UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.        )

Filed by the Registrant þ

Filed by a Party other than the Registrant o

Check the appropriate box:

o		Preliminary Proxy Statement
o		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ		Definitive Proxy Statement
o		Definitive Additional Materials
o		Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

QLT Inc.

Payment of Filing Fee (Check the appropriate box):

þ		No fee required.
o		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

	(1)		Title of each class of securities to which transaction applies:
	(2)		Aggregate number of securities to which transaction applies:
	(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 011 (Set forth the amount on which the filing fee is calculated and state how it was determined):
	(4)		Proposed maximum aggregate value of transaction:
	(5)		Total fee paid:

o		Fee paid previously with preliminary materials.
o		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)		Amount previously paid:
	(2)		Form, Schedule or Registration Statement No.:
	(3)		Filing Party:
	(4)		Date Filed:

March 30, 2009

To the Shareholders of QLT Inc.

I am pleased to invite you to attend the Annual Meeting of shareholders of QLT Inc. to be held on Tuesday, May 5, 2009 at 10:00 a.m. (Pacific Time) at QLT’s offices at 887 Great Northern Way, Vancouver, British Columbia. A reception will follow the Annual Meeting to allow you to meet the Directors and Management of QLT.

The attached Notice of Annual Meeting and Proxy Statement provide details of the business to be conducted at the Annual Meeting. The Notice of Annual Meeting and Proxy Statement, the Instrument of Proxy, and the Annual Report on Form 10-K are first being mailed to shareholders on or about April 7, 2009. A copy of QLT’s Annual Report on Form 10-K is enclosed.

Your vote on the enclosed Instrument of Proxy is very important to us. Whether or not you plan to attend our Annual Meeting, please communicate your vote in accordance with the instructions in the Proxy Statement and the enclosed Instrument of Proxy.

Thank you for your continued support of QLT and I look forward to seeing you at the Annual Meeting on May 5, 2009.

Sincerely,

QLT Inc.

ROBERT L. BUTCHOFSKY
President and Chief Executive Officer

QLT Inc.
887 Great Northern Way, Suite 101
Vancouver, British Columbia V5T 4T5
Notice of Annual Meeting of Shareholders
to be held May 5, 2009

NOTICE IS HEREBY GIVEN that the Annual Meeting (the “Annual Meeting”) of shareholders of QLT Inc. (“QLT”) will be held at QLT’s head office at 887 Great Northern Way, Vancouver, British Columbia, on Tuesday, May 5, 2009 at 10:00 a.m. (Pacific time) for the following purposes, each of which is described in more detail in the accompanying Proxy Statement (the “Proxy Statement”):

1.		To receive the Annual Report on Form 10-K, including the report of the Directors of QLT (the “Directors”), and the Audited Consolidated Financial Statements of QLT for the year ended December 31, 2008, together with the Report of the Independent Registered Chartered Accountants on those Financial Statements;
2.		To elect seven Directors to serve for the ensuing year;
3.		To approve the appointment of Deloitte & Touche LLP as independent auditors of QLT for the ensuing year and to authorize the Directors to fix the remuneration to be paid to the auditors;
4.		To approve the Amended and Restated 2000 Incentive Stock Option Plan pursuant to the shareholder resolution attached to the Proxy Statement as Exhibit ‘C’, and;
5.		To transact such other business as may properly come before the Annual Meeting, or at any adjournments or postponements thereof.

You are entitled to receive notice of and attend the Annual Meeting, and may vote at the Annual Meeting, if you were a shareholder of QLT at the close of business on March 23, 2009, which we refer to as the “record date.” If you are unable to attend the Annual Meeting in person, you may vote by proxy on the matters to be considered at the Annual Meeting. Please read the notes accompanying the Instrument of Proxy enclosed with these materials and then follow the instructions for voting by proxy contained in this Proxy Statement. If on March 23, 2009, your shares in QLT were held of record in your brokerage firm, securities dealer, trust company, bank or another similar organization, you may vote at the Annual Meeting if you obtain a proxy card from that organization issued in your name and carefully follow any instructions that are provided to you in connection with that proxy card.

In order for it to be voted at the Annual Meeting, a proxy must be received (whether delivered by mail, facsimile, telephone or internet) by no later than 10:00 a.m. (Pacific Time)/1:00 p.m. (Eastern Time) on Friday, May 1, 2009 by our registrar and transfer agent, Computershare Investor Services Inc., Attn: Proxy Department, 100 University Avenue, 9th Floor, Toronto, Ontario, M5J 2Y1, facsimile number: from within North America at (866) 249-7775 or from outside North America at (416) 263-9524; telephone number: 1-866-732-VOTE (8683), website: www.investorvote.com. The Chairman of the Annual Meeting may determine, in his sole discretion, to accept or reject an Instrument of Proxy that is delivered in person to the Chairman at the Annual Meeting as to any matter in respect of which a vote has not already been cast.

DATED at Vancouver, British Columbia, this 30th day of March, 2009.

BY ORDER OF THE BOARD OF DIRECTORS
Robert. L. Butchofsky
President and Chief Executive Officer

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 5, 2009:

This Proxy Statement and our Annual Report for the fiscal year ended December 31, 2008 are available at www.qltinc.com by clicking on “2009 Proxy Materials and Our Annual Report” or directly at: http://phx.corporate-ir.net/phoenix.zhtml?c=67181&p=irol-proxy.

TABLE OF CONTENTS

		Page
QUESTIONS AND ANSWERS ABOUT THIS PROXY STATEMENT AND OUR ANNUAL MEETING			1
CORPORATE GOVERNANCE			6
COMPENSATION OF DIRECTORS			14
PROPOSAL NO. 1 ELECTION OF DIRECTORS			18
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			22
EXECUTIVE COMPENSATION			23
COMPENSATION COMMITTEE REPORT			47
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS			48
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS			49
REPORT OF THE AUDIT AND RISK COMMITTEE			49
PROPOSAL NO. 2 APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS			52
PROPOSAL NO. 3 SPECIAL BUSINESS APPROVAL OF AMENDED AND RESTATED STOCK OPTION PLAN			53
INTEREST OF CERTAIN PERSONS IN MATERIAL TRANSACTIONS			57
AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION			57
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE			57
OTHER BUSINESS			59
ATTACHMENTS

EXHIBIT A		AMENDED AND RESTATED QLT 2000 INCENTIVE STOCK OPTION PLAN
EXHIBIT B		SUMMARY OF QLT 2000 INCENTIVE STOCK OPTION PLAN
EXHIBIT C		ORDINARY RESOLUTION AMENDING STOCK OPTION PLAN

QLT INC.
887 Great Northern Way, Suite 101
Vancouver, British Columbia V5T 4T5

PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 5, 2009

We have sent this Notice of Annual Meeting and Proxy Statement, together with the enclosed Instrument of Proxy, because our Board of Directors and management are soliciting your proxy to vote at our Annual Meeting of shareholders to be held on Tuesday, May 5, 2009. This Proxy Statement contains information about the matters being voted on at the Annual Meeting and important information about QLT. Unless otherwise stated, information in this Proxy Statement is given as of March 25, 2009. As many of our shareholders are expected to be unable to attend the Annual Meeting in person, proxies are solicited by mail to give each shareholder an opportunity to vote on all matters that will properly come before the Annual Meeting. QLT intends to mail this Proxy Statement and accompanying Instrument of Proxy on or about April 7, 2009 to all shareholders of record as at the close of business on March 23, 2009, which we refer to as the “record date.”

We use a number of abbreviations in this Proxy Statement. We refer to the company as “the Company,” “we,” “us” or “our” and to our board of directors as the “Board” or the “Board of Directors.” The term “proxy solicitation materials” includes this Proxy Statement and the enclosed Instrument of Proxy. References to “fiscal 2008” and “fiscal 2009” mean our 2008 fiscal year which began on January 1, 2008 and ended on December 31, 2008 and our 2009 fiscal year which began on January 1, 2009 and will end on December 31, 2009, respectively. Our Annual Meeting of Shareholders to be held on Tuesday, May 5, 2009 is referred to as the “Annual Meeting” or the “Meeting.” References in this Proxy Statement to the Annual Meeting include any adjournment or postponement of the Meeting.

QUESTIONS AND ANSWERS ABOUT THIS PROXY STATEMENT
AND OUR ANNUAL MEETING

Why did I receive this Proxy Statement?

You are receiving these proxy materials from us because you owned common shares of QLT at the close of business on the record date. When you vote using the Instrument of Proxy, you appoint Messrs. Robert L. Butchofsky and C. Boyd Clarke as your representatives at the Annual Meeting. Messrs. Butchofsky and Clarke will vote your shares at the Annual Meeting as you have instructed them on the Instrument of Proxy. This way, your shares will be voted whether or not you attend the Annual Meeting. Even if you plan to attend the Meeting, it is a good idea to vote by proxy in advance of the Annual Meeting just in case your plans change.

Can I access the proxy materials on the Internet?

Yes. This Proxy Statement and our Annual Report for the fiscal year ended December 31, 2008 are available on our website at www.qltinc.com by clicking “2009 Proxy Materials and Annual Report” or directly at: http://phx.corporate-ir.net/phoenix.zhtml?c=67181&p=irol-proxy.

What is the date, time, and place of the Annual Meeting?

The Annual Meeting will be held at our head office at 887 Great Northern Way, Vancouver, British Columbia, on Tuesday, May 5, 2009 at 10:00 a.m. (Pacific Time).

Who is entitled to vote at the Annual Meeting?

Only shareholders of record at the close of business on the record date may vote at the Annual Meeting. On a show of hands every shareholder present in person has one vote, and on a poll every shareholder present in person or by proxy has one vote for each QLT common share registered in the shareholder’s name. There are no other classes of voting securities other than the common shares. Cumulative voting is not permitted.

What am I voting on at the Annual Meeting?

At the Annual Meeting, shareholders will be asked to vote on the following resolutions:

1.		To elect seven Directors for the ensuing year;
2.		To approve the appointment of Deloitte & Touche LLP as independent auditors of QLT for the ensuing year and to authorize the Directors to fix the remuneration to be paid to the auditors; and,
3.		To approve the Amended and Restated 2000 Incentive Stock Option Plan pursuant to the shareholder resolution attached to the Proxy Statement as Exhibit ‘C’.

QLT does not know of any business or proposals to be considered at the Annual Meeting other than those set out in this Proxy Statement. If any other business is proposed and properly presented at the Annual Meeting, the proxies received from our shareholders give the proxy holders the authority to vote on the matter at their discretion. The proxy holders intend to vote the shares they represent as directed by our Board.

How does the Board recommend that I vote?

Our Board believes the election of our seven nominees to the Board, the appointment of Deloitte & Touche LLP as our independent auditors, and the approval of the Amended and Restated 2000 Incentive Stock Option Plan (the 2000 Incentive Stock Option Plan shall be referred to as the “2000 Plan” and the 2000 Plan, as amended and restated as contemplated herein, shall be referred to as the “Amended and Restated Stock Option Plan”) are in the best interests of QLT and our shareholders and, accordingly, recommends that each shareholder vote his or her shares “FOR” each of the director nominees, “FOR” the proposal to approve Deloitte & Touche LLP as our independent auditors for fiscal 2009, and “FOR” the proposal to approve the Amended and Restated Stock Option Plan.

Who may attend the Annual Meeting?

All QLT shareholders are invited to attend the Annual Meeting, including shareholders whose shares are held by their brokerage firm or another similar organization.

What is the quorum for the Annual Meeting?

At least two shareholders, two proxy holders representing two shareholders, or one shareholder and a proxy holder representing another shareholder entitled to vote at the Annual Meeting, present in person at the beginning of the Meeting and collectively holding or representing by proxy in the aggregate not less than 33 1/3% of the issued and outstanding QLT common shares as of the record date, will constitute a quorum for the Annual Meeting. There were 54,620,328 common shares of QLT issued and outstanding on the record date. To the knowledge of QLT’s executive officers and the Directors, the only persons or companies that beneficially own, control or direct, directly or indirectly, 10% or more of QLT’s common shares are NB Public Equity K/S which, as evidenced by public filings, own 7,778,960 common shares,

representing approximately 14.2% of the issued and outstanding common shares, Axial Capital Management, LLC which, as evidenced by public filings, own 6,721,392 common shares, representing approximately 12.3% of the issued and outstanding common shares, and Renaissance Technologies LLC which, as evidenced by public filings, own 5,665,849 common shares, representing approximately 10.4% of the issued and outstanding common shares.

What vote is required to approve each proposal?

Election of Directors. For Proposal 1, the election of seven Directors, the nominees will be elected by a plurality of the votes cast at the Annual Meeting. This means that the seven nominees with the most votes for election will be elected. You may choose to vote, or withhold your vote, separately for each nominee. A properly executed Instrument of Proxy marked “Withhold” with respect to the election of one or more Directors will not be voted with respect to the nominee(s) indicated, although it will be counted for quorum purposes.

Appointment of Auditors. For Proposal 2, the appointment of Deloitte & Touche LLP as auditors and authorization of the Board to fix the remuneration to be paid to the auditors, the affirmative vote of a simple majority of the common shares voted at the Annual Meeting will be required for approval.

Approval of the Amended and Restated Stock Option Plan. For Proposal 3, the approval of the Amended and Restated Stock Option Plan, the affirmative vote of a simple majority of the common shares voted at the Annual Meeting will be required for approval. In order to comply with the requirements of the TSX, the amendment to the 2000 Plan must be approved by a resolution of the disinterested shareholders (being the approval of all of the shareholders of the Company other than insiders of QLT who may receive options under the 2000 Plan). Accordingly, the votes attached to the 312,447 common shares held by persons who do not qualify as disinterested shareholders (representing approximately 0.57% of the issued and outstanding common shares as at March 23, 2009) will not be counted for the purpose of determining whether the required level of shareholder approval has been obtained for the resolution amending the 2000 Plan.

How will broker non-votes and abstentions affect the vote on each proposal?

Common shares which are represented by “broker non-votes” (i.e. common shares held by brokers which are represented at the Annual Meeting but with respect to which the broker is not empowered to vote on a particular proposal) and common shares held by holders who abstain from voting on any matter are not included in the determination of the common shares voting on such matters but are included for quorum purposes.

How do I vote?

Carefully read and consider the information contained or incorporated by reference in this Proxy Statement. You should also determine whether you hold your shares directly in your name as a registered shareholder or through a broker or other nominee, because this will determine the procedure that you must follow in order to vote. If you are a registered shareholder of QLT (that is, if your shares are registered in your name, as opposed to being held through a broker or other intermediary), you may vote in any of the following ways:

	•		in person at the Annual Meeting;
	•		by mail or facsimile — complete, sign and date the enclosed Instrument of Proxy and return it in the enclosed postage paid return envelope or by facsimile as soon as possible to our registrar and transfer agent, Computershare Investor Services Inc., Attn: Proxy

			Department, 100 University Avenue, 9th Floor, Toronto, Ontario, M5J 2Y1, facsimile number: from within North America at (866) 249-7775 or from outside North America at (416) 263-9524;
	•		by telephone — call 1-866-732-VOTE (8683) toll free from your touch-tone phone and follow the instructions (you will need the control number located on the enclosed Instrument of Proxy). You do not need to return your proxy form if you vote by telephone; or
	•		using the internet — go to www.investorvote.com and follow the instructions on the screen (you will need the control number located on the enclosed Instrument of Proxy). You do not need to return your proxy form if you vote using the internet.

All votes made by proxy must be received (whether delivered by mail, facsimile, telephone or internet) no later than Friday, May 1, 2009 at 10:00 a.m. (Pacific Time)/1:00 p.m. (Eastern Time).

If your shares are not registered in your name but instead are held through your broker or another intermediary, then you will have received this material from your broker or the intermediary seeking your instructions as to how you wish your shares to be voted. In that case, follow the instructions given to you by your broker or the other intermediary. The Chairman may determine, in his sole discretion, to accept or reject an Instrument of Proxy that is delivered in person to the Chairman at the Annual Meeting as to any matter in respect of which a vote has not already been cast. You have the right to appoint another person to attend and act on your behalf at the Annual Meeting other than the persons named in the enclosed Instrument of Proxy. To exercise this right, you should strike out the names of the persons named in the Instrument of Proxy and insert the name of your nominee in the blank space provided. A person appointed as a proxy holder need not be a shareholder of QLT.

How will proxies be exercised?

The proxy holder will vote or withhold from voting according to instructions in the Instrument of Proxy on any ballot which may be called for and for which a choice has been specified. Unless otherwise indicated by you on the Instrument of Proxy, your shares will be voted “FOR” the election of the seven nominees for election to the Board as set out in this Proxy Statement, “FOR” the proposal to approve the appointment of Deloitte & Touche LLP as our independent auditors until the close of the next annual meeting of shareholders, and “FOR” the proposal to approve the Amended and Restated Stock Option Plan. If you properly return your Instrument of Proxy, but do not include instructions on how to vote, your shares will be voted “FOR” each of the proposals described in this Proxy Statement.

The Instrument of Proxy also confers upon the proxy holder discretionary authority to vote all shares represented by the proxy with respect to amendments or variations to matters identified in the Notice of Meeting and any other matter that properly comes before the Annual Meeting. We know of no such amendment, variation or other matter that is to be presented for action at the Annual Meeting. However, if any other matters which are not now known to us should properly come before the Annual Meeting, the proxies will be voted, or not voted, by the proxy holder in his or her discretion.

What does it mean if I receive more than one set of proxy materials?

You may receive more than one set of proxy materials because you own QLT common shares that are registered under different names. For example, you may own some shares directly as a shareholder of record and other shares through a broker, or you may own shares through more than one broker. In these situations, you will receive multiple sets of proxy materials. It is necessary for you to vote all of the Instruments of

Proxy according to the instructions contained in this Proxy Statement and to follow the instructions for any alternative voting procedures you receive in order to vote all of the shares you own. Each Instrument of Proxy you receive will come with its own prepaid return envelope. If you vote by mail, please make sure you return each Instrument of Proxy in the return envelope that accompanies that Instrument of Proxy.

Can I change my vote after I have voted?

You may revoke your proxy at any time before it is exercised at the Annual Meeting. A proxy may be revoked by voting in person at the Annual Meeting, by an instrument in writing stating that the proxy is revoked and signed and delivered as follows, or in any other manner provided by law:

1.		the instrument revoking the proxy must be signed by you or by the person to whom you have granted a power of attorney in writing. If the shareholder is a corporation, the instrument of revocation must be signed under that corporate shareholder’s corporate seal or by a duly authorized officer or attorney of the corporation; and
2.		the instrument revoking the proxy must be (i) delivered to our registered office at 26th Floor, Toronto Dominion Bank Tower, 700 West Georgia Street, Vancouver, British Columbia, V7Y 1B3 on or before Monday, May 4, 2009 at 5:00 p.m. (Pacific Time) or the last business day preceding the date of any adjournment of the Annual Meeting at which the proxy is to be voted, or (ii) deposited with the Chairman on the date of the Annual Meeting or any adjournment of it before the taking of any vote in respect of which the proxy is to be used.

If your shares are held in the name of an intermediary such as a brokerage firm, securities dealer, trust company, bank or other nominee institution, you may change your vote by submitting new voting instructions to your intermediary, as applicable. You will need to contact your brokerage firm, securities dealer, trust company, bank or other nominee institution to learn how to make that change.

Who will tabulate the votes?

Our transfer agent, Computershare Investor Services Inc., will tabulate votes cast by proxy by an automated system. Votes cast by proxy or in person at the Meeting will be counted by the persons appointed by us to act as scrutineer for the Annual Meeting.

Who pays the cost of the proxy solicitation?

We will pay the cost of soliciting these proxies, including the printing, handling and mailing of the proxy materials. Copies of these materials will be given to brokerage firms, securities dealers, trust companies, banks and other institutions that hold our shares that are beneficially owned by others. We will reimburse these brokerage firms, securities dealers, trust companies, banks and other institutions for their reasonable out of pocket expenses in forwarding proxy materials to beneficial owners of our shares. Proxies may be solicited by certain Directors, officers and employees of QLT personally or by telephone, mail, facsimile or e-mail. No additional compensation will be paid to Directors, officers or other QLT employees for soliciting proxies. In addition, we may engage external proxy solicitation services to solicit proxies from brokers, banks and other institutional holders and from beneficial owners and individual holders of record of common shares. In the event we engage such proxy solicitation services, we anticipate that the services would be provided at a standard fee and on other typical commercial terms.

How can shareholders submit proposals for QLT’s 2010 Annual Meeting?

If you want to propose a matter for consideration at the 2010 Annual Meeting, then notice of that proposal must be received at our registered office at 26th Floor, Toronto Dominion Bank Tower, 700 West Georgia Street, Vancouver, British Columbia, V7Y 1B3 before February 5, 2010. For a proposal to be valid, it must, according to the Business Corporations Act (British Columbia) (the “BCA”), be in writing, accompanied by the requisite declarations and signed by the submitter and qualified shareholders who at the time of signing are the registered or beneficial owners of shares that, in the aggregate, (i) constitute at least 1% of the issued shares of QLT that have the right to vote at general meetings, or (ii) have a fair market value in excess of $2,000. For the submitter or a qualified shareholder to be eligible to sign the proposal, that shareholder must have been the registered or beneficial owner of QLT shares that carry the right to vote at general meetings for an uninterrupted period of at least two years before the date the proposal is signed.

CORPORATE GOVERNANCE

Overview of Our Corporate Governance Principles

We believe that effective and transparent corporate governance is critical to our long-term success and our ability to create value for our shareholders. We frequently review our corporate governance policies, monitor emerging developments in corporate governance and update our policies and procedures when our Board determines that it would benefit the Company and our shareholders to do so.

We maintain a corporate governance page on our website that includes key information about our corporate governance, including our Code of Ethics and Code of Exemplary Conduct and the charters for the Audit and Risk, Corporate Governance and Nominating, Executive Compensation and Scientific Review Committees of our Board, all of which can be found at www.qltinc.com by clicking on “Corporate Governance” under “Corporate.” The charter of the Audit and Risk Committee is also available on EDGAR at www.sec.gov and on SEDAR at www.sedar.com. The documents noted above will also be provided without charge to any shareholder who requests them. Any changes to these documents, and any waivers granted by us with respect to our Code of Ethics, will be posted on our website.

We also monitor our corporate governance policies and practices to maintain compliance with the provisions of the Sarbanes-Oxley Act of 2002, rules of the Securities and Exchange Commission (“SEC”), National Instrument 58-101 — Disclosure of Corporate Governance Guidelines, National Policy 58-201 — Corporate Governance Guidelines, Multilateral Instrument 52-110 — Audit Committees, the Marketplace Rules of The NASDAQ Stock Market (“NASDAQ”), and the policies of the Toronto Stock Exchange (the “TSX”) (collectively, the “Governance Guidelines”). Our policies and practices meet or exceed the Governance Guidelines.

Disclosure Practices

QLT has in place disclosure controls and procedures to ensure QLT meets its information disclosure obligations on a timely basis. These disclosure controls and procedures are evaluated on an ongoing basis, not less than quarterly, to ensure the controls and procedures allow QLT to accomplish this objective. To implement and review our disclosure controls and procedures, our President and Chief Executive Officer and our Chief Financial Officer have established a Disclosure Practices Committee. The role of this Disclosure Practices Committee is to identify and consider the information gathered for disclosure purposes and also to make recommendations to the President and Chief Executive Officer and the Chief Financial Officer with respect to the disclosures to be made by QLT.

The disclosure controls and procedures include procedures for ensuring prompt and effective communication of any material or reportable event to the appropriate executives, the President and Chief Executive Officer and the Chief Financial Officer, and also for designating those individuals within QLT responsible for preparing, reviewing and approving the content of any disclosure.

Corporate Code of Ethics and Code of Exemplary Conduct

QLT has adopted a Code of Ethics which is applicable to all Directors, officers and employees of QLT, as well as a Code of Exemplary Conduct which applies to the Chief Executive Officer, all other executive officers and all senior financial managers, internal legal counsel and human resources managers of QLT. As further described in the Charter of the Audit and Risk Committee (available on our web site at www.qltinc.com), the Audit and Risk Committee is responsible for monitoring compliance with the Code of Ethics and Code of Exemplary Conduct and reviews and updates them annually, if determined appropriate.

Our Audit and Risk Committee and our management review and discuss with the Board from time to time the effectiveness of our Code of Ethics and our Code of Exemplary Conduct and any areas or systems that may be further improved. QLT has not been required to, and has not, filed a material change report that pertains to any conduct of any of our Directors or executive officers that constitutes a departure from these codes.

QLT complies with the provisions of the BCA that deal with conflict of interest situations. QLT, through Directors’ and officers’ questionnaires and other systems, also gathers and monitors relevant information in relation to potential conflicts of interest that a Director or officer may have.

The Code of Ethics and Code of Exemplary Conduct are available on QLT’s web site at www.qltinc.com. QLT will also post on its website any amendments to those codes or waivers of compliance by Directors or executive officers. In fiscal 2008 there were no such amendments made or waivers granted.

Mandate of the Board and the Chairman of the Board

Our Board is responsible for the supervision of the management of the business and affairs of QLT, the stewardship of QLT and the enhancement of shareholder value. The Board has adopted a written mandate, which is applicable to all Directors, and which has formalized its position on corporate governance. The Board has also developed a written position description for the Chairman of the Board, which is detailed in the Mandate of the Chairman of the Board. The Mandate of the Board of Directors and the Mandate of the Chairman of the Board were distributed to our shareholders as exhibits to our 2006 proxy statement and are available on our web site at www.qltinc.com, or copies can be requested by contacting QLT at the address set out below under the heading “Audited Consolidated Financial Statements and Additional Information.” The Corporate Governance and Nominating Committee of the Board has the mandate to actively review and ensure that good corporate governance practices and the Mandate of the Board of Directors are followed. The Corporate Governance and Nominating Committee is also responsible for reviewing and updating, as appropriate, the QLT Board of Directors’ Mandate.

Under its Mandate, our Board is responsible for developing a succession plan for the Chief Executive Officer, and for discussing with the Chief Executive Officer succession plans for other senior management personnel. The Chief Executive Officer is responsible for recommending and then implementing the corporate strategy approved by the Board and for managing QLT’s business with the objective of meeting the corporate goals. On an annual basis, the Board reviews, approves and documents in writing the annual corporate goals and objectives that the Chief Executive Officer is responsible for meeting each year, and the Board, together with the Executive Compensation Committee, assesses the Chief Executive Officer’s performance against those goals.

Our Directors are kept informed of QLT’s business through open discussions with the Chief Executive Officer and other key members of management. Our Board also reviews documents, such as detailed quarterly and periodic management reports and financial statements, by attending presentations made during Board meetings and through periodic reports to the full Board from each of QLT’s Committees. Our Directors have access to all books, records and reports upon request, and members of management are available at all times to answer any questions.

Board Attendance at Annual Meeting

It is a policy of the Board to encourage Directors to attend regular Board meetings, Board committee meetings on which they serve and each annual general meeting of the shareholders. In 2008, all members of the Board attended QLT’s annual general meeting. It is anticipated that all director nominees will attend our 2009 Annual Meeting.

Decisions Requiring Prior Approval of the Board

In addition to matters that must, by law or by the Articles of QLT, be approved by the Board, management is required to seek approval from the Board for major transactions, for any single expense which exceeds certain specified dollar values, and for certain transactions with related persons. Additional information relating to transactions with related persons is set forth below under the heading “Review, Approval or Ratification of Transactions with Related Persons.”

Orientation and Continuing Education Programs

It is the intention of the Board that as and when a new Board nominee is appointed, the Board will ensure that a full program of orientation and education is provided for the nominee, including (but not limited to) provision of a complete corporate history, copies of past minutes of meetings of the Board and the Mandate of the Board, and information regarding our business and operations. The Corporate Governance and Nominating Committee is responsible for reviewing the current orientation and education program and recommending and initiating improvements to this program as warranted. As part of the ongoing commitment of the Board to effective governance and director continuing education, our Directors are encouraged to, and do, periodically attend accredited courses on current trends in corporate governance and other relevant areas. As well, from time to time the Directors tour the facilities of QLT and its subsidiaries.

Outside Advice

In certain circumstances it may be appropriate for an individual Director to engage an outside professional advisor at the expense of QLT. The engagement of the outside professional advisor would be subject to approval of the Chairman of the Board. Each of the Audit and Risk Committee, the Executive Compensation Committee and the Corporate Governance and Nominating Committee also has the authority to engage external advisors as set forth in each of their respective charters. The Scientific Review Committee is also authorized to engage independent consultants with the approval of the Chairman of the Board.

Director and Officer Liability Insurance

We maintain Directors’ and officers’ liability insurance coverage through a policy covering QLT and its subsidiaries. This insurance provides coverage for indemnity payments made by QLT to our Directors and officers as required or permitted by law for losses, including legal costs, incurred by officers and Directors in their capacity as such. This policy also provides coverage directly to individual Directors and officers if

they are not indemnified by QLT. The insurance coverage for our Directors and officers has customary exclusions, including those acts determined to be uninsurable under law, deliberately fraudulent or dishonest, or that have resulted in personal profit or advantage.

Minimum Share Ownership Guidelines for Directors

The Board believes it to be in the best interests of our shareholders to specify a minimum level of equity holdings in QLT by each independent Director to further align the interests of our Board and shareholders. As a result, in March 2005, the Board resolved that each independent Director is encouraged to acquire (if not already held) and hold by March 2009 (or four years after they assume a position on the Board, if later) common shares of QLT valued at four times their then current annual Board retainer. Holdings of deferred share units (referred to as “DSUs”) are counted toward this guideline, while unexercised stock options are not. According to Radford Surveys + Consulting, the independent compensation advisor engaged by the Executive Compensation Committee in 2007, the minimum share ownership guideline instituted by the Board was consistent with RiskMetrics’ (formerly ISS) best practices at that time. Three of our independent Directors have Board tenure greater than four years, Messrs. Clarke, Crossgrove and Wood.

In February 2006, Mr. Clarke assumed the role of Chairman of the Board with a commensurate increase in his annual retainer and hence an increase in his minimum share ownership guideline. Mr. Clarke has significantly increased his share holdings over the course of the past three years and is exceeding his share ownership guideline as originally established in March 2005. Mr. Clarke intends to meet the revised guideline by February 2010, within four years of his appointment as Chairman of the Board.

Messrs. Crossgrove and Wood met their share ownership guidelines during the course of the past twelve months and as recently as September 2008. However, they are not currently meeting the guideline because of the decrease in QLT stock value since that time. Both of these Directors have increased their stock ownership over the past four years.

The Board will consider and clarify stock ownership guidelines in 2009 taking into account the current broad market volatility.

Director Nomination Process

To assist with director nominations, the Board has designated a standing committee, the Corporate Governance and Nominating Committee, as being responsible for reviewing and recommending nominees to the Board. In evaluating prospective nominees, the Corporate Governance and Nominating Committee looks for the following minimum qualifications: strong business acumen, previous experience as an executive or director with successful companies, the highest standards of integrity and ethics, and a willingness and ability to make the necessary time commitment to diligently perform the duties of a director. Nominees are selected with a view to the best interests of QLT as a whole.

The Board prefers a mix of experience among its members to maintain a diversity of viewpoints and ensure that the Board can achieve its objectives. In searching for a new director, the Corporate Governance and Nominating Committee identifies particular areas of specialization which it considers beneficial, in addition to the general qualifications, having regard to the skill sets of the other members of the Board and may retain the assistance of a recruiting firm to assist it to identify and recruit candidates that possess the desired qualifications. The Corporate Governance and Nominating Committee may also involve other members of the Board or other Board committees to assist it with the recruitment of new directors. Potential nominees and their respective references are interviewed extensively in person before any nomination is endorsed by that Board committee. All nominations proposed by the Corporate Governance and Nominating Committee must receive the approval of the Board.

The Board will also consider any director nominees proposed by shareholders. Shareholders may submit nominations to the Board by addressing a communication to the Chair of the Corporate Governance and Nominating Committee and providing sufficient information to the Corporate Governance and Nominating Committee to permit it to conduct an assessment of the qualifications of the proposed nominee, including biographical information about the candidate and his or her professional experience, confirmation of the candidate’s willingness to serve as a Director, and complete contact information for the candidate and the nominating shareholder. The methods by which a shareholder may communicate with the Corporate Governance and Nominating Committee are set out on QLT’s web site at www.qltinc.com. As a matter of policy, the Corporate Governance and Nominating Committee is committed to giving due and fair consideration to proposed nominations submitted by shareholders using the same criteria and processes as other nominations which come before it.

Independence of Directors

To ensure good objective governance is maintained at QLT, the Board strives to maintain strong independence from management. In determining whether Directors are independent, each year the Board considers and discusses the nature and materiality of all direct or indirect relationships between each Director and QLT, including any family, supplier or service provider relationships. The Board considers a relationship material where that relationship could, in the view of the Board, reasonably interfere with the exercise of the Director’s independent judgment.

The Chairman of the Board, Mr. Boyd Clarke, is an independent member of the Board. Six of the seven current Directors are considered “independent.” Mr. Butchofsky is not considered “independent” since he is also our President and Chief Executive Officer.

Executive Session of Independent Directors

The independent members of the Board meet without management and non-independent Directors present during a session of each quarterly Board meeting (unless the independent Directors determine such a session is not required) and during such other meetings where considered appropriate.

Independence of Committee Members

The members of each of the Audit and Risk Committee, the Executive Compensation Committee, the Corporate Governance and Nominating Committee and the Scientific Review Committee are all “independent” Directors within the meaning ascribed to it in Multilateral Instrument 52-110 — Audit Committees and the Marketplace Rules of the NASDAQ, respectively, and, in the case of the Audit and Risk Committee, the additional independence requirements set out by the SEC.

Audit Committee Financial Expert

Each member of the Audit and Risk Committee is financially sophisticated, as defined by the Marketplace Rules of NASDAQ, and is financially literate, as defined by Canadian securities regulations, and as required by such rules, able to read and understand fundamental financial statements, including QLT’s consolidated balance sheet, consolidated statement of income and consolidated statement of cash flows. The Board has determined that Mr. Peter Crossgrove, the Chair of our Audit and Risk Committee, is an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K under the Exchange Act. Mr. Crossgrove is also “independent,” as independence for audit committee members is defined by the NASDAQ and the TSX.

Compensation Committee Interlocks and Insider Participation

None of the members of the Executive Compensation Committee during fiscal 2008 or as of the date of this Proxy Statement is a current officer or employee of QLT or has any interlocking relationship as set forth in applicable SEC rules. In addition, none of QLT’s executive officers serves as a member of the compensation committee or board of directors of any entity that has one or more executive officers serving as a member of our Executive Compensation Committee or Board.

The Directors are also directors of the following reporting issuers:

	Name of Director		Reporting Issuer
	Robert L. Butchofsky		N/A
	Dr. Bruce L.A. Carter		ZymoGenetics, Inc.
	C. Boyd Clarke		N/A
	Peter A. Crossgrove		Barrick Gold Corporation
			Excellon Resources Inc.
			West Timmins Mining Inc.
			Detour Gold Corporation
			Pelengio Explorations Inc.
	Kathryn E. Falberg		Halozyme Therapeutics, Inc.
	Dr. Ian J. Massey		N/A
	L. Jack Wood		Clinuvel Pharmaceuticals Ltd.

Communicating with the Board of Directors

Any shareholder or interested party who wishes to communicate with the Board or any specific Director, including independent Directors, the Chairman of the Board, or committee members, may write to:

QLT Inc.
Attn: Board of Directors
887 Great Northern Way, Suite 101
Vancouver, British Columbia, V5T 4T5
Canada

Depending on the subject matter of the communication, the corporate secretary will:

	•		forward the communication to the Director or Directors to whom it is addressed (matters addressed to the Chairman of the Board will be forwarded unopened directly to the Chairman of the Board);
	•		attempt to handle the inquiry directly where the communication does not appear to require direct attention by the Board, or an individual member, e.g., the communication is a request for information about the company or is a stock-related matter; or
	•		not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.

Shareholders and other interested persons may submit concerns regarding accounting matters by following the instructions for making a report published in the Corporate Governance subsection of the Investor Relations section of our web site.

Board of Directors and Board Committees

The Board held 11 meetings (in person or by teleconference) during fiscal 2008, a number of which included sessions with only independent Directors. No Director attended fewer than 75% of the aggregate of (1) the total number of meetings of the Board, and (2) the total number of meetings held by all committees of the Board on which he served during fiscal 2008. Ms. Kathryn Falberg joined the Board as a Director on March 25, 2009 and was appointed to serve as a member of the Company’s Audit and Risk Committee effective as of that date, replacing C. Boyd Clarke on the Audit and Risk Committee.

     Board Committees. The Board has a standing Audit and Risk Committee, Corporate Governance and Nominating Committee, Executive Compensation Committee and Scientific Review Committee.

									Number of
			Members (as at						Meetings
Committee			12/31/08)			Key Functions			in 2008
Audit and Risk			Peter A. Crossgrove*			monitors QLT’s internal accounting controls and business conduct			10
			L. Jack Wood
			C. Boyd Clarke			oversees QLT’s accounting and financial reporting practices
						reviews the adequacy of the system of internal controls, reviewing any relevant accounting, financial and securities regulatory matters
						reviews the management of corporate financial and compliance risks
						recommends the appointment of independent auditors, engages the independent auditors, and receives the reports of the Chief Executive Officer and the Chief Financial Officer with respect to their assessment of internal controls
						provides a mechanism for communication between the Board and QLT’s independent auditors
						meets regularly with QLT’s auditors without management present
Corporate Governance and Nominating			C. Boyd Clarke* Peter A. Crossgrove L Jack Wood			develops and oversees Board governance principles assesses the effectiveness of corporate governance and makes recommendations to the full Board makes recommendations to the Board regarding the size and composition of the Board and Board committees develops and oversees Board continuing education program conducts an annual assessment process to assess the effectiveness of the Board and individual members of the Board reviews and considers nominations to the Board reviews annually the credentials of nominees for re-election and ensures qualifications are maintained			4
Executive Compensation			L Jack Wood * Ian J. Massey			makes recommendations to the Board regarding the compensation of all executive officers			3
			Bruce L.A. Carter
						reviews and makes recommendations with respect to compensation policy and programs generally and determines and recommends option grants under QLT’s incentive stock option plans reviews and recommends to the Board the manner in which executive compensation should be tied to both short-term and long-term corporate goals of QLT and completes the disclosure regarding executive compensation contained in QLT’s Proxy Statement

						Committee Meetings
						Attended (where
		Board Meetings				attending as a member of
		Attended				the committee and paid
Summary of Attendance of Directors in 2008(1):		in 2008				for attendance) in 2008
Robert L. Butchofsky			11/11				N/A
Bruce L.A. Carter(2)			11/11				1/1
C. Boyd Clarke(3)			11/11				13/13
Peter A. Crossgrove			11/11				17/17
Ian J. Massey(4)			9/11				4/4
L. Jack Wood			11/11				13/13

Notes:

     Ad-Hoc Committees

Special Strategic Committee. Contemporaneous with the announcement in November 2007 of the intention of the Board to consider all potential strategic alternatives for QLT, the Board formed a Special Strategic Committee comprising three independent Directors. The Special Strategic Committee had a mandate to review strategic alternatives available to QLT to maximize shareholder value and to make any necessary recommendations to the Board. Under its mandate, the Special Strategic Committee engaged Goldman, Sachs & Co. as its financial advisor, to assist the Board in identifying, evaluating and pursuing alternative strategies to maximize shareholder value. The Special Strategic Committee worked with Goldman, Sachs & Co. in 2008 to oversee and advise the Board in respect of certain asset divestitures.

The Special Strategic Committee comprised only independent Directors. Its members originally were Mr. Clarke (Chair), Mr. Crossgrove and Alan Mendelson, a former director. Mr. Mendelson resigned from the Special Strategic Committee effective March 30, 2008 and was replaced by Mr. Wood on April 9, 2008. At the Board of Directors meeting on May 13 and 14, 2008, the Board resolved to waive the retainer fees for the members of the Special Committee. The Special Strategic Committee met three times in 2008. All three meetings were prior to the appointment of Mr. Wood, and no further meetings of the Special Strategic Committee are planned.

COMPENSATION OF DIRECTORS

2008 Independent Director Compensation Program

The amount and form of director compensation is reviewed periodically by the Executive Compensation Committee, with any resulting recommendations made to the Board, to ensure that such compensation realistically reflects the responsibilities and risks of being an effective director. To assist in its evaluation of director compensation, the Executive Compensation Committee has the authority to retain independent compensation consultants. Accordingly, in 2007 the Executive Compensation Committee engaged Radford Surveys + Consulting (“Radford”), an international consulting group that focuses on the compensation issues facing technology and life sciences companies, to conduct an independent assessment of our director compensation practices relative to a comparator group of peer companies (the “Radford Director Compensation Report”). The peer group comprised biotechnology and life sciences companies located in Canada and primarily the West Coast of the United States comparable to QLT based on a number of factors, including number of employees, revenues and stage of product pipeline. The peer group was selected by Radford and approved by the Executive Compensation Committee.

     Overview. Our independent Directors receive cash and equity-based compensation for their service on the Board. As an employee, our President and Chief Executive Officer is not compensated separately for his service on the Board. Directors are also eligible for reimbursement of their expenses incurred in connection with attendance at Board meetings in accordance with our policies.

     Cash compensation. As noted above, the Executive Compensation Committee previously engaged Radford to assess our Director compensation program against a comparator group of peer companies. The Radford Director Compensation Report was received in late 2007. According to the Report, overall, our Director compensation program fell within the 50th to the 75th percentile of our comparator group, which is consistent with market practices for companies whose board of directors have a similar work load and number of meetings held. Following a review and consideration of the results and recommendations of the Report and the Executive Compensation Committee, and in anticipation of an increased number of meetings in 2008, effective February 2008 the Board of Directors approved a 25% reduction in the fees paid for Board and Committee meetings attended in person and for Board meetings attended by telephone. In addition, since June 2008, where our Directors attend one or more Committee meetings in conjunction with a Board meeting that same day, the total fees for that set of Board and Committee meetings for that day are capped at $4,000. Those reduced fees are shown in the tables set out below.

In addition, while the Radford Director Compensation Report did not make a recommendation concerning a reduction in the Chairman’s retainer, the Chairman of the Board, C. Boyd Clarke, recommended to the Executive Compensation Committee that in light of the fact the shareholders of the Company had suffered substantial diminution in the value of their shares over the course of 2007, and in conjunction with the Company’s ongoing efforts to reduce costs where possible, the Chairman’s additional annual retainer fee be reduced by 50% from $90,000

to $45,000 for 2008. The Executive Compensation Committee and the Board accepted Mr. Clarke’s recommendation. Accordingly, the Chairman’s aggregate retainer fee was reduced from $120,000 in 2007 to $75,000 in 2008 ($30,000 retainer as a Board member and a reduced $45,000 additional retainer as Chairman). The fees to directors are paid quarterly in arrears.

In 2008, the fees paid to our independent Directors were based on the following:

Nature of Board Duty		Fee (US$)
Annual Board Retainer Fee:
•    for all Directors		$	30,000
•    additional retainer for Chairman of the Board		$	45,000
Additional Annual Retainer fee for Chair of the Audit and Risk Committee		$	12,500
Additional Annual Retainer fee for Chair of the Special Strategic Committee(1)		$	16,000
Additional Annual Retainer fee for Chair of all other committees (other than the Chair of the Corporate Governance and Nominating Committee, for which no separate retainer is paid)		$	10,000
Additional Annual Retainer fee for non-chair committee members (other than the Special Strategic Committee, for which a fee of $8,000 is paid(1))		$	5,000
Fee for each Board meeting attended:
•    by telephone		$	1,500	(2)
•    in person		$	3,000	(2)
Fee for each committee meeting attended (other than the Special Strategic Committee):
•    by telephone or in person if already at the meeting location to attend an in person Board of Directors meeting		$	1,500	(3)
•    in person (unless already attending in person for a meeting of the Board of Directors, in which case only the above meeting fee will be paid in addition to the fee for attending the Board meeting)		$	3,000	(2)(3)
Fee for each Special Strategic Committee meeting attended (whether in person or by telephone)		$	1,500
Fee for out-of-town travel to perform Board or Committee business (other than attendance at a Board or Committee meeting) at the specific request of the Board or relevant Committee		$	3,000

     Equity-Based Compensation. In addition to cash compensation, our independent Directors also receive equity-based compensation to ensure that their interests are fully aligned with those of our shareholders.

We maintain a Directors’ Deferred Share Unit Plan, which we refer to as the “DDSU Plan”. Under the DDSU Plan, at the discretion of the Board, independent Directors receive all or a percentage of their equity-based compensation in the form of deferred share units, or “DSUs,” each of which has a value equal to the closing price of our common shares on the TSX on the date of grant. A DSU is convertible only into cash (no shares are issued), and can only be converted after the independent Director ceases to be a member of the Board. The DSUs vest monthly over 36 months from the date of grant.

The value of a DSU, when converted to cash, will be equivalent to the market value of a QLT common share at the time the conversion takes place. We do not have a history of paying dividends on our common shares however, if dividends ever are paid on our common shares, an independent Director’s DSU account will be credited with dividends at the same rate.

The Executive Compensation Committee’s objective in granting DSUs to independent Directors is to provide a reasonable, market-based, incentive for Directors to deliver increased value to shareholders. Based in part on advice received from Towers Perrin at the time the DDSU Plan was implemented in 2005, the Executive Compensation Committee and the Board concluded that DSUs are an effective way to align the interests of the independent Directors with those of the shareholders, without resulting in additional share dilution to shareholders.

In May, 2008 following their appointment at the Annual Meeting of shareholders, each independent Director received 7,500 DSUs, except the Chairman of the Board who received 15,000 DSUs.

Our Directors are also eligible to receive stock options under the 2000 Plan, however no stock options were granted to our independent Directors in fiscal 2008.

The following table provides information regarding the compensation of our Directors for fiscal 2008.

Director Compensation Table

																		Changes in
																		Pension Value
																		and
																		Nonqualified
		Fees Earned												Non-Equity				Deferred
		or				Stock				Option				Incentive Plan				Compensation				All Other
		Paid in Cash				Awards				Awards				Compensation				Earnings				Compensation				Total
Name		(US$)				(US$)(1)(2)(3)				(US$) (1)(3)				(US$)				(US$)				(US$)				(US$)
Robert L. Butchofsky (4)			—				—				—				—				—				—				—
Bruce L.A. Carter		$	62,125	(6)		$	11,984				—				—				—				—			$	74,109
C. Boyd Clarke		$	124,125	(7)		$	11,128				—				—				—				—			$	135,253
Peter A. Crossgrove		$	96,500	(8)		$	3,706				—				—				—				—			$	100,206
Philip B. Livingston (5)		$	24,125	(9)		$	10,801				—				—				—				—			$	34,926
Ian J. Massey		$	71,500	(10)		$	11,128				—				—				—				—			$	82,628
Alan C. Mendelson (5)		$	37,000	(11)		$	22,493				—				—				—				—			$	59,493
Richard R. Vietor (5)		$	27,125	(12)		$	22,493				—				—				—				—			$	49,618
L. Jack Wood		$	89,125	(13)		$	1,712				—				—				—				—			$	90,837

		Outstanding Stock				Outstanding Option
Name		Awards (DSUs)				Awards
Bruce L.A. Carter			22,500				—
C. Boyd Clarke			52,500				10,000
Peter A. Crossgrove			30,000				10,000
Ian J. Massey			22,500				—
L. Jack Wood			30,000				10,000

2009 Independent Director Compensation Program

The Executive Compensation Committee met early in 2009 to consider any adjustments to our independent Director compensation. On the recommendation of the Executive Compensation Committee, the Board determined that the retainer and meeting fees payable to our independent Directors in 2009 would remain at the 2008 fee levels.

PROPOSAL NO. 1
ELECTION OF DIRECTORS

Our Board of Directors currently has seven members. Upon the recommendation of the Corporate Governance and Nominating Committee, the Board has fixed the number of directors constituting the Board at seven and has nominated for election at the Annual Meeting a slate of seven nominees, including Ms. Kathryn Falberg, who was appointed by the Board as an additional director on March 25, 2009. As more specifically described below, Ms. Falberg augments our Board with both her financial expertise and with her knowledge of the biotechnology industry.

The Board of Directors of QLT has consistently sought Board membership that reflects a mix of experience among its members to maintain a diversity of perspectives and to ensure that QLT can meet its objectives. The Board believes the current Board nominees achieve this goal, reflecting as a whole diverse knowledge and experience, including in the areas of finance, science and biotechnology and healthcare executive management. The names and biographical information about each nominee are set out below.

Each Director elected will hold office until the next Annual Meeting or until his or her successor is duly elected, unless he or she resigns earlier. The Board is permitted to increase the number of Directors by up to one-third of the number of Directors elected at the Annual Meeting at any time prior to the next Annual Meeting.

In the unanticipated event that a nominee is unable to or declines to serve as a Director at the time of the Annual Meeting, the proxies will be voted at the discretion of the proxy holder to elect another nominee designated by the Board, if presented, or the Board will comprise a lesser number of Directors accordingly. As of the date of this Proxy Statement, the Board is not aware of any nominee who is unable or who intends to decline to serve as a Director, if elected.

Information Regarding Director Nominees

The names of the nominees and certain information about them are set forth below:

Name of Nominee and Residence

Age

Position(s) With the Company

Independent

Director Since

Robert L. Butchofsky British Columbia, Canada

47

President, Chief Executive Officer and Director

No

2006

Bruce L.A. Carter, Ph.D Washington, USA

65

Director

Yes

2006

C. Boyd Clarke Pennsylvania, USA

60

Chairman of the Board and Director

Yes

2003

Peter A. Crossgrove Ontario, Canada

72

Director

Yes

1990

Kathryn E. Falberg California, USA

48

Director

Yes

2009

Ian J. Massey, Ph.D. California, USA

58

Director

Yes

2006

L. Jack Wood British Columbia, Canada

72

Director

Yes

2001

There is no family relationship between any of our Directors or executive officers. The number of common shares owned by each of the nominees for election as a Director is set forth under ‘Security Ownership of Certain Beneficial Owners and Management’ on page 22 of this Proxy Statement.

Robert L. Butchofsky was appointed as President and Chief Executive Officer and a Director of QLT in February 2006 following his earlier appointment as Acting Chief Executive Officer of QLT in September 2005. Mr. Butchofsky joined QLT in 1998 as Associate Director, Ocular Marketing and was appointed Vice President, Marketing and Sales Planning in September 2001. Mr. Butchofsky was promoted to Senior Vice President, Marketing and Sales Planning in early 2005. From June 1990 to August 1998, Mr. Butchofsky was employed at Allergan Inc. (a pharmaceutical company) where he built an extensive background with ocular pharmaceutical products and Botoxâ, including sales, health economics, worldwide medical marketing, and product management. Prior to joining Allergan Inc., Mr. Butchofsky spent several years managing clinical trials at the Institute for Biological Research and Development. Mr. Butchofsky holds a Bachelor of Arts degree in Biology from the University of Texas and a Masters of Business Administration from Pepperdine University.

Dr. Bruce L.A. Carter has been a Director of QLT since November 2006. Dr. Carter is Chairman of the Board of ZymoGenetics, Inc. a biopharmaceutical company in Seattle, Washington. Dr. Carter was appointed Chairman of the Board in April 2005 and was ZymoGenetics’ Chief Executive Officer from April 1998 to January 2009. Dr. Carter first joined ZymoGenetics in 1986 as Vice President of Research and

Development. In 1994, he was chosen as Corporate Executive Vice President and Chief Scientific Officer for Novo Nordisk A/S, the former parent company of ZymoGenetics. He was elected to the board of ZymoGenetics in 1987 and was appointed Chairman of the Board and President of that company in 1998. Dr. Carter held the title of President until July, 2007. Dr. Carter led the negotiations that established ZymoGenetics as an independent company from Novo Nordisk in 2000. Dr. Carter held various positions of increasing responsibility at G.D. Searle & Co., Ltd. from 1982 to 1986 and was a lecturer at Trinity College, University of Dublin from 1975 to 1982. Dr. Carter is also a director of the Global Alliance for TB Drug Development (a not-for-profit product development partnership). Dr. Carter received a B.Sc. with Honors in Botany from the University of Nottingham, England, and a Ph.D. in Microbiology from Queen Elizabeth College, University of London.

C. Boyd Clarke has been a Director of QLT since 2003 and was appointed as Chairman of the Board in February 2006. Since September 2007, Mr. Clarke has been a Venture Advisor to ProQuest Investments, a healthcare venture capital firm. From March 2002 to May 2006, Mr. Clarke was President and Chief Executive Officer of Neose Technologies, Inc., a U.S. publicly listed biotechnology company focused on the development of protein therapeutics. Mr. Clarke served on the board of directors of Neose from 2002 to May 2007. From December 1999 through March 2002, Mr. Clarke was President and Chief Executive Officer of Aviron, Inc., a biotechnology company developing vaccines, which was acquired by MedImmune, Inc., and was also Chairman from January 2001 through March 2002. From 1998 through 1999, Mr. Clarke was Chief Executive Officer and President of U.S. Bioscience, Inc., also a biotechnology company focused on products to treat cancer, which was also acquired by MedImmune. Mr. Clarke served as President and Chief Operating Officer of U.S. Bioscience, Inc. from 1996 to 1998. From 1977 to 1996, Mr. Clarke held a number of positions at Merck & Co., Inc., including being the first President of Pasteur-Merieux MSD, and most recently as Vice President of Merck Vaccines. Mr. Clarke was formerly a director of the Biotechnology Industry Association. He is also a director of Rib-X Pharmaceuticals, Palkion, Inc. and Ligocyte Pharmaceuticals, Inc. (all are private biotechnology companies) and he is Chairman of the Board of Mersana Therapeutics, Inc. (also a private biotechnology company). Mr. Clarke has a Bachelor of Science in biochemistry and a Master of Arts in History from the University of Calgary.

Peter A. Crossgrove has been a Director of QLT since 1990. From 1997 to April 2005, Mr. Crossgrove was the Chairman of Masonite International Corporation (formerly Premdor Inc., a door and industrial products manufacturing company which was acquired on March 31, 2005 by Stile Acquisition Corp.). Mr. Crossgrove is a director of the following mining companies: Barrick Gold Corporation, West Timmins Mining Inc., Detour Gold Corporation and Pelengio Explorations Inc. Mr. Crossgrove is Chairman of Excellon Resources Inc. (a mining company) and is a trustee of Dundee Real Estate Investment Trust (a real estate trust). Mr. Crossgrove is also Chairman Emeritus of Cancer Care Ontario, is a recipient of the Queen’s Golden Jubilee medal and was appointed to the Order of Canada in 2004. Mr. Crossgrove holds a Bachelor of Commerce from McGill University and Concordia University, an M.B.A. from the University of Western Ontario and was a Sloan Fellow in the Doctoral Program at Harvard Business School.

Kathryn E. Falberg was appointed to the Board of Directors of QLT by the Board on March 25, 2009. Ms. Falberg has over 23 years of financial experience with companies of varying sizes across multiple industries. Ms. Falberg joined ARCA biopharma, Inc. (a biopharmaceutical company) in February 2009 as its Chief Financial Officer and Chief Operating Officer. From 2003 to 2008, Ms. Falberg was President of Canyon Capital & Consulting (a private investment and consulting firm). From October 2001 to June 2002, Ms. Falberg was a consultant to Inamed (a medical device company) and briefly served as its interim Chief Financial Officer. Ms. Falberg joined Amgen Inc. (a global biotechnology company) in 1995 as Treasurer, and advanced through a series of positions of increasing responsibility, culminating in

her appointment as Senior Vice President, Finance and Strategy, and Chief Financial Officer in 1998. Ms. Falberg left Amgen Inc. in July 2001. Ms. Falberg currently serves on the board of ESS Technology, Inc. (a privately held semiconductor company), and Halozyme Therapeutics, Inc. (a biopharmaceutical company). Ms. Falberg received an M.B.A. and B.A. in Economics from the University of California, Los Angeles.

Dr. Ian J. Massey has been a Director of QLT since June 2006. Dr. Massey is a senior pharmaceutical executive with experience in all phases of the drug discovery and development process. In 2006, Dr. Massey joined Sysnosia Therapeutics, Inc. as its President and Chief Executive Officer. From 2002 to 2006, Dr. Massey was the Senior Vice President, and Head of Research and Preclinical Development, at Roche Palo Alto. From 1995 to 2002, Dr. Massey held positions of increasing responsibility at Roche Bioscience including Senior Vice President, Head of Neurobiology Business Unit and Central Research & Development and Vice President and Director of Preclinical Research and Development. Prior to joining Roche, Dr. Massey was at Syntex Research for over 15 years where he held a number of senior positions, culminating in the position of Vice President and Director, Institute of Analytical Research. Dr. Massey has a D. Phil. degree in Organic Chemistry from the University of Oxford, England, a M.A. in Organic/Natural Product Chemistry and a B.A. in Chemistry.

L. Jack Wood has been a Director of QLT since 2001. Mr. Wood is a Director and the Chairman of enGene Inc., a private biotechnology company, and a director of Clinuvel Pharmaceuticals Ltd., a biotechnology company listed on the Australian Stock Exchange. From 1992 to 2004, Mr. Wood worked with CSL Limited, an Australian healthcare company listed on the Australian Stock Exchange. Prior to joining CSL, Mr. Wood was the President and Chief Executive Officer of Exogene Corporation (a biotechnology company). From 1988 to 1990, Mr. Wood was Senior Vice President of BioResponse Corporation, a biotechnology company sold to Baxter Healthcare Corporation. From 1980 to 1988, Mr. Wood worked for Bayer Corporation (a healthcare company) as a Vice President and General Manager for Europe, the Middle East and Africa. From 1963 to 1980, Mr. Wood held a series of operating and general management positions with Baxter Healthcare Corporation.

Vote Required and Board of Directors’ Recommendation

Director nominees will be elected by a plurality of the votes cast at the Annual Meeting. This means that the seven nominees with the highest number of affirmative votes cast at the Annual Meeting will be elected as Directors. You may choose to vote, or withhold your vote, separately for each nominee. Proxies cannot be voted for more than seven nominees for election to the Board.

The Board of Directors recommends that shareholders vote “FOR” the election of all seven nominees for Director. The proxyholders intend to vote the shares represented by proxies “FOR” the election of the seven nominees named in the Instrument of Proxy unless authority to vote for those persons is withheld.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the shares of our common stock beneficially owned by (1) each of our Directors and director nominees, (2) the named executive officers listed in the Summary Compensation Table below, (3) all of our Directors, director nominees and executive officers as a group, and (4) all persons known by us to beneficially own more than 5% of our outstanding voting stock. We have determined the beneficial ownership shown on this table in accordance with the rules of the SEC and the applicable Canadian securities regulators. Under those rules, shares are considered beneficially owned if held by the person indicated, or if such person, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares the power to vote, to direct the voting of and/or to dispose of or to direct the disposition of such security. Except as otherwise indicated in the accompanying footnotes, beneficial ownership is shown as of March 23, 2009.

Amount and Nature of Beneficial Ownership

						Shares for
						Which
						Beneficial
						Ownership								Total Beneficial
						Can Be								Ownership
		Shares				Acquired				Number				Number				Percent
		Beneficially				Within 60				of				of				of
Name of Beneficial Owner		Owned				Days(1)				DSUs(2)				Shares				Class(3)
Robert L. Butchofsky			150,497				836,667				—				987,164				1.8	%
Bruce Carter			—				—				13,750				13,750				*
C. Boyd Clarke			51,000				10,000				37,500				98,500				*
Peter A. Crossgrove			32,000				10,000				22,500				64,500				*
Alain H. Curaudeau(4)			—				—				—				—				*
Kathryn E. Falberg			—				—				—				—				*
Linda Lupini			10,000				220,000				—				230,000				*
Alexander R. Lussow			10,000				146,111				—				156,111				*
Ian J. Massey			8,950				—				14,375				23,325				*
Cameron R. Nelson			25,000				275,000				—				300,000				*
L. Jack Wood			25,000				10,000				22,500				57,500				*
All directors, nominees and executive officers as a group (11 persons)			312,447				1,507,778				110,625				1,930,850				3.5	%
NB Public Equity K/S (5)			7,778,960				—				—				7,778,960				14.2	%
Axial Capital Management, LLC (6)			6,721,392				—				—				6,721,392				12.3	%
Renaissance Technologies LLC (7)			5,665,849				—				—				5,665,849				10.4	%
Mackenzie Financial Corporation (8)			2,935,843				—				—				2,935,843				5.4	%

For additional information on our equity compensation plans, and our common shares that may be issued upon the exercise of options, warrants and other rights granted to employees, consultants or Directors under all of our existing equity compensation plans, see our Annual Report on Form 10-K which is available on our web site at www.qltinc.com, SEDAR at www.sedar.com and EDGAR at www.sec.gov.

EXECUTIVE COMPENSATION

The following sets forth information about our executive officers as of March 25, 2009. The executive officers listed below serve in their respective capabilities at the discretion of our Board of Directors.

Robert Butchofsky

President and Chief Executive Officer

See page 19 of this Proxy Statement for Mr. Butchofsky’s biography.

Cameron Nelson

Vice President, Finance and Chief Financial Officer

Mr. Nelson, aged 43, joined QLT in May 2000 as Associate Director, Financial Analysis and Planning and has made many contributions to QLT during his time with the Company. He was promoted to Director, Financial Analysis and Planning in January 2002 and later to Senior Director, Financial Reporting and Planning. In early 2005, he was promoted to Vice President, Finance and was named Chief Financial Officer in August 2005.

Prior to joining QLT, Mr. Nelson held finance and accounting positions with Mattel Inc. and Equity Marketing Inc. in Los Angeles. Mr. Nelson earned his Bachelor of Commerce from the University of British Columbia and his Master of Business Administration from Dartmouth College.

Linda Lupini

Senior Vice President, Human Resources and Organizational Development

Since joining QLT in 1997, Ms. Lupini, aged 49, has managed QLT’s growing demand for highly skilled science and technology specialists. She brings nearly 15 years of experience to the role, including over 10 years with leading software firm MacDonald Dettwiler and Associates and her broad experience encompasses all aspects of human resources management.

A past board member of BC Biotech, a member of the Board of Directors of BioTalent Canada, and on the advisory Board of Simon Fraser University’s MBA in Biotechnology Program, Ms. Lupini holds a Bachelor of Arts degree in Psychology from the University of British Columbia.

Alexander R. Lussow, PhD

Senior Vice President, Business Development & Commercial Operations

Alexander Lussow is 46 years old and he joined QLT in 2006. Mr. Lussow is responsible for QLT’s business development activities, including product licensing, acquisitions and strategic partnering opportunities.

Before joining QLT, Mr. Lussow was Gryphon Therapeutics’ Chief Business Officer and Vice President of Business Development where he was responsible for the licensing of the company’s products, the formation of strategic alliances, corporate communications and fund raising. Before joining Gryphon, Alex served as the head of business development at Sangstat Medical Corporation (now wholly owned by Genzyme Corp.). He also has broad experience in biotechnology management consulting advising on venture financing, strategic business planning and licensing transactions for several biotechnology companies.

Mr. Lussow received his BSc at McGill University in Montreal and his PhD in immunology at the University of Geneva, Switzerland. He has been an adjunct professor of pharmacology at the University of North Carolina, USA and has worked extensively for the World Health Organization (WHO) in West Africa.

Compensation Discussion and Analysis

     Overview. We are engaged in a highly specialized and competitive industry. Success in this environment requires talented and motivated executives. The goal of our executive compensation program is to attract, retain and motivate executives and reward business successes that have the potential to increase shareholder value. The Executive Compensation Committee, which is composed of independent members of the Board, is responsible for implementing our executive compensation program and establishing corporate and individual performance objectives that reward executives when those objectives are met. In considering executive compensation, the Executive Compensation Committee ensures that our total compensation program is competitive, supports our overall strategy and objectives, and reflects both risk and reward for our executive officers.

The Executive Compensation Committee obtains information from a number of sources, including North American surveys and reports on executive compensation in the biotechnology industry, as well as internally generated reports of executive compensation practices of a sub-group of biotechnology companies. To assist with its evaluation of executive compensation, the Executive Compensation Committee has the authority to retain and terminate independent compensation consultants. In early 2007 the Executive Compensation Committee engaged Radford, an international consulting group that focuses on the compensation issues facing technology and life sciences companies, to conduct an overall review of all aspects of executive compensation at QLT, to review non-executive employee compensation practices, and to review compensation of Directors. The Directors’ compensation review was updated in 2008 and Directors’ fees were reduced as described in the table of Directors fees set out on page 15 of this Proxy. The Executive Compensation Committee determined that obtaining an external review of Executive Compensation in 2008 was not necessary since base salaries were being held constant other than for promotions.

     Basic Principles. At the foundation of the Executive Compensation Committee’s strategy is the principle that there should be both consequences for underperformance and incentives for outstanding performance. This is achieved through a compensation program that emphasizes fixed and variable components which make up the “pay mix” for each executive officer.

Prior to 2006, our compensation strategy targeted each component of the total compensation amount to fall between the 50th and the 75th percentile of its comparator group. In 2006, and continuing into 2008, the Executive Compensation Committee decided to focus compensation closer to the lower end, or 50th percentile, of our comparator group as we continued to move towards reducing our overall costs and as we reduced the overall number of our employees. The comparator group used by the Executive Compensation Committee in 2006 for compensation purposes were those companies or corporate divisions in the Radford Global Life Sciences Survey of biotechnology and life-sciences entities having between 150 to 499 employees (the “2006 Peer Survey”). The 2006 Peer Survey consisted of 114 companies or corporate divisions based in the United States, a substantial number of which are included in the NASDAQ Biotechnology Index. The Executive Compensation Committee periodically adjusts our comparator group so that QLT compares itself with similarly sized companies (determined according to the number of employees). As a result of the restructurings that occurred, the Executive Compensation Committee adjusted the comparator group for 2007 and 2008 to a smaller group of 21 biotechnology public companies located primarily in North America comparable to QLT based on a number of factors, including number of employees, revenues, market capitalization, and stage of product pipeline. The list of 21 peer companies determined to be relevant comparator companies is as follows:

Canadian Peer Companies

Axcan Pharma, Inc.
Aspreva Pharmaceuticals Inc.
Angiotech Pharmaceuticals, Inc.
Cardiome Pharma Corporation
Labopharm Inc.

U.S. Peer Companies

InterMune, Inc.
ZymoGenetics, Inc.
Cubist Pharmaceuticals, Inc.
Exelixis, Inc.
Tanox, Inc.
Exelixis, Inc
LifeCell Corporation
Isis Pharmaceuticals, Inc.
Arena Pharmaceuticals, Inc.
CV Therapeutics, Inc.
Momenta Pharmaceuticals, Inc.
Incyte Corporation
XenoPort, Inc.
Array BioPharma Inc.
Onyx Pharmaceuticals, Inc.
POZEN Inc.
Trubion Pharmaceuticals, Inc.

There are two major elements to our executive compensation:

•		Base salary; and
•		Pay-at-Risk Compensation, consisting of:

	—		variable performance-based compensation, consisting of annual cash bonuses based on a comparison of individual and corporate performance to pre-set goals and objectives; and
	—		performance-based equity compensation, consisting of annual grants of long-term stock options.

Our executive officers are paid in Canadian dollars but, for reporting purposes only, their compensation is set out below in U.S. dollars. In addition, our executives are eligible to participate in the benefit plans generally available to all our employees and an annual executive medical screening consultation (as described in “Health and Life Benefits” on page 34).

In 2008, in keeping with the previous shift made to pay-for-performance compensation, the Executive Compensation Committee again continued to limit non-promotion base salary increases, awarding enhanced performance-based equity compensation and rewarding corporate and individual achievement through the annual cash-incentive compensation program.

     Determining Compensation

     Base Salary. In determining whether to increase the base salary for a particular executive officer, the Executive Compensation Committee considers the results of each executive officer’s individual annual performance review described below, comparative survey data for equivalent executive positions in our comparator group, along with the other elements of compensation received by our executive officers.

In its compensation review conducted in 2008, the Executive Compensation Committee compared QLT’s executive compensation to our comparator group of biotechnology companies described above. The base salary levels of our executive officers have been aligned to be at or near the 50th percentile of our comparator group. The Executive Compensation Committee implemented cost controls to limit increases in base salaries for our executive officers so that increases would be allowed only in connection with promotions and when determined to be reasonably necessary for retention.

In 2008, none of our executive officers received a base salary increase except Mr. Lussow. Mr. Lussow received a 3% increase in his base salary at the time he was promoted from Vice President, Business Development to Senior Vice President, Business Development and Commercial Operations and assumed significant additional operational responsibilities within QLT for all commercial supply chain management. Effective upon his promotion, Mr. Lussow’s eligibility under our cash incentive compensation program was adjusted in accordance with our normal practices from a target of 40% to a target of 45% of his base salary.

In early 2009, the Executive Compensation Committee met and again determined that base salaries for our executive officers will not be increased in 2009. Exceptions have not been made at this time but would only be made if associated with a promotion or considered necessary for retention.

Again in keeping with a philosophy of pay-for-performance, and to counter the potential negative perception among the general employee population due to the limited salary increases at that time, in 2007 our President and Chief Executive Officer, Mr. Butchofsky, believed it was appropriate for him to set an example and personally take a 10% base salary cut. Mr. Butchofsky proposed his base salary reduction with the expectation that this would enhance employee morale at that time. The President and Chief Executive Officer’s 10% base salary cut was discussed with, and approved by, the Executive Compensation Committee in April 2007, continued at that reduced level in 2008, and will again remain constant at that reduced level for 2009.

     Pay-at-Risk Compensation. We have always had a compensation philosophy that includes a pay-at-risk component. The annual cash incentive bonus represents income at risk — it is only paid if and to the extent certain goals and objectives are met, with minimum performance thresholds required to earn any incentive compensation, as well as maximum payouts geared towards rewarding extraordinary performance, the terms of which are defined in identified “stretch” (or extraordinary) goals. The goals are intended to be difficult to attain, yet achievable. Corporate goal achievements from prior years and industry trends assist the Executive Compensation Committee in determining realistic but challenging goals for each year. The annual cash incentive compensation that each executive officer was eligible to receive for 2008 was based on a pre-determined target percentage of the base salary for each executive officer (determined in accordance with practices within the applicable comparator group) and varied by position among the executive officers as follows:

Range of Possible

Target Bonus

Bonus Payment

Weighting between

(as a % of base

(as a % of base

Corporate and

Level

salary)

salary)

Individual Goals

Chief Executive Officer

50

%

0 – 100%

100% Corporate

Chief Financial Officer and all Senior Vice Presidents

45

%

0 – 90%

75% Corporate / 25% Individual

All Vice Presidents who are Executive Officers

40

%

0 – 80%

75% Corporate / 25% Individual

These cash incentive amounts were calculated taking into consideration the practices of our peer group and aligning ourselves with comparator companies at or around the 50th percentile for pay-at-risk components of Compensation. The breakdown between Corporate and Individual objectives that determine the payout amounts are weighted heavily toward overall achievement of corporate objectives to align our executives with objective measures of corporate performance.

     Establishing Goals

     Individual Goals. The annual individual goals are primarily objective and measurable and relate to the individual executive officer’s area of responsibility. They are designed to facilitate the achievement of our corporate goals. It is possible for an executive officer to attain between 0% and 200% of his or her individual goals depending on performance, although the Executive Compensation Committee has the discretion to recognize additional factors and award bonuses outside of this range. The extent to which those individual goals have been achieved or exceeded is determined largely from the annual performance recommendations for each of the other executive officers prepared by the President and Chief Executive Officer and approved by the Executive Compensation Committee. Cash incentive compensation for the President and Chief Executive Officer is determined based solely on achievement of the corporate goals as approved by the Board.

     Corporate Goals. In early 2008, on the recommendation of the Executive Compensation Committee, the Board approved specific corporate goals for us to achieve. The corporate goals for 2008, and our assessment of how successful we were in attaining those goals, are described below.

The Executive Compensation Committee recommended, and the Board set, the following high-level goals and the relative weighting for each goal for QLT for 2008.

	•		Asset Divestiture: 35% — based on the achievement of specified asset divestiture goals based on gross proceeds obtained from the divestment of the assets of our subsidiary, QLT USA, Inc., namely the Atrigel® drug delivery system, Eligard® product line, and Aczone®, and the sale of our building and land at our Vancouver, British Columbia headquarters;
	•		Visudyne® Radical Trial: 15% — based on the achievement of specified milestones related to progress and six-month interim clinical trial results;
	•		Punctal Plug Development: 30% — based on the achievement of specified milestones related to clinical development and product research and development for our punctal plug drug delivery program;
	•		Lemuteporfin (LFI/LTS) Development: 10% — based on the achievement of specified clinical development milestones for our photodynamic therapy acne programs using our drug, lemuteporfin; and
	•		Business Efficiencies and Expense Management: 10% — based on our success in streamlining the operations of our business in Vancouver to be in line with a smaller organization including: reducing business systems burden; streamlining processes and procedures leading to cost efficiencies and becoming a more entrepreneurial culture; and generating target savings from budget including savings derived from reduction in administrative functions.

To reflect the relative value of each achievement to the resulting value for QLT and our shareholders, within each goal, the Executive Compensation Committee set out criteria that must be reached for the goal to be met or exceeded (stretch goals). Except as discussed below with respect to a change to our Asset Divestiture goals, the Executive Compensation Committee did not modify any performance targets during 2008 to reflect changes in financial budgets or goals upon which the target objectives were dependent.

After each fiscal year, our President and Chief Executive Officer presents a recommendation to the Executive Compensation Committee for performance bonus payments based on the results achieved as compared to targets established for that fiscal year. The Executive Compensation Committee has the discretion to award the amount corresponding to that level of achievement, or to modify the award payable if it believes a modification would be in the best interests of QLT and its shareholders.

In early 2009, the Executive Compensation Committee considered at length the performance of QLT relative to the corporate objectives set in early 2008. Based on the achievement of QLT against those specific goals, the Executive Compensation Committee determined that QLT achieved 75% of its 2008 corporate goals. The following chart illustrates the level of achievement of the 2008 corporate goals:

Goal		Target %				Actual %
Asset Divestitures			35	%			43.75	%(1)
Punctal Plug Development			30	%			9	%
Visudyne Radical Trial			15	%			15	%
Lemuteporfin (LFI/LTS) Development			10	%			0	%
Business Efficiencies and Expense Management			10	%			7.25	%
Total			100	%			75	%

In evaluating our performance to the goals established for 2008, and determining the extent to which those goals were successfully achieved, the Executive Compensation Committee recognized the following factors, among others:

•

Asset Divestitures: The target level of gross proceeds for asset sales was developed in early 2008 by the Executive Compensation Committee in consultation with QLT’s external financial advisors and included predetermined “stretch” goals. Through 2008, QLT successfully divested or out-licensed assets for gross proceeds of approximately $235 million. That comprised:

	(a)		the sale in July 2008 of QLT USA’s Aczone product, a topical treatment for acne vulgaris, to Allergan Sales, LLC, a wholly-owned subsidiary of Allergan, Inc. for a one-time cash payment of $150 million;
	(b)		the sale in September 2008 of the land and building at QLT’s corporate headquarters and the adjacent undeveloped parcel of land in Vancouver, British Columbia to Discovery Parks Holdings Ltd. for CAD$65.5 million (including CAD $12 million of vendor financing to be paid to QLT in September 2010); and
	(c)		the consummation of an exclusive license agreement in August 2008 with Reckitt Benckiser Pharmaceuticals Inc. for QLT USA’s Atrigel sustained-release drug delivery technology (except for certain rights being retained by QLT USA and its prior licensees) for an aggregate upfront payment of $25 million and potential milestone payments of up to $5 million based on the development milestones.

			Of the material assets originally targeted for divestment in 2008, Eligard was the only asset that was not divested.
			In evaluating the extent to which the Asset Divestiture goal was met, the Executive Compensation Committee recognized that it was the intention that Management be rewarded for significant contributions realized from the sale of the listed assets. However, upon taking into consideration, (i) the significant efforts of Management to effect a sale of the Eligard asset, (ii) the prevailing worldwide economic conditions towards the end of 2008, and (iii) the fact that Management would not sell the Eligard asset on terms that Management and the Board did not believe were in the best interests of our shareholders, the Executive Compensation Committee recommended that the gross proceed target for a sale of Eligard be excluded when measuring actual performance against the Asset Divestiture target.

			As a result, in determining cash incentive compensation for 2008, our executive officers’ performance was measured against the gross proceeds targets originally established by the Executive Compensation Committee, in consultation with QLT’s external financial advisors, for Aczone, Atrigel and the Vancouver building and lands only. QLT exceeded, by 25%, our aggregate target gross proceeds for the divestiture of those three assets, and therefore it was determined that management achieved 43.75% out of target of 35% (125% achievement of target) for the 2008 Asset Divestiture goal.
	•		Punctal Plug Development: QLT met its goals for the Phase II trial being conducted to evaluate the safety and efficacy of its Latanoprost Punctal Plug Delivery System for the treatment of certain ocular conditions. However, certain other development goals were not met for the punctal plug program in 2008. As a result, QLT achieved 9% out of a possible 30% on its goals for this program.
	•		Visudyne Radical Trial: QLT’s Visudyne Radical trial was successfully initiated and met all goal targets for 2008, including with respect to the six-month results from an interim analysis of the Phase II RADICAL study, resulting in a full goal achievement at 15% (out of a maximum possible 15%).
	•		Lemuteporfin Development: While the lemuteporfin interim clinical trial was completed as planned in 2008, QLT did not achieve its goals for the interim clinical trial results from our lemuteporfin study in patients with severe acne and decided to re-evaluate continuation of its current clinical development plans for that indication. As a result, QLT received 0% out of a possible 10% for this goal.
	•		Business Efficiencies and Expense Management: In measuring QLT’s achievement against this goal, the Executive Compensation Committee considered, among other criteria, the completion of a significant restructuring effort in early 2008 and the resulting accomplishments of management to streamline and reorganize QLT’s remaining staff, processes and procedures resulting in cost and operating efficiencies. In addition, the Executive Compensation Committee considered the efforts undertaken by the executive officers in connection with the redemption in September 2008 of the $172.5 million outstanding principal amount of QLT’s 3% Convertible Senior Notes and the value returned to shareholders through our $50 million ‘Dutch Auction’ share repurchase which was initiated in late 2008 and completed in early 2009. However, not all target goal criteria were met during 2008 and, as a result, QLT was determined to achieve 7.25% out of a possible 10% with respect to this goal.

     2009 Corporate Goals

For 2009, the Board has approved the following recommendation of the Executive Compensation Committee for corporate goals:

Goal		Target %
Punctal Plug Development — achieve specified milestones related to clinical development and product research and development for the punctal plug drug delivery program			50	%
Visudyne — achieve specified milestones related to revenue; achieve specified milestones related to progress and successful results of our clinical trial			15	%
Eligard — achieve specified milestones related to revenue; achieve specified milestones related to supply management			15	%
Synthetic Retinoid — achieve specified milestones related to clinical development; achieve progress related to product research and development			5	%
Shareholder Value — improve shareholder value by achieving target adjusted EBITDA, pursuing strategic alliances for key assets, streamlining business processes, and becoming a more entrepreneurial culture			15	%
Total			100	%

     Analysis of Named Executive Officers Compensation and Goals

     President and Chief Executive Officer. As previously discussed, Mr. Butchofsky’s base salary was voluntarily cut by 10% in 2007 in an effort to enhance employee morale. Prior to the voluntary reduction of Mr. Butchofsky’s base salary, the Executive Compensation Committee had considered his experience and responsibilities and placed his compensation at that time at approximately the 50th percentile of Chief Executive Officer compensation for similarly sized companies in our comparator group according to the Radford CEO compensation survey. Mr. Butchofsky’s base salary remained constant (in Canadian dollars) at that reduced level in 2008.

Our President and Chief Executive Officer has no individual goals and our corporate goals determine our President and Chief Executive Officer’s bonus. Mr. Butchofsky’s target cash incentive compensation is set at 50% of his base salary. As noted above, the Executive Compensation Committee determined that QLT achieved 75% of its corporate goals for 2008, resulting in a 2008 annual cash incentive compensation payment to Mr. Butchofsky of $172,866.

In addition, for fiscal 2008 only, Mr. Butchofsky was eligible to receive a one-time additional cash bonus targeted at 35% of his base salary based solely on the achievement of the 2008 Asset Divestiture goal described above. That one-time additional cash bonus was established in early 2008 when Mr. Butchofsky recommended that, despite the achievement of certain corporate goals in 2007, he receive no bonus for 2007 as a result of our disappointing stock price performance. The result was that Mr. Butchofsky voluntarily waived payment of his bonus compensation that he would otherwise have been entitled to receive in respect of 2007. The Executive Compensation Committee accepted this recommendation in early 2008 but, in an effort to provide additional incentives for 2008 that were aligned with the corporate objectives, determined that Mr. Butchofsky would have the opportunity to “earn back” the 2007 bonus through eligibility for an additional cash bonus with a target of 35% of his base salary, based solely on the achievement of the 2008 Asset Divestitures goal described above. As discussed above,

the Executive Compensation Committee and the Board determined that Asset Divestiture goal was achieved at 125%. As a result, in 2008, Mr. Butchofsky received a special one-time additional bonus for 2008 equal to $201,677.

     Chief Financial Officer. In early 2008, the following individual goals were established for Mr. Nelson: (i) maintain Sarbanes-Oxley compliance for QLT and its subsidiaries; (ii) continue to streamline SAP, budgeting and other processes in our finance and accounting departments following the completion of QLT’s restructuring activities in early 2008 to create additional business efficiencies; (iii) provide strategic and financial input on QLT and its subsidiaries ongoing divestiture activities and lead the divestment of QLT’s buildings and lands in Vancouver; and (iv) manage repayment of QLT’s then outstanding convertible debt. Mr. Nelson was determined to have met, partially met or exceeded each of these goals, to achieve, overall by percentage, 134.8% of his individual goals for 2008. Based upon the achievement of the corporate goals and his individual goals, and the relative weighting between them (75% dependant upon corporate goal achievement; 25% dependant upon individual goal achievement), Mr. Nelson was awarded a cash incentive compensation amount for 2008 equal to $129,587, which represented in the aggregate 40.5% of his base salary for 2008.

     Senior Vice President, Human Resources and Organizational Development. In early 2008, the following individual goals were established for Ms. Lupini: (i) implement and manage a significant reduction in headcount, including managing the re-assignment of the remaining employees as needed to ensure that the needs of our business were met; (ii) advise on and implement measures to ensure key employee retention following the completion of our significant restructuring activities; and (iii) assist in the divestiture of QLT’s buildings and lands in Vancouver and manage the consolidation in office space following that sale and lease-back of a portion of that space. Ms. Lupini was assessed as having met or exceeded all of those goals, to achieve, overall by percentage, 135.7% of her individual goals for 2008. Based upon the achievement of the corporate goals and her individual goals, and the relative weighting between them (75% dependant upon corporate goal achievement; 25% dependant upon individual goal achievement), Ms. Lupini was awarded a cash incentive compensation amount for 2008 equal to $108,917, which represented in the aggregate 40.6% of her base salary for 2008.

     Senior Vice President, Business Development and Commercial Operations. In early 2008, the following individual goals were established for Mr. Lussow: To work with QLT’s external financial advisors, manage or assist in the divestment of certain of QLT and its subsidiaries’ products and technologies, including Aczone, Atrigel and Eligard. In addition, following his promotion from Vice President, Business Development to Senior Vice President, Business Development and Commercial Operations in May 2008, a further goal was added for Mr. Lussow to achieve certain commercial supply chain objectives. For the reasons discussed above, the Executive Compensation Committee determined that the goal relating to the divestment of Eligard should be excluded when measuring Mr. Lussow’s performance relative to his goals. As a result, Mr. Lussow was determined to achieve, overall by percentage, 142% of his individual goals for 2008. Based upon the achievement of the corporate goals and his individual goals, and the relative weighting between them (75% dependant upon corporate goal achievement; 25% dependant upon individual goal achievement), Mr. Lussow was awarded a cash incentive compensation amount for 2008 equal to $117,994, which represented in the aggregate 39.3% of his base salary for 2008.

     Equity Grants Policy. Equity compensation represents a significant portion of executive total compensation at QLT. The amount and type of equity awards are intended to align our executives’ interests with shareholder interests, increasing executive compensation derived from sustained increases in the value of our common stock. In setting the equity compensation levels of our executive officers, the Executive Compensation Committee considers the recent prior grants of stock options to the executive officer, the level of responsibility that the executive officer has in QLT, the performance of the executive officer in the year, the ability of stock options to retain executive officers and any pre-existing contractual obligations that we may have to that executive officer with respect to minimum annual stock option grants.

Our Board has adopted a policy for granting equity awards. Pursuant to that policy, and as was our practice in the past, only our Board or the Executive Compensation Committee are authorized to grant equity awards and, except in the case of awards for new hires, equity awards will be decided once a year at a regularly scheduled meeting. The exercise price of stock options granted in accordance with the equity grant policy in and prior to 2008 must have an exercise price not lower than the closing price of our common stock on the grant date (if the grant is made after the close of the market on that day), or the closing price on the day immediately prior to the grant date (if the grant is made prior to or during trading hours). The proposed Amended and Restated 2000 Stock Option Plan will provide that the fair market value generally will be the closing sales price for a common share for the given date (e.g., the date of grant). The terms of any awards will be communicated as soon as administratively practicable after the approval of the grants.

All options issued to our executive officers during 2006, 2007 and 2008 are exercisable for a term of five years and vest in 36 equal monthly instalments. In addition, in the event an executive officer’s employment is terminated without cause (other than due to a change of control), 50% of the options then unvested will automatically vest. Whether or not the executive officer’s employment with us continues, 100% of the then unvested options will vest upon the occurrence of a change of control of QLT. The terms provide our executives with certain financial security that enhances our ability to attract and retain key employees. Although no longer the predominant practice in the industry, monthly vesting, in our view, continues to provide a balance between ongoing incentives and longer term retention.

In early 2006, QLT underwent the first of two progressive restructuring and refocusing initiatives. The Executive Compensation Committee wanted to ensure retention of executive officers during this challenging period, and so commissioned a detailed analysis of our compensation structure and its relative competitive position within the industry as well as market practices with respect to the design and level of retention awards. As a result of that study, and in consultation with Towers Perrin, the Board, on the recommendation of the Executive Compensation Committee, authorized an enhanced stock option grant to executive officers. The Executive Compensation Committee and the Board considered the number and value of stock options previously granted to the executive officers and determined that a grant of stock options equivalent in size to that which the executive officers might receive as “signing options” was appropriate for 2006 and 2007 to provide a long-term retention incentive.

Our second significant restructuring and refocusing initiative was completed in 2008. That included a significant reduction in the number of executive officers and senior managers in our organization and caused each remaining executive officer to assume broader duties and responsibilities within the organization. As a result, the Executive Compensation Committee determined that it was important to ensure that our four remaining executive officers be retained and incented to fulfill the goals set for QLT and to assume increased organizational responsibilities resulting from those restructuring efforts. To further align incentives with the interests of our shareholders, in May 2008, the Executive Compensation Committee authorized an enhanced stock option grant to our President and Chief Executive Officer and our remaining three executive officers.

QLT currently maintains two equity compensation plans, as discussed under “Securities Authorized for Issuance Under Equity Compensation Plans” on page 48 of this Proxy Statement, which provide for the issuance of stock options to executive officers, among others. Option grants are meant to directly link executive compensation to value creation for shareholders, and the amount (if any) each executive ultimately realizes from the options depends solely on the increase in value of our shares from the date of grant through the date of exercise.

Pursuant to the terms of each of our plans, the exercise price of options granted will be determined by the Executive Compensation Committee, but will in no event be less than the fair market value of our common shares immediately preceding the grant. As such, the exercise price for options granted under all of our plans is the closing price on the TSX (for options issued under the 2000 Plan) or NASDAQ (for options previously issued to employees of QLT USA under the 2000 Atrix Performance Stock Option Plan) immediately preceding the grant. All current option grants have a five-year term and vest in monthly instalments over 36 months, subject to such altered vesting schedules as the Executive Compensation Committee or our Board may determine. For senior managers, executive officers and directors, 50% of any unvested options vest on the termination of employment without cause, and 100% of unvested options vest on the occurrence of a change of control.

     Health and Life Benefits. Our executive officers receive medical, dental, life insurance and other benefits generally made available to all of our employees. In addition, commencing in 2008, our Executive Compensation Committee approved implementing a screening and disease prevention program for our executive officers and certain senior managers. Under that program, our executive officers are eligible to obtain a full medical and disease prevention evaluation each year paid for by QLT and subject to certain fee caps agreed upon by QLT with the external benefit provider.

     Tax Deductibility. Section 162(m) of the U.S. Internal Revenue Code limits the deductibility of compensation in excess of US$ 1 million in cash compensation paid to the named executive officers unless certain specific criteria are satisfied. As all our executive officers are resident in Canada and, in any event, received less than US$1 million in cash compensation in fiscal 2008, we do not expect the 162(m) limits to have any impact on our ability to deduct compensation paid to our named executive officers.

Compensation of Executive Officers

As of December 31, 2008, QLT had four executive officers. The following table summarizes total compensation for the 2008, 2007 and 2006 fiscal years earned by our principal executive officer, our principal financial officer and our other two executive officers who were serving as executive officers at the end of 2008. The table also summarizes total compensation for those three years earned by one of our former executive officers, Mr. Curaudeau, who would have been one of the five most highly compensated executive officers but for the fact that he was no longer employed by QLT at the end of fiscal 2008. The executive officers named in the Summary Compensation Table are referred to elsewhere in this Proxy Statement as the “named executive officers.”

Summary Compensation Table

																		Non-Equity
														Option				Incentive Plan				All Other
Name and Principal						Salary(1)				Bonus				Award(2)				Compensation				Compensation				Total
Position		Year				(US$)				(US$)				(US$)				(US$)				(US$)				(US$)
Robert L. Butchofsky			2008			$	460,976				—			$	656,490			$	374,543	(7)		$	12,697	(8)		$	1,504,706
President and Chief Executive			2007			$	457,798				—			$	529,992				—	(7)		$	8,385			$	996,175
Officer			2006			$	481,481				—			$	467,723			$	192,593			$	7,275			$	1,149,072
Cameron R. Nelson			2008			$	320,122				—			$	246,685			$	129,587			$	12,753	(9)		$	709,147
Vice President, Finance and			2007			$	317,915				—			$	203,621			$	98,355			$	8,385			$	628,276
Chief Financial Officer			2006			$	300,926				—			$	152,277			$	113,750			$	7,790			$	574,743
Linda M. Lupini			2008			$	268,385				—			$	190,900			$	108,917			$	8,912			$	577,114
Senior Vice President, Human			2007			$	266,534				—			$	167,934			$	83,958			$	26,454			$	544,880
Resources and Organizational Development			2006			$	252,291				—			$	174,281			$	85,779			$	7,275			$	519,626
Alexander R. Lussow			2008			$	297,378				—			$	137,067			$	117,994			$	11,480	(10)		$	563,919
Senior Vice President, Business			2007			$	289,827			$	13,974	(5)		$	83,279			$	81,151			$	12,421			$	480,652
Development and Commercial Operations			2006			$	103,064	(4)		$	39,683	(5)		$	25,783			$	35,190			$	1,816			$	205,536
Alain H. Curaudeau(3)			2008			$	59,536				—			$	290,428				—			$	500,785	(11)		$	850,749
Former Senior Vice President,			2007			$	354,755				—			$	177,308			$	107,757			$	8,385			$	648,205
Portfolio and Project Management			2006			$	335,797			$	26,455	(6)		$	172,490			$	114,171			$	7,275			$	656,188

Grants of Plan-Based Awards for the Fiscal Year Ended December 31, 2008

The following table provides certain information concerning each grant of an award made to a named executive officer in fiscal 2008.

																						All Other
																						Option
																						Awards:				Exercise								Grant Date
																						Number of				or Base								Fair Value
										Estimated Future Payouts Under Non-												Securities				Price of				Closing				of Stock
										Equity Incentive Plan Awards												Underlying				Option				Price on				and Option
		Grant				Approval				Threshold				Target				Maximum				Options				Awards				Grant Date				Awards
Name		Date				Date				($)				($) (1)				($) (1)				(#)				(US$/Sh) (2)				(US$/Sh) (2)				(US$/) (3)
Robert L. Butchofsky			05/17/08				05/13/08				—			$	391,829	(5)		$	783,659	(5)			450,000			$	3.50			$	3.50			$	563,471
Cameron R. Nelson			05/17/08				05/13/08				—			$	144,055			$	288,110				150,000			$	3.50			$	3.50			$	187,824
Linda M. Lupini			05/17/08				05/13/08				—			$	120,773			$	241,546				150,000			$	3.50			$	3.50			$	187,824
Alexander R. Lussow			05/17/08				05/13/08				—			$	135,267			$	270,534				150,000			$	3.50			$	3.50			$	187,824
Alain H. Curaudeau(4)			—				—				—				—				—				—				—				—				—

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

Each of our named executive officers has a written employment agreement setting forth the material terms of their employment.

The employment agreements with our named executive officers are described in more detail below under the heading “Employment and Other Arrangements.” Under their employment agreements, those executive officers receive annual base salaries at amounts not less than the amounts specified in the Summary Compensation Table, which may be adjusted from time to time. Each of these employment agreements provides for the potential payment of performance bonuses, option awards and other benefits as described in the Summary Compensation Table and below. Potential severance payments in the event of the resignation or termination of each of the executive officers is also set out in employment or change of control agreements with each executive officer, and are described below under the heading “Post-Employment Compensation — Severance and Change of Control Arrangements.”

Outstanding Equity Awards at 2008 Fiscal Year-End Table

The following table provides information concerning unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer outstanding as of the end of the 2008 fiscal year.

Option Awards

Stock Awards

Equity

Equity

Incentive

Incentive

Plan

Equity Incentive

Plan

Awards:

Plan awards:

Awards:

Number of

Market or

Number of

Number of

Number of

Number of

Market Value

Unearned

Payout Value of

Securities

Securities

Securities

Shares or

of Shares

Shares,

Unearned

Underlying

Underlying

Underlying

Units of

or Units

Units or

Shares, Units or

Unexercised

Unexercised

Unexercised

Option

Stock That

of Stock

Other Rights

Other Rights

Options

Options

Unearned

Exercise

Option

Have Not

That Have Not

That Have

That Have Not

(#)

(#)

Options

Price

Expiration

Vested

Vested

Not Vested

Vested

Name

Exercisable(2)

Unexercisable

(#)

(US$)(1)

Date(2)

(#)

(US$)

(#)

(US$)

Robert L. Butchofsky

87,500

362,500

—

$3.50 ($3.73 CAD)

May 16, 2013

—

—

—

—

131,944

118,056

$7.95 ($8.48 CAD)

May 16, 2012

229,167

20,833

$7.89 ($8.41 CAD)

March 12, 2011

250,000

(3)

—

$7.65 ($8.15CAD)

September 24, 2010

20,000

—

$14.09 ($15.02CAD)

March 8, 2010

15,000

—

$30.82 ($32.85 CAD)

March 9, 2009

Cameron R. Nelson

29,167

120,833

—

$3.50 ($3.73 CAD)

May 16, 2013

—

—

—

—

47,500

42,500

$7.95 ($8.48 CAD)

May 16, 2012

123,750

11,250

$7.89 ($8.41 CAD)

March 12, 2011

15,000

—

$7.31 ($7.79 CAD)

November 7, 2010

15,000

—

$14.09 ($15.02 CAD)

March 8, 2010

8,400

—

$30.82 ($32.85 CAD)

March 9, 2009

Linda M. Lupini

29,167

120,833

—

$3.50 ($3.73 CAD)

May 16, 2013

—

—

—

—

39,583

35,417

$7.95 ($8.48 CAD)

May 16, 2012

73,333

6,667

$7.89 ($8.41 CAD)

March 12, 2011

20,000

—

$7.31 ($7.79 CAD)

November 7, 2010

20,000

—

$14.09 ($15.02 CAD)

March 8, 2010

20,000

—

$30.82 ($32.85 CAD)

March 9, 2009

Alexander R. Lussow

29,167

120,833

—

$3.50 ($3.73 CAD)

May 16, 2013

—

—

—

—

23,750

21,250

$7.95 ($8.48 CAD)

May 16, 2012

56,389

13,611

$7.31 ($7.79 CAD)

July 16, 2011

Alain H. Curaudeau(4)

—

—

—

—

—

—

—

—

—

Option Exercises and Stock Vested Table

No stock options were exercised by our named executive officers in fiscal 2008. In addition, in 2008 and prior years QLT did not offer its executive officers a stock purchase program.

Pension Benefits Table

We do not have any pension plans for our named executive officers.

Nonqualified Deferred Compensation Table

We do not have any nonqualified deferred compensation plans for our named executive officers.

Employment and Other Arrangements

We have entered into the employment agreements summarized below with the named executive officers.

     Employment Agreement with Mr. Butchofsky. In 2005, Mr. Butchofsky entered into an employment agreement with QLT under which he was appointed Acting Chief Executive Officer. On February 27, 2006, he was promoted to President and Chief Executive Officer. Under the terms of Mr. Butchofsky’s employment agreement, Mr. Butchofsky is entitled to an annual base salary (subject to annual adjustments approved by the Board), cash incentive compensation under our cash incentive compensation plan, with an annual target bonus equal to 50% of his base salary, and other health related benefits and registered retirement savings plan employer matching contributions. The amounts paid to Mr. Butchofsky during 2008 are disclosed in the Summary Compensation Table. In addition as disclosed above, in lieu of any 2007 bonus amount, for 2008, Mr. Butchofsky was eligible to receive a special one-time cash bonus payment dependent on the gross proceeds received by QLT from asset divestitures in 2008.

In the event that QLT terminates Mr. Butchofsky’s employment without cause, Mr. Butchofsky is entitled to payment of salary and cash incentive compensation earned to the date of termination and (a) notice or pay in lieu of notice equal to (i) 18 months’ base salary, plus one month of additional base salary for each year of employment after September 2006, up to a maximum of 24 months, and (ii) cash incentive compensation for the applicable severance period at the target level, (b) an amount to compensate for the cost of lost health-related benefits, and (c) payment for out placement counselling services to assist the executive officer in seeking alternative employment.

     Employment Agreements with Ms. Lupini and Messrs. Nelson and Lussow. Ms. Lupini and Messrs. Nelson and Lussow each entered into employment agreements with QLT which are similar in form in all material respects. Under those employment agreements, during their employment, each executive officer is entitled to base salary, cash incentive compensation under our cash incentive compensation plan, participation in our stock option plan, and other health related benefits and registered retirement savings plan employer matching contributions. Except as stated below, in the event that QLT terminates the employment of the executive officer without cause, the employment agreements provide that each executive officer is entitled to six months’ notice (twelve months’ notice in the case of Mr. Lussow) plus one additional month of base salary for each year of service (to a maximum of 24 months in total), (b) payment of salary and bonus earned to the date of termination as if all corporate and individual goals for that year have been achieved but not exceeded, (c) an amount to compensate the executive officer for lost benefits during the notice period, and (d) payment for out placement counselling services to assist the executive officer in seeking alternative employment.

     Mr. Nelson’s Employment Agreement dated November 8, 2005, confirmed his position as Vice President, Finance and Chief Financial Officer. Under the terms of Mr. Nelson’s employment agreement, Mr. Nelson is entitled to the annual base salary (subject to annual increases approved by the Board) disclosed in the Summary Compensation Table, and the other compensation and benefits described above.

     Ms. Lupini’s Employment Agreement dated January 1, 2006, confirmed her position as Senior Vice President, Human Resources and Organizational Development. Under the terms of her employment agreement, Ms. Lupini is entitled to the annual base salary (subject to annual increases approved by the Board) disclosed in the Summary Compensation Table, and the other compensation and benefits described above.

     Mr. Lussow’s Employment Agreement dated June 30, 2006, appointed him as Vice President, Business Development. Mr. Lussow was promoted to Senior Vice President, Business Development and Commercial Operations in May 2008. Under the terms of his employment agreement, as amended on April 26, 2007 and May 21, 2008, Mr. Lussow is entitled to the annual base salary (subject to annual increases approved by the Board) disclosed in the Summary Compensation Table, and the other compensation and benefits described above.

     Employment and Separation Agreement with Mr. Curaudeau. Mr. Curaudeau entered into an employment agreement dated May 19, 2000 and was appointed as Senior Vice President, Portfolio and Project Management. Mr. Curaudeau’s last day of employment with QLT was February 29, 2008. Pursuant to a letter agreement between Mr. Curaudeau and QLT relating to his departure, Mr. Curaudeau received his regular base salary through the last day of employment, and on that date QLT paid him a lump sum equivalent to 13 months’ salary. In addition, on February 29, 2008, QLT paid Mr. Curaudeau $108,505 for his 2007 bonus and $26,352 in lieu of the cash incentive compensation that he would have earned for the first two months of 2008. Mr. Curaudeau continued to receive health-related benefits until March 30, 2008, and on February 29, 2008 QLT paid him $38,699 in lieu of employee benefit coverage to compensate him for the balance of his severance period. On February 29, 2008, he also received $30,455 for his remaining accumulated but unpaid vacation to which he was entitled through that date. QLT paid him an additional $18,293 on February 29, 2008 to compensate him for his retirement plan matching payments that he was otherwise eligible to receive from January 1, 2007 to February 29, 2008, and his departure was considered “termination without cause” for the purpose of the vesting provisions in the stock option agreements previously entered into between him and QLT. All of the severance payments to Mr. Curaudeau under the above-noted letter agreement were paid in accordance with the terms of his employment agreement.

Post-Employment Compensation — Severance and Change of Control Arrangements

     Severance Arrangements. We entered into employment agreements with our named executive officers that entitle the named executive officers to receive certain severance benefits as described in the “Employment and Other Arrangements” section above. As a condition to each executive’s entitlement to receive the severance benefits, each executive is required to execute a waiver of claims against QLT and will be bound by the terms of a non-competition and non-solicitation agreement, which prohibits the executive from participating in a competitive business or soliciting our customers or employees for a period of one year (or in the case of Messrs. Butchofsky and Curaudeau, two years) following the termination of his or her employment. Stock options that have been awarded to a named executive officer, but that have not vested upon termination, are to be dealt pursuant to the terms of the stock option agreements entered into between QLT and its executive officers, which provide:

In the event of retirement, unless otherwise determined by the Executive Compensation Committee, (1) if the executive officer has worked with the Company for at least 20 years, or (2) is at least 60 years of age and has worked continuously on behalf of the Company for at

least five years, then all of his or her previously unvested stock options will vest, and all stock options will remain exercisable until the expiration date of the stock options. In the event of retirement where neither (1) or (2) above is applicable, and the retiree has received the consent of the Committee, then the retiree’s stock options will immediately vest and will terminate upon the earlier of, (a) 90 days following the retirement date, or (b) the expiration date of the stock option.

In the event of death or termination due to disability, all previously unvested stock options of the named executive officer will vest, and all stock options will remain exercisable until the earlier of, (a) twelve months following the date of death, or termination due to disability, of the named executive officer, or (b) the expiration date of the stock option.

In the event of a termination of the named executive officer’s employment other than for cause, one-half of the previously unvested stock options of the executive officer will vest. All vested stock options will remain exercisable until the earlier of, (a) 90 days following his or her termination of employment, or (b) the expiration date of the stock option.

     Change of Control Agreements. Separate change of control agreements have been entered into with our executive officers, including the President and Chief Executive Officer. The change of control agreements provide that, in the event of termination by QLT of that executive officer’s employment without cause or by the executive officer after a triggering event (as the terms “cause” and “triggering event” are defined in the agreements) within a period of 24 months following a change of control in QLT, each executive officer will receive a severance payment equal to 18 months’ (or in the case of Mr. Butchofsky, 24 months’) base salary, an annual cash incentive compensation entitlement (calculated at the target cash incentive compensation entitlement that would otherwise have been paid during the severance period), the maximum RRSP contribution to which the executive officer would otherwise be entitled during the severance period, amounts in lieu of certain other health and retirement benefits for the severance period, relocation expenses and out-placement counselling. Under the stock option agreements entered into between QLT and its executive officers, 100% of the then unvested options granted to the executive officers will vest upon the occurrence of a change in control.

A change of control includes an event in which any person acquires 35% or more of the voting securities of QLT, the sale of all or substantially all of the assets of QLT (other than to an affiliate of QLT or to an entity in which our shareholders held 65% of the voting securities prior to the sale), a merger or other reorganization involving QLT in which the original shareholders of QLT own less than 65% of the resulting merged entity, or a change in the majority of the Directors on the Board in any consecutive 24 month period or less such that a majority of the Board members ceases to comprise individuals who either have been (a) Board members continuously since the beginning of such period, or (b) appointed or nominated for election as Board members during such period by at least a majority of the Board members described in subsection (a) above who were still in office at the time the Board approved such appointment or nomination.

     Potential Payments upon Termination or Change in Control. The amount of compensation payable to our named executive officers in the event of a termination of employment or a change in control is set forth in the tables below. The amounts in the tables below were calculated assuming the termination of the executive officer’s employment occurred as of December 31, 2008.

Robert L. Butchofsky

																		Termination
																		due to
																		Permanent
																		Disability
														Termination				Causing								Termination
Benefits and										Termination				other than for				Inability to								upon a Change in
Payments upon		Resignation				Retirement				for Cause				Cause				Act				Death				Control of QLT
Termination		(US$)				(US$)				(US$)				(US$)				(US$)				(US$)				(US$)
Compensation:
Base Salary			—				—				—			$	768,293			$	768,293				—			$	921,951
Cash Bonus
2008 Performance Period			—				—				—			$	230,488	(1)		$	230,488	(1)		$	230,488	(1)		$	230,488	(1)
Subsequent Performance Periods			—				—				—				—				—				—			$	460,976
Stock Options
Unvested and Accelerated			—			$	777,959				—			$	388,980			$	777,959			$	777,959			$	777,959
Benefits and Perquisites:
RRSP Contributions		$	9,381	(2)			—				—			$	9,381			$	9,381			$	9,381			$	29,550
Benefits Compensation			—				—				—			$	76,829	(3)		$	76,829	(3)		$	46,098			$	92,195
Out Placement Counseling			—				—				—			$	4,690			$	4,690	(4)			—			$	4,690
Moving Expenses			—				—				—				—				—				—				Est.$75,000	(5)

Cameron R. Nelson

																		Termination
																		due to
																		Permanent								Termination
																		Disability								upon a
														Termination other				Causing								Change in
Benefits and										Termination				than for				Inability to								Control of
Payments upon		Resignation				Retirement				for Cause				Cause				Act				Death				QLT
Termination		(US$)				(US$)				(US$)				(US$)				(US$)				(US$)				(US$)
Compensation:
Base Salary			—				—				—			$	373,476			$	373,476				—			$	480,183
Cash Bonus
2008 Performance Period			—				—				—			$	144,055	(1)		$	144,055	(1)		$	144,055	(1)		$	144,055	(1)
Subsequent Performance Periods			—				—				—				—				—				—			$	216,082
Stock Options
Unvested and Accelerated			—			$	278,524				—			$	139,262			$	278,524			$	278,524			$	278,524
Benefits and Perquisites:
RRSP Contributions		$	9,381	(2)			—				—			$	9,381			$	9,381			$	9,381			$	24,390
Benefits Compensation			—				—				—			$	37,348	(3)		$	37,348	(3)		$	32,012			$	48,018
Out Placement Counseling			—				—				—			$	4,690			$	4,690	(4)			—			$	4,690
Moving Expenses			—				—				—				—				—				—				Est.$75,000	(5)