Trilon Securities Corporation - ss. 5.1(2) of NI 33-105

Headnote

National Instrument 33-105 - Issuer proposingto make public offering of units - filer proposing to underwriteapproximately 4.1% of the offering - filer prohibited from actingas direct underwriter in the distribution since the issuer isa related issuer of the filer - filer unable to rely on exemptionin subsection 2.1(3) of NI 33-105 since the proportionate shareof the offering to be underwritten by the largest independentunderwriter is 14.2% - independent underwriters in the aggregatewill collectively underwrite approximately 42.1% of the offering- relief granted from subsection 2.1 of NI 33-105 in connectionwith the offering.

Applicable Rules

National Instrument 33-105 Underwriting Conflicts.

IN THE MATTER OF
NATIONAL INSTRUMENT 33-105
UNDERWRITING CONFLICTS ("NI 33-105")

AND

IN THE MATTER OF
TRILON SECURITIES CORPORATION

AND

GREAT LAKES HYDRO INCOME FUND

DECISION
(SUBSECTION 5.1(2) OF NI 33-105)

UPON the application of Trilon SecuritiesCorporation (the "Filer") to the Director of the OntarioSecurities Commission (the "Commission") for a decisionpursuant to subsection 5.1(2) of NI 33-105 that the Filer beexempt from the prohibition contained in subsection 2.1 of NI33-105 of registrants making a distribution under a prospectusas a direct underwriter if a related issuer of the registrantis the issuer in the distribution;

AND UPON considering the applicationand the recommendation of the staff of the Commission;

AND UPON the Filer representing to theCommission and the Director as follows:

1. Great Lakes Hydro Income Fund (the "Issuer")is an unincorporated open-ended trust created by a trust agreementdated September 14, 1999, as amended and restated October 27,1999, under the laws of the Province of Québec.

2. The Issuer's head office and registered officeis located in Masson-Angers, Québec.

3. The current primary business of the Issueris owning and operating electricity generating facilities inCanada.

4. The Issuer is not in financial difficulty.The Issuer is not under any immediate financial pressure toproceed with a proposed offering (the "Offering")of units ("Units") of the Issuer.

5. The Units are listed on The Toronto StockExchange.

6. The Issuer is currently a "reportingissuer" in each of the Provinces of Canada. The Offeringwill be made under a short form prospectus (the "Prospectus").The preliminary Prospectus relating to the Offering was filedon May 10, 2002.

7. The underwriters of the Offering (the "Underwriters")are CIBC World Markets Inc. ("CIBCWM"), RBC DominionSecurities Inc. ("RBCDS"), Scotia Capital Inc. ("Scotia"),TD Securities Inc. ("TDSI"), BMO Nesbitt Burns Inc.("Nesbitt"), National Bank Financial Inc. ("NBF"),Trilon Securities Corporation ("Trilon"), FirstEnergyCapital Corp. ("FEC") and HSBC Securities Canada Inc.("HSBC").

8. The proportionate share of the Offering underwrittenby each of the Underwriters is expected to be as follows:

9. The preliminary Prospectus containsand the final Prospectus will contain a certificate signed byeach of the Underwriters.

10. Canadian Imperial Bank of Commerce ("CIBC")and Royal Bank of Canada ("Royal") have extended toGreat Lakes Power Trust ("GLPT"), a trust wholly ownedby the Issuer, a secured credit facility in the amount of $50million (the "CIBC/Royal Loan"). As of March 31, 2002,approximately $7.3 million was outstanding under the CIBC/RoyalLoan and GLPT is in compliance with the terms of such loan.

11. National Bank of Canada ("National"),CIBC and Canadian Western Bank have extended to Powell RiverEnergy Inc. ("PREI"), an indirect subsidiary of theIssuer, a secured credit facility in the amount of $70 million(the "National/CIBC/CW Loan"). As of March 31, 2002approximately $70 million was outstanding under the National/CIBC/CWLoan and PREI is in compliance with the terms of such loan.The CIBC/Royal Loan and the National/CIBC/CW Loan are hereinaftercollectively referred to as the "Bank Loans" and CIBC,National and Royal are hereinafter collectively referred toas the "Banks".

12. Each of CIBCWM, RBCCM and NBF (the "ConnectedRegistrants") is a direct subsidiary of one of the Banks.

13. Trilon Bancorp Inc. ("Trilon Bancorp")has extended to PREI a secured credit facility in the amountof $35 million (the "Trilon PREI Loan"). As of March31, 2002 approximately $3 million was outstanding under theTrilon PREI Loan and PREI is in compliance with the terms ofsuch loan.

14. In connection with the funding of the acquisitionof four hydroelectric generating stations on the MississagiRiver, east of Sault Ste. Marie, Ontario for $340 million (the"Acquisition"), the Issuer will be entering into twobridge credit facilities which will be provided in whole orin part by Trilon Bancorp (the "Mississagi Credit Facilities").The first bridge credit facility will mature one year afterthe closing of the Acquisition (the "Mississagi Closing")and will be secured. Interest on amounts drawn and outstandingunder this facility will be charged at the 30 day CIBC BankersAcceptance rate plus 150 basis points and all interest paymentsare due and payable on the 28th day of each month. The secondbridge credit facility will mature 60 days after the MississagiClosing. Interest on amounts drawn and outstanding under thisfacility will be charged at the 30 day CIBC Bankers Acceptancerate plus 350 basis points. The second bridge credit facilityis subordinate to the terms of the first secured bridge creditfacility. The Mississagi Credit Facilities are subject to usualconditions precedent to be satisfied prior to drawdown. TheTrilon PREI Loan and the Mississagi Credit Facilities are hereinaftercollectively referred to as the "Trilon Loans".

15. Trilon Bancorp and Trilon are both subsidiariesof Trilon Financial Corporation ("Trilon Financial"),and both Trilon Financial and the Issuer are indirect subsidiariesof Brascan Corporation ("Brascan").

16. In light of the Bank Loans, the Issuer maybe considered a "connected issuer" of the ConnectedRegistrants pursuant to subsection 1.1 of NI 33-105.

17. In light of the Trilon Loans and the commonindirect ownership of both the Issuer and Trilon by Brascan,the Issuer may be considered to be both a "connected issuer"and a "related issuer" of Trilon pursuant to subsection1.1 and 1.2(2) of NI 33-105, respectively.
18. Each of Scotia, TDSI, Nesbitt, HSBC and FEC (the "IndependentUnderwriters") is unrelated to the Banks, to Trilon Bancorpand to the Issuer, and the Independent Underwriters are collectivelyunderwriting 42.1% of the Offering.

19. Subsection 2.1(3)(a) of NI 33-105 providesfor an exemption for registrants to whom subsection 2.1(2) applies,whereby at least one registrant acting as direct underwriteracts as principal, so long as an independent underwriter underwritesnot less than the lesser of (A) 20% of the dollar value of thedistribution, and (B) the largest portion of the distributionunderwritten by a registrant that is not an independent underwriter.However, under the Offering, no independent underwriter withinthe meaning of NI 33-105 will underwrite 20% or more of thedollar value of the distribution, and the largest portion ofthe distribution is not being underwritten by a registrant thatis an independent underwriter.

20. The Prospectus will contain the informationrequired in Appendix C to NI 33-105.

21. The Banks, Trilon Bancorp and Brascan didnot participate in the decision to make the Offering or in thedetermination of the terms of the distribution or the use ofproceeds thereof.

AND UPON the Commission being satisfiedthat to do so would not be prejudicial to the public interest;

IT IS HEREBY DECIDED pursuant to subsection5.1(2) of NI 33-105 that the Filer is exempt from subsection2.1 of NI 33-105 in connection with the Offering.

May 17, 2002.

"Margo Paul"