Briefly:

(April 1, 2005) One-hundred and thirty-seven Ontario Securities Commission employees earned more than $100,000 in 2004, according to the provincial government. That’s up from 106 the previous year.

Topping the list is chair David Brown, whose annual salary was nearly $642,000. Brown is leaving the OSC in June. Executive director Charlie Macfarlane earned more than $457,000 in 2004, while vice-chair Paul Moore pulled in nearly $436,000.

Meanwhile, 29 employees of the Financial Services Commission of Ontario, the province’s insurance regulator, made at least $100,000 in 2004.

The Ontario government releases salary information annually under the terms of the 1996 Public Sector Salary Disclosure Act.

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Alterna Savings opens its doors

(April 1, 2005) Ontario’s newest credit union, Alterna Savings, was officially launched on Friday in 24 branches across the province. Alterna — created when Toronto’s Metro Credit Union merged with Ottawa-based CS Co-op in February, — is the third largest credit union in Ontario, serving nearly 200,000 members.

“The name Alterna Savings conveys our mandate, which is to be the preferred alternative when people and businesses are looking for a financial services provider,” says chief executive Gary Seveny.

“We will be at the forefront of the financial services industry by building a stronger community-based alternative for the people of Ontario.”

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Skylon introduces Y.I.E.L.D. notes

(April 1, 2005) Skylon Advisors today announced the launch of a new series of principal-protected notes, the Bank of Montreal Skylon Y.I.E.L.D. Notes, Series 1.

The 6.6-year note pays a 5% coupon at the end of 2005 and has the potential to pay an annual variable coupon of up to 11% over the remaining six years, Skylon says.

The interest is linked to the performance of a basket of equally-weighted securities of 10 Canadian issuers, including Bank of Nova Scotia, CI Fund Management and TD Bank. If every security’s price return remains positive, each annual interest payment will be 11%. If the price of each security has not increased or the simple average is zero or negative, there will be no interest payable for that period.

“Investors have the opportunity to benefit from the quality and well-recognized names in the portfolio, the potential attractive yield and the principal protection that the structure of the notes provides,” said Skylon CEO David McBain.

The notes are available until May 6, with a minimum investment of $2,000.

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S&P unveils new bond index

(April 1, 2005) Standard & Poor’s today launched Canada’s first independent fixed-income index. The S&P/TSX Canadian Bond Index was developed in collaboration with CIBC World Markets and RBC Capital Markets, and the TSX will be responsible for its distribution.

The new index is comprised of 901 issuers with a total market value of more than $600 billion. It is designed to represent the market performance of investment-grade bonds issued by Canadian companies and the government sector.

“The same index construction and maintenance techniques that have earned Standard & Poor’s equity market indices a reputation of objectivity and integrity are embodied in the S&P/TSX Canadian Bond Index,” said S&P vice president Steve Rive. “As a result, investors now have access to independent benchmarks for measuring and comparing investment performance in both the equity and debt capital markets.”

The index is the first in Canada that is not managed by a party directly involved in the trading or underwriting of bonds, and the first that features multi-dealer pricing for index-valuation purposes, S&P says. A bond must have a minimum of two price providers to be eligible for inclusion in the index.

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Skylon launches new series of notes

(March 31, 2005) CI Mutual Funds and Skylon Advisors have introduced the Bank of Montreal CI C.A.P.I.T.A.L. Deposit Notes, Enhanced Yield Class, Series 2. The first series of principal-protected noted attracted more than $240 million in assets, Skylon says.

“The Series 2 notes have a similar structure as the Series 1 notes, the first fund-linked notes in Canada to offer 100% principal protection at maturity in which the principal protection is not diminished by the monthly distributions,” says David McBain, CEO of Skylon, which developed and is marketing the notes in cooperation with CI.

The new notes provide a total return over an eight-year period linked to the performance of the Signature Income & Growth Fund, managed by CI and lead portfolio manager Eric Bushell. The fund aims for annual distributions of 7% through a combination of income and capital gains.

The notes are available until May 6 with a minimum investment of $2,000.

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OAS rates climb 0.4%

(March 31, 2005) The federal government is boosting Old Age Security and Guaranteed Income Supplement rates by 0.4%, effective April 1.

The basic OAS pension, paid to people 65 years of age and over, will be $473.65 per month, while the GIS rate rises to $562.93.

OAS and GIS rates are linked to changes to the rate of inflation.

In the February budget, Ottawa announced the first non cost-of-living increase to the GIS in more than 20 years. Starting in 2006, the GIS will be bumped by 7% over a two year period.

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FCAC introduces complaint database

(March 31, 2005) The Financial Consumer Agency of Canada has launched an on-line database aimed at helping consumers work their way through the complaint process.

“What’s unique about this tool,” explains FCAC Commissioner Bill Knight, “is that it gives Canadians specific information on who to contact for each step. For example, rather than telling consumers that they can contact the ombudsman at their bank, we tell them exactly who to speak to and provide them with the relevant contact information for that person. All the consumer has to do is enter the name of his/her financial institution, and the tool’s searchable database will list the process to follow, including the contact information for each step.”

All banks and federal financial institutions are required to have a complaint-handling process. FCAC is responsible for ensuring that these processes are in place, and that the relevant information is available to consumers.

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Egelton joins C.D. Howe’s monetary policy council

(March 31, 2005) BMO chief economist Richard Egelton has been appointed to the C.D. Howe Institute’s monetary policy council. He replaces Lloyd Atkinson, who recently stepped down.

Egelton has more than 25 years experience as an economist, working at the department of finance in Ottawa before joining BMO in 1997.

The 12-member council meets regularly to discuss the central bank’s interest rate policy and issues recommendations for rate changes.

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BMO to sharpen focus on customers, revenues

(March 30, 2005) With a renewed focus on increasing revenues, BMO Financial Group president and CEO Tony Comper said Wednesday that the key lies within a “total customer orientation throughout the enterprise.”

Speaking to an audience gathered at the National Bank Financial Canadian Financial Services Conference in Montreal, Comper noted that BMO has undertaken a number of large-scale initiatives to forge deeper bonds with customers, including multi-million dollar investments in technology for its frontline sales staff and implementing staff incentives that reward a strong customer service and sales performance.

“We are also starting to do a much better job of coordinating and intensifying our efforts to meet a larger share of our customers’ needs through new Sales Councils in Canada and the One Harris initiative in the U.S., both of which promote a customer-focused dedication to cross-business referrals,” said Comper. “In addition, I am personally spearheading a major drive to create a higher-performance work environment throughout the enterprise.”

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Small business confidence continues to climb

(March 30, 2005) Business confidence climbed for a third consecutive quarter in March, according to the latest survey of small- and medium-sized enterprises by the Canadian Federation of Independent Business (CFIB).

According to CFIB chief economist Ted Mallett, the business confidence index remains at a level that suggests overall healthy growth for the Canadian economy, while job creation plans are at their highest level since early 2002.

Thirty-seven per cent of all business owners say their firms are doing much or slightly better than a year ago and 53% of all businesses expect improved performance for their firms a year from now.

Also of note, 33% of business owners planning to increase full-time employment over the next year, while only 6% foresee reducing employment levels in the next 12 months.

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NWQ new sub-advisor on select Talvest, Renaissance funds

(March 30, 2005) CIBC today announced Tuesday that NWQ Investment Management Company (NWQ) will replace Capital Guardian Trust Company as portfolio sub-advisor for Talvest Global Equity Fund and Renaissance Tactical Allocation Fund, effective May 1, 2005.

“NWQ was selected following a thorough review for its strong value- oriented approach,” said Brenda Bartlett, president and chief operating officer, CIBC Asset Management Inc.

NWQ, a Los Angeles-based affiliate of Nuveen Investments Inc., has more than $30 billion in assets under management (as of December 31, 2004) and serves institutions and individual private clients through U.S. equity, global equity and balanced portfolios that span all capitalization ranges.

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Overhaul tax system, paper urges

(March 29, 2005) Canada should consider a number of major reforms to create a “smarter” taxation system, according to a paper released on Tuesday by the Institute for Competitiveness & Prosperity.

For instance, governments should think about removing high marginal tax burdens on families with low incomes and shift to a system based on lifetime earnings, the institute says.

“Because social benefits, such as the Child Benefit, are clawed back as incomes rise, families face perversely high effective tax burdens. For example, a single earner couple with two children faces a marginal effective tax rate of 60% as they pass $31,000 in taxable income. As earnings approach $36,000, the marginal effective tax rate reaches 90%.”

And instead of giving taxpayers an annual exemption of around $10,000, the institute suggests exempting the first $250,000 of lifetime earnings from taxation. Income taxes would be imposed after this hurdle is achieved, and the tax rate would rise as accumulated lifetime earnings passed other income levels.

“People with lower incomes could face zero taxation for years and even decades. Those with higher incomes would face lower tax rates. This would occur because the basic personal exemption, which costs the federal government about $23 billion annually in forgone revenue, would be eliminated.”

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Cartier funds to be merged

(March 29, 2005) Investment counselor Goodman & Company has announced merger plans involving three Cartier funds.

Under a proposal to be approved by unitholders in May, the Cartier U.S. Equity Fund and Cartier Global Leaders RSP Fund will be merged into the Cartier Global Equity Fund.

“The proposed mergers will eliminate overlap and achieve cost-efficiencies by merging mutual funds with similar investment objectives,” Goodman said in a statement.

Goodman — a division of Dundee Wealth management — also runs the Dynamic fund family. Dundee purchased Cartier in November, 2003.

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Canadians mortgage rate savvy, survey suggests

(March 29, 2005) Nearly 40% of Canadian homeowners say they prefer the combination of a variable and fixed rate mortgage, according to a housing study from RBC Financial. Thirty per cent favoured fixed rate and 23% liked variable rate.

RBC’s 12th annual home ownership survey also revealed that almost half of those who are planning to buy a house in the next two years will do so with a down payment of at least 25% and that many Canadians mistakenly believe they need at least 11% down to purchase a new home.

“New options such as no-down and low down payment mortgages make it possible for qualified buyers to purchase a home without having to spend years saving up while house prices continue to advance,” RBC points out.

Overall, 91% of homeowners and 79% of renters believe buying a home is a good investment. “Canadians are definitely bullish on housing and they should be,” said Clayton Van Esch, senior manager, Home Equity Financing, RBC Royal Bank. “No matter what the markets are doing, people have faith in the ongoing value of their homes.”

The average Canadian with a mortgage has $109,504 left to pay and expects to take 12 years to pay it off, RBC found.

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Counsel to streamline Select fund lineup

(March 29, 2005) Counsel Group of Funds has announced changes to its Select fund family.

Counsel is seeking unitholder and regulatory approval to merge the assets of Counsel Focus Value with Counsel Focus and re-name the fund Counsel Select America.

The new fund’s investment objectives will be broadened to favour a value mandate.

In addition, Counsel plans to merge the assets of Counsel World Equity with Counsel Select Value and call the new fund Counsel Select International Equity. That fund will follow a growth investment mandate.

If approved, the mergers and changes to the fundamental investment objectives will take place in May, Counsel says.

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Sarbit steps down

(March 28, 2005) Larry Sarbit, manager of the AIC American Focus Fund, is stepping down as manager and resigning from the company as of April 27.

The $1 billion U.S. equity fund has been managed by Sarbit since November 1999. As of February 28, 2005, 77.5% of the fund’s holdings were cash and cash-related instruments.

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Clarington Corporation completes IPO

(March 28, 2005) Clarington Corporation completed its initial public offering of more than six million shares and began trading today on the Toronto Stock Exchange. The IPO of more than six million shares, issued at $13 per share, raised $80.6 million.

The company filed its second preliminary prospectus with regulators in February after its first attempt to join the public market, back in December 2003, failed.

Within two weeks of filing the first prospectus, the company deferred and then postponed the offering, before filing an application with regulators to cease being a reporting issuer.

Today, Clarington’s chairman, Terrence Stone, says the company is pleased with the success of this subsequent offering. He says the proceeds raised by the company’s treasury issue will be used to prepay a portion of the company’s subordinated debt.

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