BFI Canada Income Fund Announces Results for the Three and Nine Months Ended September 30, 2006

BFI Canada Income Fund (the "Fund") (TSX: BFC.UN) today reported strong continuing financial results for the three and nine months ended September 30, 2006. The Fund's 2006 financial results include a full year to date contribution from IESI Corporation ("IESI") which was acquired by the Fund on January 21, 2005. Accordingly, the comparable nine month period ended September 30, 2005 excludes IESI's financial results for the period from January 1 to January 20, 2005. All amounts are in thousands of Canadian dollars, unless otherwise stated.

Management Commentary

"BFI Canada Income Fund set a new performance standard in the third quarter, outpacing our previous quarterly results in all areas," said Keith Carrigan, Vice Chairman and Chief Executive Officer. "On the strength of 9.7% organic revenue growth in the U.S. and 11.5% organic growth in Canada as well as contributions from seven "tuck-in" acquisitions completed so far this year, we achieved a new mark for consolidated quarterly revenue. We also translated this growth effectively into unitholder value. Year-over-year third quarter and year to date EBITDA(A) grew 13.1% to $64.5 million dollars, and 12.2% to $175.7 million dollars, respectively, while free cash flow available for distribution(B) increased 17.7% and 13.7% comparatively. Consequently, our payout ratio in the third quarter was 74.8% and 82.4% year to date. Excluding the positive effects of our foreign currency hedges, we achieved a comfortable payout ratio of 77.0% on the quarter and 84.8% year to date. This performance reflects the continuous development of our assets through our market-focused strategies, the momentum we're enjoying from our platform assets acquired over the past two years and a favourable economic climate."

Financial Highlights

- Revenues for three and nine months ended September 30, 2006 increased, when compared to a year ago, by 9.4% to $200.0 million, and 14.4% to $571.5 million, respectively. Excluding the impact of foreign currency exchange fluctuations and the impact of consolidating IESI's financial results for an additional 20 days in the nine months ended September 30, 2006, consolidated revenues increased 14.1% and 15.8% for the three and nine months ended September 30, 2006, respectively.

- Free cash flow available for distribution(B) increased to $38.8 million or 17.7% in the third quarter and grew 13.7% to $102.7 million on a year to date basis compared to a year ago.

- The Fund's payout ratio of 74.8% in the third quarter and 82.4% for the nine months ended, or 77.0% and 84.8% excluding the effects of foreign currency hedges, is in line with management's annual payout ratio target of sub 90.0%.

Other Highlights for the Three and Nine months Ended September 30, 2006

- Based on the Fund's performance and consideration of the current and forecasted foreign currency exchange rate, trustees of the Fund approved a 7.1% increase to distributions from an annual rate of $1.698 per trust unit to $1.818 per trust unit effective for the distribution paid on September 15, 2006 to unitholders of record on August 31, 2006. Distributions to holders of participating preferred shares have increased by an amount equal to the increase in per trust unit distributions paid to unitholders of the Fund.

- The Fund completed seven "tuck-in" acquisitions for the nine months ended September 30, 2006. Aggregate cash consideration, including payments in respect of contingent consideration, totalled approximately $16,100 and $19,700 for the three and nine months ended September 30, 2006, respectively.

- Effective February 10, 2006, the Fund, through BFI Canada Holdings Inc. ("Holdings"), entered into a Fourth Amended and Restated Credit Agreement. The amended and restated credit agreement increases the total available credit under the facility, subject to lender consent, from $80,000 to $120,000 and matures, subject to one year extensions, on June 30, 2010. Borrowing rates under the Fourth Amended and Restated Credit Agreement are more favourable than the predecessor credit agreement.

- Effective September 30, 2006, the Fund exercised a portion of the accordion feature available through its U.S. term loan and revolving credit facility which increased the facility to U.S. $450,000 in aggregate. Available lending under the U.S. term loan and revolving credit facility increased by U.S. $10,000 and U.S. $55,000 to U.S. $195,000 and U.S. $255,000, respectively.

- Effective March 10, 2006, the Fund, through IESI, amended its Amended and Restated Revolving Credit and Term Loan Agreement in the U.S. The amendments increased the total available credit under the facility, subject to lender consent, from U.S. $500,000 to U.S. $550,000 and borrowing rates under the amended credit agreement are more favourable than the predecessor credit agreement.

- The Fund drew U.S. $17,000 of variable rate solid waste disposal revenue bonds ("IRB"). A portion of the IRB proceeds was used to repay the Fund's U.S. revolving credit facility with the balance used to finance construction activities at the Seneca Meadows landfill.