Dexterra : Q4 2020 MD&A

Management's Discussion and Analysis

Three months and years ended December 31, 2020 and 2019

The following Management's Discussion and Analysis ("MD&A") prepared as at March 10, 2021 for Dexterra Group Inc. ("Dexterra Group" or the "Corporation"), provides information concerning Dexterra Group's financial condition and results of operations. This MD&A should be read in conjunction with the Corporation's audited Consolidated Financial Statements ("2020 Financial Statements") for the year ended December 31, 2020 and 2019. Additional information about the Corporation, including its Annual Information Form ("AIF") for the year ended December 31, 2020 can be found on SEDAR and sedar.com. Some of the information contained in this MD&A contains forward-looking statements that involve risks and uncertainties. See "Forward-Looking Information" for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results may differ materially from those indicated or underlying forward-looking information as a result of various factors including those described elsewhere in this MD&A and AIF.

On November 13, 2020, the shareholders of the Corporation approved a name change to Dexterra Group Inc. (previously Horizon North Logistics Inc. ("Horizon North")). The common shares now trade on the Toronto Stock Exchange ("TSX") under the ticker symbol "DXT". Adopting a new corporate name reflects the corporate transformation into a pan-Canadian, diversified support services organization and marks a new phase in the Corporation's history as it focuses on delivering quality solutions for the creation, management, and operation of infrastructure.

The accompanying 2020 Financial Statements of Dexterra Group as at and for the year ended December 31, 2020 and December 31, 2019 are the responsibility of Dexterra Group's management and have been prepared in accordance with International Financial Reporting Standards ("IFRS") and all amounts presented are in thousands of Canadian dollars unless otherwise indicated.

Financial Summary

Three months ended December 31,

Years ended December 31,

(000's except per share amounts)	2020	2019	2020	2019
Total Revenue(1) EBITDA(2)(4) Adjusted EBITDA(2)(4)(5) Operating income(4) Net earnings(3)(4) Earnings per share Basic(6) Diluted(6) Total assets Total loans and borrowings Net capital proceeds (spending)	$ 164,418 18,713 17,477 6,731 27 $ $ 0.00 0.00 $ 513,523 $ 85,369 $ (1,242)	$ 64,134 3,240 3,315 2,031 1,455 $ $ 0.04 0.04 $ 174,830 $ 5,453 $ (1,465)	$ 477,815 77,190 71,087 50,752 64,479 $ $ 1.25 1.24 $ 513,523 $ 85,369 $ 1,430	$ 261,059 16,465 16,540 12,826 9,304 $ $ 0.28 0.28 $ 174,830 $ 5,453 $ (3,869)

• (1) Revenue for the year ended December 31, 2020 includes $6.6 million related to amounts awarded on two legal proceedings with former customers.

• (2) Please refer to "Non-GAAP measures" for the definition of EBITDA and Adjusted EBITDA.

• (3) Net earnings for the three months and year ended December 31, 2020 includes $(4.2) million and $29.9 million, respectively Bargain purchase (reduction)/gain resulting from the Acquisition.

• (4) Includes $4.2 million and $32.9 million of pre-tax Canada Emergency Wage Subsidy for the three months and year ended December 31, 2020, respectively .

• (5) Non-recurring items excluded from Adjusted EBITDA for Q4 2020 relate to legal costs recovered through legal proceedings with a former customer and for the year ended December 31,

  2020 incrementally adjusts for acquisition costs and the revenue in item (1) above.

• (6) All share and per share data presented has been retroactively adjusted to reflect the share Consolidation discussed in the "Outstanding Shares" section of the MD&A.

Non-GAAP measures

Certain measures in this MD&A do not have any standardized meaning as prescribed by generally accepted accounting principles ("GAAP") and, therefore, are considered non-GAAP measures. Non-GAAP measures include "EBITDA", calculated as earnings before interest, taxes, depreciation, amortization, depreciation from equity investment, share based compensation, bargain purchase gain (reduction) and gain/loss on disposal of property, plant and equipment, "Adjusted EBITDA", calculated as EBITDA before acquisition costs, other revenue and non-recurring items, "EBITDA as a % of revenue", calculated as EBITDA divided by revenue, and "Free Cash Flow", calculated as net cash flows from (used in) operating activities, less maintenance capital expenditures, payments for lease liabilities and finance costs, to provide investors with supplemental measures of Dexterra Group's operating performance and thus highlight trends in its core businesses that may not otherwise be apparent when relying solely on GAAP financial measures. Dexterra Group also believes that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation of issuers. Dexterra Group's management also uses non-GAAP measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets, and to determine components of management compensation.

These measures are regularly reviewed by the Chief Operating Decision Maker and provide investors with an alternative method for assessing the Corporation's operating results in a manner that is focused on the performance of the Corporation's ongoing operations and to provide a more consistent basis for comparison between periods. These measures should not be construed as alternatives to net earnings and total comprehensive income determined in accordance with GAAP as an indicator of the Corporation's performance. The method of calculating these measures may differ from other entities and accordingly,

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Management's Discussion and Analysis

Three months and years ended December 31, 2020 and 2019

may not be comparable to measures used by other entities. For a reconciliation of these non-GAAP measures to their nearest measure under GAAP please refer to "Reconciliation of non-GAAP measures".

Management's Discussion and Analysis

Core Business

Dexterra Group is a publicly listed corporation (TSX: DXT.TO) delivering quality solutions to create, manage and operate infrastructure, offering both experience and regional expertise across Canada under its three operating business units: Facilities Management, Workforce Accommodations, Forestry and Energy Services ("WAFES"), and Modular Solutions.

Our Facilities Management business delivers operations and maintenance solutions for built assets and infrastructure in the public and private sectors, including aviation, defense, retail, healthcare, education and government. Our WAFES business provides a full range of workforce accommodations solutions, forestry services and access solutions to clients in the mining, forestry, construction and other natural resource sectors. Our Modular Solutions business integrates modern design concepts with off-site manufacturing processes to produce high-quality building solutions for social and affordable housing, commercial, residential and industrial clients. As a result of our diverse product and service offerings, Dexterra Group is uniquely positioned to meet the needs of our customers in numerous sectors across Canada.

On May 29, 2020, Dexterra Group (previously Horizon North) entered into a transaction (the "Acquisition") with 10647802 Canada Limited, operating as Dexterra Integrated Facilities Management ("Dexterra"), a subsidiary of Fairfax Financial Holdings Limited ("Fairfax Financial"). Pursuant to the Acquisition, the Corporation acquired all of the outstanding common shares of Dexterra and in exchange issued 31,785,993 common shares of Dexterra Group to Dexterra's sole shareholder, 9477179 Canada Inc. ("Dexterra Parent"), a wholly-owned subsidiary of Fairfax Financial. Accordingly, Fairfax Financial indirectly owns a 49% interest in the combined Corporation, while existing shareholders of the Corporation maintain a 51% interest. Prior to the Acquisition, Fairfax Financial had no ownership interest in Dexterra Group.

For accounting purposes, the Acquisition constituted a reverse acquisition that involved a change of control of Dexterra Group and a business combination of Horizon North and Dexterra, to form a new corporation that now carries on operations as Dexterra Group Inc. Based on the guidance in IFRS 3, Business Combinations ("IFRS 3"), it was determined that Horizon North was the accounting acquiree and Dexterra was the accounting acquirer, as Fairfax Financial, the sole shareholder of Dexterra, now controls the Corporation. As a result, 2019 comparative information included herein is solely Dexterra. Horizon North financial results are included subsequent to the Acquisition closing date. Refer to Note 4 of the 2020 Financial Statements for further information.

Consolidated Results for 2020

Annual sales totaled $477.8 million compared to $261.1 million in the prior year, an increase of $216.7 million, primarily due to the Acquisition and partially offset by the pandemic impact on the legacy Facilities Management results. The Corporation reported consolidated net earnings of $64.5 million compared to consolidated net earnings of $9.3 million in the prior year. The net earnings increase of $55.2 million includes a $29.9 million non-cash bargain purchase gain ("BPG") related to the Acquisition. This BPG was based on the fair value of the consideration received by Fairfax Financial which was equal to the share price at the close date in the amount of $100.9 million. The BPG equates to the difference between the estimated fair value of the net assets acquired of Horizon North of $130.8 million and the consideration received by Fairfax Financial, as disclosed in the 2020 Financial Statements.

Fourth Quarter Results and Overview

Highlights

• • Consolidated Q4 2020 revenue of $164.4 million and EBITDA of $18.7 million,an increase of $100.3 million and $15.5 million respectively, when compared to Q4 2019. The increase is mainly attributable to $97.3 million of revenue from the Acquisition.

• • Net earnings increased by $2.8 million when compared with Q4 2019, excluding the non-cash bargain purchase reduction of $4.2 million in Q4 2020 with the finalization of the purchase price equation related to the Acquisition;

• • Dexterra Group generated net cash flows from operating activities in Q4 2020 of $34.0 million, compared to the $2.5 million used in Q4 2019, an increase of $31.5 million, primarily reflecting improvements in EBITDA and in accounts receivable collections;

• • Consolidated Adjusted EBITDA for Q4 2020 was $17.5 million compared to $3.3 million in 2019 and included $4.2 million from the Canada Emergency Wage Subsidy ("CEWS") program;

• • The Facilities Management business had Q4 2020 revenue of $38.5 million, a decrease of $6.2 million or 14% from Q4 2019. EBITDA for the same period was $2.6 million, a decrease of $0.6 million when compared to Q4 2019;

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Management's Discussion and Analysis

Three months and years ended December 31, 2020 and 2019

• • The Modular Solutions business had Q4 2020 revenue of $48.2 million and EBITDA of $4.4 million. Revenue in Q4 2020 increased by $8.7 million when compared to Q3 2020. Backlog1 for social housing was $61.2 million at December 31, 2020, excluding recurring modular business for school portables and specialty commercial structures worth approximately $40 million per annum. Continued growth in Modular solutions revenues in the back half of 2021 and beyond is expected;

• • The WAFES business had Q4 2020 revenue of $78.2 million, an increase of 302%, from Q4 2019. EBITDA for the same period was $14.4 million, an increase of$12.6 million when compared to Q4 2019;

• • The Corporation has leased a facility in Cambridge, Ontario for NRB Modular Solutions. The capital cost of the plant is estimated to be $7 million and it will provide incremental annual production capacity in excess of $100 million. The facility will be operational by the end of the second quarter of 2021 and will ramp-up production through the remainder of 2021; and

• • Dexterra Group paid a dividend of $0.075 per share on January 15, 2021 to shareholders of record on December 31, 2020, and declared a dividend for the first quarter of 2021 of $0.075 per share. The dividend is payable to shareholders of record at the close of business on March 31, 2021, to be paid on April 15, 2021.

Operational Analysis

EBITDA:

Facilities Management

WAFES

Modular Solutions

Total EBITDA(1)

Other Revenue

Corporate and non-recurring items(2)

Total Adjusted EBITDA(1)

(000's)	2020	2019	2020	2019
Revenue: Facilities Management WAFES Modular Solutions Inter-segment eliminations	$ 38,522 78,225 48,212 (541)	$ 44,698 19,436 - -	$ 147,229 234,681 98,767 (2,862)	$ 166,761 94,298 - -
Total Revenue	$ 164,418	$ 64,134	$ 477,815	$ 261,059

$ 2,609 14,391 4,360	$ 21,345 57,245 10,636
21,360	4,939	89,226
- (3,883)	- (1,624)	(6,569) (11,570)
$ 17,477	$ 3,315	$ 71,087

Three months ended December 31,	Years ended December 31,
$	9,778
11,403
-
21,181
(6,569)	-
(11,570)	(4,641)
$	16,540

• (1) Includes CEWS of $4.2 million and $32.9 million for Q4 2020 and the year ended December 31, 2020, respectively.

• (2) Includes $1.3 million of legal cost recoveries in Q4 2020 which was applied against expenses and relates to the legal settlement award in Q3 2020 and for the year ended December 31, 2020 incrementally adjusts for transaction costs and $6.6 million awarded in two legal proceedings.

Facilities Management

For 2020, Facilities Management revenues were $147.2 million and decreased by $19.6 million or 12% from the $166.8 millionin 2019. Facilities Management revenue decreased primarily due to the temporary closure or reduction in operations at certain facilities as a result of COVID-19. In particular, the aviation and retail sectors decreased by $32.1 million compared to 2019. This was partially offset by new business.

EBITDA as a percentage of revenue increased to 14% in 2020 from 6% in 2019 due to the inclusion of $13.7 millionCEWS in 2020. When adjusting for wage subsidies, EBITDA margin decreased to 5% for 2020 in comparison to 6%for the same period in the prior year, mainly due to the increased costs in the healthcare and defense sector, and other costs associated with operating in COVID-19 environment. See "Non-GAAP measures" above for the definition of "EBITDA as a percentage of revenue".

Facilities Management revenues in Q4 2020 were $38.5 million, which represents a decrease of $6.2 million or 14% from the $44.7 million in Q4 2019. Facilities Management revenue decreased primarily due to lower aviation and retail revenue, which decreased by $8.4 million compared to Q4 2019. This was partially offset by new business.

EBITDA as a percentage of revenue was consistent at 7% in both Q4 2020 and Q4 2019 due to the inclusion of$1.0 million in CEWS in Q4 2020 which offset the decrease in revenue from Q4 2019. When adjusting for wage subsidies, EBITDA margin was

1 Backlog is the total value of work that has not yet been completed that: (a) has a high certainty of being performed based on the existence of an executed contract or work order specifying job scope, value and timing; or (b) has been awarded to Dexterra Group, as evidenced by an executed letter of award or agreement, describing the general job scope, value and timing of such work, and where the finalization of a formal contract in respect of such work is reasonably assured and expects to be recognized in the next 12 months.

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Management's Discussion and Analysis

Three months and years ended December 31, 2020 and 2019

4% for Q4 2020 or 3% lower than Q4 2019, due to a restructuring and reorganization in Q4 2020, the increased costs in the healthcare and defense sector, and other costs associated with operating in a COVID-19 environment.

Direct Costs

Direct Costs for the year ended December 31, 2020 were $121.8 million compared to $153.7 million in 2019, a decrease of $31.9 million or 21% mainly due to the inclusion of $13.7 million CEWS in 2020 and decreased activity. When adjusting for wage subsidies, direct costs as a percentage of revenue were at 92% in 2020 which is consistent with the prior year.

Direct Costs for Q4 2020 were $34.8 million compared to $40.7 million in Q4 2019, a decrease of $5.9 million or 14%, mainly due to the inclusion of $1.0 million in CEWS in Q4 2020 and the decrease in costs associated with the lower revenue. When adjusting for wage subsidies, direct costs as a percentage of revenue were at 93% in Q4 2020 compared to 91% in Q4 2019.

Workforce Accommodations, Forestry and Energy Services ("WAFES")

WAFES is comprised of two revenue streams: Workforce accommodations & Forestry and Energy Services.

WAFES revenue performance has been strong in a COVID-19 environment. Revenues from the WAFES segment for the year ended December 31, 2020 were $234.7 million, an increase of $140.4 million compared to same period in 2019. The increase in segment revenues was primarily driven by the Acquisition which added $132.5 million of revenue. Also, WAFES had other revenue of $6.6 million related to amounts awarded for legal proceedings with two former customers.

For 2020, EBITDA as a percentage of revenue increased to 24% from 12% in the same period in 2019 mainly due to the inclusion of $14.7 million CEWS and $6.6 million in legal settlements. When adjusting for wage subsidies and the legal settlements, EBITDA as a percentage of revenue is at 15.3% which is an increase of 3% compared to 2019. This increase in margin is related to stronger occupancy at higher margin camps.

Revenues from the WAFES segment for Q4 2020 were $78.2 million, an increase of $58.8 million compared to Q4 2019. The increase in Q4 2020segment revenues was primarily driven by the Acquisition which added $49.6 million of revenue growthin catering and infrastructure install and rental activities.

EBITDA as a percentage of revenue increased to 18% in Q4 2020 from 9% in Q4 2019 mainly due to the inclusion of $2.8 millionCEWS and stronger occupancy at higher margin camps. When adjusting for wage subsidies, EBITDA as a percentage of revenue is 15% which is an increase of 6% compared to Q4 2019. This increase in margin is related to stronger occupancy at higher margin camps.

Workforce accommodations and forestry revenue

Revenues from workforce accommodations and forestry for 2020 were $216.3 million, an increase of $122.0 million when compared to 2019. The increase in revenues was primarily driven by the Acquisition. When adjusting 2020 revenue to remove acquisition related revenue of $114.1 million, revenue for the workforce accommodation and forestry increased by $7.9 million. The increase in revenue was primarily due to increased activity under catering, infrastructure install and rental activities as a result of new contracts that started in Q1 2020, which was partially offset by a decrease in seasonal work under forestry services, mainly for fire camps and firefighting services and reductions in revenue associated with temporary closure and reduction in operations at certain client facilities as a result of COVID-19.

Revenues from workforce accommodations and forestry for Q4 2020 were $71.8 millionand increased by $52.3 millioncompared to Q4 2019. The increase in Q4 2020 was mainly driven by the Acquisition. When adjusting Q4 2020 revenue to remove Acquisition related revenue of $43.1 million, revenue for the workforce accommodation and forestry increased by $9.2 million to $28.6 million. This was due to increased activity in catering and infrastructure install and rental activities.

Energy Services

Revenues from energy services were $6.5 million and $18.4 million for the three months and year ended December 31, 2020, respectively. The energy services business was part of the Acquisition. Revenue for energy services is primarily from mat and relocatable structures rentals combined with equipment sales and installation. The Corporation has temporarily closed the mat manufacturing plant due to lower business activity, however, the relocatables structures business experienced high utilization throughout 2020.

Direct Costs

Direct costs in the WAFES business unit for the year ended December 31, 2020 were $175.1 million or 75% of revenue compared to $81.3 million or 86% of revenue for 2019. Direct costs in 2020 includes $101.3 million of costs associated with the acquired operations, partially offset by $14.7 million of CEWS. When adjusting for wage subsidies, direct costs were 81% of

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