A Note Holder's adjusted cost base of a note acquired pursuant to this Prospectus will generally include any amount paid to acquire the note plus the amount of any discount included in income by such Note Holder. A Resident Note Holder that receives repayment in full of the outstanding principal amount of a note upon maturity will be considered to have disposed of the note for proceeds of disposition equal to such outstanding principal amount.

Subject to the Capital Gains Proposals (as defined below), one half of the amount of any capital gain (a "taxable capital gain") realized by a Resident Note Holder in a taxation year generally must be included in the Resident Note Holder's income for that year, and one-half of the amount of any capital loss (an "allowable capital loss") realized by a Resident Note Holder in a taxation year must generally be deducted from taxable capital gains realized by the Resident Note Holder in that year. Allowable capital losses in excess of taxable capital gains realized in a taxation year may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized in such years to the extent and under the circumstances described in the Tax Act.