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LEASES

12 Months Ended

Dec. 31, 2021

LESSEE

We incur operating lease expenses related primarily to real estate, pipelines, storage and equipment. Our operating leases have remaining lease terms of 5 months to 25 years as at December 31, 2021.

For the years ended December 31, 2021 and 2020, we incurred operating lease expenses of $95 million and $107 million, respectively. Operating lease expenses are reported under Operating and administrative expense in the Consolidated Statements of Earnings.

For the years ended December 31, 2021 and 2020, operating lease payments to settle lease liabilities were $118 million and $133 million, respectively. Operating lease payments are reported under Operating activities in the Consolidated Statements of Cash Flows.

Supplemental Statements of Financial Position Information


	December 31, 2021		December 31, 2020
(millions of Canadian dollars, except lease term and discount rate)
Operating leases1
Operating lease right-of-use assets, net2	645		708

Operating lease liabilities - current3	92		80
Operating lease liabilities - long-term3	612		681
Total operating lease liabilities	704		761

Finance leases
Finance lease right-of-use assets, net4	49		57

Finance lease liabilities - current5	13		11
Finance lease liabilities - long-term3	33		42
Total finance lease liabilities	46		53

Weighted average remaining lease term
Operating leases	12 years		13 years
Finance leases	7 years		7 years

Weighted average discount rate
Operating leases	4.1	%	4.1	%
Finance leases	3.8	%	3.8	%

1Affiliate right-of-use assets, current lease liabilities and long-term lease liabilities as at December 31, 2021 were $51 million (December 31, 2020 - $65 million), $5 million (December 31, 2020 - $5 million) and $47 million (December 31, 2020 - $52 million), respectively.

2Operating lease right-of-use assets are reported under Deferred amounts and other assets in the Consolidated Statements of Financial Position.

3Current operating lease liabilities and long-term operating and finance lease liabilities are reported under Accounts payable and other and Other long-term liabilities, respectively, in the Consolidated Statements of Financial Position.

4Finance lease right-of-use assets are reported under Property, plant and equipment, net in the Consolidated Statements of Financial Position.

5Current finance lease liabilities are reported under Current portion of long-term debt in the Consolidated Statements of Financial Position.

As at December 31, 2021, our operating and finance lease liabilities are expected to mature as follows:


	Operating leases	Finance leases
(millions of Canadian dollars)
2022	117	15
2023	98	13
2024	91	9
2025	84	2
2026	72	1
Thereafter	455	11
Total undiscounted lease payments	917	51
Less imputed interest	(213)	(5)
Total	704	46

LESSOR

We receive revenues from operating leases primarily related to natural gas and crude oil storage and processing facilities, rail cars, and wind power generation assets. Our operating leases have remaining lease terms of 1 month to 30 years as at December 31, 2021.


Year ended December 31,	2021	2020
(millions of Canadian dollars)
Operating lease income	263	265
Variable lease income	333	361
Total lease income1	596	626

1Lease income is recorded under Transportation and other services in the Consolidated Statements of Earnings.

As at December 31, 2021, the following table sets out future lease payments to be received under operating lease contracts where we are the lessor:


			Operating leases
(millions of Canadian dollars)
2022			235
2023			215
2024			205
2025			196
2026			191
Thereafter			1,938
Future lease payments			2,980

LEASES