Securities Law & Instruments


Subsection 83.1(1) - issuer deemed to be a reportingissuer in Ontario - corporation a reporting issuer in BritishColumbia since September 28,2000, in Alberta since October 10,2000, and Ontario since April 17, 1997 - corporation tradeson TSX Venture Exchange - corporation sought to reorganize itselfinto a mutual fund trust by plan of arrangement - definitionof "reporting issuer" in Ontario Securities Act notbroad enough to capture a mutual fund trust.

Applicable Ontario Statutes

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 1(1), 83.1(1).









(Subsection 83.1)

UPON the application of Carfinco Inc.("Carfinco") and Carfinco Income Fund (the "Fund")to the Ontario Securities Commission (the "Commission")for an order pursuant to subsection 83.1(1) of the Act thatthe Fund be deemed to be a reporting issuer for the purposesof the Act upon the effectiveness of a plan of arrangement inrespect of a reorganization of Carfinco (the "Arrangement");

AND UPON considering the applicationof Carfinco and the recommendation of the staff of the Commission;

AND UPON Carfinco having representedto the Commission that:

1. Carfinco was incorporated pursuant to theBusiness Corporations Act (Ontario) on December 30,1996.

2. Carfinco's common shares commenced tradingon the Canadian Venture Exchange (now the TSX Venture Exchange,the "TSXV") on October 10, 2000 under the symbol"YCR" and Carfinco is currently in good standingunder the rules, regulations and policies of the TSXV.

3. Carfinco became a reporting issuer in (i)British Columbia on September 28, 2000, (ii) Alberta on October10, 2000, and (iii) Ontario on April 17, 1997.

4. The Fund was established pursuant to adeed of trust dated August 26, 2002 and is governed by thelaws of the Province of Ontario.

5. Pursuant to the Arrangement and subjectto the satisfaction or waiver of certain conditions and thereceipt of all necessary approvals, including the approvalof Carfinco's securityholders, Carfinco will be reorganizedinto a mutual fund trust, the Fund, on the date the Arrangementbecomes effective, which is anticipated to be on or aboutOctober 25, 2002 (the "Effective Date").

6. Upon completion of the Arrangement, theformer shareholders of Carfinco will be holders of all ofthe outstanding trust units of the Fund and the Fund willbe the sole beneficiary of a newly established trust whichwill be a limited partner of, and hold an approximately 86%partnership interest in, Carfinco Limited Partnership ("CarfincoLP") which partnership holds substantially all of theassets of Carfinco and its wholly-owned subsidiary, CanadianAutomotive Finance Corporation, and will continue to conductthe business of Carfinco. The Fund will also own all of theshares of an amalgamated company which will be the generalpartner of, and hold approximately 14% partnership interestin, Carfinco LP.

7. On the Effective Date, the common sharesof Carfinco will be de-listed from the TSXV.

8. Carfinco and the Fund have made an applicationto list the trust units of the Fund on the TSXV; such listingis a condition precedent to the effectiveness of the Arrangement.

9. On the Effective Date the Fund will becomea reporting issuer in the Provinces of British Columbia andAlberta by virtue of the definition of "reporting issuer"contained in the Securities Act (British Columbia)and the Securities Act (Alberta).

10. On the Effective Date the Fund will not,however, become a reporting issuer in Ontario, since it willnot satisfy the definition of "reporting issuer"contained in the Securities Act (Ontario) because,in the context of the Arrangement, the applicable provisionof such definition is limited to a "company" andtherefore is not broad enough to capture the Fund.

11. Five of the Fund's seven trustees areOntario residents.

12. As at August 29, 2002, Carfinco had approximately72% of the beneficial holders of its shares resident in Ontario.

AND UPON the Commission being satisfiedthat to do so would not be prejudicial to the public interest;

IT IS ORDERED, pursuant to subsection83.1(1) of the Act, that the Fund be deemed to be a reportingissuer for the purposes of Ontario securities law as of andfrom the Effective Date.

October 18, 2002.

"Robert W. Korthals"                    "HaroldP. Hands"