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Burgundy Asset Management Ltd.
Headnote
Relief granted to the extent that the "Ontario percentage" for each financial year should be calculated as the percentage of the total revenues attributable to capital markets activities in Ontario and not as the percentage of its income allocated to Ontario in the registrant's corporate income tax filings. The registrant's income includes "capital market activities" not attributable to Ontario.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990 c. S.5, as am., Rule 13-502 Fees.
December 1, 2006
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, c. S.5, AS AMENDED (THE "ACT")
AND
IN THE MATTER OF
ONTARIO SECURITIES COMMISSION RULE 13-502
FEES (THE "RULE")
AND
IN THE MATTER OF
BURGUNDY ASSET MANAGEMENT LTD.
DECISION
WHEREAS the Director ("Director") has received an application from Burgundy Asset Management Ltd. ("Burgundy") for a decision, pursuant to section 6.1 of the Rule, that exempts Burgundy, in part, from the requirement to pay participation fees calculated in the matter prescribed by Part 3 of the Rule;
AND WHEREAS the Rule requires that certain registrants under the Act which have a permanent establishment in Ontario, determine their participation fees by taking into account income allocated to Ontario in the corporate income tax filings for the registrant under the Income Tax Act (Canada);
AND WHEREAS Burgundy's corporate income tax filings include income from certain non-Ontario sources where the registrant does not have a permanent establishment in that jurisdiction;
AND WHEREAS unless otherwise defined, the terms herein have meanings set out in Ontario Securities Commission Rule 14-501 -- Definitions;
AND WHEREAS Burgundy has represented to the Director that:
1. Burgundy was incorporated under the laws of the Province of Ontario with its head office in Toronto. Other than its main office in Toronto and its satellite office in Montreal, Burgundy has no other permanent establishment in Canada.
2. Burgundy is a registered adviser in the categories of investment counsel and portfolio manager under the Ontario Act, and as a dealer in the category of limited market dealer under the Ontario Act. Burgundy is also registered as an adviser (or the equivalent) in each province in Canada but not in the territories.
3. Burgundy is not in default of any of the requirements of the securities legislation of Ontario.
4. Burgundy is in the business of providing discretionary management services to clients in each province in Canada.
5. As a registrant firm in Ontario, Burgundy must pay, for each of its financial years, the participation fee shown in Appendix B of the Rule that applies to it according to Burgundy's "specified Ontario revenues" earned from its capital market activities.
6. In accordance with section 3.4 of the Rule, Burgundy's "specified Ontario revenue" for a financial year is calculated by multiplying the gross revenues earned by it as disclosed in its annual financial statements for the financial year less specified deductions, by its "Ontario percentage".
7. Registrants that have a permanent establishment in Ontario must calculate their "Ontario percentage" by referring to the amount allocated to Ontario in their corporate income tax filings made under the Income Tax Act (Canada). Registrants who do not have a permanent establishment in Ontario must calculate their Ontario percentage by determining the percentage of their total revenues which are attributable to their capital markets activities in Ontario.
8. Burgundy does not have a permanent establishment in any other jurisdiction in Canada other than Ontario and Quebec. Accordingly, Burgundy reports all of its Ontario income and all of its non-Ontario income, excluding its income earned in Quebec, in its Ontario corporate income tax returns. Burgundy does not file corporate income tax returns in any other jurisdiction in Canada, except Quebec. Burgundy's corporate tax filings do not distinguish between income attributable to its capital markets activities in Ontario and income attributable to its capital markets activities in jurisdictions outside of Ontario and Quebec.
9. Based on the calculation method disclosed above, there is a material difference between an "Ontario percentage" that is calculated for Burgundy using the amount allocated to Ontario in Burgundy's corporate tax filings and the percentage of Burgundy's total revenues which are attributable to its capital markets activities in Ontario.
AND UPON the Director being satisfied that to do so would not be prejudicial to the public interest;
IT IS THE DECISION of the Director pursuant to section 6.1 of the Rule, that for purposes of calculating capital markets participation fees pursuant to Part 3 of the Rule, Burgundy is granted relief to the extent that the "Ontario percentage" for each financial year of Burgundy is calculated as the percentage of the total revenues of Burgundy attributable to capital markets activities in Ontario and not as the percentage of its income allocated to Ontario in its corporate income tax filings.
"David M. Gilkes"