Agreement upon written notice to BOPM LP: if BOPM LP defaults in the performance of any material term of the Asset Management Agreement and such default continues for a period of 30 days; if BOPM LP engages in any act of fraud, misappropriation of funds or embezzlement against us, if there is an event of gross negligence by BOPM LP in the performance of its duties that results in material harm to us; or in the event of the bankruptcy or insolvency of BOPM LP. BOPM LP may terminate the Asset Management Agreement upon written notice to us: if we default in the performance of any material term of the Asset Management Agreement and such default continues for a period of 30 days; or in the event that we become bankrupt or insolvent.

We will indemnify BOPM LP and its affiliates, directors, officers, agents, members, partners, shareholders, delegates, subcontractors, advisors, employees and other representatives of each of the foregoing from and against any claims, liabilities, losses, damages, costs or expenses (including legal fees) incurred by an indemnified person or threatened in connection with the Asset Management Agreement or the Asset Management Services, other than those that are determined by a final and non-appealable judgment or final and binding arbitration decision to have resulted from an indemnified party’s bad faith, fraud, willful misconduct, gross negligence or breach of any material term of the Asset Management Agreement.

The maximum liability of BOPM LP pursuant to the Asset Management Agreement is equal to all amounts we paid in respect of the Asset Management Services in the five most recent fiscal years.

The Asset Management Agreement does not prohibit BOPM LP or its affiliates (including BPO) from pursuing other business activities or providing services to third parties that compete directly or indirectly with us. The Asset Management Agreement provides that any conflicts of interest between us and BOPM LP or its affiliates will be dealt with by BOPM LP in good faith and in a fair, equitable and even-handed manner.

Property Management Agreement

We have appointed BOPM LP as the exclusive property manager for all our managed properties and to manage all aspects of the operation, maintenance, leasing, insuring, repair, cleaning, security and management of such properties (the “Property Management Services”). The Property Management Services include:

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(i)

sourcing appropriate tenants and negotiating, settling and administering the terms of all tenancies, amendments and renewals;

(ii)

collecting all rent and other amounts due from tenants and licensees and enforcing the collection of arrears and lease obligations;

(iii)

negotiating, settling and administering all contracts as may be reasonably necessary for the operation and maintenance of the properties (including all agreements with municipalities and the owners or occupants of neighbouring lands), and contracting for the purchase of all services, materials and supplies as may be necessary in the performance of its duties and responsibilities;

(iv)

obtaining and maintaining any necessary permits and performing such services as are required to comply with all applicable laws in all material respects, including environmental laws; and

(v)

maintaining all equipment and facilities (including the heating, ventilation and air conditioning equipment) and the common areas and exteriors of the properties.

BOPM LP’s activities are subject to the supervision and direction of our trustees and the rights of any co-owners of the properties.

Compensation and Reimbursement

As compensation for the performance of the Property Management Services, BOPM LP receives the following fees:

(i)

an annual property management fee equal to:

the lesser of: (a) 3% of the gross revenues accruing to us from the properties (excluding HST/GST, certain insurance proceeds and certain revenues) for a fiscal year; and (b) 3% of the aggregate of all revenues accruing to us from all parking facilities located at the properties plus all amounts paid to them by tenants who are not governmental authorities with respect to administration/management or equivalent fees pursuant to leases of the properties for that fiscal year plus the greater of (x) the administration/management or equivalent fees accruing to us from tenants who are governmental authorities and (y) 1.75% of the gross revenues accruing to us from such tenants’ leases; less

all equivalent property management fees we paid with respect to that fiscal year pursuant to individual property and/or third party management agreements;

(ii)

a leasing fee (based on our percentage ownership interest in a particular property) for any lease signed for space in the properties equal to:

where the original term of the lease is five years or less, $0.65 per square foot of rentable area per year (pro-rated for partial years); and

where the original term of the lease is more than five years, the fee in paragraph (i) above, plus $0.85 per square foot of rentable area per year for the number of years or partial years covered by the lease between years six and 10 (pro-rated for partial years). No leasing fee will be paid in respect of the years of the original term of the lease in excess of 10 years;

(iii)

leasing fees are also paid on the same basis for lease extensions, renewals, renegotiations and restructurings provided that: (a) if the term of the lease is renewed or extended prior to the expiry of the original term, such leasing fees will only be paid in respect of the incremental term; and (b) if we owe a commission to an outside broker in respect of the lease, the leasing fee will be reduced by 50%;

(iv)

capital expenditure fees equal to 5% of the project costs associated with the performance of certain construction work involved for all work in respect of which BOPM LP acts substantially as construction manager; and

(v)

major capital purchase fees in respect of large equipment purchases greater than $200,000, equal to 5% of the cost of such equipment.

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BOPM LP is reimbursed for all reasonable actual out-of-pocket costs and expenses paid by BOPM LP in connection with the performance of the Property Management Services. To the extent such costs are contemplated by an approved budget or otherwise approved, we reimburse BOPM LP for all costs and expenses for persons hired or employed by, or under contract to, BOPM LP to provide services allocable to specific properties, including but not limited to information technology and systems support personnel, building science and engineering personnel, security personnel, building managers and staff, mechanical and electrical staff, lease administration personnel, tenant liaison staff, merchandise receiving and delivery staff, maintenance, cleaning and housekeeping staff, clerical and secretarial staff, human resources, accounting staff and other staff associated with the management, operation, repair, maintenance, supervision and administration of the properties.

In addition, if BOPM LP’s or its affiliates’ in-house counsel and legal staff provide legal services in respect of the properties, including in connection with the preparation and negotiation of lease documentation, we will pay reasonable fees for such services in amounts that would not exceed those that would be charged by outside counsel in any material respect.

Other Terms

The Property Management Agreement has an initial ten-year term and is automatically renewable for further terms of five years each. At least 12 months prior to the end of the initial term and any renewal term, our independent trustees will review the performance of BOPM LP and, if they are not satisfied with the performance by BOPM LP of its obligations under the Property Management Agreement and determine that it is not in our best interests that the Property Management Agreement be renewed, they may submit the termination of the Property Management Agreement to a vote of our unitholders. If such termination is approved by at least a majority of the votes cast by our unitholders, we may terminate the Property Management Agreement at the end of the then current term, provided that we provide BOPM LP with at least three months’ prior written notice and pay BOPM LP a termination fee equal to the aggregate amount paid to BOPM LP in respect of the property management fee, leasing fee, capital expenditure fee and major capital purchase fee in the fiscal year preceding the effective date of the termination. If the agreement is not so terminated, it will automatically be renewed.

We may also terminate the Property Management Agreement upon written notice to BOPM LP: if BOPM LP defaults in the performance of any term of the Property Management Agreement that results in material harm to us and such default continues for a period of 30 days; if BOPM LP engages in any act of fraud, misappropriation of funds or embezzlement against us; if there is an event of gross negligence by BOPM LP in the performance of its duties that results in material harm to us; or in the event of the bankruptcy or insolvency of BOPM LP. BOPM LP may terminate the Property Management Agreement upon written notice to us: if we default in the performance of any term of the Property Management Agreement that results in material harm to BOPM LP and such default continues for a period of 30 days; or in the event of our bankruptcy or insolvency.

We will indemnify BOPM LP and its affiliates, directors, officers, agents, members, partners, shareholders, delegatees, subcontractors, advisors, employees and other representatives of each of the foregoing from and against any claims, liabilities, losses, damages, costs or expenses (including legal fees) incurred by an indemnified person or threatened in connection with the Property Management Agreement or the Property Management Services, other than those that are determined by a final and non-appealable judgment or final and binding arbitration decision to have resulted from an indemnified party’s bad faith, fraud, wilful misconduct, gross negligence or material breach of the agreement.

The maximum liability of BOPM LP is equal to all fees paid to BOPM LP in the five most recent fiscal years.

The Property Management Agreement does not prohibit BOPM LP or its affiliates (including BPO) from pursuing other business activities or providing services to third parties that compete directly or indirectly with us. The Property Management Agreement provides that any conflicts of interest between us and BOPM LP or its affiliates will be dealt with by BOPM LP in good faith and in a fair, equitable and even-handed manner.

BOPM LP is required to inform us if a prospective tenant that is negotiating a significant lease is an existing or prospective tenant of another property which BOPM LP, BPO or their affiliates owns (or co-owns). BOPM LP will identify the measures it proposes to put in place in the circumstances to mitigate and manage any real or reasonably perceived conflict of interests. These measures, if any, will comply with applicable law and may include, without limitation, the assignment of different leasing personnel to represent the interests of each of the parties and

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reasonable “cone of silence” or “ethical wall” arrangements to avoid the disclosure of information relating to the properties between such leasing personnel.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Except as disclosed herein, as of the date hereof, none of our trustees, officers or associates of a trustee or an officer nor, to the knowledge of our trustees or officers after having made reasonable inquiry, any person or company who beneficially owns, directly or indirectly, our voting securities carrying more than 10% of the voting rights attached to any class of our voting securities outstanding at the date hereof, or any associate or affiliate thereof, had any material interest, direct or indirect, in any of our material transactions nor do any such persons have a material interest, direct or indirect, in any of our proposed transactions.

In the normal course of our operations, we enter into various transactions on market terms with related parties, including intercompany loans, putting amounts on deposit with affiliates, acquiring insurance and leasing office space. In connection with the Management Agreements, in the year ended December 31, 2015, we paid BOPM LP fees relating to property management services of $13.7 million (compared to $14.1 million in 2014), fees relating to leasing and construction services of $8.3 million (compared to $3.2 million in 2014) and fees relating to asset management and administrative and regulatory compliance services of $19.5 million (compared to $19.0 million in 2014).

MATERIAL CONTRACTS

The only material contracts, other than contracts entered into in the ordinary course of business, that we have entered into are the following:

the Declaration of Trust (see “Description of Brookfield Canada Office Properties”);

the Limited Partnership Agreement (see “Description of Brookfield Office Properties Canada LP”);

the Asset Management Agreement (see “Trustees and Management — Management Agreements — Asset Management Agreement”);

the Property Management Agreement (see “Trustees and Management — Management Agreements — Property Management Agreement”);

the Exchange and Support Agreement; and

the BPO undertaking.

Copies of these material contracts have been filed on SEDAR at www.sedar.com. These material contracts may also be requested from our Secretary at Brookfield Place, 181 Bay Street, Suite 330, Toronto, Ontario, M5J 2T3.

Exchange and Support Agreement

On May 1, 2010, we entered into the Exchange and Support Agreement with Brookfield Office Properties Canada LP, BPP and certain subsidiaries of BPP to create certain support obligations with respect to the Class B LP Units. Under the Exchange and Support Agreement, we agree to take such actions as are reasonably necessary to ensure that the distributions on the Class B LP Units will be of the same nature and amount, on a per unit basis, as the corresponding distribution on our trust units.

The Exchange and Support Agreement also provides that we will not, subject to certain exceptions, issue or distribute trust units (or securities exchangeable for or convertible into or carrying rights to acquire trust units) to the holders of all or substantially all of the then outstanding trust units; issue or distribute rights, options or warrants to the holders of all or substantially all of the then outstanding trust units entitling them to subscribe for or to purchase trust units (or securities exchangeable for or convertible into or carrying rights to acquire trust units); or issue or distribute to the holders of all or substantially all of the then outstanding trust units evidences of our indebtedness or our assets except in accordance with the provisions of our trust units, unless the economic equivalent on a per unit basis of such rights, options, securities, units, evidences of indebtedness or other assets is issued or distributed simultaneously to the holders of Class B LP Units. In addition, we will not, subject to certain exceptions, subdivide, re-divide or change the then outstanding trust units into a greater number of trust units; reduce, combine, consolidate or change the

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then outstanding trust units into a lesser number of trust units; or reclassify, amend the terms of, or otherwise change our trust units or effect an amalgamation, merger, reorganization or other transaction affecting our trust units, unless the same or an economically equivalent change is made simultaneously to, or in the rights of the holders of, Class B LP Units.

Pursuant to the Exchange and Support Agreement, upon notice from Brookfield Office Properties Canada LP that a holder of Class B LP Units has surrendered Class B LP Units for exchange into trust units in accordance with the terms thereof, we will issue and deliver or cause to be issued and delivered to such holder the requisite number of trust units.

In accordance with the Exchange and Support Agreement, prior to our liquidation, dissolution or winding-up, all Class B LP Units will be automatically exchanged for trust units in order that the holders of Class B LP Units will be able to participate on a pro rata basis with the holders of our trust units in the distribution of our assets in connection with a liquidation event.

BPO Undertaking

Under applicable Canadian securities laws it is possible for a holder of an equity interest in BOX exceeding 90% to effect a privatization of BOX or enter into certain related party transactions with BOX without obtaining minority unitholder approval. BPO has undertaken to us not to rely on the exemptions from the minority approval requirement contained in sections 4.6(1)(a) and 5.7(g) of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), or any discretionary exemption having a similar effect granted by the Canadian securities regulators, in connection with any “business combination” or “related party transaction” (as such terms are defined in MI 61-101) in respect of which BPO or any of its affiliates is an “interested party” (as such term is defined in MI 61-101). This undertaking will terminate in the future if BPO and its affiliates hold in aggregate an equity interest in BOX of 75% or less for a period of 12 months. As of the date hereof, BPO and its affiliates indirectly hold units representing an aggregate equity interest in BOX of approximately 83%.

In addition, BPO has undertaken that prior to completing a disposition, restructuring or development of any of the assets that it retained in the Transaction in circumstances where we are permitted and have the financial capacity to participate, it will (except where otherwise restricted or where the transaction involves a broader enterprise) notify and discuss with our independent trustees in good faith our participation in such transaction prior to or concurrent with discussing the same with other parties.

The terms of the undertakings may only be amended, waived or terminated with the prior approval of a majority of our independent trustees (within the meaning of the Declaration of Trust).

EXEMPTIVE RELIEF

MI 61-101 provides a number of circumstances in which a transaction between an issuer and a related party may be subject to valuation and minority approval requirements. An exemption from such requirements is available when the fair market value of the transaction is not more than 25% of the market capitalization of the issuer. BOX has been granted exemptive relief from the requirements of MI 61-101 that, subject to certain conditions, permits it to be exempt from the minority approval and valuation requirements for transactions that would have a value of less than 25% of BOX’s market capitalization, if the Class B LP Units are included in the calculation of BOX’s market capitalization. As a result, the 25% threshold, above which the minority approval and valuation requirements would apply, is increased to reflect the approximate 72% indirect interest in BOX in the form of Class B LP Units.

AUDITORS, TRANSFER AGENT AND REGISTRAR

Deloitte LLP (“Deloitte”) are the principal external auditors of the Trust. Deloitte is an Independent Registered Public Accounting Firm, having an address at Suite 200, Bay Adelaide Centre East, 22 Adelaide Street West, Toronto, Ontario M5H 0A5. Deloitte is independent of BOX within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of Ontario and the rules and standards of the Public Company Accounting Oversight Board and the securities laws and regulations administered by the United States Securities and Exchange Commission.

The registrar and transfer agent of our trust units is CST Trust Company at its principal offices in Toronto, Ontario.

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AUDIT COMMITTEE INFORMATION

The Audit Committee is responsible for monitoring BOX’s systems and procedures for financial reporting, risk management and internal controls, reviewing certain public disclosure documents and monitoring the performance and independence of our internal and external auditors. The Audit Committee is also responsible for reviewing BOX’s annual audited financial statements, unaudited quarterly financial statements and management’s discussion and analysis of financial condition and results of operations prior to their approval by the full board of trustees.

The Audit Committee charter sets out its responsibilities and duties, qualifications for membership, procedures for committee member removal and appointment and reporting to our board of trustees. A copy of the charter is attached hereto as Appendix B.

Our Audit Committee is comprised of three individuals, all of whom are financially literate and independent as required under applicable securities laws: Mr. Paul D. McFarlane (Chair), Mr. Colum Bastable and Ms. Susan Riddell Rose.

Relevant Education and Experience

All of the members of the Audit Committee have acquired significant financial experience and exposure to accounting and financial issues through service as senior executive officers and directors of various public and private companies in different sectors, including the financial services industry. In these roles, the members of the Audit Committee have been involved in the supervision of a company’s accounting function, the preparation of financial statements, the assessment and oversight of the external auditors, the oversight of regulatory filings and compliance and the evaluation of internal controls over financial reporting. Messrs. McFarlane and Bastable have also served on the audit committees of various public and private companies. In addition, Mr. Bastable has a business-related university degree. Details of the experience of Messrs. McFarlane and Bastable and Ms. Riddell Rose are contained our Management Proxy Circular dated March 14, 2016 under the heading “Business of the Meeting – Election of Trustees.” The collective experience and depth of knowledge represented by the members of the Audit Committee provide the committee with an understanding of the accounting principles used by us, including the application of estimates, accruals and provisions, that is sufficient to allow the committee to carry out its mandate.

Pre-Approval Policies and Procedures

From time to time, Deloitte also provides us with tax and other non-audit services and we maintain a policy regarding the provision of non-audit services by our external auditors. This policy, which is periodically reviewed and updated, requires consideration of whether the provision of services other than audit services is compatible with maintaining the auditors’ independence and requires Audit Committee pre-approval of permitted audit, audit related and non-audit services. It also specifies a number of services that are not permitted to be provided by our external auditors, including services related to financial information systems design and implementation.

External Auditor Service Fees (By Category)

The following table sets forth further information on the fees billed or expected to be billed by Deloitte to BOX relating to the fiscal years ended December 31, 2015 and 2014:

Service Performed	2015	2014
Audit fees	$685,000	$830,000
Audit related fees⁽¹⁾	$1,018,100	$1,050,000
Tax fees	-	-
All other fees	-	-
Total fees	$1,703,100	$1,880,000

Note:

(1)

Included in this amount is $1,008,100 (2014 - $1,020,000) related to the audits of various BOX subsidiaries and $10,000 (2014 - $30,000) of non-recurring fees.

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Audit fees were for professional services rendered for the audit of our consolidated financial statements as of and for the years ended December 31, 2015 and 2014, quarterly review of the financial statements included in our quarterly reports, consents and comfort letters issued and review of filings with securities commissions.

Audit-related fees consisted of fees for assurance and related services that are reasonably related to the performance of the audit and are not reported under “Audit Fees.” Audit-related fees include fees for employee benefit plans, operating cost and escalation, joint venture and lender audits, as well as consultations concerning financial accounting and reporting standards.

Tax fees consist of fees for services related to tax compliance, including the preparation of tax returns and refund claims and tax planning and advice, including assistance with property tax assessment and appeals and technical advice related to income tax matters.

The Audit Committee of the board of trustees has determined that the provision of these services is compatible with the maintenance of the independence of Deloitte.

ADDITIONAL INFORMATION

Additional information including trustees’ and executive officers’ remuneration and indebtedness, the principal holders of our securities and securities authorized for issuance under equity compensation plans is set out in our Management Proxy Circular dated March 14, 2016. Additional financial information is also provided in the consolidated financial statements in our Annual Report for the year ended December 31, 2015. Our 2015 Annual Report also contains, in pages 4 through 31, the Management’s Discussion and Analysis of our financial condition and results of operations for the year ended December 31, 2015.

You may access other information about us, including our disclosure documents, reports, statements or other information that we file with the Canadian securities regulatory authorities through SEDAR at www.sedar.com and in the United States with the Securities and Exchange Commission at www.sec.gov and on our web site at www.brookfieldcanadareit.com.

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APPENDIX A - Commercial Properties by Region

Information in this table is as of December 31, 2015.

(Square feet in 000’s)	Number of Properties	Leased %	Office	Retail	Leasable Area	Parking and Other	Total	Ownership Interest %	Owned Interest
TORONTO
Brookfield Place Toronto
Bay Wellington Tower	1	92.3%	1,297	44	1,341	68	1,409	100%	1,409
Retail & Parking⁽¹⁾	1	97.2%	—	52	52	503	555	56%	308
First Canadian Place	1	93.3%	2,380	229	2,612	220	2,832	25%	708
Bay Adelaide West	1	95.3%	1,156	32	1,189	409	1,598	100%	1,598
Bay Adelaide East⁽²⁾	1	95.0%	980	—	980	—	980	100%	980
Exchange Tower	1	96.8%	961	66	1,027	203	1,230	50%	615
Hudson's Bay Centre	1	97.4%	532	213	745	175	920	100%	920
2 Queen St. East	1	99.7%	448	16	464	71	535	25%	134
Queen’s Quay Terminal	1	97.4%	429	54	483	28	511	100%	511
105 Adelaide St. West	1	99.9%	177	7	184	31	215	100%	215
22 Front St. West	1	99.9%	136	7	143	1	144	100%	144
	11	95.1%	8,500	720	9,220	1,709	10,929		7,542

OTTAWA
Place de Ville I	2	91.6%	571	11	582	364	946	25%	237
Place de Ville II	2	94.7%	587	7	594	330	924	25%	231
Jean Edmonds Towers	2	99.8%	544	10	554	108	662	25%	166
	6	95.3%	1,702	28	1,730	802	2,532		634

CALGARY
Bankers Hall	3	94.0%	1,940	222	2,162	481	2,643	50%	1,322
Bankers Court	1	99.8%	256	7	263	70	333	50%	167
Suncor Energy Centre	2	100.0%	1,708	25	1,733	349	2,082	50%	1,041
Fifth Avenue Place	2	98.4%	1,428	49	1,477	294	1,771	50%	886
	8	97.3%	5,332	303	5,635	1,194	6,829		3,416
VANCOUVER
Royal Centre	1	93.7%	488	93	581	260	841	100%	841

OTHER
Merivale Place, Nepean	1	100.0%	—	3	3	—	3	100%	3
TOTAL COMMERCIAL PROPERTIES	27	95.8%	16,022	1,147	17,169	3,965	21,134		12,436

DEVELOPMENT
Brookfield Place Calgary East⁽³⁾	1	71.4%	1,400	—	1,400	—	1,400	100%	1,400

TOTAL PORTFOLIO	28		17,422	1,147	18,569	3,965	22,534		13,836

(1)

Brookfield Canada Office Properties owns a 50% interest in the retail operations and is entitled to a 56% interest in the parking operations.

(2)

95.0% occupancy includes BPO headlease. Occupancy excluding BPO headlease is 71.3%.

(3)

The development was acquired on an “as-if-completed-and-stabilized basis.”

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APPENDIX B - Audit Committee Charter

A committee of the board of trustees of Brookfield Canada Office Properties (the “Trust”) to be known as the Audit Committee (the “Committee”) shall have the following terms of reference:

Membership and Chair

Annually, the board of trustees of the Trust (the “Board”) shall appoint three or more trustees (the “Members” and each a “Member”) to serve on the Committee for the upcoming year or until the Member ceases to be a trustee, resigns or is replaced, whichever occurs first.

The Members will be selected by the Board on the recommendation of the Governance and Nominating Committee. Any Member may be removed from office or replaced at any time by the Board. All of the Members will be Independent trustees. In addition, every Member will be Financially Literate, or agree to become Financially Literate within a reasonable period of time following appointment. Members may not serve on three or more other public company audit committees, except with the prior approval of the Chair of the Board.

The Board shall appoint one Member as the Chair of the Committee. If the Chair is absent from a meeting, the Members shall select a Member from those in attendance to act as Chair of the meeting.

Responsibilities

The Committee shall:

oversee the work of the external auditor of the Trust engaged for the purpose of preparing or issuing an auditor’s report or providing other audit, review or attest services to the Trust (the “auditor”);

require the auditor to report directly to the Committee;

review and evaluate the auditor’s independence, experience, qualifications and performance and determine whether the auditor should be appointed or re-appointed and recommend to the Board the auditor who should be nominated for appointment or re-appointment by the unitholders;

where appropriate, recommend to the Board that the unitholders terminate the auditor;

when a change of auditor is proposed, review all issues related to the change, including the information to be included in the notice of change of auditor required, and the orderly transition of such change;

review the terms of the auditor’s engagement and recommend to the Board the compensation of the auditor;

at least annually, obtain and review a report by the auditor describing:

the auditor’s internal quality-control procedures; and

any material issues raised by the most recent internal quality control review, or peer review, of the auditor, or review by any independent oversight body such as the Canadian Public Accountability Board or the Public Company Accounting Oversight Board, or governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the auditor, and the steps taken to deal with any issues raised in any such review;

at least annually, confirm that the auditor has submitted a formal written statement describing all of its relationships with the Trust; discuss with the auditor any disclosed relationships or services that may affect its objectivity and independence; obtain written confirmation from the auditor that it is objective within the meaning of the Rules of Professional Conduct/Code of Ethics adopted by the order of chartered accountants to which it belongs and is an independent public accountant within the meaning

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of applicable securities legislation, and confirm that it has complied with applicable laws with the rotation of certain members of the audit engagement team;

review and evaluate the lead partner of the auditor;

ensure the regular rotation of the audit engagement team members as required by law, and periodically consider whether there should be regular rotation of the auditor;

meet privately with the auditor as frequently as the Committee feels is appropriate to fulfill its responsibilities, which will not be less frequently than annually, to discuss any items of concern to the Committee or the auditor, including:

planning and staffing of the audit;

any material written communications between the auditor and management;

whether or not the auditor is satisfied with the quality and effectiveness of financial recording procedures and systems;

the extent to which the auditor is satisfied with the nature and scope of its examination;

whether or not the auditor has received the full co-operation of management of the Trust;

the auditor’s opinion of the competence and performance of the Chief Financial Officer and other key financial personnel;

the items required to be communicated to the Committee in accordance with generally accepted auditing standards;

all critical accounting policies and practices to be used by the Trust;

all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the auditor;

any difficulties encountered in the course of the audit work, any restrictions imposed on the scope of activities or access to requested information, any significant disagreements with management and management’s response; and

any illegal act that may have occurred and the discovery of which is required to be disclosed to the Committee pursuant to applicable securities legislation.

annually review and approve the Approval of Audit and Non-Audit Services Provided by the Independent Auditor Policy (the “Pre-approval Policy”) which sets forth the parameters by which the auditor can provide certain audit and non-audit services to the Trust not prohibited by law and the process by which the Committee pre-approves such services. The Committee, or a member(s) of the Committee duly delegated, will review and approve all auditor requests to provide audit and non-audit services that are not pre-approved under the Pre-Approval Policy, or are in excess of the aggregate fee threshold for the amount of services that can be provided by the auditor. At each quarterly meeting of the Committee, the Committee will ratify all audit and non-audit services provided by the auditor for the then-ended quarter;

resolve any disagreements between management and the auditor regarding financial reporting;

| Brookfield Canada Office Properties | 2016 Annual Information Form

prior to the disclosure to the public, review, and, where appropriate, recommend for approval by the Board, the following:

audited annual financial statements, in conjunction with the report of the auditor;

interim consolidated financial statements;

annual and interim earnings press releases;

annual and interim management’s discussion and analysis of financial condition and results of operations;

reconciliations of the annual or interim financial statement; and

all other audited or unaudited financial information contained in public disclosure documents (including without limitation, any prospectus, or other offering or public disclosure documents and financial statements required by regulatory authorities);

discuss press releases containing financial information (to ensure consistency of the disclosure to the financial statements), as well as financial information and earnings guidance provided to analysts and rating agencies including the use of “pro forma” information in such press releases and financial information. Such review may consist of a general discussion of the types of information to be disclosed or the types of presentations to be made;

review the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Trust’s financial statements;

review disclosures made to the Committee by the Chief Executive Officer and Chief Financial Officer during their certification process for applicable securities law filings about any significant deficiencies and material weaknesses in the design or operation of the Trust’s internal control over financial reporting which are reasonably likely to adversely affect the Trust’s ability to record, process, summarize and report financial information, and any fraud involving management or other employees;

review the effectiveness of management’s policies and practices concerning financial reporting, any proposed changes in major accounting policies, the appointment and replacement of management responsible for financial reporting and the internal audit function;

review the adequacy of the internal controls that have been adopted by the Trust to safeguard assets from loss and unauthorized use and to verify the accuracy of the financial records and any special audit steps adopted in light of significant deficiencies and material weaknesses in internal control over financial reporting;

meet privately with the person responsible for the Trust’s internal audit function as frequently as the Committee feels appropriate to fulfill its responsibilities, which will not be less frequently than annually, to discuss any items of concern;

review the mandate, budget, planned activities, staffing and organizational structure of the internal audit function (which may be outsourced to a firm other than the auditor) to confirm that it is independent of management and has sufficient resources to carry out its mandate. The Committee will discuss this mandate with the auditor, review the appointment and replacement of the person in charge of the Trust’s internal audit function and review the significant reports to management prepared by the internal audit function and management’s responses. As part of this process, the Committee will review and approve the governing charter of the internal audit function on an annual basis;

| Brookfield Canada Office Properties | 2016 Annual Information Form

review the controls and procedures that have been adopted to confirm that material information about the Trust and its subsidiaries that is required to be disclosed under applicable law or stock exchange rules is disclosed and to review the public disclosure of financial information extracted or derived from the issuer’s financial statements and periodically assess the adequacy of such controls and procedures;

establish and periodically review the procedures for the receipt, follow-up, retention and treatment of complaints received by the Trust about accounting, internal controls, disclosure controls or auditing matters and for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters;

review and approve periodically, the Trust’s policies with respect to risk assessment and management, particularly financial risk exposure, including the steps taken to monitor and control risks;

review periodically, the status of taxation matters of the Trust;

review and approve the Trust’s policies for hiring partners and employees and former partners and employees of the auditor and any former auditors of the Trust;

aa)

review, with legal counsel where required, such litigation, claims, tax assessments, transactions, inquiries from regulators and material inquiries from governmental agencies or other contingencies which may have a material impact on financial results or which may otherwise adversely affect the financial well-being of the Trust; and

bb)

consider other matters of a financial nature as directed by the Board.

Limitation of Audit Committee Role

The Committee’s function is one of oversight. The Trust’s management is responsible for preparing the Trust’s financial statements and, along with the internal audit function, for developing and maintaining systems of internal accounting and financial controls, while the independent auditor will assist the Committee and the Board in fulfilling their responsibilities for their review of the financial statements and internal controls and will be responsible for its independent audit of the financial statements. The Committee expects the auditor to call to their attention any accounting, auditing, internal accounting control, regulatory or other related matters that they believe warrant consideration or action. The Committee recognizes that the financial management and the internal audit team and the auditor have more knowledge and information about the trust than do Committee members. Accordingly, in carrying out its oversight responsibilities, the Committee does not provide any expert or special assurance as to the Trust’s financial statements or internal controls or any professional certification as to the auditor’s work.

Reporting

The Committee will regularly report to the Board on:

the auditor’s independence;

the performance of the auditor and the Committee’s recommendations regarding its reappointment or termination;

the performance of the internal audit function;

the adequacy of the Trust’s internal controls and disclosure controls;

its recommendations regarding the annual and interim financial statements of the Trust and any reconciliation of the Trust’s financial statements, including any issues with respect to the quality or integrity of the financial statements;

| Brookfield Canada Office Properties | 2016 Annual Information Form

its review of any other public disclosure document including the annual report and the annual and interim management’s discussion and analysis of financial condition and results of operations;

the Trust’s compliance with legal and regulatory requirements, particularly those related to financial reporting; and

all other significant matters it has addressed and with respect to such other matters that are within its responsibilities.

Review and Disclosure

The Committee will review this Charter at least annually and submit it to the Governance and Nominating Committee together with any proposed amendments. The Governance and Nominating Committee will review the Charter and submit it to the Board for approval with such further amendments as it deems necessary and appropriate.

This Charter will be posted on the Trust’s website and the annual report of the Trust will state that this Charter is available on the website. This Charter will also be included in the Trust’s Annual Information Form.

Assessment

At least annually, the Governance and Nominating Committee will review the effectiveness of this Committee in fulfilling its responsibilities and duties as set out in this Charter and in a manner consistent with the governance guidelines adopted by the Board.

Access To Advisors And Senior Management

In furtherance of its responsibilities to the Trust, the Committee may retain any advisor at the expense of the Trust, without the Board’s approval, at any time and may determine any such advisor’s fees and other retention terms.

The Trust will provide for appropriate funding, for payment of compensation to any auditor engaged to prepare or issue an audit report or perform other audit, review or attest services, and ordinary administrative expenses of the Committee.

Members will meet privately with senior management as frequently as they feel is appropriate to fulfill the Committee’s responsibilities, but not less than annually.

Meetings

Meetings of the Committee may be called by any Member, the Chair of the Board, the Chief Executive Officer, the Chief Financial Officer or the auditor. Meetings will be held each quarter and at such additional times as is necessary for the Committee to fulfill its responsibilities. The Committee shall appoint a secretary to be the secretary of each meeting of the Committee and to maintain minutes of the meeting and deliberations of the Committee. The Committee may also take action from time to time by unanimous written consent.

The powers of the Committee shall be exercisable at a meeting at which a quorum is present. A quorum shall be not less than two of the Members from time to time. Matters decided by the Committee shall be decided by majority vote. Subject to the foregoing and the Trust’s governing documents, and unless otherwise determined by the Board, the Committee shall have the power to regulate its procedure.

Notice of each meeting shall be given to the auditor, each Member, and to the Chair of the Board and the Chief Executive Officer of the Trust. Notice of meeting may be given orally, in person or by telephone, by letter, by electronic mail or other reasonable means not less than 48 hours before the time fixed for the meeting. Members may waive notice of any meeting and attendance at a meeting is deemed waiver of notice. The notice need not state the purpose or purposes for which the meeting is being held.

| Brookfield Canada Office Properties | 2016 Annual Information Form

The Committee may invite from time to time such persons as it may see fit to attend its meetings and to take part in discussion and consideration of the affairs of the Committee. The Committee may require the auditors and/or members of management to attend any or all meetings.

Definitions

Capitalized terms used in this Charter and not otherwise defined have the meaning attributed to them below:

“Independent” has the meaning based on the rules and guidelines of applicable stock exchanges and securities regulatory authorities.

“Financially Literate” means the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Trust’s financial statements.

Amended and Affirmed by the Board of Trustees on January 25, 2016

| Brookfield Canada Office Properties | 2016 Annual Information Form

Exhibit 99.2

Portfolio by City

Brookfield Canada Office Properties’ portfolio is composed of interests in 27 premier office properties totaling 21.1 million square feet, including 4.0 million square feet of parking and other. Landmark properties include Brookfield Place Toronto, Bay Adelaide Centre, and First Canadian Place in Toronto and Bankers Hall in Calgary. Our development portfolio consists of 1.4 million square feet in the downtown core of Calgary.

	Number of		Leased							Leasable		Parking				Ownership			Owned
(Square feet in 000’s)	Properties		%			Office		Retail		Area		and Other		Total		Interest %			Interest
TORONTO
Brookfield Place Toronto
Bay Wellington Tower		1		92.3	%		1,297		44		1,341		68		1,409		100	%		1,409
Retail & Parking⁽¹⁾		1		97.2	%		—		52		52		503		555		56	%		308
First Canadian Place		1		93.3	%		2,383		229		2,612		220		2,832		25	%		708
Bay Adelaide West		1		95.3	%		1,157		32		1,189		266		1,455		100	%		1,455
Bay Adelaide East⁽²⁾		1		95.0	%		980		—		980		143		1,123		100	%		1,123
Exchange Tower		1		96.8	%		961		66		1,027		203		1,230		50	%		615
Hudson’s Bay Centre		1		97.4	%		532		213		745		175		920		100	%		920
2 Queen St. East		1		99.7	%		448		16		464		71		535		25	%		134
Queen’s Quay Terminal		1		97.4	%		429		54		483		28		511		100	%		511
105 Adelaide St. West		1		99.9	%		177		7		184		31		215		100	%		215
22 Front St. West		1		99.9	%		136		7		143		1		144		100	%		144
		11		95.1	%		8,500		720		9,220		1,709		10,929					7,542
OTTAWA
Place de Ville I		2		91.6	%		571		11		582		364		946		25	%		237
Place de Ville II		2		94.7	%		587		7		594		330		924		25	%		231
Jean Edmonds Towers		2		99.8	%		544		10		554		108		662		25	%		166
		6		95.3	%		1,702		28		1,730		802		2,532					634
CALGARY
Bankers Hall		3		94.0	%		1,940		222		2,162		481		2,643		50	%		1,322
Bankers Court		1		99.8	%		256		7		263		70		333		50	%		167
Suncor Energy Centre		2		100.0	%		1,708		25		1,733		349		2,082		50	%		1,041
Fifth Avenue Place		2		98.4	%		1,428		49		1,477		294		1,771		50	%		886
		8		97.3	%		5,332		303		5,635		1,194		6,829					3,416
VANCOUVER
Royal Centre		1		93.7	%		488		93		581		260		841		100	%		841
OTHER
Merivale Place, Nepean		1		100.0	%		—		3		3		—		3		100	%		3
TOTAL COMMERCIAL PROPERTIES		27		95.8	%		16,022		1,147		17,169		3,965		21,134					12,436

DEVELOPMENT
Brookfield Place Calgary East⁽³⁾		1		71.4	%		1,400		—		1,400		—		1,400		100	%		1,400

TOTAL PORTFOLIO		28					17,422		1,147		18,569		3,965		22,534					13,836

⁽¹⁾

Brookfield Canada Office Properties owns a 50% interest in the retail operations and is entitled to a 56% interest in the parking operations.

⁽²⁾

95.0% occupancy includes Brookfield Office Properties Inc. headlease. Occupancy excluding Brookfield Office Properties Inc. headlease is 71.3%. Refer to Related-Party Transactions section on page 30 of the MD&A.

⁽³⁾

The development was acquired on an “as-if-completed-and-stabilized basis” as described on page 10 of the MD&A under Commercial Developments.

Brookfield Canada Office Properties

Contents

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL RESULTS

PART I – OBJECTIVES AND FINANCIAL HIGHLIGHTS	4

PART II – FINANCIAL STATEMENT ANALYSIS	8

PART III – RISKS AND UNCERTAINTIES	25

PART IV – CRITICAL ACCOUNTING POLICIES AND ESTIMATES	28

PART V – BUSINESS ENVIRONMENT AND OUTLOOK	31

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS	32

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	33

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING	34

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	35

CONSOLIDATED FINANCIAL STATEMENTS	36

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	40

UNITHOLDER INFORMATION	53

SELECTED FINANCIAL AND OPERATIONAL INFORMATION	54

BOARD OF TRUSTEES AND OFFICERS	55

2	2015 Annual Report

FORWARD-LOOKING STATEMENTS

This annual report to unitholders, particularly the section entitled Management’s Discussion and Analysis of Financial Results, contains “forward-looking information” within the meaning of Canadian provincial securities laws and applicable regulations and “forward-looking statements” within the meaning of “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, include statements regarding the Trust’s operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook, as well as the outlook for the Canadian economy for the current fiscal year and subsequent periods, and include words such as “expects”, “anticipates”, “plans”, “believes”, “estimates”, “seeks”, “intends”, “targets”, “projects”, “forecasts”, “likely”, or negative versions thereof and other similar expressions, or future or conditional verbs such as “may”, “will”, “should”, “would” and “could”.

Although the Trust believes that the anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Trust, which may cause the actual results, performance or achievements of the Trust to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.

Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to: risks incidental to the ownership and operation of real estate properties including local real estate conditions; the impact or unanticipated impact of general economic, political and market factors in Canada; the ability to enter into new leases or renew leases on favourable terms; business competition; dependence on tenants’ financial condition; the use of debt to finance the Trust’s business; the behavior of financial markets, including fluctuations in interest rates; equity and capital markets and the availability of equity and debt financing and refinancing within these markets; risks relating to the Trust’s insurance coverage; the possible impact of international conflicts and other developments including terrorist acts; potential environmental liabilities; changes in tax laws and other tax related risks; dependence on management personnel; illiquidity of investments; the ability to complete and effectively integrate acquisitions into existing operations and the ability to attain expected benefits therefrom; operational and reputational risks; catastrophic events, such as earthquakes and hurricanes; and other risks and factors detailed from time to time in the Trust’s documents filed with the securities regulators in Canada and the United States.

Brookfield Canada Office Properties

Management’s Discussion and Analysis of Financial Results

February 24, 2016

PART I – OBJECTIVES AND FINANCIAL HIGHLIGHTS

BASIS OF PRESENTATION

Financial data included in this Management’s Discussion and Analysis (“MD&A”) for the year ended December 31, 2015, includes material information up to February 24, 2016. Financial data provided has been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). All dollar references, unless otherwise stated, are in millions of Canadian dollars except per unit amounts. Amounts in U.S. dollars are identified as “US$.”

Brookfield Canada Office Properties (“BOX,” the “Trust,” “we”, “our” or “us” ) was formed in connection with the reorganization of BPO Properties Ltd. (“BPP”), a former wholly-owned subsidiary of Brookfield Office Properties Inc. (“BOPI”), on May 1, 2010, in which BPP’s directly owned office assets were transferred to the Trust. In connection with the reorganization, the Trust also acquired BOPI’s interest in Brookfield Place Toronto, which includes Bay Wellington Tower and partial interests in the retail concourse and parking operations.

On December 1, 2011, we acquired from BOPI, a 25% interest in nine office assets from its Canadian Office Fund portfolio totaling 6.5 million square feet in Toronto and Ottawa. On July 11, 2013, we acquired Bay Adelaide East from BOPI totaling 980,000 square feet in Toronto and on October 14, 2014, we acquired Brookfield Place Calgary East from BOPI totaling 1.4 million square feet in Calgary.

The following discussion and analysis is intended to provide readers with an assessment of the performance of BOX over the past two years as well as our financial position and future prospects. It should be read in conjunction with the consolidated financial statements and appended notes, which begin on page 36 of this report. In Part II – Financial Statement Analysis, we review our operating performance and financial position as presented in our financial statements prepared in accordance with IFRS.

We included our discussion of operating performance on an IFRS basis beginning on page 18 of the MD&A followed by a discussion of non-IFRS measures. Included in non-IFRS measures are commercial property net operating income, funds from operations, and adjusted funds from operations on a total and per-unit basis. Commercial property net operating income, funds from operations and adjusted funds from operations do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies. We define commercial property net operating income as income from commercial property operations after direct property operating expenses, including property administration costs, have been deducted but prior to deducting or including interest expense, general and administrative expenses, and fair value gains (losses). We define funds from operations as net income prior to transaction costs, fair value gains (losses), and certain other non-cash items. Adjusted funds from operations is defined by us as funds from operations net of second-generation leasing commissions and tenant improvements, maintaining value capital expenditures, and straight-line rental income.

Commercial property net operating income is an important measure that both investors and management use to assess operating performance of our commercial properties, and funds from operations is a widely used measure in analyzing the performance of real estate. Adjusted funds from operations is a measure used to assess an entity’s ability to pay distributions. We provide the components of commercial property net operating income, a reconciliation of net income to commercial property net operating income, a full reconciliation of net income to funds from operations and adjusted funds from operations, and a reconciliation of cash generated from operating activities to adjusted funds from operations beginning on page 22.

Additional information, including our Annual Information Form, is available on our Web site at www.brookfieldcanadareit.com or at www.sedar.com or www.sec.gov.

OVERVIEW OF THE BUSINESS

BOX is a publicly traded, real estate investment trust listed on the Toronto and New York stock exchanges under the symbol BOX.UN and BOXC, respectively.

The Trust invests, develops and operates commercial office properties in Toronto, Ottawa, Calgary, and Vancouver.

At December 31, 2015, the carrying value of BOX’s total assets was $6,356.5 million. During the year ended December 31, 2015, we generated $351.4 million of net income ($3.76 per unit), $145.8 million of funds from operations ($1.56 per unit), and $94.6 million of adjusted funds from operations ($1.01 per unit).

4	2015 Annual Report

FINANCIAL HIGHLIGHTS

BOX’s financial results are as follows:

(Millions, except per-unit amounts)	2015		2014		2013
Results of operations
Commercial property revenue	$	516.9	$	517.2	$	521.9
Net income		351.4		116.1		164.8
Funds from operations⁽¹⁾		145.8		158.2		144.7
Adjusted funds from operations⁽¹⁾⁽²⁾		94.6		121.5		110.1
Distributions		115.5		113.4		109.1
Per unit amounts – attributable to unitholders
Net income		3.76		1.24		1.77
Funds from operations⁽¹⁾		1.56		1.70		1.55
Adjusted funds from operations⁽¹⁾⁽²⁾		1.01		1.30		1.18
Distributions		1.24		1.21		1.17

(Millions, except per-unit amounts)	Dec. 31, 2015		Dec. 31, 2014		Dec. 31, 2013
Balance sheet data
Total assets	$	6,356.5	$	5,943.4	$	5,608.8
Investment properties		6,267.8		5,802.4		5,390.2
Investment property and corporate debt		2,838.5		2,649.7		2,354.9
Total equity		3,333.0		3,096.3		3,092.3
Total equity per unit		35.72		33.19		33.18

⁽¹⁾

Non-IFRS measure. Refer to description of non-IFRS measures and reference to reconciliation to comparable IFRS measures beginning on page 20.

⁽²⁾

Based on actual leasing commissions, tenant improvements and maintaining value capital expenditures incurred.

COMMERCIAL PROPERTY OPERATIONS

Our strategy to own premier properties in high-growth, and in many instances supply-constrained markets with high barriers to entry, has created one of Canada’s most distinguished portfolios of office properties. Our commercial-property portfolio consists of interests in 27 properties totaling 21.1 million square feet, including 4.0 million square feet of parking and other. Our development portfolio consists of the Brookfield Place Calgary East development site totaling 1.4 million square feet in Calgary. Our markets are the financial, government and energy sectors primarily located in the cities of Toronto and Calgary. Our strategy is concentrating operations within a select number of Canadian gateway cities with attractive tenant bases in order to maintain a meaningful presence and build on the strength of our tenant relationships within these markets.

Gross Leasable Area by City	Gross Leasable Area by Tenant Base
as of December 31, 2015	as of December 31, 2015

We remain focused on the following strategic priorities:

•

Realizing value from our investment properties through proactive leasing initiatives;

•

Prudent capital management, including the refinancing of mature investment properties; and

•

Acquiring high-quality investment properties in our primary markets for value when opportunities arise.

Brookfield Canada Office Properties

The following table summarizes our commercial property portfolio by region as at December 31, 2015:

					BOX’s								Net Book
	Number of		Total Area		Owned Interest		Fair Value		Fair Value		Debt⁽¹⁾		Equity⁽²⁾
Region	Properties		(000’s Sq. Ft.)		(000’s Sq. Ft.)		(Millions)		Per Sq. Ft.		(Millions)		(Millions)
Commercial properties
Eastern region		18		13,464		8,179	$	3,723.0	$	455	$	1,632.7	$	2,090.3
Western region		9		7,670		4,257		2,082.1		489		886.4		1,195.7
Total		27		21,134		12,436	$	5,805.1	$	467	$	2,519.1	$	3,286.0

⁽¹⁾

Excludes debt associated with our development properties and corporate debt.

⁽²⁾

Represents fair value less debt and excludes working capital and is a non-IFRS measure.

An important characteristic of our portfolio is the strong credit quality of our tenants. We direct special attention to credit quality, particularly in the current economic environment, in order to ensure the long-term sustainability of rental revenues through economic cycles. Major tenants with over 500,000 square feet of space in the portfolio include government and related agencies, Suncor Energy Inc., Bank of Montreal, Deloitte LLP, and Canadian Natural Resources. A detailed list of major tenants is included in Part III (“Risks and Uncertainties”) of this MD&A, beginning on page 25.

Our strategy is to sign long-term leases in order to mitigate risk and reduce our overall re-tenanting costs. We typically commence discussions with tenants regarding their space requirements well in advance of the contractual expiration, and although each market is different, the majority of our leases, when signed, extend between five and 10-year terms. As a result of this strategy, approximately 4.9% of our leases, on average, mature annually up to and including 2020. Our average lease term is eight years.

The following is a breakdown of lease maturities by region with associated in-place rental rates on our commercial properties:

	Total Portfolio							Toronto, Ontario						Ottawa, Ontario
						Net Rent						Net Rent						Net Rent
	000's					per		000's				per		000's				Per
Year of Expiry	Sq. Ft.		%			Sq. Ft.⁽¹⁾		Sq. Ft.		%		Sq. Ft.⁽¹⁾		Sq. Ft.		%		Sq. Ft.⁽¹⁾
Currently available		724		4.2					452		4.9				82		4.7
2016		685		4.0		$	22		276		3.0	$	20		22		1.3	$	17
2017		463		2.7			32		352		3.8		35		35		2.0		18
2018		746		4.3			35		571		6.2		33		3		0.2		20
2019		878		5.1			28		670		7.3		28		86		5.0		23
2020		1,415		8.2			35		1,066		11.6		33		9		0.5		27
2021		1,287		7.5			30		587		6.4		35		566		32.7		23
2022		1,201		7.0			31		729		7.9		30		20		1.2		13
2023 and beyond		9,770		57.0			30		4,517		48.9		29		907		52.4		19
Parking and other		3,965		—			—		1,709		—		—		802		—		—
Total		21,134		100.0	%				10,929		100.0				2,532		100.0
Average market net rent^{(2) (3)}						$	28					$	32					$	18

	Calgary, Alberta						Vancouver, B.C.						Other
					Net Rent						Net Rent						Net Rent
	000's				per		000’s				per		000’s				Per
Year of Expiry	Sq. Ft.		%		Sq. Ft.⁽¹⁾		Sq. Ft.		%		Sq. Ft.⁽¹⁾		Sq. Ft.		%		Sq. Ft.⁽¹⁾
Currently available		154		2.7				36		6.3				—		—
2016		355		6.3	$	24		32		5.5	$	27		—		—	$	—
2017		63		1.1		28		13		2.2		29		—		—		—
2018		142		2.5		42		30		5.2		34		—		—		—
2019		80		1.4		42		41		7.1		26		1		33.3		—
2020		272		4.8		43		68		11.7		32		—		—		28
2021		108		1.9		43		26		4.5		40		—		—		—
2022		374		6.6		34		78		13.4		29		—		—		—
2023 and beyond		4,087		72.7		34		257		44.1		17		2		66.7		26
Parking and other		1,194		—		—		260		—		—		—		—		—
Total		6,829		100.0				841		100.0				3		100.0
Average market net rent⁽²⁾					$	26					$	25					$	—

⁽¹⁾

Net rent at expiration of lease.

⁽²⁾

Average market net rent represents management’s estimate of average rent per square foot for buildings of similar quality to our portfolio. However, it may not necessarily be representative of the specific space that is rolling in any specific year. Included on page 20 is the average leasing net rent achieved on our year-to-date leasing as compared to the average expiring net rent.

⁽³⁾

Average market net rent for Toronto reflects higher market rents for Brookfield Place Toronto and Bay Adelaide West, which comprise 28% of BOX’s exposure in Toronto.

6	2015 Annual Report

COMMERCIAL DEVELOPMENTS

The following table summarizes our development projects at December 31, 2015:

Number of

Owned

Leasable Area

Region

Location

Sites

Interest

(000's Sq. Ft.)

Brookfield Place Calgary East

Calgary

Within one block of Fifth Avenue Place,

100

1,400

Bankers Hall and Suncor Energy Centre

Brookfield Place Calgary East is currently 71.4% pre-leased to anchor tenant Cenovus and is on target to be completed in late 2017.

On November 30, 2015, Bay Adelaide East was transferred into commercial property upon substantial completion with its first lease commencing in December 2015.

PERFORMANCE MEASUREMENT

The key indicators by which we measure our performance are:

•

Net income per unit;

•

Commercial property net operating income;

•

Funds from operations per unit;

•

Adjusted funds from operations per unit;

•

Total equity per unit;

•

Overall indebtedness level;

•

Weighted-average cost of debt; and

•

Occupancy levels.

Although we monitor and analyze our financial performance using a number of indicators, our primary business objective of generating reliable and growing cash flow is monitored and analyzed using net income, commercial property net operating income, funds from operations, and adjusted funds from operations. Although net income is calculated in accordance with IFRS, IFRS does not prescribe standardized meanings for commercial property net operating income, funds from operations, and adjusted funds from operations; therefore, they are unlikely to be comparable to similar measures presented by other entities. We provide the components of commercial property net operating income, a reconciliation of net income to commercial property net operating income and a full reconciliation of net income to funds from operations and adjusted funds from operations beginning on page 22 of this MD&A.

Net Income

Net income is calculated in accordance with IFRS. Net income is used as a key indicator in assessing the profitability of the Trust.

KEY PERFORMANCE DRIVERS

In addition to monitoring and analyzing performance in terms of net income, we consider the following items to be important drivers of our current and anticipated financial performance:

•

Increases in occupancies by leasing vacant space;

•

Increases in rental rates through maintaining or enhancing the quality of our assets and as market conditions permit; and

•

Reduction in operating costs through achieving economies of scale and diligently managing contracts.

We also believe that the key external performance drivers include the availability of:

•

Debt capital at a cost and on terms conducive to our goals;

•

Equity capital at a reasonable cost;

•

New property acquisitions that fit into our strategic plan; and

•

Investors for dispositions of peak value or non-core assets.

Brookfield Canada Office Properties

PART II – FINANCIAL STATEMENT ANALYSIS

ASSET PROFILE

Our total asset carrying value was $6,356.5 million at December 31, 2015 (compared to $5,943.4 million at December 31, 2014). The following is a summary of our assets:

(Millions)	Dec. 31, 2015		Dec. 31, 2014
Non-current assets
Investment properties
Commercial properties	$	5,805.1	$	5,131.7
Commercial developments		462.7		670.7
		6,267.8		5,802.4
Current assets
Tenant and other receivables		23.8		34.3
Other assets		7.3		8.9
Cash and cash equivalents		57.6		58.9
		88.7		102.1
Assets held for sale		—		38.9
Total	$	6,356.5	$	5,943.4

COMMERCIAL PROPERTIES

Commercial properties comprise of our direct interests in wholly owned commercial properties and our proportionate share of the related assets, liabilities, revenue and expenses in our jointly controlled commercial properties.

The fair value of our commercial properties was $5,805.1 million as at December 31, 2015 (compared to $5,131.7 million at December 31, 2014). The increase in value of commercial properties is primarily attributable to the transfer of Bay Adelaide East to commercial properties upon substantial completion and increases across the Eastern portfolio due to capital expenditures, leasing costs and recognition of fair value gains as a result of favourable market conditions, improvements to tenant profiles, and rental curves related to new leases and renewals; offset by the disposition of HSBC Building in Toronto.

A breakdown of our commercial properties is as follows:

					BOX’s
					Owned		Fair Value		Fair Value
	Number of		Total Area		Interest		Dec. 31, 2015		Dec. 31, 2014
	Properties		(000's Sq. Ft.)		(000's Sq. Ft.)		(Millions)		(Millions)
Eastern region		18		13,464		8,179	$	3,723.0	$	3,145.7
Western region		9		7,670		4,257		2,082.1		1,986.0
Total commercial properties		27		21,134		12,436	$	5,805.1	$	5,131.7
Fair value per Sq. Ft.							$	467	$	439

The key valuation metrics for our commercial properties are as follows:

	December 31, 2015									December 31, 2014
							Weighted									Weighted
	Maximum			Minimum			Average			Maximum			Minimum			Average
Eastern region
Discount rate		7.00	%		6.00	%		6.13	%		7.00	%		6.00	%		6.34	%
Terminal cap rate		6.50	%		5.25	%		5.51	%		6.50	%		5.25	%		5.63	%
Hold period (yrs)		15			10			11			15			10			11
Western region
Discount rate		6.75	%		4.75	%		6.01	%		6.75	%		6.00	%		6.32	%
Terminal cap rate		6.25	%		3.53	%		5.46	%		6.00	%		5.50	%		5.63	%
Hold period (yrs)		11			10			10			11			10			10

Fair values are most sensitive to changes in discount rates and timing or variability of cash flows. A 25 basis-point decrease in the discount and terminal capitalization rates will impact the fair value of commercial properties by $103.2 million and $160.3 million, or 1.8% and 2.8%, respectively, at December 31, 2015.

8	2015 Annual Report

Upon the signing of the majority of our leases, we provide a capital allowance for tenant improvements or tenant inducements for leased space in order to accommodate the specific space requirements of the tenant. In addition to these allowances, leasing commissions are paid to third-party brokers and Brookfield Office Properties Management LP (“BOPM LP”), a subsidiary of BOPI. We may experience a delay between lease commencement and the payment of leasing costs due to timing of the tenant installation and the required inspections and certifications. For the year ended December 31, 2015, such expenditures totaled $43.8 million (compared to $29.7 million in 2014). The increase is primarily related to tenant installation costs incurred on the lease-up of space at Brookfield Place Toronto, Bay Adelaide East, Bankers Hall, Fifth Avenue Place, and Royal Centre.

We also invest in ongoing maintenance and capital improvement projects to sustain the high quality of the infrastructure and tenant service amenities in our properties. Capital expenditures for the year ended December 31, 2015 totaled $20.6 million (compared to $22.8 million in 2014). These expenditures exclude repairs and maintenance costs. Fluctuations in our capital expenditures vary period over period based on required and planned expenditures on our commercial properties.

Capital expenditures include maintaining value expenditures, which are those required in order to maintain the properties in their current operating state. Capital expenditures also include projects which represent improvements to an asset or reconfiguration of space that adds productive capacity in order to increase rentable area or increase current rental rates. For the year ended December 31, 2015, maintaining value capital expenditures totaled $8.7 million (compared with $7.9 million in 2014), while the remaining capital expenditures of $11.9 million (compared with $14.9 million in 2014) primarily consist of exterior plaza and common area upgrades at Fifth Avenue Place, food court renovation and the floor conversion project at First Canadian Place, and washroom upgrades at Exchange Tower and Brookfield Place Toronto. Capital expenditures are recoverable in some cases through contractual tenant cost-recovery payments. During the year ended December 31, 2015, $17.4 million, of our total capital expenditures were recoverable (compared with $20.8 million in 2014).

The following table summarizes the second-generation leasing commissions and tenant improvements, and maintaining value capital expenditures recorded on our commercial properties during the year ended December 31, 2015. “Second-generation” leasing commissions and tenant improvements includes both new and renewal tenants for all of our commercial properties and vary with the timing of renewals, vacancies and tenant mix. These costs historically have been lower for renewals of existing tenants compared to new tenants.

For the year ended December 31, 2015, second-generation leasing commissions and tenant improvements consisted primarily of leasing commissions incurred at Brookfield Place Toronto, and Bankers Hall, and tenant improvements at Brookfield Place Toronto, Bankers Hall, Fifth Avenue Place and Royal Centre related to tenant build-outs.

(Millions)	2015		2014
Second-generation leasing commissions and tenant improvements	$	39.5	$	28.0
Maintaining value capital expenditures		8.7		7.9
Total	$	48.2	$	35.9

The following table summarizes the changes in value of our commercial properties during the year ended December 31, 2015:

(Millions)	Dec. 31, 2015
Balance at beginning of year	$	5,131.7
Additions:
Capital expenditures and tenant improvements		48.6
Leasing commissions		15.1
Tenant inducements		0.7
Reclassification of commercial development, net		508.9
Investment property disposition		(108.8	)
Fair value gains		207.9
Other changes		1.0
Balance at end of year	$	5,805.1

Brookfield Canada Office Properties

COMMERCIAL DEVELOPMENTS

Commercial developments consist of Brookfield Place Calgary East which is a high quality, centrally located development site acquired from our parent company, BOPI for an aggregate total investment of $966.3 million. The building was purchased on an “as-if-completed-and-stabilized basis,” and as such, BOPI retains the development obligations including construction, lease-up and financing.

On November 30, 2015, Bay Adelaide East was transferred into commercial property upon substantial completion with its first lease commencing in December 2015.

The following table summarizes the details of the transactions and operational information as at December 31, 2015:

				Brookfield Place
(Millions, except Operational Information)	Bay Adelaide East			Calgary East
Initial acquisition price	$	169.9		$	245.5
Up-front equity commitment		26.0			81.8
First mortgage construction loan		350.0			575.0
Final payment due to BOPI on stabilization⁽¹⁾		56.0			64.0
Aggregate total investment	$	601.9		$	966.3

Operational Information
Total Leasable Area (000's Sq. Ft.)		980			1,400
Leased %⁽²⁾		95.0	%		71.4	%
Target Completion Date		Completed Nov 2015			Late 2017

⁽¹⁾

Subject to achieving stabilized net operating income and targeted permanent financing, which is expected to occur in 2017 for Bay Adelaide East and 2018 for Brookfield Place Calgary East.

⁽²⁾

95.0% occupancy includes BOPI headlease. Occupancy excluding BOPI headlease is 71.3%

Commercial developments under active development are measured using a discounted cash flow model, net of costs to complete, as of the balance sheet date. The total fair value of development land and infrastructure was $462.7 million at December 31, 2015.

The details of development expenditures are as follows:

(Millions)	2015		2014
Construction costs	$	261.2	$	173.3
Property taxes and other related costs		12.7		6.3
Borrowing costs capitalized		27.0		13.6
Total	$	300.9	$	193.2

The following table summarizes the changes in value of our commercial developments during the year ended December 31, 2015:

(Millions)	Dec. 31, 2015
Balance at beginning of year	$	670.7
Additions (Deductions):
Development expenditures		300.9
Transfer into commercial properties	$	(508.9	)
Balance at end of year	$	462.7

10	2015 Annual Report

INVESTMENT PROPERTY DISPOSITIONS AND HELD FOR SALE

During the year, we completed the sale of our 100% interest in HSBC Building and 25% interest in 151 Yonge St. We generated net proceeds of $105.7 million. During the fourth quarter of 2014, we reclassified our 25% interest in 151 Yonge St. in Toronto to assets held for sale for $38.8 million. The related receivables and liabilities were $0.1 million and $0.5 million, respectively.

(Millions)	HSBC Building			151 Yonge St.			Total
Sale proceeds	$	110		$	38.5		$	148.5
Selling costs		(1.2	)		(0.1	)		(1.3	)
Investment property disposition		108.8			38.4			147.2
Assumption of mortgage by purchaser		(41.5	)	$	—			(41.5	)
Net sale proceeds	$	67.3			38.4		$	105.7

During the fourth quarter, we commenced marketing the sale of our 100% interest in Royal Centre in Vancouver. Subsequently, we entered into an agreement to sell the property, which is anticipated to close during the first quarter of 2016.

TENANT AND OTHER RECEIVABLES

Tenant and other receivables decreased to $23.8 million at December 31, 2015, from $34.3 million at December 31, 2014 mainly due to receipt of realty tax refunds at Bay Adelaide West.

OTHER ASSETS

At December 31, 2015, the balance of other assets is comprised of prepaid expenses and other assets of $7.3 million (compared to $8.9 million at December 31, 2014).

CASH AND CASH EQUIVALENTS

We endeavor to maintain high levels of liquidity to ensure that we can meet distribution requirements and react quickly to potential investment opportunities. At December 31, 2015, cash balances were $57.6 million (compared to $58.9 million at December 31, 2014).

LIABILITIES AND EQUITY

Our asset base of $6,356.5 million is financed with a combination of debt and equity. The components of our liabilities and equity are as follows:

(Millions)	Dec. 31, 2015		Dec. 31, 2014
Liabilities
Non-current liabilities
Investment property and corporate debt	$	2,560.1	$	2,368.4
Current liabilities
Investment property and corporate debt		278.4		281.3
Accounts payable and other liabilities		185.0		196.9
		463.4		478.2
Liabilities associated with assets held for sale		—		0.5
		3,023.5		2,847.1
Equity
Unitholders’ equity		923.8		856.7
Non-controlling interest		2,409.2		2,239.6
		3,333.0		3,096.3
Total liabilities and equity	$	6,356.5	$	5,943.4

Brookfield Canada Office Properties

INVESTMENT PROPERTY AND CORPORATE DEBT

Investment property and corporate debt (current and non-current) totaled $2,838.5 million at December 31, 2015 (compared to $2,649.7 million at December 31, 2014). Investment property and corporate debt at December 31, 2015 had a weighted-average interest rate of 3.76%. Debt on our investment properties is mainly non-recourse, thereby reducing overall financial risk to the Trust.

We attempt to match the maturity of our investment property debt portfolio with the average lease term of our properties. At December 31, 2015, the average term to maturity of our investment property debt was seven years, compared to our average lease term of eight years.

The details of the financing transactions completed during 2015 are as follows:

New

Net Proceeds

Interest

(Millions)

Proceeds⁽¹⁾

Generated⁽¹⁾

Rate (%)

Mortgage Detail

Maturity

Hudson's Bay Centre

Extension

—

BA + 140 bps

Limited recourse

May 2016

Royal Centre

Extension

—

BA + 150 bps

Non-recourse

June 2016

Place de Ville I

New

21.0

3.752

Non-recourse

June 2025

Place de Ville II

New

22.8

3.752

Non-recourse

June 2025

⁽¹⁾

Excludes financing costs.

During the second quarter of 2015, we upsized our revolving corporate credit facility by $70.0 million to $350.0 million.

During the third quarter of 2015, we extended our revolving corporate credit facility for an additional two years under the existing financial terms, maturing August 29, 2020. As of December 31, 2015, $194.0 million was drawn on the revolving corporate credit facility.

12	2015 Annual Report

The details of investment property and corporate debt at December 31, 2015, are as follows:

		Interest			Maturity	BOX’s Share
	Location	Rate %			Date	(Millions)			Mortgage Details
Income Producing
Hudson's Bay Centre⁽¹⁾	Toronto		2.24	%	May 2016	$	97.3		Limited recourse - floating rate
Royal Centre	Vancouver		2.33	%	June 2016		137.8		Non-recourse - floating rate
Bay Adelaide East⁽²⁾	Toronto		2.75	%	December 2017		260.5		Limited recourse - floating rate
2 Queen St. East	Toronto		5.64	%	December 2017		28.6		Non-recourse - fixed rate
Brookfield Place Toronto	Toronto		3.24	%	January 2020		497.9		Non-recourse - fixed rate
22 Front St. West	Toronto		6.24	%	October 2020		16.9		Non-recourse - fixed rate
Bankers Court	Calgary		4.96	%	November 2020		42.3		Non-recourse - fixed rate
Queen's Quay Terminal	Toronto		5.40	%	April 2021		80.9		Non-recourse - fixed rate
Fifth Avenue Place	Calgary		4.71	%	August 2021		158.7		Non-recourse - fixed rate
Bay Adelaide West	Toronto		4.43	%	December 2021		376.5		Non-recourse - fixed rate
Exchange Tower	Toronto		4.03	%	April 2022		109.0		Non-recourse - fixed rate
105 Adelaide St. West	Toronto		3.87	%	May 2023		35.1		Non-recourse - fixed rate
Bankers Hall	Calgary		4.38	%	November 2023		289.8		Non-recourse - fixed rate
First Canadian Place	Toronto		3.56	%	December 2023		76.8		Non-recourse - fixed rate
Jean Edmonds Towers	Ottawa		6.79	%	January 2024		15.6		Non-recourse - fixed rate
Place de Ville I	Ottawa		3.75	%	June 2025		21.0		Non-recourse - fixed rate
Place de Ville II	Ottawa		3.75	%	June 2025		22.8		Non-recourse - fixed rate
Suncor Energy Centre	Calgary		5.19	%	August 2033		263.6		Non-recourse - fixed rate

Development
Brookfield Place Calgary East⁽³⁾	Calgary		2.61	%	November 2017		126.2		Limited recourse - floating rate

Corporate
$350M Corporate Revolver	-		2.29	%	August 2020		194.0		Recourse - floating rate
			3.76	%			2,851.3
Premium on assumed mortgages							1.0
Deferred financing costs							(13.8	)
Total			3.76	%		$	2,838.5

⁽¹⁾

This loan has limited recourse to the Trust for up to $15.0 million.

⁽²⁾

This loan has a three year term from the date of the initial advance, and has limited recourse to the Trust for up to $50.0 million. Two one-year extension options are available provided certain leasing thresholds have been met and no material defaults have occurred. The criteria for the first option to extend the maturity to 2017 has been met as of December 31, 2015.

⁽³⁾

This loan has limited recourse to the Trust for up to $80.0 million. A one-year extension option is available provided certain leasing thresholds have been met and no material defaults have occurred.

Investment property and corporate debt maturities for the next five years and thereafter are as follows:

							Weighted-Average
	Scheduled						Interest Rate (%) at
(Millions, except interest data)	Amortization⁽¹⁾		Maturities		Total⁽¹⁾		Dec. 31, 2015
2016	$	43.3	$	235.1	$	278.4		2.29	%
2017		46.6		415.3		461.9		2.90	%
2018		49.4		—		49.4		—	%
2019		51.7		—		51.7		—	%
2020		41.3		693.3		734.6		3.16	%
2021 and thereafter		193.1		1,069.4		1,262.5		4.56	%
Total	$	425.4	$	2,413.1	$	2,838.5		3.76	%

⁽¹⁾

Net of transaction costs.

Brookfield Canada Office Properties

CONTRACTUAL OBLIGATIONS

The following table presents our contractual obligations over the next five years and beyond:

	Payments Due By Period
(Millions)	Total		1 year		2 – 3 years		4 – 5 Years		After 5 Years
Investment property and corporate debt⁽¹⁾	$	2,851.3	$	281.2	$	515.2	$	789.3	$	1,265.6
Interest expense – investment property and corporate debt⁽²⁾		588.2		86.0		164.3		146.4		191.5
Minimum rental payments - ground leases⁽³⁾		486.9		7.4		14.9		14.9		449.7
	$	3,926.4	$	374.6	$	694.4	$	950.6	$	1,906.8

⁽¹⁾

Net of transaction costs.

⁽²⁾

Represents aggregate interest expense expected to be paid over the term of the debt, on an undiscounted basis, based at current interest rates.

⁽³⁾

Represents minimum rental payments, on an undiscounted basis, on land leases or other agreements.

CREDIT RATINGS

Our access to financing depends on, among other things, suitable market conditions and the maintenance of suitable long-term credit ratings. Our credit ratings may be adversely affected by various factors, including increased debt levels, decreased earnings, declines in tenant demand, increased competition, a further deterioration in general economic and business conditions and adverse publicity. Any downgrades in our credit ratings may impede our access to capital markets or raise our borrowing rates.

We are currently rated by Dominion Bond Rating Service Inc. (“DBRS”) and Standard & Poor’s (“S&P”). Our credit ratings at December 31, 2015, and at the date of this report were:

		DBRS		S&P
Issuer Rating		BBB (stable)		BBB (stable)

We are committed to arranging our affairs to maintain these ratings and improve them over time.

Credit ratings are intended to provide investors with an independent measure of the credit quality of an issue of securities. The credit ratings presented are not a recommendation to purchase, hold or sell our Trust Units, as such ratings do not comment as to market price or suitability for a particular investor. There is no assurance that any rating will remain in effect for any given period or that any rating will not be revised or withdrawn entirely by the rating agency in the future if, in its judgment, circumstances so warrant.

CORPORATE GUARANTEES AND CONTINGENT OBLIGATIONS

We and our operating subsidiaries may be contingently liable with respect to litigation and claims that arise from time to time in the normal course of business or otherwise. In addition, we may execute agreements that provide for indemnifications and guarantees to third parties. Disclosure of commitments, guarantees, and contingencies can be found in Note 15 of the consolidated financial statements.

INCOME TAXES

ACCOUNTS PAYABLE AND OTHER LIABILITIES

Accounts payable and other liabilities totaled $185.0 million at December 31, 2015 (compared to $196.9 million at December 31, 2014).

A summary of the components of accounts payable and other liabilities is as follows:

(Millions)	Dec. 31, 2015		Dec. 31, 2014
Accounts payable and accrued liabilities	$	165.9	$	177.0
Accrued interest		19.1		19.9
Total	$	185.0	$	196.9

14	2015 Annual Report

EQUITY

The components of equity are as follows:

(Millions)	Dec. 31, 2015		Dec. 31, 2014
Trust Units	$	554.4	$	553.4
Contributed surplus		2.9		3.1
Retained earnings		366.5		300.2
Unitholders’ equity		923.8		856.7
Non-controlling interest		2,409.2		2,239.6
Total	$	3,333.0	$	3,096.3

The following tables summarize the changes in the units outstanding during the year ended December 31, 2015 and December 31, 2014:

	2015
	Trust Units			Class B LP Units
Units issued and outstanding at beginning of year		26,218,183			67,088,022
Units repurchased		(37,053	)		—
Units issued pursuant to Distribution Reinvestment Plan		69,214			—
Total units outstanding at December 31, 2015		26,250,344			67,088,022

	2014
	Trust Units		Class B LP Units
Units issued and outstanding at beginning of year		26,167,835		67,088,022
Units issued pursuant to Distribution Reinvestment Plan		50,348		—
Total units outstanding at December 31, 2014		26,218,183		67,088,022

At December 31, 2015, the weighted average number of Trust Units outstanding was 26,246,958 (compared to 26,191,933 at December 31, 2014).

In November 2015, we renewed our normal course issuer bid for our Trust Units for a further one-year period. During the twelve-month period commencing November 12, 2015, and ending November 11, 2016, we may purchase on the Toronto Stock Exchange ("TSX"), the New York Stock Exchange and any alternative Canadian trading system up to 1,566,602 Trust Units, representing approximately 10% of our public float. During the year, we purchased 37,053 Trust Units through open market purchases. The weighted average price that we paid per Trust Units acquired under this bid was $25.95. A copy of the Notice of Intention relating to our normal course issuer bid may be requested without charge.

Trust Units

Each Trust Unit is transferable and represents an equal, undivided, beneficial interest in BOX and in any distributions, whether of net income, net realized capital gains, or other amounts, and in the event of the termination or winding-up of the Trust, in the Trust’s net assets remaining after satisfaction of all liabilities. All Trust Units rank among themselves equally and ratably without discrimination, preference, or priority. Each Trust Unit entitles the holder thereof to one vote at all meetings of unitholders or with respect to any written resolution of unitholders. The Trust Units have no conversion, retraction, or redemption rights.

Special Voting Units

Special Voting Units are only issued in tandem with Class B limited partnership units (“Class B LP Units”) of Brookfield Office Properties Canada LP (“BOPC LP”) and are not transferable separately from the Class B LP Units to which they relate and upon any transfer of Class B LP Units, such Special Voting Units will automatically be transferred to the transferee of the Class B LP Units. As Class B LP Units are exchanged for Trust Units or purchased for cancellation, the corresponding Special Voting Units will be cancelled for no consideration.

Each Special Voting Unit entitles the holder thereof to one vote at all meetings of unitholders or with respect to any resolution in writing of unitholders. Except for the right to attend and vote at meetings of the unitholders or with respect to written resolutions of the unitholders, Special Voting Units do not confer upon the holders thereof any other rights. A Special Voting Unit does not entitle its holder to any economic interest in BOX, or to any interest or share in BOX, or to any interest in any distributions (whether of net income, net realized capital gains, or other amounts), or to any interest in any net assets in the event of termination or winding-up.

Non-Controlling interest

We classify the outstanding Class B LP Units as non-controlling interest for financial statement purposes in accordance with IFRS. The Class B LP Units are exchangeable on a one-for-one basis (subject to customary anti-dilution provisions) for Trust Units at the option of the holder. Each Class B LP Unit is accompanied by a Special Voting Unit that entitles the holder thereof to receive notice of, to attend, and to vote at all meetings of unitholders of BOX. The holders of Class B LP Units are entitled to receive distributions when declared by BOPC LP equal to the per-unit amount of distributions payable to each holder of Trust Units. However, the Class B LP Units have limited voting rights over BOPC LP.

Brookfield Canada Office Properties

The following tables present distributions declared to Trust unitholders and non-controlling interest for the year ended December 31, 2015 and December 31, 2014.

	2015
(Millions, except per unit amounts)		Trust Units		Class B LP Units
Paid in cash or DRIP		$	29.6	$	76.3
Payable as of December 31, 2015			2.7		6.9
Total			32.3		83.2
Per unit		$	1.24	$	1.24

	2014
(Millions, except per unit amounts)		Trust Units		Class B LP Units
Paid in cash or DRIP		$	29.1	$	74.7
Payable as of December 31, 2014			2.7		6.9
Total			31.8		81.6
Per unit		$	1.21	$	1.21

We determine annual distributions to unitholders by looking at forward-looking cash flow information, including forecasts and budgets and the future business prospects of the Trust. We do not consider periodic cash flow fluctuations resulting from items such as the timing of property operating costs, property tax installments, or semi-annual debenture and mortgage payable interest payments in determining the level of distributions to unitholders. To determine the level of cash distributions made to unitholders, we consider the impact of, among other items, the future growth in the income-producing portfolio, future acquisitions and dispositions, and leasing related to the income-producing portfolio. Annual distributions to unitholders are expected to continue to be funded by cash flows generated from our portfolio.

CAPITAL RESOURCES AND LIQUIDITY

We employ a broad range of financing strategies to facilitate growth and manage financial risk, with particular emphasis on the overall reduction of the weighted-average cost of capital, in order to enhance returns for unitholders. Our principal liquidity needs for the next twelve months are to:

•

fund recurring expenses;

•

meet debt service requirements;

•

make distributions;

•

fund those capital expenditures deemed mandatory, including tenant improvements;

•

fund current development costs not covered by construction loans; and

•

fund investing activities, which could include:

•

discretionary capital expenditures;

•

property acquisitions; and

•

repurchases of our units.

We believe that our liquidity needs will be satisfied using cash on hand and cash flows generated from operating, investing, and financing activities. Rental revenue, recoveries from tenants, interest and other income, available cash balances, divestiture of non-core assets, draws on our credit facilities and refinancings (including upward refinancings) of maturing indebtedness are our principal sources of capital used to pay operating expenses, distributions, debt service, capital expenditures, and leasing costs in our commercial-property portfolio. We seek to increase income from our existing properties by controlling operating expenses and by maintaining quality standards for our properties that promote high occupancy rates and support increases in rental rates while reducing tenant turnover. We believe our revenue, along with proceeds from financing activities, will continue to provide the necessary funds for our short-term liquidity needs and to fund anticipated ongoing distributions. However, material changes in these factors may adversely affect our net cash flows.

Our principal liquidity needs for periods beyond the next year are for scheduled debt maturities, unit distributions, development costs and capital expenditures. We plan to meet these needs with one or more of the following:

•

cash flow from operating activities;

•

credit facilities and refinancing opportunities;

•

construction loans; and

•

divestiture of commercial properties.

Our investment property and corporate debt is primarily fixed-rate and non-recourse to the Trust. These investment-grade financings are typically structured on a loan-to-appraised-value basis of between 50% and 65% as market conditions permit. In addition, in certain circumstances where a building is leased almost exclusively to a high-credit-quality tenant, a higher loan-to-value financing, based on the tenant’s credit quality, is put in place at rates commensurate with the cost of funds for the tenant. This reduces our equity requirements to finance investment property and enhances equity returns.

16	2015 Annual Report

Most of our borrowings are in the form of long-term property-specific financings with recourse only to the specific assets. Limiting recourse to specific assets ensures that poor performance within one area does not compromise our ability to finance the balance of our operations. Our maturity schedule is fairly diversified so that financing requirements in any given year are manageable.

Our focus on structuring financings with investment-grade characteristics ensures that debt levels on any particular asset can typically be maintained throughout a business cycle. This enables us to limit covenants and other performance requirements, thereby reducing the risk of early payment requirements or restrictions on the distribution of cash from the assets being financed.

To help ensure we are able to react to investment opportunities quickly and on a value basis, we attempt to maintain a high level of liquidity. Our primary sources of liquidity consist of cash and undrawn committed credit facilities. In addition, we structure our affairs to facilitate monetization of longer-duration assets through financings, co-investor participations, or refinancings.

At December 31, 2015, our available liquidity consists of $57.6 million of cash on hand, and $156.0 million of undrawn capacity on our corporate credit facility.

Cost of Capital

We continually strive to reduce our weighted-average cost of capital and improve unitholders’ equity returns through value-enhancement initiatives and the consistent monitoring of the balance between debt and equity financing.

As of December 31, 2015, our weighted-average cost of capital, assuming a long-term 9.0% return on equity, was 6.2%. Our cost of capital is lower than many of our peers because of the greater amount of investment-grade financing that can be placed on our assets, which is a function of the high-quality nature of both the assets and the tenant base that composes our portfolio. In determining the long-term 9.0% return on equity, management considers various factors including a review of various financial models such as dividend growth model and capital asset pricing model, as well as examination of market returns. Based on the calculations of the financial models, market returns and historic returns achieved by the Trust, management believes that the long-term 9.0% return is an appropriate benchmark.

The following schedule details the capitalization of the Trust and the related costs thereof:

	Cost of Capital⁽¹⁾						Underlying Value⁽²⁾
(Millions, except cost of capital data)	Dec. 31, 2015			Dec. 31, 2014			Dec. 31, 2015		Dec. 31, 2014
Liabilities
Investment property and corporate debt		3.8	%		4.0	%	$	2,838.5	$	2,649.7
Unitholders’ equity
Trust Units⁽³⁾		9.0	%		9.0	%		682.8		706.4
Other equity
Non-controlling interest⁽³⁾		9.0	%		9.0	%		1,748.6		1,809.0
Total		6.2	%		6.4	%	$	5,269.9	$	5,165.1

⁽¹⁾

Total weighted-average cost of capital is calculated on the weighted average of underlying value.

⁽²⁾

Underlying value of liabilities presents the cost to retire debt on maturity. Underlying value of unitholders’ equity and other equity is based on the closing unit price of BOX on the Toronto Stock Exchange.

⁽³⁾

Assumes a long-term 9.0% return on equity for December 31, 2015 and December 31, 2014.

Brookfield Canada Office Properties

OPERATING RESULTS

Included on the following pages is a discussion of the various components of our operating results in accordance with IFRS followed by a discussion of non-IFRS measures and corresponding reconciliations to comparable IFRS measures.

(Millions, except per unit amounts)	2015		2014
Commercial property revenue	$	516.9	$	517.2
Direct commercial property expense		265.6		247.9
		251.3		269.3
Investment and other income		—		1.1
Interest expense		84.3		91.9
General and administrative expense		23.1		23.6
Income before fair value gains (losses)		143.9		154.9
Fair value gains (losses)		207.5		(38.8	)
Net income and comprehensive income	$	351.4	$	116.1
Net income and comprehensive income attributable to:
Unitholders	$	98.6	$	32.5
Non-controlling interest		252.8		83.6
	$	351.4	$	116.1
Net income per Trust unit	$	3.76	$	1.24

COMMERCIAL PROPERTY REVENUE

Revenue from commercial properties includes rental revenues earned from tenant leases, straight-line rent, percentage rent, and additional rent from the recovery of operating costs and property taxes. Revenue from investment properties totaled $516.9 million for the year ended December 31, 2015 (compared to $517.2 million in 2014). The decrease is primarily due to lower rents and recoveries related to the dissolution of a tenant at Bay Adelaide West in the prior year and lower rent and recoveries at Bankers Hall due to an early expiry; offset by incremental rent and recoveries from Bay Adelaide East and higher rent and recoveries at Exchange Tower and 105 Adelaide St. West due to lease ups.

The components of revenue are as follows:

(Millions)	2015		2014
Rental revenue	$	513.5	$	507.9
Non-cash rental revenue (expense)		1.1		(1.4	)
Lease termination and other income		2.3		10.7
Commercial property revenue	$	516.9	$	517.2

Our strategy of owning premier properties in high-growth, and, in many instances, supply-constrained markets with high barriers to entry, along with our focus on executing long-term leases with strong credit-rated tenants, has created one of Canada’s most distinguished portfolios of office properties. In the past, this strategy has reduced our exposure to the cyclical nature of the real estate business. We feel confident with our current rollover exposure, which is the percentage of our total managed space currently scheduled to expire, and are focused on working toward renewals on expiries and backfilling vacant spaces in the upcoming months, as well as continuing to manage our rollover exposure in the future years.

Our leases generally have clauses that provide for the collection of rental revenues in amounts that increase every few years, with these increases negotiated at the signing of the lease. During the year ended December 31, 2015, approximately 59% of our leases executed had rent escalation clauses. On average, these escalation clauses will increase rent annually by 1.1% over the terms of the respective leases. The large number of high-credit-quality tenants in our portfolio lowers the risk of not realizing these increases. IFRS requires that these increases be recorded on a straight-line basis over the life of the lease. For the year ended December 31, 2015, we recognized $1.1 million of non-cash rental revenue (compared to $1.4 million of non-cash rental expense in 2014). Direct commercial property expenses, which include real estate taxes, utilities, insurance, repairs and maintenance, cleaning, and other property-related expenses, were $265.6 million for the year ended December 31, 2015 (compared to $247.9 million in 2014).

Substantially all of our leases are net leases, in which the lessee is required to pay its proportionate share of the property’s operating expenses such as utilities, repairs, insurance, and taxes. Consequently, leasing activity is the principal contributor to the change in same-property net operating income. Our total portfolio occupancy rate ended the quarter at 95.8%. At December 31, 2015, average in-place net rent throughout the portfolio was $29 per square foot, compared with an average market net rent of $28 per square foot.

18	2015 Annual Report

The following table shows the average lease term, in-place rents, and estimated current market rents for similar space in each of our markets as of December 31, 2015:

			Avg.		Avg. In-Place⁽¹⁾		Avg. Market⁽²⁾
	Leasable Area		Lease Term		Net Rent		Net Rent
Region	(000's Sq. Ft.)		(Years)		($ per Sq. Ft.)		($ per Sq. Ft.)
Toronto, Ontario		9,220		7.2		29		32
Ottawa, Ontario		1,730		7.8		20		18
Calgary, Alberta		5,635		10.2		32		26
Vancouver, B.C.		581		9.0		24		25
Other		3		—		—		—
Total		17,169		8.3		29		28

⁽¹⁾

Average in-place net rent represents the annualized cash amount on a per square foot basis collected from tenants plus tenant expense reimbursements less the operating expenses being incurred for that space, excluding the impact of straight-lining rent escalations or amortizing free rent periods provided on in-place leases.

⁽²⁾

A summary of current and historical occupancy levels at December 31 for the past two years is as follows:

	Dec. 31, 2015				Dec. 31, 2014
	Leasable		%		Leasable		%
(000’s Sq. Ft., except % leased data)	Area		Leased		Area		Leased
Toronto, Ontario		9,220		95.1		8,747		93.1
Ottawa, Ontario		1,730		95.3		1,743		93.3
Calgary, Alberta		5,635		97.3		5,634		99.4
Vancouver, B.C.		581		93.7		582		97.0
Other		3		100.0		3		100.0
Total		17,169		95.8		16,709		95.4

During 2015, we leased 2,062,000 square feet of space, which included 818,000 square feet of new leasing, and 1,244,000 square feet of renewals, compared to expiries of 1,587,000 square feet and accelerated expiries of 420,000 square feet. The overall average leasing net rent was $27 per square foot, compared to an average expiring net rent of $25 per square foot. At December 31, 2015, the average leasing net rent related to new and renewed leases was $32 per square foot and $24 per square foot, respectively.

Leasing highlights from the fourth quarter include:

•

528,000 square feet in Toronto

A seven-year, 82,000-square-foot renewal and expansion with Thomson Reuters Corporation at Bay Adelaide West

A 10-year, 62,000-square-foot renewal and expansion with Royal Bank of Canada at Brookfield Place Toronto

A 12-year, 58,000-square-foot renewal with Labatt Brewing Company Limited at Queen's Quay Terminal

A 10-year, 47,000-square-foot new lease with Aviva Canada Inc. at First Canadian Place

A five-year, 37,000-square-foot renewal and expansion with Liberty Mutual Insurance Co. at Brookfield Place Toronto

A four-year, 25,000-square-foot expansion with Air Canada at 2 Queen St. East

A five-year, 25,000-square-foot renewal with The Bank of Nova Scotia at Exchange Tower

A 10-year, 19,000-square-foot new lease with New Gold at Brookfield Place Toronto

A 10-year, 13,000-square-foot new lease with Eagle Professional Resources at 2 Queen St. East

•

28,000 square feet in Ottawa

A one-year, 28,000-square-foot renewal with Public Works and Government Services Canada at Place de Ville I

•

19,000 square feet in Vancouver

A 10-year, 13,000-square-foot new lease with Western Forest Products Inc. at Royal Centre

Brookfield Canada Office Properties

The details of our leasing activity for the year ended December 31, 2015, are as follows:

			Activities during the year ended December 31, 2015
						Average⁽²⁾						Year One⁽³⁾		Average⁽⁴⁾
	Dec. 31, 2014					Expiring		Leasing				Leasing		Leasing		Transfer/			Dec. 31, 2015
(000's Sq. Ft.)	Leased⁽¹⁾		Expiries			Net Rent		New		Renewal		Net Rent		Net Rent		Disposition			Leased
Toronto, Ontario		8,142		(1,014	)	$	28		566		622	$	30	$	31		452			8,768
Ottawa, Ontario		1,628		(593	)		17		35		580		16		16		(2	)		1,648
Calgary, Alberta		5,603		(322	)		29		187		13		37		37		—			5,481
Vancouver, B.C.		564		(78	)		26		30		29		28		29		—			545
Other		3		—			—		—		—		—		—		—			3
Total Leasing		15,940		(2,007	)	$	25		818		1,244		27		27		450			16,445
Development		1,909		—			—		22		—		—		—		(931	)		1,000

⁽¹⁾

Restated for re-measurements

⁽²⁾

Represents net rent in the final year.

⁽³⁾

Year one leasing net rent is the rent at the commencement of the lease term on a per square foot basis including tenant expense reimbursements, less operating expenses being incurred for that space, but excluding the impact of straight-lining rent escalations or amortization of free rent periods.

⁽⁴⁾

Average leasing net rent is the average rent over the lease term on a per square foot basis including tenant expense reimbursements, less operating expenses being incurred for that space, but including the impact of straight-lining rent escalations or amortization of free rent periods.

Additionally, during the year ended December 31, 2015, tenant improvements and leasing costs related to leasing activity that occurred averaged $6.65 per square foot, of which $11.15 per square foot and $3.61 per square foot related to new and renewed leases, respectively, compared to $10.65 per square foot during the same prior year period.

INVESTMENT AND OTHER INCOME

Investment and other income totaled $nil during the year ended December 31, 2015 (compared to $1.1 million in 2014). The prior year amounts primarily included interest earned on cash balances and cash settlements on legal matters.

INTEREST EXPENSE

Interest expense totaled $84.3 million during the year ended December 31, 2015 (compared to $91.9 million in 2014). The decrease was due to the lower average costs of borrowing of 3.76%, compared to 4.01% in 2014, coupled with an increase in capitalized imputed interest on our development properties; offset by higher debt balances.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses were $23.1 million during the year ended December 31, 2015 (compared to $23.6 million in 2014).

INCOME TAX EXPENSE

FAIR VALUE GAINS (LOSSES)

During the year ended December 31, 2015, the Trust recognized fair value gains of $207.5 million (compared to $38.8 million of fair value losses in 2014). Fair value adjustments are determined based on the movement of various parameters on a quarterly basis, including changes in projected cash flows as a result of leasing and timing, discount rates, and terminal capitalization rates. Our investment property valuations have increased from December 31, 2014 due to improved tenant profiles and higher rental rates and decreases in downtime as a result of new leases and renewals, as well as improvements in our valuation metrics.

TOTAL EQUITY PER UNIT

Total equity per unit represents the book value of our total equity divided by total units outstanding. We believe that total equity per unit is the best indicator of our current financial position because it reflects our total equity adjusted for all inflows and outflows, including FFO and changes in the value of our investment properties.

NON-IFRS MEASURES

20	2015 Annual Report

Commercial property net operating income

Commercial property net operating income is defined by us as income from commercial property operations after direct property operating expenses, including property administration costs, have been deducted but prior to deducting interest expense, general and administrative expenses, and fair value gains (losses). Commercial property net operating income is used as a key indicator of performance, as it represents a measure over which management of our commercial property operations has control.

Funds from Operations

Our definition of funds from operations or “FFO” includes all of the adjustments that are outlined in the National Association of Real Estate Investment Trusts (“NAREIT”) definition of FFO including the exclusion of gains (or losses) from the sale of real estate property and the add back of any depreciation and amortization related to real estate assets. In addition to the adjustments prescribed by NAREIT, we also make adjustments to exclude any unrealized fair value gains (or losses) that arise as a result of reporting under IFRS. These additional adjustments result in an FFO measure that would be similar to that which would result if the Trust determined net income in accordance with U.S. GAAP and is also consistent with the Real Property Association of Canada (“REALPAC”) white paper on funds from operations for IFRS issued November 2012. Our FFO measure will differ from other organizations applying the NAREIT definition to the extent of certain differences between the IFRS and U.S. GAAP reporting frameworks, principally related to the recognition of lease termination income and fair value gains (or losses), which does not have a significant impact on the FFO measure reported.

Adjusted Funds from Operations

Adjusted funds from operations or “AFFO” is defined by us as FFO net of actual second-generation leasing commissions and tenant improvements, actual maintaining value capital expenditures, and straight-line rental income. AFFO is a widely used measure used to assess an entity’s ability to pay distributions.

COMMERCIAL PROPERTY NET OPERATING INCOME

Commercial Property NOI by City

for the year ended December 31, 2015 (in $millions)

Commercial property net operating income includes commercial property revenue less direct commercial property expense and is a key indicator of performance as it represents a measure over which management of the commercial property operations has control. One of the ways in which we evaluate performance is by comparing the performance of the commercial property portfolio on a same property basis. Same property commercial property net operating income is defined as properties included in our consolidated results that we own and operate throughout both the current and prior period. Accordingly, same property results would exclude properties acquired or sold during each period, as well as significant lease termination and other income (charges) amounts that are non-recurring.

Our commercial property net operating income for the year ended December 31, 2015, was $251.3 million (compared to $269.3 million in 2014). The decrease is primarily due to a favourable realty tax recovery at Bay Adelaide West and parking settlement at Brookfield Place Toronto recognized in the prior year, one-time retroactive adjustment of ground rent at Hudson’s Bay Centre as a result of an unfavourable arbitration settlement and higher ground rent expense at First Canadian Place; offset by incremental net operating income at Bay Adelaide East and higher rent and recoveries related to new deals at Exchange Tower and 105 Adelaide St. West.

Brookfield Canada Office Properties

The components of commercial property net operating income are as follows:

(Millions)	2015		2014
Commercial property revenue	$	516.9	$	517.2
Direct commercial property expense		265.6		247.9
Total	$	251.3	$	269.3

Same commercial property operation highlights are as follows:

(Millions)	2015			2014
Commercial property net operating income – same property	$	249.3		$	251.6
Commercial property net operating income – development transferred		2.6			—
Commercial property net operating income – property sold during period ⁽¹⁾		3.5			5.9
Lease termination and other (charges) income		(4.1	)		11.8
Total	$	251.3		$	269.3

	Dec. 31, 2015			Dec. 31, 2014
Same property average in-place net rent	$	29.0		$	28
Same property occupancy		95.8	%		95.3	%

⁽¹⁾

151 Yonge St. and HSBC building in Toronto sold in Q1 and Q3 2015, respectively.

RECONCILIATION OF COMMERCIAL PROPERTY NET OPERATING INCOME TO NET INCOME

(Millions, except per unit amounts)	2015			2014
Commercial property net operating income	$	251.3		$	269.3
Add (deduct):
Fair value gains (losses)		207.5			(38.8	)
General and administrative expense		(23.1	)		(23.6	)
Interest expense		(84.3	)		(91.9	)
Investment and other income		—			1.1
Net income	$	351.4		$	116.1

RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS

Funds from operations was $1.56 per unit during the year ended December 31, 2015, respectively (compared to $1.70 per unit in 2014).

(Millions, except per unit amounts)	2015			2014
Net income	$	351.4		$	116.1
Add (deduct):
Fair value (gains) losses		(207.5	)		38.8
Amortization of lease incentives		1.9			2.2
Foreign exchange losses		—			1.1
Funds from operations	$	145.8		$	158.2
Funds from operations attributable to unitholders		40.8			44.3
Funds from operations attributable to non-controlling interest		105.0			113.9
	$	145.8		$	158.2
Weighted average Trust Units outstanding		26.2			26.2
Funds from operations per Trust unit	$	1.56		$	1.70

22	2015 Annual Report

RECONCILIATION OF FUNDS FROM OPERATIONS TO ADJUSTED FUNDS FROM OPERATIONS

Adjusted funds from operations totaled $1.01 per unit during the year ended December 31, 2015, respectively (compared to $1.30 per unit in 2014).

(Millions, except per unit amounts)	2015			2014
Funds from operations	$	145.8		$	158.2
Deduct:
Straight-line rental income		(3.0	)		(0.8	)
Second-generation leasing commissions and tenant improvements		(39.5	)		(28.0	)
Maintaining value capital expenditures		(8.7	)		(7.9	)
Adjusted funds from operations	$	94.6		$	121.5
Adjusted funds from operations attributable to unitholders		26.5			34.0
Adjusted funds from operations attributable to non-controlling interest		68.1			87.5
	$	94.6		$	121.5
Weighted average Trust Units outstanding		26.2			26.2
Adjusted funds from operations per Trust Unit	$	1.01		$	1.30
Trust unit distribution declared	$	1.24		$	1.21
Distribution ratio		123	%		93	%

AFFO is calculated by adjusting FFO for straight-line rental income, actual second-generation leasing commissions and tenant improvements, and actual maintaining value capital expenditures for maintaining the infrastructure and current rental revenues of our properties. Actual expenditures will vary from period to period and at times could be materially different depending on the timing of leasing activities and capital plans. As a result, AFFO will experience volatility when comparing period-over-period results. Due to the volatile nature of AFFO, we believe that it is important to compare the actual results with historic and projected averages of leasing costs and maintaining value capital expenditures in order to determine the effects of a full office leasing cycle. Our 5-year historic average reflects the actual leasing activities completed, while the 10-year average projections reflect our leasing expiry profile. We also believe that these averages will provide insight to determining the normalized distribution payout ratio and growth in adjusted funds from operations.

The historic and projected averages are as follows:

	Annual amount
	5-year		10-year
(Millions)	historical coverage		average plan
Second generation
Leasing commissions	$	8.0	$	6.5
Tenant improvements		16.0		16.3
Maintaining value capital expenditures		5.6		7.9

There is no standard industry defined measure of AFFO; therefore, our methodology of calculating AFFO will differ from other entities and may not be comparable to similar measures presented by other entities.

RECONCILIATION OF CASH FLOWS PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FUNDS FROM OPERATIONS

(Millions)	2015			2014
Cash flows provided by operating activities	$	115.0		$	136.2
Add (deduct):
Working capital and other		17.2			14.4
Leasing commissions and tenant inducements		13.9			8.8
Foreign exchange losses		—			1.1
Amortization of deferred financing costs		(3.3	)		(3.1	)
Second-generation leasing commissions and tenant improvements		(39.5	)		(28.0	)
Maintaining value capital expenditures		(8.7	)		(7.9	)
Adjusted funds from operations	$	94.6		$	121.5

Brookfield Canada Office Properties

QUARTERLY RESULTS

The results by quarter are as follows:

	2015								2014
(Millions, except per unit amounts)	Q4		Q3		Q2		Q1		Q4		Q3		Q2		Q1
Revenue	$	134.7	$	128.3	$	126.3	$	127.6	$	134.8	$	131.9	$	124.9	$	125.6
Commercial property net operating income		64.8		59.5		63.2		63.8		67.9		66.4		66.4		68.6
Interest expense		21.4		21.0		20.8		21.1		22.0		23.5		23.3		23.1
Funds from operations		38.5		33.4		36.8		37.1		40.6		38.1		38.6		40.9
Adjusted funds from operations		19.6		25.0		21.4		28.6		21.7		28.6		31.5		39.7
Net income		158.8		50.3		83.6		58.7		25.8		9.0		39.2		42.1
Net income per Trust unit	$	1.70	$	0.54	$	0.90	$	0.63	$	0.28	$	0.10	$	0.42	$	0.44

24	2015 Annual Report

PART III – RISKS AND UNCERTAINTIES

BOX’s financial results are affected by the performance of our operations and various external factors influencing the specific sectors and geographic locations in which we operate, as well as macroeconomic factors such as economic growth, inflation, interest rates, regulatory requirements and initiatives, and litigation and claims that arise in the normal course of business.

Our strategy is to invest in premier assets that generate sustainable streams of cash flow. Although high-quality assets may initially generate lower returns on capital, we believe that the sustainability and future growth of their cash flows is more assured over the long term and, as a result, warrant higher valuation levels. We also believe that the high quality of our asset base protects the Trust against future uncertainty and enables us to invest with confidence when opportunities arise.

The following is a review of the material factors and the potential impact these factors may have on our business operations. A more detailed description of our business environment and risks is contained in our Annual Information Form, which is posted on our web site at www.brookfieldcanadareit.com or at www.sedar.com or www.sec.gov.

PROPERTY-RELATED RISKS

Our strategy is to invest in high-quality office properties as defined by the physical characteristics of the asset and, more important, the certainty of receiving rental payments from large corporate tenants (with investment-grade credit ratings – see “Credit Risk” on page 26) that these properties attract. Nonetheless, we remain exposed to certain risks inherent in the core office-property business.

Commercial property investments are generally subject to varying degrees of risk depending on the nature of the property. These risks include changes in general economic conditions (such as the availability and costs of mortgage funds), local conditions (such as an oversupply of space or a reduction in demand for real estate in the markets in which we operate), the attractiveness of the properties to tenants, competition from other landlords with competitive space, and our ability to provide adequate maintenance at an economical cost.

Certain significant expenditures, including property taxes, maintenance costs, mortgage payments, insurance costs, and related charges, must be made regardless of whether a property is producing sufficient income to service these expenses. Our office properties are subject to mortgages that require substantial debt service payments. If we become unable or unwilling to meet mortgage payments on any property, losses could be sustained as a result of the mortgagee’s exercise of its rights of foreclosure or of sale. We believe the stability and long-term nature of our contractual revenues effectively mitigates these risks.

As owners of premier office properties, lease rollovers also present a risk, as continued growth of rental income is dependent on strong leasing markets to ensure expiring leases are renewed and new tenants are found promptly to fill vacancies. Refer to “Lease Rollover Risk” on page 26 of this MD&A for further details.

INTEREST RATE AND FINANCING RISK

We attempt to stagger the maturities of our mortgage portfolio evenly over a 10-year time horizon. We believe that this strategy will most effectively manage interest rate risk.

As outlined under “Capital Resources and Liquidity,” beginning on page 16 of this MD&A, we have an ongoing need to access debt markets to refinance maturing debt as it comes due. There is a risk that lenders will not refinance such maturing debt on terms and conditions acceptable to us or on any terms at all. Our strategy to stagger the maturities of our mortgage portfolio attempts to mitigate our exposure to excessive amounts of debt maturing in any one year.

Approximately 28.7% of our outstanding investment property and corporate debt at December 31, 2015 is floating-rate debt (December 31, 2014 – 13.1%) and subject to fluctuations in interest rates. The effect of a 100-basis point increase in interest rates on interest expense relating to our floating-rate debt, all else being equal, is an increase in interest expense of $8.1 million on an annual basis or $0.09 per unit. In addition, there is interest rate risk associated with the Trust’s fixed rate debt due to the expected requirement to refinance such debt in the year of maturity. There is no fixed rate debt maturing within one year.

The analysis does not reflect the impact a changing interest rate environment could have on our overall performance and, as a result, it does not reflect the actions management may take in such an environment.

We currently have a level of indebtedness for the Trust of 45.3% of the fair market value of our commercial and development properties. This level of indebtedness is considered by the Trust to be conservative and, based on this, the Trust believes that all debts will be financed or refinanced as they come due in the foreseeable future.

Brookfield Canada Office Properties

CREDIT RISK

Credit risk arises from the possibility that tenants may be unable to fulfill their lease commitments. We mitigate this risk by ensuring that our tenant mix is diversified and by limiting our exposure to any one tenant. We also maintain a portfolio that is diversified by industry type so that exposure to a business sector is lessened. Currently, no single tenant represents more than 10.8% of total leasable area and 7.4% of commercial property revenue.

We attempt to mitigate our credit risk by signing long-term leases with tenants who have investment-grade credit ratings. The Trust directs special attention to the credit quality of our tenants in order to ensure the long-term sustainability of rental revenues through economic cycles. Once a lease has been signed, the Trust proactively monitors the financial performance of significant tenants on a regular basis and reviews the status of arrears. The Trust regularly monitors indicators of increased risk within its tenant portfolio and maintains a formalized tenant credit report to identify natural changes in credit quality.

The following list shows our top 20 largest tenants by leasable area in our commercial properties portfolio and their respective lease commitments:

			Credit	000’s Sq. Ft.⁽²⁾														Year of			% of
	Tenant	Primary Location	Rating⁽¹⁾	2016		2017		2018		2019		2020		2021		Beyond		Expiry⁽²⁾	Total		Sq. Ft.⁽³⁾
1	Government and Related	Toronto, Ottawa	AAA	11		28		264		89				562		903		2023/2029	1,857		10.8	%
	Agencies
2	Suncor Energy Inc.	Calgary	A-													1,332		2028	1,332		7.7	%
3	Bank of Montreal	Toronto, Calgary	A+	27				27						5		1,071		2023/2024	1,130		6.6	%
4	Deloitte LLP	Toronto, Calgary	Not Rated	146												578		Various	724		4.2	%
5	Canadian Natural Resources	Calgary	BBB+													531		2026	531		3.1	%
6	Imperial Oil	Calgary	AAA	514															514		3.0	%

7	Royal Bank	Toronto, Calgary,	AA-	12				1		17		3		37		405		Various	475		2.8	%
		Vancouver
8	Talisman Energy	Calgary	BBB-													446		2025	446		2.6	%
9	Enbridge Inc.	Calgary	BBB+													401		2028	401		2.3	%
10	Bennett Jones	Toronto, Calgary	Not Rated											150		173		2027	323		1.9	%
11	CIBC	Toronto, Calgary	A+									160				151		2026/2053	311		1.8	%

12	KPMG Management	Toronto	Not Rated													297		2025	297		1.7	%
	Services LP
13	Osler, Hoskin & Harcourt	Toronto	Not Rated													199		2030	199		1.1	%
14	Westcoast Energy	Calgary, Vancouver	BBB									40				147		2022	187		1.1	%
15	Toronto Stock Exchange	Toronto	Not Rated					143								42		2023	185		1.1	%
16	Goodmans LLP	Toronto	Not Rated													182		2026	182		1.1	%
17	The Bay	Toronto	B+							164		15							179		1.0	%
18	Gowlings Canada Inc.	Toronto	Not Rated									170							170		1.0	%
19	The Manufacturers Life	Toronto	AA-													169		2022	169		1.0	%
	Insurance
20	McMillan LLP	Toronto, Vancouver	Not Rated			1				109						56		2022	166		1.0	%
	Total			710		29		435		379		388		754		7,083			9,778		56.9	%
	Total %			7.3	%	0.3	%	4.4	%	3.9	%	4.0	%	7.7	%	72.4	%		100.0	%

⁽¹⁾

From S&P.

⁽²⁾

Reflects the year of maturity related to lease(s) included in the ‘Beyond’ column.

⁽³⁾

Percentage of total leasable area of commercial properties, prior to considering partnership interests in partially owned properties; excludes parking.

LEASE ROLLOVER RISK

Lease roll-over risk arises from the possibility that we may experience difficulty renewing leases as they expire or in re-leasing space vacated by tenants upon early lease expiry. We attempt to stagger our lease-expiry profile so that we are not faced with disproportionate amounts of space expiring in any one year. Approximately 4.9% of our leases mature annually up to and including 2020. Our portfolio has a weighted-average lease life of eight years. We further mitigate this risk by maintaining a diversified portfolio mix by geographic location and by proactively leasing space in advance of its contractual expiry.

The following table sets out lease expiries, by square footage, for our portfolio at December 31, 2015.

	Currently																								2023
(000’s Sq. Ft.)	Available			2016			2017			2018			2019			2020			2021			2022			& Beyond			Leasable			Parking			Total
Toronto, Ontario		452			276			352			571			670			1,066			587			729			4,517			9,220			1,709			10,929
Ottawa, Ontario		82			22			35			3			86			9			566			20			907			1,730			802			2,532
Calgary, Alberta		154			355			63			142			80			272			108			374			4,087			5,635			1,194			6,829
Vancouver, B.C.		36			32			13			30			41			68			26			78			257			581			260			841
Other		—			—			—			—			1			—			—			—			2			3			—			3
Total		724			685			463			746			878			1,415			1,287			1,201			9,770			17,169			3,965			21,134
% of total		4.2	%		4.0	%		2.7	%		4.3	%		5.1	%		8.2	%		7.5	%		7.0	%		57.0	%		100.0	%		—	%		100.0	%

26	2015 Annual Report

ENVIRONMENTAL RISKS

As an owner of real property, we are subject to various laws relating to environmental matters. These laws could hold us liable for the costs of removal and remediation of certain hazardous substances or waste present in our buildings, released or deposited on or in our properties or disposed of at other locations. These costs could be significant and would reduce cash available for our business. The failure to remove or remediate such substances could adversely affect our ability to sell or our ability to borrow using such real estate as collateral and could potentially result in claims against us. We are not aware of any material non-compliance with environmental laws at any of our properties nor are we aware of any pending or threatened investigations or actions by environmental regulatory authorities in connection with any of our properties or any pending or threatened claims relating to environmental conditions at our properties.

We will continue to make the necessary capital and operating expenditures to ensure that we are compliant with environmental laws and regulations. Although there can be no assurances, we do not believe that costs relating to environmental matters will have a material effect on our business, financial condition or results of operations. However, environmental laws and regulations can change rapidly and we may become subject to more stringent environmental laws and regulations in the future. Compliance with more stringent environmental laws and regulations could have an adverse effect on our business, financial condition, or results of operations.

OTHER RISKS AND UNCERTAINTIES

Real estate is relatively illiquid. Such illiquidity may limit our ability to vary our portfolio promptly in response to changing economic or investment conditions. Also, financial difficulties of other property owners resulting in distressed sales could depress real estate values in the markets in which we operate.

Our investment properties generate a relatively stable source of income from contractual tenant rent payments. Continued growth of rental income is dependent on strong leasing markets to ensure expiring leases are renewed and new tenants are found promptly to fill vacancies at attractive rental rates. With leasing markets performance being impacted by the strength of the economies in which we operate, it is possible we could see downward pressure on overall occupancy levels and net effective rents if economic recovery slows or stalls. We are, however, substantially protected against short-term market conditions, as most of our leases are long-term in nature with an average term of eight years.

INSURANCE RISKS

We maintain insurance on our commercial properties in amounts and with deductibles that we believe are in line with what owners of similar properties carry. We maintain all risk property insurance and rental value coverage (including coverage for the perils of flood, earthquake and windstorm). Our all risk policy limit is $1.5 billion per occurrence. Our earthquake limit is $500 million per occurrence and in the annual aggregate. This coverage is subject to a $100,000 (dollars) deductible for all locations except for British Columbia where the deductible is 3% of the values for all locations where the physical loss, damage or destruction occurred subject to a minimum $250,000 (dollars) deductible. The flood limit is $500 million per occurrence and in the annual aggregate, and is subject to a deductible of $25,000 (dollars) for all losses arising from the same occurrence. Windstorm is included under the all risk coverage limit of $1.5 billion.

With respect to our commercial properties, we purchase an insurance policy that covers acts of terrorism for limits up to $1.5 billion.

Brookfield Canada Office Properties

PART IV – CRITICAL ACCOUNTING POLICIES AND ESTIMATES

FUTURE ACCOUNTING POLICY CHANGES

The following are the accounting policies that the Trust expects to adopt in the future:

Leases

On January 13, 2016, the IASB published a new Standard, IFRS 16, "Leases". The new Standard sets out the principles for the recognition, measurement, presentation and disclosure of leases, with the objective of ensuring that lessees and lessors provide relevant information that faithfully represent those transactions. IFRS 16 supersedes IAS 17 "Leases" and related interpretations and is effective for periods beginning on or after January 1, 2019, with earlier adoption permitted if IFRS 15 "Revenue from Contracts with Customers" has also been applied. The Trust is currently evaluating the impact to the consolidated financial statements.

Financial Instruments

On July 25, 2014, the IASB issued its final version of IFRS 9, “Financial Instruments”. IFRS 9, as amended, introduces a logical approach for the classification of financial assets, which is driven by cash flow characteristics and the business model in which an asset is held. This single, principle-based approach replaces existing rule-based requirements that are generally considered to be overly complex and difficult to apply. The new model results in a single impairment model being applied to all financial instruments, thereby removing a source of complexity associated with previous accounting requirements. It also introduces a new, expected-loss impairment model that will require more timely recognition of expected credit losses. IFRS 9 is effective for annual periods beginning on or after January 1, 2018 and should be applied retrospectively. The Trust is currently evaluating the impact to the consolidated financial statements.

Joint Arrangements

In May 2014, the IASB issued Amendments to IFRS 11, “Joint Arrangements: Accounting for Acquisitions of Interests in Joint Operations”. The objective of the amendments is to add new guidance to IFRS 11 on accounting for the acquisition of an interest in a joint operation in which the activity of the joint operation constitutes a business, as defined in IFRS 3, “Business Combinations”. Acquirers of such interests are to apply the relevant principles on business combination accounting in IFRS 3 and other standards, as well as disclosing the relevant information specified in these standards for business combinations. This amendment to IFRS 11 is effective for annual periods beginning on or after January 1, 2016 and should be applied prospectively. The Trust is currently evaluating the impact to the consolidated financial statements.

Revenue from Contracts with Customers

In May 2014, the IASB issued its new revenue standard, IFRS 15, “Revenue from Contracts with Customers”. IFRS 15 specifies how and when revenue should be recognized as well as requiring more informative and relevant disclosures. IFRS 15 supersedes IAS 18, “Revenue Recognition”, IAS 11, “Construction Contracts” and a number of revenue-related interpretations. Application of the standard is mandatory and it applies to nearly all contracts with customers: the main exceptions are leases, financial instruments and insurance contracts. IFRS 15 is effective for annual periods on or after January 1, 2018 and should be applied retrospectively. The Trust is currently evaluating the impact to the consolidated financial statements.

CRITICAL ACCOUNTING POLICIES

Our critical accounting policies are those that we believe are the most important in portraying our financial condition and results of operations, and require the most subjective judgment and estimates on the part of management.

Investment Properties

Investment properties include commercial properties held to earn rental income and properties that are being constructed or developed for future use as investment properties. Commercial properties and commercial developments are recorded at fair value, determined based on available market evidence, at the balance sheet date. We determine the fair value of each investment property based upon, among other things, rental income from current leases and assumptions about rental income from future leases reflecting market conditions at the balance sheet date, less future cash flows in respect of such leases. Fair values are primarily determined by discounting the expected future cash flows, generally over a term of 11 years including a terminal value based on the application of a capitalization rate to estimated year 12 cash flows. Commercial developments under active development are measured using a discounted cash flow model, net of costs to complete, as of the balance sheet date. Valuations of investment properties are most sensitive to changes in the discount rate and timing or variability of cash flows.

28	2015 Annual Report

The cost of commercial developments includes direct development costs, realty taxes and borrowing costs directly attributable to the development. Borrowing costs associated with direct expenditures on properties under development are capitalized. The amount of borrowing costs capitalized is determined first by reference to borrowings specific to the project, where relevant, and otherwise by applying a weighted average cost of borrowings to eligible expenditures after adjusting for borrowings associated with other specific developments. Where borrowings are associated with specific developments, the amount capitalized is the gross cost incurred on those borrowings less any investment income arising on their temporary investment. Borrowing costs are capitalized from the commencement of the development until the date of practical completion. The capitalization of borrowing costs is suspended if there are prolonged periods when development activity is interrupted. We consider practical completion to have occurred when the property is capable of operating in the manner intended by management. Generally this occurs upon completion of construction and receipt of all necessary occupancy and other material permits. Where we have pre-leased space as of or prior to the start of the development and the lease requires us to construct tenant improvements which enhance the value of the property, practical completion is considered to occur on completion of such improvements.

Initial direct leasing costs we incur in negotiating and arranging tenant leases are added to the carrying amount of investment properties.

Tax

The Trust is a “mutual fund trust” pursuant to the Income Tax Act (Canada). The Trust distributes or designates all taxable earnings to unitholders, and as such, under current legislation, the obligation to pay tax rests with each unitholder. Deferred income taxes are not recognized in the Trust’s financial statements on the basis that the Trust can deduct distributions paid such that its liability for income taxes is substantially reduced or eliminated for the year, and the Trust intends to continue to distribute its taxable income and continue to qualify as a real estate investment trust for the foreseeable future.

Revenue Recognition

We account for our leases with tenants as operating leases as we have retained substantially all of the risks and benefits of ownership of our investment properties. Revenue recognition under a lease commences when the tenant has a right to use the leased asset. Generally, this occurs on the lease commencement date or, where we are required to make additions to the property in the form of tenant improvements that enhance the value of the property, upon substantial completion of those improvements. The total amount of contractual rent to be received from operating leases is recognized on a straight-line basis over the term of the lease; a straight-line rent or free-rent receivable, which is included in the carrying amount of investment property, is recorded for the difference between the rental revenue recorded and the contractual amount received.

An allowance for doubtful accounts is recorded, if necessary, for estimated losses resulting from the inability of tenants to make required rent payments. The computation of this allowance is based on the tenants’ payment history and current credit status as well as certain industry-specific or geography-specific credit considerations. We also make judgments with respect to whether tenant improvements provided in connection with a lease enhance the value of the leased property, which determines whether such amounts are treated as additions to investment property as well as the point in time at which revenue recognition under the lease commences. In addition, where a lease allows a tenant to elect to take all or a portion of any unused tenant improvement allowance as a rent abatement, we must exercise judgment in determining the extent to which the allowance represents an inducement that is amortized as a reduction of lease revenue over the term of the lease.

Rental revenue also includes percentage participating rents and recoveries of operating expenses, including property taxes. Percentage participating rents are recognized when tenants’ specified sales targets have been met. Operating expense recoveries are recognized in the period that recoverable costs are chargeable to tenants.

Critical judgments in applying accounting policies

The critical judgments that have been made in applying our accounting policies and that have the most significant effect on the amounts in the consolidated financial statements are described in Note 2(n) in the consolidated financial statements.

USE OF ESTIMATES

The preparation of our consolidated financial statements requires management to make judgments, estimates, and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Our estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The result of our ongoing evaluation of these estimates forms the basis for making judgments about the carrying values of assets and liabilities and the reported amounts of revenues and expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions.

Brookfield Canada Office Properties

RELATED-PARTY TRANSACTIONS

In the normal course of operations, the Trust enters into various transactions with related parties that have been measured at exchange value and are recognized in the consolidated financial statements.

The Trust has entered into two service-support agreements with BOPM LP, dated May 1, 2010, for the provision of property management, leasing, construction, and asset management services. The purpose of the agreements is to provide the services of certain personnel and consultants as are necessary to help the Trust operate and manage its assets and tenant base; it also includes a cost-recovery for administrative and regulatory compliance services provided. The fees paid to BOPM LP are calculated in accordance with the terms of the agreements. Included in direct commercial property expense during the year ended December 31, 2015, are amounts paid to BOPM LP for property management services of $13.7 million (compared to $14.1 million in 2014). Included in investment properties during the year ended December 31, 2015, are amounts paid to BOPM LP for leasing and construction services of $8.3 million (compared to $3.2 million in 2014). Included in general and administrative expenses during the year ended December 31, 2015, are amounts paid to BOPM LP for asset management and administrative and regulatory compliance services of $19.5 million (compared to $19.0 million in 2014).

Included in fair value gains (losses) is $1.2 million paid to a subsidiary of BAM for services provided for the dispositions of 151 Yonge St. and HSBC Building during the year ended December 31, 2015.

The Trust entered into a long-term lease with BOPI at Bay Adelaide East and total rent received was $2.6 million for the year ended December 31, 2015.

Included in rental revenues during the year ended December 31, 2015, are amounts received from Brookfield Asset Management Inc., the ultimate parent of BOPI, and its affiliates of $9.8 million (compared to $6.9 million in 2014). Included in commercial developments during the year ended December 31, 2015, are amounts paid to a subsidiary of Brookfield Asset Management Inc. of $83.3 million (compared to $151.9 million in 2014) pursuant to a contract to construct Bay Adelaide East.

30	2015 Annual Report

PART V – BUSINESS ENVIRONMENT AND OUTLOOK

OPERATING ENVIRONMENT AND OUTLOOK

We closed out 2015 with stable operational and financial results and improvements in the Toronto region. Key highlights for the year included 2.1 million square feet of leasing, capital generation through dispositions of investment properties and new financings, on-target completion of Bay Adelaide East development, and annual distribution increase of 5.7% subsequent to year-end. Our performance over the past year reiterates our belief that BOX offers institutional investors and individual shareholders alike the best option to invest in the most prestigious office properties in Canada. On the leasing front, BOX achieved leasing volume that was consistent with the last 3 years; as well, our portfolio occupancy rate increased by 0.4% over the year to 95.8%, which compared favourably with the Canadian national average of 89.6%. Despite the erosion in the Calgary economy and the associated delays in lease-ups that we experienced during the year, BOX maintained a sub-5% overall vacancy in our portfolio. We also improved our 5-year rollover exposure up to 2019 by 9.3%. With respect to capital, we divested two investment properties in Toronto at peak values and repatriated $107 million. In terms of financing initiatives, we completed new financings at Place de Ville I & II which generated net proceeds of $43.8 million. We also increased our borrowing capacity by $70 million through upsizing of the corporate revolver. In development, we achieved a major milestone by delivering the second office tower at Bay Adelaide Centre. The East tower contributed to net operating income immediately upon completion and commenced tenant occupancy in January 2016. Lastly, with the transition of Bay Adelaide East into income producing properties, the Trust raised its unit distribution by 5.7% to $1.31 annually as we look for ways to add investment value to our unitholders.

Our first priority for 2016 is focusing on leasing objectives as we continue to backfill existing voids and reduce vacancy exposure and maintaining an above-market occupancy rate. We had seen occupancy levels improved for the second consecutive quarter in Toronto after several quarters of negative absorption. In contrast, we are experiencing downward momentum in Calgary which will likely continue in 2016. The decline in global oil prices has put substantial pressure on Calgary’s energy sector. Companies continue to cut capital budgets, lower operational expectations and reduce work forces. Our exposure to the energy sector is approximately 26% of our overall portfolio. However, our tenants represent many of the strongest players in the oil & gas sector and our average remaining lease term in Calgary is 10 years. We believe that our portfolio will continue to maintain an above market occupancy rate in 2016. Second, we will manage the integration of operations and the completion of the remaining construction activities at Bay Adelaide East. As well, we continue to advance and actively manage the development of Brookfield Place Calgary East and the lease-ups of both properties. Third, we plan to divest additional investment properties, including Royal Centre in Vancouver, given the favourable market conditions and strong demand for high quality assets.

We ended 2015 with $3.3 billion in net assets at a value per unit of $35.72. In addition, we ended the year with $214 million of liquidity and we will continue to look for opportunities to deploy this cash at attractive returns to unitholders.

With a strong balance sheet offering financial flexibility and a well-leased portfolio, BOX is well positioned to weather the economic downturn in Calgary and to deliver on its commitment to unitholders in 2016.

DISCLOSURE CONTROLS AND PROCEDURES

Management, including the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in the applicable Canadian and U.S. securities law) as of December 31, 2015. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that such disclosure controls and procedures were effective as of December 31, 2015.

INTERNAL CONTROLS OVER FINANCIAL REPORTING

There was no change in the Trust’s internal control over financial reporting that occurred during 2015 that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting. Management has also evaluated the effectiveness of the Trust’s internal control over financial reporting as of December 31, 2015, and based on that assessment concluded that the Trust’s internal control over financial reporting was effective. Refer to Management’s Report on Internal Control over Financial Reporting on page 34 of this annual report.

Bryan K. Davis

Chief Financial Officer

February 24, 2016

Brookfield Canada Office Properties

Management's Responsibility for the Financial Statements

The consolidated financial statements and management’s financial analysis and review contained in this annual report are the responsibility of the management of the Trust. To fulfill this responsibility, the Trust maintains a system of internal controls to ensure that its reporting practices and accounting and administrative procedures are appropriate and provide assurance that relevant and reliable financial information is produced. The consolidated financial statements have been prepared in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board and, where appropriate, reflect estimates based on management’s best judgment in the circumstances. The financial information presented throughout this annual report is consistent with the information contained in the consolidated financial statements.

Deloitte LLP, the independent auditors appointed by the unitholders, have audited the consolidated financial statements in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Their report as Independent Registered Public Accounting Firm is set out on the following page.

The consolidated financial statements have been further examined by the Board of Trustees and by its Audit Committee, which meets with the auditors and management to review the activities of each and reports to the Board of Trustees. The auditors have direct and full access to the Audit Committee and meet with the committee both with and without management present. The Board of Trustees, directly and through its Audit Committee, oversees management’s responsibilities and is responsible for reviewing and approving the consolidated financial statements.



Jan Sucharda	Bryan K. Davis
President and Chief Executive Officer	Chief Financial Officer
February 24, 2016

32	2015 Annual Report

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Unitholders of Brookfield Canada Office Properties

We have audited the accompanying consolidated financial statements of Brookfield Canada Office Properties and subsidiaries (the “Trust”), which comprise the consolidated balance sheets as at December 31, 2015 and December 31, 2014, and the consolidated statements of income and comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and the notes to the consolidated financial statements.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Trust and subsidiaries as at December 31, 2015 and December 31, 2014, and their financial performance and their cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Other Matter

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Trust’s internal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2016 expressed an unqualified opinion on the Trust's internal control over financial reporting.

Chartered Professional Accountants

Licensed Public Accountants

February 24, 2016

Toronto, Canada

Brookfield Canada Office Properties

Management's Report on Internal Control over Financial Reporting

Management of Brookfield Canada Office Properties is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Chief Executive Officer and the Chief Financial Officer and effected by the Board of Trustees, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis. Also, projections of any evaluation to the effectiveness of internal control over the financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of Brookfield Canada Office Properties’ internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that, as at December 31, 2015, Brookfield Canada Office Properties’ internal control over financial reporting is effective. There are no material weaknesses that have been identified by Management.

Brookfield Canada Office Properties' internal control over financial reporting as of December 31, 2015 has been audited by Deloitte LLP, Independent Registered Public Accounting Firm, who also audited Brookfield Canada Office Properties’ consolidated financial statements for the year ended December 31, 2015, and as stated in the Report of Independent Registered Public Accounting Firm, Deloitte LLP expressed an unqualified opinion on the effectiveness of Brookfield Canada Office Properties' internal control over financial reporting.



Jan Sucharda	Bryan K. Davis
President and Chief Executive Officer	Chief Financial Officer
February 24, 2016

34	2015 Annual Report

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Unitholders of Brookfield Canada Office Properties

We have audited the internal control over financial reporting of Brookfield Canada Office Properties and subsidiaries (the “Trust”) as of December 31, 2015, based on the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Trust's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Trust's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2015 of the Trust and our report dated February 24, 2016 expressed an unqualified opinion on those financial statements.

Chartered Professional Accountants

Licensed Public Accountants

February 24, 2016

Toronto, Canada

Brookfield Canada Office Properties

Consolidated Balance Sheets

(Millions) (CDN$)	Note		Dec. 31, 2015		Dec. 31, 2014
Assets
Non-current assets
Investment properties
Commercial properties		4	$	5,805.1	$	5,131.7
Commercial developments		4		462.7		670.7
				6,267.8		5,802.4
Current assets
Tenant and other receivables		7		23.8		34.3
Other assets		8		7.3		8.9
Cash and cash equivalents		9		57.6		58.9
				88.7		102.1
Assets held for sale		5		—		38.9
Total assets			$	6,356.5	$	5,943.4

Liabilities
Non-current liabilities
Investment property and corporate debt		10	$	2,560.1	$	2,368.4
Current liabilities
Investment property and corporate debt		10		278.4		281.3
Accounts payable and other liabilities		11		185.0		196.9
				463.4		478.2
Liabilities associated with assets held for sale		5		—		0.5
Total liabilities				3,023.5		2,847.1

Equity		13
Unitholders’ equity				923.8		856.7
Non-controlling interest				2,409.2		2,239.6
Total equity				3,333.0		3,096.3
Total liabilities and equity			$	6,356.5	$	5,943.4

See accompanying notes to the consolidated financial statements.

36	2015 Annual Report

Consolidated Statements of Income and Comprehensive Income

Years ended December 31
(Millions, except per unit amounts) (CDN$)	Note		2015		2014
Commercial property revenue		14 (a)	$	516.9	$	517.2
Direct commercial property expense		14 (b)		265.6		247.9
Investment and other income		14 (c)		—		1.1
Interest expense		14 (b)		84.3		91.9
General and administrative expense		14 (b), 17		23.1		23.6
Income before fair value gains (losses)				143.9		154.9
Fair value gains (losses)		4, 5		207.5		(38.8	)
Net income and comprehensive income			$	351.4	$	116.1

Net income and comprehensive income attributable to:
Unitholders			$	98.6	$	32.5
Non-controlling interest				252.8		83.6
			$	351.4	$	116.1
Net income per Trust unit – basic and diluted			$	3.76	$	1.24

See accompanying notes to the consolidated financial statements.

Brookfield Canada Office Properties

Consolidated Statements of Changes in Equity

Years ended December 31 (Millions) (CDN$)	Note		2015			2014
Trust Units
Balance at beginning of year			$	553.4		$	552.1
Repurchase of Trust Units		13		(0.8	)		—
Issuance of Trust Units under Distribution Reinvestment Plan (“DRIP”)		12		1.8			1.3
Balance at end of year				554.4			553.4
Contributed surplus
Balance at beginning of year				3.1			3.1
Repurchase of Trust Units		13		(0.2	)		—
Balance at end of year				2.9			3.1
Retained earnings
Balance at beginning of year				300.2			299.5
Net income and comprehensive income				98.6			32.5
Distributions		12		(32.3	)		(31.8	)
Balance at end of year				366.5			300.2
Total unitholders’ equity			$	923.8		$	856.7

Non-controlling interest
Balance at beginning of year			$	2,239.6		$	2,237.6
Net income and comprehensive income				252.8			83.6
Distributions		12		(83.2	)		(81.6	)
Balance at end of year				2,409.2			2,239.6
Total equity			$	3,333.0		$	3,096.3

See accompanying notes to the consolidated financial statements.

38	2015 Annual Report

Consolidated Statements of Cash Flows

Years ended December 31 (Millions) (CDN$)	Note		2015			2014
Operating activities
Net income			$	351.4		$	116.1
Add (deduct):
Non-cash rental (revenue) expense		14(a)		(1.1	)		1.4
Amortization of deferred financing costs				3.3			3.1
Leasing commissions and tenant inducements				(13.9	)		(8.8	)
Fair value (gains) losses		4, 5		(207.5	)		38.8
Interest expense				84.3			91.9
Interest paid				(108.6	)		(102.9	)
Other working capital				7.1			(3.4	)
Cash flows provided by operating activities				115.0			136.2

Investing activities
Acquisition of commercial developments		4		—			(235.3	)
Disposition of commercial property		5		105.7			—
Capital expenditures – commercial properties				(59.0	)		(37.2	)
Capital expenditures – commercial developments				(275.3	)		(179.7	)
Cash flows used in investing activities				(228.6	)		(452.2	)

Financing activities
Investment property debt arranged				267.4			235.8
Investment property debt repayments				(0.3	)		(78.1	)
Investment property debt amortization				(49.1	)		(51.0	)
Corporate debt arranged				119.0			185.0
Corporate debt repayments				(110.0	)		—
Repurchase of Trust units		13		(1.0	)		—
Trust unit distributions paid		19		(30.5	)		(30.4	)
Class B LP unit distributions paid		19		(83.2	)		(81.2	)
Cash flows provided by financing activities				112.3			180.1
Decrease in cash and cash equivalents				(1.3	)		(135.9	)
Cash and cash equivalents, beginning of year				58.9			194.8
Cash and cash equivalents, end of year			$	57.6		$	58.9

See accompanying notes to the consolidated financial statements.

Brookfield Canada Office Properties

Notes to the Consolidated Financial Statements

NOTE 1: NATURE AND DESCRIPTION OF THE TRUST

Brookfield Canada Office Properties (the “Trust” or “BOX”) is an unincorporated, closed-end real estate investment trust (“REIT”) established under and governed by the laws of the Province of Ontario, Canada and created pursuant to a declaration of trust dated March 19, 2010 and amended and restated February 24, 2012. Although it is intended that BOX qualifies as a “mutual fund trust” pursuant to the Income Tax Act (Canada), BOX is not a mutual fund under applicable securities laws.

The Trust is a subsidiary of Brookfield Office Properties Inc. (“BOPI”), which owns an aggregate equity interest in the Trust of 57.2% as of December 31, 2015 consisting of 79.5% of the issued and outstanding Class B limited partnership units (“Class B LP Units”) of Brookfield Office Properties Canada LP (“BOPC LP”), a subsidiary of BOX that owns direct interests in the Trust’s investment properties. In addition, BOPI’s parent company, Brookfield Property Partners LP (“BPY”), directly owns an aggregate equity interest in the Trust of 26.0% consisting of 40.3% of the issued and outstanding units of BOX (“Trust Units”) and 20.5% of the Class B LP Units. BOX primarily invests in and operates commercial office properties in Toronto, Ottawa, Calgary, and Vancouver. The registered and operating office of the Trust is Brookfield Place Toronto, 181 Bay Street, Suite 330, Toronto, Ontario, M5J 2T3.

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

(a)

Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”).

(b)

Basis of presentation

The financial statements have been prepared on a going concern basis and have been presented in Canadian dollars rounded to the nearest million. The accounting policies set out below have been applied consistently in all material respects. New and revised standards not effective for the current accounting year are described in Note 3.

(c)

Basis of consolidation

The consolidated financial statements include the accounts of the Trust and its subsidiaries consisting of BOPC GP Inc. and BOPC LP, which are the entities over which the Trust has control. Control is achieved when the Trust has power over an entity; is exposed, or has rights, to variable returns from its involvement with the investee; and has the ability to use its power to affect its returns. The Trust holds all of the Class A Limited Partnership Units of BOPC LP (“Class A LP Units”). The holders of the Class A LP Units are entitled to vote at all meetings of the partners of BOPC LP. In addition, BOX is the sole shareholder of BOPC GP Inc., the general partner of BOPC LP, which has full power and exclusive authority to administer, manage, control and operate the business and affairs of BOPC LP. The Trust reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Non-controlling interests in the equity and results of the Trust are shown separately in equity on the consolidated balance sheets.

All intercompany assets, liabilities, equity, income, expenses and cash flows relating to transactions between members of the Trust are eliminated on consolidation.

(d)

Interests in joint operations

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. This usually results through a direct interest in the assets rather than through the establishment of a separate entity. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. The Trust has determined that its joint arrangements are all joint operations.

Where the Trust undertakes its activities under joint operations, the Trust recognizes its proportionate share of jointly controlled assets, liabilities, revenues and expenses in the consolidated financial statements, which are classified according to their nature.

(e)

Fair value measurement

The Trust measures its non-financial assets such as investment properties, at fair value at each balance sheet date. Fair values of financial instruments measured at amortized cost are described in Note 2(j).

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability, the Trust takes into account the characteristics of the asset or liability and available market evidence at the measurement date.

40	2015 Annual Report

In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

•

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Trust can access at the measurement date;

•

Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

•

Level 3 inputs are unobservable inputs for the asset or liability.

(f)

Investment properties

Investment properties include commercial properties held to earn rental income and properties that are being constructed or developed for future use as investment properties. Commercial properties and commercial developments are recorded at fair value, determined based on available market evidence, at the balance sheet date. The Trust determines the fair value of each investment property based upon, among other things, rental income from current leases and assumptions about rental income from future leases reflecting market conditions at the balance sheet date, less future cash flows in respect of such leases. Fair values are primarily determined by discounting the expected future cash flows, generally over a weighted-average term of 11 years, including a terminal value based on the application of a capitalization rate to estimated year 12 cash flows. Commercial developments under active development are measured using a discounted cash flow model, net of costs to complete, as of the balance sheet date. Valuations of investment properties are most sensitive to changes in the discount rate and timing or variability of cash flows.

The cost of commercial development includes direct development costs, realty taxes and borrowing costs directly attributable to the development. Borrowing costs associated with direct expenditures on properties under development are capitalized. The amount of borrowing costs capitalized is determined first by reference to borrowings specific to the project, where relevant, and otherwise by applying a weighted average cost of borrowings to eligible expenditures after adjusting for borrowings associated with other specific developments. Where borrowings are associated with specific developments, the amount capitalized is the gross cost incurred on those borrowings less any investment income arising on their temporary investment. Borrowing costs are capitalized from the commencement of the development until the date of practical completion. The capitalization of borrowing costs is suspended if there are prolonged periods when development activity is interrupted. The Trust considers practical completion to have occurred when the property is capable of operating in the manner intended by management. Generally this occurs upon completion of construction and receipt of all necessary occupancy and other material permits. Where the Trust has pre-leased space as of or prior to the start of the development and the lease requires the Trust to construct tenant improvements which enhance the value of the property, practical completion is considered to occur on completion of such improvements.

Initial direct leasing costs we incur in negotiating and arranging tenant leases are added to the carrying amount of investment properties.

(g)

Assets held for sale

Non-current assets and groups of assets and liabilities that comprise disposal groups are categorized as assets held for sale where the asset or disposal group is available for sale in its present condition and the sale is highly probable. For this purpose, a sale is highly probable if management is committed to a plan to achieve the sale, there is an active program to find a buyer, the non-current asset or disposal group is being actively marketed at a reasonable price, the sale is anticipated to be completed within one year from the date of classification, and it is unlikely there will be changes to the plan. Where an asset or disposal group is acquired with a view to resale, it is classified as a non-current asset held for sale if the disposal is expected to take place within one year of the acquisition and it is highly likely that the other conditions referred to above will be met within a short period following the acquisition. Non-current assets held for sale and disposal groups are measured at fair value as described in Note 2(e).

(h)

Provisions

A provision is a liability of uncertain timing or amount. Provisions are recognized when the Trust has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognized for future operating losses. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. Provisions are remeasured at each balance sheet date using the current discount rate. The increase in the provision due to the passage of time is recognized as interest expense.

(i)

Revenue recognition

The Trust has retained substantially all of the risks and benefits of ownership of its investment properties and therefore accounts for leases with its tenants as operating leases. Revenue recognition under a lease commences when the tenant has a right to use the leased asset. Generally, this occurs on the lease inception date or, where the Trust is required to make additions to the property in the form of tenant improvements that enhance the value of the property, upon substantial completion of those improvements. The total amount of contractual rent to be received from operating leases is recognized on a straight-line basis over the term of the lease; a straight-line rent receivable, which is included in the carrying amount of investment property, is recorded for the difference between the rental revenue recorded and the contractual amount received.

Brookfield Canada Office Properties

Rental revenue also includes percentage participating rents and recoveries of operating expenses, including property and capital taxes. Percentage participating rents are recognized when tenants’ specified sales targets have been met. Operating expense recoveries are recognized in the period that recoverable costs are chargeable to tenants.

(j)

Financial instruments and derivatives

Derivative instruments are recorded on the consolidated balance sheets at fair value, including those derivatives that are embedded in financial or non-financial contracts and that are not closely related to the host contract, and gains and losses arising from changes in fair value of derivative instruments are recognized in net income in the period the changes occur.

The following summarizes the Trust’s classification and measurement of financial instruments:

Financial assets and liabilities	Classification	Measurement
Cash and cash equivalents	Loans and receivables	Amortized cost
Tenant receivables	Loans and receivables	Amortized cost
Investment property and corporate debt	Other liabilities	Amortized cost
Accounts payable and other liabilities	Other liabilities	Amortized cost

With the exception of Investment property and corporate debt, the carrying amounts of these financial assets and liabilities approximate fair value. The fair value of investment property and corporate debt is determined by discounting contractual principal and interest payments at estimated current market interest rates for the instrument. Current market interest rates are determined with reference to current benchmark rates for a similar term and current credit spreads for debt with similar terms and risks.

(k)

Cash and cash equivalents

Cash and cash equivalents include cash and short-term investments with original maturities of three months or less.

(l)

Non-controlling interest

Class B LP Units are classified as non-controlling interest and are presented as a component of equity as they represent equity interests in BOPC LP not attributable, directly or indirectly, to the Trust.

(m)

Income taxes

The Trust is a “mutual fund trust” pursuant to the Income Tax Act (Canada). The Trust intends to distribute or designate all taxable earnings to unitholders and, under current legislation, the obligation to pay tax rests with each unitholder. No current or deferred tax provision is recognized in the Trust’s financial statements on the Trust’s income.

(n)

Critical judgments in applying accounting policies

The following are the critical judgments that have been made in applying the Trust’s accounting policies and that have the most significant effect on the amounts in the consolidated financial statements:

(i)

Leases

The Trust’s policy for revenue recognition on investment properties is described in Note 2(i). In applying this policy, the Trust makes judgments with respect to whether tenant improvements provided in connection with a lease enhance the value of the leased property, which determines whether such amounts are treated as additions to investment property as well as the point in time at which revenue recognition under the lease commences. In addition, where a lease allows a tenant to elect to take all or a portion of any unused tenant improvement allowance as a rent abatement, the Trust must exercise judgment in determining the extent to which the allowance represents an inducement that is amortized as a reduction of lease revenue over the term of the lease.

The Trust also makes judgments in determining whether certain leases, in particular those tenant leases with long contractual terms where the lessee is the sole tenant in a property and long-term ground leases where the Trust is lessor, are operating or finance leases. The Trust has determined that all of its leases are operating leases.

(ii)

Investment property

The Trust’s accounting policies relating to investment property are described in Note 2(f). In applying this policy, judgment is applied in determining whether certain costs are additions to the carrying amount of the property and, for properties under development, identifying the point at which practical completion of the property occurs and identifying the directly attributable borrowing costs to be included in the carrying value of the development property.

(iii)

Income taxes

Deferred income taxes are not recognized in the Trust’s financial statements on the basis that the Trust can deduct distributions paid such that its liability for income taxes is substantially reduced or eliminated for the year, and the Trust intends to continue to distribute its taxable income and continue to qualify as a real estate investment trust for the foreseeable future.

42	2015 Annual Report

(iv)

Assets held for sale

The Trust’s accounting policies relating to assets held for sale are described in Note 2(g). In applying this policy, judgment is applied in determining whether sale of certain assets is highly probable, which is a necessary condition for being presented within assets held for sale. Also, judgment is applied in determining whether disposal groups represent a component of the entity, the results of which should be recorded in discontinued operations on the consolidated statements of income.

(v)

Common control transactions

IFRS does not include specific measurement guidance for transfers of businesses or subsidiaries between entities under common control. Accordingly, the Trust has developed a policy to account for such transactions taking into consideration other guidance in the IFRS framework and pronouncements of other standard-setting bodies. The Trust’s policy is to record assets and liabilities recognized as a result of transfers of businesses or subsidiaries between entities under common control at the carrying value on the transferor’s financial statements. Differences between the carrying amount of the consideration paid or received, where the Trust is the transferor, and the carrying amount of the assets and liabilities transferred are recorded directly in equity.

(vi)

Consolidated financial statements

The Trust’s accounting policies relating to consolidation are described in Note 2(c). In applying this policy, judgment is applied in determining whether the Trust has control over the entity and if facts or circumstances indicate that there are changes to one or more of the elements of control.

(o)

Critical Accounting Estimates and Assumptions

The Trust makes estimates and assumptions that affect the carrying amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amount of earnings for the period. Actual results could differ from estimates. The estimates and assumptions that are critical to the determination of the amounts reported in the consolidated financial statements relate to investment property. The critical estimates and assumptions underlying the valuation of investment properties are set out in Note 4.

NOTE 3: FUTURE ACCOUNTING POLICY CHANGES

(a)

Leases

(b)

Financial Instruments

(c)

Joint Arrangements

(d)

Revenue from Contracts with Customers

In May 2014, the IASB issued its new revenue standard, IFRS 15, “Revenue from Contracts with Customers”. IFRS 15 specifies how and when revenue should be recognized as well as requiring more informative and relevant disclosures. IFRS 15 supersedes IAS 18, “Revenue Recognition”, IAS 11, “Construction Contracts” and a number of revenue-related interpretations. Application of the standard applies to nearly all contracts with customers: the main exceptions are leases, financial instruments and insurance contracts. IFRS 15 is effective for annual periods on or after January 1, 2018 and should be applied retrospectively. The Trust is currently evaluating the impact to the consolidated financial statements.

Brookfield Canada Office Properties

NOTE 4: INVESTMENT PROPERTIES

	Dec 31, 2015						Dec 31, 2014
	Commercial			Commercial			Commercial			Commercial
(Millions)	properties			developments			properties			developments
Balance at beginning of year	$	5,131.7		$	670.7		$	5,158.2		$	232.0
Additions:
Acquisition		—			—			—			245.5
Capital expenditures and tenant improvements		48.6			300.3			45.4			193.0
Leasing commissions		15.1			0.6			6.2			0.2
Tenant inducements		0.7			—			0.9			—
Reclassification of assets held for sale		—			—			(38.8	)		—
Reclassification of commercial development, net		508.9			(508.9	)		—			—
Investment property disposition		(108.8	)		—			—			—
Fair value gains (losses)		207.9			—			(38.8	)		—
Other changes		1.0			—			(1.4	)		—
Balance at end of year	$	5,805.1		$	462.7		$	5,131.7		$	670.7

(a)

Fair value of investment properties

The Trust determined the fair value of each investment property based upon, among other things, rental income from current leases and assumptions about rental income from future leases reflecting market conditions at the applicable balance sheet dates, less future cash outflows with respect to such leases. Fair values were primarily determined by discounting the expected future cash flows, generally over a weighted-average term of 11 years, including a terminal value based on the application of a capitalization rate to estimated year 12 cash flows. Commercial developments under active development are measured using a discounted cash flow model, net of costs to complete, as of the balance sheet date. In accordance with its policy, the Trust measures its investment properties using valuations prepared by management. The Trust does not measure its investment properties based on valuations prepared by external valuation professionals.

The key valuation metrics for the Trust’s investment properties are set out in the following tables:

	December 31, 2015									December 31, 2014
	Maximum			Minimum			Weighted Average			Maximum			Minimum			Weighted Average
Eastern region
Discount rate		7.00	%		6.00	%		6.13	%		7.00	%		6.00	%		6.34	%
Terminal cap rate		6.50	%		5.25	%		5.51	%		6.50	%		5.25	%		5.63	%
Hold period (yrs)		15			10			11			15			10			11

Western region
Discount rate		6.75	%		4.75	%		6.01	%		6.75	%		6.00	%		6.32	%
Terminal cap rate		6.25	%		3.53	%		5.46	%		6.00	%		5.50	%		5.63	%
Hold period (yrs)		11			10			10			11			10			10

A 25 basis-point decrease in the discount and terminal capitalization rates will impact the fair value of commercial properties by $103.2 million and $160.3 million or 1.8% and 2.8%, respectively at December 31, 2015.

Investment properties with a fair value of approximately $925.9 million at December 31, 2015 (compared to $971.3 million in 2014) are situated on land held under leases or other agreements largely expiring after the year 2023. Investment properties do not include any properties held under operating leases.

Investment properties with a fair value of $4,874.9 million at December 31, 2015 (compared to $4,679.9 million in 2014) are pledged as security for investment property and corporate debt.

(b)

Development activities

During the third quarter of 2013 and the fourth quarter of 2014, the Trust acquired Bay Adelaide East and Brookfield Place Calgary East, respectively, from its parent company, BOPI, for an aggregate total investment of $601.9 million and $966.3 million, respectively. The buildings were purchased on an “as-if-completed-and-stabilized basis,” and as such, BOPI retains the development obligations including construction, lease-up and financing. As part of the acquisitions, the Trust formed an independent committee and engaged third-party advisors to evaluate the fairness of the transactions. The assets, liabilities and earnings from Bay Adelaide East and Brookfield Place Calgary East have been included in the consolidated financial statements commencing from July 11, 2013, and October 14, 2014, respectively.

44	2015 Annual Report

The following table summarizes the details of the transactions:

			Brookfield Place
(Millions)	Bay Adelaide East		Calgary East
Initial acquisition price	$	169.9	$	245.5
Up-front equity commitment		26.0		81.8
First mortgage construction loan		350.0		575.0
Final payment due to BOPI on stabilization⁽¹⁾		56.0		64.0
Aggregate total investment	$	601.9	$	966.3

⁽¹⁾

Subject to achieving stabilized net operating income and targeted permanent financing, which is expected to occur in 2017 for Bay Adelaide East and 2018 for Brookfield Place Calgary East.

As part of the Brookfield Place Calgary East acquisition, the title to Brookfield Place Calgary West ("BPCW") was also transferred to the Trust because the development site is currently under one legal title. However, the acquisition agreements provide that all economic benefits and obligations of BPCW remain with BOPI. BOPI has also agreed to indemnify the Trust for all current liabilities, future costs and obligations in respect of BPCW. As part of the transaction, the Trust entered into a separate agreement to sell BPCW back to BOPI upon the City of Calgary approving the severance of the east and west parcels, which is anticipated to occur by the end of 2016. Accordingly, the Trust has not reflected the value of the BPCW site and related debt of the same amount in the financial statements.

On November 30, 2015, Bay Adelaide East was transferred into commercial property upon substantial completion with its first lease commencing in December 2015.

During the year ended December 31, 2015, the Trust capitalized a total of $300.9 million (compared to $193.2 million in 2014) of costs related to commercial developments. Included in this amount during the year ended December 31, 2015, is $12.7 million (compared to $6.3 million in 2014) of property taxes and other related costs and $27.0 million (compared to $13.6 million in 2014) of capitalized borrowing costs. The weighted average capitalization rate used for capitalization of borrowing costs on commercial developments was 3.9%. Included in construction and related costs for the year ended December 31, 2015, are amounts paid to a subsidiary of Brookfield Asset Management Inc. (“BAM”), the ultimate parent of BOPI, of $83.3 million (compared to $151.9 million in 2014) pursuant to a contract to construct Bay Adelaide East.

NOTE 5: INVESTMENT PROPERTY DISPOSITIONS AND HELD FOR SALE

During the year, the Trust completed the sale of its 100% interest in HSBC Building and 25% interest in 151 Yonge St. The Trust generated net proceeds of $105.7 million. During the fourth quarter of 2014, the Trust reclassified its 25% interest in 151 Yonge St. in Toronto to assets held for sale for $38.8 million. The related receivables and liabilities were $0.1 million and $0.5 million, respectively.

(Millions)	HSBC Building			151 Yonge St.			Total
Sale proceeds	$	110		$	38.5		$	148.5
Selling costs		(1.2	)		(0.1	)		(1.3	)
Investment property disposition		108.8			38.4			147.2
Assumption of mortgage by purchaser		(41.5	)		—			(41.5	)
Net sale proceeds	$	67.3		$	38.4		$	105.7

During the fourth quarter, the Trust commenced marketing of the sale of its 100% interest in Royal Centre in Vancouver. Subsequently, the Trust entered into an agreement to sell the property, which is anticipated to close during the first quarter of 2016.

Brookfield Canada Office Properties

NOTE 6: INVESTMENT IN JOINTLY CONTROLLED OPERATIONS

The Trust undertakes its activities under jointly controlled operations through direct interests in assets, rather than through the establishment of a separate entity. The Trust’s interests in the following properties are classified as joint operations and, accordingly, the Trust has recognized its share of the related assets, liabilities, revenues and expenses for the following properties:

		Principal place of business/	Ownership interest and voting rights
Jointly controlled assets	Nature	Incorporation	Dec. 31, 2015			Dec. 31, 2014
Exchange Tower	Commercial office property	Toronto, Ontario		50	%		50	%
Fifth Avenue Place	Commercial office property	Calgary, Alberta		50	%		50	%
Bankers Hall	Commercial office property	Calgary, Alberta		50	%		50	%
Bankers Court	Commercial office property	Calgary, Alberta/Toronto, Ontario		50	%		50	%
Suncor Energy Centre	Commercial office property	Calgary, Alberta		50	%		50	%
Brookfield Place Retail	Commercial office property	Toronto, Ontario		50	%		50	%
Brookfield Place Parking	Commercial office property	Toronto, Ontario		56	%		56	%
First Canadian Place	Commercial office property	Toronto, Ontario		25	%		25	%
2 Queen St. East	Commercial office property	Toronto, Ontario		25	%		25	%
Place de Ville I	Commercial office property	Toronto, Ontario		25	%		25	%
Place de Ville II	Commercial office property	Toronto, Ontario		25	%		25	%
Jean Edmonds Towers	Commercial office property	Toronto, Ontario		25	%		25	%

⁽¹⁾

First Canadian Place is subject to a land lease with respect to 50% of the land on which the property is situated. The land lease will expire on December 1, 2023 subject to an extension under certain circumstances. At the expiry of the land lease, the other land owner will have the option to acquire, for a nominal amount, an undivided 50% beneficial interest in the office tower.

NOTE 7: TENANT AND OTHER RECEIVABLES

As of December 31, 2015, $0.2 million of the Trust’s balance of accounts receivable is over 90 days past due (compared to $0.7 million at December 31, 2014).

The Trust’s maximum exposure to credit risk associated with tenant and other receivables is equivalent to its carrying value. Credit risk related to tenant receivables arises from the possibility that tenants may be unable to fulfill their lease commitments. The Trust manages this risk by attempting to ensure that its tenant mix is diversified and by limiting its exposure to any one tenant. The Trust maintains a portfolio that is diversified by industry type so that exposure to a particular sector is lessened. Currently no one tenant represents more than 7.4% of commercial property revenue. This risk is further managed by attempting to sign long-term leases with tenants who have investment grade credit ratings.

NOTE 8: OTHER ASSETS

At December 31, 2015, the Trust’s balance of other assets is comprised of prepaid expenses and other assets of $7.3 million (compared to $8.9 million at December 31, 2014).

NOTE 9: CASH AND CASH EQUIVALENTS

At December 31, 2015, the Trust had $nil of cash placed in term deposits, which is consistent with the amount at December 31, 2014. For the year ended December 31, 2015, interest income of $nil was recorded on cash and cash equivalents (compared to $1.1 million in 2014).

NOTE 10: INVESTMENT PROPERTY AND CORPORATE DEBT

	Dec. 31, 2015					Dec. 31, 2014
	Weighted					Weighted
(Millions)	Average Rate			Debt Balance		Average Rate			Debt Balance
Investment property debt – fixed rate		4.27	%	$	2,024.1		4.17	%	$	2,303.7
Investment property and corporate debt – floating rate		2.49	%		814.4		2.93	%		346.0
Total investment property and corporate debt		3.76	%	$	2,838.5		4.01	%	$	2,649.7

Current				$	278.4				$	281.3
Non-current					2,560.1					2,368.4
Total debt				$	2,838.5				$	2,649.7

The Trust’s secured investment property and corporate debt is non-recourse to the Trust with the exception of $97.3 million at December 31, 2015 (compared to $98.5 million at December 31, 2014) which has limited recourse to the Trust and guarantees as discussed in Note 15(d).

46	2015 Annual Report

Investment property and corporate debt maturities for the next five years and thereafter are as follows:

							Weighted-Average
	Scheduled						Interest Rate (%) at
(Millions, except interest data)	Amortization⁽¹⁾		Maturities		Total⁽¹⁾		Dec. 31, 2015
2016	$	43.3	$	235.1	$	278.4		2.29	%
2017		46.6		415.3		461.9		2.90	%
2018		49.4		—		49.4		—	%
2019		51.7		—		51.7		—	%
2020		41.3		693.3		734.6		3.16	%
2021 and thereafter		193.1		1,069.4		1,262.5		4.56	%
Total	$	425.4	$	2,413.1	$	2,838.5		3.76	%

For the year ended December 31, 2015, interest of $84.3 million (compared to $91.9 million in 2014) was expensed relating to investment property and corporate debt.

Approximately 28.7% of the Trust's outstanding investment property and corporate debt at December 31, 2015 is floating-rate debt (December 31, 2014 – 13.1%). The effect of a 100-basis point increase in interest rates on interest expense relating to our floating-rate debt, all else being equal, is an increase in interest expense of $8.1 million on an annual basis. In addition there is interest rate risk associated with the Trust’s fixed rate debt due to the expected requirement to refinance such debt in the year of maturity. There is no fixed rate debt maturing within one year.

The fair value of investment property and corporate debt is determined by discounting contractual principal and interest payments at estimated current market interest rates for the instrument. Current market interest rates are determined with reference to current benchmark rates for a similar term and current credit spreads for debt with similar terms and risks. As of December 31, 2015, the fair value of investment property and corporate debt exceeds the principal loan value of these obligations by $160.3 million (compared to an excess of $114.3 million at December 31, 2014).

Interest rate risk arises when the fair value or future cash flows of commercial property and corporate debt fluctuate because of changes in market interest rates. Financing risk arises when lenders will not refinance maturing debt on terms and conditions acceptable to the Trust, or on any terms at all. The Trust attempts to stagger the maturities of its borrowings, as well as obtain fixed-rate debt as the means of managing interest rate risk. The Trust has an ongoing need to access debt markets to refinance maturing debt as it comes due. The Trust’s strategy to stagger its borrowing maturities attempts to mitigate the Trust’s exposure to excessive amounts of debt maturing in any one year.

The details of the financing transactions completed during 2015 are as follows.

New

Net Proceeds

Interest

(Millions)

Proceeds⁽¹⁾

Generated⁽¹⁾

Rate (%)

Mortgage Detail

Maturity

Hudson's Bay Centre

Extension

—

BA + 140 bps

Limited recourse

May 2016

Royal Centre

Extension

—

BA + 150 bps

Non-recourse

June 2016

Place de Ville I

New

21.0

3.752

Non-recourse

June 2025

Place de Ville II

New

22.8

3.752

Non-recourse

June 2025

⁽¹⁾

Excludes financing costs.

During the second quarter of 2015, the Trust upsized its revolving corporate credit facility by $70.0 million to $350.0 million.

During the third quarter of 2015, the Trust extended its revolving corporate credit facility for an additional two years under the existing financial terms, maturing August 29, 2020. As of December 31, 2015, $194.0 million was drawn on the revolving corporate credit facility.

NOTE 11: ACCOUNTS PAYABLE AND OTHER LIABILITIES

The components of the Trust’s accounts payable and other liabilities are as follows:

(Millions)	Dec. 31, 2015		Dec. 31, 2014
Accounts payable and accrued liabilities	$	165.9	$	177.0
Accrued interest		19.1		19.9
Total	$	185.0	$	196.9

Brookfield Canada Office Properties

NOTE 12: DISTRIBUTIONS

The following tables present distributions declared for the years ended December 31, 2015 and December 31, 2014:

	2015
(Millions, except per unit amounts)	Trust Units		Class B LP Units
Paid in cash or DRIP	$	29.6	$	76.3
Payable as of December 31, 2015		2.7		6.9
Total	$	32.3	$	83.2
Per unit	$	1.24	$	1.24

	2014
(Millions, except per unit amounts)	Trust Units		Class B LP Units
Paid in cash or DRIP	$	29.1	$	74.7
Payable as of December 31, 2014		2.7		6.9
Total	$	31.8	$	81.6
Per unit	$	1.21	$	1.21

The Trust has implemented a distribution reinvestment plan (“DRIP”), which allows certain Canadian resident unitholders to elect to have their distributions reinvested in additional Trust Units. No brokerage commissions or service charges are payable in connection with the purchase of Trust Units under the DRIP and the Trust will pay all administrative costs. The automatic reinvestment of distributions under the DRIP does not relieve holders of Trust Units of any income tax applicable to such distributions. For the year ended December 31, 2015, $1,859,505 (dollars) or 69,214 Trust Units were issued through the DRIP, compared to $1,359,047 (dollars), or 50,348 Trust Units during the same period in 2014.

NOTE 13: EQUITY

The components of equity are as follows:

(Millions)	Dec. 31, 2015		Dec. 31, 2014
Trust Units	$	554.4	$	553.4
Contributed surplus		2.9		3.1
Retained earnings		366.5		300.2
Unitholders’ equity		923.8		856.7
Non-controlling interest		2,409.2		2,239.6
Total	$	3,333.0	$	3,096.3

Authorized Capital and Outstanding Securities

The Trust is authorized to issue an unlimited number of two classes of units: Trust Units and Special Voting Units. Special Voting Units are only issued in tandem with the issuance of Class B LP Units. As of December 31, 2015, the Trust had a total of 26,250,344 Trust Units outstanding and 67,088,022 Class B LP Units outstanding (and a corresponding number of Special Voting Units).

The following tables summarize the changes in the units outstanding during the year ended December 31, 2015 and December 31, 2014:

	2015
	Trust Units			Class B LP Units
Units issued and outstanding at beginning of year		26,218,183			67,088,022
Units repurchased		(37,053	)		—
Units issued pursuant to DRIP		69,214			—
Total units outstanding at December 31, 2015		26,250,344			67,088,022

	2014
	Trust Units		Class B LP Units
Units issued and outstanding at beginning of year		26,167,835		67,088,022
Units issued pursuant to DRIP		50,348		—
Total units outstanding at December 31, 2014		26,218,183		67,088,022

For the year ended December 31, 2015, the weighted average number of Trust Units outstanding was 26,246,958 (compared to 26,191,933 at December 31, 2014).

In November 2015, the Trust renewed its normal course issuer bid for its Trust Units for a further one-year period. During the twelve-month period commencing November 12, 2015, and ending November 11, 2016, the Trust may purchase on the Toronto Stock Exchange ("TSX"), the New York Stock Exchange and any alternative Canadian trading system up to 1,566,602 Trust Units, representing approximately 10% of its public float. During the year, the Trust purchased 37,053 Trust Units through open market purchases. The weighted average price that the Trust paid per Trust Units acquired under this bid was $25.94.

48	2015 Annual Report

Trust Units

Special Voting Units

Special Voting Units are only issued in tandem with Class B LP Units of BOPC LP and are not transferable separately from the Class B LP Units to which they relate and upon any transfer of Class B LP Units, such Special Voting Units will automatically be transferred to the transferee of the Class B LP Units. As Class B LP Units are exchanged for Trust Units or purchased for cancellation, the corresponding Special Voting Units will be cancelled for no consideration.

Non-Controlling interest

The Trust classifies the outstanding Class B LP Units as non-controlling interest for financial statement purposes in accordance with IFRS. The Class B LP Units are exchangeable on a one-for-one basis (subject to customary anti-dilution provisions) for Trust Units at the option of the holder. Each Class B LP Unit is accompanied by a Special Voting Unit that entitles the holder thereof to receive notice of, to attend, and to vote at all meetings of unitholders of BOX. The holders of Class B LP Units are entitled to receive distributions when declared by BOPC LP equal to the per-unit amount of distributions payable to each holder of Trust Units. However, the Class B LP Units have limited voting rights over BOPC LP.

BOPC LP is a subsidiary of BOX, which owns 100% of the issued and outstanding Class A LP Units of BOPC LP. Summarized financial information for BOPC LP has not been disclosed as all the investment properties are held in BOPC LP and as such BOPC LP is substantially the same as BOX.

NOTE 14: REVENUE AND EXPENSES
(a) Commercial property revenue

The components of revenue are as follows:

(Millions)	2015		2014
Rental revenue	$	513.5	$	507.9
Non-cash rental revenue (expense)		1.1		(1.4	)
Lease termination and other income		2.3		10.7
Commercial property revenue	$	516.9	$	517.2

The Trust generally leases investment properties under operating leases with lease terms between five and 10 years, with options to extend up to five additional years.

Future minimum rental commitments on non-cancellable tenant operating leases are as follows:

(Millions)	2015		2014
Not later than 1 year	$	262.6	$	252.1
Later than 1 year and not longer than 5 years		1,111.7		973.5
Later than 5 years		2,024.0		2,165.3
	$	3,398.3	$	3,390.9

Brookfield Canada Office Properties

(b)

Expenses

The following represents an analysis of the nature of the expense included in direct commercial property expense, interest expense, and general and administrative expense:

(Millions)	2015		2014
Employee benefits ⁽¹⁾	$	19.2	$	18.6
Interest expense		84.3		91.9
Property maintenance		124.1		124.0
Real estate taxes		107.5		98.0
Ground rents		16.6		8.5
Asset management fees and other		21.3		22.4
Total expenses	$	373.0	$	363.4

¹⁾

Includes $18.5 million paid to a subsidiary of BAM for payroll services during 2015 (2014 - $17.9 million)

Operating expenses include ground rent expenses for the year ended December 31, 2015, of $16.6 million (compared to $8.5 million in 2014) representing rent expense associated with operating leases for land on which certain of the Trust's investment properties are situated. These leases have remaining terms of between eight and 99 years. The Trust does not have an option to purchase the leased land at the expiry of the lease periods.

Future minimum lease payments under these arrangements are as follows:

(Millions)	2015		2014
Not later than 1 year	$	7.4	$	7.1
Later than 1 year and not longer than 5 years		29.8		28.6
Later than 5 years		449.7		450.1
	$	486.9	$	485.8

(c)

Investment and other income

Investment and other income was $nil for the year ended December 31, 2015 (compared to $1.1 million in 2014). The prior year amounts primarily include interest earned on cash balances and cash settlements on legal matters.

NOTE 15: GUARANTEES, CONTINGENCIES, AND OTHER

(a) In the normal course of operations, the Trust and its consolidated subsidiaries execute agreements that provide for indemnification and guarantees to third parties in transactions such as business dispositions, business acquisitions, lease-up of development properties, sales of assets, and sales of services.

(b) As of December 31, 2015, the Trust had commitments totaling $274.2 million for Brookfield Place Calgary East development costs to third parties and $43.4 million for Bay Adelaide East construction payment holdbacks and remaining construction costs, of which $37.4 million were with third parties.

(c) As of December 31, 2015, the Trust has guaranteed up to $350.0 million related to its revolving corporate credit facility, up to $50.0 million related to the construction loan on Bay Adelaide East and up to $80.0 million related to the construction loan on Brookfield Place Calgary East. As of December 31, 2015, the Trust has issued letters of credit of $0.9 million related to its revolving corporate credit facility.

(d) The Trust maintains insurance on its commercial properties in amounts and with deductibles that the Trust believes are in line with what owners of similar properties carry. The Trust maintains all risk property insurance and rental value coverage (including coverage for the perils of flood, earthquake and windstorm). The Trust’s all risk policy limit is $1.5 billion per occurrence. The Trust’s earthquake limit is $500 million per occurrence and in the annual aggregate. This coverage is subject to a $100,000 (dollars) deductible for all locations except for British Columbia where the deductible is 3% of the values for all locations where the physical loss, damage or destruction occurred subject to a minimum $250,000 (dollars) deductible. The flood limit is $500 million per occurrence and in the annual aggregate, and is subject to a deductible of $25,000 (dollars) for all losses arising from the same occurrence. Windstorm is included under the all risk coverage limit of $1.5 billion. With respect to its commercial properties, the Trust purchases an insurance policy that covers acts of terrorism for limits up to $1.5 billion.

NOTE 16: SEGMENTED INFORMATION

The Trust has only one business segment: the ownership and operation of investment properties in Canada. The Trust identifies each investment property as an individual segment and has aggregated them into a single segment based on similarity in the nature of the product, tenants and operational processes.

50	2015 Annual Report

NOTE 17: RELATED-PARTY TRANSACTIONS

The Trust has entered into two service-support agreements with Brookfield Office Properties Management LP (“BOPM LP”), a subsidiary of BOPI, for the provision of property management, leasing, construction, and asset management services. The purpose of the agreements is to provide the services of certain personnel and consultants as are necessary to help the Trust operate and manage its assets and tenant base; it also includes a cost-recovery for administrative and regulatory compliance services provided. The fees paid to BOPM LP are calculated in accordance with the terms of the agreements. Included in direct commercial property expense during the year ended December 31, 2015, are amounts paid to BOPM LP for property management services of $13.7 million (compared to $14.1 million in 2014). Included in investment properties during the year ended December 31, 2015, are amounts paid to BOPM LP for leasing and construction services of $8.3 million (compared to $3.2 million in 2014). Included in general and administrative expenses during the year ended December 31, 2015, are amounts paid to BOPM LP for asset management and administrative and regulatory compliance services of $19.5 million (compared to $19.0 million in 2014).

The Trust entered into a long-term lease with BOPI at Bay Adelaide East and total rent received was $2.6 million for the year ended December 31, 2015.

Included in rental revenues during the year ended December 31, 2015, are amounts received from BAM and its affiliates of $9.8 million (compared to $6.9 million in 2014).

Refer to Note 4, Investment Properties, for information on the acquisition of the Bay Adelaide East and Brookfield Place Calgary East developments from BOPI as well as details of construction and related costs paid to a subsidiary of BAM pursuant to a contract to construct Bay Adelaide East.

Compensation of Independent Trustees

The remuneration of independent trustees during the year ended December 31, 2015 and 2014 was as follows:

(Millions)	2015		2014
Cash compensation	$	0.4	$	0.3
Unit-based awards		0.3		0.3
	$	0.7	$	0.6

The remuneration of independent trustees is determined by the Trust's Governance and Nominating Committee having regard to the complexity of the Trust's operations, the risks and responsibilities involved in being a trustee of the Trust, the requirement to participate in scheduled and special board meetings, expected participation on the board's standing committees and compensation paid to trustees of comparable entities.

NOTE 18: CAPITAL MANAGEMENT AND LIQUIDITY

The Trust employs a broad range of financing strategies to facilitate growth and manage financial risk.

The Trust continually strives to reduce its weighted-average cost of capital and improve unitholders’ equity returns through value-enhancement initiatives and the consistent monitoring of the balance between debt and equity financing. As of December 31, 2015, the weighted-average cost of capital, assuming a long-term 9.0% return on equity, was 6.2% (compared to 6.4% in 2014).

The following schedule details the capitalization of the Trust and the related costs thereof:

	Cost of Capital⁽¹⁾						Underlying Value⁽²⁾
(Millions, except cost of capital data)	Dec. 31, 2015			Dec. 31, 2014			Dec. 31, 2015		Dec. 31, 2014
Liabilities
Investment property and corporate debt		3.8	%		4.0	%	$	2,838.5	$	2,649.7
Unitholders’ equity
Trust Units⁽³⁾		9.0	%		9.0	%		682.8		706.4
Other equity
Non-controlling interest⁽³⁾		9.0	%		9.0	%		1,748.6		1,809.0
Total		6.2	%		6.4	%	$	5,269.9	$	5,165.1

⁽¹⁾

Total weighted-average cost of capital is calculated on the weighted average of underlying value.

⁽²⁾

Underlying value of liabilities presents the cost to retire debt on maturity. Underlying value of unitholders’ equity and other equity is based on the closing unit price of BOX on the TSX.

⁽³⁾

Assumes a long-term 9.0% return on equity for December 31, 2015 and December 31, 2014.

Brookfield Canada Office Properties

Investment property and corporate debt

The Trust’s investment property and corporate debt is primarily fixed-rate and non-recourse to the Trust, thereby reducing the overall financial risk to the Trust. These financings are typically structured on a loan-to-appraised value basis of between 50% and 65% when the market permits. In addition, in certain circumstances where a building is leased almost exclusively to a high-credit quality tenant, a higher loan-to-value financing, based on the tenant’s credit quality, is put in place at rates commensurate with the cost of funds for the tenant. This reduces equity requirements to finance investment property and enhances equity returns.

The Trust is subject to certain covenants on its borrowings, including debt service coverage and loan-to-value thresholds. As of December 31, 2015, the Trust was in compliance with all of its covenants.

The Trust’s strategy is to satisfy its liquidity needs using cash on hand, cash flows generated from operating activities, and cash provided by financing activities. Rental revenue, recoveries from tenants, interest and other income, available cash balances, draws on credit facilities, and refinancings, including upward refinancings, of maturing indebtedness are the Trust’s principal sources of capital used to pay operating expenses, distributions, debt service, and recurring capital and leasing costs in its investment property portfolio.

The principal liquidity needs for periods beyond the next year are for unit distributions, scheduled debt maturities, recurring and non-recurring capital expenditures, and development costs. The Trust’s strategy is to meet these needs with one or more of the following:

•

cash flow from operations;

•

construction loans;

•

credit facilities and refinancing opportunities; and

•

divestiture of investment properties.

The Trust attempts to match the maturity of its commercial property and corporate debt portfolio with the average lease terms of its properties. At December 31, 2015, the average term to maturity of the Trust’s investment property and corporate debt portfolio was seven years and the Trust’s average lease term of its properties was approximately eight years. The Trust will continue to make efforts to match the maturity of the investment property and corporate debt portfolio with the average lease term of its properties.

The following table presents the contractual maturities of the Trust’s financial liabilities:

	Payments Due By Period
(Millions)	Total		1 year		2 – 3 years		4 – 5 Years		After 5 Years
Investment property and corporate debt ⁽¹⁾	$	3,439.5	$	367.2	$	679.5	$	935.7	$	1,457.1
Accounts payable and other liabilities		185.0		185.0		—		—		—

⁽¹⁾ Includes repayment of principal and interest.

NOTE 19: OTHER INFORMATION

Supplemental cash flow information:

	2015						2014
(Millions)	Trust Units			Class B LP Units			Trust Units			Class B LP Units
Distributions declared to unitholders	$	32.3		$	83.2		$	31.8		$	81.6
Add: Distributions payable at the beginning of the year		2.7			6.9			2.6			6.5
Less: Distributions payable at the end of the year		(2.7	)		(6.9	)		(2.7	)		(6.9	)
Less: Distributions to participants in DRIP		(1.8	)		—			(1.3	)		—
Cash distributions paid	$	30.5		$	83.2		$	30.4		$	81.2

NOTE 20: SUBSEQUENT EVENTS

On February 18, 2016, the Ontario Ministry of Finance published amendments to regulation 70/91 to the Land Transfer Act (Ontario) that may impact the transfers of partnership interests in prior fiscal years. The Trust is currently evaluating the impact of the amendments to its consolidated financial statements.

NOTE 21: APPROVAL OF ANNUAL FINANCIAL STATEMENTS

The annual financial statements were approved by the Trust’s Board of Trustees and authorized for issue on January 25, 2016.

52	2015 Annual Report

Unitholder Information

DISTRIBUTION PAYMENT DATES

	2016				2015				2014

(Dollars)	Trust Units		Class B LP Units		Trust Units		Class B LP Units		Trust Units		Class B LP Units
January 15	$	0.1033	$	0.1033	$	0.1033	$	0.1033	$	0.0975	$	0.0975
February 15		0.1033		0.1033		0.1033		0.1033		0.0975		0.0975
March 15		0.1033		0.1033		0.1033		0.1033		0.0975		0.0975
April 15						0.1033		0.1033		0.0975		0.0975
May 15						0.1033		0.1033		0.0975		0.0975
June 15						0.1033		0.1033		0.1033		0.1033
July 15						0.1033		0.1033		0.1033		0.1033
August 15						0.1033		0.1033		0.1033		0.1033
September 15						0.1033		0.1033		0.1033		0.1033
October 15						0.1033		0.1033		0.1033		0.1033
November 15						0.1033		0.1033		0.1033		0.1033
December 15						0.1033		0.1033		0.1033		0.1033

Brookfield Canada Office Properties

Selected Financial and Operational Information

December 31 (Millions, except per-unit and operating information)	2015		2014		2013
Financial results
Commercial property net operating income	$	251.3	$	269.3	$	271.9
Funds from operations		145.8		158.2		144.7
Adjusted funds from operations		94.6		121.5		110.1
Distributions		115.5		113.4		109.1
Net income		351.4		116.1		164.8
Total assets		6,356.5		5,943.4		5,608.8
Unitholders’ equity		923.8		856.7		854.7

Per Trust unit
Trust Units outstanding		26,250,344		26,218,183		26,167,835
Class B LP Units outstanding		67,088,022		67,088,022		67,088,022
Funds from operations		1.56		1.70		1.55
Adjusted funds from operations		1.01		1.30		1.18
Distributions		1.24		1.21		1.17
Unitholders value		35.72		33.19		33.18

Operating data
Number of commercial properties		27		27		28
Total area (000’s of sq. ft.)		21,134		20,403		20,821
Owned interest (000’s of sq. ft.)		12,436		11,688		11,796
Average occupancy (%)⁽¹⁾		95.8		95.4		96.0

⁽¹⁾ 95.8% occupancy includes BOPI headlease at Bay Adelaide East.

54	2015 Annual Report

Board of Trustees	Officers

Thomas F. Farley	T. Jan Sucharda
Chairman of the Board	President and Chief Executive Officer

T. Jan Sucharda	Bryan K. Davis
President and Chief Executive Officer	Chief Financial Officer
Brookfield Canada Office Properties
	Ian Parker
Mark Brown	Chief Operating Officer
Global Chief Investment Officer
Brookfield Office Properties Inc.	Deborah R. Rogers
	Senior Vice President, Legal Counsel and Secretary
Paul D. McFarlane
Corporate Director	Ryk Stryland
	Senior Vice President, Development
Colum Bastable
Chairman, Cushman & Wakefield Ltd.	T. Nga Gilgan
	Senior Vice President, Investments
Roderick D. Fraser, Ph.D., O.C.
Officer, Order of Canada	Matthew Cherry
	Vice President, Investor Relations and Communications
Susan Riddell Rose
President, Perpetual Energy Inc.	Elliott S. Feintuch
	Vice President, Legal, Eastern

	Robert Kiddine
	Vice President, Legal Counsel, Western

	Amelia Nasrallah-Pumilia
	Vice President, Legal, Eastern

	Elizabeth Phalen
	Vice President, Legal, Eastern

	Keith Hyde
	Vice President, Taxation

	Michael Yam
	Vice President & Controller

	Michelle L. Campbell
	Assistant Secretary

Brookfield Canada Office Properties

Information

PROFILE

Brookfield Canada Office Properties is a Canadian real estate investment trust, focusing on the ownership and value enhancement of premier office properties. The current property portfolio is comprised of interests in 27 premier office properties totaling 21.1 million square feet and 1 development property totaling 1.4 million square feet. Landmark properties include Brookfield Place Toronto and First Canadian Place in Toronto and Bankers Hall in Calgary.

BROOKFIELD CANADA OFFICE PROPERTIES

Brookfield Place, Bay Wellington Tower
181 Bay Street, Suite 330
Toronto, Ontario M5J 2T3
Tel: 416.359.8555
Fax: 416.359.8596
www.brookfieldcanadareit.com

UNITHOLDER INQUIRIES

Brookfield Canada Office Properties welcomes inquiries from unitholders, analysts, media representatives and other interested parties. Questions relating to investor relations or media inquiries can be directed to Sherif El-Azzazi, Manager Investor Relations and Communications at 416.359.8593 or via e-mail at sherif.elazzazi@brookfield.com. Inquiries regarding financial results should be directed to Bryan Davis, Chief Financial Officer at 416.359.8612 or via e-mail at bryan.davis@brookfield.com.

Unitholder questions relating to distributions, address changes and unit certificates should be directed to the Trust’s Transfer Agent:

CST TRUST COMPANY

P.O. Box 700
Station B

Montreal, Quebec H3B 3K3

Tel: 416.682.3860 / 800.387.0825

Fax: 888.249.6189

Website: www.canstockta.com

E-mail: inquiries@canstockta.com

COMMUNICATIONS

We strive to keep our unitholders updated on our progress through a comprehensive annual report, quarterly interim reports, periodic press releases and quarterly conference calls.

Brookfield Canada Office Properties maintains a Web site, www.brookfieldcanadareit.com, which provides access to our published reports, press releases, statutory filings, supplementary information and trust and distribution information as well as summary information on the Trust.

56	2015 Annual Report

Exhibit 99.3

CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, T. Jan Sucharda, certify that:

I have reviewed this annual report on Form 40-F of Brookfield Canada Office Properties;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 18, 2016

/s/ T. Jan Sucharda

T. Jan Sucharda

President and Chief Executive Officer

(Principal Executive Officer)

Exhibit 99.4

CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bryan K. Davis, certify that:

I have reviewed this annual report on Form 40-F of Brookfield Canada Office Properties;

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 18, 2016

/s/ Bryan K. Davis

Bryan K. Davis

Chief Financial Officer

(Principal Financial Officer)

Exhibit 99.5

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Brookfield Canada Office Properties (the “Company”) on Form 40-F for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, T. Jan Sucharda, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By: /s/ T. Jan Sucharda

T. Jan Sucharda

President and Chief Executive Officer

March 18, 2016

Exhibit 99.6

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Brookfield Canada Office Properties (the “Company”) on Form 40-F for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bryan K. Davis, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By: /s/ Bryan K. Davis

Bryan K. Davis

Chief Financial Officer

March 18, 2016

Exhibit 99.7

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Amendment No. 1 to Registration Statement No. 333-194541 on Form F-10 and to the use of our reports dated February 24, 2016 relating to the consolidated financial statements of Brookfield Canada Office Properties and subsidiaries (the “Trust”) and the effectiveness of the Trust’s internal control over financial reporting appearing in this Annual Report on Form 40-F of the Trust for the year ended December 31, 2015.

/s/ Deloitte LLP

Chartered Professional Accountants

Licensed Public Accountants

March 18, 2016

Toronto, Canada

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