Briefly:

(September 2, 2005) B2B Trust has increased the maximum amount of its Accelerator Investment Loan product to $100,000 from $50,000.

Under the terms of the loan, B2B Trust finances 100% of the client’s investment for the purchase of eligible non-registered mutual funds.

Investors are not required to make monthly principal payments, only interest, and there will be no margin calls should the value of their investment fall. Investors are free to pay down or pay off the loan at any time without fees or penalties.

The product is designed for financial advisors who have clients with a high risk tolerance, limited collateral, a good credit rating and a desire to increase their participation in mutual fund or segregated fund investments, B2B says.

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CIBC bullish on energy, TSX

(September 2, 2005) CIBC World Markets says it is increasing its weighting in the energy sector as a result of high oil prices. In a commentary, CIBC says energy now accounts for 35% of it equity portfolio, up two percentage points from last month.

“Our revised energy targets will also push up our TSX composite target for next year by 800 points, from 11,000 to 11,800.” Virtually all of those gains will gain from energy stocks, CIBC expects, although the investment bank is also overweight in telecom and utility stocks, due to their attractive dividend yields.

CIBC is also reducing exposure to the financial sector by two percentage points, “on account of already rich multiple earnings by banks and a flattening yield curve.”

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CRA announces interest rates for Q4

(September 2, 2005) The Canada Revenue Agency today announced the annual interest rates applied to amounts owed to the CRA and to any amounts the CRA owes to individuals and corporations.

The interest rate charged on overdue taxes, CPP contributions, and employment insurance premiums will be 7%. The rate paid on overpayments to the CRA will be 5% and rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans will be 3%.

The rates are calculated quarterly and will be in effect from October 1, 2005, to December 31, 2005.

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Canadian regulators team up to penalize U.S. securities firm

(September 1, 2005) OptionsXpress, an Internet-based securities firm in Chicago, has been penalized more than half-a-million dollars for trading in Canada without registration.

Options permitted Canadians to open internet accounts to trade securities in the U.S., in violation of securities laws.

The agreement requires Options to pay a total of $550,000 to the regulators of the 10 Canadian jurisdictions in which the firm was trading.

The company was also ordered to join the IDA and register with provincial regulators by the end of the year. Until then, it cannot open any new accounts for Canadian customers.

From 2001 to 2004, Options opened nearly 1,500 accounts in Canada, earning gross commissions of more than $2 million.

“By coordinating the settlement process, we were able to avoid the unnecessary expense and procedural complexity of 10 settlement agreements with 10 regulators,” said Kelley McKinnon, chief litigation counsel at the Ontario Securities Commission. “This serves our aim of reducing the regulatory burden on the marketplace.”

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Hub acquires B.C. firm

(September 1, 2005) Hub International today announced the acquisition of Cranbrook, B.C.-based Innovators Insurance Agencies, which serves the Kootenay region of the province. Innovators, founded in 1973, will become part of Hub International Barton, which services B.C.

Terms of the deal were not released. Innovators generated revenue of approximately $1 million in 2004.

“Shawn Trimble, president of Innovators, and his team have built a strong reputation and client base in the Kootenay region, specializing in personal, automobile and commercial insurance,” said Jim Barton, president of Hub Barton. “We look forward to a solid contribution from the Trimble team.”

“After establishing a strong track record and solid customer relationships in our region, we are now relishing the opportunity to continue building and growing our business as part of HUB Barton,” Trimble added.

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Altamira savings product continues to boost sales for fundco

(September 1, 2005) Altamira’s high-interest savings account generated $282 million in sales for the company last month, eclipsing mutual fund redemptions of nearly $37 million.

The Altamira High-Interest Cash Performer offers an interest rate of 2.4%, the same as ING’s current rate, as well as a trailing commission of 0.25% to advisors.

The popular product, launched last December, now has assets of $1.9 billion, about one-third of Altamira’s total assets under management.

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Watson Wyatt projects higher salary increases

(September 1, 2005) Salary increases may have reached a turning point, according to Watson Wyatt — for the first time since 2001, both actual and forecast increases are higher than the previous year.

After three years of declining salary increases, Canadian employees received an average 3.3% raise in 2005, compared to 3.2% the previous year.

The trend towards higher increases is also reflected in employers’ forecasts for next year. Canadian employers expect to provide salary increases in 2006 of 3.3%, slightly higher than the 3.1% predicted for 2005, but in-line with actual increases.

“As the economy continues to improve and the competition for high-performing individuals intensifies, employers will face increasing pressure to raise salaries at a faster rate to attract and retain talented employees,” said Graham Dodd, national practice director for Watson Wyatt Canada’s Human Capital Group. “However, these increases should be tied to performance in ways that reflect and reward key employees and increase value to shareholders.”

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CFA Institute elects new chair

(September 1, 2005) CFA Institute has elected John Stannard as chair of the professional association’s board of governors. Stannard is managing director of client service for Russell’s institutional investment group.

He replaces Montreal’s Monique Gravel, who will continue to serve on the board for one year as past chair. Vincent Duhamel, managing director of Goldman Sachs (Asia), will serve as vice-chair.

Toronto CFA Margaret Franklin also sits on the CFA Institute’s 20-member board.

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Income fund switches managers

(August 31, 2005) Claymore Investments has appointed Alan Wicks and Duncan Anderson of MFC Global as portfolio managers of the preferred share assets of the Canadian Financial Income Fund, replacing Stephen Dunn.

Wicks and Anderson also manage more than $50 million in preferred share assets on behalf of the Elliott & Page Dividend Fund and the Maritime Life Dividend Fund. They are also members of MFC Global’s Canadian Value Equity team, which manages more than $5 billion in assets.

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Homes getting more affordable, RBC says

(August 31, 2005) Low mortgage rates helped improve housing affordability in the second quarter, according to a report by RBC Economics.

“For the most part, affordability improved in the second quarter across Canada with Alberta, and to a lesser extent Saskatchewan being the exceptions,” said economist Allan Seychuk. “Affordability probably looks as good as it will get in the near term as mortgage rates are on the rise.”

RBC’s affordability index measures the proportion of pre-tax household income needed to service the costs of owning a home. Condos were most affordable at 25%, while a detached bungalow took up 36% of median pre-tax income. A standard two-storey home was the least affordable with an index reading of nearly 42%.

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Insurance regulator re-launches website

(August 31, 2005) The Financial Services Commission of Ontario, the province’s insurance regulator, today unveiled its redesigned website.

FSCO says the new site will make it easier for consumers to get information on insurance, pensions and other financial services.

“This initiative supports FSCO’s commitment to increase and enhance the delivery of services and information electronically,” said Cheryl Cottle, FSCO’s acting superintendent.

The redesign is based on research and analysis, as well as input from consumers and other regulators. The site can be viewed at www.fsco.gov.on.ca.

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Scotia’s profits near $800 million

(August 30, 2005) Scotiabank today reported third-quarter earnings of $784 million, up 7% from last year. Earnings per share rose to $0.77, an 8.5% increase from 2004.

“This quarter’s results reflect strong broad-based gains across all three of our growth platforms — domestic banking, Scotia Capital and international banking — continuing the success of our strategy of diversifying geographically across business lines,” said bank CEO and president Rick Waugh.

For the nine-month period ended July 31, 2005, net income was a record $2.4 billion. Scotiabank also announced a dividend of $0.34 per common share for the quarter ending October 31, 2005.

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Acuity files prospectus for new income trust

(August 30, 2005) Acuity Funds has filed a preliminary prospectus for the Acuity Multi-Cap Total Return Trust, a closed-end investment intended to provide unitholders with monthly distributions and enhance long-term returns within the portfolio.

The trust will invest in an actively managed diversified portfolio of securities consisting primarily of units of large-cap, mid-cap and small-cap income funds. To a lesser extent, Acuity will invest in equity securities of issuers that it believes may convert into income funds in the future as well as in equity securities of issuers that have publicly announced their intention to convert into an income fund.

Acuity Investment Management will provide investment advisory and portfolio management services to the trust.

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Former Rampart branch manager suspended for three years

(August 30, 2005) Lawrence Freedman, a former branch manager with Rampart Securities in Toronto, has been banned from the securities industry for three years and fined $35,000 by the IDA.

An IDA hearing panel found that between January 1999 and February 2002, Freedman should have made further enquiries and taken steps to personally ensure that transactions involved in the issuance of shares of an Ontario issuer to offshore accounts, and their subsequent disposition, complied with securities regulations.

In addition, the panel ruled that Freedman did not perform adequate due diligence on seven corporate clients and one individual client. Freedman, who has not worked in the industry since September 2002, was also ordered to rewrite the Conduct and Practices Handbook examination as a condition of re-approval.

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Sun Life updates long term care product

(August 30, 2005) Sun Life Financial today introduced Sun Long Term Care Insurance, a new product aimed at providing greater flexibility and benefit choices and protecting the assets of Canadians who require care due to an accident or deteriorating health.

Sun Life says the “next generation” of the product — first launched in 1999 — offers the flexibility to design plans with varying lengths of comprehensive income benefit, facility care income benefit, or a combination of the two and is available from issue aged 21 to 80.

Two inflation protection options are available at the time of purchase, as well as an optional 20-year paid-up feature.

“Requiring care — whether it’s in retirement years or earlier in life — can have a devastating effect on financial security,” said Diana Deverall-Ross, vice-president, individual health insurance for Sun Life Financial Canada. “Beyond the financial toll, the entire family is affected, with adults taking on the additional role of caregiver to a parent or spouse, or incurring the cost of in-home or facility care.”

Sun Life already has in place a dedicated team of long term care insurance specialists who work directly with clients to evaluate their insurance needs.

“Care options run the range from facility care to 24-hour in-home nursing care. With the vast differences in cost, and the varying levels of government funding available in each province, planning for the cost of long term care is complex,” said Deverall-Ross. “We’ve invested significantly in our specialist network because we strongly believe in the need for this product, and we recognize that our specialists are integral to helping people determine their needs and select the appropriate coverage.”

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BMO to provide financial relief for Manitoba farmers

(August 30, 2005) In the wake of record rainfall and devastating flooding in Manitoba this summer, BMO has set up a financial relief program for agricultural producers.

The BMO Bank of Montreal Flood Relief Program includes possible principal payment deferral and interest rate relief on operating loans, as well as waiver of new loan application or renewal fees for customers currently in good standing.

It is specifically designed for producers affected by the flooding and those in related industries who will see their cash-flow in the coming months impeded given their dependence on a productive agriculture industry, BMO says.

The program will expire on October 31, 2006, giving producers time to market a portion of next year’s crop.

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Integral Wealth signs up with CNQ

(August 30, 2005) Integral Wealth Securities, a full-service financial advisory firm, is joining electronic stock exchange CNQ as a participating dealer.

Integral joins numerous other participating dealers include BMO Nesbitt Burns, Canaccord Capital, Scotia Capital and TD Securities.

CNQ began operations two years ago and was recognized by the Ontario Securities Commission as a full stock exchange in May 2004.

There are currently 49 companies listed on CNQ, 19 investment dealers from across Canada with direct access to the market and 20 dealers participating indirectly.

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Ragan re-joins C.D. Howe advisory council

(August 30, 2005) Christopher Ragan, an associate professor of economics at McGill University in Montreal, is re-joining the C.D. Howe Institute’s Monetary Policy Council.

Ragan was a member of the council when it was created in 2003 to provide an independent assessment of the Bank of Canada’s interest rate movements. He resigned in 2004 to take a one-year position as Special Advisor to the Governor of the Bank of Canada.

Ragan replaces John Chant, economics professor at Simon Fraser University, who is stepping down after a two-year term.

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Quebec’s finance minister angered by Norbourg situation

(August 29, 2005) Quebec’s finance minister says he supports efforts by police and regulators to shut down Norbourg Asset Management.

“Like everyone, I am incensed by this situation, which is extremely unfortunate for those who entrusted this company with their savings,” Michel Audet said in a statement. “However [last week’s] operation should limit the potential losses.”

Last Thursday, Quebec regulator AMF ordered the Montreal-based fund manager to cease activities and froze its assets, alleging that nearly $70 million belonging to investors in the Evolution and Norbourg fund families have been embezzled.

Norbourg’s president, Vincent Lacroix, spoke on the allegations for the first time this past weekend in an interview with Montreal’s La Presse, promising to cooperate fully with the investigation.

“We will put all our efforts into getting each investor’s money back,” he said, but refused comment on the specific accusations against his firm.

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Teachers buys U.S. pet food company

(August 29, 2005) The private investment arm of the Ontario Teachers’ Pension Plan has signed an agreement to buy Doane Pet Care Company, the largest manufacturer of private label pet for in the U.S., for $1 billion.

The company serves many of the top pet food retailers in the U.S., Europe and Japan. Doane’s president and CEO, Doug Cahill, says the new ownership structure will enable the company to further develop its global business and U.S. market position. “With the long-term commitment and financial stability provided by the Ontario Teachers’, we have a unique opportunity to offer an even higher level of product innovation and marketing support to help new and existing customers build their brands.”

“We are extremely pleased with the opportunity to invest in a market-leading U.S. company,” says Ontario Teachers’ senior vice president, Jim Leech. “The U.S. is a key market for us. We look forward to working with Doane’s excellent management team to help grow this business.”

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Mackenzie renames fund, changes mandate

(August 29, 2005) Unitholders in the Mackenzie Universal Financial Services Capital Class fund gave Mackenzie Financial approval this morning to change the fund’s mandate and invest in a wider range of global companies. The fund will be renamed the Mackenzie Maxxum Global Explorer Capital Class, effective August 30, to better reflect the new mandate.

The fund, launched in October 2000, invests in financial services companies and a variety of other equity investments. At least 35% of the fund’s assets will be invested in North American securities. Annual management fees are 2.25% or 1.25% for F-class shares. Minimum investment is $500.

“We’re searching for those stories where a good company in a solid business is temporarily broken, overlooked or trading in the low range, but has the necessary elements for a comeback,” says lead manager Alan Pasnick. “Strong management, free cash flow, and good dividend yields are reliable signs of value in an otherwise depressed stock. Valuation is key.”

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GE plans to enter Canadian banking

(August 29, 2005) General Electric has announced plans to apply to the federal Minister of Finance for permission to incorporate a bank in Mississauga, Ontario. The company would carry on business in Canada under the names GE Money Bank Canada and Banque GE Money du Canada.

GE Consumer Finance currently provides financial services including include private label credit cards, personal loans, bank cards, auto loans and leases, mortgages, corporate travel and purchasing cards, debt consolidation, home equity loans and credit insurance to consumers and retailers in 47 countries around the world.

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KPMG fined in U.S. tax shelter scheme

(August 29, 2005) Accounting firm KPMG has been fined $456 million US after admitting it helped high net worth investors avoid paying billions in taxes by developing and marketing fraudulent tax shelters in the late 1990s.

Eight former KPMG executives and a tax lawyer who worked with the firm were also charged with conspiring to defraud the U.S. Internal Revenue Service.

KPMG stopped offering the tax shelters in 2002.

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