Variable Return

The Variable Return calculation is the formula used to determine the Variable Return on the Notes at the Maturity Date. The Variable Return per Note is calculated as follows:

‘‘NAVFINAL’’means, at any time (expressed pro rata per Note), an amount equal to: (i) the proceeds from the liquidation of the Fund Account; plus (ii) the maturity value of the Bond Account as calculated by the Calculation Agent; minus (iii) repayment of the Loan and any accrued and unpaid Loan interest and Program Fees. An Investor cannot elect to receive the Variable Return, if any, prior to the Maturity Date and the Notes cannot be redeemed or retracted prior to the Maturity Date. There is a possibility that an Investor may not receive any Variable Return.

Fund Account Exposure

Fund exposure was 105% on the issue date (May 14, 2008) and has changed as noted below:

Quarterly Coupons Payment History

Quarterly Coupons per Note will be payable in Canadian dollars in an amount equal to 1.25% of the Fund Account Value, if any, determined as of each Quarterly Coupon Determination Date. Upon payment of any Quarterly Coupon on the Notes, the aggregate amount of such payment will be deducted from the Distribution Account. Each Quarterly Coupon will be paid within 10 Business Days of the immediately preceding Quarterly Coupon Payment Date (the date of such payment being, a ‘‘Quarterly Coupon Payment Date’’) during the term of the Notes in an amount equal to the Distribution Account Value on the immediately preceding Quarterly Coupon Determination Date. Program Fees and Loan interest will not be deducted from the Distribution Account. Quarterly Coupons will be funded by notionally liquidating Fund Account assets, which will reduce the value of the Fund Account.

Performance Commentary

As at July 31, 2008 the BNS Beutel Goodman Equity Value Plus Deposit Notes (Yield), Series 1 have yielded a return of
-8.83% since inception, comprised of a change in NAV of -8.83% and a total of $0 in all quarterly coupon payments. Weak global markets have caused Canadian and global equities to underperform over the past several months, negatively affecting the overall performance of the Note. The Canadian yield curve rallied over the month, increasing the cost of principal protection and therefore decreasing distance in CPPI Notes. During the period from July 1, 2008 to July 31, 2008 there were 2 de-leveraging events. As at July 31, 2008 the Notes have a fund exposure of 63%.

Fund Performance

Fund Units	Weight	Initial Unit NAV	Month End Unit NAV	Change %	Lock-in Date
Beutel Goodman Canadian Equity Fund	60.00%	$26.47	$19.55	-26.14%	10/27/2008
Beutel Goodman Global Fund	40.00%	$13.32	$10.58	-20.57%	10/27/2008
Overall Return				-23.91%

Note: An investment in principal protected notes may not be suitable for all investors. Important information about these investments is contained in the Information Statement of each note. Investors should obtain and carefully read a copy prior to investing, paying particular attention to the associated risks. Past performance is not indicative of future returns. Commissions, trailing commissions, management fees and expenses all may be associated with these investments. Principal is guaranteed at maturity only for products purchased at their issue price and held to maturity. The investment return on the notes, if any, is uncertain in that an investor may not receive more than return of the principal amount at maturity. A person should reach a decision to invest in the notes only after carefully considering with his or her advisor, the suitability of this investment in light of his or her investment objectives and the information set out in the respective Information Statement.

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