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2003 Annual Report

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Schedule M - Eckler Partners Ltd. Investment Summary as at March 31, 2003

Overview

Total assets consist of two main components:

An Investible Fund, split into two two portfolios

Long Term Fund investing in real return bonds, equities and other bonds
Short Term Fund investing in short term bonds

A Notional Fund, consisting of amounts owed by the provincial governments
Investible assets are managed by TD Asset Management, either passively or on an indexed basis
Royal Trust are the custodians of the investible assets
Our analysis is based on statements provided by both Royal Trust and TD Asset Management as well as previous performance analyses done by Towers Perrin
In particular
- All dollar amounts, including asset values and cashflows, are taken from Royal Trust accounts
- Returns after March 2002 are derived from the TD quarterly statements and have not been independently verified
- Returns prior to April 2002 are mainly from Towers Perrin reports
TD Asset Management is required to certify that it has complied with the investment guidelines specified by the trustees. We have not verified that this has taken place or that the guidelines have been complied with.

Asset Summary ($,000's)


				Mar - 03			Mar - 02
Fund	Portfolio	Strategy	Bench- Mark	Value	Asset Alloc	Fund Alloc	Value	Asset Alloc	Fund Alloc
Long term	Real Return Bonds	Passive	80.0%	570,260	84.4%		485,616	79.6%
	Universe Bonds	Index	6.0%	40,327	6.0%		37,654	6.2%
	Canadian Equity	Index	7.0%	35,046	5.2%		43,599	7.1%
	US Equity	Index	3.5%	15,088	2.2%		21,569	3.5%
	EAFE Equity	Index	3.5%	15,032	2.2%		21,713	3.6%
	Cash		0.0%	16	0.0%		10	0.0%
			100.0%	675,768	100.0%	64.4%	610,160	100.0%	57.8%

Short Term
	Short Term Bonds	Index		117,906			177,609
	Cash			366			258
				118,272		11.3%	177,868		16.9%

Total Invested Assets *				794,040		75.7%	788,028		74.7%

Provinces Notional Assets (net of prepayments)				254,761		24.3%	267,342		25.3%

Total Assets				1,048,801		100.0%	1,055,370		100.0%

*Total Invested Assets includes prepayments from Alberta and Ontario


Split of Invested Assets between:
		Long Term Fund				85.1%			77.4%
		Short Term Fund				14.9%			22.6%
		Total Invested Assets				100.0%			100.0%
Totals may not add due to rounding May 30, 2003

Comments on Asset Summary

As of March 31, 2003

Real return bonds are currently 4.4% above their benchmark of 80% of the Long Term Fund

At March 31, 2002 they were close to benchmark (0.4% below)
This increase is largely the result of the differences in relative returns for the different asset classes

Strongly positive for real return bond, negative for equities

Mitigated by TD Asset Management transferring $9.9m from the real return bond portfolio over the period

Universe bonds are at their benchmark

Equities are below their benchmark due mainly to poor performance relative to real return and universe bonds

PT Notional Funds are net of prepayments by Alberta and Ontario

As a percentage of the Invested Assets, the Long Term Fund has increased from 77.4% to 85.1%, while the Short Term Fund has decreased from 22.6% to 14.9% during the fiscal year

Asset Development ($,000's)


	Invested Assets (1)
	Real Return Bond Fund	Other Long Term Funds	Short Term Fund	Invested Assets	Provinces Notional Assets 1	Total Assets
Initial, at April 1, 2002	485,617	124,543	177,868	788,028	267,342	1,055,370

Investment Income (realized and unrealized)	93,790	(17,072)	10,217	86,935	6,769	93,704
Inflow: Recoveries from Provinces	722	629	17,998	19,350	(19,350)	-

Outflow: Benefit Payments	-	-	(91,981)	(91,981)	-	(91,981)
Expenses	-	-	(8,293)	(8,293)	-	(8,293)

Transfers between funds	(9,863)	(2,599)	12,462	-	-	-

Closing, at March 31, 2003	570,267 (2)	105,501 (2)	118,272	794,040	254,761	1,048,801
May 30, 2003
(1) Invested Assets include PT prepayments; Provinces' Notional Assets are net of prepayments (2) These figures differ slightly from those on page 2 because of allocation of cash balances Totals may not add due to rounding May 30,2003

Comments on Asset Development

Total invested assets (i.e. excluding PT assets) have increased over the year to March 31, 2003 by $6.0m

As a result of investment returns exceeding the “federal” 8/11ths share of the total payouts

The notional PT assets have decreased by $12.6m

Interest credits are at T-bill rates and hence relatively lower

Total assets (i.e. including PT assets) have decreased by $6.6m

Benefits are paid from the Short Term Fund

Prior to June 2002 the 3/11ths recoveries from the provinces were allocated to both the Short Term and Long Term Funds

From June 2002 onwards all recoveries from the provinces were allocated to the Short Term Fund

This practice is expected to continue in the future

TD Asset Management made transfers from the Long Term Fund to the Short Term Fund of $12.5m

$9.9m from real return bonds in December 2002
$2.6m from other long term funds after December 2002

Expansion of PT Assets ($,000's)

		Less: prepayments
	Gross PT Assets	Ontario	Alberta	Net PT Assets

Initial, at April 1, 2002	276,940	5,201	4,397	267,342

Interest Credits	6,873	31	73	6,769

Additional Prepayments	-	-	-	-

3/11 th share of benefits/expenses	(27,452)	(5,223)	(2,879)	(19,350)

Closing, At March 31, 2003	256,361	9	1,591	254,761
Ontario 's prepayments were used up by August 2002. They started making cash payments to cover their share of the benefits/expenses in September 2002; these subsequent amounts are include in the PT recoveries on page 5 Ontario 's prepayment balance is now negligible Alberta made no further payments during the year, using its initial prepayment balance towards its cost requirements May 31, 2003

Investment Returns

		Fiscal Year ending			Quarterly Returns Fiscal 2003
Fund	Portfolio	2001	2002	2003

Long term	Real Return Bonds	11.3%	2.3%	19.7%		7.0%	4.7%	1.2%	5.5%
	Universe Bonds	8.8%	5.1%	9.2%		3.2%	4.3%	2.2%	-0.7%
	Canadian Equity	-17.4%	5.0%	-17.0%		-8.3%	-12.9%	7.5%	-3.4%
	US Equity	-15.2%	1.2%	-30.9%		-17.5%	-13.8%	7.7%	-9.9%
	EAFE Equity	-19.9%	-7.0%	-29.5%		-6.8%	-16.4%	6.0%	-14.6%

	Total	7.0%	2.3%	12.6%		4.3%	2.3%	1.9%	3.6%

Short Term	Short Term Bonds	9.0%	5.9%	7.0%		2.5%	2.9%	1.7%	-0.3%

Total Invested Assets		7.5%	3.5%	11.7%		3.9%	2.5%	1.9%	2.9%

Notional PT Assets		5.6%	3.5%	2.6%		0.6%	0.7%	0.7%	0.7%

Total Assets		7.1%	3.6%	9.4%		3.1%	2.0%	1.6%	2.4%
Notes: Returns for the fiscal years 2001 and 2002 are as reported in the Towers Perrin Investment Performance Summary March 2002. Quarterly returns for the component portfolios for the fiscal year 2003 are as reported by TD Asset Management in their quarterly investment reports. EPL has not independently verified these. Aggregated quarterly returns (Total Long Term, Total Invested Assets and Total Assets) are calculated by EPL taking into account the relative market values, cashflows and investment returns of the component portfolios. Returns for the fiscal year 2003 are calculated by EPL based on the quarterly returns shown above. EPL returns are calculated on an approximate basis, using average cashflows; they may differ lightly from returns calculated by a performance measurement service using daily cashflows. May 31, 2003

Comments on Investment Returns

The overall return of 9.4% for fiscal 2003 is the result of

positive returns from

Real Return Bonds	19.7%
Universe Bonds	9.2%
Short Term Fund	7.0%
Notional Fund	2.6%

reduced by the negative returns on equity components of the Invested Assets

A similar pattern was seen in 2001

Tracking Error

		Fiscal Year Ending			Target tracking error
		2001	2002	2003	1 year	4 years
Universe Bonds	Actual	8.8%	5.1%	9.2%
	Index	8.7%	5.1%	9.1%
	t/e	0.1%	0.0%	0.1%	0.2%	0.1%

Canadian Equity	Actual	-17.4%	5.0%	-17.0%
	Index	-18.6%	4.9%	-17.6%
	t/e	1.2%	0.1%	0.6%	0.3%	0.2%

US Equity	Actual	-15.2%	1.2%	-30.9%
	Index	-15.2%	1.4%	-30.8
	t/e	0.0%	-0.2%	-0.1%	0.3%	0.2%

EAFE Equity	Actual	-19.9%	-7.0%	-29.5%
	Index	-19.6%	-7.3%	-29.2%
	t/e	-0.3%	0.3%	-0.3%	0.6%	0.3%

Short Term Bonds	Actual	9.0%	5.9%	7.0%
	Index	8.9%	5.8%	7.0%
	t/e	0.1%	0.1%	0.0%	0.2%	0.1%
Actual Returns for the fiscal years 2001 and 2002 are as reported in the Towers Perrin Investment Performance Summary March 2002 Actual returns for the fiscal year 2003 are calculated by EPL based on the quarterly returns reported by the TD Asset Management Index Returns for all years are calculated by EPL, based on quarterly index returns reported by TD Asset Management May 30, 2003

Comments on Tracking Error

Canadian Equity has a positive tracking error outside the target range for fiscal 2001 and 2003
All other portfolios meet their tracking error target

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