Proxy Voting Policies and Procedures

The Manager has delegated the voting of proxies of each fund’s portfolio securities to that fund’s portfolio manager as part of the portfolio manager’s management of the fund’s portfolio, subject to the Manager’s continuing oversight. A portfolio manager voting proxies on behalf of a fund must do so in a manner consistent with the best interests of the fund and its securityholders.

As part of its continuing oversight, the Manager has established policies and procedures to be followed by each fund’s portfolio manager, in conjunction with the portfolio manager’s own policies and procedures, in determining how to vote on any matter for which the funds receive proxy materials for a meeting of securityholders of an issuer. The policies and procedures established by the Manager (the “Proxy Policies”) include:

A conflict of interest may exist if a portfolio manager, its personnel or another related entity has a business relationship with (or is actively soliciting business from) either the company soliciting the proxy or a third party that has a material interest in the outcome of a proxy vote or that is actively lobbying for a particular outcome of a proxy vote. Conflicts of interest also may arise if an individual employed by the portfolio adviser that is involved in the proxy vote decision, has a direct or indirect personal relationship or other interest in either the company soliciting the proxy or in a third party that has a material interest in the outcome of a proxy voter or that is lobbying for a particular outcome of a proxy vote.

Each fund’s portfolio manager has procedures in place to identify potential conflicts of interest. When a Fund’s portfolio manager becomes aware of any vote that presents a conflict, the portfolio manager must vote such proxy question in a manner consistent with, and uninfluenced by considerations other than, the best interest of the fund and its securityholders.

The policies and procedures that the funds follow when voting proxies relating to portfolio securities are available on request, at no cost, by calling 1-800-665-7700 or by writing to the Manager, 77 King Street West, Suite 4200, Toronto, Ontario M5K 1J5.

Each fund’s proxy voting record for the most recent period ended June 30 of each year will be available free of charge to any securityholder of the fund upon request at any time after August 31 of the relevant year, commencing August 31, 2006. The proxy voting record will also be available on the Funds’ website at www.bmo.com/mutualfunds.