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RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of the Consolidated Statements of Financial Position Location and Carrying Value of Derivative Instruments

The following tables summarize the Consolidated Statements of Financial Position location and carrying value of our derivative instruments, as well as the maximum potential settlement amounts, in the event of the specific circumstances described above.


March 31, 2025	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	—	—	26	26	(17)	9
Interest rate contracts	5	—	16	21	(9)	12
Commodity contracts	2	—	432	434	(257)	177

	7	—	474	481	(283)	198
Deferred amounts and other assets
Foreign exchange contracts	—	—	68	68	(58)	10
Interest rate contracts	15	—	92	107	(32)	75
Commodity contracts	—	—	196	196	(53)	143

	15	—	356	371	(143)	228
Other current liabilities
Foreign exchange contracts	—	(31)	(713)	(744)	17	(727)
Interest rate contracts	(11)	—	(25)	(36)	9	(27)
Commodity contracts	—	—	(483)	(483)	257	(226)

	(11)	(31)	(1,221)	(1,263)	283	(980)
Other long-term liabilities
Foreign exchange contracts	—	—	(1,523)	(1,523)	58	(1,465)
Interest rate contracts	(16)	—	(97)	(113)	32	(81)
Commodity contracts	—	—	(162)	(162)	53	(109)

	(16)	—	(1,782)	(1,798)	143	(1,655)
Total net derivative asset/(liability)
Foreign exchange contracts	—	(31)	(2,142)	(2,173)	—	(2,173)
Interest rate contracts	(7)	—	(14)	(21)	—	(21)
Commodity contracts	2	—	(17)	(15)	—	(15)

	(5)	(31)	(2,173)	(2,209)	—	(2,209)


December 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	—	78	47	125	(29)	96
Interest rate contracts	44	—	23	67	(39)	28
Commodity contracts	2	—	360	362	(191)	171
Other contracts	—	—	3	3	—	3
	46	78	433	557	(259)	298
Deferred amounts and other assets
Foreign exchange contracts	—	—	83	83	(71)	12
Interest rate contracts	9	—	137	146	(27)	119
Commodity contracts	—	—	197	197	(39)	158

	9	—	417	426	(137)	289
Other current liabilities
Foreign exchange contracts	—	(73)	(731)	(804)	29	(775)
Interest rate contracts	(58)	—	(22)	(80)	39	(41)
Commodity contracts	—	—	(451)	(451)	191	(260)

	(58)	(73)	(1,204)	(1,335)	259	(1,076)
Other long-term liabilities
Foreign exchange contracts	—	—	(1,579)	(1,579)	71	(1,508)
Interest rate contracts	—	—	(80)	(80)	27	(53)
Commodity contracts	(1)	—	(238)	(239)	39	(200)

	(1)	—	(1,897)	(1,898)	137	(1,761)
Total net derivative asset/(liability)
Foreign exchange contracts	—	5	(2,180)	(2,175)	—	(2,175)
Interest rate contracts	(5)	—	58	53	—	53
Commodity contracts	1	—	(132)	(131)	—	(131)
Other contracts	—	—	3	3	—	3
	(4)	5	(2,251)	(2,250)	—	(2,250)

Schedule of the Maturity and Notional Principal or Quantity Outstanding Related to Derivative Instruments

The following table summarizes the maturity and notional principal or quantity outstanding related to our derivative instruments:


March 31, 2025	2025	2026	2027	2028	2029	Thereafter	Total
Foreign exchange contracts - US dollar forwards - purchase (millions of US dollars)	791	—	—	—	—	—	791
Foreign exchange contracts - US dollar forwards - sell (millions of US dollars)	4,706	5,627	4,841	3,552	1,278	30	20,034

Foreign exchange contracts - British pound (GBP) forwards - sell (millions of GBP)	23	28	32		—	—	83

Foreign exchange contracts - Euro forwards - sell (millions of Euro)	93	121	81	67	66	129	557
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)	1,469	1,737	676	49	13	—	3,944

Interest rate contracts - long-term pay fixed rate (millions of Canadian dollars)1	2,883	1,384	—	—	—	—	4,267
Interest rate contracts - costless collar (millions of Canadian dollars)	1,520	1,314	846	36	—	—	3,716

Commodity contracts - natural gas (billions of cubic feet)2	93	87	42	14	4	2	242
Commodity contracts - crude oil (millions of barrels)2	1	5	(3)	1	1	1	6

Commodity contracts - power (megawatt per hour (MW/H))	118	107	51	30	30	—	64	3

1Represents the notional amount of long-term debt issuances hedged.

2Represents the notional amount of net purchase/(sale).

3Total is an average net purchase/(sale) of power.

Schedule of Effect of Cash Flow Hedges and Net Investment Hedges on Consolidated Earnings and Consolidated Comprehensive Income, Before Income Taxes

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,
		2025	2024
(millions of Canadian dollars)
Unrealized loss on derivative		(42)	(63)
Unrealized gain on hedged item		50	74
Realized gain on derivative		61	59
Realized loss on hedged item		(74)	(79)

The following table presents the effect of cash flow hedges and fair value hedges on our consolidated earnings and comprehensive income, before the effect of income taxes:


	Three months ended March 31,
		2025	2024
(millions of Canadian dollars)
Amount of unrealized gain/(loss) recognized in OCI
Cash flow hedges

Interest rate contracts		(35)	138
Commodity contracts		1	12
Other contracts		—	1
Fair value hedges
Foreign exchange contracts		(6)	(15)


		(40)	136
Amount of loss reclassified from AOCI to earnings
Foreign exchange contracts1		12	19
Interest rate contracts2		8	—


		20	19

1Reported within Interest expense and Other income/(expense) in the Consolidated Statements of Earnings.

2Reported within Interest expense in the Consolidated Statements of Earnings.

Schedule of Unrealized Gains and Losses Associated With Changes in The Fair Value of Non-Qualifying Derivatives

The following table presents the unrealized gains and losses associated with changes in the fair value of our non-qualifying derivatives:


	Three months ended March 31,
		2025	2024
(millions of Canadian dollars)
Foreign exchange contracts1		38	(730)
Interest rate contracts2		(73)	105
Commodity contracts3		130	(67)
Other contracts4		(3)	(1)
Total unrealized derivative fair value gain/(loss), net		92	(693)

1Reported within Other income/(expense) in the Consolidated Statements of Earnings.

2Reported within Interest expense in the Consolidated Statements of Earnings.

3For the respective three months ended periods, reported within Transportation and other services revenues (2025 - $86 million gain; 2024 - $35 million loss), Commodity sales (2025 - $24 million loss; 2024 - $37 million loss), Commodity costs (2025 - $70 million gain; 2024 - $23 million gain) and Operating and administrative expense (2025 - $2 million loss; 2024 - $18 million loss) in the Consolidated Statements of Earnings.

4Reported within Operating and administrative expense in the Consolidated Statements of Earnings.

Schedule of Credit Concentrations and Maximum Credit Exposure, With Respect to Derivative Instruments

We have credit concentrations and credit exposure, with respect to derivative instruments, in the following counterparty segments:


	March 31, 2025	December 31, 2024
(millions of Canadian dollars)
Canadian financial institutions	291	344
US financial institutions	107	128
European financial institutions	73	116
Asian financial institutions	32	53
Other1	335	332
	838	973

1Other is comprised of commodity clearing house and crude oil, natural gas and power counterparties.

Schedule of Derivative Assets and Liabilities Measured at Fair Value

We have categorized our derivative assets and liabilities measured at fair value as follows:


March 31, 2025	Level 1	Level 2	Level 3	Total Gross Derivative Instruments
(millions of Canadian dollars)
Financial assets
Current derivative assets
Foreign exchange contracts	—	26	—	26
Interest rate contracts	—	21	—	21
Commodity contracts	30	76	328	434

	30	123	328	481
Long-term derivative assets
Foreign exchange contracts	—	68	—	68
Interest rate contracts	—	107	—	107
Commodity contracts	—	17	179	196

	—	192	179	371
Financial liabilities
Current derivative liabilities
Foreign exchange contracts	—	(744)	—	(744)
Interest rate contracts	—	(36)	—	(36)
Commodity contracts	(49)	(113)	(321)	(483)

	(49)	(893)	(321)	(1,263)
Long-term derivative liabilities
Foreign exchange contracts	—	(1,523)	—	(1,523)
Interest rate contracts	—	(113)	—	(113)
Commodity contracts	—	(33)	(129)	(162)

	—	(1,669)	(129)	(1,798)
Total net financial asset/(liability)
Foreign exchange contracts	—	(2,173)	—	(2,173)
Interest rate contracts	—	(21)	—	(21)
Commodity contracts	(19)	(53)	57	(15)

	(19)	(2,247)	57	(2,209)


December 31, 2024	Level 1	Level 2	Level 3	Total Gross Derivative Instruments
(millions of Canadian dollars)
Financial assets
Current derivative assets
Foreign exchange contracts	—	125	—	125
Interest rate contracts	—	67	—	67
Commodity contracts	34	72	256	362
Other contracts	—	3	—	3
	34	267	256	557
Long-term derivative assets
Foreign exchange contracts	—	83	—	83
Interest rate contracts	—	146	—	146
Commodity contracts	1	14	182	197

	1	243	182	426
Financial liabilities
Current derivative liabilities
Foreign exchange contracts	—	(804)	—	(804)
Interest rate contracts	—	(80)	—	(80)
Commodity contracts	(52)	(116)	(283)	(451)

	(52)	(1,000)	(283)	(1,335)
Long-term derivative liabilities
Foreign exchange contracts	—	(1,579)	—	(1,579)
Interest rate contracts	—	(80)	—	(80)
Commodity contracts	(1)	(31)	(207)	(239)

	(1)	(1,690)	(207)	(1,898)
Total net financial asset/(liability)
Foreign exchange contracts	—	(2,175)	—	(2,175)
Interest rate contracts	—	53	—	53
Commodity contracts	(18)	(61)	(52)	(131)
Other contracts	—	3	—	3
	(18)	(2,180)	(52)	(2,250)

Schedule of Significant Unobservable Inputs Used in the Fair Value Measurement of Level 3 Derivative Instruments

The significant unobservable inputs used in the fair value measurement of Level 3 derivative instruments were as follows:


March 31, 2025	Fair Value	Unobservable Input	Minimum Price/Volatility	Maximum Price/ Volatility	Weighted Average Price/Volatility	Unit of Measurement
(fair value in millions of Canadian dollars)
Commodity contracts - financial1
Natural gas	11	Forward gas price	3.78	9.85	5.91	$/mmbtu2
Crude	(8)	Forward crude price	76.32	103.75	97.19	$/barrel

Power	(19)	Forward power price	28.60	195.45	74.48	$/MW/H
Commodity contracts - physical1
Natural gas	(71)	Forward gas price	0.59	12.21	4.61	$/mmbtu2
Crude	25	Forward crude price	76.45	118.36	99.11	$/barrel

Power	(15)	Forward power price	24.97	138.58	76.37	$/MW/H
Commodity options3
Natural gas	134	Forward gas price	4.66	11.29	7.60	$/mmbtu2
		Price volatility	11%	77%	53%
	57

1Financial and physical forward commodity contracts are valued using a market approach valuation technique.

2One million British thermal units (mmbtu).

3Commodity options contracts are valued using an option model valuation technique.

Schedule of Changes in Net Fair Value of Derivative Assets and Liabilities Classified as Level 3 in the Fair Value Hierarchy

Changes in the net fair value of derivative assets and liabilities classified as Level 3 in the fair value hierarchy were as follows:


	Three months ended March 31,
	2025	2024
(millions of Canadian dollars)
Level 3 net derivative liability at beginning of period	(52)	(131)
Total gain/(loss), unrealized
Included in earnings1	23	(17)
Included in OCI	2	12
Included in regulatory assets/liabilities	(45)	—
Settlements	129	9
Level 3 net derivative asset/(liability) at end of period	57	(127)

1Reported within Transportation and other services revenues, Commodity costs and Operating and administrative expense in the Consolidated Statements of Earnings.

- Definition

Tabular disclosure of all significant concentrations of risk, including credit risk and market risk, arising from all financial instruments (as defined), whether from an individual counterparty or groups of counterparties. The disclosure concerning concentrations of risk may consist of the following information: (1) for concentrations of credit risk disclosure may include: (a) information about the (shared) activity, region, or economic characteristic that identifies the concentration, (b) the maximum amount of loss due to credit risk that, based on the gross fair value of the financial instrument, the entity would incur if parties to the financial instruments that make up the concentration failed completely to perform according to the terms of the contracts and the collateral or other security, if any, for the amount due proved to be of no value to the entity, (c) the policy of requiring collateral or other security to support financial instruments subject to credit risk, information about the entity's access to that collateral or other security, and the nature and a brief description of the collateral or other security supporting those financial instruments, and (d) the policy of entering into master netting arrangements to mitigate the credit risk of financial instruments, information about the arrangements for which the entity is a party, and a brief description of the terms of those arrangements, including the extent to which they would reduce the entity's maximum amount of loss due to credit risk and (2) for disclosure of quantitative information about the market risks of financial instruments that is consistent with the way the company manages or adjusts those risks, disclosure may include: (a) more details about current positions and perhaps activity during the period, (b) the hypothetical effects on comprehensive income (or net assets), or annual income, of several possible changes in market prices, (c) a gap analysis of interest rate re-pricing or maturity dates, (d) the duration of the financial instruments, (e) the entity's value at risk from derivatives and from other positions at the end of the reporting period and the average value at risk during the year, or (f) other ways of reporting quantitative information as internally developed.

+ References + Details