Borealis Infrastructure Trust and Borealis Infrastructure Trust Management Inc. - MRRS Decision

Headnote

Mutual Reliance Review System for ExemptiveRelief Applications - issuer of asset-backed securities exemptfrom the requirement to prepare and file first and third quarterinterim financial statements. Relief will terminate 30 daysafter the issuance by the issuer of securities which differin material respects from previously issued securities.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.ss. 77(1), 80(b)(iii).

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
BRITISH COLUMBIA, ALBERTA,
SASKATCHEWAN, MANITOBA,
ONTARIO, QUEBEC, NOVA SCOTIA AND NEWFOUNDLAND AND LABRADOR

AND

IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF
BOREALIS INFRASTRUCTURE TRUST AND
BOREALIS INFRASTRUCTURE TRUST
MANAGEMENT INC.

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof the provinces of British Columbia, Alberta, Saskatchewan,Manitoba, Ontario, Québec, Nova Scotia and Newfoundlandand Labrador (collectively, the "Jurisdictions") hasreceived an application from Borealis Infrastructure Trust (the"Issuer") and Borealis Infrastructure Trust ManagementInc. (the "Issuer Trustee"), the trustee of the Issuer,for a decision pursuant to the securities legislation of theJurisdictions (the "Legislation") that the requirementcontained in the Legislation to file with the Decision Makersinterim financial statements for each of the Issuer's financialyears shall not apply to the Issuer with respect to the firstand third quarters of each of its financial years;

AND WHEREAS pursuant to the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor this application;

AND WHEREAS the Issuer and the IssuerTrustee, on behalf of the Issuer, have represented to the DecisionMakers that:

The Issuer is a special purpose trust establishedby the Issuer Trustee pursuant to a declaration of trust datedApril 29, 1999 governed by the laws of the province of Ontario(the "Declaration of Trust"). The Issuer's principaloffice is located at the Canada Trust Tower, BCE Place, 161Bay Street, Suite 3100, P.O. Box 207, Toronto, Ontario, M5J2S1.

Pursuant to the Declaration of Trust, the businessactivities of the Issuer are specifically limited to the financing,acquisition and administration of interests in infrastructureprojects and related programs, for the purpose of producingincome therefrom, and the funding of such activities throughthe issuance of bonds evidencing indebtedness of the Issuerpursuant to the terms of a trust indenture (the "TrustIndenture") between the Issuer and the Trust Company ofBank of Montreal and supplemental indentures thereto. The Issuerdoes not carry on any activities other than those permittedunder the Declaration of Trust.

On June 2, 1999, the Issuer became a "reportingissuer" or the equivalent thereof in each of the Jurisdictionsunder the Legislation by filing and obtaining a receipt fora prospectus in respect of an initial offering of 6.35% Borealis-NovaScotia Learning Centres Secured Bonds, Series NS99-1 (the "NSBonds"). An aggregate principal amount of CAD$162,000,000NS Bonds were issued.

On May 3, 2001, the Issuer issued an aggregateprincipal amount of CAD$290,000,000 of 6.27% Borealis - EnersourceSeries Bonds (the "Enersource Bonds"). A materialchange report in respect of this issuance was filed with theDecision Makers on May 3, 2001. The Enersource Bonds were qualifiedfor distribution under a prospectus dated April 25, 2001 anda prospectus supplement dated April 26, 2001.

The Issuer has no other issued or outstandingsecurities other than the NS Bonds and the Enersource Bonds,and the securities of the Issuer are not listed on any stockexchange.

Holders of the NS Bonds and the EnersourceBonds will only have recourse to a specific and segregated poolof assets and the undertaking of the Issuer identified in supplementalindentures and will not have any further recourse to the Issuer.

The market value of each series of bonds issuedby the Issuer or the assets secured in favour of the bondholderswill not depend on the value or financial performance of theIssuer, but rather on factors relating to the specific infrastructureproject being funded by the bonds, such as: (i) the fixed rateof interest on the bonds in comparison to the prevailing Canadianinterest rate, (ii) the contractual arrangements in place tofund payments in respect of the bonds, (iii) the bondholders'security and the remedies available to the bondholders for non-performanceof the Issuer's obligations in respect of the bonds, and (iv)the rating assigned to the bonds by an approved credit ratingagency.

There is no requirement under the Trust Indenturefor the preparation, filing or delivery of interim financialstatements to bondholders.

The Trust Indenture contains extensive covenantsof the Issuer and, in the event of default by the Issuer inrespect thereof, the bondholders are entitled to enforce a rangeof remedies under the Trust Indenture.

AND WHEREAS pursuant to the System thisMRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers underthe Legislation is that the requirement contained in the Legislationto file with the Decision Makers interim financial statementsfor each of the Issuer's financial years shall not apply tothe Issuer with respect to the first and third quarters of eachof its financial years provided that this Decision shall terminateon the date that is 30 days after the issuance by the Issuerof a class of securities if any of the representations in paragraphs6 to 9, inclusive, of this Decision made in respect of the NSBonds and the Enersource Bonds could not also be made in respectof such additional class of securities.

May 23, 2002.

"R.L. Shirriff"      "H. Lorne Morphy"