40-F - NOA - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 40-F

☐	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | --- | --- || For the fiscal year ended December 31, 2021 | Commission File Number 001-33161 | | --- | --- |

NORTH AMERICAN CONSTRUCTION GROUP LTD.

(Exact name of Registrant as specified in its charter)

Canada

(Province or other jurisdiction of incorporation or organization)

1629

(Primary Standard Industrial Classification Code Number (if applicable))

N/A

(I.R.S. Employer Identification Number (if applicable))

27287 - 100 Avenue

Acheson, Alberta,T7X 6H8

(780) 960-7171

(Address and telephone number of Registrant’s principal executive offices)

CT Corporation System

111 Eighth Avenue, 13th Floor

New York, New York 10011

(212) 894-8940

(Name, address (including zip code) and telephone number (including area code)

of agent for service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Shares	NOA	Toronto Stock Exchange
Common Shares	NOA	The New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

For annual reports, indicate by check mark the information filed with this Form:

☒	Annual information form	☒	Audited annual financial statements

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

30,022,928 Common Shares

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No £

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No £

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act

Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. £

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Auditor Name: KPMG LLP Auditor Location: Edmonton, AB, Canada Auditor Firm ID: 85

ANNUAL INFORMATION FORM, AUDITED ANNUAL CONSOLIDATED

FINANCIAL STATEMENTS AND MANAGEMENT’S DISCUSSION AND ANALYSIS

Annual Information Form

The Registrant’s Annual Information Form for the fiscal year ended December 31, 2021 is attached as Exhibit 99.2 to this Annual Report on Form 40-F and is incorporated herein by reference.

Audited Annual Consolidated Financial Statements

The Registrant’s audited annual consolidated financial statements for the fiscal year ended December 31, 2021, including the report of the independent registered public accounting firm with respect thereto, are attached as Exhibit 99.3 to this Annual Report on Form 40-F and are incorporated herein by reference.

Management’s Discussion and Analysis

The Registrant’s Management’s Discussion and Analysis for the fiscal year ended December 31, 2021 is attached as Exhibit 99.4 to this Annual Report on Form 40-F and is incorporated herein by reference.

DISCLOSURES REGARDING CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Please see “Internal Systems and Processes—Evaluation of Disclosure Controls and Procedures” included in the Registrant’s Management’s Discussion and Analysis for the fiscal year ended December 31, 2021, which is attached as Exhibit 99.4 to this Annual Report on Form 40-F and is incorporated herein by reference.

Management’s Annual Report on Internal Control Over Financial Reporting

Please see “Internal Systems and Processes—Management’s Report on Internal Controls Over Financial Reporting (ICFR)” included in the Registrant’s Management’s Discussion and Analysis for the fiscal year ended December 31, 2021, which is attached as Exhibit 99.4 to this Annual Report on Form 40-F and is incorporated herein by reference.

Attestation Report of the Registered Public Accounting Firm

The attestation report of the independent registered public accounting firm on the effectiveness of the Registrant's internal control over financial reporting is included under the heading “Report of Independent Registered Public Accounting Firm” on pages 1 and 2 of Exhibit 99.3 to this Annual Report on Form 40-F, which attestation report is incorporated herein by reference.

Changes in Internal Control over Financing Reporting

Please see “Internal Systems and Processes—Material Changes to the Internal Controls over Financial Reporting” included in the Registrant’s Management’s Discussion and Analysis for the fiscal year ended December 31, 2021, which is attached as Exhibit 99.4 to this Annual Report on Form 40-F and is incorporated herein by reference.

NOTICES PURSUANT TO REGULATION BTR

None.

AUDIT COMMITTEE FINANCIAL EXPERT

The Registrant’s board of directors has determined that Mr. Bryan Pinney, a member and the chairman of the Registrant’s audit committee, and Mr. John Pollesel, a member of the Registrant’s audit committee, are each an “audit committee financial expert” (as such term is defined by the rules and regulations of the Securities and Exchange Commission) and is each “independent” (as such term is defined by the New York Stock Exchange’s listing standards applicable to the Registrant).

CODE OF ETHICS

The Registrant has adopted a “code of ethics” (as such term is defined by the rules and regulations of the Securities and Exchange Commission), entitled the “Code of Conduct and Ethics Policy”, that applies to all employees of the Registrant, including its Chief Executive Officer and Chief Financial Officer. The Code of Conduct and Ethics Policy is available for viewing on the Registrant’s website at www.nacg.ca under "Social Responsibility-Code of Conduct & Ethics”. There were not any amendments to any provision of the Code of Conduct and Ethics Policy during the fiscal year ended December 31, 2021 that applied to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Further, there were not any waivers, including implicit waivers, granted from any provision of the Code of Conduct and Ethics Policy during the fiscal year ended December 31, 2021 that applied to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

AND PRE-APPROVAL POLICIES AND PROCEDURES

Please see “The Board and Board Committees” included in the Registrant’s Annual Information Form for the fiscal year ended December 31, 2021, which is attached as Exhibit 99.2 to this Annual Report on Form 40-F and is incorporated herein by reference.

OFF-BALANCE SHEET ARRANGEMENTS

We currently do not have any off-balance sheet arrangements.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

Please see “Contractual Obligations and Other Commitments” included in the Registrant’s Management’s Discussion and Analysis for the fiscal year ended December 31, 2021, which is attached as Exhibit 99.4 to this Annual Report on Form 40-F and is incorporated herein by reference.

IDENTIFICATION OF THE AUDIT COMMITTEE

Please see “The Board and Board Committees—Audit Committee” included in the Registrant’s Annual Information Form for the fiscal year ended December 31, 2021, which is attached as Exhibit 99.2 to this Annual Report on Form 40-F and is incorporated herein by reference.

NYSE CORPORATE GOVERNANCE RULES

The Registrant has reviewed the New York Stock Exchange’s corporate governance rules and confirms that the Registrant’s corporate governance practices are not significantly different from those required of domestic companies under the New York Stock Exchange’s listing standards.

MINE SAFETY DISCLOSURE

Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is set out under the heading “U.S. Mine Safety Disclosure” in the Registrant’s Annual Information Form for the fiscal year ended December 31, 2021, which is attached as Exhibit 99.2 to this Annual Report on Form 40-F and is incorporated herein by reference.

UNDERTAKING

The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.

NORTH AMERICAN CONSTRUCTION GROUP LTD.
By:	/S/ Joseph Lambert
	Joseph Lambert
	Chief Executive Officer

Date: February 16, 2022

DOCUMENTS AND EXHIBIT INDEX

99.1	North American Construction Group Ltd. Announces Results for the Year Ended December 31, 202 1 .
99.2	Annual Information Form for the fiscal year ended December 31, 202 1 .
99.3	Audited Annual Consolidated Financial Statements for the fiscal year ended December 31, 2021.
99.4	Management’s Discussion and Analysis for the fiscal year ended December 31, 202 1 .
99.5	Consent of KPMG LLP.
99.6	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
99.7	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
99.8	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.9	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial information from North American Construction Group Ltd.’s audited Consolidated Financial Statements, formatted in iXBRL (Inline eXtensible Business Reporting Language) and furnished electronically herewith: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations and Comprehensive (Loss) Income; (iii) the Consolidated Statements of Changes in Shareholders’ Equity; (iv) the Consolidated Statements of Cash Flows; and (v) Notes to the Consolidated Financial Statements.

Exhibit 99.3

NORTH AMERICAN CONSTRUCTION GROUP LTD.

Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

KPMG LLP

2200, 10175 - 101 Street

Edmonton AB T5J 0H3

Telephone (780) 429-7300

Fax (780) 429-7379

www.kpmg.ca

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of North American Construction Group Ltd.:

Opinion on Internal Control Over Financial Reporting

We have audited North American Construction Group Ltd. and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive income, changes in shareholders’ equity, and cash flows for the years then ended, and the related notes (collectively, the “consolidated financial statements”), and our report dated February 16, 2022 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired DGI (Aust) Trading Pty Ltd. (“DGI”) during 2021, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021, DGI’s internal control over financial reporting representing approximately 2% of total assets, 2% of revenues and 1% net income, respectively, for the year ended December 31, 2021. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of DGI.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting in the accompanying Management’s Discussion and Analysis. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. KPMG Canada provides services to KPMG LLP

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate

Chartered Professional Accountants

Edmonton, Canada

February 16, 2022

KPMG LLP

2200, 10175 - 101 Street

Edmonton AB T5J 0H3

Telephone (780) 429-7300

Fax (780) 429-7379

www.kpmg.ca

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of North American Construction Group Ltd.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of North American Construction Group Ltd. and subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive income, changes in shareholders’ equity, and cash flows for the years then ended, and the related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 16, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Estimation of total costs to be incurred for unit-price long-term contract revenue

As discussed in note 2(c) to the consolidated financial statements, the Company recognizes revenues under four principal types of contracts: lump-sum, unit-price, time-and-materials, and cost-plus. For the year ended December 31, 2021, total contract revenues recognized by the Company were $654.1 million, including $82.4 million recognized under unit-price contracts with defined scope that were in-progress at year-end. Under its unit-price contracts with defined scope, the Company recognizes revenue over time based on the ratio of actual costs incurred to date divided by the Company’s estimated total costs (ETC).

We identified the evaluation of ETC for in-progress unit-price contracts with defined scope as a critical audit matter. The evaluation of the ETC for in-progress unit-price contracts with defined scope involved complex auditor judgement, given these estimates are dependent upon a number of factors, including the accuracy of the estimates made at the period-end date, primarily consisting of labor hours, equipment usage, and material costs and quantities to be incurred over the remaining contract periods.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls within the Company’s revenue recognition process. This included controls related to the review of the ETC for unit-price contracts with defined scope that were in-progress at year-end. For a selection of these contracts, we evaluated the reasonableness of the Company’s determination of ETC for the contract, including tracing a selection of costs in the ETC (material costs and quantities, labor hours, and equipment usage) to recent forecasts developed by project managers and comparing actual costs incurred subsequent to year-end for consistency with corresponding amounts included in the ETC at year-end. We inspected the executed contract with the customer to evaluate the Company’s identification of the performance obligation and the determined method for measuring contract progress. We conducted interviews with relevant project personnel to gain an understanding of the status of project activities and factors impacting the ETC of the selected contract, such as costs associated with scope changes; changes in productivity expectations; extended overhead due to owner, weather, and other delays; differences in site conditions from the original bid; the availability and skill level of workers in the geographic location of the project; and changes in the availability and proximity of equipment and materials. We evaluated the Company’s ability to estimate these amounts by comparing actual project margins to previous estimates.

We have served as the Company’s auditor since 1998.

Chartered Professional Accountants

Edmonton, Canada

February 16, 2022

Consolidated Balance Sheets

As at December 31

(Expressed in thousands of Canadian Dollars)

	Note	2021		2020
				Note 22
Assets
Current assets
Cash		$	16,601	$	43,447
Accounts receivable	5,11	68,787		36,231
Contract assets	6(b)	9,759		7,008
Inventories	7	44,544		19,151
Prepaid expenses and deposits		6,828		4,977
Assets held for sale		660		4,129
Derivative financial instruments	8(b)	—		4,334
		147,179		119,277
Property, plant and equipment, net of accumulated depreciation $339,505 (2020 – $302,161)	9	640,950		632,210
Operating lease right-of-use assets	10	14,768		18,192
Investments in affiliates and joint ventures	11	55,974		46,263
Other assets		6,000		6,336
Goodwill and intangible assets	12	4,407		378
Deferred tax assets	13	—		16,407
Total assets		$	869,278	$	839,063
Liabilities and shareholders' equity
Current liabilities
Accounts payable		$	76,251	$	41,428
Accrued liabilities	14	33,389		19,382
Contract liabilities	6(b)	3,349		1,512
Current portion of long-term debt	8	19,693		16,263
Current portion of finance lease obligations	10	25,035		26,895
Current portion of operating lease liabilities	10	3,317		4,004
		161,034		109,484
Long-term debt	8	306,034		341,396
Finance lease obligations	10	29,686		42,577
Operating lease liabilities	10	11,461		14,118
Other long-term obligations	15	26,400		18,850
Deferred tax liabilities	13	56,200		64,195
		590,815		590,620
Shareholders' equity
Common shares (authorized – unlimited number of voting common shares; issued and outstanding – December 31, 2021 - 30,022,928 (December 31, 2020 – 31,011,831))	17(a)	246,944		255,064
Treasury shares (December 31, 2021 - 1,564,813 (December 31, 2020 - 1,845,201))	17(a)	(17,802)		(18,002)
Additional paid-in capital		37,456		46,536
Retained earnings (deficit)		11,863		(35,155)
Accumulated other comprehensive income		2		—
Shareholders' equity		278,463		248,443
Total liabilities and shareholders' equity		$	869,278	$	839,063
Contingencies	21

Approved on behalf of the Board

/s/ Joseph Lambert	/s/ Bryan D. Pinney
Joseph Lambert, President and Chief Executive Officer	Bryan D. Pinney, Lead Director

See accompanying notes to consolidated financial statements.

Consolidated Financial Statements<br><br>December 31, 2021	F - 1	North American Construction Group Ltd.

Consolidated Statements of Operations and

Comprehensive Income

For the years ended December 31

(Expressed in thousands of Canadian Dollars, except per share amounts)

	Note	2021		2020
				Note 22
Revenue	6	$	654,143	$	498,468
Project costs	2(b)	223,537		140,341
Equipment costs	2(b)	232,173		177,127
Depreciation		108,016		88,782
Gross profit		90,417		92,218
General and administrative expenses	2(b),6(d),12,19	35,374		24,437
(Gain) loss on disposal of property, plant and equipment		(85)		659
Operating income		55,128		67,122
Interest expense, net	18	19,032		18,656
Equity earnings in affiliates and joint ventures	11	(21,860)		(7,740)
Net realized and unrealized gain on derivative financial instruments	8(b)	(2,737)		(4,266)
Income before income taxes		60,693		60,472
Current income tax expense	13	1,000		—
Deferred income tax expense	13	8,285		11,264
Net income		51,408		49,208
Other comprehensive income
Unrealized foreign currency translation gain		(2)		—
Comprehensive income		$	51,410	$	49,208
Per share information
Basic net income per share	17(b)	$	1.81	$	1.75
Diluted net income per share	17(b)	$	1.64	$	1.60

See accompanying notes to consolidated financial statements.

Consolidated Financial Statements<br><br>December 31, 2021	F - 2	North American Construction Group Ltd.

Consolidated Statements of Changes in Shareholders’

Equity

(Expressed in thousands of Canadian Dollars)

	Common<br>shares		Treasury <br>shares		Additional<br>paid-in<br>capital		Retained earnings (deficit)		Accumulated other comprehensive income		Total
Balance at December 31, 2019	$	225,966	$	(15,911)	$	49,919	$	(79,855)	$	—	$	180,119
Net income	—		—		—		49,208		—		49,208
Dividends ($0.16 per share)	—		—		—		(4,508)		—		(4,508)
Exercise of stock options	895		—		(358)		—		—		537
Conversion of convertible debentures	38,066		—		—		—		—		38,066
Share purchase program	(9,863)		—		755		—		—		(9,108)
Purchase of treasury shares	—		(9,893)		—		—		—		(9,893)
Stock-based compensation	—		7,802		(3,780)		—		—		4,022
Balance at December 31, 2020	$	255,064	$	(18,002)	$	46,536	$	(35,155)	$	—	$	248,443
Net income	—		—		—		51,408		—		51,408
Unrealized foreign currency translation gain	—		—		—		—		2		2
Dividends ($0.16 per share)	—		—		—		(4,390)		—		(4,390)
Exercise of stock options	859		—		(340)		—		—		519
Share purchase programs	(8,979)		—		(7,540)		—		—		(16,519)
Purchase of treasury shares	—		(5,500)		—		—		—		(5,500)
Stock-based compensation	—		5,700		(1,200)		—		—		4,500
Balance at December 31, 2021	$	246,944	$	(17,802)	$	37,456	$	11,863	$	2	$	278,463

See accompanying notes to consolidated financial statements.

Consolidated Financial Statements<br><br>December 31, 2021	F - 3	North American Construction Group Ltd.

Consolidated Statements of Cash Flows

For the years ended December 31

(Expressed in thousands of Canadian Dollars)

	Note	2021		2020
				Note 22
Cash provided by
Operating activities:
Net income		$	51,408	$	49,208
Adjustments to reconcile net income to cash from operating activities:
Depreciation		108,016		88,782
Amortization of deferred financing costs	18	1,064		1,091
(Gain) loss on disposal of property, plant and equipment		(85)		659
Net realized and unrealized gain on derivative financial instruments		(2,737)		(4,266)
Stock-based compensation expense	19	11,606		1,944
Cash settlement of directors' deferred share unit plan	19(c)	(2,300)		(103)
Equity earnings in affiliates and joint ventures	11	(21,860)		(7,740)
Dividends and advances received from affiliates and joint ventures	11	11,270		8,621
Other adjustments to cash from operating activities		(158)		483
Deferred income tax expense	13	8,285		11,264
Net changes in non-cash working capital	20(b)	671		(3,393)
		165,180		146,550
Investing activities:
Acquisition of DGI (Aust) Trading Pty Limited, net of cash acquired	12	(11,395)		—
Purchase of property, plant and equipment		(112,563)		(117,069)
Additions to intangible assets		(1,228)		(272)
Proceeds on disposal of property, plant and equipment		17,141		2,784
Investment in affiliates and joint ventures	11	(1,959)		(1,810)
Net repayments of loans to affiliates and joint ventures		3,664		3,540
Settlement of derivative financial instruments		7,071		—
		(99,269)		(112,827)
Financing activities:
Proceeds from long-term debt	8	135,049		145,227
Repayment of long-term debt	8	(164,369)		(82,262)
Financing costs		(3,567)		(965)
Repayment of finance lease obligations		(33,949)		(34,649)
Dividend payments	17(c)	(4,423)		(4,371)
Proceeds from exercise of stock options		519		537
Share purchase program		(16,519)		(9,108)
Purchase of treasury shares	17(a)	(5,500)		(9,893)
		(92,759)		4,516
(Decrease) increase in cash		(26,848)		38,239
Effect of exchange rate on changes in cash and cash equivalents		2		—
Cash, beginning of year		43,447		5,208
Cash, end of year		$	16,601	$	43,447

Supplemental cash flow information (note 20(a))

See accompanying notes to consolidated financial statements.

Consolidated Financial Statements<br><br>December 31, 2021	F - 4	North American Construction Group Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in thousands of Canadian Dollars, except per share amounts or unless otherwise specified)

Nature of operations

North American Construction Group Ltd. ("NACG" or the “Company”), was formed under the Canada Business Corporations Act. The Company and its predecessors have been operating continuously since 1953 primarily in western Canada but also in other parts of Canada, the United States and Australia, providing a wide range of mining and heavy construction services to customers in the resource development and industrial construction sectors.

Significant accounting policies

a) Basis of presentation

These consolidated financial statements are prepared in accordance with United States generally accepted accounting principles ("US GAAP"). These consolidated financial statements include the accounts of the Company and its wholly-owned incorporated subsidiaries in Canada, the United States and Australia. All significant intercompany transactions and balances are eliminated upon consolidation. The Company also holds ownership interests in other corporations, partnerships and joint ventures.

The Company consolidates variable interest entities (“VIE”) for which it is considered to be the primary beneficiary as well as voting interest entities in which it has a controlling financial interest as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation, and related standards. Investees and joint ventures over which the Company exercises significant influence are accounted for using the equity method and are included in “investments in affiliates and joint ventures” within the accompanying Consolidated balance sheets.

i) Change in significant accounting policy - Basis of presentation

Prior to July 1, 2021, the Company elected to apply the provision available to entities operating within the construction industry to apply proportionate consolidation to unincorporated entities that would otherwise be accounted for using the equity method. The Company elected to change this policy to account for these unincorporated entities using the equity method, resulting in a change to the consolidation method for Dene North Site Services ("DNSS") and Mikisew North American Limited Partnership ("MNALP"). This change allows for consistency in the presentation of the Company's investments in affiliates and joint ventures (note 11).

The Company has accounted for the change retrospectively according to the requirements of US GAAP Accounting Standards Codification ("ASC") 250 by restating the comparative periods. The effect of the change in accounting policy for the current and comparable periods is summarized in note 22.

b) Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures reported in these consolidated financial statements and accompanying notes and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Significant estimates and judgments made by management include:

•the assessment of the percentage of completion on time-and-materials, unit-price, lump-sum and cost-plus contracts with defined scope (including estimated total costs and provisions for estimated losses) and the recognition of claims and change orders on revenue contracts;

•the determination of whether an acquisition meets the definition of a business combination;

•the fair value of the assets acquired and liabilities assumed as part of an acquisition;

•the evaluation of whether the Company is a primary beneficiary of an entity or has a controlling interest in an investee and is required to consolidate it;

•assumptions used in impairment testing; and

Consolidated Financial Statements<br><br>December 31, 2021	F - 5	North American Construction Group Ltd.

•estimates and assumptions used in the determination of the allowance for credit losses, the recoverability of deferred tax assets and the useful lives of property, plant and equipment and intangible assets.

The accuracy of the Company’s revenue and profit recognition in a given period is dependent on the accuracy of the estimates of the cost to complete each project. Cost estimates for all significant projects use a detailed “bottom up” approach and the Company believes its experience allows it to provide reasonably dependable estimates. There are a number of factors that can contribute to changes in estimates of contract costs and profitability that are recognized in the period in which such adjustments are determined. The most significant of these include:

•the completeness and accuracy of the original bid;

•costs associated with added scope changes;

•extended overhead due to owner, weather and other delays;

•subcontractor performance issues;

•changes in economic indices used for the determination of escalation or de-escalation for contractual rates on long-term contracts;

•changes in productivity expectations;

•site conditions that differ from those assumed in the original bid;

•contract incentive and penalty provisions;

•the availability and skill level of workers in the geographic location of the project; and

•a change in the availability and proximity of equipment and materials.

The foregoing factors as well as the mix of contracts at different margins may cause fluctuations in gross profit between periods. With many projects of varying levels of complexity and size in process at any given time, changes in estimates can offset each other without materially impacting the Company’s profitability. Major changes in cost estimates, particularly in larger, more complex projects, can have a significant effect on profitability.

In March 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization. Governments worldwide, including Canada, enacted emergency measures to combat the spread of the virus, including the implementation of travel bans, quarantine periods and social distancing. These factors created material disruptions to businesses globally, resulting in an economic slowdown.

The situation continues to evolve while markets and economies have somewhat stabilized, with governments and industry implementing measures to mitigate the impacts of the pandemic. As populations in Canada and many other countries are being vaccinated, governments have loosened emergency measures. Should the pandemic worsen, the Company could be subject to additional or continued adverse impacts including, but not limited to, restrictions or limitations on the ability of employees, contractors, suppliers and customers to conduct business due to quarantines, closures or travel restrictions, including the potential for deferral or cessation of ongoing or planned projects.

The ultimate duration and magnitude of these impacts on the economy and the financial effect on the Company is not known. Estimates and judgments made by management in the preparation of these financial statements are difficult and subject to a higher degree of measurement uncertainty during this period. Management continues to monitor the situation and has taken steps to mitigate the likelihood of occurrence of the events described above.

In response to the economic slowdown caused by COVID-19, the Government of Canada introduced the Canada Emergency Wage Subsidy, an employer assistance program. For the year ended December 31, 2021, the Company recognized $13,244 of salary and wage subsidies presented as reductions of project costs, equipment costs and general and administrative expenses of $8,309, $4,180 and $755 respectively. For the year ended December 31, 2020, the Company recognized $28,041 of salary and wage subsidies presented as reduction of project costs, equipment costs and general and administrative expenses of $16,050, $9,107, and $2,884, respectively.

c) Revenue recognition

The Company's revenue source falls into one of three categories: construction services, operations support, or equipment and component sales.

Consolidated Financial Statements<br><br>December 31, 2021	F - 6	North American Construction Group Ltd.

Construction services are related to mine development or expansion projects and are generally funded from customers' capital budgets. The Company provides construction services under lump-sum, unit-price, time-and materials and cost-plus contracts. When the commercial terms are lump-sum and unit-price, the contract scope and value is typically defined. Time-and-materials and cost-plus contracts are generally undefined in scope and total price. Operations support services revenue is mainly generated under long-term site-services agreements with the customers (master service agreement and multiple use contracts). These agreements clearly define whether commitment to volume or scope of services over the life of the contract is included or excluded. When excluded, work under the agreement is awarded through shorter-term work authorizations under the general terms of the agreement. The Company generally provides operations support services under either time-and-materials or unit-price contracts depending on factors such as the degree of complexity, the completeness of engineering and the required schedule. Equipment and component sales revenue is generated from our equipment maintenance and rebuild activities, along with our mining component supplier business. The commercial terms for equipment and component sales are generally lump-sum, unit-price, or time-and-materials.

Significant estimates are required in the revenue recognition process including assessment of the percentage of completion, identification of performance obligations, and estimation of variable consideration, including the extent of any constraints.

The Company’s invoicing frequency and payment terms are in accordance with negotiated customer contracts. Customer invoicing can range between daily and monthly and payment terms generally range between net 15 and net 60 days. The Company does not typically include extended payment terms in its contracts with customers. Under these payment terms, the customer pays progress payments based on actual work or milestones completed. When payment terms do not align with revenue recognition, the variance is recorded to either contract liabilities or contract assets, as appropriate. Customer contracts do not generally include a significant financing component because the Company does not expect the period between customer payment and transfer of control to exceed one year. The Company does not adjust consideration for the effects of a significant financing component if the period of time between the transfer of control and the customer payment is less than one year.

The Company accounts for a contract when it has approval and commitments from both parties, the rights of the parties are identified, the payment terms are identified, the contract has commercial substance and the collectability of consideration is probable. Each contract is evaluated to determine if it includes more than one performance obligation. This evaluation requires significant judgement and the determination that the contract contains more than one performance obligation could change the amount of revenue and profit recorded in a given period. The majority of the Company's contracts with defined scope include one significant integrated service, where the Company is responsible for ensuring the individual goods and services are incorporated into one combined output. Such contracts are accounted for as one performance obligation. When more than one distinct good or service is contracted, the contract is separated into more than one performance obligation and the total transaction price is allocated to each performance obligation based upon stand-alone selling prices. When a stand-alone selling price is not observable, it is estimated using a suitable method.

The total transaction price can be comprised of fixed consideration and variable consideration, such as profit incentives, discounts and performance bonuses or penalties. When a contract includes variable consideration, the amount included in the total transaction price is based on the expected value or the mostly likely amount, constrained to an amount that it is probable a significant reversal will not occur. Significant judgement is involved in determining if a variable consideration amount should be constrained. In applying this constraint, the Company considers both the likelihood of a revenue reversal arising from an uncertain future event and the magnitude of the revenue reversal if the uncertain event were to occur or fail to occur. The following circumstances are considered to be possible indicators of significant revenue reversals:

•The amount of consideration is highly susceptible to factors outside the Company’s influence, such as judgement of actions of third parties and weather conditions;

•The length of time between the recognition of revenue and the expected resolution;

•The Company’s experience with similar circumstances and similar customers, specifically when such items have predictive value;

•The Company’s history of resolution and whether that resolution includes price concessions or changing payment terms; and

Consolidated Financial Statements<br><br>December 31, 2021	F - 7	North American Construction Group Ltd.

•The range of possible consideration amounts.

The Company's performance obligations for construction services and operations support are typically satisfied by transferring control over time, for which revenue is recognized using the percentage of completion method, measured by the ratio of costs incurred to date to estimated total costs. For defined scope contracts, the cost-to-cost method faithfully depicts the Company’s performance because the transfer of the asset to the customer occurs as costs are incurred. The costs of items that do not relate to the performance obligation, particularly in the early stages of the contract, are excluded from costs incurred to date. Pre-construction activities, such as mobilization and site setup, are recognized as contract costs on the Consolidated Balance Sheets and amortized over the life of the project. These costs are excluded from the cost-to- cost calculation. Equipment and component sales are typically satisfied at a point in time, and revenue is recognized when control of the completed asset has been transferred to the customer, along with the cost of goods sold (project costs).

The Company has elected to apply the ‘as-invoiced’ practical expedient to recognize revenue in the amount to which the Company has a right to invoice for all contracts in which the value of the performance completed to date directly corresponds with the right to consideration. This will be applied to all contracts, where applicable, and the majority of undefined scope work is expected to use this practical expedient.

The length of the Company’s contracts varies from less than one year for typical contracts to several years for certain larger contracts. Project costs include all direct labour, material, subcontract and equipment costs and those indirect costs related to contract performance such as indirect labour and supplies. General and administrative expenses are charged to expenses as incurred. If a loss is estimated on an uncompleted contract, a provision is made in the period in which such losses are determined.

Changes in project performance, project conditions, and estimated profitability, including those arising from profit incentives, penalty provisions and final contract settlements, may result in revisions to costs and revenue that are recognized in the period in which such adjustments are determined. Once a project is underway, the Company will often experience changes in conditions, client requirements, specifications, designs, materials and work schedules. Generally, a “change order” will be negotiated with the customer to modify the original contract to approve both the scope and price of the change. Occasionally, disagreements arise regarding changes, their nature, measurement, timing and other characteristics that impact costs and revenue under the contract. When a change becomes a point of dispute between the Company and a customer, the Company will assess the legal enforceability of the change to determine if a contract modification exists. The Company considers a contract modification to exist when the modification either creates new or changes the existing enforceable rights and obligations.

Most contract modifications are for goods and services that are not distinct from the existing contract due to the integrated services provided in the context of the contract and are accounted for as part of the existing contract. Therefore, the effect of a contract modification on the transaction price and the Company's measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue on a cumulative catch-up basis. If a contract modification is approved in scope and not price, the associated revenue is treated as variable consideration, subject to constraint. This can lead to a situation where costs are recognized in one period and revenue is recognized when customer agreement is obtained or claim resolution occurs, which can be in subsequent periods.

In certain instances, the Company’s long-term contracts allow its customers to unilaterally reduce or eliminate scope of work without cause. These instances represent higher risk due to uncertainty of total contract value and estimated costs to complete; therefore, potentially impacting revenue recognition in future periods.

Revenue is measured based on consideration specified in the customer contract, and excludes any amounts collected on behalf of third parties. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specified revenue producing transaction, that are collected by the Company for a customer, are excluded from revenue.

d) Balance sheet classifications

A one-year time period is typically used as the basis for classifying current assets and liabilities. However, there is a possibility that amounts receivable and payable under construction contracts (principally holdbacks) may extend beyond one year.

Consolidated Financial Statements<br><br>December 31, 2021	F - 8	North American Construction Group Ltd.

e) Cash

Cash includes cash on hand and bank balances net of outstanding cheques.

f) Accounts receivable and contract assets

Accounts receivable are recorded when the Company has an unconditional right to consideration arising from performance of contracts with customers. Accounts receivable may be comprised of amounts billed to customers and amounts that have been earned but have not yet been billed. Such unbilled but earned amounts generally arise when a billing period ends subsequent to the end of the reporting period. When this occurs, revenue equal to the earned and unbilled amount is accrued. Such accruals are classified as accounts receivable on the balance sheet, even though they are not yet billed, as they represent consideration for work that has been completed prior to the period end where the Company has an unconditional right to consideration.

Contract assets include unbilled amounts representing revenue recognized from work performed where the Company does not yet have an unconditional right to compensation. These balances generally relate to (i) revenue accruals on contracts where the percentage of completion method of revenue recognition requires an accrual over what has been billed and (ii) revenue recognized from variable consideration related to unpriced contract modifications.

The Company records allowance for credit losses using the expected credit loss model upon the initial recognition of financial assets. The estimate of expected credit loss considers historical credit loss information that is adjusted for current economic and credit conditions. Bad debt expense is charged to project costs in the Consolidated Statements of Operations and Comprehensive Income in the period the allowance is recognized. The counterparties to the majority of the Company's financial assets are major oil producers with a long history of no credit losses.

g) Contract costs

The Company occasionally incurs costs to obtain contracts (reimbursable bid costs) and to fulfill contracts (fulfillment costs). If these costs meet certain criteria, they are capitalized as contract costs, included within other assets on the Consolidated Balance Sheets. Capitalized costs are amortized based on the transfer of goods or services to which the assets relate and are included in project costs. Reimbursable bid costs meet the criteria for capitalization when these costs will be reimbursed by the owner regardless of the outcome of the bid. Generally, this occurs when the Company has been selected as the preferred bidder for a project. The Company recognizes reimbursable bid costs an expense when incurred if the amortization period of the asset that the entity would have otherwise recognized is one year or less. Costs to fulfill a contract meet the criteria for capitalization if they relate directly to a specifically identifiable contract, they generate or enhance resources that will be used to satisfy future performance obligations and if the costs are expected to be recovered. The costs that meet this criterion are often mobilization and site set-up costs. Contract costs are recorded within other assets on the Consolidated Balance Sheets.

h) Remaining performance obligations

Remaining performance obligation represents the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period. Certain of the Company's long-term contracts can allow customers to unilaterally reduce or eliminate the scope of the contracted work without cause. These long-term contracts represent higher risk due to uncertainty of total contract value and estimated costs to complete; therefore, potentially impacting revenue recognition in future periods. Excluded from this disclosure are amounts where the Company recognizes revenue as-invoiced (note 6(c)). Remaining performance obligations are recorded within contract assets and contract liabilities on the Consolidated Balance Sheets.

i) Contract liabilities

Contract liabilities consist of advance payments and billings in excess of costs incurred and estimated earnings on uncompleted contracts.

j) Inventories

Inventories are carried at the lower of cost and net realizable value, and consist primarily of repair parts, parts and components held for resale, tires and track frames, fuel and lubricants, and customer rebuild work in progress. Cost is determined using the weighted-average method.

Consolidated Financial Statements<br><br>December 31, 2021	F - 9	North American Construction Group Ltd.

k) Property, plant and equipment

Property, plant and equipment are recorded at cost. Equipment under finance lease is recorded at the present value of minimum lease payments at the inception of the lease.

Major components of heavy construction equipment in use such as engines and drive trains are recorded separately. The capitalized interest is amortized at the same rate as the respective asset. Depreciation is not recorded until an asset is available for use. Depreciation is calculated based on the cost, net of the estimated residual value, over the estimated useful life of the assets on the following bases and rates:

Assets	Basis	Rate
Heavy equipment	Units of production	3,000 - 120,000 hours
Major component parts in use	Units of production	2,500 - 70,000 hours
Other equipment	Straight-line	5 - 10 years
Licensed motor vehicles	Straight-line	5 - 10 years
Office and computer equipment	Straight-line	4 - 10 years
Furnishings, fixtures and facilities	Straight-line	10 - 30 years
Buildings	Straight-line	10 - 50 years
Leasehold improvements	Straight-line	Over shorter of estimated useful life and lease term
Land	No depreciation	No depreciation

The costs for periodic repairs and maintenance are expensed to the extent the expenditures serve only to restore the assets to their normal operating condition without enhancing their service potential or extending their useful lives.

l) Goodwill

Goodwill represents the excess of consideration over the fair value of the net tangible and identifiable intangible assets acquired and liabilities assumed in a business combination. Goodwill is reviewed annually on October 1st for impairment or more frequently when there is an indication of potential impairment. Impairment is tested at the reporting unit level by comparing the reporting unit's carrying amount to its fair value. The process of determining fair values is subjective and requires management to exercise judgment in making assumptions about future results, including revenue and cash flow projections and discount rates. The annual test was performed on the acquired goodwill with no impairment identified.

m) Intangible assets

Acquired intangible assets with finite lives are recorded at historical cost net of accumulated amortization and accumulated impairment losses, if any. The cost of intangible assets acquired in an asset acquisition are recorded at cost based upon relative fair value as at the acquisition date. Costs incurred to increase the future benefit of intangible assets are capitalized. Intangible assets are recorded with goodwill on the Consolidated Balance Sheets.

Intangible assets with definite lives are amortized over their estimated useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and method for an intangible asset with a finite useful life are reviewed at the end of each reporting period.

Estimated useful lives of definite lived intangible assets and corresponding amortization method are:

Assets	Basis	Rate
Internal-use software	Straight-line	4 years
Customer relationship	Straight-line	4 years

n) Impairment of long-lived assets

Long-lived assets or asset groups held and used including property, plant and equipment and identifiable intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of an asset or group of assets is less than its carrying

Consolidated Financial Statements<br><br>December 31, 2021	F - 10	North American Construction Group Ltd.

amount, it is considered to be impaired. The Company measures the impairment loss as the amount by which the carrying amount of the asset or group of assets exceeds its fair value, which is charged to the Consolidated Statements of Operations and Comprehensive Income. In determining whether an impairment exists, the Company makes assumptions about the future cash flows expected from the use of its long-lived assets, such as: applicable industry performance and prospects; general business and economic conditions that prevail and are expected to prevail; expected growth; maintaining its customer base; and, achieving cost reductions. There can be no assurance that expected future cash flows will be realized, or will be sufficient to recover the carrying amount of long-lived assets. Furthermore, the process of determining fair values is subjective and requires management to exercise judgment in making assumptions about future results, including revenue and cash flow projections and discount rates.

At each reporting period, the Company reviews the carrying value of its long-lived assets for indications of impairment. At December 31, 2021, there were no impairment indicators identified, as there had been no material declines in the operating environment or expected financial results.

o) Assets held for sale

Long-lived assets are classified as held for sale when certain criteria are met, which include:

•management, having the authority to approve the action, commits to a plan to sell the assets;

•the assets are available for immediate sale in their present condition;

•an active program to locate buyers and other actions to sell the assets have been initiated;

•the sale of the assets is probable and their transfer is expected to qualify for recognition as a completed sale within one year;

•the assets are being actively marketed at reasonable prices in relation to their fair value; and

•it is unlikely that significant changes will be made to the plan to sell the assets or that the plan will be withdrawn.

Assets to be disposed of by sale are reported at the lower of their carrying amount or estimated fair value less costs to sell and are disclosed separately on the Consolidated Balance Sheets. These assets are not depreciated.

Equipment disposal decisions are made using an approach in which a target life is set for each type of equipment. The target life is based on the manufacturer’s recommendations and the Company’s past experience in the various operating environments. Once a piece of equipment reaches its target life it is evaluated to determine if disposal is warranted based on its expected operating cost and reliability in its current state. If the expected operating cost exceeds the target operating cost for the fleet or if the expected reliability is lower than the target reliability of the fleet, the unit is considered for disposal. Expected operating costs and reliability are based on the past history of the unit and experience in the various operating environments. Once the Company has determined that the equipment will be disposed, and the criteria for assets held for sale are met, the unit is recorded in assets held for sale at the lower of depreciated cost or net realizable value.

p) Foreign currency translation

The functional currency of the Company and the majority of its subsidiaries is Canadian Dollars. Transactions recorded within these subsidiaries that are denominated in foreign currencies are recorded at the rate of exchange on the transaction date. Monetary assets and liabilities within these subsidiaries denominated in foreign currencies are translated into Canadian Dollars at the rate of exchange prevailing at the balance sheet date. The resulting foreign exchange gains and losses are included in the determination of earnings and included within general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income.

Accounts of the Company's Australia-based subsidiary, which has an Australian Dollar functional currency and US- based subsidiaries, which have US Dollar functional currency are translated into Canadian Dollars using the current rate method. Assets and liabilities are translated at the rate of exchange in effect at the balance sheet date, and revenue and expense items are translated at the average rate of exchange for the period. The resulting unrealized exchange gains and losses from these translation adjustments are included as a separate component of shareholders’ equity in Accumulated Other Comprehensive Income. The effect of exchange rate changes on cash

Consolidated Financial Statements<br><br>December 31, 2021	F - 11	North American Construction Group Ltd.

balances held in foreign currencies is separately reported as part of the reconciliation of the change in cash and for the period.

q) Fair value measurement

Fair value measurements are categorized using a valuation hierarchy for disclosure of the inputs used to measure fair value, which prioritizes the inputs into three broad levels. Fair values included in Level 1 are determined by reference to quoted prices in active markets for identical assets and liabilities. Fair values included in Level 2 include valuations using inputs based on observable market data, either directly or indirectly other than the quoted prices. Level 3 valuations are based on inputs that are not based on observable market data. The classification of a fair value within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

r) Income taxes

The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized based on the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period of enactment. A valuation allowance is recorded against any deferred tax asset if it is more likely than not that the asset will not be realized.

The Company recognizes the effect of income tax positions only if those positions are more likely than not (greater than 50%) of being sustained. Changes in recognition or measurement are reflected in the period in which the change in judgement occurs. The Company accrues interest and penalties for uncertain tax positions in the period in which these uncertainties are identified. Interest and penalties are included in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income.

s) Stock-based compensation

The Company has a Restricted Share Unit (“RSU”) Plan which is described in note 19(a). RSUs are generally granted effective July 1 of each fiscal year with respect to services to be provided in that fiscal year and the following two fiscal years. The RSUs generally vest at the end of the three-year term. The Company settles RSUs with common shares purchased on the open market through a trust arrangement. Compensation expense is calculated based on the number of vested RSUs multiplied by the fair value of each RSU as determined by the volume weighted-average trading price of the Company’s common shares for the five trading days immediately preceding the day on which the fair market value was to be determined. The Company recognizes compensation cost over the three-year term in the Consolidated Statements of Operations and Comprehensive Income, with a corresponding increase to additional paid-in capital. When dividends are paid on common shares, additional dividend equivalent RSUs are granted to all RSU holders as of the dividend payment date. The number of additional RSUs to be granted is determined by multiplying the dividend payment per common share by the number of outstanding RSUs, divided by the fair market value of the Company's common shares on the dividend payment date. Such additional RSUs are granted subject to the same service criteria as the underlying RSUs.

The Company has a Performance Restricted Share Unit ("PSU") plan which is described in note 19(b). The PSUs vest at the end of a three-year term and are subject to the performance criteria approved by the Human Resources and Compensation Committee at the date of the grant. Such performance criterion includes the passage of time and is based upon the improvement of total shareholder return ("TSR") as compared to a defined company Canadian peer group. TSR is calculated using the fair market values of voting common shares at the grant date, the fair market value of voting common shares at the vesting date and the total dividends declared and paid throughout the vesting period. The grants are measured at fair value on the grant date using a Monte Carlo model. At the maturity date, the Human Resources and Compensation Committee will assess actual performance against the performance criteria and determine the number of PSUs that have been earned. The Company intends to settle all PSUs with common shares purchased on the open market through a trust arrangement. The Company recognizes compensation cost over the three-year term of the PSU in the Consolidated Statements of Operations and Comprehensive Income, with a corresponding increase to additional paid-in capital.

The Company has a Deferred Stock Unit (“DSU”) Plan which is described in note 19(c). The DSU plan enables directors and executives to receive all or a portion of their annual fee or annual executive bonus compensation in

Consolidated Financial Statements<br><br>December 31, 2021	F - 12	North American Construction Group Ltd.

the form of DSUs and are settled in cash. Compensation expense is calculated based on the number of DSUs multiplied by the fair market value of each DSU as determined by the volume weighted-average trading price of the Company’s common shares for the 5 trading days immediately preceding the day on which the fair market value is to be determined, with any changes in fair value recognized in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income. Compensation costs related to DSUs are recognized in full upon the grant date as the units vest immediately. When dividends are paid on common shares, additional dividend equivalent DSUs are granted to all DSU holders as of the dividend payment date. The number of additional DSUs to be granted is determined by multiplying the dividend payment per common share by the number of outstanding DSUs, divided by the fair market value of the Company's common shares on the dividend payment date. Such additional DSUs are granted subject to the same service criteria as the underlying DSUs.

The Company had a Share Option Plan which is described in note 19(d). Effective November 17, 2021, this plan was terminated. The Company accounts for all stock-based compensation payments that are settled by the issuance of equity instruments at fair value. Compensation cost is measured using the Black-Scholes model at the grant date and is expensed on a straight-line basis over the award’s vesting period, with a corresponding increase to additional paid-in capital. Upon exercise of a stock option, share capital is recorded at the sum of proceeds received and the related amount of additional paid-in capital.

As stock-based compensation expense recognized in the Consolidated Statements of Operations and Comprehensive Income is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimated.

t) Net income per share

Basic net income per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period (see note 17(b)). Diluted net income per share is computed by dividing net income available to common shareholders by the weighted-average number of shares outstanding during the year, adjusted for dilutive share amounts. The diluted per share amounts are calculated using the treasury stock method and the if-converted method.

u) Leases

For lessee accounting, the Company determines whether a contract is or contains a lease at inception of the contract. At the lease commencement date, the Company recognizes a right-of-use ("ROU") asset and a lease liability. The ROU asset for operating and finance leases are included in operating lease right-of-use assets and property, plant and equipment, respectively, on the Consolidated Balance Sheets. The lease liability for operating and finance leases are included in operating lease liabilities and finance lease obligations, respectively.

Operating and finance lease assets and liabilities are initially measured at the present value of lease payments at the commencement date. Subsequently, finance lease liabilities are measured at amortized cost using the effective interest rate method and operating lease liabilities are measured at the present value of unpaid lease payments.

As most of the Company’s operating lease contracts do not provide the implicit interest rate, nor can the implicit interest rate be readily determined, the Company uses its incremental borrowing rate as the discount rate for determining the present value of lease payments. The Company's incremental borrowing rate for a lease is the rate that the Company would pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses the lease implicit interest rate when it is determinable.

The lease term for all of the Company's leases includes the non-cancellable period of the lease plus any period covered by options to extend (or not to terminate) the lease term when it is reasonably certain that the Company will exercise that option.

Lease payments are comprised of fixed payments owed over the lease term and the exercise price of a purchase option if the Company is reasonably certain to exercise the option. The ROU assets for both operating and finance leases are initially measured at cost, which consists of the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred, less any lease incentives received. Subsequently, the ROU assets for finance leases are amortized on a straight-line basis from the lease commencement date to the earlier of the end of its useful life or the end of the lease term. For finance leases, ROU asset depreciation expense is recognized and presented separately from interest expense on the

Consolidated Financial Statements<br><br>December 31, 2021	F - 13	North American Construction Group Ltd.

lease liability through depreciation and interest expense, net, respectively. The ROU asset for operating leases is measured at the amortized value of the ROU asset. For operating leases, amortization of the ROU asset is calculated as the current-period lease cost adjusted by the lease liability accretion to the then outstanding lease balance. Lease expense of the operating lease ROU asset is recognized on a straight-line basis over the remaining lease term through general and administrative expenses.

ROU assets for operating and finance leases are reduced by any accumulated impairment losses. The Company's existing accounting policy for impairment of long-lived assets is applied to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to be recognized.

The Company monitors for events or changes in circumstances that require a reassessment of one or more of its leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset.

The Company generally accounts for contracts with lease and non-lease components separately. This involves allocating the consideration in the contract to the lease and non-lease components based on each component’s relative standalone price. For certain leases, the Company has elected to apply the practical expedient to account for the lease and non-lease components together as a single lease component. Non-lease components include common area maintenance and machine maintenance. For those leases, the lease payments used to measure the lease liability include all of the fixed consideration in the contract.

ROU assets and lease liabilities for all leases that have a lease term of 12 months or less ("short-term leases") are not recognized. The Company recognizes its short-term lease payments as an expense on a straight-line basis over the lease term. Short-term lease variable payments are recognized in the period in which the payment is assessed.

For lessor accounting, the Company entered into contracts to sublease certain operating property leases to third parties and generally accounts for lease and non-lease components of subleases separately. The Company also entered into agreements as a lessor for equipment leases.

If any of the following criteria are met, the Company classifies the lease as a sales-type lease:

•The lease transfers ownership of the underlying asset to the lessee by the end of the lease term;

•The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise;

•The lease term is for the major part of the remaining economic life of the underlying asset. However, if the commencement date falls at or near the end of the economic life of the underlying asset, this criterion shall not be used for purposes of classifying the lease;

•The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset.

•The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term.

When none of these criteria are met, the Company classifies the lease as an operating lease unless both of the following criteria are met, in which case the Company records the lease as a direct financing lease:

•The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments and/or any other third party unrelated to the lessor equals or exceeds substantially all of the fair value of the underlying asset.

•It is probable that the lessor will collect the lease payments plus any amount necessary to satisfy a residual value guarantee.

For sales-type leases, the Company recognizes the net investment in the lease, and derecognizes the underlying asset on the Consolidated Balance Sheets. The interest income over the lease term is recognized in the Consolidated Statements of Operations and Comprehensive Income, with cash received from leases classified as operating cash flows in the Consolidated Statements of Cash Flows. The difference between the cash received from leases and the interest income is the reduction of the initial net investment. The net investment at the end of the lease term will equate to the estimated residual value at lease inception. For operating leases, the Company

Consolidated Financial Statements<br><br>December 31, 2021	F - 14	North American Construction Group Ltd.

continues to recognize the underlying asset on the Consolidated Balance Sheets, and lease income is recognized in revenue, straight-line over the lease term in the Consolidated Statements of Operations and Comprehensive Income. The cash received from leases are classified as operating cash flows on the Consolidated Statements of Cash Flows.

v) Deferred financing costs

Underwriting, legal and other direct costs incurred in connection with the issuance of debt are presented as deferred financing costs. Deferred financing costs related to the mortgage and the issuance of Convertible Debentures are included within liabilities on the Consolidated Balance Sheets and are amortized using the effective interest rate method over the term to maturity. Deferred financing costs related to revolving facilities under the credit facilities are included within other assets on the Consolidated Balance Sheets and are amortized ratably over the term of the Credit Facility.

w) Investments in affiliates and joint ventures

Upon inception or acquisition of a contractual agreement, the Company performs an assessment to determine whether the arrangement contains a variable interest in a legal entity and whether that legal entity is a variable interest entity ("VIE"). Where it is concluded that the Company is the primary beneficiary of a VIE, the Company will consolidate the accounts of that VIE. Other qualitative factors that are considered include decision-making responsibilities, the VIE capital structure, risk and rewards sharing, contractual agreements with the VIE, voting rights and level of involvement of other parties. The Company assesses the primary beneficiary determination for a VIE on an ongoing basis as changes occur in the facts and circumstances related to a VIE. If an entity is determined not to be a VIE, the voting interest entity model will be applied. The maximum exposure to loss as a result of involvement with the VIE is the Company’s share of the investee’s net assets.

The Company utilizes the equity method to account for its interests in affiliates and joint ventures that the Company does not control but over which it exerts significant influence. The equity method is typically used when it has an ownership interest of between 15% and 50% in an entity, provided the Company is able to exercise significant influence over the investee’s operations. Significant influence is the power to participate in the financial and operating policy decisions of the investee.

Under the equity method, the investment in an affiliate or a joint venture is initially recognized at cost. Transaction costs that are incremental and directly attributable to the investment in the affiliate or joint venture are included in the cost. The total initial cost of the investment is attributable to the net assets in the equity investee at fair value and additional assets acquired including intangible assets.

The carrying amount of investment is adjusted to recognize changes in the Company’s share of net assets of the affiliate or joint venture since the acquisition date.

The aggregate of the Company’s share of profit or loss of affiliates and joint ventures is shown on the face of the Consolidated Statements of Operations and Comprehensive Income, representing profit or loss after in the subsidiaries of the affiliate or joint venture. Transactions between the Company and the affiliate or joint venture are eliminated to the extent of the interest in the affiliate or joint venture. When the Company earns revenue on downstream sales to affiliate or joint ventures, it eliminates its proportionate share of profit through revenue and project or equipment costs.

After application of the equity method, the Company determines whether it is necessary to recognize an impairment loss on its investment in its affiliate or joint venture. At each reporting date, the Company determines whether there is objective evidence that the investment in the affiliate or joint venture is impaired. If there is such evidence, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognizes the loss within "equity earnings in affiliates and joint ventures" in the Consolidated Statements of Operations and Comprehensive Income. Upon loss of significant influence over the associate or joint control over the joint venture, the Company measures and recognizes any retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognized in the Consolidated Statements of Operations and Comprehensive Income.

Consolidated Financial Statements<br><br>December 31, 2021	F - 15	North American Construction Group Ltd.

x) Government assistance

The Company may receive compensation from government-funded assistance, which provides compensation for expenses incurred. These amounts are recognized in the Consolidated Statements of Operations and Comprehensive Income on a systematic basis in the periods in which the expenses are recognized. These amounts are presented as a reduction to the related expense.

y) Derivative instruments

The Company may periodically use derivative financial instruments to manage financial risks from fluctuations in share prices. These instruments included swap agreements related to the conversion of convertible debentures. Such instruments were only used for risk management purposes. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. Derivative financial instruments are subject to standard terms and conditions, financial controls, management and risk monitoring procedures including Board approval for all significant transactions. These derivative financial instruments were not designated as hedges for accounting purposes and were recorded at fair value with realized and unrealized gains and losses recognized in the Consolidated Statements of Operations and Comprehensive Income.

z) Business combinations

Business combinations are accounted for using the acquisition method. Assets acquired and liabilities assumed are recorded at the acquisition date at their fair values. The Company measures goodwill as the excess of the total cost of acquisition over the fair value of identifiable net assets of an acquired business at the acquisition date. Any contingent consideration payable is recognized at fair value at the acquisition date. The current portion of the consideration payable is recorded in accrued liabilities and long-term portion is recorded in other long-term obligations on the Consolidated Balance Sheets, with any subsequent changes to fair value recorded in other income in Consolidated Statement of Operations and Comprehensive Income. Acquisition-related costs are expensed when incurred in general and administrative charges.

Accounting pronouncements recently adopted

a) Business Combinations

In October 2021, the FASB issued ASU 2021-08, Business Combinations. The accounting standard update was issued to improve the accounting for acquired revenue contracts with customers in a business combination. This update requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 - Revenue from Contract with Customers. The adoption of this new standard did not have an impact to the consolidated financial statements.

b) Government Assistance

In November 2021, the FASB issued ASU 2021-10, Government Assistance. The accounting standard update was issued to increase the transparency of government assistance including the disclosure of 1) the type of assistance, 2) an entity's accounting for the assistance, and 3) the effect of the assistance on an entity's financial statements. The adoption of this new standard did not have a material impact to the consolidated financial statements.

Recent accounting pronouncements not yet adopted

a) Debt with Conversion and Other Options

In September 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity's own Equity. This accounting standard update was issued to address issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. This standard is effective January 1, 2022 with early adoption permitted. The Company is assessing the impact that the adoption of this standard may have on its consolidated financial statements.

Consolidated Financial Statements<br><br>December 31, 2021	F - 16	North American Construction Group Ltd.

Accounts receivable

	Note	December 31, 2021		December 31, 2020
				Note 22
Trade	11	$	51,774	$	23,637
Holdbacks		380		64
Accrued trade receivables		12,266		8,415
Contract receivables		$	64,420	$	32,116
Other		4,367		4,115
		$	68,787	$	36,231

Holdbacks represent amounts up to 10% of the contract value under certain contracts that the customer is contractually entitled to withhold until completion of the project or until certain project milestones are achieved. Information about the Company’s exposure to credit risks and impairment losses for trade and other receivables is included in note 16(d).

Revenue

a) Disaggregation of revenue

Year ended December 31,	2021		2020
			Note 22
Revenue by source
Operations support services	$	600,308	$	486,926
Equipment and component sales	28,603		4,625
Construction services	25,232		6,917
	$	654,143	$	498,468
By commercial terms
Time-and-materials	$	388,998	$	262,429
Unit-price	253,840		225,186
Lump-sum	11,305		10,853
	$	654,143	$	498,468
Revenue recognition method
As-invoiced	$	407,496	$	335,927
Cost-to-cost percent complete	218,044		157,916
Point-in-time	28,603		4,625
	$	654,143	$	498,468

b) Contract balances

Contract assets:

Year ended December 31,	2021		2020
			Note 22
Balance, beginning of year	$	7,008	$	19,094
Transferred to receivables from contract assets recognized at the beginning of the period	(7,008)		(19,094)
Increases as a result of changes to the estimate of the stage of completion, excluding amounts transferred in the period	8,838		5,805
Increases as a result of work completed, but not yet an unconditional right to consideration	921		1,203
Balance, end of year	$	9,759	$	7,008

Contract liabilities:

Year ended December 31,	2021		2020
			Note 22
Balance, beginning of year	$	1,512	$	23
Revenue recognized that was included in the contract liability balance at the beginning of the period	(899)		(23)
Increases due to cash received, excluding amounts recognized as revenue during the period	2,736		1,512
Balance, end of year	$	3,349	$	1,512	Consolidated Financial Statements<br><br>December 31, 2021	F - 17	North American Construction Group Ltd.
---	---	---

The following table provides information about revenue recognized from performance obligations that were satisfied (or partially satisfied) in previous periods:

Year ended December 31,	2021		2020
Revenue recognized	$	3,572	$	1,403

These amounts relate to cumulative catch-up adjustments arising from changes in estimated project costs on cost-to-cost percent complete jobs and final settlement of constrained variable consideration.

c) Transaction price allocated to the remaining performance obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. Included is all consideration from contracts with customers, excluding amounts that are recognized using the as-invoiced method and any constrained amounts of revenue.

For the year ended December 31,
2022	$	116,352
2023	10,500
2024	8,362
2025	6,226
	$	141,440

d) Contract costs

The following table summarizes contract costs included within other assets on the Consolidated Balance Sheets.

	December 31,<br>2021		December 31, 2020
Fulfillment costs	$	2,673	$	1,432
Reimbursable bid costs	—		537
	$	2,673	$	1,969

During the year ended December 31, 2021, fulfillment costs of $2,909 and reimbursable bid costs of $1,464 were capitalized (December 31, 2020 - $2,256 and $537, respectively). During the year ended December 31, 2021, fulfillment costs of $1,668 and reimbursable bid costs of $2,001 were recognized (December 31, 2020 - $1,841 and $nil, respectively). Reimbursable bid costs received in excess of amounts capitalized have been recognized in general and administrative expenses as a recovery.

Inventory

The following table summarizes the Company's major classes of inventory:

	December 31,<br>2021		December 31, 2020
			Note 22
Repair parts	$	19,519	$	14,684
Parts, equipment and components held for resale	15,858		—
Tires and track frames	2,617		2,546
Fuel and lubricants	1,832		1,921
Customer rebuild work in process	4,718		—
	$	44,544	$	19,151

During the year ended December 31, 2021, parts and components held for resale increased upon the acquisition of DGI (Aust) Trading Pty Ltd. ("DGI") (note 12).

Consolidated Financial Statements<br><br>December 31, 2021	F - 18	North American Construction Group Ltd.

Long-term debt

	Note	December 31, 2021		December 31, 2020
				Note 22
Credit Facility	8(a)	$	110,000	$	220,000
Convertible debentures	8(b)	129,750		55,000
Mortgages	8(e)	30,000		21,206
Financing obligations	8(c)	47,945		50,923
Promissory notes	8(d)	13,210		12,726
Unamortized deferred financing costs	8(f)	(5,178)		(2,196)
		$	325,727	$	357,659
Less: current portion of long-term debt		(19,693)		(16,263)
		$	306,034	$	341,396

The aggregate maturities of long-term debt for each of the five years subsequent to December 31, 2021 are: $19.7 million in 2022, $20.3 million in 2023, $128.4 million in 2024, $5.9 million in 2025 and $156.6 million in 2026 and thereafter.

a) Credit Facility

On September 29, 2021, the Company entered into an Amended and Restated Credit Agreement (the "Credit Facility") with a banking syndicate that allows borrowing under the revolving loan to $325.0 million with the ability to increase the maximum borrowings by $50.0 million, subject to certain conditions. The amended agreement extended the facility maturity from October 8, 2023 to October 8, 2024, with an option to extend on an annual basis, subject to certain conditions. The Credit Facility permits finance lease obligations to a limit of $150.0 million and certain other borrowings outstanding to a limit of $20.0 million. In the amended agreement, the permitted amount of $150.0 million was expanded to include guarantees provided by the Company to a permitted joint venture, provided that value of such obligations shall not exceed the permitted amount.

As at December 31, 2021, there was $33.9 million (December 31, 2020 - $0.9 million) in issued letters of credit under the Credit Facility and the unused borrowing availability was $181.1 million (December 31, 2020 - $104.1 million). As at December 31, 2021, there was an additional $28.6 million in borrowing availability under finance lease obligations (December 31, 2020 - $29.6 million). Borrowing availability under finance lease obligations considers the current and long-term portion of finance lease obligations and financing obligations, including the finance lease obligations for the joint venture that the Company guarantees.

The Credit Facility has two financial covenants that must be tested quarterly on a trailing four-quarter basis. As at December 31, 2021, the Company was in compliance with its financial covenants.

•The first covenant is the Senior Leverage Ratio which is Bank Senior Debt plus outstanding letters of credit compared to Bank EBITDA less NACG Acheson Ltd. rental revenue.

◦"Bank Senior Debt" is defined as the Company's long-term debt, finance leases and outstanding letters of credit, excluding Convertible Debentures, deferred financing costs, mortgages related to NACG Acheson Ltd. and debt related to investment in affiliates and joint ventures.

◦"Bank EBITDA" is defined as earnings before interest, taxes, depreciation and amortization, excluding the effects of unrealized foreign exchange gain or loss, realized and unrealized gain or loss on derivative financial instruments, cash and non-cash stock-based compensation expense, gain or loss on disposal of property, plant and equipment, and certain other non-cash items included in the calculation of net income.

◦The Senior Leverage Ratio must be less than or equal to 3.0:1. In the event the Company enters into a material acquisition, the maximum allowable Senior Leverage Ratio would include a step up of 0.50x for four quarters following the acquisition.

•The second covenant is the Fixed Charge Coverage Ratio which is defined as Bank EBITDA less cash taxes compared to Fixed Charges.

◦"Fixed Charges" is defined as cash interest, scheduled payments on debt, unfunded cash distributions by the Company and unfunded capital expenditures.

Consolidated Financial Statements<br><br>December 31, 2021	F - 19	North American Construction Group Ltd.

◦The Fixed Charge Coverage Ratio is to be maintained at a ratio greater than 1.15:1.

The Credit Facility bears interest at Canadian prime rate, U.S. Dollar Base Rate, Canadian bankers’ acceptance rate or London interbank offered rate ("LIBOR") (all such terms as used or defined in the Credit Facility), plus applicable margins. Effective December 31, 2021, LIBOR will be discontinued for future contracts; however, it will be available and published until June 2023 for contracts entered before 2022. During the transition, the Company will either have the option to use LIBOR until June 2023 or to choose an alternative rate like Secured Overnight Financing Rate ("SOFR"). The Company is also subject to non-refundable standby fees, 0.40% to 0.75% depending on the Company's Total Debt to Bank EBITDA Ratio. Total debt ("Total Debt") is defined in the Credit Facility as long-term debt including finance leases and letters of credit, excluding convertible debentures, deferred financing costs, the mortgage related to NACG Acheson Ltd., and other non-recourse debt. The Credit Facility is secured by a first priority lien on all of the Company's existing and after-acquired property excluding the Company's first securities interests on the Business Development Bank of Canada ("BDC") mortgage.

On December 3, 2021, the Company entered into an agreement with a financial institution to provide guarantee on a revolving equipment lease credit facility of $45.0 million for Mikisew North American Limited Partnership, an affiliate of the Company. This equipment lease credit facility will allow MNALP to avail the credit through a lease agreement and/or equipment finance contract with appropriate supporting documents. As at December 31, 2021, the available balance on this facility was $28.1 million. At this time, there have been no instances or indication that payments will not be made by MNALP. Therefore, no liability has been recorded.

b) Convertible debentures

	December 31,<br>2021		December 31, 2020
5.50% convertible debentures	$	74,750	$	—
5.00% convertible debentures	55,000		55,000
	$	129,750	$	55,000

On June 1, 2021, the Company issued $65,000 aggregate principal amount of 5.50% convertible unsecured subordinated debentures. On June 4, 2021, the underwriters exercised the over-allotment option, in full, purchasing an additional $9,750 aggregate principal amount of 5.50% convertible unsecured subordinated debentures.

The terms of the convertible debentures are summarized as follows:

	Date of issuance	Maturity	Conversion price		Share equivalence per 1000 debenture	Debt issuance costs
5.50% convertible debentures	June 1, 2021	June 30, 2028	$	24.75		$	3,531
5.00% convertible debentures	March 20, 2019	March 31, 2026	$	26.25		$	2,691

All values are in US Dollars.

Interest on the 5.50% convertible debentures is payable semi-annually in arrears on June 30 and December 31 of each year, commencing on December 31, 2021. Interest on the 5.00% convertible debentures is payable semi-annually on March 31 and September 30 of each year.

The 5.50% convertible debentures are not redeemable prior to June 30, 2024, except under certain exceptional circumstances. The 5.50% convertible debentures may be redeemed at the option of the Company, in whole or in part, at any time on or after June 30, 2024 at a redemption price equal to the principal amount provided that the market price of the common shares is at least 125% of the conversion price; and on or after June 30, 2026 at a redemption price equal to the principal amount. In each case, the Company will pay accrued and unpaid interest on the debentures redeemed to the redemption date.

The 5.00% convertible debentures are redeemable under certain conditions after a change in control has occurred. If a change in control occurs, the Company is required to offer to purchase all of the 5.00% convertible debentures at a price equal to 101% of the principal amount plus accrued and unpaid interest to the date of purchase.

During the year ended December 31, 2021, the Company realized a gain of $7,071 (unrealized gain for the year ended December 31, 2020 of $4,334) on the swap agreement related to the 5.50% convertible debentures that were issued in 2017 and redeemed through issuance of 4,583,655 common shares in April 2020. This swap agreement was completed on September 30, 2021 and the derivative financial instrument recorded on the Consolidated Balance Sheet was extinguished at that time.

Consolidated Financial Statements<br><br>December 31, 2021	F - 20	North American Construction Group Ltd.

c) Financing obligations

During the year ended December 31, 2021, the Company recorded new financing obligations of $11,700. The financing contract expires on February 9, 2026. The Company is required to make monthly payments over the life of the contract with an annual interest rate of 2.23%. The financing obligations are secured by the corresponding property, plant and equipment.

d) Promissory note

During the year ended December 31, 2021, the Company recorded a new equipment promissory note of $4,300. The contract expires on August 5, 2025. The Company is required to make monthly payments over the life of the contract with an annual interest rate of 4.20%. The promissory note is secured by the corresponding property, plant and equipment. The Company also acquired a new promissory note of $370 upon acquisition of DGI (note 12).The contract expires in November 2023 and bears interest at 2.90%. During the year ended December 31, 2021, the Company made payments of $4,185 towards promissory notes.

e) Mortgage

On October 28, 2021, the Company entered into an updated mortgage agreement with BDC which increased the mortgage amount from $21.1 million to $30.0 million. The updated mortgage includes additional loan of $7.0 million for a building expansion and a $1.9 million cash advance. The mortgage has a maturity date of November 1, 2046 and bears variable interest at BDC's floating base rate of 5.60% minus a variance of 2.20%, equal to 3.40%.

f) Deferred financing costs

	December 31, 2021		December 31, 2020
Cost	$	6,351	$	2,784
Accumulated amortization	1,173		588
	$	5,178	$	2,196

During the year ended December 31, 2021, the Company recognized accelerated amortization of $1,064 due to the early conversion of convertible debentures.

Property, plant and equipment

December 31, 2021	Cost		Accumulated<br>Depreciation		Net Book Value
Owned assets
Heavy equipment	$	353,037	$	105,686	$	247,351
Major component parts in use	343,048		131,157		211,891
Other equipment	45,096		30,633		14,463
Licensed motor vehicles	15,113		10,838		4,275
Office and computer equipment	7,002		4,891		2,111
Buildings	29,406		3,748		25,658
Capital inventory	24,605		—		24,605
Land	10,472		—		10,472
	827,779		286,953		540,826
Assets under finance lease
Heavy equipment	92,690		28,504		64,186
Major component parts in use	52,679		21,996		30,683
Other equipment	4,633		1,281		3,352
Licensed motor vehicles	2,674		771		1,903
	152,676		52,552		100,124
Total property, plant and equipment	$	980,455	$	339,505	$	640,950	Consolidated Financial Statements<br><br>December 31, 2021	F - 21	North American Construction Group Ltd.
---	---	---
December 31, 2020	Cost		Accumulated<br>Depreciation		Net Book Value
---	---	---	---	---	---	---
Note 22
Owned assets
Heavy equipment	$	351,842	$	102,469	$	249,373
Major component parts in use	304,205		111,583		192,622
Other equipment	41,784		26,918		14,866
Licensed motor vehicles	15,747		10,370		5,377
Office and computer equipment	6,337		4,137		2,200
Buildings	22,582		3,040		19,542
Capital inventory	21,817		—		21,817
Land	10,472		—		10,472
	774,786		258,517		516,269
Assets under finance lease
Heavy equipment	97,871		25,454		72,417
Major component parts in use	52,798		16,264		36,534
Other equipment	5,287		966		4,321
Licensed motor vehicles	3,629		960		2,669
	159,585		43,644		115,941
Total property, plant and equipment	$	934,371	$	302,161	$	632,210

Finance and operating leases

As a lessee, the Company has finance and operating leases for heavy equipment, shop facilities, vehicles and office facilities. These leases have terms of 1 to 15 years, with options to extend on certain leases for up to five years. The Company generates operating lease income from the sublease of certain office facilities and heavy equipment rentals.

a) Minimum lease payments and receipts

The future minimum lease payments and receipts from non-cancellable operating leases as at December 31, 2021 for the periods shown are as follows:

	Payments				Receipts
For the year ending December 31,	Finance Leases		Operating Leases		Operating leases
2022	$	26,398	$	3,845	$	5,497
2023	18,272		2,581		4,355
2024	9,743		1,371		493
2025	1,448		1,429		—
2026 and thereafter	1,148		8,902		—
Total minimum lease payments	$	57,009	$	18,128	$	10,345
Less: amount representing interest	(2,288)		(3,350)
Carrying amount of minimum lease payments	$	54,721	$	14,778
Less: current portion of leases	(25,035)		(3,317)
	$	29,686	$	11,461

b) Lease expenses and (income)

Year ended December 31,	2021		2020
Short-term lease expense	$	27,421	$	14,654
Operating lease expense	4,556		4,740
Operating lease income	(7,074)		(8,118)

During the year ended December 31, 2021, depreciation of equipment under finance leases was $21,343 (December 31, 2020 - $17,147).

Consolidated Financial Statements<br><br>December 31, 2021	F - 22	North American Construction Group Ltd.

c) Supplemental balance sheet information

	December 31,<br>2021			December 31, 2020
Net book value of property, plant and equipment under finance leases	$	100,124		$	115,941
Weighted-average remaining lease term (in years):
Finance leases	2.5			3.0
Operating leases	8.3			8.1
Weighted-average discount rate:
Finance leases	3.22		%	3.66		%
Operating leases	4.68		%	4.72		%

Investments in affiliates and joint ventures

On October 13, 2021, the Company entered into the Limited Liability Company Agreement with Concessions Fargo Holdings, LLC, S&B USA Concessions – Fargo LP to form Red River Valley Alliance, LLC (“RRVA”). On August 19, 2021, RRVA entered into an agreement with the Metro Flood Diversion Authority to design, construct, finance, operate and maintain a diversion channel and associated infrastructure that will form part of the Fargo-Moorhead Metropolitan Area Flood Risk Management Project. The Company holds 15% interest in the investment and can exercise significant influence over the financial and operational policies of the joint venture through its voting rights, therefore the equity method of accounting is used to account for this investment.

On July 20, 2021, the Company entered into a Joint Venture Agreement with Acciona Construction USA Corp. (“Acciona”), and Shikun and Binui – America Inc. (“SBA”), to form ASN Constructors. The joint venture formalizes the relationship in terms of the participation in the Fargo Moorhead Area Diversion Project for which the ASN Constructors entered into a design and build contract with RRVA for the Fargo project agreement. The agreement was effective August 19, 2021. The Company holds 30% proportional share of interest and cost sharing through the joint venture agreement. The Company can exercise influence over the financial and operational policies of the joint venture through its voting rights, therefore the equity method of accounting is used to account for this investment.

The following is a summary of the Company's interests in its various affiliates and joint ventures, which it accounts for using the equity method:

Affiliate or joint venture name:	Interest
Nuna Group of Companies
1229181 B.C Ltd.	49	%
North American Nuna Joint Venture	50	%
Nuna East Ltd.	37	%
Nuna Pang Contracting Ltd.	37	%
Nuna West Mining Ltd.	49	%
NAYL Realty Inc.	49	%
BNA Remanufacturing Limited Partnership	50	%
Dene North Site Services Partnership	49	%
Mikisew North American Limited Partnership	49	%
ASN Constructors	30	%
Red River Valley Alliance LLC	15	%

The following table summarizes the movement in the investments in affiliates and joint ventures balance during the year:

	December 31, 2021		December 31, 2020
			Note 22
Balance, beginning of the year	$	46,263	$	45,015
Investments in affiliates and joint ventures	2,321		2,790
Share of net income	21,860		7,740
Dividends and advances received from affiliates and joint ventures	(11,270)		(8,621)
Other adjustments	(3,200)		(661)
Balance, end of the year	$	55,974	$	46,263	Consolidated Financial Statements<br><br>December 31, 2021	F - 23	North American Construction Group Ltd.
---	---	---

During the year ended December 31, 2021, the Company invested $1,959 in cash and $362 in property, plant and equipment for the investments in Mikisew North American Limited Partnership and BNA Remanufacturing Limited Partnership, respectively.

The financial information for the Company's share of the investments in affiliates and joint ventures accounted for using the equity method is summarized as follows:

Balance Sheets

	December 31,<br>2021		December 31,<br>2020
			Note 22
Assets
Current assets	$	118,371	$	55,887
Non-current assets	42,406		43,020
Total assets	$	160,777	$	98,907
Liabilities
Current liabilities	$	82,926	$	27,772
Non-current liabilities	21,877		24,872
Total liabilities	$	104,803	$	52,644
Net investments in affiliates and joint ventures	$	55,974	$	46,263

Statements of Operations

Year ended December 31,	2021		2020
Revenue	$	332,440	$	159,054
Gross profit	33,641		17,220
Income before taxes	25,064		9,113
Net income	21,860		7,740

Related parties

The following table provides the material aggregate outstanding balances with affiliates and joint ventures. Accounts payable and accrued liabilities due to joint ventures and affiliates do not bear interest, are unsecured and without fixed terms of repayment. Accounts receivable from certain joint ventures and affiliates bear interest at various rates, and all other accounts receivable amounts are non-interest bearing.

	December 31, 2021		December 31, 2020
			Note 22
Accounts receivable	$	31,050	$	3,808
Other assets	2,162		1,432
Accounts payable and accrued liabilities	286		5,296

The Company enters into transactions with a number of its joint ventures and affiliates that involve providing services primarily consisting of subcontractor services, equipment rental revenue, equipment and component sales, and management fees. These transactions were conducted in the normal course of operations, which were established and agreed to as consideration by the related parties. For the years ended December 31, 2021 and 2020, revenue earned from these services was $356,592 and $191,104, respectively. The majority of services provided in the oil sands region are being completed through the Mikisew North American Limited Partnership. This joint venture performs the role of contractor and sub-contracts work to the Company.

Consolidated Financial Statements<br><br>December 31, 2021	F - 24	North American Construction Group Ltd.

Business acquisition

On July 1, 2021, the Company acquired all the shares and business of DGI (Aust) Trading Pty Ltd., a supplier of production-critical mining equipment and components based in Kempsey, New South Wales, Australia for total consideration of $18,441, comprised of a cash payment and contingent consideration in the form of an earn-out to be paid based on the earnings of DGI over the next four annual periods.

The following table summarizes the total consideration paid for DGI shareholders and the fair value of the assets acquired and liabilities assumed at the acquisition date:

	July 1, 2021
Cash consideration	$	13,724
Earn-out at estimated fair value	4,717
Total consideration	$	18,441
Purchase price allocation to assets acquired and liabilities assumed:
Cash	$	2,329
Accounts receivable	1,910
Inventory	13,713
Prepaid expenses and deposits	971
Property, plant and equipment	1,176
Operating lease right-of-use asset	749
Intangible assets	2,575
Accounts payable	(3,560)
Accrued liabilities	(718)
Long-term debt	(370)
Operating lease liability	(749)
Deferred tax liability	(128)
Total identifiable net assets at fair value	$	17,898
Goodwill arising on acquisition	$	543

The fair value of acquired identified intangible assets, consists of $595 in brand with an indefinite useful life and $1,980 in customer relationships with a useful life of four years.

The fair value of acquired inventory consists of used mining equipment and related components for resale.

During the year ended December 31, 2021, the Company recognized $209 of acquisition related costs associated with professional and legal advisory fees in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income.

During the year ended December 31, 2021, the Company recognized $12,687 or 2% of revenue and $605 or 1% of net income from DGI recorded in the Consolidated Statement of Operations and Comprehensive Income.

The pro forma disclosures related to the effect of the acquisition have been excluded on the basis of immateriality.

Consolidated Financial Statements<br><br>December 31, 2021	F - 25	North American Construction Group Ltd.

Income taxes

Income tax expense differs from the amount that would be computed by applying the federal and provincial statutory income tax rates to income before income taxes. The reasons for the differences are as follows:

Year ended December 31,	2021			2020
Income before income taxes	$	60,693		$	60,472
Equity earnings in affiliates and joint ventures	(21,860)			(7,740)
	$	38,833		$	52,732
Tax rate	23.00		%	23.00		%
Expected expense	$	8,932		$	12,128
Adjustments related to:
Stock-based compensation	1,043			(113)
Foreign tax rate differential	233			—
Other	(923)			(751)
Total income tax expense	$	9,285		$	11,264
Current income tax expense	$	1,000		$	—
Deferred income tax expense	8,285			11,264
Total income tax expense	$	9,285		$	11,264

The deferred tax assets and liabilities are summarized below:

	December 31, 2021		December 31, 2020
Deferred tax assets:
Non-capital and net capital loss carryforwards	$	40,367	$	40,758
Finance lease obligations	24,785		27,736
Stock-based compensation	4,029		2,872
Other	2,093		1,990
Subtotal	$	71,274	$	73,356
Less: valuation allowance	—		(391)
	$	71,274	$	72,965
Deferred tax liabilities:
Contract assets	$	932	$	1,524
Property, plant and equipment	124,265		117,768
Other	2,277		1,461
	$	127,474	$	120,753
Net deferred income tax liability	$	56,200	$	47,788

Classified as:

	December 31, 2021		December 31, 2020
Deferred tax asset	$	—	$	16,407
Deferred tax liability	(56,200)		(64,195)
	$	(56,200)	$	(47,788)

The Company and its subsidiaries file income tax returns in the Canadian federal jurisdiction, multiple provincial jurisdictions, the U.S. federal jurisdiction, three U.S state jurisdictions and the Australia federal jurisdiction.

Consolidated Financial Statements<br><br>December 31, 2021	F - 26	North American Construction Group Ltd.

At December 31, 2021, the Company has a deferred tax asset of $40,367 resulting from non-capital loss carryforwards of $175,509, which expire as follows:

	December 31, 2021
2026	3
2027	278
2032	176
2033	9,095
2036	1,213
2037	17,799
2038	86,979
2039	37,798
2040	18,188
2041	3,980
	$	175,509

Accrued liabilities

	Note	December 31, 2021		December 31, 2020
				Note 22
Payroll liabilities		$	16,888	$	11,869
Income and other taxes payable		5,064		3,205
Dividends payable	17(c)	1,137		1,167
Accrued interest payable		1,331		856
Liabilities related to short-term rentals		2,678		730
Funding obligations		3,022		—
Obligation related to acquisition earn-out liability		1,571		—
Other		1,698		1,555
		$	33,389	$	19,382

Other long-term obligations

	Note	December 31, 2021		December 31, 2020
				Note 22
Directors' deferred stock unit plan	19(c)	$	17,515	$	10,761
Deferred gain on sale-leaseback	15(a)	2,954		4,748
Obligation related to acquisition earn-out liability	12	3,098		—
Other		2,833		3,341
		$	26,400	$	18,850

a) Deferred gain on sale-leaseback

Changes in deferred gains on sale-leaseback transactions of heavy equipment are summarized below.

	December 31, 2021		December 31, 2020
			Note 22
Balance, beginning of year	$	4,748	$	6,593
Amortization of deferred gain on sale-leaseback	(1,794)		(1,845)
Balance, end of year	$	2,954	$	4,748

The gain on sale was deferred and is being amortized under depreciation in the Consolidated Statements of Operations and Comprehensive Income over the expected useful life of the equipment.

Financial instruments and risk management

a) Fair value measurements

In determining the fair value of financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing on each reporting date. Standard market conventions and

Consolidated Financial Statements<br><br>December 31, 2021	F - 27	North American Construction Group Ltd.

techniques, such as discounted cash flow analysis are used to determine the fair value of the Company’s financial instruments. All methods of fair value measurement result in a general approximation of fair value and such value may never actually be realized.

The fair values of the Company’s cash, accounts receivable, contract assets, loans to affiliates and joint ventures (included in other assets), acquisition earn-out liability, accounts payable, accrued liabilities and contract liabilities approximate their carrying amounts due to the nature of the instrument or the relatively short periods to maturity for the instruments. The Credit Facility has a carrying value that approximates the fair value due to the floating rate nature of the debt. The promissory notes and mortgages have carrying values that are not materially different than their fair values due to similar instruments bearing similar interest rates.

Financial instruments with carrying amounts that differ from their fair values are as follows:

		December 31, 2021		December 31, 2020
	Fair Value Hierarchy Level	Carrying<br>Amount	Fair<br>Value	Carrying<br>Amount	Fair<br>Value
					Note 22
Convertible debentures	Level 1	129,750	135,963	55,000	52,250
Financing obligations	Level 2	47,945	47,010	50,923	49,743

b) Risk management

The Company is exposed to liquidity, market and credit risks associated with its financial instruments. The Company will from time to time use various financial instruments to reduce market risk exposures from changes in foreign currency exchange rates and interest rates. Management performs a risk assessment on a continual basis to help ensure that all significant risks related to the Company and its operations have been reviewed and assessed to reflect changes in market conditions and the Company’s operating activities.

The Company is also exposed to concentration risk through its revenues which is mitigated by the customers being large investment grade organizations. The credit worthiness of new customers is subject to review by management through consideration of the type of customer and the size of the contract. The Company has further mitigated this risk through diversification of its operations. This diversification has primarily come through investments in joint ventures which are accounted for using the equity method. Revenues from these investments are not included in consolidated revenue.

c) Market risk

Market risk is the risk that the future revenue or operating expense related cash flows, the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices such as foreign currency exchange rates and interest rates. The level of market risk to which the Company is exposed at any point in time varies depending on market conditions, expectations of future price or market rate movements and composition of the Company’s financial assets and liabilities held, non-trading physical assets and contract portfolios.

To manage the exposure related to changes in market risk, the Company has used various risk management techniques. Such instruments may be used to establish a fixed price for a commodity, an interest bearing obligation or a cash flow denominated in a foreign currency.

The sensitivities provided below are hypothetical and should not be considered to be predictive of future performance or indicative of earnings on these contracts.

i) Foreign exchange risk

The Company regularly transacts in foreign currencies when purchasing equipment and spare parts as well as certain general and administrative goods and services. These exposures are generally of a short-term nature and the impact of changes in exchange rates has not been significant in the past. The Company may fix its exposure in either the Canadian Dollar or the US Dollar for these short term transactions, if material.

ii) Interest rate risk

The Company is exposed to interest rate risk from the possibility that changes in interest rates will affect future cash flows or the fair values of its financial instruments. Interest expense on borrowings with floating interest rates, including the Company’s Credit Facility, varies as market interest rates change. At December 31, 2021, the Company held $110.0 million of floating rate debt pertaining to its Credit Facility (December 31, 2020 – $220.0

Consolidated Financial Statements<br><br>December 31, 2021	F - 28	North American Construction Group Ltd.

million). As at December 31, 2021, holding all other variables constant, a 100 basis point change to interest rates on the outstanding floating rate debt will result in $1.1 million corresponding change in annual interest expense.

The fair value of financial instruments with fixed interest rates fluctuate with changes in market interest rates. However, these fluctuations do not affect earnings, as the Company’s debt is carried at amortized cost and the carrying value does not change as interest rates change.

The Company manages its interest rate risk exposure by using a mix of fixed and variable rate debt.

d) Credit risk

Credit risk is the risk that financial loss to the Company may be incurred if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company manages the credit risk associated with its cash by holding its funds with what it believes to be reputable financial institutions. The Company is also exposed to credit risk through its accounts receivable and contract assets. Credit risk for trade and other accounts receivables and contract assets are managed through established credit monitoring activities.

The following customers accounted for 10% or more of total revenues:

Year ended December 31,	2021		2020
			Note 22
Customer A	38	%	45	%
Customer B	27	%	30	%
Customer C	17	%	11	%
Customer D	10	%	10	%

The concentration risk is mitigated primarily by the customers being large investment grade organizations. The credit worthiness of new customers is subject to review by management through consideration of the type of customer and the size of the contract. Where the Company generates revenue under its subcontracting arrangement with MNALP, the final end customer is represented in the table above and in the table below.

The following customers represented 10% or more of accounts receivable and contract assets:

	December 31, 2021		December 31, 2020
			Note 22
Customer 1	45	%	39	%
Customer 2	15	%	20	%
Customer 3	15	%	16	%

The Company’s exposure to credit risk for accounts receivable and contract assets is as follows:

	December 31, 2021		December 31, 2020
			Note 22
Trade accounts receivable	$	51,774	$	23,637
Holdbacks	380		64
Accrued trade receivables	12,266		8,415
Contract receivables, included in accounts receivable	$	64,420	$	32,116
Other receivables	4,367		4,115
Total accounts receivable	$	68,787	$	36,231
Contract assets	9,759		7,008
Total	$	78,546	$	43,239	Consolidated Financial Statements<br><br>December 31, 2021	F - 29	North American Construction Group Ltd.
---	---	---

Payment terms are per the negotiated customer contracts and generally range between net 15 days and net 60 days. As at December 31, 2021 and December 31, 2020, trade receivables and holdbacks are aged as follows:

	December 31, 2021		December 31, 2020
			Note 22
Not past due	$	31,531	$	21,677
Past due 1-30 days	19,209		1,814
Past due 31-60 days	1,250		85
More than 61 days	164		125
Total	$	52,154	$	23,701

As at December 31, 2021, the Company has recorded an allowance for credit losses of $nil (December 31, 2020 - $nil).

a) Common shares

	Common shares	Treasury shares	Common shares, net of treasury shares
Issued and outstanding at December 31, 2019	27,502,912	(1,725,467)	25,777,445
Issued upon exercise of stock options	109,100	—	109,100
Issued upon conversion of convertible debentures	4,622,916	—	4,622,916
Retired through share purchase program	(1,223,097)	—	(1,223,097)
Purchase of treasury shares	—	(534,834)	(534,834)
Settlement of certain equity classified stock-based compensation	—	415,100	415,100
Issued and outstanding at December 31, 2020	31,011,831	(1,845,201)	29,166,630
Issued upon exercise of stock options	125,000	—	125,000
Retired through share purchase program	(1,113,903)	—	(1,113,903)
Purchase of treasury shares	—	(21,503)	(21,503)
Settlement of certain equity classified stock-based compensation	—	301,891	301,891
Issued and outstanding at December 31, 2021	30,022,928	(1,564,813)	28,458,115

Upon settlement of certain equity classified stock-based compensation during the year ended December 31, 2021, the Company withheld 274,359 shares for $5,134 to satisfy the recipient tax withholding requirements (year ended December 31, 2020 - 372,628 shares for $3,576).

b) Net income per share

Year ended December 31,	2021		2020
Net income	$	51,408	$	49,208
Interest from convertible debentures (after tax)	4,410		2,370
Diluted net income available to common shareholders	$	55,818	$	51,578
Weighted-average number of common shares	28,325,489		28,165,130
Weighted-average effect of dilutive securities
Dilutive effect of treasury shares	1,707,718		1,949,717
Dilutive effect of stock options	47,767		90,741
Dilutive effect of 5.00% convertible debentures	2,095,236		2,095,236
Dilutive effect of 5.50% convertible debentures	1,770,747		—
Weighted-average number of diluted common shares	33,946,957		32,300,824
Basic net income per share	$	1.81	$	1.75
Diluted net income per share	$	1.64	$	1.60

For the year ended December 31, 2021, all securities were dilutive (year ended December 31, 2020, all securities were dilutive).

Consolidated Financial Statements<br><br>December 31, 2021	F - 30	North American Construction Group Ltd.

On April 9, 2021, the Company commenced a normal course issuer bid ("NCIB") under which a maximum number of 2,000,000 common shares were authorized to be purchased. During the year ended December 31, 2021, the Company purchased and subsequently cancelled 37,000 shares under this NCIB, which resulted in a decrease of common shares of $300 and an increase to additional paid-in capital of $213. This NCIB will be terminated no later than April 8, 2022.

During the year ended December 31, 2021, the Company completed the NCIB commenced on March 12, 2020 upon the purchases and cancellation of 1,076,903 common shares. The purchases resulted in a decrease to common shares of $8,679 and a decrease to additional paid-in capital of $7,327. This completed the NCIB with the maximum number of authorized common shares purchased.

c) Dividends

	Date declared	Per share		Shareholders on record as of	Paid or payable to shareholders	Total paid or payable
Q1 2020	February 18, 2020	$	0.04	March 5, 2020	April 3, 2020	$	1,023
Q2 2020	May 5, 2020	$	0.04	May 29, 2020	July 3, 2020	$	1,162
Q3 2020	July 28, 2020	$	0.04	August 31, 2020	October 2, 2020	$	1,156
Q4 2020	October 27, 2020	$	0.04	November 30, 2020	January 8, 2021	$	1,040
Q1 2021	February 16, 2021	$	0.04	March 4, 2021	April 9, 2021	$	1,123
Q2 2021	April 27, 2021	$	0.04	May 28, 2021	July 9, 2021	$	1,123
Q3 2021	July 27, 2021	$	0.04	August 31, 2021	October 8, 2021	$	1,137
Q4 2021	October 26, 2021	$	0.04	November 30, 2021	January 7, 2022	$	1,137

Interest expense, net

Year ended December 31,	2021		2020
			Note 22
Credit Facility	$	6,559	$	8,189
Convertible debentures	5,148		3,299
Finance lease obligations	2,260		3,176
Mortgage	1,350		999
Promissory notes	450		664
Financing obligations	1,562		1,265
Amortization of deferred financing costs	1,064		1,091
Other interest expense	701		154
Interest expense	$	19,094	$	18,837
Other interest income	(62)		(181)
	$	19,032	$	18,656	Consolidated Financial Statements<br><br>December 31, 2021	F - 31	North American Construction Group Ltd.
---	---	---

Stock-based compensation

Stock-based compensation expenses included in general and administrative expenses are as follows:

Year ended December 31,	Note	2021		2020
Restricted share unit plan	19(a)	$	2,335	$	1,991
Performance restricted share unit plan	19(b)	2,165		2,031
Deferred stock unit plan	19(c)	7,106		(2,078)
		$	11,606	$	1,944

a) Restricted share unit plan

Restricted Share Units (“RSU”) are granted each year to executives and other key employees with respect to services to be provided in that year and the following two years. The majority of RSUs vest at the end of a three-year term. The Company settles RSUs with common shares purchased on the open market through a trust arrangement.

	Number of units	Weighted-average exercise price<br>$ per share
Outstanding at December 31, 2019	650,077	9.35
Granted	298,142	8.55
Vested	(269,484)	6.19
Forfeited	(37,264)	8.81
Outstanding at December 31, 2020	641,471	10.34
Granted	144,383	19.97
Vested	(220,116)	8.44
Forfeited	(12,327)	13.01
Outstanding at December 31, 2021	553,411	13.55

At December 31, 2021, there were approximately $4,339 of unrecognized compensation costs related to non-vested share-based payment arrangements under the RSU plan (December 31, 2020 – $3,290) and these costs are expected to be recognized over the weighted-average remaining contractual life of the RSUs of 1.4 years (December 31, 2020 – 1.6 years). During the year ended December 31, 2021, 220,116 units vested, which were settled with common shares purchased through a trust arrangement (December 31, 2020 - 269,484 units vested and settled).

b) Performance restricted share unit plan

Performance Restricted Share Units ("PSU") are granted each year to senior management employees with respect to services to be provided in that year and the following two years. The PSUs vest at the end of a three-year term and are subject to performance criteria approved by the Human Resources and Compensation Committee at the grant date. The Company settles PSUs with common shares purchased through a trust arrangement.

	Number of units	Weighted-average exercise price<br>$ per share
Outstanding at December 31, 2019	481,907	8.85
Granted	211,754	8.55
Vested	(201,104)	8.51
Forfeited	—	—
Outstanding at December 31, 2020	492,557	8.86
Granted	112,079	20.04
Vested	(178,067)	8.24
Outstanding at December 31, 2021	426,569	12.06	Consolidated Financial Statements<br><br>December 31, 2021	F - 32	North American Construction Group Ltd.
---	---	---

At December 31, 2021, there were approximately $3,702 of total unrecognized compensation costs related to non–vested share–based payment arrangements under the PSU plan (December 31, 2020 - $3,405) and these costs are expected to be recognized over the weighted-average remaining contractual life of the PSUs of 1.5 years (December 31, 2020 - 1.6 years). During the year ended December 31, 2021, 178,067 units vested, which were settled with common shares purchased through a trust arrangement at a factor of 2.0 common shares per PSU based on performance against grant date criteria (December 31, 2020 - 201,104 units at a factor of 2.0 vested and settled).

The Company estimated the fair value of the PSUs granted during the years ended December 31, 2021 and 2020 using a Monte Carlo simulation with the following assumptions:

	2021		2020
Risk-free interest rate	0.65	%	0.30	%
Expected volatility	50.96	%	48.71	%

c) Director's deferred stock unit plan

Prior to January 1, 2021, under the Company’s shareholding guidelines non-officer directors of the Company were required to receive at least 50% and up to 100% of their annual fixed remuneration in the form of DSUs, at their election. The shareholding guidelines were amended effective January 1, 2021 to require directors to take at least 60% of their annual fixed remuneration in the form of DSUs if they do not meet shareholding guidelines, and to take between 0% and 100% of their annual fixed remuneration in the form of DSUs if they do meet shareholding guidelines. In addition to directors, eligible executives can elect to receive up to 50% of their annual short term incentive plan compensation in the form of DSUs.

The DSUs vest immediately upon issuance and are only redeemable upon departure, retirement or death of the participant. DSU holders that are not US taxpayers may elect to defer the redemption date until a date no later than December 1 of the calendar year following the year in which the departure, retirement or death occurred.

	Number of units
Outstanding at December 31, 2019	901,045
Granted	114,020
Redeemed	(9,562)
Outstanding at December 31, 2020	1,005,503
Granted	66,265
Redeemed	(139,124)
Outstanding at December 31, 2021	932,644

At December 31, 2021, the fair market value of these units was $18.78 per unit (December 31, 2020 – $12.42 per unit). At December 31, 2021, the current portion of DSU liabilities of $nil was included in accrued liabilities (December 31, 2020 - $1,728) and the long-term portion of DSU liabilities of $17,515 was included in other long-term obligations (December 31, 2020 - $10,761) in the Consolidated Balance Sheets. During the year ended December 31, 2021, there were 139,124 units redeemed and settled in cash for $2,300 (December 31, 2020 - 9,562 units were redeemed and settled in cash for $103). There is no unrecognized compensation expense related to the DSUs since these awards vest immediately upon issuance.

Consolidated Financial Statements<br><br>December 31, 2021	F - 33	North American Construction Group Ltd.

d) Share option plan

Effective November 17, 2021, the Company terminated 2004 Amended and Restated Share Option Plan, which became effective in 2006. Under this plan, directors, officers, employees and certain service providers to the Company were eligible to receive stock options to acquire voting common shares in the Company. Each stock option provided the right to acquire one common share in the Company and expired ten years from the grant date or on termination of employment. There were no issued or outstanding options as at the date of termination.

	Number of options	Weighted-average<br>exercise price<br>$ per share
Outstanding at December 31, 2019	238,600	4.61
Exercised(i)	(109,100)	4.91
Forfeited or expired	(4,500)	10.13
Outstanding at December 31, 2020	125,000	4.16
Exercised(i)	(125,000)	4.16
Outstanding at December 31, 2021	—	—

(i) All stock options exercised resulted in new common shares being issued (note 17(a)).

Cash received from options exercised for the year ended December 31, 2021 was $519 (2020 - $537). For the year ended December 31, 2021, the total intrinsic value of options exercised, calculated as the market value at the exercise date less exercise price, multiplied by the number of units exercised, was $1,909 (December 31, 2020 - $535).

At December 31, 2021, the Company had no outstanding exercisable options (December 31, 2020 – 125,000). At December 31, 2020, the weighted-average remaining contractual life of outstanding options was 1.9 years and the weighted-average exercise price was $4.16.

Other information

a) Supplemental cash flow information

Year ended December 31,	2021		2020
			Note 22
Cash paid during the year for:
Interest	$	17,028	$	18,518
Cash received during the year for:
Interest	69		151
Non-cash transactions:
Addition of property, plant and equipment by means of finance leases	19,198		27,882
Decrease to property, plant and equipment upon investment contribution to affiliates and joint ventures	(362)		(980)
Increase in assets held for sale, offset by property, plant and equipment	9,281		6,903
Non-cash working capital exclusions:
Net decrease in accounts receivable relating to other adjustments to investments in affiliates and joint ventures	—		(911)
Net increase in inventory due to transfer from property, plant and equipment	437		—
Net decrease in accrued liabilities related to conversion of bonus compensation to deferred stock units	223		294
Net decrease (increase) in accrued liabilities related to the current portion of deferred stock unit liability	1,725		(1,727)
Net decrease (increase) in accrued liabilities related to dividend payable	33		(137)
Non-cash working capital transactions related to acquisition of DGI: (note 12)
Increase in accounts receivable	1,910		—
Increase in inventory	13,713		—
Increase in prepaid expenses	971		—
Increase in accounts payable	(3,591)		—
Increase in accrued liabilities	(2,307)		—		Consolidated Financial Statements<br><br>December 31, 2021	F - 34	North American Construction Group Ltd.
---	---	---

b) Net change in non-cash working capital

The table below represents the cash (used in) provided by non-cash working capital:

Year ended December 31,	2021		2020
			Note 22
Operating activities:
Accounts receivable	$	(30,646)	$	29,162
Contract assets	(2,751)		12,086
Inventories	(11,243)		2,476
Contract costs	(704)		(593)
Prepaid expenses and deposits	(735)		(953)
Accounts payable	31,232		(47,398)
Accrued liabilities	13,681		338
Contract liabilities	1,837		1,489
	$	671	$	(3,393)

Contingencies

During the normal course of the Company's operations, various disputes, legal and tax matters are pending. In the opinion of management involving the use of significant judgement and estimates, these matters will not have a material effect on the Company's consolidated financial statements.

Consolidated Financial Statements<br><br>December 31, 2021	F - 35	North American Construction Group Ltd.

Change in significant accounting policy - Basis of presentation

The following tables summarize the effect of the change in accounting policy which updated the consolidation method of DNSS and MNALP from proportionate to equity method (note 2 (a)(i)).

Consolidated Balance Sheets at December 31, 2021 and 2020:

	December 31, 2021						December 31, 2020
(in thousands)	Without change		Adjustments		As reported		As originally reported		Adjustments		As reported
Assets
Current assets	156,963		(9,784)		147,179		119,958		(681)		119,277
Non-current assets	727,175		(5,076)		722,099		718,970		816		719,786
Total assets	$	884,138	$	(14,860)	$	869,278	$	838,928	$	135	$	839,063
Liabilities and shareholders' equity
Current liabilities	168,635		(7,601)		161,034		109,198		286		109,484
Non-current liabilities	437,040		(7,259)		429,781		481,287		(151)		481,136
	605,675		(14,860)		590,815		590,485		135		590,620
Shareholders' equity	278,463		—		278,463		248,443		—		248,443
Total liabilities and shareholders' equity	$	884,138	$	(14,860)	$	869,278	$	838,928	$	135	$	839,063

Consolidated Statements of Operations and Comprehensive Income for December 31, 2021 and 2020:

	December 31, 2021						December 31, 2020
(in thousands)	Without change		Adjustments		As reported		As originally reported		Adjustments		As reported
Revenue	$	658,122	$	(3,979)	$	654,143	$	500,374	$	(1,906)	$	498,468
Gross profit	93,927		(3,510)		90,417		94,382		(2,164)		92,218
Operating income	58,523		(3,395)		55,128		68,945		(1,823)		67,122
Equity earnings in affiliates and joint ventures	(18,475)		(3,385)		(21,860)		(5,942)		(1,798)		(7,740)
Income before income taxes	60,693		—		60,693		60,472		—		60,472
Net income	51,408		—		51,408		49,208		—		49,208
Comprehensive income	$	51,410	$	—	$	51,410	$	49,208	$	—	$	49,208

Consolidated Statements of Cash Flows for December 31, 2021 and 2020:

	December 31, 2021						December 30, 2020
(in thousands)	Without change		Adjustments		As reported		As originally reported		Adjustments		As reported
Operating activities	168,893		(3,713)		165,180		147,272		(722)		146,550
Investing activities	(100,604)		1,335		(99,269)		(113,573)		746		(112,827)
Financing activities	(92,547)		(212)		(92,759)		4,672		(156)		4,516
Decrease in cash	(24,258)		(2,590)		(26,848)		38,371		(132)		38,239
Effect of exchange rate on changes in cash and cash equivalents	2		—		2				—		—
Cash, beginning of period	43,915		(468)		43,447		5,544		(336)		5,208
Cash, end of period	$	19,659	$	(3,058)	$	16,601	$	43,915	$	(468)	$	43,447	Consolidated Financial Statements<br><br>December 31, 2021	F - 36	North American Construction Group Ltd.
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Document

EXHIBIT 99.1

News Release

North American Construction Group Ltd. Announces Results for the Fourth Quarter and Year Ended December 31, 2021

ACHESON, Alberta, February 16, 2022 - North American Construction Group Ltd. (“NACG”) (TSX:NOA/NYSE:NOA) today announced results for the fourth quarter and year ended December 31, 2021. Unless otherwise indicated, figures are expressed in Canadian dollars with comparisons to prior periods ended December 31, 2020.

Fourth Quarter and Year Ended 2021 Highlights:

•Revenue of $181.0 million in Q4 2021 compared to $136.1 million in the same period last year was primarily a result of the increased demand at the Fort Hills mine and increased mine support work at the Kearl mine. Additionally, the acquisition of DGI Trading Pty Ltd. ("DGI") positively impacted our revenue from a seamless transition on July 1, 2021 and the strong demand for heavy equipment parts and components.

•Our share of revenue from equity consolidated joint ventures was $53.9 million in Q4 2021 compared to $33.9 million in the same period last year, representing a 59% step-change in activity primarily from our Indigenous joint ventures with the Nuna Group of Companies and the Mikisew Group of Companies.

•Net income of $15.3 million in Q4 2021 compared to $10.0 million in the same period last year was a result of higher revenue and equity earnings in affiliates and joint ventures.

•Adjusted EBITDA of $56.3 million in Q4 2021 resulted in full year adjusted EBITDA of $207.3 million. Both are increases from the prior year ($45.2 million and $174.3 million, respectively), reflecting improved operating conditions and a continued recovery to pre-pandemic levels.

•Gross profit margin of 12.7% in Q4 2021 compared to 16.6% in the same period last year reflected increased equipment maintenance activities to support the large demand of work for the remainder of the winter season.

•The Fargo-Moorhead project achieved secured financing and formal financial close milestone in the quarter which provided the ability to recognize certain cost reimbursements as well as early progress of the project.

•Cash flows generated from operating activities of $65.9 million in Q4 2021 compared to $62.5 million in the same period last year as higher net earnings were partially offset by changes in joint venture balances.

•Free cash flow ("FCF") of $48.3 million in Q4 2021 resulted in full year FCF of $67.2 million through strong adjusted EBITDA in the quarter and minimal working capital balances for the year, offset by timing impacts of capital work in process and capital inventory which required initial cash investments to build and maintain our component rebuild capabilities.

•Net debt was $369.0 million at December 31, 2021, a reduction of $16.9 million from the prior year balance as free cash flow generation and subsequent capital allocation in Q4 resulted in deleverage.

•On February 15, 2022, the Board of Directors approved an increase to the dividend rate from $0.16 per annum to $0.32 per annum.

NACG President and CEO, Joseph Lambert, added: “2021 was a year filled with accomplishments and records for our Company. We achieved our objectives and were able to work collaboratively with our long-standing existing customers as well as diversifying our business and starting relationships with new ones. And as evidenced by the results in our annual report and a fact that I'm particularly proud of, the scopes in our Indigenous joint ventures continues to trend upward."

Lambert added: "But with all that said, we are in no mood to celebrate. On January 6, 2022, we had a tragic incident which we do all in our power to avoid. The fatality has left us shaken and we grieve with the family and friends of our coworker. This was an exemplary employee and we are resolved in ensuring an accident like this never happens again. While the incident remains under investigation, we are recommitting ourselves here in 2022 to take any and all applicable actions identified to prevent reoccurrence."

Consolidated Financial Highlights

	Three months ended						Year ended
	December 31,						December 31,
(dollars in thousands, except per share amounts)	2021			2020			2021			2020
Revenue	$	181,001		$	136,076		$	654,143		$	498,468
Project costs	68,077			39,552			223,537			140,341
Equipment costs	60,810			47,708			232,173			177,127
Depreciation	29,050			26,248			108,016			88,782
Gross profit	$	23,064		$	22,568		$	90,417		$	92,218
Gross profit margin	12.7		%	16.6		%	13.8		%	18.5		%
General and administrative expenses (excluding stock-based compensation)	3,694			6,268			23,768			22,493
Stock-based compensation expense	1,643			4,839			11,606			1,944
Operating income	17,464			11,439			55,128			67,122
Interest expense, net	5,250			4,435			19,032			18,656
Net income	15,308			10,044			51,408			49,208
Adjusted EBITDA(i)	$	56,285		$	45,192		$	207,333		$	174,336
Adjusted EBITDA margin(ii)	24.0		%	26.6		%	25.5		%	29.9		%
Per share information
Basic net income per share	$	0.54		$	0.34		$	1.81		$	1.75
Diluted net income per share	$	0.48		$	0.32		$	1.64		$	1.60
Adjusted EPS(i)	$	0.59		$	0.36		$	2.06		$	1.73

(i) See "Non-GAAP Financial Measures".

(ii)Adjusted EBITDA margin is calculated using adjusted EBITDA over total combined revenue.

(i)See "Non-GAAP Financial Measures".

	Three months				Year ended
	December 31				December 31,
(dollars in thousands)	2021		2020(ii)		2021		2020(ii)
Cash provided by operating activities	$	65,895	$	62,493	$	165,180	$	146,550
Cash used in investing activities	(24,301)		(25,158)		(99,269)		(112,827)
Capital additions financed by leases	—		—		(19,198)		(27,882)
Add back:
Growth capital additions	6,735		3,178		6,795		37,665
Acquisition of DGI (Aust) Trading Pty Ltd.	—		—		13,724		—
Free cash flow(i)	$	48,329	$	40,513	$	67,232	$	43,506

Declaration of Quarterly Dividend

On February 15, 2022, the NACG Board of Directors declared a regular quarterly dividend (the “Dividend”) of eight Canadian cents ($0.08) per common share, payable to common shareholders of record at the close of business on March 4, 2022. The Dividend will be paid on April 8, 2022 and is an eligible dividend for Canadian income tax purposes.

2022 Sustainability Report

In addition to the 2021 financial results, we have released our 2022 Sustainability Report. This second annual report provides the structured framework for environmental, social, and governance initiatives moving forward. We plan to issue future reports around this time each year which will allow stakeholders to measure progress in a variety of business areas with increasing rigor and metrics. The 2022 Sustainability Report is available for download on the company’s website at www.nacg.ca/social-responsibility.

Results for the Three Months Ended December 31, 2021

Revenue was $181.0 million, up from $136.1 million in the same period last year. The increase was primarily generated by the equipment fleet at the Fort Hills mine which was remobilized in the third quarter of 2021. Additionally, there was a stronger demand for mine support work and equipment rental support at the Kearl mine than the comparable quarter. Lastly, the completion of three haul truck rebuilds by our external maintenance program and the acquisition of the Australian component supplier DGI bolstered revenue in Q4 2021.

Gross profit margin of 12.7% was down from 16.6% in the prior year. Lower gross profit margin was impacted by increased equipment maintenance activities, primarily at the Millennium mine, as we performed the required maintenance services to ensure the fleet is operating at full capacity for the large demand of work for the remainder of the winter season. Furthermore, Canada Emergency Wage Subsidy ("CEWS") impacted the variance as it was a significant program in place in the comparable quarter. These decreases were offset by the strong operational execution of the scopes of work at the Aurora & Fort Hills mine and the diversified margin profile from component and parts sales by DGI.

Direct general and administrative expenses (excluding stock based compensation expense) were $3.7 million, or 2.0% of revenue, lower than Q4 2020 spending of $6.3 million or 4.6% of revenue primarily due to recognition of reimbursable bid costs received in excess of amounts capitalized, offset by no CEWS amounts received in Q4 2021 compared to $0.5 million received in Q4 2020.

Cash related interest expense of $4.9 million represents an average cost of debt of 4.7% (compared to 4.2% for the three months ended December 31, 2020). The increase in the current year period was a result of the addition of new 5.5% convertible debentures, partially offset by the decrease in interest related to our Credit Agreement.

Net income of $15.3 million in Q4 2021 compared to $10.0 million in the same period last year was a result of higher revenue and equity earnings in affiliates and joint ventures, and lower general and administrative expenses.

Free cash flow in the quarter was $48.3 million and was driven by strong operating results with higher cash distribution from non-cash working capital, offset by investment in capital work in progress and joint ventures. Primary routine drivers of free cash flow were adjusted EBITDA of $56.3 million less sustaining capital spending of $20.2 million and cash interest paid of $4.9 million. The remaining drivers for free cash flow generation were i) the timing impacts of capital work in process and capital inventory which require initial cash investment as we build our maintenance and component rebuild capabilities and ii) the timing of joint venture distributions which had a slight negative impact for the whole of 2021 but was not a significant driver this year given the large distributions that were received as planned in Q4 2021.

Business Updates

Strategic Focus Areas

•Safety - focus on people and relationships as we emerge from the pandemic, maintain an uncompromising commitment to health and safety while elevating the standard of excellence in the field.

•Sustainability - commitment to the continued development of sustainability targets and consistent measurement of progress to those targets.

•Execution - enhance our record of operational excellence with respect to fleet maintenance, availability and utilization through leverage of our reliability programs, technical improvements and management systems.

•Diversification - continue to pursue further diversification of customers, resources and geography through strategic partnerships, industry expertise and/or investment in Indigenous joint ventures.

Liquidity

Managing our liquidity has been a critical function during the uncertainty of the pandemic. Our current liquidity positions us well moving forward to continually fund organic growth and the required correlated working capital investments. Including equipment financing availability and factoring in the amended Credit Facility agreement, total available capital liquidity of $226.3 million includes total liquidity of $197.7 million and $28.6 million of unused finance lease borrowing availability as at December 31, 2021. Liquidity is primarily provided by the terms of our $325.0 million credit facility which allows for funds availability based on a trailing twelve-month EBITDA and is now scheduled to expire in October 2024.

Achievement against 2021 targets and our outlook for 2022

Given our visibility into 2022 and the assumption of continued easing of site access restrictions, management has provided stakeholders with guidance through 2022. This guidance is predicated on contracts currently in place and the heavy equipment fleet that we own and operate.

Key measures	2021 Actual	2021 Stated Targets	2022 Outlook
Adjusted EBITDA	$207M	$205 - $215M	$215 - $245M
Adjusted EPS	$2.06	$1.95 - $2.15	$2.15 - $2.55
Sustaining capital	$102M	$95 - $105M	$110 - $245M
Free cash flow	$67M	$65 - $85M	$95 - $115M
Capital allocation measures
Growth capital and acquisitions	$25M	$25 - $35M	$nil - $35M
Deleverage	$17M	$15 - $35M	$50 - $80M
Shareholder activity(i)	$31M	n/a	$15 - $35M
Leverage ratios
Senior debt	1.5x	1.1x - 1.5x	0.9x - 1.4x
Net debt	1.8x	1.7x - 2.1x	1.2x - 1.7x

(i)Shareholder activity includes common shares purchased under a normal course issuer bid, dividends paid and the purchase of treasury shares.

Conference Call and Webcast

Management will hold a conference call and webcast to discuss our financial results for the three months and year ended December 31, 2021 tomorrow, Thursday, February 17, 2022 at 9:00 am Eastern Time (7:00 am Mountain Time).

The call can be accessed by dialing:

Toll free: 1-844-248-9143

International: 1-216-539-8612

Conference ID: 2060308

A replay will be available through March 17, 2022, by dialing:

Toll Free: 1-855-859-2056

International: 1-404-537-3406

Conference ID: 2060308

A slide deck for the webcast will be available for download the evening prior to the call and will be found on the company’s website at www.nacg.ca/presentations/

The live presentation and webcast can be accessed at:

https://onlinexperiences.com/Launch/QReg/ShowUUID=344C72F0-E7DB-4D57-9603-73EF180089CA

A replay will be available until March 17, 2022 using the link provided.

Basis of Presentation

We have prepared our consolidated financial statements in conformity with accounting principles generally accepted in the United States ("US GAAP"). Unless otherwise specified, all dollar amounts discussed are in Canadian dollars. Please see the Management’s Discussion and Analysis (“MD&A”) for the three months and year ended December 31, 2021 for further detail on the matters discussed in this release. In addition to the MD&A, please reference the dedicated Q4 2021 Results Presentation for more information on our results and projections which can be found on our website under Investors - Presentations.

Change in significant accounting policy - Basis of presentation

Prior to July 1, 2021, we elected to apply the provision available to entities operating within the construction industry to apply proportionate consolidation to unincorporated entities that would otherwise be accounted for using the equity method. In Q3 2021, we elected to change this policy to account for these unincorporated entities using the equity method, resulting in a change to the consolidation method for Dene North Site Services and Mikisew North American Limited Partnership. This change allows for consistency in the presentation of our investments in affiliates and joint ventures. We have accounted for the change retrospectively according to the requirements of US GAAP

Accounting Standards Codification ("ASC") 250 by restating the comparative periods. For full disclosure, refer to note 22 in our Financial Statements for December 31, 2021 available on EDGAR on the SEC website at www.sec.gov or on the CSA website at www.sedar.com.

Forward-Looking Information

The information provided in this release contains forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “anticipate”, “believe”, “expect”, “should” or similar expressions and include guidance with respect to financial metrics provided in our outlook for 2022.

The material factors or assumptions used to develop the above forward-looking statements include, and the risks and uncertainties to which such forward-looking statements are subject, are highlighted in the MD&A for the three months and year ended December 31, 2021. Actual results could differ materially from those contemplated by such forward-looking statements because of any number of factors and uncertainties, many of which are beyond NACG’s control. Undue reliance should not be placed upon forward-looking statements and NACG undertakes no obligation, other than those required by applicable law, to update or revise those statements. For more complete information about NACG, please read our disclosure documents filed with the SEC and the CSA. These free documents can be obtained by visiting EDGAR on the SEC website at www.sec.gov or on the CSA website at www.sedar.com and on our company website at www.nacg.ca.

Non-GAAP Financial Measures

This press release presents certain non-GAAP financial measures, non-GAAP ratios, and supplementary financial measures that may be useful to investors in analyzing our business performance, leverage and liquidity. A non-GAAP financial measure is defined by relevant regulatory authorities as a numerical measure of an issuer's historical or future financial performance, financial position or cash flow that is not specified, defined or determined under the issuer’s GAAP and that is not presented in an issuer’s financial statements. A "non-GAAP ratio" is a ratio, fraction, percentage or similar expression that has a non-GAAP financial measure as on or more of its components. Non-GAAP financial measures and ratios do not have standardized meanings under GAAP and therefore may not be comparable to similar measures presented by other issuers. They should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. A "supplementary financial measure" is a financial measure disclosed, or intended to be disclosed, on a periodic basis to depict historical or future financial performance, financial position or cash flows that does not fall within the definition of a non-GAAP financial measure or non-GAAP ratio. The non-GAAP financial measures and ratios we present include, "adjusted net earnings", "total combined revenue", "adjusted EBIT", "equity investment EBIT", "adjusted EBITDA", "adjusted EPS", "margin", "senior debt", "net debt" "cash provided by operating activities prior to change in working capital", "sustaining capital", "growth capital" and "free cash flow". We also use supplementary financial measures such as "gross profit margin" in our MD&A. Each non-GAAP financial measure used in this press release is defined under "Financial Measures" in our Management's Discussion and Analysis filed on EDGAR on the SEC website at www.sec.gov or on the CSA website at www.sedar.com and on our company website at www.nacg.ca.

A reconciliation of total reported revenue to total combined revenue is as follows:

	Three months ended				Year ended
	December 31,				December 31,
(dollars in thousands)	2021		2020(ii)		2021		2020(ii)
Revenue from wholly-owned entities per financial statements	181,001		136,076		654,143		498,468
Share of revenue from investments in affiliates and joint ventures	108,291		48,194		332,440		159,054
Adjustment for joint ventures	(54,394)		(14,293)		(174,357)		(74,059)
Total combined revenue(i)	$	234,898	$	169,977	$	812,226	$	583,463

(i) See "Non-GAAP Financial Measures"

(ii)The prior year amounts are adjusted to reflect a change in accounting policy. See "Change in significant accounting policy - Basis of presentation".

A reconciliation of net income and comprehensive income available to shareholders to adjusted net earnings, adjusted EBIT and adjusted EBITDA is as follows:

	Three months ended						Year ended
	December 31,						December 31,
(dollars in thousands)	2021			2020(iii)			2021			2020(iii)
Net income	$	15,308		$	10,044		$	51,408		$	49,208
Adjustments:
Loss (gain) on disposal of property, plant and equipment	263			22			(85)			659
Stock-based compensation expense	1,643			4,839			11,606			1,944
Net realized and unrealized gain on derivative financial instruments	—			(3,429)			(2,737)			(4,266)
Write-down on asset held for sale	—			—			700			1,800
Tax effect of the above items	(438)			(1,118)			(2,649)			(599)
Adjusted net earnings(i)	$	16,776		$	10,358		$	58,243		$	48,746
Adjustments:
Tax effect of the above items	438			1,118			2,649			599
Interest expense, net	5,250			4,435			19,032			18,656
Income tax expense	2,487			319			9,285			11,264
Equity loss (earnings) in affiliates and joint ventures(i)	(5,581)			70			(21,860)			(7,740)
Equity investment EBIT(i)	5,768			1,284			25,312			9,893
Adjusted EBIT(i)	$	25,138		$	17,584		$	92,661		$	81,418
Adjustments:
Depreciation and amortization	29,242			26,292			108,333			89,309
Write-down on asset held for sale	—			—			(700)			(1,800)
Equity investment depreciation and amortization(i)	1,905			1,316			7,039			5,409
Adjusted EBITDA(i)	$	56,285		$	45,192		$	207,333		$	174,336
Adjusted EBITDA margin(ii)	24.0		%	26.6		%	25.5		%	29.9		%

(i) See "Non-GAAP Financial Measures".

(ii)Adjusted EBITDA margin is calculated using adjusted EBITDA over total combined revenue.

(iii)The prior year amounts are adjusted to reflect a change in accounting policy. See "Change in Accounting Policy - Basis of presentation".

Below is a reconciliation of the amount included in adjusted EBITDA for the three months and year ended December 31, 2021.

	Three months ended				Year ended
	December 31,				December 31,
(dollars in thousands)	2021		2020(ii)		2021		2020(ii)
Equity (earnings) loss in affiliates and joint ventures	$	5,581	$	(70)	$	21,860	$	7,740
Adjustments:
Interest expense, net	(73)		149		168		376
Income tax expense	294		1,125		3,204		1,374
Gain on disposal of property, plant and equipment	(34)		80		80		403
Equity investment EBIT(i)	$	5,768	$	1,284	$	25,312	$	9,893

(i) See "Non-GAAP Financial Measures"

(ii)The prior year amounts are adjusted to reflect a change in accounting policy. See "Change in significant accounting policy - Basis of presentation".

About the Company

North American Construction Group Ltd. (www.nacg.ca) is one of Canada’s largest providers of heavy civil construction and mining contractors. For more than 65 years, NACG has provided services to large oil, natural gas and resource companies.

For further information contact:

Jason Veenstra, CPA, CA

Chief Financial Officer

North American Construction Group Ltd.

(780) 960.7171

ir@nacg.ca

www.nacg.ca

Consolidated Balance Sheets

As at December 31

(Expressed in thousands of Canadian Dollars)

	2021		2020(i)
Assets
Current assets
Cash	$	16,601	$	43,447
Accounts receivable	68,787		36,231
Contract assets	9,759		7,008
Inventories	44,544		19,151
Prepaid expenses and deposits	6,828		4,977
Assets held for sale	660		4,129
Derivative financial instruments	—		4,334
	147,179		119,277
Property, plant and equipment, net of accumulated depreciation $339,505 (2020 – $302,161)	640,950		632,210
Operating lease right-of-use assets	14,768		18,192
Investments in affiliates and joint ventures	55,974		46,263
Other assets	6,000		6,336
Goodwill and intangible assets	4,407		378
Deferred tax assets	—		16,407
Total assets	$	869,278	$	839,063
Liabilities and shareholders' equity
Current liabilities
Accounts payable	$	76,251	$	41,428
Accrued liabilities	33,389		19,382
Contract liabilities	3,349		1,512
Current portion of long-term debt	19,693		16,263
Current portion of finance lease obligations	25,035		26,895
Current portion of operating lease liabilities	3,317		4,004
	161,034		109,484
Long-term debt	306,034		341,396
Finance lease obligations	29,686		42,577
Operating lease liabilities	11,461		14,118
Other long-term obligations	26,400		18,850
Deferred tax liabilities	56,200		64,195
	590,815		590,620
Shareholders' equity
Common shares (authorized – unlimited number of voting common shares; issued and outstanding – December 31, 2021 - 30,022,928 (December 31, 2020 – 31,011,831))	246,944		255,064
Treasury shares (December 31, 2021 - 1,564,813 (December 31, 2020 - 1,845,201))	(17,802)		(18,002)
Additional paid-in capital	37,456		46,536
Retained earnings (deficit)	11,863		(35,155)
Accumulated other comprehensive income	2		—
Shareholders' equity	278,463		248,443
Total liabilities and shareholders' equity	$	869,278	$	839,063

(i)The prior year amounts are adjusted to reflect a change in accounting policy. See "Change in significant accounting policy - Basis of presentation".

Consolidated Statements of Operations and

Comprehensive Income

For the years ended December 31

(Expressed in thousands of Canadian Dollars, except per share amounts)

	2021		2020(i)
Revenue	$	654,143	$	498,468
Project costs	223,537		140,341
Equipment costs	232,173		177,127
Depreciation	108,016		88,782
Gross profit	90,417		92,218
General and administrative expenses	35,374		24,437
(Gain) loss on disposal of property, plant and equipment	(85)		659
Operating income	55,128		67,122
Interest expense, net	19,032		18,656
Equity earnings in affiliates and joint ventures	(21,860)		(7,740)
Net realized and unrealized gain on derivative financial instruments	(2,737)		(4,266)
Income before income taxes	60,693		60,472
Current income tax expense	1,000		—
Deferred income tax expense	8,285		11,264
Net income	51,408		49,208
Other comprehensive income
Unrealized foreign currency translation gain	(2)		—
Comprehensive income	$	51,410	$	49,208
Per share information
Basic net income per share	$	1.81	$	1.75
Diluted net income per share	$	1.64	$	1.60

(i)The prior year amounts are adjusted to reflect a change in accounting policy. See "Change in significant accounting policy - Basis of presentation".

Document

Table of Contents

ANNUAL INFORMATION FORM
A. Explanatory Notes	1
B. Corporate Structure	1
C. Our Business	2
D.Capital Structure and Securities	8
E. Directors and Officers	10
F. The Board and Board Committees	13
G. Forward-Looking Information, Assumptions and Risk Factors	17
H. General Matters	22
EXHIBIT A	24

Annual Information Form

February 16, 2022

A. EXPLANATORY NOTES

The information in this Annual Information Form ("AIF") is stated as at December 31, 2021, unless otherwise indicated. For an explanation of specific terms used in our documents, please refer to the “Glossary of Terms” in this AIF. All references in this AIF to “we”, “us”, or the “Company”, unless otherwise specified, mean North American Construction Group Ltd. and its Subsidiaries (as defined below). Except where otherwise specifically indicated, all dollar amounts are expressed in Canadian dollars. The audited consolidated financial statements and notes for the year ended December 31, 2021 and the annual Management’s Discussion and Analysis (“MD&A”) are available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov and our company website at www.nacg.ca.

Caution Regarding Forward-Looking Information

Our AIF is intended to enable readers to gain an understanding of our current results and financial position. To do so we provide material information and analysis about our company and our business at a point in time in the context of our historical and possible future development. Accordingly, certain sections of this report contain forward-looking information that is based on current plans and expectations. This forward-looking information is affected by risks, assumptions and uncertainties that could have a material impact on future prospects. Readers are cautioned that actual events and results may vary from the forward-looking information. Please refer to "Forward-Looking Information, Assumptions and Risk Factors" for further detail on what constitutes forward looking information and discussion of the risks, assumptions and uncertainties related to such information.

B. CORPORATE STRUCTURE

North American Construction Group Ltd.

The Company is a corporation subsisting under the Canada Business Corporations Act, originally formed on November 28, 2006, from an amalgamation of NACG Holdings Inc. with two of its wholly-owned subsidiaries. The amalgamated entity took the name "North American Energy Partners Inc.". On April 11, 2018, the Company changed its name to "North American Construction Group Ltd.". On January 1, 2021, the Company undertook a further amalgamation with certain of its wholly owned subsidiaries, adopting the articles and bylaws of the predecessor parent. Under the Company’s Articles of Amalgamation and Bylaws, there are no restrictions on the business the Company may carry on.

The Company's head office is located at 27287 - 100 Avenue, Acheson, AB, T7X 6H8. Its registered office is 2700, 10155 - 102 Street, Edmonton, AB, T5J 4G8.

Subsidiaries

The Company's business is primarily carried out by its subsidiaries. As at December 31, 2021, those consisted of:

•Ten wholly-owned directly-held subsidiaries carrying on business in Canada, those being North American Fleet LP (operated by its general partner North American Fleet GP Ltd.), North American Enterprises LP (operated by its general partner North American Enterprises GP Ltd.), NACG Management Ltd., NACG Acheson Ltd., NACG Properties Inc., North American Engineering Inc., North American Maintenance Ltd., North American Mining Inc., North American Services Inc. and North American Site Development Ltd. North American Fleet LP and North American Enterprises LP are limited partnerships established under the Alberta Partnership Act, with their general partners being corporations subsisting under the Business Corporations Act (Alberta). All of the other subsidiaries are corporations subsisting under the Business Corporations Act (Alberta).

•The Company's interest in the "Nuna Group of Companies", which consists of various ownership interests in the following corporations, with the Company's ownership and voting interests being as indicated below:

• Nuna East Ltd. (37.25%) • Nuna West Mining Ltd. (49%)

• Nuna Pang Contracting Ltd. (37.25%) • 1229181 B.C. Ltd. (49%)

Annual Information Form	1	North American Construction Group Ltd.

As at December 31, 2021, 1229181 B.C. Ltd. and its wholly owned subsidiary, 1229184 B.C. Ltd., both corporations subsisting under the Business Corporations Act (British Columbia), were the sole voting and participating partners of the Nuna Logistics Partnership. Effective January 1, 2022, Nuna Logistics Partnership was wound up and 1229181 B.C. Ltd. and 1229184 B.C. Ltd. were amalgamated under the name Nuna Logistics Limited pursuant to the Business Corporations Act (British Columbia). As of January 1, 2022, the Company holds a 49% ownership and voting interest in Nuna Logistics Limited. Nuna East Ltd., Nuna West Mining Ltd. and Nuna Pang Contracting Ltd. are corporations subsisting under the Canada Business Corporations Act.

•The Company's interest in the Mikisew North American Limited Partnership (operated by its general partner 2109830 Alberta Ltd.). The Company has a 49% ownership and voting interest in both Mikisew North American Limited Partnership, a limited partnership established under the Alberta Partnership Act, and its general partner, a corporation subsisting under the Business Corporations Act (Alberta).

The Company has subsidiaries not included above, including subsidiaries operating in the United States and Australia, but the total assets and revenues of such subsidiaries do not, individually, constitute more than 10% of the consolidated assets or consolidated revenues of the Company or, in aggregate, constitute more than 20% of the consolidated assets or consolidated revenues of the Company as at December 31, 2021.

C. OUR BUSINESS

General Development of the Business

On January 6, 2022, we regretfully reported that there had been a fatality at the Millennium mine in Fort McMurray, Alberta. The incident involved two haul trucks which collided in the early morning hours. We continue to work diligently with our client and the appropriate authorities in completing a full and thorough investigation into the cause of the incident.

In October 2021, we completed the expansion of our primary heavy equipment maintenance facility in Acheson, Alberta. The facility was increased by four bays and over 14,000 square feet, representing a capacity increase of approximately 50%. The expansion incorporated design changes with the objective of improving work flow and increasing available man hours. It is expected that these additional man hours will displace high-cost external hours being incurred on site.

On September 14, 2021, we announced a contract award to Mikisew North American Limited Partnership ("MNALP") by a major oil sands producer. The contract extends the existing master service agreement between NACG and the producer to December 2023 as well as transitioning the contractor role to MNALP. We anticipate the contract to generate approximately $275 million in revenue for NACG over the term of the agreement.

On July 21, 2021, we announced a contract amendment to a multiple use agreement between the MNALP and a major oil sands producer. While the amended agreement retains the expiration date of December 2023, we anticipate our share to be approximately $175 million in additional revenue over the remainder of the agreement.

On June 21, 2021, along with our partners Acciona S.A. and Shikun & Binui Ltd., we announced the award of the Fargo-Moorhead flood diversion project in the United States. Our share of the project revenue will be approximately $650 million over the term of the contract of which the majority is expected to be earned during the initial six-year construction period. This award marks the largest infrastructure project in our history and underlines the significant earth works and construction expertise that we brought to the bid process. The completion of the financial close for this project was announced on October 14, 2021.

On June 9, 2021, we announced that we had entered into a definitive agreement to acquire DGI Trading Pty Ltd. ("DGI"), a supplier of production-critical mining components based in Kempsey, New South Wales, Australia. The transaction closed on July 1, 2021 for a purchase price of $18.4 million with an initial payment of $10.3 million funded through existing debt facilities. The purchase price was approximately equal to the net identifiable assets of DGI, comprised primarily of inventory, plus subsequent payments over a four-year period based on the earnings of the business.

On October 22, 2020, we announced the award of a major earthworks construction contract at a gold mining project in Northern Ontario. The contract was awarded to a newly formed joint venture owned and operated equally by NACG and Nuna Group of Companies. The two-year project is valued at over $250 million and will occur during the construction phase of the gold mine project. Our work ramped up through Q1 2021, achieved peak volumes in Q3 2021 and is expected to be completed in Q4 2022.

Annual Information Form	2	North American Construction Group Ltd.

On January 30, 2020, we executed a five-year Management Services Agreement to operate a thermal coal mine in Texas, USA. The transition from the current operator took place in June 2020. This long-term agreement builds on our mine management services offering as did the similar five-year management services agreement of a coal mine in Wyoming, USA which was signed in June 2019.

In January 2020, we opened a newly constructed component rebuild facility on land adjacent to the Acheson maintenance facility and head office. We continue to enhance our internal equipment maintenance capabilities and grow our external equipment maintenance business. This five-bay facility was custom designed with the primary objective of rebuilding used components for heavy equipment in the mining industry. While providing low-cost zero-hour components, the facility also creates much needed capacity in our primary maintenance facility to allow for its intended use of rebuilding and maintaining both our heavy equipment fleet and the fleets of external customers. In addition, the Nuna Group of Companies will be utilizing this facility for its maintenance needs as well as required kitting and logistics activities for projects in northern Canada.

In December 2019, the first rebuilds of heavy equipment haul trucks (CAT 793 and 797) from cores were completed in our primary maintenance facility in Acheson.

On June 21, 2019, we executed a five-year Management Services Agreement to operate a thermal coal mine in Wyoming, USA which serves an adjacent power plant. The agreement was part of a structured bankruptcy process and is indirectly supported by a long-term coal supply agreement between the mine owner and the power producer.

Sustainability

On February 2, 2021, we announced the release of our inaugural 2021 Sustainability Report, providing a structured framework for environmental, social and governance initiatives moving forward. Our 2022 Sustainability Report was released on February 16, 2022, marking a significant step forward in our commitment to sustainable business practices and to standardize transparent sustainability disclosure. Future reports will be issued around the same time each year and will continue to build on the progress we have made so far, including more advanced metrics and greater alignment with relevant reporting frameworks.

Leadership Changes

As of January 1, 2022, Martin Ferron's role as an executive of the Company ended and, accordingly, while he continues as a director of the Company and as Chair of the Board, he is no longer Executive Chair of the Board.

Effective January 1, 2021, Joseph Lambert was appointed to the position of President and Chief Executive Officer and joined our board of directors. Concurrently, Martin R. Ferron resigned as Chief Executive Officer and assumed the role of Executive Chair and Barry W. Palmer was promoted from his position of Senior Vice-President Operations to the position of Chief Operating Officer.

On August 8, 2019, we announced the appointments of Maryse C. Saint-Laurent and Kristina E. Williams to our board of directors.

Pandemic Impacts

Beginning in early 2020 and continuing to the present, the global COVID-19 pandemic has presented novel challenges to our operations. We took swift and aggressive measures at the outset of the pandemic to protect our employees, customers and our Company, taking several cost reduction measures to reduce our variable and fixed costs, including but not limited to, immediate suspension of production-related spending on impacted mine sites, minimized use of vendor provided maintenance, a reduced work week schedule for administrative staff, a complete halt of all discretionary spending, and termination of services deemed non-essential in light of the pandemic. We also reduced sustaining capital maintenance costs by implementing a reduced capital plan for the remainder of the year and have taken steps to preserve liquidity and conserve cash given the uncertain economic climate. We have been able to ease certain of these measures somewhat as the management of pandemic impacts has stabilized to a degree.

Annual Information Form	3	North American Construction Group Ltd.

Financing and Capital Allocation

On February 16, 2022, we announced a change to our dividend policy whereby our regular dividend was increased to $0.32 per common share per year, payable on a quarterly basis, up from $0.16 per year.

On September 29, 2021, we announced an amendment and extension of our senior secured credit facility (the “Credit Facility”). The facility maturity date has been extended by one year with a new maturity date of October 8, 2024. In addition to the extension of existing favourable terms, amendments have also been incorporated that provide us greater flexibility in operating through joint ventures, including joint ventures related to larger contracts under public-private-partnership financing models.

On June 1, 2021, we issued $65.0 million aggregate principal amount of 5.50% convertible unsecured subordinated debentures. On June 4, 2021, the underwriters exercised the over-allotment option, in full, purchasing an additional $9.8 million aggregate principal amount of 5.50% convertible unsecured subordinated debentures. The 5.50% convertible debentures are not redeemable prior to June 30, 2024, except under certain exceptional circumstances.

On April 9, 2021, we commenced a normal course issuer bid ("NCIB") under which a maximum number of 2,000,000 common shares were authorized to be purchased. To comply with applicable securities laws, no more than 1,497,476 voting common shares will be purchased on the New York Stock Exchange ("NYSE") or alternative trading systems. This NCIB will be terminated no later than April 8, 2022. During the year ended December 31, 2021, we purchased and subsequently cancelled 37,000 shares under this NCIB, which resulted in a decrease of common shares of $0.3 million and a decrease to additional paid-in capital of $0.2 million.

In Q1 2021, we completed the NCIB which had commenced on March 12, 2020 upon the purchases and cancellations of 1,076,903 common shares. The purchases resulted in a decrease to common shares of $8.7 million and a decrease to additional paid-in capital of $7.3 million. This completed the NCIB with the maximum number of authorized common shares purchased.

On October 8, 2020 we entered into an amendment to our Amended and Restated Credit Agreement with a banking syndicate led by National Bank Financial Inc. that increased the revolving loan to $325.0 million with the ability to increase the maximum borrowings by an additional $25.0 million, subject to certain conditions. This facility was to mature on October 8, 2023, with an option to extend on an annual basis, but was extended by a year as noted above. The Credit Facility permits finance lease obligations to a limit of $150.0 million and certain other borrowings outstanding to a limit of $20.0 million.

On April 6, 2020 we fully redeemed our 5.50% convertible debentures due March 31, 2024. The redemption was satisfied through issuance of 4,583,655 voting common shares and all accrued and unpaid interest up to, excluding the redemption date, was paid in cash.

On August 7, 2019, we announced a change to our dividend policy whereby our regular dividend was increased to $0.16 per common share per year, payable on a quarterly basis, up from $0.08 per year.

On March 20, 2019, we issued $55.0 million in aggregate principal amount of 5.00% convertible unsecured subordinated debentures which mature on March 31, 2026. Interest is payable semi-annually on March 31 and September 30 of each year.

Option Plan

Effective November 17, 2021, the Board of Directors of the Company resolved to terminate the Company's 2004 Amended and Restated Option Plan. There were no options issued or outstanding as at the date of termination.

Annual Information Form	4	North American Construction Group Ltd.

Business Overview

In general, we provide a wide range of mining and heavy civil construction services to customers in the resource development and industrial construction sectors, primarily within western Canada but also in other parts of Canada and the United States. Our services are primarily focused on supporting the construction and operation of surface mines. We are considered to be a “first-in, last-out” service provider because we provide services through the entire lifecycle of projects. Our work typically begins with the initial consulting services provided during the planning phase, including a review of constructability, engineering and budgeting. This leads into the construction phase during which we provide an expanded range of services, including clearing, road construction, site preparation, underground utility installation and mine infrastructure construction, including construction of tailings ponds, access roads, stabilized earth walls and earth dams. As our mining customers move into production, we support the long-term operation of the mine by providing ongoing site maintenance and upgrading, equipment and labour supply, overburden removal, material hauling and land reclamation. During these lifecycles, we also are increasingly providing rental equipment to the site either directly to the customer or indirectly to a joint venture which holds the contract with the customer.

More specifically, our business overview can be summarized as follows:

•We provide construction and operations support services in the Canadian oil sands region through all stages of the various mine's lifecycle. Our services are typically provided pursuant to non-exclusive master service agreements or multiple use agreements that set out contractual terms over three-to-five year periods. At present, we have such agreements with existing terms expiring between 2022 and 2024 with Suncor Energy Services Inc., for its Millennium and North Steepbank projects, Fort Hills Energy LP, for its Fort Hills Mine, Syncrude Canada, for its Mildred Lake Mine and Aurora Mine, and Imperial Oil Limited, for its Kearl Mine. The majority of services provided in the oil sands region are now being completed through the Mikisew North American Limited Partnership ("MNALP"). In general terms, this Indigenous joint venture, of which we have a 49% ownership interest, performs the role of contractor and sub-contracts work to us as needed.

•We provide heavy equipment maintenance, component remanufacturing and full equipment rebuild services to mining companies and other heavy equipment operators. Our maintenance personnel have specialized skills in working with equipment subjected to the difficult operating conditions of the mining industry. Those specialized skills, combined with our new purpose-built facilities, provide us with the ability to provide a high level of maintenance services in a cost effective manner to our external customers.

•We provide mine management services for thermal coal mines in Wyoming and Texas, USA. Multi-year service agreements are in place to provide the framework for the supply of mind and management services as well as labour, equipment and back-office supplies & services.

DGI (Aust) Trading Pty Ltd. ("DGI"), an Australian-based subsidiary, serves the mining and construction industry by supplying production-critical components. DGI is vertically integrated with our maintenance programs and therefore is also able to support our equipment rebuild and component remanufacturing processes. With partners in over ten key countries, DGI maintains a network of suppliers and facilities which enable a unique ability to provide these valuable components in an economical fashion.

Nuna Group of Companies ("Nuna"), of which we own 49%, is a well-established incumbent contractor in Nunavut and the Northwest Territories. Nuna’s revenue relates to commodities such as base metals, precious metals and diamonds as well as infrastructure-related projects that involve major earthworks. Nuna continues to successfully complete major projects in Ontario, Saskatchewan and British Columbia. Nuna’s peak business activity occurs during the summer months generally from June to September.

As a result of the Fargo-Moorhead flood diversion project award in June 2021, we entered into two joint ventures, each with specific roles & responsibilities. First, we own a 15% interest in the Red River Valley Alliance, LLC ("RRVA") which entered into an agreement with the Metro Flood Diversion Authority to design, construct, finance, operate and maintain a diversion channel and associated infrastructure that forms part of the Fargo-Moorhead Metropolitan Area Flood Risk Management Project. Second, we own a 30% interest in ASN Constructors which entered into the design and build contract for the project with RRVA.

Given the growing prominence of our joint ventures, we have commenced reporting the gross sales to our joint venture as a percentage of total consolidated revenue. For clarity, this percentage excludes equity accounted results. For the year ended December 31, 2021, gross sales to our affiliates and joint ventures was 55% as a percentage of total consolidated revenue (December 30, 2020 – 38%).

Annual Information Form	5	North American Construction Group Ltd.

Fleet and Equipment

As of December 31, 2021, we directly operated a heavy equipment fleet of 632 units; 60% were owned, 33% were leased and 7% were rented. This fleet is supported by over 1,000 pieces of ancillary equipment. In addition to this, the joint ventures we operate have a combined owned fleet of approximately 292 pieces of heavy equipment.

We have a modern, well-maintained fleet of equipment to service our clients' needs. We operate a significant number of trucks larger than 240 tons in capacity which gives us a distinct advantage over competitors with respect to both specialized skill base and equipment availability. The size and diversity of our fleet gives us the ability to respond on short notice and provide customized fleet solutions for each specific job. Our equipment strategy allows us to meet our customers' variable service requirements while balancing the need to maximize equipment utilization.

As of December 31, 2021, our owned and leased fleet (excluding rentals) is comprised of the following categories:

Category	Capacity Range	Horsepower<br>Range	Number<br>Owned	Number<br>Leased
Mining trucks	40 to 400 tons	476 ‑ 2,700	185	85
Articulating trucks	30 to 60 tons	305 ‑ 406	5	20
Loaders	1.5 to 16 cubic yards	110 ‑ 690	34	4
Shovels	18 ‑ 80 cubic yards	1,300 ‑ 3,760	6	2
Excavators	1 to 29 cubic yards	90 ‑ 1,944	27	60
Dozers	20,741 lbs to 230,100 lbs	96 - 850	74	31
Graders	14 to 24 feet	150 ‑ 500	22	8
Packers	14,175 to 68,796 lbs	216 ‑ 315	4	—
Other heavy equipment			18	1
Total			375	211

Competitive Conditions

Much of our business is secured through the formal competitive bidding process. Our competitive environment and customer behavior have continued to remain focused on lowering costs and getting the best value for their dollar. Our customers take different approaches to contracting on their sites and in some cases have embarked on contractor consolidation and the signing of longer-term agreements with committed volumes to ensure safe and cost-conscious execution certainty.

High commodity pricing has generally resulted in both an increased number of active bids and an increased number of competitors on those bid lists. In some cases, we are seeing willingness from the customer and competitors to entertain alternate pricing arrangements such as “risk/reward” agreements where the customer is willing to share in some of the risks, provided there are corresponding costs savings to warrant taking on such risks.

Our commitment to safety combined with our significant mining and heavy construction knowledge, experience, long-term customer relationships, equipment capacity and scale of operations, differentiate us from our competition and provide significant value to our customers. We believe we are the premier provider of contract mining services and heavy civil earthworks. We have operated in western Canada for over 65 years and have participated in every significant oil sands mining project since operators first began developing this resource over 40 years ago. This participation has given us extensive experience operating in the challenging working conditions created by the harsh climate and difficult terrain of the oil sands and northern Canada. We have amassed what we believe is the largest heavy civil construction and mining fleet of equipment in Canada. The combination of our significant size and extensive experience makes us one of only a few companies capable of taking on long-term, large-scale mining and heavy civil construction projects, both in the oil sands and in other remote resource development locations. This competitive advantage supports successfully providing similar services to large-scale earthworks infrastructure and resource development projects in both Canada and the United States.

Major Suppliers

We have long-term relationships with the following suppliers of equipment, parts and components:

•Finning International Inc. (over 51 years), the Caterpillar heavy equipment supplier in Alberta for the majority of our mining fleet, including repair parts;

•Wajax Corporation (over 26 years), the supplier of our mining and construction Hitachi excavators and shovels;

•Brandt Tractor Ltd. (over 36 years), the Alberta supplier for our construction John Deere excavators;

•SMS Equipment Inc. (over 11 years), the Canadian supplier of our Komatsu mining trucks;

Annual Information Form	6	North American Construction Group Ltd.

•Brake Supply Inc. (over 11 years), our prime supplier of Caterpillar powertrain components, hydraulic cylinders for our Caterpillar mining fleet of haul trucks, ranging in carrying capacity from 100-tonne to 400-tonne and for dozers, ranging from D8T to D11T models.

•Hydraulic Repair and Design (over 11 years), our prime supplier of hydraulic cylinders and pumps for our Hitachi mining shovels and excavators;

•SRC of Lexington (4 years), our prime supplier of Caterpillar re-manufactured engines for our Caterpillar mining fleet of haul trucks, ranging in carrying capacity from 100-tonne to 240-tonne and for dozers, ranging from D10T and D11T models;

•Independent Rebuilders (3 years), our prime supplier of Caterpillar re-manufactured engines for our Caterpillar 793F and 797B fleet of haul trucks, ranging in carrying capacity from 240-tonne to 400-tonne;

•Imperial Oil (over 16 years), our prime supplier of lubricants for our mining and mobile equipment fleets; and

•BNA Re-Manufacturing (3 years), a joint venture providing remanufactured and refurbished final drives and front wheel assemblies for the 100-tonne to 400-tonne haul trucks and D8T to D11T dozers.

Finning, Wajax, Brant and SMS are also major suppliers for equipment rentals and service labour.

We continue to work with all of our suppliers to identify shared cost savings opportunities, including opportunities to extend vendor parts reliability programs, leverage their parts supply chain, improve the cost effectiveness of vendor supplied maintenance services and reduce costs for rental equipment.

We have a tire agreement and allocations with Bridgestone (Kal Tire) along with additional tire availability from Michelin and Goodyear which have allowed us to maintain tire inventories required to keep our fleet fully operational. Our tire inventory and availability from the manufacturers is such that we do not anticipate any tire shortages. However, as the global mining and commodities markets strengthen, tire supply can be negatively affected by natural disasters, raw material shortages or unscheduled interruptions from global production facilities.

Seasonality

Oil sands mine support revenue during the December to March time period of each year is traditionally highest as ground conditions are most favorable for work requiring frozen ground access. We generally experience a seasonal decline in our oil sands mine site support revenue, such as reclamation and muskeg removal services, during the three months ended June 30 of each year as weather conditions make performance of this heavy equipment intensive work difficult during this period. Mine support activities for resource mines outside the oil sands typically are at their peak during the May to October time period, contrary to the seasonality of an oil sands mine that relies on the cold winter season for effective material movement. The exact timing of the winter freeze or spring thaw in any given year obviously affects the exact timing of this cyclical and counter-cyclical work cycle.

Health, Safety and Environmental

While environmental permitting and compliance with respect to the projects and sites on which we operate is generally the responsibility of our customers, our operations and business are subject to various federal, provincial, state and municipal legislation and regulation in relation to health, safety and the environment in all of the jurisdictions in which we operate. Beyond our commitment to meet statutory and regulatory requirements, our commitment to health, safety and environmental responsibility is of utmost priority to us. We are committed to conducting our business in such a manner as to protect and preserve the health and safety of our employees, contractors and the public as well as the safety of the environment.

The Company has implemented an Environment Code that establishes specific environmental management procedures and protocols that all employees, contractors and management personnel must undertake and comply with at all times, including the requirement for the Company and every contractor to establish waste and water management plans for every project. Among other things, the Environment Code addresses and sets standards and procedures for: (a) collection, handling, storage, recycling and disposal of waste, including hazardous and non-hazardous waste; (b) prevention, containment and cleanup of spills and leaks of hazardous materials or anything that may cause groundwater contamination; (c) water management and testing; (d) soil management and testing; (e) management of controlled products; (f) noise and energy monitoring and management; (g) storm water contamination prevention; (h) erosion prevention and sedimentary control; (i) air pollution prevention and control; (j) training in relation to the matters dealt with by the Environment Code; and (k) periodic audits to ensure compliance with the Environment Code.

Annual Information Form	7	North American Construction Group Ltd.

At each work site, we develop and implement detailed health, safety and environmental plans as the primary tool to demonstrate and maintain compliance with all applicable regulations and conditions of permits and approvals as well as the Company's Environment Code. All employees at a supervisor role or higher are required to complete on an annual basis health, safety and environmental training. In addition, our Code of Conduct and Ethics Policy (the “Code”) identifies health, safety and environmental responsibility as fundamental corporate values. The Code requires that every employee, officer, director, representative and agent of the Company: (a) maintain a safe and healthy workplace for all Company personnel by following health and safety rules and practices instituted by the Company and by reporting accidents, injuries and unsafe equipment, practices or conditions; (b) be accountable for their own health and safety and have a responsibility towards maintaining the health and safety of those with whom they work; (c) report fit for work such that the ability to work safely is not impaired by alcohol, drugs, medications or any other substance; (d) continually improve environmental performance through the implementation of effective systems and the use of technology; (e) ensure that all Company personnel understand NACG’s commitment to and their role in NACG’s environmental performance; (f) conserve natural resources, minimize waste and promote recycling; (g) meet the expectations of our employees, customers, government, regulatory bodies and the community in relation to environmental responsibility; and (h) comply with the environmental policies of our customers while working on their sites.

Employees are required to report any safety or environmental concerns or violations to their supervisor, to the Company’s Health, Safety and Environment department, to the senior officers of the Company or to any member of the Company’s board of directors, or where anonymity is desired, through the Company’s anonymous ethics reporting system. Any issues raised are investigated and are included in quarterly reports which are provided to the senior management team and the board of directors. Senior management also receives a weekly report setting out any health, safety or environmental incidents in the previous week and actions to be taken in order to prevent future incidents.

Employees and Labour Relations

As at December 31, 2021, we had 197 salaried employees (2020 - 176 salaried employees) and approximately 1,845 hourly employees (2020 - 1,499 hourly employees) in our western Canadian operations (excluding 641 active employees employed by the Nuna Group of Companies in 2021 and 273 in 2020). Of the hourly employees, approximately 85% of the employees are union members and work under collective bargaining agreements (December 31, 2020 - 86% of the employees). Our hourly workforce fluctuates according to the seasonality of our business and the staging and timing of projects by our customers. The hourly workforce for our ongoing operations ranges in size from approximately 1,000 to 2,000 employees, depending on the time of year, types of work and duration of awarded projects. We also utilize the services of subcontractors in our business. Subcontractors perform an estimated 7% to 10% of the work we undertake.

The majority of our work is carried out by employees governed by our mining 'overburden’ collective bargaining agreement with the International Union of Operating Engineers ("IUOE") Local 955 which ensures labour stability through to April 2025. Collective bargaining negotiations recently concluded and a new agreement was ratified effective January 2, 2022.

A collective agreement specific to work performed in our Acheson facilities between the IUOE and North American Maintenance Ltd. is in place until February 2023.

Our relationship with all our employees, both union and non-union, is strong and we have not experienced a union labour disruption since the inception of our collective agreements.

D. CAPITAL STRUCTURE AND SECURITIES

Some of the statements contained herein are summaries of the material provisions of our articles of amalgamation relating to dividends, distribution of assets upon dissolution, liquidation or winding up. A copy of our articles of amalgamation can be found on our website at www.nacg.ca. We confirm that no material modifications have been made to the instruments defining the rights of holders of any class of registered securities.

Capital Structure

We are authorized to issue an unlimited number of voting common shares and an unlimited number of non-voting common shares.

Annual Information Form	8	North American Construction Group Ltd.

Voting Common Shares

Each voting common share has an equal and ratable right to receive dividends to be paid from our assets legally available therefore when, as and if declared by our board of directors. In the event of our dissolution, liquidation or winding up, the holders of common shares are entitled to share equally and ratably in the assets available for distribution after payments are made to our creditors. Holders of common shares have no preemptive rights or other rights to subscribe for our securities. Each common share entitles the holder thereof to one vote in the election of directors and all other matters submitted to a vote of shareholders, and holders of common shares have no rights to cumulate their votes in the election of directors. We have no voting rights ceilings.

Non-Voting Common Shares

Except as prescribed by Canadian law and except in limited circumstances, the non-voting common shares have no voting rights but are otherwise identical to the voting common shares in all respects. The non-voting common shares are convertible into voting common shares on a share-for-share basis at the option of the holder if the holder transfers, sells or otherwise disposes of the converted voting common shares: (i) in a public offering of our voting common shares; (ii) to a third party that, prior to such sale, controls us; (iii) to a third party that, after such sale, is a beneficial owner of not more than 2% of our outstanding voting shares; (iv) in a transaction that complies with Rule 144 under the Securities Act of 1933, as amended; or (v) in a transaction approved in advance by regulatory bodies.

Outstanding Shares and Shares Held in Trust

On June 12, 2014, we entered into a trust agreement under which the trustee purchases and holds common shares to settle units issued under our equity classified Restricted Share Unit ("RSU") and Performance Share Unit ("PSU") long-term incentive plans. Units granted under our RSU and PSU plans vest at the end of a three-year term.

As at February 11, 2022, there were 30,022,928 total voting common shares outstanding, which included 1,568,041 common shares held by the trust and classified as treasury shares on our consolidated balance sheets (30,022,928 common shares, including 1,564,813 common shares classified as treasury shares at December 31, 2021). We had no non-voting common shares outstanding on any of the foregoing dates.

Dividends

As of December 31, 2021, the Company's policy was to pay an annual aggregate dividend of sixteen Canadian cents ($0.16) per common share, payable on a quarterly basis. The Board resolved, as of February 15, 2022, to change the Company's dividend policy so as to pay an annual aggregate dividend of thirty-two Canadian cents ($0.32) per common share going forward, payable on a quarterly basis. Dividends declared for each of the three most recently completed financial years are as follows:

	Date declared	Per share		Shareholders on record as of	Paid or payable to shareholders	Total paid or payable
Q1 2019	February 25, 2019	$	0.02	March 12, 2019	April 5, 2019	$	503
Q2 2019	April 30, 2019	$	0.02	May 31, 2019	July 5, 2019	$	505
Q3 2019	July 30, 2019	$	0.04	August 31, 2019	October 4, 2019	$	1,028
Q4 2019	October 29, 2019	$	0.04	November 30, 2019	January 3, 2020	$	1,030
Q1 2020	February 18, 2020	$	0.04	March 5, 2020	April 3, 2020	$	1,023
Q2 2020	May 5, 2020	$	0.04	May 29, 2020	July 3, 2020	$	1,162
Q3 2020	July 28, 2020	$	0.04	August 31, 2020	October 2, 2020	$	1,156
Q4 2020	October 27, 2020	$	0.04	November 30, 2020	January 8, 2021	$	1,040
Q1 2021	February 16, 2021	$	0.04	March 4, 2021	April 9, 2021	$	1,123
Q2 2021	April 27, 2021	$	0.04	May 28, 2021	July 9, 2021	$	1,123
Q3 2021	July 27, 2021	$	0.04	August 31, 2021	October 8, 2021	$	1,137
Q4 2021	October 26, 2021	$	0.04	November 30, 2021	January 7, 2022	$	1,137	Annual Information Form	9	North American Construction Group Ltd.
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Trading Price and Volume

Our voting common shares are listed on the TSX and on the NYSE. The following table summarizes the highest trading price, lowest trading price and volume for our common shares on the TSX (in Canadian dollars) and on the NYSE (in US dollars) on a monthly basis for 2021:

	Toronto Stock Exchange			New York Stock Exchange
Date	High ($)	Low ($)	Volume	High ($)	Low ($)	Volume
December 2021	19.00	17.20	802,200	15.20	13.31	679,100
November 2021	21.51	17.90	1,428,000	17.36	14.00	663,000
October 2021	22.00	18.21	2,292,300	17.79	14.40	846,300
September 2021	19.61	17.11	1,028,300	15.50	13.53	842,900
August 2021	18.68	16.16	1,401,000	15.10	12.70	828,700
July 2021	19.71	16.45	2,031,600	15.70	12.87	1,218,100
June 2021	21.30	15.90	2,445,500	17.30	13.17	1,878,500
May 2021	17.48	15.67	1,270,300	14.42	12.97	1,058,100
April 2021	16.85	13.23	1,162,300	13.76	10.56	1,153,100
March 2021	15.76	13.00	1,864,900	12.41	10.29	1,254,400
February 2021	16.49	11.49	3,749,400	13.07	8.96	2,346,200
January 2021	13.79	11.48	1,757,200	10.92	8.98	1,346,100

Convertible Debentures

On June 1, 2021, we issued $65.0 million in aggregate principal amount of 5.50% convertible unsecured subordinated debentures. On June 4, 2021, the underwriters exercised the over-allotment option in full, purchasing an additional $9.8 million on aggregate principal amount of 5.50% convertible unsecured subordinated debentures. On April 6, 2020, the 5.50% convertible debentures issued on March 15, 2017 were redeemed in accordance with their terms. We satisfied the redemption price through issuance of 4,583,655 shares. On March 20, 2019, we issued $55.0 million in aggregate principal amount of 5.00% convertible unsecured subordinated debentures, which mature on March 31, 2026.

The below table summarizes the highest trading price, lowest trading price and volume for our 5.50% convertible debentures and 5.00% convertible debentures on the TSX (in Canadian dollars).

	5.50% convertible debentures			5.00% convertible debentures
Date	High ($)	Low ($)	Volume	High ($)	Low ($)	Volume
December 2021	110.99	106.50	1,905,000	110.00	101.51	516,000
November 2021	113.81	107.61	1,789,000	113.00	105.00	288,000
October 2021	114.99	106.56	1,537,000	112.00	104.50	360,000
September 2021	111.99	105.60	1,563,000	108.24	103.10	475,000
August 2021	108.50	105.00	1,641,000	105.50	102.50	1,905,000
July 2021	109.60	103.00	5,416,000	106.00	104.01	549,000
June 2021	111.00	100.79	12,926,000	105.52	100.45	1,001,000
May 2021	—	—	—	101.36	99.10	8,593,000
April 2021	—	—	—	101.00	97.75	1,245,000
March 2021	—	—	—	100.74	96.56	2,178,000
February 2021	—	—	—	100.75	94.00	1,193,000
January 2021	—	—	—	98.99	91.00	2,358,900

E. DIRECTORS AND OFFICERS

Director and Officer Information

Each director is elected at the Company's annual meeting for a one-year term or until such person’s successor is duly elected or appointed, unless his or her office is earlier vacated. As at February 11, 2022, the directors and executive officers of the Company, as a group, beneficially owned, directly or indirectly, or exercised control or direction over 2,897,490 common voting shares of the Company (representing approximately 9.7% of all issued and outstanding common voting shares). Our board has determined that each director, other than Martin Ferron and Joseph Lambert, is an independent director under applicable regulatory and exchange standards.

Annual Information Form	10	North American Construction Group Ltd.

The following table sets forth information about our directors as at February 16, 2022:

Name and Municipality of Residence	Position with the Company	Director Since
Martin R. Ferron	Chair of the Board	June 7, 2012
Edmonton, Alberta, Canada
Joseph C. Lambert	President & Chief Executive Officer, Director	January 1, 2021
Spruce Grove, Alberta, Canada
Ronald A. McIntosh	Director	May 20, 2004
Calgary, Alberta, Canada
Bryan D. Pinney	Lead Director	May 13, 2015
Calgary, Alberta, Canada
John J. Pollesel	Director	November 23, 2017
Sudbury, Ontario, Canada
Maryse C. Saint-Laurent	Director	August 8, 2019
Calgary, Alberta, Canada
Thomas P. Stan	Director	July 14, 2016
Calgary, Alberta, Canada
Kristina E. Williams	Director	August 8, 2019
Edmonton, Alberta, Canada

Martin R. Ferron is presently the Chair of the Board, was, until December 31, 2021, the Executive Chair of the Board and was, until December 31, 2020, the Chief Executive Officer of the Company. He originally joined the Company as President and Chief Executive Officer and as a member of the Board on June 7, 2012. Previously, Mr. Ferron was Director, President and Chief Executive Officer of Helix Energy Solutions Inc., a NYSE-listed international energy services company. Prior to joining Helix, Mr. Ferron worked in successively more senior management positions with oil services and construction companies including McDermott Marine Construction, Oceaneering International and Comex Group.

Joseph C. Lambert became Chief Executive Officer of the Company on January 1, 2021. He had previously been appointed President on October 31, 2017, while also retaining his role as Chief Operating Officer which role he had held since June 1, 2013. Mr. Lambert originally joined us as General Manager of Mining in April 2008 after an extensive career in the mining industry. Mr. Lambert was promoted to Vice President, Oil Sands Operations in September of 2010 and accepted the position of Vice President, Operations Support in January 2012.

Ronald A. McIntosh served as Chair of our Board from May 20, 2004 to October 31, 2017. Between October 2002 and January 2004, he was President and Chief Executive Officer of Navigo Energy Inc. He was Senior Vice President and Chief Operating Officer of Gulf Canada Resources Limited from December 2001 to July 2002 and Vice President, Exploration and International of Petro-Canada from April 1996 through November 2001. Mr. McIntosh also previously served as Chief Operating Officer of Amerada Hess Canada.

Bryan D. Pinney was appointed as the Company’s lead independent director on October 31, 2017. He is the principal of Bryan D. Pinney Professional Corporation, which provides financial advisory and consulting services. Mr. Pinney was a partner with Deloitte between 2002 and 2015, serving as Calgary Managing Partner from 2002 through 2007, as National Managing Partner of Audit & Assurance from 2007 to 2011, and as Vice Chair until June 2015. Mr. Pinney was a past member of Deloitte’s board of directors and chair of the Finance and Audit Committee.

John J. Pollesel is currently the Chief Executive Officer of Boreal Agrominerals Inc., a private company that explores for, tests, develops and produces organic approved agromineral fertilizers and soil amendment products. Until November of 2017, Mr. Pollesel was Senior Vice President, Mining for Finning (Canada). Prior to Finning, he held the positions of CEO for the Morris Group of Companies, Chief Operating Officer for Vale's North Atlantic Operations and Chief Financial Officer for Compania Minera Antamina in Peru, one of the largest copper/zinc mining and milling operations in the world.

Maryse C. Saint-Laurent is a corporate director and currently serves on the board of directors of Turquoise Hill Resources Ltd., the Alberta Securities Commission and most recently Pretivm Resources Inc. Ms. Saint-Laurent is an accomplished executive with over 25 years' experience as a business oriented corporate, transactional and

Annual Information Form	11	North American Construction Group Ltd.

securities lawyer in the energy, power, and mining sectors. Ms. Saint-Laurent also possesses several years' experience in human resources, labour relations, compensation, and benefits as well as pension management.

Thomas P. Stan was the President and CEO of Corval Energy Ltd., a Calgary, Alberta based oil company, until September of 2019. Previously, Mr. Stan has held positions as Managing Director of Investment Banking at Desjardins Capital Markets and Blackmont Capital Markets, President and CEO of Phoenix Energy Ltd. and Sound Energy Trust, and Chairman and CEO of Total Energy Services Ltd. Mr. Stan began his career at Suncor and spent 16 years at Hess Corporation as Vice President Corporate Planning. After Petro Canada acquired Hess Canada he became Vice President of Corporate Development of Petro Canada.

Kristina E. Williams is the President and CEO of Alberta Enterprise Corporation, which oversees a fund consisting of twenty-four venture capital investments with an underlying portfolio of over 200 technology companies. She also serves as the Swedish Honorary Consul for Northern Alberta, is a member of the Board of Governors for Northern Alberta Institute of Technology (NAIT) and she is a board member of Alcanna Inc. Previously, she held the position as Vice President of Marketing and Sales for Natraceutical Canada Inc.

The following table sets forth information about our executive officers.

Name and Municipality of Residence	Position	In Current Role Since
Joseph C. Lambert	President and Chief Executive Officer	January 1, 2021
Spruce Grove, Alberta, Canada
Jason W. Veenstra	Executive Vice President and Chief Financial Officer	September 10, 2018
Edmonton, Alberta, Canada
Barry W. Palmer	Chief Operating Officer	January 1, 2021
Edmonton, Alberta, Canada
Jordan A. Slator	Vice President and General Counsel; Corporate Secretary	November 28, 2018
Edmonton, Alberta, Canada
David G. Kallay	Vice President, Health, Safety Environment and Human Resources	November 28, 2018
St. Albert, Alberta, Canada

Jason W. Veenstra joined us on September 10, 2018 as Executive Vice President and Chief Financial Officer. Mr. Veenstra came from Finning International Inc. where most recently he led sales and marketing efforts for Caterpillar equipment in their Canadian mining division. Prior to Finning, Mr. Veenstra spent 10 years at the publicly traded Westmoreland Coal Company in various roles including CFO and Treasurer.

Barry W. Palmer became Chief Operating Officer on January 1, 2021. Mr. Palmer joined us in 1982 as a Heavy Equipment Operator. Since then, Mr. Palmer has advanced through the Company holding positions of Operations Foreman; General Foreman; Superintendent; Project Manager; Operations Manager; General Manager, Vice-President, Heavy Construction and Mining Operations; and Senior Vice President, Operations.

Jordan A. Slator became Vice President and General Counsel on November 28, 2018. Mr. Slator originally joined the Company as General Counsel on August 30, 2010. He has also served as Corporate Secretary since June 2, 2011. Mr. Slator began his career in law with Miller Thomson LLP in Edmonton after being called to the Alberta bar in 1996.

David G. Kallay became Vice President, Health, Safety, Environment and Human Resources on November 28, 2018. Mr. Kallay originally joined the Company as Health and Safety Manager on December 1, 2008. He was promoted to General Manager of Health, Safety, Environment and Training on October 1, 2011 and General Manager of Human Resources July 21, 2016.

Corporate Cease Trade Orders, Bankruptcies, Penalties or Sanctions

John Pollesel is a director of Electra Battery Materials Corporation (formerly named "First Cobalt Corporation") (“Electra”). Electra announced on June 21, 2017 that it had proposed a friendly merger with Cobalt One Ltd. (“Cobalt One”) and CobalTech Mining Inc. (“CobalTech”). At that time, Electra signed letters of intent with each of Cobalt One and CobalTech and requested the TSX Venture Exchange to temporarily halt trading of its shares. The TSX Venture Exchange approved the resumption of trading as of August 28, 2017.

Annual Information Form	12	North American Construction Group Ltd.

Interest of Management and Others in Material Transactions

No director or executive officer of the Company and, to the knowledge of the directors and executive officers of the Company, none of their respective associates or affiliates, nor any person who owns, controls or directs, directly or indirectly, more than 10 percent of our outstanding voting common shares, nor their respective associates or affiliates, has had any material interest, direct or indirect, in any transaction within our three most recently completed financial years or during our current financial year that has materially affected or is reasonably expected to materially affect us.

F. THE BOARD AND BOARD COMMITTEES

Our board has established the following committees:

Audit Committee

The Audit Committee is currently composed of Bryan Pinney, Ronald McIntosh, John Pollesel and Kristina Williams, with Mr. Pinney serving as Chair.

Mr. Pinney is a chartered accountant and chartered business valuator, with extensive experience in auditing financial statements, assessing internal controls and providing financial advice. During his tenure with Deloitte, from 2002 and 2015, he was quality control review partner for integrated audits on SEC registrants and Canadian publicly traded entities and was an equity partner responsible for signing audit opinions between 1986 and 2015. Further, from 2007 through 2010, he was the National Managing Partner for the audit and assurance practice for Deloitte LLP. Prior to joining Deloitte as a partner, Mr. Pinney was a partner with Andersen LLP and served as Calgary Managing Partner from 1991 through May of 2002. He is a Fellow of the Institute of Chartered Accountants, a Chartered Business Valuator and is a graduate of the Ivey Business School at the University of Western Ontario with an honours degree in Business Administration.

Mr. McIntosh has served on the audit committees of several public and non-public companies. The various senior executive roles he has held through his career have involved evaluation, analysis and interpretation of financial statements and understanding the accounting principles underlying their preparation as well as the general application of accounting principles to the preparation of estimates and accruals. His executive roles have also required an understanding of internal controls and procedures for financial reporting.

Mr. Pollesel worked in a public accounting firm early in his career and has held various senior executive finance positions with public and non-public companies throughout his career, including the position of Chief Financial Officer for Compania Minera Antamina in Peru, one of the largest copper/zinc mining and milling operations in the world. He currently sits on the audit committees for Noront Resources Ltd. and Electra Battery Materials Corporation which are Canadian publicly listed companies. He holds an Honours BA in Accounting and an MBA from the University of Waterloo and Laurentian University, respectively. He is a Chartered Professional Accountant and a Fellow of CPA Ontario.

In her role as President and CEO of Alberta Enterprise Corporation Ms. Williams oversees the finance and accounting functions of the Corporation. She also oversees the audit results and evaluation of the fund financial statements. Ms. Williams currently is the Chair of the Audit and Finance committee of the Northern Alberta Institute of Technology. She holds a Master of Business Administration from the University of Alberta.

In accordance with Rule 10A-3 under the Securities Exchange Act of 1934, as amended, the listing requirements of the New York Stock Exchange and the requirements of the Canadian Securities regulatory authorities, our board of directors has affirmatively determined that our Audit Committee is composed solely of independent directors. Based on their experience (see “Director and Officer Information” above), each of the members of the Audit Committee is financially literate. The board of directors has determined that Mr. Bryan D. Pinney and Mr. John J. Pollesel are both audit committee financial experts, as defined by Item 407(d) (5) of the SEC’s Regulation S-K. Our board of directors has adopted a written charter for the Audit Committee that is attached as Exhibit A to this AIF and is also available on our website at www.nacg.ca.

Annual Information Form	13	North American Construction Group Ltd.

Our auditors are KPMG LLP ("KPMG"). Our Audit Committee has the sole authority to review in advance, and grant any appropriate pre-approvals of all audit and non-audit services to be provided by the independent auditors and to approve fees, in connection therewith, with the Chair of the Committee, on behalf of the Committee, having authority to pre-approve any non-audit services and the related engagement fees up to an amount of $20,000 per engagement provided that such pre-approval is reported to the Committee at its next meeting. The Audit Committee pre-approved all audit and non-audit related services provided by KPMG LLP in 2021. The fees we have paid to KPMG for services rendered by them include:

•Audit Fees – We incurred $1,095 and $939 for audit fees from KPMG during the years ended December 31, 2021 and 2020, respectively. Audit fees were incurred for the audit of our annual financial statements, the audit of internal controls over financial reporting, the quarterly interim reviews of the consolidated financial statements and certain procedures pertaining to acquisitions and involvement in securities documents.

•Audit Related Fees – We incurred $nil and $nil for audit related fees from KPMG during the years ended December 31, 2021 and 2020, respectively.

•Tax Fees - We incurred $126 and $68 for income tax advisory and compliance services fees during the years ended December 31, 2021 and 2020, respectively.

•Other Fees - We incurred $9 and $nil in other fees for the years ended December 31, 2021 and 2020, respectively.

Human Resources and Compensation Committee

The Human Resources and Compensation Committee is responsible for: (a) reviewing and recommending to the Board for approval the Company’s compensation philosophy, policies and guiding principles; (b) assessing whether the Company’s performance indicators and the variable and long-term incentive plans are consistent with Company business strategy and, where appropriate, recommending to the Board any proposed changes thereto; (c) reviewing the Company’s high level functional and organizational structure and where appropriate recommending to the Board any material changes thereto; (d) reviewing, assessing and approving where appropriate those persons recommended by the CEO for appointment to Executive Management or as a corporate officer of the Company; (e) reviewing and making recommendations to the Board with respect to the approval of all agreements dealing with employment, termination, retirement or other special circumstance between the Company and the CEO; (f) reviewing and approving all agreements dealing with employment, termination, retirement or other special circumstance between the Company and any member of Executive Management other than the CEO; (g) reviewing the CEO’s performance evaluations of the other members of Executive Management; (h) reviewing and making recommendations to the Board with respect to the approval of the succession plan for the CEO; (i) reviewing and approving the succession plans for Executive Management other than the CEO on an annual basis; (j) reviewing and recommending to the Board for approval the corporate goals and objectives relevant to the compensation of the CEO and evaluating the CEO’s performance in light of such goals and objectives; (k) reviewing and approving the adequacy and form of compensation for Executive Management other than the CEO; (l) reviewing and approving the compensation of individual members of Executive Management other than the CEO; (m) reviewing and recommending to the Board for approval the Executive share ownership requirements, amendments thereof and any changes to the mechanisms to achieve such requirements; (n) reviewing and recommending to the Board for approval the implementation of, eligibility under, grants under, or any proposed changes to the Company’s security-based compensation plans or other long-term incentive plans; (o) reviewing and recommending to the Board for approval the director compensation including annual retainers, any variable compensation and any additional retainers paid to the Chair of the Board, the Lead Director and to the Chairs of the committees of the Board, as applicable, as well as any directors’ equity program; and (p) reviewing and approving other compensation proposals, incentive or bonus plans applicable to the Company’s full-time employees broadly.

In accordance with the listing requirements of the New York Stock Exchange applicable to domestic listed companies and applicable Canadian securities laws, our board of directors has affirmatively determined that our Human Resources and Compensation Committee is composed solely of independent directors. Our board of directors has adopted a written charter for the Human Resources and Compensation Committee that is available on our website at www.nacg.ca. The Human Resources and Compensation Committee is currently composed of Thomas Stan, Bryan Pinney and Maryse Saint-Laurent, with Mr. Stan serving as Chair.

Annual Information Form	14	North American Construction Group Ltd.

Operations Committee

The Operations Committee is responsible for: (a) reviewing and evaluating with management the existing health, safety and environment policies of the Company for conformity with industry standards and best practices; (b) confirming that the Company has in place and maintains systems to effectively manage the material health, safety and environmental aspects of the business; (c) confirming that the Company has in place systems to identify risks to health, safety and the environment from the Company’s operations and manage their consequential risks to the Company, its directors, officers and employees; (d) confirming, through internal and external audits, that appropriate health, safety and environmental policies, standards, processes, programs, practices and procedures are in place, understood and being adhered to, for the purposes of enabling the Company to comply with applicable laws, regulations, recognized industry practice and permits; (e) reviewing the findings of all health, safety and environmental audits performed on the Company’s facilities and operations, supervise and monitor the progress of actions taken or to be taken to remedy any deficiencies or outstanding issues identified therein; (f) confirming and reporting to the Board any changes to applicable health, safety and environmental laws, regulations or voluntary programs substantially impacting the Company’s business; (g) researching, monitoring and reporting to the Board trends and current and emerging public policy issues in matters of health, safety and environment as they may impact or require change of the Company’s operations; (h) reviewing the adequacy of the Company’s environmental and Workers’ Compensation Board insurance coverage at least annually; (i) reviewing annually the Company’s safety results against industry standards and peers; (j) receiving management presentations and other information to understand the significant business risks to which the Company is exposed; (k) reviewing with management and approving the Company’s non-financial risk policies and the procedures developed and implemented to measure non-financial risk exposures and for identifying, evaluating and managing significant business risks; (l) regularly monitoring the Company’s risk management performance and obtaining reasonable assurance that the risk management policies and procedures for significant non-financial risks are being adhered to; (m) approving delegation of risk limits to management and approving any transactions exceeding those delegated authorities in accordance with the Company's Delegation of Authority Policy, including forwarding to the Board for ratification any tender bids or contracts that are of a magnitude, scope or risk level that, in their view, should be referred to the full Board approval; (n) reviewing reports on management’s approach for safeguarding corporate assets; security practices and procedures; business continuity plans, including work stoppage and disaster recovery; environmental risk management activities and results; risk mitigation plans and employee health and safety programs and results; (o) working with management and the Board to assess, establish and monitor the appropriate ‘risk appetite’ for the Company; (p) considering and providing advice to the Board, when appropriate, on the risk impact of any strategic decision that the Board may be contemplating, including considering whether any strategic decision is within the ‘risk appetite’ established for the Company and its individual business units; (q) reviewing and approving any other matter in the Delegation of Authority Guideline which is above the approval limit of the CEO; (r) reviewing and monitoring the Company’s loss prevention policies and reviewing the adequacy of insurance coverage (excluding corporate liability protection programs for directors and officers, which are the responsibility of the Governance and Sustainability Committee); and (s) reviewing with management the annual insurance report including the Company’s risk retention philosophy and resulting uninsured exposure.

The board of directors has affirmatively determined that the Operations Committee is composed solely of independent directors. Our board of directors has adopted a written charter for the Operations Committee that is available on our website at www.nacg.ca. The Operations Committee is currently composed of Ronald McIntosh, John Pollesel, Thomas Stan and Kristina Williams, with Mr. Pollesel serving as Chair.

Annual Information Form	15	North American Construction Group Ltd.

Governance and Sustainability Committee

The Governance and Sustainability Committee is responsible for: (a) establishing an appropriate system of corporate governance including practices designed to permit the Board to function independently of management; (b) establishing written terms of reference for directors that describe and communicate performance expectations of a director; (c) reviewing the charters of committees of the Board, including the limits of authority to be delegated to each committee, and recommending any amendments to such charters to the Board for approval; (d) reviewing and monitoring the Company’s corporate liability protection programs for directors and officers; (e) reviewing and recommending to the Board for approval the Company’s public disclosure relating to governance; (f) assessing the skills and competencies required for members of the Board and its committees and recommending selection criteria for new directors; (g) identifying candidates for new directors using the selection criteria of the skills and competency assessment, the Board and Senior Management Diversity Policy, as well as a candidate’s education, business, governmental and civic experience, communication and interpersonal skills and any other matters that are relevant to the Board’s objectives; (h) retaining and terminating any search firm to be used to identify director candidates and approving the search firm’s fees and other retention terms; (i) recommending to the Board candidates for nomination for election by the shareholders at each annual meeting and recommending to the Board candidates to fill vacancies that occur between annual meetings; (j) recommending to the Board the removal of a director in extraordinary circumstances; (k) recommending to the Board the composition of Board committees; (l) reviewing annually the Company’s Board and Senior Management Diversity Policy, including targets where applicable, and taking into consideration the succession needs of the Board and senior management; (m) reviewing and making recommendations to the Board relating to requests for outside directorships of the senior officers of the Company; (n) reviewing the Company’s policies regarding sponsorship, donations and political contributions; (o) receiving reports from the Company’s General Counsel confirming that all reasonable steps have been taken to ensure that the Board and its committees comply with all legislative and regulatory requirements relating to the structure of the Board and its committees; (p) establishing appropriate processes for the annual assessment of the effectiveness of the Board as a whole, each committee of the Board and individual directors; (q) developing orientation and ongoing education plans for the directors; (r) reviewing guidelines and practices relating to environmental protection, including the mitigation of pollution and climate change; (s) considering whether the Company’s policies and practices relating to the environment, climate change, greenhouse gases and other pollutants are being effectively implemented; (t) reviewing reports from management on public policy proposals, laws or regulations relating to environment, health and safety and discussing with management the potential impact and application of such policies on the Company, including reputational risks and, if applicable, together with the Audit Committee, financial risks; (u) reviewing annually the Company’s policies and processes adopted in support of conducting the Company’s business towards meeting high standards of ethics, and social and environmental responsibility, including periodic review of the adequacy and appropriateness of the Code of Conduct and Ethics Policy and management’s implementation of the same and making any recommendations to the Board in that regard; (v) together with the Audit Committee, reviewing and recommending to the Board for approval the Company’s public disclosure relating to sustainability; (w) together with the Operations and Audit Committees, reviewing the Company’s operational and capital plans and programs with respect to environmental impacts which pose a high risk to the Company, along with potential opportunities and mitigation; (x) reviewing and recommending to the Board for approval, the need for disclosure of any information and reports concerning the Company’s environmental, social and governance practices, as required by regulatory authorities or industry best practices; (y) reviewing the results of annual shareholder votes related to election of directors and recommending to the Board whether any actions are advisable in response to the same; and (z) reviewing the Company’s policies and practices relating to the retention of records to ensure the same meet legal requirements, best practices and are being effectively implemented.

In accordance with the listing requirements of the New York Stock Exchange applicable to domestic listed companies and applicable Canadian securities laws, the board of directors has affirmatively determined that the Governance Committee is composed solely of independent directors. Our board of directors has adopted a written charter for the Governance Committee that is available on our website at www.nacg.ca. The Governance Committee is currently composed of Ronald McIntosh, Bryan Pinney and Maryse Saint-Laurent, with Ms. Saint-Laurent serving as Chair.

Annual Information Form	16	North American Construction Group Ltd.

G. FORWARD-LOOKING INFORMATION, ASSUMPTIONS AND RISK FACTORS

Forward-Looking Information

This document contains forward-looking information that is based on expectations and estimates as of the date of this document. Our forward-looking information is information that is subject to known and unknown risks, uncertainties, assumptions and other factors that may cause future actions, conditions or events to differ materially from the anticipated actions, conditions or events expressed or implied by such forward-looking information including those listed in the “Forward-Looking Information, Assumptions and Risk Factors” section of our annual MD&A, which section is expressly incorporated by reference into this AIF. Forward-looking information is information that does not relate strictly to historical or current facts and can be identified by the use of the future tense or other forward-looking words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “should”, “may”, “could”, “would”, “target”, “objective”, “projection”, “forecast”, “continue”, “strategy”, “intend”, “position” or the negative of those terms or other variations of them or comparable terminology.

Examples of such forward-looking information in this document include, but are not limited to, statements with respect to the following, each of which is subject to significant risks and uncertainties and is based on a number of assumptions that may prove to be incorrect:

1.Our expectations regarding magnitude and timing of project revenues, including revenues related to Fargo-Moorhead flood diversion project, the major earthworks construction contract at a gold mining project in Northern Ontario, the contract awarded to MNALP by a major oil sands producer and the amendment to a multiple use agreement between the MNALP and a major oil sands producer;

2.Our expectation that we will be issuing future sustainability reports annually and that we will be able to include more advanced metrics and greater alignment with relevant reporting frameworks. Our expectations regarding timing of work in relation to i) the major earthworks construction contract at a gold mining project in Northern Ontario and ii) the infrastructure project in Fargo, North Dakota;

3.Our anticipation that we will not experience any tire shortages in the foreseeable future; and

4.Our expectations of labour stability and impact of COVID going forward.

While we anticipate that subsequent events and developments may cause our views to change, we do not have an intention to update this forward-looking information or the forward-looking information and related risks, assumptions or other information expressly incorporated by reference into this AIF, except as required by applicable securities laws. Such forward-looking information represents our views as of the date of this document and such information should not be relied upon as representing our views as of any date subsequent to the date of this document. We have attempted to identify important factors that could cause actual results, performance or achievements to vary from those current expectations or estimates expressed or implied by the forward-looking information. However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. These factors are not intended to represent a complete list of the assumptions and factors that could affect us. See “Assumptions” and “Risk Factors” below and risk factors highlighted in materials filed with the securities regulatory authorities filed in the United States and Canada from time to time, including, but not limited to, our most recent annual MD&A, which section is expressly incorporated by reference in this AIF.

Assumptions

For a description of assumptions, see the “Assumptions” section of our annual MD&A, which section is expressly incorporated by reference into this AIF.

Risk Factors

The following are the key risk factors that affect us and our business. These factors could materially and adversely affect our operating results and could cause actual results to differ materially from those described in forward-looking statements.

Annual Information Form	17	North American Construction Group Ltd.

pandemic and the resulting measures taken by governments, customers and by the Corporation have increased the difficulty in obtaining skilled labour. The resulting competition for labour may limit our ability to take advantage of opportunities otherwise available or alternatively may impact the profitability of such endeavors on a going forward basis. We believe that our union status, size and industry reputation will help mitigate this risk but there can be no assurance that we will be successful in identifying, recruiting or retaining a sufficient number of skilled workers.

•Cashflow, Liquidity and Debt. As of December 31, 2021 we had $385.6 million of total debt outstanding. While we have achieved a significant improvement in the flexibility to borrow against our borrowing capacity and a reduction in the cost of our debt over the past three years, our current indebtedness may:

•limit our ability to obtain additional financing to fund our working capital, capital expenditures, debt service requirements, potential growth or other purposes;

•limit our ability to use operating cash flow in other areas of our business as such funds are instead used to service debt;

•limit our ability to post surety bonds required by some of our customers;

•place us at a competitive disadvantage compared to competitors with less debt;

•increase our vulnerability to, and reduce our flexibility in planning for, adverse changes in economic, industry and competitive conditions; and

•increase our vulnerability to increases in interest rates because borrowings under our Credit Facility and payments under our mortgage along with some of our equipment leases and promissory notes are subject to variable interest rates.

Further, if we do not have sufficient cash flow to service our debt, we would need to refinance all or part of our existing debt, sell assets, borrow more money or sell securities, none of which we can guarantee we will be able to achieve on commercially reasonable terms, if at all.

•Unit-price Contracts. Approximately 41%, 47% and 53% of our revenue for the years ended December 31, 2021, 2020 and 2019, respectively, was derived from unit-price contracts and, to a lesser degree, lump-sum contracts. Unit-price contracts require us to guarantee the price of the services we provide and thereby potentially expose us to losses if our estimates of project costs are lower than the actual project costs we incur and contractual relief from the increased costs is not available. The costs we actually incur may be affected by a variety of factors including those that are beyond our control, such as:

•site conditions differing from those assumed in the original bid;

•the availability and cost of skilled workers;

•the availability and proximity of materials;

•unfavorable weather conditions hindering productivity;

•equipment availability and timing differences resulting from project construction not starting on time; and

•the general coordination of work inherent in all large projects we undertake.

Further, under these contracts any errors in quantity estimates or productivity losses for which contractual relief is not available, must be absorbed within the price. When we are unable to accurately estimate and adjust for the costs of unit-price contracts, or when we incur unrecoverable cost overruns, the related projects may result in lower margins than anticipated or may incur losses, which could adversely affect our results of operations, financial condition and cash flow.

•Project Management. Our business requires effective project management. We are reliant on having skilled managers to effectively complete our contracted work on time and on budget. Increased costs or reduced revenues due to productivity issues caused by poor management are usually not recoverable and will result in lower profits or potential project losses. Project managers also rely on our business information systems to provide accurate and timely information in order to make decisions in relation to projects. The failure of such systems to provide accurate and timely information may result in poor project management decisions and ultimately in lower profits or potential project losses.

Annual Information Form	18	North American Construction Group Ltd.

work that we are to perform under the contract. Additionally, certain contracts allow the customer to terminate the contract without cause with minimal or no notice to us. The loss of or significant reduction in business with one or more of our major customers could have a material adverse effect on our business and results of operations. Our combined revenue from our four largest customers represented approximately 86% and 95% of our total combined revenue for the years ended December 31, 2021 and 2020, respectively.

•Large Projects and Joint Ventures. A portion of our revenue is derived from large projects, some of which are conducted through joint ventures. These projects provide opportunities for significant revenue and profit contributions but, by their nature, carry significant risk and, as such, can result in significant losses. The risks associated with such large-scale projects are often proportionate to their size and complexity, thereby placing a premium on risk assessment and project execution. The contract price on large projects is based on cost estimates using several assumptions. Given the size of these projects, if assumptions prove incorrect, whether due to faulty estimates, unanticipated circumstances, or a failure to properly assess risk, profit may be materially lower than anticipated or, in a worst-case scenario, result in a significant loss. The recording of the results of large project contracts can distort revenues and earnings on both a quarterly and an annual basis and can, in some cases, make it difficult to compare the financial results between reporting periods. Joint ventures are often formed to undertake a specific project, jointly controlled by the partners, and are dissolved upon completion of the project. We select our joint venture partners based on a variety of criteria including relevant expertise, past working relationships, as well as analysis of prospective partners’ financial and construction capabilities. Joint venture agreements spread risk between the partners and they generally state that companies will supply their proportionate share of operating funds and share profits and losses in accordance with specified percentages. Nevertheless, each participant in a joint venture is usually liable to the client for completion of the entire project in the event of a default by any of its partners. Therefore, in the event that a joint venture partner fails to perform its obligations due to financial or other difficulties or is disallowed from performing or is otherwise unable to perform its obligations as a result of the client’s determination, whether pursuant to the relevant contract or because of modifications to government or agency procurement policies or rules or for any other reason, we may be required to make additional investments or provide additional services which may reduce or eliminate profit, or even subject us to significant losses with respect to the joint venture. As a result of the complexity and size of such projects that we undertake or are likely to undertake going forward, the failure of a joint venture partner on a large complex project could have a significant impact on our results.

•Cyber Security and Information Technology Systems. We utilize information technology systems for some of the management and operation of our business and are subject to information technology and system risks, including hardware failure, cyber-attack, security breach and destruction or interruption of our information technology systems by external or internal sources. Although we have policies, controls and processes in place that are designed to mitigate these risks, an intentional or unintentional breach of our security measures or loss of information could occur and could lead to a number of consequences, including but not limited to: the unavailability, interruption or loss of key systems applications, unauthorized disclosure of material and confidential information and a disruption to our business activities. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties or other negative consequences. We attempt to prevent breaches through the implementation of various technology-based security measures, contracting consultants and expert third-parties, hiring qualified employees to manage our systems, conducting periodic audits and reviewing and updating policies, controls and procedures when appropriate. To date, we have not been subject to a material cyber security breach that has had a serious impact on our business or operations; however, there is a possibility that the measures we take to protect our information technology systems may not be effective in protecting against a significant specific breach in the future.

•Competition. We compete for work with other contractors of various sizes and capabilities. New contract awards and contract margin are dependent on the level of competition and the general state of the markets in which we operate. Fluctuations in demand may also impact the degree of competition for work. Competitive position is based on a multitude of factors including pricing, ability to obtain adequate bonding, backlog, financial strength, appetite for risk, reputation for safety, quality, timeliness and experience. If we are unable to effectively respond to these competitive factors, results of operations and financial condition will be adversely impacted.

Annual Information Form	19	North American Construction Group Ltd.

business and results of operations. Certain customers perform some of this work internally and may choose to expand on the use of internal resources to complete this work if they believe they can perform this work in a more cost effective and efficient manner using their internal resources.

•Equipment Utilization. Our business depends on our fleet being operable and in ready-to-work condition. We often operate in conditions that inflict a high degree of wear on our equipment. If we are unable to maintain our fleet so as to obtain our planned utilization rates, or if we are required to expend higher than expected amounts on maintenance or to rent replacement equipment at high rates due to equipment breakdowns, our operating revenues and profits will be adversely impacted. We endeavor to mitigate these risks through our maintenance planning and asset management processes and procedures, though there is no assurance that we can anticipate our future equipment utilization rates with certainty.

•Labour Disputes. The majority of our hourly employees are subject to collective bargaining agreements to which we are a party or are otherwise subject. Any work stoppage resulting from a strike or lockout could have a material adverse effect on our business, financial condition and results of operations. In order to minimize this risk, NACG has no strike and no lockout provisions in our collective agreements. In addition, our customers employ workers under collective bargaining agreements. Any work stoppage or labour disruption experienced by our key customers could significantly reduce the amount of our services that they need.

•Backlog. There can be no assurance that the revenues projected in our backlog at any given time will be realized or, if realized, that they will perform as expected with respect to margin. Project suspensions, terminations or reductions in scope do occur from time to time due to considerations beyond our control and may have a material impact on the amount of reported backlog with a corresponding impact on future revenues and profitability.

•Foreign Exchange. We regularly transact in foreign currencies when purchasing equipment and spare parts as well as certain general and administrative goods and services. As such, we are exposed to the risk of fluctuations in foreign exchange rates. These exposures are generally of a short-term nature and the impact of changes in exchange rates has not been significant in the past. We may fix our exposure in either the Canadian dollar or the US dollar for these short-term transactions, if material.

•Internal Controls Over Financial Reporting. Ineffective internal controls over financial reporting could result in an increased risk of material misstatements in our financial reporting and public disclosure record. Inadequate controls could also result in system downtime, give rise to litigation or regulatory investigation, fraud or the inability to continue our business as presently constituted. We have designed and implemented a system of internal controls and a variety of policies and procedures to provide reasonable assurance that material misstatements in the financial reporting and public disclosures are prevented and detected on a timely basis and that other business risks are mitigated. See the section entitled “Internal Systems and Processes” in our MD&A for further details.

•Health and Safety. We are subject to, and comply with, all health and safety legislation applicable to our operations. We have a comprehensive health and safety program designed to provide that our business is conducted in a manner that protects both our workforce and the general public. There can be no guarantee that we will be able to maintain our high standards and level of health and safety performance. An inability to maintain excellent safety performance could adversely affect our business by customers reducing existing work in response and by hampering our ability to win future work.

•Short-notice Reductions in Work. We allocate and mobilize our equipment and hire personnel based on estimated equipment and service plans supplied by our customers. At the start of each new project, we incur significant start-up costs related to the mobilization and maintenance configuration of our heavy equipment along with personnel hiring, orientation, training and housing costs for staff ramp-ups and redeployments. We expect to recover these start-up costs over the planned volumes of the projects we are awarded. Significant reductions in our customer's required equipment and service needs, with short notice, could result in our inability to redeploy our equipment and personnel in a cost effective manner. In the past, such short-notice reductions have occurred due to changes in customer production schedules or mine planning or due to unplanned shutdowns of our customers’ processing facilities due to events outside our control or the control of our customers, such as fires, mechanical breakdowns and technology failures. Our ability to maintain revenues and margins may be adversely affected to the extent these events cause reductions in the utilization of equipment and we can no longer recover our full start-up costs over the reduced volume plan of our customers.

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•Resolution of Claims. Changes to the nature or quantity of the work to be completed under our contracts are often requested by clients or become necessary due to conditions and circumstances encountered while performing work. Formal written agreement to such changes, or in pricing of the same, is sometimes not finalized until the changes have been started or completed. As such, disputes regarding the compensation for changes could impact our profitability on a particular project, our ability to recover costs or, in a worst-case scenario, result in project losses. If we are not able to resolve claims and undertake legal action in respect of these claims, there is no guarantee that a court will rule in our favour. There is also the possibility that we could choose to accept less than the full amount of a claim as a settlement to avoid legal action. In either such case, a resolution or settlement of the claims in an amount less than the amount recognized as claims revenue could lead to a future write-down of revenue and profit. Included in our revenues is a total of $nil relating to disputed claims or unapproved change orders.

•Heavy Equipment Demand. As our work mix changes over time we adjust our fleet to match anticipated future requirements. This involves both purchasing and disposing of heavy equipment. If the global demand for mining, construction and earthworks services is reduced, we expect that the global demand for the type of heavy equipment used to perform those services would also be reduced. While we may be able to take advantage of reduced demand to purchase certain equipment at lower prices, we would be adversely impacted to the extent we seek to sell excess equipment. If we are unable to recover our cost base on a sale of excess heavy equipment, we would be required to record an impairment charge which would reduce net income. If it is determined that market conditions have impaired the valuation of our heavy equipment fleet, we also may be required to record an impairment charge against net income.

•Price Escalators. Our ability to maintain planned project margins on longer-term contracts with contracted price escalators is dependent on the contracted price escalators accurately reflecting increases in our costs. If the contracted price escalators do not reflect actual increases in our costs, we will experience reduced project margins over the remaining life of these longer-term contracts. In strong economic times, the cost of labour, equipment, materials and sub-contractors is driven by the market demand for these project inputs. The level of increased demand for project inputs may not have been foreseen at the inception of the longer-term contracts with fixed or indexed price escalators resulting in reduced margins over the remaining life of the longer-term contracts.

•Shifting Customer Priorities Related to Climate Change. Climate change continues to attract considerable public and regulatory attention, with greenhouse gas emission regulations becoming more commonplace and stringent. The transition to a lower-carbon economy has the potential to be disruptive to traditional business models and investment strategies. Government action intended to address climate change may involve both economic instruments such as carbon taxation as well as restrictions on certain sectors such as cap-and-trade schemes. Certain jurisdictions in which we operate impose carbon taxes on significant emitters and there is a possibility of similar taxation in other jurisdictions in the future. Other government restrictions on certain market sectors could also adversely impact current or potential clients resulting in a reduction of available work and supplies. Our clients may also alter their long-term plans due to government regulation, changes in policies of investors or lenders or simply due to changes in public perception of their business. This risk can be mitigated to an extent by identifying changing market demands to offset lower demand for some services with opportunities in others, forming strategic partnerships and pursuing sustainable innovations.

•Climate Change Related Financial Risks. As new climate change measures are introduced or strengthened our cost of business may increase as we incur expenses related to complying with environmental regulations and policies. We may be required to purchase new or retrofit current equipment to reduce emissions in order to comply with new regulatory standards or to mitigate the financial impact of carbon taxation. We may also incur costs related to monitoring regulatory trends and implementing adequate compliance processes. Our inability to comply with climate change laws and regulations could result in penalties or reputational damage that may impair our prospects.

•Climate Change Related Reputational Risks. Investors and other stakeholders worldwide are becoming more attuned to climate change action and sustainability matters, including the efforts made by issuers to reduce their carbon footprint. Our reputation may be harmed if it is not perceived by our stakeholders to be sincere in our sustainability commitment and our long-term results may be impacted as a result. In addition, our approach to climate change issues may increasingly influence stakeholders’ views of the company in relation to its peers and their investment decisions.

Annual Information Form	21	North American Construction Group Ltd.

•Impact of Extreme Weather Conditions and Natural Disasters. Extreme weather conditions or natural disasters, such as fires, floods and similar events, may cause delays in the progress of our work, which to the extent that such risk is not mitigated through contractual terms, may result in loss of revenues while certain costs continue to be incurred. Such delays may also lead to incurring additional non-compensable costs, including overtime work, that are necessary to meet customer schedules. Delays in the commencement of a project due to extreme weather or natural disaster may also result in customers choosing to defer or even cancel planned projects entirely. Such events may also impact the availability and cost of equipment, parts, labour or other inputs to our business that could have a material adverse effect on our financial position. If the frequency or severity of such events rises in the future as a result of climate change, our risk and potential impacts will also rise.

•Management. Our continued growth and future success depends on our ability to identify, recruit, assimilate and retain key management, technical, project and business development personnel. There can be no assurance that we will be successful in identifying, recruiting or retaining such personnel.

•Risk Factors Related to COVID-19. While markets and economies have somewhat stabilized as governments and industry have implemented measures to mitigate the impacts of the pandemic, the situation continues to evolve. Should the pandemic worsen, we could be subject to additional or continued adverse impacts, including, but not limited to restrictions or limitations on the ability of our employees, contractors, suppliers and customers to conduct business due to quarantines, closures or travel restrictions, including the potential for deferral or cessation of ongoing or planned projects. The ultimate duration and magnitude of the pandemic and its financial effect on us is not known at this time. We are continuously monitoring the situation, however, and working with our customers and suppliers to mitigate its effects.

As required by US GAAP, we review our long-lived assets, including property, plant and equipment and identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We detected impairment indicators at March 31, 2020, as a result of the recent uncertainty in the economic environment, relating to the suppression of commodity prices combined with the impact of the COVID-19 pandemic. We completed an impairment test comparing the net carrying value of our long-lived assets to the estimated undiscounted net cash flows to be generated from use of those assets and concluded that they are recoverable and, as such, no impairment was recorded. At December 31, 2021, there were no indicators, as there had been no material declines in the operating environment or expected financial results as compared to March 31, 2020.

H. GENERAL MATTERS

Transfer Agent and Registrar

The transfer agent and registrar of the Company is Computershare Investor Services Inc., 9th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1.

The Company’s agent in the United States is C T Corporation, located at 111 Eighth Avenue, 13th Floor, New York, New York, 10011 USA.

Material Contracts

We do not consider ourselves to be party to any material contracts other than those entered into in the ordinary course of our business and that are not required to be filed under applicable securities legislation and regulations.

Experts

KPMG LLP are the auditors of the Company and have confirmed that they are independent within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation or regulations and also that they are independent accountants with respect to the Company under all relevant US professional and regulatory standards.

Additional Information

Additional information, including information in respect of (i) the remuneration and indebtedness of the directors and executive officers of the Company; (ii) the principal holders of our securities; and (iii) securities authorized for issuance under equity compensation plans, is contained in our management information circular for our most recent annual meeting of holders of common shares that involved the election of our directors.

Additional financial information relating to the Company is provided in the Company's audited consolidated financial statements and MD&A for the financial year ended December 31, 2021, all of which, together with other information

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relating to the Company, can be found on the Canadian Securities Administrators System for Electronic Document Analysis and Retrieval ("SEDAR") database at www.sedar.com, the Securities and Exchange Commission’s website at www.sec.gov and our Company’s website at www.nacg.ca.

U.S. Mine Safety Disclosure

As required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Company confirms that its wholly-owned subsidiary NACG Wyoming, Inc. has, since June 21, 2019, been the operator of a coal mine located in southwest Wyoming known as the Kemmerer Mine (the "Mine"). During the period of the Company's operation of the Mine in 2021, the Company received, with respect to the Mine: (a) 2 citations from the Mine Safety and Health Administration (the "MSHA") under Section 104 of the Federal Mine Safety and Health Act of 1977 (30 U.S.C. 814) (the "Act"); (b) no orders under Section 104(b) of the Act; (c) 2 orders under Section 104(d) of the Act; (d) no flagrant violations under Section 110(b)(2) of the Act; and (e) no imminent danger orders under Section 107(a) of the Act. The total value of proposed assessments from the MSHA relating to violations under the Act in relation to the Mine in 2021 was $14,192 US. There were no fatalities at the Mine in 2021. The MSHA has not provided any notice with respect to the Mine of a pattern of violations, or the potential to have a pattern of violations, of mandatory health or safety standards that could have significantly and substantially contributed to the cause and effect of health or safety hazards under Section 104(e) of the Act. There is no pending legal action before the federal Mine Safety and Health Review Commission involving the Mine.

As required by Section 1503 (a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the company confirms that its wholly-owned subsidiary NACG Texas Inc. has since June 21, 2020, been the operator of a coal mine located in Texas as the San Miguel Mine (the "Mine"). During the period of the Company's operation of the Mine in 2021, the Company received, with respect to the Mine: (a) 35 non-significant and substantial citations and 1 significant and substantial citation from the Mine Safety and Health Administration (the "MSHA") under Section 104 of the Federal Mine Safety and Health Act of 1977 (30 U.S.C. 814) (the "Act"); (b) 1 order under Section 104(b) of the Act (Not Assessed Yet); (c) no orders under Section 104(d) of the Act; (d) no flagrant violations under Section 110(b)(2) of the Act; and (e) no imminent danger orders under Section 107(a) of the Act; The total value of proposed assessments from the MSHA relating to violations under the Act in relation to the Mine in 2021 was $11,952 US. As of 12/20/21, 31 Non Significant and Substantial Citations totaling $7,175 US have been paid and closed with 4 Non Significant and Substantial Citations and 1 Significant and Substantial Citation totaling $4,777 US remains in contesting stages with Federal Mine Safety and Health Review Commission. There were no fatalities at the Mine in 2020. MSHA has not provided any notice with respect to the Mine of a pattern of violations, or the potential to have a pattern of violations, of mandatory health or safety standards that could have significantly and substantially contributed to the cause and effect of health or safety hazards under Section 104(e) of the Act. There is pending legal action before the federal Mine Safety and Health Review Commission involving the Mine – Docket No. CENT 2022-0008.

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EXHIBIT A

Audit Committee Charter

1.PURPOSE

The board of directors (the “board”) of North American Construction Group Ltd. (the “Company”) has established the Audit Committee (the “Committee”) for the purpose of assisting the board in meeting its oversight responsibilities in relation to: (a) the integrity of the Company’s accounting and financial reporting processes; (b) internal controls over financial reporting; (c) controls and procedures related to disclosure; (d) the internal audit function; (e) the qualifications, independence and performance of the Company’s external auditors; (f) identification and monitoring of financial risks; (g) the processes for monitoring compliance with legal and regulatory requirements (other than those related to health, environment and safety matters); and (h) establishment and monitoring of the Company’s codes of conduct and ethics.

2.AUTHORITY

The Committee has the authority to:

(a)conduct or authorize investigations into any matter within its scope of responsibility;

(b)retain and compensate independent counsel, accountants and others to advise the Committee or assist it with respect to its responsibilities;

(c)pre-approve all audit services and permitted non-audit services performed by the Company’s external auditors and negotiate the compensation to be paid for such services;

(d)resolve any disagreements between management and the Company’s external auditors regarding financial reporting;

(e)seek any information it requires from employees of the Company, all of whom will be directed by management to co-operate with the Committee’s requests;

(f)meet and communicate directly with the Company’s officers, external auditors, internal auditor, outside counsel and consultants, all as the Committee may deem necessary;

(g)direct the Company’s internal auditor to carry out such activities as the Committee may require;

(h)access all documents of the Company that the Committee may deem relevant to it in carrying out its responsibilities; and

(i)undertake any other activity that may be reasonably necessary for the Committee to carry out its responsibilities as set out in this Charter.

3.COMPOSITION AND QUALIFICATIONS

3.1.The Committee will consist of at least three and not more than six directors of the Company. The Board will appoint the Committee and its Chair from time to time, upon recommendation of the Governance Committee, with members to hold office until their successors are appointed or until they cease to be directors of the Company.

3.2.Each member of the Committee must be “independent” as that term is defined under the requirements of applicable securities laws and the standards of any stock exchange on which the Company’s securities are listed.

3.3.Each member of the Committee must be “financially literate” in that he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to that which can reasonably be expected to be raised by the Company’s financial statements.

3.4.At least one member of the Committee will be an “audit committee financial expert” who will possess the attributes outlined in Appendix A.

3.5.No director currently serving on the Committee will serve on the audit committees of more than two additional public companies without prior approval of the Governance Committee.

3.6.Determinations as to whether a particular director meets the requirements for membership on the Committee will be made by the Board upon recommendation of the Governance Committee.

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4MEETINGS

4.1.The Committee will meet at least once each fiscal quarter, with authority to convene additional meetings as circumstances require. A meeting may be convened by the Chair, any member of the Committee, the external auditors, the internal auditor, the chief executive officer of the Company or the chief financial officer of the Company. The Chair will determine the time, place and procedures for calling and conducting Committee meetings, subject to the requirements of the bylaws of the Company, of this Charter and of the Canada Business Corporations Act.

4.2.A majority of the members of the Committee will constitute a quorum. Members of the Committee may participate in a meeting through any means which permits all parties to communicate adequately with each other. Any member not physically present but participating in the meeting through such means is deemed to be present at the meeting. A quorum, once established, is maintained even if members of the Committee leave before the meeting concludes.

4.3.In the event of a tie vote on a resolution, the issue will be forwarded to the full board for a vote.

4.4.A resolution signed (including signatures communicated by fax or electronic mail) by all members of the Committee entitled to vote on that resolution is as valid as if it had been passed at a meeting of the Committee.

4.5.The Committee may invite such officers, directors and employees of the Company as it may see fit from time to time to attend at meetings and provide information pertinent to any matter being discussed. Any director of the Company is entitled to attend Committee meetings, however, only members of the Committee are eligible to vote or establish a quorum. The external auditors will be entitled to receive notice of every meeting of the Committee and to attend and be heard at the same. The Committee will periodically meet in camera alone and separately with each of the external auditors and management.

4.6.The Chair will ensure that meeting agendas are prepared and provided in advance to members of the Committee, along with appropriate briefing materials. The Committee will keep and approve minutes of each meeting which record the decisions reached by the Committee. Once approved, the minutes will be kept with the records of the Company.

5.RESPONSIBILITIES

The Committee will carry out the following responsibilities:

5.1.Financial Reporting

(a)Review with management and the external auditors any issues of concern with respect to financial reporting, including proposed changes in the selection or application of major accounting policies and the reasons for such changes, any complex or unusual transactions, any issues depending on management’s judgment, proposed changes to or adoption of disclosure practices, and the effects of any recent or proposed regulatory or accounting initiatives or pronouncements, all to the extent that the foregoing may be material to financial reporting.

(b)Review with management and the external auditors their qualitative judgments about the appropriateness, not just the acceptability, of accounting principles and accounting disclosure practices used or proposed to be used, particularly the degree of aggressiveness or conservatism of the Company’s accounting principles and underlying estimates.

(c)In reviewing with management and the external auditors the results of their year-end audit and quarterly reviews, and management's responses, review any problems or difficulties experienced by the external auditors in performing the audit and reviews, including any restrictions or limitations imposed by management and resolve any disagreements between management and the external auditors regarding these matters.

(d)Review with management, the external auditors and legal counsel, as necessary, any litigation, claim or other contingency, including tax assessments, that could have a material effect on the financial position or operating results of the Company, and the manner in which these matters have been disclosed or reflected in the financial statements.

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(e)Review with management and the external auditors the annual audited financial statements and the related MD&A and press release; make recommendations to the Board with respect to approval thereof before being released to the public, and obtain an explanation from management of all significant variances between comparable reporting periods. Obtain confirmation from management and the external auditors that any GAAP reconciliation complies with the requirements of applicable securities laws.

(f)Approve the quarterly unaudited financial statements and the related MD&A and press release prior to their release to the public.

(g)Review with management and the external auditors any other matter required to be communicated to the Committee by the external auditors under applicable generally accepted auditing standards, applicable law and listing standards.

5.2.Internal Controls

(a)Review with management and with the internal and external auditors, as applicable, and assess the adequacy and effectiveness of the Company’s internal controls over accounting and financial reporting, including information technology security and control, and any material non-compliance with such controls.

(b)Understand the scope of internal audits and the external auditors’ review of internal control over financial reporting and obtain reports on significant findings and recommendations, together with management’s responses.

(c)Review management’s internal control report and the related attestation by the external auditors and discuss the same with management and external auditors.

(d)Obtain from the chief financial officer and chief executive officer confirmation that each is prepared to sign all required annual and quarterly certificates under applicable securities law in relation to internal controls over accounting and financial reporting. Review any disclosures made by the chief financial officer and chief executive officer regarding significant deficiencies or material weaknesses in the design or operation of internal controls or any fraud that involves management or other employees who have a significant role in the Company’s internal controls.

(e)Consider any special audit steps to be taken in light of any material internal control deficiencies.

5.3.Disclosure Controls

(a)Review with management and with the internal and external auditors, as applicable, and assess the adequacy and effectiveness of the Company’s disclosure controls and procedures, including any material non-compliance with such controls and procedures.

(b)Review and approve the disclosure policy of the Company and periodically assess the adequacy of such policy for completeness and accuracy.

(c)Ensure that the Company has satisfactory procedures in place for the review of the Company’s public disclosure of financial information extracted or derived from the Company’s financial statements.

(d)Monitor the activities of the Company’s Disclosure Committee.

(e)Review and approve, and in some instances recommend approval to the Board, material financial disclosures prior to their public release or filing with securities regulators that are contained within the following documents:

(i)any prospectus or offering document;

(ii)annual information forms;

(iii)all material financial information required by securities regulations (ex. quarterly and annual financial statements, Forms 6-K, 40-F and F-4) including all exhibits thereto and required certifications of the Company’s principal executive officer and principal financial officer;

(iv)any correspondence with securities regulators or government financial agencies; and

Annual Information Form	26	North American Construction Group Ltd.

(v)news or press releases, investor presentations or other documents to be made publicly available that contain audited or unaudited financial information, including the type and presentation of information and, in particular, any pro-forma or non-GAAP information.

(f)Review and approve, and in some instances, recommend approval to the Board, material financial disclosures prior to their public release or filing with securities regulators that relate to related-party transactions or off balance sheet structures.

5.4.Internal Audit

The Company currently outsources its internal audit work. Within this framework, the Committee will:

(a)Review management’s proposed appointment or replacement of the internal auditor.

(b)Review and approve the annual internal audit plan and scope of work and ensure that the internal audit plan is coordinated with the activities of the external auditors.

(c)Review all internal audit reports and management’s responses.

(d)Ensure that the internal auditor has direct and open communication with the Committee in the course of internal audit work and ensure that no unjustified restrictions or limitations are imposed on the internal auditor and that any other disagreements with management are resolved.

(e)Review the effectiveness of the internal audit function on an annual basis, including, resources, qualifications of internal audit staff, the internal auditor’s working relationship with the external auditors and compliance by the internal auditor with the relevant codes and standards of The Institute of Internal Auditors. The internal auditor reports functionally to the Chair of the Audit Committee.

5.5.External Audit

(a)Advise the board with respect to the selection, appointment, retention, compensation and replacement of the external auditors. In the event of a change of external auditors, review all issues and provide documentation to the Board related to the change, including the information to be included in the Notice of Change of Auditors and the planned steps for an orderly transition period.

(b)Oversee the work and evaluate the qualifications and performance of the external auditors, in the course of which evaluation the Committee will:

(i)annually obtain and review a report by the external auditors describing: (A) the external auditors’ internal quality control procedures; (B) any material issues raised by the most recent internal quality control review, or peer review, of the external auditors or by any inquiry or investigation by government or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the external auditors and any steps taken to deal with such issues; and (C) all relationships between the external auditors and the Company (in order to assess the auditors’ independence);

(ii)annually review and evaluate senior members of the external audit team, including their expertise and qualifications and take into consideration the opinions of management and the internal auditor in that regard; and

(iii)report all of its findings and conclusions with respect to the external auditors to the Board.

(c)Annually review and confirm with management and the external auditors the independence of the external auditors, which review will include but will not be limited to:

(i)ensuring receipt at least annually from the external auditors of a formal written statement delineating all relationships between the external auditors and the Company, including non-audit services provided to the Company, and outlining the extent to which the compensation of the audit partners of the external auditors is based upon selling non-audit services;

(ii)considering and discussing with the external auditors any disclosed relationships or services, including non-audit services, that may impact the objectivity and independence of the external auditors;

Annual Information Form	27	North American Construction Group Ltd.

(iii)enquiring into and determining the appropriate resolution of any conflict of interest in respect of the external auditors;

(iv)reviewing the timing and process for implementing the rotation of the lead audit partner, the reviewing partner and other partners providing audit services to the Company;

(v)considering whether there should be a regular rotation of the audit firm itself;

(vi)reviewing and approving the Company’s hiring policies regarding the hiring of partners, employees and former partners and employees of the Company’s existing and former external auditors and ensuring a “cooling off” period of at least one year before any such persons can become employees of the Company in a financial oversight role.

(d)Ensure that the external auditors report directly to the Committee and that they are ultimately accountable to the Committee and to the Board as representatives of the shareholders of the Company.

(e)Review and approve the annual audit plan prior to the annual audit of the Company’s financial statements being undertaken by the external auditors, including review of the proposed scope and approach of the external auditors and the coordination of effort with internal audit.

(f)Ensure that the external auditors have direct and open communication with the Committee and that the external auditors meet regularly with the Committee without the presence of management to discuss any matters that the Committee or the external auditors believe should be discussed privately.

(g)Review and approve the basis and amount of the external auditors’ fees with respect to the annual audit and the quarterly reviews.

(h)Review and pre-approve all non-audit services to be provided to the Company or its subsidiaries by the external auditors and the engagement fees in respect to such services, provided that the Chair of the Committee, on behalf of the Committee, is authorized to pre-approve any non-audit services and the related engagement fees up to an amount of $20,000 per engagement. At the next Committee meeting, the Chair will report to the Committee any such pre-approval given.

5.6.Financial Risk Management

(a)Review the Company’s major financial risk exposures and approve the Company’s policies to manage such financial risk.

(b)Monitor management of hedging, debt and credit, make recommendations to the Board respecting management of such risks and review the Company’s compliance with the same.

(c)Monitor management’s communication and implementation of the Anti-Fraud Policy and review compliance with such Policy by, among other things, receiving reports from management on:

(i)any investigations of fraudulent activity;

(ii)monitoring activities in relation to fraud risks and controls; and

(iii)assessments of fraud risk.

(d)Periodically review and approve the adequacy and appropriateness of the Anti-Fraud Policy and management’s implementation of the same.

5.7.Code of Conduct and Ethics Reporting

(a)Review the policies and procedures established by management for:

(i)the receipt, retention and treatment of complaints received by the Company regarding financial reporting, accounting, internal accounting controls or auditing matters; and

(ii)the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.

(b)Monitor management’s communication and implementation of the Code of Conduct and Ethics Policy and review compliance with such Policy by, among other things:

Annual Information Form	28	North American Construction Group Ltd.

(i)reviewing on a timely basis serious violations of the Code of Conduct and Ethics Policy; and

(ii)reviewing on a summary basis at least quarterly all reported violations of the Code of Conduct and Ethics Policy.

(c)Periodically review the adequacy and appropriateness of the Code of Conduct and Ethics Policy and management’s implementation of the same and make recommendations to the Governance Committee in that regard.

5.8.Legal and Regulatory Compliance

(a)Review the effectiveness of the system for monitoring compliance with laws and regulations (other than those related to health, environment and safety matters) and the results of management’s investigation and follow-up (including disciplinary action) of any instances of non-compliance. Review the findings of any examination by regulatory authorities and any external auditors’ observations relating to such matters.

(b)Obtain regular updates from management and legal counsel regarding compliance matters, including compliance with applicable financial, tax or securities regulations and the accuracy and timeliness of filings with regulators.

(c)Review any litigation, claim or other contingent liability, including any tax reassessment that could have a material effect on the financial statements.

(d)Monitor compliance by the Company with all payments and remittances required to be made in accordance with applicable law, where the failure to make such payments could render the directors of the Company personally liable.

5.9.Other Responsibilities

(a)Regularly report to the Board about Committee activities, issues and related recommendations, including such matters as the Board may from time to time refer or delegate to the Committee.

(b)Annually assess the adequacy of this Charter, submit such evaluation to the Governance Committee and recommend any proposed changes to the Governance Committee to bring forward to the Board for approval.

(c)Evaluate the performance and effectiveness of the Committee on an annual basis.

(d)Provide an open avenue of communication between the external auditors and the Board.

(e)Perform any other activities consistent with the Committee’s mandate, the Company’s governing laws and the regulations of relevant stock exchanges as the Committee or the Board deems necessary or appropriate.

6.GENERAL

6.1.While the Committee will have the responsibilities and powers set forth in this Charter, it will not be the responsibility of the Committee to determine whether the Company’s financial statements are complete, accurate or prepared in accordance with generally accepted accounting principles, to manage financial risks or to conduct audits. These are the responsibilities of management and the external auditors in accordance with their respective roles.

6.2.The Committee will take reasonable steps to ensure that management establishes and maintains the controls, procedures and processes that comply with all appropriate laws, regulations or policies of the Company. It is not the responsibility of the Committee to conduct investigations or to ensure compliance with laws, regulations or Company policies.

Annual Information Form	29	North American Construction Group Ltd.

Appendix A: Audit Committee Financial Expert

At least one member of the Committee will be an “audit committee financial expert” who will possess the attributes outlined below:

1.An understanding of generally accepted accounting principles and financial statements;

2.The ability to assess the general application of generally accepted accounting principles in connection with the accounting for estimates, accruals and reserves;

3.Experience in preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company's financial statements, or experience in actively supervising one or more persons engaged in such activities;

4.An understanding of internal control over financial reporting; and

5.An understanding of audit committee functions.

As provided in the rules of the SEC, the designation or identification of a person as an audit committee financial expert does not (a) impose on that person any duties, obligations or liability that are greater than the duties, obligations or liability imposed on that person as a member of the Committee and the Board in the absence of such designation or identification or (b) affect the duties, obligations or liability of any other member of the Committee or the Board.

A member of the Committee may qualify as an audit committee financial expert as a result of his or her:

a)education and experience as a principal financial officer, principal accounting officer, controller, public accountant or auditor or experience in one or more positions that involve the performance of similar functions;

b)experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor or person performing similar functions;

c)experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements; or

d)other relevant experience.

Annual Information Form	30	North American Construction Group Ltd.

Document

Table of Contents

MANAGEMENT'S DISCUSSION AND ANALYSIS
Overall Performance	M-2
Financial Highlights	M-5
Liquidity and Capital Resources	M-11
Outlook	M-19
Accounting Estimates, Pronouncements and Measures	M-20
Internal Systems and Processes	M-23
Forward-Looking Information	M-24
Additional Information	M-31

Management’s Discussion and Analysis

For the year ended December 31, 2021

February 16, 2022

The following Management's Discussion and Analysis ("MD&A") is as of December 31, 2021 and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2021 and notes that follow. These statements have been prepared in accordance with United States ("US") generally accepted accounting principles ("GAAP"). Except where otherwise specifically indicated, all summary information contained in this MD&A has also been prepared in accordance with GAAP and all dollar amounts are expressed in Canadian dollars. The audited consolidated financial statements and additional information relating to our business, including our most recent Annual Information Form ("AIF"), are available on the Canadian Securities Administrators' SEDAR System at www.sedar.com, the Securities and Exchange Commission's website at www.sec.gov and our company website at www.nacg.ca.

Our MD&A presents non-GAAP financial measures, non-GAAP ratios, and supplementary financial measures that provide useful financial information to our investors to better understand our performance. A "non-GAAP financial measure" is a financial measure that depicts historical or future financial performance, financial position or cash flows, but excludes amounts included in, or includes amounts excluded from, the most directly comparable GAAP measure. A "non-GAAP ratio" is a ratio, fraction, percentage or similar expression that has a non-GAAP financial measure as one or more of its components. Non-GAAP financial measures and ratios do not have standardized meanings under GAAP and therefore may not be comparable to similar measures presented by other issuers. A "supplementary financial measure" is a financial measure disclosed, or intended to be disclosed, on a periodic basis to depict historical or future financial performance, financial position or cash flows that does not fall within the definition of a non-GAAP financial measure or non-GAAP ratio. In our MD&A, we use non-GAAP financial measures and ratios such as "adjusted EPS", "adjusted net earnings", "total combined revenue", "adjusted EBIT", "adjusted EBITDA", "adjusted EBITDA margin", "backlog", "capital additions", "capital expenditures, net", "capital inventory", "capital work in progress", "cash provided by operating activities prior to change in working capital", "equity investment depreciation and amortization", "equity investment EBIT", "free cash flow", "gross profit", "growth capital", "invested capital", "net debt", "senior debt", "sustaining capital" and "total debt". We also use supplementary financial measures such as "gross profit margin" in our MD&A. We provide tables in this document that reconcile non-GAAP and capital management measures used to GAAP measures reported on the face of the consolidated financial statements. A summary of our financial measures is included below under the heading "Financial Measures".

Management's Discussion and Analysis<br><br>December 31, 2021	M-1	North American Construction Group Ltd.

OVERALL PERFORMANCE

(Expressed in thousands of Canadian Dollars, except per share amounts)		Year ended
	December 31,
		2021			2020(iii)			Change
Revenue		$	654,143		$	498,468		$	155,675
Total combined revenue(i)		812,226			583,463			228,763
Gross profit		90,417			92,218			(1,801)
Gross profit margin		13.8		%	18.5		%	(4.7)		%
Operating income		55,128			67,122			(11,994)
Adjusted EBITDA(i)		207,333			174,336			32,997
Adjusted EBITDA margin(ii)		25.5		%	29.9		%	(4.4)		%
Net income and comprehensive income available to shareholders		51,410			49,208			2,202
Adjusted net earnings(i)		58,243			48,746			9,497
Cash provided by operating activities		165,180			146,550			18,630
Cash provided by operating activities prior to change in working capital		164,509			149,943			14,566
Free cash flow(i)		67,232			43,506			23,726
Purchase of PPE		112,563			117,069			(4,506)
Sustaining capital additions(i)		102,183			98,650			3,533
Growth capital additions(i)		6,795			37,665			(30,870)
Basic net income per share		$	1.81		$	1.75		$	0.06
Adjusted EPS(i)		$	2.06		$	1.73		$	0.33

(i)See "Non-GAAP Financial Measures".

(ii)Adjusted EBITDA margin is calculated using adjusted EBITDA over total combined revenue.

(iii)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

Revenue of $654.1 million represents a $155.7 million (or 31.2%) increase from the full year of 2020 reflecting the improved operating conditions, particularly the quarter-over-quarter improvements when comparing to Q2 and Q3 of 2020. The primary drivers of this significant increase were the step change in demand for mine support work equipment rentals at the Kearl mine and the re-mobilized equipment fleet at the Fort Hills mine. Our diversification efforts continue to drive positive changes as the July 1, 2021 acquisition of DGI (Aust) Trading Pty Ltd. ("DGI") provided a half year of revenue on target due to a seamless transition and strong global demand for heavy equipment parts and components. Lastly, our external maintenance program completed various projects during second half of 2021 and is growing with increased capacity from recent facility expansions.

Starting in Q3 2021, we began disclosing combined revenue to more thoroughly reflect the growing contribution from the investments we have in partnerships and joint ventures. Our intention is for reported revenue to reflect our wholly-owned entities with remaining interests being accounted for in equity earnings. We are confident that this will improve understanding for the readers of our financial reports.

Combined revenue of $812.2 million in 2021 represents a $228.8 million (or 39.2%) year-over-year increase. Our share of revenue generated in 2021 by joint ventures and affiliates was $158.1 million compared to $85.0 million in 2020 (an increase of 86.0%). Nuna Group of Companies achieved outstanding top-line performance during the year driven by the full year activity at the gold mine in Northern Ontario. In addition to Nuna, our share of revenue was bolstered by the various joint venture initiatives which are all gaining momentum: i) the investments being made by the Mikisew North American Limited Partnership in ultra-class haul trucks, ii) the consistent progress being made in the component rebuild programs managed and performed by the Brake Supply North American joint venture, and lastly iii) the newly formed joint ventures dedicated to the Fargo-Moorhead flood diversion project. The Fargo-Moorhead project secured financing and achieved the formal financial close milestone in the quarter which provided the ability to recognize income in 2021. Costs incurred to year-end were primarily related to the hiring of staff and initial set-up of certain facilities, equipment and processes in Fargo, North Dakota.

Management's Discussion and Analysis<br><br>December 31, 2021	M-2	North American Construction Group Ltd.

For the full year 2021, gross profit was $90.4 million, or 13.8% of revenue, down from $92.2 million and down from 18.5% of revenue in the previous year. For the entirety of 2021, persistent increases in operating costs from employee absenteeism and the costs associated with pandemic risk mitigation measures in place at the mine sites remained very prevalent. At the same time, the favourable impacts of the federal Canada Emergency Wage Subsidy ("CEWS") program subsided. Equipment maintenance costs and the complex, challenging working conditions at the Millennium mine also hampered margins in 2021. Partial offsets to these factors were the acquisition of DGI, which yielded higher margins on component and parts sales, as well as the contributions from operations support contracts at coal mines in Texas and Wyoming. Included in the gross profit margin for the year was depreciation of $108.0 million, or 16.5% of revenue, which is an increase from our prior year expense of $88.8 million but a decrease from our prior year rate of 17.8% as more productive operating hours generated higher revenue.

General and administrative expenses (excluding stock-based compensation) were $23.8 million, or 3.6% of revenue, compared to $22.5 million, or 4.5% of revenue. The decrease as a percentage of revenue reflects higher year-over-year revenue while gross costs increased as a result of the acquisition of DGI in Q3 2021, generally higher business activity levels and lower CEWS amounts received in the current year.

In managing the challenges of recovering from a global pandemic, adjusted EBITDA of $207.3 million represents a 18.9% increase from the prior year result of $174.3 million and reflects the recovery in demand that was experienced during 2021. Adjusted EBITDA margin of 25.5% illustrates solid operating performance across all our various diversified work sites. Regional isolation protocols, vaccination requirements and the decreased CEWS program in 2021 contributed to the year-over-year decrease in margin but were mitigated through effective change management and our disciplined approach to site performance. The margin was impacted by increased equipment maintenance activities, particularly at the Millennium mine, to ensure our fleet is operating at full capacity heading into the remainder of the 2021/2022 winter season. Offsetting these decreases were the particularly strong operating performances of the Aurora and Fort Hills mines and, as mentioned above, the strong diversified margin profile from parts and component sales by DGI.

Net interest expense was $19.0 million for the year including approximately $1.1 million of non-cash interest. Our average cash cost of debt for the year was 4.3% and was primarily driven by the rates paid on our Credit Facility as well as the competitive interest rates related to secured equipment financing. Adjusted EPS of $2.06 on adjusted net earnings of $58.2 million is 19.1% up from the prior year figure of $1.73 and is consistent with the percentage increase of adjusted EBITDA as depreciation, tax and interest generally tracked consistently with the prior year. Weighted-average common shares outstanding for the full years of 2021 and 2020 were 28.3 million and 28.2 million, respectively.

Free cash flow of $67.2 million is the culmination of adjusted EBITDA of $207.3 million, mentioned above, less sustaining capital additions of $102.2 million and cash interest paid during the year of $17.0 million. Changes in routine working capital balances were minimal for the year with the remaining two drivers for free cash flow generation being i) the timing impacts of capital work in process and capital inventory which required initial cash investment as we build our maintenance and component rebuild capabilities and ii) joint venture activity which required working capital support over full year of 2021.

Management's Discussion and Analysis<br><br>December 31, 2021	M-3	North American Construction Group Ltd.

Impact of and Response to COVID-19

During 2021, the global COVID-19 pandemic continued to impact operations albeit to a much lesser degree than 2020. As with many of our peers in North America, mid-2021 marked a noticeable and positive change with regards to the pandemic as vaccination rates lowered severe outcomes and hospitalizations, which in turn had the effect of lowering site operational restrictions we had been subject to. The Fort McMurray region experienced a difficult third wave with their highest case counts being recorded during that time and a correlating impact on workforce availability in April and May 2021.

Since the onset in mid-March 2020, we have been aggressive with measures to protect our employees, customers and our Company. We have worked collaboratively with mine and work sites owners throughout North America as they tightened site access and made decisions based on their specific and unique circumstances. We provided essential services to these sites where allowed, and have been able to carry-on operations through the adoption of enhanced safety and health monitoring protocols.

The safety of our employees is paramount. We believe that every employee is entitled to a safe workplace and the strict safety policies that put worker health and safety first, were in place prior to this outbreak. Our legacy commitment to safety has been challenged during this pandemic and we are embracing this challenge by implementing procedures and practices to keep our employees safe. These actions not only keep our employees safe, but also their families and friends, as well as our broader provincial, national and global communities.

Management's Discussion and Analysis<br><br>December 31, 2021	M-4	North American Construction Group Ltd.

FINANCIAL HIGHLIGHTS

Five year financial performance

	Year ended December 31,
(dollars in thousands except ratios and per share amounts)	2021			2020 (iii)			2019(iii)			2018(iii)			2017(iii)
Operating Data
Revenue	$	654,143		$	498,468		$	715,110		$	405,384
Gross profit	90,417			92,218			94,338			69,081			39,247
Gross profit margin	13.8		%	18.5		%	13.2		%	17.0		%	13.6	%
Operating income	55,128			67,122			57,131			30,218			13,783
Adjusted EBIT(i)	92,661			81,418			70,962			43,072			17,429
Adjusted EBITDA(i)	207,333			174,336			174,379			101,834			63,082
Adjusted EBITDA margin(ii)	25.5		%	29.9		%	23.4		%	24.7		%	21.6	%
Comprehensive income	51,410			49,208			36,878			15,286			5,264
Adjusted net earnings(i)	58,243			48,746			43,721			24,875			8,197
Per share information
Basic net income per share	$	1.81		$	1.75		$	1.45		$	0.61
Diluted net income per share	$	1.64		$	1.60		$	1.23		$	0.54
Adjusted EPS(i)	$	2.06		$	1.73		$	1.72		$	1.00
Balance Sheet Data
Total assets	$	869,278		$	839,063		$	793,152		$	689,554
Current portion of financial lease obligations and long-term debt	44,728			43,158			47,680			62,136			28,898
Non-current portion of financial lease obligations and long-term debt	340,898			386,169			364,412			322,006			109,623
Total debt(i)	385,626			429,327			412,092			384,142			138,521
Cash	(16,601)			(43,447)			(5,208)			(19,450)			(7,291)
Net debt(i)	369,025			385,880			406,884			364,692			131,230
Total shareholders' equity	278,463			248,443			180,119			149,721			145,924
Invested capital(i)	$	647,488		$	634,323		$	587,003		$	514,413		277,154
Outstanding common shares, excluding treasury shares	28,458,115			29,166,630			25,777,445			25,004,205			25,452,224
Cash dividend declared per share	0.16			0.16			0.12			0.08			0.08

All values are in US Dollars. (i)See "Non-GAAP Financial Measures"

(ii)Adjusted EBITDA margin is calculated using adjusted EBITDA over total combined revenue.

(iii)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

Management's Discussion and Analysis<br><br>December 31, 2021	M-5	North American Construction Group Ltd.

Summary of net income

	Three months ended						Year ended
	December 31,						December 31,
(dollars in thousands, except per share amounts)	2021			2020(iii)			2021			2020(iii)
Revenue	$	181,001		$	136,076		$	654,143		$	498,468
Project costs	68,077			39,552			223,537			140,341
Equipment costs	60,810			47,708			232,173			177,127
Depreciation	29,050			26,248			108,016			88,782
Gross profit	$	23,064		$	22,568		$	90,417		$	92,218
Gross profit margin	12.7		%	16.6		%	13.8		%	18.5		%
General and administrative expenses (excluding stock based compensation)	3,694			6,268			23,768			22,493
Stock-based compensation expense	1,643			4,839			11,606			1,944
Operating income	17,464			11,439			55,128			67,122
Interest expense, net	5,250			4,435			19,032			18,656
Net income	15,308			10,044			51,408			49,208
Adjusted EBITDA(i)	56,285			45,192			207,333			174,336
Adjusted EBITDA margin(ii)	24.0		%	26.6		%	25.5		%	29.9		%
Per share information
Basic net income per share	$	0.54		$	0.34		$	1.81		$	1.75
Diluted net income per share	$	0.48		$	0.32		$	1.64		$	1.60
Adjusted EPS(i)	$	0.59		$	0.36		$	2.06		$	1.73

(i)See "Non-GAAP Financial Measures".

(ii)Adjusted EBITDA margin is calculated using adjusted EBITDA over total combined revenue.

(iii)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

Reconciliation of total reported revenue to total combined revenue

	Three months ended				Year ended
	December 31,				December 31,
(dollars in thousands)	2021		2020(ii)		2021		2020(ii)
Revenue from wholly-owned entities per financial statements	181,001		136,076		654,143		498,468
Share of revenue from investments in affiliates and joint ventures	108,291		48,194		332,440		159,054
Adjustment for joint ventures	(54,394)		(14,293)		(174,357)		(74,059)
Total combined revenue(i)	$	234,898	$	169,977	$	812,226	$	583,463

(i)See "Non-GAAP Financial Measures"

(ii)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

Management's Discussion and Analysis<br><br>December 31, 2021	M-6	North American Construction Group Ltd.

Reconciliation of net income to adjusted net earnings, adjusted EBIT and adjusted EBITDA

	Three months ended						Year ended
	December 31,						December 31,
(dollars in thousands)	2021			2020(iii)			2021			2020(iii)
Net income	$	15,308		$	10,044		$	51,408		$	49,208
Adjustments:
Loss (gain) on disposal of property, plant and equipment	263			22			(85)			659
Stock-based compensation expense	1,643			4,839			11,606			1,944
Net realized and unrealized gain on derivative financial instruments	—			(3,429)			(2,737)			(4,266)
Write-down on asset held for sale	—			—			700			1,800
Tax effect of the above items	(438)			(1,118)			(2,649)			(599)
Adjusted net earnings(i)	$	16,776		$	10,358		$	58,243		$	48,746
Adjustments:
Tax effect of the above items	438			1,118			2,649			599
Interest expense, net	5,250			4,435			19,032			18,656
Income tax expense	2,487			319			9,285			11,264
Equity loss (earnings) in affiliates and joint ventures(i)	(5,581)			70			(21,860)			(7,740)
Equity investment EBIT(i)	5,768			1,284			25,312			9,893
Adjusted EBIT(i)	$	25,138		$	17,584		$	92,661		$	81,418
Adjustments:
Depreciation and amortization	29,242			26,292			108,333			89,309
Write-down on asset held for sale	—			—			(700)			(1,800)
Equity investment depreciation and amortization(i)	1,905			1,316			7,039			5,409
Adjusted EBITDA(i)	$	56,285		$	45,192		$	207,333		$	174,336
Adjusted EBITDA margin(ii)	24.0		%	26.6		%	25.5		%	29.9		%

(i)See "Non-GAAP Financial Measures".

(ii)Adjusted EBITDA margin is calculated using adjusted EBITDA over total combined revenue.

(iii)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

Reconciliation of equity earnings in affiliates and joint ventures to equity investment EBIT

	Three months ended				Year ended
	December 31,				December 31,
(dollars in thousands)	2021		2020(ii)		2021		2020(ii)
Equity (earnings) loss in affiliates and joint ventures	$	5,581	$	(70)	$	21,860	$	7,740
Adjustments:
Interest expense, net	(73)		149		168		376
Income tax expense	294		1,125		3,204		1,374
Gain on disposal of property, plant and equipment	(34)		80		80		403
Equity investment EBIT(i)	$	5,768	$	1,284	$	25,312	$	9,893

(i)See "Non-GAAP Financial Measures"

(ii)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

Management's Discussion and Analysis<br><br>December 31, 2021	M-7	North American Construction Group Ltd.

Analysis of three months and year ended December 31, 2021 results

Revenue

For the three months ended December 31, 2021, revenue was $181.0 million, up from $136.1 million in the same period last year. The majority of this quarter-over-quarter positive variance was generated by the equipment fleet at the Fort Hills mine which was remobilized in the third quarter of 2021. Additionally, the demand for mine support work and equipment rental support at the Kearl mine was stronger than the prior quarter. Lastly, the completion of three haul truck rebuilds by our external maintenance program and the acquisition of the Australian component supplier DGI bolstered revenue in Q4 2021.

For the year ended December 31, 2021, revenue was $654.1 million, up from $498.5 million for the year ended December 31, 2020. The increase of 31.2% reflects the fourth quarter increases mentioned above combined with a strong demand for equipment rental support and overburden removal activities at the Millennium mine and an expanded winter reclamation program at the Aurora mine. The completion of the overburden and ditch construction work at the Kearl mine also positively impacted revenue in the year.

Gross profit

For the three months ended December 31, 2021, gross profit was $23.1 million or 12.7% of revenue, up from a gross profit of $22.6 million, but down from a 16.6% gross margin in the same period last year. The improvement in gross profit in the current period was driven by the variety of increases in demand mentioned above. The gross profit margin variance quarter-over-quarter was impacted by increased equipment maintenance activities, primarily at the Millennium mine, as we performed the required maintenance services to ensure the fleet is operating at full capacity for the large demand of work for the remainder of the important winter season. Furthermore, CEWS impacted the variance as it was a significant program in place in the prior quarter. Offsetting these decreases was the strong operational execution of the scopes of work at the Aurora and Fort Hills mines and the diversified margin profile from component and parts sales by DGI.

There are no amounts related to CEWS receipts included in the three months ended December 31, 2021. Included in the three months ended December 31, 2020 was $6.5 million of which $6.0 million is included in gross profit.

For the year ended December 31, 2021, gross profit was $90.4 million, or 13.8% of revenue, down from $92.2 million and 18.5% of revenue in the previous year. The gross profit margin impacts experienced in the fourth quarter discussed above were largely experienced throughout the year. Increases in operating costs from employee absenteeism and the costs associated with risk mitigation measures in place at the mine sites remained very prevalent throughout 2021 as the impact of the CEWS program subsided. Equipment maintenance costs and the complex working conditions at the Millennium mine hampered margins at that site. Partially offsetting these full year factors were the consistent operating efficiency on the reclamation scope at the Aurora mine and the strong performance of the newly awarded scopes at the Fort Hills mine. Our operations support services at the two coal mines in the U.S. also positively impacted margin given the nature of those mine management contracts.

For the year ended December 31, 2021, results include $13.2 million related to CEWS receipts of which $12.5 million is included in gross profit. In the same period last year, results include $28.0 million of which $25.2 million is included in gross profit.

For the three months ended December 31, 2021, depreciation was $29.1 million, or 16.0% of revenue, up from $26.2 million (or 19.3% of revenue) in the same period last year. Depreciation for the year ended December 31, 2021 was $108.0 million, (16.5% of revenue), up from $88.8 million (17.8% of revenue) for the year ended December 31, 2020. The increases in gross depreciation are the result of higher operating equipment hours utilization by the fleet in 2021. The depreciation percentages in 2021 were lower than the comparable periods in 2020 due to more effective and productive use of the fleet when compared to the inefficiencies experienced especially in Q2 and Q3 of 2020. Furthermore, an increase in the use of rental equipment in 2021 when compared to 2020 was a noticeable factor in the reduction of depreciation as a percentage of revenue.

Management's Discussion and Analysis<br><br>December 31, 2021	M-8	North American Construction Group Ltd.

Operating income

For the three months ended December 31, 2021, operating income was $17.5 million, compared to operating income of $11.4 million during the same period last year. G&A expense excluding stock-based compensation expense was $3.7 million, or 2.0% of revenue for the three months ended December 31, 2021, down from $6.3 million, or 4.6% of revenue in the same period last year. The decrease in the current period expense compared to prior year was due to recognition of reimbursable bid costs received in excess of amounts capitalized, offset by the acquisition of DGI in Q3 2021 as well as higher CEWS receipts in the prior year. For the three months ended December 31, 2021, there are no amounts related to the CEWS program as a reduction in general and administrative expenses compared to $0.5 million received in the previous period.

For the year ended December 31, 2021, operating income was $55.1 million, down from $67.1 million for the year ended December 31, 2020. G&A expense, excluding stock-based compensation expense was $23.8 million for the year ended December 31, 2021, or 3.6% of revenue, up from the $22.5 million, and down from 4.5% of revenue, recorded in the year ended December 31, 2020. The year-over-year gross increase was due to the acquisition of DGI in Q3 2021, generally higher business activity levels and lower CEWS receipts received in the current year. For the year ended December 31, 2021, we received $0.8 million from the CEWS program as a reduction in general and administrative expenses compared to $2.9 million received in the previous year.

For the three months and year ended December 31, 2021, stock-based compensation was $1.6 million and $11.6 million, respectively. For the three months and year ended December 31, 2020, stock- based compensation was $4.8 million and $1.9 million, respectively. The year-over-year change is primarily due to the impact of the fluctuating share price on the carrying value of our liability classified award plans.

Non-operating income and expense

	Three months ended				Year ended
	December 31,				December 31,
(dollars in thousands)	2021		2020(i)		2021		2020(i)
Interest expense
Credit Facility	$	1,527	$	2,054	$	6,559	$	8,189
Convertible debentures	1,733		691		5,148		3,299
Finance lease obligations	480		687		2,260		3,176
Mortgage	622		246		1,350		999
Promissory notes	126		115		450		664
Financing obligations	366		402		1,562		1,265
Amortization of deferred financing costs	312		204		1,064		1,091
Other interest expense	88		154		701		154
Interest expense	$	5,254	$	4,553	$	19,094	$	18,837
Other interest expense (income)	(4)		(118)		(62)		(181)
Total interest expense	$	5,250	$	4,435	$	19,032	$	18,656
Equity loss (earnings) in affiliates and joint ventures	(5,581)		70		(21,860)		(7,740)
Net realized and unrealized gain on derivative financial instruments	—		(3,429)		(2,737)		(4,266)
Income tax expense	2,487		319		9,285		11,264

(i)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

Total interest expense was $5.3 million during the three months ended December 31, 2021, up from $4.4 million in the same period last year. In the year ended December 31, 2021, total interest expense was $19.0 million, up from the $18.7 million in the year ended December 31, 2020. The increase in interest expense in both periods can be primarily attributed to the addition of 5.50% convertible debentures which was not fully offset by the decrease in interest related to our Credit Agreement ("the Credit Facility").

Cash related interest expense for the three months ended December 31, 2021, calculated as interest expense excluding amortization of deferred financing costs of $0.3 million, was $4.9 million and represents an average cost of debt of 4.7% when factoring in the Credit Facility balances during the quarter (compared to 4.2% for the three months ended December 31, 2020). Cash related interest expense for the year ended December 31, 2021, excluding deferred financing cost of amortization of $1.1 million, was $18.0 million and represents an average cost of debt of 4.3% (compared to 4.1% for the year ended December 31, 2020).

Management's Discussion and Analysis<br><br>December 31, 2021	M-9	North American Construction Group Ltd.

Equity earnings in affiliates and joint ventures was $5.6 million for the three months ended December 31, 2021, up from a loss of $0.1 million in the same period last year. In the year ended December 31, 2021 equity earnings in affiliates and joint ventures was $21.9 million up from the $7.7 million in the year ended December 31, 2020. Nuna Group of Companies achieved outstanding operational performance during the year driven by the full year activity at the gold mine in Northern Ontario. In addition to Nuna, equity earnings was bolstered by the various joint venture initiatives which are all gaining momentum: i) the investments being made by the Mikisew North American Limited Partnership in ultra-class haul trucks, ii) the consistent progress being made in the component rebuild programs managed and performed by the Brake Supply North American joint venture, and lastly iii) the newly formed joint ventures dedicated to the Fargo-Moorhead flood diversion project. The Fargo-Moorhead project secured financing and achieved the formal financial close milestone in the quarter which provided the ability to recognize income in 2021. Costs incurred to year-end were primarily related to the hiring of staff and initial set-up of certain facilities, equipment and processes in Fargo, North Dakota.

For the year ended December 31, 2021, we realized a gain of $7.1 million (unrealized gain at December 31, 2020 of $4.3 million) on the swap agreement related to the 5.50% convertible debentures that were issued in 2017 and redeemed through issuance of 4,583,655 common shares in April 2020. This swap agreement was completed on September 30, 2021.

We recorded income tax expense of $2.5 million and $9.3 million, respectively, during the three months and year ended December 31, 2021, an increase from the $0.8 million and a decrease from the $11.3 million deferred income tax expense recorded in the respective prior year periods. The current quarter income tax expense was higher than Q4 2020 due to higher earnings. The current year income tax expense approximates our combined effective corporate tax rate of 23%.

A reconciliation of basic net income per share to adjusted EPS is as follows:

	Three months ended				Year ended
	December 31,				December 31,
(dollars in thousands)	2021		2020		2021		2020
Net income	$	15,308	$	10,044	$	51,408	$	49,208
Interest from convertible debentures (after tax)	1,480		597		4,410		2,370
Diluted net income available to common shareholders	$	16,788	$	10,641	$	55,818	$	51,578
Adjusted net earnings(i)	$	16,776	$	10,358	$	58,243	$	48,746
Weighted-average number of common shares	28,455,992		29,157,143		28,325,489		28,165,130
Weighted-average number of diluted shares	35,140,822		33,180,912		33,946,957		32,300,824
Basic net income per share	$	0.54	$	0.34	$	1.81	$	1.75
Diluted net income per share	$	0.48	$	0.32	$	1.64	$	1.60
Adjusted EPS(i)	$	0.59	$	0.36	$	2.06	$	1.73

(i)See "Non-GAAP Financial Measures".

Summary of consolidated quarterly results

A number of factors contribute to variations in our quarterly financial results between periods, including:

•changes in the mix of work from earthworks, with heavy equipment, to more labour intensive, light construction projects;

•seasonal weather and ground conditions;

•certain types of work that can only be performed during cold, winter conditions when the ground is frozen;

•the timing and size of capital projects undertaken by our customers on large oil sands projects;

•the timing of equipment maintenance and repairs;

•the timing of project ramp-up costs as we move between seasons or types of projects;

•the timing of resolution for claims and unsigned change-orders;

•the timing of "mark-to-market" expenses related to the effect of a change in our share price on stock-based compensation plan liabilities; and

•the level of borrowing under our convertible debentures, Credit Facility and finance leases and the corresponding interest expense recorded against the outstanding balance of each.

Management's Discussion and Analysis<br><br>December 31, 2021	M-10	North American Construction Group Ltd.

The table, below, summarizes our consolidated results for the eight preceding quarters:

(dollars in millions, except per share amounts)	Q4 2021		Q3 2021(iv)		Q2 2021(iv)		Q1 2021(iv)		Q4 2020(iv)		Q3 2020(iv)		Q2 2020(iv)		Q1 2020(iv)
Revenue	$	181.0	$	166.0	$	139.3	$	167.8	$	136.1	$	93.6	$	70.6	$	198.3
Gross profit	23.1		21.7		14.5		31.2		22.6		14.8		20.7		34.1
Adjusted EBITDA(i)	56.3		47.5		42.4		61.1		45.2		37.1		32.1		59.9
Net income	15.3		14.0		2.7		19.4		10.0		6.8		13.3		19.0
Basic income per share(ii)	$	0.54	$	0.49	$	0.10	$	0.68	$	0.34	$	0.23	$	0.46	$	0.74
Diluted income per share(ii)	$	0.48	$	0.44	$	0.09	$	0.62	$	0.32	$	0.22	$	0.42	$	0.67
Adjusted EPS(i)(ii)	$	0.59	$	0.50	$	0.32	$	0.65	$	0.36	$	0.26	$	0.45	$	0.70
Cash dividend per share(iii)	$	0.04	$	0.04	$	0.04	$	0.04	$	0.04	$	0.04	$	0.04	$	0.04

(i)See "Non-GAAP Financial Measures".

(ii)Net income and adjusted earnings per share for each quarter have been computed based on the weighted-average number of shares issued and outstanding during the respective quarter. Therefore, quarterly amounts are not additive and may not add to the associated annual or year-to-date totals.

(iii)The timing of payment of the cash dividend per share may differ from the dividend declaration date.

(iv)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

All other events being equal, oil sands mine support revenue during the December to March time period of each year is traditionally highest as ground conditions are most favorable for work requiring frozen ground access. Delays in the start of the winter freeze required to perform this type of work or an abnormal thaw period during the winter months will reduce overall revenues or have an adverse effect on project performance in the winter period. Extreme winter weather conditions, where temperatures dip below minus 30 degrees Celsius, can have an adverse effect on revenue due to lower equipment performance and reliability.

We generally experience a seasonal decline in our oil sands mine site support revenue, such as reclamation and muskeg removal services, during the three months ended June 30 of each year as weather conditions make performance of this heavy equipment intensive work difficult during this period. The oil sands mine support activity levels decline when frost leaves the ground and access to excavation and dumping areas, as well as associated roads, are rendered temporarily incapable of supporting the weight of heavy equipment. The duration of this period, which can vary considerably from year-to-year, is referred to as "spring breakup" and has a direct impact on our mine support activity levels.

Mine support activities for resource mines outside the oil sands typically are at their peak during the May to October time period, contrary to the seasonality of an oil sands mine that relies on the cold winter season for effective material movement.

Overall, full-year results are not likely to be a direct multiple or combination of any one quarter or quarters. In addition to revenue variability, gross margins can be negatively impacted in less active periods because we are likely to incur higher maintenance and repair costs due to our equipment being available for servicing.

LIQUIDITY AND CAPITAL RESOURCES

Summary of consolidated financial position

As at December 31, 2021, our total liquidity was $197.7 million, comprised of $16.6 million in cash and $181.1 million of unused borrowing availability on the Credit Facility. This is compared to our total liquidity of $148.0 million at December 31, 2020, comprised of $43.9 million cash, and $104.1 million available and unused Credit Facility borrowings. Our liquidity is complemented by available borrowings through our equipment leasing partners. Under the terms of our Credit Facility, our finance lease borrowing is limited to $150.0 million. As at December 31, 2021, we had $28.6 million in unused finance lease borrowing availability under our Credit Facility, compared to $29.6 million at December 31, 2020. Borrowing availability under finance lease obligations considers the current and long-term portion of finance lease obligations and financing obligations, including the finance lease obligations for the joint ventures that we guarantee. There are no restrictions within the terms of our Credit Facility relating to the use of operating leases. As at December 31, 2021, our total available capital liquidity was $226.3 million, comprised of total liquidity plus unused finance lease borrowing availability under our Credit Facility compared to $177.6 million at December 31, 2020.

Management's Discussion and Analysis<br><br>December 31, 2021	M-11	North American Construction Group Ltd.

A reconciliation of long-term debt to senior, total and net debt is as follows:

(dollars in thousands)	December 31, 2021		December 31, 2020(iii)		Change
Cash	$	16,601	$	43,447	$	(26,846)
Working capital assets
Accounts receivable	$	68,787	$	36,231	$	32,556
Contract assets	9,759		7,008		2,751
Inventories	44,544		19,151		25,393
Contract costs	2,673		1,969		704
Prepaid expenses and deposits	6,828		4,977		1,851
Working capital liabilities
Accounts payable	(76,251)		(41,428)		(34,823)
Accrued liabilities	(33,389)		(19,382)		(14,007)
Contract liabilities	(3,349)		(1,512)		(1,837)
Total net working capital (excluding cash)	$	19,602	$	7,014	$	12,588
Property, plant and equipment	640,950		632,210		8,740
Total assets	869,278		839,063		30,215
Finance lease obligations(i)	54,721		69,472		(14,751)
Credit Facility(i)	110,000		220,000		(110,000)
Promissory notes(i)	13,210		12,726		484
Financing obligations(i)	47,945		50,923		(2,978)
Senior debt(ii)	$	225,876	$	353,121	$	(127,245)
Convertible debentures(i)	129,750		55,000		74,750
Mortgage(i)	30,000		21,206		8,794
Total debt(ii)	$	385,626	$	429,327	$	(43,701)
Cash	(16,601)		(43,447)		(26,846)
Net debt(ii)	$	369,025	$	385,880	$	(16,855)
Total shareholders' equity	278,463		248,443		30,020
Invested capital(ii)	$	647,488	$	634,323	$	13,165

(i)Includes current portion.

(ii)See "Non-GAAP Financial Measures".

(iii)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

As at December 31, 2021, we had $1.4 million in trade receivables that were more than 30 days past due, compared to $0.2 million as at December 31, 2020. As at December 31, 2021 and December 31, 2020, we did not have an allowance for credit losses related to our trade receivables as we believe that there is minimal risk in the collection of past due trade receivables. We continue to monitor the credit worthiness of our customers.

Our current working capital is also significantly affected by the timing of the completion of projects and the contractual terms of the project. In some cases, our customers are permitted to withhold payment of a percentage of the amount owing to us for a stipulated period of time (such percentage and time period is usually defined by the contract and in some cases provincial legislation). This amount acts as a form of security for our customers and is referred to as a "holdback". Typically, we are only entitled to collect payment on holdbacks if substantial completion of the contract has been performed, there are no outstanding claims by subcontractors or others related to work performed by us and we have met the period specified by the contract, usually 45 days after completion of the work. However, in some cases, we are able to negotiate the progressive release of holdbacks as the job reaches various stages of completion. As at December 31, 2021, holdbacks totaled $0.4 million, up from the $0.1 million balance as at December 31, 2020.

The variability of our business through the year due to the timing of construction project awards or the execution of work that can only be performed during winter months can result in an increase in our working capital requirements from higher accounts receivable and unbilled revenue balances in the early phases of such projects.

Capital resources

Our capital resources consist primarily of cash flow provided by operating activities, cash borrowings under our Credit Facility and financing through operating leases and capital equipment financing.

Management's Discussion and Analysis<br><br>December 31, 2021	M-12	North American Construction Group Ltd.

Our primary uses of cash are for capital expenditures, to fulfill debt repayment and interest payment obligations, to fund operating and finance lease obligations, to finance working capital requirements and to pay dividends. When prudent, we have also used cash to repurchase our common shares.

We anticipate that we will have enough cash from operations to fund our annual expenses, planned capital spending program and meet current and future working capital, debt servicing and dividend payment requirements in 2022 from existing cash balances, cash provided by operating activities and borrowings under our Credit Facility.

Reconciliation of capital additions	Three months ended				Year ended
	December 31,				December 31,
(dollars in thousands)	2021		2020(iii)		2021		2020(iii)
Purchase of PPE	$	25,937	$	27,281	$	112,563	$	117,069
Additions to intangibles	483		1		1,228		272
Gross capital expenditures	$	26,420	$	27,282	$	113,791	$	117,341
Proceeds from sale of PPE	(1,544)		(707)		(17,141)		(2,784)
Change in capital inventory and capital work in progress(i)(ii)	2,051		3,360		(6,870)		(6,124)
Capital expenditures, net(i)	26,927		29,935		89,780		108,433
Finance lease additions	—		—		19,198		27,882
Capital additions(i)	$	26,927	$	29,935	$	108,978	$	136,315

(i)See "Non-GAAP Financial Measures".

(ii)Included in property, plant and equipment on the Consolidated Balance Sheets is $39.2 million (2020 - $32.3 million) of capital inventory and capital work in progress.

(iii)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

	Three months ended				Year ended
	December 31,				December 31,
(dollars in thousands)	2021		2020(ii)		2021		2020(ii)
Sustaining	$	20,192	$	26,757	$	82,985	$	96,500
Growth	6,735		3,178		6,795		11,933
Capital expenditures, net(i)	26,927		29,935		89,780		108,433
Sustaining	—		—		19,198		2,150
Growth	—		—		—		25,732
Finance lease additions	—		—		19,198		27,882
Sustaining	20,192		26,757		102,183		98,650
Growth	6,735		3,178		6,795		37,665
Capital additions(i)	$	26,927	$	29,935	$	108,978	$	136,315

(i)See "Non-GAAP Financial Measures".

(ii)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

Sustaining capital additions for the three months ended December 31, 2021 were $20.2 million and were primarily made up of capitalized maintenance performed on the existing fleet. For the year ended December 31, 2021, sustaining capital expenditures were $102.2 million and were predominantly comprised of capital expenditures dedicated to routine capital maintenance activities required to maintain the existing fleet.

Growth capital additions for the three months ended December 31, 2021 were $6.7 million and for the year ended December 31, 2021 were $6.8 million. This spending was comprised of costs related to the heavy equipment maintenance facility expansion which recently became available for use. Further to the growth capital additions above is the acquisition of DGI, totaling $13.7 million.

A portion of our heavy construction fleet is financed through finance leases. We continue to lease our motor vehicle fleet through our finance lease facilities. Our equipment fleet is currently split among owned (60.0%), finance leased (33.0%) and rented equipment (7.0%).

Management's Discussion and Analysis<br><br>December 31, 2021	M-13	North American Construction Group Ltd.

Summary of consolidated cash flows

	Three months ended				Year ended
	December 31,				December 31,
(dollars in thousands)	2021		2020(i)		2021		2020(i)
Cash provided by operating activities	$	65,895	$	62,493	$	165,180	$	146,550
Cash used by investing activities	(24,301)		(25,158)		(99,269)		(112,827)
Cash (used) provided by financing activities	(40,022)		(33,685)		(92,759)		4,516
Net increase (decrease) in cash	$	1,572	$	3,650	$	(26,848)	$	38,239

(i)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

Operating activities

	Three months ended				Year ended
	December 31,				December 31,
(dollars in thousands)	2021		2020(i)		2021		2020(i)
Cash provided by operating activities prior to change in working capital	$	44,872	$	44,656	$	164,509	$	149,943
Net changes in non-cash working capital	21,023		17,837		671		(3,393)
Cash provided by operating activities	$	65,895	$	62,493	$	165,180	$	146,550

(i)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

Cash provided by operating activities for the three months ended December 31, 2021 was $65.9 million, compared to cash provided by operating activities of $62.5 million for the three months ended December 31, 2020. Cash provided by operating activities for the year ended December 31, 2021 was $165.2 million, compared to cash provided by operating activities of $146.6 million for the year ended December 31, 2020.

The increase in cash flow in both current year period is a result of improved EBITDA and changes in non-cash working capital. Cash provided by (used by) the net change in non-cash working capital specific to operating activities is detailed below.

	Three months ended				Year ended
	December 31,				December 31,
(dollars in thousands)	2021		2020(i)		2021		2020(i)
Accounts receivable	$	(2,360)	$	8,132	$	(30,646)	$	29,162
Contract assets	753		(2,913)		(2,751)		12,086
Inventories	4,808		896		(11,243)		2,476
Contract costs	1,580		(79)		(704)		(593)
Prepaid expenses and deposits	(252)		(50)		(735)		(953)
Accounts payable	5,478		6,155		31,232		(47,398)
Accrued liabilities	9,559		4,306		13,681		338
Contract liabilities	1,457		1,390		1,837		1,489
	$	21,023	$	17,837	$	671	$	(3,393)

(i)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

Investing activities

During the three months ended December 31, 2021, cash used by investing activities was $24.3 million, compared to $25.2 million in cash used by investing activities in the three months ended December 31, 2020. Current period investing activities largely relate to $26.4 million for the purchase of property, plant and equipment, offset by $1.5 million in proceeds on disposal of property, plant and equipment. Prior year investing activities included $27.3 million for the purchase of property, plant, equipment offset by $0.7 million in proceeds on disposal of property, plant and equipment.

During the year ended December 31, 2021, cash used by investing activities was $99.3 million, compared to $112.8 million used by investing activities during the year ended December 31, 2020. Current period investing activities largely relate to the acquisition of DGI for net cash consideration of $11.4 million and $112.6 million for the purchase of property, plant and equipment, partially offset by $17.1 million in proceeds from the disposal of property, plant and equipment and $7.1 million gain from settlement of the derivative financial instrument. Prior year investing activities included $117.1 million for the purchase of property, plant, equipment offset by $2.8 million in proceeds for the

Management's Discussion and Analysis<br><br>December 31, 2021	M-14	North American Construction Group Ltd.

disposal of property, plant and equipment and $3.5 million of net repayments activity within the Nuna Group of Companies.

Financing activities

Cash used by financing activities during the three months ended December 31, 2021, was $40.0 million, which included $18.7 million of proceeds of long-term debt offset by $50.3 million of long-term debt repayments, and $7.3 million in finance lease obligation repayments. Cash used by financing activities for the three months ended December 31, 2020 was $33.7 million, which included $23.1 million of long-term debt repayments and $8.6 million in finance lease obligation repayments.

For the year ended December 31, 2021, cash used in financing activities was $92.8 million, which included $135.0 million of proceeds of long-term debt offset by $164.4 million of long-term debt repayments, $33.9 million in finance lease obligation repayments, $5.5 million of treasury share purchases and $16.5 million in share purchase program. Cash used by financing activities during the year ended December 31, 2020 was $4.5 million, driven by proceeds of long-term debt of $145.2 million offset by $82.3 million of long-term debt repayments, $34.6 million repayments towards finance lease obligations, $9.9 million of treasury share purchases and $1.0 million in financing costs.

Free cash flow

Free cash flow is a non-GAAP measure (see "Explanatory Notes - Non-GAAP Financial Measures" in this MD&A). Below is our reconciliation from the consolidated statement of cash flows ("Cash provided by operating activities" and "Cash used in investing activities") to our definition of free cash flow.

	Three months				Year ended
	December 31				December 31,
(dollars in thousands)	2021		2020(ii)		2021		2020(ii)
Cash provided by operating activities	$	65,895	$	62,493	$	165,180	$	146,550
Cash used in investing activities	(24,301)		(25,158)		(99,269)		(112,827)
Capital additions financed by leases	—		—		(19,198)		(27,882)
Add back:
Growth capital additions	6,735		3,178		6,795		37,665
Acquisition of DGI (Aust) Trading Pty Ltd.	—		—		13,724		—
Free cash flow(i)	$	48,329	$	40,513	$	67,232	$	43,506

(i)See "Non-GAAP Financial Measures".

(ii)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

Free cash flow for the year ended December 31, 2021 was $67.2 million driven by strong operating results and higher profitability with higher cash contributed from non-cash working capital, offset by investment in capital work in progress and joint ventures. Positive cash flow of $88.1 million was generated by adjusted EBITDA of $207.3 million, less sustaining capital additions of $102.2 million and cash interest paid of $17.0 million. Sustaining maintenance expenditures remained consistent with the expectations of the 2021 capital maintenance plan reflecting necessary maintenance in anticipation of our busy winter season. Changes in routine working capital balances were minimal for the year. The remaining difference primarily relates to the timing impacts of capital work in process and capital inventory which require initial cash investment as we continue to build our maintenance and component rebuild capabilities. The last factor in free cash flow was the timing of joint venture distributions which required working capital support over full year of 2021.

Free cash flow for the year ended December 31, 2020 was $43.5 million. Positive cash flow of $57.2 million was generated by adjusted EBITDA of $174.3 million, less sustaining capital additions of $98.7 million and cash interest paid of $18.5 million. The lower free cash flow in 2020 was a result of lower cash contributed from non-cash working capital and higher capital additions financed by leases.

Management's Discussion and Analysis<br><br>December 31, 2021	M-15	North American Construction Group Ltd.

Contractual obligations and other commitments

Our principal contractual obligations relate to our long-term debt; finance and operating leases; and supplier contracts. The following table summarizes our future contractual obligations as of December 31, 2021, excluding interest where interest is not defined in the contract (operating leases and supplier contracts). The future interest payments were calculated using the applicable interest rates and balances as at December 31, 2021 and may differ from actual results.

	Payments due by fiscal year
(dollars in thousands)	Total		2022		2023		2024		2025		2026 and thereafter
Credit Facility	$	120,831	$	3,262	$	4,270	$	113,299	$	—	$	—
Convertible debentures	168,847		6,861		6,861		6,861		6,861		141,403
Mortgage	44,588		1,783		1,783		1,783		1,783		37,456
Promissory notes	13,907		5,320		5,307		2,500		780		—
Finance leases(i)	51,291		23,539		15,413		9,743		1,448		1,148
Operating leases(ii)	13,502		1,207		1,086		878		1,429		8,902
Non-lease components of building lease commitments(iii)	547		388		159		—		—		—
Financing obligations	50,379		15,236		15,236		15,573		4,334		—
Supplier contracts	8,013		8,013		—		—		—		—
Total contractual obligations	$	471,905	$	65,609	$	50,115	$	150,637	$	16,635	$	188,909

(i)Finance leases are net of receivable on heavy equipment operating sublease of $5,718 (2022 - $2,859; 2023 - $2,859).

(ii)Operating leases are net of receivables on subleases of $4,627 (2022 - $2,638; 2023 - $1,496; 2024 - 493).

(iii)Non-lease components of lease commitments are net of receivables on subleases of $2,197 (2022 - $1,467; 2023 - $730). These commitments include common area maintenance, management fees, property taxes and parking related to operating leases.

Our total contractual obligations of $471.9 million as at December 31, 2021 have decreased from $498.4 million as at December 31, 2020 primarily related to a decrease of $119.0 million related to our Credit Facility, $8.3 million of financing obligations and $3.7 million of supplier contracts, offset by an increase in convertible debentures of $98.7 million and a mortgage of $10.2 million. For a discussion on our Credit Facility see "Credit Facility" below and for a more detailed discussion of our convertible debentures, see "Capital Structure and Securities" in our most recent AIF, which section is expressly incorporated by reference into this MD&A.

Credit Facility

On September 29, 2021, we entered into an Amended and Restated Credit Agreement (the "Credit Facility") with a banking syndicate that allows borrowing under the revolving loan to $325.0 million with the ability to increase the maximum borrowings by $50.0 million, subject to certain conditions. The amended agreement extended the facility maturity from October 8, 2023 to October 8, 2024, with an option to extend on an annual basis, subject to certain conditions. The Credit Facility permits finance lease obligations to a limit of $150.0 million and certain other borrowings outstanding to a limit of $20.0 million. In the amended agreement, permitted amount of $150.0 million was expanded to include guarantees provided by us to a permitted joint venture, provided that value of such obligations shall not exceed the permitted amount.

Our Credit Facility has two financial covenants that must be tested quarterly on a trailing four-quarter basis.

•The first covenant is the senior leverage ratio ("Senior Leverage Ratio") which is Bank Senior Debt compared to Bank EBITDA.

◦"Bank Senior Debt" is defined as the Company's long-term debt, finance leases and outstanding letters of credit, excluding convertible debentures, deferred financing costs, mortgages related to NACG Acheson Ltd. and debt related to investment in affiliates and joint ventures. "Bank EBITDA" is defined as earnings before interest, taxes, depreciation, and amortization, excluding the effects of unrealized foreign exchange gain or loss, realized and unrealized gain or loss on derivative financial instruments, cash and non-cash stock-based compensation expense, gain or loss on disposal of property, plant and equipment, and certain other non-cash items included in the calculation of net income.

◦The Senior Leverage Ratio must be less than or equal to 3.0:1 at Q4 2021 and thereafter. In the event we enter into a material acquisition, the maximum allowable Senior Leverage Ratio would include a step up of 0.50x for four quarters following the acquisition.

Management's Discussion and Analysis<br><br>December 31, 2021	M-16	North American Construction Group Ltd.

•The second covenant is the fixed charge coverage ratio ("Fixed Charge Coverage Ratio") which is defined as Bank EBITDA less cash taxes compared to Fixed Charges.

◦"Fixed Charges" is defined as cash interest, scheduled payments on debt, unfunded cash distributions and unfunded capital expenditures.

◦The Fixed Charge Coverage Ratio must be maintained at a ratio greater than 1.15:1.

•The calculation of both financial covenants excludes rental revenue of the wholly-owned subsidiary that owns our shop and head office complex.

As at December 31, 2021, we were in compliance with our financial covenants. The Senior Leverage Ratio was 1.48:1, in compliance with the maximum of 3.0:1. The Fixed Charge Coverage Ratio was 2.06:1, in compliance with the minimum of 1.15:1.

Borrowing activity under our Credit Facility

As at December 31, 2021, there was $110.0 million borrowed against our Credit Facility along with $33.9 million in issued letters of credit under our Credit Facility (December 31, 2020 - $220.0 million and $0.9 million, respectively) and the unused borrowing availability was $181.1 million (December 31, 2020 - $104.1 million).

Guarantee

On December 3, 2021, we entered into an agreement with a financial institution to provide a guarantee on a revolving equipment lease credit facility of $45.0 million for Mikisew North American Limited Partnership ("MNALP") to assist with a growing fleet of equipment in MNALP. This equipment lease credit facility will allow MNALP to avail the credit through a lease agreement and/or equipment finance contract with appropriate supporting documents. As at December 31, 2021, the available balance on this facility was $28.1 million. At this time, there have been no instances or indication that payments will not be made by MNALP. Therefore, no liability has been recorded.

Outstanding share data

Common shares

We are authorized to issue an unlimited number of voting common shares and an unlimited number of non-voting common shares. On June 12, 2014, we entered into a trust agreement whereby the trustee may purchase and hold voting common shares, classified as treasury shares on our Consolidated Balance Sheets, until such time that units issued under the equity classified long-term incentive plans are to be settled. Units granted under such plans typically vest at the end of a three-year term.

Options

Effective November 17, 2021, we terminated our Amended and Restated 2004 Share Option Plan. There were no options issued or outstanding as at the date of termination.

Management's Discussion and Analysis<br><br>December 31, 2021	M-17	North American Construction Group Ltd.

Convertible debentures

	December 31,<br>2021		December 31, 2020
5.50% convertible debentures	$	74,750	$	—
5.00% convertible debentures	55,000		55,000
	$	129,750	$	55,000

The summarized terms of these convertible debentures are:

	Date of issuance	Maturity	Conversion price		Share equivalence per 1000 debenture	Debt issuance costs
5.50% convertible debentures	June 1, 2021	June 30, 2028	$	24.75		$	3,531
5.00% convertible debentures	March 20, 2019	March 31, 2026	$	26.25		$	2,691

All values are in US Dollars.

The 5.50% convertible debentures are not redeemable prior to June 30, 2024, except under certain exceptional circumstances. The 5.50% convertible debentures may be redeemed at the option of the Company, in whole or in part, at any time on or after June 30, 2024 at a redemption price equal to the principal amount provided that the market price of the common shares is at least 125% of the conversion price; and on or after June 30, 2026 at a redemption price equal to the principal amount. In each case, we are required to pay accrued and unpaid interest on the debentures redeemed to the redemption date.

The 5.00% convertible debentures are redeemable under certain conditions after a change in control has occurred. If a change in control occurs, we are required to offer to purchase all of the 5.00% convertible debentures at a price equal to 101% of the principal amount plus accrued and unpaid interest to the date of purchase.

During the year ended December 31, 2021, we realized a gain of $7.1 million (unrealized gain at December 31, 2020 of $4.3 million) on the swap agreement related to the 5.50% convertible debentures that were issued in 2017 and redeemed through issuance of 4,583,655 common shares in April 2020. This swap agreement was completed on September 30, 2021.

Share purchase program

During the year ended December 31, 2021, we completed the Normal-Course Issuer Bid ("NCIB") which had commenced on March 12, 2020 with purchases and cancellations totaling 1,076,903 common shares, at an average price of $14.86. The transactions resulted in a decrease to common shares of $8,679 and a decrease to additional paid-in capital of $7,327 and completed the NCIB with the maximum number of authorized common shares being purchased and canceled.

On April 9, 2021, we commenced a NCIB under which a maximum number of 2,000,000 common shares were authorized to be purchased. As at December 31, 2021, we purchased and subsequently cancelled 37,000 shares under this NCIB, at an average price of $13.86 per share. This resulted in a decrease to common shares of $0.3 million and an increase to additional paid-in capital of $0.2 million. This NCIB will terminate no later than April 8, 2022.

Management's Discussion and Analysis<br><br>December 31, 2021	M-18	North American Construction Group Ltd.

Backlog

The following summarizes our reconciliation of non-GAAP backlog as at December 31, 2021 and December 31, 2020.

(dollars in thousands)	December 31, 2021		December 31, 2020(i)
Performance obligations per financial statements	$	141,440	$	126,816
Add: undefined committed volumes	699,562		609,736
Backlog(i)	$	841,002	$	736,552
Revenue generated from backlog for the year end	$	355,755	$	309,783

(i)See "Non-GAAP Financial Measures".

(ii)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

We recognized $355.8 million of revenue from backlog during the year ended December 31, 2021, which included recognition of $290.5 million of backlog from 2020. Our backlog increased by $104.5 million from December 31, 2020. As at December 31, 2021, we expect that $481.6 million of our backlog reported above will be performed over 2022.

Our equity method investments also have a backlog of which our share was $830.9 million as at December 31, 2021 (December 31, 2020 - $194.9 million), resulting in a combined backlog of $1,671.9 million as at December 31, 2021 (December 31, 2020 - $931.4 million).

Related parties

Accounts payable due to joint ventures and affiliates do not bear interest, are unsecured and without fixed terms of repayment. Accounts receivable from certain joint ventures and affiliates bear interest at various rates, and all other accounts receivable amounts are non-interest bearing. The following table provides the material aggregate outstanding balances with affiliates and joint ventures.

	December 31, 2021		December 31, 2020(i)
Accounts receivable	$	31,050	$	3,808
Other assets	2,162		1,432
Accounts payable and accrued liabilities	286		5,296

(i)The prior year amounts are adjusted to reflect a change in accounting policy. See "Accounting Estimates, Pronouncements and Measures".

We enter into transactions with a number of our joint ventures and affiliates that involve providing services primarily consisting of subcontractor services, management fees, and equipment rental revenue, and equipment and component sales. These transactions were conducted in the normal course of operations, which were established and agreed to as consideration by the related parties. The majority of services provided in the oil sands region are being completed through MNALP. This joint venture performs the role of contractor and sub-contracts work to us. For the years ended December 31, 2021 and 2020, revenue earned from these services was $356.6 million and $191.1 million, respectively.

OUTLOOK

Our strategic focus areas in 2022 remain::

•Safety - focus on people and relationships as we emerge from the pandemic, maintain an uncompromising commitment to health and safety while elevating the standard of excellence in the field.

•Sustainability - commitment to the continued development of sustainability targets and consistent measurement of progress to those targets.

•Diversification - continue to pursue further diversification of customer, resource and geography through strategic partnerships, industry expertise and/or investment in Indigenous joint ventures.

Management's Discussion and Analysis<br><br>December 31, 2021	M-19	North American Construction Group Ltd.

The following table provides projected key measures for 2022 and actual results of 2021. These measures are predicated on contracts currently in place, including expected renewals, and the heavy equipment fleet that we own and operate.

Key measures	2021 Actual	2021 Stated Targets	2022 Outlook
Adjusted EBITDA	$207M	$205 - $215M	$215 - $245M
Adjusted EPS	$2.06	$1.95 - $2.15	$2.15 - $2.55
Sustaining capital	$102M	$95 - $105M	$110 - $245M
Free cash flow	$67M	$65 - $85M	$95 - $115M
Capital allocation measures
Growth capital and acquisitions	$25M	$25 - $35M	$nil - $35M
Deleverage	$17M	$15 - $35M	$50 - $80M
Shareholder activity(i)	$31M	n/a	$15 - $35M
Leverage ratios
Senior debt	1.5x	1.1x - 1.5x	0.9x - 1.4x
Net debt	1.8x	1.7x - 2.1x	1.2x - 1.7x

(i)Shareholder activity includes common shares purchased under a NCIB, dividends paid and the purchase of treasury shares.

ACCOUNTING ESTIMATES, PRONOUNCEMENTS AND MEASURES

Critical accounting estimates

The preparation of our consolidated financial statements in conformity with US GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from these estimates.

Significant estimates and judgments made by us include:

•the evaluation of whether we are a primary beneficiary of an entity or has a controlling interest in an investee and is required to consolidate;

•assumptions used in impairment testing; and

Actual results could differ materially from those estimates.

The accuracy of our revenue and profit recognition in a given period is dependent on the accuracy of the estimates of the cost to complete each project. Cost estimates for all significant projects use a detailed “bottom up” approach and we believe our experience allows us to provide reasonably dependable estimates. There are a number of factors that can contribute to changes in estimates of contract cost and profitability that are recognized in the period in which such adjustments are determined. The most significant of these include:

•the completeness and accuracy of the original bid;

•costs associated with added scope changes;

•extended overhead due to owner, weather and other delays;

•subcontractor performance issues;

•changes in economic indices used for the determination of escalation or de-escalation for contractual rates on long-term contracts;

•changes in productivity expectations;

•site conditions that differ from those assumed in the original bid;

•contract incentive and penalty provisions;

Management's Discussion and Analysis<br><br>December 31, 2021	M-20	North American Construction Group Ltd.

•the availability and skill level of workers in the geographic location of the project; and

•a change in the availability and proximity of equipment and materials.

The foregoing factors as well as the mix of contracts at different margins may cause fluctuations in gross profit between periods. With many projects of varying levels of complexity and size in process at any given time, changes in estimates can offset each other without materially impacting our profitability. Major changes in cost estimates, particularly in larger, more complex projects, can have a significant effect on profitability.

For a complete discussion of how we apply these critical accounting estimates in our significant accounting policies adopted, see the "Significant accounting policies" section of our consolidated financial statements for the year ended December 31, 2021 and notes that follow, which sections are expressly incorporated by reference into this MD&A.

Change in significant accounting policy - Basis of presentation

Prior to July 1, 2021, we elected to apply the provision available to entities operating within the construction industry to apply proportionate consolidation to unincorporated entities that would otherwise be accounted for using the equity method. During the three months ended September 30, 2021, we elected to change this policy to account for these unincorporated entities using the equity method, resulting in a change to the consolidation method for Dene North Site Services and Mikisew North American Limited Partnership. This change allows for consistency in the presentation of our investments in affiliates and joint ventures. We have accounted for the change retrospectively according to the requirements of US GAAP Accounting Standards Codification ("ASC") 250 by restating the comparative periods. For full disclosure, refer to note 22 in our Financial Statements for the year ended December 31, 2021.

Accounting pronouncements recently adopted

•Business Combinations

◦In October 2021, the FASB issued ASU 2021-08, Business Combinations. The accounting standard update was issued to improve the accounting for acquired revenue contracts with customers in a business combination. This update requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in according with Topic 606 - Revenue from Contract with Customers. The adoption of this new standard did not have an impact to the financial statements.

•Government assistance

◦In November 2021, the FASB issued ASU 2021-10, Government Assistance. The accounting standard update was issued to increase the transparency of government assistance including the disclosure of 1) the type of assistance, 2) an entity's accounting for the assistance, 3) the effect of the assistance on an entity's financial statement. The adoption of this new standard did not have a material impact to the financial statements.

Issued accounting pronouncements not yet adopted

•Debt with conversion and other options

◦In September 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity's own Equity. This accounting standard update was issued to address issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. This standard is effective January 1, 2022 with early adoption permitted. We are assessing the impact that the adoption of this standard may have on our consolidated financial statements.

For a complete discussion of accounting pronouncements, see the "Recent accounting pronouncements" section of our consolidated financial statements for the year ended December 31, 2021 and notes that follow, which sections are expressly incorporated by reference into this MD&A.

Management's Discussion and Analysis<br><br>December 31, 2021	M-21	North American Construction Group Ltd.

Financial measures

Non-GAAP financial measures

We believe that the below Non-GAAP financial measures are all meaningful measures of business performance because they include or exclude items that are or are not directly related to the operating performance of our business. Management reviews these measures to determine whether property, plant and equipment are being allocated efficiently.

"Adjusted net earnings" is defined as net income and comprehensive income available to shareholders excluding the effects of unrealized foreign exchange gain or loss, realized and unrealized gain or loss on derivative financial instruments, cash and non-cash (liability and equity classified) stock-based compensation expense, gain or loss on disposal of property, plant and equipment and certain other non-cash items included in the calculation of net income.

"Total combined revenue" is defined as consolidated revenue per the financial statements combined with our share of revenue from affiliates and joint ventures that are accounted for using the equity method. This measure is reviewed by management to assess the impact of affiliates and joint ventures' revenue on our adjusted EBITDA margin.

"Adjusted EBIT" is defined as adjusted net earnings before the effects of interest expense, income taxes and equity earnings in affiliates and joint ventures, but including the equity investment EBIT from our affiliates and joint ventures accounted for using the equity method.

“Equity investment EBIT” is defined as our proportionate share (based on ownership interest) of equity earnings in affiliates and joint ventures before the effects of gain or loss on disposal of property, plant and equipment, interest expense and income taxes.

“Adjusted EBITDA” is defined as adjusted EBIT before the effects of depreciation, amortization and equity investment depreciation and amortization.

"Adjusted EPS" is defined as adjusted net earnings, divided by the weighted-average number of common shares.

“Equity investment depreciation and amortization” is defined as our proportionate share (based on ownership interest) of depreciation and amortization in other affiliates and joint ventures accounted for using the equity method.

As adjusted EBIT, adjusted EBITDA, adjusted net earnings and adjusted EPS are non-GAAP financial measures, our computations may vary from others in our industry. These measures should not be considered as alternatives to operating income or net income as measures of operating performance or cash flows and they have important limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our results as reported under US GAAP. For example adjusted EBITDA does not:

•reflect our cash expenditures or requirements for capital expenditures or capital commitments or proceeds from capital disposals;

•reflect changes in our cash requirements for our working capital needs;

•reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt;

•include tax payments or recoveries that represent a reduction or increase in cash available to us; or

•reflect any cash requirements for assets being depreciated and amortized that may have to be replaced in the future.

"Total debt" is defined as the sum of the outstanding principal balance (current and long-term portions) of: (i) finance leases; (ii) borrowings under our credit facilities (excluding outstanding Letters of Credit); (iii) convertible unsecured subordinated debentures; (iv) mortgage; (v) promissory notes; and (vi) financing obligations. We believe total debt is a meaningful measure in understanding our complete debt obligations.

"Net debt" is defined as total debt less cash and cash equivalents recorded on the balance sheets. Net debt is used by us in assessing our debt repayment requirements after using available cash.

Management's Discussion and Analysis<br><br>December 31, 2021	M-22	North American Construction Group Ltd.

"Senior debt" is defined as total debt, excluding convertible debentures, deferred financing costs, mortgages related to NACG Acheson Ltd. and debt related to investment in affiliates and joint ventures. Senior debt is used primarily for our bank covenants contained in the Credit Facility agreement.

"Invested capital" is defined as total shareholders' equity plus net debt.

"Cash provided by operating activities prior to change in working capital" is defined as cash used in or provided by operating activities excluding net changes in non-cash working capital.

"Free cash flow" is defined as cash from operations less cash used in investing activities including finance lease additions but excluding cash used for growth capital. We believe that free cash flow is a relevant measure of cash available to service our total debt repayment commitments, pay dividends, fund share purchases and fund both growth capital expenditures and potential strategic initiatives.

"Backlog" is a measure of the amount of secured work we have outstanding and, as such, is an indicator of a base level of future revenue potential. We define backlog as work that has a high certainty of being performed as evidenced by the existence of a signed contract or work order specifying expected job scope, value and timing. Backlog, while not a GAAP term is similar in nature and definition to the "transaction price allocated to the remaining performance obligations", defined under US GAAP and reported in "Note 6 - Revenue" in our financial statements. When the two numbers differ, the variance relates to expected scope where we have a contractual commitment, but the customer has not yet provided specific direction.

“Growth capital” is defined as new or used revenue-generating and customer facing assets which are not intended to replace an existing asset and have been commissioned and are available for use. These expenditures result in a meaningful increase to earnings and cash flow potential.

“Sustaining capital” is defined as expenditures, net of routine disposals, related to property, plant and equipment which have been commissioned and are available for use operated to maintain and support existing earnings and cash flow potential and do not include the characteristics of growth capital.

"Capital expenditures, net" is defined as growth capital and sustaining capital. We believe that capital expenditures, net and its components are a meaningful measure to assess resource allocation.

"Capital additions" is defined as capital expenditures, net and lease additions.

"Capital inventory" is defined as rotatable parts included in property, plant and equipment held for use in the overhaul of property, plant and equipment.

“Capital work in progress” is defined growth capital and sustaining capital prior to commissioning and not available for use.

Non-GAAP ratios

"Margin" is defined as the financial number as a percent of total reported revenue. We will often identify a relevant financial metric as a percentage of revenue and refer to this as a margin for that financial metric.

"Adjusted EBITDA Margin" is defined as adjusted EBITDA divided by total combined revenue.

We believe that presenting relevant financial metrics as a percentage of revenue is a meaningful measure of our business as it provides the performance of the financial metric in the context of the performance of revenue. Management reviews margins as part of its financial metrics to assess the relative performance of its results.

Supplementary Financial Measures

"Gross profit margin" represents gross profit as a percentage of revenue.

INTERNAL SYSTEMS AND PROCESSES

Evaluation of disclosure controls and procedures

Our disclosure controls and procedures are designed to provide reasonable assurance that information we are required to disclose is recorded, processed, summarized and reported within the time periods specified under Canadian and US securities laws. They include controls and procedures designed to ensure that information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer to allow timely decisions regarding required disclosures.

Management's Discussion and Analysis<br><br>December 31, 2021	M-23	North American Construction Group Ltd.

An evaluation was carried out under the supervision of and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the US Securities Exchange Act of 1934, as amended; and in National Instrument 52-109 under the Canadian Securities Administrators Rules and Policies. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2021 such disclosure controls and procedures were effective.

Management's report on internal control over financial reporting

Internal control over financial reporting is a process designed to provide reasonable, but not absolute, assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with US GAAP. Management, including the Chief Executive Officer and the Chief Financial Officer are responsible for establishing and maintaining adequate internal control over financial reporting ("ICFR"), as such term is defined in Rule 13a -15(f) under the US Securities Exchange Act of 1934, as amended; and in National Instrument 52-109 under the Canadian Securities Administrators Rules and Policies. A material weakness in ICFR exists if a deficiency, or a combination of deficiencies, is such that there is reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

Because of its inherent limitations, ICFR may not prevent or detect misstatements. Also, projections or any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As of December 31, 2021, we applied the criteria set forth in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") to assess the effectiveness of our ICFR. Based on this assessment, management has concluded that, as of December 31, 2021, our internal control over financial reporting is effective. In accordance with the published guidance of the U.S. Securities and Exchange Commission (SEC), management's assessment of and conclusion on the effectiveness of our internal control over financial reporting did not include the internal controls of DGI, which is included in our 2021 consolidated financial statements and represented approximately 2% of total assets, 2% of revenues and 1% net income, respectively for the year ended December 31, 2021. Our independent auditor, KPMG LLP, has issued an audit report stating that we, maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO. KPMG LLP's audit of internal controls over financial reporting of the Company also excluded an evaluation of the internal controls over financial reporting of DGI.

Material changes to internal controls over financial reporting

In early 2020, many of our corporate office staff and site administrative staff began working remotely from home due to the COVID-19 pandemic. This change required certain processes and controls that were previously done or documented manually to be completed and retained in electronic form. Despite the changes required by the current environment, there have been no significant changes to our internal controls over financial reporting (“ICFR”) for the period ended December 31, 2021 that have materially affected, or are reasonably likely to affect, our ICFR.

FORWARD-LOOKING INFORMATION

Our MD&A is intended to enable readers to gain an understanding of our current results and financial position. To do so, we provide information and analysis comparing results of operations and financial position for the current period to that of the preceding periods. We also provide certain forward-looking information, based on current plans and expectations, for the purpose of assisting the holders of our securities and financial analysts in understanding our financial position and results of operations as at and for the periods ended on the dates presented, as well as our financial performance objectives, vision and strategic goals. Such forward-looking information may not be appropriate for other purposes. Our forward-looking information is subject to known and unknown risks and other factors that may cause future actions, conditions or events to differ materially from the anticipated actions, conditions or events expressed or implied by such forward-looking information. Readers are cautioned that actual events and results may vary from the forward-looking information.

Management's Discussion and Analysis<br><br>December 31, 2021	M-24	North American Construction Group Ltd.

Forward-looking information is information that does not relate strictly to historical or current facts and can be identified by the use of the future tense or other forward-looking words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, "intend", “possible”, "predict", "project", “will” or the negative of those terms or other variations of them or comparable terminology.

•our expectations that the seasonality of oil sands mine support revenues and non-oil sands mine support revenues will continue respectively as they have in the past;

•our belief that there is minimal risk in the collection of past due trade receivables;

•our anticipation that we will have enough cash from operations to fund our annual expenses, planned capital spending program and meet current and future working capital, debt servicing and dividend payment requirements in 2022 from existing cash balances, cash provided by operating activities and borrowings under our Credit Facility;

•statements regarding backlog, including our expectation that $481.6 million of our backlog will be performed over 2022; and

•all financial guidance provided in the "Outlook" section of this MD&A, including projections related to Adjusted EBITDA, Adjusted EPS, sustaining capital, free cash flow, deleveraging, growth capital and acquisitions, share purchases, Senior Debt and Net Debt.

While we anticipate that subsequent events and developments may cause our views to change, we do not have an intention to update this forward-looking information, except as required by applicable securities laws. This forward-looking information represents our views as of the date of this document and such information should not be relied upon as representing our views as of any date subsequent to the date of this document. We have attempted to identify important factors that could cause actual results, performance or achievements to vary from those current expectations or estimates expressed or implied by the forward-looking information. However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations.

There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.

These factors are not intended to represent a complete list of the factors that could affect us. See "Assumptions" and "Risk Factors" below and risk factors highlighted in materials filed with the securities regulatory authorities filed in the United States and Canada from time to time, including, but not limited to, risk factors that appear in the "Forward-Looking Information, Assumptions and Risk Factors" section of our most recent AIF, which section is expressly incorporated by reference in this MD&A.

Assumptions

The material factors or assumptions used to develop the above forward-looking statements include, but are not limited to:

•consistent or improved site access restrictions related to COVID-19 safety protocols;

•oil prices remaining stable and not dropping significantly in 2022;

•oil sands production continuing to be resilient to drops in oil prices due to our customer's desire to lower their operating cost per barrel;

•continuing demand for heavy construction and earth-moving services, including in diversified resources and geographies;

•continuing demand for external heavy equipment maintenance services and our ability to hire and retain sufficient qualified personnel and to have sufficient maintenance facility capacity to capitalize on that demand;

•our ability to maintain our expenses at current levels in proportion to our revenue;

Management's Discussion and Analysis<br><br>December 31, 2021	M-25	North American Construction Group Ltd.

•work continuing to be required under our master services agreements with various customers and such master services agreements remaining intact;

•our customers' continued willingness and ability to meet their contractual obligations to us;

•our customers' continued economic viability, including their ability to pay us in a timely fashion;

•our customers and potential customers continuing to outsource activities for which we are capable of providing services;

•our ability to maintain the right size and mix of equipment in our fleet and to secure specific types of rental equipment to support project development activity enables us to meet our customers' variable service requirements while balancing the need to maximize utilization of our own equipment and that our equipment maintenance costs are similar to our historical experience;

•our continued ability to access sufficient funds to meet our funding requirements;

•our success in executing our business strategy, identifying and capitalizing on opportunities, managing our business, maintaining and growing our relationships with customers, retaining new customers, competing in the bidding process to secure new projects and identifying and implementing improvements in our maintenance and fleet management practices;

•our relationships with the unions representing certain of our employees continuing to be positive; and

•our success in improving profitability and continuing to strengthen our balance sheet through a focus on performance, efficiency and risk management.

Risk factors

•Availability of Skilled Labour. The success of our business depends on our ability to attract and retain skilled labour. Our industry is faced with a shortage of skilled labour in certain disciplines, particularly in remote locations that require workers to live away from home for extended periods. The effects of the COVID-19 pandemic and the resulting measures taken by governments, customers and by the Corporation have increased the difficulty in obtaining skilled labour. The resulting competition for labour may limit our ability to take advantage of opportunities otherwise available or alternatively may impact the profitability of such endeavors on a going forward basis. We believe that our union status, size and industry reputation will help mitigate this risk but there can be no assurance that we will be successful in identifying, recruiting or retaining a sufficient number of skilled workers.

•limit our ability to obtain additional financing to fund our working capital, capital expenditures, debt service requirements, potential growth or other purposes;

•limit our ability to use operating cash flow in other areas of our business as such funds are instead used to service debt;

•limit our ability to post surety bonds required by some of our customers;

•place us at a competitive disadvantage compared to competitors with less debt;

•increase our vulnerability to, and reduce our flexibility in planning for, adverse changes in economic, industry and competitive conditions; and

Management's Discussion and Analysis<br><br>December 31, 2021	M-26	North American Construction Group Ltd.

•site conditions differing from those assumed in the original bid;

•the availability and cost of skilled workers;

•the availability and proximity of materials;

•unfavorable weather conditions hindering productivity;

•equipment availability and timing differences resulting from project construction not starting on time; and

•the general coordination of work inherent in all large projects we undertake.

•Customer Concentration. Most of our revenue comes from the provision of services to a small number of customers. If we lose or experience a significant reduction of business or profit from one or more of our significant customers, we may not be able to replace the lost work or income with work or income from other customers. Certain of our long-term contracts can allow our customers to unilaterally reduce or eliminate the work that we are to perform under the contract. Additionally, certain contracts allow the customer to terminate the contract without cause with minimal or no notice to us. The loss of or significant reduction in business with one or more of our major customers could have a material adverse effect on our business and results of operations. Our combined revenue from our four largest customers represented approximately 86% and 95% of our total combined revenue for the years ended December 31, 2021 and 2020, respectively.

Management's Discussion and Analysis<br><br>December 31, 2021	M-27	North American Construction Group Ltd.

performing or is otherwise unable to perform its obligations as a result of the client’s determination, whether pursuant to the relevant contract or because of modifications to government or agency procurement policies or rules or for any other reason, we may be required to make additional investments or provide additional services which may reduce or eliminate profit, or even subject us to significant losses with respect to the joint venture. As a result of the complexity and size of such projects that we undertake or are likely to undertake going forward, the failure of a joint venture partner on a large complex project could have a significant impact on our results.

•Cyber Security and Information Technology Systems. We utilize information technology systems for some of the management and operation of our business and are subject to information technology and system risks, including hardware failure, cyber-attack, security breach and destruction or interruption of our information technology systems by external or internal sources. Although we have policies, controls and processes in place that are designed to mitigate these risks, an intentional or unintentional breach of our security measures or loss of information could occur and could lead to a number of consequences, including but not limited to: the unavailability, interruption or loss of key systems applications, unauthorized disclosure of material and confidential information and a disruption to our business activities. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties or other negative consequences. We attempt to prevent breaches through the implementation of various technology-based security measures, contracting consultants and expert third-parties, hiring qualified employees to manage our systems, conducting periodic audits and reviewing and updating policies, controls and procedures when appropriate. To date, we have not been subject to a material cyber security breach that has had a serious impact on its business or operations; however, there is a possibility that the measures we take to protect our information technology systems may not be effective in protecting against a significant specific breach in the future.

•Customer Outsourcing. Outsourced heavy construction and mining services constitute a large portion of the work we perform for our customers. The election by one or more of our customers to perform some or all of these services themselves, rather than outsourcing the work to us, could have a material adverse impact on our business and results of operations. Certain customers perform some of this work internally and may choose to expand on the use of internal resources to complete this work if they believe they can perform this work in a more cost effective and efficient manner using their internal resources.

•Labour Disputes. The majority of our hourly employees are subject to collective bargaining agreements to which we are a party or are otherwise subject. Any work stoppage resulting from a strike or lockout could have a material adverse effect on our business, financial condition and results of operations. In order to minimize this risk, NACG has no strike and no lockout provision in our collective agreements. In addition, our customers employ workers under collective bargaining agreements. Any work stoppage or labour disruption experienced by our key customers could significantly reduce the amount of our services that they need.

Management's Discussion and Analysis<br><br>December 31, 2021	M-28	North American Construction Group Ltd.

•Health and Safety. We are subject to, and comply with, all health and safety legislation applicable to our operations. We have a comprehensive health and safety program designed to ensure our business is conducted in a manner that protects both our workforce and the general public. Despite our past success, there can be no guarantee that we will be able to maintain our high standards and level of health and safety performance. An inability to maintain excellent safety performance could adversely affect our business by customers reducing existing work in response and by hampering our ability to win future work.

Management's Discussion and Analysis<br><br>December 31, 2021	M-29	North American Construction Group Ltd.

to the extent we seek to sell excess equipment. If we are unable to recover our cost base on a sale of excess heavy equipment, we would be required to record an impairment charge which would reduce net income. If it is determined that market conditions have impaired the valuation of our heavy equipment fleet, we also may be required to record an impairment charge against net income.

•Shifting Customer Priorities Related to Climate Change. Climate change continues to attract considerable public and regulatory attention, with greenhouse gas emission regulations becoming more commonplace and stringent. The transition to a lower-carbon economy has the potential to be disruptive to traditional business models and investment strategies. Government action intended to address climate change may involve both economic instruments such as carbon taxation as well as restrictions on certain sectors such as cap-and-trade schemes. Certain jurisdictions in which we operate impose carbon taxes on significant emitters and there is a possibility of similar taxation in other jurisdictions in the future. Other government restrictions on certain market sectors could also adversely impact current or potential clients resulting in a reduction of available work. Our clients may also alter their long-term plans due to government regulation, changes in policies of investors or lenders or simply due to changes in public perception of their business. This risk can be mitigated to an extent by identifying changing market demands to offset lower demand for some services with opportunities in others, forming strategic partnerships and pursuing sustainable innovations.

•Climate Change Related Financial Risks. As new climate change measures are introduced or strengthened our cost of business may increase as we incur expenses related to complying with environmental regulations and policies. We may be required to purchase new equipment to reduce emissions in order to comply with new regulatory standards or to mitigate the financial impact of carbon taxation. We may also incur costs related to monitoring regulatory trends and implementing adequate compliance processes. Our inability to comply with climate change laws and regulations could result in penalties or reputational damage that may impair our prospects.

Management's Discussion and Analysis<br><br>December 31, 2021	M-30	North American Construction Group Ltd.

ADDITIONAL INFORMATION

Corporate head office is located at 27287 - 100 Avenue, Acheson, Alberta, T7X 6H8.

Telephone and facsimile are 780-960-7171 and 780-969-5599, respectively.

Management's Discussion and Analysis<br><br>December 31, 2021	M-31	North American Construction Group Ltd.

Document

Exhibit 99.5

KPMG LLP

2200, 10175 - 101 Street

Edmonton AB T5J 0H3

Telephone (780) 429-7300

Fax (780) 429-7379

www.kpmg.ca

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors of North American Construction Group Ltd.

We consent to the use of our reports, each dated February 16, 2022, with respect to the consolidated financial statements and the effectiveness of internal control over financial reporting included in this annual report on Form 40-F.

Chartered Professional Accountants

Edmonton, Canada

February 16, 2022

Document

Exhibit 99.6

CERTIFICATION OF FORM 40-F

REQUIRED BY RULE 13a-14(a)

OR RULE 15d-14(a), PURSUANT TO SECTION 302

OF THE SARBANES–OXLEY ACT OF 2002

I, Joseph Lambert, the Chief Executive Officer of North American Construction Group Ltd., certify that:

1. I have reviewed this annual report on Form 40-F for the fiscal year ended December 31, 2021 of North American Construction Group Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

5. The issuer’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Date: February 16, 2022
/s/ Joseph Lambert
Name: Joseph Lambert
Title: Chief Executive Officer

Document

Exhibit 99.7

CERTIFICATION OF FORM 40-F

REQUIRED BY RULE 13a-14(a)

OR RULE 15d-14(a), PURSUANT TO SECTION 302

OF THE SARBANES–OXLEY ACT OF 2002

I, Jason Veenstra, the Chief Financial Officer of North American Construction Group Ltd., certify that:

1. I have reviewed this annual report on Form 40-F for the fiscal year ended December 31, 2021 of North American Construction Group Ltd.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Date: February 16, 2022
/s/ Jason Veenstra
Name: Jason Veenstra
Title: Chief Financial Officer

Document

Exhibit 99.8

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ENACTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 40-F for the fiscal year ended December 31, 2021 (the “Report”) of North American Construction Group Ltd. (the “Company”), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 16, 2022
/s/ Joseph Lambert
Name: Joseph Lambert
Title: Chief Executive Officer

Document

Exhibit 99.9

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ENACTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 16, 2022
/s/ Jason Veenstra
Name: Jason Veenstra
Title: Chief Financial Officer