3. Canada Our Canada segment is a leading financial services provider, offering insurance products, insurance-based wealth accumulation products and banking solutions, has an in-force variable annuity business, and leverages the asset management expertise and products managed by our Global Wealth and Asset Management segment. The comprehensive solutions we offer target a broad range of customer needs and foster holistic long-lasting relationships. We offer financial protection solutions to individuals, families and business owners through a combination of competitive products, professional advice and quality customer service. We provide group life, health and disability insurance solutions to Canadian employers, with approximately 26,000 Canadian businesses and organizations entrusting their employee benefit programs to Manulife’s Group Insurance. We also provide life, health, disability and specialty products, such as mortgage creditor and travel insurance, through advisors, sponsor groups and associations, as well as direct-to-customer. We continue to increase the proportion of products with behavioural insurance features. Manulife Bank offers flexible debt and cash flow management solutions as part of a customer’s overall financial plan. Products include savings and chequing accounts, guaranteed investment certificates, lines of credit, investment loans, mortgages and other specialized lending programs, offered through financial advisors and mortgage brokers supported by a broad distribution network. In 2022, our Canada segment contributed 21% of the Company’s core earnings from operating segments and, as at December 31, 2022, accounted for 11% of the Company’s assets under management and administration. Profitability Canada’s full year 2022 net income attributed to shareholders was $1,530 million compared with $1,354 million in 2021. Net income attributed to shareholders is comprised of core earnings, which was $1,359 million in 2022 compared with $1,179 million in 2021, and items excluded from core earnings, which amounted to a net gain of $171 million for 2022 compared with a net gain of $175 million in 2021. Items excluded from core earnings are outlined in the table below. The $180 million increase in core earnings was driven by experience gains in 2022 compared with losses in 2021, with all businesses contributing to the improvement, higher insurance in-force earnings, and higher bank earnings, partially offset by the impact of an increase in the tax rate and lower segregated fund in-force earnings due to lower equity markets. The table below presents net income attributed to shareholders for Canada for 2022 and 2021 consisting of core earnings and items excluded from core earnings. For the years ended December 31, ($ millions) 2022 2021 Coreearnings $ 1,359 $ 1,179 (1) Itemsexcludedfromcoreearnings: Investment-related experience related to fixed income trading, market value increases in excess of expected alternative assets investment returns, asset mix changes and credit experience 70 329 (2) Direct impact of equity markets and interest rates and variable annuity guarantee liabilities 76 (89) Change in actuarial methods and assumptions 35 (65) Reinsurance transactions, tax-related items and other (10) – Totalitemsexcludedfromcoreearnings 171 175 Netincomeattributedtoshareholders $ 1,530 $ 1,354 (1) For explanations of items excluded from core earnings, see “Items excluded from core earnings” table in the total Company “Profitability” section above. (2) The direct impact of markets in 2022 was a gain of $76 million and included a gain of $192 million related to fixed income reinvestment rates, partially offset by a charge of $116 million related to the direct impact of equity markets and variable annuity guarantee liabilities. The charge in 2021 related to fixed income reinvestment rates and changes to the URR, partially offset by a gain related to the direct impact of equity markets and variable annuity guarantee liabilities. 26 | 2022AnnualReport | Management’sDiscussionandAnalysis