EXHIBIT 99.1

                                GSI LUMONICS INC.

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                   RESULTS OF OPERATIONS - CANADIAN SUPPLEMENT
        (in United States dollars, and in accordance with Canadian GAAP)

The following Management's Discussion and Analysis of Financial Condition and
Results of Operations - Canadian Supplement ("Canadian Supplement") should be
read in conjunction with our Management's Discussion and Analysis of Financial
Condition and Results of Operations ("MD&A") included in Item 2 of this
Quarterly Report. The Canadian Supplement should also be read in conjunction
with the unaudited Consolidated Financial Statements and Notes prepared in
accordance with U.S. GAAP (included in Item 1), the unaudited Consolidated
Financial Statements and Notes prepared in accordance with Canadian generally
accepted accounting principles ("Canadian GAAP")(included in exhibit 99) and the
audited Consolidated Financial Statements and Notes included in the Company's
Annual Report for the fiscal year ended December 31, 2001.

The following contains forward-looking statements and should be read in
conjunction with the factors set forth in the "Forward-looking statements"
section of the MD&A in Item 2 of this Quarterly Report. All dollar amounts in
this Canadian Supplement are in thousands of United States dollars unless
otherwise stated. The Canadian Supplement has been prepared by management to
provide an analysis of the material differences between Canadian GAAP and U.S.
GAAP on GSI Lumonics Inc.'s financial condition and results of operations.

Results of Operations



                                              Three months ended                   Six months ended
                                       -------------------------------     -------------------------------
                                       June 28, 2002     June 29, 2001     June 28, 2002     June 29, 2001
($000s)                                -------------     -------------     -------------     -------------
                                                                                
Income (loss) before income taxes
     - Canadian GAAP ..............     $ (11,069)           $ 6,385       $ (20,412)           $ 15,303
     - U.S. GAAP ..................     $ (11,782)           $ 5,427       $ (22,002)           $ 12,953

Net income (loss)
     - Canadian GAAP ..............     $ (10,673)           $ 4,123       $ (16,749)           $  9,641
     - U.S. GAAP ..................     $ (11,112)           $ 3,585       $ (17,732)           $  8,364

Net income (loss) per common share
diluted
     - Canadian GAAP ..............     $  (0.26)            $ 0.10        $  (0.41)            $  0.24
     - U.S. GAAP ..................     $  (0.27)            $ 0.09        $  (0.44)            $  0.20



Business Combinations

On March 22, 1999, Lumonics Inc. and General Scanning, Inc. ("General Scanning")
completed a merger of equals to form the Company. Under Canadian GAAP, the
merger was accounted for using the pooling of interests method and the
consolidated financial statements reflect the combined historical carrying
values of the assets, liabilities, stockholders' equity and the historical
operating results of the two predecessor companies.

Under US GAAP, the merger has been accounted for as a purchase transaction. The
purchase price, based on the fair value of General Scanning shares purchased, is
allocated in the consolidated financial statements to acquired net identifiable
General Scanning assets. Property, plant and equipment and acquired intangible
assets were recorded at their estimated fair values at the time of the 1999
acquisition and are being amortized over their useful life.

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The Canadian GAAP loss was lower than the corresponding U.S. GAAP amounts due to
amortization of lower net book values of property, plant and equipment and
acquired intangible assets resulting from different methods of accounting for
the business combination. The different net book values resulted in a lower
depreciation and amortization expense under Canadian GAAP by $0.7 million and
$0.9 million for the three months ended June 28, 2002 and June 29, 2001,
respectively. For the six months ended June 28, 2002 and June 29, 2001, the
impact of this difference was to decrease depreciation and amortization expense
under Canadian GAAP by $1.6 million and $1.8 million, respectively.

Stock compensation expense is not recorded in the Company's earnings under
Canadian GAAP. Under US GAAP, there were no events during the three months ended
June 28, 2002 or June 29, 2001 that gave rise to compensation expense. For the
six months ended June 28, 2002 and June 29, 2001, compensation expense of nil
and $0.2 million were recorded, respectively.

Under Canadian GAAP, global investment tax credits are required to be netted
against research and development expense. Under U.S. GAAP, these amounts are
included in the income tax provision. For the three months ended June 28, 2002
and June 29, 2001, the Canadian GAAP net income before income taxes was nil and
$0.1 million more than the U.S. GAAP net income before income taxes,
respectively. For the six months ended June 28, 2002 and June 29, 2001, the
impact of this difference was to increase net income before income taxes under
Canadian GAAP by nil and $0.4 million, respectively.

The Canadian GAAP income tax provision (benefit) does not reflect any income tax
recovery for the depreciation and amortization and investment tax credits
presented only under US GAAP.

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