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ANNUAL REPORT 2007Enriching the legacy of the arts in Canada

by nurturing exceptional talent

TheHNATYSHYN FOUNDATION

MESSAGE FROM THE PRESIDENT

In 2007 we were pleased to continue the expansion of our grants programs for artists. To recognize the important role visual arts curators play in foster-ing and promoting Canadian art, we introduced the Hnatyshyn Foundation Award for Curatorial Excel-lence in Contemporary Visual Art, an annual prize of $15,000. The only national award of its kind in Canada, the new prize is the counterpart of the $25,000 Hnatyshyn Foundation Visual Arts Award, created in 2006 to honour the work of an outstand-ing mid-career artist.

We are very grateful to the Canadian Museums Association for inviting us to present our two Visual Arts Awards in November at the Visual Arts Sum-mit in Ottawa, the largest gathering of visual arts professionals ever held in Canada. The opportunity to celebrate the accomplishments of our award recipients in the presence of more than 400 of their colleagues was truly memorable.

Our Developing Artists Grants, a national scholar-ship program for young performing artists in train-ing, awarded nine $10,000 grants this year in a very high quality competition. This program has provided over $200,000 in financial support to exceptional young Canadians over the past three years. Some of our previous scholarship winners have now finished their training and are begin-ning their professional careers. For example, our 2005 classical ballet winner, Maude Sabourin, is a dancer with the Ballets de Monte-Carlo and the 2006 winner, Kostyantyn Keshyshev, has joined the Hong Kong Ballet. Lisa Di Maria, who received the classical voice grant in 2005, has completed her studies at the University of Toronto and was accepted

into the Canadian Opera Company Ensemble Stu-dio program. We look forward to following the successes of all the talented young performers who have received our scholarships.

On the investment front, 2007 was a challenging year for income-oriented funds that represent a large portion of the Foundation’s investment port-folio and our combined return was considerably less than it had been in the previous year. We are hopeful that investment markets will stabilize in 2008 and provide a higher income stream to support our programs.

Let me express my appreciation for the generosity of all our donors and the many members of the arts community across Canada who supported the Foundation in the past year by providing advice, serving as jury members for our grants or as Honorary Patrons. Finally, I extend my sincere thanks to our Board of Directors and staff whose hard work and expertise has ensured the continued growth of The Hnatyshyn Foundation.

Gerda Hnatyshyn, C.C.President and Chair of the Board

July 2008

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Dedicated to the support of excellence in the arts, The Hnatyshyn Foundation is a federally registered charity established by the late Right Honourable Ramon John Hnatyshyn, Canada’s twenty-fourth Governor General. We have two major objectives. First and foremost, we seek to nurture Canadian talent and facilitate the creation of new art by providing the means for indi-vidual artists to excel in their discipline and achieve national and international recognition.

Secondly, our goal is to promote national cohesive-ness and pride in citizenship through the medium of the arts – transcending regional boundaries and cultural differences – by exposing Canadians to the wealth of artistic talent within Canada.

The Foundation has a volunteer Board of Directors and a small operational staff. We collaborate with other organizations, whenever possible, to reduce administrative costs. Our grants programs are con-ceived to complement assistance offered by other public and private arts funding bodies, and to avoid unnecessary duplication. We work in consultation with artistic advisors in all disciplines to ensure the relevancy of our programs.

FUNDRAISING

The Foundation is building an endowment fund of $8.5 million the income from which is used to carry out our programs. By December 31, 2007 we had raised nearly $2.5 million in donations from individual, corporate and provincial government donors. In addition, through an agreement with the Department of Canadian Heritage, the Government of Canada had provided matching funds of $2.38 million.

INVESTMENT STRATEGY

The Foundation’s investment portfolio, managed by Greystone Managed Investments Inc., had a market value of $4.3 million at the end of 2007. The Foundation seeks to preserve the value of its portfolio within reasonable return and risk param-eters. While the base is growing to the targeted $8.5 million level, the Foundation is emphasizing the generation of income over the growth in capital of the fund.

2007 was a volatile year in the investment markets and our portfolio had a combined return of only 3.3% compared to 7.7% in 2006. The uncertainty in financial markets is expected to continue into 2008.

TheHNATYSHYN

FOUNDATION

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classical music (string instrument), classical music (wind instrument), classical music (piano), classical voice, jazz, classical ballet, contemporary dance, English theatre acting, French theatre acting. Five provinces were represented in this year’s scholarship winners: British Columbia, Alberta, Saskatchewan, Manitoba and Quebec.

“Many thanks to you and the Foundation for making wonder-ful things happen for the future leaders of Canadian culture...bravo!!”Denny Christianson, Director, Music ProgramHumber College

“Grateful thanks to the Foundation for their wisdom in sup-porting young artists.”Patricia Fraser, Artistic DirectorThe School of Toronto Dance Theatre

“Thank you to Mrs. Hnatyshyn and to the members of the Hnatyshyn Foundation for establishing such a notable source of encouragement and practical help for our developing art-ists. It is the difference that makes all the difference. As sing-ers, voice teachers, and coaches, we are deeply grateful.”Dr. Darryl Edwards, Associate Professor and Head of Voice Studies, University of Toronto

“The support your foundation provides for developing artists is without equal and I sincerely thank you for your dedica-tion.”André Jean, DirectorConservatoire d’art dramatique de Québec

“We are very appreciative of the support that the Hnatyshyn Foundation has given to our own children and to other young Canadian artists. It makes a world of difference to the students and their families, in helping to alleviate the tuition load and also in encouraging them in their chosen path.”Joan Dyrda, mother of classical music grant recipient, Keith Dyrda

“This grant is truly a wonderful initiative by your foundation. There are not a lot of scholarship programs for students in the arts because we are a relatively small group and we don’t always get our training in a university context. I am enormously encouraged by receiving this award. When I have fears and doubts it will help me to keep going because I know that some-body believes in me.”Claudiane RuellandFrench theatre acting grant recipient

“I am sending my immense gratitude for awarding me the Developing Artist Grant for contemporary dance. I am so looking forward to my next year at the School of Toronto Dance Theatre. Thank you for all you have done to improve this year for me.”Megan NadainContemporary dance grant recipient

“I want to express my utmost thanks for being awarded the prestigious 2007 Oscar Peterson Grant for Jazz Performance. It is truly an honour to receive this distinguished award. To my knowledge, this is the only music scholarship of its kind in North America and over the past few years it has been a tremendous financial help to young emerging Canadian jazz artists like myself.”Eli BennettJazz grant recipient

GRANTING PROGRAMS

Developing Artists Grants

In the third year of our Developing Artists Grants program we awarded nine scholarships of $10,000 each to exceptionally talented young students in the performing arts. Nominated by universities and professional training institutions across Canada, the candidates were then adjudicated anonymously by an expert jury. One scholarship was awarded in each of the following disciplines:

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English Acting Ms. Lindsey Angell, High River, AlbertaStudying at Langara College, Vancouver

French Acting Ms. Claudiane Ruelland, Quebec City, QuebecStudying at the Conservatoire d’art dramatique de Québec

BalletMs. Alyssa Stevens, Surrey, British ColumbiaStudying at the Goh Ballet Academy, Vancouver

Contemporary DanceMs. Megan Nadain, North Vancouver, B.C.Studying at the School of Toronto Dance Theatre

2007 DEVELOPING ARTISTS GRANTS RECIPIENTS

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Classical Music (Strings) Mr. Victor Fournelle-Blain, Sainte-Julienne, QuebecStudying violin at the Conservatoire de musique de Montréal

Classical PianoMr. Devon Joiner, Nanaimo, British ColumbiaStudying at the University of British Columbia, Vancouver

Classical VoiceMs. Allison Cecilia Arends, Regina, SaskatchewanStudying at the University of Toronto

Classical Music (Winds) Mr. Keith Dyrda, Oakbank, ManitobaStudying trombone at McGill University, Montreal

JazzMr. Eli Bennett, Vancouver, British ColumbiaStudying jazz saxophone at Humber College, Toronto

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2007 DEVELOPING ARTISTS GRANTS ADJUDICATORS

English ActingMs. Linda Moore, HalifaxDr. Gerald Lenton-Young, ReginaMr. John Lazarus, Kingston

French ActingMs. Brigitte Haentjens, MontrealMr. Guy Mignault, TorontoMr. Maurice Arsenault, Caraquet

BalletMs. Merrilee Hodgins, OttawaMr. David LaHay, KelownaMs. Nancy Kilgour, Calgary

Contemporary DanceMr. David Earle, C.M., GuelphMr. Michael Montanaro, MontrealMs. Anne Flynn, Calgary

Classical Music (Orchestral)Mr. Jeremy Berkman, VancouverMs. Elaine Klimasko, Ottawa Dr. Jeremy Brown, Calgary

Classical PianoMr. Stéphane Lemelin, OttawaMs. Kristina Szutor, St. John’sMr. David Louie, Toronto

Classical VoiceMs. Nancy Hermiston, VancouverMr. Daniel Lichti, WaterlooMs. Hélène Fortin, Quebec City

Jazz Ms. Christine Jensen, MontrealMr. Barry Elmes, TorontoMr. André Lachance, Vancouver

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VISUAL ARTS AWARDS

The Hnatyshyn Foundation Visual Arts Awards are two national prizes for excellence in Cana-dian contemporary art. Together they recognize and celebrate the crucial relationship between those who create art and those who help make it accessible to the public.

The 2007 award recipients, chosen by a jury of arts professionals from across Canada, received their awards at a ceremony at the Crowne Plaza Hotel in Ottawa on November 26 during the

Visual Arts Summit, a gathering of visual arts professionals from across Canada. The $25,000 prize for outstanding achievement by a mid-career Canadian artist was awarded to Vancouver artist Ken Lum. The $15,000 award for curatorial excellence in contemporary art was presented to Montreal gallery director and curator Louise Déry.

One of Canada’s leading international artists, Ken Lum was born in Vancouver in 1956 and

Ken Lum and Louise Déry, 2007 Visual Arts Awards recipients, with Gerda Hnatyshyn

“Contemporary art is a way of expressing what it means to be living in today’s world. It can make us aware of both the beauty and the ugliness of contemporary existence. It can open our eyes to see and our minds to imagine. In a world beset by environmental problems and armed conflicts, artists are more important than ever because, in the words of Henry Moore, “To be an artist is to believe in life.”

However, to be appreciated art has to be seen and it is surprising that so little attention is paid to the people who orchestrate the experiences we have when we visit art exhibitions. Great exhibitions that provide a seamless journey of discovery for the visitor do not happen by accident. They are the result of an enormous amount of highly creative and intellectually demanding work by curators who decide what the journey will be, the route we will take and the information we will gather along the way.”

Gerda HnatyshynHnatyshyn Foundation Visual Arts Awards PresentationOttawa, November 26, 2007

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has been exhibiting internationally since 1978. While he has employed sculpture and painting in his practice, it is his photo-text works that have gained the artist international attention in recent years. In recommending Lum for the Hnatyshyn Foundation Award, the jury high-lighted the multifaceted nature of his artistic practice: “Recognizing that the formation of one’s identity is informed by social and com-mercial influences, Lum blurs the boundaries between traditional and popular aesthetics in the interest of revealing the basis of our con-temporary ethos. In addition to his studio work, he has persistently challenged the precepts of the established art world through public presen-tations, writing and teaching. Taken together, Ken Lum’s activities constitute an active, critical engagement with the public as to what art is, how it is used and who has access to it.”

Louise Déry, recipient of the Hnatyshyn Foundation Award for Curatorial Excellence in Contemporary Art, is Director of the Art Gallery at the

Université du Québec à Montréal (UQAM). Her numerous projects have greatly contributed to the advancement of Quebec and Canadian art both nationally and internationally, particularly in France, Belgium, Italy, China, Japan and the United States. In 2007, Ms. Déry served as curator for the David Altmejd exhibition in the Canadian pavilion at the Venice Biennale, - an exhibition that was lauded by both Canadian and international art critics as one of the high-lights of the prestigious biannual event featur-ing contemporary art. The Hnatyshyn Foundation jury underlined the intellectual rigour of Ms. Dery’s curatorial practice: “Her exhibitions show an ability to engage with the contemporary world and her outstanding catalogues embody a desire to reflect on what it means to live in our world today. They combine a concern for making art accessible to a broad audience with a refined interpretation of the works, giving equal attention to the visual aspect of a work and its meaning.”

2007 VISUAL ARTS AWARDS JURY

Ms. Liz Magor, artist, VancouverMr. Robert Enright, arts journalist, WinnipegMs. Diana Nemiroff, Carleton University Art Gallery, OttawaMs. Christine Ross, Dept. of Art History, McGill University, MontrealMr. Jon Tupper, Confederation Centre Art Gallery and Museum, Charlottetown

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VISUAL ARTS AWARDS PRESENTATION

From left to right, top to bottom:Louise Déry and Ken Lum at the Awards reception; Gerda Hnatyshyn presenting the awards;Jon Tupper, jury member, introducing Ken Lum; Diana Nemiroff, jury member, speaking about Louise Déry; John McAvity, Executive Director of the Canadian Museums Association; Barbara Janes, Gerda Hnatyshyn, Peter Herrndorf and Diana Nemiroff at the reception.

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The Honourable J. Edward Broadbent, P.C., O.C

The Right Honourable Joe Clark, P.C., C.C.

Ben Heppner, O.C.

The Honourable Frank Iacobucci, C.C., Q.C.

Archbishop Yurij KalistchukAnn McCain Evans

The Honourable Barbara McDougall, P.C., O.C.

The Right Honourable M. Brian Mulroney, P.C., C.C.

Veronica Tennant, C.C.

Adam Zimmerman, O.C.

The Right Honourable Kim A. Campbell, P.C., Q.C.Vicki GabereauPeter Herrndorf, O.C.Norman Jewison, C.C.The Right Honourable Antonio Lamer, P.C.The Right Honourable Donald Mazankowski, P.C., O.C.The Honourable Yves Morin, O.C., O.Q.Dr. Oscar E. Peterson, C.C., C.Q., O.Ont.The Right Honourable John Turner, P.C., C.C., Q.C.

2007 HONORARY PATRONS

2007 BOARD OF DIRECTORS

Gerda Hnatyshyn, C.C., ChairRené Blouin

Nance GelberPierre Pontbriand

The Honourable William SaundersonJames Yersh, Treasurer

David AdderleyRichard Dearden, SecretaryKeith KellyAudrey L. RobinsonGuillaume Sirois

HONORARY COUNSELY.A. George Hynna

EXECUTIVE DIRECTORBarbara Janes

ADMINISTRATIVE ASSISTANTSChristine IrvinePatti McCuaig

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PRESIDENT’S BOX ($100,000 or more)

Government of Canada (Department of Canadian Heritage)Estate of John R. Stratton

Gerda HnatyshynGowling Lafleur Henderson LLP

Government of AlbertaShirley & Dan Greenberg

The McCain FamilyPower Corporation of Canada

SPONSOR’S BOX ($50,000 to $99,999)

Oscar PetersonRBC Foundation

William and Meredith SaundersonThe Temerty Family Foundation

FRONT ROW CENTRE ($25,000 to $49,999)

The Gail Asper & Michael Paterson Family FoundationBMO Financial Group

Government of British ColumbiaImperial Tobacco of CanadaThe Kahanoff FoundationThe Ron Joyce Foundation

Rothmans Benson & HedgesScotiabank

The Sobey FoundationW. Garfield Weston Foundation

DONORS

We gratefully acknowledge the support of our major donors:

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ORCHESTRA ($10,000 to $24,999)

Acuity Investment ManagementThe Andreasen Family

Ann BirksCanada Post

Celtic House Venture PartnersClearwater Seafood Inc.

Connor Clark & Lunn FoundationDanbe FoundationRichard Dearden

Government of the Northwest TerritoriesGovernment of OntarioGovernment of Quebec

Government of SaskatchewanGreystone Managed Investments

Hnatyshyn Gough LawyersIan Ihnatowycz

Norman & Margaret Jewison Charitable FoundationHelen Mussallem

James and Sandra PitbladoNancy Southam

UBS

MEZZANINE ($5,000 to $9,999)

Canril CorporationFrederick Fountain

David Glenn FountainWilliam and Pauline Girgulis

Audrey S. Hellyer Charitable FoundationGovernment of Nunavut

Scott JolliffeMagna International

St. Volodymyr Cultural Centre (Oakville) Thomas Downie Holdings LimitedTom McLellan Family Foundation

J. E. NewellWilliam & Nancy Turner Foundation

Milton WongWoodlawn Arts Foundation

Government of Yukon

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Alexander AllenKathleen ArmitageCharles Armstrong

Richard BaltzanTony Banks

Robert BellamyEdgar Benson & Mary Jane Binks

John BerrymanDaniel Bilak

Dean BlainPaul Blanchard

René BlouinDavid Bonham

Ted BoswellJanet Bradley

Todd BurkeT. Roberts CaldwellCalian Technologies

Canadian Heritage Garden FoundationAnne Carlyle & Sean Moore

Harold ChattawayDavid Clarke

Paul-Émile CloutierReuben Cohen

Brian CranePaul Curly

Dan Family FoundationGordon Desautels

John DohertyKenneth EvansSylvia Fedoruk

Joseph Frieberg Family FoundationMuriel Ginsberg

Peter GolfGovernment of New Brunswick

Government of Newfoundland & LabradorBruce Graham

Roger GreenbergJohn L.M. Hampton

Richard HaskayneJohn Hnatyshyn

Christopher HopgoodGeorge Hynna

Frank IacobucciChristine & Joe Irvine

Peter JensenNorman Keith

Keith Kelly

Betty KennedyRobert Laughton Tom LeBrunPatrick LeSageJames MacaulayRobert MacDonaldBarbara MacKenzieDonna MacKenzieAlexander Macklin Roderick MaclennanJean MacphersonDavid McFaddenBrian McGarrySusan Menzies Daniel Monson Bruce Morgan Gordon Parks E. M. PearsonBrenda PritchardStephen Probyn Renlim Holdings Inc.George RewaRobert Richards Gordon Robertson Audrey Robinson Margaret Ross Karen Shaffer-McClintockJohn ScottRodney SeyffretJacques ShoreDavid Simmonds Jackie SmithDavid & Faye Sobey Foundation Soloway Holdings LimitedChristopher Speyer Jane SteinbergElizabeth & Joe StephensStratton StevensRoger TasséDavid Todd Brian WalshPeter WebberRoss Wells & Judith Stephens-WellsGeorge WilsonMichael Wilson Adam Zimmerman Moses Znaimer

BALCONY ($1,000 to $4,999)

FRIENDS OF THE FOUNDATION (up to $999)We are very grateful to the many Friends of the Foundation who have made donations to our

endowment fund. They are too numerous to list in an annual report but we are pleased to acknowledge their support on our website (www.rjhf.com).

THE HNATYSHYN FOUNDATION / LA FONDATION HNATYSHYN

FINANCIAL STATEMENTS

DECEMBER 31, 2007

MCKECHNIE & CO.CHARTERED ACCOUNTANTS

MCKECHNIE & CO.Suite 500, 1390 Prince of Wales Drive

Ottawa, Ontario, K2C 3N6

AUDITORS' REPORT

To the Board of Directors of The Hnatyshyn Foundation / La Fondation Hnatyshyn

We have audited the statement of financial position of The Hnatyshyn Foundation / La FondationHnatyshyn as at December 31, 2007 and the statements of revenue and expenditure and changesin fund balances and cash flows for the year then ended. These financial statements are theresponsibility of the foundation's management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards.Those standards require that we plan and perform an audit to obtain reasonable assurancewhether the financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financialposition of the foundation as at December 31, 2007 and the results of its operations and thechanges in its financial position for the year then ended in accordance with Canadian generallyaccepted accounting principles.

Chartered AccountantsOttawa, OntarioJune 4, 2008

THE HNATYSHYN FOUNDATION / LA FONDATION HNATYSHYN

STATEMENT OF FINANCIAL POSITION

AS AT DECEMBER 31, 2007

Unrestricted Restricted 2007 2006CanadianHeritage General

John R.Stratton Fund General Total Total

ASSETSCurrent

Cash $ 0 $ 109,801 $ 0 $ 11,000 $ 120,801 $ 218,015Amounts receivable 0 1,627 0 0 1,627 2,202Prepaid expenses 0 725 0 0 725 689

0 112,153 0 11,000 123,153 220,906

Investments 2,547,675 295,025 266,128 1,360,080 4,468,908 3,579,231

$ 2,547,675 $ 407,178 $ 266,128 $ 1,371,080 $ 4,592,061 $ 3,800,137

LIABILITIES AND BALANCE OF FUNDSCurrent

Accounts payable and accrued liabilities $ 3,021 $ 20,500 $ 0 $ 0 $ 23,521 $ 35,860Interfund balances 177,285 (167,427) 0 (9,858) 0 0

180,306 (146,927) 0 (9,858) 23,521 35,860

Balance of funds 2,367,369 554,105 266,128 1,380,938 4,568,540 3,764,277

$ 2,547,675 $ 407,178 $ 266,128 $ 1,371,080 $ 4,592,061 $ 3,800,137

On behalf of the Board:

Director

Director

(See accompanying notes to the financial statements)

THE HNATYSHYN FOUNDATION / LA FONDATION HNATYSHYN

STATEMENT OF REVENUE AND EXPENDITURE AND CHANGES IN FUND BALANCES

FOR THE YEAR ENDED DECEMBER 31, 2007

Unrestricted Restricted 2007 2006CanadianHeritage General

John R.Stratton Fund General Total Total

RevenueDonations

Individual $ 0 $ 7,275 $ 0 $ 192,696 $ 199,971 $ 211,636Government 530,134 5,000 0 0 535,134 687,500Corporate 0 0 0 39,500 39,500 45,000Other associations 0 54,155 0 0 54,155 100,988Specified gifts 0 25,000 0 0 25,000 0

Golf tournament proceeds 0 0 0 0 0 96,736Investment 149,139 25,297 15,018 85,056 274,510 204,020

679,273 116,727 15,018 317,252 1,128,270 1,345,880Expenditure

Administration and fundraisingSalaries and benefits 18,995 18,995 0 0 37,990 33,032Office administration 2,712 2,712 0 0 5,424 4,858Professional fees 3,258 3,258 0 0 6,516 3,948Special events expense 0 325 0 0 325 55,113Other 14,711 11,297 1,624 0 27,632 24,690

39,676 36,587 1,624 0 77,887 121,641Program

Salaries and benefits 34,785 34,785 0 0 69,570 52,562Program administration 10,549 10,549 0 0 21,098 3,546Adjudication 12,351 12,351 750 0 25,452 8,650

57,685 57,685 750 0 116,120 64,758Grants

Grants and awards 60,000 60,000 10,000 0 130,000 102,000

157,361 154,272 12,374 0 324,007 288,399

Excess of revenue over expenditure 521,912 (37,545) 2,644 317,252 804,263 1,057,481

Balance of funds, beginning of year 1,845,457 591,650 263,484 1,063,686 3,764,277 2,706,796

Balance of funds, end of year $ 2,367,369 $ 554,105 $ 266,128 $ 1,380,938 $ 4,568,540 $ 3,764,277

(See accompanying notes to the financial statements)

THE HNATYSHYN FOUNDATION / LA FONDATION HNATYSHYN

STATEMENT OF CHANGES IN CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2007

Unrestricted Restricted

CanadianHeritage General

John R.Stratton

Fund General2007Total

2006Total

Operating ActivitiesExcess of revenue over expenditure $ 521,912 $ (37,545) $ 2,644 $ 317,252 $ 804,263 $ 1,057,481Changes in non-cash working capital

Amounts receivable 0 575 0 0 575 (61)Prepaid expenses 0 (36) 0 0 (36) (41)Accounts payable and accrued liabilities 438 (12,777) 0 0 (12,339) 27,048Interfund balances 50,770 236,594 0 (287,364) 0 0

573,120 186,811 2,644 29,888 792,463 1,084,427

Investing ActivitiesMaturity (acquisition) of investments (573,120) (295,025) (2,644) (18,888) (889,677) (1,007,294)

Increase (decrease) in cash during the year 0 (108,214) 0 11,000 (97,214) 77,133

Cash, beginning of year 0 218,015 0 0 218,015 140,882

Cash, end of year $ 0 $ 109,801 $ 0 $ 11,000 $ 120,801 $ 218,015

(See accompanying notes to the financial statements)

THE HNATYSHYN FOUNDATION / LA FONDATION HNATYSHYN

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2007

1. Authority, Objectives and Operations

The Foundation is incorporated under Part II of the Canada Corporations Act and

commenced operations in 1995. Its objectives are to promote excellence in the arts in

Canada by fostering education of the public at large in Canadian arts and by advancing the

training of Canadian artists. The Foundation currently derives its revenue from donations

and interest earned thereon.

The Foundation is a charitable organization registered with Canada Revenue Agency and

is exempt from income taxes.

2. Significant Accounting Policies

a) Basis of presentation

The financial statements of the Foundation have been prepared using the restricted

fund method of accounting. Revenue, expenditure, assets and liabilities are classified

for accounting and reporting purposes into funds according to the objectives specified

externally by donors or internally by the Board of Directors.

i) Unrestricted Fund

The unrestricted fund includes the revenue, expenditure, assets and liabilities

related to the Foundation’s general fundraising, granting and administrative

activities.

ii) Restricted Fund

The restricted fund includes the revenue, expenditure, assets and liabilities related

to donations received from external donors that have been restricted in use for

specific purposes.

The Foundation holds a $250,000 restricted donation from the Estate of John R.

Stratton to assist promising singers or collaborative pianists by providing financial

support for their advanced instruction in classical voice repertoire and singing

techniques, or classical song, lieder or operatic repertoire as a collaborative pianist.

THE HNATYSHYN FOUNDATION / LA FONDATION HNATYSHYN

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2007

2. Significant Accounting Policies (continued)

b) Investments

Investments are marketable securities recorded at cost. If the market value of

investments becomes lower than cost and this decline in value is considered to be other

than temporary, the investments are written down to market value.

c) Revenue Recognition

Donations are recorded as revenue when received. In-kind contributions are recognized

as revenue and corresponding expense upon receipt at their fair market value.

Unrestricted contributions are recognized as revenue of the unrestricted fund.

Restricted donations are recorded as revenue of the restricted fund. Interest revenue

is recorded as earned.

d) Use of Estimates

The preparation of financial statements in conformity with Canadian generally accepted

accounting principles requires management to make estimates and assumptions that

affect the reported amounts of assets and liabilities and disclosure of contingent assets

and liabilities at the date of the period. Actual results could differ from these estimates.

These estimates are reviewed annually and as adjustments become necessary, they

are recognized in the financial statements in the period in which they become known.

3. Canadian Heritage

The Foundation has an agreement with the Department of Canadian Heritage (the

“Canadian Heritage”) whereby the Canadian Heritage has approved a grant to the

Foundation of up to $2,500,000 in matching funds over three years, with $1,200,000 paid

in 2005, $650,000 paid in 2006 and $530,134 paid in 2007.

THE HNATYSHYN FOUNDATION / LA FONDATION HNATYSHYN

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2007

4. Financial Instruments

The carrying value of cash, amounts receivable, and accounts payable and accrued

liabilities approximates their fair value due to the short term to maturities.

5. Investments

Investments are recorded at cost. The market value of the investments is $4,289,309

(2006 - $3,533,134).