Guardian Capital : 2023 First Quarter

TO OUR SHAREHOLDERS:

We present below a summary of the Company's operating results for the three months ended March 31, 2023 and 2022. All per share figures disclosed below are stated on a diluted basis.

Summary

The Company successfully closed on March 1, 2023, the previously announced transaction to sell its subsidiaries, IDC Worldsource Insurance Network Inc. ("IDC WIN"), Worldsource Financial Management Inc. and Worldsource Securities Inc. (all three entities together, the "Worldsource Businesses") for $750 million, subject to adjustments for net working capital, less amounts due to minority shareholders of IDC WIN. At the time of entering into an agreement to sell, the Company classified the Worldsource Businesses as discontinued operations. Its financial results were netted on the Statements of Operations and presented on one line called, "Net earnings from discontinued operations" and on the Balance Sheets as "Discontinued operations" in both the assets and liabilities. Comparative periods were restated to reflect this presentation. All other figures referenced below reflect the results of the continuing business of the Company and its restated prior year.

The Company is reporting $553.7 million in Net earnings from discontinued operations, which includes net gains of $619.5 million realized on the disposition of the Worldsource Businesses, income tax expense of $69.0 million on the net gains and $3.2 million in operating earnings, net of taxes, for the period up to the closing date.

The Company's share of the net proceeds from the sale of the Worldsource Businesses were immediately invested into interest-bearingshort-term securities. As a result, the Company is reporting fair value of its Securities at $1.3 billion ($51.06 per share) as at March 31, 2023, compared to $660 million ($25.31 per share) as at December 31, 2022.

The Company is reporting $56.3 billion in total client assets as at March 31, 2023, which include assets under management ("AUM") and assets under advisement ("AUA"). This is a 6% increase from $53.3 billion as at December 31, 2022, and a 2% decrease from $57.4 billion reported as at March 31, 2022.

Net revenue for the current quarter was $54.5 million, a 5% increase from $51.8 million in the same quarter in the prior year. Interest income earned on the proceeds from the sale of the Worldsource Businesses was the biggest driver of the increase, despite it being only one month's income. Net management and advisory fee revenue decreased by $0.8 million in the current quarter to $44.0 million, which includes the addition of RaeLipskie in the

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current quarter results. The expenses were 13% higher in the current quarter at $43.3 million. The increase is due to the inclusion of RaeLipskie's expenses, increase in interest expense due to rising interest rates and increased strategic investments into the Canadian Retail Asset Management team, the Guardian Smart Infrastructure team, Guardian Partners Inc. and Modern Advisor Inc., our additional expected growth sources for the future.

Operating earnings for the quarter were $11.2 million, a $2.3 million decrease from the $13.5 million reported in 2022. The Operating losses associated with the strategic investments mentioned above were $1.0 million higher at $3.3 million in the current quarter.

EBITDA(1) and EBITDA attributable to shareholders(1) were $17.4 million and $16.4 million in the current quarter, compared to $17.5 million and $16.4 million in the comparative period.

Net gains in the current quarter were $18.1 million, compared to Net losses of $9.7 million in the same quarter in the prior year, both largely consistent with the performance of the global equity markets.

Net earnings attributable to shareholders were $487.6 million in the current quarter and $4.3 million in the comparative period. The net gains realized on the sale of the Worldsource Businesses was the main reason for the increase in the current year.

Adjusted cash flow from operations(1) and Adjusted cash flow from operations attributable to shareholders(1) for the current quarter were $18.1 million and $17.1 million, respectively, compared to $16.8 million and $15.6 million, respectively, in the comparative period. During the current quarter, the Company returned to shareholders $6.1 million in dividends and $5.4 million in share buybacks.

The Company's Shareholders' equity as at March 31, 2023 was $1,242 million, or $48.73 per share(1), compared to $768 million, or $29.43 per share(1) as at December 31, 2022.

The Board of Directors has declared a quarterly eligible dividend of $0.34 per share, payable on July 18, 2023, to shareholders of record on July 11, 2023.

1. These terms do not have standardized measures under International Financial Reporting Standard ("IFRS"). These non-IFRS measures used by the Company are defined in the quarterly Management's Discussion and Analysis, including a reconciliation of these measures to their most comparable IFRS measures. Certain of the names of these measures were amended to include the words "attributable to shareholders" to better describe the measures.

CAUTION CONCERNING FORWARD-LOOKING INFORMATION

Certain information included in this Report to Shareholders constitutes forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking information is often, but not always, identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "would", "expect", "intend", "estimate", "anticipate", "believe", "should", "plan", "continue", or similar expressions suggesting future outcomes or events or the negative thereof. Forward-looking information in this Report to Shareholders includes, but is not limited to, statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations. Such forward-looking information reflects management's beliefs and is based on information currently available. All forward-looking information in this Report to Shareholders is qualified by the following cautionary statements.

Although Guardian Capital Group Limited ("Guardian") believes that the expectations reflected in such forward-looking information are reasonable, such information involves known and unknown risks and uncertainties which may cause Guardian's actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking information. Important factors that could cause actual results to differ materially include but are not limited to: general economic and market conditions, including interest rates, business competition, changes in government regulations or in tax laws, the duration and severity of pandemics, such as COVID-19, the ongoing conflict in the Ukraine as well as those risk factors discussed or referred to in Guardian's Management's Discussion and Analysis and the other disclosure documents filed by Guardian with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com. The reader is cautioned to consider these factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking information, as there can be no assurance that actual results will be consistent with such forward-looking information.

The forward-looking information included in this Report to Shareholders is presented as of the preparation date of this Report to Shareholders and should not be relied upon as representing Guardian's views as of any date subsequent to the date of this Report to Shareholders. Guardian undertakes no obligation, except as required by applicable law, to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

NOTICE TO SHAREHOLDERS

Guardian's Board of Directors, appoints independent auditors to audit Guardian's annual Financial Statements. Under Canadian securities laws (National Instrument 51-102), if an auditor has not reviewed the interim Financial Statements, this must be disclosed in an accompanying notice.

Guardian's independent auditor has not performed a review of these condensed interim Financial Statements in accordance with the standards established by the Chartered Professional Accountants of Canada.

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Commentary

Market Recap

The past year has seen central banks embark on a tightening campaign that has been a standout versus history in terms of the speed and magnitude with which rates have gone up. Moreover, it is not just that rates went up, but that they did so by similar degrees across the globe as policymakers hiked together in lockstep. This led to a significant market correction in 2022. Global economic forecasts, and with them the outlooks for corporate earnings, were persistently ratcheted down on the assumption that the now materially higher interest rate environment, which was decimating bonds and culling equity valuation multiples, would compound the impact of high inflation and quickly choke off real economic activity. As has been the case since the onset of the pandemic, however, the global economy has persistently outperformed these increasingly dour expectations, with momentum proving far more resilient than forecasters have assumed. Thankfully, inflation pressures, while still higher than recent history have moderated, leading to central bank guidance that there would gradually be a reduction in the pace of monetary tightening. Armed with the expectation that monetary policy would soon be on hold, and visibility that economic growth, while slowing, was still fairly strong, stock and bond markets rebounded from their 2022 lows, and, in general, had quite a strong quarter. While there are still plenty of risks to the outlook, and the last few years have shown that new shocks can emerge rapidly and unexpectedly, it would appear that the underpinnings of the global economy at the moment would support the possibility for continued outperformance.

Subsequent to the sale of the Worldsource businesses, Guardian streamlined its businesses into two Segments, Investment Management Segment and Corporate Activities and Investments Segment. The businesses which were previously included in the Wealth Management Segment have now been consolidated into the Investment Management Segment.

Investment Management

In the first quarter, Guardian's investment products along with the broader markets, generally experienced positive returns. Institutional assets under management ("AUM") grew to $46.9 billion from $44.3 billion at the prior year end as the growth was entirely related to market returns as overall cash- flows were very slightly negative. Canadian equities actually had modest inflows, offset by small outflows from global and fixed income products. During the quarter we continued to expend time and money on the retail products division, which we expect to contribute to the future growth of our investment management segment. Progress is always slow to begin with, but we maintain confidence, that we will gain traction in the market, and accordingly are more than willing to invest significant time and money to achieve success. Building a following among financial advisors is an effort that will require our patience and persistence, but we are uniquely well positioned to stay the course on this initiative. We believe the commitment to sustain meaningful current operating losses related directly to the building of our presence in this segment will prove to be a worthwhile investment for our shareholders in the long term. At the current stage of our development, we take note of more intangible signs of success, which include monitoring engagement levels with financial advisors and growing brand awareness, rather than being myopic about the drag on earnings from these initiatives. Another investment initiative where we are committing support by front-loading expenses which will precede any new revenues has been our efforts at building our nascent Guardian Smart Infrastructure Management team. We have been actively engaging with potential institutional investors across the globe, and early interest toward raising our first fund has been encouraging, including securing a lead limited partner commitment from a large US-based institutional investor, being in active due diligence with a number of other large U.S. pension plans looking to participate in a first close of the fund, and expressions of interest from existing Canadian institutional clients. Our engagement with the institutional investor market has also included the active pursuit of establishing awareness and support from some of the leading alternative pension consultant advisors, and we are making progress in this area. We believe with a continued focus and effort to advance the many discussions we have with prospective investors that we realistically can target a first fund closing in the second half of 2023.

Our Private Wealth business includes our "Outsourced Chief Investment Officer" operation, Guardian Partners Inc., Guardian Capital Advisors LP, Alexandria Bancorp Limited, and 60% of Rae & Lipskie Investment Counsel Inc. ("RaeLipskie"), acquired in September, 2022. At March 31, our Private Wealth operations had a total AUM of $5.3 billion (including $1.1 billion of AUM at RaeLipskie) and $4.1 billion of assets under advisement ("AUA"), both asset metrics showed a slight increase in the quarter, reflecting positive markets through the quarter. Our goal in Private Wealth is to offer increasing depth of services to high-net-worth and ultra-high-net-worth clients, as we are very optimistic about the opportunity in both this demographic and the advisory/family office segment of the market. We will continue to invest in the Private Wealth area, while seeking to create revenue synergies between our private client operations as we share the various capabilities and strengths of each business unit, with their counterparts. We believe this business is synergistic to our existing Investment Management businesses and allows us to provide a continuum of services to a spectrum of wealthy clients.

Discontinued Operations

At the time of entering into an agreement to sell the Worldsource businesses, the financial results from these related entities were classified as discontinued operations and are excluded from our reported results for continuing operations. Meanwhile, upon receipt of the proceeds from the deal, we invested into a portfolio of high-quality liquid fixed-income securities that mature 3, 6 and 12 months and provide a blended yield of just under 5%. We were not planning on the sale of the Worldsource businesses and, as such, there were no strategic plans that required us to monetize the business to fund targeted objectives in other areas. The sale of Worldsource ultimately came down to a very persistent and compelling case made by the acquirer at a price that we thought was more than fair relative to the on-going execution risk we had in running these businesses. We accepted the reality that it was time to transition our strategic ownership of these businesses to a more heavily resourced and even more committed business partner. We would like to thank the advisors, staff and management of the Worldsource businesses as well as our deal advisors and especially our counterparts at Desjardins for their contributions to the success of this business, and this deal, and wish them all a future of ever increasing success as they move forward.

As the sale of these businesses were opportunistic we have determined the need to review our long-term strategic plans. Immediately after closing of the transaction we committed to take the next six months to undertake a full strategic review which will include engagement with various stakeholders of including Board of Directors, Shareholders, and third-party advisors. Our review will focus on the strategic opportunities to support and grow our core business as an asset manager.

Corporate Securities Portfolio

In addition to our core Investment Management operating segment, steady and reliable investment income from our corporate securities portfolio has been a meaningful contributor to Guardian's profitability and long-term financial health and flexibility. At the current quarter's end, our investment portfolio was valued at $1.3 billion, up from $680 million at December 31, 2022 and $741 million at the end of Q1 2022. The large increase in the investment portfolio is due to the proceeds from the sale of the Worldsource businesses to the Desjardins Group, a transaction that closed March 1 2023. We received net cash proceeds from Desjardins that amounted to approximately $625 million (net of funds received by minority interests) plus approximately $39 million of excess working capital formerly held in these businesses. The cash was immediately invested in high quality liquid fixed income securities that mature in 3, 6 and 12 months and provide a blended yield of just under 5%. Our aggregate portfolio received dividend and interest income of approximately $8.0 million in the quarter. This is a substantial increase when measured against prior quarters, and is of course, related to the interest we collected since investing the proceeds of the sale. It is important to note that we only received one month of investment income from the sale proceeds. The results of the next quarterly reporting period should be more reflective of the near term run rate earnings from securities. Historically, our balance sheet has been heavily equity oriented, but at the end of the quarter we were roughly 50% exposed to the fixed-income markets, almost all of it with maturities under 12 months. As mentioned above, the sale of the dealers was not a planned event, and Guardian's management and board will engage in a comprehensive strategic planning process to reflect the changes in Guardian's balance sheet, and business focus. While we conduct our analysis, we have decided that it would be prudent to invest the entire net proceeds of the aforementioned sale in short-term instruments and fortunately,

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for the first time in many years, short term investments offer a return that is both relatively safe, and quite rewarding. Our holding of Bank of Montreal stock has historically provided an important source of dividend income and stability on our balance sheet. However, its contribution to our overall profitability has been decreasing, especially now that the proceeds of the Worldsource sale have been invested, due to a combination of growing contributions from our operating businesses over the last decade and, at the same time, we have diversified our investment portfolio largely into higher- growth, but generally lower-yielding, proprietary investments. In the current quarter, BMO dividends contributed $3.2 million to Guardian revenues, a slight increase from the fourth quarter. No BMO shares were sold in the current quarter, and we continue to hold 2,230,000 shares with a fair value of $268 million. The balance of our portfolio is largely comprised of proprietary, diversified public equity strategies, Canadian real estate and fixed-income strategies and, to a lesser extent, third-party public and private investments. We will continue to utilize our balance sheet to seed new strategies and to support growth in our operating business segment. Overall, we believe that we have ample capacity to fund any future demand for seeding of proprietary strategies and their respective investment vehicles, corporate acquisitions or buybacks of Guardian stock under our normal course issuer bid.

Capital Allocation

Quality companies generate strong earnings and cash flows, and as we grow these financial metrics, Guardian is committed to balancing the distribution of our cash flows between investing sufficient funds into the business for future growth and returning an ever-increasing amount of cash to its shareholders. In the first quarter of 2023, Guardian returned roughly $6.1 million to shareholders through dividends. In addition, $5.4 million was returned to shareholders through the purchase of 134,000 shares for cancellation as part of our normal course issuer bid. Historically Guardian has focused on allocating its cash flow to a combination of growth initiatives, dividend increases and share buybacks. Guardian's management team and Board of Directors remain supportive of buying back our shares if the market continues to materially underappreciate the intrinsic value of our Company and while doing so has neither diminished the quality of our balance sheet nor affected our ability to invest in future growth initiatives. With strong, continuing cash flow and an even greater fortress balance sheet, we are in the enviable position of being able to balance the needs of all stakeholders, including our clients, associates and shareholders. Given the sale of the Worldsource businesses nearly doubling our liquidity, Guardian has concluded that we have the flexibility to substantially increase the allocation of our cash flow to dividend payout, compared to prior years. As a result, the Board is pleased to report that we have declared another quarterly dividend of $0.34 per share, payable on July 18, 2023 to the shareholders of record on July 11, 2023. Our core values at Guardian are to be Trustworthy, to act with Integrity and to ensure Stability throughout the organization. Clients, shareholders, employees, partners and other stakeholders of Guardian should be assured that, from top to bottom, our organization seriously embraces the responsibilities with which we are entrusted, and we are continuously striving to improve all aspects of how we do business. Consistently delivering on our stated objectives, along with the balancing of all stakeholders' interests through both good and challenging times, are further measures of the quality of institution we expect Guardian to represent. As long as we continue to live up to these expectations, all of our stakeholders should expect to benefit from our successes.

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