Total Cost Reporting: What Investors Need to Know for 2027

Beginning January 1, 2027, Canadian investors will see new information on their annual fee and charge reports as part of Total Cost Reporting (TCR), a regulatory initiative designed to make the costs associated with owning prospectus-qualified investment funds easier to understand. These changes are intended to improve transparency around embedded fund expenses, such as management and trading expenses.

In the past, annual fee and charges reports showed what you paid directly to your investment firm, along with some payments the firm received from third parties. TCR builds on this by also including the costs of investment funds, which were not shown before. This gives you a clearer and more complete picture of all the costs tied to your investments.

Under TCR, your annual statement will show both:

• The total dollar amount of costs you paid over the year; and
• The percentage cost for each investment fund you hold.

Total costs may include, but are not limited to:

• The Fund Expense Ratio (FER) which is the total sum of the Management Expense Ratio (MER) and the Trading Expense Ratio (TER)
• Advisor compensation
• Sales charges (e.g., front-end or deferred sales charges)
• Account or administrative fees
• Recordkeeping fees

To help illustrate how this information may appear in practice, please see the sample fee and charge report.

Sample - Charges and Compensation Report

The effect of TCR is that information relating to fund expenses will appear on the annual fee and charge reports for the first time, alongside dealer and advisor fees, and charges and compensation that were already disclosed under existing reporting requirements.

Although this added detail may make costs more visible, no new fees are being introduced. Investors are simply seeing expenses that have always applied to their investment funds but were not previously reported in a consolidated and transparent way. TCR builds on earlier regulatory initiatives and reflects growing expectations for clearer, more comprehensive cost disclosure across the investment industry.

These enhancements provide investors with a more complete view of what they pay and help them better assess the value they receive, supporting more informed financial decisions.

If you have questions about the new disclosures, your investment firm or advisor can help explain how these costs apply to your specific accounts.