BMO Investments Inc. et al.

Headnote

NP 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Approval of mutual fund mergers -- approval required because mergers do not meet the criteria for pre-approved reorganizations and transfers in National Instrument 81-102 -- certain continuing funds have different investment objectives and fees than certain terminating funds, some mergers not a "qualifying exchange" or a tax-deferred transaction under the Income Tax Act - tailored prospectus of continuing funds will be sent to securityholders of terminating funds instead of a complete simplified prospectus -- financial statements of continuing funds not required to be sent to securityholders of terminating funds in connection with the mergers provided that the information circular sent for unitholder meetings clearly discloses the various ways unitholders can access the financial statements -- securityholders provided with timely and adequate disclosure regarding the mergers.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 5.5(1)(b), 5.6.

November 13, 2009

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the Jurisdiction)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

BMO INVESTMENTS INC.

(the Manager)

AND

BMO GUARDIAN CANADIAN MONEY MARKET FUND

BMO GUARDIAN U.S. MONEY MARKET FUND

BMO GUARDIAN CANADIAN BOND FUND

GGOF CANADIAN EQUITY FUND LTD.

BMO GUARDIAN AMERICAN EQUITY FUND LTD.

BMO GUARDIAN CANADIAN BALANCED FUND

BMO GUARDIAN EMERGING MARKETS FUND

BMO GUARDIAN EUROPEAN EQUITY FUND

BMO GUARDIAN GLOBAL REAL ESTATE FUND

BMO GUARDIAN CANADIAN RESOURCE FUND

BMO GUARDIAN SMALL CAP GROWTH AND INCOME FUND

BMO GUARDIAN GLOBAL DIVIDEND GROWTH FUND

BMO GUARDIAN JAPANESE EQUITY FUND

BMO GUARDIAN U.S. DIVERSIFIED MONTHLY INCOME FUND

(each, a Terminating Fund and collectively, the Terminating Funds,

and with the Manager, the Filers)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filers on behalf of the Terminating Funds for a decision under the securities legislation of the Jurisdiction (the Legislation) approving the mergers (the Mergers) of the Terminating Funds into the Continuing Funds (defined below) pursuant to subsection 5.5(1)(b) of National Instrument 81-102 Mutual Funds (NI 81-102) (the Approval Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Newfoundland and Labrador, Prince Edward Island, Northwest Territories, Nunavut and Yukon.

Interpretation

Terms defined in National Instrument 14-101 Definitions, and MI 11-102 have the same meaning if used in this decision, unless otherwise defined. The following additional terms shall have the following meanings:

BMO Guardian Funds means BMO Guardian Canadian Bond Fund, BMO Guardian Canadian Money Market Fund, BMO Guardian U.S. Money Market Fund, BMO Guardian American Equity Fund Ltd., GGOF Canadian Equity Fund Ltd., BMO Guardian Emerging Markets Fund, BMO Guardian European Equity Fund, BMO Guardian Global Dividend Growth Fund, BMO Guardian Global Real Estate Fund, BMO Guardian Japanese Equity Fund, BMO Guardian Asian Growth and Income Fund, BMO Guardian Canadian Resource Fund, BMO Guardian Canadian Balanced Fund, BMO Guardian Small Cap Growth and Income Fund and BMO Guardian U.S. Diversified Monthly Income Fund;

BMO Mutual Funds means BMO Bond Fund, BMO Money Market Fund, BMO U.S. Dollar Money Market Fund, BMO American Equity Class, BMO Canadian Equity Class, BMO Emerging Markets Fund, BMO European Fund, BMO Global Dividend Class, BMO Global Infrastructure Fund, BMO Resource Fund, BMO Asset Allocation Fund, BMO Special Equity Fund and BMO U.S. Dollar Monthly Income Fund;

Continuing Funds means BMO Money Market Fund, BMO U.S. Dollar Money Market Fund, BMO Bond Fund, BMO Canadian Equity Class, BMO American Equity Class, BMO Asset Allocation Fund, BMO Emerging Markets Fund, BMO European Fund, BMO Global Infrastructure Fund, BMO Resource Fund, BMO Specialty Equity Fund, BMO Global Dividend Class, BMO Guardian Asian Growth and Income Fund and BMO U.S. Dollar Monthly Income Fund;

Current Simplified Prospectus means, as applicable, the simplified prospectus relating to the BMO Mutual Funds dated May 8, 2009, as amended, the simplified prospectus relating to the BMO Mutual Funds dated October 29, 2008, as amended, or the simplified prospectus relating to the BMO Guardian Mutual Funds dated July 8, 2009, as amended, that qualifies the Continuing Funds, among others, for sale;

Fund or Funds means, individually or collectively, the Terminating Funds and the Continuing Funds;

IRC means the independent review committee for the Funds;

Materially Changed Continuing Funds means BMO Canadian Equity Class and BMO American Equity Class;

NI 81-102 means National Instrument 81-102 Mutual Funds;

NI 81-107 means National Instrument 81-107 Independent Review Committee for Investment Funds;

Preliminary Simplified Prospectus means the preliminary simplified prospectus of the Continuing Funds (other than BMO Guardian Asian Income and Growth Fund) dated September 28, 2009; and

Tax Act means the Income Tax Act (Canada).

Representations

This decision is based on the following facts represented by the Filers:

1. The Manager is a corporation governed by the laws of Canada with its head office in Toronto, Ontario.

2. The Manager is the manager of the BMO Mutual Funds and of the BMO Guardian Funds.

3. The Funds are either open ended mutual fund trusts established under the laws of Ontario or mutual fund corporations governed under the laws of Canada or Ontario.

4. Securities of the Funds are offered under one or more of three different simplified prospectuses and annual information forms. Securities of the Funds are currently qualified for sale either by a simplified prospectus and annual information form dated May 8, 2009 (as amended), a simplified prospectus and annual information form dated July 8, 2009 (as amended) and/or a simplified prospectus and annual information form dated November 3, 2009 (the Offering Documents).

5. Each of the Funds is a reporting issuer under the applicable securities legislation of each province and territory of Canada (the Legislation) and is not on the list of defaulting reporting issuers maintained under the applicable Legislation.

6. Other than circumstances in which the securities regulatory authority of a province or territory of Canada has expressly exempted a Fund therefrom, each of the Funds follows the standard investment restrictions and practices established under the Legislation.

7. The net asset value for each class or series of the Funds is calculated on a daily basis in accordance with the Funds' valuation policy as described in the Offering Documents.

8. The Manager intends to reorganize the Funds as follows:

(a) BMO Guardian Canadian Bond Fund will merge into BMO Bond Fund;

(b) BMO Guardian Canadian Money Market Fund will merge into BMO Money Market Fund;

(c) BMO Guardian U.S. Money Market Fund will merge into BMO U.S. Dollar Money Market Fund;

(d) BMO Guardian American Equity Fund Ltd. will merge into BMO American Equity Class;

(e) GGOF Canadian Equity Fund Ltd. will merge into BMO Canadian Equity Class;

(f) BMO Guardian Emerging Markets Fund will merge into BMO Emerging Markets Fund;

(g) BMO Guardian European Equity Fund will merge into BMO European Fund;

(h) BMO Guardian Global Dividend Growth Fund will merge into BMO Global Dividend Class;

(i) BMO Guardian Global Real Estate Fund will merge into BMO Global Infrastructure Fund;

(j) BMO Guardian Japanese Equity Fund will merge into BMO Guardian Asian Growth and Income Fund;

(k) BMO Guardian Canadian Resource Fund will merge into BMO Resource Fund;

(l) BMO Guardian Canadian Balanced Fund will merge into BMO Asset Allocation Fund;

(m) BMO Guardian Small Cap Growth and Income Fund will merge into BMO Special Equity Fund; and

(n) BMO Guardian U.S. Diversified Monthly Income Fund will merge into BMO U.S. Dollar Monthly Income Fund.

9. The Merger of BMO Guardian American Equity Fund Ltd. into BMO American Equity Class and the Merger of GGOF Canadian Equity Fund Ltd. into BMO Canadian Equity Class will be a material change for each of these Materially Changed Continuing Funds, as the net asset values of each of these Continuing Funds are smaller than the net asset values of each applicable Terminating Fund.

10. A press release announcing the proposed Mergers was issued and filed on September 25, 2009 and amendments to the simplified prospectuses and annual information forms of the Funds and a material change report with respect to the proposed Mergers was filed via SEDAR on September 25, 2009.

11. As required by National Instrument 81-107, an IRC has been appointed for the Funds. The potential conflict of interest matters related to the Mergers were presented to the IRC for a recommendation. The IRC reviewed the potential conflict of interest matters related to the proposed Mergers and provided a positive recommendation for the Mergers, having determined that the proposed Mergers, if implemented, achieve a fair and reasonable result for each of the Funds.

12. The Manager believes it is in the overall best interest of investors to implement the Mergers on a taxable basis as most Continuing Funds have unused tax losses that would expire if the Mergers were completed on a tax-deferred basis. By completing the Mergers on a taxable basis, these unused losses will be preserved for use in future years for the benefit of investors of the relevant Terminating Funds that become investors of the applicable Continuing Funds and for the benefit of the existing investors of the applicable Continuing Funds. In addition, for those investors of the Terminating Funds who realize capital gains as a consequence of the Mergers, the Manager believes that, due to current economic conditions, such investors will have capital losses from other sources (including from other Terminating Funds) available to shelter capital gains.

13. The Manager believes that the Mergers are beneficial to securityholders of each Terminating Fund and Continuing Fund for the following reasons:

(a) securityholders of the applicable Terminating Fund will enjoy increased economies of scale and lower fund operating expenses (which are borne directly by securityholders) as part of a larger combined Continuing Fund;

(b) securityholders of each Terminating Fund will move to a fixed administration fee in the Continuing Fund, which is easier to understand and more transparent than the variable expenses charged to the Terminating Fund;

(c) the Mergers will eliminate duplicate fund offerings across product line-ups, thereby reducing the administrative and regulatory costs of operating each Terminating Fund and Continuing Fund as a separate mutual fund;

(d) following the Merger, each Continuing Fund will have a portfolio of greater value, allowing for increased portfolio diversification opportunities;

(e) in most cases, there is a large overlap between portfolio holdings of the Terminating Fund and portfolio holdings of the Continuing Fund; and

(f) each Continuing Fund, as a result of its greater size, will benefit from its larger profile in the marketplace.

14. The investment portfolio and other assets of each Terminating Fund to be acquired by the applicable Continuing Fund arising from the Mergers are currently, or will be, acceptable, on or prior to the effective date of the Mergers, to the portfolio manager(s) of the applicable Continuing Fund and are or will be consistent with the investment objectives of the applicable Continuing Fund.

15. Each Continuing Fund will not assume liabilities of the applicable Terminating Fund and the Terminating Fund will retain sufficient assets to satisfy its estimated liabilities, if any, as of the effective date of the Mergers.

16. Securityholders of each Terminating Fund will receive, on a dollar-for-dollar and class-by-series or class basis, securities in an equivalent series of the applicable Continuing Fund as they currently own in the Terminating Fund. Where applicable, Mutual Fund securities of a Terminating Fund will be exchanged for those series of securities which contain the words "Advisor Series" of its corresponding Continuing Fund.

17. No sales charges will be payable in connection with the acquisition by a Continuing Fund of the investment portfolio of an applicable Terminating Fund.

18. Each Terminating Fund will merge into the applicable Continuing Fund on or about the close of business on the dates set out in Schedule A and the Continuing Funds will continue as publicly offered open end mutual funds trusts or corporations governed by the laws of Ontario or Canada, as applicable.

19. Each Terminating Fund will be wound up as soon as reasonably possible following the relevant Merger.

20. Securityholders of a Terminating Fund will continue to have the right to redeem securities of the Terminating Fund at any time up to the close of business on the business day immediately before the effective date of the Mergers.

21. A notice of meeting, a management information circular and a proxy in connection with meetings of securityholders (collectively, the Meeting Materials), describing the proposed Mergers and the IRC's recommendation under paragraph 11 above, was mailed to securityholders of the Terminating Funds and securityholders of the Materially Changed Continuing Funds, commencing October 19, 2009 and was filed via SEDAR on October 21, 2009.

22. Securityholders of the Terminating Funds, and the Materially Changed Continuing Funds have approved the Mergers at meetings held on November 10, 2009.

23. The Manager will pay for the costs of the Mergers. These costs consist mainly of brokerage charges associated with the merger-related trades that occur both before and after the date of the Mergers and legal, proxy solicitation, printing, mailing and regulatory fees.

24. Approval of the Mergers is required because each Merger does not satisfy all of the criteria for pre-approved reorganizations and transfers set out in section 5.6 of NI 81-102 in the following ways:

(a) in each of the following Mergers, the Continuing Funds do not have substantially similar investment objectives to the relevant Terminating Fund:

(i) the Merger of BMO Guardian European Equity Fund into BMO European Fund;

(ii) the Merger of BMO Guardian Global Real Estate Fund into BMO Global Infrastructure Fund; and

(iii) the Merger of BMO Guardian Japanese Equity Fund into BMO Guardian Asian Growth and Income Fund.

(b) in all of the Mergers, with the exception of the Merger of BMO Guardian Japanese Equity Fund into BMO Guardian Asian Growth and Income Fund, the Continuing Funds and relevant Terminating Fund do not have substantially similar fee structures;

(c) each of the Mergers will not be a "qualifying exchange" within the meaning of section 132.2 of the Tax Act or a tax-deferred transaction under subsection 85(1), 85.1(1), 86(1) or 87(1) of the Tax Act;

(d) the Current Simplified Prospectus was not sent to securityholders of the Terminating Funds but, instead:

(i) each securityholder of BMO Guardian Japanese Equity Fund was sent an excerpt of the Current Simplified Prospectus for BMO Guardian Asian Growth and Income Fund consisting of Part A and the Part B for the Continuing Fund; and

(ii) each securityholder of the Terminating Funds other than BMO Guardian Japanese Equity Fund was sent an excerpt of the Preliminary Simplified Prospectus, consisting of Part A and the Part B for the relevant Continuing Fund; and

(e) the most recent annual and interim financial statements for the Continuing Funds were not sent to the securityholders of the Terminating Funds but, instead, the information circular sent to securityholders of the Terminating Funds prominently disclosed that they can obtain the most recent interim and annual financial statements of the Continuing Funds by accessing the SEDAR website at www.sedar.com, by accessing the Manager's website or by calling a toll-free number.

25. The Manager will, except as noted above in paragraph 24, comply with all of the other criteria for pre-approved reorganizations and transfers set out in section 5.6 of NI 81-102.

26. The tax implications of the Mergers as well as the foregoing differences between the investment objectives of the Terminating Funds and the Continuing Funds are described in the Meeting Materials so that the securityholders of the Terminating Funds may consider this information before voting on the Mergers. The Meeting Materials also describe the various ways in which investors can obtain a copy of the annual information forms and the management reports of fund performance for the Continuing Funds.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Approval Sought is granted provided that:

(a) the information circular sent to securityholders in connection with a Merger provides sufficient information about the Merger to permit securityholders to make an informed decision about the Merger;

(b) the information circular sent to securityholders in connection with a Merger prominently discloses that securityholders can obtain the most recent interim and annual financial statements of the applicable Continuing Fund by accessing the SEDAR website at www.sedar.com, by accessing the Manager's website or by calling the Manager's toll-free telephone number;

(c) upon request by a securityholder for financial statements, the Manager will make best efforts to provide the securityholder with financial statements of the applicable Continuing Fund in a timely manner so that the securityholder can make an informed decision regarding a Merger;

(d) each applicable Terminating Fund and the applicable Continuing Fund with respect to a Merger have an unqualified audit report in respect of their last completed financial period;

(e) the material sent to each securityholder of BMO Guardian Japanese Equity Fund in respect of the Merger includes a tailored simplified prospectus consisting of:

(i) the Part A of the Current Simplified Prospectus of BMO Guardian Asian Growth and Income Fund and

(ii) the Part B of the Current Simplified Prospectus of BMO Guardian Asian Growth and Income Fund; and

(f) the material sent to each securityholder of the Terminating Funds other than BMO Guardian Japanese Equity Fund in respect of the Mergers includes a tailored simplified prospectus consisting of:

(i) the Part A of the Preliminary Simplified Prospectus and

(ii) the Part B of the Preliminary Simplified Prospectus of the applicable Continuing Fund.

SCHEDULE A

±A class of BMO Global Tax Advantaqe Funds Inc.