• Capital gains are taxed at much lower rates than interest income, dividend income and foreign source non business income. The capital gains inclusion rate was 50% for 2002. The T-3 or T-5 you receive from your investment dealer will show the breakdown of the capital gains received from any of the Quadravest products.
• Dividends received from Canadian companies are taxed at a much lower rate than interest income. This is because the corporation has already paid tax on its earnings before paying a dividend to the Fund. On your tax return, you actually report a grossed-up dividend and then claim an offsetting dividend tax credit. The T-3 or T-5 you receive from your investment dealer will show the breakdown of the dividend income received from any of the Quadravest products.
• Interest income received from a money market instrument or bond is fully taxable in the same manner as a salary or pension.
• Foreign non business income includes foreign dividends and are fully taxable, however there will be a credit for any foreign withholding taxes paid.
• Non-taxable distributions received must be used by the investor to reduce the adjusted cost base (ACB) of their shares/units. This will impact the capital gains realized by each investor upon any future dispositions of the shares/units. As an example, if a 50 cent per unit non-taxable distribution was received during the year, the investor would reduce the cost base of each unit by 50 cents.

General Tax Information

1.	* Based on top combined Federal/Ontario personal marginal rate.
2.	Tax rates on Capital Gains, Dividend Income and Interest Income at the highest combined federal/provincial rate (Ontario) are:
	Type Of Income 2004 Capital Gains 23.21% Dividend Income 31.34% Interest Income 46.41%
3.	On a before tax yield equivalent basis, a 10% capital gain yield is now equivalent to pre tax interest income of approximately 14.3%.
4.	The table below lists Top Personal Marginal Rates (%) effective for the 2004 tax year for the top federal tax bracket.
	Capital Gains Canadian Dividends Interest & Ordinary Income Quebec 24.1 32.8 48.2 Nfld 24.3 37.3 48.6 B.C. 21.8 31.6 43.7 Sask. 22.0 28.3 44.0 N.B. 23.4 37.3 46.8 P.E.I. 23.7 32.0 47.4 N.S. 24.1 33.1 48.2 Manitoba 23.2 35.1 46.4 Ontario 23.2 31.3 46.4 Yukon 21.2 28.6 42.4 Alberta 19.5 24.1 39.0 N.W.T. & Nun. 20.3 26.5 40.5

Rates include all federal, provincial and territorial income taxes and surtaxes.

The information presented may change at any time as a result of further tax changes made at the federal or provincial level and may vary depending on your own personal tax situation. Please contact your tax advisor.