Annual Investment Outlook

The Empire Club Presents

Annual Investment Outlook Luncheon: Making Money in 2016 from Domestic and International Financial Markets

January 5, 2016

Welcome Address by Dr. Gordon McIvor, President, Empire Club of Canada

Good afternoon, ladies and gentlemen. From the Royal York Hotel in downtown Toronto, welcome, to the continuation of the 112th season of the Empire Club of Canada. For those of you just joining us either through our webcast, our podcast or on Rogers Television, welcome, to our meeting today.

Now, before our distinguished speakers are introduced, it gives me great pleasure to introduce our head table guests to you.

Head Table:

Distinguished Guest Speakers:

Mr. Ian Russell, President and CEO, Investment Industry Association of Canada

Mr. Nick Barisheff, Founder, President and CEO, Bullion Management Group, Inc.

Greg Greer, Managing Director and Head, Global Debt Capital Markets, Scotiabank.

Guests:

Mr. David Brown, Partner, WeirFoulds LLP

Mr. Richard Carleton, Chief Executive Officer, Canadian Securities Exchange

Ms. Vivien Clubb, President, Providential Pictures Inc.

Ms. Charyl Gaplin, Head, Executive Vice-President and Managing Director, BMO Nesbitt Burns

Mr. Joe Hinzer, President, Watts, Griffis & McOuat Limited

Ms. Amber Kanwar, Anchor and Reporter, Business News Network

Ms. Sue Lemon, Chief Executive Officer, CFA Society, Toronto Mr. Don Ludlow, President, Treble Victor Group

Dr. Gordon McIvor, Executive Director, National Executive Forum on Public Property; President, Empire Club of Canada

Mr. D’Arcy Nordick, Partner, Stikeman Elliot LLP

Mr. Bill Packham, Co-Chair and CEO, Qtrade Financial Group

Mr. Geoff Ritchie, Executive Director, Private Capital Markets Association of Canada (PCMA)

Ms. Verity Sylvester, Vice President, Corporate Accounts, CMC; Past President, Empire Club of Canada

Mr. Nick Thadaney, Vice President, Corporate Accounts, CMC; Past President, Empire Club of Canada

Mr. Rod Thomas, Vice President, Corporate Accounts, CMC; Past President, Empire Club of Canada

Mr. Howard Wetston, Past Chairman, Ontario Securities Commission (OSC) Mr. William White, Chairman, IBK Capital Corp.; Director, Empire Club of Canada

My name is Gordon McIvor, and I am the Executive Director of the National Executive Forum on Public Property. Ladies and gentlemen, your head table.

We are also delighted to have a group of students joining us today from Ryerson University. Students, would you, please, rise and be recognized. Welcome

Introduction

Now, our format today, ladies and gentlemen, is a bit different than the usual format for the Empire Club series of lunches. Instead of appearing as a panel, our speakers are going to come up and speak to you one by one, so I am going to introduce all three of them now, and then invite them to come up and join us at the podium.

I will start with Ian Russell to my right. Ian is the President and Chief Executive Officer, as I mentioned, of the Investment Industry Association of Canada or the IIAC, a position he has held since its inauguration in April of 2006. Prior to his appointment to the IIAC, Mr. Russell was the Senior Vice President of Industry Relations and Representation, at the Investment Dealers Association of Canada. And in his twenty-year tenure with the IDA and the IIAC, he has participated actively in many committees and working groups involved in regulatory and tax issues related to the securities industry and capital markets. He is a frequent commentator in the media. We are delighted to have him with us today.

Nick Barisheff is the Founder, President and CEO of Bullion Management Group Inc., a company dedicated to providing investors with a secure, cost-effective, transparent way to purchase and hold physical bullion. BMG is an associate member of the London Bullion Market Association as well as the Responsible Investment Association. Widely recognized as an international bullion expert, Nick has written numerous articles on bullion and current market trends which have been published around the world. We are also delighted to welcome him back this year.

Greg Greer, our third speaker today, is the Managing Director and the Head of Global Debt Capital Markets at the Bank of Nova Scotia. He is currently responsible for Scotia Bank’s Global Debt Capital Markets business, as well as the bank’s EMEA and Asia Pacific Risk Solutions businesses. Greg has twenty years of capital markets experience, primarily focused on debt and derivatives, and we are also delighted to welcome him back to this group today. So let us start with our first speaker today, Ian Russell, and, Ian, I invite you up as our first speaker.

Ian Russell

Thank you, Gordon. I am delighted to join you at this Empire Club Annual Investment Outlook Luncheon.

For the past four years, the IIAC has polled the CEOs of its 144 member firms. Our aim was to gain an up- to-date snapshot of executive thinking on the economic and financial trends and the issues impacting their businesses. We also surveyed the firms on the challenges and opportunities that they foresee in the year ahead. Their collective insights are important. The health of the investment industry is an essential component of vibrant and competitive capital markets. The investment industry plays a vital role in the savings investment process in intermediating capital flows in the marketplace from investors to corporations and to Canadian government.

So let us get to the results of our survey. The 2015 survey was conducted from November the 3rd to November the 25th. The steady stream of negative headlines throughout November clouded the sunny optimism surrounding the swearing in of the new government in Ottawa, and it probably influenced the thinking reflected in the survey results. Crude oil prices careened lower threatening the $40 per barrel level. The Canadian dollar flirted with fresh 11-year lows, and President Obama officially rejected the Keystone XL Pipeline.

The geopolitical concerns weighed heavily on business and investor sentiment—and on the capital markets. Public finances deteriorated. By all accounts, 2015 was another mediocre year in the Canadian economy. Growth looks like it will average 2.1% for 2015 as a whole. This is the worst annual performance since 2009.

Roughly, one half of the investment dealer CEOs who responded to our survey said that they expected a similar weak economic condition in 2016. Only one in five expect economic conditions to improve and 28% anticipate economic conditions to actually worsen. If the survey were undertaken today, the respondents would likely be even more pessimistic given the continued collapse in global oil and base metal prices.

In the survey, CEOs indicated concerns about slower growth in China, the world’s second largest economy. CEOs in western Canada are particularly concerned about the slowdown in China. It is not surprising given that B.C. and Alberta have felt the most pain from the drop in resource prices. The weak China economy is mostly responsible for the collapse in commodity demand. Many domestic, institutional boutique firms are in turn heavily dependent on resource markets for securities trading and for investment banking.

When surveyed regarding commodity markets in 2016, roughly 75% of CEOs said they did not see an improvement. Despite poor conditions in capital markets, a minority of surveyed CEOs felt vulnerable to a major economic, financial and/or geopolitical shock that could affect their business. Among these respondents, 62% of those surveyed highlighted a potential geopolitical shock. Twelve percent pointed to a housing correction, and another 12% sited a major cyber security incident as the most likely shocks impacting the financial markets. At the time of the survey, CEOs were roughly split on whether the Bank of Canada would raise interest rates in 2016.

Let me now comment on the state of the investment

industry. We asked CEOs, What are the top three trends transforming the investment industry? And they answered industry restructuring, regulatory change and demographics. These three themes emerge time and time again as CEOs address questions related to the forecast of operating costs and revenue.

So what were the CEOs’ views about their firms’ prospects regarding operating costs and revenue? Let us look at operating revenue. The results indicated that many industry CEOs have taken a positive view for the next year on the outlook for operating revenue. Roughly 40% of investment dealer CEOs surveyed expect their firms’ 2016 operating revenue to increase at a faster rate than 2015. One-third of the CEOs project operating revenue growth roughly in line with 2015, and 25% anticipate operating revenue will increase but at a lesser pace compared to 2015. We also asked CEOs what they see as the largest contributor of revenue to their firm in 2016. The largest number of CEOs said the retail business. For the CEOs of institutional firms, 50% see equity trading as the largest contributor to revenue; 25% identified corporate advisory fees, and another 25% indicated fixed income trading.

Moving on to operating costs, the biggest negative factor affecting performance in the industry has been the relentless rise in operating costs in recent years. Higher compliance and technology costs account for much of this escalation. These costs are estimated to rise roughly 7% in 2015 compared to a 6% increase for the industry in the previous year. Fifty-five percent of CEOs reported that their operating costs have increased significantly over the past four years, and another 22% indicated that they have increased somewhat. What is the top cross pressure affecting their businesses? Over 70% said that regulation was the issue. The explanation can be traced to the significant ramping up in compliance costs in the industry. Consulting needs, technology requirements and added professional compliance staff to meet the CRM rules and FATCA reporting. A smaller number of CEOs indicated that other factors had contributed to the expenditure rise. CEOs expect operating costs to continue to escalate. Indeed, nearly half the CEOs anticipated their operating costs will increase at a faster rate in 2016 than in 2015. Another 20% expect operating costs to increase at about the same rate while about one-third see costs rising at a lower rate. This more optimistic view on operating cost increases probably reflects the ongoing solid efforts of member firms to squeeze greater efficiencies and reduce unnecessary costs.

So what does this relentless cost escalation mean?

It means that most executives expect an even greater ramp- up in the regulatory burden next year. The self-clearing retail firms and the introducing firms foresee the largest increase in costs. This is most likely due to an escalation in direct compliance costs, technology expenditure and carrier brokerage fees for the introducing firms as the CRM too and FACTA reporting rules become fully effective.

Fifty-three percent of the firms expect to spend more on technology in 2016 than they did in 2015. Thirty-seven percent expect to spend about the same, and 10% expect to spend less. We asked, What is the main driver of the technology spend? Sixty percent of firms answered that it was regulatory and compliance changes. What is more surprising is the other forty percent of firms identified other factors as the main drivers of technology spend. Twenty- three percent of the firms indicated that spending on technology was to simplify and streamline processes in the front and back offices of their firms. This focus on operating efficiency is not surprising given the business pressures that are facing all the firms.

Fifteen percent indicated their technology spend was to address security concerns, and only a very small percentage said that they will allocate their technology spend to big data analytics to tailor products and risk profiling.

The unprecedented period of weak economic conditions, rising costs and deteriorating profitability has unleashed massive restructuring in the investment industry. Here is some interesting news. Over the past three years, roughly 50 boutique firms or about 25% of the entire investment industry have exited through merger and amalgamation, shuttering operations or transferring the business to the exempt marketplace. The survey probes CEOs on how this restructuring is likely to unfold over the next several years, and this is what we learned.

One third of CEOs expect industry consolidation to intensify in the next two years. Twenty-three percent said it will remain about the same, and the balance of CEOs expected the rate of consolidation to slow. The majority of CEOs, therefore, expect significant contraction in the industry over the next couple of years. This pessimistic view comes as no surprise given that there are more than 50 investment dealers still operating with growth annual revenue of $5 million or less, a magnitude suggesting insufficient scale to operate businesses under existing conditions.

The survey confirmed the importance of demographics as a major trend impacting the investment business in two respects: The aging of the population is reflected in the wealth management services mostly in demand by clients, namely, discretionary managed accounts, financial planning and trust and estate planning. Robo-advisors are also highlighted as a growing trend impacting the industry. This focus on robo-advisors reflects the underlying influence of the expanding millennial investor.

This survey also put the spotlight on Canada’s small business marketplace. The year 2016 is expected to be another bleak year. We asked CEOs for their views on Canada’s small cap private equity market. Close to 60% indicated that 2016 will be another weak year. They also expect foreign, private equity players to be the dominant participants in Canada’s private equity market. The vast majority of CEOs indicated that Canada’s small cap public venture markets would see no improvement in 2016.

Let me summarize. In going through our CEO results with you today, it is clear the investment industry will continue to cope with weak economic conditions. The CEOs expect a relentless rise in operating costs related primarily to compliance and technology to continue. This will further squeeze profitability, and it will also mean the industry will continue to consolidate with firms merging or shutting down operations. Consolidation has severely damaged the viability and the vibrancy of the public venture marketplace. This market is in the throes of massive structural change from a period of extended weakness in commodities markets and the withdrawal of retail and institutional investors from the speculative securities marketplace.

The venture marketplace is unlikely to see a return to the old model. However, we also know that capital markets are innovative, and they are flexible. They will undoubtedly adapt to the pressures. Overtime, market participants will, as they always have in the past, find innovative ways to intermediate capital to small business, but it will take time before a new, efficient model emerges. For our part, the IIAC remains committed to fostering a vibrant, investment industry driven by strong and efficient capital markets. We will work with our investment dealer registrants to ensure their ongoing success in difficult times.

Thank you.

Nick Barisheff

Good afternoon. It is always a pleasure to speak at the Empire Club. The market outlook in 2016 presents significant challenges and opportunities that we have not seen for forty years. Since I began working on creating our first bullion fund in 1998, I have generally restricted my commentary to using precious metals for strategic portfolio allocation. Everyone agrees that investment portfolios should be diversified. Since gold is the most non-correlated asset to traditional financial assets, it provides important portfolio diversification. A strategic allocation of at least 10% reduces portfolio risk and improves returns over the long-term.

This year, I would like to talk about a tactical opportunity, a market disparity that exists because of an artificial low in the price of gold and an unsustainable high in financial assets. Everybody understands the concept of buy low, sell high. But the opportunity for 2016 is going to be sell high and buy low. Although the Canadian market has been somewhat muted, many Canadians have invested in U.S. equities since 2009. And, since 2011, they have also received that 32% bonus because the Canadian dollar declined against the U.S. dollar. However, this rise in equities is largely the result of the U.S. Federal Reserve increasing its balance sheet. The monetary policy of low interest rates resulted in trillions of dollars in stock buy-backs and mergers using low-cost, borrowed money. Monetary policies on part of the world’s central banks have caused bubbles in stocks, bonds, real estate and exotic cars. It is not likely to continue in 2016, and the risk of a major correction looms. In 2000, we had the tech sell-off that no one expected. Eight years later, we had the subprime sell-off that no one expected. In 2016, another eight years along, we are likely to have an equity sell-off as global economies contract and political tensions increase.

It should be clear that the global economy is contracting, and there are numerous vulnerabilities. There are several methodologies that summarize the current market fundamentals without getting into the details and provide an excellent predictor of future trends. These are the Buffett Indicator, the Shiller P/E Ratio and the Tobin Q Ratio.

The Buffet Indicator uses the total market capitalization of U.S. equities divided by U.S. GDP. The only other times that the Buffet ratio exceeded 100 was prior to the tech crash in 2000 and a credit bubble in 2008.

The Schiller P/E is a popular indicator of stock valuation. The 134 year average is 16.7 whereas the current ratio is 25.9 or 55% overvalued. The ratio has only been this high on three occasions: 1929, 1999 and 2007. Each time it happened, stocks dropped by over 50% and did not recover for years.

The Tobin Q Ratio, which measures market value versus replacement costs, is considered one of the better, long-term indicators of a pending market decline. The current Tobin Q Ratio exceeds the 70-year average of .7 by 58%. This ratio only rose above this average in 2000 and 2008. This time, however, the correction could be much worse than either 2000 or 2008.

Not only do we have a significant overvaluation, but historically high margin debt will accelerate the decline due to margin calls. These conditions provide investors with the opportunity to sell high and take a profit.

The buy low opportunity exists because gold has been in a cyclical correction for three years and seems to have formed a bottom. Gold’s strong fundamentals point to a bright future and, of course, gold has always protected portfolios during market declines, as you can see from the accompanying chart here. The future for gold pricing is not complete without understanding the implications that China will have. China has been increasing its gold reserves and has made a number of strategic moves that threaten the U.S. dollar’s currency reserve status. China has signed twenty- eight currency swap agreements wherein the U.S. dollar is no longer used to settle trade imbalances. The Asian infrastructure bank has been formed as an IMF alternative to provide loans to BRIC countries. The yuan currency exchange hub has been created in Canada with the ICBC bank. China has developed an alternative to the SWIFT system of international currency transfers, and Russia is also developing its own version.

A Shanghai Gold Fix, which is scheduled to be introduced in the spring of 2006, has a good chance of eliminating the short selling that takes place on the COMEX because the Shanghai Gold Fix is going to be based on physical only without any paper market dilution. If traders try to drive the price of gold down on the COMEX through shorting, arbitrage traders in Shanghai will quickly counter the move.

In 2015, the result of these changes has already started to show as a 71% of the U.S. Treasuries were purchased by the Federal Reserve itself with newly issued currency as demand for U.S. dollars has decreased.

Finally, to reinforce the buy-low opportunity, a comparison to this cyclical gold correction from 1974 to 1976 and a subsequent price rise serves as a good example. At that time, after 445% rise from 1971, gold declined 45%. Gold sentiment was at a record low and the media, was full of negative gold commentary, just as it is today. On March 26th, 1976, the New York Times stated, “For the moment at least, the gold party seems to be over.” It also quoted a Citibank letter that declared “Gold was an inflation hedge in the early 1970s, but money is now a gold-price hedge.” It suggested that the rout was due to the “victorious dollar.” The “victorious dollar” has lost 80% of its purchasing power against gold since that day in 1976.

After two years of decline, many investors sold their gold holdings and vowed never to invest in gold again. However, in the fall of 1976, gold began its assent. It saw a 750% rise peaking at $850 an ounce just three years and four months later. After a three-year correction, the same opportunity to buy low exists today just as it did in 1976. Of course, conditions were different then. We did not have a stock market that was in a bubble, and the total U.S. debt at the time was $800 billion. That is less than the annual deficit.

I am often asked, “How high will the price of gold go?” And I still think it will hit $10,000 an ounce as I have described in my book. The conditions detailed in my book are very much still in place, and many of the vulnerabilities that I discussed have actually increased.

Now, the other indicator is that there has been a lock-step relationship between gold and the U.S. dollar as this chart suggests. If the U.S. debt continues to increase at the same rate that it has in the last ten years, they will actually reach $26 trillion. This is a good indicator that a gold price of at least $2,500 is likely in the near future.

Thank you.

Greg Greer

Good afternoon, and, thank you, to the Empire Club of Canada for inviting me to speak today. It is an honour and a privilege to be here. As we enter 2016, it is natural to ponder what the coming year might bring. For those of us in the capital markets, it is necessary to identify and assess the key drivers that will influence the asset classes in which one can invest. Today, I would like to discuss three key themes that are likely to capture investor attention throughout 2016: The Federal Reserve, the price of oil and capital market liquidity. Although these topics may seem obvious, I expect the discussion on each will develop meaningfully in the year ahead.

Before I touch on each theme in detail, I want to share something with you that I learned early in my capital markets career at Scotiabank. At first glance, this slide may seem intuitive and perhaps insignificant. However, it has been a formative concept in how I look at assets and markets. It represents the notion that all asset classes within the global financial markets are interconnected. Interest rates influence currencies, which influence commodities, which influence equities, which influence interest rates. You get the idea. This concept is as important as ever in determining investment opportunities in 2016.

On December 16th, 2015, the Fed raised the Fed Funds rate by 25 basis points. The rate hike was anticipated as the day drew near with Fed Fund futures pricing in a 75% probability of a hike. This rate hike occurred seven years after the 2008 cut to near zero and marked the first U.S. benchmark rate increase since June 2006. This policy action was justified by an improving U.S. economic outlook. The Fed forecast that economic activity will expand at a moderate pace supported by labour market strength. Inflation is expected to hit the Fed’s 2% target in the medium term.

As the outcome was largely predicted, market reaction on the day of the announcement was muted. Bond prices moved moderately lower; equities rallied; commodities weakened; and the U.S. dollar strengthened. Since then the market has been relatively illiquid and moves have been directionally similar leaving us with one question: What is next from the Fed? To try to answer this question, we can look forward to ascertain the sentiment of the Fed itself and look backward to review historical Fed actions during an election year.

Fed Chair, Janet Yellen, emphasized that U.S. monetary policy will remain accommodative and that economic conditions are expected to warrant gradual rate increases. As the Dot Plot survey consensus of Fed members suggests, we can expect up to four rate hikes this year. In each and every case, the expectation is for higher Fed Funds in 2016. Despite the expected increases, the Fed Funds rate is widely projected to remain below long-run levels for some time with the path of future increases remaining data-dependent. As this table shows on this slide, there is no set pattern to Fed behaviour in an election year. The Fed raised rates three times during periods of economic expansion in 1988, 2000 and 2004. More recently, and, understandably, in 2008, the Fed cut rates. In September 2012, the Fed eased in a sense when they commenced QE3. Based on this information, it is difficult to predict the exact trajectory of Fed Funds in 2016. From Scotiabank’s perspective, our current forecast is for Fed Funds to be at 1.5% by the end of 2016.

Higher U.S. rates should also contribute to continued U.S. dollar strength. The U.S. dollar is expected to gain renewed impetus fueled by economic growth and interest rate differentials. Scotiabank’s forecast for U.S. dollar CAD is 1.39 at the end of 2016.

The second theme I would like to discuss is the price of oil and its relationship to the Canadian dollar. This graph displays the strong correlation between oil and the Canadian dollar. The loonie has declined more than 15% over the last year touching an 11-year low in late December. Meanwhile, the price of WTI fell to its lowest level since 2009 after OPEC announced its decision to abandon production limits. According to Statistics Canada, mining, quarrying and oil and gas extraction represent only 8% of Canadian GDP. However, oil price variability has clearly influenced both the energy sector and the strength of our domestic currency. Given its impact on our nation’s investment outlook, the question we face is What will happen to the price of oil? We, again, can look forward and backward to analyze potential outcomes.

Looking forward, the most obvious place to start is the supply of and demand for oil. As shown on this chart, the potential for demand growth to slightly outstrip supply at current prices is underpinned by an overall reduction in production activities and an increase in global demand. As highlighted by Scotiabank economics, global demand for oil increased by 1.9%, or 1.8 million barrels per day in 2015—the fastest pace in five years. It is projected to advance further in 2016. Scotiabank’s 2016 forecast for WTI is no more than $40 to $45 per barrel.

When considering the history of oil prices, it is instructive to acknowledge that some market participants’ perspectives have only been formed based on the last seven or eight years, as shown by this graph. Over this period, the price of oil generally trended in one direction: Up. However, looking further back exposes oil’s vulnerability to many factors, including economic cycles, geopolitical events and liquidity. As shown here, the average price of oil from 1990 to 2015 was approximately $47 per barrel.

The last concept I would like to discuss is capital markets liquidity, which is highly relevant in the context of the previous two themes. To properly discuss liquidity, one must first start with a definition that provides perspective for the capital markets. Martin Barnes, Chief Economist at BCA Research, laid out three ways of looking at liquidity. The first has to do with overall monetary conditions— money supply, official interest rates and the price of credit. The second is the state of balance sheets, the share of money or things that can be exchanged for it in a hurry. The third, financial market liquidity, is close to the textbook definition—the ability to buy and sell securities without triggering big changes in prices.

Let us consider assets across the liquidity spectrum under normal market conditions. Currency and government bonds are very liquid. They trade on electronic platforms and include most market participants. Equities are liquid, trade on electronic platforms and involve many market participants. And commodities and corporate bonds are less liquid, largely trade over the counter and include fewer participants.

In the context of U.S. monetary policy, the liquidity of U.S. government bonds will not necessarily change in 2016. However, the cost of that liquidity may change given uncertainty around Fed activity. This phenomenon is captured when comparing the Merrill Lynch Option Volatility Estimate or MOVE index compared to ten-year, historical U.S. Treasury yields. In periods of uncertainty, we expect a flight to quality as capital flows to the safest assets, U.S. treasuries.

The impact of liquidity on the price of oil is also relevant, particularly, when we think of access to capital in the energy industry. Recently, the debt capital markets have provided a tremendous source of funding for energy issuers as shown on this slide. In the U.S. alone, investment-grade and high-yield energy companies have raised more than $750 billion over the last five years.

Looking forward, however, conditions are becoming more challenging. The cost of issuance has risen, and liquidity has declined. Alternative sources are needed. Potentially filling the gap are private equity, which is designated significant funds for investment in the energy sector, as well as asset sale programs, which could provide energy companies with another source of liquidity.

In closing, 2016 should be an exciting and interesting year in global capital markets with the Fed, the price of oil and liquidity all influencing investment opportunities and performance.

I will leave you with one closing quote from John Maynard Keynes that continues to hold true in today’s ever- changing markets. “The market can stay irrational longer than you can stay solvent.”

Thank you very much, and I wish you a prosperous 2016.

Note of Thanks by Dr. Gordon McIvor

Thank you very much, Ian, Nick and Greg and for those of you who follow these lunches over the years, ladies and gentlemen, you know that this Club goes back to 1903. We were set up to discuss political and societal issues but quickly also began looking at economic forecasting, and it is a long tradition. If you go back and look at the speeches from this Club, in the ‘30s, we were talking about whether we would be coming too communist or not. Over the eras, you can literally track the history of Canada through the speeches of the Empire Club and these types of economic forecast lunches.

For the last 22 years, these lunches have been organized by our own William White who, of course, as you know, is the Chair of IBK Capital and a board member of the Club, so I really want to thank Bill for his ongoing work over the year because you may not know this: There are about 300 to 500 people in a room every year, but this event is now watched by hundreds of thousands of people all over the world through our webcasting abilities in London, Beijing, Frankfurt—so a lot of investors are actually getting their ideas for the coming year around the world from what is said at this lunch.

So I want to invite Bill to thank our speakers, but, before he thanks our speakers, I would like you to join me in thanking Bill for 22 years of great lunches.

Note of Appreciation by William White, Chairman, IBK Capital Corp; Director, Empire Club

Mr. President, distinguished head table guests, fellow members and guests of the Empire Club of Canada, I have the pleasure to express our formal thanks to our three key speakers and their firms. Ian Russell, President and Chief Executive Officer of the Investment Industry Association of Canada; Nick Barisheff, President, Chief Executive Officer and Chairman, Bullion Management Group Inc.; and Greg Greer, Managing Director and Head of Global Debt Capital Markets, Scotiabank. Gentlemen, what you did today, why you did it, and how you did it helps each of us to better understand and embrace the capital markets for this New Year. Each of your presentations pointed out how difficult 2015 has been, as well as the many challenges and, more importantly, the major opportunities available in 2016 to all of us as Canadian investors.

Please, join me now in a warm and special thank you to Ian Russell, Nick Barisheff and Greg Greer.

Concluding Remarks by Dr. Gordon McIvor

Thank you very much, Bill, and thank you to our generous sponsors today, IBK Capital Corp.; BMO Financial Group; TMX; CFA Society, Toronto; Prospectors and Developers Association of Canada; Stikeman Elliott; Canadian Securities Exchange; Weirfoulds LLP; Qtrade Financial Group; Watts, Griffis and McOuat Limited. And thanks to them for being our gold sponsors today. I would also like to thank Bullion Management Group Inc. and the Bank of Nova Scotia for being our event sponsors. Thank you to IBK Capital for sponsoring our student table today, and, lastly, I would like to thank the Investment Industry Association of Canada for being our presenting sponsor today. Also, regular thanks go out to the National Post, our print media sponsor, to Rogers Television, our television sponsor, and to Mediaevents.ca, which broadcasts, webcasts, and podcasts this event at a global level.

Please, follow us on Twitter at @Empire_Club and visit us on line at empireclub.org. You can also follow us on Facebook, LinkedIn and Instagram. And we hope you will join us in the coming weeks and months, ladies and gentlemen. We have some great events lined up, including that our new police chief is going to be here in a couple of weeks, February 2nd, at the Arcadian Court. He will talk about some of the new initiatives for 2016 in our police force. We have the President and CEO of the Canadian Electricity Association, Sergio Marchi, coming on February 16th to talk about rates and rate changes in the coming year. We also have to look forward to the Chief Justice of Canada, Chief Justice Beverley McLachlin, who will be appearing at the Arcadian Court as well on June 3rd.

Thank you, ladies and gentlemen. Happy New Year, and this meeting is adjourned.