We employ financial derivative instruments to hedge foreign currency denominated earnings exposure. A combination of qualifying and non-qualifying derivative instruments is used to hedge anticipated foreign currency denominated revenues and expenses and to manage variability in cash flows. We hedge certain net investments in US dollar-denominated investments and subsidiaries using foreign currency US dollar-denominated debt.

Our earnings, cash flows and OCI are exposed to short-term interest rate variability due to the regular repricing of our variable rate debt, primarily commercial paper. We have a policy of limiting the maximum floating rate debt to 30% of total debt outstanding. To ensure compliance with our policy, we monitor and adjust our debt portfolio mix of fixed and variable rate debt instruments in conjunction with the use of hedging instruments. We have implemented a hedging program to partially mitigate the impact of short-term interest rate volatility on interest expense via the execution of floating-to-fixed interest rate swaps and costless collars. These swaps have an average fixed rate of 4.1%.

Our earnings and cash flows are also exposed to variability in longer term interest rates ahead of anticipated fixed rate term debt issuances. A combination of qualifying and non-qualifying forward starting interest rate swaps are used to hedge against the effect of future interest rate movements. We have established a program including some of our subsidiaries to partially mitigate our exposure to long-term interest rate variability on forecasted term debt issuances via execution of floating-to-fixed interest rate swaps with an average swap rate of 3.5%.

Our earnings, cash flows and OCI are exposed to changes in commodity prices as a result of our ownership interests in certain assets and investments, as well as through the activities of our energy marketing subsidiaries. These commodities include natural gas, crude oil, power and natural gas liquids (NGL). We employ financial and physical derivative instruments to fix a portion of the variable price exposures that arise from physical transactions involving these commodities. We use primarily non-qualifying derivative instruments to manage commodity price risk.

We have a policy of entering into individual International Swaps and Derivatives Association, Inc. (ISDA) agreements, or other similar derivative agreements, with the majority of our financial derivative counterparties. These agreements provide for the net settlement of derivative instruments outstanding with specific counterparties in the event of bankruptcy or other significant credit events and reduce our credit risk exposure on financial derivative asset positions outstanding with the counterparties in those circumstances.


March 31, 2024	Derivative Instruments Used as Cash Flow Hedges	Derivative Instruments Used as Fair Value Hedges	Non- Qualifying Derivative Instruments	Total Gross Derivative Instruments as Presented	Amounts Available for Offset	Total Net Derivative Instruments
(millions of Canadian dollars)
Other current assets
Foreign exchange contracts	—	32	92	124	(26)	98
Interest rate contracts	51	—	51	102	(50)	52
Commodity contracts	—	—	241	241	(157)	84

	51	32	384	467	(233)	234
Deferred amounts and other assets
Foreign exchange contracts	—	—	124	124	(98)	26
Interest rate contracts	67	—	26	93	(7)	86
Commodity contracts	—	—	87	87	(40)	47

	67	—	237	304	(145)	159
Other current liabilities
Foreign exchange contracts	—	(43)	(195)	(238)	26	(212)
Interest rate contracts	(97)	—	(2)	(99)	50	(49)
Commodity contracts	(4)	—	(311)	(315)	157	(158)
Other contracts	—	—	(1)	(1)	—	(1)
	(101)	(43)	(509)	(653)	233	(420)
Other long-term liabilities
Foreign exchange contracts	—	(51)	(899)	(950)	98	(852)
Interest rate contracts	—	—	(22)	(22)	7	(15)
Commodity contracts	(2)	—	(164)	(166)	40	(126)

	(2)	(51)	(1,085)	(1,138)	145	(993)
Total net derivative asset/(liability)
Foreign exchange contracts	—	(62)	(878)	(940)	—	(940)
Interest rate contracts	21	—	53	74	—	74
Commodity contracts	(6)	—	(147)	(153)	—	(153)
Other contracts	—	—	(1)	(1)	—	(1)
	15	(62)	(973)	(1,020)	—	(1,020)


December 31, 2023	Derivative Instruments Used as Cash Flow Hedges	Derivative Instruments Used as Fair Value Hedges	Non- Qualifying Derivative Instruments	Total Gross Derivative Instruments as Presented	Amounts Available for Offset	Total Net Derivative Instruments
(millions of Canadian dollars)
Other current assets
Foreign exchange contracts	—	41	98	139	(32)	107
Interest rate contracts	31	—	34	65	(32)	33
Commodity contracts	—	—	418	418	(270)	148
Other contracts	—	—	1	1	(1)	—
	31	41	551	623	(335)	288
Deferred amounts and other assets
Foreign exchange contracts	—	16	319	335	(122)	213
Interest rate contracts	51	—	2	53	(21)	32
Commodity contracts	—	—	75	75	(41)	34

	51	16	396	463	(184)	279
Other current liabilities
Foreign exchange contracts	—	(44)	(84)	(128)	32	(96)
Interest rate contracts	(183)	—	(3)	(186)	32	(154)
Commodity contracts	(11)	—	(412)	(423)	270	(153)
Other contracts	—	—	(1)	(1)	1	—
	(194)	(44)	(500)	(738)	335	(403)
Other long-term liabilities
Foreign exchange contracts	—	(17)	(481)	(498)	122	(376)
Interest rate contracts	(3)	—	(85)	(88)	21	(67)
Commodity contracts	(7)	—	(159)	(166)	41	(125)

	(10)	(17)	(725)	(752)	184	(568)
Total net derivative liability
Foreign exchange contracts	—	(4)	(148)	(152)	—	(152)
Interest rate contracts	(104)	—	(52)	(156)	—	(156)
Commodity contracts	(18)	—	(78)	(96)	—	(96)
Other contracts	—	—	—	—	—	—
	(122)	(4)	(278)	(404)	—	(404)


March 31, 2024	2024	2025	2026	2027	2028	Thereafter	Total
Foreign exchange contracts - US dollar forwards - purchase (millions of US dollars)	715	500	—	—	—	—	1,215
Foreign exchange contracts - US dollar forwards - sell (millions of US dollars)	5,368	5,327	4,697	4,091	3,162	888	23,533
Foreign exchange contracts - British pound (GBP) forwards - sell (millions of GBP)	25	30	28	32	—	—	115

Foreign exchange contracts - Euro forwards - sell (millions of Euro)	106	126	121	81	67	195	696
Foreign exchange contracts - Japanese yen forwards - purchase (millions of yen)	—	84,800	—	—	—	—	84,800
Interest rate contracts - short-term pay fixed rate (millions of Canadian dollars)	4,726	1,904	1,130	75	25	13	7,873
Interest rate contracts - short-term receive fixed rate (millions of Canadian dollars)	708	947	179	—	—	—	1,834
Interest rate contracts - long-term pay fixed rate (millions of Canadian dollars)1	5,436	588	—	—	—	—	6,024
Interest rate contracts - costless collar (millions of Canadian dollars)	—	1,382	53	—	—	—	1,435

Commodity contracts - natural gas (billions of cubic feet)	50	28	18	12	—	—	108
Commodity contracts - crude oil (millions of barrels)	13	—	—	—	—	—	13

Commodity contracts - power (megawatt per hour (MW/H))	51	(18)	(35)	(51)	(49)	(30)	(25)	2

The following table presents foreign exchange derivative instruments that are designated and qualify as fair value hedges. The realized and unrealized gain or loss on the derivative is included in Other income/(expense) or Interest expense in the Consolidated Statements of Earnings. The offsetting loss or gain on the hedged item attributable to the hedged risk is included in Other income/(expense) in the Consolidated Statements of Earnings. Any excluded components are included in the Consolidated Statements of Comprehensive Income.


	Three months ended March 31,
		2024	2023
(millions of Canadian dollars)
Amount of unrealized gain/(loss) recognized in OCI
Cash flow hedges

Interest rate contracts		138	(105)
Commodity contracts		12	34
Other contracts		1	(2)
Fair value hedges
Foreign exchange contracts		(15)	7


		136	(66)
Amount of loss reclassified from AOCI to earnings
Foreign exchange contracts1		19	—
Interest rate contracts2		—	8

Other contracts3		—	1
		19	9

We estimate that a loss of $8 million from AOCI related to cash flow hedges will be reclassified to earnings in the next 12 months. Actual amounts reclassified to earnings depend on the foreign exchange rates, interest rates and commodity prices in effect when derivative contracts that are currently outstanding mature. For all forecasted transactions, the maximum term over which we are hedging exposures to the variability of cash flows is two years as at March 31, 2024.

3For the respective three months ended periods, reported within Transportation and other services revenues (2024 - $35 million loss; 2023 - $6 million gain), Commodity sales (2024 - $37 million loss; 2023 - $69 million gain), Commodity costs (2024 - $23 million gain; 2023 - $75 million loss) and Operating and administrative expense (2024 - $18 million loss; 2023 - $39 million loss) in the Consolidated Statements of Earnings.

Liquidity risk is the risk that we will not be able to meet our financial obligations, including commitments and guarantees, as they become due. In order to mitigate this risk, we forecast cash requirements over a 12-month rolling time period to determine whether sufficient funds will be available and maintain substantial capacity under our committed bank lines of credit to address any contingencies. Our primary sources of liquidity and capital resources are funds generated from operations, the issuance of commercial paper and draws under committed credit facilities and long-term debt, which includes debentures and medium-term notes. Our shelf prospectuses with securities regulators enable ready access to either the Canadian or US public capital markets, subject to market conditions. In addition, we maintain sufficient liquidity through committed credit facilities with a diversified group of banks and institutions which, if necessary, enables us to fund all anticipated requirements for approximately one year without accessing the capital markets. We were in compliance with all the terms and conditions of our committed credit facility agreements and term debt indentures as at March 31, 2024. As a result, all credit facilities are available to us and the banks are obligated to fund us under the terms of the facilities. We also identify a variety of other potential sources of debt and equity funding alternatives, including reinstatement of our dividend reinvestment and share purchase plan or at-the-market equity issuances.

Entering into derivative instruments may result in exposure to credit risk from the possibility that a counterparty will default on its contractual obligations. In order to mitigate this risk, we enter into risk management transactions primarily with institutions that possess strong investment grade credit ratings. Credit risk relating to derivative counterparties is mitigated through the maintenance and monitoring of credit exposure limits and contractual requirements, netting arrangements and review counterparty credit exposure using external credit rating services and other analytical tools.

Gross derivative balances have been presented without the effects of collateral posted. Derivative assets are adjusted for non-performance risk of our counterparties using their credit default swap spread rates and are reflected at fair value. For derivative liabilities, our non-performance risk is considered in the valuation.

Credit risk also arises from trade and other long-term receivables, and is mitigated through credit exposure limits and contractual requirements, the assessment of credit ratings and netting arrangements. Within Enbridge Gas, credit risk is mitigated by the utility's large and diversified customer base and the ability to recover an estimate for expected credit losses through the ratemaking process. We actively monitor the financial strength of large industrial customers and, in select cases, have obtained additional security to minimize the risk of default on receivables. Generally, we utilize a loss allowance matrix which contemplates historical credit losses by age of receivables, adjusted for any forward-looking information and management expectations to measure lifetime expected credit losses of receivables. The maximum exposure to credit risk related to non-derivative financial assets is their carrying value.

Our financial assets and liabilities measured at fair value on a recurring basis include derivatives and other financial instruments. We also disclose the fair value of other financial instruments not measured at fair value. The fair value of financial instruments reflects our best estimates of market value based on generally accepted valuation techniques or models and is supported by observable market prices and rates. When such values are not available, we use discounted cash flow analysis from applicable yield curves based on observable market inputs to estimate fair value.

Level 1 includes financial instruments measured at fair value based on unadjusted quoted prices for identical assets and liabilities in active markets that are accessible at the measurement date. An active market for a financial instrument is considered to be a market where transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Our Level 1 instruments consist primarily of exchange-traded derivatives used to mitigate the risk of crude oil price fluctuations, US and Canadian treasury bills, investments in exchange-traded funds held by our captive insurance subsidiaries, as well as restricted long-term investments in exchange-traded funds that are held in trust in accordance with the CER's regulatory requirements under the Land Matters Consultation Initiative (LMCI).

Level 2 includes financial instrument valuations determined using directly or indirectly observable inputs other than quoted prices included within Level 1. Financial instruments in this category are valued using models or other industry standard valuation techniques derived from observable market data. Such valuation techniques include inputs such as quoted forward prices, time value, volatility factors and broker quotes that can be observed or corroborated in the market for the entire duration of the financial instrument. Derivatives valued using Level 2 inputs include non-exchange traded derivatives such as over-the-counter foreign exchange forward and cross-currency swap contracts, interest rate swaps, physical forward commodity contracts, as well as commodity swaps and options for which observable inputs can be obtained.

We have also categorized the fair value of our long-term debt, investments in debt securities held by our captive insurance subsidiaries, and restricted long-term investments in Canadian government bonds held in trust in accordance with the CER's regulatory requirements under the LMCI as Level 2. The fair value of our long-term debt is based on quoted market prices for instruments of similar yield, credit risk and tenor. When possible, the fair value of our restricted long-term investments is based on quoted market prices for similar instruments and, if not available, based on broker quotes.

Level 3 includes derivative valuations based on inputs which are less observable, unavailable or where the observable data does not support a significant portion of the derivative's fair value. Generally, Level 3 derivatives are longer dated transactions, occur in less active markets, occur at locations where pricing information is not available or have no binding broker quote to support Level 2 classification. We have developed methodologies, benchmarked against industry standards, to determine fair value for these derivatives based on the extrapolation of observable future prices and rates. Derivatives valued using Level 3 inputs primarily include long-dated derivative power, NGL and natural gas contracts, basis swaps, commodity swaps, and power and energy swaps, as well as physical forward commodity contracts. We do not have any other financial instruments categorized in Level 3.

We use the most observable inputs available to estimate the fair value of our derivatives. When possible, we estimate the fair value of our derivatives based on quoted market prices. If quoted market prices are not available, we use estimates from third-party brokers. For non-exchange traded derivatives classified in Levels 2 and 3, we use standard valuation techniques to calculate the estimated fair value. These methods include discounted cash flows for forwards and swaps and Black-Scholes-Merton pricing models for options. Depending on the type of derivative and nature of the underlying risk, we use observable market prices (interest, foreign exchange, commodity and share price) and volatility as primary inputs to these valuation techniques. Finally, we consider our own credit default swap spread, as well as the credit default swap spreads associated with our counterparties, in our estimation of fair value.


March 31, 2024	Level 1	Level 2	Level 3	Total Gross Derivative Instruments
(millions of Canadian dollars)
Financial assets
Current derivative assets
Foreign exchange contracts	—	124	—	124
Interest rate contracts	—	102	—	102
Commodity contracts	35	82	124	241

	35	308	124	467
Long-term derivative assets
Foreign exchange contracts	—	124	—	124
Interest rate contracts	—	93	—	93
Commodity contracts	—	14	73	87

	—	231	73	304
Financial liabilities
Current derivative liabilities
Foreign exchange contracts	—	(238)	—	(238)
Interest rate contracts	—	(99)	—	(99)
Commodity contracts	(63)	(78)	(174)	(315)
Other contracts	—	(1)	—	(1)
	(63)	(416)	(174)	(653)
Long-term derivative liabilities
Foreign exchange contracts	—	(950)	—	(950)
Interest rate contracts	—	(22)	—	(22)
Commodity contracts	—	(16)	(150)	(166)

	—	(988)	(150)	(1,138)
Total net financial asset/(liability)
Foreign exchange contracts	—	(940)	—	(940)
Interest rate contracts	—	74	—	74
Commodity contracts	(28)	2	(127)	(153)
Other contracts	—	(1)	—	(1)
	(28)	(865)	(127)	(1,020)


December 31, 2023	Level 1	Level 2	Level 3	Total Gross Derivative Instruments
(millions of Canadian dollars)
Financial assets
Current derivative assets
Foreign exchange contracts	—	139	—	139
Interest rate contracts	—	65	—	65
Commodity contracts	142	103	173	418
Other contracts	—	1	—	1
	142	308	173	623
Long-term derivative assets
Foreign exchange contracts	—	335	—	335
Interest rate contracts	—	53	—	53
Commodity contracts	—	24	51	75

	—	412	51	463
Financial liabilities
Current derivative liabilities
Foreign exchange contracts	—	(128)	—	(128)
Interest rate contracts	—	(186)	—	(186)
Commodity contracts	(136)	(76)	(211)	(423)
Other contracts	—	(1)	—	(1)
	(136)	(391)	(211)	(738)
Long-term derivative liabilities
Foreign exchange contracts	—	(498)	—	(498)
Interest rate contracts	—	(88)	—	(88)
Commodity contracts	—	(22)	(144)	(166)

	—	(608)	(144)	(752)
Total net financial asset/(liability)
Foreign exchange contracts	—	(152)	—	(152)
Interest rate contracts	—	(156)	—	(156)
Commodity contracts	6	29	(131)	(96)
Other contracts	—	—	—	—
	6	(279)	(131)	(404)


March 31, 2024	Fair Value	Unobservable Input	Minimum Price	Maximum Price	Weighted Average Price	Unit of Measurement
(fair value in millions of Canadian dollars)
Commodity contracts - financial1
Natural gas	(8)	Forward gas price	1.73	8.97	3.72	$/mmbtu2
Crude	(7)	Forward crude price	84.20	105.12	100.91	$/barrel

Power	(72)	Forward power price	23.64	163.57	61.76	$/MW/H
Commodity contracts - physical1
Natural gas	18	Forward gas price	0.83	12.95	3.39	$/mmbtu2
Crude	12	Forward crude price	79.56	115.53	99.80	$/barrel

Power	(70)	Forward power price	19.59	184.82	63.68	$/MW/H
	(127)

If adjusted, the significant unobservable inputs disclosed in the table above would have a direct impact on the fair value of our Level 3 derivative instruments. The significant unobservable inputs used in the fair value measurement of Level 3 derivative instruments include forward commodity prices. Changes in forward commodity prices could result in significantly different fair values for our Level 3 derivatives.

During the three months ended March 31, 2024 and 2023, we recognized unrealized foreign exchange losses of $377 million and gains of $59 million, respectively, on the translation of US dollar-denominated debt, in OCI. During the three months ended March 31, 2024 and 2023, we recognized nil and realized losses of $44 million, respectively, associated with the settlement of US dollar-denominated debt that had matured during the period, in OCI.

Certain long-term investments in other entities with no actively quoted prices are classified as Fair Value Measurement Alternative (FVMA) investments and are recorded at cost less impairment. The carrying value of FVMA investments totaled $176 million and $173 million as at March 31, 2024 and December 31, 2023, respectively.

As at March 31, 2024, we had investments with a fair value of $743 million included in Restricted long-term investments in the Consolidated Statements of Financial Position (December 31, 2023 - $717 million). These securities are classified as available-for-sale and represent restricted funds which are collected from customers and held in trust for the purpose of funding pipeline abandonment in accordance with the CER's regulatory requirements.

We had restricted long-term investments held in trust totaling $293 million as at March 31, 2024 which are classified as Level 1 in the fair value hierarchy (December 31, 2023 - $263 million). We also had restricted long-term investments held in trust totaling $450 million (cost basis - $507 million) and $454 million (cost basis - $486 million) as at March 31, 2024 and December 31, 2023, respectively, which are classified as Level 2 in the fair value hierarchy. There were unrealized holding losses of $13 million on these investments for the three months ended March 31, 2024 (2023 - gains of $34 million).

We have wholly-owned captive insurance subsidiaries whose principal activity is providing insurance and reinsurance coverage for certain insurable property and casualty risk exposures of our operating subsidiaries and certain equity investments. As at March 31, 2024, the fair value of investments in equity funds and debt securities held by our captive insurance subsidiaries was $312 million and $251 million, respectively (December 31, 2023 - $287 million and $284 million, respectively). Our investments in debt securities had a cost basis of $247 million as at March 31, 2024 (December 31, 2023 - $279 million). These investments in equity funds and debt securities are recognized at fair value, classified as Level 1 and Level 2 in the fair value hierarchy, respectively, and are recorded in Other current assets and Long-term investments in the Consolidated Statements of Financial Position. There were unrealized holding gains of $16 million for the three months ended March 31, 2024, (2023 - gains of $15 million).

As at March 31, 2024 and December 31, 2023, our long-term debt including finance lease liabilities had a carrying value of $87.6 billion and $81.2 billion, respectively, before debt issuance costs and a fair value of $84.6 billion and $78.1 billion, respectively. We also have non-current notes receivable carried at book value and recorded in Deferred amounts and other assets in the Consolidated Statements of Financial Position. As at March 31, 2024 and December 31, 2023, the non-current notes receivable had a carrying value of $53 million, respectively, which also approximates their fair value.

The fair value of financial assets and liabilities other than derivative instruments, certain long-term investments in other entities, restricted long-term investments, investments held by our captive insurance subsidiaries, long-term debt and non-current notes receivable described above approximate their carrying value due to the short period to maturity.