Mackenzie Financial Corporation

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- approval of investment fund reorganization because the reorganization does not meet all the pre-approval criteria -- relief granted to new reorganized funds to invest in foreign government securities in line with relief granted to predecessor funds -- subject to conditions -- relief granted to permit top funds to invest in reorganized and continuing funds that hold securities of a fund established for tax deferral purposes post-reorganization -- subject to conditions.

Applicable Legislative Provisions

National Instrument 81-102 Investment Funds, ss. 2.1(1), 2.5(2)(b), 5.5(1)(b), 5.6(1), 5.7(1)(b) and 19.1(2).

March 22, 2021

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF MACKENZIE FINANCIAL CORPORATION (the Filer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for:

(i) on behalf of the Reorganizing Funds (as defined below), approval under clause 5.5(1)(b) of National Instrument 81-102 Investment Funds (NI 81-102) for the proposed reorganizations (the Reorganizations, and each a Reorganization) of certain series of the Reorganizing Funds as set out below (the Affected Series) with the applicable Canada Life Fund (as defined below) (the Approval Sought);

(ii) on behalf of the Mackenzie CL Ivy Foreign Equity LP, Mackenzie CL Ivy Global Balanced (Fixed Income) LP and Mackenzie CL Strategic Income (Fixed Income) LP for an exemption from subsection 2.1(1) of NI 81-102 (the Concentration Restriction) to permit them to invest up to:

a. 20% of its net asset value (NAV) at the time of the transaction in evidences of indebtedness of any one issuer if those evidences of indebtedness are issued, or fully guaranteed as to principal and interest, by supranational agencies or governments other than the government of Canada, the government of a jurisdiction in Canada, or the government of the United States of America, and are rated "AA" by Standard & Poor's Rating Services (Canada) (S&P) or its DRO affiliate (as defined in NI 81-102), or have an equivalent rating by one or more other designated rating organizations or their DRO affiliates; and

b. 35% of its NAV at the time of the transaction in evidences of indebtedness of any one issuer if those securities are issued, or fully guaranteed as to principal and interest, by supranational agencies or governments other than the government of Canada, the government of a jurisdiction in Canada, or the government of the United States of America, and are rated "AAA" by S&P or its DRO affiliate, or have an equivalent rating by one or more other designated rating organizations or their DRO affiliates (such evidences of indebtedness are collectively referred to as Foreign Government Securities) (the Sovereign Debt Relief); and

(iii) on behalf of the Filer's current and future mutual funds managed by the Filer or an affiliate of the Filer (the Top Funds), an exemption from the prohibition in paragraph 2.5(2)(b) of NI 81-102 to permit the Top Funds to purchase and hold a security of a Reorganizing Fund or a Canada Life Fund that holds more than 10% of its NAV in securities of its corresponding LP Fund(s) and other investment funds in the aggregate (the Three-Tier Relief).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of the provinces and territories of Canada, other than Ontario (together with Ontario, the Canadian Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined. The following additional terms shall have the following meanings:

Canada Life Funds means Canada Life Foreign Equity Fund, Canada Life US All Cap Growth Fund, Canada Life Canadian Dividend Fund, Canada Life Canadian Focused Growth Fund, Canada Life Global Balanced Fund, Canada Life Strategic Income Fund and Canada Life Floating Rate Income Fund;

CLIML means Canada Life Investment Management Ltd., an affiliate of the Filer, subsidiary of The Canada Life Assurance Company and manager and trustee and manager of the Canada Life Funds;

LP Funds means Mackenzie CL Ivy Foreign Equity LP, Mackenzie CL US All Cap Growth LP, Mackenzie CL Canadian Dividend LP, Mackenzie CL Canadian Growth LP, Mackenzie CL Ivy Global Balanced LP, Mackenzie CL Ivy Global Balanced (Fixed Income) LP, Mackenzie CL Strategic Income LP and Mackenzie CL Strategic Income (Fixed Income) LP;

Meeting Materials means the notice of meeting and management information circular in respect of the Meetings dated February 19, 2021;

Reorganizing Funds means the Mackenzie Ivy Foreign Equity Fund, Mackenzie US All Cap Growth Fund, Mackenzie Canadian Dividend Fund, Mackenzie Canadian Growth Fund, Mackenzie Ivy Global Balanced Fund, Mackenzie Strategic Income Fund and Mackenzie Floating Rate Income Fund;

Tax Act means the Income Tax Act (Canada); and

Tax Deferred Reorganizing Fund means each of Mackenzie Ivy Foreign Equity Fund, Mackenzie US All Cap Growth Fund, Mackenzie Canadian Dividend Fund, Mackenzie Canadian Growth Fund, Mackenzie Ivy Global Balanced Fund and Mackenzie Strategic Income Fund.

Representations

This decision is based on the following facts represented by the Filer:

The Filer

1. The Filer is a corporation governed by the laws of Ontario and is registered as follows: as an investment fund manager in Ontario, Quebec and Newfoundland and Labrador; as a portfolio manager and exempt market dealer in the Canadian Jurisdictions; as an adviser in Manitoba; and as a commodity trading manager in Ontario.

2. The Filer, with its head office in Toronto, Ontario, is or will be the trustee and manager of the Reorganizing Funds, the LP Funds and the Top Funds.

3. Neither the Filer, the Reorganizing Funds, the LP Funds nor the Top Funds are in default of securities legislation in any of the Canadian Jurisdictions.

CLIML

4. CLIML is a corporation governed under the laws of Canada.

5. CLIML is registered as a portfolio manager in each province and territory of Canada, as an investment fund manager in each of Ontario, Quebec and Newfoundland and Labrador, and as a commodity trading manager in Ontario.

6. CLIML will act as manager and trustee for the Canada Life Funds.

The Reorganizing Funds, Canada Life Funds and the LP Funds

7. The Reorganizing Funds are, and the Canada Life Funds are expected to be, mutual funds established under the laws of Ontario. Each of the Reorganizing Funds are, and the Canada Life Funds are expected to be, reporting issuers under the securities legislation of the Canadian Jurisdictions.

8. Units of the Affected Series of the Reorganizing Funds and Canada Life Funds generally are, or will be, qualified for sale under one or more simplified prospectuses, annual information forms and fund facts documents (collectively, the Offering Documents).

9. Series S units of each of the Reorganizing Funds and the corresponding Canada Life Funds will be offered only on an exempt distribution basis, as is the case with Series CL of each of Mackenzie Ivy Foreign Equity Fund, Mackenzie US All Cap Growth Fund, Mackenzie Canadian Dividend Fund and Mackenzie Floating Rate Income Fund and series R of the corresponding Canada Life Funds.

10. Each of the other series of units of each of the Canada Life Funds that correspond to the Affected Series will be newly created and will be qualified for distribution under a prospectus.

11. Each of the LP Funds will be a reporting issuer under the applicable securities legislation of the Province of Ontario.

12. Other than circumstances in which the securities regulatory authority of a province or territory of Canada has expressly exempted a Reorganizing Fund therefrom, each of the Reorganizing Funds follows the standard investment restrictions and practices established under NI 81-102.

13. The NAV for each series of the Funds and the LP Funds is, or will be, calculated on a daily basis in accordance with that fund's valuation policy and as described in the applicable Offering Documents.

The Top Funds

14. Each Top Fund is, or will be, a mutual fund established under the laws of Ontario. Each Top Fund is, or will be, a reporting issuer under the securities legislation of the Canadian Jurisdictions.

15. Each Top Fund distributes, or will distribute, some or all of its securities pursuant to a prospectus, annual information form and fund facts or ETF facts documents (as applicable).

16. Other than circumstances in which the securities regulatory authority of a province or territory of Canada has expressly exempted a Reorganizing Fund therefrom, each Top Fund follows, or will follow the standard investment restrictions and practices established under NI 81-102.

17. Each Top Fund is, or will be, subject to National Instrument 81-107 Independent Review Committee for Investment Funds (NI 81-107).

The Proposed Reorganizations and the Approval Sought

18. Pursuant to the Reorganizations, unitholders of each of the Reorganizing Funds would become unitholders of the applicable Canada Life Fund, as follows:

	<<Reorganizing Fund>>	<<Canada Life Fund>>	<<Affected Series>>	<<Nature of Reorganization>>	<<Expected Reorganization Date>>
1.	Mackenzie Floating Rate Income Fund	Canada Life Floating Rate Income Fund	Q, L, N, QF, H, QFW, HW, S, CL	Taxable	April 16, 2021
2.	Mackenzie Ivy Foreign Equity Fund	Canada Life Foreign Equity Fund	Q, D5, L, L5, N, N5, QF, QF5, H, H5, QFW, QFW5, HW, HW5, S, CL	Tax Deferred	April 16, 2021
3.	Mackenzie US All Cap Growth Fund	Canada Life US All Cap Growth Fund	Q, L, N, QF, H, QFW, HW, I, S, CL	Tax Deferred	March 26, 2021
4.	Mackenzie Canadian Dividend Fund	Canada Life Canadian Dividend Fund	Q, D5, D8, L, L5, L8, N, N5, QF, QF5, H, H5, QFW, QFW5, HW, HW5, S, CL	Tax Deferred	April 16, 2021
5.	Mackenzie Canadian Growth Fund	Canada Life Canadian Focused Growth Fund	Q, D5, D8, L, L5, L8, N, N5, QF, QF5, H, H5, QFW, QFW5, HW, HW5, S	Tax Deferred	April 16, 2021
6.	Mackenzie Ivy Global Balanced Fund	Canada Life Global Balanced Fund	Q, D5, L, L5, N, N5, QF, QF5, H, H5, QFW, QFW5, HW, HW5, S	Tax Deferred	April 16, 2021
7.	Mackenzie Strategic Income Fund	Canada Life Strategic Income Fund	Q, D5, D8, L, L5, L8, N, N5, N8, QF, QF5, H, H5, H8, QFW, QFW5, HW, HW5, HW8, S	Tax Deferred	April 16, 2021

19. In the opinion of the Filer, the Qualifying Dispositions (as defined below) and the proposed Taxable Reorganization (as defined below) satisfy all of the criteria for pre-approved reorganizations and transfers set forth in section 5.6 of NI 81-102 except that:

(i) The Qualifying Dispositions and the Taxable Reorganization are not "qualifying exchanges" within the meaning of section 132.2 of the Tax Act or tax deferred transactions under subsection 85(1), 85.1(1), 86(1) or 87(1) of the Tax Act;

(ii) None of the Reorganizations contemplate the wind-up of the Reorganizing Fund as soon as reasonably possible following the Reorganizations; and

(iii) Unitholders of the Reorganizing Funds will not be provided with a fund facts document prior to the time they are asked to approve the Reorganizations for the reasons described below.

The Qualifying Dispositions and Taxable Reorganization

20. The proposed Reorganizations are in connection with a larger set of transactions that were announced on December 31, 2020. Although the Affected Series of the Reorganizing Funds are presently offered under the Filer's Mackenzie Canada Life Mutual Funds simplified prospectus and set out below, except those offered on an exempt distribution basis as described above, the Reorganizing Funds also offer series of units under the Filer's Mackenzie Investments simplified prospectus.

21. In the case of the Tax Deferred Reorganizing Funds, causing the Affected Series unitholders to redeem their units of the Tax Deferred Reorganizing Funds (in cash or in kind) in which they are invested and using the redemption proceeds to subscribe for units of the corresponding Canada Life Funds (each, a Redemption Transaction) would trigger the realization of significant capital gains by the Affected Series unitholders. In addition, such Redemption Transactions in cash or in kind have the potential to result in material net capital gains in the Tax Deferred Reorganizing Funds themselves.

22. The Filer intends to carry out "qualifying dispositions" with respect to the transfer of property from each Tax Deferred Reorganizing Fund to a newly created Canada Life Fund under section 107.4 of the Tax Act. That provision exempts transfers of property from one trust to another (each a Qualifying Disposition) from being a taxable event for the transferring trust (i.e., a Tax Deferred Reorganizing Fund) and its unitholders (essentially allowing for a pro-rata partition of the Tax Deferred Reorganizing Fund on a tax deferred basis).

23. Each Canada Life Fund will have the same investment objectives as the corresponding Reorganizing Fund and LP Fund (if applicable). In the case of Mackenzie Ivy Global Balanced Fund and Mackenzie Strategic Income Fund and the corresponding Canada Life Funds, Canada Life Global Balanced Fund and Canada Life Strategic Income Fund, which have two underlying LP Funds with investment objectives that will achieve the same or substantially similar investment objectives as their respective Tax Deferred Reorganizing Funds and corresponding Canada Life Funds.

24. Each Canada Life Fund and corresponding LP Fund or LP Funds, as the case may be (if applicable), will have substantially the same investment strategies and valuation procedures and, in the case of each Canada Life Fund, the same fee structure as its corresponding Reorganizing Fund. No fees or expenses will be charged at the LP Fund level other than expenses that otherwise would have been borne at the Reorganizing Fund level had the Reorganizations not occurred.

25. The Reorganization of Mackenzie Floating Rate Income Fund will be effected on a taxable basis (the Taxable Reorganization) in order for the corresponding Canada Life Floating Rating Income Fund to become a unitholder of Mackenzie Floating Rate Income Fund following the Reorganization.

26. The chart immediately below paragraph 18 sets out the Canada Life Funds and the Affected Series that correspond to each Reorganizing Fund.

Details of the Proposed Reorganizations

27. On completion of the Reorganizations, the Filer will become sub-advisor of all the Canada Life Funds (except Canada Life US All Cap Growth Fund and Canada Life Floating Rate Income Fund) in accordance with the terms of a sub-advisory agreement between the Filer and CLIML.

28. No sales charges will be payable in connection with the transfer to a Canada Life Fund or LP Fund of the investment portfolio by its applicable Reorganizing Fund.

29. Unitholders of each Affected Series of each Reorganizing Fund will continue to have the right to redeem their units or exchange such units for units of any other mutual fund offered under the applicable Offering Documents at any time up to close of business on the day of the Reorganizations.

30. In accordance with National Instrument 81-106 -- Investment Fund Continuous Disclosure (NI 81-106), a press release announcing the proposed Reorganizations was issued and filed via SEDAR on August 4, 2020. A material change report and amendments to the Offering Documents with respect to the proposed Reorganizations were filed in accordance with NI 81-106.

31. By way of order dated October 21, 2016, the Filer was granted relief (the Notice-and-Access Relief) from the requirement set out in paragraph 12.2(2)(a) of NI 81-106 to send a printed management information circular to unitholders while proxies are being solicited, and, subject to certain conditions, instead allows a notice-and-access document (as described in the Notice-and-Access Relief) to be sent to such unitholders. Pursuant to the requirements of the Notice-and-Access Relief, the notice-and-access document and a form of proxy in connection with each special meeting of unitholders of the Affected Series of the Reorganizing Funds will be mailed to unitholders of the Affected Series of the Reorganizing Funds commencing on or about February 19, 2021 and will be concurrently filed on SEDAR. The Meeting Materials will also appear on the SEDAR website at www.sedar.com. If approved, unitholders of Affected Series of the Reorganizing Funds will receive fund facts document(s) for the corresponding Canada Life Fund in their first confirmation statement following the Reorganization.

32. The Meeting Materials describe all relevant facts concerning the Reorganizations, including the Qualifying Dispositions applicable to the Tax Deferred Reorganizing Funds, the tax implications and other consequences of the Reorganizations, as well as the view of the Reorganizing Funds' Independent Review Committee (the IRC) that the Reorganizations achieve a fair and reasonable result for the Reorganizing Funds, so that unitholders of the Affected Series of the Reorganizing Funds may consider this information before voting on the Reorganization.

33. All of the series of the Canada Life Funds (other than Series S of all of the Canada Life Funds and Series R of Canada Life Foreign Equity Fund, Canada Life US All Cap Growth Fund, Canada Life Canadian Dividend Fund and Canada Life Floating Income Fund) and the single series of the LP Funds will be newly created and will be qualified for distribution under a prospectus.

34. In order to effect the Reorganizations, Series S units of the Canada Life Funds and Series CL of Canada Life Foreign Equity Fund, Canada Life US All Cap Growth Fund, Canada Life Canadian Dividend Fund and Canada Life Floating Income Fund will be distributed to the Canada Life Unitholders currently in the corresponding Reorganizing Fund in reliance on the prospectus exemption contained in section 2.11 of National Instrument 45-106 -- Prospectus Exemptions.

35. A current simplified prospectus and fund facts documents are not available in respect of the Canada Life Funds and the LP Funds as those funds are new. Instead of delivering these documents, the Filer has included information in respect of the Canada Life Funds and the LP Funds in the Meeting Materials. This will include the fact that the investment objective of each Canada Life Fund and, if applicable, each corresponding LP Fund(s), will be the same as that of the Reorganizing Fund. The management fees and administration fees of the Canada Life Fund will be the same as those of the Reorganizing Funds. It will also disclose that the investment strategies and valuation procedures of the Canada Life Funds and the LP Funds will be substantially the same as those of the Reorganizing Funds. The fact that the LP Funds will not charge management fees, administration fees or other expenses (other than expenses that otherwise would have been borne at the Reorganizing Fund level had the Reorganization not occurred) will also be disclosed. The Filer believes that with this information, together with the information contained in the fund facts of the relevant series of the Reorganizing Fund that each unitholder of the Affected Series of the Reorganizing Fund received when their initial investment was made, unitholders in the Reorganizing Fund have access to prospectus-level disclosure with respect to the applicable Canada Life Fund.

36. Unitholders of the Affected Series of the Reorganizing Funds approved the Reorganizations at special meetings held on March 22, 2021.

37. If the necessary unitholder approval is obtained and the Filer decides to proceed with the Reorganizations, they will occur at or about the close of business on or about March 26, 2021 or April 16, 2021.

38. The Filer and CLIML will pay for the costs of the proposed Reorganizations. No management fees, administration fees or other expenses (other than expenses that would have been borne at the Reorganizing Fund level had the Reorganization not occurred) will be charged at the LP Fund level. There are no charges payable by unitholders in the Reorganizing Funds who acquire units of the corresponding Canada Life Funds as a result of the Reorganizations.

39. The LP Funds will dispose of their assets as expeditiously as is consistent with prudent portfolio management and it is not anticipated that they will accept new money or assets by way of subscription after the completion of the Reorganization. With the exception of the Reorganizing Funds and Canada Life Funds no other unitholders will be allowed to invest in the LP Funds.

40. As required by NI 81-107, the IRC has been appointed for the Reorganizing Funds. The Canada Life Funds established their own independent review committees and appointed. their initial members on December 22, 2020. The IRC of the LP Funds will be comprised of the same members as the IRC of the Reorganizing Funds.

41. The Filer presented the potential conflict of interest matters related to the proposed Reorganizations to the IRC for a recommendation. On January 22, 2020, the IRC reviewed the potential conflict of interest matters related to the proposed Reorganizations and provided its positive recommendation for each of the Reorganizations, after determining that each proposed Reorganization, if implemented, would achieve a fair and reasonable result for each applicable Reorganizing Fund.

Reasons for the Approval Sought

42. It has been determined that for the Reorganization involving Mackenzie Floating Rate Income Fund it is in the best interests of the Fund and its unitholders to effect the Reorganization on a taxable basis to permit the Affected Series unitholders to continue to indirectly benefit from the significant capital losses of the Mackenzie Floating Rate Income Fund. In addition, the vast majority of unitholders in this Fund are in Registered Plans or in a loss position. A Taxable Reorganization is neither beneficial nor detrimental to a Registered Plan. With respect to taxable unitholders, the tax consequences of the Taxable Reorganization will vary depending on each unitholder's individual circumstances. The Meeting Materials will provide taxable unitholders of each Reorganizing Fund with sufficient information to permit them to make an informed decision as to whether or not to approve the Reorganization, including a discussion regarding the tax implications of the Reorganization and the potential benefits of the Reorganization.

43. The purpose of the Qualifying Dispositions in respect of each of the Tax Deferred Reorganizing Funds is to allow the Affected Series unitholders in the Tax Deferred Reorganizing Funds to be moved to the corresponding Canada Life Fund in the most cost and/or tax-efficient manner.

44. Proceeding by way of Redemption Transactions would cause the realization of significant capital gains by the taxable investors in the Tax Deferred Reorganizing Funds. In addition, such Redemption Transactions in cash or in kind have the potential to result in material net capital gains in the Tax Deferred Reorganizing Funds themselves.

45. The Reorganizations are not expected to have any material impact on the unitholders in the Tax Deferred Reorganizing Funds or Mackenzie Floating Rate Income Fund in respect of the Taxable Reorganization other than Affected Series unitholders. The Reorganizations will not negatively affect any unitholder's interest in the assets and liabilities of the relevant Reorganizing Fund and each Reorganizing Fund's investment objectives will be the same as its corresponding Canada Life Fund and, where applicable, its corresponding LP Fund (or substantially the same in the case of the two Funds with two underlying LP Funds). The Qualifying Dispositions are being structured to be a non-taxable event to the Affected Series unitholders and the remaining unitholders of the Tax Deferred Reorganizing Funds. The Taxable Reorganization will only impact the unitholders in the Affected Series.

46. Affected Series unitholders will continue to have the right to redeem units of the Reorganizing Funds for cash at any time up to the close of business on the last business day before the Reorganizations. Units so redeemed will be redeemed at a price equal to their NAV per unit on the redemption date.

Required Relief for the LP Funds

47. One of the requirements to effecting the Tax Deferred Reorganizations as Qualifying Dispositions is that each asset (or group of identical assets) of each Tax Deferred Reorganizing Fund must be capable of being divided into a precise percentage allocable to each unitholder or class of unitholders (the Transfer Percentage). In recognition of the fact that it may not always be practicable to effect such a division, the Tax Act contains a "safe harbour" exception to this requirement. The "safe harbour" provides that the Canada Life Funds may receive as part of the Qualifying Dispositions, in lieu of a fractional interest in a share that would otherwise be required, a disproportionate amount of money or interest in the share, provided that its value does not exceed the lesser of $200 and the fair market value of the fractional interest. This "safe harbour" only applies in respect of equity securities (and specifically equity securities that do not exceed the specified value threshold) and does not adequately address the difficulties that the precise Transfer Percentage requirement poses more generally.

48. In addition, certain assets (or group of identical assets) may not be readily divisible for other reasons. In order to meet this condition, certain assets (or groups of identical assets) will be transferred on a tax deferred basis by the Tax Deferred Reorganizing Funds to the LP Funds in exchange for units of the LP Funds. The units of each of the LP Funds will then become an asset (or group of identical assets) of the corresponding Tax Deferred Reorganizing Fund and a portion of those units will be transferred to the corresponding Canada Life Fund based on the Transfer Percentage.

49. In summary, where it would otherwise be difficult or impossible to effect a transfer in the required precise Transfer Percentages of certain assets of the Tax Deferred Reorganizing Funds, those assets will be transferred to LP Funds, whose units are readily capable of being transferred in the required Transfer Percentages.

50. Given that the LP Funds are intended to largely mirror their corresponding Reorganizing Funds and have the same investment objectives and substantially the same investment strategies, the LP Funds require the same relief from the investment restrictions and practices in Part 2 of NI 81-102 that the Reorganizing Funds have already obtained, where the existing relief does not cover the Filer's future funds.

The Sovereign Debt Relief

51. The Sovereign Debt Relief was granted to the Mackenzie Ivy Foreign Equity Fund and Mackenzie Ivy Global Balanced Fund pursuant to a decision dated September 10, 2007 and to Mackenzie Strategic Income Fund pursuant to a decision dated August 5, 2011

52. The investment objectives and investment strategies of Mackenzie CL Ivy Foreign Equity LP, Mackenzie CL Ivy Global Balanced (Fixed Income) LP and Mackenzie CL Strategic Income (Fixed Income) LP permit portfolio investments in fixed-income and/or equity securities of issuers anywhere in the world. To achieve its investment objectives, the fixed-income portion of these three funds may invest in all types of fixed-income securities from around the world and the Fund's portfolio managers seek the discretion to gain exposure to any one issuer of Foreign Government Securities in excess of the Concentration Restriction.

53. Subsection 3.1(4) of the Companion Policy 81-102CP indicates that relief from paragraph 2.04(1)(a) of National Policy 39, which was replaced by the Concentration Restriction, has been provided to mutual funds generally under parameters of the Sovereign Debt Relief.

The Three-Tier Relief

54. As the LP Funds are being qualified by prospectus, a Reorganizing Fund or a Canada Life Fund may invest up to 100% of their NAV in a LP Fund under section 2.5 of NI 81-102.

55. However, if any of the Reorganizing Funds or Canada Life Funds invest more than 10% of their NAV in other investment funds and the LP Funds in aggregate, it would preclude other investment funds managed by the Filer or its affiliates from investing in that Reorganizing Fund or Canada Life Fund under paragraph 2.5(2)(b) of NI 81-102.

56. Prior to the Reorganizations, the Top Funds would have been permitted to invest in the Reorganizing Funds in accordance with section 2.5 of NI 81-102.

57. The Reorganizations will result in certain of the Reorganizing Funds and the Canada Life Funds holding more than 10% of its NAV in other investment funds due to these funds holding securities of the corresponding LP Fund(s).

58. The Three-Tier Relief is required for the Top Funds to continue investing in one or more of the Reorganizing Funds or the Canada Life Funds that invest more than 10% of its NAV in other investment funds, which includes holdings of its corresponding LP Funds that were received as a result of the Reorganization, in order for the Top Funds to further their investment objectives and investment strategies (the Three-Tier Structure).

59. Except for paragraph 2.5(2)(b) of NI 81-102, a Fund's use of the Three-Tier Relief will be made in accordance with the provisions of section 2.5 of NI 81-102.

60. Each Reorganizing Fund and Canada Life Fund that is part of a Three-Tier Structure will not invest more than 10% of its NAV in other investment funds, excluding investments in (i) one or more money market funds, (ii) one or more index participation units as defined in NI 81-102 (IPUs) and (iii) corresponding LP Fund(s).

61. The LP Funds are being introduced into the structure to further the best interests of unitholders in the Reorganizing Funds.

62. The LP Funds will dispose of their assets as expeditiously as is consistent with prudent portfolio management and it is not anticipated that they will accept new money or assets by way of subscription after the completion of the Reorganization.

63. There will be no duplication of fees between each tier of the Three-Tier Structure. The prospectus of each Top Fund, Reorganizing Fund and Canada Life Fund will disclose that fees and expenses will not be duplicated as a result of investments in underlying funds.

64. To ensure investors continue to have transparency into the portfolio securities attributable to the Reorganizing Fund and/or Canada Life Fund mandates, the Filer and CLIML intend to disclose the individual LP Fund positions within the quarterly portfolio disclosures, MRFP holdings disclosure and manager website holdings disclosure at the Reorganizing Fund level.

65. Each Top Fund will comply with the requirement under NI 81-106 relating to the top 25 positions portfolio holdings disclosure in its management report of fund performance and the requirements of Form 81-101F3 Contents of Fund Facts Document relating to top 10 position portfolio holdings disclosure in its fund facts documents as if the Top Fund were investing directly in the LP Fund held by the corresponding Reorganizing Fund or Canada Life Fund.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision. The decision of the principal regulator under the Legislation is that:

1. the Approval Sought is granted, provided that the Filer obtains the prior approval of the applicable unitholders of the Funds for the Reorganizations at a special meeting held for that purpose;

2. the Sovereign Debt Relief is granted, provided that:

a. paragraphs (a) and (b) of the Sovereign Debt Relief cannot be combined for any one issuer;

b. any security that may be purchased under the Sovereign Debt Relief is traded on a mature and liquid market;

c. the acquisition of the securities by each of Mackenzie CL Ivy Foreign Equity LP, Mackenzie CL Ivy Global Balanced (Fixed Income) LP and Mackenzie CL Strategic Income (Fixed Income) LP pursuant to the Sovereign Debt Relief is consistent with the fundamental investment objectives of the fund;

d. the simplified prospectus of each of Mackenzie CL Ivy Foreign Equity LP, Mackenzie CL Ivy Global Balanced (Fixed Income) LP and Mackenzie CL Strategic Income (Fixed Income) LP discloses the additional risks associated with the concentration of net asset value of the Fund in securities of fewer issuers, such as the potential additional exposure to the risk of default of the issuer in which the Fund has so invested and the risks, including foreign exchange risks, of investing in the country in which the issuer is located; and

e. the simplified prospectus of each of each of Mackenzie CL Ivy Foreign Equity LP, Mackenzie CL Ivy Global Balanced (Fixed Income) LP and Mackenzie CL Strategic Income (Fixed Income) LP will include a summary of the nature and terms of the Sovereign Debt Relief under the investment strategies section along with the conditions imposed and the type of securities covered by the Sovereign Debt Relief.

3. the Three-Tier Relief is granted, provided that:

a. an investment by a Top Fund in securities of a Reorganizing Fund or Canada Life Fund is in accordance with the investment objectives of the Top Fund;

b. each Reorganizing Fund and Canada Life Fund part of a Three-Tier Structure do not invest more than 10% of NAV in other investment funds, excluding investments in (i) one or more money market funds; (ii) one or more IPUs; and (ii) in its corresponding LP Fund(s);

c. each Reorganizing Fund and Canada Life Fund will not make additional investments in its corresponding LP Fund(s) after the Reorganization is completed;

d. the investment of each Top Fund in securities of a Reorganizing Fund or Canada Life Fund is otherwise made in compliance with all other requirements of section 2.5 of NI 81-102, except to the extent that discretionary relief has been granted from any such requirement;

e. each Top Fund complies with the requirements under NI 81-106 relating to top 25 positions portfolio holdings disclosure in its management reports of fund performance and the requirements of Form 81-101F3 Contents of Fund Facts Document relating to top 10 position portfolio holdings disclosure in its fund facts documents as if the Fund was investing directly in the LP Funds; and

f. the prospectus of each Top Fund discloses, or will disclose in the next renewal of its prospectus following the date of this decision, the fact that the Top Fund has obtained the Exemption Sought.