Variable Return

The Variable Return calculation is the formula used to determine the Variable Return on the Notes at the Maturity Date. The Variable Return per Note is calculated as follows:

‘‘NAVFINAL’’means, at any time (expressed pro rata per Note), an amount equal to: (i) the proceeds from the liquidation of the Fund Account; plus (ii) the maturity value of the Bond Account as calculated by the Calculation Agent; minus (iii) repayment of the Loan and any accrued and unpaid Loan interest and Program Fees. An Investor cannot elect to receive the Variable Return, if any, prior to the Maturity Date and the Notes cannot be redeemed or retracted prior to the Maturity Date. There is a possibility that an Investor may not receive any Variable Return.

Fund Account Exposure

Fund exposure was 105% on the issue date (May 14, 2008) and has changed as noted below:

Quarterly Coupons Payment History

Quarterly Coupons per Note will be payable in Canadian dollars in an amount equal to 1.25% of the Fund Account Value, if any, determined as of each Quarterly Coupon Determination Date. Upon payment of any Quarterly Coupon on the Notes, the aggregate amount of such payment will be deducted from the Distribution Account. Each Quarterly Coupon will be paid within 10 Business Days of the immediately preceding Quarterly Coupon Payment Date (the date of such payment being, a ‘‘Quarterly Coupon Payment Date’’) during the term of the Notes in an amount equal to the Distribution Account Value on the immediately preceding Quarterly Coupon Determination Date. Program Fees and Loan interest will not be deducted from the Distribution Account. Quarterly Coupons will be funded by notionally liquidating Fund Account assets, which will reduce the value of the Fund Account.

Performance Commentary

As of October 24, 2008 the Variable Return of the Notes is no longer linked to the portfolio of Units notionally held in the Fund Account of the Notes. The NAV of the Notes minus the Floor declined to $1.40 per Note at the close of business on October 24, 2008. In accordance with the terms of the Notes, this resulted in a Protection Event whereby the remaining notional assets in the Fund Account were liquidated and notionally invested in the 0.50% coupon Bond in the Bond Account, following payment of the Loan, any accrued and unpaid Loan interest and any Program Fees. Investors will not receive any further Quarterly Coupons on their Notes and will receive their $100 of Principal per Note and a Variable Return of $1.28, for total proceeds of $101.28 per Note at the Maturity Date, which is November 15, 2016.

Fund Performance

Fund Units	Weight	Initial Unit NAV	Month End Unit NAV	Change %	Lock-in Date
Beutel Goodman Canadian Equity Fund	60.00%	$26.47	$19.55	-26.14%	10/27/2008
Beutel Goodman Global Fund	40.00%	$13.32	$10.58	-20.57%	10/27/2008
Overall Return				-23.91%

Note: An investment in principal protected notes may not be suitable for all investors. Important information about these investments is contained in the Information Statement of each note. Investors should obtain and carefully read a copy prior to investing, paying particular attention to the associated risks. Past performance is not indicative of future returns. Commissions, trailing commissions, management fees and expenses all may be associated with these investments. Principal is guaranteed at maturity only for products purchased at their issue price and held to maturity. The investment return on the notes, if any, is uncertain in that an investor may not receive more than return of the principal amount at maturity. A person should reach a decision to invest in the notes only after carefully considering with his or her advisor, the suitability of this investment in light of his or her investment objectives and the information set out in the respective Information Statement.

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