A Message from our CEO

Corporate Responsibility & Continued Growth

As the need for and reliance on energy continues to grow, TransCanada provides the infrastructure required to move natural gas and electricity that fuel our businesses, institutions and households throughout North America.

TransCanada has experienced outstanding growth in the last half dozen years. Our network of pipelines has expanded from a base in western Canada to all major natural gas supply basins on the continent. Our facilities now generate electricity in many Provinces and States. We have become a major player in gas storage, and we are pursuing promising opportunities in crude oil transmission and liquefied natural gas. With such a sharp strategic focus and the unsurpassed talent of our employees and management team at our disposal, the future looks very bright.

We are proud we have been able to attain such enviable growth while being recognized as one of the Global 100 Most Sustainable Companies in the world. As you know, growth and sustainability do not always go hand-in-hand. At TransCanada, we have shown consistently that you can achieve both at the same time.

Sustainable growth starts with a company-wide ethic of corporate responsibility. Acting responsibly toward our shareholders enables us to secure the financial resources required for expansion. Acting responsibly toward our other diverse stakeholders aids us in gaining public trust that enables us to satisfy the regulations that govern our industry. By acting responsibly toward the natural world in which we operate, we are a steward of the environment and a model of corporate governance within our industry.

In 2006, our vision of corporate responsibility was evident throughout our operations in Canada, the United States and Mexico. We point proudly to achievements like these:

• Community investment of over $5 million across North America
• Reaching our best ever field-employee safety record
• Enhanced health and safety measures for our employees and our contractors
• Minimizing our environmental footprint through continued technical innovation and integrated environmental management
• Extensive, on-going public consultation efforts that result in positive, mutually-rewarding, long-term relationships
• Proactive creation of competitive employee compensation, development and retention strategies
• High levels of overall customer satisfaction
• Exceptional financial returns for our shareholders

You’ll find additional detail about these, and other notable 2006 achievements, in this report.

As we look ahead, we will be focusing our energies on maximizing the value and profitability of existing assets, launching new projects and initiatives, and nurturing a portfolio of high quality growth opportunities. In every case, responsible management by highly skilled and dedicated employees will remain critical to our continuing success.

Hal Kvisle

President and CEO
December 2007