THE VOICE OF THE SHAREHOLDER June 8…

                                  THE VOICE OF THE SHAREHOLDER

June 8, 2007


Richard Nesbitt
Chief Executive Officer
TSX Group
130 King Street West, 3rd Floor
Toronto, Ontario
M5X 1J2

Dear Mr. Nesbitt,

I am writing to you on behalf of the members of the Canadian Coalition for Good Governance
(CCGG). The members of the CCGG are institutional investors that manage, in aggregate,
approximately C$1 trillion. A goal of the CCGG is to ensure that adequate protections are
maintained to ensure ongoing investor confidence in our capital markets.

The Toronto Stock Exchange ("TSX") Company Manual requires shareholder approval where
the number of shares issued in payment of the purchase price for an acquisition exceed 25% of
the acquirer's outstanding securities (section 611(c)). However, under section 611(d), listed
issuers acquiring other issuers are exempt from this requirement where the target is a reporting
issuer with 50 or more beneficial securityholders, regardless of the dilutive effect of the new
issuance.

The members believe that the protection afforded under section 6.11(c) is appropriate and forms
part of an important system of checks and balances needed to protect investors and maintain
investor confidence for the following reasons.

1. Other major stock exchanges (NYSE, Amex, NASDAQ, LSE, JSE, and Hong Kong) prohibit
   listed issuers from issuing more than a specified percentage of its issued shares without
   shareholder approval. This specified percentage is 20 to 30 percent and there are no
   exceptions relating to acquisitions.

2. The NYSE viewed the implementation of the rule in 1955 as "closing a loophole" in the laws
   requiring shareholder approval in the case of mergers, consolidations or recapitalizations,
   but not acquisitions. In 1989, it expressed its belief that approval of certain significant
   corporate transactions is an important aspect of its corporate governance listing standards
   and that the rule's purpose is to ensure shareholder ratification of significant issuances of
   securities. The purpose of the TSX or NYSE rule has also been described as "to ensure fair
   dealing prior to the consummation of a transaction", to "protect the integrity of [the
   shareholders'] investment", "to ensure fairness to all shareholders", "to preserve investor
   confidence in the capital markets", "to protect [investors] from dilution of their economic
   position or voting rights without a prior shareholder vote".




                    120 ADELAIDE STREET WEST, SUITE 2500, TORONTO, ONTARIO M5H 1T1
                TELEPHONE: (416) 868-3585 FAX: (416) 367-1954 WEB SITE: WWW.CCGG.CA
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3. The OSC has stated that it approves the principle that securities regulation (including the
   rules of the TSX) may apply a standard which is higher than the standard required at
   corporate law because securities regulation prescribes, on a very current basis, standards
   designed to preserve investor confidence in the capital markets.

4. Although the TSX published changes to Part 6 of the Company Manual in 2002 and 2004,
   section 611(d) did not appear until the final version with the result that interested parties did
   not have an opportunity to comment on this specific provision. The TSX did not provide any
   substantive discussion of the reason for the exemption, although it seems to have been in
   response to submissions that called for the codification of exemptions that were typically
   granted by TSX staff. There was no real public consultation on this change nor was there
   public consultation when discretionary exemptions were granted, so there is very little public
   information explaining the rationale or discussing the merits of the exemption.

5. We understand that the original rationale for granting discretionary exemptions was that
   there was wide distribution of securities and comprehensive disclosure documents (albeit not
   directed to the offeror securityholders). On more of a secondary basis, the exemption also
   allowed offerors in a competitive bid situation to react quickly to other offers. We do not
   agree with either of these rationales and believe the exemption is inconsistent with the
   standards required to preserve investor confidence. At least when granting discretionary
   exemptions one would presume that TSX staff must have been convinced that it was in the
   best interests of the listed company (and its shareholders) to be able to issue the shares to
   make the acquisition without being subject to the delay and potential uncertainty that would
   be caused by a shareholder vote. The delay issue (at least with respect to take-over bids)
   might have been more of an issue prior to 1999 when the minimum deposit period for a take-
   over bid was 21 days instead of the current 35 days.

Members of the Canadian Coalition for Good Governance believe that the board of directors of a
public company should seek the approval of its shareholders before proceeding with an
acquisition of significant size, whether the consideration for the acquisition is in the form of
shares or some other form of compensation. But dilution through share issuances is of
particular concern because Canadian issuers, unlike issuers incorporated in the United States,
almost invariably have unlimited authorized common share capital. The potential for a board of
directors to fundamentally change a Canadian corporation through acquisitions without seeking
shareholder approval is alarming under current regulations. Therefore, we urge the TSX to
initiate the steps necessary to remove section 611(d) from the TSX Company Manual in order to
restore appropriate checks and balances.

Sincerely yours,




David R. Beatty
Managing Director




                       120 ADELAIDE STREET WEST, SUITE 2500, TORONTO, ONTARIO M5H 1T1
                   TELEPHONE: (416) 868-3585 FAX: (416) 367-1954 WEB SITE: WWW.CCGG.CA