Held on:
January 20, 2005 and January 31, 2005
David M. Gilkes
Manager, Registrant Regulation
Capital Markets Branch
Matthew Britton
For the Staff of the Commission
Leslie Daiter
Ellen J. Bessner
For All-Canadian Management Inc.


1. All-Canadian Management Inc. (ACMI) was first granted registration in the category of investment counsel and portfolio manager (ICPM) in 1974. ACMI and its predecessors, Vancouver and Ancaster Management (Vanam) and Central Group, have been managing mutual funds since 1954.

2. On December 29, 2004, Staff of the Ontario Securities Commission (OSC) sent a letter to Russell Boychuk, President of ACMI, notifying him that OSC Staff had recommended the Director refuse to grant the renewal of registration of ACMI on January 1, 2005. OSC Staff cited the following reasons for refusing registration:

1. No financial statements have been filed for any of the University Avenue Funds since June 30, 2003;

2. There are currently no "live" prospectuses to sell any of the University Avenue funds or the All-Canadian Money Market Fund, and;

3. Effective May 5, 2004 ACMI has been subject to terms and conditions on its registration that require it to file certain financial statements on a monthly basis with the Compliance section of the OSC. These filings have repeatedly been filed late.

3. After receiving the letter from Staff, Mr. Boychuk requested an Opportunity to be Heard (OTBH) by the Director pursuant to subsection 26(3) of the Act that states:

(3) Refusal -- The Director shall not refuse to grant, renew, reinstate or amend registration or impose terms and conditions thereon without giving the applicant an opportunity to be heard.

4. The OTBH was conducted through oral hearings on January 20, 2005 and January 31, 2005.


5. Counsel for OSC Staff provided information that expanded the reasons for the recommendation that the Director refuse to grant registration to ACMI. This included information obtained by OSC Compliance OSC Staff from a meeting with Mr. Boychuk at the premises of ACMI in Ancaster, Ontario on January 7, 2005.

6. Counsel for ACMI, through the testimony of Mr. Boychuk and through exhibits, explained and clarified the findings of OSC Staff. In addition, a great deal of background into the former owners and their business practices, unknown to OSC Staff was provided.

7. I will not record in this decision all the evidence presented during the OTBH as much of the information placed context around the actions that were undertaken by ACMI. The key elements of the submissions and other relevant information are addressed below.

Investment in ACMI

8. In November 2002, Mr. Boychuk acquired a 20% interest in ACMI. Up to that time ACMI had been owned 75% by the Loyalist Insurance Group (Loyalist) and 25% by Accrete Corporation Limited (Accrete). Loyalist had been a shareholder in ACMI since 1999, prior to that time Accrete was the sole shareholder of ACMI.

9. At the time that he made the investment, Mr. Boychuk had retired from the investment industry and was asked by Loyalist to join ACMI. Although Mr. Boychuk had undertaken some due diligence he did not appreciate the seriousness of the situation at ACMI until after he had put his money into the firm.

10. Mr. Boychuk and his business partner, Harold Kent, intend to purchase the outstanding shares of ACMI from Loyalist and Accrete. It is anticipated that they will each own 50% of ACMI once the transaction closes.

Business Practices and Environment at ACMI

11. Submissions from both OSC Staff and ACMI indicate that ACMI could not have continued as a going concern without a change in its business strategy. There had only been about 30 new sales of units in the All-Canadian funds over the last 25 years.

12. The only new revenue coming into ACMI had been through its alliance with the Coleford Investment Counselors of Toronto (Coleford). Coleford is the subadviser of a fund managed by ACMI. There have been sales of about $2.5 million over the past 18 months in this fund.

13. Mr. Boychuk discovered a number of irregularities when he started looking into the daily operations of ACMI. These irregularities included: salaries paid to individuals who were not doing any work at ACMI, trailer commissions paid to firms or persons not registered with the OSC or other securities commissions, expenses paid by ACMI for affiliated companies, and approximately 1,400 dormant accounts which dated back over 40 years.

14. Mr. Boychuk tried to correct these practices and he found himself in an adversarial relationship with his partners and OSC Staff at ACMI. When Loyalist acquired a share of ACMI, it agreed to give five people long term contracts. Mr. Boychuk found himself at odds with these employees after he joined the firm.

15. In February 2004, Mr. Boychuk became Managing Director and took over the position of CFO at ACMI. At this time he started to come to the office everyday and found further irregularities.

16. In March 2004, Mr. Boychuk became President of ACMI. At that time, Mr. Boychuk took additional steps to learn if there were any other irregularities in the operations of ACMI. He conducted an internal audit and changed auditors and law firms. In addition, there was a complete turnover of staff at ACMI. Previous staff started to resign when Mr. Boychuk took over as President.

Financial Monitoring

17. ACMI had terms and conditions imposed on its registration since May 6, 2004. Under these terms and conditions, ACMI is required to file certain financial statements on a monthly basis with OSC Compliance Staff.

18. Over the seven months through to the end of 2004, ACMI has filed the required reports but on five occasions they were filed late. The terms and conditions require that these statements be filed within 3 weeks of the end of each month. OSC Staff submitted that this time frame is ample to allow for the preparation of such statements and even more so in the case of ACMI given its low number of transactions and relatively modest finances.

19. The financial statements for the first month following the imposition of the terms and conditions were filed by the June 21, 2004 deadline. Subsequently almost all the statements were filed late.

20 Mr. Boychuk explained that the fund accountant at ACMI, one of the employees carried over from the Accrete days, resigned on July 1, 2004. Following the resignation of the accountant Mr. Boychuk started to maintain the accounting records. However, the former accountant did not leave passwords for certain files and had taken two computer hard drives when she left.

21. ACMI hired a new accountant in September 2004. The new accountant found numerous problems with the books and records at ACMI.

22. ACMI has since upgraded its computer systems, has regained access to all its files and the new OSC Staff are more familiar with the organization. Mr. Boychuk said he does not intend to have any further late filings and believes that ACMI will meet the financial monitoring terms and conditions going forward.

Capital Adequacy

23. During the on-site meeting with Mr. Boychuk at ACMI on January 7, 2005, OSC Compliance Staff expressed concern that the capital adequacy calculations contained items that should not have been included. OSC Staff found that if these items were removed, ACMI would be capital deficient.

24. ACMI has reviewed its calculations with its auditors and they agreed that the calculations were not computed correctly. Mr. Boychuk said that ACMI does have sufficient capital to meet the requirements of the Securities Act (the Act). He noted that the new shareholders will put more money into the company once they have completed the acquisition.

Dormant Accounts

25. Mr. Boychuk was not aware of the dormant accounts when he bought into the company and only learned of the dormant accounts shortly after becoming Managing Director of ACMI. According to Mr. Boychuk, Loyalist was not aware of the dormant accounts when it became the major shareholder.

26. After becoming aware of the dormant accounts, Mr. Boychuk took steps to quantify the value of these accounts. There were approximately 1,450 dormant accounts valued at about $3.7 million. This represented about 66% of the clients and 30% of the asset base of the All-Canadian Funds.

27. All the dormant accounts related to the All-Canadian funds and not the University Avenue Group of funds or the Coleford fund. As some of the All-Canadian funds had started in 1954, some of the dormant accounts were over 40 years old.

28. Mr. Boychuk indicated that there is no uniform law in Canada for the treatment of dormant accounts and in Ontario there is no specific legislation on point. In absence of any governing law, Mr. Boychuk reviewed the practices of other companies relating to dormant accounts and unclaimed property. He checked with Standard Life, Franklin Templeton, and AIM Trimark. Mr. Boychuk found that depending on the province after either one year or three events of returned cheques, unclaimed amounts of $100 to $300 could be taken into income. However, the unit holder still retained the right to redeem at some later date.

29. ACMI wanted to obtain a new prospectus for the funds and to do so it had to redeem the dormant accounts. The dormant accounts were moved over to four interest bearing trust accounts at CIBC. There are separate accounts for the All-Canadian Consumer fund, the All-Canadian Capital fund, the All-Canadian Compound fund and the All-Canadian Resources fund. There are approximately $3 million in the combined accounts.

30. ACMI has a systematic approach to tracking down the dormant account holders starting with the largest amounts. However, this could be a full-time job. Once all efforts to find a dormant account holder have been exhausted the amount will be redeemed. ACMI will then distribute the money to charity.

31. There is one exception to the above. Vanan redeemed a number of dormant accounts in 1974 and placed the funds in an account named Vanan and then ACMI. There are no records of the original accounts redeemed. Mr. Boychuk indicated that this account will be taken into income and the appropriate taxes paid.

32. While all these steps have been taken it was noted by OSC Staff that approximately 50 accounts had been settled since July 2004. OSC Staff was concerned with the seemingly little progress in rectifying this issue.

33. Mr. Boychuk noted that the volume and age of the dormant accounts presented ACMI with a unique problem. He stated that while it is important that the accounts are handled fairly and in the best interests of the clients, ACMI must continue to focus on operating and growing its business. However, he indicated that some resources will be dedicated to finding the beneficial owners of the accounts.

University Avenue Funds

34. ACMI was in negotiation with Avenue Financial to buy the University Avenue Funds in January 2003 but ACMI backed out in the spring of 2003 for various reasons. Avenue Financial approached ACMI again in December of 2003 in relation to taking over the University Avenue Funds.

35. ACMI decided to take over the University Avenue Funds for two reasons. First, Avenue Financial paid ACMI $20,000 ($10,000 for legal expenses and $10,000 on closing) to take over the funds. Second, ACMI had received interest from High Street Funds in University Avenue's balanced fund. ACMI was also interested in the University Avenue Money Market Fund and renamed it the All-Canadian Money Market Fund.

36. However, when ACMI tried to get the books and records for the funds, it found that many records did not exist. The record keeping was so poor that the accountants could not complete the audit. The poor records applied to all University Avenue Funds including the money market fund, as a result, ACMI decided to wind-up all the University Avenue Funds.

37. OSC Staff had believed that the unit holders of the University Avenue Funds had not received proper notice of the wind up of the funds. The evidence produced by ACMI indicates that unit holders were given appropriate notice. All the University Avenue Funds have now been paid out and wound up.

All-Canadian Investor Services

38. All-Canadian Investor Services (ACIS) was the dealer subsidiary of ACMI. ACMI decided to close ACIS as it had no clients.

39. ACIS is a member of the Mutual Fund Dealers Association and it must have an audit before resignation from membership will be granted. The audit was scheduled to start on February 14, 2005.

Business Plan of ACMI

40. The evidence presented by OSC Staff, the business environment that had existed at ACMI described by Mr. Boychuk, the large number of dormant accounts and the low number of new sales over the past 25 years, raise questions as to whether ACMI is a going concern.

41. At the second day of the OTBH, Mr. Boychuk entered ACMI's business plan as an exhibit. The business plan builds on the success that ACMI has had with the Coleford Fund. The plan, while not detailed, provides a fairly clear direction of where ACMI is heading.


42. Based on all the evidence presented, I believe that ACMI should continue its registration but it should be monitored closely. Therefore, the terms and conditions attached as Schedule A shall be imposed on the registration of ACMI.

43. The terms and conditions in Schedule A were developed by OSC Staff in consultation with ACMI management to ensure that they balanced the requirements under the Act with ACMI's ability to operate its business.

44. ACMI is required to provide reports on a regular basis and to meet certain milestones set out in the terms and conditions. ACMI will maintain its registration provided it meets the terms and conditions to the satisfaction of OSC Staff. Should ACMI fail to meet any milestone or provide reports, the Director may decide not to renew the registration of the firm.

45. ACMI must continue to meet all other requirements under the Act that apply to it as a registrant. The terms and conditions will be removed from its registration once ACMI has met all the milestones in Appendix A to the satisfaction of Staff.

May 5, 2005

"David M. Gilkes"


Schedule A


1. Registration of the Firm will continue until either:

a. the Director determines that the Firm has failed to satisfy one or more of these terms and conditions, in which case the registration of the Firm may be suspended at the discretion of the Director; or

b. the Director determines that all of these terms and conditions have been satisfied, in which case these terms and conditions will be removed.


2. No later than May 15, 2005, the Firm shall have submitted, via the National Registration Database, an application satisfactory to the Director for the registration of Mr. Kent as an officer, director and shareholder of the Firm.

Wind-up of All-Canadian Investor Services Inc. (ACIS)

3. No later than May 15, 2005, the Firm shall have engaged the services of a third party accounting firm acceptable to the Manager, Compliance to conduct a closing audit of its wholly-owned subsidiary, ACIS.

4. No later than July 15, 2005, the firm shall have completed the wind-up of ACIS.

Wind-up of the University Avenue Funds (the University Funds) and the All-Canadian Money Market Fund (the Money Market Fund)

5. No later than May 15, 2005, the Firm shall have completed the wind-up of the University Funds in compliance with all applicable requirements of National Policy 51 - Changes in the Ending Date of a Financial Year and in Reporting Status of an Investment Fund (NP 51).

6. No later than June 15, 2005, the Firm will have completed the wind-up of the All-Canadian Money Market Fund in accordance with its trust indenture, National Instrument 81-102 - Mutual Funds (NI 81-102) and NP 51.

Merger of the All-Canadian Capital Fund (the Capital Fund) and the All-Canadian Compound Fund (the Compound Fund)

7. No later than June 15, 2005, the Firm will have either:

a. submitted to the Senior Accountant, Compliance documents establishing that it has complied with the requirements of Section 5.6 of NI 81-102; or

b. filed an application pursuant to Section 5.7 of NI 81-102 seeking regulatory approval to facilitate the merger of the Capital Fund and the Compound Fund.

8. No later than September 15, 2005, the Firm will have completed the merger of the Capital Fund and the Compound Fund in compliance with all applicable requirements of NI 81-102 and NP 51.

Dormant Accounts

9. No later than May 15, 2005, the Firm shall have submitted a written plan (the Plan) acceptable to the Director for the reunification of dormant account assets with their beneficial owners. The Plan shall include, among other items, a proposal for the disposition of assets in respect of which beneficial owners cannot be located.

10. No later than July 15, 2005, the Firm shall have submitted a written quarterly progress report to the Senior Accountant, Compliance with respect to the Plan. Further progress reports shall be submitted no later than the 15th day following the end of each quarter for the duration of the Plan.

Financial and other Reporting

11. No later than the 15th day of each month, the Firm shall file the following information with the Senior Accountant, Compliance:

a. year-to-date unaudited financial statements, including a balance sheet and income statement prepared in accordance with generally accepted accounting principles;

b. a calculation of minimum required capital as of the last day of the preceding month; and

c. copies of all trust account statements from the preceding month relating to dormant accounts, as well as all supporting documents relating to any withdrawal or transfer of funds out of any such account.

Further Information

12. No later than the 15th day of each month, the Firm shall file the following information with the Manager, Registrant Registration:

a. written notices of any progress in regard to the Firm's proposed business transactions as outlined in the Firm's business plan presented to the Director in January 2005; and

b. any letters of intent entered into with any third party.__________________