2016 ANNUAL INFORMATION FORM

Transcription

1 2016 ANNUAL INFORMATION FORM Respecting Units and Preferred Units of CANOE EIT INCOME FUND Managed by Canoe Financial LP March 27, 2017

2 - 2 - TABLE OF CONTENTS GLOSSARY OF TERMS... 5 FORWARD-LOOKING STATEMENTS... 9 NAME AND FORMATION OF THE FUND HISTORY OF THE FUND INVESTMENT RESTRICTIONS AND PRACTICES INVESTMENT POLICIES ELIGIBILITY FOR INVESTMENT DECLARATION OF TRUST Description of the Trust Interests Information and Reports to Trust Interest Holders Limitation on Non-Resident Ownership Repurchase of Units Repurchase of the Series 1 Preferred Units Modification of Declaration of Trust and Meetings of Trust Interest Holders Distributions on Units Distribution Reinvestment Plan Distributions on Preferred Units Termination of EIT VALUATION OF PORTFOLIO SECURITIES AND CALCULATION OF NET ASSET VALUE PURCHASE OF TRUST INTERESTS REDEMPTION OF UNITS Optional Unitholder Redemption Redemption Price and Fee Redemption Payment Recirculation of Units Suspension of Redemptions REDEMPTION AND RETRACTION OF SERIES 1 PREFERRED UNITS Redemption at the Option of the Fund Retraction by Series 1 Preferred Unitholders RESPONSIBILITY FOR FUND OPERATIONS The Manager Amended and Restated Management Agreement Directors and Executive Officers of the Manager PORTFOLIO MANAGEMENT BROKERAGE ARRANGEMENTS TRUSTEE CUSTODIAN OF PORTFOLIO SECURITIES AUDITORS... 37

3 - 3 - REGISTRAR CONFLICTS OF INTEREST Conflicts of Interest Principal Holders of Securities FUND GOVERNANCE Business Practices, Sales Practices, Risk Management Controls and Internal Conflicts Independent Review Committee Securities Lending Voting Securities of Other Funds Short-Term Trading PROXY VOTING Policies and Procedures Proxy Voting Conflicts of Interest Disclosure of Proxy Voting Guidelines and Record FEES AND EXPENSES Management Fee Administration Charge Ongoing Expenses Management Fee Rebate or Distribution Programs CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS Status of the Fund Taxation of the Fund Taxation of Trust Interest Holders RISK FACTORS Trading Price of Trust Interests Relative to Net Asset Value Nature of Units Commodity Price Risk Companies Engaged in Discovery, Development or Processing of Resources Recent Global Financial Conditions Reserve Estimates Performance of Issuers Oil and Natural Gas Royalty Rate and other Changes No Guaranteed Return Loss of Investment Cash Distributions Creditworthiness of the Fund No Assurance of Achieving Investment Objectives or Monthly Distributions Taxation of the Fund Investment Eligibility; Mutual Fund Trust Status under the Tax Act SIFT Rules Changes to Portfolio Liquidity Issues Interest Rate Fluctuations Foreign Currency Exposure Real Estate Investment Trusts Credit Ratings Changes in Legislation Environmental Risks Use of Leverage Trust Interest Holder Liability Status of EIT Other Investment Considerations Securities Lending Priority Status of Preferred Units... 55

4 - 4 - Prevailing Yields Stock Market Volatility Historical Allocations and Distributions Reliance on Canoe Illiquid Securities Use of Covered Call Options and Other Derivative Instruments Conflicts of Interest Fixed Income Investments Composition of Fund Investments Interest Rate and Foreign Exchange Hedging Use of Derivatives REMUNERATION OF DIRECTORS, OFFICERS AND TRUSTEES MATERIAL CONTRACTS LEGAL AND ADMINISTRATIVE PROCEEDINGS PENALTIES AND SANCTIONS OTHER MATERIAL INFORMATION Securities Authorized for Issuance Under Equity Compensation Plans Indebtedness of Directors and Executive Officers Appointment of Auditor International Information Reporting EXEMPTIONS AND APPROVALS... 60

5 - 5 - GLOSSARY OF TERMS In this Annual Information Form, the following terms shall have the meanings set forth below, unless otherwise indicated Credit Facility means the syndicated credit facility entered into on January 31, 2006 by a credit agreement between EIT, as borrower, CIBC, as lead arranger, administrative agent and security agent, and Alberta Treasury Branch, Union Bank of California, Canadian Western Bank and CIBC, as lenders. Administration Charge has the meaning ascribed thereto under the section Fees and Expenses Administration Charge. Annual Information Form means this annual information form. Amended and Restated Management Agreement means the Management Agreement between the Manager and the Trustee dated as of July 24, 1997, as amended and restated as of October 7, 1999, and as of March 14, 2002, and as of March 26, 2009, and as of October 8, 2009, and as of March 15, 2011, and as of August 30, 2013, and as of November 1, 2013, and as of March 10, Business Day means any day except Saturday, Sunday or a statutory holiday in Calgary, Alberta or Toronto, Ontario. CIBC means Canadian Imperial Bank of Commerce. Canoe means Canoe Financial LP. Canoe Group means the Fund and other closed-end income trusts, flow-through share limited partnerships, private pool funds and open-end mutual funds that are part of the Canoe group of funds. Certificate of Amendment means a certificate of amendment setting out the terms of a particular series of Preferred Units, which shall be approved by the Manager prior to the issue of any series of Preferred Units and, upon such approval, shall become a part of the Declaration of Trust. CRA means the Canada Revenue Agency. Custodian or CIBC Mellon means CIBC Mellon Global Securities Services Company, in its capacity as custodian under the Custodian Agreement. Custodian Agreement means the custodian agreement dated February 9, 2011 between the Manager and the Custodian, as amended and restated from time to time. Declaration of Trust means the declaration of trust of the Fund dated as of August 5, 1997, as amended and restated on October 7, 1999, and as of March 14, 2002, and as of March 6, 2006, and as of July 5, 2007, and as of March 26, 2009, and as of November 1, 2013, and as of March 25, 2015, and as of March 10, 2017 and includes any Certificate of Amendment. Distribution Payment Date has the meaning ascribed thereto under the section Declaration of Trust Distribution Reinvestment Plan. Distribution Record Date has the meaning ascribed thereto under the section Declaration of Trust Distribution Reinvestment Plan. Downside Protection means the percentage by which the Portfolio would have to decline in value before the holders of Series 1 Preferred Units would be in a first-dollar loss position.

6 - 6 - DRIP has the meaning ascribed thereto under the section Declaration of Trust Distribution Reinvestment Plan. Fund or EIT means Canoe EIT Income Fund (formerly EnerVest Diversified Income Trust), a closed-end investment trust established under the laws of Alberta pursuant to the Declaration of Trust. Fund Costs has the meaning ascribed thereto under the section Fees and Expenses Ongoing Expenses. General Partner means Canoe Financial Corp., the general partner of Canoe. Independent Review Committee or IRC means the independent review committee of the Fund established in accordance with NI Manager means Canoe as of November 1, 2010, and prior thereto, EnerVest Diversified Management Inc. Management Fee has the meaning ascribed thereto under the section Fees and Expenses Management Fee. Net Asset Value or NAV means the net asset value of EIT, as determined by subtracting the aggregate value of the liabilities of EIT from the Total Assets of EIT and as more particularly set forth in the Declaration of Trust. NI means National Instrument Mutual Fund Prospectus Disclosure of the Canadian Securities Administrators, as it may be amended from time to time. NI means National Instrument Investment Funds of the Canadian Securities Administrators, as it may be amended from time to time. NI means National Instrument Investment Fund Continuous Disclosure of the Canadian Securities Administrators, as it may be amended from time to time. NI means National Instrument Independent Review Committee for Investment Funds of the Canadian Securities Administrators, as it may be amended from time to time. Non-Residents means non-residents of Canada for purposes of the Tax Act. Operating Expenses means all of the expenses associated with the operation and administration of the Fund. Permitted Merger has the meaning ascribed thereto under the section Declaration of Trust Modification of Declaration of Trust and Meetings of Trust Interest Holders. Portfolio means the portfolio of securities held by the Fund from time to time. Portfolio Manager means Canoe, or such person as may be substituted therefor in accordance with the Declaration of Trust. Portfolio Securities means securities generally acquired by the Portfolio Manager through trades made through the facilities of the TSX and, from time to time, securities acquired pursuant to exchange offers whereby EIT issues Trust Interests in exchange for units of certain specified royalty trusts, income trusts, limited partnership units and other investments. Preferred Unit means one transferable unit of any series representing a preferred equity interest in the property of EIT, with such designation, rights, privileges, restrictions and conditions attached thereto as determined by the Manager and set forth in a Certificate of Amendment and which are issued from time to time in accordance with the provisions of the Declaration of Trust.

7 - 7 - Preferred Unit Redemption Price shall mean in respect of a Preferred Unit, the redemption price specified in the applicable Certificate of Amendment. Preferred Unitholder means the holder of a Preferred Unit. Premium Distribution refers to a cash amount equal to 102% of a distribution or, as the context may require, 102% of the aggregate distributions payable by EIT on a particular Distribution Payment Date to participants enrolled in the Premium Distribution Component, subject to proration in certain events as described within the DRIP. Premium Distribution Component means a component of the DRIP, pursuant to which Units are purchased on the reinvestment of distributions under the DRIP and disposed of in exchange for the Premium Distribution. Registered Plan means any of: RRSPs, RRIFs, deferred profit sharing plans, RESPs, RDSPs and TFSAs. RDSP means a registered disability savings plan under the Tax Act. REITs means real estate investment trusts. RESP means a registered education savings plan under the Tax Act. RRIF means a registered retirement income fund under the Tax Act. RRSP means a registered retirement savings plan under the Tax Act. Securities Lending Agreement means the standard securities lending agreement between EIT or its agents and securities borrowers acceptable to EIT and its agents. Series 1 Preferred Unit means a Preferred Unit designated as a Series 1 Preferred Unit. Series 1 Preferred Unitholder means the holder of a Series 1 Preferred Unit. Series 1 Preferred Unit Certificate of Amendment means the Certificate of Amendment setting out the terms of the Series 1 Preferred Units, approved by the Manager on March 10, 2017 which became a part of the Declaration of Trust on that date. SIFT Rules means the rules in the Tax Act regarding the taxation of SIFT trusts and SIFT partnerships, each as defined in the Tax Act, and their investors. Tax Act means the Income Tax Act (Canada), as now or hereafter amended, or successor statutes, and shall include the regulations promulgated thereunder. Tax Proposals means all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof. Termination Date has the meaning ascribed thereto under the section Declaration of Trust Termination of EIT. TFSA means a tax-free savings account under the Tax Act. Total Asset Value means the Net Asset Value of the Fund plus the amount representing any outstanding Preferred Units if they are deducted from the assets of the Fund in calculating the Net Asset Value of the Fund. Total Assets means the aggregate value of the assets of the Fund as determined in accordance with the terms of the Declaration of Trust.

8 - 8 - Trust Interests shall mean the Units and/or Preferred Units of any series. Trust Interest Holder means the holder of a Unit or Preferred Unit. Trustee means Alliance Trust Company, who replaced Computershare Trust Company of Canada as trustee on September 22, 2014 in accordance with the provisions of the Declaration of Trust, in its capacity as Trustee under the Declaration of Trust, and thereafter such successor as may be appointed the Trustee in accordance with the provisions of the Declaration of Trust. TSX means the Toronto Stock Exchange. Unit means one transferable unit representing an equal and undivided interest in the property of EIT in accordance with and subject to the provisions of the Declaration of Trust, that is not a Preferred Unit. Unitholders means holders of Units.

9 - 9 - FORWARD-LOOKING STATEMENTS Certain statements included in this Annual Information Form as they relate to EIT or the Manager constitute forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, action or plans, strategies, prospects, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as expects, does not expect, is expected, potential, continues, anticipates, does not anticipate, plans, estimates, believes, does not believe or intends, or stating that certain actions, events or results may, should, could, would, might or will be taken, occur or achieved) are not statements of historical fact but reflect EIT s current expectations regarding future results or events and may be forward-looking statements. Market predictions and forward-looking statements are subject to known and unknown risks and uncertainties and other factors that may cause actual results, performance, events, activity and achievements to differ materially from those expressed or implied by such statements. Forward-looking statements involve significant risks and uncertainties and a number of factors could cause actual results to materially differ from expectations discussed in the forward looking statements including, but not limited to, changes in general economic and market conditions, including the matters discussed below and under Risk Factors and in other sections of this Annual Information Form: competition; departure of key personnel or consultants; fluctuation in foreign exchange or interest rates; negative conditions in general economic and financial markets; losses from credit exposure; stock market volatility and market valuations; conflicts of interest; and changes in income tax laws and other government regulations. With respect to market predictions and forward-looking statements contained in this document, EIT has made assumptions regarding, among other things: future exchange rates; the impact of increasing competition; the continuity of existing business relationships; conditions in general economic and financial markets; and the ability to obtain financing on acceptable terms. Although the forward-looking statements are based on what EIT believes to be reasonable assumptions, EIT cannot assure that actual results will be consistent with these forward-looking statements. These statements speak only as of the date of this Annual Information Form and EIT does undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by applicable laws. EIT makes monthly distributions of an amount comprised in part of returns of capital in respect of Units and quarterly distributions of an amount comprised in part of returns of capital in respect of Series 1 Preferred Units. A return of capital effectively returns all or a portion of an investor s original investment. Return of capital that is not reinvested will reduce the Net Asset Value of the Fund, which could reduce the Fund s ability to generate future income. Readers should not draw any conclusions about the Fund s investment performance from the distribution amounts described in this Annual Information Form. Management fees and expenses may be associated with investment funds. Readers are encouraged to review the information filed about the Fund on SEDAR at before investing. Readers are cautioned that the foregoing list of factors is not exhaustive. Should one or more of these risks and uncertainties materialize, or should EIT s estimates or underlying assumptions prove incorrect, actual results, performance or achievements may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements.

10 NAME AND FORMATION OF THE FUND EIT is a closed-end investment trust established under the name EnerVest Diversified Income Trust on August 5, 1997 under the laws of Alberta pursuant to the Declaration of Trust. The Fund subsequently changed its name to Canoe EIT Income Fund on November 4, Alliance Trust Company is EIT s trustee, and CIBC Mellon is the custodian of EIT s assets. Canoe Financial LP has been EIT s manager and portfolio manager since November 1, Prior thereto, EnerVest Diversified Management Inc. was EIT s manager. EIT s office is located at Suite 3900, 350-7th Avenue S.W., Calgary, Alberta T2P 3N9. EIT s registered office is located at Suite 3500, nd Street S.W., Calgary, Alberta, T2P 4J8. The fiscal year end of EIT is December 31. Units and Series 1 Preferred Units trade on the TSX under the symbols EIT.UN and EIT.PR.A, respectively HISTORY OF THE FUND On January 30, 2007, EIT renewed and amended the 2006 Credit Facility and increased the maximum borrowing base thereunder to $400 million. CIBC and the Bank of Montreal were the lenders under the amended 2006 Credit Facility. On May 1, 2007, EIT announced the appointment of an independent review committee pursuant to NI See Fund Governance Independent Review Committee below for more details. At a special meeting of Unitholders held on July 5, 2007, the following amendments to the Declaration of Trust were approved: (a) (b) (c) (d) the clarification and broadening of the investment objectives to allow for a greater percentage of investments in debt and equity, including shares of corporations; the incorporation of new national securities legislation (NI ) which required all investment funds to establish an independent review committee by May 1, 2007; the amendment of provisions relating to Unitholder communications and deliveries to conform with the guidelines set out in National Instrument Communications with Beneficial Owners of Securities of a Reporting Issuer; and changing the quorum requirements for a meeting of Unitholders to two or more Unitholders present in person or by proxy and representing not less than 5% of the outstanding Units. On July 24, 2007, the Amended and Restated Management Agreement between EIT and the Manager was renewed for an additional five year term. On September 24, 2007, EIT announced the renewal of its normal course issuer bid (the NCIB ) with the TSX. During the 12 months preceding September 24, 2007, EIT repurchased 3,750,925 Units at a weighted average trading price of $6.04 per Unit. On October 22, 2007, EIT closed an exchange offer whereby EIT issued 33,941,261 Units having an aggregate value of approximately $201.5 million in exchange for certain royalty trust, income trust, limited partnership units and securities of corporations. On December 13, 2007, EIT renewed its $400 million amended 2006 Credit Facility with CIBC and the Bank of Montreal for a further period of 364 days from January 29, 2008 to January 27, 2009.

11 On May 16, 2008, all of the issued and outstanding shares of the Manager were indirectly acquired by Canoe. On September 24, 2008, EIT announced the renewal of the NCIB with the TSX. On October 23, 2008, EIT announced it had received a waiver of a technical breach of the amended 2006 Credit Facility due to a 30% decline in Net Asset Value of EIT as a result of external market factors beyond the control of the Manager. In connection with the waiver, EIT reduced its indebtedness and the size of the amended 2006 Credit Facility to $300 million On February 9, 2009, EIT announced a reduction of the Fund s monthly distribution to $0.07 per Unit from $0.10 per Unit effective with the February 2009 monthly distribution. On February 26, 2009, EIT renewed its amended 2006 Credit Facility with a syndicate of Canadian financial institutions for a further period of 364 days from February 25, 2009 to February 24, 2010 for an amount up to $200 million with an option to increase to $300 million. On March 26, 2009, at a special meeting, Unitholders approved amendments to the Declaration of Trust and the Amended and Restated Management Agreement to allow for the following: (a) a voluntary cash redemption once every calendar year pursuant to which EIT may offer to redeem up to 10% of outstanding Units; (b) a reduction of the fee the Manager would receive on termination of EIT. Pursuant to the amendment, the Manager receives a fee equal to 5% of the Net Asset Value of any Units being redeemed pursuant to the voluntary cash redemption with the cumulative fees paid on any such redemptions being deducted from any final termination fee to be paid to the Manager; and (c) further flexibility in managing the investment portfolio and the consolidation or split of Units to maintain Unit market prices at levels acceptable for margin accounts and for trading. On April 20, 2009, EIT announced a consolidation of the outstanding Units on the basis of three pre-consolidation Units for one post-consolidation Unit. In connection with the consolidation, monthly distributions were changed to $0.15 per Unit. On August 19, 2009, EIT announced a reduction of the Fund s monthly distribution to $0.10 per Unit from $0.15 per Unit effective with the August 2009 monthly distribution. On September 28, 2009, EIT announced the renewal of the NCIB with the TSX. During the 12 months preceding September 28, 2009, EIT repurchased 1,130,667 Units pursuant to the NCIB at a weighted average trading price of $9.43 per Unit on a post consolidation basis. On October 8, 2009, 9,985,000 Units were redeemed in connection with the first voluntary annual cash redemption for an approximate redemption price of $12.77 per Unit. On December 15, 2009, EIT announced that it had filed a final prospectus for an offering of warrants to Unitholders. Each Unitholder of record on December 23, 2009 received one-quarter of a warrant for each Unit held. Each whole warrant entitled the holder to subscribe for one Unit upon payment of the subscription price of $13.31 at any time prior to 5:00 p.m. (Calgary time) on September 23, 2010.

12 On February 11, 2010, EIT announced that it had established a new 364-day credit facility with a Canadian lending institution effective February 11, The credit facility remained at $200 million, with the option to increase the facility up to $300 million. EIT was limited to borrowing up to 20% of the Total Assets and generally applied a strategy that kept the Fund conservatively levered well below the borrowing limit. EIT s credit facility was drawn by approximately $138 million as at February 11, On September 8, 2010, 9,464,000 Units were redeemed in connection with the voluntary annual cash redemption for an approximate redemption price of $14.75 per Unit. On September 28, 2010, EIT announced the renewal of its NCIB with the TSX. During the 12 months preceding September 28, 2010, EIT repurchased 997,500 Units at a weighted average trading price of $ per Unit. On September 28, 2010, EIT announced that its warrant offering had closed. Under the offering EIT issued 15,441,805 Units and raised gross proceeds totalling approximately $206 million, including funds raised under the additional subscription privilege. On November 1, 2010, EnerVest Diversified Management Inc. assigned its rights under the Amended and Restated Management Agreement to Canoe, who assumed the obligations thereunder. On November 15, 2010, Haber Trilix Advisors, LP assumed the portfolio management duties from Cypress Capital Management Ltd., pursuant to a sub-advisory agreement with the Manager On January 17, 2011, EIT announced that it had filed a final prospectus for an offering of warrants to Unitholders. Each Unitholder of record on January 25, 2011 received one-quarter of a warrant for each Unit held. Each whole warrant entitled the holder to subscribe for one Unit upon payment of the subscription price of $15.27 at any time prior to 5:00 p.m. (Calgary time) on September 20, 2011 (or such earlier date as EIT may have determined in accordance with the provisions of the warrants). 2,060,645 Units were issued pursuant to the exercise of warrants under this offering raising gross proceeds totaling approximately $31.5 million. On February 10, 2011, EIT announced that it had extended its credit facility with its existing lender. The credit facility was a 20 month facility with a one year term-out option. The maximum available credit was increased to $350 million from $200 million. EIT was limited to borrowing an amount not exceeding 20% of the Total Assets of the Fund. On September 8, 2011, 9,748,000 Units were redeemed in connection with the voluntary annual cash redemption for an approximate redemption price of $14.46 per Unit. On September 29, 2011, EIT announced it had renewed its NCIB with the TSX. The NCIB commenced on October 1, 2011, and terminated on September 30, During the 12-months preceding September 29, 2011, EIT had not made any purchases under its NCIB. On November 1, 2011, EIT announced that it had filed a final prospectus for an offering of warrants to Unitholders. Each Unitholder of record on November 11, 2011 received one-quarter of a warrant for each Unit held. At any time prior to the expiry date of 5:00 p.m. (Calgary time) on April 30, 2012 each whole warrant entitled the holder to subscribe for one Unit upon payment of the subscription price of $ The subscription price represented a 5% discount to the Net Asset Value per Unit as calculated most immediately prior to October 27, Upon the closing of the warrant offering, the Fund had issued 181,371 Units and raised gross proceeds totalling $2.5 million.

13 On August 13, 2012, EIT announced that it had filed a final prospectus for an offering of warrants to Unitholders of the Fund. Each Unitholder of record on August 22, 2012 was entitled to one-quarter of a warrant for each Unit held. At any time prior to the expiry date of 5:00 p.m. (Calgary time) on February 22, 2013 each whole warrant entitled the holder to subscribe for one Unit upon payment of the subscription price of $ The subscription price represented a 5% discount to the most recently calculated Net Asset Value per Unit prior to the date of the Fund s preliminary prospectus dated May 10, In connection with the offering, the Fund issued 3,379,419 Units and raised gross proceeds totaling approximately $44.8 million. On July 24, 2012, the Amended and Restated Management Agreement between EIT and the Manager was renewed for an additional five year term. On September 27, 2012, EIT announced that it had renewed the NCIB with the TSX. The NCIB commenced on October 1, 2012, and terminated on September 30, Under the previous NCIB which commenced on October 1, 2011 and expired on September 30, 2012, EIT purchased 30,400 Units at an average cost of $13.77 per Unit. On October 9, 2012, the Fund entered into an amended credit facility with its existing lender extending the term to October 10, 2013 with a two-year term out option. The maximum amount of available credit remained at $350 million with borrowing limited to 20% of the Fund s Total Assets. On November 26, 2012, 9.2 million Units were redeemed in connection with the voluntary annual cash redemption for an approximate redemption price of $12.91 per Unit On February 26, 2013, EIT announced that its warrant offering dated August 9, 2012 had closed. Under the offering, EIT issued 3,379,419 Units and raised gross proceeds totalling approximately $44.8 million. On May 23, 2013, EIT announced that it had filed a final prospectus for an offering of warrants to Unitholders. Each Unitholder of record on June 4, 2013 received one-third of a warrant for each Unit held. Each whole warrant entitled the holder to subscribe for one Unit upon payment of the subscription price of $11.94 at any time prior to 5:00 p.m. (Calgary time) on November 15, 2013 (or such earlier date as EIT may have determined in accordance with the provisions of the warrants). In connection with this offering, the Fund issued 8,021,312 Units and raised gross proceeds totalling approximately $96 million. On July 29, 2013, Mr. Robert Taylor, Senior Vice President and Portfolio Manager of the Manager, assumed portfolio management responsibilities from Haber Trilix Advisors, LP, the Fund s former sub-advisor. On August 30, 2013, at a special meeting, Unitholders approved amendments to the Declaration of Trust and the Amended and Restated Management Agreement (as applicable) providing: (a) (b) (c) (d) (e) the Manager with specific authority to amend the DRIP by adding a Premium Distribution Component; the Fund with the authority to issue a new class of preferred equity securities, issuable in series; for a fixed administration charge to be paid to the Manager for certain expenses incurred on the Fund s behalf by the Manager in connection with the operation and administration of the Fund; an update to the Fund s investment objectives to reflect changes in the current investment environment; amendments to the investment restrictions of the Fund to expand the Fund s investment options;

14 (f) (g) the ability for automatic year-end distributions to be paid in the form of Units and to permit subsequent consolidations of Units following such non-cash distributions; for the elimination of the requirements that a successor Trustee: i. must be confirmed by the Unitholders, and ii. must be a corporation that has at least $100 million of shareholders equity on its balance sheet; (h) (i) that certain Permitted Mergers may be effected at the discretion of the Manager and without Unitholder approval, and in particular, mergers of two funds, that, among other things, have similar investment objectives and may be merged without a resulting increase in the management expense ratio for Unitholders (see Declaration of Trust Modification of Declaration of Trust and Meetings of Unitholders ); and the Fund and Manager with the authority to make amendments to the Declaration of Trust without Unitholder approval in non-material circumstances, including, but not limited to, making amendments to conform the Declaration of Trust with current market practices within the securities or investment fund industries (see Declaration of Trust Modification of Declaration of Trust and Meetings of Unitholders ). On September 26, 2013, EIT announced that it had renewed the NCIB with the TSX. The NCIB commenced on October 1, 2013, and terminated on September 30, Under the previous NCIB, which commenced on October 1, 2012 and expired on September 30, 2013, EIT purchased 50,000 Units at an average cost of $11.31 per Unit. On October 9, 2013, EIT announced that it had renewed its amended credit facility with its existing lender effective October 1, The amended credit facility is a 12 month facility with a one-year term-out option. The maximum amount of available credit remained at $350 million, with borrowing limited to 20% of the Fund s Total Assets, but EIT had the option, subject to lender approval, to increase the facility to $400 million. As of November 1, 2013, each of the Declaration of Trust and the Amended and Restated Management Agreement was amended and restated to reflect the amendments approved at the special meeting of Unitholders held on August 30, 2013 as described above. On November 4, 2013, EIT announced that the name of the Fund had been changed from EnerVest Diversified Income Trust to Canoe EIT Income Fund. The trading symbol for the Units on the TSX did not change. On November 25, 2013, 8.9 million Units were redeemed in connection with the voluntary cash redemption for an approximate redemption price of $12.94 per Unit Effective January 1, 2014, investment funds in Canada were required to adopt International Financial Reporting Standards ( IFRS ) for fiscal years beginning on or after January 1, 2014, resulting in the Fund adopting IFRS. On May 15, 2014, EIT announced that it had filed a final prospectus for an offering of warrants to Unitholders of the Fund. Each Unitholder of record on May 27, 2014 was entitled to one warrant for each whole Unit held. At any time prior to the expiry date of 5:00 p.m. (Calgary time) on November 14, 2014, four warrants entitled the holder to subscribe for one Unit upon payment of the subscription price of $ The subscription price represented 102% of the most recent closing price per Unit on the TSX prior to the date of the Fund s preliminary prospectus dated April 2, In connection with the offering, the Fund issued 13,938,259 Units and raised gross proceeds totaling approximately $173 million.

15 On June 10, 2014, EIT announced the implementation of a long-term distribution plan and the intention to continue to pay a $0.10 per Unit monthly distribution through the first quarter of Effective September 16, 2014, the Fund suspended the optional cash purchase plan which was previously available to investors under the OCP component of the DRIP (see Declaration of Trust Distribution Reinvestment Plan ). On September 22, 2014, the amendments to NI published on June 19, 2014 by the Canadian Securities Administrators in connection with the Modernization of Investment Fund Product Regulation Project came into effect, resulting in EIT being subject to the amended NI On September 22, 2014, Alliance Trust Company replaced Computershare Trust Company of Canada as Trustee of the Fund in accordance with the provisions of the Declaration of Trust. On October 6, 2014, EIT announced that it had renewed the NCIB with the TSX. The NCIB commenced on October 8, 2014, and terminated on October 7, Under the previous NCIB, which commenced on October 1, 2013 and expired on September 30, 2014, EIT purchased 1,273,900 Units at an average cost of $11.84 per Unit. On October 7, 2014, EIT announced that it had renewed its amended credit facility with its existing lender effective October 2, The amended credit facility is a 12 month facility with a one-year term-out option. The maximum amount of available credit remained at $350 million, with borrowing limited to 20% of the Fund s Total Assets, but EIT had the option, subject to lender approval, to increase the facility to $400 million. On December 31, 2014, approximately 10.1 million Units were redeemed in connection with the voluntary cash redemption at an approximate redemption price of $13.51 per Unit Due to legislative changes governing closed-end investment funds in Canada, EIT did not issue a warrant offering in On March 25, 2015, the Declaration of Trust was amended and restated to reflect the amendments to NI as described above. On October 9, 2015, EIT announced that it had renewed its amended credit facility with its existing lender effective October 9, The amended credit facility is a 12 month facility with a one-year term-out option. The maximum amount of available credit remained at $350 million, with borrowing limited to 20% of the Fund s Total Assets, but EIT had the option, subject to lender approval, to increase the facility to $400 million. On December 10, 2015, approximately 9.8 million Units were redeemed in connection with the voluntary cash redemption at an approximate redemption price of $11.76 per Unit. On December 30, 2015, EIT announced that it had renewed the NCIB with the TSX. The NCIB commenced on January 4, 2016, and terminated on January 3, Under the previous NCIB, which commenced on October 8, 2014 and expired on October 7, 2015, no Units were purchased On October 7, 2016, EIT announced that it had renewed its amended credit facility with its existing lender effective October 7, The amended credit facility is a 12 month facility with a one-year term-out option. The maximum amount of available credit is $250 million, with borrowing limited to 20% of the Fund s Total Assets, but EIT has the option, subject to lender approval, to increase the facility to $300 million. On December 9, 2016, approximately 9.7 million Units were redeemed in connection with the voluntary cash redemption at an approximate redemption price of $12.29 per Unit.

16 On February 16, 2017 the Fund received an updated favourable (as determined in the sole discretion of the Manager) advance tax ruling from the CRA to make such amendments to the Declaration of Trust as necessary or desirable to enable the Fund to issue Preferred Units up to a maximum aggregate amount equal to 25% of the Fund s Total Assets after giving effect to the issuance of Preferred Units. As of March 10, 2017, each of the Declaration of Trust and the Amended and Restated Management Agreement was amended and restated to reflect the Preferred Units. As of March 10, 2017, the Series 1 Preferred Unit Certificate of Amendment to the Declaration of Trust setting out the terms of the Series 1 Preferred Units was approved by Canoe. On March 14, 2017, EIT announced that its offering of Series 1 Preferred Units had closed (the Series 1 Preferred Unit Offering ). Under the Series 1 Preferred Unit Offering, EIT issued 4,900,000 Series 1 Preferred Units and raised gross proceeds totalling $122,500,000. On March 21, 2017, EIT announced that the syndicate of underwriters for the Series 1 Preferred Unit Offering had fully exercised its over-allotment option (the Over-Allotment Option ). As a result of the exercise of the Over- Allotment Option, EIT raised additional gross proceeds totalling $18,735,000 from the sale of 735,000 additional Series 1 Preferred Units. Inclusive of the Series 1 Preferred Unit Offering and Over-Allotment Option, EIT issued 5,635,000 Series 1 Preferred Units and raised gross proceeds totalling $140,875,000. This Annual Information Form reflects the foregoing developments that occurred in INVESTMENT RESTRICTIONS AND PRACTICES The Fund is not considered to be a mutual fund under the securities legislation of the provinces and territories of Canada. Consequently, the Fund is not subject to the various policies and regulations that apply to mutual funds under such legislation. The Fund is subject to certain other requirements and restrictions contained in applicable securities laws, including NI , which governs the continuous disclosure obligations of investment funds and NI , which imposes certain investment restrictions on investment funds, such as the Fund. EIT is currently also subject to certain restrictions and practices contained in the Declaration of Trust which are designed in part to ensure that the investments of EIT are diversified and to ensure the proper administration of EIT. In particular, the Declaration of Trust contains investment restrictions to the effect that EIT may not: (a) (b) (c) (d) (e) hold any security issued by any issuer (other than short-term debt securities issued or guaranteed by the Government of Canada or any Canadian province or municipality) if as a result more than 10% of the Total Assets would consist of securities issued by such issuer; borrow money in excess of 20% of the Total Assets at the time of borrowing after giving effect to the borrowing; purchase or sell commodities or commodity contracts; make loans or guarantee securities or obligations of a person or company, except that the Fund may purchase and hold debt obligations (including bonds, debentures or other obligations and certificates of deposit, bankers acceptances and fixed time deposits) in accordance with its investment objectives; participate in mining, oil and gas or similar ventures, other than through the ownership of securities issued by royalty and income trusts, corporations, partnerships or other issuers and such other investments as the Manager may determine in its sole discretion from time to time;

17 (f) sell securities short, provide a security interest over Fund assets in connection with short sales, or deposit Fund assets with dealers as security in connection with such transactions selling securities short, unless the following conditions are met: (A) (B) (C) (D) (E) (F) (G) (H) (I) (J) (K) securities shall be sold short only for cash and the Fund will receive the cash proceeds within normal trading settlement periods for the market in which the short sale is made; short sales shall only be effected through market facilities through which those securities normally are bought and sold; the Fund shall only sell short a security which is listed and posted for trading on a stock exchange and either the issuer of the security has a market capitalization of not less than $300 million, or the equivalent thereof in another currency, at the time the short sale is effected or the Portfolio Manager has pre-arranged to borrow securities for the purposes of such short sale, or if the security sold short is a bond, debenture or other evidence of indebtedness of or guaranteed by the Government of Canada or any province or territory of Canada or the Government of the United States; at the time securities of a particular issuer are sold short by the Fund, the aggregate market value of all securities of that issuer sold short will not exceed 5% of the total net assets of the Fund; the Fund shall place a stop-loss order (effectively a standing instruction) with a dealer to immediately repurchase for the Fund the securities sold short if the trading price of the securities exceeds 115% (or a lower percentage determined by the Manager) of the price at which the securities were sold short; the aggregate market value of all securities sold short by the Fund will not exceed 10% of its total net assets on a daily marked-to-market basis; the Fund shall hold cash cover in an amount, including the Fund s assets deposited with lenders, that is at least 150% of the aggregate market value of all securities it sold short on a daily marked-to-market basis; no proceeds from short sales shall be used by the Fund to purchase long positions other than cash cover; where a short sale is effected in Canada, each dealer that holds Fund assets as security in connection with the short sale must be a registered dealer in a province and a member of the Investment Industry Regulatory Organization of Canada; where a short sale is effected outside Canada, each dealer that holds Fund assets as security in connection with the short sale must be (i) a member of a stock exchange and subject to regulatory audit and (ii) have a net worth in excess of the equivalent of $50 million determined from its most recent audited financial statements; and the aggregate assets deposited by the Fund with any single dealer as security in connection with short sales will not exceed 10% of the Fund s total net assets at the time of deposit; (g) own more than 10% of any class of securities issued by any issuer or purchase securities for the purpose of exercising control over, or management of, any issuer, in each case other than (A) an entity whose sole purpose is to invest in Portfolio Securities on behalf of the Fund or (B) an investment fund or mutual fund issuer;

18 (h) (i) invest more than 15% of the Total Assets in securities for which a market quotation is not readily available, directly or indirectly; make any investment or conduct any activity that would result in the Fund failing to qualify as a unit trust or a mutual fund trust within the meaning of the Tax Act; (j) loan portfolio assets unless the loan transaction is in compliance with the provisions of NI ; (k) (l) (m) (n) purchase real property, real property mortgage loans or real estate limited partnership interests (other than securities issued by issuers that invest in real estate or interests therein including real estate investment trusts); act as underwriter except to the extent that the Fund may be deemed to be an underwriter in connection with the sale of securities in its portfolio; make or hold any investments that would result in the Fund itself being a SIFT trust for the purposes of the Tax Act; or invest in or hold (A) securities of or an interest in any non-resident entity, an interest in or a right or option to acquire such property, or an interest in a partnership which holds any such property if the Fund (or the partnership) would be required to include any significant amounts in income pursuant to section 94.1 of the Tax Act, (B) an interest in a trust (or a partnership which holds such an interest) which would require the Fund (or the partnership) to report income in connection with such interest pursuant to the rules in section 94.2 of the Tax Act, or (C) any interest in a nonresident trust (or a partnership which holds such an interest) other than an exempt foreign trust for the purposes of section 94 of the Tax Act. Percentage limitations specified in or applicable to the investment restrictions apply only immediately after a transaction, and any subsequent change in any applicable percentage resulting from changing values will not require the sale of any security in the Fund s portfolio (except for the restrictions in paragraphs (h), (i), (m) and (n) which must be complied with at all times and which may necessitate the selling of securities from time to time). If the Fund receives from an issuer subscription rights to purchase securities of that issuer, and if the Fund exercises such subscription rights at a time when the Fund s holdings of securities of that issuer would otherwise exceed the limits set forth above, the investment restrictions will not be considered to have been violated if, prior to receipt of securities upon exercise of such rights, the Fund has sold at least as many securities of the same class and value as would result in the restrictions being complied with. The investment restrictions may not be changed without the approval of two-thirds of the votes cast by the Unitholders entitled to vote thereon at a meeting called for such purpose, except to the extent necessary to ensure compliance with applicable laws, regulations or other requirements imposed by applicable regulatory authorities from time to time, including NI INVESTMENT POLICIES The investment objectives of EIT are to maximize monthly distributions relative to risk and maximize Net Asset Value, while maintaining and expanding a diversified investment portfolio, primarily through acquiring, investing, holding, transferring, disposing of or otherwise dealing with or in equity and debt securities of corporations, partnerships, or other issuers and such other investments as the Manager may determine in its sole discretion from time to time. The investment objectives set forth above may be achieved through direct acquisitions, investments or, at the election of the Manager, through exchange offers completed by EIT from time to time. The assets of EIT may be invested in equity or debt securities which include, but are not limited to, (i) energy-related corporations and partnerships (including, but not limited to, oil and gas, oil and gas services, industrial, propane, natural gas liquids, pipeline, production and handling facilities, and coal corporations or partnerships, or other issuers and such other

19 investments as the Manager may determine in its sole discretion from time to time), (ii) other resource-oriented corporations or partnerships or other issuers and such other investments as the Manager may determine in its sole discretion from time to time, (iii) real estate investment trusts, and (iv) any other corporation, partnership, or other issuers operating in an industry as the Manager may determine in its sole discretion from time to time. EIT invests its funds in a broad range of income-producing investments, including the securities of publicly traded REITs, qualified limited partnerships, corporations and similar issuers, corporate debt, convertible debentures and preferred shares of issuers engaged in businesses in various industries and geographic regions. Income from these investments, including capital gains arising from capital appreciation, is used to support regular monthly distributions to Unitholders and quarterly distributions to Series 1 Preferred Unitholders. To the extent any net income or net realized capital gains generated during the year have not been fully distributed to Trust Interest Holders during the year, and having regard to the intention of the Trustee to ensure that EIT will not have any liability for non-refundable tax under Part I of the Tax Act in any taxation year, such net income and net realized capital gains will, without any further action on the part of the Trustee, be due and payable on the last day of each taxation year of EIT to Unitholders of record at the close of business on such day. Such amounts may be paid in cash or as a non-cash distribution in the form of Units, in the discretion of the Manager. See Declaration of Trust Distributions Annual Distributions. The Declaration of Trust states that the assets of EIT and any monies available for reinvestment at any time are to be invested in accordance with applicable laws, including NI , and EIT s investment objectives, policies and restrictions as expeditiously as prudent investment practice permits. Pending such investment, from time to time, funds of EIT may be invested at the written direction of the Portfolio Manager in debt securities issued or guaranteed by the Government of Canada having less than 12 months to maturity from the date of purchase or in short-term commercial paper of investment grade having less than 12 months to maturity from the date of purchase. Any funds not so invested must be deposited in an interest-bearing account at a Canadian chartered bank or trust company selected by the Trustee. The Declaration of Trust provides that EIT is entitled to borrow for investment purposes and to mortgage its assets to secure such borrowings, subject to compliance with the investment restrictions and the limitations on the amounts that may be borrowed contained in the Declaration of Trust. See Risk Factors Use of Leverage. ELIGIBILITY FOR INVESTMENT Provided that at all relevant times, either the Trust Interests are listed on a designated stock exchange under the Tax Act (which currently includes the TSX) or EIT qualifies as a mutual fund trust for the purposes of the Tax Act, the Trust Interests will be qualified investments under the Tax Act for trusts governed by Registered Plans. Notwithstanding that a Trust Interest may be a qualified investment for a trust governed by a TFSA, RRSP or RRIF, the holder of such TFSA or the annuitant of such RRSP or RRIF, as the case may be, will be subject to a penalty tax in respect of a Trust Interest held in such TFSA, RRSP or RRIF if such Trust Interest is a prohibited investment for such TFSA, RRSP or RRIF, as the case may be. A Trust Interest will be a prohibited investment for a TFSA, RRSP or RRIF if the holder of such TFSA or the annuitant of such RRSP or RRIF, as the case may be, (i) does not deal at arm s length with the Fund for the purposes of the Tax Act, or (ii) has a significant interest (within the meaning of the Tax Act) in the Fund. Generally, a holder of a TFSA or an annuitant of an RRSP or RRIF will not have a significant interest in the Fund unless such holder or annuitant, as the case may be, owns interests as a beneficiary under the Fund that have a fair market value of 10% or more of the fair market value of the interests of all beneficiaries under the Fund, either alone or together with persons and partnerships with which such holder or annuitant does not deal at arm s length for purposes of the Tax Act. In addition, Trust Interests will not be a prohibited investment for a trust governed by a TFSA, RRSP or RRIF if the Trust Interests are excluded property as defined in the Tax Act for such TFSA, RRSP or RRIF. Pursuant to Tax Proposals released on March 22, 2017, the rules in respect of prohibited investments are also proposed to apply to (i) RDSPs and the holders thereof and (ii) RESPs and the subscribers thereof. Holders of TFSAs or RDSPs, annuitants of RRSPs or RRIFs and subscribers of RESPs who wish to hold Trust Interests in such plans should consult their own tax advisors.