Securities Law & Instruments

Headnote

Application by former wholly owned subsidiaries of public income trust and investment trust for an order designating applicants to be reporting issuers -- applicants are the public corporate entities that will continue following a transaction whereby unitholders of the income trust will exchange their ordinary units for common shares of one of the applicants and a trust will transfer shares of certain subsidiaries and inter-company debt to the other applicant in return for common shares and convertible debentures -- conversion transaction effected by way of plan of arrangement under the Canada Business Corporation Act pursuant to an arrangement agreement -- income trust and investment trust will be wound-up on effective date of conversion -- requested order harmonizes regulatory treatment of applicant across Canada.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(11).

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, c.S.5, AS AMENDED

(the "Act")

AND

IN THE MATTER OF

ENERCARE INC. AND

ENERCARE SOLUTIONS INC.

ORDER

(Clause 1(11)(b))

UPON the application (the "Application") of EnerCare Inc. ("New Consumers") and EnerCare Solutions Inc. ("New Consumers' Holdco" and together with New Consumers, the "Applicants") for an order pursuant to clause 1(11)(b) of the Act that, for the purposes of Ontario Securities law, the Applicants become reporting issuers in Ontario as of January 1, 2011 (the "Effective Date");

AND UPON considering the Application and the recommendation of staff of the Ontario Securities Commission (the "Commission");

AND UPON the Issuer having represented to the Commission that:

1. New Consumers was incorporated under the laws of Canada on September 27, 2010 under the name 7660251 Canada Inc. New Consumers changed its name from 7660251 Canada Inc. to EnerCare Inc. effective October 8, 2010.

2. New Consumers is a direct wholly-owned subsidiary of The Consumers' Waterheater Income Fund (the "Fund"), an unincorporated open-ended investment trust established on October 28, 2002 under the laws of the Province of Ontario.

3. The Fund's head office is located at 2 East Beaver Creek Road, Building 2, Richmond Hill, Ontario, L4B 2N3.

4. The Fund is a reporting issuer (or the equivalent thereof) in each of the provinces and territories of Canada (the "Reporting Jurisdictions") and, to its knowledge, is currently not in default of any applicable requirements under the securities legislation thereof.

5. The Fund has trust units (the "Units') and convertible debentures (the "Convertible Debentures") listed and posted for trading on the Toronto Stock Exchange (the "TSX") under the symbols "CWI.UN" and "CWI.DB".

6. New Consumers' Holdco was incorporated under the laws of Canada on September 27, 2010 under the name 7660260 Canada Inc. New Consumers' Holdco changed its name from 7660260 Canada Inc. to EnerCare Solutions Inc. effective October 8, 2010.

7. New Consumers' Holdco is a direct wholly-owned subsidiary of The Consumers' Waterheater Operating Trust (the "Trust"), an unincorporated open-ended investment trust established on November 18, 2002 under the laws of the Province of Ontario. The Trust is a direct wholly-owned subsidiary of the Fund.

8. The Trust's head office is located at 2 East Beaver Creek Road, Building 2, Richmond Hill, Ontario, L4B 2N3.

9. The Trust is a reporting issuer (or the equivalent thereof) in each of the Reporting Jurisdictions and, to its knowledge, is currently not in default of any applicable requirements under the securities legislation thereof.

10. The Trust has outstanding to the public $60,000,000 aggregate principal amount of 6.20% series 2009-1 senior notes, due April 30, 2012 (the "Series 2009-1 Notes"), $270,000,000 aggregate principal amount of 6.75% series 2009-2 senior notes, due April 30, 2014 (the "Series 2009-2 Notes") and $240,000,000 aggregate principal amount of 5.25% series 2010-1 senior unsecured notes, due March 15, 2013 (the "Series 2010-1 Notes" and together with the Series 2009-1 Notes and the Series 2009-2 Notes, the "Senior Notes").

11. The Trust does not have any securities listed or posted for trading on any exchange or quotation and trading system.

12. The registered office of each of the Applicants is 2 East Beaver Creek Road, Building 2, Richmond Hill, Ontario, L4B 2N3.

13. The Fund plans to convert from an income trust to a corporation on or about January 1, 2011 (the "Conversion Transaction").

14. The Conversion Transaction will be effected by way of a plan of arrangement under the Canada Business Corporations Act pursuant to an arrangement agreement to be entered into between, among others, the Fund, the Trust, New Consumers and New Consumers' Holdco.

15. New Consumers will have conducted no business prior to the Effective Date.

16. Prior to the Effective Date, New Consumers will not be a reporting issuer in any jurisdiction and its shares will not be listed or posted for trading on any exchange or quotation and trade reporting system.

17. New Consumers' Holdco will have conducted no business prior to the Effective Date.

18. Prior to the Effective Date, New Consumers' Holdco will not be a reporting issuer in any jurisdiction and its shares will not be listed or posted for trading on any exchange or quotation and trade reporting system.

19. On the Effective Date, among other things:

(a) unitholders of the Fund will receive one common share of New Consumers (a "New Consumers Share") for each Unit held;

(b) the Trust will transfer the shares of certain subsidiaries and certain inter-company debt to New Consumers' Holdco in return for common shares and debt of New Consumers' Holdco and the assumption by New Consumers' Holdco of the Senior Notes;

(c) the Trust will be dissolved and will distribute the common shares and debt of New Consumers' Holdco to the Fund;

(d) the Fund will be dissolved and will distribute the common shares and debt of New Consumers' Holdco to New Consumers; and

(e) New Consumers will assume the Convertible Debentures, which will become convertible for New Consumers Shares (the "New Consumers Convertible Debentures").

20. New Consumers will continue the business of the Fund following the Effective Date and it is intended that New Consumers will be a reporting issuer (or equivalent thereof) in all the Reporting Jurisdictions and that the New Consumers Shares and the New Consumers Convertible Debentures will be listed and posted for trading on the TSX.

21. New Consumers' Holdco will continue the business of the Trust following the Effective Date and it is intended that New Consumers' Holdco will be a reporting issuer (or equivalent thereof) in all the Reporting Jurisdictions.

22. The TSX has indicated that the New Consumers Shares will be listed on the Effective Date, subject to the prior receipt of certain standard documents. The New Consumers Shares will not be posted for trading on the TSX until two or three trading days after the Effective Date.

23. As a result of the varying definitions of "reporting issuer" contained in Canadian securities legislation, on the Effective Date each of the Applicants will, by operation of law, automatically become reporting issuers in each of the Reporting Jurisdictions, except Ontario.

24. The definition of "reporting issuer" in clause 1(1) of the Act will not, by operation of law, confer upon the Applicants status as reporting issuers upon completion of the Conversion Transaction on the Effective Date.

25. Each Applicant has made the Application so that it will be a reporting issuer in all of the Reporting Jurisdictions on the Effective Date.

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

IT IS ORDERED pursuant to clause 1(11)(b) of the Act that, for purposes of Ontario securities law, the Applicants shall become reporting issuers on the Effective Date.

DATED in Toronto on this 14th day of December, 2010.

"Carol S. Perry"
Commissioner
Ontario Securities Commission
 
"James D. Carnwath"
Commissioner
Ontario Securities Commission