interest, principal and tax payments price and the amount remaining on of about $1080 per month. If taxes the old mortgage, but charge you inare $100 per month and the interest terest on the combined amount at a rates are 10.5%, you could finance a higher rate than the old mortgage. While you make regular payments to mortgage of up to $105 500. You might consider a "wrap- your lenders, they in turn pay the around" mortgage if you want to buy holder of the old mortgage. Often current interest rates are a property already mortgaged by the current owner. Assuming the first higher than rates on existing mortmortgage lender will not increase the gages, so there is obviously an advanfirst mortgage, the usual course of tage in any arrangement that can preaction would be to finance the total serve the lower costs of the existing purchase price with a new mortgage. mortgage. But there are a few probThe proceeds from the new mortgage lems. Perhaps the existing mortgage would be used to pay the seller and on the home ends automatically when the house is sold. As well, legal fees pay off the old mortgage. A second course would be to as- may be higher than usual. So before sume the owner's mortgage and fi- proceeding, work out the average innance the difference with a second terest cost of combining a second mortgage. If second mortgage rates mortgage and a first mortgage and seem high, the wraparound mort- compare this with the wraparound gage provides a third alternative. interest rate. The wraparound may Your lenders give you a mortgage for appear easier, but it could be costly the difference between the purchase in the long run.
Mortgage insurance on National Housing Act loans provided by approved lenders, such as banks and trust companies, is usually about .875% for existing houses and 1% on new ones. This is not life insurance. It is a policy under which the insurance company guarantees that if the borrower defaults for any reason, the mortgage lender will get back all the outstanding principal. The property is, of course, the security. You will also have to pay an appraisal fee of $100. Many mortgage lenders deduct part of the loan to provide a reserve for future tax payments. Remember that your lawyer will want to be paid for arranging the mortgage. Ask first what it will cost. When an existing mortgage is assumed many of these hidden costs can be avoided.E
Physician manpower seminars. Part V: The ins and outs of incorporation RICHARD STARKS If doctors have really earned their reputation for being naive in investment and money-management decisions they gave little sign of it on the last day of the 3-day MD Management Ltd. symposium. The subject of the morning session - incorporation - was clearly one with which many were familiar, so that at times the listeners were ahead of the speakers. Certainly, the audience showed itself to be more than capable of grasping the financial twists and turns - and the legal ones too - that go with the setting up of a corporation. About a dozen of the participants were practitioners' wives, who had attended the seminar (as one said) to be convinced that incorporation is a legitimate practice enshrined in law, that it can lead to significant financial benefits and that it is not likely to land their doctor-husbands in trouble with the tax man - or, worse still, in jail. They came, in other words, to be reassured by hearing the truth from reputable sources. A similat number, however, had already established corporations and were fully aware of the complexities.
They had come for a fine-tuning of their existing knowledge, rather than an introduction to the basic mechanics. The audience, as one speaker said, was therefore "not as unsophisticated" as some medical audiences he had earlier addressed. And that led to a lively, and at times spirited, session. First to address the seminar was Richard Pyne, a lawyer and partner in the Toronto firm of Pyne and Rovet. A recognized expert in setting up corporations, he brought to the seminar the added advantage of having seen the picture from the other side too; before going into private legal practice he had worked for the Justice Department in Ottawa where he had argued many of the cases that have set the precedents which now shape and control what a corporation can and cannot do. Corporate advantages
Pyne started by explaining the basic concept of a corporation. It is, he said, a "fictitious legal entity", which has a separate and distinct existence all of its own - an exist-
646 CMA JOURNAL/SEPTEMBER 23, 1978/VOL. 119
ence that is quite independent of the people who own and control it. It is possible, as a result, for an individual to create two separate income centres: a personal one and a corporate one. That concept may well have had just theoretical interest for many individuals, were it not for the difference in the way individuals and corporations are taxed. Pyne explained it this way: for an individual, the rate at which he is taxed varies with his income: the higher the income, the higher the rate. For a corporation, however, this is not the case. If a corporation is publicly owned, tax will be levied at a rate of 46% -49%, depending on the provincial rate that is applied. If a corporation is privately owned by 50 or fewer Canadian residents, then it will be taxed at the same rate only if it earns "passive income for example, income from investments or interest from a bank account. If the private company earns "active" business income, however, it will be taxed at a rate of just 25% -28%, again depending on the province.
The distinction between active and passive income is unfortunately blurred, even though it is obviously a crucial factor. Many questions from the audience reflected a desire for a clear-cut definition, but as Pyne indicated, it simply was not possible to give instant tax rulings in such a grey area. However, it was clear that many of the functions of a doctor's practice can be put under the umbrella of a corporation that earns active income. And that, of course, can lead to a substantial saving in tax. If a doctor can split off part of his income so that it is earned by a corporation, then it will be taxed at the 25% -28% rate, instead of his personal rate, which is certain to be higher. (For an individual earning as much as $85 000, the marginal tax rate goes as high at 60%.) If the money saved from the taxman were immediately withdrawn from the company, the doctor would have to declare it as personal income and pay tax on it at his marginal rate; nothing would have been gained. If he were to leav'. it inside the company, however, he would be able to reinvest it and pay tax at the corporate rate on the income earned. Eventually, the money would likely be withdrawn, at which time it would trigger a personal tax. The tax would therefore have been deferred, not avoided. However, as Pyne said, the money could be withdrawn at a time when the doctor's income and personal income tax were lower - after retirement perhaps. Another potential tax saving results, Pyne said, from income splitting. If a doctor's wife is involved in running the administrative side of a practice, the doctor cannot deduct her salary from his taxable income. However, a company can. So if the doctor establishes a corporation and his wife is employed by that corporation, then he can reduce his tax bill. The wife would have to pay tax on her income, but at a rate probably lower than her husband's. Also, if she were a shareholder in the company, she would be able to receive income as dividends, and so take advantage of the dividend tax credit. So what kind of corporation can a doctor establish? There are, Pyne said, two types. First, he can set up a management corporation in which all the income
that normally goes to the doctor goes ing, because it allows him to reduce instead to the corporation. In effect, his taxable income. The corporation the doctor becomes an employee of would have to pay tax on the markhis own corporation. However, while up, but of course it pays tax at the the concept of a management cor- lower, corporate rate. poration has been firmly established Although Pyne said he knew of in Canada for more than a decade, cases where Revenue Canada has acit has not as yet been extended to cepted a 20% mark-up, the accepted doctors. In a court case in British level is 15%. A doctor with a Columbia, where a doctor's manage- $30 000 overhead would therefore ment corporation was first put to a be able to reduce his taxable income test, the concept was struck down by 15% of that $30000 - or because the "medical act did not con- $4500. "It's nowhere near as good template corporations carrying on as a management corporation, but medicine." that's all that's available to you in this jurisdiction (Ontario)." Setting up a service corporation is Alberta exception "simple enough in concept"; the The one exception to this is complexities arise only in the actual Alberta, where a doctor is allowed procedures that have to be followed. to operate his professional practice The key thing to remember is that through a corporation. (In answer to the corporation must be established a question from the audience, Pyne in such a way that it won't be ignored explained that the limited liability or struck down by the Department normally associated with a corpora- of National Revenue. As Pyne detion does not extend to professional scribed it, there are four main lines corporations.) Michael Landry, mar- of attack that must be guarded keting vice president of MD Manage- against: ment Ltd., predicted that the other * The tax department will either provinces would follow suit "within not recognize, or it will strike down, 2 to 3 years". British Columbia has any service corporation it considers already had a "flirtation" with the a "sham" - that is, an "ostensible idea. But, with that one exception, arrangement that is not the real arthe rule remains that "you cannot rangement". practise medicine as a corporation". * The department might also atAs one member of the audience tack the company if there is no said: "Fair enough. Now we know what we can't do. But what can we "bona fide business purpose for which it was established". Saving do?" taxes is not a bona fide business For doctors outside Alberta, Pyne purpose. said, there is one other possibility * The corporation will be vuland that is to set up a service or facilities corporation, which would nerable if it is used to create an artiprovide "to the medical practice the ficial reduction in income - if, for non-medical or paramedical services example, a doctor pays it for services that are needed. For example, the he doesn't need or receive, or if he service corporation might employ pays it, say, $100 for a service that non-medical people such as secre- normally would cost him just $10. taries or maintenance staff, own the "Greed," Pyne said, "is going to get building in which the practice is lo- you into trouble. Don't take too cated and charge the doctor rent, much." purchase supplies and equipment * The doctor will also run into that are required by the practice or difficulty if his service corporation perhaps provide all bookkeeping exists only on paper and not in services. It can, in other words, pro- reality. The company must be seen vide almost any service associated to be "doing something". The nonwith the practice, except for the medical staff should be transferred medical ones. from the practice to the company, For these services, the doctor but they should also know they've would pay the company a fee. He been transferred, so that if they are could also pay it a "mark-up" on the asked, they will say that they work fee, so that the service company for the company and not for the would show a profit. It is this mark- doctor. Then, too, the company up that gives the doctor his tax say- should be given some tangible signs GMA JOURNAL/SEPTEMBER 23, 1978/VOL. 119 647
that support its existence - its own telephone listing, for example, and its own letterhead, bank account, office space, and so on. In response to a question from the audience, Pyne said that the likelihood of a service corporation's being struck down was low. "The chances are minimal. But if an assessor walks in on you and finds the company doesn't do anything, then the chances are high." In setting up the corporation, there is considerable leeway in deciding the most suitable share structure to adopt - and the option that is selected can lead to benefits beyond the immediate tax saving. For example, a doctor could set up his share structure so that he personally holds preferred shares that carry perhaps 10 votes each. He would then be able to outvote all other shareholders, and so have control. Meanwhile, he might issue common shares to his family, so that they could participate in the growth of the company, and so that the size of his estate could be held below $300 000 - the level at which succession duties would be triggered upon death. Also, once established, the company could have additional functions, such as holding the doctor's other investments, and thereby limiting his financial liabilities. In a specific example to show the tax-saving benefits, Landry led the audience through a situation in which a doctor has $80 000 in gross income and $30 000 in expenses. Allowing for normal deductions and assuming a 1977 tax rate, the doctor would save himself $2000-$2500 if
he employed a service corporation. (The example assumes a 15% mark-up.) While the saving might seem attractive, there are costs associated with the company that can rapidly take away some of the glitter. First, there are accounting fees, which, Landry said, could be as high as $800 (although they should be lower). Second, there is the initial cost of establishing the company, which might run anywhere from $600-$2000 (although, again, it would likely be lower - perhaps in the $600-$800 range). Also, if the doctor's annual expenses were lower than the $30 000 assumed in the example, then clearly his after-tax saving would be lower too. Furthermore, the example assumes that the doctor's wife is employed by the company and that she is paid an annual salary of $4000 - an amount that reflects fair market value for the part-time work she performs. If the wife does not work for the company then the overall tax saving will once more be reduced. If both these situations apply - a lower overhead and a wife who does not work for the corporation - then the corporation might well end up costing the doctor money, rather than offering him a saving. "You have to work it out carefully," Landry said, "to see if a service company is really worthWhile." There was much interest in the concept of a service corporation and in the tax savings that could be realized as a result. One doctor in the audience, for example, was a
member of a clinic in which 45 doctors were considering establishing a service company each. The good attendance, the lively discussion and the range and number of questions all reflected that interest. At times, though, the session bogged down in detail so that the underlying benefits were either lost or obscured. At other times, it seemed too unstructured, trying, as some doctors said, to cover too much ground that was not directly relevant to the audience. And then, too, there was Landry's warning that the benefits were not automatic, but had to be carefully weighed in the balance. Whatever the reason, the session by no means convinced everyone present that incorporation is really worthwhile. As one doctor said: "It's a lot easier to hear how it's done than to go out and do it. The savings just don't seem that great for the amount of effort involved." What seems to have happened is that those doctors who have already established corporations came away with their decisions endorsed. One (younger) doctor, who had set up a service company 2 years before, said bluntly: "You'd have to be crazy not to do it." At the same time, though, those who have not established a corporation remained unconvinced of their value. Not many minds were changed. Meanwhile, one (older) doctor had his own views on corporations and on the advantages of having his wife employed by one. "She may be a qualified nurse," he said, "but there's no way I'd want to work with her. It's just not on."
Part VI: A grab bag of investment options The final half-day session of the MD Management 3-day seminar roamed over a number of topics from tax shelters such as MURBs and movies to investment vehicles such as annuities and real estate. It was a lucky-dip grab bag of investment ideas - options, straddles, puts, calls - that were plucked out almost at random. What stood out most, however, was the presentation by the three senior executives of Mackenzie Financial Investment Management Ltd.. 648 CMA JOURNAL/SEPTEMBER 23,
the Toronto firm that took over the bulk of the management of the CMARSP stock fund June 1 this year. It's not hard to see why the management of the fund has been shifted. Under the Royal Trust Company, which had managed the fund since 1957, the common stock fund (but not the guaranteed income fund) has performed dismally - as few doctors probably need or want to be reminded. It ranked 56th out of 66 comparable funds recently assessed 1978/VOL. 119
by Pirbeck Investment Measurement Ltd., so the management was long overdue for a change. The Mackenzie people, meanwhile, have a remarkable record. As B.E. Freamo, executive vice president of MD Management Ltd., said in introducing the three speakers, the Industrial Growth Fund that Mackenzie manages ranks first in performance among all Canadian registered retirement savings plans over the past 5 years. Last year alone, it had an impressive 28% rate of return.
Mortgage insurance on National Housing Act loans provided by approved lenders, such as banks and trust companies, is usually about .875% for existing houses and 1% on new ones. This is not life insurance. It is a policy under which the insurance company guarantees that if the borrower defaults for any reason, the mortgage lender will get back all the outstanding principal. The property is, of course, the security. You will also have to pay an appraisal fee of $100. Many mortgage lenders deduct part of the loan to provide a reserve for future tax payments. Remember that your lawyer will want to be paid for arranging the mortgage. Ask first what it will cost. When an existing mortgage is assumed many of these hidden costs can be avoided.E
Physician manpower seminars. Part V: The ins and outs of incorporation RICHARD STARKS If doctors have really earned their reputation for being naive in investment and money-management decisions they gave little sign of it on the last day of the 3-day MD Management Ltd. symposium. The subject of the morning session - incorporation - was clearly one with which many were familiar, so that at times the listeners were ahead of the speakers. Certainly, the audience showed itself to be more than capable of grasping the financial twists and turns - and the legal ones too - that go with the setting up of a corporation. About a dozen of the participants were practitioners' wives, who had attended the seminar (as one said) to be convinced that incorporation is a legitimate practice enshrined in law, that it can lead to significant financial benefits and that it is not likely to land their doctor-husbands in trouble with the tax man - or, worse still, in jail. They came, in other words, to be reassured by hearing the truth from reputable sources. A similat number, however, had already established corporations and were fully aware of the complexities.
They had come for a fine-tuning of their existing knowledge, rather than an introduction to the basic mechanics. The audience, as one speaker said, was therefore "not as unsophisticated" as some medical audiences he had earlier addressed. And that led to a lively, and at times spirited, session. First to address the seminar was Richard Pyne, a lawyer and partner in the Toronto firm of Pyne and Rovet. A recognized expert in setting up corporations, he brought to the seminar the added advantage of having seen the picture from the other side too; before going into private legal practice he had worked for the Justice Department in Ottawa where he had argued many of the cases that have set the precedents which now shape and control what a corporation can and cannot do. Corporate advantages
Pyne started by explaining the basic concept of a corporation. It is, he said, a "fictitious legal entity", which has a separate and distinct existence all of its own - an exist-
646 CMA JOURNAL/SEPTEMBER 23, 1978/VOL. 119
ence that is quite independent of the people who own and control it. It is possible, as a result, for an individual to create two separate income centres: a personal one and a corporate one. That concept may well have had just theoretical interest for many individuals, were it not for the difference in the way individuals and corporations are taxed. Pyne explained it this way: for an individual, the rate at which he is taxed varies with his income: the higher the income, the higher the rate. For a corporation, however, this is not the case. If a corporation is publicly owned, tax will be levied at a rate of 46% -49%, depending on the provincial rate that is applied. If a corporation is privately owned by 50 or fewer Canadian residents, then it will be taxed at the same rate only if it earns "passive income for example, income from investments or interest from a bank account. If the private company earns "active" business income, however, it will be taxed at a rate of just 25% -28%, again depending on the province.
The distinction between active and passive income is unfortunately blurred, even though it is obviously a crucial factor. Many questions from the audience reflected a desire for a clear-cut definition, but as Pyne indicated, it simply was not possible to give instant tax rulings in such a grey area. However, it was clear that many of the functions of a doctor's practice can be put under the umbrella of a corporation that earns active income. And that, of course, can lead to a substantial saving in tax. If a doctor can split off part of his income so that it is earned by a corporation, then it will be taxed at the 25% -28% rate, instead of his personal rate, which is certain to be higher. (For an individual earning as much as $85 000, the marginal tax rate goes as high at 60%.) If the money saved from the taxman were immediately withdrawn from the company, the doctor would have to declare it as personal income and pay tax on it at his marginal rate; nothing would have been gained. If he were to leav'. it inside the company, however, he would be able to reinvest it and pay tax at the corporate rate on the income earned. Eventually, the money would likely be withdrawn, at which time it would trigger a personal tax. The tax would therefore have been deferred, not avoided. However, as Pyne said, the money could be withdrawn at a time when the doctor's income and personal income tax were lower - after retirement perhaps. Another potential tax saving results, Pyne said, from income splitting. If a doctor's wife is involved in running the administrative side of a practice, the doctor cannot deduct her salary from his taxable income. However, a company can. So if the doctor establishes a corporation and his wife is employed by that corporation, then he can reduce his tax bill. The wife would have to pay tax on her income, but at a rate probably lower than her husband's. Also, if she were a shareholder in the company, she would be able to receive income as dividends, and so take advantage of the dividend tax credit. So what kind of corporation can a doctor establish? There are, Pyne said, two types. First, he can set up a management corporation in which all the income
that normally goes to the doctor goes ing, because it allows him to reduce instead to the corporation. In effect, his taxable income. The corporation the doctor becomes an employee of would have to pay tax on the markhis own corporation. However, while up, but of course it pays tax at the the concept of a management cor- lower, corporate rate. poration has been firmly established Although Pyne said he knew of in Canada for more than a decade, cases where Revenue Canada has acit has not as yet been extended to cepted a 20% mark-up, the accepted doctors. In a court case in British level is 15%. A doctor with a Columbia, where a doctor's manage- $30 000 overhead would therefore ment corporation was first put to a be able to reduce his taxable income test, the concept was struck down by 15% of that $30000 - or because the "medical act did not con- $4500. "It's nowhere near as good template corporations carrying on as a management corporation, but medicine." that's all that's available to you in this jurisdiction (Ontario)." Setting up a service corporation is Alberta exception "simple enough in concept"; the The one exception to this is complexities arise only in the actual Alberta, where a doctor is allowed procedures that have to be followed. to operate his professional practice The key thing to remember is that through a corporation. (In answer to the corporation must be established a question from the audience, Pyne in such a way that it won't be ignored explained that the limited liability or struck down by the Department normally associated with a corpora- of National Revenue. As Pyne detion does not extend to professional scribed it, there are four main lines corporations.) Michael Landry, mar- of attack that must be guarded keting vice president of MD Manage- against: ment Ltd., predicted that the other * The tax department will either provinces would follow suit "within not recognize, or it will strike down, 2 to 3 years". British Columbia has any service corporation it considers already had a "flirtation" with the a "sham" - that is, an "ostensible idea. But, with that one exception, arrangement that is not the real arthe rule remains that "you cannot rangement". practise medicine as a corporation". * The department might also atAs one member of the audience tack the company if there is no said: "Fair enough. Now we know what we can't do. But what can we "bona fide business purpose for which it was established". Saving do?" taxes is not a bona fide business For doctors outside Alberta, Pyne purpose. said, there is one other possibility * The corporation will be vuland that is to set up a service or facilities corporation, which would nerable if it is used to create an artiprovide "to the medical practice the ficial reduction in income - if, for non-medical or paramedical services example, a doctor pays it for services that are needed. For example, the he doesn't need or receive, or if he service corporation might employ pays it, say, $100 for a service that non-medical people such as secre- normally would cost him just $10. taries or maintenance staff, own the "Greed," Pyne said, "is going to get building in which the practice is lo- you into trouble. Don't take too cated and charge the doctor rent, much." purchase supplies and equipment * The doctor will also run into that are required by the practice or difficulty if his service corporation perhaps provide all bookkeeping exists only on paper and not in services. It can, in other words, pro- reality. The company must be seen vide almost any service associated to be "doing something". The nonwith the practice, except for the medical staff should be transferred medical ones. from the practice to the company, For these services, the doctor but they should also know they've would pay the company a fee. He been transferred, so that if they are could also pay it a "mark-up" on the asked, they will say that they work fee, so that the service company for the company and not for the would show a profit. It is this mark- doctor. Then, too, the company up that gives the doctor his tax say- should be given some tangible signs GMA JOURNAL/SEPTEMBER 23, 1978/VOL. 119 647
that support its existence - its own telephone listing, for example, and its own letterhead, bank account, office space, and so on. In response to a question from the audience, Pyne said that the likelihood of a service corporation's being struck down was low. "The chances are minimal. But if an assessor walks in on you and finds the company doesn't do anything, then the chances are high." In setting up the corporation, there is considerable leeway in deciding the most suitable share structure to adopt - and the option that is selected can lead to benefits beyond the immediate tax saving. For example, a doctor could set up his share structure so that he personally holds preferred shares that carry perhaps 10 votes each. He would then be able to outvote all other shareholders, and so have control. Meanwhile, he might issue common shares to his family, so that they could participate in the growth of the company, and so that the size of his estate could be held below $300 000 - the level at which succession duties would be triggered upon death. Also, once established, the company could have additional functions, such as holding the doctor's other investments, and thereby limiting his financial liabilities. In a specific example to show the tax-saving benefits, Landry led the audience through a situation in which a doctor has $80 000 in gross income and $30 000 in expenses. Allowing for normal deductions and assuming a 1977 tax rate, the doctor would save himself $2000-$2500 if
he employed a service corporation. (The example assumes a 15% mark-up.) While the saving might seem attractive, there are costs associated with the company that can rapidly take away some of the glitter. First, there are accounting fees, which, Landry said, could be as high as $800 (although they should be lower). Second, there is the initial cost of establishing the company, which might run anywhere from $600-$2000 (although, again, it would likely be lower - perhaps in the $600-$800 range). Also, if the doctor's annual expenses were lower than the $30 000 assumed in the example, then clearly his after-tax saving would be lower too. Furthermore, the example assumes that the doctor's wife is employed by the company and that she is paid an annual salary of $4000 - an amount that reflects fair market value for the part-time work she performs. If the wife does not work for the company then the overall tax saving will once more be reduced. If both these situations apply - a lower overhead and a wife who does not work for the corporation - then the corporation might well end up costing the doctor money, rather than offering him a saving. "You have to work it out carefully," Landry said, "to see if a service company is really worthWhile." There was much interest in the concept of a service corporation and in the tax savings that could be realized as a result. One doctor in the audience, for example, was a
member of a clinic in which 45 doctors were considering establishing a service company each. The good attendance, the lively discussion and the range and number of questions all reflected that interest. At times, though, the session bogged down in detail so that the underlying benefits were either lost or obscured. At other times, it seemed too unstructured, trying, as some doctors said, to cover too much ground that was not directly relevant to the audience. And then, too, there was Landry's warning that the benefits were not automatic, but had to be carefully weighed in the balance. Whatever the reason, the session by no means convinced everyone present that incorporation is really worthwhile. As one doctor said: "It's a lot easier to hear how it's done than to go out and do it. The savings just don't seem that great for the amount of effort involved." What seems to have happened is that those doctors who have already established corporations came away with their decisions endorsed. One (younger) doctor, who had set up a service company 2 years before, said bluntly: "You'd have to be crazy not to do it." At the same time, though, those who have not established a corporation remained unconvinced of their value. Not many minds were changed. Meanwhile, one (older) doctor had his own views on corporations and on the advantages of having his wife employed by one. "She may be a qualified nurse," he said, "but there's no way I'd want to work with her. It's just not on."
Part VI: A grab bag of investment options The final half-day session of the MD Management 3-day seminar roamed over a number of topics from tax shelters such as MURBs and movies to investment vehicles such as annuities and real estate. It was a lucky-dip grab bag of investment ideas - options, straddles, puts, calls - that were plucked out almost at random. What stood out most, however, was the presentation by the three senior executives of Mackenzie Financial Investment Management Ltd.. 648 CMA JOURNAL/SEPTEMBER 23,
the Toronto firm that took over the bulk of the management of the CMARSP stock fund June 1 this year. It's not hard to see why the management of the fund has been shifted. Under the Royal Trust Company, which had managed the fund since 1957, the common stock fund (but not the guaranteed income fund) has performed dismally - as few doctors probably need or want to be reminded. It ranked 56th out of 66 comparable funds recently assessed 1978/VOL. 119
by Pirbeck Investment Measurement Ltd., so the management was long overdue for a change. The Mackenzie people, meanwhile, have a remarkable record. As B.E. Freamo, executive vice president of MD Management Ltd., said in introducing the three speakers, the Industrial Growth Fund that Mackenzie manages ranks first in performance among all Canadian registered retirement savings plans over the past 5 years. Last year alone, it had an impressive 28% rate of return.
