--------------------

(1) The average of the daily buying rates during the applicable period.
(2) Noon buying rate on last banking day.

See accompanying notes

Reference is made to Note 2 of these Condensed Consolidated Interim Financial Statements and to the Notes to the Consolidated Financial Statements which appear in the Company's 1999 Consolidated Financial Statements, including Note 1 on "Financial Statement Presentation". The significant accounting policies disclosed therein apply to these condensed consolidated interim financial statements.

As further described in Note 4, the accounting policies followed by the Company differ in certain respects from those that would have been followed had these condensed consolidated interim financial statements been prepared in conformity with the accounting principles generally accepted in the United States ("U.S. GAAP") and the accounting principles and practices required by the United States Securities and Exchange Commission ("SEC").

These condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles on a going concern basis which presumes the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. The Company's ability to continue as a going concern is dependent upon its ability to achieve profitable operations and upon continuing to generate positive cash flow from operations (See Note 1 to the 1999 Consolidated Financial Statements). These condensed consolidated interim financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue in business.

Effective January 1, 2000 the Company has adopted the CICA recommendations related to the accounting for employee future benefits. The standard outlines guidance for the accounting for pensions and post retirement/post employment benefit costs. In accordance with the transitional provisions of the new standard, the Company has applied the recommendations on a retroactive basis but not restated prior periods. The cumulative effect of the adoption of the new standard, a charge of $14.5 million, has been reflected as an adjustment to opening retained earnings.

Raw materials include chemicals, chips and logs used in the production of pulp, paper and lumber. Work in process and finished goods include pulp, paper and lumber.

The condensed consolidated interim financial statements have been prepared in accordance with Canadian GAAP. The following summary sets out the material adjustments to the Company's reported net loss which would be made in order to conform with U.S. GAAP and the accounting principles and practices required by the SEC. For information on the nature of these adjustments, refer to Note 22 of the Company's 1999 Consolidated Financial Statements.

See Note 11 to the Company's 1999 Consolidated Financial Statements.

During the first quarter of 2000, 11 million options were granted at an exercise price of $0.13 per share. Five million of these options are fully vested and 6 million are exercisable as to 20% immediately and 20% on each of the first, second, third and fourth anniversaries of the date of grant.

On May 4, 2000, shareholders of the Company approved the repricing of 19 million options previously granted from $0.235 per share to $0.13 per share, and 4,069,615 options also previously granted, were subsequently cancelled.

The Company has outstanding U.S.$45 million, 6% Convertible Subordinated Debentures maturing June 30, 2005. They are convertible into Common Shares at the option of the holder on the business day prior to maturity at U.S.$0.35 per share.

In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements (SAB 101), which among other guidance clarifies certain conditions to be met in order to recognize revenue. The Company has reviewed the provisions of SAB 101 and believes that it is in compliance.

       In the action commenced by Mr. F. Steven Berg in the County of New York naming the Corporation as defendant and seeking a declaratory judgment that Mr. Berg's employment agreement is a valid and binding corporate obligation of the Corporation and damages for its breach, Mr. Berg has brought a motion for summary judgment. The Corporation has replied asking the court to deny the motion. The court has not yet heard argument on the motion.

       Mr. Berg has brought a motion seeking to dismiss, or alternatively to stay, the action commenced by TD Asset Management Inc. ("TDAM") in the Ontario Superior Court of Justice against the Corporation, Mr. F. Steven Berg and two former directors of the Corporation, namely, Clifford M. Sifton and Stephen W. Phillips. TDAM has filed an affidavit responding to this motion and is asking the court to allow it to proceed with its suit. The court has not yet heard argument on the motion.

On March 20, 2000, Mr. Berg filed a Notice of Dismissal, voluntarily dismissing, without prejudice, the action he brought against Stephen Larson, the Corporation's President and Chief Executive Officer, and The Toronto-Dominion Bank in the United States District Court of the Southern District of New York.

Certain of the comparative figures have been reclassified to conform to the presentation adopted for the current year.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

FINANCIAL REVIEW (IN CANADIAN DOLLARS UNLESS OTHERWISE NOTED)

Our first quarter results were a good start to what should be a much improved year for Repap. Record paper production, record paper shipments, good cost control and solid market conditions for our products combined to generate an EBITDA* of $42.6 million. Looking to the second quarter, further price increases for both coated paper and kraft pulp have been implemented effective April 1, 2000.

The Company reported a net loss in the first quarter of 2000 of $12.5 million or 2 cents per share, compared to a net loss of $9.3 million or 1 cent per share in the first quarter of 1999. As discussed below, the major cause for this increase in net loss was the higher amortization of a 1992 non-cash currency hedge offset by higher operating profit from both the coated paper and pulp segments.

Net Sales increased 2.3% to $148.3 million in the first quarter of 2000 from $145.0 million for the same quarter last year. The increase was primarily due to higher selling prices for coated paper and kraft pulp and higher coated paper shipments offset by the impact of a stronger Canadian dollar. In addition, net sales in this quarter were impacted negatively by the amortization of the 1992 non-cash currency hedge of $9.4 million compared to $1.2 million in the corresponding quarter of 1999.

Net sales for the first quarter were down $9.3 million from the fourth quarter of 1999 due to the higher 1992 non-cash currency hedge ($9.4 million compared to $1.7 million) and to lower shipments of pulp. These negative variances were partially offset by higher selling prices for coated paper and pulp.

Shipments of coated paper totaled a record 127,200 tons during the first quarter, up 8.4% over shipments of 117,300 in the corresponding quarter last year, and up slightly over shipments of 126,200 tons in the fourth quarter of 1999. Finished goods inventory at the end of the quarter was 13,600 tons, down 32% from the prior year first quarter level of 20,000 tons and essentially flat with the end of the fourth quarter of 1999.

Average selling prices for coated paper were up by U.S.$15 per ton in the first quarter of 2000 compared to the first quarter last year and up U.S.$20 per ton from the fourth quarter of 1999. A further price increase of U.S.$60 per ton was implemented in April 2000. Net sales from coated paper were $136.8 million in the first quarter of 2000 compared to $127.7 million in the first quarter of 1999, an increase of $9.1 million or 7.1%. Of this increase, $14.5 million is related to higher sales volume and increased selling prices offset by the impact of a stronger Canadian dollar ($5.4 million). Net sales were also up by $3.6 million or 2.7% from fourth quarter sales of $133.2 million, reflecting mainly the impact of higher selling prices.

Shipments of kraft pulp totaled 22,400 metric tons during the first quarter compared to 22,600 in the corresponding quarter last year, and compared to 31,400 metric tons in the fourth quarter of 1999.

Shipments in the fourth quarter were higher due to efforts to bring inventories down to minimum levels by year end and first quarter shipments were seasonally lower as we built inventories at quarter end in anticipation of our scheduled semi-annual kraft pulp mill maintenance shutdown, which was successfully completed in early April.

Average selling prices for kraft pulp were up by U.S.$119 per metric ton in the first quarter 2000 compared to the first quarter last year and up U.S.$20 per metric ton over the fourth quarter. A further price increase of U.S.$40 per metric ton was implemented in April 2000. Net market sales from kraft pulp were $15.9 million in the first quarter of 2000 compared to $14.2 million in the first quarter of 1999, an increase of $1.7 million or 12.0%. This increase is primarily due to pricing. Net sales for the quarter were, however, $4.2 million below fourth quarter sales of $20.1 million due mainly to lower shipments.

Shipments of lumber totaled 12.2 million board feet during the first quarter of 2000 compared to 11.0 million board feet in the corresponding quarter last year and 14.5 million board feet in the fourth quarter, reflecting seasonality.

Average selling prices for lumber were up by U.S.$19 per thousand board feet from the first quarter 1999 compared to the first quarter of 2000. Net sales from lumber were $5.0 million in the first quarter of 2000 up slightly over the $4.3 million reported in the first quarter of 1999. Sales were down $1.1 million from fourth quarter sales of $6.1 million, reflecting lower shipments due to seasonality.

Cost of sales before depreciation and amortization expense increased by $9.8 million or 9.8% from $99.6 million in the first quarter of 1999 to $109.4 million in the first quarter of 2000, due primarily to increased shipments of paper ($7.2 million) and higher kraft pulp manufacturing costs. Cost of sales were $8.3 million below fourth quarter 1999 costs of $117.7 million, due to lower shipments of pulp and lower costs.

Depreciation and amortization totaled $14.7 million in the first quarter of 2000, down $2.5 million from $17.2 million in the first quarter of 1999, primarily as a result of lower amortization of foreign exchange losses offset by increased depreciation.

Selling, administration and research expenses decreased by $1.9 million from $7.6 million in the first quarter of 1999 to $5.7 million in the first quarter of 2000, primarily due to lower wages and benefits. As a percentage of net sales, selling, administration and research expenses were 3.8% in the first quarter of 2000 compared to 5.2% in the first quarter of 1999.

Operating profit decreased by $2.1 million to $18.5 million in the first quarter of 2000 from $20.6 million in the first quarter of last year. The decrease primarily reflects the impact of the higher amortization of the 1992 non-cash currency hedge of $8.2 million offset by higher paper shipments, pulp pricing and the impact of the ongoing cost reduction program.

EBITDA increased by $3.6 million from $39.0 million in the first quarter of 1999 to $42.6 million in the first quarter of 2000. The increase reflects the impact of the items identified in the foregoing discussion. EBITDA for the first quarter also increased by $6.2 million from the fourth quarter of 1999 EBITDA of $36.4 million, reflecting improved pricing and lower costs.

Interest expense increased by $2.8 million to $30.9 million in the first quarter of 2000 from $28.1 million in the first quarter of 1999, reflecting the impact of higher borrowing by Repap New Brunswick as a result of a U.S.$100 million Senior Secured Note financing completed in May 1999.

Miscellaneous income was $0.6 million in the first quarter of 2000 compared to an expense of $1.2 million in the same quarter of 1999, a favorable change of $1.8 million. A foreign exchange loss was recorded in the first quarter of 1999. The first quarter of 2000 reflects the realization of interest income.

Net loss increased to $12.5 million in the first quarter of 2000 from $9.3 million in the first quarter of 1999 and $10.1 million in the fourth quarter. This increase reflects the impact of the items identified in the foregoing discussion.

The Company generated $12.0 million in cash from operations in the first quarter of 2000 compared to $9.3 million in the corresponding quarter of 1999. Non-cash working capital changes used cash of $2.1 million in the first quarter compared with a cash generation of $8.1 million in the corresponding quarter in 1999. The cash generated from operations after working capital in the first quarter was used primarily to finance capital expenditures of $2.4 million and to increase cash reserves. The Company also had cash and short-term deposits on hand of $72.7 million at March 31, 2000.

During the second quarter of 2000, the Company has debt servicing requirements of approximately $44.1 million, of which $27.0 million relates to a semi-annual interest payment on the 10 5/8% Second Priority Senior Secured Notes. This payment was made on April 14, 2000. The balance of approximately $17.1 million relates primarily to a semi-annual interest payment on the 9% First Priority Senior Secured Notes and to a quarterly interest payment on the First Priority Floating Rate Senior Secured Loans. These payments are due in June.

Industry Mill inventories of coated groundwood were at 131,000 tons at the end of March 2000. They have been relatively flat for the past six months and are well below their 327,000 ton peak in May of 1996.

On the other hand, reported buyer inventories have come down in six of the last seven months. They were at 420,000 tons at the end of February 2000 compared to a peak of 747,000 tons in July 1998. February 2000 buyer inventories were lower than at any time in 1998.

Coated groundwood shipments from U.S. producers were up 3.9% or 40,000 tons in the first quarter of 2000 compared to the first quarter of 1999. All end users registered healthy demand for lightweight coated paper with magazines up 3.2% and commercial printing up 4% from last year's first quarter. Most forecasts still project a stronger second half with lightweight coated paper basic demand increasing and operating rates averaging 97%.

Year 2000 Computer Issue
The Year 2000 Issue arises because many computerized systems use two digits rather than four to identify a year. Date-sensitive systems may recognize the year 2000 as 1900 or as some other date, resulting in errors when information using year 2000 dates is processed. In addition, similar problems may arise in some systems that use certain dates in 1999 to represent something other than a date. The effects of the Year 2000 Issue may be experienced before, on, or after January 1, 2000, and if not addressed, the impact on operations and financial reporting may range from minor errors to significant systems failures that could affect an entity's ability to conduct normal business operations. Although the change in date has occurred, it is not possible to conclude that all aspects of the Year 2000 Issue that may affect the entity, including those related to the efforts of customers, suppliers, or other third parties have been fully resolved.

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results and company plans and objectives to differ materially from those expressed in the forward-looking statements. Such risks and uncertainties include, but are not limited to, changes in the United States and international economies; changes in worldwide demand for the company's products; changes in worldwide production and production capacity in the forest products industry; competitive pricing pressures for the company's products; changes in raw material, energy, and other costs; and currency fluctuations.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Currency
The profitability level of Repap's Canadian operations is sensitive to fluctuations in foreign exchange rates as most of their revenues are derived in U.S. dollars. A U.S.$0.01 variation in exchange rates affects Repap's cash flow by approximately $4.7 million. The competitiveness of Repap's operations in world markets depends on the relative strength of the currency in the countries of competitive producers. Prior to May 1999, Repap had foreign exchange contracts in effect to hedge expected future revenues denominated in U.S. dollars. Subsequent to May 1999, Repap no longer has such currency contracts in place and is therefore exposed to fluctuations in the Canadian/U.S. exchange rate.

In April 2000, Repap New Brunswick entered into a new US$100 million, 18-month foreign exchange facility. As of May 4, 2000, approximately US$86 million of foreign exchange contracts had been entered into under this facility.

At March 31, 2000, approximately 97% of Repap's consolidated borrowings of approximately Cdn.$1.2 billion were in U.S. dollars.

Repap is naturally hedged against the exchange risk associated with holding U.S. dollar debt. Since most of Repap's products are sold in U.S. dollars, U.S. dollar revenue streams should be sufficient to accommodate any U.S. dollar principal repayment as it falls due. Repap has chosen to issue primarily U.S. dollar denominated debt because of this natural hedge and to take advantage of interest rates available on U.S. dollar denominated debt which have, at times, been significantly less than corresponding rates on Canadian dollar-denominated debt.

Accordingly, effective July 1, 1992, Repap designated future U.S. dollar revenue streams as effective hedges against currency risks related to U.S. dollar debt borrowings. Designation of revenues as a hedge results in exchange gains and losses on debt being deferred without amortization until repayment. At maturity, any exchange adjustment is included with revenues, recognizing that Repap has realized equal and offsetting exchange adjustments in the period the debt is repaid.

In April 1995, Repap New Brunswick refinanced the majority of its U.S. dollar long-term debt with U.S. dollar denominated senior secured notes. At that time, Repap New Brunswick had exchange losses relating to the refinanced debt of $63.8 million. As it remains highly likely that Repap New Brunswick's U.S. revenue streams will continue, the exchange losses accumulated at the time of the 1995 refinancing continue to be proportionately applied against those U.S. dollar revenues based upon the original debt repayment schedule.

Revenues in the first quarter of 2000 were reduced by $9.4 million as a result of the application of this accounting method. As at December 31, 1999, approximately $37.7 million of hedged currency exchange losses remained on the balance sheet, and are expected to reduce revenues by the following non-cash currency exchange adjustments:

Under generally accepted accounting principals in the United States ("U.S. GAAP"), any change in the currency fluctuations is immediately recognized in income. The total amount of the above-mentioned non-cash currency adjustments to future revenues has already been charged to income under U.S. GAAP. Accordingly, any reduction in revenues and income of future years resulting from these currency adjustments under Canadian GAAP will be added back in the reconciliation of revenues and income under U.S. GAAP. (See Note 22 to the Company's Consolidated Financial Statements).

Interest Rates
The Company's variable-rate debt from continuing operations, totaling U.S.$120 million, is subject to fluctuations in LIBOR lending rates. A 1% change in interest rates affects Repap's cash flow by approximately U.S.$1.2 million.

Environmental Concerns and Regulations
The forest products industry is subject to evolving environmental legislation, regulations and standards from various levels of governments which impose effluent and emission standards and other requirements on Repap's operations. Future capital investments may be required to meet legislation, regulations and standards as they evolve. In addition to regulatory pressure, market pressures may influence product evolution. Repap's ability to continue to address changing market needs could require additional capital investments as well as additional investments in product and process development.

Item 1. Legal Proceedings

(1) Mr. F. Steven Berg served as Chairman of the Board of the Corporation from January 27, 1999 to August 16, 1999 when he was replaced by the current chairman, Harold (Hap) S. Stephen. Mr. Berg was not nominated for re-election to the Board of Directors of the Corporation at its Annual Meeting held on August 16, 1999. On June 16, 1999, F. Stephen Berg commenced an action in the Supreme Court of the State of New York in the County of New York naming the Corporation as defendant. The summons is seeking a declaratory judgement that Mr. Berg's employment agreement is a valid and binding corporate obligation of the Corporation. The Corporation is vigorously defending this action.

Under the challenged employment agreement, Mr. Berg would have been entitled to receive an annual base salary of no less than U.S.$420,000, an annual cash bonus based on increases in the Corporation's market capitalization (based on a percentage of such increase above target amounts but exclusive of issuances of Common Shares in exchange for outstanding debt and issuances of Common Shares upon conversion of convertible preferred shares issued in exchange for outstanding debt), certain perquisites that include participation in all executive-level benefit plans, compensation arrangements and fringe benefits including, for example, pension benefits, supplementary pension (including immediate crediting of eight years of past service), health and welfare benefits, an automobile, six weeks of vacation per year, life insurance equal to at least two-and-one-half times his base salary and long term disability coverage at least equal to his base salary. The challenged employment agreement authorizes the grant of an option to purchase 75 million Common Shares of the Corporation at U.S.$0.05 per share and a signing bonus of U.S.$1.25 million payable in Common Shares. The shares which are the subject of the option have not been authorized for issuance by regulatory authorities. The signing bonus has not been paid.

If Mr. Berg's action is successful and it is determined he was terminated without cause or left for good reason, the challenged employment agreement requires the Corporation to pay Mr. Berg: (i) a lump sum equal to the greater of (a) his base salary and bonus (other than the market capitalization bonus) for the remainder of the term of the challenged employment agreement, or (b) twice his base salary plus twice his highest bonus (other than the market capitalization bonus) payable for the three years prior to termination; (ii) continued health and welfare benefits for 24 months after termination; (iii) full vesting of any stock options; (iv) an additional eight years of past service credit under the Supplementary Pension Plan and an immediate lump sum payment of the benefit; and (v) the market capitalization bonus.

Upon a change in control (generally, a sale or acquisition of 10% of the Corporation's voting stock, a reduction in share ownership by Third Avenue Fund to less than 10% (other than a reduction by the conversion of the Corporation's debt into securities), a merger, consolidation, or sale of 10% of the Corporation's Common Shares, the sale of all or substantially all of the assets or changes in the composition of the Board occurring as a result of an actual or threatened election contest or proxy or consent solicitation), the challenged employment agreement provides that Mr. Berg is entitled to receive upon the termination of his employment within two years after the change in control or within six months prior to a change in control: (i) a lump sum payment equal to the greater of (a) his base salary and bonus (other than the market capitalization bonus) for the remainder of the term of the challenged employment agreement; or (b) three times his base salary plus three times his highest bonus (other than the market capitalization bonus) earned during three years preceding the change in control; (ii) continued health and welfare benefits for 36 months; (iii) full vesting of any stock option; (iv) transfer of car ownership; (v) an additional 11 years of past service credit under the Supplementary Pension Plan and immediate lump sum payment of the benefit; and (vii) the market capitalization bonus. The challenged employment agreement also provides that Mr. Berg is entitled to receive a gross up of parachute payments so that he is in the same after-tax position as if there were no excise tax on excess parachute payments.

Mr. Berg has brought a motion for summary judgment to which the Corporation has replied asking the court to deny the motion. The court has not yet heard argument on the motion.

(2)    On October 15, 1999, TD Asset Management Inc. ("TDAM"), which holds 13.65% of the Corporation's outstanding common shares, commenced an action in the Ontario Superior Court of Justice against the Corporation, Mr. F. Steven Berg and two former directors of the Corporation, namely, Clifford M. Sifton and Stephen W. Phillips. TDAM is seeking (i) a declaration that actions of the defendants in entering into Mr. Berg's challenged employment agreement were oppressive or unfairly prejudicial to or unfairly disregarded the interests of the shareholders of the Corporation, (ii) an order setting aside Mr. Berg's challenged employment agreement, (iii) injunctions restraining performance of the challenged employment agreement and stock option grant and (iv) damages against the personal defendants in the amount of $5 million each. TDAM is not seeking monetary damages against the Corporation but should this action be successful the Corporation may be ordered to pay the costs of TDAM in bringing this action.

Mr. Berg has brought a motion seeking to dismiss the action, or alternatively, to stay the motion. TDAM has filed an affidavit responding to this motion and asking the court to allow it to proceed with its suit. The court has not yet heard argument on the motion.

(3) On January 3, 2000 F. Steven Berg, the former Chairman of the Corporation, commenced an action against Stephen Larson, the Corporation's President and Chief Executive Officer, and The Toronto-Dominion Bank in the United States District Court of the Southern District of New York. Mr. Berg claims that, as a result of alleged misrepresentations and omissions taken by Mr. Larson, he has suffered damages in an as yet undetermined amount resulting from his purchase of the Corporation's common stock. Mr. Berg further alleges that actions of Mr. Larson and The Toronto-Dominion Bank have caused the Corporation to breach his challenged employment contract and that he is entitled to compensatory and punitive damages. On March 13, 2000, Mr. Larson and The Toronto-Dominion Bank each moved to dismiss the law suit in its entirety. On March 14, 2000, the Court dismissed the law suit as not complying with the basic requirements to a pleading but gave the plaintiff 15 days to amend and serve a proper pleading. On March 20, 2000, Mr. Berg filed a Notice of Dismissal, voluntarily dismissing the action without prejudice.

(4) On January 10, 2000, Repap New Brunswick received a summons to appear in the Provincial Court of the Province of New Brunswick to answer to the charge that it unlawfully released a contaminant into water which would or could affect the natural, physical, chemical and biological quality or constitution to water contrary to the Clean Water Act (New Brunswick). The circumstances on which the charge is based occurred in the fall of 1998 when a heavier than usual rain storm washed silt from an area that had been cleared to accommodate Repap New Brunswick's new landfill site into the Northwest Millstream River. Repap New Brunswick has pled not guilty to the charge and a trial has been set for June 6, 7 and 8, 2000.

Item 2. Changes in Securities and Use of Proceeds.

     No material changes to the constituent instruments defining the rights of the holders of any class of registered securities have occurred during the first quarter of fiscal 2000.

Item 3. Defaults Upon Senior Securities.

     No material defaults upon senior securities have occurred during the first quarter of fiscal 2000.

Item 4. Submission of Matters to a Vote of Security Holders.

     No matters were submitted to a vote of security holders during the first quarter of fiscal 2000.

Item 5. Other Information.

     N/A

Item 6. Exhibits and Reports on Form 8-K.

       b) Reports on Form 8-K.

     No current report on Form 8-K was filed by the Company during first quarter of fiscal 2000.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

EXHIBIT INDEX

Exhibit 11.1 Statement Re: Computation of per Share Earnings
Exhibit 27 Financial Data Schedule