Annual Report & Accounts-Pt 2

Name	Symbol	Market	Type
Citi Fun 24	LSE:BC93	London	Medium Term Loan

RNS Number:8667J
TransCanada Pipelines Ld
16 March 2005

PART 2

MARKET FOR SECURITIES

TransCanada holds of all of the commons shares of TCPL and these are not listed
on a public market. TransCanada's common shares are listed on the Toronto Stock
Exchange ("TSX") and the New York Stock Exchange ("NYSE"). The following table
sets forth the reported monthly high and low closing prices and monthly trading
volumes of the common shares of TransCanada on the TSX for the period indicated:

Common Shares (TRP)
Month High ($) Low ($) Volume Traded
December, 2004 30.35 28.51 18,175,381
November, 2004 29.52 27.00 17,243,717
October, 2004 28.31 26.98 21,415,001
September, 2004 28.60 27.11 29,869,649
August, 2004 27.72 26.28 14,911,517
July, 2004 26.79 25.37 17,985,303
June, 2004 27.30 25.70 21,550,578
May, 2004 28.39 26.92 19,232,179
April, 2004 29.40 26.31 29,357,948
March, 2004 29.72 27.60 39,732,275
February, 2004 27.83 26.47 27,926,798
January, 2004 28.43 26.45 22,784,477

TRANSCANADA PIPELINES LIMITED 25

In addition, the following securities of TCPL are listed:

TCPL's Cumulative Redeemable First Preferred Shares,

Series U (TCA.PR.X) and Series Y (TCA.PR.Y), which are listed on the TSX
Series U Series Y
Month High Low ($) Volume High Low ($) Volume
($) Traded ($) Traded
December, 2004 53.85 52.15 28,039 54.00 52.30 41,433
November, 2004 53.25 51.00 39,867 53.35 50.76 40,254
October, 2004 51.85 49.51 48,266 52.00 50.37 50,807
September, 2004 51.40 49.80 59,303 51.50 50.25 42,532
August, 2004 51.50 50.05 60,990 51.50 50.10 124,617
July, 2004 50.50 49.30 44,344 50.70 49.15 105,422
June, 2004 49.90 49.05 165,814 49.99 49.00 206,494
May, 2004 50.50 48.01 70,652 50.30 48.10 79,547
April, 2004 52.59 49.50 83,415 52.70 49.75 104,524
March, 2004 54.00 52.30 48,254 54.25 51.80 477,223
February, 2004 52.50 51.85 55,563 52.49 51.55 78,157
January, 2004 52.75 51.00 40,324 52.70 51.00 80,093

TCPL's 8.25% preferred securities due 2047, which are listed on the NYSE (TCAPr)
Month High Low (US$) Volume Traded
(US$)
December, 2004 26.05 25.40 166,400
November, 2004 26.06 25.53 158,900
October, 2004 25.93 25.48 190,000
September, 2004 25.90 25.42 201,600
August, 2004 25.87 25.40 134,500
July, 2004 25.56 25.22 156,100
June, 2004 25.70 25.06 170,200
May, 2004 25.49 24.85 207,400
April, 2004 26.00 25.24 214,800
March, 2004 26.25 25.40 246,200
February, 2004 26.25 25.61 168,100
January, 2004 26.20 25.54 158,600

In addition, the following securities of TCPL and its subsidiary, NGTL, are
listed on the markets specified below, however, both issues are thinly traded
and together, account for approximately $298 million or less than five per cent
of TCPL's consolidated capital structure:

*
TCPL's 16.50% First Mortgage Pipe Line Bonds due 2007, are listed on the
London Stock Exchange; and

*
NGTL's 7.875% debentures due April 1, 2023, are listed on the NYSE.

26 TRANSCANADA PIPELINES LIMITED

DIRECTORS AND OFFICERS

As of March 7, 2005, the directors and executive officers of TransCanada as a
group beneficially owned, directly or indirectly, or exercised control or
direction over, 2,601,214 common shares of TransCanada and 19,800 units of Power
LP, which constitutes less than one per cent of TransCanada's common shares and
less than one per cent of the voting securities of any of its subsidiaries or
affiliates. TCPL collects this information from its directors and officers but
otherwise has no direct knowledge of individual holdings of its securities.
Further information as to securities beneficially owned, or over which control
or direction is exercised, is provided in TransCanada's Management Proxy
Circular dated March 1, 2005 ("Proxy Circular") under the heading "Business To
Be Transacted at the Meeting - Election of Directors". See also "Additional
Information" in this AIF.

Directors

Set forth below are the names of the twelve directors who served on TCPL's
Board at Year End, together with their jurisdictions of residence, all positions
and offices held by them with TCPL and its significant affiliates, their
principal occupations or employment during the past five years and the year from
which each director has continually served as a director of TransCanada and TCPL
and, prior to the arrangement, with TCPL. Positions and offices held with TCPL
are also held by such person at TransCanada.

Name and Place of Residence Principal Occupation During The Five Preceding Years Director Since

Douglas D. Baldwin Chairman, Talisman Energy Inc., (oil and gas) since May 2003. 1999
Calgary, Alberta President and Chief Executive Officer, TCPL, from August 1999
Canada to April 2001. Director, Calgary Airport Authority, Citadel
Group of Funds, Resolute Energy Inc. and UTS Energy
Corporation. Member, Board of Governors, University of
Calgary.

Wendy K. Dobson Professor, Rotman School of Management and Director, 1992
Uxbridge, Ontario Institute for International Business, University of Toronto
Canada (education). Director, MDS Inc., Toronto-Dominion Bank and
Vice Chair, Canadian Public Accountability Board.

The Hon. Paule Gauthier, Senior Partner, Desjardins Ducharme Stein Monast (law firm). 2002
P.C., O.C., O.Q., Q.C. Director, Royal Bank of Canada, The Royal Trust Corporation
Quebec, Quebec of Canada, The Royal Trust Company, Rothmans Inc. and Metro
Canada Inc. Chair, Security Intelligence Review Committee.
President, Fondation de la Maison Michel Sarrazin and
President, Institut Quebecois des Hautes Etudes
Internationales, Laval University.

Richard F. Haskayne, Chairman of the Board, TransCanada and TCPL. Prior to 1998
O.C., F.C.A. February 19, 2003, Chairman, Fording Inc. (coal and (NOVA, 1991)(1)
Calgary, Alberta wollastonite). Director, EnCana Corporation and Weyerhauser
Canada Company.

Kerry L. Hawkins President, Cargill Limited (grain handlers, merchants, 1996
Winnipeg, Manitoba transporters, processors of agricultural products and gas
Canada marketers). Director, NOVA Chemicals Corporation, Shell
Canada Limited and Hudson's Bay Company.

S. Barry Jackson Chairman, Resolute Energy Inc. (oil and gas) since 2002 and 2002
Calgary, Alberta Chairman, Deer Creek Energy Limited (oil and gas) since 2001.
Canada President and Chief Executive Officer, Crestar Energy Inc.
(oil and gas) from 1993 to 2000. Director, Nexen Inc.

TRANSCANADA PIPELINES LIMITED 27

Paul L. Joskow Professor, Department of Economics, Massachusetts Institute 2004
Brookline, Massachusetts of Technology (MIT) (education). Director of the MIT Center
United States for Energy and Environmental Policy Research. Director,
National Grid Transco plc. Trustee, Putnam Mutual Funds and
President, Yale University Council.

Harold N. Kvisle(2) President and Chief Executive Officer, TransCanada since May 2001
Calgary, Alberta 2003 and TCPL since May 2001. Executive Vice-President,
Canada Trading and Business Development, TCPL, from June 2000 to
April 2001. Senior Vice-President, Trading and Business
Development, TCPL, from April 2000 to June 2000. Senior
Vice-President and President, Energy Operations, TCPL, from
September 1999 to April 2000. Director, PrimeWest Energy Inc.
and Bank of Montreal. Past Chair, Interstate National Gas
Association of America (INGAA) and Chair, Mount Royal
College.

David P. O'Brien(3) Chairman, EnCana Corporation (oil and gas) since April 2002 2001
Calgary, Alberta and Chairman, Royal Bank of Canada (banking) since February
Canada 2004. Chairman and Chief Executive Officer, PanCanadian
Energy Corporation (oil and gas) from October 2001 to April
2002. Chairman, President and Chief Executive Officer,
Canadian Pacific Limited (transportation, energy and hotels)
from May 1996 to October 2001. Director, Fairmont Hotels &
Resorts Inc., Inco Limited, Molson Coors Brewing Company,
Profico Energy Management Ltd. and The E & P Limited
Partnership.

James R. Paul Chairman, James and Associates (private investment firm). 1996
Kingwood, Texas Member of the Advisory Board, AMEC plc.
United States

Harry G. Schaefer, F.C.A. President, Schaefer & Associates (business advisory 1987
Calgary, Alberta services). Vice-Chairman of the Board, TransCanada and TCPL.
Canada Chairman, Crestar Energy Inc. (oil and gas) from May 1996 to
November 2000. Director, Agrium Inc. and Fording Canadian
Coal Trust. Chairman, Alberta Chapter, Institute of Corporate
Directors, Fellow, Institute of Corporate Directors and
Director, The Mount Royal College Foundation.

W. Thomas Stephens Chairman and Chief Executive Officer, Boise Cascade LLC since 1999
Boise, Idaho November 2004. Director, The Putnam Funds.
United States

Notes:
(1)
NOVA Corporation merged with TCPL on July 2, 1998.

(2)
Mr. Kvisle will not stand for re-election as a director of Norske Skog
Canada Limited at its April 27, 2005 annual meeting. Mr. Kvisle was elected
to the Bank of Montreal's Board of Directors on February 22, 2005.

(3)
Mr. O'Brien was a director of Air Canada on April 1, 2003 when Air Canada
filed for protection under the Companies' Creditors Arrangement Act
(Canada). Mr. O'Brien resigned as a director from Air Canada in November
2003.

28 TRANSCANADA PIPELINES LIMITED

Each director holds office until the next annual meeting or until his or her
successor is earlier elected or appointed. Mr. Haskayne and Mr. Paul will be
retiring from their respective positions on the Board on April 29, 2005. Mr.
Jackson has been designated as the next Chair of the Board and will succeed Mr.
Haskayne as Chair upon his retirement on April 29, 2005.

Election of Directors

TCPL's articles of incorporation provide for the Board to consist of a minimum
of ten and a maximum of twenty directors. The number of directors presently in
office is twelve. Messrs. R.F. Haskayne and J.R. Paul will retire from their
respective positions on the Board effective April 29, 2005 at the Annual Meeting
of the holders of common shares of TransCanada ("Meeting") and Mr. Benson has
been selected as a new nominee for election. Mr. Jackson has been designated as
the next Chairman of the Board and will succeed Mr. Haskayne as Chairman upon
his retirement on April 29, 2005.

The Board has set the number of directors to be elected at the Meeting at
eleven. To summarize, the nominees for election as directors of TCPL at the
Meeting are:
D.D. Baldwin P.L. Joskow
K.E. Benson H.N. Kvisle
W.K. Dobson D.P. O'Brien
P. Gauthier H.G. Schaefer
K.L. Hawkins W.T. Stephens
S.B. Jac

The Governance Committee of the Board annually reviews the qualifications of
persons proposed for election to the Board and submits its recommendations to
the Board for consideration. The persons proposed for nomination are, in the
opinion of the Board, well qualified to act as directors for the ensuing year.
Each nominee, with the exception of Mr. Kvisle, has been determined by the Board
to be unrelated and independent within the meaning of Canadian and applicable
U.S. securities law, regulation and policy, and has established his or her
eligibility and willingness to serve as a director if elected. Each director
elected will hold office until the next annual meeting or until his or her
successor is earlier elected or appointed. The proposed nominees will also be
the directors of TransCanada.

The following table sets forth, for the new nominee for election as director,
that being Mr. Benson who has been determined to be unrelated and independent of
TCPL, his jurisdiction of residence and principal occupation or employment
during the past five years.

Name and Place of Residence Principal Occupation During The Five Preceding Years Director Since

Kevin E. Benson(1) President and Chief Executive Officer and a director of 2005
Wheaton, Illinois Laidlaw International, Inc. (transportation) since June 2003
United States and Laidlaw, Inc. (transportation) from September 2002 to
June 2003. President and Chief Executive Officer, The
Insurance Corporation of British Columbia, from December 2001
until September 2002. President, The Pattison Group, from
April 2000 to February 2001. President and Chief Executive
Officer, Canadian Airlines International Ltd., from July 1996
to February 2000.

Notes:
(1)
Mr. Benson resigned as President and Chief Executive Officer from Canadian
Airlines International Ltd. effective February 29, 2000. Canadian Airlines
initiated proceedings under the Companies' Creditors Arrangement Act and
applicable bankruptcy protection statutes in the U.S. on March 24, 2000.

TRANSCANADA PIPELINES LIMITED 29

Officers

All of the executive officers and corporate officers of TCPL reside in Calgary,
Alberta, Canada. References to positions and offices with TransCanada prior to
May 15, 2003 are references to the positions and offices held with TCPL. Current
positions and offices held with TCPL are also held by such person at
TransCanada. As of the date hereof, the officers of TCPL, their present
positions within TCPL and their principal occupations during the five preceding
years are as follows:

Executive Officers

Name Present Position Held Principal Occupation During the Five
Preceding Years
Harold N. Kvisle President and Chief Executive Vice-President, Trading and
Executive Officer Business Development, June 2000 to
April 2001. Senior Vice-President,
Trading and Business Development,
April 2000 to June 2000. Senior
Vice-President and President, Energy
Operations, September 1999 to April
2000.

Albrecht W.A. Bellstedt, Executive Vice-President, Senior Vice-President, Law and
Q.C.(1) Law and General Counsel General Counsel, April 2000 to June
2000. Senior Vice-President, Law and
Administration, September 1999 to
April 2000.

Russell K. Girling Executive Vice-President, Executive Vice-President and Chief
Corporate Development and Financial Officer, June 2000 to March
Chief Financial Officer 2003. Senior Vice-President and
Chief Financial Officer, August 1999
to June 2000.

Dennis J. McConaghy Executive Vice-President, Senior Vice-President, Business
Gas Development Development, October 2000 to May
2001. Senior Vice-President,
Midstream/Divestments, June 2000 to
October 2000. Prior to June 2000
Vice-President, Corporate Strategy
and Planning.

Alexander J. Pourbaix Executive Vice-President, Executive Vice-President, Power
Power Development, May 2001 to March 2003.
Senior Vice-President, Power
Ventures, June 2000 to May 2001.
Prior to June 2000, Vice-President,
Corporate Development, Power
Services.

Sarah E. Raiss Executive Vice-President, Executive Vice-President, Human
Corporate Services Resources and Public Sector
Relations, June 2000 to January 2002.
Senior Vice-President, Human
Resources and Public Sector
Relations, February 2000 to June
2000.

30 TRANSCANADA PIPELINES LIMITED

Ronald J. Turner Executive Vice-President, Executive Vice-President, Operations
Gas Transmission and Engineering, December 2000 to
March 2003. Executive Vice-President,
International, June 2000 to December
2000. Prior to June 2000, Senior
Vice-President, International.

Donald M. Wishart Executive Vice-President, Senior Vice-President, Field
Operations and Operations, June 2000 to March 2003.
Engineering August 1999 to June 2000, Senior
Vice-President, Operations,
Transmission Division.

Note:
(1)
Mr. Bellstedt, who served as a trustee of Atlas Cold Storage Income Trust,
was subject to an Ontario Securities Commission cease trade order issued in
respect of all insiders of Atlas Cold Storage Income Trust on December 2,
2003 and arose because of late filed financial statements required to
reflect certain re-statements. The cease trade order was rescinded in
January 2004.

Corporate Officers

Name Present Position Held Principal Occupation During the Five
Preceding Years
Ronald L. Cook Vice-President, Taxation Prior to April 2002, Director,
Taxation.

Rhondda E.S. Grant Vice-President, Prior to February 2005,
Communications and Vice-President and Corporate
Corporate Secretary Secretary.

Lee G. Hobbs Vice-President and Prior to August, 2001, Director,
Controller Accounting.

Garry E. Lamb Vice-President, Risk Vice-President, Audit and Risk
Management Management, June 2000 to October
2001. Vice-President, Risk
Management, February 2000 to June
2000.

Donald R. Marchand Vice-President, Finance Vice-President, Finance and Treasurer
and Treasurer

CORPORATE GOVERNANCE

The Board and members of TCPL's management are committed to the highest
standards of corporate governance. TCPL is subject to a variety of corporate
governance guidelines and requirements enacted by the TSX, the Canadian
Securities Administrators ("CSA"), the NYSE, and by the U.S. Securities and
Exchange Commission ("SEC") under its rules and those mandated by the U.S.
Sarbanes-Oxley Act of 2002 ("SOX"). TCPL's corporate governance practices comply
with the TSX Company Manual Corporate Governance Guidelines, governance rules of
the NYSE applicable to foreign issuers and applicable requirements of the CSA
and SEC. As a non-U.S. company, TCPL is not required to comply with most of the
NYSE corporate governance listing standards applicable to U.S. domestic issuers.
TCPL discloses the significant ways in which its corporate governance practices
differ from those followed by domestic companies listed on the NYSE, on its
website at www.transcanada.com. TCPL is in compliance with the CSA's
Multilateral Instrument 52-110 pertaining to audit committees, as proposed to be
amended. TCPL is also in substantial compliance with the proposed corporate
governance guidelines and proposed disclosure of corporate governance practice
rules, both released for comment by the CSA on October 29, 2004. Full disclosure
of TCPL's corporate governance practices are set out in TransCanada's Proxy
Circular. TCPL's corporate governance documents, are available on TCPL's website
located at: http://www.transcanada.com/company/board_committees.html.

TRANSCANADA PIPELINES LIMITED 31

Audit Committee

TCPL has an Audit Committee which is responsible for assisting the Board in
overseeing the integrity of TCPL's financial statements and compliance with
legal and regulatory requirements and in ensuring the independence and
performance of TCPL's internal and external auditors. The members of the Audit
Committee at Year End are Harry G. Schaefer (Chair), Douglas D. Baldwin, Paule
Gauthier, S. Barry Jackson and Paul L. Joskow.

The Board believes that the composition of the Audit Committee reflects a high
level of financial literacy and expertise. Each member of the Audit Committee
has been determined by the Board to be "independent" and "financially literate"
within the meaning of the definitions under Canadian and U.S. securities laws
and the NYSE rules. In addition, the Board has determined that Mr. Schaefer is
an "Audit Committee Financial Expert" as that term is defined under U.S.
securities laws. The Board has made these determinations based on the education
and breadth and depth of experience of each member of the Audit Committee. The
following is a description of the education and experience, apart from their
respective roles as directors of TCPL, of each member of the Audit Committee
that is relevant to the performance of his or her responsibilities as a member
of the Audit Committee:

Mr. Schaefer earned a Bachelor of Commerce from the University of Alberta, is a
Chartered Accountant and is a Fellow of the Canadian Institute of Chartered
Accountants. He has served on the boards of several public companies and other
organizations, including as Chairman of the Alberta Chapter of the Institute of
Corporate Directors, and on the Audit Committees of some of those boards. Mr.
Schaefer has also held several executive positions with public companies.

Mr. Baldwin earned a Bachelor of Science in Chemical Engineering from the
University of Saskatchewan. He has served on the boards of several public
companies and other organizations and on the Audit Committees of some of those
boards. Mr. Baldwin has also held several executive positions with public
companies, including the position of President and Chief Executive Officer of
both Esso Resources Canada Limited and TCPL.

Ms. Gauthier earned a Bachelor of Arts from the College Jesus-Marie de Sillery,
a Bachelor of Laws from Laval University and a Master of Laws in Business Law
(Intellectual Property) from Laval-University. She has served on the boards of
several public companies and other organizations and on the Audit Committees of
some of those boards.

Mr. Jackson earned a Bachelor of Science in Engineering from the University of
Calgary. He has served on the boards of several public companies and on the
Audit Committees of some of those boards. Mr. Jackson has also held several
executive positions with public companies, including the position of President
and Chief Executive Officer of Crestar Energy Inc.

Mr. Joskow earned a Bachelor of Arts with Distinction in Economics from Cornell
University, a Masters of Philosophy in Economics from Yale University, and Ph.D.
in Economics from Yale University. He has served on the boards of several public
companies and other organizations and on the Audit Committees of some of those.

The Charter of the Audit Committee can be found in Schedule "B" of this AIF and
on TCPL's website under the Corporate Governance - Board Committees page, at the
link specified above under the heading "Corporate Governance".

Pre-Approval Policies and Procedures

TCPL's Audit Committee has adopted a pre-approval policy with respect to
permitted non-audit services. Under the policy, the Audit Committee has granted
pre-approval for specified non-audit services of $25,000 or less that are within
the annual pre-approved limit for non-audit services. For engagements of $25,000
or less which are not within the annual pre-approved limit, and for engagements
between $25,000 and $100,000, approval of the Audit Committee chair is required
and the Audit Committee is to be informed of the engagement at the next
scheduled Audit Committee meeting. For all engagements of $100,000 or more,
pre-approval of the Audit Committee is required. In all cases, regardless of the
dollar amount involved, where there is a potential for conflict of interest
involving the external auditor on an engagement, the Audit Committee chair must
pre-approve the assignment.

32 TRANSCANADA PIPELINES LIMITED

To date, TCPL has not approved any non-audit services on the basis of the
de-minimis exemptions. All non-audit services have been pre-approved by the
Audit Committee in accordance with the pre-approval policy described above.

External Auditor Service Fees

The aggregate fees for external auditor services rendered by KPMG LLP
("External Auditor") for TCPL in each of 2004 and 2003 fiscal years, are shown
in the table below:

Fee Category 2004 2003 Description of Fee Category
(millions of
dollars)

Audit Fees 2.50 1.80 Aggregate fees for audit services rendered by TCPL's External Auditor.

Audit Related Fees 0.06 0.05 Aggregate fees for assurance and related services rendered by TCPL's
External Auditor that are reasonably related to performance of the audit or
review of TCPL's financial statements and are not reported as Audit Fees.
The nature of services comprising these fees related to the audit of the
financial statements of TCPL's various pension plans.

Tax Fees 0.06 0.06 Aggregate fees rendered by TCPL's External Auditor for tax compliance and
tax advice. The nature of these services consisted of: tax compliance
including the review of original and amended tax returns; assistance with
questions regarding tax audits; assistance in completing routine tax
schedules and calculations; and tax services relating to common forms of
domestic and international taxation (i.e.: income tax, capital tax, Goods
and Services Tax and Value Added Tax).

All Other Fees 0.05 0.05 Aggregate fees for products and services other than those reported in this
table above rendered by TCPL's External Auditor. The nature of these
services consisted of activites with respect to TCPL's compliance with SOX
and particularly, with section 404.

Total 2.67 1.96

Other Board Committees

In addition to the Audit Committee, TCPL has three other Board committees: the
Governance Committee, the Health, Safety and Environment Committee and the Human
Resources Committee. The members of each of these committees as of Year End are
identified below:
Governance Committee
Chair: W.K. Dobson
Members: P.L. Joskow
D.P. O'Brien
J.R. Paul
H.G. Schaefer

Health, Safety & Environment Committee
Chair: D.D. Baldwin
Members: P. Gauthier
K.L. Hawkins
J.R. Paul
W.T. Stephens

TRANSCANADA PIPELINES LIMITED 33

Human Resources Committee
Chair: K.L. Hawkins
Members: W.K. Dobson
S.B. Jackson
D.P. O'Brien
W.T. Stephens

The charters of the Governance Committee, the Health, Safety & Environment
Committee and the Human Resources Committee were filed with TCPL's 2003 Annual
Information Form dated February 24, 2004 and can be found on TCPL's website
under the Corporate Governance - Board Committees page at the link specified
below.

Further information about TCPL's Board committees and corporate governance can
be found in the Proxy Circular under the heading "Corporate Governance" or on
TCPL's website located at: http://www.transcanada.com/company/
board_committees.html.

Conflicts of Interest

The Board and members of TCPL's management are not aware of any existing or
potential material conflicts of interest between TCPL or a subsidiary and any
director or officer of TCPL or its subsidiary. Directors and officers of TCPL
and its subsidiaries are required to disclose the existence of existing or
potential conflicts in accordance with TCPL policies governing directors and
officers and in accordance with the Canada Business Corporations Act. If a
director or officer has such a conflict, TCPL requires that the director or
officer absent themselves from any discussion or voting relating to the matter
giving rise to the material existing or potential conflict.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

Since the beginning of the most recently completed financial year, no director
or executive officer of TCPL, no proposed nominee for election as a director of
TCPL, or any associate of any such director, executive officer or proposed
nominee has been indebted to TCPL. There is no indebtedness of any such person
to another entity that is the subject of a guarantee, support agreement, letter
of credit or other similar arrangement or understanding provided by TCPL or any
of its subsidiaries.

SECURITIES OWNED BY DIRECTORS

The following table sets out the number of each class of securities of TCPL or
any of its affiliates beneficially owned, directly or indirectly, or over which
control or direction is exercised and the number of deferred share units
credited to each directors or proposed director, as of March 1, 2005.

Director or Proposed Director Securities Deferred
Owned, Share Units (3)
Controlled or
Directed(1)(2)
D. Baldwin 217,813 (4) 11,428
K. Benson 0 0
W. Dobson 4,000 (5) 21,765
P. Gauthier 1,000 12,401
K. Hawkins 3,832 (6) 23,144
S.B. Jackson 29,000 (7) 6,192
P. Joskow 5,000 3,959
H. Kvisle 557,881 (8) 0
D. O'Brien 10,000 12,401
H. Schaefer 28,916 (9) 13,052
W.T. Stephens 2,000 24,721

Notes:
(1)
The information as to shares beneficially owned or over which control or
direction is exercised, not being within the knowledge of TCPL, has been
furnished by each of the nominees. Except as indicated in these notes, the
nominees have sole voting and dispositive

34 TRANSCANADA PIPELINES LIMITED

power with respect to the securities listed above. As to each class of
shares of TransCanada, its subsidiaries and affiliates, the percentage of
outstanding shares beneficially owned by any one director or nominee or by
all directors and officers of TCPL as a group does not exceed 1% of the
class outstanding.

(2)
Securities owned, controlled or directed include common shares that certain
of the directors have a right to acquire through the exercise of stock
options that are vested under the Stock Option Plan, which plan is described
elsewhere in this AIF. Directors as such do not participate in the Stock
Option Plan. Mr. Kvisle, as an employee of TCPL, has the right to acquire
516,667 common shares of TransCanada under vested stock options, which
amount is included in this column. Mr. Baldwin, while occupying the position
of interim President and Chief Executive Officer of TCPL, was granted
options entitling him to acquire 200,000 common shares of TransCanada under
vested stock options, which amount is included in this column.

(3)
The value of a deferred share unit is tied to the value of TransCanada's
common shares. A deferred share unit is a bookkeeping entry, equivalent to
the value of a TransCanada common share and does not entitle the holder to
voting or other shareholder right, other than additional deferred share
units for the value of dividends. A director cannot redeem deferred share
units until the director ceases to be a member of the Board. Canadian
directors can then redeem their units in cash or shares while U.S. directors
can only redeem for cash.

(4)
The shares listed also include 100 Cumulative Redeemable First Preferred
Shares Series U and 500 Cumulative Redeemable First Preferred Shares, Series
Y of TCPL, and 2,000 units of TransCanada Power, L.P.

(5)
The shares listed include 1,000 units of TransCanada Power, L.P.

(6)
The shares listed include 2,500 shares held by Mr. Hawkins' wife.

(7)
The shares listed include 5,000 units of TransCanada Power, L.P. and 8,000
common shares held by Mr. Jackson's wife.

(8)
Mr. Kvisle, as an employee of TCPL, participates in the Employee Stock
Savings Plan which is described elsewhere in this AIF; his holdings in this
plan and 1,000 units of TransCanada Power, L.P. are included in this column.

(9)
The shares listed include 700 common shares held by Mr. Schaefer's wife and
5,500 common shares held by a company controlled by Mr. Schaefer's wife. Mr.
Schaefer disclaims beneficial ownership of such shares.

COMPENSATION OF DIRECTORS

TCPL's directors also serve as directors of TransCanada. An aggregate fee is
paid for serving on the Boards of TCPL and TransCanada. Since TransCanada does
not hold any assets directly other than the common shares of TCPL, all
directors' costs are assumed by TCPL according to a management services
agreement between the two companies. The meetings of the Boards and committees
of TCPL and TransCanada run concurrently.

Minimum Share Ownership Guidelines

The Board believes that directors can more effectively represent the interests
of shareholders if they have a significant investment in the common shares of
TransCanada, or their economic equivalent. As a result, TCPL requires each
director to acquire and hold a minimum number of common shares or their economic
equivalent in value to five times the director's annual cash retainer fee.
Directors have a maximum of five years to reach this level of ownership. The
level of ownership can be achieved by direct purchase of common shares, by
participation in the TransCanada Dividend Reinvestment Plan or by means of
directing cash retainer fees into, or otherwise acquiring units under, the Share
Unit Plan for Non-Employee Directors (1998) (the "DSU Plan"), described
elsewhere in this AIF.

All current directors have achieved the minimum share ownership. There is share
ownership at risk for each director. The value of the retainer fee paid in DSUs
may decrease over time if the value of a common share falls below its value at
the time the DSU was credited to the director's account.

Board and Committee Remuneration

TCPL's director compensation practices are designed to reflect the size and
complexity of TCPL and to reinforce the emphasis TCPL places on shareholder
value by linking a portion of directors' compensation to the value of common
shares. The market competitiveness of director compensation is assessed against
the Comparator Group (as defined in the Report on Executive Compensation below)
and a general industry sample of Canadian companies of similar size and scope to
TCPL.

TRANSCANADA PIPELINES LIMITED 35

For the financial year ended December 31, 2004, each director who was not an
employee of TCPL, other than the Chair, was paid in quarterly instalments in
arrears as follows:
Retainer fee(1) $ 27,000 per annum
Committee retainer fee $ 3,000 per annum
Committee Chair retainer fee $ 4,000 per annum
Board and Committee attendance fee $ 1,500 per meeting
Committee Chair attendance fee $ 1,500 per meeting

Note:
(1)
For 2005 the retainer fee has been raised to $30,000 per annum.

The Chair, who was paid none of the directors' fees outlined above, was paid a
retainer fee of $300,000 per annum in respect of his duties as Chair, $3,000 per
chaired board meeting, and was reimbursed for certain office and other expenses.
The Vice-Chair was paid a retainer fee of $12,000 per annum in respect of his
duties as Vice-Chair, in addition to his other director's fees as outlined
above. Each committee chair is paid a per diem fee for time spent on meetings
outside of the committee meetings. Additionally, directors other than the Chair
and the President and Chief Executive Officer receive, in respect of their
service as directors, an annual grant of units under the DSU Plan. See "Share
Unit Plan for Non-Employee Directors". Fees are paid quarterly and are pro-rated
from the date of the director's appointment to the Board and the relevant
committees.

TCPL pays a travel fee of $1,500 per meeting for which round trip travel time
exceeds three hours, and reimburses the directors for out-of-pocket expenses
incurred in attending such meetings. Directors who are U.S. residents are paid
the same amounts as outlined above in U.S. dollars.

Cash Fees Paid to Directors in 2004(1)

The total fees paid to the directors in 2004 was $1,064,840. The following
table sets out, for each non-employee director, the total fees paid. See the
heading "Share Unit Plan for Non-Employee Directors" below for DSUs granted as
additional directors' compensation.

Directors generally direct their retainer fee to be paid in DSUs until the
minimum share ownership guideline is reached, and are always entitled to direct
their retainer fee to be paid in DSUs. All directors hold the minimum number of
common shares or DSUs. In 2004, Paule Gauthier, Kerry Hawkins and David O'Brien
received their retainer fees in DSUs. In a year that a director chooses to
receive the retainer fee in DSUs, 100% of the retainer fee must be credited as
DSUs. The retainer fee in 2004 was $27,000.

Name Retainer Committee Committee Board Committee Travel Total Fees
Fee Retainer Chair Attendance Attendance Fee Paid
Fee Retainer Fee Fee
Fee
Douglas Baldwin(2) $ 27,000 $ 6,000 $ 4,000 $ 13,500 $ 15,000 $ 1,500 $ 67,000
Wendy Dobson(2) 27,000 6,000 4,000 13,500 13,500 9,000 73,000
Paule Gauthier 27,000 6,000 N/A 16,500 13,500 7,500 70,500
Richard Haskayne(3) 336,000 N/A N/A N/A N/A 1,500 337,500
Kerry Hawkins(2) 27,000 6,000 4,000 15,000 21,000 9,000 82,000
Barry Jackson 27,000 6,000 N/A 16,500 16,500 1,500 67,500
Paul L. Joskow(4) 20,250 4,500 N/A 7,500 6,000 4,500 42,750
David O'Brien 27,000 6,000 N/A 13,500 9,000 N/A 55,500
James Paul(4) 27,000 6,000 N/A 15,000 9,000 9,000 66,000
Harry Schaefer(2)(5) 39,000 6,000 20,090 16,500 21,000 1,500 104,090
W. Thomas Stephens(4) 27,000 6,000 N/A 15,000 9,000 7,500 64,500
Joseph Thompson 13,500 3,000 N/A 6,000 7,500 4,500 34,500

Notes:
(1)
Fees are aggregate amounts respecting duties performed on both TransCanada
and TCPL boards.

(2)
The Committee Chair Retainer Fee amount includes per diem fees paid in
addition to the Committee Retainer Fee in respect of duties performed and
meetings held in preparation for committee meetings.

(3)
The Retainer Fee amount includes the fee of $3,000 in respect of each Board
meeting chaired.

(4)
U.S. directors are paid these dollar amounts in U.S. dollars.

(5)
The Retainer Fee amount includes the fee of $12,000 in respect of duties
performed as Vice-Chair.

36 TRANSCANADA PIPELINES LIMITED

Share Unit Plan for Non-Employee Directors

The Share Unit Plan for Non-Employee Directors (1998) was established in 1998
and was amended and restated in October 2000. The DSU Plan allows eligible Board
members, on a quarterly basis, to direct their annual directors' retainer fee
or, at the discretion of the Governance Committee, other board-related fees, to
acquire units representing the right to acquire common shares or their cash
equivalent. The DSU Plan also allows the Governance Committee to grant units as
additional directors' compensation. In September 2004, a grant of 3,000 DSUs was
made to each director other than the Chair and the President and Chief Executive
Officer.

Initially the value of a DSU is equal to the market value of a common share at
the time the directors are credited with the units. Thus each grant of 3,000
DSUs in September 2004 had an initial cash value of approximately $83,940. The
value of a DSU, when redeemed, is equivalent to the market value of a common
share at the time the redemption takes place. In addition, at the time dividends
are declared on the common shares each DSU accrues an amount equal to such
dividends, which amount is then reinvested in additional DSUs at a price equal
to the then market value of a common share. DSUs cannot be redeemed until the
director ceases to be a member of the Board. Canadian directors may redeem for
cash or shares at their option. U.S. directors may only redeem for cash.

EXECUTIVE COMPENSATION AND OTHER INFORMATION

The following is the Human Resources Committee (the "HR Committee") report on
executive compensation, which covers all executives whose compensation is
reviewed by the HR Committee, including the executives referred to as the Named
Executive Officers in the section entitled "Executive Compensation Information"
below.

The HR Committee is composed of five directors, K.L. Hawkins (Chair), W.K.
Dobson, S.B. Jackson, D.P. O'Brien and W.T. Stephens, all of whom are unrelated
and independent as required by securities regulations. None of these individuals
have ever been an officer or employee of TransCanada or any of its subsidiaries.
None of TransCanada's current executive officers have served as a member of the
compensation committee or as a director of any other entity in respect of which
any of the members of the HR Committee or any of the other directors of
TransCanada is an executive officer. S.B. Jackson joined the HR Committee in
2004 as a replacement for J.D. Thompson who retired from the Board in April
2004. The HR Committee reports to the Board on all material matters considered,
recommended or approved by the HR Committee.

Independent Advice

The HR Committee engages its own consultants and legal advisors, independent of
those used by management, to gather information and deliver opinions and advice
on various subjects including the compensation practices of TCPL versus the
market, securities law and governance practices.

Executive Compensation Structure and Policies

Compensation Philosophy

The design of TCPL's executive compensation program is based on a compensation
philosophy that:

*
supports employee attraction, engagement and retention;

*
is competitive with the external compensation market;

*
aligns executive interests with shareholders and customers; and

*
rewards accomplishments through "pay-for-performance".

The executive compensation program specifically provides for Total Direct
Compensation ("TDC") which is a combination of base salary and performance-based
incentives that reflects business achievement, fulfillment of individual
objectives and overall job performance. The HR Committee approves all
remuneration to be awarded through the executive compensation program. TCPL will
continue to monitor market conditions and adapt its executive compensation
program to ensure it remains competitive and aligned with TCPL's compensation
philosophy.

TRANSCANADA PIPELINES LIMITED 37

Determining Individual Executive Compensation

Market Competitiveness

When determining the level of individual executive compensation, the HR
Committee considers market compensation data provided by external compensation
consultants. This data consists of summary compensation information from
selected Canadian-based companies. These companies are generally head offices or
subsidiary offices of similar size and scope to TCPL, and represent the market
where TCPL may compete for talent (the "Comparator Group").

The membership of the Comparator Group is reviewed annually by the HR Committee
for its business relevance to TCPL. An overview of the characteristics of the
2004 Comparator Group, as compared to TCPL, is provided in the following table:

Characteristics TCPL 2004 Comparator Group
Industry North American Pipelines, Power Canadian Oil and Gas, Pipelines, Power,
Utilities
Location Calgary Principally Alberta

Median 75th Percentile
Revenue(1) $5.4 billion $4.7 billion $6.3 billion
Market Capitalization(2) $12.9 billion $12.2 billion $17.8 billion
Assets(1) $20.5 billion $10.2 billion $12.7 billion
Employees(3) Approximately 2,500 2,367 3,982

Notes:
(1)
Revenue and Assets statistics reflect 2003 information.

(2)
Market Capitalization is calculated as at July 31, 2004.

(3)
Number of employees is reported as of April 1, 2004.

Pay for Performance

The HR Committee considers actual performance and results achieved against
annual business and individual performance objectives. The compensation an
executive receives will vary in accordance with the following guidelines:

*
If actual performance meets objectives and is considered satisfactory,
an executive's TDC is designed to be comparable to the median of the
data from the Comparator Group;

*
If actual performance exceeds those objectives and is considered to be
above satisfactory, an executive's TDC is designed to be competitive
with above-median compensation levels of the market data for his or her
role. The degree to which an executive is compensated over the median is
relative to his or her performance level; or

*
If actual performance falls short of objectives and is considered to be
below satisfactory, variable incentive awards in a given year may be
positioned below market median levels, but fixed elements are held and
not adjusted downward.

38 TRANSCANADA PIPELINES LIMITED

Pay Component Mix

The pay component mix of TDC is structured to place a significant portion of
the executive's compensation at risk. Disclosure of the actual pay component mix
for the Named Executive Officers is noted in the table below.

Elements of Executive Compensation for 2004

In 2004, the executive compensation program consisted of four direct
compensation elements; base salary, short-term annual cash incentives, share
units issued under the mid-term incentive plan and stock options issued as
long-term incentives. The following table provides an overview of these
elements:

Component of Type of Average Element Form Performance Determination of Market
TDC Compensation Mix(1) Period Competitive Award
for NEOs
(2)
Fixed Annual 30% of Base Salary Cash 1 year Match to similar roles
TDC in the Comparator Group
plus individual
performance sustained
over a number of years

Variable Annual 28% of Short-term Cash 1 year Degree to which each
TDC Incentive executive's achievement
against pre-established
annual objectives
contributed to annual
corporate performance

Longer-term 33% of Mid-term Executive Up to 3 years Degree to which each
TDC Incentive Share Units with vesting executive's contribution
at end of and potential will be
period key to the success of
TransCanada

9% of Long-term Stock Vesting 33 1/ Degree to which each
TDC Incentive Options 3% each year executive's contribution
for 3 years and potential will be
with a 7 year key to the success of
term TransCanada

Notes:
(1)
Mix is the relative emphasis placed on each pay element and is expressed as
an average percentage of TDC for the five NEOs. The relative emphasis on
specific forms of variable compensation for individual executives is aligned
with the executive's ability to contribute to short, medium and long-term
business achievement based on the HR Committee's assessment.

(2)
Named Executive Officers.

Overview of Executive Compensation Elements

Fixed Compensation - Base Salary

Base salary provides a fixed level of income based on the market value of a
role. In accordance with TCPL's market-based compensation practices, all
executive roles are individually matched to similar roles in the Comparator
Group. Although reviewed annually, base salaries are not significantly adjusted
upward year-over-year beyond what is required to maintain appropriate market
positioning based on individual contribution and performance or to reflect a
material change in an executive's responsibility.

Variable Compensation

The Board has specifically moved away from formulaically driven variable/
incentive compensation programs to programs based on sound judgement and
discretion at the HR Committee and Board levels. The Board is of the view that
formulas and weightings applied to forward-looking objectives may lead to
unintended consequences for compensation purposes. This is often due to
unforeseen events that are outside the scope of the

TRANSCANADA PIPELINES LIMITED 39

compensation program. For this reason, there are no pre-established weightings
applied to measures or numerical calculations used to determine payments for
executives from TCPL's performance-based variable compensation programs. The
Board's comprehensive assessment of overall business performance of TCPL,
including company performance achievement against stated objectives and business
circumstances, provides the context for individual executive evaluations for
short-term incentives, as well as the vesting of the medium-term incentive
awards.

Short-term Incentives

Short-term incentives are awarded through the annual Incentive Compensation
("IC") program. The IC program provides for annual cash payments based on
individual performance measured against pre-established annual business and
individual objectives, within the context of overall corporate performance. The
awards are provided under the following guidelines:

If actual performance is viewed Then...
as...

Below satisfactory --> payments are below median market incentive levels
Satisfactory --> payments align with median market incentive levels
Above satisfactory --> payments may be in excess of the median market incentive levels

Annual corporate performance provides the baseline from which individual
assessments are made. In years where corporate performance meets or exceeds
objectives, the foundation for award considerations will generally be, on
aggregate, above median market incentive levels. Conversely, if corporate
performance is less than satisfactory, award considerations for executives will
be tempered accordingly.

The actual incentive awards for each executive are based on the HR Committee's
subjective and discretionary assessment of the executive's proportional
contribution to the corporate results based on his or her achievement against
individual objectives. Payments from the IC program are made in the first
quarter following the completion of the financial year.

For 2004, TransCanada's stated objectives focused on the diligent and
disciplined implementation of TransCanada's key strategies for growth and value
creation. Examples of some of the measures used to assess performance in these
areas are as follows:

Financial strength * Earnings per share
* Funds generated from operations
* Earnings before interest, taxes, depreciation and amortization
* The ability to be well prepared for the right transactions

Regulatory framework * Progress on work with regulators and customers to evolve the regulated business model

Grow and optimize * Total shareholder return rolling average
core operations * Invested capital
(Pipe and Power) * Earnings growth after three years of the capital being invested

Operational Excellence * Safety
* Costs
* Employee engagement
* Environment
* Asset performance
* Customer relationships

To assess the results achieved against these objectives, the Board looks at
both absolute performance and relative performance against specific comparators.
The company is of the view that both relative and absolute measures are required
to give a balanced perspective of achievement.

40 TRANSCANADA PIPELINES LIMITED

In 2004, performance against these objectives delivered above satisfactory
results in the areas of financial strength and growth, and significant progress
on other objectives. The Board has therefore assessed that TransCanada met or
exceeded the vast majority of stated performance objectives for 2004. On
average, this achievement has resulted in above-median payments to executives
under the IC program. The extent to which an individual executive's payment is
above median is related to his or her contribution to these business results as
assessed by his or her own performance against specified objectives. The actual
IC program payments awarded to the Named Executive Officers is noted in the
"Summary Compensation Table" below.

Medium-term Incentives

Medium-term incentives are awarded through the Executive Share Unit Plan (the
"ESU Plan"). The purpose of this plan is to align a considerable portion of
executives' compensation with longer-term performance objectives that support
the interests of shareholders and customers. This plan has been in effect since
2003 and TCPL has made three grants under it. The awarding of annual grants and
number of units granted to executives is based on delivering competitive TDC and
is not dependent on the number, term or current value of other outstanding
incentive awards previously granted to the individual.

Under the ESU Plan, participants receive a provisional grant of units that are
valued based on the price of TransCanada's common shares at the time of grant.
Grants are subject to specific business performance conditions set by the HR
Committee at the time of grant. Throughout the three year term of the grant,
participant's accounts are credited with additional units for dividends declared
and paid.

At the end of the term, actual achievement will be compared with the
performance objectives and participant unit totals will be adjusted based on
this assessment. The resulting vested units will then be valued based on the
price of TransCanada's common shares at the time of vesting and participants
will receive a cash payment for their vested units.

In 2004, participants received a grant of units that were valued based on the
closing price of TransCanada's common shares on the TSX on the date of grant.
The HR Committee established specific objectives for Threshold and Target
performance levels, the achievement of which will adjust payouts as follows:

Performance Level Unit Total Adjustment
Below Threshold = zero units vest; no payment is made
At Threshold = 50% of units vest for payment
At or Above Target = 100% of units vest for payment

The performance criteria for the 2004 grant consisted of a combination of:
1.
TransCanada's absolute total shareholder return ("TSR");

2.
TransCanada's relative TSR as compared to specified companies with which
TransCanada may compete for capital (the "ESU Peer Group"); and

3.
Corporate financial measures of earnings per share and funds generated from
continuing operations.

There are no pre-established weightings applied to these measures or numerical
calculations used. The HR Committee will use its judgement and discretion to
assess overall performance in light of the stated criteria and business
circumstances surrounding the performance achievement.

If the actual performance achievement is determined by the HR Committee to
align at a point between Threshold and Target levels, the HR Committee will
determine the number of units that vest on a pro rata basis. The amount paid to
the participants will be based on the number of vested units and the weighted
average closing price on the TSX during the five trading days immediately prior
to and including the valuation date.

For the purposes of executive compensation disclosure, the ESU Plan is reported
as a long term incentive plan in this AIF.

TRANSCANADA PIPELINES LIMITED 41

Long-term Incentives

Long-term incentives are awarded to executives through the Stock Option Plan.
This plan aligns executives' interests with the longer-term growth and
profitability of TransCanada, ultimately enhancing shareholder value. Executives
who participate benefit only if the market value of TransCanada's common shares
at the time of option exercise is greater than the market value of such shares
at the time of grant. The awarding of annual grants and number of options
granted to executives is based on delivering competitive TDC and is not
dependent on the number, term or current value of other outstanding incentive
awards previously granted to the individual.

The exercise price of an option is based on the price of a TransCanada common
share as of the date of grant. The price is set as the higher of the closing
price on the grant date or the weighted average closing price on the TSX during
the five trading days immediately prior to the grant date. Options granted in
2004 vest 331/3% on each anniversary of the grant date for a period of three
years. Vested options from this grant may be exercised until their expiry, which
is seven years from the grant date.

Share Ownership Guidelines

The HR Committee is of the opinion that senior executives should hold an
interest in TransCanada in order to align their financial interests with those
of shareholders. In January 2003, certain senior officers of the company were
given guidelines to achieve an interest level that the HR Committee viewed as
significant in relation to each senior executive's base salary. The specified
executives have five years (until December 31, 2007) to meet the following
guidelines:

President and Chief Executive Officer 3 times base salary
Executive Vice-Presidents 2 times base salary
Other Specified Senior Executives 1 times base salary

In calculating their interest in TransCanada, these executives may include the
value of shares owned and any outstanding units granted under the ESU Plan. As
of December 31, 2004, all Named Executive Officers have met or exceeded these
guidelines.

Changes to the Executive Compensation Program

ESU Plan

As a continuous improvement initiative, a review of the ESU Plan design was
undertaken in 2004 to further enhance its alignment to TCPL's compensation
principles. As a result of this review, fundamental changes have been approved
by the HR Committee for implementation starting with the 2005 grant.

The design changes are intended to provide more transparent and intuitive plan
mechanics for participants while maintaining the delivery of competitive
compensation. The key design changes included the expansion of the

42 TRANSCANADA PIPELINES LIMITED

performance levels from two to three and the recalibration of performance
requirements in light of the new structure.

Below Threshold Threshold Target Maximum
Previous Zero payout Requires stretch but Very difficult stretch N/A
Design achievable performance performance requirements
50% of granted units At Target = 100% granted
payout units payout

New Design Zero payout Requires acceptable and Requires stretch but Very difficult stretch
achievable performance achievable performance performance requirements
50% of granted units At Target = 100% granted At Maximum = 150% granted
payout units payout units payout

With the previous design, there was a significant risk of grant forfeiture due
to the difficulty of the performance requirements at both the Threshold and
Target levels. Grants were made with higher nominal values in recognition of
this significant risk. As a result of the design review, it was concluded that
the previous structure of the ESU Plan failed to provide adequate performance
motivation for participants. The new design provides for greater recognition of
both satisfactory and excellent performance and does not require higher nominal
value to deliver the same intended level of competitive compensation over the
longer term.

Starting with the 2005 grant, the share price used to value the units at the
time of grant will reflect the weighted average closing price for TransCanada's
common shares on the TSX for the five trading days prior to and including the
grant date. Previously, the share price used to value the units was the closing
price on the TSX on the grant date. The change was made to align the grant
valuation process with the payout valuation process.

For every annual grant under the ESU Plan, the HR Committee reviews and
approves specific business performance conditions. For the 2005 grant, the
performance requirements will be based on the same measures as those used for
the 2004 grant (i.e., absolute and relative TSR plus corporate financial
measures).

Stock Option Plan

As a result of the introduction of the ESU Plan, the administrative changes
noted below were made to the use of the Stock Option Plan in 2003. The
implementation of these administrative changes did not require a Plan amendment.

1995 to 2002 Grants 2003 Grants Onward
Vesting 25% on the grant date 0% on the grant date
25% each year for the next three years 331/3% each year for the next three years

Exercise Expiry Ten years from grant Seven years from grant

Other awards made at Units from Performance Unit Plan Units from ESU Plan
the time of grant One unit for each Stock Option granted Number of units granted is not related to
the number of Stock Options granted

Starting in 2005, only executive-level employees participate in the Stock
Option Plan.

TRANSCANADA PIPELINES LIMITED 43

Performance Unit Plan

The Performance Unit Plan ("PUP") was established in 1995 and includes
participants in the executive and management employee groups. In July 2002, the
HR Committee amended the plan so that no further awards would be made under the
PUP, but accruals on existing awards will continue until expiry of the last
grants, in 2012.

Until 2003, one PUP unit was granted in tandem with each option granted under
the Stock Option Plan. Each unit is eligible for an annual cash accrual that is
no greater than the value of dividends paid on one common share in the preceding
financial year. The accrual is made if TransCanada's TSR is equal to or greater
than that of other specified Canadian companies with which TransCanada competes
for capital (the "PUP Peer Group"). The HR Committee has full discretion to
award the full or a lesser value if TransCanada's absolute TSR is below that of
the PUP Peer Group. For 2004, the HR Committee approved a cash accrual of $1.14
per PUP unit.

The accrued dollar value vests three years after the grant date and is deemed
to be automatically redeemed on the tenth anniversary of the grant date. A
performance unit may be exercised for the dollar value accrued on the unit
beginning on the third anniversary of the grant date.

At the time of exercise the market price of a common share plus the amount
accrued on the unit must be equal to or greater than the market price of a
common share on the grant date of the unit. Additionally, the option awarded in
tandem with the unit must have been previously or concurrently exercised.
However, if the underlying option is exercised before the PUP unit is vested,
the PUP unit is forfeited.

Compensation of the Chief Executive Officer

The components of TDC for the Chief Executive Officer ("CEO") are the same as
those for other executive officers of TCPL, namely base salary, short-term
incentive (from the IC program), medium-term incentive (from the ESU Plan) and
long-term incentive (from the Stock Option Plan). Annually, the HR Committee
makes recommendations to the Board regarding the CEO's compensation based on the
same market-based, performance-related basis as for other executive officers. As
with other executive officers, there are no pre-established weightings applied
to the CEO's personal performance objectives or numerical calculations performed
to determine his variable compensation payments.

Overview of Performance

Mr. Kvisle is accountable for ensuring the stated corporate performance
objectives are achieved and this forms the first of his personal objectives. As
previously noted, the Board has reviewed TransCanada's financial and
non-financial results, and assessed them as meeting or exceeding the vast
majority of those objectives for 2004.

In addition to ensuring the stated corporate objectives are achieved, Mr.
Kvisle's 2004 individual objectives focused on delivering value-added support
for key initiatives in the organization such as:

*
Northern development and key acquisitions;

*
Ensuring key management bench strength;

*
Building winning long-term relationships with key stakeholders;

*
Reinforcing operational excellence throughout the organization;

*
Ensuring a high level of ethical behaviour and good governance
throughout the organization; and

*
Personal growth.

The HR Committee assessed Mr. Kvisle's results and concluded that his
performance exceeded expectations against individual objectives and made this
recommendation to the Board.

The Board is of the view that Mr. Kvisle's overall contribution to
TransCanada's achievements and his performance against individual objectives in
2004 exceeded expectations, resulting in his TDC being positioned slightly below
the top quartile TDC for similar roles in the Comparator Group. In its decision,
the Board

44 TRANSCANADA PIPELINES LIMITED

considered the achievement of the company and individual objectives (both
financial and non financial) as well as significant economic, industrial and
market circumstances that influenced the performance of TransCanada.

Information on the incentive award decisions for Mr. Kvisle and the other Named
Executive Officers made by the Committee and the Board in February 2005 can be
found in the section entitled "Supplemental Disclosure of Compensation".

This Report on Executive Compensation is submitted on behalf of the Human
Resources Committee of the Board:

H.L. Hawkins (Chair) D.P. O'Brien
W.K. Dobson W.T. Stephens
S.B. Jackson

Performance Graph

The following chart compares the five-year cumulative total shareholder return
on the TransCanada (formerly TCPL) common shares to the S&P/TSX composite index
(assuming reinvestment of dividends and considering a $100 investment on
December 31, 1999 in common shares).

Dec Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Compound
31, 2000 2001 2002 2003 2004 Annual Growth
1999
TransCanada 100 148.1 179.4 216.2 274.6 306.0 25.1%
TSX 100 107.4 93.9 82.2 104.2 119.3 3.6%

Compensation of Executive Officers of TCPL

TCPL's executive officers also serve as executive officers of TransCanada. An
aggregate remuneration is paid for serving as an executive officer of TCPL and
for service as an executive officer of TransCanada. Since TransCanada does not
hold any assets directly other than the common shares of TCPL, all executive
officers' costs are assumed by TCPL according to a management services agreement
between the two companies.

TRANSCANADA PIPELINES LIMITED 45

Executive Compensation Information

Summary Compensation Table

The following table outlines the summary of compensation earned in the 2004,
2003 and 2002 financial years by the President and Chief Executive Officer, the
Chief Financial Officer and the three other most highly compensated executive
officers. Executive officers are included as NEO's based on base salary and
annual incentive bonuses earned during the most recently completed financial
year.
Long-term Compensation
Annual Compensation
Award of
Name and Principal Year Salary Bonus(2) Other Annual Award of Shares or LTIP All Other
Position of the (b) (1) ($) Compensation Securities Units Payouts Compensation
Named Executive ($) (d) (3) Under Subject to (5) (6)
Officers (c) ($) Options Resale ($) ($)
(a) (e) Granted(4) Restriction (h) (i)
(#) ($)
(f) (g)
H.N. Kvisle 2004 871,251 1,100,000 46,700 165,000 0 0 0
President and 2003 772,503 900,000 69,108 200,000 0 0 0
Chief Executive 2002 726,252 1,000,000 93,230 150,000 0 0 0
Officer
R.K. Girling 2004 457,524 460,000 42,680 60,000 0 0 0
Executive 2003 443,751 430,000 39,611 80,000 0 0 0
Vice-President, 2002 420,003 480,000 26,904 65,000 0 0 6,575
Corporate
Development and
Chief Financial
Officer
A.J. Pourbaix 2004 407,505 450,000 61,462 60,000 0 0 0
Executive 2003 382,506 430,000 51,638 80,000 0 0 0
Vice-President, 2002 322,500 480,000 14,790 65,000 0 0 6,575
Power
R.J. Turner 2004 450,000 340,000 58,714 40,000 0 0 0
Executive 2003 447,501 300,000 64,233 60,000 0 0 0
Vice-President, 2002 436,254 340,000 41,420 50,000 0 0 0
Gas Transmission
D.J. McConaghy 2004 355,002 330,000 40,024 60,000 0 0 0
Executive 2003 337,506 400,000 43,595 60,000 0 0 0
Vice-President, 2002 322,500 310,000 56,043 45,000 0 0 0
Gas Development

Notes:
(1)
Base salary is earned income during the financial year and reflects any
changes in base pay rates that occurred during that time period. Any
approved change to the base pay rate is effective April 1st of the financial
year.

(2)
Amounts referred to in this table as "Bonus" are paid pursuant to TCPL's
Incentive Compensation program. See "Report on Executive Compensation -
Short-term Incentives".

(3)
The amounts in this column include the value of salary paid in lieu of
vacation. This column also includes amounts paid to the Named Executive
Officers by way of flex benefit credits applied to the Employee Stock
Savings Plan and payments made to the Named Executive Officers by
subsidiaries and affiliates of TCPL (including directors' fees paid by
affiliates and amounts paid for serving on management committees of
partnerships in which TCPL holds an interest) specifically, Mr. Girling -
$21,000 and Mr. Pourbaix - $39,000 (directors' fees paid by an affiliate).
The value of perquisites for each Named Executive Officer is less than the
lesser of $50,000 and 10% of the Named Executive Officer's total annual
salary and bonus and, as such, is not included in the amounts shown in this
column.

(4)
This column shows the number of stock options awarded under the Stock Option
Plan to each of the Named Executive Officers for each of the financial years
noted. A similar number of performance units were granted in tandem in 2002
under the PUP, described in the section titled "Changes to the Executive
Compensation Program - Performance Unit Plan".

(5)
LTIP Payouts will represent the settlements for the vested and paid ESU Plan
and PUP grants. There have been no payouts made to the Named Executive
Officers from either plan to date. Please refer to the sections titled
"Long-term Incentive Plan Awards", "Supplemental Disclosure of Compensation"
and "Long-term Incentive Plan Grants Outstanding" for all past and present
grant information pertaining to these plans.

(6)
For 2002, the amounts in this column include amounts contributed by TCPL for
the Named Executive Officers under the Defined Contribution Pension Plan.
See the section titled, "Pension and Retirement Benefits" below.

46 TRANSCANADA PIPELINES LIMITED

Long-term Incentive Plan Awards

2004 Executive Share Unit Plan Grants

The following table outlines the medium-term incentive grants made to the Named
Executive Officers under the ESU Plan for the financial year ending December 31,
2004:
Estimated Future Payouts Under
Non-Securities-Price-Based Plans
(units)(2)
Name Securities, Performance or Other Period Below Threshold Target Maximum
(a) Units or Until Maturation or Payout Threshold (#) (#) (#)
Other Rights (c) (#) (e) (f) (g)
(1) (d)
(#)
(b)
H.N. Kvisle 0 - 73,185 01-Jan-04 through 31-Dec-06 0 36,593 73,185 73,185
R.K. Girling 0 - 29,275 01-Jan-04 through 31-Dec-06 0 14,638 29,275 29,275
A.J. Pourbaix 0 - 26,140 01-Jan-04 through 31-Dec-06 0 13,070 26,140 26,140
R.J. Turner 0 - 21,540 01-Jan-04 through 31-Dec-06 0 10,770 21,540 21,540
D.J. McConaghy 0 - 23,005 01-Jan-04 through 31-Dec-06 0 11,503 23,005 23,005

Notes:
(1)
This is the range of units under the ESU Plan that may be eligible to vest,
not including units related to reinvested dividends. See "Report on
Executive Compensation - Medium-term Incentives" for more information about
the ESU Plan.

(2)
Does not include units related to reinvested dividends.

Stock Options Granted in 2004

The following table outlines the stock options granted under the Stock Option
Plan to each of the Named Executive Officers in February 2004.

Name Date of Number of % of Total Exercise Market Value Expiration
Grant Common Options Price ($/ of Common Date
Shares Granted to common Shares
Under Employees share)(2) Underlying
Options Options on
Granted(1) the Date of
Grant
($/common
share)
H.N. Kvisle 23-Feb-04 165,000 12.40 26.85 26.80 23-Feb-11
R.K. Girling 23-Feb-04 60,000 4.51 26.85 26.80 23-Feb-11
A.J. Pourbaix 23-Feb-04 60,000 4.51 26.85 26.80 23-Feb-11
R.J. Turner 23-Feb-04 40,000 3.01 26.85 26.80 23-Feb-11
D.J. McConaghy 23-Feb-04 60,000 4.51 26.85 26.80 23-Feb-11

Notes:
(1)
On each anniversary date of the grant for a period of three years, one-third
of these options vest and are exercisable.

(2)
The exercise price is equal to the higher of the closing price of common
shares on the award date and the weighted average closing price of common
shares on the TSX during the five trading days immediately prior to the
award date of the options.

TRANSCANADA PIPELINES LIMITED 47

Aggregate Option Exercises during 2004 and 2004 Year-End Option Values

The following table outlines, for each of the Named Executive Officers:

*
The number of stock options, if any, exercised during the financial year
ended December 31, 2004;

*
The aggregate value realized upon exercise;

*
The total number of unexercised options, if any; and

*
The value of unexercised "in-the-money" options at December 31, 2004.

Unexercised Options at Value of Unexercised
Name Common Aggregate December 31, 2004 in-the-Money Options at
Shares Value (#) December 31, 2004(1)
Acquired Realized ($)
on ($)
Exercise
(#) Exercisable Unexercisable Exercisable Unexercisable

H.N. Kvisle 0 0 516,667 335,833 5,715,152 1,796,623
R.K. Girling 235,162 2,404,055 75,417 129,583 607,240 711,410
A.J. Pourbaix 0 0 147,917 129,583 1,325,915 711,410
R.J. Turner 23,256 373,111 207,094 92,500 2,232,542 430,425
D.J. McConaghy 6,349 83,277 187,275 111,250 2,162,599 569,962

Note:
(1)
The value of unexercised "in-the-money" options at the financial year end is
the difference between the exercise price and the closing price of $29.80
per share of a common share on the TSX on December 31, 2004. The underlying
options have not been and will not necessarily be exercised and the actual
gains, if any, on exercise will depend on the value of common shares on the
date of exercise.

Equity Compensation Plan Information

Stock Option Plan

The Stock Option Plan is the only compensation plan under which equity
securities of TransCanada have been authorized for issuance. Stock options may
be granted to such employees of TCPL as the HR Committee may from time to time
determine. Starting in 2005, the HR Committee determined that only
executive-level employees will participate in the plan. The following provides
key information regarding the Stock Option Plan provisions:

*
The plan was first approved by shareholders in 1995;

*
There was an amendment approved by shareholders at TransCanada's annual
and special meeting of shareholders held on April 23, 2004 to increase
the number of shares issuable by 1,000,000;

*
A maximum of 26,000,000 of TransCanada's common shares may be issued
under the plan. This represents 5.36% of common shares issued and
outstanding as at March 1, 2005;

*
As at March 1, 2005, there were approximately 10,694,000 common shares
issuable upon the exercise of outstanding stock options. This represents
2.2% of issued and outstanding common shares;

*
As at March 1, 2005, there were approximately 3,627,500 common shares
remaining available for issuance. This represents 0.75% of issued and
outstanding common shares;

*
As at March 1, 2005, approximately 11,678,500 common shares have been
issued upon the exercise of stock options, representing 2.4% of issued
and outstanding common shares; and

*
The exercise price for unexercised issued stock options ranges from
$10.03 to $30.09, with expiry periods ranging from March 3, 2005 to
February 28, 2012.

Under the terms of the Stock Option Plan, the maximum number of common shares
reserved for issuance as stock options to any one participant cannot exceed 5%
of TransCanada's common shares then issued and outstanding. There are no
restrictions on the number of stock options that may be granted to insiders,
subject to the foregoing limitation. Stock options cannot be transferred or
assigned by participants other than by will or by participants who for any
reason are unable to manage their affairs.

48 TRANSCANADA PIPELINES LIMITED

Stock options granted in 2004 vest as to one-third on each anniversary of the
grant date for a period of three years and have a seven year expiry date. The
exercise price of a stock option is equal to the higher of the closing price of
common shares on the award date and the weighted average closing price of common
shares on the TSX during the five trading days immediately prior to the award
date of the stock options. Administrative changes were made to the use of the
Stock Option Plan in 2003 which did not require an amendment to the terms of the
plan. More information on these changes is found in "Changes to the Executive
Compensation Program - Stock Option Plan".

Under the current terms of the Stock Option Plan, stock options expire on the
earlier of:

1.
The third anniversary of the date of a participant's retirement;

2.
The first anniversary of the date of a participant's death; and

3.
The seven year anniversary of the date of grant.

The following table outlines the action prescribed by the Stock Option Plan,
following an employment event:

Employment Event Action
Resignation The participant may exercise outstanding exercisable stock options no
later than the last day of active employment, after which date all
outstanding stock options are forfeited.

Termination without cause The participant may exercise outstanding exercisable stock options no
later than the last day of the notice period, after which date all
outstanding stock options are forfeited.

Termination for cause The participant may exercise outstanding exercisable stock options no
later than 10 days after the last day of active employment, after
which date all outstanding stock options are forfeited.

The HR Committee has the power to amend or discontinue this plan at any time,
provided, however, that any amendment which increases the number of common
shares that may be issued under the plan, must be approved by the shareholders
of TransCanada. Any such amendment shall not alter or impair the rights of any
participants without their consent.

Securities Authorized For Issuance under Equity Compensation Plans

The following table outlines the number of common shares to be issued upon the
exercise of outstanding options under the Stock Option Plan, the
weighted-average exercise price of the outstanding options, and the number of
common shares remaining available for future issuance under the Stock Option
Plan, all at December 31, 2004.

Plan Category Number of Weighted-average Number of securities
securities to be exercise price of remaining available for
issued upon outstanding options future
exercise of (b) issuance under equity
outstanding compensation plans
options (excluding securities
(a) reflected in column (a))
(c)
Equity compensation plans approved by 9,964,792 $ 20.90 4,682,535
security holders
Equity compensation plans not approved by Nil Nil Nil
security holders
TOTAL 9,964,792 $ 20.90 4,682,535

TRANSCANADA PIPELINES LIMITED 49

Long-term Incentive Plan Grants Outstanding

This section includes information on previously awarded medium and long term
incentive grants that are still outstanding as of December 31, 2004 under the
specified plans. These outstanding grants have not yet been recorded as LTIP
Payouts in the Summary Compensation Table, Column (h).

Executive Share Unit Plan

The following table outlines the medium-term incentive grants under the ESU
Plan that are in addition to those granted in 2004 and disclosed under
"Long-term Incentive Plan Awards - 2004 Executive Share Unit Plan Grants" above.

Estimated Future Payouts Under
Performance or Other Non-Securities-Price-Based Plans (units)(2)
Name Securities, Period Until Maturation Below Threshold Target Maximum
(a) Units or or Payout Threshold (#) (#) (#)
Other Rights (c) (#) (d) (e) (f)
(1)
(#)
(b)
H.N. Kvisle 0 - 50,000 01-Jan-03 through 0 25,000 50,000 50,000
31-Dec-05
R.K. Girling 0 - 20,000 01-Jan-03 through 0 10,000 20,000 20,000
31-Dec-05
A.J. Pourbaix 0 - 20,000 01-Jan-03 through 0 10,000 20,000 20,000
31-Dec-05
R.J. Turner 0 - 15,000 01-Jan-03 through 0 7,500 15,000 15,000
31-Dec-05
D.J. McConaghy 0 - 15,000 01-Jan-03 through 0 7,500 15,000 15,000
31-Dec-05

(2)
Does not include units related to reinvested dividends.

Performance Unit Plan

The following table outlines PUP awards made to the Named Executive Officers.
The estimated future payouts set out in the table include all accruals up to and
including the accrual approved on February 28, 2005, as the accrual is
attributable to 2004 performance. See "Changes to the Executive Compensation
Program - Performance Unit Plan" for information with respect to this plan. As
at December 31, 2004, approximately 6,976,000 units under the PUP were
outstanding. As at March 1, 2005, approximately 6,941,000 units under the PUP
were outstanding with a dollar value of $28,653,718.

Estimated Future Payouts Under Non-Securities
Performance or Other Price-Based Plans(3)
Name Securities, Period Until Below Threshold Target Maximum
(a) Units or Maturation Threshold ($) ($) ($)
Other or Payout(2) ($) (d) (e) (f)
Rights(1) (c)
(#)
(b)
H.N. Kvisle 150,000 25-Feb-12 0 476,250 476,250 476,250
100,000 20-Mar-11 0 407,500 407,500 407,500
42,500 27-Feb-11 0 173,188 173,188 173,188
55,000 28-Feb-10 0 272,525 272,525 272,525
50,000 01-Feb-10 0 247,750 247,750 247,750
90,000 01-Sep-09 0 445,950 445,950 445,950

50 TRANSCANADA PIPELINES LIMITED

R.K. Girling 65,000 25-Feb-12 0 206,375 206,375 206,375
45,000 27-Feb-11 0 183,375 183,375 183,375
45,000 28-Feb-10 0 222,975 222,975 222,975
50,000 01-Feb-10 0 247,750 247,750 247,750
20,000 29-Jul-09 0 99,110 99,110 99,110
25,000 01-Mar-09 0 123,875 123,875 123,875
25,000 03-Dec-08 0 123,875 123,875 123,875
25,162 09-Dec-07 0 155,124 155,124 155,124

A.J. Pourbaix 65,000 25-Feb-12 0 206,375 206,375 206,375
35,000 27-Feb-11 0 142,625 142,625 142,625
20,000 28-Feb-10 0 99,100 99,100 99,100
20,000 01-Feb-10 0 99,100 99,100 99,100
20,000 01-Mar-09 0 99,100 99,100 99,100
17,500 03-Dec-08 0 86,713 86,713 86,713

R.J. Turner 50,000 25-Feb-12 0 158,750 158,750 158,750
42,500 27-Feb-11 0 173,188 173,188 173,188
35,000 28-Feb-10 0 173,425 173,425 173,425
50,000 01-Feb-10 0 247,750 247,750 247,750
20,000 29-Jul-09 0 99,100 99,100 99,100
40,000 01-Mar-09 0 198,200 198,200 198,200

D.J. McConaghy 45,000 25-Feb-12 0 142,875 142,875 142,875
35,000 27-Feb-11 0 142,625 142,625 142,625
20,000 28-Feb-10 0 99,100 99,100 99,100
20,000 01-Feb-10 0 99,100 99,100 99,100
17,500 01-Mar-09 0 86,713 86,713 86,713

Notes:
(1)
As no further awards will be made under the PUP, it will be phased out over
the remaining life of the outstanding units.

(2)
The exercise period for all units commences upon vesting, which is the third
anniversary of the grant date, and expires on the tenth anniversary of the
grant date, with the exception of the performance units maturing on February
1, 2010 granted under a one time special performance incentive program,
which vested on February 22, 2002.

(3)
The HR Committee determined in February 2005 that $1.14 will accrue for 2004
in respect of the awards made from 1995 to 2002. The amounts referred to
herein are either received in full or forfeited by the Named Executive
Officers. See "Changes to the Executive Compensation Program - Performance
Unit Plan" for more information.

Pension and Retirement Benefits for Executive Officers

Pension and Retirement Benefits

TCPL's Canadian pension plans are designed to attract and retain employees for
the long term and to provide employees with a lifetime annual retirement income.

Base Pension Plan

All TCPL employees participate in the TCPL Registered Pension Plan, which is
now solely a non-contributory defined benefit pension plan. The Registered
Pension Plan previously provided three benefit options, a defined benefit, a
defined contribution and a combination option (defined benefit and defined
contribution). It was amended on October 1, 2001 to eliminate the combination
option for new members and on January 1, 2003 to eliminate the defined
contribution option.

TRANSCANADA PIPELINES LIMITED 51

The normal retirement age under the Registered Pension Plan is age 60 or any
age between 55 and 60 where the sum of an employee's age and continuous service
equals 85. Employees are eligible to retire prior to their normal retirement
date but the benefit payable is subject to early retirement reduction factors.
The defined benefit plan is integrated with Canada Pension Plan benefits. The
benefit calculation is:

1.25% of an employee's highest average earnings(1) up to the final average YMPE
(2)

plus

1.75% of an employee's highest average earnings above the final average YMPE

multiplied by

the employee's years of credited service in the Registered Pension Plan
("Credited Pensionable Service")

Notes:
(1)
Highest Average Earnings means the average of an employee's best consecutive
36 months of pensionable earnings in the last 15 years before retirement.
Pensionable Earnings means an employee's base salary plus actual Incentive
Compensation paid to a targeted percentage or for executive employees a
fixed percentage of their base salary. Pensionable earnings do not include
overtime, shift and premium differentials or any other forms of
compensation.

(2)
YMPE means Year's Maximum Pensionable Earnings under the Canada/Quebec
Pension Plan (C/QPP). Final Average YMPE means the average of the YPME in
effect for the latest calendar year from which earnings are included in an
employee's highest earnings calculation plus the two previous years.

Registered defined benefit pension plans are subject to a maximum annual
benefit accrual under the Income Tax Act (Canada), which is currently $2,000 for
each year of Credited Pensionable Service, with the result that benefits cannot
be earned in the Registered Pension Plan on compensation above approximately
$126,000 per annum.

Supplemental Pension Plan

All TCPL employees with pensionable earnings over the Income Tax Act (Canada)
ceiling of $126,000, including the Named Executive Officers, participate in the
company's non-contributory defined benefit Supplemental Pension Plan.
Approximately 417 TCPL employees currently participate in the Supplemental
Pension Plan.

The Supplemental Pension Plan is funded through a retirement compensation
arrangement (RCA), under the Income Tax Act (Canada). Subject to the Board's
approval, contributions to the fund are based on an annual actuarial valuation
of the Supplemental Pension Plan obligations calculated on the basis of the plan
terminating at the beginning of each calendar year.

The annual pension benefit under the Supplemental Pension Plan is equal to 1.75
per cent multiplied by the employee's Credited Pensionable Service multiplied
by the amount by which such employee's highest average earnings exceed the
ceiling imposed under the Income Tax Act (Canada) and were recognized under the
Registered Pension Plan.

Generally, neither the Registered Pension Plan nor the Supplemental Pension
Plan provide for the recognition of past service. However, the HR Committee may,
under the provisions of the Supplemental Pension Plan, at its sole discretion,
grant additional years of credited service to executive employees.

Under the Registered Pension Plan and the Supplemental Pension Plan, TCPL
employees, including the Named Executive Officers, will receive the following
normal form of pension:

(a)
in respect of credited service prior to January 1, 1990, upon
retirement, a monthly pension payable for life with 60 per cent
continuing thereafter to the participant's designated joint annuitant;
and

(b)
in respect of credited service on and after January 1, 1990, upon
retirement, a monthly pension as described in (a) above and for
unmarried participants or married participants who have received spousal
consent and who have so elected, a monthly pension payable for life with
payments to the participant's estate guaranteed for the balance of 10
years if the participant dies within 10 years of retirement.

In lieu of the normal form of pension, optional forms of pension payment may be
chosen provided that any legally required waivers are completed.

52 TRANSCANADA PIPELINES LIMITED

The following table sets out the estimated annual defined benefit plan benefits
(based on the "joint and 60% survivor" method) payable for credited service
under the Registered Pension Plan and the Supplemental Pension Plan (excluding
amounts payable under the Canada Pension Plan) for employees with the following
"highest average earnings" and "years of credited pensionable service
classifications".
Years of Credited Pensionable Service
Highest Average Earnings 10 15 20 25 30 35
$ 400,000 $ 68,000 $ 102,000 $ 136,000 $ 170,000 $ 204,000 $ 238,000
600,000 103,000 154,000 206,000 257,000 309,000 360,000
800,000 138,000 207,000 276,000 345,000 414,000 483,000
1,000,000 173,000 259,000 346,000 432,000 519,000 605,000
1,200,000 208,000 312,000 416,000 520,000 624,000 728,000
1,400,000 243,000 364,000 486,000 607,000 729,000 850,000
1,600,000 278,000 417,000 556,000 695,000 834,000 973,000
1,800,000 313,000 469,000 626,000 782,000 939,000 1,095,000
2,000,000 348,000 522,000 696,000 870,000 1,044,000 1,218,000

Based on their current highest average earnings and assuming the Named
Executive Officers remain employed by TCPL until age 60 and that the Registered
Pension Plan and Supplemental Pension Plan remain in force substantially in
their present form, the Named Executive Officers will have the number of years
of credited pensionable service and benefit payable set out below under their
names:
Kvisle(2) Girling(3) Pourbaix(3) Turner McConaghy
Years of Credited Service to December 10.33 6.00 6.00 22.80 24.83
31, 2004
Accrued Pension at December 31, 2004 and $ 264,000 $ 72,000 $ 59,000 $ 280,000 $ 230,000
Payable at age 60(1)
Years of Credited Service to age 60 23.16 26.50 29.58 31.13 31.99
Annual Benefit Payable at age 60(1) $ 595,000 $ 311,000 $ 285,000 $ 381,000 $ 295,000

Notes:
(1)
Amounts are rounded to the nearest one thousand dollar.

(2)
Mr. Kvisle was granted five years of additional credited pensionable service
which vested on his fifth anniversary of employment. Mr. Kvisle is also
eligible for one additional year of credited pensionable service for each of
the next five continuous years of service with the company. The additional
credited service is to be recognized solely in the Supplemental Pension Plan
with respect to earnings in excess of the maximum set under the Income Tax
Act (Canada).

(3)
Upon the completion of three years of continuous service from September 8,
2004, Mr. Girling and Mr. Pourbaix will each be granted three years of
additional credited service to be recognized solely in the Supplemental
Pension Plan with respect to earnings in excess of the maximum set under the
Income Tax Act (Canada).

Fiscal 2004 Pension Expense Related to Service and Compensation

Amounts reported in the table below represent the pension expense related to
2004 service for each of the Named Executive Officers under both the Registered
Pension Plan and the Supplemental Pension Plan including the impact of
differences between actual compensation paid in 2004 and the actuarial
assumptions used for the year.

Name Fiscal 2004 pension expense related to service and
compensation
H.N. Kvisle $ 894,000
R.K. Girling $ 86,000
A.J. Pourbaix $ 70,000
R.J. Turner $ 21,000
D.J. McConaghy $ 175,000

TRANSCANADA PIPELINES LIMITED 53

Accrued Pension Obligations

As at December 31, 2004, TCPL's accrued obligation for the Supplemental Pension
Plan was approximately $155.9 million. The 2004 current service costs and
interest costs of the Supplemental Pension Plan were approximately $3.4 and $8.3
million, respectively, for a total of $11.7 million. The accrued pension
obligation is calculated following the method prescribed by the Canadian
Institute of Chartered Accountants and is based on management's best estimate of
future events that affect the cost of pensions, including assumptions about
future salary adjustments and bonuses. More information on the accrued
obligations and the assumptions utilized may be found in Note 18 of the Notes to
the Audited Consolidated Financial Statements which are available on the
company's website at www.transcanada.com and filed with Canadian securities
regulators on SEDAR at www.sedar.com.

The accrued pension obligations for the Named Executive Officers under both the
Registered Pension Plan and the Supplemental Pension Plan are outlined in the
following table. Changes include the fiscal 2004 expense attributed to service
and compensation, as well as the normal increases(1) to pension obligations
arising from the annual valuation of the company's pension plans.

Name Accrued obligation Change in accrued Accrued
at December 31, obligation for obligation at
2003(2) 2004(2)(3) December 31,
(a) (b) 2004(2)
(c)= (a) + (b)
H.N. Kvisle 2,357,000 1,254,000 3,611,000
R.K. Girling 485,000 200,000 685,000
A.J. Pourbaix 389,000 175,000 564,000
R.J. Turner 2,931,000 361,000 3,292,000
D.J. McConaghy 2,549,000 457,000 3,006,000

Notes:
(1)
The normal increases include interest on the beginning of year obligation
and changes in interest rate assumptions as a result of changes in long-term
bond yields.

(2)
The calculation of reported amounts use actuarial assumptions and methods
that are consistent with those used for calculating pension obligations and
annual expense as disclosed in the company's 2003 and 2004 audited
consolidated financial statements. As the assumptions reflect the company's
best estimate of future events, the values shown in the above table may not
be directly comparable to similar estimates of pension obligations that may
be disclosed by other corporations.

(3)
Excluded from the change in accrued obligations for 2004 is the impact of
investment returns on the company's pension plan assets.

Supplemental Disclosure of Compensation

Decisions regarding medium and long-term grants are made annually by the HR
Committee in February prior to the publication of the AIF. Therefore, although
not a requirement, TCPL discloses these forthcoming compensation awards for the
Named Executive Officers.

The following tables outline the grants made under the noted plans that were
approved in February 2005. For information pertaining to the noted compensation
plans, please refer to the Report on Executive Compensation, found elsewhere in
this AIF.

54 TRANSCANADA PIPELINES LIMITED

Medium Term Incentives - Executive Share Unit Plan
Estimated Future Payouts Under
Non-Securities-Price-Based Plans (units)(2)
Name Securities, Performance or Other Below Threshold Target Maximum
(a) Units or Period Until Maturation Threshold (#) (#) (#)
Other or Payout (#) (d) (e) (f)
Rights(1) (c)
(#)
(b)
H.N. Kvisle 0-65,320 01-Jan-05 through 0 32,660 65,320 97,980
31-Dec-07
R.K. Girling 0-18,349 01-Jan-05 through 0 9,175 18,349 27,524
31-Dec-07
A.J. Pourbaix 0-15,657 01-Jan-05 through 0 7,829 15,657 23,486
31-Dec-07
R.J. Turner 0-12,458 01-Jan-05 through 0 6,229 12,458 18,687
31-Dec-07
D.J. McConaghy 0-12,458 01-Jan-05 through 0 6,229 12,458 18,687
31-Dec-07

Notes:
(1)
This is the range of units under the ESU Plan that may be eligible to vest,
not including units related to reinvested dividends. See "Report on
Executive Compensation - Changes to the Executive Compensation Program - ESU
Plan" for more information about the ESU Plan.

(2)
Does not include the units related to reinvested dividends.

Long Term Incentives - Stock Option Plan

Name Date of Number of % of Total Exercise Market Value of Expiration
Grant Common Shares Options Price ($/ Common Shares Date
Under Options Granted to common share) Underlying
Granted(1) Employees (2) Options on the
Date of Grant ($
/common share)
H.N Kvisle 28-Feb-05 160,000 15.17% $ 30.09 $ 29.72 28-Feb-12
R.K. Girling 28-Feb-05 60,000 5.69% $ 30.09 $ 29.72 28-Feb-12
A.J. Pourbaix 28-Feb-05 60,000 5.69% $ 30.09 $ 29.72 28-Feb-12
R.J. Turner 28-Feb-05 40,000 3.79% $ 30.09 $ 29.72 28-Feb-12
D.J. McConaghy 28-Feb-05 40,000 3.79% $ 30.09 $ 29.72 28-Feb-12

Notes:
(1)
On each anniversary date of the grant for a period of three years, one-third
of these options vest and are exercisable.

Employee Stock Savings Plan

Named Executive Officers may participate in the Employee Stock Savings Plan on
the same basis as all other TCPL employees. Each employee may direct a payroll
deduction toward the purchase of common shares. TCPL matches the
employee-directed purchase in an amount equal to 25% of the employee amount to a
maximum additional TCPL contribution of 1% of the employee's base salary. The
shares purchased and the dividends paid on those shares are allocated to the
employee account and vest immediately.

Employment Contracts

In 2002, the HR Committee approved an arrangement with Mr. Kvisle to grant him
additional credited pensionable service. The arrangement resulted in him
receiving five years of additional credited pensionable service in 2004, on his
fifth anniversary date with TCPL. In addition, for the next five years Mr.
Kvisle will be granted one additional year of credited pensionable service on
his anniversary date. All such additional service is not to exceed 10 additional
years of credited pensionable service and is only to be recognized on that
portion of his pensionable earnings which exceeds his annual Registered Pension
Plan earnings, to be recognized in the TCPL Supplemental Pension Plan.

In 2004, the HR Committee also approved arrangements for Mr. Girling and Mr.
Pourbaix to obtain additional credited pensionable service. Subject to these
executives maintaining continuous employment with TCPL until September 8, 2007
they will each receive three additional years of credited pensionable service on
that date.

TRANSCANADA PIPELINES LIMITED 55

ADDITIONAL INFORMATION
1.
Additional information in relation to TCPL may be found on SEDAR at
www.sedar.com.

2.
Additional information including directors' and officers' remuneration and
indebtedness, principal holders of TCPL's securities and securities
authorized for issuance under equity compensation plans (all where
applicable), is contained in TransCanada's Proxy Circular for its most
recent annual meeting of shareholders that involved the election of
directors and can be obtained upon request from the Corporate Secretary of
TCPL.

3.
Additional financial information is provided in TCPL's Audited Consolidated
Financial Statements and MD&A for its most recently completed financial
year.

GLOSSARY
AIF - Annual Information Form of TCPL Corporation dated March 7, 2005
Alberta System - A natural gas transmission system throughout the province of Alberta
APG - Aboriginal Pipeline Group or Mackenzie Valley Aboriginal Pipeline
L.P.
Bcf - Billion cubic feet
BC System - A natural gas transmission system in southeastern B.C.
Becancour Plant - A power plant near Trois-Rivieres, Quebec
Board - TCPL's Board of Directors
Bruce Power - Bruce Power L.P.
Canadian Mainline - A natural gas pipeline system running from the Alberta border east to
delivery points in eastern Canada and along the U.S. border
CSA - Canadian Securities Administrators
ERA - Electricity Restructuring Act, 2004
EUB - Alberta Energy and Utilities Board
External Auditor - KPMG LLP
FERC - Federal Energy Regulatory Commission (USA)
Foothills - Foothills Pipe Lines Ltd.
Foothills System - A natural gas pipeline system in southeastern B.C., southern Alberta
and southwestern Saskatchewan
Gas Pacifico - Gasoducto del Pacifico
GCOC - Generic cost of capital
GRA - General rate application
Grandview Plant - A power plant in Saint John, New Brunswick
Great Lakes System - A natural gas pipeline system in the north central U.S., roughly
parallel to the Canada - U.S. Border
GTN System - A natural gas transmission system running from northwestern Idaho,
through Washington and Oregon to California
HS&E - Health, Safety and Environment
Iroquois System - A natural gas pipeline system in New York
LNG - Liquefied Natural Gas
Mackenzie Producers - Mackenzie Delta Producers Group
MD&A - TCPL's Management's Discussion and Analysis dated March 1, 2005
Meeting - The Annual Meeting of the holders of common shares of TransCanada to
be held on April 29, 2005.
Mmcf/d - Million British thermal units per day
MW - Megawatts
NBP L.P. - Northern Border Partners, L.P.
NEB - National Energy Board (Canada)
NEGT - National Energy & Gas Transmission, Inc.
NGTL - NOVA Gas Transmission Ltd.

56 TRANSCANADA PIPELINES LIMITED

North Baja System - A natural gas pipeline system in southeastern California
Northern Border - Northern Border Pipeline Company
Pipeline
NYSE - New York Stock Exchange
OPG - Ontario Power Generation Inc.
Portland - Portland Natural Gas Transmission System Partnership
Power LP - TransCanada Power, L.P.
Proxy Circular - TransCanada's Management Proxy Circular dated March 1, 2005
psi - Pounds per square inch
ROE - Return on common equity
SEC - U.S. Securities and Exchange Commission
Shell - Shell US Gas & Power LLC
Simmons Pipeline - A natural gas pipeline system in northeastern Alberta
System
SOX - U.S. Sarbanes-Oxley Act of 2002
Tcf - Trillion cubic feet
TCPL - TransCanada PipeLines Limited
TQM - Trans Quebec & Maritimes Pipeline Inc.
TQM System - A natural gas pipeline system in southeastern Quebec
TransCanada - TransCanada Corporation
TSX - Toronto Stock Exchange
Tuscarora - Tuscarora Gas Transmission Company
USGen - US Gen New England, Inc.
VCR - Voluntary Challenge and Registry
WCSB - Western Canada Sedimentary Basin
Year End - December 31, 2004

TRANSCANADA PIPELINES LIMITED 57

SCHEDULE "A"

Exchange Rate of the Canadian Dollar

All dollar amounts in the AIF are in Canadian dollars, except where otherwise
indicated. The following table shows the yearly high and low noon rates, the
yearly average noon rates and the year-end noon spot rates for the U.S. dollar
for the past five years, each expressed in Canadian dollars, as reported by the
Bank of Canada.
Year Ended
2004 2003 2002 2001 2000
Yearly High Noon Rate 1.3968 1.5747 1.6132 1.6021 1.5593
Yearly Low Noon Rate 1.1774 1.2924 1.5110 1.4936 1.4341
Yearly Average Noon Rate 1.3016 1.4014 1.5703 1.5484 1.4852
Year-End Noon Rate 1.2036 1.2924 1.5796 1.5926 1.5002 *
*
Year end noon rate for 2000 is as at December 29, 2000.

On March 7, 2005, the noon rate for the U.S. dollar as reported by the Bank of
Canada was US $1.00 = Cdn. $1.2293.

Metric Conversion Table

The conversion factors set out below are approximate factors. To convert from
Metric to Imperial multiply by the factor indicated. To convert from Imperial to
Metric divide by the factor indicated.

Metric Imperial Factor
Kilometres Miles 0.62
Millimetres Inches 0.04
Gigajoules Million British thermal units 0.95
Cubic metres* Cubic feet 35.3
Kilopascals Pounds per square inch 0.15
Degrees Celsius Degrees Fahrenheit to convert to Fahrenheit multiply by
1.8, then add 32 degrees;
to convert to Celsius subtract
32 degrees, then divide by 1.8
*
The conversion is based on natural gas at a base pressure of 101.325
kilopascals and at a base temperature of 15 degrees Celsius.

58 TRANSCANADA PIPELINES LIMITED

This information is provided by RNS
The company news service from the London Stock Exchange
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