June 30, 2009

In the Matter of Ontario Securities Commission Rule 13-502 Fees

and

In the Matter of the Bank of nova scotia and Scotiabank tier 1 Trust

ORDER

WHEREAS the Ontario Securities Commission (the “Commission”) has received an application from The Bank of Nova Scotia (the “Bank”) and Scotiabank Tier 1 Trust (the “Trust”) for an order, pursuant to section 6.1 of Ontario Securities Commission Rule 13-502 Fees (the “Fees Rule”), that the requirement to pay a participation fee under section 2.2 of the Fees Rule shall not apply to the Trust, subject to certain terms and conditions;

AND WHEREAS the Bank and the Trust have represented to the Commission that:

1. The Trust is a trust established under the laws of Ontario by Computershare Trust Company of Canada, as trustee (the “Trustee”) pursuant to a declaration of trust dated as of August 19, 2008, as amended and restated on May 7, 2009, and as it may be amended, restated and supplemented from time to time.

2. The Trust’s head and registered office is located in Toronto, Ontario. The Trust has a financial year-end of December 31.

3. The Trust completed an initial public offering (the “Offering”) of 7.802% Scotiabank Tier 1 Securities – Series 2009-1 Due June 30, 2108 (the “Scotia BaTS III Series 2009-1”) in each of the provinces and territories in Canada (the “Jurisdictions”) on May 7, 2009, and may, from time to time, issue further series of similar securities (“Scotia BaTS III). As a result of the Offering, the capital of the Trust consists of: (i) Scotia BaTS III Series 2009-1 and (ii) voting trust units (the “Voting Trust Units”). All of the outstanding Voting Trust Units are held, directly or indirectly, by the Bank.

4. The Trust is a reporting issuer, or the equivalent, in the Jurisdictions. The Trust is not, to the best of its knowledge, in default of any requirement under the securities legislation in the Jurisdictions.

5. Pursuant to an administration agreement dated August 19, 2008, as amended and restated on May 7, 2009, the Trustee has delegated to the Bank certain of its obligations in relation to the administration of the Trust, including the day-to-day operations of the Trust and other matters as may be requested by the Trustee from time to time.

6. The Trust is a single purpose vehicle established for the purpose of effecting offerings of securities, including Scotia BaTS III and Voting Trust Units (collectively, the “Trust Securities”), in order to provide the Bank with a cost-effective means of raising capital for Canadian bank regulatory purposes by means of (i) creating and selling the Trust Securities; and (ii) acquiring and holding assets, which will consist primarily of a senior unsecured deposit note of the Bank (the “Bank Deposit Note”) and certain other eligible assets (collectively, the “Trust Assets”). The Trust Assets will generate income for the payment of principal, interest, the redemption price, if any, and any other amounts, in respect of the Trust’s debt securities, including the Scotia BaTS III Series 2009-1. The Trust will not carry on any operating activity other than in connection with offerings of Trust Securities and in connection with the Trust Assets.

7. No securities of the Trust are currently listed on a marketplace as defined in National Instrument 21-101 Marketplace Operation.

8. Pursuant to a decision document dated June 30, 2009 (the “Continuous Disclosure Exemption Decision”) granted to the Trust by the Commission, as principal regulator, on behalf of itself and the securities regulatory authorities of the Jurisdictions under the passport system contemplated by Multilateral Instrument 11-102 Passport System (“MI 11-102”), the Trust has been granted an exemption from the requirements contained in the securities legislation of the Province of Ontario (the “Legislation”) to:

(a) (i) file interim financial statements and audited annual financial statements and deliver same to the security holders of the Trust pursuant to sections 4.1, 4.3 and 4.6 of National Instrument 51-102 Continuous Disclosure Obligations (“NI 51-102”);

(ii) file interim and annual management’s discussion and analysis and deliver same to security holders of the Trust pursuant to sections 5.1 and 5.6 of NI 51-102;

(iii) file an annual information form pursuant to section 6.1 of NI 51-102; and

(iv) comply with any other requirements of NI 51-102

(collectively referred to herein as the “Continuous Disclosure Obligations”); and

(b) file interim and annual certificates (collectively, the “Officers’ Certificates”) pursuant to Parts 4, 5 and 6 of National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (the “Certification Obligations”).

9. As a result of granting the Continuous Disclosure Exemption Decision, the Trust is exempt from the Continuous Disclosure Obligations and the Certification Obligations, subject to certain terms and conditions, and no continuous disclosure documents concerning the Trust will be filed with the Commission.

10. The Office of the Superintendent of Financial Institutions Canada (“OSFI”) maintains strict guidelines and standards with respect to the capital adequacy requirements of federally regulated financial institutions, including the Bank, and, in particular, specifies minimum required amounts of capital to be maintained by such institutions. Tier 1 capital consists of common shareholders’ equity, qualifying non-cumulative perpetual preferred shares, qualifying innovative instruments and qualifying non-controlling interests arising on a consolidation from Tier 1 capital instruments. Innovative instruments, such as the Scotia BaTS III Series 2009-1, must satisfy the detailed requirements of OSFI’s Innovative Capital Guidelines (the “OSFI Guidelines”) to be included in the Tier 1 capital of the Bank. OSFI approved the inclusion of the Scotia BaTS III Series 2009-1 as Tier 1 capital of the Bank.

11. The Trust is a “Class 2 reporting issuer” under the Fees Rule and would be required (but for this Order) to pay participation fees under such rule.

12. The Bank, as a legal and factual matter, controls the Trust through its ownership of the Voting Trust Units issued by the Trust and its role as administrative agent of the Trust. The Bank has paid, and will continue to pay, participation fees applicable to it under section 2.2 of the Fees Rule.

13. The Fees Rule includes an exemption for “subsidiary entities” in subsection 2.9(2) of the Fees Rule. The Bank and the Trust meet all of the substantive requirements to rely on the exemption in subsection 2.9(2) of the Fees Rule, but for the definition of “subsidiary entity”. The Fees Rule defines “subsidiary entity” by reference to the accounting definition under Canadian generally accepted accounting principles (“GAAP”), rather than by reference to a legal definition based on control.

14. On November 1, 2004, the Canadian Institute of Chartered Accountants adopted Guideline 15, Consolidation of Variable Interest Entities (the “VIE Guideline”). According to the VIE Guideline, the Bank may not consolidate the Trust because the assets of the Trust consist primarily of the Bank Deposit Note, a liability of the Bank. As a result, the Trust may not, from a technical accounting perspective, be considered to be a “subsidiary entity” of the Bank for Canadian GAAP purposes and may not be entitled to rely on the exemption in section 2.9(2) of the Fees Rule.

THE ORDER of the Commission under the Fees Rule is that the requirements to pay a participation fee under section 2.2 of the Fees Rule shall not apply to the Trust, for so long as:

(a) the Bank and the Trust continue to satisfy all of the conditions contained in the Continuous Disclosure Exemption Decision; and

(b) the capitalization of the Trust represented by the Scotia BaTS III Series 2009-1 and any additional securities of the Trust that may be issued, from time to time, by the Trust is included in the participation fee calculation applicable to the Bank and the Bank has paid the participation fee calculated on this basis.

“Michael Brown”

Michael Brown

Assistant Manager, Corporate Finance

Ontario Securities Commission