August 1, 2000

Westcoast Energy has recently reported excellent financial results and demonstrated solid earnings growth. For the six months ended June 30, earnings per share totaled $1.63 versus $1.13 in the first half of 1999. Second quarter earnings per share of $0.60 were significantly higher than the $0.05 recorded for the comparable period last year. However, proceeds from the sale of the Company's interests in NGX Canada (gain of $4 million after-tax) and the EastCoast Power Project in Australia (gain of $8 million after-tax) were included in the first and second quarterly results, respectively. Further, a reduction in corporate income tax rates added $16 million to Westcoast's bottom line. Even after excluding these non-recurring items, earnings from continuing operations exceeded our expectations.

Two key divisions made notable contributions to the improved earnings, as benefits from various capital expenditures were realized. The Transmission and Field Services division, which includes the Maritimes and & Northeast Pipeline, the Alliance Pipeline and the Vector Pipeline, helped to boost earnings to $98 million in 2000 from $80 million in 1999. The Energy Services division added $13 million to net income in the first half of this year, versus a loss of $18 million in 1999, now that the division is beyond its start-up phase.

With strong natural gas price levels leading to increased production, pipeline capacity and energy-marketing services are in high demand. We believe that the Company's earnings growth will continue as new projects, additional capacity, cost savings and efficiency gains contribute to net income. The positive earnings momentum could very well be the catalyst needed to rekindle investor interest in Westcoast Energy's inherent value.

September 29, 2000

We purchased Westcoast Energy for its attractive dividend yield and its defensive nature during periods of significant market volatility. At the time, Westcoast was undervalued and largely ignored due to the high-tech mania that was gripping the market. However, as market volatility escalated, more and more investors began to look for safer investment alternatives. When we added Westcoast to our Value Favourites, the 5.3% dividend yield would have appealed to many such investors.

As capital flowed back into the stock, Westcoast's share price appreciated remarkably from a low of $19.65 in January to over $28 in recent weeks. Pipelines are generally cyclical stocks and the magnitude of this gain fell in the upper range of historic share price performance. In fact, at $28 the dividend yield was reduced to just over 4.5%, which was less appealing than even the yield available on risk-free T-Bills.

Because of the dramatic share price move and the associated reduction in dividend yield, we believed that Westcoast Energy was approaching a price level that fully valued its operations. Despite good prospects for the Alliance Pipeline project, Energy Services and Westcoast's other divisions, it was difficult to believe that much upside remained. Therefore, we sold our entire position in Westcoast Energy, taking advantage of the recent share price strength. The sale is not to imply that Westcoast won't go higher in price, rather that we believe the upside, compared to other out of favour value stocks, is relatively limited. As always, our disciplined approach to investing demanded that we reallocate our capital from fully valued to undervalued investments in the belief that the market will reward our efforts.