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DERIVATIVE FINANCIAL INSTRUMENTS
 12 Months Ended
Dec. 31, 2022
Disclosure of detailed information about financial instruments [abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS
The company’s activities expose it to a variety of financial risks, including market risk (i.e. currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The company selectively uses derivative financial instruments principally to manage these risks.
The aggregate notional amount of the company’s derivative positions as at December 31, 2022 and 2021 is as follows:
AS AT DEC. 31 (MILLIONS)Note20222021
Foreign exchange(a)$50,361 $63,083 
Interest rates(b)60,600 55,899 
Equity derivatives(c)1,942 4,448 
Commodity instruments(d)
Energy (GWh)69,902 35,156 
Natural gas (MMBtu – 000’s)128,381 246,375 
a)    Foreign Exchange
The company held the following foreign exchange contracts with notional amounts as at December 31, 2022 and 2021:
Notional Amount
(U.S. Dollars)
Average Exchange Rate
(MILLIONS)2022202120222021
Foreign exchange contracts
Canadian dollars$7,381 $11,689 0.76 0.81 
British pounds6,880 12,089 1.12 1.19 
European Union euros10,074 9,939 1.01 1.14 
Australian dollars4,088 4,791 0.69 0.72 
Indian rupee3,921 3,281 73.72 78.90 
Korean won1
923 756 1,293 1,151 
Chinese yuan1
4,166 2,484 6.07 6.02 
Japanese yen1
378 793 116.26 111.27 
Colombian pesos1
355 740 4,800 3,937 
Brazilian reais1,371 1,291 0.16 0.16 
Swedish krona— 1,475 — 9.08 
Other currencies2,765 2,799 VariousVarious
Cross currency interest rate swaps
Canadian dollars5,673 5,566 0.77 0.63 
European Union euros— 848 — 1.06 
Australian dollars634 1,317 0.93 0.98 
Japanese yen1
275 750 130.68 113.33 
British pounds243 298 1.21 1.48 
Brazilian reais1
749 — — — 
Foreign exchange futures
   Brazilian reais— 175 — 0.18 
Foreign exchange options
European Union euros— 1,430 — 1.11 
Indian rupee485 572 78.73 74.56 
1.Average rate is quoted using USD as base currency.
Included in net income are unrealized net losses on foreign currency derivative contracts amounting to $23 million (2021 – losses of $53 million) and included in the cumulative translation adjustment account in other comprehensive income are gains in respect of foreign currency contracts entered into for hedging purposes amounting to $2.8 billion (2021 – gains of $367 million).
b)    Interest Rates
As at December 31, 2022, the company held interest rate swap and forward starting swap contracts having an aggregate notional amount of $37.5 billion (2021 – $28.6 billion), interest rate swaptions with an aggregate notional amount of $244 million (2021 – $248 million) and interest rate cap contracts with an aggregate notional amount of $22.8 billion (2021 – $27.1 billion).
c)    Equity Derivatives
As at December 31, 2022, the company held equity derivatives with a notional amount of $1.9 billion (2021 – $4.4 billion) which includes $1.9 billion (2021 – $1.8 billion) notional amount that hedges long-term compensation arrangements. The balance represents common equity positions established in connection with the company’s investment activities as well as general equity market hedges. The fair value of these instruments was reflected in the company’s consolidated financial statements at year end.
d)    Commodity Instruments
The company has entered into energy derivative contracts primarily to hedge the sale of generated power. The company endeavors to link forward electricity sale derivatives to specific periods in which it expects to generate electricity for sale. All energy derivative contracts are recorded at an amount equal to fair value and are reflected in the company’s consolidated financial statements. The company has financial contracts outstanding on 128,381,000 MMBtu’s (2021 – 246,375,000 MMBtu’s) of natural gas as part of its electricity sale price risk mitigation strategy.
Other Information Regarding Derivative Financial Instruments
The following table classifies derivatives elected for hedge accounting during the years ended December 31, 2022 and 2021 as either cash flow hedges or net investment hedges. Changes in the fair value of the effective portion of the hedge are recorded in either other comprehensive income or net income, depending on the hedge classification, whereas changes in the fair value of the ineffective portion of the hedge are recorded in net income:
20222021
FOR THE YEARS ENDED DEC. 31
(MILLIONS)		NotionalEffective PortionIneffective PortionNotionalEffective PortionIneffective Portion
Cash flow hedges1
$47,860 $2,081 $13 $43,776 $582 $24 
Net investment hedges
35,198 2,998 — 43,997 407 (14)
$83,058 $5,079 $13 $87,773 $989 $10 
1.Notional amount does not include 18,133 GWh and 67,803 MMBtu – 000’s – of commodity derivatives as at December 31, 2022 (2021 – 17,753 GWh, 93,623 MMBtu – 000’s and 1,152 bbls – millions).
The following table presents the change in fair values of the company’s derivative positions during the years ended December 31, 2022 and 2021, for derivatives that are fair valued through profit or loss, and derivatives that qualify for hedge accounting:

(MILLIONS)		Unrealized Gains During 2022Unrealized Losses During 2022Net Change During 2022Net Change During 2021
Foreign exchange derivatives$192 $(169)$23 $(53)
Interest rate derivatives575 (156)419 183 
Equity derivatives69 (365)(296)757 
Commodity derivatives
177 (469)(292)(183)
$1,013 $(1,159)$(146)$704 
The following table presents the notional amounts underlying the company’s derivative instruments by term to maturity as at December 31, 2022 and 2021, for derivatives that are classified as fair value through profit or loss, and derivatives that qualify for hedge accounting:
20222021
AS AT DEC. 31 (MILLIONS)<1 Year1 to 5 Years>5 Years
Total Notional
Amount
Total Notional
Amount
Fair value through profit or loss
Foreign exchange derivatives$4,440 $1,671 $965 $7,076 $10,933 
Interest rate derivatives10,126 8,578 1,272 19,976 19,661 
Equity derivatives866 1,002 73 1,941 4,353 
Commodity instruments
Energy (GWh)3,456 21,743 26,571 51,770 17,403 
Natural gas (MMBtu – 000’s)50,703 9,875 — 60,578 152,753 
Elected for hedge accounting
Foreign exchange derivatives$12,956 $29,530 $800 $43,286 $52,150 
Interest rate derivatives5,916 31,597 3,111 40,624 36,238 
Equity derivatives— — — — 95 
Commodity instruments
Energy (GWh)
6,574 8,868 2,691 18,133 17,754 
Natural gas (MMBtu – 000’s)52,168 15,635 — 67,803 93,623