TransCanada Corporation

Notice of 2018 annual meeting of shareholders

2018 Management information circular

February 20, 2018

With more than 65 years’ experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas and liquids pipelines, power generation and gas storage facilities.

TransCanada’s common shares trade on the Toronto and New York stock exchanges under the symbol TRP.

LETTER TO SHAREHOLDERS pg1

NOTICE OF 2018 ANNUAL MEETING pg2

MANAGEMENT INFORMATION CIRCULAR pg3

Summary pg4

ABOUT THE SHAREHOLDER MEETINGpg6

Delivery of meeting materialspg6

Voting pg6

Business of the meeting pg10

GOVERNANCEpg26

About our governance practices pg26

COMPENSATIONpg53

Compensation governance pg55

Director compensation discussion and analysis pg61

Director compensation - 2017 details pg65

Human Resources committee letter to shareholders pg70

Executive compensation discussion and analysis pg73

Executive compensation - 2017 detailspg98

OTHER INFORMATIONpg112

SCHEDULESpg113

We encourage you to sign up for electronic delivery of the 2018 Annual report and 2019 Management information circular.

Registered Shareholders can go to www.investorcentre.com and click on "Sign up for eDelivery" at the bottom of the page. Enter your Holder Account Number from your form of proxy and enter your postal code (if you are a Canadian resident), or your Family or Company Name (if you are not a resident of Canada), and click "Sign In".

Non-registered shareholders can go to www.investordelivery.com using the control number found on your voting instruction form or at www.proxyvote.com when you have finished voting. You can click on "Enroll for Electronic Delivery" and follow the instructions.

Letter to shareholders

February 20, 2018

Dear Shareholder:

TransCanada Corporation (TransCanada) is pleased to invite you to the annual meeting of common shareholders on April 27, 2018. The meeting will be held at 10:00 a.m. (Mountain Daylight Time) in the Ross Glen Hall, Roderick Mah Centre for Continuous Learning Building, Mount Royal University, 4825 Mount Royal Gate S.W., Calgary, Alberta.

Attending the meeting is your opportunity to meet the Board of Directors (Board) and management, learn more about our performance in 2017 and our strategy for the future, and vote in person on the items of business. If you are unable to attend the meeting in person, you can vote by proxy and listen to the live webcast on our website (www.transcanada.com).

The attached Management information circular includes important information about the meeting and how to vote. Please take some time to read the document and remember to vote. You can find more information about TransCanada in our 2017 Annual report and on our website.

We would like to extend our sincere thanks to Mr. Derek Burney and Mr. Rick Waugh, who are retiring from the Board on April 27, 2018, for their many years of dedicated service to TransCanada and our shareholders. Mr. Burney served as a director for 13 years, and made significant contributions to the Board and its committees. Mr. Burney most recently served on our Audit committee and Governance committee, where he assisted the Board in overseeing the integrity of our financial compliance practices and maintaining strong governance policies and practices. Mr. Burney also served as chair of the Governance committee for five years, during which he oversaw board renewal and a smooth transition of Chair of the Board. Mr. Waugh served as a director for six years during which time his industry knowledge and management experience provided valuable context and perspective to each of the committees he has served on.

In November 2017, the company was pleased to announce the appointment of Mr. Thierry Vandal to the Board of Directors. Mr. Vandal's extensive experience in the energy industry, leadership skills and strong business acumen have proven to be a useful addition to the Board.

Thank you for your continued confidence in TransCanada. Russ Girling, our CEO, and I look forward to seeing you at the meeting on April 27^th.

Sincerely,

Siim A. Vanaselja

Chair of the Board of Directors

1 TransCanada Management information circular2018

Notice of 2018 annual meeting

You are invited to our 2018 annual meeting of common shareholders:

WHEN Friday, April 27, 2018 at 10:00 a.m. Mountain Daylight Time (MDT) WHERE Ross Glen Hall Roderick Mah Centre for Continuous Learning Building 4825 Mount Royal Gate S.W. Calgary, Alberta YOUR VOTE IS IMPORTANT If you are a shareholder of record of TransCanada common shares on March 12, 2018, you are entitled to receive notice of, attend and vote at this meeting. Please take some time to read the attached Management information circular. It contains important information about the meeting and explains who can vote and how to vote. By order of the Board of Directors,	Six items of business 1. Receive our audited consolidated financial statements for the year ended December 31, 2017, and the auditors’ report. 2. Elect the directors. 3. Appoint the auditors and authorize the directors to set their compensation. 4. Participate in the advisory vote on our approach to executive compensation (say on pay). 5. Consider a shareholder proposal regarding climate change disclosure. 6. Consider other business that is properly brought before the meeting or any meeting that is reconvened if the meeting is adjourned.
Christine R. Johnston Vice-President, Law and Corporate Secretary TransCanada Corporation Calgary, Alberta February 20, 2018

TransCanada Management information circular2018 2

Management information circular

We are sending you this Management information circular (circular) because you are a shareholder of record of TransCanada shares on March 12, 2018. You have the right to attend our 2018 annual meeting of common shareholders and to vote your shares in person or by proxy. If you are unable to attend the meeting, you can listen to the webcast in English on our website (www.transcanada.com). Management is soliciting your proxy for the meeting, and we pay all costs for doing so. We will start mailing the proxy materials on March 20, 2018, and will also provide the materials to brokers, custodians, nominees and other fiduciaries to forward them to shareholders. A TransCanada employee may also contact you to encourage you to vote. The Board of Directors (Board) has approved the contents of this circular and has authorized us to send it to you. We have also sent a copy to each member of our Board and to our auditors, and will file copies with the appropriate government agencies. Unless stated otherwise, information in this document is as of February 20, 2018, and all dollar amounts are in Canadian dollars. By order of the Board of Directors,

In this document, • you, your and shareholder mean a holder of common shares of TransCanada Corporation, • we, us, our and TransCanada mean TransCanada Corporation, and • TransCanada shares and shares mean common shares of TransCanada Corporation, unless stated otherwise.

Our principal corporate and executive offices are located at 450 1st Street S.W., Calgary, Alberta T2P 5H1

Christine R. Johnston

Vice-President, Law and Corporate Secretary

TransCanada Corporation

Calgary, Alberta

February 20, 2018

About shareholder mailings
In March 2017, we asked all registered and beneficial shareholders to advise us in writing if they did not want to receive our Annual reports when they became available. If you are a registered shareholder who replied that you no longer want to receive the report, or a beneficial shareholder who did not reply, you will not receive a copy. If you purchased TransCanada shares after March 12, 2018, you also may not receive a copy of our 2017 Annual report.	Our 2017 Annual report is available on our website (www.transcanada.com) and on SEDAR (www.sedar.com), or you can request a free copy from our transfer agent: Computershare Trust Company of Canada
	Tel:	1.800.340.5024 (toll-free within North America) 1.514.982.7959 (outside North America)
	Email:	transcanada@computershare.com

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Summary

The following pages are key points of information you will find in this circular. You should read the entire circular before voting.

Voting

You will be asked to vote on four items at the meeting:

Item	Board recommendation	More information (pages)
Elect 11 directors	For	13
Appoint KPMG LLP, Chartered Professional Accountants as auditors	For	11
Advisory vote on executive compensation (say on pay)	For	53-58, 68-111
Consider a shareholder proposal regarding climate change disclosure	For	113-114

Nominated Directors

Name	Occupation	Age	Independent	Director since	% Votes in favour at 2017 AGM	2017 Committees	2017 Board attendance		Number of other public boards
Kevin E. Benson Calgary, AB	Corporate Director	70	Yes	2005	99.70	Audit Governance (Chair)	100	%	0
Stéphan Crétier Dubai, UAE	Chairman, President and Chief Executive Officer, GardaWorld Security Corporation	54	Yes	2017	99.75	Audit Health, Safety & Environment	78	%	0
Russell K. Girling Calgary, AB	President and Chief Executive Officer, TransCanada	55	No	2010	99.77	–	100	%	1
S. Barry Jackson Calgary, AB	Corporate Director	65	Yes	2002	99.32	Governance Human Resources	100	%	1
John E. Lowe Houston, TX	Senior Executive Adviser, Tudor, Pickering, Holt & Co., LLC	59	Yes	2015	99.79	Audit (Chair) Health, Safety & Environment	100	%	2
Paula Rosput Reynolds Seattle, WA	Corporate Director	61	Yes	2011	99.26	Governance Human Resources (Chair)	100	%	3
Mary Pat Salomone Naples, FL	Corporate Director	57	Yes	2013	99.65	Health, Safety & Environment Human Resources	82	%	2
Indira Samarasekera Vancouver, BC	Senior Advisor, Bennett Jones LLP	65	Yes	2016	99.75	Audit Governance	82	%	2
D. Michael G. Stewart Calgary, AB	Corporate Director	66	Yes	2006	99.72	Audit Health, Safety & Environment (Chair)	100	%	2
Siim A. Vanaselja Toronto, ON	Corporate Director	61	Yes	2014	93.55	Board Chair Governance Human Resources	100	%	2
Thierry Vandal Mamaroneck, NY	President, Axium Infrastructure US, Inc.	57	Yes	2017	–	Audit Health Safety & Environment	100	%	1

TransCanada Management information circular2018 4

Compensation TransCanada’s compensation programs are designed to 'pay for performance' by rewarding employees, including our executives, for delivering results that meet or exceed our corporate objectives and support our overall strategy. In order to attract, engage and retain high-performing employees, we review our programs each year to ensure we offer compensation that is market competitive. Our target compensation levels are determined with reference to median levels in our peer group. Actual performance that exceeds expectations can result in compensation above market median levels. Our compensation programs are intended to align the executives' interests with those of our various stakeholders. The Human Resources committee and the Board place a significant emphasis on variable compensation, particularly long-term incentives, when determining the total direct compensation for our executives. Both our executive share unit and stock option plans encourage value creation over the long term. Our best practices include: •  benchmarking director and executive compensation against size appropriate peer groups to assess competitiveness and fairness •  maximums on variable compensation payments •  share ownership requirements for our directors and executives •  incentive compensation reimbursement ('clawback') policy and anti-hedging policy, and •  annual say on pay vote, averaging 97 per cent approval for the last three years.

Governance

We believe that strong corporate governance improves corporate performance and benefits all stakeholders. Our governance highlights are noted below.

Size of Board	13
Percentage of independent directors	92%
Percentage of women on Board	23%
Board Diversity policy	Yes + 30% target
Number of board interlocks	0
External board service limits for independent directors	4 public company boards in total
Average director age	63
All committees independent	Yes
Annual director elections	Yes
Individual director elections	Yes
Majority voting policy	Yes
Independent executive compensation consultant	Yes
Clawback policy	Yes
Double-trigger vesting on change of control	Yes
Separate chair and CEO	Yes
Director retirement age	70
Director share ownership requirements	4x retainer
Executive share ownership requirements	5x (CEO), 2x (other named executives)
In-camera sessions at every Board and committee meeting	Yes
Annual say on pay	Yes
Code of business ethics	Yes
Board, committee and director evaluations annually	Yes
Board orientation and education program	Yes

Notes

• There are currently 13 directors on the Board, however, with Mr. Burney and Mr. Waugh retiring, there will be 11 directors after the annual meeting of shareholders.

• The Board may waive the director retirement policy in special circumstances or if a director has not yet served seven years on the Board by age 70. The Board has waived the retirement policy for Mr. Benson as discussed on page 45.

• All executives must meet their share ownership requirements through direct share ownership.

5 TransCanada Management information circular2018

About the shareholder meeting

As a shareholder of record, you are entitled to vote your TransCanada shares at the annual meeting. The meeting will cover six items of business, which are discussed in more detail starting on page 10.

This next section discusses delivery of the meeting materials and the voting process.

Delivery of meeting materials

We are using notice and access to deliver the circular to our registered shareholders.

This means that TransCanada will post the circular online for our shareholders to access electronically. You will receive a package in the mail with a notice (Notice) explaining how to access and review the circular electronically and how to request a paper copy at no charge. You will also receive a form of proxy in the mail so you can vote your shares.

Notice and access is an environmentally friendly and cost effective way to distribute the circular because it reduces printing, paper and postage.

This circular is available on SEDAR (www.sedar.com) and on our website (www.Transcanada.com/Notice-And-Access).

How to request a paper copy of the circular

Starting March 20, 2018, registered shareholders can request a paper copy of the circular for up to one year. The circular will be sent to you at no charge.

If you would like to receive a paper copy of the circular, please follow the instructions provided in the Notice.

Requests by registered shareholders must be made by 5:00 p.m. Eastern Daylight Time (EDT), Wednesday, April 11, 2018 in order for you to receive a paper copy of the circular before the annual meeting on April 27, 2018.

If you request a paper copy of the circular you will not receive a new form of proxy, so you should keep the original form sent to you in order to vote.

If you have questions about notice and access, you can call our Investor Relations line at 403.920.7911 or 1.800.361.6522.

Voting

WHO CAN VOTE

Shareholders of record on March 12, 2018 are entitled to receive notice of our 2018 annual meeting of common shareholders and vote their shares. Our Board set this date to allow enough time for shareholders to receive and review the materials, make their voting decisions and send in their voting instructions before the deadline.

As of February 20, 2018, we had 884,844,295 shares outstanding. Each share carries the right to one vote on any item of business that properly comes before the meeting and any meeting that is reconvened if the meeting is adjourned. Subject to our majority voting policy for director elections (see Governance Philosophy – Majority Voting), we need a simple majority of votes (50 per cent plus one vote) for all items to be approved by shareholders.

As of February 20, 2018, we had the following preferred shares outstanding:

First Preferred Shares	Number of shares outstanding
Series 1	9,498,423
Series 2	12,501,577
Series 3	8,533,405
Series 4	5,466,595
Series 5	12,714,261
Series 6	1,285,739
Series 7	24,000,000
Series 9	18,000,000
Series 11	10,000,000
Series 13	20,000,000
Series 15	40,000,000

The holders of these shares do not have voting rights at the meeting.

TransCanada Management information circular2018 6

Registered shareholders

You are a registered shareholder if you have a share certificate in your name.

We will prepare a list of the registered shareholders as of March 12, 2018, showing the names of all shareholders who are entitled to vote at the meeting and the number of shares each owns. Our transfer agent, Computershare Trust Company of Canada (Computershare), will have a copy of the list at their Calgary office if you want to check it during regular business hours. Computershare is located at Suite 600, 530 8^th Avenue S.W., Calgary, Alberta T2P 3S8. Tel: 403.267.6800.

You can also check the list when you arrive at the meeting.

Non-registered (beneficial) shareholders

You are a non-registered or beneficial shareholder if your securities broker, financial institution, clearing agency, trustee or custodian (your nominee) holds the shares for you in a nominee account.

Principal shareholders

Our directors and executives are not aware of any person or corporation that beneficially owns, directly or indirectly, or exercises control or direction over, more than 10 per cent of our outstanding shares.

HOW TO VOTE

You have two ways to vote:

• by proxy, or

• by attending the meeting and voting in person.

Voting by proxy

Voting by proxy means you are giving someone else the authority to attend the meeting and vote for you (your proxyholder).

You must return your signed proxy form in order to vote by proxy.

If you appoint the TransCanada proxyholders and specify your voting instructions, your shares will be voted accordingly. If you do not specify how you want to vote your shares, your shares will be voted for you as follows:

• for the nominated directors listed on the proxy form and in this circular

• for the appointment of KPMG LLP, Chartered Professional Accountants (KPMG) as TransCanada’s auditors and authorizing the directors to set their compensation

• for our approach to executive compensation, as described in this circular

• for the shareholder proposal, as set forth in Schedule A of this circular.

If you appoint someone else as your proxyholder, but do not specify how you want to vote your shares, the person can vote as they see fit.

If there are any amendments to the items of business or any other matters that properly come before the meeting (including where the meeting will be reconvened if it was adjourned), your proxyholder has the discretion to vote as they see fit, in each instance, to the extent permitted by law whether the amendment or other matter of business that comes before the meeting is routine or contested.

Late proxies may be accepted or rejected by the chair of the meeting at his or her discretion and the chair of the meeting is under no obligation to accept or reject any particular late proxy. The chair of the meeting may waive or extend the proxy cut-off without notice.

You can choose anyone to be your proxyholder – the person does not need to be a TransCanada shareholder or the TransCanada representatives named in the proxy form. You must write the person's name on your proxy form, and return the signed proxy form to Computershare to appoint someone as your proxyholder.

You should tell this person that you have appointed him or her as your proxyholder and that they need to attend the meeting in person and vote on your behalf. Your proxyholder must vote your shares according to your instructions. Your shares will not be voted if your proxyholder does not attend the meeting to vote for you.

If you have returned your signed proxy form and you do not appoint anyone to be your proxyholder, Siim A. Vanaselja, Chair of the Board, Russell K. Girling, President and Chief Executive Officer or Christine R. Johnston, Vice-President, Law and Corporate Secretary (TransCanada proxyholders) will be appointed to act as your proxyholder to vote or withhold from voting your shares at the meeting according to your instructions.

7 TransCanada Management information circular2018

Registered shareholders

We mail the Notice directly to you, and your package includes a proxy form.

You may request a paper copy of the circular by following the instructions in the Notice that was mailed to you.

Appointing a proxyholder

You can appoint the TransCanada proxyholders named on the proxy form to vote your shares at the meeting according to your instructions. If you appoint them, but do not indicate your voting instructions on the form, your shares will be voted for each item of business.

You can decide to appoint someone else to represent you and vote your shares at the meeting. Print the name of that person in the blank space on the proxy form. If you do not specify how to vote your shares, your proxyholder can vote as they see fit.

Take some time to read about the items of business (see page 10), then complete the proxy form mailed to you, sign and date it, and mail it in the envelope provided. Computershare must receive the completed form by 12:00 p.m. Eastern Daylight Time (EDT) on Wednesday, April 25, 2018.

If your package is missing an envelope, use a blank one and address it to:

Computershare Trust Company of Canada

Stock Transfer Services

100 University Avenue, 8^th Floor

Toronto, Ontario M5J 2Y1

If you want to submit your voting instructions by phone or on the internet, you must do so by 12:00 p.m. EDT on Wednesday, April 25, 2018. See the instructions on your proxy form.

Attending the meeting and voting in person

If you want to attend the meeting and vote in person, do not complete the proxy form. Just register with Computershare when you arrive at the meeting.

You can still attend the meeting if you have already submitted your voting instructions, but you cannot vote again at the meeting unless you revoke your proxy as described on the next page.

Non-registered (beneficial) shareholders

Your broker, its agent or its nominee can only vote your TransCanada shares if they have received proper voting instructions from you. If you are a beneficial shareholder, your package includes a voting instruction form. Complete the form and follow the return instructions on the form.

The voting instruction form is similar to a proxy form, however it can only instruct the registered shareholder how to vote your shares. You cannot use the form to vote your shares directly.

Your broker is required by law to receive voting instructions from you before voting your shares. Every broker has their own mailing procedures and instructions for returning the completed voting instruction form, so be sure to follow the instructions provided on the form.

Most brokers delegate responsibility for obtaining instructions from their clients to Broadridge Investor Communications Corporation (Broadridge). Broadridge mails the proxy materials and voting instruction form to beneficial shareholders, at our expense.

The voting instruction form will name the same TransCanada representatives listed on page 7 to act as TransCanada proxyholders.

Attending the meeting and voting in person

You can attend the meeting and vote in person, or you can appoint someone else to attend the meeting and give your voting instructions. Print your name, or the name of the person you are appointing, in the blank space provided on the voting instruction form. Complete the rest of the form and then mail it to Broadridge (or to your broker, as instructed on your voting instruction form) as soon as possible. Your package also includes instructions for submitting your voting instructions by phone or on the internet if you prefer either of these methods. You can still attend the meeting if you have already submitted your voting instructions, but you cannot vote again at the meeting unless you revoke your proxy as described below.

Broadridge tabulates the results of all the instructions it receives from beneficial shareholders, and provides appropriate voting instructions to our transfer agent.

TransCanada Management information circular2018 8

CHANGING YOUR VOTE

Registered shareholders

If you change your mind and want to revoke your proxy, you need to notify us in writing. Sign a written statement (or have your attorney sign a statement with your written authorization) and send it to:

Corporate Secretary

TransCanada Corporation

450 1^st Street S.W.

Calgary, Alberta T2P 5H1

Fax: 403.920.2467

We must receive the notice by 12:00 p.m. EDT on Wednesday, April 25, 2018, or the last business day prior to the day the meeting is reconvened if it was adjourned. You can also give the notice to the chair of the meeting in person at the meeting.

If you submitted your voting instructions by phone or on the internet, you can revoke or change your vote by sending your new instructions again, as long as they are received by 12:00 p.m. EDT on Wednesday, April 25, 2018, or the last business day prior to the day the meeting is reconvened if it was adjourned. A vote that is cast with a later date and time will supersede an earlier vote.

Non-registered (beneficial) shareholders

If you change your mind, contact your broker or nominee.

HOW THE VOTES ARE COUNTED

As transfer agent, Computershare counts and tabulates the votes on our behalf to ensure the votes are kept confidential. They only show us the ballot or proxy form if:

• it is required by law

• there is a proxy contest, or

• there are written comments on the proxy form.

Unable to attend the meeting?

We will have a live webcast of our meeting in English on our website – go to www.transcanada.com for details.

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Business of the meeting Our annual meeting will cover six items of business:

FINANCIAL STATEMENTS– see our 2017 Annual report (available at www.transcanada.com). You will receive our consolidated financial statements for the year ended December 31, 2017, and the auditors’ report. These documents have been filed with the appropriate government regulatory agencies and are included in our 2017 Annual report. We mail you the Annual report unless you declined in writing, or failed to respond that you wanted to receive a copy when we asked you in March 2017. Our Annual report is also available in English and French on our website (www.transcanada.com), or you can request a copy from our Corporate Secretary. DIRECTORS– see page 13 You will vote on electing 11 directors to the Board. The director profiles starting on page 14 give important information about each nominated director, including his or her background, experience and memberships on other public company boards he or she serves on. All of the nominated directors currently serve on our Board, and we have included their 2017 attendance, the value of TransCanada shares or Deferred Share Units (DSUs) they currently hold (their at-risk investment) and their election results from the 2017 annual meeting. You can find more information about their at-risk investment on pages 65 and 66.

About quorum We must have a quorum for the meeting to proceed. Quorum constitutes two people present, in person, at the meeting, who are entitled to vote at the meeting and represent at least 25 per cent of the issued and outstanding TransCanada shares. The two people are entitled to vote in their own right, by proxy, or as a duly authorized representative of a shareholder.

All directors are elected for a one-year term.

1.	Kevin E. Benson	5.	John E. Lowe	9.	D. Michael G. Stewart
2.	Stéphan Crétier	6.	Paula Rosput Reynolds	10.	Siim A. Vanaselja
3.	Russell K. Girling	7.	Mary Pat Salomone	11.	Thierry Vandal
4.	S. Barry Jackson	8.	Indira Samarasekera

The Board recommends you vote for the nominated directors:

RESOLVE to elect the directors listed in TransCanada’s circular dated February 20, 2018 to hold office until the next annual meeting of shareholders or until their successors are earlier elected or appointed.

TransCanada Management information circular2018 10

AUDITORS

You will vote on appointing the auditors. The auditors will hold office until the close of our next annual meeting of shareholders.

The Board recommends that KPMG be appointed as auditors. Representatives of KPMG will attend the meeting, have an opportunity to make a statement and respond to any questions.

KPMG has been our external auditors since 1956, and have confirmed they are independent with respect to TransCanada within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and applicable legal requirements.

The table below shows the services KPMG provided during the last two fiscal years and the fees we paid them:

($ millions)	2017	2016
Audit fees	9.7(1)	8.2
• audit of the annual consolidated financial statements
• services related to statutory and regulatory filings or engagements
• review of interim consolidated financial statements and information contained in various prospectuses and other securities offering documents
Audit-related fees	0.1	0.1
• services related to the audit of the financial statements of certain TransCanada post-retirement and post-employment plans, and pipeline abandonment trusts
Tax fees(2)	0.8	0.6
• Canadian and international tax planning and tax compliance matters, including the review of income tax returns and other tax filings
All other fees	0.2	–
• French translation services
Total fees	10.8	8.9

Notes

(1) The increase in audit fees from 2016 reflects the transfer of Columbia Pipeline Group, Inc. (Columbia) audit to KPMG, following TransCanada's acquisition of Columbia in 2016.

(2) The tax fees principally related to fees incurred on account of compliance matters.

You will also vote on authorizing the directors to set the auditors’ compensation.

The Board recommends you vote for appointing KPMG as our auditors to hold office until the close of our next annual meeting of shareholders:

RESOLVE to appoint KPMG as auditors of TransCanada until the close of our next annual meeting of shareholders, and authorize the directors to fix their remuneration.

11 TransCanada Management information circular2018

ADVISORY VOTE ON OUR APPROACH TO EXECUTIVE COMPENSATION

You will have an opportunity to have a say on pay by participating in the advisory vote on our approach to executive compensation. The Board believes the vote is beneficial because it holds directors accountable to shareholders for their decisions on executive compensation and provides valuable feedback.

While the vote is non-binding, the Board will take the results into consideration when it considers compensation policies, procedures and decisions in the future. We will disclose the results of the advisory vote in our report on voting results for the meeting, which will be posted on our website (www.transcanada.com) and on SEDAR (www.sedar.com).

Since 2010, we have held annual say on pay votes at our annual shareholder meetings. Over the last three years, these advisory votes were approved by 97.10 per cent in 2015, 97.46 per cent in 2016, and 97.39 per cent in 2017. The voting results confirm that a significant majority of shareholders have accepted our approach to executive compensation.

The Board recommends you vote for our approach to executive compensation:

RESOLVE on an advisory basis, without diminishing the role and responsibilities of TransCanada’s Board, that the shareholders accept the approach to executive compensation disclosed in TransCanada’s circular dated February 20, 2018.

SHAREHOLDER PROPOSAL

We received one shareholder proposal, included below. Please refer to Schedule A for the supporting statement and our response.

The Board recommends you vote for the shareholder proposal.

RESOLVE that TransCanada will report on how the company is assessing long-term risks and opportunities in relation to climate change and the current transition to a low-carbon economy. Such reporting should provide an analysis of the resilience of TransCanada’s business model in various scenarios and could include a 2° Celsius scenario analysis. This reporting should be done at reasonable cost, omit proprietary information and be issued before the company’s annual meeting in 2019.

OTHER BUSINESS

We did not receive any shareholder proposals for the meeting, except for the one included above. The Board and management are not aware of any other items to be properly brought before the meeting.

TransCanada Management information circular2018 12

THE NOMINATED DIRECTORS Our articles currently state that the Board must have a minimum of eight and a maximum of 15 directors. The Board has determined that 11 directors will be elected this year. The Board believes this size is appropriate based on the scope of our business, the skills and experience of the nominated directors and the four standing committees, and to achieve effective decision-making. It believes that all of the nominated directors are well qualified to serve on the Board.

Each nominated director has expressed his or her willingness to serve on our Board until our next annual meeting of shareholders. If elected, they will also serve on the Board of TransCanada PipeLines Limited (TCPL), our main operating subsidiary.

10 of the 11 nominated directors (91 per cent) are independent within the meaning of Canadian and applicable U.S. securities law, regulation and policy, and the applicable rules of the Toronto Stock Exchange (TSX) and New York Stock Exchange (NYSE), the two stock exchanges TransCanada shares are listed on. The only exception is Russell K. Girling because of his role as President and Chief Executive Officer (CEO). The profiles on the following pages show each director’s holdings in TransCanada shares at February 28, 2017, and as of the date of this circular. DSUs are calculated on the basis of retainer fees paid in 2017 and dividend equivalents credited up to January 31, 2017 and January 31, 2018. They also indicate the year he or she joined the Board and has continually served as a director of TransCanada (or TCPL, prior to 2003 when it became a wholly-owned subsidiary of TransCanada). All of the nominated directors are Canadian residents except for Mr. Lowe, Ms. Reynolds, Ms. Salomone and Mr. Vandal who are U.S. residents, and Mr. Crétier, who is a resident of the United Arab Emirates. We have share ownership requirements for our directors and executives to align their interests with those of our shareholders. As of February 20, 2018, all of our directors are in compliance with our director share ownership policy. The following directors have five years from their appointment date to meet the requirements (see page 61 for more information):

Director	Date appointed	Share ownership date
Dr. Samarasekera	April 29, 2016	April 29, 2021
Mr. Vanaselja	May 5, 2017	May 5, 2022
Mr. Vandal	November 6, 2017	November 6, 2022

As Mr. Vanaselja was appointed Chair of the Board on May 5, 2017, his required share ownership level has increased to four times the Chair retainer.

Mr. Girling meets the share ownership requirements for the CEO (see page 79 for details).

The at-risk investment reflects the total market value of the director’s TransCanada shares and DSUs based on the closing share price on the TSX of $56.89 on February 20, 2018. See At-risk investment on pages 65 and 66 for more information.

13 TransCanada Management information circular2018

	Kevin E. Benson AGE 70, CALGARY, AB, CANADA | DIRECTOR SINCE 2005
	Mr. Benson is a corporate director. He was President and Chief Executive Officer of Laidlaw International, Inc. from June 2003 to October 2007, and Laidlaw, Inc. from September 2002 to June 2003. Mr. Benson served as President and Chief Executive Officer of The Insurance Corporation of British Columbia from December 2001 until September 2002. He was also a director of the Calgary Airport Authority from January 2010 to December 2013. In February 2015, Mr. Benson became a director of Winter Sport Institute (non-profit). Mr. Benson is a Chartered Accountant (South Africa) and was a member of the South African Society of Chartered Accountants.
Independent Skills and experience • Accounting/audit • Capital markets • CEO • Governance • Operations/health, safety & environment At-risk investment $4,455,739 TransCanada Board/committees 2017 meeting attendance • Board of Directors 11/11 meetings (100%) • Audit committee 5/5 meetings (100%) • Governance committee (Chair) 4/4 meetings (100%)
	Annual general meeting voting results	Votes in favour		Votes withheld
	2017	490,809,599	(99.70%)	1,486,837 (0.30%)
	2016	375,803,538	(99.55%)	1,699,271 (0.45%)
	2015	338,385,874	(98.34%)	5,726,837 (1.66%)
	Other public company boards	Stock exchange		Board committees
	–	–		–
	TransCanada securities held	2018	2017	Meets share ownership requirements
	Shares	3,000	13,000	Yes
	DSUs	75,322	68,403
	Mr. Benson became the Governance committee Chair on May 5, 2017

TransCanada Management information circular2018 14

	Stéphan Crétier AGE 54, DUBAI, UNITED ARAB EMIRATES | DIRECTOR SINCE 2017
	Mr. Crétier is the Chairman, President and Chief Executive Officer of GardaWorld Security Corporation (GardaWorld) (private security services). He is also a director of a number of GardaWorld's direct and indirect subsidiaries. Mr. Crétier has previously served as a director of ORTHOsoft Inc. (formerly ORTHOsoft Holidings Inc.) from August 2004 to November 2004, a director of BioEnvelop Technologies Corp. from 2001 to 2003 and as a director, President and Chief Executive Officer of Rafale Capital Corp. from 1999 to 2001. He plays an active role as a board member of several organizations, including the Montréal Economic Institute, a leading free market thinktank, and the International Security Lique. He also serves on the Board of Trustees of the Hirshhorn Museum, a Smithsonian Institution in Washington D.C. In 2007, Mr. Crétier was honoured by the Canadian Cancer Society for his exceptional contribution to its mission and in 1998 he was named Young Entrepreneur of the Year by the Québec Young Chamber of Commerce. Mr. Crétier holds a Master of Business Administration degree from the University of California (Pacific).
Independent Skills and experience • CEO • Mergers & acquisitions • Operations/health, safety & environment • Risk management • Strategy & leading growth At-risk investment $1,253,002 TransCanada Board/committees 2017 meeting attendance • Board of Directors 7/9 meetings (78%) • Audit committee 4/4 meetings (100%) • Health, Safety & Environment committee 3/3 meetings (100%)
	Annual general meeting voting results	Votes in favour		Votes withheld
	2017	491,065,885	(99.75%)	1,231,867 (0.25%)
	2016	–	–	–
	2015	–	–	–
	Other public company boards	Stock exchange		Board committees
	–	–		–
	TransCanada securities held	2018	2017	Meets share ownership requirements
	Shares	18,500	–	Yes
	DSUs	3,525	–
	Mr. Crétier joined the Board of Directors on February 17, 2017.

15 TransCanada Management information circular2018

	Russell K. Girling AGE 55, CALGARY, AB, CANADA | CHIEF EXECUTIVE OFFICER | DIRECTOR SINCE 2010
	Mr. Girling has been President and Chief Executive Officer (CEO) since July 1, 2010. He has led TransCanada through a period of unprecedented growth, including the development of its Liquids Pipelines business, expansion of its power generation portfolio and the successful US$13 billion acquisition of Columbia Pipeline Group in July 2016. Previously, Mr. Girling held the positions of Chief Operating Officer; President, Pipelines; Executive Vice-President, Corporate Development; Chief Financial Officer; and Executive Vice-President, Power. Prior to joining TransCanada in 1994, Mr. Girling held several marketing and management positions at Suncor Inc., Northridge Petroleum Marketing and Dome Petroleum. Mr. Girling is currently a director of Nutrien Ltd. (formed by the merger of Potash Corporation of Saskatchewan and Agrium Inc. Mr. Girling was a director of Agrium Inc.) (agricultural), the American Petroleum Institute and the Business Council of Canada and is a member of the U.S. National Petroleum Council and U.S. Business Roundtable. Mr. Girling is the former Chairman of the Interstate Natural Gas Association of America, former Chairman of the Natural Gas Council and former director of the Canadian Energy Pipeline Association. He has also served as Chairman and CEO of TC PipeLines GP, Inc. (general partner of TC PipeLines, LP), Chairman of TransCanada Power, L.P. and director of Bruce Power Inc. Mr. Girling co-chaired the 2012 United Way of Calgary Campaign and is a director of the Willow Park Charity Golf Classic. He was a 1998/1999 recipient of Canada’s Top 40 Under 40 Award for leadership excellence for Canadians under the age of 40. In 2008, he was the recipient of the Haskayne School of Business Management Alumni Excellence (MAX) Award. Mr. Girling holds a Bachelor of Commerce degree and a Master of Business Administration in Finance from the University of Calgary.
Not Independent (President and Chief Executive Officer of TransCanada) Skills and experience • Accounting/audit • Capital markets • Electric power • Energy, midstream & transportation • Strategy & leading growth At-risk investment $14,138,075 TransCanada Board/committees 2017 meeting attendance • Board of Directors 11/11 meetings (100%)
	Annual general meeting voting results	Votes in favour		Votes withheld
	2017	491,176,311	(99.77%)	1,122,491 (0.23%)
	2016	376,856,536	(99.83%)	646,477 (0.17%)
	2015	338,970,732	(98.51%)	5,141,980 (1.49%)
	Other public company boards	Stock exchange		Board committees
	Nutrien Ltd. (formerly Agrium Inc.) (agricultural)	TSX, NYSE		Audit Corporate Governance
	TransCanada securities held	2018	2017	Meets share ownership requirements
	Shares	248,516	208,293	Yes (for CEO)
	DSUs	–	–
	As President and CEO of TransCanada, Mr. Girling is not a member of any of our committees, but is invited to attend committee meetings as required.

TransCanada Management information circular2018 16

	S. Barry Jackson AGE 65, CALGARY, AB, CANADA | DIRECTOR SINCE 2002
	Mr. Jackson is a corporate director. He currently serves on the board of WestJet Airlines Ltd. (airline). Mr. Jackson has previously served as a director of Laricina Energy Ltd. (oil and gas, exploration and production) from 2009 to November 2017, Nexen Inc. (oil and gas, exploration and production) from 2001 to June 2013, serving as Chair from 2012, a director of Cordero Energy Inc. from 2005 to 2008, the Chair of Resolute Energy Inc. from 2002 to 2005, the Chair of Deer Creek Energy Limited from 2001 to 2005 and director of ENMAX Corporation from 1999 to 2002, Westcoast Energy Inc. from 2001 to 2002, and Gulf Canada Resources Ltd. from 2000 to 2001. Mr Jackson has also been the President and Chief Executive Officer of Crestar Energy Inc. from 1993 to 2000 and was the Chair of the Canadian Association of Petroleum Producers in 1997. Prior to that, he held a number of senior management positions in the oil and gas industry since 1974. Mr. Jackson has a Bachelor of Science in Engineering from the University of Calgary.
Independent Skills and experience • CEO • Human resources & compensation • Operations/health, safety & environment • Strategy & leading growth • Upstream oil & gas At-risk investment $11,088,999 TransCanada Board/committees 2017 meeting attendance • Board of Directors 11/11 meetings (100%) • Governance committee 4/4 meetings (100%) • Human Resources committee 5/5 meetings (100%)
	Annual general meeting voting results	Votes in favour		Votes withheld
	2017	488,941,028	(99.32%)	3,355,408 (0.68%)
	2016	368,817,294	(97.70%)	8,685,719 (2.30%)
	2015	338,454,635	(98.36%)	5,658,076 (1.64%)
	Other public company boards	Stock exchange		Board committees
	WestJet Airlines Ltd. (airline)	TSX		People & Compensation Safety, Health and Environment (Chair)
	TransCanada securities held	2018	2017	Meets share ownership requirements
	Shares	39,000	39,000	Yes
	DSUs	155,920	146,772
	Laricina Energy (Laricina), a private company, voluntarily entered into the Companies’ Creditors Arrangement Act (CCAA) and obtained an order from the Court of Queen's Bench of Alberta, Judicial Centre of Calgary for creditor protection and stay of proceedings effective March 26, 2015. A final court order was granted on January 28, 2016, allowing Laricina to exit from protection under the CCAA and concluding the stay of proceedings against Laricina and subsidiaries.

17 TransCanada Management information circular2018

	John E. Lowe AGE 59, HOUSTON, TX, U.S.A. | DIRECTOR SINCE 2015
	Mr. Lowe has been the non-executive Chairman of Apache Corporation’s (oil and gas) board of directors since May 2, 2015, having previously joined Apache Corporation's board in July 2013. He also currently serves on the board of directors for Phillips 66 (energy infrastructure) and, has been the Senior Executive Adviser at Tudor, Pickering, Holt & Co. LLC (energy investment and merchant banking) since September 2012. Mr. Lowe has previously served as a director of Agrium Inc. (agricultural) from May 2010 to August 2015, DCP Midstream LLC (oil and gas, exploration and production) and its wholly owned subsidiary, DCP Midstream GP, LLC, the general partner of DCP Midstream Partners, LP from October 2008 to April 2012 and Chevron Phillips Chemical Co. LLC from October 2008 to January 2011. He has also held various executive and management positions with ConocoPhillips Co. for more than 25 years, including Assistant to the Chief Executive Officer of ConocoPhillips Co., Executive Vice-President of Exploration & Production and Executive Vice-President of Commercial. Mr. Lowe is on the Board of Advisors of Kelce School at Pittsburg State University. He has also previously served on the Texas Children’s Hospital West Campus Advisory Council and is a former director of the National Association of Manufacturers. Mr. Lowe holds a Bachelor of Science degree in Finance and Accounting from Pittsburg State University in Pittsburg, Kansas and is a Certified Public Accountant (inactive).
Independent Skills and experience • Accounting/audit • Capital markets • Energy, midstream & transportation • Mergers & acquisitions • Upstream oil & gas At-risk investment $1,476,808 TransCanada Board/committees 2017 meeting attendance • Board of Directors 11/11 meetings (100%) • Audit committee (Chair) 5/5 meetings (100%) • Health, Safety & Environment committee 4/4 meetings (100%)
	Annual general meeting voting results	Votes in favour		Votes withheld
	2017	491,250,080	(99.79%)	1,040,235 (0.21%)
	2016	376,651,391	(99.77%)	851,418 (0.23%)
	2015	–	–	–
	Other public company boards	Stock exchange		Board committees
	Apache Corporation (oil and gas)	NYSE		Non-executive Chairman
	Phillips 66 Company (energy infrastructure)	NYSE		Public Policy (Chair) Audit
	TransCanada securities held	2018	2017	Meets share ownership requirements
	Shares	15,000	15,000	Yes
	DSUs	10,959	7,952
	Mr. Lowe became the Audit committee Chair on May 5, 2017

TransCanada Management information circular2018 18

	Paula Rosput Reynolds AGE 61, SEATTLE, WA, U.S.A. | DIRECTOR SINCE 2011
	Ms. Reynolds is a corporate director. She serves as a director of CBRE Group, Inc. (commercial real-estate), BP p.l.c. (oil and gas) and BAE Systems plc (aerospace, defense, information security). Ms. Reynolds previously served as a director of Siluria Technologies Inc. (natural gas) from February 2015 to June 2017, Delta AirLines Inc. (airline) from August 2004 to June 2015 and Anadarko Petroleum Corporation (oil and gas, exploration and production) from August 2007 to May 2014. She also served as Vice-Chair and Chief Restructuring Officer of American International Group, Inc. from October 2008 to September 2009 as part of the team that was appointed during the global financial crisis. Prior to that appointment, she served as President and Chief Executive Officer of Safeco Corporation until its acquisition by Liberty Mutual Group in September 2008. She was also Chair, President and Chief Executive Officer of AGL Resources Inc. from August 2000 to January 2006. Ms. Reynolds has held the roles of Chief Executive Officer, President and Chief Operating Officer of Atlanta Gas Light Company, a wholly-owned subsidiary of AGL Resources Inc. She also previously served as President and Chief Executive Officer of Duke North America, a subsidiary of Duke Energy Corporation, and President of PanEnergy Power Services Inc. Prior to that she was Senior Vice-President of Pacific Gas Transmission Company, a predecessor company of Gas Transmission Northwest LLC, a subsidiary of TransCanada. Ms. Reynolds currently serves on the board for the Fred Hutchinson Cancer Research Center, and was until June 2015, on the board for KCTS-9 public television in Seattle. She has a Bachelor of Arts in Economics, with honours, from Wellesley College.
Independent Skills and experience • CEO • Energy, midstream & transportation • Government & regulatory • Human resources & compensation • Major projects At-risk investment $1,863,204 TransCanada Board/committees 2017 meeting attendance • Board of Directors 11/11 meetings (100%) • Governance committee 1/1 meetings (100%) • Health, Safety & Environment committee 2/2 meetings (100%) • Human Resources committee (Chair) 5/5 meetings (100%)
	Annual general meeting voting results	Votes in favour		Votes withheld
	2017	488,654,240	(99.26%)	3,644,562 (0.74%)
	2016	374,046,880	(99.08%)	3,456,071 (0.92%)
	2015	338,415,097	(98.34%)	5,696,983 (1.66%)
	Other public company boards	Stock exchange		Board committees
	BAE Systems plc (aerospace, defence, information security)	London Stock Exchange (LSE), American Depositary Receipt (ADR), NYSE		Audit Remuneration (Chair)
	BP p.l.c. (oil and gas)	LSE, ADR, NYSE		Audit Chairman's Committee
	CBRE Group, Inc. (commercial real estate)	NYSE		–
	TransCanada securities held	2018	2017	Meets share ownership requirements
	Shares	6,000	6,000	Yes
	DSUs	26,751	21,613

19 TransCanada Management information circular2018

	Mary Pat Salomone AGE 57, NAPLES, FL, U.S.A. | DIRECTOR SINCE 2013
	Ms. Salomone is a corporate director. She currently serves on the board of directors of Herc Rentals (equipment rental) and Intertape Polymer Group (manufacturing). She also serves as a trustee of the Youngstown State University Foundation. Ms. Salomone was the Senior Vice-President and Chief Operating Officer of The Babcock & Wilcox Company (B&W) (energy infrastructure) from January 2010 to June 30, 2013. Prior to that, she served as Manager of Business Development from 2009 to 2010 and Manager of Strategic Acquisitions from 2008 to 2009 for Babcock & Wilcox Nuclear Operations Group, Inc. From 1998 through December 2007, Ms. Salomone served as an officer of Marine Mechanical Corporation, which B&W acquired in 2007, including her term as President and Chief Executive Officer from 2001 through 2007. Ms. Salomone previously served on the board of directors of United States Enrichment Corporation (basic materials, nuclear) from December 2011 to October 2012 and on the Naval Submarine League from 2007 to 2013. She was formerly a member of the Governor’s Workforce Policy Advisory Board in Ohio and the Ohio Employee Ownership Center, and served on the board of Cleveland’s Manufacturing Advocacy & Growth Network. Ms. Salomone has a Bachelor of Engineering in Civil Engineering from Youngstown State University and a Master of Business Administration from Baldwin Wallace College. She completed the Advanced Management Program at Duke University’s Fuqua School of Business in 2011.
Independent Skills and experience • Electric power • Governance • Human resources & compensation • Major projects • Operations/health, safety & environment At-risk investment $998,875 TransCanada Board/committees 2017 meeting attendance • Board of Directors 9/11 meetings (82%) • Health, Safety & Environment committee 4/4 meetings (100%) • Human Resources committee 5/5 meetings (100%)
	Annual general meeting voting results	Votes in favour		Votes withheld
	2017	490,567,884	(99.65%)	1,730,918 (0.35%)
	2016	376,547,744	(99.75%)	955,286 (0.25%)
	2015	340,476,224	(98.94%)	3,636,487 (1.06%)
	Other public company boards	Stock exchange		Board committees
	Herc Rentals (rental equipment)	NYSE		Compensation Nominating & Governance
	Intertape Polymer Group (manufacturing)	TSX		Audit Compensation
	TransCanada securities held	2018	2017	Meets share ownership requirements
	Shares	3,000	3,000	Yes
	DSUs	14,558	11,407
	Ms. Salomone was a director of Crucible Materials Corp. (Crucible) from May 2008 to May 1, 2009. On May 6, 2009, Crucible and one of its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the Bankruptcy Court). On August 26, 2010, the Bankruptcy Court entered an Order confirming Crucible’s Second Amended Chapter 11 Plan of Liquidation.

TransCanada Management information circular2018 20

	Indira V. Samarasekera AGE 65, VANCOUVER, BC, CANADA | DIRECTOR SINCE 2016
	Dr. Samarasekera is currently a senior advisor for Bennett Jones LLP (law firm) and serves on the board of The Bank of Nova Scotia (chartered bank), Magna International Inc. (manufacturing, automotive parts), Asia-Pacific Foundation and the Rideau Hall Foundation. She also currently serves on the selection panel for Canada’s outstanding chief executive officer of the year, is a member of the TriLateral Commission and is a Fellow of the Royal Society of Canada. Dr. Samarasekera is internationally recognized as one of Canada’s leading metallurgical engineers for her groundbreaking work on steel process engineering and she was the first incumbent of the Dofasco Chair in Advanced Steel Processing at the University of British Columbia. From 2005 to 2015, she served as President of the University of Alberta. Prior to that, she was elected to the National Academy of Engineering in the U.S. She has also served as the chair of the Worldwide Universities Network and has served on several boards and committees including the Prime Minister’s Advisory Committee for Renewal of the Public Service, a Presidential Visiting Committee at the Massachusetts Institute of Technology and Canada’s Science, Technology, Innovation Council. Dr. Samarasekera has received honorary degrees from the Universities of Alberta, British Columbia, Toronto, Waterloo, Montreal and Western in Canada, and Queen’s University in Belfast, Ireland. She received the Peter Lougheed Leadership Award from the Public Policy Forum in Canada in 2012 and was awarded the Order of Canada in 2002. Dr. Samarasekera was also granted a PhD in metallurgical engineering from the University of British Columbia in 1980 and, as a Hays Fulbright Scholar, she earned a Master of Science from the University of California in 1976.
Independent Skills and experience • CEO • Governance • Government & regulatory • Human resources & compensation • Strategy & leading growth At-risk investment $388,729 TransCanada Board/committees 2017 meeting attendance • Board of Directors 9/11 meetings (82%) • Audit committee 5/5 meetings (100%) • Governance committee 3/4 meetings (75%)
	Annual general meeting voting results	Votes in favour		Votes withheld
	2017	491,078,902	(99.75%)	1,217,534 (0.25%)
	2016	376,140,498	(99.64%)	1,362,311 (0.36%)
	2015	–	–	–
	Other public company boards	Stock exchange		Board committees
	The Bank of Nova Scotia (chartered bank)	TSX, NYSE		Corporate Governance Human Resources
	Magna International Inc. (manufacturing, automotive parts)	TSX, NYSE		Corporate Governance and Nominating
	TransCanada securities held	2018	2017	Meets share ownership requirements
	Shares	–	–	Dr. Samarasekera has until April 29, 2021 to meet the requirements.
	DSUs	6,833	2,652

21 TransCanada Management information circular2018

	D. Michael G. Stewart AGE 66, CALGARY, AB, CANADA | DIRECTOR SINCE 2006
	Mr. Stewart is a corporate director. He serves as a director of Pengrowth Energy Corporation (oil and gas, exploration and production) and CES Energy Solutions Corp. (oilfield services). He was a director of Northpoint Resources Ltd. (oil and gas, exploration and production) from July 2013 to February 2015, a director of C&C Energia Ltd. (oil and gas) from May 2010 to December 2012, a director of Orleans Energy Ltd. from October 2008 to December 2010, a director of Pengrowth Corporation (administrator of Pengrowth Energy Trust) from October 2006 to December 2010, a director of Canadian Energy Services Inc. (general partner of Canadian Energy Services L.P.) from January 2006 to December 2009, Chairman and trustee of Esprit Energy Trust from August 2004 to October 2006, and a director of Creststreet Power & Income General Partner Limited (general partner of Creststreet Power & Income Fund L.P.) from December 2003 to February 2006. Mr. Stewart held a number of senior executive positions with Westcoast Energy Inc. from September 1993 to March 2002, including Executive Vice-President, Business Development. He has been active in the Canadian energy industry for over 40 years, and is a member of the Institute of Corporate Directors and the Association of Professional Engineers and Geoscientists of Alberta (non-practicing). Mr. Stewart holds a Bachelor of Science (Geological Sciences) with First Class Honours from Queen’s University.
Independent Skills and experience • Energy, midstream & transportation • Major projects • Operations/health, safety & environment • Risk management • Upstream oil & gas At-risk investment $2,936,036 TransCanada Board/committees 2017 meeting attendance • Board of Directors 11/11 meetings (100%) • Audit committee 5/5 meetings (100%) • Health, Safety & Environment committee (Chair) 4/4 meetings (100%)
	Annual general meeting voting results	Votes in favour		Votes withheld
	2017	490,934,299	(99.72%)	1,356,016 (0.28%)
	2016	376,770,778	(99.81%)	732,173 (0.19%)
	2015	340,638,900	(98.99%)	3,473,810 (1.01%)
	Other public company boards	Stock exchange		Board committees
	CES Energy Solutions Corp. (oilfield services)	TSX		Audit Corporate Governance and Nominating Committee (Chair)
	Pengrowth Energy Corporation (oil and gas, exploration and production)	TSX, NYSE		Compensation Corporate Governance & Nominating (Chair)
	TransCanada securities held	2018	2017	Meets share ownership requirements
	Shares	17,310	16,651	Yes
	DSUs	34,299	30,928

TransCanada Management information circular2018 22

	Siim A. Vanaselja AGE 61, TORONTO, ON, CANADA | BOARD CHAIR | DIRECTOR SINCE 2014
	Mr. Vanaselja is a corporate director. He is currently the Chair of the Board of TransCanada. He also serves on the boards of Great-West Lifeco Inc. (financial services) and RioCan Real Estate Investment Trust. Mr. Vanaselja was the Executive Vice-President & Chief Financial Officer of BCE Inc. and Bell Canada (telecommunications and media) from January 2001 to June 2015. Prior to joining BCE Inc., he was a partner at the accounting firm KPMG Canada in Toronto. Mr. Vanaselja previously served as a member of the Conference Board of Canada’s National Council of Financial Executives, the Corporate Executive Board’s working council for Chief Financial Officers and Moody’s Council of Chief Financial Officers. During the period of the 2008 global financial crisis, he was a member of the late Minister of Finance’s Special Advisory Committee to address the continued functioning of financial and credit markets in Canada. He is a member of the Institute of Corporate Directors and the Chartered Professional Accountants of Ontario. He holds an Honours Bachelor of Business degree from the Schulich School of Business. His community involvement has included work with Big Brothers Big Sisters of Toronto, St. Mary’s Hospital, the Heart and Stroke Foundation of Québec and the annual Walk for Kids Help Phone.
Independent Skills and experience • Accounting/audit • Capital markets • Mergers & acquisitions • Risk management • Strategy & leading growth At-risk investment $1,833,678 TransCanada Board/committees 2017 meeting attendance • Board of Directors (Chair) 11/11 meetings (100%) • Audit committee 2/2 meetings (100%) • Governance committee 4/4 meetings (100%) • Human Resources committee 3/3 meetings (100%)
	Annual general meeting voting results	Votes in favour		Votes withheld
	2017	460,559,700	(93.55%)	31,739,102 (6.45%)
	2016	376,770,778	(99.81%)	732,173 (0.19%)
	2015	340,638,900	(98.99%)	3,473,810 (1.01%)
	Other public company boards	Stock exchange		Board committees
	Great-West Lifeco Inc. (financial services)	TSX		Audit Risk Investment Executive
	RioCan Real Estate Investment Trust	TSX		Board of Trustees
	TransCanada securities held	2018	2017	Meets share ownership requirements
	Shares	12,000	12,000	Mr. Vanaselja has until May 5, 2022 to meet the requirements.
	DSUs	20,232	12,719
	Mr. Vanaselja became the Board Chair on May 5, 2017.

23 TransCanada Management information circular2018

	Thierry Vandal AGE 57, MAMARONECK, NY, U.S.A | DIRECTOR SINCE 2017
	Mr. Vandal is the President of Axium Infrastructure US, Inc. (independent infrastructure fund management firm) and currently serves on the board of directors for Axium Infrastructure Inc. (infrastructure fund management) and The Royal Bank of Canada (chartered bank). He also serves on the international advisory board of École des Hautes Etudes Commerciales (HEC) Montréal. Mr. Vandal previously served as President and Chief Executive Officer for Hydro-Québec (electric utility) from 2005 to May 2015. He has also served as a director for HEC Montréal from 2006 to October 2017, director for Veresen Inc. (energy infrastructure) from 2015 to July 2017, Chairman of BioFuelNet Canada (biofuels industry) from 2013 to 2015, Chairman of the Conference Board of Canada from 2009 to 2010 and was a McGill University Governor from 2006 to 2017 as well as Chair of its Finance Committee from 2010 to 2017. Mr. Vandal holds a Bachelor of Engineering degree from École Polytechnique de Montréal and a Master of Business Administration in finance from HEC Montréal. In 2012, he was named Canadian Energy Person of the Year by the Canadian Energy Council. He was also awarded an honorary doctorate by the Université de Montréal in 2007.
Independent Skills and experience • CEO • Electric power • Energy, midstream & transportation • Government & regulatory • Major projects At-risk investment $60,588 TransCanada Board/committees 2017 meeting attendance • Board of Directors 2/2 meetings (100%) • Audit committee 2/2 meetings (100%) • Health, Safety & Environment committee 1/1 meetings (100%)
	Annual general meeting voting results	Votes in favour		Votes withheld
	2017	–	–	–
	2016	–	–	–
	2015	–	–	–
	Other public company boards	Stock exchange		Board committees
	The Royal Bank of Canada	TSX, NYSE		Audit Human Resources
	TransCanada securities held	2018	2017	Meets share ownership requirements
	Shares	261	–	Mr. Vandal has until November 6, 2022 to meet the requirements.
	DSUs	804	–
	Mr. Vandal joined the Board of Directors on November 6, 2017.

TransCanada Management information circular2018 24

SERVING TOGETHER ON OTHER BOARDS

While the Board does not prohibit directors having common membership on other boards, the Board reviews potential common membership on other boards as they arise to determine whether it affects the ability of those directors to exercise independent judgment as members of TransCanada’s Board.

None of our directors serve together on another board.

We also place limits on the number of boards that our directors may serve on. SeeGovernance– Serving on other boards.

MEETING ATTENDANCE

We expect our directors to demonstrate a strong commitment to their roles and responsibilities while serving on our Board. The table below shows the directors’ 2017 attendance record, which averaged 96 per cent for all Board and committee meetings. The Board also held three strategic issues sessions and a strategic planning meeting over two days in 2017.

Board committees

Board of directors

Audit

Governance

Health, Safety & Environment

Human Resources

Overall attendance

#

%

#

%

#

%

#

%

#

%

%

Kevin E. Benson

11/11

100

5/5

100

4/4

100

–

–

–

–

100

Derek H. Burney

11/11

100

5/5

100

4/4

100

–

–

–

–

100

Stėphan Crėtier

7/9

78

4/4

100

–

–

3/3

100

–

–

88

Russell K. Girling

11/11

100

–

–

4/4

100

–

–

5/5

100

100

S. Barry Jackson

11/11

100

–

–

4/4

100

–

–

5/5

100

100

John E. Lowe

11/11

100

5/5

100

–

–

4/4

100

–

–

100

Paula Rosput Reynolds

11/11

100

–

–

1/1

100

2/2

100

5/5

100

100

John Richels

4/5

80

–

–

–

–

2/2

100

2/2

100

89

Mary Pat Salomone

9/11

82

–

–

–

–

4/4

100

5/5

100

90

Indira Samarasakera

9/11

82

5/5

100

3/4

75

–

–

–

–

85

D. Michael G. Stewart

11/11

100

5/5

100

–

–

4/4

100

–

–

100

Siim A. Vanaselja

11/11

100

2/2

100

4/4

100

–

–

3/3

100

100

Thierry Vandal

2/2

100

2/2

100

–

–

1/1

100

–

–

100

Richard E. Waugh

11/11

100

–

–

3/3

100

2/2

100

5/5

100

100

Notes

• Five of the 11 Board meetings were not regularly scheduled meetings.

• All meetings missed by directors were special meetings scheduled at short notice.

• Mr. Girling is not a member of any committees, but is invited to attend committee meetings as required.

• On February 17, 2017, Mr. Crétier was appointed as a director and to the Audit and Health, Safety & Environment committees.

• Ms. Reynolds was a member of the Health, Safety & Environment committee until May 5, 2017 when she became a member of the Governance committee.

• The Board Chair, Mr. Vanaselja, was a member of the Audit committee until May 5, 2017 when he became a member of the Human Resources committee.

• On November 6, 2017 Mr. Vandal was appointed as a director and on November 8, 2017 he became a member of the Audit and Health, Safety & Environment committees.

• Mr. Richels retired from the Board on May 5, 2017.

25 TransCanada Management information circular2018

Governance

We believe that strong governance improves corporate performance and benefits all stakeholders. This section discusses our approach to governance and describes our Board and how it works.
		WHERE TO FIND IT
	>	About our governance practices	26
		Board characteristics	27
		Governance philosophy	30
About our governance practices Our Board and management are committed to the highest standards of ethical conduct and corporate governance. TransCanada is a public company listed on the TSX and the NYSE, and we recognize and respect rules and regulations in both Canada and the U.S. Our corporate governance practices comply with the Canadian governance guidelines, which include the governance rules of the TSX and Canadian Securities Administrators (CSA):		Role and responsibilities of the Board	32
		Orientation and education	40
		Board effectiveness and director assessment	42
		Engagement	46
		Communicating with the Board	46
		Shareholder proposals	47
		Advance notice bylaw	47
		Board committees	48
• National Instrument 52-110, Audit Committees (NI 52-110) • National Policy 58-201, Corporate Governance Guidelines • National Instrument 58-101, Disclosure of Corporate Governance Practice (NI 58-101).

We also comply with the governance listing standards of the NYSE and the governance rules of the U.S. Securities and Exchange Commission (SEC) that apply, in each case, to foreign private issuers.

Our governance practices comply with the NYSE standards for U.S. companies in all significant respects, except as summarized on our website (www.transcanada.com). As a non-U.S. company, we are not required to comply with most of the governance listing standards of the NYSE. As a foreign private issuer, however, we must disclose how our governance practices differ from those followed by U.S. companies that are subject to the NYSE standards.

We benchmark our policies and procedures against major North American companies to assess our standards and we adopt best practices as appropriate. Some of our best practices are derived from the NYSE rules and comply with applicable rules adopted by the SEC to meet the requirements of the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).

TransCanada Management information circular2018 26

BOARD CHARACTERISTICS

Our Board and its members exemplify strong principles of corporate governance:

• an independent, non-executive Chair

• an effective board size

• all directors except our CEO are independent

• knowledgeable and experienced directors who ensure that we promote ethical behaviour throughout TransCanada

• qualified directors who can make a meaningful contribution to the Board, the development of our strategy and business, and oversight of our risk management processes

• significant share ownership requirements to align the directors’ interests with those of our shareholders

• annual assessments of Board, Chair, committee and director effectiveness.

Size and composition

TransCanada’s articles state that the Board must have between eight and 15 directors. The Board has determined that 11directors will be elected this year at the annual meeting. The Board believes this size is appropriate based on the scope of our business, the skills and experience of the nominated directors and the four standing committees, and to achieve effective decision making. It believes that all of the nominated directors are well qualified to serve on the Board.

We believe our Board must consist of qualified and knowledgeable directors, and include directors with direct experience in the oil and gas, pipelines and energy sectors.

27 TransCanada Management information circular2018

Board diversity

We have been committed to a diverse Board since 1999, when our Corporate governance guidelines were revised to include a variety of diversity criteria, which bring a range of perspectives to the Board that are not limited to gender diversity. TransCanada does not have term limits for directors, but does have a retirement policy to encourage Board renewal, as discussed under Director tenure, on page 45.

In February 2018, the Board adopted and endorsed a Board Diversity policy relating to the identification and nomination of directors. The objective of the policy is to increase Board diversity by seeking qualified director nominees, while considering diversity criteria. Diversity criteria includes skills, expertise, industry experience and personal characteristics such as age, gender, ethnicity and other distinctions of potential director nominees.

More specifically, in seeking suitable candidates, the Governance committee will:

• consider all aspects of diversity

• assess the skills and backgrounds collectively represented on the Board to ensure that they reflect the diverse nature of the business environment in which we operate

• consider candidates on merit against objective criteria having due regard to the benefits of diversity on the Board

• at their discretion, engage qualified independent external advisors to identify and assess candidates that meet the Board’s skills and diversity criteria.

The Board has committed to an aspirational target for the Board to be comprised of at least 30 per cent of women by the end of 2020.

Each year, the Governance committee will:

• assess the effectiveness of the Board Diversity policy

• monitor and review our progress in achieving the aspirational target for gender diversity

• monitor the implementation of the Board Diversity policy

• report to the Board and recommend any revisions that may be necessary.

Currently, 23 per cent of the Board is composed of women. After the annual meeting, if all the nominated directors are elected, 27 per cent of the Board will be comprised of women directors. The Governance committee is vigorously pursuing the goal of meeting or exceeding the previously-mentioned 30 per cent target. The committee has set 2020 as the deadline to achieve this level of gender diversity but intends to act sooner, as it identifies female candidates who are available to serve as directors.

Pie chart of Board composition by gender (men: (10), women: (3))

The Board Diversity policy is posted on our website (www.transcanada.com).

TransCanada Management information circular2018 28

Independence

An independent board is a fundamental principle of governance. We believe that the majority of our directors must be independent in accordance with applicable Canadian legal requirements and guidelines, and consistent with the applicable independence criteria of the regulations of the SEC and rules of the NYSE.

The Governance committee and the Board review the independence of each Board member and nominated director against these criteria once a year. The Governance committee also reviews family relationships and associations with companies that have relationships with TransCanada when it reviews director independence.

The Board has determined that all of the nominated directors are independent, except for Mr. Girling because of his role as President and CEO. Other than Mr. Girling, none of the directors have a direct or indirect material relationship with TransCanada that could reasonably be expected to interfere with the exercise of his or her independent judgment.

Independent Chair

The Chair is appointed by the Board, and serves in a non-executive capacity. We have had separate Chair and CEO positions since our incorporation in 2003 and at our predecessor company since 1994. Mr. Vanaselja has served as the independent non-executive Chair since May 5, 2017.

Independent advice

The Board and each of its four standing committees can retain independent advisors to assist in carrying out their duties and responsibilities.

Serving on other boards

To ensure we do not have overboarding or interlocking relationships that would conflict with a director’s independence or interfere with fulfilling their Board duties and responsibilities, we have the following policy:

• outside directors may not serve on more than four public company boards in total

• the CEO may not serve on more than two public company boards in total

• Audit committee members may not serve on more than three audit committees in total.

Currently, all of our directors meet our overboarding policy requirements.

We discuss the time commitment and duties and responsibilities with every candidate so they have a full understanding of the role and our expectations of directors. The Governance committee monitors director relationships to ensure their business associations do not hinder their role as a TransCanada director or Board performance overall.

The Board believes that it is important for it to be composed of qualified and knowledgeable directors. As a result, due to the specialized nature of the energy infrastructure business, some of the nominated directors are associated with or sit on the boards of companies that ship natural gas or liquids through our pipeline systems. Transmission services on most of TransCanada’s pipeline systems in Canada and the U.S. are subject to regulation and, accordingly, we generally cannot deny transportation services to a creditworthy shipper. As discussed in Conflicts of interest, the Governance committee monitors relationships among directors to ensure that business associations do not affect the Board’s performance.

See the director profiles starting on page 14 for the other public company boards each nominated director serves on.

Independent of management

Our Corporate governance guidelines stipulate that the Board must meet at the end of each Board meeting, in-camera, without management present. In 2017, the independent directors met separately before and at the end of every regularly scheduled Board meeting.

Our Board has adopted the policy of holding in-camera sessions at each meeting of its committees without management. Members of management meet with the independent directors upon request.

29 TransCanada Management information circular2018

GOVERNANCE PHILOSOPHY

We believe that effective corporate governance improves corporate performance and benefits all shareholders and that honesty and integrity are vital to ensuring good corporate governance.

The Board has formally adopted the Corporate governance guidelines recommended by the Governance committee. These guidelines address the structure and composition of the Board and its committees, and clarify the responsibilities of the Board and management.

Ethical business conduct

Our Code of business ethics (the Code) incorporates principles of good conduct and ethical and responsible behaviour to guide our decisions and actions and the way we conduct business.

The Code applies to all employees, officers and directors as well as contract workers of TransCanada and its wholly-owned subsidiaries and operated entities in countries where we conduct business. All employees (including executive officers) and directors must certify their compliance with the Code.

Any unusual behaviour or suspected violations of the Code must be reported immediately. Employees can report a concern to their supervisor, Corporate compliance, Internal audit, their Compliance coordinator, or to our Ethics help-line. The help-line allows anyone – employees, contractors, consultants, other stakeholders and the general public – to report a concern, confidentially and anonymously, about any perceived accounting irregularities, legal or ethical violations or other suspected breaches of the Code. The telephone number is published on our website and employee intranet, in other employee communications and in our Annual report. Our policy strictly prohibits reprisals or retaliation against anyone who files an ethics concern or complaint in good faith.

Internal audit handles most investigations, including any concerns about directors and senior management. Human resources professionals handle any concerns relating to human resource matters such as harassment.

The Audit committee monitors compliance with the Code and reports any significant violations to the Board. The committee oversees the procedures for receiving and reviewing complaints and determining a course of action. It also oversees the operation of the Ethics help-line as part of its responsibilities.

Any waiver of the Code for our executives and directors must be approved by the Board, or the appropriate committee. There were no material departures from the Code in 2017.

The Code is posted on our website (www.transcanada.com).

Conflicts of interest

The Code covers potential conflicts of interest.

Serving on other boards

The Board considers whether directors serving on the boards of, or acting as officers or in another similar capacity, for other entities including public and private companies, Crown corporations and other state-owned entities, and non-profit organizations pose any potential conflict. The Board reviews these relationships annually to determine that they do not interfere with any of our director’s ability to act in our best interests. If a director declares a material interest in any material contract or material transaction being considered at a meeting, the director is not present during the discussion and does not vote on the matter.

Our Code requires employees to receive consent before accepting a directorship with an entity that is not an affiliate. The CEO and executive vice-presidents and two of our senior vice-presidents (our executive leadership team) must receive the consent of the Governance committee. All other employees must receive the consent of the Corporate Secretary or her delegate.

Affiliates

The Board oversees relationships between TransCanada and any affiliates to avoid any potential conflicts of interest. This includes our relationship with TC PipeLines, LP, a master limited partnership listed on the NYSE.

TransCanada Management information circular2018 30

Auditor independence

Pursuant to the Audit committee charter, the Audit committee reviews, approves and monitors adherence to our hiring policies for partners, employees and former partners and employees of our current and former external auditors to ensure auditor independence is maintained. The committee also has a pre-approval policy with respect to permitted non-audit services.

Our Annual information form (AIF) includes more information about the Audit committee, including the committee charter. The 2017 AIF is available on our website (www.transcanada.com) and on SEDAR (www.sedar.com).

Majority voting

Our majority voting policy applies to electing a new Board when the number of nominated directors is the same as the number of director positions available. If, prior to a meeting, a nominated director receives more "withheld" proxy votes than five per cent of the total votes cast by proxy, we will hold a vote by ballot for all directors. If a director does not receive a majority of "for" votes cast by ballot, the director must resign from the Board. The Board will accept the resignation if there are no exceptional circumstances. We expect the Board to announce its decision to either accept or reject the director’s resignation in a press release within 90 days after the annual meeting, and include its reasons for rejecting the resignation, if applicable.

This policy does not apply if there is a proxy contest over the election of directors.

Share ownership

We have share ownership requirements for our directors and executives to align their interests with those of our shareholders. Ownership levels are significant, and directors and executives must meet the requirements within five years of assuming their position.

As of February 20, 2018, all of our directors are in compliance with our director share ownership policy. Dr. Samarasekera and Mr. Vandal each have five years from the date of their appointment to meet the requirements. As Mr. Vanaselja was appointed Chair of the Board on May 5, 2017, his required share ownership level has increased to four times the Chair retainer:

Director	Date appointed	Share ownership date
Dr. Samarasekera	April 29, 2016	April 29, 2021
Mr. Vanaselja	May 5, 2017	May 5, 2022
Mr. Vandal	November 6, 2017	November 6, 2022

See Aligning the interests of directors and shareholders on page 61 and Aligning the interests of executives and shareholders on page 79 for more information.

31 TransCanada Management information circular2018

ROLE AND RESPONSIBILITIES OF THE BOARD

The Board’s primary responsibilities are to foster TransCanada’s long-term success, oversee our business and affairs and management, and to act honestly, in good faith and in the best interests of TransCanada.

The Board’s main objective is to promote our best interests, to maximize long-term shareholder value and to enhance shareholder returns.

The Board has key duties and responsibilities, delegates some duties to its four standing committees, and discharges others to management for managing the day-to-day affairs of the business.

The Chair is responsible for ensuring that the Board is organized properly, functions effectively and meets its obligations and responsibilities. The Chair’s role includes coordinating the affairs of the Board, working with management (primarily the CEO), and ensuring effective relations with Board members, shareholders, other stakeholders and the public.

Charters and position descriptions

The Board and each committee have adopted a charter that outlines its principal responsibilities.

The charters are reviewed every year to ensure that they reflect current developments in corporate governance and corporate best practices, and the Board approves any necessary changes.

The Board charter describes the:

• composition and organization of the Board

• duties and responsibilities for managing the affairs of the Board

• oversight responsibilities for:

• management and human resources

• strategy and planning

• financial and corporate issues

• business and risk management, including compensation risk

• policies and procedures

• compliance reporting and corporate communications

• general legal obligations, including its ability to use independent advisors as necessary.

The Board has also developed position descriptions for the Chair of the Board, each committee Chair and the CEO. The position descriptions for the Chair of the Board and the CEO are part of their terms of reference. The position descriptions for the Chair of each committee are contained in the committee charters.

See Schedule B for a copy of the Board charter. The Board charter, committee charters and position descriptions for the Chair of the Board and the CEO are posted on our website (www.transcanada.com).

TransCanada Management information circular2018 32

Strategic planning

We have a multi-year strategic plan that balances risk and reward.

The Board provides oversight and direction in the strategic planning process to ensure we have a robust strategy that supports our vision of becoming North America’s leading energy infrastructure company. To achieve this, we have a five-year strategic plan which we update and extend annually and hold strategic issues sessions with the Board throughout the year to consider specific and emerging issues. The Governance committee has accountability for overseeing the strategy development process and works with management to identify and discuss emerging issues, elevating topics for discussion with the entire Board as necessary. It also guides management in planning the annual strategy session.

We update our five-year strategic plan annually during a two-day strategic planning session in which the Board reviews, discusses and approves the revised and extended strategic plan. As part of this, management includes an assessment of energy fundamentals, the competitive environment and risks to identify opportunities and threats to our business and strategy. This session informs our annual strategic priorities and performance measures.

Throughout the year, the Board monitors management’s progress toward achieving strategic goals. At each regularly scheduled Board meeting, management provides updates on the human, technological and capital resources required to implement our strategy and relevant regulatory, environmental and social issues that may impact the execution of our strategy.

See Meeting attendance on page 25 for more information about the meetings held in 2017 and Orientation and education on pages 40 and 41 for more information about the strategic issues and planning sessions attended by Board members in 2017.

Board oversees our overall strategy
Governance committee oversees strategic process
Management revises and extends the five-year strategic plan annually, reflecting changes to our business
Management establishes annual strategic priorities and five-year objectives
Management implements the strategic plan
The Board reviews management’s progress at regular Board meetings
Strategic issues sessions with the Board, updating the Board on specific and emerging issues
Management incorporates Board feedback into the annual strategic plan update

33 TransCanada Management information circular2018

Risk oversight

In early 2018, management commenced a comprehensive review of the risk management process as part of our commitment to continuous improvement, to reflect the recent acquisition of Columbia, and organizational changes. Upon management's completion of the review, a strategic issues session will be scheduled with the Board to allow for input and discussion. The new risk framework is expected to be presented to the Governance committee and Board during the first half of 2018.

Process

The Board and its committees are responsible for risk oversight including overseeing management systems and processes for identification, evaluation, prioritization, mitigation and monitoring of risk. Our directors have a broad range of experience and skills in risk management and, as a result, the Board is highly engaged and qualified to participate in a meaningful discussion of key business risks with management at Board and committee meetings.

A key business risk is generally defined as an exposure that has the potential to materially impact TransCanada’s ability to meet or support its business, operational or strategic objectives.

TransCanada maintains a comprehensive corporate risk register which identifies principal risks associated with our business and seeks input across the organization to ensure it reflects any new key business risks as our business grows and our environment evolves. In addition, 'top-of-mind' concerns are solicited from our senior executives and presented to the Board. This process recognizes the dynamic and evolving business environment in which we operate and allows management to keep the Board informed of existing and emerging risks and how those risks are managed or mitigated in accordance with TransCanada’s risk parameters and risk tolerance.

All risks identified under the corporate risk register are categorized using a risk responsibility matrix which establishes clear accountabilities to the Board, committees and executives responsible for specific oversight of each risk.

Our risks are categorized according to these main areas:

Enterprise wide	Business unit
• corporate governance and reputation • strategy and development • financial management • information systems • organizational • political and regulatory • general corporate risk	• business opportunity • project execution • commercial risk • commodity and basin supply • physical operations

The Governance committee oversees our risk management process. The committee reviews 'top-of-mind' business risks with management at each committee meeting and the risk responsibility matrix with management annually to ensure there is proper Board and committee oversight according to the terms of their charters, and that we have management programs in place to mitigate those risks. It also recommends, along with the respective committee (or executive) assigned responsibility for specific risks, any enhancements to our risk management program and policies to the Board.

In addition, all projects and opportunities recommended by management to the Board for approval include specific descriptions on the associated risks. The risk discussion associated with each project forms a part of the Board’s determination of whether to approve projects or pursue opportunities.

Our process ensures that the Board is fully informed of the interrelationship between the business environment and risks, and is intended to facilitate and stimulate discussion of our key business risks.

Our AIF and Annual report include more information about the risks applicable to TransCanada. The 2017 AIF and the 2017 Annual report are available on our website (www.transcanada.com) and on SEDAR (www.sedar.com).

TransCanada Management information circular2018 34

Committee responsibilities

The various Board committees are also involved in risk oversight in their respective areas to ensure a robust risk management process with appropriate expertise, attention and diligence given to each key business risk. The chart below includes the risk focus area of each committee, and information on each risk focus area. The committees receive updates regularly from management on their risk focus areas, and update the Board on their risk oversight activities regularly. In addition to its specific focus area, each committee maintains an overall awareness of risk management for TransCanada, and includes other issues in its reports to the Board as appropriate.

Committee	Risk focus	Description
Audit	Financial risk	• Oversees management’s role in monitoring compliance with financial risk management policies and procedures and reviewing the adequacy of our financial risk management. • Ensures that: • our financial risk management strategies, policies and limits are designed to ensure our risks and related exposures are in line with our business objectives and risk tolerance • risks are managed within limits that are ultimately established by the Board, implemented by senior management and monitored by our risk management and internal audit groups. • Oversees cyber security and its related risks to TransCanada.
Governance	Risk management process and management allocation of risks	• Reviews TransCanada’s 'top-of-mind' business risks with management at each committee meeting. • Oversees the risk responsibility matrix with management annually to ensure there is proper Board and committee oversight according to the terms of their charters. • Ensures that we have management programs in place to mitigate those risks. • Recommends, along with the respective committee (or executive) assigned responsibility for specific risks, any enhancements to our risk management program and policies to the Board.
Health, Safety & Environment	Operational risk, people and process safety, security and environmental risk	• Monitors compliance with our health, safety and environment (HSE) corporate policies through regular reporting from management, within the framework of our integrated HSE management system that is used to capture, organize and document our related policies, programs and procedures. See the next page for more details.
Human Resources	Human resources and compensation risk	• Oversees the compensation policies and practices to effectively identify and mitigate compensation risks and discourage members of the executive leadership team or others from taking inappropriate or excessive risks and to ensure our compensation policies are not reasonably likely to have a material adverse effect on TransCanada. • See Compensation governance starting on page 53 for more information about how we manage our compensation risk.

35 TransCanada Management information circular2018

HSE risk management system

The Health, Safety and Environment committee of TransCanada’s Board oversees operational risk, people and process safety, security of personnel and environmental risks, and monitors compliance with our HSE corporate policy through regular reporting from management. We have a management system that establishes a framework for managing operational risk that is used to capture, organize, document, monitor and improve our related policies, programs and procedures.

Our management system is modeled after international standards, conforms to external industry consensus standards and voluntary programs, and complies with applicable legislative requirements. It follows a continuous improvement cycle organized into four key areas:

• Planning: risk and regulatory assessment, objective and target setting, defining roles and responsibility

• Implementing: development and implementation of programs, procedures and standards to manage operational risk

• Reporting: incident reporting and investigation, and performance monitoring

• Action: assurance activities and review of performance by management.

The committee reviews HSE performance and operational risk management. It receives detailed reports on:

• overall HSE corporate governance

• operational performance and preventive maintenance metrics

• asset integrity programs

• emergency preparedness, incident response and evaluation

• people and process safety performance metrics

• developments in and compliance with applicable legislation and regulations.

The committee also receives updates on any specific areas of operational and construction risk management review being conducted by management and the results and corrective action plans flowing from internal and third party audits.

Generally, each year the committee or the committee Chair tours one of our existing assets or projects under development as part of its responsibility to monitor and review our HSE practices. Additionally, the Health, Safety and Environment committee conducts a site visit annually, which all Board members are invited to attend.

The safety of our employees, contractors and the public, as well as the integrity of our energy and pipeline infrastructure is a top priority.

TransCanada Management information circular2018 36

Succession planning

The Board is responsible for succession planning at the executive level including the development of the CEO succession plan. Succession planning for the CEO position is an ongoing process that includes analysis of each potential candidate’s performance, skills and experience, assessment of the personal attributes and characteristics that the Board believes are necessary for the role, and assessment of developmental opportunities to increase senior executive bench strength.

The CEO prepares an overview of the executive vice-president roles, noting the required skills and expertise for each position and the current executive's areas of strength. He also prepares development plans for each executive and presents them to the Board. The CEO meets formally with each executive at least twice a year, and more frequently as necessary, to discuss progress on his or her development plan.

The CEO identifies potential future candidates for the executive vice-president positions and presents them to the Board for discussion. Each candidate is assessed based on their skills and experience and the competencies that are required for promotion to the senior executive level. Development opportunities are also identified so each candidate can receive additional or varied management experience, training, development and educational opportunities. The Board reviews each position and the performance assessment and competencies of potential successors at least once a year and makes decisions as appropriate.

Access to management

The Board has complete access to management, but gives reasonable advance notice to avoid disrupting the business and operations. The Board Chair and committee Chairs also connect with relevant members of the executive leadership team as needed.

The Board encourages the executive leadership team to include key managers in Board and committee meetings so they can share their expertise on specific matters. This approach gives the Board an opportunity to meet individuals who have the potential to assume more senior positions in the future, and for these individuals to gain exposure to the Board.

37 TransCanada Management information circular2018

Management diversity

Our executive leadership team includes our President and CEO, all of our executive vice-presidents and two senior vice-presidents. Senior management includes our executive leadership team, as well as all of our senior vice-presidents and vice-presidents.

In 2013, management set and the Board reviewed goals to increase the number of women in senior management to 18 per cent by the end of 2017. We exceeded that goal, with women holding 22 per cent of senior management positions at the end of 2017. Our target is to increase this percentage to 25 per cent by the end of 2018.

Setting these goals supports our long-term commitment to ensuring TransCanada has a capable and diverse senior management team. We believe that having a defined goal for the representation of women in senior management is an effective way to increase the number of women on our executive leadership team over the long term. More women at the senior-vice president and vice-president levels provides a larger group of women that can be considered for promotion to executive positions.

In order to achieve these goals we have focused on identifying, assessing and developing high potential candidates from our existing talent pool as well as strategic hires. High potential candidates are each assigned a sponsor on the executive leadership team who works with them to increase their exposure within the organization and to the Board.

The executive leadership team reviews and discusses this talent pool regularly and approves all senior management appointments. The Board approves all appointments to the executive leadership team.

Progress towards these goals is reviewed and assessed by the Human Resources committee and executive leadership team at least annually to ensure that we have a qualified pool of women, and that the women in senior management are being adequately supported and developed. The Board receives progress reports on our goals annually. In addition, the Human Resources committee annually reviews the company’s initiatives to provide development opportunities for high potential and diverse candidates below the executive level.

The Board encourages the inclusion of women candidates for consideration for all executive leadership positions.

Bar graph of women in senior management. Actual: 2013 - 9%, 2014 - 15%, 2015 - 16%, 2016 - 19%, 2017 - 22%, Target: 2018 - 25%

TransCanada Management information circular2018 38

We do not have specific diversity goals for the executive leadership team. As of February 20, 2018, three of 10, or 30 per cent, of our executive leadership team members were women. This is an increase from February 28, 2017, when two of our nine, or 22 per cent of our executive leadership team members were women.

Pie chart of Executive composition (Men: (7) Women: (3))

39 TransCanada Management information circular2018

ORIENTATION AND EDUCATION

New directors participate in an orientation program featuring sessions on corporate strategy, our main business issues, and historical and financial information about TransCanada. They also have an opportunity to visit and tour our facilities and project sites and meet with the executive leadership team and other directors.

We tailor the sessions for each director based on individual needs and their specific areas of interest. New directors also meet one-on-one with members of the executive leadership team for an overview of the different areas of our business and operations and a discussion of key areas of interest. Briefing sessions are also held for new committee members.

Directors receive a reference manual with:

• details about their duties and obligations as a member of the Board

• information about our business and operations

• copies of the Board and committee charters

• copies of recent public disclosure filings

• documents from recent Board meetings.

The Governance committee reviews the orientation program and manual every year so they continue to meet our needs and those of new directors.

The committee also develops the continuing education program every year based on current and emerging issues, our corporate objectives and input from other directors. Our 2017 education program included three in-depth focus sessions covering the business and industry fundamentals, which help to provide context for strategy discussions.

Continuing education helps strengthen a director’s knowledge and understanding of the business, industry, governance and other issues. Senior management and external experts make presentations to the Board and committees from time to time on various topics related to the business, including changes to legal, regulatory and industry requirements. Continuing education is also conducted on an informal basis and our directors are provided with articles and publications of interest.

We suggest seminars and education programs for our directors that may be relevant, and pay the registration fee and travel expenses as appropriate. We also offer to pay annual fees for memberships with organizations that are appropriate and provide relevant publications and educational opportunities to our directors.

TransCanada Management information circular2018 40

2017 Director education program

Date	Topic	Presented/hosted by	Attended by
May 4	Strategic issues session – North America Natural Gas Strategic Review and Project Accountabilities	Members of the executive leadership team	All directors
May 8 - 10	North American Occupational Safety & Health Week -TransCanada’s Life Saving Rules Safety Campaign	Members of executive leadership team and management representatives	D. Michael G. Stewart
June 12	Focus sessions – • Incident Management Preparation Discussion • Global LNG Market Opportunities and Challenges	• Bartlit Beck Herman Palenchar & Scott LLP • Poten & Partners	All directors
June 13	Strategic issues session – U.S. Natural Gas Pipelines Business Environment and Overview	Members of the executive leadership team and management representatives	All directors
June 14	Site visit – Leach Xpress and Summerfield Compressor Station, Ohio	Leach Xpress project team	All directors
June 21 - 23	Tour of Sur de Texas Offshore Pipeline Construction, Mexico	SVP, Mexico Natural Gas Pipelines	D. Michael G. Stewart
September 18	Focus session – North American Power Sector	IHS Markit	All directors
October 11	Site visit – Bruce Power, Kincardine, Ontario	Bruce Power project team	D. Michael G. Stewart Mary Pat Salomone Dr. Indira Samarasekera Siim Vanaselja Rick Waugh
October 25	Focus session – Crude Oil Markets	IHS Markit	All directors
October 30	Best Boardroom Practices	National Association of Corporate Directors	Mary Pat Salomone
November 6 - 7	Strategic planning sessions – • Sustainable Energy and the Future of Electric Power • Evolution of Energy Systems in Society • Business Environment, Energy and Market Fundamentals, Natural Gas and Liquids Pipelines and Asset Allocation	• Dr. Peter Fox-Penner • Peter Tertzakian, ARC Energy Research Institute • Members of the executive leadership team	All directors
December 6	Strategic issues session – Talent Management, Portfolio Management	EVP, Corporate Services and EVP, Strategy and Corporate Development	All directors

41 TransCanada Management information circular2018

BOARD EFFECTIVENESS AND DIRECTOR ASSESSMENT

The Governance committee oversees an assessment of the performance of the Board, the Chair, committees and individual directors annually and reports the results to the Board.

In 2017, the Governance committee undertook a review of the existing Board, Chair, committee and director assessment process and considered several alternatives. The committee determined that the current process of director interviews is functioning effectively.

In 2018, as part of the Governance committee's focus on continuous improvement, the assessment process will involve both the Chair of the Board and Chair of the Governance committee meeting with each director individually for the individual director assessment. The individual director assessment will also include a discussion of expectations for directors serving on our Board, and providing specific feedback to each director on their performance as a member of the Board.

Interviews include questions about effectiveness, communication and personal and individual peer performance and solicit input from directors about areas for potential improvement. The interviews are open-ended to encourage discussion and seek specific input on topics such as risk, strategy and governance.

The Governance committee believes the interview process is the most effective way for directors to give feedback that can be reviewed by the entire Board. The committee also monitors developments in board governance and evolving best practices in corporate governance.

In 2017, the assessment process showed that the Chair, each director, and all committees are functioning effectively and fulfilling the mandates set out in the Board and committee charters.

Financial literacy

The Board has determined that all members of the Audit committee are financially literate, which means each member can read and understand a set of financial statements that are generally comparable to ours in terms of breadth and complexity of accounting issues. You can find more information about their education and financial experience in the director profiles starting on page 14, in the Audit committee report on page 49 and in the AIF which is available on our website (www.transcanada.com) and on SEDAR (www.sedar.com).

Flowchart of director assessment process - Assessment / Committee analysis and discussion / Board discussion and analysis
Chair of Board interviews each director - Results reported to Governance committee for discussion - Chair of Governance committee reports to Board
Chair of Governance committee interviews each director about Chair of Board
Committee self-assessment - Committee discussion - Chair of each committee reports to Board
Chair of Board interviews each member of executive leadership team about Board - Chair of Board reports to Board

TransCanada Management information circular2018 42

Board renewal

The Governance committee regularly assesses the skill set of each director, and reviews it against the director retirement schedule, their ages and the composition of each committee. The review also takes into account the desirability of maintaining a reasonable diversity of backgrounds, and character and behavioural qualities such as integrity.

The Governance committee, with input from the Chair of the Board and the CEO, is responsible for identifying suitable director candidates, and canvasses the entire Board for potential nominees. The committee also uses a third party recruitment specialist to identify potential director candidates. The committee is responsible for assessing the individuals and proposing the strongest candidates for nomination. An evolving roster of suitable director candidates is maintained by the committee.

The committee looks for a mix of skills and experience required for overseeing our business and affairs. The Board considers personal characteristics such as gender, ethnic background and geographic residence when looking at diversity. While candidates are nominated as directors based on their background and ability to contribute to the Board and committee meetings, the Board also specifically considers gender diversity. Board gender diversity is discussed earlier, under the section Governance - Board Characteristics - Board Diversity.

Candidates who are being nominated for the first time must have experience in industries similar to ours, or experience in general business management or with corporations that are similar in size and scope. Candidates must also be willing to serve on the Board, able to devote the necessary time to fulfill their duties and responsibilities and be under 70 years old.

The committee recommends potential candidates based on their qualifications and independence and how these qualities balance with the skill set of the current Board, the structure and composition of the committees and the director retirement schedule. This assessment helps the Board determine the best mix of skills and experience to guide our business operations and our long-term strategy.

In 2017, the Governance committee reviewed and refreshed the key expertise areas considered when determining Board composition. In consultation with a third party recruitment specialist, the committee developed a revised set of key expertise areas that are fundamental to the effective functioning of our Board, and necessary to develop our strategy and facilitate long-term growth. This process included a special meeting of the Governance committee to review the existing key expertise areas, refresh key expertise areas, and a gap analysis which is used to assist in Board renewal and director candidate assessments. The committee also developed definitions for the key expertise areas, which provide a consistent guideline for director and director candidate assessment.

The committee ensures that the Board seeks expertise in the following key areas:
• Accounting/audit • Capital markets • CEO • Electric power • Energy, midstream & transportation • Governance • Government & regulatory	• Human resources & compensation • Major projects • Mergers & acquisitions • Operations/health, safety & environment • Risk management • Strategy & leading growth • Upstream oil & gas

The third party recruitment specialist also interviewed each current director, and independently assessed the experience and skills each director has in the key areas listed above. While all of our directors possess an extensive list of skills and experience, the Governance committee determined that focusing on each director's top five key expertise areas is a more effective way to assess director candidates and ensure that our Board has a deep knowledge base available in each key expertise area.

43 TransCanada Management information circular2018

Skills analysis

The image below shows the top five key expertise areas of each of the current directors, as assessed by an independent third party recruitment specialist. The Governance committee considers these factors and others when discussing Board renewal.

Skills Analysis / Legend: Director with expertise, Director with expertise + retiring within three years
Area of Expertise: Accounting/audit (4 boxes: Benson, Girling, Lowe, Vanaselja), Capital markets (5 boxes: Benson, Girling, Lowe, Vanaselja, Waugh), CEO (8 boxes: Benson, Burney, Cretier, Jackson, Reynolds, Samarasekera, Vandal, Waugh), Electric power (3 boxes: Girling, Salomone, Vandal), Energy, midstream & transportation (5 boxes: Girling, Lowe, Reynolds, Stewart, Vandal), Governance (5 boxes: Benson, Burney, Salomone, Samarasekera, Waugh), Government & regulatory (4 boxes: Burney, Reynolds, Samarasekera, Vandal), Human resources & compensation (4 boxes: Jackson, Reynolds, Salomone, Samarasekera), Major projects (4 boxes: Reynolds, Salomone, Stewart, Vandal), Mergers & acquisitions (3 boxes: Cretier, Lowe, Vanaselja), Operations/health, safety & environment (5 boxes: Benson, Cretier, Jackson, Salomone, Stewart), Risk management (5 boxes: Burney, Cretier, Stewart, Vanaselja, Waugh), Strategy & leading growth (7 boxes: Burney, Cretier, Girling, Jackson, Samarasekera, Vanaselja, Waugh), Upstream oil & gas (3 boxes: Jackson, Lowe, Stewart)
Directors: Kevin E. Benson, Stéphan Crétier. Russell K. Girling, S. Barry Jackson, John E. Lowe, Paula Rosput Reynolds, Mary Pat Salomone, Indira Samarasekera, D. Michael G. Stewart, Siim A. Vanaselja, Thierry Vandal

TransCanada Management information circular2018 44

Expected retirement years

This table provides the expected retirement year for each of the current non-executive directors, based on current age.

Year director(s) expected to retire
2018	Derek H. Burney, Richard Waugh	2029	John E. Lowe
2019	Kevin E. Benson	2030	Mary Pat Salomone
2022	D. Michael G. Stewart, Indira Samarasekera	2031	Thierry Vandal
2023	S. Barry Jackson	2033	Stéphan Crétier
2027	Paula Rosput Reynolds, Siim A. Vanaselja

Director tenure

Once a director turns 70, he or she will not stand for re-election at the next annual meeting. The Board may waive the retirement age for a director if:

• they have not served seven consecutive years by age 70, or

• their continued service is in the best interests of the company, because of their specific skills and experience.

The Governance committee reviews factors like age, changes in principal occupation, consistently poor attendance, poor performance and other relevant circumstances that may trigger the resignation or retirement of a director.

TransCanada does not use term limits for our directors. We do not believe term limits are an effective mechanism to promote board renewal. In addition to the annual director assessment, which ensures that each of our Board members, committees and the Board is functioning effectively, the committee reviews director succession planning at least annually. This review provides the opportunity for the committee to focus on creating a board with an appropriate mix of experience and skills to guide the long-term strategy and ongoing business operations of the company. Our flexible retirement policy promotes effective Board turnover without limiting the mix of skills and experience on the Board.

The Board has waived the retirement age policy for Mr. Benson and has asked him to stand for re-election at the 2018 annual meeting. Mr. Benson's extensive business experience and management skills continue to provide valuable input into the Board's oversight of TransCanada's business and affairs. In addition, as Chair of the Governance committee, Mr. Benson is integrally involved in overseeing the director succession efforts of that committee in light of recent and pending director retirements.

The graphs below show the composition of our Board by years of service as of the date of this circular and after the annual meeting, assuming all of the nominated directors are elected.

Director Tenure: Current composition (0-5 years - 46%, 6-10 years - 23%, 11+ years - 31%) / Post - meeting composition (0-5 years - 55%, 6-10 years - 18%, 11+ years - 27%)

45 TransCanada Management information circular2018

ENGAGEMENT

We believe it is important to engage with our stakeholders.

Members of our Board engage with governance organizations and shareholder advocacy groups to discuss emerging best practices and provide commentary on how we maintain our high standard of corporate governance.

TransCanada has a comprehensive program to regularly engage with our shareholders and other stakeholders. We issue press releases to announce material company developments and to report our quarterly financial results. Our executive leadership team hosts teleconferences to discuss our quarterly financial and operating results, as well as significant company developments. Our executive leadership team also hosts an annual investor day to discuss the company’s strategy, recent developments and the longer-term outlook for the business. The teleconferences and investor day are webcast and available to analysts, shareholders, media and the general public. Our executive and senior management speak at investor and industry conferences and meet in person or by phone with investors one-on-one as part of our regular shareholder engagement. Our investor relations department is also available for meetings and calls to address shareholder questions and concerns and to provide public information on TransCanada.

Press releases, corporate information, frequently asked questions and details of past and upcoming investor events and presentations can be found online at www.transcanada.com.

Investor relations welcomes opportunities to engage with our shareholders and other stakeholders. You may contact our investor relations department directly by phone, email, or regular mail at:

Investor Relations

TransCanada Corporation

450 1^st Street S.W.

Calgary, Alberta

Canada T2P 5H1

investor_relations@transcanada.com

1.800.361.6522

COMMUNICATING WITH THE BOARD

Shareholder engagement allows us to hear directly from shareholders and other important stakeholders about any issues or concerns.

Shareholders, employees and others can contact the Board directly by writing to:

Chair of the Board of Directors

c/o Corporate Secretary

TransCanada Corporation

450 1^st Street S.W.

Calgary, Alberta T2P 5H1

The Board, including committee Chairs, will also be available at the annual meeting to receive questions from shareholders.

TransCanada Management information circular2018 46

SHAREHOLDER PROPOSALS

According to Canadian law, shareholder proposals can only be considered for the annual meeting of common shareholders if they are submitted by a specific date.

Our Corporate Secretary must receive any shareholder proposals before 5:00 p.m. MDT on November 22, 2018 to be considered for the circular for our 2019 annual meeting of common shareholders.

ADVANCE NOTICE BYLAW

Shareholders who wish to nominate a director for the 2018 annual meeting of common shareholders, other than by a shareholder proposal, must:

• notify the Corporate Secretary in writing, and

• provide the information required in our By-law Number 1, which can be found on our website (www.transcanada.com) or on SEDAR (www.sedar.com).

Any notices of director nominees must be received by the Corporate Secretary before 5:00 p.m. MDT on March 27, 2018 for an individual to be included in our list of director nominees for our 2018 annual meeting of common shareholders.

The chart below explains when advance notice of director nominations is required for annual meetings and special meetings:

Type of meeting	Announcement timing	Advance notice deadline
Annual meeting	Public announcement more than 50 days before meeting	Not less than 30 days before meeting
	Public announcement 50 days or less before meeting	Not less than 10 days following the first public announcement of the meeting
Special meeting to elect directors	Public announcement more than 50 days before meeting	Not less than 15 days before meeting
	Public announcement 50 days or less before meeting	Not less than 15 days following the first public announcement of the meeting

47 TransCanada Management information circular2018

BOARD COMMITTEES

The Board has four standing committees:

• Audit committee

• Governance committee

• Health, Safety and Environment committee

• Human Resources committee

Each of the committees is comprised entirely of independent directors.

The Governance committee is responsible for reviewing the composition of each committee and recommending any changes once new directors are appointed or elected to the Board. Each committee must consist entirely of independent directors, except for the Health, Safety and Environment committee, which must have a majority of independent directors. Currently, all members of the Health, Safety and Environment committee are independent. Each committee has the authority to retain advisors to help it carry out its responsibilities. The Board does not have an executive committee.

Each committee reviews its charter at least once a year, and recommends any changes to the Governance committee and the Board. You can find the committee charters on our website (www.transcanada.com).

The Audit and the Human Resources committees hold simultaneous meetings, as do the Governance and Health, Safety and Environment committees, so each committee has sufficient time to focus on its responsibilities. As a result, Mr. Vanaselja, the independent non-executive Chair of the Board, is a voting member of the Governance committee and the Human Resources committee, and is not a member of the Audit committee or the Health, Safety and Environment committee.

The committees will be reconstituted after the annual meeting.

Each meeting has time set aside for members to discuss the committee operations and responsibilities without management present.

TransCanada Management information circular2018 48

Audit committee

Members	John E. Lowe (Chair) Kevin E. Benson Derek H. Burney (retiring April 27, 2018) Stéphan Crétier Indira Samarasekera D. Michael G. Stewart Thierry Vandal (as of November 8, 2017)
Meetings in 2017	5 regularly scheduled meetings (February, May, July, November, December)
Independent	7 independent directors, 100 per cent independent and financially literate.
	Mr. Benson, Mr. Lowe and Mr. Vandal are "audit committee financial experts" as defined by the SEC in the U.S., and each have the accounting or related financial management experience required under the NYSE rules.
Mandate	The Audit committee is responsible for assisting the Board in overseeing the integrity of our financial statements and our compliance with legal and regulatory requirements. It is also responsible for overseeing and monitoring the accounting and reporting process and the process, performance and independence of our internal and external auditors.

The Audit committee meets in-camera with the Chief Financial Officer (CFO) at the beginning of each meeting, and also meets separately with the external auditors and Vice-President, Corporate Compliance and Internal Audit. The committee also meets in-camera at the end of each meeting.

2017 highlights

• Reviewed our 2017 interim and annual disclosure documents including the unaudited interim and audited annual consolidated financial statements and related management’s discussion and analysis, AIF and circular and recommended them for approval.

• Oversaw our financial reporting risks including issues relating to materiality and risk assessment.

• Received the external auditor’s formal written statement of independence (which sets out all of its relationships with TransCanada) and its comments to management about our internal controls and procedures.

• Reviewed the appointment of the external auditor and estimated fees and recommended them to the Board for approval.

• Reviewed the audit plans of the internal and external auditors and pre-approved the non-audit services performed by KPMG relating primarily to tax and benefit plans.

• Approved appointment of the external auditor for 401(k) employee retirement plans.

• Recommended the funding of the registered pension plan and supplemental pension plan.

• Reviewed the major accounting policies and estimates.

• Received reports from management on our cybersecurity plans and initiatives.

• Oversaw the corporate compliance program requirements, structure and results, including foreign corrupt practices and anti-bribery statutes and policies.

• Monitored Canadian and U.S. financial reporting and legal and regulatory developments affecting our financial reporting process, controls and disclosure.

• Reviewed and recommended changes to the suite of risk management policies, and reviewed developments and reports relating to counterparty, insurance and market risks.

• Reviewed and recommended prospectuses relating to the issuance of securities, including an "At-the-Market" common share issuance program.

• Recommended amendments to the Code of business ethics.

• Approved annual election to enter into uncleared swaps as permitted under U.S. legislation and monitored compliance.

• Received regular reports from management on risk management, finance and liquidity, treasury, pensions, tax, compliance, material litigation and information services security controls.

• Received regular reports from Internal Audit.

• Reviewed adequacy of staff complements in accounting and tax.

• Reviewed and Recommended amendments to the Audit committee charter.

• Reviewed material litigation.

Our AIF includes more information about the Audit committee, including the committee charter, oversight responsibilities, each member’s education and experience, and policies and procedures for pre-approving permitted non-audit services. The 2017 AIF is available on our website (www.transcanada.com) and on SEDAR (www.sedar.com).

49 TransCanada Management information circular2018

Governance committee

Members	Kevin E. Benson (Chair) Derek H. Burney (retiring April 27, 2018) S. Barry Jackson Paula Rosput Reynolds (as of May 5, 2017) Indira Samarasekera Siim A. Vanaselja
Meetings in 2017	3 regularly scheduled meetings (February, May, December) and 1 special meeting (April)
Independent	6 independent directors, 100 per cent independent
Mandate	The Governance committee is responsible for assisting the Board with maintaining strong governance policies and practices at TransCanada, reviewing the independence and financial literacy of directors, managing director compensation and the Board assessment process, and overseeing our strategic planning process and risk management activities. It monitors the relationship between management and the Board, directors’ share ownership levels, governance developments and emerging best practices. It is also responsible for identifying qualified candidates for the Board to consider as potential directors. It also recommends the meeting schedule for Board and committee meetings, site visits, and oversees matters related to the timing of our annual meeting.

The Governance committee meets in-camera at the beginning and end of each meeting.

2017 highlights

• Reviewed the independence of each director according to our written criteria to give the Board guidance in its annual assessment of independence and the structure and composition of each committee, and the other directorships held by Board members (including public and private companies, Crown corporations and non-profit organizations).

• Oversaw our strategic planning process, including strategic issues to be considered and planning of our strategic issues and planning sessions.

• Oversaw our risk management activities, including receiving updates on 'top of mind' business risks and making recommendations to the Board as appropriate.

• Reviewed the identified principal risks with management to ensure we have proper Board and committee oversight and management programs in place to mitigate risks.

• Monitored director share ownership requirements.

• Received information and discussed certain elements of director compensation structure.

• Reviewed say on pay updates and voting trends.

• Reviewed our lobbying policies, activities and expenditures.

• Revised the list of key expertise areas for our Board, including developing definitions.

• Reviewed our Corporate governance guidelines and committee charters and recommended appropriate changes to the Board for approval. The changes includedrevisions to the Governance and Human Resources committee charters to reflect existing conflict of interest and risk management oversight processes.

• Oversaw the annual assessment of the Board, committees and Chair.

• Monitored updates to securities regulations (regulation and legal updates affecting our policies, procedures and disclosure practices) and matters relating to the financial markets. The committee continues to monitor legal developments and emerging best practices in Canada, the U.S. and internationally.

• Oversaw the Board’s retirement policy, Board renewal, and the selection of new director candidates.

• Reviewed external governance assessments and made recommendations for revisions to governance practices to the Board as appropriate.

• Received information about virtual and hybrid shareholder meetings.

TransCanada Management information circular2018 50

Health, Safety and Environment committee

Members	D. Michael G. Stewart (Chair) Stéphan Crétier John Lowe Mary Pat Salomone Thierry Vandal (as of November 8, 2017) Richard E. Waugh (retiring April 27, 2018)
Meetings in 2017	4 regularly scheduled meetings (February, May, June and December)
Independent	6 independent directors, 100 per cent independent
Mandate	The Health, Safety & Environment committee is responsible of oversight for health, safety, security and environmental matters (HSE matters).
	The committee reviews and monitors:
	• the performance and activities of TransCanada on HSE matters including compliance with applicable and proposed legislation, regulations and orders; conformance with industry standards and best practices; people, health, safety and security; process safety; asset reliability; operational risk management and asset integrity plans and programs; and emergency response plans and programs • the systems, programs and policies relating to HSE matters and whether they are being appropriately developed and effectively implemented • actions and initiatives undertaken by TransCanada to prevent, mitigate and manage risks related to HSE matters which may have the potential to adversely impact our operations, activities, plans, strategies or reputation; or prevent loss or injury to our employees and assets or operations from malicious acts, natural disasters or other crisis situations • any critical incidents respecting our assets or operations involving: the fatality of or a life threatening injury to a person; any pipeline ruptures resulting in significant property damage or loss of product; any whistleblower events relating to HSE matters; or any incidents involving personnel and public safety, property damage, environmental damage or physical security that have the potential to severely and adversely impact our reputation and or business continuity • significant regulatory audits, findings, orders, reports and/or recommendations issued by or to TransCanada related to HSE matters or issues, together with management's response thereto.

The Health, Safety and Environment committee met separately with the Chief Operating Officer (for part of the year) and with representatives from senior management (for the remainder of the year) at the end of each meeting. The committee also meets in-camera at the end of each meeting.

2017 highlights

• Received and reviewed regular reports on HSE related activities, performance and compliance.

• Received regular reports on operational risk management, people and process safety and regulatory compliance matters related to asset integrity.

• Reviewed the status of critical incidents, root cause analysis and incident follow-up.

• Monitored management’s response and the status of corrective action plans to significant audits from the National Energy Board, Pipeline and Hazardous Materials Safety Administration and other regulatory agencies.

• Oversaw our risk management activities related to health, safety, security and environment, and reported to the Board as appropriate.

• Monitored the effectiveness of HSE policies, management systems, programs, procedures and practices through the receipt of reports on four levels of governance activities related to internal and external audit findings.

• Monitored updates to Canadian and U.S. air emissions and greenhouse gas (GHG) legislation, climate change initiatives and related compliance matters.

• Received the Health and Industrial Hygiene annual review.

• Visited the Leach Xpress and Summerfield Compressor Station, Ohio.

• Attended an optional site visit to Bruce Power, Kincardine, Ontario, which included a live demonstration of the Fire Training Facility.

• Received and reviewed regular reports on the operational and HSE performance at Bruce Power.

• Received a presentation from external consultants relating to root cause analysis for historical environmental disasters.

51 TransCanada Management information circular2018

Human Resources committee

Members	Paula Rosput Reynolds (Chair) S. Barry Jackson Mary Pat Salomone Siim A. Vanaselja (as of May 5, 2017) Richard E. Waugh (retiring April 27, 2018)
Meetings in 2017	5 regularly scheduled meetings (January, February, July, November and December)
Independent	5 independent directors, 100 per cent independent
Mandate	The Human Resources committee is responsible for assisting the Board with developing strong human resources policies and plans, overseeing the compensation programs, and assessing the performance of the CEO and other members of the executive leadership team against pre-established objectives and recommending their compensation to the Board.
	It approves and, as applicable, recommends to the Board executive incentive awards, and any major changes to the compensation programs and benefits plans for employees. It also reviews the benefits under our Canadian pension plans and share ownership requirements for executives.

The Human Resources committee meets in-camera at the beginning and end of each meeting.

2017 highlights

• Assessed the performance of the executive leadership team and recommended the 2017 executive compensation awards to the Board for approval.

• Reappointed Meridian Compensation Partners (Meridian) as the independent compensation advisor to the committee after determining that Meridian is independent based on the factors enumerated by the NYSE.

• Modified the performance measure relative weightings for the named executives under the short-term incentive plan to reflect a higher weighting on Corporate and Business Unit performance.

• Reviewed the changes to the U.S. retirement programs to better align with U.S. market practices.

• Reviewed the risks associated with its compensation programs.

• Reviewed and approved a recalibrated named executive officer compensation peer group.

• Approved a defined peer group for U.S. employees beginning in 2018 as part of the integration of legacy Columbia employees into TransCanada's compensation programs.

• Reviewed the stock option plan and recommended changes to amendment provisions to align with best practices.

• Reviewed the long-term incentive mix and current market trends.

• Reviewed our performance measures under the Executive Share Unit (ESU) plan.

• Reviewed our talent strategy.

• Reviewed the alignment of actual compensation earned with performance over the applicable measurement periods.

TransCanada Management information circular2018 52

Compensation

We are committed to high standards of corporate governance, including compensation governance. This section tells you how the Board makes director and executive compensation decisions at TransCanada, and explains its decisions for 2017.
			WHERE TO FIND IT
		>	Compensation governance	53
			Expertise	54
			Compensation oversight	55
			Independent consultant	58
Compensation governance The Board, the Human Resources committee and the Governance committee are responsible for the integrity of our compensation governance practices.
			Director compensation consultant	58
		>	Director compensation	59
			Director compensation discussion and analysis	59
Human Resources committee Paula Rosput Reynolds (Chair) S. Barry Jackson Mary Pat Salomone Siim A. Vanaselja (as of May 5, 2017) Richard E. Waugh	Governance committee Kevin E. Benson (Chair) Derek H. Burney S. Barry Jackson Paula Rosput Reynolds (as of May 5, 2017) Indira Samarasekera Siim A. Vanaselja
			2017 details	63
		>	Executive compensation	71
			Human Resources committee letter to shareholders	68
			Executive compensation discussion and analysis	71
			2017 details	98
The Board approves all matters related to executive and director compensation. The committees are responsible for reviewing compensation matters and making any recommendations. Both committees are entirely independent. Each Human Resources committee member is independent under the NYSE compensation committee independence requirements.

53 TransCanada Management information circular2018

EXPERTISE

Human resources and executive compensation

The Human Resources committee is responsible for executive compensation. It consists of five independent directors who have an appropriate mix of skills and experience in management, business, industry, human resources, executive compensation and public accountability for carrying out their responsibilities.

Name	Human resources/ compensation experience	Capital markets	CEO experience	Accounting /Audit	Governance	Risk management
Paula Rosput Reynolds (Chair)	X		X	X	X	X
S. Barry Jackson	X		X	X	X
Mary Pat Salomone	X			X