term, Mackenzie Delta and Alaska gas will be attractive incremental sources, and we look forward to connecting those sources within five to ten years. TransCanada is well positioned to make a strong contribution to the development of northern gas. We have extensive large diameter, cold weather natural gas pipeline experience, and a ten-year track record of bringing large pipeline projects in on budget. Our integrated Alberta to New York pipeline system is one of the most effi- cient, large volume systems anywhere. We can expand that system and our pipelines to other markets to accommodate incremental volumes at low cost and with considerable flexibility. These are real advantages that underpin our proposals to build and operate northern gas infrastructure. Our power business continues to grow at an impressive rate and performed particularly well in 2001. While our power assets constitute the smaller portion of our balance sheet, our power business offers significant potential for growth and value creation particularly over the short term. We invested more than $550 million to grow our power business in 2001, notably without having to raise external funds. We have established solid credentials as a power developer with a strong focus on cogen- eration, and we will continue to pursue development opportunities across Canada and in selected regions of the U.S. Our Alberta and New England deregulation experiences have given us considerable insight when assessing new jurisdictions. We are prepared to pursue development opportu- nities in both Canada and the U.S. when the fundamentals are right. It is with great sadness that we marked the passing in 2001 of J.M. (Jack) MacLeod, an active and valued member of the Board of Directors. Mr. MacLeod joined the board of NOVA Corporation in 1993. He served with distinc- tion on the TransCanada board as Chair of the Health, Safety and Environment Committee and as a member of the Governance Committee. This year will see the retirement from the board of The Hon. Donald S. Macdonald after ten years of service. Dominic D’Alessandro, elected to the board in 1999, will not be standing for re-election. We would like to thank both gentlemen for their contributions and dedication to TransCanada. There are two new appointments to the board, Mr. David P. O’Brien, Chairman and CEO of PanCanadian Energy Corporation; and The Hon. Paule Gauthier, P.C., O.C., O.Q., Q.C., Senior Partner, Desjardins Ducharme Stein Monast. We welcome both and look forward to the unique talents each brings to the board. We take this opportunity to acknowledge the contribution of Mr. Douglas D. Baldwin as President and CEO during the period from July 1999 through April 2001. Mr. Baldwin stepped forward to assume leadership of TransCanada at a difficult time and initiated the re-organization and divestment program that restored TransCanada’s financial health and competitive position. Mr. Baldwin continues as a valued member of the board. In conclusion, TransCanada enjoyed considerable success in 2001, and we look forward to building on that success in 2002 and beyond. We will invest in projects we understand, in regions and markets we know well and in circumstances where we have a clear competitive advantage. Through astute investments and excellent operations, we will continue to add value and deliver growth for our shareholders. BOARD AND MANAGEMENT  TransCanada today is about spirit, confi dence and focus. RICHARD F. HASKAYNE Chairman of the Board HAROLD N. KVISLE President and Chief Executive Officer 2001 ANNUAL REPORT  3