When

Wednesday, June 7, 2006
9:30 a.m. (Eastern time)

Where

Le Centre Sheraton Montréal,
1201 René-Lévesque Blvd. W.,
Montréal, Québec
in the Ballroom

Webcast

A simultaneous webcast of the meeting will be available on BCE’s website at www.bce.ca.

What the meeting is about

We will be covering five items at the meeting:

1.		receiving BCE’s financial statements for the year ended December 31, 2005, including the auditor’s report
2.		electing directors who will serve until the end of the next annual shareholder meeting
3.		appointing the auditor who will serve until the end of the next annual shareholder meeting
4.		considering and, if thought advisable, approving, with or without variation, a special resolution (the full text of which is reproduced as Schedule A to the accompanying management proxy circular) to approve the BCE plan of arrangement described in the accompanying management proxy circular
5.		considering the shareholder proposal described in Schedule E.

The meeting may also consider other business that properly comes before the meeting.

You have the right to vote

You are entitled to receive notice of and vote at our annual and special shareholder meeting, or any adjournment, if you were a holder of BCE common shares on April 10, 2006.

You have the right to vote your shares on electing directors, appointing the auditor, the BCE plan of arrangement, the shareholder proposal and any other items that may properly come before the meeting or any adjournment.

Your vote is important

As a shareholder of BCE, it is very important that you read this material carefully and then vote your shares, either by proxy or in person at the meeting.

The following pages tell you more about how to exercise your right to vote your shares.

By order of the board,

PATRICIA A. OLAH
Corporate Secretary

Montréal, Québec
April 12, 2006

In this document, you, your and shareholder refer to the common shareholder of BCE. We, us, our and BCE refer to BCE Inc. The information in this document is at April 12, 2006, unless otherwise indicated.

This management proxy circular is for our annual and special shareholder meeting on June 7, 2006 (meeting). As a shareholder, you have the right to vote your shares on electing directors, appointing the auditor, approving the special resolution (Special Resolution), the full text of which is reproduced as Schedule A, to approve the proposed BCE plan of arrangement (BCE Plan of Arrangement) pursuant to which BCE would distribute units in the Bell Aliant Regional Communications Income Fund as a return of capital to holders of common shares and effect a reduction of approximately 75 million common shares, the shareholder proposal and any other items that may properly come before the meeting or any adjournment.

To help you make an informed decision, please read this circular and our annual report for the year ended December 31, 2005 which you can access on BCE’s website at www.bce.ca. This circular tells you about the meeting, the nominated directors, the proposed auditor, our corporate governance practices, compensation of directors and officers, the BCE Plan of Arrangement, and the shareholder proposal. The annual report gives you a review of the activities of the BCE group of companies for the past year and includes a copy of our annual financial statements and annual management’s discussion and analysis of financial condition and results of operations (MD&A).

Your proxy is solicited by the management of BCE. In addition to solicitation by mail, our employees or agents may solicit proxies by telephone or other ways at a nominal cost. We have retained Georgeson Shareholder Communications Canada Inc. (Georgeson) to solicit proxies for us in Canada and the United States at an estimated cost of $55,000. We pay the costs of these solicitations.

If you have any questions about any of the information in this document, please call Georgeson at 1-866-565-4741 for service in English or in French.

Approval of this management proxy circular

The board of directors approved the contents of this management proxy circular and authorized it to be sent to each shareholder who is eligible to receive notice of and vote his or her shares at our annual and special shareholder meeting, and to each director and to the auditor.

PATRICIA A. OLAH
Corporate Secretary

Montréal, Québec
April 12, 2006

Your vote is important — As a shareholder of BCE, it is very important that you read this information carefully and then vote your shares, either by proxy or in person at the meeting.

This is the easiest way to vote. Voting by proxy means that you are giving the person or people named on your proxy form (proxyholder) the authority to vote your shares for you at the meeting or any adjournment. A proxy form is included in this package.

You can choose from five different ways to vote your shares by proxy:

1.		by telephone
2.		on the Internet
3.		by mail
4.		by fax
5.		by appointing another person to go to the meeting and vote your shares for you.

The directors who are named on the proxy form will vote your shares for you, unless you appoint someone else to be your proxyholder. If you appoint someone else, he or she must be present at the meeting to vote your shares.

If you are voting your shares by proxy, our transfer agent, Computershare Trust Company of Canada (Computershare), or other agents we appoint, must receive your completed proxy form by 4:45 p.m. (Montréal time) on Tuesday, June 6, 2006.

You are a registered shareholder

if your name appears on your share certificate. Your proxy form tells you whether you are a registered shareholder.

You are a non-registered (or beneficial) shareholder

if your bank, trust company, securities broker or other financial institution holds your shares for you (your nominee). For most of you, your proxy form tells you whether you are a non-registered (or beneficial) shareholder.

If you are not sure whether you are a registered or non-registered shareholder, please contact Computershare.

COMPUTERSHARE TRUST COMPANY OF CANADA
100 University Avenue
9th Floor
Toronto, Ontario, Canada M5J 2Y1

TELEPHONE
1-800-561-0934 (toll-free in Canada and the United States)
514-982-7555 (in the Montréal area or from outside Canada
and the United States)

FAX
1-888-453-0330 (toll-free in Canada and the United States)
416-263-9394 (outside Canada and the United States)

E-MAIL
bce@computershare.com

A. By proxy

1

BY TELEPHONE

n		Call 1-866-673-3260 (toll-free in Canada and the United States) or 312-601-6919 (International Direct Dial) from a touch-tone phone and follow the instructions.
n		You will need your holder account number and proxy access number. You will find these two numbers on the information sheet attached to your proxy form.

If you vote by telephone, you cannot appoint anyone other than the directors named on your proxy form as your proxyholder.

2

ON THE INTERNET

n

Go to BCE’s website at www.bce.ca and follow the instructions on screen.

n

You will need your holder account number and proxy access number. You will find these two numbers on the information sheet attached to your proxy form.

3

BY MAIL

n

Detach the proxy form from the information sheet, complete pages 1 and 2 of the proxy form, sign and date your proxy form and return it in the envelope we have provided.

n

Please see Completing the proxy form for more information.

4

BY FAX

n		Detach the proxy form from the information sheet, complete pages 1 and 2 of the proxy form, sign and date your proxy   form and send both pages (in one transmission) by fax to 1-866-249-7775 (toll-free in Canada and the United States) or 416-263-9524 (outside Canada and the United States).
n		Please see Completing the proxy form for more information.

5

BY APPOINTING ANOTHER PERSON TO GO TO THE MEETING AND VOTE YOUR SHARES FOR YOU

n		This person does not have to be a shareholder.
n		Strike out the four names that are printed on the proxy form and write the name of the person you are appointing in the space provided. Complete your voting instructions, date and sign the form, and return it to Computershare as instructed.
n		Make sure that the person you appoint is aware that he or she has been appointed and attends the meeting.
n		At the meeting, he or she should see a representative of Computershare at the table marked “Alternate attorneys/External proxyholders”.
n		Please see Completing the proxy form for more information.

B. In person at the meeting

You do not need to complete or return your proxy form.

You will need an admission ticket to enter the meeting. Your ticket is attached to your proxy form.

You should see a representative of Computershare before entering the meeting to register your attendance at the meeting.

Voting in person at the meeting will automatically cancel any proxy you completed and submitted earlier.

1

BY PROXY

n		Your nominee is required to ask for your voting instructions before the meeting. Please contact your nominee if you did not receive a request for voting instructions or a proxy form in this package.
n		In most cases, you will receive a voting instruction form that allows you to provide your voting instructions by telephone, on the Internet, by mail or by fax. If you want to provide your voting instructions on the Internet, go to BCE’s website at www.bce.ca (or go to the website noted on your voting instruction form), and follow the instructions on screen. You will need your 12-digit control number, which you will find on your voting instruction form.
n		Alternatively, you may be a non-registered shareholder who will receive from your nominee a voting instruction form which:

	–		is to be completed and returned, as directed in the instructions provided OR
	–		has been pre-authorized by your nominee indicating the number of shares to be voted, which is to be completed, dated, signed and returned to Computershare, by mail or fax.

2

IN PERSON AT THE MEETING

n		We do not have access to the names or holdings of our non-registered shareholders. That means you can only vote your shares in person at the meeting if you have previously appointed yourself as the proxyholder for your common shares by printing your name in the space provided on the voting instruction form and submitting such instruction form as directed on the form. Your voting instructions must be received in sufficient time to allow your voting instruction form to be forwarded to Computershare by 4:45 p.m. (Montréal time) on Tuesday, June 6, 2006.
n		Your vote will be taken and counted at the meeting.
n		Prior to the meeting, you should see a representative of Computershare at the table marked “Alternate attorneys/External proxyholders”.

You can choose to vote “For”, “Against” or “Withhold”, depending on the items listed on the proxy form.

When you sign the proxy form, you authorize Mr. R.J. Currie, Mr. M.J. Sabia, Ms. J. Maxwell or Mr. A. Bérard, who are all directors of BCE, to vote your shares for you at the meeting according to your instructions. If you return your proxy form and do not tell us how you want to vote your shares, your vote will be counted:

n		FOR electing the nominated directors who are listed in the management proxy circular
n		FOR appointing Deloitte & Touche LLP as auditor
n		FOR the approval of the BCE Plan of Arrangement
n		AGAINST shareholder proposal No. 1.

Your proxyholder will also vote your shares as he sees fit on any other matter that may properly come before the meeting.

If you are appointing someone else to vote your shares for you at the meeting, strike out the four names of the directors and write the name of the person voting for you in the space provided. If you do not specify how you want your shares voted, your proxyholder will vote your shares as he or she sees fit on each item and on any other matter that may properly come before the meeting.

If you are an individual shareholder, you or your authorized attorney must sign the form. If you are a corporation or other legal entity, an authorized officer or attorney must sign the form.

If you need help completing your proxy form, please contact Georgeson at 1-866-565-4741 for service in English or in French.

You can revoke a vote you made by proxy by:

n		voting again by telephone or on the Internet before 4:45 p.m. (Montréal time) on Tuesday, June 6, 2006
n		completing a proxy form that is dated later than the proxy form you are changing and mailing it or faxing it to Computershare so that it is received before 4:45 p.m. (Montréal time) on Tuesday, June 6, 2006
n		sending a notice in writing from you or your authorized attorney to our Corporate Secretary so that it is received before 4:45 p.m. (Montréal time) on Tuesday, June 6, 2006
n		giving a notice in writing from you or your authorized attorney to the Chair of the meeting, at the meeting or any adjournment.

How the votes are counted

You have one vote for each common share you hold on April 10, 2006. At April 10, 2006, 906, 266, 256 common shares were entitled to be voted at the meeting.

The election of directors (subject to our majority voting guidelines — see What the meeting will cover — Electing directors), the appointment of the auditor and the shareholder proposal will each be determined by a majority of votes cast at the meeting by proxy or in person, whereas the Special Resolution concerning the BCE Plan of Arrangement will be subject to the affirmative vote of not less than two-thirds of the votes cast at the meeting by proxy or in person. If there is a tie, the Chair of the meeting will cast the deciding vote.

Computershare counts and tabulates the votes. It does this independently of us to make sure that the votes of individual shareholders are confidential. Computershare refers proxy forms to us only when:

n		it is clear that a shareholder wants to communicate with management
n		the validity of the form is in question
n		the law requires it.

Five items will be covered at the meeting:

1.		receiving BCE’s financial statements for the year ended December 31, 2005, including the auditor’s report
2.		electing directors who will serve until the end of the next annual shareholder meeting
3.		appointing the auditor who will serve until the end of the next annual shareholder meeting
4.		considering and, if thought advisable, approving the Special Resolution set out as Schedule A approving the BCE Plan of Arrangement
5.		considering the shareholder proposal described in Schedule E.

The meeting may also consider other business that properly comes before the meeting. As of the date of this circular, management is not aware of any changes to these items, and does not expect any other items to be brought forward at the meeting. If there are changes or new items, your proxyholder can vote your shares on these items as he or she sees fit.

1. Receiving our financial statements

We will place before the meeting BCE’s financial statements, including the auditor’s report, for the year ended December 31, 2005. The financial statements are included in our 2005 annual report which you can access on BCE’s website at www.bce.ca.

2. Electing directors

You will be electing a board of directors (board) of 15 members. Please see About the nominated directors for more information. Directors appointed at the meeting will serve until the end of the next annual shareholder meeting.

All of the individuals nominated for election as directors are currently members of the board and were all elected at our 2005 annual shareholder meeting.

BCE recently adopted new guidelines with respect to election of directors. Notwithstanding BCE’s By-Laws and the Canada Business Corporations Act (CBCA), at any shareholders’ meeting at which directors are to be elected in an uncontested election (i.e., the election does not involve a proxy battle), if any director nominee receives a greater number of votes “withheld” from his or her election than votes “for” such election, then such director nominee shall, no later than 10 days following the receipt of the audited and final scrutineer’s report relating to such meeting (vote results), submit to the board his or her resignation letter, which shall take effect only upon the acceptance of such resignation by the board.

The board, upon the recommendation of the Corporate Governance Committee (CGC), shall within 90 days following the public disclosure of the vote results, determine either to accept or not the subject director’s offer to resign, and the board shall cause BCE to promptly publicly disclose, via press release, the board’s determination, including, in cases where the board has determined not to accept the resignation, the reasons therefor. It is generally expected that the CGC will recommend that the board accept such resignation, except in extraordinary circumstances.

If you do not specify how you want your shares voted, the directors named as proxyholders in the enclosed proxy form intend to cast the votes represented by proxy at the meeting FOR the election as directors of the nominated directors in this circular.

3. Appointing the auditor

The board, on the advice of the audit committee, recommends that Deloitte & Touche LLP be re-appointed as auditor. Deloitte & Touche LLP and its predecessors have been the auditor of BCE since it was created in 1983. The audit firm appointed at the meeting will serve until the end of the next annual shareholder meeting.

If you do not specify how you want your shares voted, the directors named as proxyholders in the enclosed proxy form intend to cast the votes represented by proxy at the meeting FOR the appointment of Deloitte & Touche LLP as auditor.

4. Approving the BCE Plan of Arrangement

On March 7, 2006, we announced with Aliant Inc. (Aliant) our agreement to combine Bell Canada’s wireline operations in its regional territories in Ontario and Québec with the wireline operations of Aliant and our 63.4% indirect interest in Télébec, Limited Partnership and NorthernTel, Limited Partnership (collectively, the Bell Nordiq Partnerships) to form the Bell Aliant Regional Communications Income Fund (Fund). The Fund is expected to have 3.4 million local access lines and over 422,000 high-speed Internet subscribers in six provinces, and will be headquartered in Atlantic Canada. As part of this transaction, we will also acquire Aliant’s wireless assets and the shares of Aliant’s subsidiary, DownEast Ltd. (DownEast), which operates retail outlets throughout Atlantic Canada. We will hold a 73.5% interest in the Fund (on a fully-diluted basis) following the completion of the foregoing transactions (Fund Transactions), which is anticipated to occur in the third quarter of 2006.

We intend to reduce our interest in the Fund to approximately 45% (on a fully-diluted basis) by way of a return of capital through a distribution of approximately 64 million units in the Fund (Units) to our shareholders under the BCE Plan of Arrangement. As a result, you will receive 0.0725 Units for each common share you own as of the effective date of the arrangement (Effective Date) provided for under the BCE Plan of Arrangement (BCE Arrangement), which is currently anticipated to occur immediately after the completion of the Fund Transactions.

Concurrently with this distribution of Units, we will also effect a consolidation in the number of common shares outstanding under the BCE Plan of Arrangement whereby you will receive 0.915 common shares for each common share you own as of the Effective Date. This will result in the reduction of the number of common shares outstanding by approximately 75 million common shares.

We intend to maintain our current dividend of $1.3200 per common share following our distribution of Units and reduction in the number of common shares outstanding. It is expected that a shareholder holding Units received pursuant to the BCE Arrangement will receive annual cash distributions of $1.4065 in Fund distributions and BCE common share dividends combined (per pre-consolidation common share). The increase from $1.3200 to a $1.4065 payout represents a 6.5% increase to shareholders.

You will be voting on the Special Resolution approving the BCE Plan of Arrangement as set out in Schedule A. The BCE Plan of Arrangement relates solely to the return of capital through the distribution of the Units and the consolidation of the common shares. You are not being asked to approve the Fund Transactions as such approval is not required from our shareholders under applicable law.

The BCE Plan of Arrangement was unanimously approved by the board at a meeting held on April 12, 2006. The BCE Plan of Arrangement and related transactions are described in greater detail under The BCE Plan of Arrangement. This circular contains important information relating to the BCE Plan of Arrangement, and you are urged to read it carefully and in its entirety. In addition, further information about the Fund and the Units is contained under Background Information to the BCE Plan of Arrangement and in the management proxy circular of Aliant dated April 14, 2006, certain portions of which are incorporated herein by reference (Aliant Circular). The Aliant Circular includes historical and pro-forma financial information on the Fund and its operating entities: please see the Aliant Circular for more information. A copy of the Aliant Circular may be obtained upon request without charge from Georgeson and is also available electronically at www.sedar.com.

The BCE Plan of Arrangement is being considered by our shareholders pursuant to an order of the Superior Court of Québec dated April 20, 2006 (Interim Order). A copy of the Interim Order is included as Schedule C. In order for the BCE Plan of Arrangement to be implemented as provided in the Interim Order, the Special Resolution must be approved by a two-thirds majority of the votes cast at the meeting in person or by proxy. The text of the Special Resolution is included as Schedule A.

As described under The BCE Plan of Arrangement — Dissenting Shareholders’ Rights, any registered holder of common shares is entitled to be paid the fair value of all, but not less than all, of such shares in accordance with the Interim Order, if the registered shareholder dissents from the BCE Plan of Arrangement and such BCE Plan of Arrangement becomes effective. You will not be entitled to dissent rights with respect to the BCE Plan of Arrangement if you vote any shares in favour of the Special Resolution.

Only registered shareholders may exercise the dissent rights in respect of common shares that are registered in such holder’s name. Each registered shareholder who might desire to exercise dissent rights should carefully consider and comply with the provisions of the Interim Order and of the CBCA, a summary of which is set out under The BCE Plan of Arrangement — Dissenting Shareholders’ Rights, and consult his or her legal advisor.

Notwithstanding the approval of the shareholders or of the Superior Court of Québec, the board may decide not to proceed with the BCE Arrangement or revoke the Special Resolution at any time prior to the Effective Date, including, without limitation: (i) in the event the closing of the Fund Transactions does not take place, or (ii) in the event that the Final Order is not in form and on terms satisfactory to us.

The board recommends that shareholders vote FOR the approval of the BCE Plan of Arrangement.

If you do not specify how you want your shares voted, the directors named as proxyholders in the enclosed proxy form intend to cast the votes represented by proxy at the meeting according to the board’s recommendations noted in the above paragraph.

5. Considering the shareholder proposal

You will be voting on one shareholder proposal that has been submitted for consideration at the meeting. This proposal is set out in Schedule E. The board recommends that shareholders vote AGAINST shareholder proposal No. 1.

If you do not specify how you want your shares voted, the directors named as proxyholders in the enclosed proxy form intend to cast the votes represented by proxy at the meeting according to the board’s recommendations noted in the above paragraph.

Other business

Following the conclusion of the formal business to be conducted at the meeting, we will:

n		report on recent events that are significant to our business
n		report on other items that are of interest to our shareholders
n		invite questions and comments from shareholders.

If you are not a shareholder, you may be allowed into the meeting after speaking with a representative of Computershare and if the Chair of the meeting allows it.

ANDRÉ BÉRARD, O.C. Québec, Canada

CORPORATE DIRECTOR (SINCE MARCH 2004)

Mr. Bérard was Chairman of the board of National Bank of Canada (chartered bank) from 2002 to March 2004, and Chairman of the board and Chief Executive Officer of National Bank of Canada from 1990 to March 2002. He holds a Fellow’s Diploma of the Institute of Canadian Bankers and was Chairman of the Executive Council of the Canadian Bankers’ Association from 1986 to 1988. He was appointed an Officer of the Order of Canada in 1995.

RONALD ALVIN BRENNEMAN ¹⁰ Alberta, Canada

PRESIDENT AND CHIEF EXECUTIVE OFFICER, PETRO-CANADA (PETROLEUM COMPANY) (SINCE JANUARY 2000)

Before January 2000, Mr. Brenneman spent more than 30 years with Imperial Oil Limited and its parent company, Exxon Corporation (both petroleum companies) where he completed his career as General Manager — Corporate Planning. He is a member of the board of the Canadian Council of Chief Executives.

RICHARD JAMES CURRIE, O.C.^3,10 Ontario, Canada

CHAIR OF THE BOARD, BCE AND BELL CANADA (SINCE APRIL 2002)

Mr. Currie was President and a director of George Weston Limited (food distribution, retail and production company) from 1996 to May 2002 and President and a director of Loblaw Companies Limited (grocery chain) from 1976 to January 2001. In 1997, Mr. Currie was appointed a Member of the Order of Canada and was promoted to Officer in 2004. In 2001 he was elected “Canada’s outstanding CEO of the year” and in 2003 entered the Canadian Business Hall of Fame. In 2004 he received the McGill University Management Achievement Award and was inducted as Fellow of the Institute of Corporate Directors.

ANTHONY SMITHSON FELL, O.C.^3,10 Ontario, Canada

CHAIRMAN OF THE BOARD, RBC DOMINION SECURITIES LIMITED (INVESTMENT BANK) (SINCE DECEMBER 1999)

Mr. Fell was the Chairman of the board and Chief Executive Officer of RBC Dominion Securities Limited from 1992 to December 1999. He was also, until June 2005, Chairman of the University Health Network Trustees. He was appointed an Officer of the Order of Canada in 2001.

DONNA SOBLE KAUFMAN Ontario, Canada

CORPORATE DIRECTOR (SINCE JULY 1997) AND LAWYER

Mrs. Kaufman was formerly Chair and Chief Executive Officer of Selkirk Communications Ltd. (communications company) from 1988 to 1989 and a partner of Stikeman Elliott, LLP (law firm) from 1985 until 1997. In 2001, she was named Fellow of the Institute of Corporate Directors. She is also a director of Historica, a private sector-led education initiative to promote knowledge of Canadian history and heritage, and Baycrest, a centre for elderly and specialized care.

BRIAN MICHAEL LEVITT Québec, Canada

PARTNER AND CO-CHAIR, OSLER, HOSKIN & HARCOURT LLP (LAW FIRM) (SINCE JANUARY 2001)

Mr. Levitt was the President and Chief Executive Officer of Imasco Limited (consumer products and services company) from 1995 to 2000 and he is currently a director of the Montréal Museum of Fine Arts.

JOHN HECTOR MCARTHUR Massachusetts, United States of America

DEAN EMERITUS, HARVARD UNIVERSITY GRADUATE SCHOOL OF BUSINESS ADMINISTRATION (SINCE JUNE 1995)

Mr. McArthur was a senior advisor to the President, The World Bank Group, from 1996 to May 2005. Mr. McArthur was Dean of the Faculty, Harvard University Graduate School of Business Administration from 1980 through 1995. Mr. McArthur has been awarded honorary doctorates from Middlebury College, Queens University, Simon Fraser University, the University of British Columbia, University of Navarra (Spain) and the University of Western Ontario. Other awards have included a Management Achievement Award, McGill University, a Harvard Statesman Award from the HBS Club in New York and a Canadian Business Leadership Award from the combined HBS Clubs of Canada.

THOMAS CHARLES O’NEILL, F.C.A.¹⁰ Ontario, Canada

CORPORATE DIRECTOR (SINCE OCTOBER 2002) AND CHARTERED ACCOUNTANT

Mr. O’Neill is also Vice-Chairman of the board of Governors at Queen’s University. He was Chief Executive Officer of PricewaterhouseCoopers Consulting (provider of management consulting and technology services) from January 2002 to May 2002 and then Chairman of the board from May 2002 to October 2002. He was also Chief Operating Officer of PricewaterhouseCoopers LLP global organization (professional services firm in accounting, auditing, taxation and financial advisory) from 2000 to January 2002 and Chief Executive Officer of PricewaterhouseCoopers LLP in Canada from 1998 to July 2000. He is currently a director of the Ontario Teachers’ Pension Plan.

JAMES ALLEN PATTISON, O.C., O.B.C.⁶ British Columbia, Canada

CHAIRMAN AND CHIEF EXECUTIVE OFFICER, THE JIM PATTISON GROUP (DIVERSIFIED CONSUMER-ORIENTED COMPANY) (SINCE MAY 1961)

Mr. Pattison is also a trustee of the Ronald Reagan Presidential Foundation. He was appointed a Member of the Order of Canada in 1987 and of the Order of British Columbia in 1990.

ROBERT CHARLES POZEN Massachusetts, United States of America

CHAIRMAN OF THE BOARD, MFS INVESTMENT MANAGEMENT (GLOBAL INVESTMENT MANAGER) (SINCE FEBRUARY 2004)

Mr. Pozen was Vice-Chairman of the board of Fidelity Investments (investment manager) from 2000 to December 2001 and President and a director of Fidelity Management and Research Company (provider of financial services and investment resources) from 1997 to June 2001. He also served as a visiting professor, Harvard Law School, from 2002 to August 2004.

MICHAEL JONATHAN SABIA³ Québec, Canada

PRESIDENT AND CHIEF EXECUTIVE OFFICER (SINCE APRIL 2002)
BCE, AND CHIEF EXECUTIVE OFFICER (SINCE MAY 2002), BELL CANADA

Mr. Sabia was President and Chief Operating Officer of BCE from March 2002 to April 2002 and Chief Operating Officer of Bell Canada from March 2002 to May 2002. He was President of BCE from 2000 to March 2002 and Executive Vice-President of BCE from July 2000 to December 2000, and Vice-Chair of Bell Canada from 2000 to March 2002. He was previously Vice-Chair and Chief Executive Officer of BCI from 1999 to June 2000 and then Vice-Chair of BCI from 2000 to November 2001. Before joining BCE, Mr. Sabia was an executive of Canadian National Railway Company (railway company) where he joined as Vice-President, Corporate Development in 1993 and was appointed Executive Vice-President and Chief Financial Officer in 1995. Prior to 1993, Mr. Sabia held a number of senior positions in the Canadian Federal Public Service, including Director-General of Tax Policy in the Department of Finance and Deputy Secretary to the Cabinet (Plans) in the Privy Council Office.

PAUL MATHIAS TELLIER, P.C., C.C., Q.C. Québec, Canada

CORPORATE DIRECTOR (SINCE DECEMBER 2004)

Mr. Tellier was President and Chief Executive Officer of Bombardier Inc. (manufacturer of business jets, regional aircraft and rail transportation equipment) from 2003 to December 2004, and President and Chief Executive Officer of Canadian National Railway Company from 1992 to December 2002. He is a director of Alcan Inc. (global materials company), also a director of the advisory board of General Motors of Canada (car manufacturer) and a director of McCain Foods Limited (food distribution, retail and production company). In 2005, Mr. Tellier was Advisor to the Canadian Government on the Softwood Lumber Negotiations with the U.S. In 1998, he was elected “Canada’s outstanding CEO of the year” and was elected in 2003 as the most respected Canadian CEO by KPMG/Ipsos-Reid Survey. He was appointed Companion of the Order of Canada in 1992 and was awarded Honorary Doctorates from the following universities: St-Mary’s University (Halifax), University of New Brunswick (Fredericton), McGill University (Montréal), University of Alberta (Edmonton) and University of Ottawa (Ottawa).

VICTOR LEYLAND YOUNG, O.C. Newfoundland and Labrador, Canada

CORPORATE DIRECTOR (SINCE MAY 2001)

Mr. Young was Chairman of the board and Chief Executive Officer of Fishery Products International Limited (frozen seafood products company) from 1984 to May 2001. He is also a director of RBC Dexia Investor Services Trust (institutional investor services company) and McCain Foods Limited (food distribution, retail and production company). He was appointed an Officer of the Order of Canada in 1996 and was awarded an Honorary Doctorate from Memorial University in Newfoundland and Labrador.

As a public company, we are required by law to have an audit committee. The purpose of the audit committee is set forth in its written charter which is available in the governance section of BCE’s website at www.bce.ca.

This report tells you how the audit committee is managed and BCE’s process for complying with applicable laws and regulations.

See Schedule 1 — Audit Committee in our annual information form dated March 1, 2006 for more information about the audit committee, including the audit committee’s charter, information about independence, financial literacy, relevant education and experience of audit committee members, as well as audit committee policies and procedures for engaging BCE’s external auditor.

The audit committee is currently made up of five independent directors: Mr. T.C. O’Neill (Chair), Mr. A. Bérard, Ms. J. Maxwell, Mr. R.C. Pozen and Mr. V.L. Young. The audit committee communicates regularly and directly with management and the internal and external auditors. The audit committee met seven times in 2005. Time is set aside at each regularly scheduled committee meeting, for the committee members to meet without management, and without the internal and external auditors.

The audit committee continued to focus on three key areas in 2005:

n		assessing the appropriateness of BCE’s financial reporting
n		reviewing the adequacy of BCE’s policies and processes for internal control over financial reporting, risk management and compliance with laws and regulations that apply to us, and oversight of our code of business conduct and environmental policy
n		overseeing all aspects of the internal and external audit functions.

Since BCE has securities registered in the United States, we are subject to certain provisions of the United States Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act) and related rules and regulations of the U.S. Securities and Exchange Commission (SEC) (related SEC rules). In addition, since BCE’s common shares are listed on the New York Stock Exchange (NYSE), we are subject to certain NYSE corporate governance rules (NYSE rules). The Canadian Securities Administrators (CSA) also issued rules relating to audit committees and certification of financial information (Canadian Financial rules).

The audit committee meets to review the following documents with management and the external auditor and recommends them to the board for approval:

n		our annual and interim financial statements
n		the related management’s discussion and analysis of financial condition and results of operation (MD&A)
n		our annual report for U.S. purposes on Form 40-F
n		our annual information form (AIF)
n		our earnings press releases.

This review is to provide reasonable assurance that:

n		BCE’s financial reporting is complete and fairly presented in all material respects
n		the accounting standards used to prepare our financial reporting are appropriate, in particular, where judgment, estimates, risks and uncertainties are involved
n		we have provided adequate disclosure of critical issues.

The audit committee also reviews new legal and regulatory initiatives that apply to us and the adoption and disclosure of new accounting pronouncements. It also assesses the potential impact of choosing between accounting alternatives, when appropriate.

Under the Sarbanes-Oxley Act and related SEC rules, and under the Canadian Financial rules, BCE is required to design and maintain controls and procedures to ensure that the information we publicly disclose is recorded, processed, summarized and reported on a timely basis. The board has approved guidelines reflecting BCE’s disclosure controls and procedures as well as a written charter outlining the responsibilities, membership and procedures of BCE’s disclosure and compliance committee. This committee consists of officers and other key employees responsible for overseeing the accuracy and timeliness of BCE’s disclosure documents.

As part of its disclosure controls and procedures, BCE has established a comprehensive process to support the annual certifications required under the Sarbanes-Oxley Act and related SEC rules, and to support the annual and quarterly certifications required under the Canadian Financial rules. Among other things, these certifications by the President and Chief Executive Officer and the Chief Financial Officer state that:

n		they are responsible for establishing and maintaining BCE’s disclosure controls and procedures
n		they have evaluated the effectiveness of these disclosure controls and procedures
n		BCE’s financial statements, related MD&A and the AIF do not contain any untrue statement of a material fact
n		BCE’s financial statements and other financial information fairly present in all material respects BCE’s financial condition, results of operation and cash flows.

Internal control over financial reporting

The audit committee has the overall responsibility of providing reasonable assurance that BCE’s internal control systems are adequate and effective. It reviews the policies in place, monitors compliance and approves recommendations for changes.

The audit committee also ensures that BCE’s processes for identifying and managing risks are adequate and that BCE complies with its business ethics and environmental policies. The Sarbanes-Oxley Act and related SEC rules require, as part of the annual certifications discussed above, that the President and Chief Executive Officer and the Chief Financial Officer certify that they have disclosed to BCE’s external auditor and to the audit committee:

n		all significant deficiencies and material weaknesses in the design or operation of BCE’s internal control over financial reporting that could negatively affect our ability to record, process, summarize and report financial information
n		any fraud involving management or other employees who have a significant role in our internal control over financial reporting.

The audit committee also oversees the requirements of the Sarbanes-Oxley Act and related SEC rules for the certification of BCE’s internal control over financial reporting. These rules are scheduled to be applicable to BCE’s 2006 annual report that will be filed in 2007. These rules require a management internal control report that contains:

n		a statement of management’s responsibilities for establishing and maintaining adequate internal control over financial reporting
n		a description of the framework used to evaluate, and management’s assessment of, the effectiveness of BCE’s internal control over financial reporting
n		a statement that the external auditor has issued a report that confirms management’s assessment.

BCE has undertaken the following initiatives to meet these requirements:

n		established a financial controls project
n		appointed an external accounting firm (other than the external auditor) to assist BCE in the project
n		held regular meetings with the audit committee, senior management and BCE’s disclosure and compliance committee to update them on the progress of the project.

BCE is on schedule to comply with these rules when they come into effect.

EXTERNAL AUDITOR

Deloitte & Touche LLP is the current external auditor.

The audit committee is responsible for recommending to the board the appointment of the external auditor and its compensation. The audit committee is directly responsible for:

n		evaluating the external auditor to make sure that it fulfills its responsibilities. The audit committee reviews its performance against acceptable auditing standards, as well as its qualifications, independence, internal quality control procedures, audit plans and fees
n		assessing the adequacy of the auditor independence policy and approving recommendations for changes to, and monitoring compliance with, the policy. This includes the process for approving all audit and other services in advance.

BCE’s Auditor Independence Policy is a comprehensive policy governing all aspects of BCE’s relationship with the external auditor, including:

n		establishing a process for determining whether various audit and other services provided by the external auditor affect its independence
n		identifying the services that the external auditor may and may not provide to BCE and its subsidiaries
n		pre-approving all services to be provided by the external auditor of BCE and its subsidiaries
n		establishing a process outlining procedures (as part of a separate policy) when hiring current or former personnel of the external auditor in a financial oversight role to ensure auditor independence is maintained.

The Auditor Independence Policy is available in the governance section of BCE’s website at www.bce.ca.

The following summary includes a breakdown of fees for services provided in 2005 and 2004.

EXTERNAL AUDITOR’S FEES

The table below shows the fees that Deloitte & Touche LLP billed to BCE and its subsidiaries for various services for each year in the past two fiscal years.

		2005				2004
(millions)
Audit fees		$	12.2			$	11.4
Audit-related fees		$	1.9			$	3.1
Tax fees		$	1.4			$	1.9
Other fees			–				–
TOTAL		$	15.5			$	16.4

These fees include professional services provided by the external auditor for the review of the interim financial statements, statutory audits of the annual financial statements, the review of prospectuses, review of financial accounting and reporting matters, other regulatory audits and filings and translation services.

These fees relate to non-statutory audits, Sarbanes-Oxley Act initiatives, due diligence, pension plan audits and the review of financial accounting and reporting matters.

These fees include professional services for administering compliance with our conflict of interest policy for senior management, tax compliance, tax advice and assistance with tax audits and appeals. Since October 2005, the external auditor no longer provides services with respect to compliance with our conflict of interest policy for senior management.

These fees include any other fees for permitted services not included in any of the above-stated categories.

INTERNAL AUDITOR

The audit committee also oversees the internal audit function. This includes:

n		overseeing internal audit plans, staffing and budgets
n		evaluating the responsibilities and performance of the internal auditor
n		reviewing periodic internal audit reports and corrective actions being taken.

The senior vice-president, audit and risk management reports directly to the Chair of the audit committee.

The audit committee also reviews, monitors, reports and, where appropriate, provides recommendations to the board regarding:

n		our processes for identifying, assessing and managing risk
n		our major financial risk exposures and the steps we take to monitor and control such exposures.

OTHER

The audit committee also reviews our compliance with respect to our environmental policies and also carries out an annual evaluation of its performance with the CGC, including a review of the adequacy of its charter.

Finally, the audit committee reports regularly to the board on its activities.

Report presented April 12, 2006 by:

T.C. O’NEILL, CHAIR
A. BÉRARD
J. MAXWELL
R.C. POZEN
V.L. YOUNG

The purpose of the CGC is set forth in its written charter which is available in the governance section of BCE’s website at www.bce.ca.

This report describes how the CGC is managed and how it ensures that BCE maintains the highest standards of corporate governance to meet, and in some cases exceed, laws, regulations and other corporate governance initiatives that apply to us. It also tells you how non-management directors are compensated and the process by which such compensation in general is determined.

ABOUT THE CORPORATE GOVERNANCE COMMITTEE

The CGC is currently made up of five independent directors:

Mrs. D. Soble Kaufman (Chair), Mr. A. Bérard, Mr. A.S. Fell, the Honourable E.C. Lumley and Mr. J.H. McArthur.

The CGC communicates regularly and directly with BCE’s officers. The CGC met five times in 2005. Time is set aside at each regularly scheduled meeting, for the committee members to meet without management.

Under its charter, the CGC reviewed and reported, or made recommendations, to the board on the following matters in 2005 and up to the date of this management proxy circular:

n		the size and composition of the board to ensure that the board and its committees continue to benefit from the range of skills, expertise and experience needed to function effectively and for sound succession planning
n		the independence of directors
n		the financial literacy and expertise of the members of the audit committee
n		the consideration of existing and new board interlocks
n		the consideration of the possible effect of any change in a director’s external directorships or principal occupation on such director’s suitability to continue to serve as a director of BCE
n		the nominees for director who will stand for election at the meeting
n		the annual review of the effectiveness of the board and of its committees and the assessment of the performance of each director and of the board, the board Chair, board committees and each committee Chair
n		the directors’ attendance record
n		the annual review of the adequacy and form of non-management directors’ compensation for serving on the board and its committees, including the requirement for minimum share ownership, to ensure that it continues to be appropriate
n		how BCE aligns with the new corporate governance guidelines of the CSA National Instrument 58-101 — Corporate Governance Guidelines (Canadian Governance rules), NYSE rules, the Sarbanes-Oxley Act and other corporate governance initiatives
n		the statement of corporate governance principles & guidelines, including our new majority voting guidelines for the election of directors
n		the update of our director independence standards to ensure consistency with the Canadian Governance rules and the NYSE rules; these standards are available in the governance section of BCE’s website at www.bce.ca
n		BCE’s responses to the proposal submitted by a shareholder for the meeting; see Schedule E for details
n		the manner in which BCE’s shareholders will exercise their voting right at the meeting
n		the Bell Community Investment Program.

Such Community Investment Program provides in-kind support to registered charitable organizations and their initiatives taking place in Canada with the focus on the well-being, safety, security and education of children or youth living within Canada.

The CGC also carries out an annual evaluation of its performance with the board, including the review of the adequacy of each committee’s charter.

Finally, the CGC reports regularly to the board on its activities.

		ATTENDANCE AT MEETINGS IN 2005
DIRECTORS		BOARD				COMMITTEES
A. Bérard, O.C.			11/11				10/10
R.A. Brenneman			10/11				6/7
R.J. Currie, O.C.			11/11				7/7
A.S. Fell			10/11				11/12
D. Soble Kaufman			11/11				5/5
B.M. Levitt			10/11				4/4
The Honourable E.C. Lumley, P.C.			10/11				5/5
J. Maxwell, C.M.			11/11				7/7
J.H. McArthur			10/11				11/12
T.C. O’Neill, F.C.A.			11/11				7/7
J.A. Pattison, O.C., O.B.C.1			8/10				2/2
R.C. Pozen			10/11				10/11
M.J. Sabia			11/11				N/A
P.M. Tellier, P.C., C.C., Q.C.			11/11				3/4
V.L. Young, O.C.			11/11				14/14

1

Mr. Pattison joined the Board and the Pension Fund Committee in February 2005 and May 2005, respectively, and therefore was not a director at the time of the first board meeting and the first two Pension Fund Committee meetings held in 2005.

BCE’s objective is to ensure that the membership of our board is of the highest quality, with an extensive and relevant breadth of experience. As a result, the directors’ compensation program is designed to attract and retain high quality individuals to serve on the board and its committees and to align the interests of directors with those of BCE’s shareholders.

BCE’s objective is to provide adequate compensation in light of the risks and responsibilities of being an effective director. The board sets the compensation of non-management directors based on the CGC’s recommendations. The CGC regularly reviews such compensation and recommends to the board such adjustments as it considers appropriate and necessary to recognize the workload and responsibility of the board and committee members. In performing such compensation review, the CGC uses industry survey comparative data.

In 2005, the CGC refined the process for the annual review of the determination of the compensation of non-management directors by adopting more formal parameters for setting such remuneration. These parameters are established on the basis of a comparator group being the applicable publicly traded companies included in the peer group of comparator companies (Canadian and U.S.) that is used by the MRCC to benchmark its executive compensation policy. Within such comparator group, the total compensation of non-management directors is positioned at the same level as our executive compensation (see Report on Executive Compensation — Total Compensation). Following a review of the

non-management directors’ compensation in relation to these parameters, the CGC and the board determined that the current levels of compensation of non-management directors are generally in line with market practice at this time. Any director who is also an employee of BCE, or any of its subsidiaries, does not receive any compensation as a director.

Cash compensation

The compensation listed below also compensates non-management directors for their services as directors of any subsidiaries whose common shares are not publicly traded, such as Bell Canada and Telesat. Directors receive annual fees and do not receive additional retainers or attendance fees. The table below shows the annual fee (paid quarterly) for each position.

POSITION		ANNUAL FEE
Non-management directors who live in Canada and future directors who live outside of Canada		$	150,000
Two non-management directors who live outside of Canada and who were members of the board when the annual flat fee arrangement was approved in November 2002 (Mr. J.H. McArthur and Mr. R.C. Pozen)		US$	150,000
Chair of the board, who also currently serves as Chair of the board of Bell Canada with no additional compensation		$	300,000
Chair of the audit committee, who also currently serves as Chair of Bell Canada’s audit committee with no additional compensation		$	225,000

Directors’ share unit plan

The Share unit plan for non-employee directors (1997) serves to more closely link the interests of the non-management directors to those of BCE’s shareholders.

Each non-management director receives his or her compensation in the form of share units. One share unit is equal in value to one BCE common share and each director accumulates share units until he or she reaches the minimum share ownership requirement of 10,000 BCE common shares or share units. Once the director reaches this minimum requirement, he or she can choose how much, if any, of his or her compensation will be paid in share units.

Each director has an account where share units are credited and held until the director leaves the board. The number of share units credited to each director’s account is calculated by dividing the amount of the payment by the BCE common share price on the day the credit is made.

Holders of share units are credited additional units that are equal to the dividends on BCE’s common shares. Additional share units are credited to each non-management director’s account on each dividend payment date. The number of share units is calculated using the same rate as the dividends paid on BCE common shares.

When a director retires from the board, BCE will buy the same number of BCE common shares on the open market as the number of share units the director holds in the plan, after deducting the appropriate tax. These shares are then delivered to the former director.

Compensation of directors of subsidiary boards

The flat fee discussed above (see Cash compensation) also compensates non-management directors for their services as directors of subsidiaries whose common shares are not publicly traded, including Bell Canada and Telesat. As a result, only those directors who sit on boards of subsidiaries whose common shares are publicly traded, such as Aliant, receive additional compensation.

During 2005, one non-management director of BCE, Mr. V.L. Young, also served as a director of Aliant and certain of its subsidiaries.

Mr. Young received regular director fees from Aliant according to its rates for non-management directors. Mr. Young’s compensation from Aliant in 2005 is based on the following fee structure:

Annual retainer1
board		$	35,000
committees		$	3,000
Attendance fees
board		$	1,500
committees		$	1,500

1

All or part of the annual retainer and fees may have been paid in share units under the share unit plan of Aliant.

Minimum share ownership requirement

Non-management directors must own at least 10,000 BCE common shares or share units. They must meet this requirement within five years of being elected to the board or November 26, 2002 (when this requirement was adopted), whichever is later. As of the date of this circular, all non-management directors have met this minimum share ownership requirement.

The board believes that the current share ownership requirement continues to effectively link the interests of the non-management directors to those of the shareholders.

The board and management believe that good corporate governance practices help create and maintain shareholder value. Accordingly, we are committed to attaining high standards in all aspects of corporate governance.

In June 2005, the Canadian Governance rules came into force. The CGC conducted a careful review of these new rules and evaluated our corporate governance practices against them. The board has concluded that we comply with, and in some cases exceed, the Canadian Governance rules. Likewise, the CGC and the board reviewed our corporate governance practices against the Sarbanes-Oxley Act, other related SEC rules, NYSE rules, Canadian Financial rules, and other similar indicators.

Although we are not required to comply with most of the NYSE rules, our governance practices generally comply with them. You will find a summary of the differences between our governance practices and the NYSE rules in the governance section of BCE’s website at www.bce.ca.

Acting on the recommendation of the CGC, the board has recently adopted a Statement of Corporate Governance Principles & Guidelines.

These guidelines complement the board’s written mandate and provide a general description of the board’s expectations and responsibilities of its individual directors.

Board of Directors

The board has overall responsibility for the supervision of the management of our business in BCE’s best interests. In exercising this responsibility, the board must act in accordance with a number of rules and standards, including:

n		the CBCA
n		the Bell Canada Act
n		other laws that apply to telecommunications companies
n		laws of general application
n		BCE’s Articles and By-Laws
n		BCE’s administrative resolution and the written charters of the board and each of its committees
n		BCE’s Code of Business Conduct (code of conduct) and other internal policies.

Role of the Board

In 2005, the board approved its written mandate, which is attached as Schedule F. The mandate can also be found in the governance section of BCE’s website at www.bce.ca. We have summarized below the principal duties and responsibilities of the board. Some of these duties and responsibilities are first reviewed and recommended by the appropriate committee and then submitted to the full board for its consideration and approval.

STRATEGY & BUDGET

The board approves our overall strategic direction and objectives during an annual key planning session. This session is typically held in November, coincident with the board’s approval of the business plan and budget for the coming year. The annual business plan outlines our strategy and objectives and sets out measurable financial and operating targets. Management reports to the board on any developments that could affect our objectives and strategic direction.

GOVERNANCE

In the broad area of governance, the board is responsible for:

n		developing our approach to, and disclosure of, corporate governance practices, including developing a Statement of Corporate Governance Principles & Guidelines
n		approving the nomination of directors and ensuring that a majority of directors are independent
n		developing appropriate qualifications and criteria for the selection of new directors and establishing the criteria for determining director independence
n		appointing the board Chair and the Chair and members of each board committee
n		ensuring that each audit committee member is financially literate, and determining who among the members of the audit committee qualify as an “audit committee financial expert”
n		providing an orientation program for new directors and identifying continuing education opportunities for all directors
n		annually assessing the effectiveness and contribution of the board, its directors, the board Chair, each board committee and their respective Chairs

n		developing written position descriptions for the board Chair, and the Chair of each board committee
n		approving the compensation policy for non-management directors.

The board has also established an administrative procedure which sets out rules governing the approval of transactions carried out in the ordinary course of BCE’s operations. These rules also provide for the delegation of authority and the signing or execution of documents on behalf of BCE.

At each regularly scheduled board meeting, the directors meet without management. Since the advent of the Canadian Governance rules on June 30, 2005, the board also met without the non-independent directors at each such regularly scheduled meeting (4 meetings).

The board and each committee may hire outside advisors at our expense. With the approval of the CGC, individual directors may also hire outside advisors.

CHIEF EXECUTIVE OFFICER AND OTHER OFFICERS

The board is responsible for:

n		appointing the Chief Executive Officer and all other officers of the company
n		developing a written position description for the role of the Chief Executive Officer
n		developing the corporate goals and objectives that the Chief Executive Officer is responsible for meeting and reviewing his performance against these corporate goals and objectives annually
n		approving the compensation and benefits policy (including pension plans) for officers and approving (by the independent directors) all forms of compensation for the Chief Executive Officer
n		providing stewardship in terms of succession planning, including the appointment, training and monitoring of the Chief Executive Officer, other officers and senior management personnel.

RISK MANAGEMENT, CAPITAL MANAGEMENT AND INTERNAL CONTROLS

In this area, the board is responsible for:

n		identifying and assessing the principal risks of our business
n		ensuring the implementation of appropriate systems to manage these risks
n		ensuring the integrity of our internal control systems and management information systems and safeguarding BCE’s assets
n		reviewing, approving and overseeing as required compliance with our disclosure policy
n		reviewing, approving and overseeing our disclosure controls and procedures.

FINANCIAL REPORTING AND EXTERNAL AUDITORS

The board is responsible for:

n		reviewing and approving, as required, our financial statements and related financial information
n		appointing (subject to approval of shareholders) and removing the external auditor
n		appointing and removing our internal auditor
n		reviewing processes for identifying and managing our principal risks, including risk management policies, internal control procedures and standards relating to risk management.

LEGAL REQUIREMENTS AND COMMUNICATION

In addition, the board oversees the adequacy of our processes to ensure compliance with applicable legal and regulatory requirements.

The board also establishes measures for receiving feedback from shareholders. In addition to our annual shareholder meeting, we have a toll-free number for shareholder inquiries (1-888-932-6666) and for investor and general inquiries (1-800-339-6353). Shareholders and other interested parties may also communicate with the board and its Chair by contacting the Corporate Secretary’s Office at corporate.secretariat@bell.ca or 514-786-3891. Finally, the company communicates regularly with the investment community and the media to explain our results and to answer questions. This includes meetings, conferences, press releases and quarterly conference calls. Our quarterly financial results conference calls are broadcast live on BCE’s website at www.bce.ca.

Composition of the Board

In terms of the composition of our board, our objective is to have a sufficient range of skills, expertise and experience to ensure that the board can carry out its responsibilities effectively. We also seek to have a reasonable geographical representation that reflects where our shareholders live and where we conduct our business. Directors are chosen for their ability to contribute to the broad range of issues with which the board routinely deals. The board reviews each director’s contribution and determines whether the board’s size allows it to function efficiently and effectively. The board believes that its current size and range of skills promote effectiveness and efficiency.

The CGC receives suggestions for board candidates from individual board members, the Chief Executive Officer, shareholders and professional search organizations. On a regular basis, the CGC reviews the current profile of the board, including average age and tenure of individual directors and the representation of various areas of expertise and experience.

MAJORITY VOTING

Early in 2006, the board adopted, on a voluntary basis, majority voting principles for the election of directors at the annual shareholders’ meeting.

As we have for several years, we will continue to ensure that the proxy forms we use for the election of directors at our shareholders’ meeting enable shareholders to vote in favor of, or to withhold their vote, separately for each director nominee. We will also continue an initiative we implemented at the 2005 annual meeting to call for a vote by ballot on the election of directors rather than a vote by show of hands. The official “vote results” will be presented in the audited and final scrutineers’ report for the meeting, and the company will disclose the vote results through a report filed on SEDAR (www.sedar.com), Canada’s System for Electronic Document Analysis and Retrieval. This vote results report will include the number and percentage of votes cast for, and votes withheld from, each individual director nominee.

The board also established guidelines specifying that, in an uncontested election (i.e., the election does not involve a proxy battle), any director nominee who receives a greater number of votes “withheld” than votes “for” his or her election, must submit to the CGC his or her resignation letter no later than 10 days following the public disclosure of the vote results. The resignation will take effect upon its acceptance by the board.

It is generally expected that the CGC will recommend, absent exceptional circumstances, that the board accept such resignation. Within 90 days following the filing of the vote results, the board will, upon recommendation of the CGC, decide to accept or refuse the resignation and will promptly publicly disclose its decision via press release. A director who so tenders his or her resignation will not participate in any discussion or action of the CGC or of the board with respect to the decision to accept or not his or her resignation. In cases where the board determines to refuse the resignation, the reasons for its decision will also be disclosed. If a resignation is accepted, the board may appoint a new director to fill any vacancy, or may reduce the size of the board.

Independence of the Board

It is the board of director’s policy that a majority of its members must be independent. Again acting on the recommendation of the CGC, the board is responsible for determining whether or not each director is independent. The board analyzes all of the relationships each director has with BCE and its subsidiaries. To guide this analysis, the board has adopted director independence standards. These standards are consistent with the Canadian Governance rules and the NYSE rules and can be reviewed in the governance section of BCE’s website at www.bce.ca. In general, a director who meets these standards and who does not otherwise have a material relationship with BCE would be considered independent under the Canadian Governance rules and the NYSE rules.

Evaluating the information provided by each director against the independence standards outlined above, the board determined that all of the directors standing for election at the 2006 annual and special shareholder meeting (with the exception of our President and Chief Executive Officer M.J. Sabia) do not have a material relationship with BCE and are considered to be independent under the Canadian Governance rules and the NYSE rules. Because he is an officer of BCE, Mr. Sabia is not considered to be independent under these rules.

Other directors represent a wide variety of business sectors. Certain directors may be partners in or officers of entities that provide legal, financial or other services to us or to our subsidiaries. The board considers these directors to be independent given that:

n		the amount of fees received by such entities for services rendered to us or our subsidiaries are not material to these entities or to BCE
n		such services are provided on customary commercial terms by these entities and are received by us or our subsidiaries in the ordinary course of our respective businesses
n		we are at liberty to choose from among other service providers which maintain similar quality standards.

As well, each committee of the board consists only of independent directors. None of the members of the audit committee has directly or indirectly accepted any consulting, advisory or other compensatory fee from BCE or any of its subsidiaries, other than ordinary director fees. The board has concluded that all of the audit committee members are independent under the more stringent audit committee independence tests under the Canadian Financial rules and the NYSE rules.

Board Chair

Our By-Laws provide that directors may determine from time to time whether the Chair should not be an officer and should act solely in a non-executive capacity. Should they decide that the Chair should be an officer acting in an executive capacity, the board must designate one of its members as the “lead director”. The lead director is responsible for ensuring that the board can function independently of management. For the past several years, the board decided that the Chair should be separate from management and appointed as Chair Mr. R.J. Currie. Mr. Currie is not an executive officer of BCE or its subsidiaries and is considered independent under the Canadian Governance rules and the NYSE rules.

The detailed mandate of the board Chair can be found in Schedule F and in the governance section of BCE’s website at www.bce.ca. The principal duties and responsibilities of the board Chair consist of leading the board in all aspects of its work, effectively managing the affairs of the board and ensuring that the board is properly organized and functions efficiently. The board Chair also advises the Chief Executive Officer in all matters concerning the interests of the board and the relationships between management personnel and board members.

Director’s Expectation and Personal Commitment

The board expects all of its members to comply with BCE’s Statement of Corporate Governance Principles & Guidelines. Members are also expected to comply with BCE’s policies that apply to directors and the various board procedures and practices. These procedures include the declaration of interest and changes in principal occupation (see below for details), the conflict of interest guidelines (see below for details), the share ownership guidelines (see Corporate Governance Committee Report — Directors’ Compensation for details) and the code of conduct (see below under Ethical Business Conduct for details). The board also expects all of its members to demonstrate beyond reproach personal and professional characteristics. These characteristics include high ethical standards and integrity, leadership, financial literacy, and current fluency in their own field of expertise.

The board further expects all of its members to make meaningful commitments during their time as directors of BCE. Each director is expected to participate in the director orientation program and in continuing education and development programs. They are expected to develop and expand a broad, current knowledge of the nature and operation of our major businesses. Similarly, all members are expected to commit the necessary time required to be an effective and fully contributing member of the board and of each board committee on which they serve.

With respect to time commitment, the board approved the following recommended guidelines:

n		each director should periodically review their other commitments (including their commitments as directors on other public and private company boards or non-profit organizations) and
n		each director should consider whether their current or intended future commitments may limit their ability to be an effective and fully contributing member of the BCE board and each committee on which they serve.

The CGC periodically reviews each director’s external commitments and considers whether such commitments may impair the director’s service on the board or each board committee on which such director serves, and provides recommendations to the board in this respect.

The CGC is also responsible for administering our policy on directors’ attendance at meetings of the board and its committees. Under this policy, the Corporate Secretary must report to the CGC any director who did not attend at least 75 per cent of the board and committee meetings held in the year. The CGC reviews each director’s attendance record and takes this into consideration when proposing the list of nominated directors for election to the board at the next annual shareholders’ meeting.

Directors must follow BCE’s procedure for declaration of interest and changes in their principal occupation. The procedure is designed to enable the CGC to be notified in a timely fashion of any change in a director’s external directorships and any change in a director’s principal occupation, and to permit the CGC to review and consider any possible effect of such a change on the suitability of that director’s continued service as a member of the board. This procedure also states that directors are expected to tender their resignation upon a change in their principal occupation, which only becomes effective when it is accepted by the board upon the recommendation of the CGC. Similarly, any change in a director’s external directorships must be promptly reported to the CGC for its consideration.

BCE’s conflict of interest guidelines for directors sets out how conflict situations will be managed during a board meeting. If a director is deemed to have a conflict of interest because of an interest in a party to a proposed contract or transaction with BCE, then a specific “declaration of interest” is noted in the minutes of the meeting. As well, the conflicted director must abstain from voting on the matter. Depending on circumstances, the director may also withdraw from the meeting while the board deliberates. This procedure is followed on an “as-required” basis.

Orientation and Continuing Education

New directors are given the opportunity to individually meet with members of senior management to aid in their understanding of our business. All directors have regular access to senior management to discuss board presentations and other matters of interest.

We also give directors a reference manual which is updated regularly. This comprehensive manual contains information about our various businesses and special legislation affecting us and our investments. It also covers the structure and responsibilities of the board and its committees, the legal duties and liabilities of directors, BCE’s Articles and By-Laws, BCE’s Statement of Corporate Governance Principles & Guidelines and other significant policies.

As part of its mandate, the CGC assists in the orientation of newly elected or appointed directors. The CGC assists new directors in becoming acquainted with BCE and its governance processes and encourages continuing education opportunities for all members of the board. To facilitate this process, BCE reimburses the costs of attending outside director education programs. During regularly scheduled board meetings presentations are made on various aspects of our business, and directors are also given the opportunity to visit our various business units.

Board Assessments

As part of its charter, the CGC is required to develop and oversee a process to enable each director to assess the effectiveness and performance of the board and its Chair, the committees of the board and their respective Chairs and themselves as a member of the board. In 2005, the assessment process was conducted through one-on-one meetings. Each director met firstly with the Chair of the board to discuss their assessment of the performance of the board as a whole, the performance of each board committee on which they serve, the CGC Chair (if they serve on the CGC), and their own performance as a member of the board and secondly with the Chair of the CGC to discuss the performance of the Chair of the board and the Chair of each committee (other than the CGC Chair). To facilitate these meetings, a written guide (approved by the CGC) was given to each board member for their review and use in preparing for these meetings. The guide included suggestions for topics and questions for discussion at the meetings, including (among others) the board’s responsibilities, its relationship with management, its operations and its composition, committee structure and operations, and materials prepared for board and committee meetings and timeliness of delivery to directors. Following the one-on-one meetings, an in camera session of the board was held at which the board discussed and reviewed feedback from the one-on-one meetings and considered the appropriateness of any modifications or enhancements to the effective performance of the board, its committees and individual directors.

Board Committees

There are four standing committees of the board: the Audit Committee, the Corporate Governance Committee, the Management Resources and Compensation Committee and the Pension Fund Committee.

						NUMBER OF
				ALL MEMBERS		MEETINGS
COMMITTEE		MEMBERS		INDEPENDENT?		HELD IN 2005
Audit		T.C. O’Neill (Chair)		Yes		7
		A. Bérard
		J. Maxwell
		R.C. Pozen
		V.L. Young
Corporate		D. Soble Kaufman (Chair)		Yes		5
Governance		A. Bérard
(CGC)		A.S. Fell
		E.C. Lumley
		J.H. McArthur
Management		R.J. Currie (Chair)		Yes		7
Resources and		R.A. Brenneman
Compensation		A.S. Fell
(MRCC)		J.H. McArthur
		V.L. Young
Pension Fund		R.C. Pozen (Chair)		Yes		4
(PFC)		B.M. Levitt
		J.A. Pattison
		P.M. Tellier

It is our policy that each of the Audit Committee, the MRCC and the CGC must be comprised solely of independent directors.

The complete charter of each board committee can be found in the governance section of BCE’s website at www.bce.ca. As well, the position description of the committee Chairs is detailed in the corresponding committee charter. The principal duties and responsibilities of each committee Chair consists of leading the committee in all aspects of its work, effectively managing the committee’s affairs and ensuring that it is properly organized and functions efficiently. At each regularly scheduled board committee meeting, each board committee provides a report to the board of directors on its activities.

Audit Committee

The purpose of the audit committee is to assist the board in its oversight of:

n		the integrity of BCE’s financial statements and related information
n		BCE’s compliance with applicable legal and regulatory requirements
n		the independence, qualifications and appointment of the external auditor
n		the performance of both the external and internal auditor
n		management’s responsibility for reporting on internal controls and risk management.

Please see Audit Committee Report for a complete review of the activities of the committee during 2005.

FINANCIAL LITERACY, EXPERTISE AND SIMULTANEOUS SERVICE

Under the Sarbanes-Oxley Act and related SEC and NYSE rules, BCE is required to disclose whether its audit committee members include at least one “audit committee financial expert”, as defined by these rules. In addition, the Canadian Financial rules and the NYSE rules require that all audit committee members be financially literate.

The board of directors has determined that at least one of the members of the audit committee, being the Chair of the audit committee, Mr. T.C. O’Neill, is qualified as “audit committee financial expert”. Please see Schedule 1 — Audit Committee in our annual information form dated March 1, 2006, for the relevant education and experience of all our audit committee members.

The NYSE rules require that if an audit committee member serves simultaneously on the audit committee of more than three public companies, the board must determine and disclose that this simultaneous service does not impair the ability of the member to effectively serve on the BCE audit committee.

In addition to serving on BCE’s audit committee, the following audit committee members currently serve on the audit committees of the following public companies: Mr. Bérard — Bombardier Inc., Groupe BMTC Inc. and TransForce Inc.; and Mr. O’Neill — Nexen Inc., Adecco, S.A., and Loblaw Companies Limited. The board has carefully reviewed the audit committee service of each of Mr. Bérard and Mr. O’Neill and has concluded in each case that these other activities do not impair their ability to effectively serve on BCE’s audit committee. This conclusion is based on the following:

n		each is retired and is not involved in professional activities other than sitting on various public company boards and audit committees;
n		each has extensive accounting and financial knowledge and experience, which serves the best interests of BCE and
n		each makes valuable contributions to BCE’s audit committee.

Corporate Governance Committee

The purpose of the CGC is to assist the board in:

n		developing and implementing our corporate governance guidelines
n		identifying individuals qualified to become board members
n		determining the composition of the board and its committees
n		determining the directors’ remuneration for board and committee service
n		developing and overseeing a process to assess the board Chair, the board, board committees, Chairs of committees, and individual directors
n		reviewing and recommending for board approval our policies concerning business conduct, ethics, public disclosure of material information and other matters.

Please see Corporate Governance Committee Report for a complete review of the activities of the corporate governance committee during 2005.

COMPENSATION OF DIRECTORS

The CGC annually reviews BCE’s compensation policy for non-management directors. It compares their compensation to that of similar companies and recommends any changes to the board. As of January 1, 2003, a “flat fee” compensation arrangement was established for non-management directors.

Please see Corporate Governance Committee Report — Directors’ Compensation for more information on directors’ compensation, including a description of the process by which the board determines the compensation of directors based on the recommendations of the CGC.

NOMINATION OF DIRECTORS

The CGC also performs the functions of a nominating committee. The CGC proposes new candidates to be nominated for election or appointment to the board and has developed qualifications and criteria to assist in the selection process.

See above under Board of Directors — Composition of the Board for more details on the nomination of directors.

Management Resources and Compensation Committee

The purpose of the MRCC is:

n		to assist the board in its oversight responsibilities concerning compensation, nomination, evaluation, and succession of officers and other management personnel
n		to oversee BCE’s health and safety policies and practices.

Please see Management Resources and Compensation Committee Report for a complete review of the activities of the MRCC during 2005.

COMPENSATION OF OFFICERS

Please see Management Resources and Compensation Committee Report — Officers’ Compensation for information on the compensation of our President and Chief Executive Officer and other officers, and on details on the process by which the board determines the compensation of officers based on the recommendations of the MRCC.

INDEPENDENT ADVICE

The company retains the firm of Towers Perrin to provide expertise and advice in connection with the design of compensation programs and policies. During 2005 management requested Towers Perrin to provide

advice on various compensation matters such as a compensation market review for our directors and executive positions and our Mid and Long Term Incentive plans. They were also used to provide advice on various specific compensation issues.

Pension Fund Committee

The purpose of the PFC is to assist the board in its oversight responsibilities related to:

n		the administration, funding and investment of BCE’s pension plans and fund
n		the unitized pooled fund sponsored by BCE for the collective investment of the fund and the participant subsidiaries’ pension funds.

Please see Pension Fund Committee Report for a complete review of the activities of the committee during 2005.

Chief Executive Officer

Our Chief Executive Officer has primary responsibility for the management of the business and affairs of BCE. As such, the Chief Executive Officer, subject to the board’s approval, develops our strategic and operational orientation. In so doing, the Chief Executive Officer provides leadership and vision for the effective overall management, profitability, and growth of the company, and for increasing shareholder value and ensuring compliance with policies adopted by the board. The Chief Executive Officer is directly accountable to the board for all of BCE’s activities. In 2005, the board approved a written position description for the Chief Executive Officer, a copy of which is attached at Schedule G and is also available in the governance section of BCE’s website at www.bce.ca.

Ethical Business Conduct

In mid 2005, we established a new Ethics and Policy Management Group (EPMG) which reports to our Corporate Secretary, and in turn to the CGC and the audit committee. The creation of this new group is part of a corporate-wide initiative to strengthen our governance practices, our ethics program and our oversight of corporate policies across BCE and Bell Canada.

The EPMG has responsibility, among others, for:

n		the oversight of our ethics program, including the code of conduct and ethics training
n		our 24/7 Employee Help Line that assists employees with any ethical issues on a completely confidential and anonymous basis
n		our complaint tool allowing for anonymous reporting of issues relating to questionable accounting, internal controls, auditing matters or corporate fraud
n		the implementation and oversight of a new corporate policy management framework designed to improve employee awareness and access to some of the core corporate policies and business unit-specific processes, procedures and systems.

Corporate Policies

The most significant corporate-wide policies with respect to business ethics are the code of conduct, the complaint procedures for accounting and auditing matters, the disclosure policy and the auditor independence policy. These policies are available in the governance section of BCE’s website at www.bce.ca.

CODE OF CONDUCT

Our code of conduct provides various rules and guidelines for ethical behaviour based on our mission and values and on applicable laws and regulations. Our code of conduct applies to all employees, officers and directors. In recognition of the important role of the directors and senior management personnel of BCE in demonstrating their commitment to and support of the company’s ethics program, as embodied in the values and rules set out in the code of conduct, in 2005 the board determined to require all directors, officers and vice-presidents to certify annually their compliance with the code of conduct. This certification also confirms their express support for the setting of standards to discourage wrongdoing and to promote honest and ethical conduct throughout the organization.

Our shareholders, customers and suppliers expect honest and ethical conduct in all aspects of our business. Accordingly, we require that employees, officers and directors certify annually that they have reviewed and understood the code of conduct. In addition, all new employees are required to complete an on-line training course on the code of conduct within the first few weeks of being hired.

Employees must also report to their manager any real or potential conflict of interest, and, as required, provide written disclosure of such conflict to the EPMG. The EPMG is responsible for managing the conflict of interest issues of employees. In addition to the requirements to comply with the conflict of interest guidelines and procedures set out in the code of conduct applicable to employees, all officers and vice-presidents are required to disclose to the EPMG any potential or actual conflicts of interest. Any actual or potential conflict of interest is resolved by the EPMG or BCE’s Chief Legal Officer.

BCE considers it vital that employees have the most effective tools to pose questions or raise issues concerning any ethical dilemma. To that end, as part of our ethics compliance initiative, we made important improvements to our long standing Employee Help Line in 2005. We implemented a new support system which can be accessed either by telephone or on-line. The system enables employees, on a completely anonymous and confidential 24/7 basis, to pose questions or report concerns relating to issues under the code of conduct. The system is administered by an independent outside firm specializing in the field. Our new support system also provides employees a means to track the progress of their enquiries on-line and provides the company with an auditable record of issues raised.

COMPLAINT PROCEDURES FOR ACCOUNTING AND AUDITING MATTERS

In early 2004, the audit committee established procedures for receiving, filing and treating complaints that BCE or any of its subsidiaries might receive about

n		accounting, internal accounting control or auditing matters
n		evidence of an activity that may constitute corporate fraud, violation of federal or provincial laws, or misappropriation of property that belongs to BCE or any of its subsidiaries, if such activity is deemed material by BCE’s Chief Legal Officer.

The audit committee also established “whistleblowing” procedures for confidentially and anonymously submitting concerns from employees of BCE or any of its subsidiaries about questionable accounting or auditing

matters. To this end, we developed an internal innovative on-line web tool that allows all employees to report questionable accounting and auditing practices in complete confidence. This is in addition to the other means of communication available to our employees, such as the Employee Help Line discussed above, contact with the EPMG, e-mail and regular mail.

DISCLOSURE POLICY

The board periodically approves policies for communicating with our various stakeholders including shareholders, employees, financial analysts, governments and regulatory authorities, the media and the Canadian and international communities. Several years ago, we adopted a disclosure policy governing our communications to the investment community, the media and the general public. This policy is designed to assist us in ensuring that our communications are timely, accurate and broadly disseminated according to the laws that apply to us. Among others, the policy establishes guidelines for the verification of the accuracy and completeness of information disclosed publicly and the “principles of disclosure” with respect to material information, news releases, conference calls and webcasts, electronic communications and rumours.

AUDITOR INDEPENDENCE POLICY

Our Auditor Independence Policy is a comprehensive policy governing all aspects of BCE’s relationship with its external auditor. Please see Audit Committee Report — Auditor Independence Policy for more details.

Oversight and Reports

The board is responsible for ensuring that management creates and supports a culture in which ethical business conduct is recognized, valued and exemplified throughout the organization. The board must also satisfy itself as to the integrity of the Chief Executive Officer, other corporate officers and senior management. Both the CGC and the audit committee support the board in its oversight of our ethics program. The CGC has the responsibility for the content of the policies discussed above, while the audit committee has the oversight responsibility for compliance with these policies.

The audit committee receives a quarterly report prepared by the EPMG on the number, nature and scope of issues raised under the code of conduct and provides details of the complaints received in respect of accounting and auditing matters. This report also details the status of investigations and any follow-up action required. In addition, the EPMG provides an annual report to the audit committee identifying the officers and vice-presidents who have signed their annual certification statement under the code of conduct.

The Chair of the audit committee is notified by the Chief Legal Officer of any complaints that relate to accounting, internal controls, auditing matters or corporate fraud. The results of any investigation or follow-up action are provided to the audit committee.

Report presented April 12, 2006 by:

D. SOBLE KAUFMAN, CHAIR
A. BÉRARD
A.S. FELL
THE HONOURABLE E.C. LUMLEY
J.H. MCARTHUR

The purpose of the MRCC is set forth in its written charter which is available in the governance section of BCE’s website at www.bce.ca.

The first part of this report tells you how the MRCC is managed, what its responsibilities and powers are and how it makes sure that BCE’s strategies for management resources in general, and executive compensation in particular, are consistent with its business plan.

The second part of this report tells you how certain executive officers are compensated and the process by which such compensation of officers in general is determined.

The MRCC met seven times in 2005. Time is set aside at each regularly scheduled committee meeting, for the committee members to meet without management. It communicates regularly and directly with BCE’s officers.

The MRCC reviewed and reported, or made recommendations, to the board on the following items in 2005 and up to the date of this management proxy circular:

n		the appointment or resignation of officers and the terms of these changes to ensure that they are appropriate in relation to both external and internal benchmarks
n		the review of proposed major changes in organization or personnel with the President and Chief Executive Officer
n		the position description of the President and Chief Executive Officer
n		the review of the President and Chief Executive Officer’s performance against pre-set specific corporate and individual goals and objectives approved by the MRCC and recommendation for approval by the independent directors of the board of the terms of his compensation
n		the review with the President and Chief Executive Officer of the performance of the other officers and the terms of their compensation
n		the review with the President and Chief Executive Officer of the BCE group’s management resources and plans for ensuring appropriate succession to officers and other management personnel
n		the review of significant changes to benefit plans (excluding pension plans which are overseen by the PFC, see Pension fund committee report)
n		the review of the share ownership requirement and the monitoring of interim measures for executives to ensure such share ownership requirements are met
n		the review of BCE’s executive compensation policy, as further detailed in this report under Executive officers’ compensation
n		the review of this report on the compensation of executive officers
n		the review of health and safety procedures and compliance with respect to the health and safety policies.

The MRCC also carried out an annual evaluation of its performance with the CGC, including the review of the adequacy of its charter.

Finally, the MRCC reports regularly to the board on its activities.

Report on Executive compensation

The executive compensation policy is designed to attract, motivate and retain the executive officers needed to achieve and surpass BCE’s corporate objectives and to build a company that leads the industry in terms of operational performance and creation of value for our shareholders.

Our compensation philosophy is to offer total compensation that is competitive in the marketplace. To complement this market positioning, we also ensure (for internal equity) that the compensation of each position fairly reflects the responsibilities of that position compared to other positions at BCE.

A substantial portion of every executive officer’s cash compensation each year is based on meeting annual corporate performance objectives. In addition, BCE has in place mid-term and long-term incentive programs. These are mainly in the form of restricted share units and stock options that are designed to:

n		compensate and retain executive officers
n		link the executive officers’ interests to those of the shareholders
n		encourage executive officers to pursue value-creating opportunities for BCE by allowing them to participate in the appreciation of share value
n		encourage the type of leadership and behaviour required for the achievement of strategic objectives by creating an even stronger link between executive compensation and BCE’s mid-term and long-term operational and financial success.

We periodically review our executive compensation policy to make sure that it continues to meet our objectives. This review also includes a specific review of the compensation of the President and Chief Executive Officer and of the executive officers. In this document, executive officers whose compensation is disclosed in the Summary compensation table are referred to as the “named executive officers”. Named executive officers are determined on a BCE consolidated basis.

In light of the evolving internal and external environments, the MRCC recommended changes to the compensation policy which were approved by the board in January 2006. The changes to the compensation policy are discussed in more detail under Change to the compensation policy for 2006 and in the future.

Total Compensation

In 2005, total compensation consisted of:

n		base salary
n		annual short-term incentive awards
n		mid-term incentive awards
n		long-term incentives, and
n		benefits and perquisites, including pension benefits, described under Other compensation information.

Total compensation is positioned at the 60th percentile of compensation paid by the group of companies that BCE compares itself against (comparator group). Paying at the 60th percentile of the comparator group means that 40% of the companies in the comparator group pay more than BCE and 60% pay less for similar positions. This allows BCE to attract and retain high-performing executives.

Base salary and the annual short-term incentive are positioned at the 50th percentile (median) and the 75th percentile, respectively. This further reinforces the importance of meeting annual financial targets. The other components of total compensation are used to bring overall compensation of the various executive officers to the 60th percentile. This reflects our objective to put a significant portion of compensation at risk, encouraging the required behaviour for achieving the desired business results.

Since 2004, there is less emphasis on the use of long-term incentive plans under which stock options are granted in light of grants of Restricted Share Units (RSUs) made under a mid-term incentive plan. Moreover, stock options granted since 2004 have performance vesting criteria. For more information on key features of these plans, see Mid-term incentive plan and Long-term incentives.

We did not assign specific weightings to any element of the total compensation other than the positioning of base salary, short-term incentive and total compensation value in relation to the market.

The comparator group for 2005 consisted of 45 publicly traded Canadian and U.S. companies. The companies in the comparator group were selected based on one or more of the following criteria: telecommunications/high technology, strategic use of technology, most admired companies and revenues. The annual review of the comparator group in 2005 resulted in a net addition of two companies.

Please see Other compensation information — Executive compensation table for more information on compensation paid to the named executive officers over the past three years.

We determine the base salary of each executive officer within a salary range to reflect individual performance and responsibilities related to the position. The mid-point of the salary range corresponds to the median of the comparator group for similar positions. The minimum for the salary range is 20% below the mid-point and the maximum is 20% above.

The short-term incentive program is designed to support the achievement of corporate objectives and reward executive officers based on BCE’s success. To recognize the increased focus of BCE’s senior executives on Bell Canada, BCE’s core asset, we decided that all short-term incentive awards for executive officers would have their corporate performance factor based on Bell Canada’s results. In 2005, the following components of Bell Canada’s performance were used for setting short-term incentive awards:

n		EBITDA1 (45%)
n		revenue2 (25%)
n		and customer loyalty3 (30%).

This resulted in a Bell Canada corporate performance factor of 70% of the target award for executive officers which was computed based on total results for Bell Canada as opposed to results by business units.

We determine the annual short-term incentive awards by taking both the corporate performance and the executive officer’s individual contribution into consideration.

In 2005, the individual contribution was evaluated based on the achievement of objectives (results) and the demonstration of leadership behaviour required to drive BCE’s success (leadership attributes). The individual performance factor may vary between 0 and 200%.

Each year, we set target values for the awards. In 2005 the target awards ranged from 40% of base salary for the lowest eligible officer’s position to 125% of base salary for the President and Chief Executive Officer. The lowest target for the named executive officers was 75% of base salary.

On the basis of the above factors, we determine the size of the annual short-term incentive awards. Awards are calculated based on the product of the target award, the corporate performance factor and the individual performance factor. The maximum payout is two times the target award. In most cases, awards granted for a year are paid at the beginning of the following year.

Executive officers who are eligible to participate in the BCE share unit plan for senior executives and other key employees (1997) (deferred share unit plan) or in the employees’ profit sharing plan can choose to have up to 100% of their annual short-term incentive award paid in deferred share units (DSUs) under the deferred share unit plan or contributed to the employees’ profit sharing plan. They must decide how they wish to receive their award by the end of the year in which the award is earned. Please see Deferred share unit plan for more information. Executive officers who choose to have their incentive awards contributed to the employees’ profit sharing plan will be taxed for the year the contribution was made. Taxes will need to be paid by the time they file their income tax return for that year.

Awards in the form of DSUs can be used as a means to achieve the mandatory share ownership levels described under Share ownership requirements.

We may grant to BCE executive officers and other key employees, and those of certain of BCE’s subsidiaries, restricted share units (RSUs). The RSU plan is designed to more closely link the compensation of the executives with the achievement of specific operating objectives that are key in supporting the overall business strategy.

RSUs are granted for a given performance period based on position and level of contribution.

At any time, the value of one RSU is equal to the value of one BCE common share. RSUs vest according to the vesting schedule relating to the performance period for the award. Under the vesting schedule, RSUs vest over time, provided that pre-set operating objectives directly aligned to specific goals are met. RSUs that are granted during a given performance period will all be subject to the same vesting rules and operating objectives attached to the performance period.

Dividend equivalents in the form of additional RSUs are credited to the participant’s account on each dividend payment date and are equal in value to the dividend paid on BCE common shares. These additional RSUs are subject to the same vesting schedule that applied to the original grant of RSUs.

At the end of the performance period, we assess the actual performance against pre-set objectives to determine the percentage of RSUs that will become vested (vesting percentage). RSUs become vested on the date the board confirms the vesting percentage. All unvested RSUs as of that date are forfeited. If an employee participating in the plan is terminated prior to the end of the performance period, he or she must have participated in at least half of the performance period to be entitled to receive his or her vested RSUs.

Participants may choose to receive their payment of RSUs in cash, in BCE common shares, or a combination of both. We may, however, determine that all or a portion of a participant’s RSUs is to be paid out in BCE common shares if he or she has not met the minimum share ownership requirements described under Share ownership requirements. Payment in cash is calculated based on the number of vested RSUs in the participant’s account times the percentage chosen for payment in cash times the market value of a BCE common share on the day before the board confirms the vesting percentage (after withholding taxes and any other deductions). For payment in BCE shares, BCE will buy a number of BCE shares on the open market equal to the number of vested RSUs chosen to be taken in BCE common shares less withholding taxes and any other deductions. Such purchase will occur within 45 days from the day the board confirms the vesting percentage.

The vesting of the RSUs granted for the two-year performance period from January 1, 2004 to December 31, 2005 (2004-2005 RSUs) was based on reaching operating objectives directly aligned to specific goals for each of the core business units of Bell Canada. These preset objectives focused on specific operating targets designed, amongst others, to enhance service performance and increase the number of multi-product customers. For more information related to the payment of vested 2004-2005 RSUs, see the table under Other compensation information — Executive compensation table.

Long-Term Incentives

We may grant to BCE executive officers and other key employees as well as those of certain BCE subsidiaries, options to buy BCE common shares under stock option plans⁴. Under the BCE Inc. Long-Term Incentive (Stock Option) Program (1999), not more than 50% of the BCE common

shares covered by options under the plan may be granted to insiders (as defined in the Plan) who participate in it. We may recommend special grants of stock options to recognize specific achievements or, in some cases, to retain or motivate executive officers and key employees. We may also determine, within the parameters of the stock option plans (see Amendments section) and subject to board approval, the terms and conditions of each grant. The number of outstanding options held by an employee is not taken into account when determining if and how many new options are awarded to him or her.

The exercise price is the price at which a common share may be purchased when an option is exercised. The exercise price⁵ is at least equal to the market value of a BCE common share on the day before the grant becomes effective, except under certain circumstances. For example, we may set a higher exercise price when we grant the option. Or, subject to regulatory approval, in the case when a pre-existing option to acquire shares of one of BCE’s subsidiaries or of a company that BCE is acquiring is converted into an option to acquire BCE common shares, we may set a lower exercise price to maintain the economic position of the option holder.

Since 2004, the use of stock options that vest solely over time (time vesting options) has been reduced with the introduction of a performance component to the vesting schedule of options granted. These options are front-loaded meaning that options are granted at the beginning of a performance period (or later in the period when someone is hired or promoted), for the entire performance period.

Performance vesting options granted in 2004 have a performance period of January 1, 2004 to December 31, 2006 and are called the 2004-2006 Front-loaded options.

Under the terms of our stock option plans, the right to exercise an option accrues or “vests” by 25% a year for four years from the day of grant, unless we determine otherwise. In 2004, we determined that the vesting of the 2004-2006 Front-loaded options would be based on a combination of time and performance. The performance condition will be achieved if the BCE total shareholder return (BCE TSR) meets or exceeds the median total shareholder return (median TSR) of a group of 12 Canadian and U.S. publicly traded telecommunications companies. On January 31, 2006, the board confirmed that the BCE TSR did not meet the median TSR for the two-year period ending December 31, 2005. As a result, none of the 2004-2006 Front-loaded options vested on January 31, 2006. 50% of the 2004-2006 Front-loaded options were to vest if the two-year BCE TSR met or exceeded the two-year median TSR. Each TSR was calculated over the same two-year period i.e., from January 1, 2004 to December 31, 2005. There is however an opportunity for all of these options to vest at the end of 2006 depending on the results of the BCE TSR for the three-year period ending December 31, 2006. Vesting can be accelerated in certain circumstances if there is a change of control of BCE or of a subsidiary as described under Change of control.

The stock option plans provide that the term of any option may not exceed 10 years from the day it is granted. The term of the 2004-2006 Front-loaded options is six years. If the option holder retires, leaves the BCE group of companies, dies, or the company he or she works for is no

longer part of the BCE group of companies, the term may be reduced pursuant to the stock option plan under which it was granted. Options are not assignable by the optionee, except to the optionee’s estate upon the optionee’s death. We may use our discretionary authority under the relevant plan as described under Amendments in order to otherwise alter the terms of the options within the parameters of the relevant plans.

Option holders will lose all of their unexercised options granted after 2001 if they engage in prohibited behaviour after they leave the BCE group of companies. This includes using BCE’s confidential information for the benefit of another employer. In addition, the option holder must reimburse BCE the after-tax profit realized on exercising any options during the twelve-month period preceding the date on which the unfair employment practice began.

Prior to November 1999, some options were granted with related rights to special compensation payments (SCPs). SCPs are cash payments equal to the excess of the market value of the shares on the day of exercise of the related option over the exercise price of the option. SCPs, if any, are attached to options and are triggered when the options are exercised.

Effective January 1, 2003, BCE adopted the fair value method of accounting for stock option compensation on a prospective basis.

In 1999, we introduced special vesting provisions that will apply if there is a change of control of BCE. A change of control of BCE occurs when:

n		another party acquires 50% or more of the outstanding securities of a class of voting or equity securities of BCE
n		the composition of a majority of the BCE board changes for a reason such as a dissident proxy solicitation
n		BCE’s shareholders approve plans or agreements for disposing of all or substantially all of BCE’s assets, liquidating or dissolving BCE, or in certain cases, merging, consolidating or amalgamating BCE, or
n		we determine that an event is a change of control.

If there is a change of control of BCE and the option holder’s employment is terminated within 18 months of the change of control for a reason other than for cause or if the option holder terminates his employment for good reason, his or her unvested options can be exercised for a period of 90 days from the date of termination, or for a longer period that we may determine.

Unvested options of an option holder who is employed in one of BCE’s business units, such as Bell Canada or another subsidiary that we identify as a “designated business unit”, will become exercisable if:

n		BCE’s interest in the business unit or subsidiary falls below 50% but remains at least 20%, and
n		the option holder’s employment is terminated within 18 months of the reduction for a reason other than for cause or if the option holder terminates employment for good reason.

The option holder has up to 90 days from that day, or longer if we so determine, to exercise the options.

If BCE’s interest in a designated business unit falls below 20%, option holders who are employed in that business unit may exercise all of their unvested options effective upon the earlier of:

n		one year following the reduction in the interest, or
n		the day the option holder was terminated.

The option holder has up to 90 days from that day, or longer if we so determine, to exercise the options.

The following provisions for early termination apply to stock options, unless we have, for specific circumstances, determined otherwise either at the time an option is granted or later, based on our discretionary authority under the relevant stock option plan. See Amendments for more information.

All non-vested options are forfeited when an employee ceases to be employed by BCE or an applicable subsidiary. Participants have 30 days following their termination date (without exceeding the original option period) to exercise their vested options. At the end of the 30-day period or, as of the expiry date, all outstanding options are forfeited. The same provisions apply when someone dies except that the estate has 12 months instead of 30 days to exercise all vested options (without exceeding the original expiry date).

When an employee retires, options granted after September 2000 continue to vest for three years after retirement. Participants have three years following their retirement date (without exceeding the original expiry date) to exercise their vested options. At the end of the three-year period or, on the original expiry date if it is earlier, all outstanding options are forfeited.

For options granted before September 2000 which are already vested, participants have five years following their retirement date (without exceeding the original expiry date) to exercise their vested options. At the end of the five-year period or on the original expiry date if it is earlier, all outstanding options are forfeited.

We have determined that the termination provisions applicable to the 2004-2006 Front-loaded options will be as follows:

If an employee ceases to be employed before January 1, 2006, all options are forfeited on the date employment is terminated. If an employee ceases to be employed in 2006, vested options on the termination date can be exercised within 30 days. Unvested options are forfeited. Given that the vesting percentage established at the end of 2005 was 0%, if an employee ceases to be employed in 2006, 25% of the participant’s options will vest at the end of 2006 if the performance goal is met at that time. The participants will have 30 days after the date the board confirms the vesting percentage to exercise vested options. Unvested options are forfeited. The same provisions apply if someone dies except that the estate has 12 months to exercise vested options. At the end of this period, all outstanding options are forfeited.

If retirement occurred in 2005, one-third of the options forfeited. No options will forfeit if retirement occurs in 2006. Options that are not forfeited upon retirement continue to vest for three years after the retirement date under the vesting schedule. Participants have three years following their retirement date (without exceeding the original expiry date) to exercise their vested options. At the end of this period or, on the original expiry date if it is earlier, all outstanding options are forfeited.

Under the discretionary authority granted to our committee in the relevant stock options plans⁶, we may use such authority to depart from standard vesting provisions, exercise schedules or termination provisions at the time of grant of new options or later on with respect to any

outstanding option, without shareholder approval. We may not, without shareholder approval, extend the term of any option beyond 10 years from the original date of grant.

Our committee is also authorized to interpret the rules of the plans and effect non-material amendments including those of a housekeeping nature to the plans, without shareholder approval.

All amendments to the stock option plans are subject to regulatory and stock exchange approvals, when applicable.

The deferred share unit plan is designed to more closely link the interests of the executive officers to those of the shareholders. Deferred share units (DSUs) may be awarded to certain executive officers and other key employees and those of certain subsidiaries.

DSUs have the same value as BCE common shares. The number and terms of outstanding DSUs are not taken into account when determining if DSUs will be awarded and how many DSUs will be awarded under the plan. DSUs vest immediately.

Dividend equivalents in the form of additional DSUs are credited to the participant’s account on each dividend payment date and are equal in value to dividends paid on BCE common shares.

Executive officers can choose to have up to 100% of their annual short-term incentive award paid in DSUs instead of cash. The award is converted into DSUs based on the market value of a BCE common share on the day before the award becomes effective. These DSUs count towards the minimum share ownership requirements, which are described under Share ownership requirements.

We may also grant special awards of DSUs to recognize outstanding achievements or for reaching certain corporate objectives.

Holders of DSUs may not redeem their DSUs while they are employed by a company of the BCE group. Once they leave the BCE group, BCE will buy a number of BCE common shares on the open market equal to the number of DSUs a participant holds in the plan, after withholding taxes and any other deductions. These shares are then delivered to the former employee.

Share Ownership Requirements

BCE believes in the importance of substantial share ownership and has compensation programs designed to encourage share ownership by executive officers. A minimum share ownership level has been set for each position as a percentage of annual base salary:

n		President and Chief Executive Officer — 500%
n		Chief Operating Officer — 400%
n		Group Presidents7 and heads of major lines of business — 300%
n		other officers — 200%.

These officers must meet their target within five years (5-year target) with the objective that 50% of their target will be reached within 3 years (3-year target). The 5-year target must be reached by April 2006, or within five years of when they were hired or promoted if it was after April 1, 2001. Share ownership requirements also apply to all Vice-Presidents with a target of 100% of annual base salary.

Shares or DSUs received under the following programs can be used to reach the minimum share ownership level:

n		deferred share unit plan, described under Deferred share unit plan
n		employees’ savings plan, described in Other compensation information — Executive compensation table, footnote (7)
n		shares acquired and held by exercising stock options granted under BCE’s stock option plans, described under Long-term incentives, and
n		shares received upon payment of restricted share units, described under Mid-term incentive plan.

Concrete measures are taken if the 3-year target or the 5-year target is missed. These measures include, but are not limited to, the payment of a portion of the short-term annual incentive award in DSUs, the payment of RSUs in shares and, when BCE stock options are exercised, the requirement to hold BCE common shares having a market value equal to a portion of the net financial gain resulting from the exercise. These measures remain in effect until the target is reached.

Chief Executive Officer’s Compensation

When Mr. Sabia was appointed President and Chief Executive Officer in 2002, he asked that his current and future base salary and incentive compensation be adjusted to place more weight on variable (at risk) compensation. As a result, we reduced the mid-point of the salary range for the Chief Executive Officer from the median of the comparator group to 90% of that value (adjusted mid-point). At the same time, we increased the target value of the annual short-term incentive from 100% to 125% of base salary to preserve the alignment of the total cash compensation.

We believe, as mentioned in last year’s report, that the compensation of Mr. Sabia for 2004 was not fully competitive in the marketplace. As a result, in early 2005, we recommended and the board approved that Mr. Sabia’s base salary for year 2005 be set at $1.25 million. This is the adjusted mid-point for the comparator group.

We evaluate at the beginning of each year the performance of the Chief Executive Officer for the preceding year based on his contribution to the:

n		financial performance of BCE compared to financial targets set at the beginning of the year
n		progress of BCE in reaching its operating and strategic objectives
n		development of the executive team and succession planning
n		maintenance of BCE’s leadership in the telecommunications industry.

In 2005, BCE met or exceeded its 2005 guidance for revenue growth, cost reduction, earnings per share, free cash flow and capital intensity. Its revenues increased by 4% to $19.1 billion, with revenues from growth services outpacing the decline in the legacy business. BCE finished the year on a strong financial footing.

In the past year, BCE has made ongoing progress in lowering its cost structure and improving the customer experience. These continuing efforts are important in setting the foundations for the continued expansion of growth services and further improvements in their profitability.

In addition, BCE has recently announced a series of significant transactions to streamline BCE, to focus on its core telecom business and to surface significant value for shareholders — the latter amounting to approximately $7 billion.

Other compensation information

This section describes how the named executive officers are compensated, their pension arrangements and termination and other employment arrangements.

Executive compensation table

Compensation information for 2005, 2004 and 2003 for the President and Chief Executive Officer, the Chief Financial Officer and the three most highly compensated executive officers (on a BCE consolidated basis) other than the President and Chief Executive Officer and the Chief Financial Officer (our named executive officers) in 2005 is presented in the following table.

(1)		MR. SABIA was appointed Executive Vice-President of BCE and Vice-Chairman of Bell Canada on July 3, 2000. On December 1, 2000, he was appointed President of BCE while maintaining his responsibilities at Bell Canada. On March 1, 2002, he became President and Chief Operating Officer of BCE and Chief Operating Officer of Bell Canada. He became President and Chief Executive Officer of BCE on April 24, 2002 and Chief Executive Officer of Bell Canada on May 2, 2002. The board determined his compensation for 2005 according to our compensation policies. We paid his 2005 total compensation, but charged 40% of it to Bell Canada for services provided to Bell Canada.
		MR. VANASELJA was appointed Chief Financial Officer of BCE on January 15, 2001 and also Chief Financial Officer of Bell Canada on December 13, 2003. We paid his 2005 total compensation, but charged 40% of it to Bell Canada for services provided to Bell Canada.
		MR. WETMORE was appointed Vice-Chairman, Corporate of Bell Canada on March 1, 2002 and also Executive Vice-President of BCE on May 2, 2002. On June 1, 2003, he was appointed Executive Vice-President of Bell Canada while maintaining his responsibilities at BCE. In addition to his role at BCE, he became Group President — National Markets of Bell Canada on November 10, 2003. On October 19, 2005, MR. WETMORE was appointed Group President — Corporate Performance and National Markets of BCE and Bell Canada. Prior to March 1, 2002, he was President and Chief Executive Officer of Aliant, a subsidiary of Bell Canada. His 2005 total compensation was paid by Bell Canada, but 50% of it was charged to us for services provided to BCE.
		MR. PICHETTE was appointed Chief Financial Officer of Bell Canada on September 25, 2002. He was appointed Executive Vice-President of Bell Canada on December 1, 2003. On November 1, 2004, he was appointed President — Operations, Bell Canada. His 2005 total compensation was paid by Bell Canada.
		MRS. SHERIFF was appointed on secondment from SBC/Ameritech, Senior Vice-President — Product Management and Product Development of Bell Canada on May 31, 1999 and Chief Marketing Officer on January 26, 2000. She was hired by Bell Canada on June 16, 2001 as Chief Marketing Officer. On June 1, 2003, she was appointed President — Small and Medium Business. Her 2005 total compensation was paid by Bell Canada.
		The main terms of their employment with us are described under Pension arrangements and Termination and other employment arrangements.
(2)		The board believes that the company made considerable progress in 2004 especially with respect to the resolution of important labour negotiations, the development and implementation of the Galileo initiative and the company’s accelerated transition to Internet Protocol and a new generation of services. The board is of the view that MR. SABIA has made a particularly substantial contribution to this progress in 2004. By virtue of this contribution, the MRCC recommended and the board awarded him a short-term incentive in the amount of $1,475,000 for the year 2004. However, given the disruption in customer service that occurred in 2004 as a result of the implementation of the new wireless billing system and MR. SABIA’s belief in the final accountability of the CEO, he declined payment.
(3)		This column does not include an amount for perquisites and other personal benefits if they total less than $50,000 or 10% of the total of the annual salary and bonus, which is the disclosure threshold set by the laws that apply to us. Other types of annual compensation are disclosed in this column, as described below. For MR. SABIA, this includes an amount of $18,362 and $18,363 for payment of taxes on an additional life insurance policy of $10 million in his name for year 2005 and 2004, respectively. For MR. VANASELJA, this consists of a special compensation payment (SCP) of $315,190. Please see Management Resources and Compensation Committee (MRCC) Report — Long-term incentives for details.
		For MRS. SHERIFF, “Other annual compensation” consists of perquisites which includes an amount of $40,310, $42,050 and $38,238 for 2005, 2004 and 2003, respectively, to cover tuition fees for her children during a 5-year period ending June 2006 related to her transition from AT&T/SBC to Bell Canada.
(4)		Further to MR. WETMORE’s appointment as Group President — Corporate Performance and National Markets of BCE and Bell Canada, he received a grant of 200,000 options in 2005 which will vest at 100% on November 7, 2008.
		No other options were granted in 2005 as all executive officers received a grant of 2004-2006 Front-loaded options in 2004 for the 3-year performance period ending December 31, 2006. Please see MRCC Report — Long-term incentives and the tables under Stock Options for details.
		We do not grant freestanding stock appreciation rights (SARs) under our stock option plans.
(5)		DSUs have the same value as BCE common shares. The number of DSUs awarded was calculated using the closing price of BCE common shares on the TSX on the day preceding the effective date (3rd business day following the date the award is approved by the board). The dollar amount included in this table is the pre-tax value of the DSUs on the day the award was effective. This column includes DSUs granted as payment of the annual short-term incentive award. For 2003, this column also includes DSUs granted as payments made under the two-year capital efficiency incentive plan of Bell Canada for MR. VANASELJA, MR. PICHETTE and MRS. SHERIFF.