2001 Annual Report

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General

9. The Joint Committee believes it is appropriate to report at this time to the Supreme Court of British Columbia, the Superior Court of Justice for Ontario and the Superior Court of Quebec (collectively the "Courts") on the status of the Trust Fund and the administration of the Hemophilia HCV Plan and Transfused HCV Plan (collectively the "Plans").

10. The Joint Committee is comprised of Harvey Strosberg, J.J. Camp, Pierre Lavigne and Bonnie Tough. Harvey Strosberg was appointed by Order of the Superior Court of Justice for Ontario. J.J. Camp was appointed by Order of the Supreme Court of British Columbia and Pierre Lavigne by Order of the Superior Court of Quebec. Bonnie Tough was appointed by Order of each of the Superior Court of Justice for Ontario, the Supreme Court of British Columbia and the Superior Court of Quebec. This Report is prepared by and on behalf of all members of the Joint Committee.

11. In conjunction with the advice of Deloitte & Touche, the Joint Committee has, for audit and reporting purposes, established March 31 as the year end of the Trust Fund and the administration of the Plans. Although monies were first deposited in December of 1999, the first payment to Class Members was not made until June of 2000. Accordingly, the Joint Committee determined in conjunction with advice from Deloitte & Touche that the first year end should be for 16 months commencing with the establishment of the Trust Fund in December of 1999. All subsequent audit reports will be based upon a 12 month cycle commencing April 1 in each year and ending March 31 of the following year.

12. Monies were first deposited into the Trust Fund in December of 1999. The first payment to Class Members was made in June of 2000. In the period prior to March 31, 2001, approximately $100 million was paid to claimants.

13. The expenses of the Trust Fund of a non-start-up nature were approximately $9 million up to March 31, 2001. The Joint Committee anticipates, as is set out in the budgets of the Service Providers which are attached hereto, that the ongoing expenses in Year 2 will be of a similar amount as in Year 1. The administration expenses incurred by the Administrator will increase as a result of the dedication of an increased number of personnel to the processing of claims. Costs associated with traceback services provided by CBS and Hema-Quebec will increase over the next year as CBS and Hema-Quebec deal with the backlog of traceback requests. The Joint Committee anticipates that both the increased Administrator expenses and the increased CBS and Hema-Quebec expenses will decrease after Year 2 when the backlog of claims and tracebacks should diminish.

14. In Year 2, the Trust Fund will experience increased costs in the processing of appeals. However, those increased costs will be offset by a reduction in the amount of Fund Counsel and Joint Committee time spent in establishing protocols, standard operating procedures and other matters necessary for the start-up of the administration of the Plans.

15. The start-up expenses of the Trust Fund and the administration of the Plans was approximately $53 million. This amount includes counsel fees, a national advertising campaign directed at notifying potential class members of the settlement, consulting and other expenses incurred as part of the establishment of the administration system and the development of the appropriate software. These expenses are of a non-recurring nature.

16. Many of the expenses recorded in the period up to March 31, 2001 include GST. The Joint Committee has applied to Canada Customs and Revenue Agency for remission of the GST to the Trust Fund and are awaiting a decision by the Federal Government on this request.

17. As is set out in Schedule "A", the total assets held by the Trust Fund as at March 31, 2001 totalled $876,425,000.00. Additionally, the total unpaid liability of the provincial governments now totals $301,000,000. The total Trust Funds available (in the Trust Fund or to be paid by provincial governments) for the payment of liabilities to Class Members is, as at March 31, 2001, $1.1 billion.

18. The Settlement Agreement and Judgments require that the Joint Committee present an actuarial study to the Courts no later than June of 2002 reporting on the actuarial status of the Trust Fund and in particular whether or not any of the holdbacks (for example restriction on the quantum of payments for loss of income) can be removed. The Joint Committee has commenced that project with the assistance of medical, epidemiological and actuarial consultants.

19. In seeking approval of the Year 2 budgets for service providers, the Joint Committee is recommending that their budgets provide for payment through to June 1, 2002 in order to provide time from March 31, 2002 till June 2002 for the audit and accounting review of the expenses in preparation for a report to the Courts in June of 2002.