Consolidated Financial Statements (Unaudited) (Restated)

2 Quarterly Report Three Months Ended June 30 2005 Consolidated Financial Statements (Unaudited) (Restated) Three months ended June 30, 2005 and 2004 (in thousands of Canadian dollars)

Second Quarter Report Three Months Ended June 30, 2005 Restated Notice of No Auditor Review of Interim Financial Statements Under National Instrument 51-102 Continuous Disclosure Obligations, Part 4, Subsection 4.3(3a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying unaudited interim financial statements of the Fund have been prepared by and are the responsibility of the Fund s management. The Fund s independent auditor, PricewaterhouseCoopers, has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity s auditor. Febr uar y6,2006 2

CanWel Building Materials Income Fund Second Quarter Report Three Months Ended June 30, 2005 Restated The accompanying notes are an integral part of these consolidated financial statements. CanWel Building Materials Income Fund Consolidated Balance Sheets (Unaudited) June 30, 2005 December 31, 2004 (in thousands of Canadian dollars) (Restated) (Note 13) $ (Restated) (Note 13) $ Assets Current assets Accounts receivable Trade 149,337 85,949 Other 1,735 2,533 Inventories 120,519 113,359 Prepaid expenses 1,849 2,712 Future income taxes 2,211 2,099 275,651 206,652 Property, plant and equipment 44,155 40,414 Future income taxes 1,454 Intangible assets 12,238 10,996 Goodwill (note 4) 1,843 2,673 Other assets 4,051 3,772 337,938 265,961 Liabilities Current liabilities Bank indebtedness 13,399 10,832 Accounts payable and accrued liabilities 103,558 78,747 Due to shareholder (note 6) 7,637 Distributions payable (note 8) 3,800 Current portion of long-term debt 2,851 3,992 123,608 101,208 Deferred gain 780 816 Future income taxes 130 Long-term debt 91,902 89,684 Pensions and other post-retirement benefits (note 7) 2,510 3,385 Non-controlling interest (note 4) 9,034 218,930 204,127 Unitholders Equity Unitholders Capital (note 8) 142,934 Share Capital (note 8) 69,534 Contributed Surplus (note 8) 1,302 878 Deficit (25,228) (8,578) 119,008 61,834 337,938 265,961 Contingencies and claims (note 9) Approved by the Board of Trustees (signed) Amar S. Doman (signed) Tom Donaldson Trustee Trustee 3

CanWel Building Materials Income Fund Second Quarter Report Three Months Ended June 30, 2005 Restated The accompanying notes are an integral part of these consolidated financial statements. CanWel Building Materials Income Fund Consolidated Statements of Earnings (Unaudited) Three months ended June 30, Six months ended June 30, (in thousands of Canadian dollars, 2005 2004 2005 2004 except per unit/share and unit/share amounts) (Restated) (Note 13)$ (Restated) (Note 3)$ (Restated) (Note 13)$ (Restated) (Note 3) Sales 301,123 176,329 529,166 301,009 Cost of sales 272,250 158,887 476,685 270,510 28,873 17,442 52,481 30,499 Expenses Distribution, selling and administration 18,456 9,190 38,302 18,974 Sodisco integration costs 54 584 Trust reorganization costs 1,158 1,158 Unit/stock-based compensation (note 8) 474 180 823 180 Depreciation related to business acquisition (note 5) 193 387 Depreciation 845 401 1,689 813 Amortization of intangible assets (note 3) 335 668 Amortization of deferred financing costs 36 72 21,551 9,771 43,683 19,967 Operating earnings before the following 7,322 7,671 8,798 10,532 Interest expense 1,610 1,060 3,042 2,108 Foreign exchange loss 5 48 84 16 Earnings before income taxes 5,707 6,563 5,672 8,408 Provision for income taxes Current 338 2,538 464 3,211 Future (note 3) 2,745 152 2,807 209 3,083 2,690 3,291 3,420 Net earnings for the period 2,624 3,873 2,402 4,988 Net earnings per unit/share (note 8) Basic 0.09 0.20 0.09 0.31 Diluted 0.09 0.20 0.09 0.31 Weighted average number of units/shares outstanding (note 8) Basic 28,700,300 19,062,816 26,551,500 15,947,884 Diluted 29,087,296 19,165,986 26,938,496 15,999,470 5

Second Quarter Report Three Months Ended June 30, 2005 Restated The accompanying notes are an integral part of these consolidated financial statements. CanWel Building Materials Income Fund Consolidated Statements of Cash Flow (Unaudited) Three months ended June 30, Six months ended June 30, 2005 2004 2005 2004 (in thousands of Canadian dollars) (Restated) (Note 13) $ (Restated) (Note 3) $ (Restated) (Note 13) $ (Restated) (Note 3) $ Cash flows from operating activities Net earnings for the period 2,624 3,873 2,402 4,988 Items not affecting cash Depreciation 1,038 401 2,076 813 Future income taxes 2,745 152 2,807 209 Net decrease in pensions and other post-retirement benefits (585) (297) (875) (370) Amortization of intangible assets 335 668 Amortization of deferred financing costs 36 72 Amortization of deferred gain (18) (18) (36) (28) Gain on disposal of property, plant and equipment (27) (25) Stock-based compensation 474 180 823 180 6,622 4,291 7,912 5,792 Changes in non-cash working capital items (note 11) (2,862) 3,779 (45,309) (35,572) 3,760 8,070 (37,397) (29,780) Cash flows from financing activities Increase (decrease) in revolving loan facility (63,391) 8,966 5,197 43,401 Decrease in shareholder loans (note 6) (10,010) (7,637) (10,079) Issue of units/shares 77,207 43,503 77,207 43,503 Unit/share issuance costs (6,440) (3,602) (6,440) (3,602) Dividends paid (15,252) (17,300) (15,252) (17,300) Repayment of long-term debt (3,142) (85) (4,126) (170) Redemption of preference shares (100) (100) (11,018) 21,372 48,949 55,653 Cash flows from investing activities Business acquisition (note 4) (10,159) Increase in short term investments (30,649) (30,649) Additions to other assets (159) (172) (351) (306) Purchase of property, plant and equipment (2,354) 425 (3,636) 4,875 Proceeds on disposition of property, plant and equipment 27 27 (2,486) (30,396) (14,119) (26,080) Decrease in cash (9,744) (954) (2,567) (207) Cheques written in excess of cash - Beginning of period (3,655) (962) (10,832) (1,709) Cheques written in excess of cash - End of period (13,399) (1,916) (13,399) (1,916) Supplemental cash flow information Cash paid for income taxes 3,313 1,402 4,159 4,756 Cash paid for interest 1,589 1,060 3,046 2,108 Non-cash investing and financing activities: Conversion of shareholder loans into common shares 5,668 5,668 Acquisition of property, plant and equipment through capital leases 260 779 6

CanWel Building Materials Income Fund 2 Quarterly Second Quarter Report Three Months Ended June 30, 2005 Restated Report Three Months Ended June 30 2005 Notes to the Consolidated Financial Statements (Unaudited) (Restated) 7

Second Quarter Report Three Months Ended June 30, 2005 Restated 1 Organization and Nature of Operations CanWel Building Materials Income Fund (the Fund ) is an unincorporated, open-ended, limited purpose trust established under the laws of the Province of Ontario pursuant to a Declaration of Trust dated April 5, 2005. The Fund was established for the purpose of investing in the hardware, building materials and allied products distribution and related businesses of CanWel Building Materials Ltd. ( CanWel ). Through its wholly owned subsidiaries, the Fund operates in Canada as a national distributor of hardware, building materials and allied products. The Fund s principal customers are major retailers in the building materials industry and the Fund markets its products primarily in Canada. Pursuant to a plan of arrangement ( the Arrangement ) which became effective May 18, 2005, the Fund acquired 100% of the shares of CanWel in exchange for units of the Fund and exchangeable partnership units in a majority owned partnership of the Fund. The common shares of CanWel had previously traded on the Toronto Stock Exchange ( TSX ). On May 18, 2005, units of the Fund commenced trading on the TSX in place of the common shares of CanWel. Additionally, pursuant to the Arrangement, the Fund issued 8,620,873 Fund units in an initial public offering at a price of $8.70 per unit for gross proceeds of $75,002 and incurred issuance costs of $6,440 ($4,206, net after future income taxes). Concurrent with the initial public offering, a significant holder of the Fund units undertook a secondary offering of 5,747,127 Fund units. During the three month period ended June 30, 2005, CanWel incurred and expensed professional fees and other costs of $1,158 in respect of the creation of the Fund. The transfer of the common shares of CanWel to the Fund was recorded at the carrying values of CanWel s assets and liabilities on May 18, 2005 in accordance with the continuity of interest method of accounting as the Fund is considered to be a continuation of CanWel. 2 Basis of Presentation The accompanying interim consolidated financial statements of the Fund have been prepared in accordance with accounting principles generally accepted in Canada for interim reporting. Accordingly, these interim consolidated financial statements do not include all of the financial statement disclosures required by Canadian generally accepted accounting principles for annual financial statements and, accordingly, should be read in conjunction with the CanWel s annual audited financial statements and notes for the year ended December 31, 2004 filed on www.sedar.com. The unaudited interim financial statements follow the same accounting policies and methods of computation as used in the 2004 financial statements of CanWel, except as disclosed in note 3 below. 3 New Accounting Policies Exchangeable Securities Issued by Subsidiaries of Income Trusts Effective May 18, 2005 the Fund adopted the CICA issued emerging issues committee abstract 151 ( EIC151 ), Exchangeable Securities Issues by Subsidiaries of Income Trusts. As the Exchangeable Partnership Units (Note 8) have substantially the same rights as the Fund Units in terms of distribution they have been accounted for in unit holders equity. 8

CanWel Building Materials Income Fund Second Quarter Report Three Months Ended June 30, 2005 Restated Intangible Assets Intangible assets represent assets acquired that have no physical substance and meet the specified criteria for recognition, other than goodwill. Intangible assets represent the unamortized fair value of the customer relationships of Sodisco-Howden Group Inc. ( Sodisco-Howden ), which fair value was determined effective December 31, 2004. Intangible assets are being amortized on a straight-line basis over 10 years. Amortization in the period ending June 30, 2005 is $668. Consolidation of Variable Interest Entities Effective January, 2005, CanWel adopted AcG-15, Consolidation of Variable Interest Entities (VIEs). VIEs are entities that are subject to control on a basis other than voting interests. The guideline provides specific guidance for determining when an entity is a VIE and when it should be consolidated. Every enterprise that has a financial interest in another entity must determine whether that interest exposes the enterprise to the expected losses or expected residual gains of the entity in which it has a financial interest. The enterprise with the majority of the expected losses or expected residual returns must consolidate the VIE. AcG-15 is effective for annual or interim periods commencing after November 1, 2004. The Fund has extended loans and advances to various entities which are included in other assets. These entities are VIEs and, in the opinion of management, could be subject to consolidation; however, due to the lack of specific information as required by the Guideline, the Fund has been unable to finally determine who would bear the majority of the expected losses or enjoy the majority of the residual returns. Accordingly, the Fund has not consolidated these entities. Accounting by a Customer for Certain Consideration Received from a Vendor In 2004, CanWel implemented, on a retroactive basis, the Emerging Issues Committee (the EIC ) of the CICA, EIC Abstract 144, Accounting by a Customer (including a Reseller) of Certain Consideration Received from a Vendor. The Abstract requires a customer to generally record cash consideration received from a vendor as a reduction in the price of the vendor s products and reflect it as a reduction to cost of goods sold and related inventory when recognized in the income statement and balance sheet. Certain exceptions apply where the cash consideration received is either a reimbursement of incremental selling costs incurred by the reseller, or is a payment for assets or services delivered to the vendor. As a result, the financial statements for the six months ended June 30, 2004 have been restated. The impact of the restatement on previously recorded balances, as at and for the three months ended June 30, 2004 and the six months ended June 30, 2004, is as follows: 3 months ended 6 months ended June 30, 2004 June 30, 2004 Increase (decrease) Cost of sales (65) 30 Income taxes 22 (11) Inventories (340) (340) Future income taxes 123 123 Deficit - Beginning of the period 260 198 9

Second Quarter Report Three Months Ended June 30, 2005 Restated Income Taxes The Fund qualifies as a mutual fund trust under the Income Tax Act (Canada). As such, the Fund is only taxable on income not allocated to unitholders. As substantially all of the taxable income is allocated to unit holders, no provision for income taxes has been made for earnings of the Fund. The Fund s subsidiaries follow the asset and liability method of accounting for income taxes whereby future income tax assets and liabilities are recognized based on differences between the bases of assets and liabilities used for financial and income tax purposes. Future income tax assets are recognized only to the extent that management determines that it is more than likely than not that the future income tax assets will be realized. Future income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment or substantive enactment. Following the reorganization of CanWel into the Fund, the provision for future income taxes was reduced by $2,068, reflecting the change from CanWel to the Fund. Comparative Figures Certain comparative figures have been reclassified to conform to the presentation adopted in the current year. 4 Business Acquisition As at December 31, 2004, CanWel had acquired 85.2% of the outstanding common shares of Sodisco- Howden for cash consideration of $57,611. On February 22, 2005, CanWel acquired the remaining 14.8% of the outstanding common shares of Sodisco-Howden for cash consideration of $10,159. In total, the company acquired all of the outstanding common shares of Sodisco-Howden for cash consideration of $67,770 and direct costs of $3,912. The acquisition of the remaining 14.8% of the outstanding common shares of Sodisco-Howden and the removal of the non-controlling interest has been allocated as follows: (Restated) (Note 13) $ Current assets (950) Current liabilities (283) Property, plant and equipment 2,184 Goodwill (830) Intangible assets - customer relationships 1,909 Other liabilities (6) Future income taxes (899) Non-controlling interest 9,034 10,159 Consideration; financed by long-term debt 10,159 10

CanWel Building Materials Income Fund Second Quarter Report Three Months Ended June 30, 2005 Restated The acquisition has been recorded under the purchase method of accounting whereby the purchase consideration was allocated to the estimated fair value of the assets acquired and liabilities assumed. The Fund has not yet finalized the allocation of the purchase cost of the acquisition as it is awaiting further information on future integration costs before determining the final cost. The preliminary allocation was determined by the Fund s management based on information furnished by the management of Sodisco- Howden and an independent valuation of intangible assets and property, plant and equipment. 5 Property, Plant and Equipment Assets acquired in period ended June 30, 2005 include $2,441 invested in a new computer system at Sodisco-Howden. Depreciation expense includes $387 representing depreciation of the excess of fair value over net book value of the capital assets of Sodisco-Howden as at December 31, 2004. 6 Due to Shareholder In December 2004, the principal shareholder loaned CanWel $7,637 which was repaid without interest on January 4, 2005. 7 Pension and Other Post Retirement Benefits Total net benefit expense of the pension and post-retirement benefit plans in the quarter ended June 30, 2005 was $344 (2004 - $519) and for the six months ended June 30, 2005 was $682 (2004- $1,036). 8 Unitholders /share Capital and Contributed Surplus The authorized capital of the Fund consists of an unlimited amount of trust units. Under the Arrangement, shareholders of CanWel transferred their common shares, directly or indirectly, to the Fund and received either two units of the Fund or two Exchangeable Partnership Units of a majority owned limited partnership of the Fund, CanWel Holdings Partnership. Exchangeable Partnership Units can be converted at the option of the holder from November 14, 2005 and, in certain circumstances at the option of the Fund, on a one to one basis for units of the Fund. The Exchangeable Partnership Units issued are included in the Unitholders capital contributions on the balance sheet and summarized in the table below. On May 18, 2005 the Fund completed an initial public offering of 8,620,873 units at $8.70 per unit. The aggregate proceeds from the offering, after $4,206 of issuance costs net of future income taxes, amounted to $70,796. 11

Second Quarter Report Three Months Ended June 30, 2005 Restated The following is a summary of changes in Unitholders equity from January 1, 2005 to June 30, 2005. Common stock Trust Units Number Amount Number Amount Contributed Total surplus $ $ $ $ Balance at December 31, 2004 and May 17, 2005 12,201,350 69,534 878 70,412 Shares exchanged for trust units (8,184,766) (46,644) 16,369,532 46,644 Shares exchanged for exchangeable partnership units (4,016,584) (22,890) 8,033,168 22,890 Trust units issued in a initial public offering for cash 8,620,873 75,002 75,002 Fund issuance costs - net of future income taxes (4,206) (4,206) Units issued pursuant to exercise of options 518,918 2,205 2,205 Contributed surplus transferred on exercise of options 399 (399) Stock based compensation 823 823 Balance at June 30,2005 33,542,491 142,934 1,302 144,236 The beneficial interest of the two classes of Fund units is as follows: (a) Fund Units Each unit is transferable and represents an equal undivided beneficial interest in any distribution of the Fund. Each unit held entitles the unit holder to one vote at all meetings of unitholders. Except as set out under the redemption rights below, the units have no conversion, retraction, redemption or pre-emptive rights. Units are redeemable at any time on demand by the holders. Upon receipt of a written redemption notice by the Fund, all rights to and under the units tendered for redemption shall be surrendered and the holder shall be entitled to receive a price per unit equal to the lesser of: (i) 90% of the market price of the units principal market on which the units are quoted for trading during the 10 trading day period commencing immediately subsequent to the date in which the units were surrendered to the Fund for redemption; and (ii) 100 % of the closing market price on the principal market on which the the units are quoted for trading on the redemption date. (b) Special Voting Units The Fund may issue special voting units from time to time to holders of record of securities. The special voting units shall be entitled to such number of votes at meetings of unitholders as may be determined by the trustees at the time of issuance but shall not be entitled to any distributions from the Fund. 12

CanWel Building Materials Income Fund Second Quarter Report Three Months Ended June 30, 2005 Restated Special voting units (each representing the same number of votes as one Unit of the Fund) have been issued to the holders of Exchangeable Partnership Units of the CanWel Holdings Partnership on the basis of one special voting unit for each Exchangeable Partnership Unit held. The breakdown of Fund units by class is follows: Number CanWel Building Materials Income Fund units 25,509,323 Special voting units issued to Exchangeable Partnership Unitholders 8,033,168 Total 33,542,491 Unit/Stock Option Plan CanWel had a stock option plan available to directors, employees and consultants. Under the plan, 1,220,135 common shares were available for issue. On May 18, 2005, in accordance with the Arrangement, 1,050,000 outstanding stock options of CanWel were converted into 1,050,000 Fund options which convert on exercise into 2,100,000 unit options of the Fund. The stock option plan was converted to a unit option plan at that time. The following is an analysis of the outstanding unit options: Unit Options Weighted average exercise price $ Stock options outstanding at December 31, 2004 and May 17, 2005 1,050,000 7.56 Unit options outstanding at May 18, 2005 (conversion date) 2,100,000 3.78 Forfeited (20,000) 4.25 Exercised (518,918) 4.25 Unit options outstanding at June 30, 2005 1,561,082 3.62 Exercisable - End of period 52,193 3.20 Available for future grant pursuant to the CanWel s stock option plan - End of period 0 Stock options granted by CanWel contained exercise prices, which were equivalent to the share price on the grant date. Consideration paid by holders on exercise of the stock options is credited to share capital. As at June 30, 2005, options to purchase 1,097,082 Fund units vest one half on each of May 13, 2006 and 2007. Additionally, options to purchase 464,000 Fund units vest monthly commencing May 13, 2005 at a rate of one thirty-sixth of the total. 13

Second Quarter Report Three Months Ended June 30, 2005 Restated The following table summarizes the unit options outstanding at June 30, 2005: Weighted average Weighted Exercise remaining average Number of price Number contractual life exercise price exercisable $ outstanding (years) $ options 2.125-4.25 1,561,082 9 3.62 39,304 The fair value of stock options granted is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: Expected dividend yield nil% Expected stock price volatility 30% Risk-free interest rate 4.75% Expected life of options (years) 10 The weighted average exercise price was $3.63 and the weighted fair value price at the date of grant was $4.25. Unit/Stock-based Compensation and Contributed Surplus For the quarter ended June 30, 2005, the Fund recorded $474 (2004 - $180) in stock-based compensation expense for options issued to option holders. Employee Unit/Stock Ownership Plan In 2004, the CanWel established an employee stock ownership plan ( ESOP ). The ESOP was effective January 1, 2005. On May 18, 2005 the ESOP was replaced with an Employee Unit Ownership Plan ( EUOP ) from the Fund that allows the EUOP to issue treasury-based units so that eligible employees of CanWel can purchase market-traded units of the Fund through payroll deduction. The Fund will make an employer s contribution of 15% of the issue price of the units. Treasury-based issuances will be made at the weighted average trading price for board lots of Fund units on the TSX for the five trading days immediately prior to the purchase date. Earnings per Unit/Share Earnings per unit is a calculation using the weighted average number of Fund units and exchangeable partnership units outstanding for the period. The weighted average number of Fund units and exchangeable partnership units is determined by relating the portion of time within the reporting period that the units have been outstanding to the total time in the period. In computing diluted earnings per unit, equivalent units are considered outstanding for all potential dilutive units, notwithstanding that certain vesting periods may not yet be complete. When the unit price is greater than the option price, the fully diluted number of units may be greater than the basic number of shares outstanding. The per unit and number of units/shares have been retroactively restated to reflect the 1:2 conversion of shares into units effective May 18, 2005. 14

CanWel Building Materials Income Fund Second Quarter Report Three Months Ended June 30, 2005 Restated Distributions/Dividends On June 21, 2005, the Fund declared a distribution of 11.33 cents per unit outstanding at June 30, 2005, payable July 20, 2005. On June 21, 2005, CanWel Holdings Partnership declared a distribution of 11.33 cents per Exchangeable Partnership Unit outstanding at June 30, 2005, payable July 20, 2005. On May 11, 2005, the Board of Directors of CanWel announced aggregate dividends of $1.25 per share to shareholders of record on May 17, 2005. This dividend was paid on May 20, 2005. 9 Contingencies and Claims Guarantee CanWel guaranteed a manufacturing equipment finance credit facility of a related party. The manufacturing equipment purchased by the related party was pledged as collateral for the credit facility. The maximum amount guaranteed under this facility was estimated at $1,553. On March 30, 2005, a fire consumed the manufacturing equipment and the related facility. During the quarter, CanWel was released from this guarantee as the related party satisfied its obligations under the credit facility. Claims During the normal course of business, certain product liability claims have been brought against the Fund and its suppliers. Management has contested the validity of these claims and believes that they are without merit and that any possible settlement will have no material effect on the financial position or future earnings of the Fund. Pursuant to the acquisition of Marchands Unis by CanWel s subsidiary Sodisco-Howden, a claim was made on behalf of the workers union. This case was decided in the Fund s favour on June 29, 2005 by the Labour Relations Commission of Quebec. The plaintiff has up to a two month period to decide whether to appeal. The Fund is currently unable to estimate the likelihood of an appeal being made. A supplier of freight services to the Fund has made a claim alleging a breach of contract in the amount of $269,000. The Fund believes there is no merit to this claim and will vigorously defend the matter; however, it is unable to estimate the outcome of the proceedings. 10 Currency Risk The Fund enters into foreign exchange contracts with financial institutions to hedge the value of foreign currency denominated sales and purchases. These foreign exchange contracts are not designated as hedging instruments. At June 30, 2005, foreign exchange contracts were outstanding to purchase US$1,000 (2004 - US$750) against future liabilities at an average exchange rate of $1.2387, all with maturities of less than one year. At June 30, 2005, foreign exchange contracts were outstanding to sell US$650 (2004 - nil) against future receivables at an average exchange rate of $1.2275, all with maturities of less than one year. The fair value of these foreign exchange contracts as at June 30, 2005 was $(12) (2004 - $8). 15

Second Quarter Report Three Months Ended June 30, 2005 Restated 11 Changes in Non Cash Working Capital Items Three months ended June 30 Six months ended June 30 2005 2004 2005 2004 (Restated) (Note 13) $ $ (Restated) (Note 13) $ $ Accounts receivable (15,169) (15,015) (62,995) (41,918) Inventories 21,079 14,195 (7,705) 3,403 Prepaid expenses 87 146 863 775 Accounts payable and accrued liabilities (8,859) 4,453 24,528 2,168 (2,862) 3,779 (45,309) (35,572) 12 Segmented Information The Fund operates in the wholesale building materials industry. The Fund has determined that its operations meet the aggregation criteria in the CICA Handbook, Section 1701, Segment Disclosures, and the criteria set out in EIC-115, Segment Disclosures. Accordingly, segmented information is not presented. The Fund had sales to the United States in the six months period ended June 30, 2005 of $5,647 (2004 - $4,632) and $2,891in the three months ended June 30, 2005 (2004-$2,695). Seasonal Pattern The Fund s business follows a seasonal pattern, with sales traditionally higher in the fiscal second and third quarters than the other quarterly periods. As a result, a higher share of total earnings is typically earned in the second and third quarters. The Fund s performance for the period ended June 30, 2005 is not necessarily indicative of such performance for the balance of the year. 13 Restated Results for Interim Statements for 2005 The acquisition of 85.2% of the outstanding common shares of Sodisco-Howden as at December 31, 2004, and subsequent acquisition by February 22, 2005 of the balance of such shares, was recorded using the purchase method of accounting whereby the purchase price paid was allocated to the estimated fair value of the assets acquired and liabilities assumed. The allocation was determined by the Fund's management based on information furnished by the management of Sodisco-Howden and an independent valuation of intangible assets and property, plant and equipment conducted at the time of the acquisition. In reviewing the values assigned to current assets and liabilities as part of the audit process for the 2005 fiscal year, management determined that certain adjustments are required to the purchase equation with respect to the accounting for cash discounts from suppliers and to customers and the determination of inventories in order to align the accounting policies of Sodisco-Howden with those of the Fund. 16

CanWel Building Materials Income Fund Second Quarter Report Three Months Ended June 30, 2005 Restated The consolidated financial statements of the Fund as at December 31, 2004 and for the quarters ending June 30 and March 31, 2005 have been restated to reflect the above described adjustments of the allocation of the purchase price for the Sodisco-Howden acquisition in December of 2004 and February of 2005. A summary of the restatement in these financial statements is as follows: December 31, 2004 June 30, 2005 As Restated As Originally As Restated As Originally Reported Reported Consolidated Balance Sheet Accounts receivable-trade 85,949 86,148 149,337 149,570 Inventories 113,359 115,919 120,519 122,760 Future income taxes-current 2,099 1,336 2,211 1,566 Goodwill 2,673 1,103 1,843 - Accounts payable and accrued liabilities 78,747 79,173 103,558 104,058 Deficit no change no change (25,228) (25,742) Three months ended Six months ended June 30, 2005 June 30, 2005 As Restated As Originally As Restated As Originally Reported Reported Consolidated Statement of Earnings Cost of Sales 272,250 272,759 476,685 477,448 Earnings before income taxes 5,707 5,198 5,672 4,909 Provision for future income taxes 2,745 2,579 2,807 2,557 Net earnings for the period 2,623 2,281 2,402 1,888 Net earnings per unit/share Basic 0.09 0.08 0.09 0.07 Diluted 0.09 0.08 0.09 0.07 Consolidated Statement of Cash Flows Net earnings for the period 5,272 3,659 2,402 1,888 Future income taxes (358) (884) 2,807 2,557 Changes in non-cash working capital items 13,257 15,396 (45,309) (44,545) 17

www.canwel.com Trustees Ian M. Baskerville Toronto, Ontario Peter Dhillon Richmond, British Columbia Amar S. Doman West Vancouver, British Columbia Tom Donaldson Calgary, Alberta Kelvin Dushnisky Toronto, Ontario Todd Grenich Seattle, Washington Stephen W. Marshall Vancouver, British Columbia Siegfried J. Thoma Portland, Oregon Transfer Agent CIBC Mellon Trust Company Vancouver, British Columbia Auditors PricewaterhouseCoopers LLP Vancouver, British Columbia Officers Amar S. Doman Chairman of the Board Tom Donaldson President & CEO Martin Hope Chief Financial Officer R.S. (Rob) Doman Corporate Secretary CanWel Building Materials National Office Suite 1510, 700 West Georgia St. Vancouver, British Columbia Canada Mailing Address P.O. Box 10034, Pacific Centre Vancouver, British Columbia Canada V7Y 1A1 Contact Phone: (604) 432-1400 Internet: www.canwel.com Stock Exchange Toronto Stock Exchange Trading Symbol: CWX.UN Solicitors Goodmans LLP Toronto, Ontario Davis & Company LLP Vancouver, British Columbia