Securities Law & Instruments


Mutual Reliance Review System for ExemptiveRelief Applications - Decision declaring corporation to be nolonger a reporting issuer following the acquisition of all ofits outstanding securities by another issuer.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.,s. 83.













WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof Alberta and Ontario (the "Jurisdictions") has receivedan application from Carfinco Inc. ("Carfinco") fora decision pursuant to the securities legislation of the Jurisdictions(the "Legislation") that Carfinco be deemed to haveceased to be a reporting issuer under the Legislation;

AND WHEREAS, unless otherwise defined,the terms used herein have the meaning set out in National Instrument14-101 Definitions;

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

AND WHEREAS Carfinco has representedto the Decision Makers that:

1. Carfinco was formed under the BusinessCorporations Act (Ontario) ("OBCA") on December30, 1996;

2. in May, 1997, the common shares of Carfinco(the "Common Shares") began trading on the CanadianDealing Network ("CDN");

3. effective September 29, 2000, the CDN wastransferred by the Toronto Stock Exchange to what is now theTSX Venture Exchange (the "TSXV");

4. the Common Shares commenced trading onthe TSXV on October 10, 2000;

5. Carfinco became a reporting issuer in Albertaon October 10, 2000 and in Ontario on April 17, 1997;

6. as at November 25, 2002, the issued andoutstanding securities of Carfinco consisted of 14,820,750Common Shares;

7. Carfinco is not in default of any of therequirements of the Legislation;

8. under an arrangement agreement dated August26, 2002 among Carfinco, Carfinco Acquisition Corp. ("AcquisitionCo"),Canadian Automotive Finance Corporation ("CAFC"),Carfinco Limited Partnership ("Carfinco LP"), CarfincoHoldings Trust ("Holdings Trust") and Carfinco IncomeFund (the "Fund") (the "Arrangement Agreement"),the parties thereto agreed, among other things, to take allreasonable action necessary to give effect to a plan of arrangement(the "Arrangement") under Section 182 of the OBCAin order to reorganize the affairs of Carfinco to create atrust structure;

9. at the special meeting of security holdersof Carfinco held on October 2, 2002, the security holdersof Carfinco approved the Arrangement;

10. by Final Order of the Ontario SuperiorCourt of Justice granted on October 4, 2002, the Arrangementwas approved and, upon the filing of Articles of Arrangementon November 27, 2002 pursuant to the OBCA, was made effective;

11. pursuant to the Arrangement, holders ofthe Common Shares exchanged their Common Shares for trustunits of the Fund (the "Trust Units") on the basisof one Trust Unit for each Common Share held. Upon completionof the Arrangement, former Carfinco shareholders would ownall of the Trust Units of the Fund;

12. pursuant to the Arrangement, Carfinco,CAFC and AcquisitionCo amalgamated (the "Amalgamation")under the name Carfinco Inc. Pursuant to the Amalgamation,each Common Share, all of which shares were then held by AcquisitionCo,was deemed to be cancelled without any repayment of capital;

13. following the Amalgamation, the Fund becamethe sole shareholder of Carfinco;

14. Carfinco's head office is located in Edmonton,Alberta;

15. as a result of the Arrangement, the Fundindirectly carries on the business of Carfinco, through CarfincoLP. The former shareholders of Carfinco hold all of the TrustUnits of the Fund. The Fund is the sole beneficiary of HoldingsTrust, which is a limited partner of, and holds an approximately86% partnership interest in, Carfinco LP. The Fund also ownsall of the shares of Carfinco, which is the general partnerof, and holds a 14% interest in, Carfinco LP. Carfinco holdssubstantially all of the assets of Carfinco (and CAFC) andwill continue to conduct the business of Carfinco. Accordingly,the former shareholders of Carfinco continue to own, indirectly,substantially all of the economic interest in the Carfincobusiness and will participate in distributions of income fromthe Fund. Substantially all of Carfinco LP's income will beallocated by the Fund to holders of Trust Units;

16. on December 5, 2002, the Common Shareswere delisted by the TSXV and no securities of Carfinco arelisted or quoted on any exchange or market;

17. the Trust Units were listed and postedfor trading on the TSXV on December 6, 2002;

18. other than the Common Shares owned bythe Fund, Carfinco has no securities, including debt securities,outstanding;

19. Carfinco does not intend to seek publicfinancing by way of an offering of its securities;

AND WHEREAS under the System, this MRRSDecision Document evidences the decision of each Decision Maker(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;

AND WHEREAS the Decision of the DecisionMakers pursuant to the Legislation is that Carfinco is deemedto have ceased to be a reporting issuer under the Legislation.

January 13, 2003.

"Patricia M. Johnston"