Distributions from the Fund have tax benefits which results in higher after-tax cash flow than if the income had been earned as interest income.

A portion of the portfolio will be comprised of dividend paying equities at inception. During 2010, this portion will increase as most income trusts (excluding REITs) are expected to convert to corporations. As a result the vast majority of the portfolio will be invested in dividend paying equities (mostly former income trusts) by 2011. Dividends have a much more favourable tax treatment for taxable investors than income distributions. Dividends are taxed at less than half the rate of ordinary income for many Canadian investors in the highest marginal tax bracket. Consequently, distributions, which are taxed as eligible dividends, result in significantly higher after-tax income for investors.

The actual breakdown of distributions for tax purposes will be provided to unitholders annually in March as soon as possible following receipt of the information from the Fund's individual holdings. This information will also be posted on the website as soon as it is available.

This information is of a general nature only and does not constitute legal or tax advice to any particular investor. Accordingly, prospective investors are advised to consult their own tax advisors with respect to their individual circumstances.

2010 Tax Allocation

Canadian High Income Equity Fund is pleased to provide the following information to assist its unitholders in the preparation of their Income Tax Returns. This information is applicable to holders who, for the purposes of the Income Tax Act (Canada), are resident in Canada and hold trust units as capital property. If this is not the case, a tax advisor should be consulted.

Holders of trust units outside of a RRSP, DPSP, RRIF, RESP or TFSA should expect to receive a T3 slip from their investment dealer. T3 supplementary slips will indicate Other Income (Investment Income and Non-Investment Income) in Box 26, Foreign Non-Business Income in Box 25, Capital Gains in Box 21 and Eligible Dividend Income in Box 49. Dividend income is subject to the standard gross up and federal dividend tax credit rules.

The return of capital component is a non-taxable amount that serves to reduce the adjusted cost base of the Fund units and is reported in Box 42.

Please select year to display the breakdown of the cash distributions payable in 20102009 on a per unit basis.