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BMO Mutual Funds News

BMO Mutual Funds - Harmonized Sales Tax (HST)

Toronto, June 2, 2010

Please note that the HST information provided here is as of June, 2010. For any updates or additional information, please visit the Federal, Ontario or British Columbia HST government websites

What is the Harmonized Sales Tax (HST)?

The HST is a federally administered tax which combines the Goods and Services Tax (GST) and the retail sales tax (RST) of certain provinces into one single sales tax per province.

Which provinces use HST?

New Brunswick, Newfoundland and Labrador and Nova Scotia have used the HST since 1997 and British Columbia and Ontario are set to implement HST effective July 1, 2010. The following chart highlights the applicable sales taxes for each province and territory.

Does the Ontario HST affect individuals outside of Ontario?

The Ontario HST applies to residents of the province as well as businesses that are registered in Ontario. BMO Mutual Funds are offered by BMO Investments Inc., a company which is registered in Ontario, and so applicable products and services (i.e., the funds) offered by BMO Mutual Funds are subject to HST. Therefore investors who own BMO Mutual Funds may be impacted by the Ontario HST even though they don't live in the province.

Are all mutual fund companies affected or just BMO Mutual Funds?

Any mutual fund company that has clients in Ontario will have to incorporate HST into their Fund NAVs (Net Asset Values). The implementation of the HST will affect all of the larger mutual fund companies who have investors throughout Canada.

How does the HST affect BMO Mutual Funds?

BMO Mutual Funds must pay HST on management fees and certain other fees charged to the fund. Generally, prior to July 1, 2010 only GST was charged on theses fees. The HST that is ultimately payable by a mutual fund on these fees is generally based on the percentage of the value of holdings by unit holders that reside in the harmonized provinces. The HST liability for a mutual fund is calculated for each series in a fund.

For more information on mutual fund fees and expenses please refer to the BMO Mutual Fund Simplified Prospectus.

How is the HST impact calculated for each Fund?

The majority of mutual funds in Canada use a single net asset value ("NAV") for each fund (or series of a fund) available and each can be purchased by any qualified Canadian investor, regardless of what province the investor lives in. As of July 1, 2010, with the implementation of the HST, changes will have been made in the calculation of this single NAV to reflect the applicable HST rates.

Who do I contact for more information?

If you want more information about how your BMO Funds are affected by the Ontario HST please contact us at 1-800-665-7700.

Applicable Sales Tax

Province/TerritoryProvincial Retail Sales Tax (RST)GSTHST
British Columbia1--12%
New Brunswick--13%
Newfoundland & Labrador--13%
Nova Scotia1, 2--15%
Prince Edward Island10%5%-
Northwest Territories-5%-

1effective July 1, 2010. Back

2prior to July 1, 2010 the rate was 13%. Back

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BMO Mutual Funds are offered by BMO Investments Inc., a financial services firm and a separate legal entity from Bank of Montreal. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the fund facts or prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

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1 The BMO Investments Centre has won the DALBAR Mutual Fund Service Award from 2006-2016 consecutively.

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