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Investment Performance Report

March 31, 2017

NDT Industry

This report is proprietary and should not be disseminated or distributed in whole, or in part, to any third parties without the express written consent of Proteus Performance Management Inc. All rates of return are presented gross of

fees, unless otherwise noted. Data contained within the report has been provided from multiple sources, including (but not necessarily limited to) the plan record-keeper, the custodian, the investment manager(s), Morningstar

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Table of Contents

ECONOMIC SUMMARY 3

EXECUTIVE SUMMARY 4

ECONOMIC & FINANCIAL MARKET OVERVIEW 6

PLAN PERFORMANCE SUMMARY 23

FOUR YEAR RISK METRICS 31

ASSET ALLOCATION SUMMARY 35

INVESTMENT MANAGER ANALYSIS 36

PROTEUS UPDATE 39

NDT INDUSTRY Q1 17 INVESTMENT PERFORMANCE REPORT 2

Economic Summary - Markets

Canadian equities achieved a positive return of 2.4% this quarter. Utilities led the index followed by the information technology and consumer discretionary sectors. The energy and health care sectors were the only components within Canadian equities that had negative returns. The health care sector was the lowest performing sector for the second quarter in a row.

World markets, represented by the MSCI World Index, and the U.S. market represented by the S&P 500 were up 5.9% and 5.2% respectively for the quarter. The MSCI EAFE Index was up 6.8% for the quarter. The MSCI Emerging Markets Index reversed its previous quarter’s negative performance and achieved a positive return of 10.9% at the end of the quarter.

Interest rates decreased by approximately 3 basis points across the Canadian yield curve and 9 basis points for 10-year Canadas. U.S. rates remained relatively unchanged. The Bank of Canada left its overnight rate unchanged at 0.50% during the first quarter despite faster than expected growth in January. The FTSE TMX Canada Universe Bond Index was up 1.2% for the quarter. Provincial bonds, municipal bonds as well as corporate bonds outperformed the index for the quarter.

5.1

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0.6 9

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2.4 7

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S&P/TSX Composite Index Performance

Index Weight Current Quarter

10.97.0

4.1 5.2 6.8 5.92.4

21.3

13.9

18.420.3

15.719.0 18.6

Emerging Europe Japan U.S. International Global Canada

Global Equity Market Performance C$

Current Quarter One Year

0.7

1.5

1.9

1.21.3

1.61.7

1.5

Short Term Mid Term Long Term Universe

Canadian Bond Performance

Current Quarter One Year


Executive SummaryFirm Updates

During the quarter, Michele Brown joined Jarislowsky Fraser as Director, U.S. Institutional Sales, based in New York City. Tristan Menardwas promoted to Associate, Alliances and Advisor Distribution, focused on Quebec and Atlantic Canada. Walter Viguilouk was promoted to Associate, Institutional Management, based in Toronto.

There were no changes to the people, process, structure, or ownership at Leith Wheeler.

On January 31, 2017, Don Reed, President and CEO and Portfolio Manager for Templeton International Stock Fund retired from the firm. Duane Green is now President and CEO for FTIC of Canada.

Performance Updates

The total portfolio experienced a positive return during the first quarter, but underperformed its benchmark. Overall, Canadian and U.S. equities lagged their peers while international, global and emerging market equities rallied this quarter. The Bank of Canada kept the overnight rate unchanged despite faster than expected growth in January. Interest rates fell slightly and corporate spreads tightened, which lead to corporate bonds outperforming the Index and Government bonds underperforming for the quarter.

While capital markets continued to perform strongly during the first quarter, the allocation to the JF Canadian Equity Fund detracted from relative performance. Leith Wheeler’s international fund outperformed the MSCI EAFE Index. The Canadian, U.S. and international equity components of the Templeton fund underperformed their respective benchmarks. The total portfolio was able to achieve itsprimary investment objective of returning at least 3.5% above the cost-of-living index over a rolling 5 year period.

The Templeton portfolio underperformed both the NDT Balanced Benchmark and the manager’s benchmark this quarter. However, over a 4 year annualized period, the portfolio outperformed the NDT Balanced benchmark and exceeded its objective by 20 basis points.


Executive SummaryPerformance Updates

The Leith Wheeler Fund outperformed the NDT Balanced Benchmark by 10 basis points over the quarter. It was unsuccessful in meeting its objective of exceeding the benchmark return over a rolling 4 year annualized period by at least 0.75%, falling short of the objective by 60 basis points. The Canadian equity component lagged the benchmark, as weakness in the energy sector weighed down the overall market. The international equity component outperformed the benchmark due to strong stock selection and an overweight position in the information technology sector. The fixed income component, which makes up nearly half of the Leith Wheeler fund, outperformed the benchmark due to an overweight position in corporate bonds.

The JF Canadian Equity Fund underperformed its benchmark for the quarter. Detracting from performance was an underweight position in the materials sector as well as weak stock selection the energy sector. Over longer periods, the fund has performed well and has met its objective of exceeding the benchmark return over a 4 year annualized period by at least 100 basis points, with a return of 190basis points above the objective. The fund also experienced less volatility than its benchmark, as measured by the 4 year standard deviation over the 4 year annualized period.


Q1 Summary

Canada’s 2017 Federal Budget provided more clarity on the funding programs and budgetallocations for the Canada Infrastructure Bank and the new Housing Statistic Framework. Nochanges were made to capital gain taxes.

Political risk remains a concern throughout Europe, with the three largest economies in theEurozone (Germany, France, and Italy) undergoing elections. Each nation has a right-wingpopulist candidate promising a referendum once elected. Britain will also have a generalelection in June, with Theresa May hoping to extend the Conservative Party’s small majority.

Oil prices hovered around the $50 (per barrel) mark throughout the first quarter. The stabilityin crude oil prices was the direct result of production cutbacks by OPEC countries. Despitethe stability in the oil market, rising non-OPEC production (more specifically the U.S.)continued to act as a price ceiling.

Canada and the U.S. continue to diverge in terms of their monetary policies. In the US, theFederal Reserve hiked the federal funds rate by 0.25% to a target range of 0.75-1%. On theother hand, the Bank of Canada kept the overnight rate unchanged.


European Elections

In April, Theresa May, the Prime Minister of Britain,called for an election to take place on June 8th, 2017.

Early polls suggest the Conservative Party arefavourites to win the general election and to expandits 17-seat majority in the House of Commons.

While May had previously denied the possibility of asnap election, she pointed to a lack of unity inWestminister for her change in stance. May’s camphas had little success in furthering their post-Brexitagenda since David Cameron stepped down as PrimeMinister of the United Kingdom.

The election does carry some risk to theConservative Party, given those whowere in favour of remaining in theEuropean Union (EU) will again have aplatform to voice their concerns.

May’s announcement has come underscrutiny from Scotland given she recentlyprevented their Prime Minister NicolaSturgeon from holding an independentreferendum due to the uncertaintysurrounding the terms of Brexit.

With the deadline set for March 2019 forBritain to finalize their new trade dealwith EU, the Conservative Party believesan extended majority will significantlyincrease their leverage in negotiations.

Source: The Economist


European Elections

While the EU received a boost with Geert Wilders’ and his far-right movement not being elected into power in the Netherlands, the EU’s strength will be largely tied to the outcomes of upcoming elections.

Marine Le Pen, one of two main contenders for the next French presidency, has based her platform largely on Euroscepticism and nationalism. Her main opponent, Emmanuel Marcon, won the initial election round on April 23rd, significantly reducing the chances of a Le Pen victory. The run-off election takes place this May.

Frauke Petry, principal speaker of the Alternative for Germany party, is similarly looking to change the nations’ open-door immigration policy.

Matteo Salivini, leader of the Northern League, is putting forth a comparable platform ahead of Italy’s general election, currently slated for 2018.

France

• May 7th

Britain

• June 8th

Germany

• Sept. 24th

Remaining 2017 Election Dates

Though the right-wing populist candidates are not presently leading in the polls, this was also the case prior to both Brexit and the U.S. election.

With referendums being promised by Le Pen, Petry, and Salivini, political related news throughout the continent will likely drive financial markets yet again in 2017.

Trade negotiations with Britain will experience additional difficulties if more countries depart from the EU.


Commodities

Oil prices remained relatively stable during thebeginning of the first quarter. The stability ofprices was partially attributed to the cutbacks inoil production by OPEC countries.

Despite disciplined production cuts by OPEC,market concerns about oversupply haven’tcompletely vanished. US crude oil inventoriesand rig count in shale oil fields haveunexpectedly risen in the United States.

As effects of the oil price shock start to fade,investment in the oil and gas sector is expectedto increase moderately.

Source: Bank of Canada

OPEC production, monthly data

Brent and US shale oil rig counts, monthly data


Canada – Economic Dashboard

GDP grew 2.6% (annualized) in the fourth quarter.Year-over-year (y/y) growth was 1.9%.

Domestic demand, which is a major driver of GDP,decelerated for a second consecutive quarter to0.1%, largely due to the decline in businessinvestment.

The unemployment rate decreased by 0.2 percentagepoints to 6.7% for the quarter. Employment increasedby 15,300 jobs in February, resulting inunemployment falling to its lowest level sinceJanuary 2015 at 6.6%.

Fueled by rising gas prices, inflation reached itshighest level in January since October 2014 (2.1%)before settling at 1.6% in March.

The dollar was approaching $0.77 CAD/USD in earlyFebruary, but experienced a steep decline in Marchlargely due to falling oil prices late in the quarter.

GDP Growth

UnemploymentInflation

CAD/USD

2017 2018Bank of Canada 2.6% 1.9%

IMF 1.9% 2.0%

OECD 2.1% 2.3%

Big 5 Banks (Median) 2.3% 1.9%

GDP Growth Projections

The Numbers1.9%

6.7%1.6%

$0.7506


GDP

For the year, household spending and disposable income grew as a result of low interest rates, middle class tax cuts, and the Canada Child Benefit. An increase in government expenditure and housing investment further contributed to the annual real GDP gain of 1.4%.

GDP year-over-year growth increased for the third consecutive quarter, reaching its highest level since the first quarter of 2015. Annualized GDP growth declined in comparison to the previous quarter.

Exports of goods and services increased by 0.3%, while imports fell by 3.5%. Crude oil, crude bitumen, and metal and non-metallic mineral products experienced significant growth in exports and a decline in imports during the quarter.

Business investment declined over the quarter, while business gross capital formation declined for the ninth consecutive quarter. Non-residential and engineer structures both experienced a sharp reduction in investment after seeing strong growth the previous quarter.

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Federal Budget

The Canada Infrastructure Bank will invest atleast $35 billion over the next 11 years usingloans, loan guarantees, and equity investments.The bank expects to be launched later in 2017and will work with all levels of government andprivate sector companies to plan and delivervarious infrastructure programs.

Despite speculation that stocks and real estateinvestments could see an increase in capital gaintaxes, no changes will be made in 2017.

25.3

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10.1

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Funding Program

Infrastructure Investments

With rising housing prices and steady increases inhousehold debt-to-income over the past decade,the Federal government will provide $40 millionof funding to Statistics Canada to help build adatabase of all Canadian residential properties.

As part of the skills and training initiative, thegovernment will launch the agency InnovationCanada in 2018-2019 in attempt to supportCanadian entrepreneurs. Employment insurancepremiums and benefits will also rise in 2018.

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Canada - Labour

The Canadian labour market posted strong results in the first quarter, adding 83,000 jobs. Over 139,000 full time-jobs were added alongside a reduction in part-time jobs.

The unemployment rate dropped to 6.7% this quarter; the lowest this rate has been since January 2015.

The participation rate rose to 65.9%. The participation rate has been steadily increasing, on average, each quarter since July 2016.

Source: Statcan

Source: www.tradingeconomics.com


Canadian Equity

The S&P/TSX Composite was up2.4% in the first quarter.

Gains were led by the utilities,information technology, andconsumer discretionary sectors.

Among other notable performerswas the gold sub-industry. Itexperienced gains over the quarteras political developments in the U.S.and Europe created uncertainty.

The health care sector was theweakest performer as Valeantcontinued to suffer significantlosses.

Source: Morningstar Direct


Ontario Housing

In late April, the Government of Ontario put forth the Fair Housing Plan. Measures that intend to address a few of the difficulties confronting the rapidly overheating housing market.

Strategies that attempt to ease demand include a 15% non-residence speculation tax in the Greater Golden Horseshoe on residences up to six units.

In order to boost supply, the Plan also permits for municipalities to levy a property tax on vacant homes. It also lowers property-taxes for new purpose-built apartment buildings.

Source: TD Economics

Greater rent control and strengthening rental standards are also included in the plan. In total there are sixteen initiatives in order to promote affordability in the provincial housing market.


US – Economic Dashboard

The economy grew by 2.1% (annualized) in the fourth quarter for year-over-year growth of 2.0%.

The unemployment fell to 4.5% in the quarter. It was the lowest jobless rate since May 2007.

A slowdown in energy and services cost resulted in the lowest inflation rate in three months.

2017 2018Bank of Canada 2.1 2.3

IMF 2.3 2.5

OECD 2.4 2.8

Big 5 Banks (Median) 2.3 2.3

GDP Growth Projections

GDP Growth (y/y)

Unemployment

Inflation (y/y)

The Numbers2.0%

4.5%

2.4%


Global Equity



US Labour

Non farm payrolls in the United States increased by 98 thousand in March, the lowest payroll number since May of last year.

The US unemployment rate dropped to 4.5% over the quarter. This is the lowest unemployment rate since May 2007. The number of unemployed declined by 326,000 while the labor force participation rate was unchanged.


Style

An investment style can experience drastically different levels of return relative to other styles over a given time periods. Sometimes styles can fall out of favour for long periods of time.

Over the quarter, growth stocks outperformed both broad market and value style stocks across all observed markets.

International equity was the top market performer this quarter.


3 Months 1 Year 4 YearsCanadian Equity

MSCI Canada Growth 2.5 11.5 7.5

MSCI Canada 2.1 19.2 8.6

MSCI Canada Value 1.8 26.6 9.3

US Equity

S&P 500 Growth 7.9 19.0 22.4

S&P 500 5.2 20.3 21.1

S&P 500 Value 2.7 22.3 19.5

International Equity

MSCI EAFE Growth 8.0 11.2 12.5

MSCI EAFE 6.8 15.7 12.4

MSCI EAFE Value 5.6 20.4 12.2

Global Equity

MSCI World Growth 8.1 16.4 17.7

MSCI World 5.9 19.0 17.1

MSCI World Value 3.9 21.6 16.4

Equity Returns by Style


Bond Yields

Interest rates decreased by approximately 3 basis points across the curve and 9 basis points for 10-year Canadas during the quarter.

The Bank of Canada kept the overnight rate unchanged. Although recent data indicate that economic growth has been stronger than expected, the economic outlook remains uncertain.

Interest rates across the US yield curve remained relatively unchanged.

The Federal Open Market Committee hiked the federal funds target rate by 0.25% based on improving labour markets and increasing inflation. The FOMC’s decision was well-anticipated by financial markets.

Source: Beutel Goodman Monthly Fixed Income Report


Fixed Income

The FTSE TMX Canada Universe Bond Index increased by 1.2% for the quarter.

The corporate, provincial, and municipal sectors outperformed the Index while the federal sector underperformed.

Corporate credit spreads tightened during the first quarter which benefitted the corporate bond sector.

Source: Morningstar DirectSource: Beutel Goodman Monthly Fixed Income Report


Key Take-Aways

The anti-establishment movement which led to Trump’s presidency and Brexit could gather momentum with the upcoming European elections. The recent announcement of Britain also going to the polls later this quarter will have implications on how the new trade agreement with the European Union will unfold.

Unemployment in both the U.S. and Canada are at their lowest rate since January 2015 and May 2007 respectively.

The Federal Open Market Committee raised the federal funds target rate by 0.25% based on improving labour markets and increasing inflation.


Plan Performance SummaryFor the Period Ending March 31, 2017

Meets SIP&P Objective

Does Not Meet SIP&P Objective 3Mths YTD 1Yr 3Yrs 4Yrs 5Yrs Q4 16 Q3 16 Q2 16 Q1 16 Q4 15 2017 2016 2015 2014 2013

Total PlanSIP&P objective 4.8 9.2 9.4 9.2 8.0 9.2

NDT Total Portfolio Fund's rate of return 2.8 2.8 14.0 7.6 9.6 9.9 10.3 10.2 9.7 8.9 9.7 14.0 -1.4 10.8 16.0 10.9 5.0*Objective - CPI Index +3.5% Differential 5.1 1.1 0.8 0.5 0.9 0.5

Quartile 3 3 1 3 3 2 2 3 3 3 3 1 3 3 2 1

Median performance 3.1 3.1 11.4 7.8 9.8 9.7 10.2 10.6 10.2 9.0 10.5 11.4 -1.0 12.7 16.0 9.1 5.5NDT Total Portfolio Benchmark** 3.0 3.0 11.4 7.2 8.8 8.7 9.2 9.4 9.2 8.0 9.2 11.4 -1.8 12.7 13.8 8.2 5.2

Consumer Price Index 1.3

Q1 17 - Total Portfolio passes the hurdle of CPI + 3.5% over 5 years.*The 4Yr Std Dev are calculated from quarterly returns for the total portfolio.

**Comprised of 30% S&P/TSX Composite, 15% S&P 500, 15% MSCI EAFE and 40% FTSE TMX Canada Universe.

Rolling 4-Year Annual Returns 4Yr Std.

Dev.


3Mth YTD 1Yr 3Yrs

Performance SummaryFor the Period Ending March 31, 2017

4Yrs 5Yrs 2017 2016 2015 2014 20134 Yr Std.

Dev.Q1 16Q2 16Q3 16Q4 16 Q4 15

4 Year Rolling Annual Returns

Balanced

Fund's rate of return

Quartile

NDT Balanced Benchmark

Median

Leith Wheeler Portfolio9.7

2 33312

-0.6

4331 2

Objective

8.69.7 -0.6 14.0 13.13.2 9.7 7.5 8.9 8.83.2

DifferentialObjective - NDT Balanced Benchmark + 0.75%

8.18.69.49.5 9.5

3433 3

9.410.210.510.0 10.9

-1.3-1.6-1.1-0.5

10.510.2 10.6 10.2 9.0

10.19.2 9.7 9.4 8.6

5.5

5.3

9.111.4 -1.0 12.7 16.03.1 11.4 7.8 9.8 9.73.1

-1.4

3.3 9.39.17.514.03.3 14.011.2-2.014.0 9.9 4.8

Balanced benchmark composed of 13% S&P/TSX Composite, 18.5% S&P 500, 18.5% MSCI EAFE and 50% FTSE TMX Canada Universe.


Quartile

NDT Balanced Benchmark

Median

Franklin Templeton Portfolio9.7

4 22324

0.2

1432 1

Objective

8.69.7 -0.6 14.0 13.13.2 9.7 7.5 8.9 8.83.2

DifferentialObjective - NDT Balanced Benchmark + 0.75%

9.710.711.110.7 11.1

2222 2

9.410.210.510.0 10.9

0.30.50.60.7

10.510.2 10.6 10.2 9.0

10.19.2 9.7 9.4 8.6

5.5

5.3

9.111.4 -1.0 12.7 16.03.1 11.4 7.8 9.8 9.73.1

0.2

2.5 10.39.97.112.72.5 18.510.6-1.312.7 12.0 5.2

Balanced benchmark composed of 13% S&P/TSX Composite, 18.5% S&P 500, 18.5% MSCI EAFE and 50% FTSE TMX Canada Universe. Templeton Balanced fund Comprised of 30% S&P/TSX Composite, 15% S&P 500, 15% MSCI EAFE and 40% FTSE TMX Canada Universe.

Templeton Balanced Benchmark 3.0 11.4 7.3 8.7 8.43.0 8.88.9 9.1 8.9 7.7 7.511.4 -1.8 12.9 13.0 5.2

Objective


Quartile

S&P/TSX Composite Index

Median

9.3

3 11133

1.9

3213 1

6.118.6 -6.6 6.9 16.02.4 18.6 5.8 8.3 7.82.4

Differential

Canadian Equity

JF Canadian EquityObjective - S&P/TSX Composite Index + 1%

10.612.112.012.5 10.4

1111 1

6.39.28.89.5 6.3

4.32.93.23.0

8.511.1 10.3 10.2 8.0

5.38.5 7.8 8.2 5.3

8.1

8.1

7.817.3 -4.8 9.3 21.22.1 17.3 7.1 10.5 9.92.1

4.1

2.0 11.511.28.615.32.0 19.49.71.515.3 12.8 7.6

Meets SIP&P Objective

Does not meet SIP&P Objective


3Mth YTD 1Yr 3Yrs


4Yrs 5Yrs 2017 2016 2015 2014 20134 Yr Std.

Dev.Q1 16Q2 16Q3 16Q4 16 Q4 15


Underlying Fixed Income


Quartile

FTSE TMX Canada Universe Index

Median

Leith Fixed Income3.3

2 11122

0.5

1222 2

Objective

4.51.5 0.8 10.3 0.81.2 1.5 4.1 3.3 3.51.2

DifferentialObjective - FTSE TMX Canada Universe Index + 0%

4.54.74.63.6 4.2

1112 1

4.04.14.13.1 3.6

0.50.60.50.5

3.93.3 4.2 4.3 4.1

3.63.1 4.1 4.1 4.0

3.8

3.9

5.02.1 0.8 10.1 1.11.4 2.1 4.2 3.5 3.81.4

0.6

1.4 4.13.84.52.41.4 1.710.11.12.4 5.4 3.8

Fund's rate of returnTempleton Global Bond6.8

n/a

Objective

1.0-0.5 8.1 10.5 9.60.9 -0.5 5.9 6.8 5.60.9Differential

JPM Global Government Bond Index Objective - JPM Global Government Bond Index (C$) + 0%

n/an/an/an/a n/a7.27.48.06.4 6.7

n/an/an/an/a

6.76.4 8.0 7.4 7.2 8.8n/a

3.4 n/an/an/a14.03.4 n/an/an/a14.0 n/a n/a

Fund's rate of returnTempleton Global Bond Hedged6.8

n/a

Objective

1.0-0.5 8.1 10.5 9.60.9 -0.5 5.9 6.8 5.60.9Differential

JPM Global Government Bond Index Objective - JPM Global Government Bond Index (C$) + 0%

n/an/an/an/a n/a7.27.48.06.4 6.7

n/an/an/an/a

6.76.4 8.0 7.4 7.2 8.8n/a

4.3 n/an/an/a11.04.3 n/an/an/a11.0 n/a n/a


Quartile

FTSE TMX Canada Universe Index

Median

Franklin Bissett Core Fixed Income3.3

1 12111

0.4

2141 1

Objective

4.51.5 0.8 10.3 0.81.2 1.5 4.1 3.3 3.51.2

DifferentialObjective - FTSE TMX Canada Universe Index + 0%

4.34.54.43.6 4.1

2222 1

4.04.14.13.1 3.6

0.30.40.30.5

3.93.3 4.2 4.3 4.1

3.63.1 4.1 4.1 4.0

3.8

3.9

5.02.1 0.8 10.1 1.11.4 2.1 4.2 3.5 3.81.4

0.5

1.7 4.13.74.63.31.7 1.110.30.33.3 5.7 3.9

Note: All returns of the underlying strategies are of pooled products obtained from the manager and Morningstar Direct Database.


3Mth YTD 1Yr 3Yrs


4Yrs 5Yrs 2017 2016 2015 2014 20134 Yr Std.

Dev.Q1 16Q2 16Q3 16Q4 16 Q4 15


Underlying Canadian Equity


Quartile


Median

Franklin Bissett Canadian Equity8.3

3 12213

2.7

2321 1

Objective

6.118.6 -6.6 6.9 16.02.4 18.6 5.8 8.3 7.82.4

DifferentialObjective - S&P/TSX Composite Index + 0%

10.712.512.712.3 10.7

1111 1

5.38.27.88.5 5.3

5.44.34.93.8

8.511.1 10.3 10.2 8.0

5.38.5 7.8 8.2 5.3

8.1

8.1

7.817.3 -4.8 9.3 21.22.1 17.3 7.1 10.5 9.92.1

5.4

1.9 12.311.07.418.71.9 22.67.3-2.718.7 17.5 8.1


Quartile

Median

Leith Canadian Equity8.3

2 11312

2.9

1441 1

Objective

6.118.6 -6.6 6.9 16.02.4 18.6 5.8 8.3 7.82.4

DifferentialObjective - S&P/TSX Composite Index + 0%

8.610.111.312.1 8.5

2321 2

5.38.27.88.5 5.3

3.31.93.53.6

8.511.1 10.3 10.2 8.0

5.38.5 7.8 8.2 5.3

8.1

8.1

7.817.3 -4.8 9.3 21.22.1 17.3 7.1 10.5 9.92.1

3.2

2.1 11.911.26.725.22.1 25.74.2-6.925.2 14.8 10.6




3Mth YTD 1Yr 3Yrs


4Yrs 5Yrs 2017 2016 2015 2014 20134 Yr Std.

Dev.Q1 16Q2 16Q3 16Q4 16 Q4 15


Underlying Canadian Small Cap


Quartile

S&P/TSX Small Cap Index

Median

Franklin Bissett Microcap6.2

4 34434

-1.7

1443 1

Objective

-7.129.5 -5.7 -9.8 15.41.5 29.5 3.3 6.2 3.41.5

DifferentialObjective - S&P/TSX Small Cap Index + 0%

5.39.06.07.4 8.1

3344 3

-2.35.54.66.0 -2.9

7.63.51.41.4

9.411.5 11.5 12.8 7.7

-2.96.0 4.6 5.5 -2.3

11.5

15.0

6.420.8 -7.2 1.5 32.71.2 20.8 4.0 10.4 9.01.2

11.0

-3.7 8.14.5-5.520.0-3.7 41.6-19.1-13.220.0 23.5 14.3


Quartile

Median

Franklin Bissett Small Cap6.2

4 34424

0.4

2442 1

Objective

-7.129.5 -5.7 -9.8 15.41.5 29.5 3.3 6.2 3.41.5

DifferentialObjective - S&P/TSX Small Cap Index + 0%

5.810.58.810.0 8.3

3333 3

-2.35.54.66.0 -2.9

8.15.04.24.0

9.411.5 11.5 12.8 7.7

-2.96.0 4.6 5.5 -2.3

11.5

15.0

6.420.8 -7.2 1.5 32.71.2 20.8 4.0 10.4 9.01.2

11.2

-5.3 8.76.6-1.321.0-5.3 34.3-10.2-11.521.0 17.6 13.3

S&P/TSX Small Cap Index



3Mth YTD 1Yr 3Yrs


4Yrs 5Yrs 2017 2016 2015 2014 20134 Yr Std.

Dev.Q1 16Q2 16Q3 16Q4 16 Q4 15


Underlying U.S. Equity


Quartile

S&P 500 Index

Median

Franklin Bissett U.S. Focus Equity21.1

4 11134

1.8

1113 1

Objective

15.820.3 4.1 29.4 32.65.2 20.3 17.5 21.1 20.05.2

DifferentialObjective - S&P 500 Index + 0%

23.123.424.026.3 26.2

1111 1

19.921.021.623.2 24.6

3.22.42.43.1

24.221.8 20.7 20.0 18.8

24.623.2 21.6 21.0 19.9

10.4

10.0

15.019.4 1.1 28.2 32.45.3 19.4 16.1 19.9 18.95.3

1.6

3.9 21.922.918.617.33.9 36.935.64.917.3 18.0 11.2


Quartile

S&P 500 Index

Median

Franklin U.S. Core Equity21.1

4 32334

-0.8

1143 4

Objective

15.820.3 4.1 29.4 32.65.2 20.3 17.5 21.1 20.05.2


18.819.622.522.9 24.0

2312 3

19.921.021.623.2 24.6

-1.1-1.40.9-0.3

24.221.8 20.7 20.0 18.8

24.623.2 21.6 21.0 19.9

10.4

10.0

15.019.4 1.1 28.2 32.45.3 19.4 16.1 19.9 18.95.3

-0.6

3.7 18.720.314.218.53.7 40.835.7-7.418.5 12.5 12.5


Quartile

S&P 500 Index

Median

Franklin U.S. Rising Dividends21.1

4 33334

-2.7

4413 1

Objective

15.820.3 4.1 29.4 32.65.2 20.3 17.5 21.1 20.05.2


18.219.620.921.2 20.2

3323 4

19.921.021.623.2 24.6

-1.7-1.4-0.7-2.0

24.221.8 20.7 20.0 18.8

24.623.2 21.6 21.0 19.9

10.4

10.0

15.019.4 1.1 28.2 32.45.3 19.4 16.1 19.9 18.95.3

-4.4

3.7 18.218.415.018.23.7 29.324.23.718.2 17.1 9.7


Quartile

Median

Leith U.S. Equity21.1

4 33314

-2.8

2431 2

Objective

15.820.3 4.1 29.4 32.65.2 20.3 17.5 21.1 20.05.2


16.216.718.021.1 20.9

4443 4

19.921.021.623.2 24.6

-3.7-4.3-3.6-2.1

24.221.8 20.7 20.0 18.8

24.623.2 21.6 21.0 19.9

10.4

10.0

15.019.4 1.1 28.2 32.45.3 19.4 16.1 19.9 18.95.3

-3.7

4.0 17.918.313.824.74.0 33.018.8-0.524.7 16.0 9.9

S&P 500 Index



3Mth YTD 1Yr 3Yrs


4Yrs 5Yrs 2017 2016 2015 2014 20134 Yr Std.

Dev.Q1 16Q2 16Q3 16Q4 16 Q4 15


Underlying International Equity


Quartile

MSCI EAFE Index

Median

Franklin Templeton EAFE Developed Market

12.4

4 11414

1.6

1421 3

Objective

13.615.7 -5.9 14.2 28.36.8 15.7 7.5 12.4 12.66.8

DifferentialObjective - MSCI EAFE Index + 0%

13.114.815.714.1 19.5

1111 1

11.913.114.312.5 17.2

1.21.71.41.6

17.112.1 14.0 12.8 11.8

17.212.5 14.3 13.1 11.9

11.2

11.2

13.315.1 -5.4 14.8 27.47.1 15.1 7.7 12.1 12.37.1

2.3

4.8 13.814.05.816.74.8 42.77.1-5.316.7 13.1 12.8


Quartile

MSCI EAFE Index

Median

Leith International Equity

12.4

2 33212

-0.4

3441 3

Objective

13.615.7 -5.9 14.2 28.36.8 15.7 7.5 12.4 12.66.8

DifferentialObjective - MSCI EAFE Index + 0%

9.210.212.211.7 13.5

4443 4

11.913.114.312.5 17.2

-2.7-2.9-2.1-0.8

17.112.1 14.0 12.8 11.8

17.212.5 14.3 13.1 11.9

11.2

11.2

13.315.1 -5.4 14.8 27.47.1 15.1 7.7 12.1 12.37.1

-3.7

7.6 12.112.08.024.77.6 24.810.9-9.024.7 12.9 9.7


Quartile

MSCI Emerging Markets Index

Median

8.0

1 44111

-0.6

4341 4

Objective

4.021.3 -9.8 15.7 7.510.9 21.3 8.2 8.0 7.210.9

Differential

Templeton EM Equity

Objective - MSCI Emerging Markets Index + 0%

1.85.47.55.2 4.1

4444 4

3.96.17.75.4 7.3

-2.1-0.7-0.2-0.2

17.112.1 14.0 12.8 11.8

7.35.4 7.7 6.1 3.9

11.2

12.2

13.315.1 -5.4 14.8 27.47.1 15.1 7.7 12.1 12.37.1

-3.2

12.6 7.47.48.633.012.6 4.012.9-14.733.0 7.4 12.9



3Mth YTD 1Yr 3Yrs


4Yrs 5Yrs 2017 2016 2015 2014 20134 Yr Std.

Dev.Q1 16Q2 16Q3 16Q4 16 Q4 15


Underlying Global Equity


Quartile

Median

Templeton Global Smaller Companies17.9

3 44413

-5.3

3441 4

Objective

16.822.1 -1.4 19.3 34.64.8 22.1 12.8 17.9 17.74.8

DifferentialObjective - MSCI World Small Cap Index + 0%

10.413.614.514.2 15.2

4444 4

16.618.520.120.1 21.7

-6.2-4.9-5.6-5.9

19.717.1 17.7 16.8 15.6

21.720.1 20.1 18.5 16.6

9.7

10.4

14.416.8 0.0 21.3 28.85.9 16.8 12.4 16.3 15.95.9

-6.5

5.7 12.412.68.520.95.7 26.010.9-4.820.9 11.6 9.9

MSCI World Small Cap Index



Four Year Risk MetricsFor the Period Ending March 31, 2017

When making decisions in our day to day lives one tends to weigh the benefits and the costs when coming to a conclusion. We attempt to maximize the benefit while minimizing the cost. The cost is not always financial and can shift in allocation from money to something less measurable, like safety. That is, the risk mitigating benefits from looking both ways before crossing the road or paying for seat belts and air bags in your car justifies the time and financial cost. One stands to benefit from applying similar logic to investing your retirement dollars. The first step is to better understand the risks the investment manager is subjecting your capital to. Quantifying or measuring the risk can be as important as measuring returns and will help give those numbers context. There are many different ways to measure and look at risk and no one measure is conclusive on its own. Proteus has added the following risk measures to your performance report to provide further insight into how the manager generated past returns:

Standard Deviation - measures the dispersion of the monthly returns around the mean rate of return. A higher number indicates that there was more volatility over the period. This metric was already included but is now also displayed with the other risk metrics.

Alpha - measures the difference between a fund's actual returns and its expected performance, given its level of risk (as measured by beta). A positive alpha figure indicates the fund has performed better than its beta would predict. In contrast, a negative alpha indicates a fund has underperformed, given the expectations established by the fund's beta. Beta measures the magnitude that a fund's returns move with the market.

Sharpe Ratio - A manager taking on systematic risk is expected to generate higher returns than the cash return. The Sharpe ratio measures how well the manager generated returns with that risk. In other words, taken on its own, it is a measurement of efficiency utilizing the relationship between annualized returns above the risk-free return and the standard deviation. The higher the Sharpe ratio, the greater efficiency produced by the manager.

Tracking Error - A measure of the amount of active risk that is being taken by the manager. A higher tracking error indicates a higher deviation of returns compared to the benchmark returns - not necessarily a higher level of return. Tracking error only accounts for deviations away from the benchmark, but does not signal in which directions these deviations occur (positive or negative).

Information Ratio - The level of excess return for a given level of tracking error; the higher the information ratio, the better the fund is performing relative to the amount of risk being taken. A positive ratio indicates that a fund is being rewarded for the deviations away from the benchmark.

Capture Ratios - measures how a fund has performed relative to the market during periods of market strength and weakness. The up markets capture ratio is used to evaluate performance relative to an index during periods when the index return was positive. Conversely, the down markets capture ratio is used to evaluate how well a manager has performed relative to the index during downturn periods. An up markets capture ratio of 110% indicates that the manager has achieved a return 10% higher than the index while the index was rising. A down markets capture ratio of 90%indicates that the manager only captured 90% of the losses of the index during the period specified (4 years in this analysis).



Proteus has created a table that provides some risk metrics for actively managed funds over the past four years. All values are annualized with the exception of theup and down capture ratios. Balanced fund metrics have been calculated using the manager’s benchmark. The funds’ risk metrics are calculated using theirrespective pooled funds. A few of the metrics are calculated relative to the appropriate benchmark. Thus, when calculating alpha, tracking error, as well as up anddown capture for each of the benchmarks, the result will always be the same (0 for the first two metrics and 100 for the capture ratios). Intuitively, this makes senseas the benchmark cannot outperform/underperform itself. The information ratio cannot be calculated for the benchmarks. This is because the denominator of theformula is tracking error and will always be 0, which is mathematically undefined. As a result, the information ratio values for the benchmarks/indices are blank.


Asset Allocation SummaryFor the Period Ending March 31, 2017

Compliance

Fund

Cash Account 175$ 0.0% Cash and Short Term 16,612,748$ 2.6%

Jarislowsky Fraser 137,700,451$ 21.3% Bonds 220,056,752$ 34.0%

Leith Wheeler 380,469,046$ 58.8% Canadian Equity 225,447,865$ 34.9%

Franklin Templeton 128,477,456$ 19.9% U.S. Equity 90,789,872$ 14.0%

Total 646,647,129$ 100.0% International Equity 93,739,891$ 14.5%

Total 646,647,129$ 100.0%

SIP&P Allowable Range

Total Plan Target Min Max

Total Fixed Income 36.6% 40.0% 30.0% 75.0%Bonds 34.0% 40.0% 0.0% 60.0%

Cash and Short Term 2.6% 0.0% 0.0% 25.0%

Total Equities 63.4% 60.0%* 25.0% 60.0%*Canadian Equity 34.9% 30.0% 0.0% 50.0%

U.S. Equity 14.0% 15.0% 0.0% 25.0%

International Equity 14.5% 15.0% 0.0% 25.0%

*While the maximum permitted proportion of equities is 60% for the purpsoing of acquiring new equities, an

allocation of up to 65% is permissible when the performance of the Plan Assets leads to an asset allocation of

over 60%.

Assets by Manager Assets by Asset Class

Jarislowsky Fraser 21.3%

Leith Wheeler 58.8%

Franklin Templeton

19.9%

Cash and Short Term2.6%

Bonds34.0%

Canadian Equity34.9%

U.S. Equity14.0%

International Equity14.5%

Jarislowsky Fraser 21.3%

Leith Wheeler 58.8%

Franklin Templeton

19.9%

Cash and Short Term2.6%

Bonds34.0%

Canadian Equity34.9%

U.S. Equity14.0%

International Equity14.5%


Investment Manager AnalysisJarislowsky Fraser

• Michele Brown joined the firm as Director, U.S. Institutional Sales, based in New York City.• Tristan Menard was promoted to Associate, Alliances and Advisor Distribution, focused on Quebec and Atlantic Canada.• Walter Viguilouk was promoted to Associate, Institutional Management, based in Toronto.

Canadian Equity

The firm's equity style emphasizes buying long-term growth at a reasonable price. The Fund segments holdings into three risk classifications. Over half of the portfolio must constitute lower risk, large capitalization, "blue-chip" leaders in non-cyclical industries. Less than one third are drawn from mid-risk cyclical leaders with international operations to diversify geographic risk. No more than 10% represent higher risk "Group III" stocks, which make up junior "growth" or special "value" situations.

• The Fund underperformed the S&P/TSX Composite Index for the quarter.• Detracting from performance was an underweight position in the materials sector.• At the stock specific level, Cenovus Energy detracted from performance.• At the stock specific level, Canadian Natural Resources, Open Text and Canadian Tire contributed to performance.

Performance Analysis


Leith Wheeler

• There have been no changes to Leith Wheeler’s people, process or structure during this quarter

NDT Balanced

To provide investors with a relatively stable, superior long-term rate of return, through a balanced portfolio of common shares and fixed income securities.

• The Fund outperformed the manager's benchmark for the quarter.• The Canadian equity component underperformed the S&P/TSX Composite Index.• Detracting from performance was weak stock selection in the energy sector.• At the stock specific level, Baytex Energy, Cardinal Energy, Seven Generations and Redknee Solutions detracted fromperformance.• At the stock specific level, Brookfield Infrastructure, Canadian Tire and Sleep Country contributed to performance.• The U.S. equity component underperformed the S&P 500 Index.• Detracting from performance was an overweight position in the financials sector, as well as an underweight position in theinformation technology sector.• Further detracting from performance was weak stock selection in the energy sector.• Contributing to performance was strong stock selection in the consumer staples, consumer discretionary and industrials sectors.• The international equity component outperformed the MSCI EAFE Index.• Contributing to performance was an overweight position in the information technology sector.• Further contributing to performance was strong stock selection in the financials, consumer discretionary and informationtechnology sectors.• Detracting from performance was an overweight position in the energy sector.• The fixed income component outperformed the FTSE TMX Canada Universe Bond Index.• Contributing to performance was an overweight position in corporate bonds.



Templeton

• Don Reed - President and CEO and Portfolio Manager for Templeton International Stock Fund, retired as of Jan 31, 2017. DuaneGreen is now President and CEO for FTIC of Canada.

NDT Balanced Fund

This fund seeks a balance of current income and long-term capital appreciation by investing primarily in a portfolio of Franklin Bissett and Templeton Funds to achieve a balance of fixed income and equity investments.

• The Fund underperformed the manager's benchmark for the quarter.• The Canadian equity component underperformed the S&P/TSX Composite Index.• Detracting from performance was an underweight position in the materials sector.• Contributing to performance was strong stock selection in the consumer discretionary and financial services sectors.• The Canadian Small Cap equity component underperformed the S&P/TSX Small Cap Index for the quarter.• Detracting from performance was a lack of exposure to metals and mining stocks.• The U.S. equity component underperformed the S&P 500 Index.• Detracting from performance was an underweight position in the information technology sector.• Contributing to performance was a lack of exposure to the telecom services sector.• The international equity component underperformed the MSCI EAFE Index.• Detracting from performance was an overweight allocation to the energy sector.• Contributing to performance was an overweight position, as well as strong stock selection in the information technology sector.• The emerging markets fund outperformed the MSCI Emerging Markets Index.• The global small cap equity component outperformed the MSCI World Small Cap Index.• The fixed income component outperformed the FTSE TMX Canada Universe Index.• Contributing to performance was an overweight position in corporate bonds, as well as an underweight position in government bonds.



PROTEUS LEARNING & UNDERSTANDING SERIES

Recorded Webinar:DC Plan Governance – Governance Series Part IIFiduciary Landmines that DC Plan Sponsors Must AvoidFeaturing: Randy Bauslaugh (Practice Leader, McCarthy Tetrault)Jeff Gray (Vice President, Proteus)Carolyn MacDonald (Senior Account Executive, Manulife)Teimaz Binesh (Consultant, Proteus)

Benefits Canada: Five Steps to Setting up a DC Pension PlanTeimaz Binesh, Consultant

Benefits Canada: Member Experience is the New Pension PlanDesign for Younger GenerationsMegan Marsiglio, Communications Manager

Benefits Canada: ESG Roundtable – Doing Better While Doing RightFeaturing Proteus, AGF & BlackRock

MANAGER RESEARCH UPDATE

IN THE MEDIA

PROTEUS VIEWPOINT

Plan Members: Drowning in Investment OptionsHow do you know if you have the right investment options available to your

members? How can you ensure members understand the difference between the

various investment options? Find out in our newest Viewpoint.

Proteus Manager Research helps clients identify best-in-class managers who will be well-aligned with their investment beliefs and objectives. Rather than just chasing yesterday’s best performing manager, Proteus strives to improves the odds of success by applying a robust research process. Our team assesses the following four main areas to see if all the key ingredients of future success are in place:

• People – managers should have a well-resourced, experiencedand stable team

• Process – an investment process should be well-defined andconsistent over time

• Portfolio – the types and sizes of the key drivers of risk andreturn need to be identified

• Performance – a track record should validate expectations forthe process and confirm the manager’s skill

Closet Indexing: Are You Paying Too Much For Your Money Manager?As a plan sponsor hiring a manager, you need to understand whether you're

getting an active manager or a passive manager. Do you know the difference?

As a plan fiduciary, you should be comfortable knowing whether you have an

active or passive fund because you don't want to pay for something you aren't

getting.

SPEAKING ENGAGEMENTS

Past: April 5, 2017 – Canada East Institutional Real Estate Investment Forum with Markets Group

Upcoming: May 17 – Canada Institutional Investor Forumwith Markets Group

Proteus Update


http://www.proteusperformance.com/blog/fiduciary-landmines-dc-plan-sponsors-must-avoid

http://www.benefitscanada.com/pensions/cap/five-steps-for-setting-up-a-dc-pension-plan-93222

http://www.benefitscanada.com/partner-education/2016-esg-roundtable-93308

http://www.proteusperformance.com/content/plan-members-drowning-investment-options-0

http://www.proteusperformance.com/content/closet-indexing-are-you-paying-too-much-your-money-manager

https://www.marketsgroup.org/forums/canada-institutional-real-estate-investor-forum-2017

https://www.marketsgroup.org/forums/canada-institutional-investor-forum-2017

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