Exhibit 99.5

** **

**ENBRIDGE INC.**

**ANNUAL INFORMATION FORM**

For the Year Ended December31, 2009

 

 

 

 

 

 

 

**February18, 2010**

** **

----

 

**TABLE OFCONTENTS**

 
| ** **                                                                | **Page** |
|---------------------------------------------------------------------------|----------|
| Glossary                                                                  | 3        |
|                                                                      |     |
| Presentation of Information                                               | 4        |
|                                                                      |     |
| Forward-Looking Information                                               | 4        |
|                                                                      |     |
| Corporate Structure                                                       | 5        |
|                                                                      |     |
| Description of the Business                                               | 6        |
|                                                                      |     |
| General Development of the  Business                                      | 8        |
|                                                                      |     |
| Liquids Pipelines                                                         | 10       |
|                                                                      |     |
| Natural Gas Delivery and Services                                         | 13       |
|                                                                      |     |
| Sponsored Investments                                                     | 19       |
|                                                                      |     |
| Corporate                                                                 | 20       |
|                                                                      |     |
| General                                                                   | 21       |
|                                                                      |     |
| Corporate Social  Responsibility                                          | 21       |
|                                                                      |     |
| Environmental Matters                                                     | 22       |
|                                                                      |     |
| Risk Factors                                                              | 22       |
|                                                                      |     |
| Dividends                                                                 | 23       |
|                                                                      |     |
| Description of Capital  Structure                                         | 23       |
|                                                                      |     |
| Market for Securities                                                     | 25       |
|                                                                      |     |
| Credit Facilities                                                         | 26       |
|                                                                      |     |
| Directors and Officers                                                    | 26       |
|                                                                      |     |
| Audit, Finance & Risk  Committee                                      | 29       |
|                                                                      |     |
| Legal Proceedings                                                         | 31       |
|                                                                      |     |
| Interest of Management and  Others in Material Transactions               | 31       |
|                                                                      |     |
| Registrar and Transfer Agent                                              | 31       |
|                                                                      |     |
| Material Contracts                                                        | 32       |
|                                                                      |     |
| Interests of Experts                                                      | 32       |
|                                                                      |     |
| Additional Information                                                    | 32       |
|                                                                      |     |
| Appendix A – Audit, Finance  & Risk Committee Terms of Reference | 34       |

** **

----

 

**GLOSSARY**

 
| Adjusted earnings               |   | Earnings applicable to common  shareholders adjusted for non-recurring or non-operating factors                                                                                                                                                                        |
|---------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| AFR  Committee or the Committee |   | Audit,  Finance & Risk Committee                                                                                                                                                                                                                                   |
| AIF                             |   | Annual  Information Form                                                                                                                                                                                                                                               |
| bpd                             |   | Barrels  per day                                                                                                                                                                                                                                                       |
| bps                             |   | Basis  points                                                                                                                                                                                                                                                          |
| bcf/d                           |   | Billion  cubic feet per day                                                                                                                                                                                                                                            |
| CAPP                            |   | Canadian  Association of Petroleum Producers                                                                                                                                                                                                                           |
| CSR                             |   | Corporate  Social Responsibility                                                                                                                                                                                                                                       |
| EEM                             |   | Enbridge  Energy Management, L.L.C. – Enbridge has a 17.2% investment  in EEM, which owns 100% of EEP’s i-units                                                                                                                                              |
| EEP                             |   | Enbridge  Energy Partners, L.P. – Enbridge has a 27.0% ownership  interest in EEP, which owns and operates crude oil and liquid petroleum  transmission pipeline systems, natural gas gathering and related facilities  and marketing assets in the United States |
| EGD                             |   | Enbridge  Gas Distribution Inc. – 100% owned natural  gas distribution utility serving customers in its franchise areas of Central  and Eastern Ontario, including the City of Toronto and surrounding areas                                                      |
| EGNB                            |   | Enbridge  Gas New Brunswick Inc. – Enbridge owns 70.8% of this natural gas  distribution utility                                                                                                                                                                  |
| EIF                             |   | Enbridge  Income Fund – Enbridge has a 41.9% ownership interest in this publicly traded  income fund                                                                                                                                                              |
| FERC                            |   | Federal  Energy Regulatory Commission                                                                                                                                                                                                                                  |
| GHG                             |   | Greenhouse  gases                                                                                                                                                                                                                                                      |
| IR                              |   | Incentive  Regulation (applicable to EGD)                                                                                                                                                                                                                              |
| ITS                             |   | Incentive  Tolling Settlement on the Enbridge mainline system                                                                                                                                                                                                          |
| MD&A                        |   | Management’s  Discussion and Analysis                                                                                                                                                                                                                             |
| mmcf                            |   | Million  cubic feet                                                                                                                                                                                                                                                    |
| mmcf/d                          |   | Million  cubic feet per day                                                                                                                                                                                                                                            |
| MTNs                            |   | Medium-term  notes                                                                                                                                                                                                                                                     |
| NEB                             |   | National  Energy Board                                                                                                                                                                                                                                                 |
| NGLs                            |   | Natural  gas liquids                                                                                                                                                                                                                                                   |
| OEB                             |   | Ontario  Energy Board                                                                                                                                                                                                                                                  |
| Offshore                        |   | Enbridge  Offshore Pipelines – Enbridge has interests ranging from 22% to 100%  in these underwater pipelines in the Gulf of Mexico                                                                                                                               |
| PwC                             |   | PricewaterhouseCoopers  LLP – the Company’s external auditors                                                                                                                                                                                                |
| SEP                             |   | System  Expansion Project                                                                                                                                                                                                                                              |
| Year End                        |   | December  31, 2009                                                                                                                                                                                                                                                     |

 

 

3

----

 

**PRESENTATION OF INFORMATION**

 

Unlessotherwise noted, the information contained in this Annual Information Form (AIF)for Enbridge Inc. (Enbridge or the Company) is given at or for the year ended December 31,2009 (Year End). Amounts are expressed in Canadian dollars unless otherwiseindicated. Financial information is presented in accordance with Canadiangenerally accepted accounting principles (GAAP).

 

Enbridge’sManagement’s Discussion and Analysis (MD&A), dated February 18, 2010,and Enbridge’s Audited Consolidated Financial Statements, dated February 18,2010, as at and for the year ended December 31, 2009 are incorporated byreference into this AIF and can be found on SEDAR at www.sedar.com.

 

**METRIC CONVERSION TABLE**

Theconversion factors set out below are approximate factors. To convert fromMetric to Imperial multiply by the factor indicated. To convert from Imperialto Metric divide by the factor indicated.

 
| ** **                         | ** **                    | ** ** |
|------------------------------------|-------------------------------|------------|
| **Metric**                         | **Imperial**                  | **Factor** |
| Cubic metre of liquid hydrocarbons | Barrel of liquid hydrocarbons | 6.29       |
| Cubic metre kilometre              | Barrel mile                   | 3.91       |
| Cubic metre of natural gas         | Cubic feet of natural gas     | 35.3145    |

 

Theannual capacities noted throughout this AIF take into account estimated crudereceipt and delivery patterns and ongoing pipeline maintenance and reflectachievable pipeline capacity over long periods of time.

 

**FORWARD-LOOKING INFORMATION**

*Forward-looking information, or forward-looking statements,have been included in this AIF to provide the Company’s shareholders andpotential investors with information about the Company and its subsidiaries,including management’s assessment of Enbridge’s and its subsidiaries’ futureplans and operations. This information may not be appropriate for otherpurposes. Forward-looking statements are typically identified by words such as ‘‘anticipate’’,‘‘expect’’, ‘‘project’’, ‘‘estimate’’, ‘‘forecast’’, ‘‘plan’’, ‘‘intend’’, ‘‘target’’,‘‘believe’’ and similar words suggesting future outcomes or statementsregarding an outlook. Forward-looking information or statements included orincorporated by reference in this document include, but are not limited to,statements with respect to: expected earnings or adjusted earnings; expectedearnings or adjusted earnings per share; expected costs related to projectsunder construction; expected in-service dates for projects under construction;expected tariffs for pipelines; expected capital expenditures; and estimatedfuture dividends.*

 

*Although Enbridge believes that these forward-lookingstatements are reasonable based on the information available on the date suchstatements are made and processes used to prepare the information, suchstatements are not guarantees of future performance and readers are cautionedagainst placing undue reliance on forward-looking statements. By their nature,these statements involve a variety of assumptions, known and unknown risks anduncertainties and other factors, which may cause actual results, levels ofactivity and achievements to differ materially from those expressed or impliedby such statements. Material assumptions include assumptions about: theexpected supply and demand for crude oil, natural gas and natural gas liquids;prices of crude oil, natural gas and natural gas liquids; expected exchange,inflation and interest rates; the availability and price of labour and pipelineconstruction materials; operational reliability; customer project approvals;maintenance of support and regulatory approvals for the Company’s projects;anticipated in-service dates; and weather. Assumptions regarding the expectedsupply and demand of crude oil, natural gas and natural gas liquids, and theprices of these commodities, are material to and underlay all forward-lookingstatements. These factors are relevant to all forward-looking statements asthey may impact current and future levels of demand for the Company’s services.Similarly, exchange, inflation and interest rates impact the economies andbusiness environments in which the Company operates, may impact levels ofdemand for the Company’s services and cost of inputs, and are thereforeinherent in all forward-looking statements. Due to the interdependencies andcorrelation of these macroeconomic factors, the impact of any one assumption ona forward-looking statement cannot be determined with certainty, particularlywith respect to expected earnings or adjusted earnings and associated per shareamounts, or estimated future dividends. The most relevant assumptionsassociated with forward-looking statements on projects under construction,including estimated in-service dates, and expected capital expendituresinclude: the availability and price of labour and pipeline constructionmaterials; the effects of inflation and foreign exchange rates on labour andmaterial costs; the effects of interest rates on borrowing costs; and theimpact of weather and customer and regulatory approvals on constructionschedules.*

 

 

4

----

 

*Enbridge’s forward-looking statements are subject to risksand uncertainties pertaining to operating performance, regulatory parameters,project approval and support, weather, economic and competitive conditions,exchange rates, interest rates, commodity prices and supply and demand forcommodities, including but not limited to those risks and uncertaintiesdiscussed in this AIF and in the Company’s other filings with Canadian andUnited States securities regulators. The impact of any one risk, uncertainty orfactor on a particular forward-looking statement is not determinable withcertainty as these are interdependent and Enbridge’s future course of actiondepends on management’s assessment of all information available at the relevanttime. Except to the extent required by law, Enbridge assumes no obligation topublicly update or revise any forward-looking statements made in this AIF orotherwise, whether as a result of new information, future events or otherwise.All subsequent forward looking statements, whether written or oral,attributable to Enbridge or persons acting on the Company’s behalf areexpressly qualified in their entirety by these cautionary statements.*

 

**CORPORATE STRUCTURE**

** **

**INCORPORATION**

Enbridge’shead office and registered office are located at 3000, 425 - 1st Street SW, Calgary, Alberta, T2P 3L8. Enbridgeis a public company trading on both the Toronto and New York stock exchangesunder the symbol “ENB”. Significant dates and events are set forth below.

 
| ** **              | ** **                                                                                                                                                                                                                      |
|-------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Date**                | **Event**                                                                                                                                                                                                                       |
| April 13,  1970    | Incorporated  under the Companies Act of the Northwest Territories as Gallery Holdings Ltd.                                                                                                                                     |
| December 15,  1987 | Continued  under the Canada Business Corporations Act under the name 159569 Canada Ltd.                                                                                                                                         |
| May 5,  1994       | Articles  of Amendment to (i) change the name to IPL Energy Inc. (French version –  IPL Energie Inc.); and (ii) change the registered office to Calgary,  Alberta.                                               |
| October 7,  1998   | Articles  of Amendment to change the name of the Company to Enbridge Inc.                                                                                                                                                       |
| April 29,  1999    | Articles  of Amendment to (i) divide each issued and outstanding common share on a  two for one basis; and (ii) provide the Board of Directors with a  process to add directors between meetings of the shareholders. |
| May 5,  2005       | Articles  of Amendment to divide each issued and outstanding common share on a two for  one basis.                                                                                                                              |

 

**SUBSIDIARIES**

Thefollowing organization chart presents the name and the jurisdiction ofincorporation of Enbridge’s material subsidiaries as at December 31, 2009.The chart does not include all of the subsidiaries of Enbridge. The assets andrevenues of excluded subsidiaries in the aggregate did not exceed 20% of thetotal consolidated assets or total consolidated revenues of Enbridge as at andfor the year ended December 31, 2009.

 

 

5

----

 

 

1      TheCompany owns 41.9% of Enbridge Income Fund (EIF) and is the primary beneficiaryof EIF through a combination of voting interest and an investment in preferredunits of an EIF subsidiary and, as such, EIF is consolidated under VariableInterest Entity accounting rules.

2      OnJanuary 1, 2010, Enbridge Gas Services Inc. was amalgamated with TidalEnergy Marketing Inc. and Enbridge Gas Services (U.S.) Inc. was amalgamatedwith Tidal Energy Marketing (U.S.) L.L.C. This change in corporate structuredid not change the Energy Services business model.

 

**DESCRIPTION OF THE BUSINESS**

 

Enbridge is a North Americanleader in delivering energy. As a transporter of energy, Enbridge operates, inCanada and the United States, the world’s longest crude oil and liquidstransportation system. The Company also has a significant involvement in thenatural gas transmission and midstream businesses. As a distributor of energy,Enbridge owns and operates Canada’s largest natural gas distribution companyand provides distribution services in Ontario, Quebec, New Brunswick and NewYork State. As a clean energy generator, Enbridge is expanding its interests inrenewable and green energy technologies, including wind and solar energy, andhybrid fuel cells. Enbridge employs approximately 6,000 people, primarily inCanada and the United States.

 

The Company’s activities are carriedout through four business segments, Liquids Pipelines, Natural Gas Delivery andServices, Sponsored Investments and Corporate. Each business segment’scontribution to earnings and revenues is as follows:

 
| ** **                         | ** **  | ** **   | ** **  | ** **   | ** **  | ** **   |
|------------------------------------|-------------|--------------|-------------|--------------|-------------|--------------|
| ** **                         | **2009**    | **2008**     | **2007**    |
| ** **                         | **Revenue** | **Earnings** | **Revenue** | **Earnings** | **Revenue** | **Earnings** |
| Liquids Pipelines                  | **11%**     | **29%**      | 7%          | 25%     | 9%          | 41%     |
| Natural Gas Delivery and  Services | **86%**     | **41%**      | 91%         | 73%     | 89%         | 49%     |
| Sponsored Investments              | **3%**      | **9%**       | 2%          | 8%      | 2%          | 14%     |
| Corporate                          | **-**       | **21%**      | -           | (6%)         | -           | (4%)         |

 

 

6

----

 

The following mapdepicts the Company’s principal operations:

 

 

 

7

----

 

**GENERALDEVELOPMENT OF THE BUSINESS**

 

Insupport of its long-term vision to be the leading energy delivery company inNorth America, the Company employs several key strategies that guide decisionmaking across the enterprise. The Company’s strategies focus on:

 

·                  leveraging thestrategic location of its existing asset base;

·                  developing newplatforms for growth and diversification;

·                  focusing onexecution and operating excellence;

·                  maintainingfinancial strength and flexibility; and

·                  development ofpeople, safety and environmental stewardship and corporate socialresponsibility.

 

Enbridgeis in the midst of its largest capital program in the Company’s 60-yearhistory. During 2007, 2008 and 2009, the Company has completed more than $4.8billion of new growth projects and has $7 billion of additional commerciallysecured projects scheduled to come into service in 2010 and 2011, with afurther $5 billion secured for post-2011 in service. In addition, the Companyhas approximately $30 billion in further growth opportunities underdevelopment, but not yet commercially secured, for the post-2011 period, ofwhich it expects to be successful on a significant portion.

 

The following table summarizes the commercially secured projects, withineach of the Company’s business segments, which were completed in the last threeyears, or are currently under active development or construction.

 
| **Project**                                                                                             | ** ** | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | ** ** | **Actual /   Estimated  Capital Cost****1** | ** ** | **Actual /  Expected****In-Service Date**    | ** ** |
|---------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------|------------|----------------------------------------------|------------|
| ** **

**LIQUIDS PIPELINES**                                                                       |       |
| Athabasca  Pipeline Expansion Projects and Laterals including Surmont and Long Lake Oil  Sands Projects |       | –               additional pumping  stations at Elk Point and Cheecham as well as modifications to existing  pumping stations 

–               new pipeline and  tank facilities at the Cheecham terminal on the Athabasca Pipeline 

–               new pipeline  laterals and tank facilities at the Cheecham terminal on the Athabasca  Pipeline |       | $0.2  billion                               |       | 2007                                         |       |
| Southern  Access Mainline Expansion - Canadian portion2                                                 |       | –               mainline system  expansion from Hardisty, Alberta to the Canada/United States border                                                                                                                                                                                                                                                                                                                                                                                                        |       | $0.2  billion                               |       | 2008                                         |       |
| Waupisoo  Pipeline                                                                                      |       | –               pipeline from  Cheecham terminal to Edmonton, Alberta                                                                                                                                                                                                                                                                                                                                                                                                                                       |       | $0.6  billion                               |       | 2008                                         |       |
| Spearhead  Pipeline Expansion2                                                                          |       | –               additional pumping  stations increasing system capacity from Flanagan, Illinois to Cushing,  Oklahoma                                                                                                                                                                                                                                                                                                                                                                                       |       | US$0.1  billion                             |       | 2009                                         |       |
| Line  4 Extension2                                                                                      |       | –               additional  pipeline from Edmonton, Alberta to Hardisty, Alberta                                                                                                                                                                                                                                                                                                                                                                                                                            |       | $0.3  billion                               |       | 2009                                         |       |
| Hardisty  Contract Terminal2                                                                            |       | –               new crude oil  terminal at Hardisty, Alberta                                                                                                                                                                                                                                                                                                                                                                                                                                                |       | $0.6  billion                               |       | 2009                                         |       |
| Alberta  Clipper - Canadian portion2,3                                                                  |       | –               new pipeline from  Hardisty, Alberta to the Canada/United States border                                                                                                                                                                                                                                                                                                                                                                                                                     |       | $2.3  billion                               |       | 2010                                         |       |
| Southern  Lights Pipeline2                                                                              |       | –               new and reversed  pipeline to transport diluent from Chicago, Illinois to Edmonton, Alberta                                                                                                                                                                                                                                                                                                                                                                                                 |       | $0.5  billion +   US$1.7 billion            |       | Light  Sour Line - 2009; Diluent Line - 2010 |       |
| Woodland  Pipeline –   Phase I2                                                                    |       | –               new pipeline from  the Kearl oil sands mine to the Cheecham terminal                                                                                                                                                                                                                                                                                                                                                                                                                        |       | $0.5  billion                               |       | 2012                                         |       |
| Fort  Hills Pipeline System2                                                                            |       | –               new pipeline and  terminaling services for the Fort Hills project                                                                                                                                                                                                                                                                                                                                                                                                                           |       | ~$2.0  billion                              |       | TBD  (pending customer timing)               |       |

 

 

8

----

 
| **Project**                                                             | ** ** | **Description**                                                                                                                                           | ** ** | **Actual /   Estimated  Capital Cost****1** | ** ** | **Actual /  Expected****In-Service Date** | ** ** |
|-------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------|------------|-------------------------------------------|------------|
|  

**NATURAL GAS DELIVERY AND SERVICES**                           |       |
| Vector  Pipeline Expansion                                              |       | –   two additional compressor stations which  expand the pipeline’s capacity to 1.2 bcf/d                                             |       | US$0.1  billion                             |       | 2007                                      |       |
| Neptune  Pipelines Project                                              |       | –   natural gas and oil laterals to connect new  Neptune fields to existing Enbridge infrastructure                                        |       | US$0.1  billion                             |       | 2007                                      |       |
| Shenzi  Lateral2                                                        |       | –   natural gas lateral to connect the new  deepwater Shenzi field to existing Enbridge infrastructure                                     |       | US$0.1  billion                             |       | 2009                                      |       |
| Walker  Ridge Gas Gathering System2                                     |       | –   new pipeline to provide natural gas  gathering services to the proposed Jack, St. Malo and Big Foot  ultra-deepwater developments      |       | US$0.5  billion                             |       | 2014                                 |       |
| Big  Foot Oil Pipeline2                                                 |       | –   new crude oil pipeline from the proposed  Big Foot ultra-deepwater development in the Gulf of Mexico                                   |       | US$0.3  billion                             |       | 2014                                 |       |
| ** **

**SPONSORED INVESTMENTS**                                   |       |
| EEP  - Southern Access Mainline Expansion – United States portion2 |       | –   mainline system expansion from  Canada/United States border to Flanagan, Illinois                                                      |       | US$2.1  billion                             |       | 2009                                      |       |
| EEP  - North Dakota System Expansion2                                   |       | –   upgrades to existing pump stations,  additional tankage as well as infrastructure to facilitate extensive use of  drag reducing agents |       | US$0.2  billion                             |       | 2010                                      |       |
| EEP/EELP  - Alberta Clipper - United States portion2,3                  |       | –   new pipeline from the Canada/United States  border to Superior, Wisconsin                                                              |       | US$1.3  billion                             |       | 2010                                      |       |
| EIF  - Saskatchewan System Capacity Expansion2                          |       | –   three separate projects to reduce capacity  constraints at a variety of locations                                                      |       | $0.1  billion                               |       | 2010                                      |       |
| ** **

**CORPORATE**                                               |       |                                                                                                                                                      |       |                                        |       |                                      |       |
| Ontario  Wind Project2                                                  |       | –   400 MW wind energy farm located in the  Municipality of Kincardine, Ontario                                                            |       | $0.5  billion                               |       | 2009                                      |       |
| Talbot  Wind Energy Farm2                                               |       | –   99MW wind project to deliver energy to the  Ontario Power Authority                                                                    |       | $0.3  billion                               |       | 2010                                      |       |
| Sarnia  Solar Project2                                                  |       | –   photovoltaic, solar energy facility that  will deliver 80 MW to the Ontario Power Authority                                            |       | $0.4  billion                               |       | 2010                                      |       |

 

1      These amounts are actual costs or currentestimates that are subject to upward or downward adjustment based on variousfactors.

2      The Company’s MD&A for the year ended2009 includes further details on each of these projects as well as otherprojects Enbridge is currently undertaking.

3      For both the Canadian and United Statessegments of the Alberta Clipper project,tariffs will be filed with the appropriate regulators to be effective on April1, 2010, the date the project is expected to be ready for service. The tarifffor the United States segment, and its effective date, will be filed on thebasis of the Alberta Clipper US Term Sheet, despite a petition filed in January2010 by a shipper requesting the Federal Energy Regulatory Commission (FERC) todelay the tariff. Following that petition filing, several shippers filedinterventions requesting to be part of the process. The Alberta Clipper US TermSheet was approved by the Canadian Association of Petroleum Producers (CAPP) onJune 28, 2007 and by the FERC on August 28, 2008. We have reviewedand will respond to the shipper petition, which we believe to be without merit.

 

In early2010, Enbridge announced two major oil sands transportation servicesagreements, building on the Company’s success in the second quarter of 2009 insecuring the 200,000 barrels per day (bpd) Woodland pipeline and relatedfacilities for the Kearl oil sands project. Through an agreement with FCCLPartnership announced in January 2010, Enbridge will provide additionalpipeline and terminal facilities to support expansion of the Christina Lakeenhanced oil project, which is operated by Cenovus Energy. The 

 

 

9

----

 

estimatedcost of the additional facilities is approximately $250 million with a plannedin service date late in 2011. Also, in February 2010, Enbridge announcedan agreement with Statoil Canada Ltd. for the addition of the Leismer oil sandsproject as a shipper on Enbridge’s regional oil sands system. This brings thenumber of producing oil sands projects connecting to Enbridge’s regional systemto six.

 

In 2009,the Company sold its 24.7% interest in Oleoducto Central S.A (OCENSA), a crude oil export pipeline in Colombia. In 2008, theCompany sold its 25% equity interest in Compañía Logística de HidrocarburosCLH, S.A. (CLH), Spain’s largest refinedproducts transportation and storage business. Both of these investments weresold at very attractive prices and proceeds were utilized in the funding of theNorth American expansion projects discussed earlier.

 

Given thedisposals of OCENSA and CLH, there are currently minimal operations inInternational. However, Enbridge continues to actively monitor theinternational business environment to identify potential new investmentopportunities.

 

**LIQUIDS PIPELINES**

** **

Liquids Pipelines includesthe operation and construction of the Enbridge crude oil mainline system andfeeder pipelines that transport crude oil and other liquid hydrocarbons. Liquids Pipelines consists ofcrude oil, natural gas liquids (NGLs) and refined products pipelines andterminals in Canada and the United States.

 

### ***ENBRIDGE SYSTEM***

###### ***The mainline system is comprised of Enbridge Systemand Lakehead System (the portion of the mainline in the United States that isoperated by Enbridge and owned by Enbridge Energy Partners, L.P. (EEP)).Enbridge has operated, and frequently expanded, the mainline system since 1949.Through six adjacent pipelines with a combined capacity of approximately 2million bpd, the system transports various grades of crude oil and dilutedbitumen from western Canada to the midwest region of the United States andeastern Canada. Also included within the Enbridge System and located in easternCanada are two crude oil pipelines and one refined products pipeline with acombined capacity of 0.4 million bpd. Average system utilization in 2009 was80%; however, it is expected to decrease in 2010 due to a combination of additionalpipeline capacity being added to the system by the Company and a new pipelinebeing brought into service by a competitor.***

###### *** ***

The following table sets forth the information relatedto deliveries and other distance-related operating data of the Enbridge andLakehead Systems for each of the years in the three-year period ended December 31,2009.

 
| * *                         | ** ** | ** ** | ** ** |
|----------------------------------|------------|------------|------------|
| *(thousands of barrels per day)* | **2009**   | **2008**   | **2007**   |
| **Prairie  Provinces**           |       |       |       |
| Light crude oil                  | **173**    | 161        | 173        |
| Medium and heavy crude oil       | **165**    | 142        | 142        |
| Refined products                 | **71**     | 69         | 81         |
|                             | **409**    | 372        | 396        |
| **United States**                |       |       |       |
| Light crude oil                  | **397**    | 316        | 282        |
| Medium and heavy crude oil       | **834**    | 875        | 852        |
| Refined products                 | **3**      | 3          | 4          |
|                             | **1,234**  | 1,194      | 1,138      |
| **Ontario**1                     |       |       |       |
| Light crude oil                  | **264**    | 294        | 314        |
| Medium and heavy crude oil       | **140**    | 81         | 62         |
| Refined products                 | **75**     | 89         | 95         |
|                             | **479**    | 464        | 471        |
| Total Deliveries                 | **2,122**  | 2,030      | 2,005      |
| **Barrel Miles***(billions)*     | **400**    | 397        | 391        |
| **Average Haul***(miles)*        | **517**    | 534        | 534        |

 

 

10

----

 

1      Enbridge System average deliveries includeLine 9 volumes of 67,000 bpd (2008 - 111,000 bpd; 2007 - 130,000 bpd).

 

###### ***Incentive Tolling***

Tolls on Enbridge System are governed by variousagreements, which are subject to the approval of the National Energy Board(NEB). The NEB’s jurisdiction over the Enbridge System includes statutoryauthority over matters such as construction, rates and ratemaking agreementsand other contractual arrangements with customers. Significant agreementsinclude the incentive tolling settlement (ITS) applicable to the Enbridgemainline system (excluding Line 8 and Line 9), the Terrace agreement, the SEPII Risk Sharing Agreement and the Southern Access Expansion Agreement which isrecovered via the Mainline Expansion Toll (MET). Tolls on the core mainlinesystem have been governed by ITS since 1995, with the most recent ITS termeffective through 2009. Discussions and negotiations are continuing for anextension to the ITS which will support a competitive toll structure. TheCompany anticipates that a settlement will be reached in early 2010. In theevent that a settlement cannot be reached, the Company could file a cost ofservice application.

 

In 2009,the ITS allowed the sharing of earnings in excess of a stipulated threshold andprovided a fixed annual mainline integrity allowance. In addition, performancemetrics bonuses and penalties aligned the Company’s interests with itsshippers.

 

Enbridge achieved total performance metrics bonusesof approximately $13 million for the year ended December 31, 2009,compared with approximately $15 million and $11 million for the years ended December 31,2008 and 2007, respectively.

 

In conjunction with the Terrace agreement, the ITScontinues the throughput protection provisions included in earlier incentivetolling arrangements, ensuring the Company is insulated from volumefluctuations beyond its control. The agreements govern both current and futureshippers on the pipeline and establish tolls each year based on an agreedcapacity and an allowed revenue requirement. Where actual volumes on thepipeline fall short of the agreed capacity and Enbridge is unable to fullycollect its annual revenue requirement, the deficiency is rolled into thesubsequent year’s tolls for collection from shippers at that time and areceivable, referred to as the Transportation Revenue Variance (TRV), isrecognized. This basis may affect the timing of recognition of revenuescompared with that otherwise expected under Canadian GAAP for companies thatare not rate-regulated. As at December 31, 2009, $98 million (2008 - $114million) was recorded as tolling deferrals.

 

Enbridge pays taxes each year only on the tollscollected in cash; therefore the tax payable on the TRV lags behind therecognition of the revenue. As theTerrace capacity is increasingly utilized, there will be less TRV recorded andmore cash tolls collected. This will result in the Company paying taxes infuture years on both the prior year’s TRV and the current year’s cash tolls.

 

Terrace Agreement

As part of theTerrace Agreement, Enbridge, EEP and the CAPP agreed to a fixed toll surchargeof $0.05 per barrel for the movement of light crude from Edmonton to theChicago area. This toll surcharge commenced on April 1, 1999, when TerracePhase I was completed. The incremental toll is allocated between Enbridge andEEP. Revenue related to unused capacity in Canada under the Terrace Agreementis incorporated in tolls in the following year.

 

SEP II Risk Sharing Agreement

Enbridge, EEP andCAPP entered into a Risk Sharing Agreement, effective for 15 years, withrespect to SEP II, a 100,000 bpd expansion completed in 1998. The Risk SharingAgreement provides that the rate of return on the SEP II investment will bebased, in part, on the utilization level of the additional capacityconstructed. Higher utilization is expected to result in a greater return,subject to a minimum and maximum rate of return of 7.5% and 15.0%,respectively. During 2009, Enbridge and EEP earned a rate of return of 11.57%(2008 - 11.71%; 2007 - 11.46%) on SEP II.

### *** ***

### ***SouthernAccess Expansion Agreement***

### ***In December 2007,Enbridge and CAPP entered into the Southern Access Expansion Agreement for aterm of 30 years for additional facilities which were added to the Mainlinesystem from 2006 to 2008. The costs of these facilities were recovered throughthe MET.***

 

 

11

----

 

**ENBRIDGE REGIONAL OIL SANDS SYSTEM**

Enbridge Regional Oil Sands Systemincludes two long haul pipelines, the Athabasca Pipeline and the WaupisooPipeline, as well as a variety of other facilities including the MacKay River,Christina Lake, Surmont and Long Lake facilities. It also includes the Company’sinterest in the Hardisty Caverns Limited Partnership, which provides crude oiltankage services and three large terminals: the Athabasca Terminal locatednorth of Fort McMurray, Alberta, the Cheecham Terminal, which is a new hublocated 95 kilometres south of Fort McMurray where the Waupisoo Pipelineinitiates, and the Hardisty Contract Terminal, one of the largest crude oilterminals in North America.

 

The Athabasca Pipeline is a540-kilometre (335-mile) synthetic and heavy oil pipeline, built in 1999, thatlinks the Athabasca oil sands in the Fort McMurray, Alberta region to apipeline hub at Hardisty, Alberta. The Athabasca Pipeline has an ultimatedesign capacity of approximately 570,000 bpd, dependent on viscosity of crudebeing shipped. It is currently configured to transport approximately 345,000bpd.

 

The Company has a long-term(30-year) take-or-pay contract with the major shipper on the Athabasca Pipelinewhich commenced in 1999. Revenue is recorded based on the contract termsnegotiated with the major shipper, rather than the cash tolls collected. Thecontract provides for volumes and tolls designed to achieve an underpinningreturn on equity based on an assumed debt/equity ratio and level of operatingcosts. The committed volumes and the tolls specified in the contract do notgenerate sufficient cash revenues in the early years to compensate Enbridge forthe debt and equity returns as well as the cost of providing service. As aresult, Enbridge is recording a receivable in these years, which will becollected in tolls in future years. This treatment ensures that the revenuerecognized each period is in accordance with the contract.

 

The Waupisoo Pipeline is a 380-kilometre(236-mile) synthetic and heavy oil pipeline that entered into service on May 31,2008 and provides access to the Edmonton market for oil sands producers. TheWaupisoo Pipeline initiates at Enbridge’s Cheecham Terminal and terminates atits Edmonton Mainline Terminal. The pipeline currently has a design capacity,dependent on crude slate, of up to 350,000 bpd, which can ultimately beexpanded to 600,000 bpd.

 

### ***Enbridge has a long-term(25-year) take-or-pay commitment with the four founding shippers on theWaupisoo Pipeline who collectively have contracted for approximately one-thirdof the initial capacity on the line. The associated revenues provide for a basereturn on equity with significant upside potential as incremental founders andthird party volumes are added.***

### *** ***

### ***OTHER LIQUIDS PIPELINES ANDSYSTEMS***

**Southern Lights Pipeline**

This pipeline received regulatoryapproval in Canada in the first quarter of 2008 and is currently underconstruction in both the United States and Canada. Upon completion, the 180,000bpd, 20-inch diameter Southern Lights Pipeline will transport diluent fromChicago, Illinois to Edmonton, Alberta.

 

Enbridge will receive tariffs under long-term (15-year) contracts withcommitted shippers. Tariffs provide for recovery of all operating and debtfinancing costs, plus a return on equity at a pre-determined rate. Uncommittedvolumes, up to a specified amount, provide for tariff revenues that are fullycredited to all shippers. Enbridge retains 25% of uncommitted tariff revenues onvolumes above the specified amount, with the remainder being credited toshippers.

 

**Spearhead Pipeline**

SpearheadPipeline delivers crude oil from Chicago, Illinois to Cushing, Oklahoma. Theperformance of this pipeline steadily increased and with further support of newcommitted shippers, the Spearhead Pipeline Expansion was completed in May 2009.This expansion increased the capacity from 125,000 bpd to 193,300 bpd from thenew initiating point of Flanagan, Illinois to Cushing.

 

Initialcommitted shippers and expansion shippers currently account for more than 70%of the 193,300 bpd capacity on Spearhead. Both the initial committed shippersand expansion shippers were required to enter into 10 year shipping commitmentsat negotiated rates that were offered during the open season process. Thebalance of the capacity is currently available to uncommitted shippers on aspot basis at FERC approved rates.

 

 

12

----

 

**Olympic Pipeline**

Enbridge has a 65% interest in the Olympic Pipeline, the largest refinedproducts pipeline in the State of Washington, transporting approximately290,000 bpd of gasoline, diesel and jet fuel. The pipeline system extendsapproximately 480 kilometres (300 miles) from Blaine, Washington to Portland,Oregon, connecting four Puget Sound refineries to terminals in Washington andPortland. BP Pipelines (North Amercia) Inc. (BP) is the operator of thepipeline.

 

**Feeder Pipelines and Other**

Feeder Pipelinesand Other primarily includes the NW System, which transports crude oil fromNorman Wells in the Northwest Territories to Zama, Alberta; interests in anumber of liquids pipelines in the United States; contract tankage facilities;and business development costs related to Liquids Pipelines activities.

 

###### ***COMPETITIVE CONDITIONS***

Competitionamong existing pipelines is based primarily on the cost of transportation,access to supply, the quality and reliability of service, contract carrieralternatives and proximity to markets. Other competing carriers are availableto ship western Canadian liquids hydrocarbons to markets in either Canada orthe United States. Competition also arises from new pipeline proposals thatprovide access to market areas currently served by the Company’s liquidspipelines. One such competing project is expected to begin commercialoperations in early 2010 and will serve markets at Wood River, Illinois andCushing, Oklahoma. This pipeline has an initial capacity of 435,000 bpd and anultimate stated capacity of 591,000 bpd. Commercial support has also beenannounced to construct additional ex-Alberta capacity of 500,000 bpd toNederland, Texas, for an in-service date during 2012. Competing alternativesfor delivering western Canadian liquid hydrocarbons into the United States orother markets could erode shipper support for current or future expansion.However, the Company believes that its liquids pipelines provide attractiveoptions to producers in the Western Canada Sedimentary Basin (WCSB) due to itscompetitive tolls and multiple delivery and storage points. Increasedcompetition could arise from new feeder systems servicing the same geographicregions as the Company’s feeder pipelines.

 

TheCompany continues to adapt to the changes in its business environment. Enbridgeis committed to performance excellence and is focused on becoming moreefficient, more collaborative, more innovative, and more cost effective so thatthe Company can pass those benefits on to its customers through service,savings, reliability and responsiveness.

 

**NATURAL GAS DELIVERY AND SERVICES**

** **

Natural Gas Delivery and Services consists of natural gasutility operations, investments in natural gas pipelines, the Company’scommodity marketing businesses and international activities.

 

The core of the Company’s natural gas utility operations isEnbridge Gas Distribution (EGD) which serves residential, commercial,industrial and transportation customers, primarily in central and easternOntario as well as northern New York State. This business segment also includesnatural gas distribution activities in Quebec and New Brunswick.

 

Investments in natural gas pipelines include the Company’sinterests in the United States portion of Alliance Pipeline (Alliance PipelineUS), Vector Pipeline and transmission and gathering pipelines in the Gulf ofMexico.

 

This segment also includes the Company’s investment in AuxSable, a natural gas fractionation and extraction business. The commoditymarketing businesses manage the Company’s volume commitments on Alliance andVector Pipelines as well as perform commodity storage, transport and supplymanagement services, as principal and agent.

### *** ***

### ***ENBRIDGE GAS DISTRIBUTION***

EGD isCanada’s largest natural gas distribution company and has been in operation formore than 160 years. It serves approximately 1.9 million customers in centraland eastern Ontario and parts of northern New York State. EGD’s utilityoperations are regulated by the Ontario Energy Board (OEB) and by the New YorkState Public Service Commission.

 

 

13

----

 

EGD is subject to seasonal demand as a significantportion of gas distribution customers use natural gas for space heating. As aresult volumes delivered and resultant revenues and earnings typically increaseduring the winter months of the first and fourth quarters of any given year.Revenues generated by EGD also vary from quarter-to-quarter with fluctuationsin the price of natural gas, although earnings remain neutral due to the passthrough nature of these costs. Further, as a result of continued changes incustomer billing to increase the fixed charge portion and decrease the per unitvolumetric charge, revenues and earnings will shift from the colder winterquarters progressively to the warmer summer quarters, with no material impacton full year revenue and earnings. This change will also impact thecomparability of a given quarter from year to year.

 

There are four principal interrelated aspects of thenatural gas distribution business in which EGD is directly involved: DistributionService, Gas Supply, Transportation and Storage.

 

**Distribution Service**

EGD’sprincipal source of revenue arises from distribution of natural gas tocustomers. The services provided to residential, small commercial andindustrial heating customers are primarily on a general service basis (withouta specific fixed term or fixed price contract). The services provided to largercommercial and industrial customers are usually on an annual contract basisunder firm or interruptible service contracts.

 

**Gas Supply**

Toacquire the necessary volume of gas to serve its customers, EGD maintains adiversified gas supply portfolio. During the year ended December 31, 2009,EGD acquired approximately 194 bcf (2008 - 194 bcf; 2007 - 185 bcf) of naturalgas, of which 25% (2008 - 27%; 2007 - 22%) was acquired from Western Canadianproducers, 46% (2008 - 46%; 2007 – 47%) was acquired from suppliers in Chicagoand 29% (2008 - 27%; 2007 - 31%) was acquired on a delivered basis in Ontario.

 

**Transportation**

TransCanadaPipelines Ltd. (TransCanada) transports approximately 61% or 261 bcf of theannual natural gas supply requirements of the Company’s customers. EGD hastransportation service contracts with TransCanada for a portion of thisrequirement.

 

EGD relies on its long-term contracts with Union GasLimited (Union) for transportation of natural gas from Dawn to EGD’s majormarket in the Greater Toronto Area. The contracts effectively provide EGD withaccess to United States sourced natural gas delivered to Dawn by the Vector Pipeline.The contracts also provide transportation for natural gas stored at EGD’s andUnion’s storage pools in the Sarnia, Ontario area to the market area.

 

**Storage**

The business of EGD is highly seasonal as daily marketdemand for gas fluctuates with changes in weather, with peak consumptionoccurring in the winter months. Utilization of storage facilities permits EGDto take delivery of gas on favourable terms during off-peak summer periods forsubsequent use during the winter heating season. This practice permits EGD tominimize the annual cost of transportation of natural gas from its supply basins, assists inreducing its overall cost of natural gas supply and adds a measure of securityin the event of any short-term interruption of transportation of natural gas toEGD’s franchise area.

 

EGD’sprincipal storage facilities are located in southwestern Ontario, near Dawn,and have a total working capacity of approximately 102 bcf.

 

 

14

----

 

### ***Historical Operating Statistics***

The following tables present certain statisticsrelating to the past three years of operations of EGD:

 
| ** **                                                   | ** **          | ** **      | ** **      |
|--------------------------------------------------------------|---------------------|-----------------|-----------------|
| ** **                                                   | **2009**            | **2008**        | **2007**        |
| Gas supply and send out*****(million cubic feet (mmcf))*     |                |            |            |
|  Natural gas  purchased                                 | **195,268 **   | 193,315    | 184,850    |
|  Gas into  storage                                      | **(75,001)**        | (100,019)       | (102,327)       |
|  Gas out of  storage                                    | **79,536 **    | 97,719     | 104,955    |
|  Total gas  sendout                                     | **199,803 **   | 191,015    | 187,478    |
|  Transportation of gas                                  | **223,503 **   | 246,170    | 255,635    |
|                                                         | **423,306 **   | 437,185    | 443,113    |
| Gas sales to customers *(mmcf)*                              | **194,679 **   | 188,780    | 179,899    |
| Transportation of gas                                        | **213,117 **   | 243,878    | 259,830    |
| Total sales                                                  | **407,796 **   | 432,658    | 439,729    |
|  Used by EGD                                            | **205 **       | 148        | 120        |
|  Other  volumetric variations                           | **15,305 **    | 4,379      | 3,264      |
|                                                         | **423,306 **   | 437,185    | 443,113    |
| Average daily sendout *(mmcf)*                               | **1,158 **     | 1,197      | 1,215      |
| Average use per residential customer *(thousand cubic feet)* | **96 **        | 97         | 99         |
| Degree day deficiency1                                       |                |            |            |
|  Actual                                                 | **3,767 **     | 3,802      | 3,659      |
|  Forecast  based on normal weather                      | **3,514 **     | 3,543      | 3,617      |
| Number of active customers at year end2                      | ** **          | ** **      | ** **      |
|  Residential                                            | **1,274,680 ** | 1,114,878  | 1,062,008  |
|  Commercial                                             | **111,276 **   | 105,056    | 97,988     |
|  Industrial                                             | **4,067 **     | 3,912      | 3,732      |
|  Wholesale                                              | **1 **         | 1          | 1          |
|  Transportation                                         | **547,241 **   | 674,382    | 697,128    |
|                                                         | **1,937,265 ** | 1,898,229  | 1,860,857  |
| New customer additions3                                      | **32,275 **    | 41,297     | 43,160     |

 

1                Degree day deficiency is a measure of coldness whichis indicative of volumetric requirements of natural gas utilized for heatingpurposes in EGD’s franchise area. It is calculated by accumulating, for thefiscal year, the total number of degrees each day by which the daily meantemperature falls below 18 degrees Celsius. The figures given are thoseaccumulated in the Greater Toronto Area.

2                Active customers is the number of gas-consumingcustomers at the end of the year and include gas sales and transportationservice customers. As the commodity cost of gas is flowed through to gas salescustomers with no mark up, the composition of customers between gas sales andtransportation service has no material impact on EGD’s earnings.

3                New customer additions is the number of  new service lines installed during theperiod.

 

**Incentive Regulation**

In 2008,EGD moved to an Incentive Regulation (IR) methodology. The objectives of the IRplan are as follows:

**·**                  reduce regulatory costs;

**·**                  provide incentives forimproved efficiency;

**·**                  provide more flexibilityfor utility management; and

**·**                  provide more stable rates.

** **

Under the IR framework, Enbridge is allowed to earn100 basis points (bps) over the base regulated return. Through variousproductivity enhancements, any return over this 100 bps must be shared withcustomers on an equal basis. Enbridge estimates the customer portion of 2009earnings over the allowed threshold at $19 million (2008 - $6 million).

 

**Rate Adjustment Applications**

In September 2009, EGD filed an application with theOEB to adjust rates for 2010 pursuant to the approved IR formula, to increasefunding of its pension plans and to seek approval for specific changes to theRate Handbook. The OEB issued a first procedural order in October 2009, inwhich the OEB indicated that it would consider its jurisdiction with regard toinclusion of green energy related projects within the regulated operations ofEGD. The OEB issued a decision in December 2009 which effectively preventsthe inclusion of such activities in rate-making for the purposes of setting2010 rates. As a result of this 

 

 

15

----

 

decision, in 2010, EGD will seek clarification of the OEB’sbroader policies with respect to such investments and activities.

 

In September 2008, EGD filed an application with theOEB to adjust rates for 2009 pursuant to the approved IR formula and to seekapproval for specific changes to the Rate Handbook. A settlement agreementcontaining all applied for aspects of the formulaic component of the IR ratesetting process was approved by the OEB in December 2008. EGD received afiscal 2009 final rate order from the OEB in February 2009 approving theimplementation of a rate change effective April 1, 2009, which enabled EGDto recover the approved revenues as if rates were effective January 1,2009.

 

***NOVERCO***

Enbridgeowns an equity interest in Noverco through ownership of 32.1% of the commonshares and a cost investment in preferred shares. Noverco is a holding companythat owns approximately 71.0% of Gaz Metro Limited Partnership (Gaz Metro), apublicly traded gas distribution company operating in the province of Quebecand in the state of Vermont.

 

### ***OTHER GAS DISTRIBUTION***

Other Gas Distribution includes natural gasdistribution utility operations in Quebec, New Brunswick and northern New YorkState. The largest utility included in this group of assets is Enbridge Gas NewBrunswick Inc. (EGNB) (70.9% owned and operated by the Company) which owns thenatural gas distribution franchise in the province of New Brunswick. EGNB isconstructing a new distribution system and has approximately 10,000 customers.Approximately 725 kilometres (450 miles) of distribution main has beeninstalled with the capability of attaching approximately 30,000 customers.

 

**ENBRIDGE OFFSHORE PIPELINE**

Offshoreis comprised of 13 natural gas gathering and FERC-regulated transmissionpipelines and one oil pipeline in five major corridors in the Gulf of Mexico,extending to deepwater frontiers. These pipelines include almost 1,500 miles(2,400 kilometres) of underwater pipe and onshore facilities and transportedapproximately 2.3 bcf/d during 2009. Offshore currently moves approximately 50%of offshore deepwater gas production through its systems in the Gulf of Mexico.

 

**Transportation Contracts**

The primary shippers on the Offshoresystems are producers who execute life-of-lease commitments in connection withtransmission and gathering service contracts. In exchange, Offshore providesfirm capacity for the contract term at an agreed upon rate. The throughputvolume generally reflects the lease’s maximum sustainable production. Thetransportation contracts allow the shippers to define a maximum daily quantity(MDQ), which corresponds with the expected production life. The contractstypically have minimum throughput volumes which are subject to take-or-paycriteria but also provide the shippers with flexibility, subject to advancenotice criteria, to modify the projected MDQ schedule to match current deliverabilityexpectations.

 

Increasingly,and reflecting recent setbacks from hurricanes and high construction costs,transportation contracts are beginning to reflect hurricane allowances to coverincreased operating and repair costs and reduce exposure to capital projectoverruns.

 

Thelong-term transport rates established in the gathering and transmission serviceagreements are generally market-based but are established using a cost ofservice methodology, which includes operating cost, projected revenue generationdirectly tied to production deliverability and the appropriate cost of capital.

 

The business modelutilized on a go forward basis and included in the Walker Ridge Gas GatheringSystem (WRGGS) and Big Foot commercially secured projects differs from thehistoric model. These new projects have a base level return which is locked inby take or pay commitments. If volumes reach producer anticipated levels thereturn on these projects will increase. In addition, Enbridge has minimalcapital cost risk on these projects and still has the life-of-lease commitmentsincluded in commercial agreements.

 

 

16

----

 

**CompetitiveConditions**

There is competition for new and existing businessin the Gulf of Mexico. Offshore has been able to capture key opportunities,positioning it to more fully utilize existing capacity. Offshore serves amajority of the strategically located deepwater host platforms and itsextensive presence in the deepwater Gulf of Mexico has Offshore well positionedto generate incremental revenues, with modest capital investment, bytransporting production from sub-sea development of smaller fields tied back toexisting host platforms. Offshore is also able to construct pipelines totransport crude oil, diversifying the risk of declining production, asdemonstrated with the newly constructed Neptune crude oil lateral and therecently announced Big Foot Oil Pipeline. Given rates of decline, Offshorepipelines typically have available capacity resulting in significantcompetition for new developments in the Gulf of Mexico.

 

### ***ALLIANCE PIPELINE US***

The Alliance System (Alliance),which includes both the Canadian and United States portions of the pipelinesystem, consists of an approximately 3,000-kilometre (1,875-mile) integrated,high-pressure natural gas transmission pipeline system and an approximately730-kilometre (455-mile) lateral pipeline system and related infrastructure.Alliance transports liquids-rich natural gas from northeast British Columbiaand northwest Alberta to Channahon, Illinois. The pipeline has firm serviceshipping contract capacity to deliver 1.325 bcf/d. Enbridge owns 50% of theAlliance Pipeline US, while EIF, described under Sponsored Investments, owns50% of the Canadian portion of the Alliance System (Alliance Pipeline Canada).

 

Allianceconnects with Aux Sable, of which Enbridge owns 42.7%, a natural gas liquidsextraction facility in Channahon, Illinois. The natural gas may then betransported to two local natural gas distribution systems in the Chicago areaand five interstate natural gas pipelines, providing shippers with access tonatural gas markets in the midwestern and northeastern United States andeastern Canada.

 

In2009, Pecan Pipeline, a gathering pipeline owned by a third party, wasconnected to a new gas receipt point on the Alliance System near Towner, NorthDakota. This pipeline will bring associated rich gas from the Bakken formationon to Alliance. The new receipt point went into service in January 2010,with an initial volume of 40 mmcf/d, which will increase to 80 mmcf/d one yearafter the initial in-service date.

 

**Transportation Contracts**

Alliance has long-term, take-or-pay contracts through 2015to transport 1.305 bcf/d of natural gas or 98.5% of the total contractedcapacity. Alliance has an additional 20 million cubic feet per day (mmcf/d) ofnatural gas contracted through 2010 which is expected to be remarketed uponexpiry. These contracts permit Alliance to recover the cost of service, whichincludes operating and maintenance costs, the cost of financing, an allowancefor income tax, an annual allowance for depreciation and an allowed return onequity (ROE) of 11.5%. Each long-term contract may be renewed upon five yearsnotice for successive one-year terms beyond the original 15-year primary term.Alliance Pipeline US operations are regulated by the FERC.

 

Depreciation expense included in the cost of service isbased on negotiated depreciation rates contained in the transportationcontracts, while depreciation expense in the financial statements is recordedon a straight-line basis at 4% per annum. Negotiated depreciation expense isgenerally less than the financial statement amount at the beginning of thecontract and higher than straight-line depreciation in the later years of theshipper transportation agreements. This difference results in recognition of along-term receivable, referred to as deferred transportation revenue, that isexpected to be recovered from shippers beginning in 2009 for Alliance Pipeline USand 2011 for Alliance Pipeline Canada. As at December 31, 2009, $151million (US$144 million) (2008 - $182 million (US$149 million)) was recorded asdeferred transportation revenue.

 

**Alliance Pipeline Recontracting Strategy**

The Alliance System continues to befully contracted on a firm service basis and is expected to run at or near fullcapacity until at least 2015 when existing long-term shipper contracts expire.Alliance Pipeline is developing strategies to maximize its competitiveness,post-2015, in light of falling export production from western Canada and thepotential for surplus export pipeline capacity. Alliance is well placed tobenefit from incremental unconventional volumes from shale plays in BritishColumbia, and is currently evaluating opportunities to expand its serviceofferings in this area.

 

 

17

----

 

**CompetitiveConditions**

Alliance Pipeline US faces competition for pipelinetransportation services to the Chicago area from both existing and proposedpipeline projects. Competing pipelines provide natural gas transportationservices from the WCSB to distribution systems in the Midwestern United States.In addition, there are several proposals to upgrade existing pipelines servingthese markets. Any new or upgraded pipelines could either allow shippersgreater access to natural gas markets or offer natural gas transportationservices that are more desirable than those provided by the Alliance System.Shippers on Alliance Pipeline US have access to additional high compressiondelivery capacity at no additional cost, other than fuel requirements, servingto enhance the competitive position of Alliance Pipeline US.

 

### ***VECTOR PIPELINE***

TheCompany provides operating services to, and holds a 60% joint venture interestin, Vector Pipeline, which transports natural gas from Chicago, Illinois toDawn, Ontario. Vector Pipeline has the capacity to deliver a nominal 1.3 bcf/dand is operating at or near capacity.

 

**Vector Pipeline’s primarysources of supply are through interconnections with the Alliance System and theNorthern Border Pipeline in Joliet, Illinois. Approximately 55% of the longhaul capacity of Vector Pipeline is committed through 15-year firmtransportation contracts at rates negotiated with the shippers and approved bythe FERC. The remaining capacity is sold at market rates and at various termlengths. The total long haul capacity of Vector is approximately 90% committedthrough 2015. Transportation service is provided through a number of differentforms of service agreements such as Firm Transportation Service andInterruptible Transportation Service.**Vector Pipeline is an interstate natural gas pipeline withFERC and NEB approved tariffs establishing rates, terms and conditionsgoverning its service to customers. On the United States portion of Vector,tariff rates are determined using a cost of service methodology and tariffchanges may only be implemented upon approval by the FERC. For 2009, the FERCapproved maximum tariff rates include a weighted average after-tax return onequity component of 11.07% (2008 - 11.04%; 2007 - 10.75%). On the Canadianportion, Vector Pipeline is required to file its negotiated tolls calculationwith the NEB on an annual basis. Tolls are calculated on a levelized basis thatinclude a rate of return incentive mechanism based on construction costs andare subject to a rate cap. In 2009, maximum tariff tolls include a return onequity component of 10.48% after-tax.

** **

**CompetitiveConditions**

Vector Pipeline faces competition forpipeline transportation services to its delivery points from new supply sourcesand traditional low cost pipelines, which could offer transportation that ismore desirable to shippers because of cost, supply location, facilities orother factors. Vector Pipeline has mitigated this risk by entering intolong-term firm transportation contracts, which expire starting in November 2015,for approximately 87% of its capacity. The remaining contracts expire atvarious times starting in April 2012. Certain long-term firm contracts(55% of capacity) provide for additional compensation to Vector Pipeline ifshippers do not extend their contracts beyond the initial term ending November 2015.The effectiveness of these mitigating factors is evidenced by the increased utilizationof the pipeline since its construction, despite the presence of transportationalternatives.

 

**AUX SABLE**

Enbridge owns 42.7% of Aux Sable, aNGLs extraction and fractionation business near Chicago, Illinois. Aux Sableowns and operates a plant at the terminus of the Alliance System. The plantextracts NGLs from the energy-rich natural gas transported on the AllianceSystem, as necessary to meet the requirements of downstream distributioncompanies, which require natural gas with less NGLs, or lower heat content; andto take advantage of positive commodity price spreads.

 

**Aux Sable has an agreement with**BP to sellits NGLs production to BP. In return, BP pays Aux Sable a fixed annual fee anda share of any net margin generated from the business in excess of specifiednatural gas processing margin thresholds (the upside sharing mechanism). Inaddition, BP compensates Aux Sable for all operating, maintenance and capitalcosts associated with the Aux Sable facilities subject to certain limits oncapital costs. BP supplies, at its cost, all make-up gas and fuel supply gas tothe Aux Sable facilities and is responsible for the capacity on the AlliancePipeline held by an Aux Sable affiliate, 

** **

** **

**18**

----

** **

**at market rates. The agreement is for an initialterm of 20 years, expiring December 21, 2025 and may be extended by mutualagreement for 10-year terms.**

** **

**ENERGY SERVICES**

Energy Services includes Gas Services and TidalEnergy, the Company’s energy marketing businesses. Gas Services markets naturalgas to optimize Enbridge’s commitments on the Alliance and Vector pipelines. Italso has a growing business of providing fee-for-service arrangements for thirdparties, leveraging its marketing expertise and access to contractedtransportation capacity. Capacity commitments as of December 31, 2009 were33 mmcf/d on the Alliance System (3% of total capacity) and 104 mmcf/d onVector Pipeline (9% of total capacity). Capacity commitments as of December 31,2008 were 33 mmcf/d on the Alliance System (3% of total capacity) and 144mmcf/d on Vector Pipeline (12% of total capacity).

 

Earnings from Gas Services are dependent upon thebasis (location) differentials between Alberta and Chicago, for AllianceSystem, and between Chicago and Dawn, for Vector Pipeline. To the extent thecost of transportation on these two pipelines exceeds the gas commodity basisdifferential, earnings will be negatively affected.

 

**Tidal Energy provides crude oil and NGLs marketingservices for the Company and its customers in** a full range of condensate and crude oil typesincluding light sweet, light and medium sours and several heavy grades. TidalEnergy transacts at many of the major North American market hubs and providesits customers with a variety of programs including flexible pricingarrangements, hedging programs, product exchanges, physical storage programs,and total supply management. TidalEnergy’s business involves buying, selling, transporting and storing condensateand crude oil. Tidal Energy is primarily a physical barrel marketing companyand in the course of its market activities can create modest commodityexposures. Any residual open positions created from this physical business aretightly monitored and must comply with the Company’s formal risk managementpolicies.

** **

**INTERNATIONAL**

In 2009,the Company sold its 24.7% interest in OCENSA, a crude oil export pipeline inColombia. In 2008, the Company sold its 25% equity interest in CLH, Spain’slargest refined products transportation and storage business. Both of theseinvestments were sold at very attractive prices and proceeds were utilized inthe funding of the North American expansion projects discussed earlier.

 

Given thedisposals of OCENSA and CLH, there are currently minimal operations inInternational. However, Enbridge continues to actively monitor theinternational business environment to identify potential new investmentopportunities.

 

**SPONSORED INVESTMENTS**

** **

Sponsored Investments includes the Company’s 27.0% ownershipinterest in EEP, Enbridge’s funding of 66.7% of the United States segment ofthe Alberta Clipper Project through EEP and Enbridge Energy, L.P. (EELP) and a72% economic interest (41.9% voting interest) in Enbridge Income Fund (EIF).Enbridge manages the day-to-day operations of, and develops and assessesopportunities for each of these investments, including both organic growth andacquisition opportunities.

 

**ENBRIDGE ENERGY PARTNERS**

EEP ownsand operates crude oil and liquid petroleum transportation and storage assets andnatural gas gathering, treating, processing, transportation and marketingassets in the United States. Significant assets include the Lakehead System,which is the extension of the Enbridge System in the United States; theMid-Continent crude oil system consisting of an interstate crude oil pipelineand storage facilities; a crude oil gathering system and interstate pipelinesystem in North Dakota; and natural gas assets located primarily in Texas.

 

In thesecond quarter of 2007, EEP issued partnership units. Because Enbridge did notfully participate in these offerings, dilution gains of $12 million resultedand Enbridge’s ownership interest in the Partnership decreased from 16.6% to15.1%. Enbridge’s average ownership interest in 2007 was 15.5%. In March 2008,Enbridge did not participate in EEP’s issuance of Class A units, resultingin a $5 million dilution 

 

 

19

----

 

gain and a decrease in ownership interest to 14.6%. In late2008, Enbridge purchased 16.3 million Class A common units of EEP,resulting in an ownership increase to 27.0%. The Company’s average ownershipinterest in EEP during 2008 was 15.7%. At December 31, 2009, Enbridge’sownership interest in EEP remained at 27.0%.

 

**Competitive Conditions**

EEP’s Lakehead System, the UnitedStates portion of the Enbridge System, is a major crude oil export route fromthe WCSB. Other existing competing carriers and pipeline proposals to shipwestern Canadian liquids hydrocarbons to markets in the United States representcompetition for the Lakehead System. EEP’s Mid-Continent system and NorthDakota system also face competition from existing competing pipelines, proposedfuture pipelines, and alternative gathering facilities available to producersor the ability of the producers to build such gathering facilities. Competitionfor EEP’s storage facilities include large integrated oil companies and othermidstream energy partnerships.

 

Other interstate and intrastatenatural gas pipelines or their affiliates and other midstream businesses thatgather, treat, process and market natural gas or NGLs represent competition toEEP’s natural gas segment. The level of competition varies depending on thelocation of the gathering, treating and processing facilities. However, mostnatural gas producers and owners have alternate gathering, treating andprocessing facilities available to them, including competitors that aresubstantially larger than EEP.

 

**ENBRIDGE ENERGY, L.P. – ALBERTA CLIPPER US**

In July 2009, the Companycommitted to fund 66.7% of the cost to construct the United States segment ofthe Alberta Clipper Project. The Company will fund 66.7% of the project’sequity requirements through EELP, while 66.7% of the debt funding will be madethrough EEP. EELP – Alberta Clipper US earnings are the Company’s earnings fromits investment in EELP which is undertaking the project and currently representallowance for equity funds used during construction (AEDC) recognized while theproject is under construction.

 

### ***ENBRIDGE INCOME FUND***

EIF is apublically traded income fund whose primary assets include a 50% interest inAlliance Pipeline Canada and the 100%-owned Enbridge Saskatchewan System, bothacquired from the Company in 2003. Alliance Pipeline Canada is the Canadianportion of the Alliance System previously described in the Natural Gas Deliveryand Services segment. The Enbridge Saskatchewan System owns and operates crudeoil and liquids pipelines systems from producing fields in southernSaskatchewan and southwestern Manitoba, connecting primarily with Enbridge’smainline pipeline to the United States.

 

EIF alsoowns interests in three wind power generation projects purchased from Enbridgein October, 2006 and a business that develops and operates waste-heat powergeneration projects at Alliance Pipeline Canada compressor stations.

 

**CORPORATE**

 

Corporate consists of new businessdevelopment activities and investing and financing activities, includinggeneral corporate investments and financing costs not allocated to the businesssegments. Corporate also includes the Company’s investments in green energyprojects, including the Ontario Wind Project, the Talbot Wind Energy Projectand the Sarnia Solar Project, as described below.

 

**ONTARIOWIND PROJECT**

The 190-megawatt (MW) Ontario Wind Project, located in theMunicipality of Kincardine on the eastern shore of Lake Huron in Ontario, wascompleted in the fourth quarter of 2008, and 65 of the 115 wind turbines wereoperating and delivering power to the grid by the end of 2008. During the firstquarter of 2009, the remaining 50 turbines were phased into service and thewind project attained full commercial operation. The project has demonstratednear design level operational performance through its net capacity factor andhigh availability of wind turbines.

 

**TALBOTWIND ENERGY PROJECT**

InNovember 2009, Enbridge announced the development of the 99-MW Talbot WindEnergy Project near Chatham, Ontario with Renewable Energy Systems Canada Inc.(RES Canada). Enbridge will have a 90% interest in the project and an option toacquire the remaining 10% interest. RES Canada will construct 

 

 

20

----

 

thewind project under a fixed price, turnkey, engineering, procurement andconstruction agreement. The project utilizes 43 Siemens 2.3-MW wind turbinesand, under a multi-year fixed price agreement, Siemens will provide operationsand maintenance services for the wind turbines. The Talbot Wind Energy projectwill deliver energy to the Ontario Power Authority under a Renewable EnergySupply (RES) III 20-year power purchase agreement and is expected to becompleted by December 2010.

 

**SARNIASOLAR PROJECT**

In October 2009, Enbridgeannounced the development of the 20-MW Sarnia Solar Project with First Solar, Inc.(First Solar). In December 2009, the Company announced a 60-MW expansionof the project. After the completion of the expansion, the project will be thelargest photovoltaic, solar energy facility in operation in North America.First Solar, a global leader in solar energy, is constructing the project undera fixed price engineering, procurement and construction contract, utilizing itsthin film photovoltaic technology. First Solar will also provide operations andmaintenance services under a long-term contract. Power output of the facilitywill be sold to the Ontario Power Authority under a 20-year power purchaseagreement. The initial 20-MW facility attained commercial operation in December 2009and the 60-MW facility is expected to be in service by December 2010.

 

**GENERAL**

** **

**EMPLOYEES**

**At December 31, 2009,Enbridge employed 6,065 employees as set forth in the following table.**

** **
| Liquids Pipelines                  |   | 1,769 |   |
|------------------------------------|--------|-------|--------|
| Natural Gas Delivery and Services1 |   | 2,204 |   |
| Sponsored Investments2             |   | 1,858 |   |
| Corporate                          |   | 234   |   |
|                               |   | 6,065 |   |

 

**1**                 Approximately 11% of the Company’s workforce is represented either bythe Communications, Energy and Paperworkers Union, Local 975 (CEPU) or theInternational Brotherhood of Electrical Workers (IBEW), Local 97. A two-yearcollective agreement for CEPU was signed in March 2009 for the period January 1,2009 to December 31, 2010. The current collective agreement for IBEWexpires February 2011.

**2**                 Neither EEP nor EIF have employees. Both use theservices of the Company’s wholly-owned subsidiaries for managing and operatingtheir businesses.

** **

**CORPORATE SOCIAL RESPONSIBILITY**

 

Enbridgehas strong corporate social responsibility practices. Enbridge definescorporate social responsibility as conducting business in a sociallyresponsible way, protecting the environment and the health and safety ofpeople, supporting human rights and engaging, respecting and supporting thecommunities and cultures with which the Company works. Enbridge’s complete 2009Corporate Social Responsibility Report can be found at www.enbridge.com/csr2009. None of the information contained on, orconnected to, the Enbridge website is incorporated or otherwise part of thisAIF.

 

In2009, the Company launched an enterprise-wide goal of achieving a neutralenvironmental footprint by 2015. The goal consists of three key commitments:

 

·                  we will conserve anacre of natural or wilderness land for every acre we permanently impact fromthe construction of new facilities;

·                  we will plant atree for every tree we remove to build new facilities; and

·                  we will generate akilowatt of renewable power, through our investments in renewable andalternative energy, for each kilowatt of power consumed by our operations.

 

Toachieve its neutral footprint goal, Enbridge will work with natureconservancies in Canada and the United States to help purchase naturalwilderness lands throughout North America. The land that Enbridge conserveswill be similar to the areas that have been affected. The Company has alsobegun to plant trees. To mark the Company’s 60th anniversary, Enbridge planted more than 60,000trees in 60 communities along its rights of way in Canada and the UnitedStates.

 

 

21

----

 

Enbridge’scommunity investments are also noteworthy. The Company launched three majorcommunity investment initiatives in 2009. School Plus, in partnership with the Assembly of First Nations,provides financial support to enrichment programming and extra-curricularactivities in First Nations schools near major Enbridge rights of way, the Safe Community program serves toconfirm the priority Enbridge places on health and safety in our right-of-waycommunities, by directly and visibly supporting those right-of-wayorganizations who would respond to an emergency on one or more of our lines orat one of our facilities, and the NaturalLegacy program focuses on tree planting and specific environmentalinitiatives in communities in proximity to our major rights of way.

 

Tocomplement community investments in its Canadian and United States operatingareas, Enbridge will also exercise leadership in extending the benefits ofenergy availability to underdeveloped countries. In 2009, Enbridge launched theenergy4everyone Foundation, which has applied to the Canada Revenue Agency forcharitable status, with a vision of empowering people and communities toimprove their own lives by providing energy to everyone. The Foundation aims toleverage the expertise and resources of the Canadian energy industry to affectsignificant enhancement in quality of life through the delivery and deploymentof affordable, reliable and sustainable energy services and technologies tocommunities in need around the world.

 

**ENVIRONMENTAL MATTERS**

 

**CLIMATE CHANGE LEGISLATION**

The Canadian Federal Government hasindicated that Canada will target a 17% reduction of greenhouse gas (GHG)emissions by 2020, based on 2006 emission levels. It has also signaled that 90%of Canada’s electricity will be provided by non-emitting sources, such ashydro, nuclear, clean-coal, solar and wind, by 2020. Details of Canada’s GHGmanagement plan will not be released until there is clarity in the UnitedStates about its intention to regulate GHG emissions. Canadian regulations willlikely be compatible with those of the United States in order for Canadian businessesto remain competitive and avoid the potential for punitive trade sanctions. Itis uncertain how climate legislation could affect the industry. Enbridgecontinues to monitor this activity.

 

**LOW CARBON FUEL STANDARDS**

California and Oregon have adoptedLow Carbon Fuel Standards and other states (including the seven New Englandstates) are considering the same. If widely adopted, such standards could limitUnited States refiners from importing oil sands products, as they are moreenergy-intensive to process than conventional crude. Flow restrictions of oilsands products to the United States would increase interest in exports to Asia,and consequently increase interest in projects like Enbridge’s Northern GatewayProject.

 

**RENEWABLE ENERGY**

Enbridge has significant interest inwind and solar power and is well positioned to expand this portfolio. Manyprograms to encourage and advance renewable energy exist in Canada and theUnited States as well as individual provinces and states. For example, theFeed-in-Tariff program introduced by the Ontario Green Energy Act has createdsignificant opportunities for renewable energy growth in Ontario. The extensionof the Production Tax Credit, introduction of a federal cash grant and thepotential for a nationwide minimum Renewable Portfolio Standard haveaccelerated renewable energy project across the United States. Enbridgecontinues to assess and advance renewable energy opportunities and monitorpotential changes to government policies and incentives that may positively ornegatively impact renewable energy projects in a particular province, state orfederal jurisdiction.

 

**RISKFACTORS**

 

A discussion of theCompany’s risk factors can be found in the 2009 Year End MD&A under thesubheading “Business Risks” for each of the operating segments as well as underthe heading “Risk Management”.

 

 

22

----

 

# **DIVIDENDS**

#  

The declaration ofdividends is at the discretion of the Board of Directors and is approvedquarterly. The Company continues to target a pay out of approximately 60% to70% of adjusted earnings as dividends. Dividends on the Preferred Shares, Series A,are fixed and are paid quarterly.

 

There are norestrictions that currently prevent the Company from paying dividends. However,in the event of liquidation, dissolution or winding-up of the Company, thepreferred shareholders have priority in the payment of dividends over thecommon shareholders. As well, restrictions in credit or financing agreementsentered into by the Company or provisions of applicable law may preclude thepayment of dividends in certain circumstances.

 
| * *                        | ** ** | ** ** | ** ** |
|---------------------------------|------------|------------|------------|
| *(Canadian dollars per share)*  | **2009**   | **2008**   | **2007**   |
| Common Shares                   | 1.4800     | 1.3200     | 1.2300     |
| Preferred Shares, Series A | 1.3750     | 1.3750     | 1.3750     |

 

**DESCRIPTION OF CAPITAL STRUCTURE**

** **

**SHARE CAPITAL**

Enbridge’sauthorized share capital consists of an unlimited number of Common Shares withno par value and an unlimited number of preferred shares. At Year End, therewere 378 million Common Shares and 5 million Series A Preferred Sharesissued and outstanding.

 

### ***Common Shares***

Holders of CommonShares are entitled to receive dividends if, as and when declared by the Boardof Directors of the Company. Holders of Common Shares are entitled to receivenotice of and to attend all meetings of shareholders and are entitled to onevote per Common Share held at all such meetings. In the event of liquidation,dissolution or winding up of the Company or other distribution of assets of theCompany among its shareholders for the purpose of winding up its affairs,holders of Common Shares will be entitled to participate ratably in anydistribution of assets of the Company.

 

The Company has aShareholder Rights Plan that is designed to encourage the fair treatment ofshareholders in connection with any takeover offer for the Company. Rightsissued under the plan become exercisable when a person, including any relatedparties, acquires or announces the intention to acquire 20% or more of theCompany’s outstanding common shares without complying with certain provisionsset out in the plan, or without approval of the Company’s Board of Directors.Should such an acquisition occur, each rights holder, other than the acquiringperson and its related parties, will have the right to purchase Common Shares ofthe Company at a 50% discount to the market price at that time. The plan wasreconfirmed at the 2005 and 2008 annual meetings of shareholders and must bereconfirmed at every third annual meeting thereafter. The renewal of this planwill be proposed for approval at the 2011 shareholders’ meeting.

 

Enbridge’s DividendReinvestment and Share Purchase Plan enables registered shareholders of theCompany to purchase additional common shares by reinvesting all of the cashdividends paid on the common shares and also by making optional cash paymentsof up to $5,000 per quarter, in both cases without incurring brokerage or othertransaction expenses. Effective with dividends payable on March 1, 2008,participants in the Company’s Dividend Reinvestment and Share Purchase Planreceive a 2% discount on the purchase of Common Shares with reinvesteddividends.

Enbridge also hasstock-based compensation plans that allow employees to purchase Common Sharesof the Company. Option exercise prices are determined based on the weightedaverage market prices of the Common Shares for the five days preceding the dateof issuance. Options granted under the plan are generally fully exercisableafter four years and expire ten years after the grant date.

### *** ***

 

23

----

### *** ***

### ***Preferred Shares***

The five million5.5% Cumulative Redeemable Preferred Shares, Series A are entitled tofixed, cumulative, quarterly preferential dividends of $1.375 per share peryear. The Company may, at its option, redeem all or a portion of theoutstanding preferred shares for $25 per share plus all accrued and unpaiddividends.

 

Preferred Sharesmay be issued in one or more series. The Board of Directors may determine thedesignation, rights, privileges, restrictions and conditions attached to eachseries of Preferred Shares before the issue of such series. Holders of thePreferred Shares are not entitled to vote at any meeting of the shareholders ofthe Company, except as required by law. Preferred Shares are entitled to priorityover the Common Shares of the Company with respect to the payment of dividendsand the distribution of assets of the Company in the event of any liquidation,dissolution or winding up of the Company’s affairs.

 

**RATINGS**

The following tablesets forth the ratings assigned to the Company’s Preferred Shares, Series A,Medium-Term Notes (MTNs) and Unsecured Debt and Commercial Paper by DBRSLimited (DBRS), Moody’s Investor Services, Inc. (Moody’s) and Standard &Poor’s Ratings Services (S&P).

 
| ** **                      | ** **   | ** **       | ** **  |
|---------------------------------|--------------|------------------|-------------|
| ** **                      | **DBRS**     | **Moody’s** | **S&P** |
| Preferred Shares, Series A | Pfd-2  (low) | Baa3             | BBB         |
| MTNs and Unsecured Debt         | A            | Baa1             | A-          |
| Commercial Paper                | R-1  (low)   | Not  Rated       | A-1  (low)  |
| Rating Outlook                  | Stable       | Stable           | Stable      |

 

The credit ratingsaccorded by these rating agencies are not recommendations to purchase, hold orsell the shares or securities and such ratings do not comment as to marketprice or suitability for a particular investor. There is no assurance that anyrating will remain in effect for any given period of time or that any ratingwill not be revised or withdrawn entirely by a rating agency in the future if,in its judgment, circumstances so warrant. A description from the rating agencyfor each credit rating listed in the table above is set out below.

 

DBRS has differentrating scales for short and long-term debt and preferred shares. “High” or “low”grades are used to indicate the relative standing within a rating category. Theabsence of either a “high” or “low” designation indicates the rating is in the “middle”of this category. The Pfd-2 (low) rating assigned to Enbridge’s PreferredShares is the second highest of six rating categories for preferred shares.Preferred shares rated Pfd-2 are of satisfactory credit quality. Protection ofdividends and principal is still substantial, but earnings, the balance sheetand coverage ratios are not as strong as Pfd-1 rated companies. The A ratingassigned to Enbridge’s MTNs and unsecured debentures is the third highest ofeight categories for long-term debt. Long-term debt rated A is of satisfactorycredit quality. Protection of interest and principal is still substantial, butthe degree of strength is less than that of AA rated entities.

 

While A is arespectable rating, entities in this category are considered to be moresusceptible to adverse economic conditions and have greater cyclical tendenciesthan higher-rated securities. The R-1 (low) rating assigned to Enbridge’scommercial paper is the third highest of ten rating categories and indicatessatisfactory credit quality. The overall strength and outlook for keyliquidity, debt and profitability ratios is not normally as favorable as withhigher rating categories, but these considerations are still respectable. Anyqualifying negative factors that exist are considered manageable, and the entityis normally of sufficient size to have some influence on its industry.

 

Moody’s has different rating scales for short andlong-term obligations. Numerical modifiers 1, 2 and 3 are applied to eachrating classification, with 1 being the highest and 3 being the lowest. TheBaa3 rating assigned to Enbridge’s Preferred Shares and the Baa1 ratingassigned to Enbridge’s MTNs and unsecured debentures is the fourth highest ofnine rating categories for long-term obligations. Obligations rated Baa aresubject to moderate credit risk. They are considered medium-grade and, as such,may possess certain speculative characteristics.

 

 

24

----

** **

S&P has different rating scales for short and long-termobligations. Ratings may be modified by the addition of a plus (+) or a minus(-) sign to show the relative standing within a particular rating category. TheBBB rating assigned to Enbridge’s preferred shares is the fourth highest ofeleven rating categories for long-term obligations. An obligor rated BBB hasadequate capacity to meet its financial commitments; however, adverse economicconditions or changing circumstances are more likely to lead to a weakenedcapacity of the obligor to meet its financial commitments. The A- ratingassigned to Enbridge’s MTNs and unsecured debentures is the third highest ofeleven rating categories. An A rating indicates the obligor has strong capacityto meet its financial commitments but is somewhat more susceptible to theadverse effects of changes in circumstances and economic conditions thanobligors in higher-rated categories. The rating of A-1 (low) assigned toEnbridge’s commercial paper is the highest of nine rating categories forshort-term obligations. An obligor rated A-1 has strong capacity to meet itsfinancial commitments.

 

**MARKETFOR SECURITIES**

** **

The Common Shares of the Company are traded on the TorontoStock Exchange (TSX) in Canada, the principal market for Enbridge’s commonshares, and on the New York Stock Exchange (NYSE) in the United States underthe symbol ENB. The following table sets forth the monthly price range andvolume traded for Enbridge’s Common Shares on the TSX and NYSE.

 
|            | ** **       | ** **     |
|-----------------|------------------|----------------|
|            | **TSX (ENB.TO)** | **NYSE (ENB)** |
|            | **High  ($)**    | **Low  ($)**   | **Close  ($)** | **Volume  Traded** | **High  (US$)** | **Low  (US$)** | **Close  (US$)** | **Volume  Traded** |
| January  2009   | 41.21            | 38.61          | 40.24 | 17,996,287 | 34.39 | 30.70 | 32.80 | 6,687,790 |
| February  2009  | 42.97            | 37.50          | 38.10 | 21,460,475 | 35.26 | 29.61 | 29.79 | 8,325,354 |
| March 2009      | 40.16            | 35.20          | 36.35 | 27,264,243 | 32.17 | 27.54 | 28.80 | 8,674,448 |
| April 2009      | 37.38            | 35.68          | 36.85 | 17,052,732 | 31.39 | 28.35 | 30.85 | 5,039,098 |
| May 2009        | 38.81            | 36.50          | 38.70 | 19,648,968 | 35.56 | 30.81 | 35.51 | 4,447,301 |
| June 2009       | 40.85            | 37.84          | 40.36 | 21,665,857 | 36.35 | 32.84 | 34.73 | 3,667,996 |
| July 2009       | 42.10            | 38.26          | 41.69 | 15,022,929 | 39.07 | 32.79 | 38.84 | 2,920,791 |
| August  2009    | 42.32            | 40.35          | 40.90 | 13,462,044 | 39.59 | 36.62 | 37.21 | 2,128,925 |
| September  2009 | 41.84            | 39.95          | 41.57 | 16,105,521 | 38.99 | 36.32 | 38.80 | 2,121,825 |
| October  2009   | 43.47            | 40.50          | 42.09 | 18,185,429 | 42.27 | 37.24 | 38.84 | 2,636,927 |
| November  2009  | 45.25            | 41.37          | 45.01 | 19,086,819 | 42.91 | 38.33 | 42.76 | 2,247,988 |
| December  2009  | 48.92            | 45.53          | 48.63 | 21,421,072 | 46.52 | 43.13 | 46.22 | 2,538,689 |

 

In addition, the Company’s PreferredShares, Series A are traded on the TSX under the symbol ENB-PA.TO. Thefollowing table sets forth the monthly price range and volume traded forEnbridge’s Preferred Shares.

 
|           | ** ** |   |
|----------------|------------|--------|
|           |       |   |   |   | **High  ($)** | **Low  ($)** | **Close  ($)** | **Volume  Traded** |
| January 2009   |       |   |   |   | 24.48 | 23.50 | 24.10 | 91,215 |
| February 2009  |       |   |   |   | 24.50 | 23.00 | 23.98 | 105,063 |
| March 2009     |       |   |   |   | 24.18 | 22.42 | 23.75 | 54,597 |
| April 2009     |       |   |   |   | 24.89 | 23.75 | 24.85 | 115,316 |
| May 2009       |       |   |   |   | 24.96 | 24.18 | 24.62 | 75,294 |
| June 2009      |       |   |   |   | 25.23 | 23.91 | 24.90 | 67,003 |
| July 2009      |       |   |   |   | 25.95 | 24.40 | 25.10 | 91,726 |
| August 2009    |       |   |   |   | 25.50 | 24.92 | 25.45 | 77,778 |
| September 2009 |       |   |   |   | 26.05 | 24.78 | 25.30 | 46,145 |
| October 2009   |       |   |   |   | 25.51 | 24.53 | 25.51 | 99,432 |
| November 2009  |       |   |   |   | 25.91 | 24.85 | 25.14 | 41,049 |
| December 2009  |       |   |   |   | 25.89 | 25.05 | 25.82 | 37,145 |
|                |            |        |  |  |  |  |  |  |  |  |

 

 

25

----

 

The following table outlines the securities issued by theCompany and its wholly-owned subsidiaries during 2009 that are not listed orquoted on an exchange. These are in the form of unsecured medium-term notes.

 
|                    | ** **                        |       |
|-------------------------|-----------------------------------|------------|
| **Issuer**              | **Principal  Amount***(millions)* | **Coupon** | **Issue Date** | **Maturity Date** | **Issue  Price** |
| Enbridge Inc.           | $400                              | 5.17%      | May 19, 2009 | May 19, 2016 | $99.942 |
| Enbridge Inc.           | $400                              | 4.77%      | September 2, 2009 | September 2, 2019 | $99.953 |
| Enbridge Inc.           | $200                              | 5.75%      | September 2, 2009 | September 2, 2039 | $99.901 |
| Enbridge Pipelines Inc. | $200                              | 5.35%      | November 10, 2009 | November 10, 2039 | $99.911 |
| Enbridge Pipelines Inc. | $300                              | 4.49%      | November 10, 2009 | November 12, 2019 | $99.920 |
|                         |                                   |            |  |  |  |  |  |

 

There are no provisions associated with this debt thatentitle debt holders to voting rights. From time to time, the Company also issuescommercial paper for various terms. Enbridge also has credit facilities thatbear interest at market rates.

 

**CREDIT FACILITIES**

** **

Credit facilities carry a weighted average standby fee of0.39% per annum onthe unused portion and draws bear interest at market rates. Certain creditfacilities serve as a backstop to the commercial paper programs and the Companyhas the option to extend the facilities, which are currently set to mature from2010 to 2014.

 
| *(millions of Canadian  dollars)*   | ** **       |                  |                             |          |
|-------------------------------------|------------------|-----------------------|----------------------------------|---------------|
| December 31, 2009                   | **Expiry Dates** | **Total  Facilities** | **Credit  Facility  Draws****2** | **Available** |
| Liquids  Pipelines                  | 2011             | 1,300                 | 876                              | 424           |
| Natural  Gas Delivery and Services  | 2010  - 2011     | 813                   | 512                              | 301           |
| Corporate                           | 2011  - 2013     | 3,898                 | 2,255                            | 1,643         |
|                                |             | 6,011                 | 3,643                            | 2,368         |
| Southern  Lights project financing1 | 2014             | 1,796                 | 1,531                            | 265           |
| Credit  facilities                  |             | 7,807                 | 5,174                            | 2,633         |

1      Totalfacilities inclusive of $186 million which is available if certain conditionsrelated to the project are met.

2      Includesfacility draws and commercial paper issuances, net of discount, that areback-stopped by the credit facility.

 

**DIRECTORS AND OFFICERS**

** **

As atDecember 31, 2009, the directors and all officers of Enbridge (including theexecutive officers listed below) as a group beneficially owned, directly orindirectly, 1,382,579 Common Shares of the Company, representing less than 1%of the issued and outstanding Common Shares on that date. The information as toshares beneficially owned or over which control or direction is exercised, notbeing within the knowledge of the Company, has been furnished by the respectivedirectors and officers individually. The directors and officers do notbeneficially own, directly or indirectly, more than 1% of the voting securitiesof any subsidiary of the Company.

 

**DIRECTORS**

The following table sets forth the names of the Directors ofEnbridge Inc. on February 18, 2010, their municipalities of residence, theirrespective principal occupations within the five preceding years and the yearfrom which they first became a Director of the Company (except where otherwisenoted). Each Director who is elected holds office until the next annual meetingof shareholders or until a successor is duly elected or appointed.

 

 

26

----

 
|                                                | ** **                                                                                                                                                                             |                     |
|-----------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------|
| **Name  and  Place of Residence**                   | **Principal  Occupation During the Five Preceding Years**                                                                                                                              | **Director  Since****1** |
| David A.  Arledge

Naples,  Florida

USA            | Corporate  Director. Chair of the Board of Directors of Enbridge Inc. since 2005.                                                                                                      | 2002                     |
| James J.  Blanchard2

Beverly  Hills, Michigan

USA | Chairman,  Government Affairs, DLA Piper U.S., LLP (law firm) since June, 2006. United  States Ambassador to Canada from 1993 to 1996.                                                 | 1999                     |
| J. Lorne  Braithwaite

Thornhill,  Ontario

Canada  | Corporate  Director. President and Chief Executive Officer of Build Toronto since April  2009.                                                                                         | 1989                     |
| Patrick  D. Daniel

Calgary,  Alberta

Canada       | President  and Chief Executive Officer of Enbridge since January 2001.                                                                                                                 | 2000                     |
| J. Herb England

Naples, Florida

USA               | Chairman  and Chief Executive Officer of Stahlman-England Irrigation Inc. (contracting  company) since January 2000.                                                                   | 2007                     |
| Charles  W. Fischer

Calgary,  Alberta

Canada      | Corporate  Director. President and Chief Executive Officer of Nexen Inc. from 2001 to  2008.                                                                                           | 2009                     |
| David A.  Leslie3

Toronto,  Ontario

Canada        | Corporate Director.                                                                                                                                                                    | 2005                     |
| George  K. Petty

San Luis  Obispo, California

USA | Corporate Director.                                                                                                                                                                    | 2001                     |
| Charles  E. Shultz

Calgary,  Alberta

Canada       | Chairman and Chief Executive  Officer of Dauntless Energy Inc. (private oil and gas corporation) since  1995.                                                                          | 2004                     |
| Dan C.  Tutcher

Houston,  Texas

USA               | Corporate Director. Group Vice  President, Transportation South of Enbridge Inc., President of Enbridge  Energy Company, Inc. and Enbridge Energy Management L.L.C. from 2001 to 2006. | 2006                     |
| Catherine  L. Williams

Calgary,  Alberta

Canada   | Corporate Director. Chief  Financial Officer of Shell Canada Limited from 2003 to 2007.                                                                                                | 2007                     |
|                                                     |                                                                                                                                                                                        |                          |  |  |

1      “Director Since” refers to the yearthe person named was elected or appointed as a Director of the Company or ofits predecessor parent, Interprovincial Pipe Line Inc.

2      On April 10, 2006, the OntarioSecurities Commission (OSC) issued a temporary cease trade order againstBennett Environmental Inc. (Bennett), and subsequently a cease trade order onApril 24, 2006, after Bennett failed to file its annual financial statementsand related management's discussion and analysis for the year ended December31, 2005. Under such orders, certain directors, officers and insiders ofBennett, including Governor Blanchard, were prohibited from trading Bennettsecurities until the OSC was in receipt of the necessary filings. Bennett madethe requisite filings on or about May 30, 2006 and the cease trade order lapsedon June 19, 2006. Governor Blanchard resigned from Bennett on August 7, 2006.

3      Mr. Leslie served as a member of theBoard of Directors of Canwest Global Communications Corp. from March 26, 2007to January 14, 2009. On October 6, 2009, Canwest Global Communications Corp.voluntarily entered into, and successfully obtained, an Order from the OntarioSuperior Court of Justice (Commercial Division) commencing proceedings underthe Companies’ Creditors Arrangement Act (“CCAA”).

 

Enbridge has four committees of the Board of Directors: (1)Audit, Finance & Risk Committee (AFR Committee); (2) Governance Committee;(3) Human Resources & Compensation Committee (HRC Committee); and (4)Corporate Social Responsibility Committee. The members of each of thesecommittees, as of Year End, are identified below:

 

 

27

----

 
|                   | ** **         |                      |
|------------------------|--------------------|---------------------------|
| **Director**           | **AFR  Committee** | **Governance  Committee** | **HRC  Committee** | **CSR  Committee** |
| David A.  Arledge      |               | ü                    | ü |   |
| James J.  Blanchard    |               | ü                    |   | Chair |
| J. Lorne  Braithwaite  |               |                      | ü | ü |
| Patrick  D. Daniel     |               |                      |   |   |
| J. Herb  England       | ü             | ü                    |   |   |
| Charles  W. Fischer    |               |                      | ü | ü |
| David A.  Leslie       | Chair              | ü                    |   |   |
| George  K. Petty       | ü             | Chair                     |   |   |
| Charles  E. Shultz     | ü             |                      | Chair |   |
| Dan C.  Tutcher        |               | ü                    |   | ü |
| Catherine  L. Williams | ü             |                      | ü |   |
|                        |                    |                           |  |  |  |  |

** **

# **OFFICERS**

The following table setsforth the names of the executive officers, their current office with theCompany on February 18, 2010, their municipality of residence and theirprincipal occupations for the five preceding years.

 
|                                                | ** **                                                                     |                                                                                                                                                                                                                                                                                                                       |
|-----------------------------------------------------|--------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Name  and  Place of Residence**                   | **Present  Position Held**                                                     | **Principal  Occupation During the Five  Preceding Years**                                                                                                                                                                                                                                                                 |
| Patrick  D. Daniel

Calgary,  Alberta

Canada       | President  & Chief Executive Officer                                       | President & Chief Executive Officer since January  2001.                                                                                                                                                                                                                                                               |
| J.  Richard Bird

Calgary,  Alberta

Canada         | Executive  Vice President, Chief Financial Officer & Corporate Development | Executive  Vice President, Chief Financial Officer & Corporate Development since  January 2008. Executive Vice President, Liquids Pipelines from May, 2006 to  January 2008. Group Vice President, Liquids Pipelines from May 2005 to May  2006. Group Vice President, Transportation North from May 2001 to May 2005. |
| Stephen  J.J. Letwin

The  Woodlands, Texas

USA    | Executive  Vice President, Gas Transportation & International              | Executive  Vice President, Gas Transportation & International since May 2006. Group  Vice President, Gas Strategy & Corporate Development from April 2003 to  May 2006.                                                                                                                                            |
| Al  Monaco

Calgary,  Alberta

Canada               | Executive  Vice President, Major Projects                                      | Executive  Vice President, Major Projects since January 2008. President, Enbridge Gas  Distribution Inc. from September 2006 to January 2008. Senior Vice President,  Corporate Planning & Development from June 2003 to September 2006.                                                                               |
| David T.  Robottom, Q.C.

Calgary,  Alberta

Canada | Executive  Vice President, Law                                                 | Executive  Vice President, Law. Group Vice President, Corporate Law from June 2006 to  January 2010. Partner, Stikeman Elliott LLP (law firm) from February 2004 to  June 2006.                                                                                                                                            |
| Stephen  J. Wuori

Calgary,  Alberta

Canada        | Executive  Vice President, Liquids Pipelines                                   | Executive  Vice President, Liquids Pipelines since January 2008. Executive Vice  President, Chief Financial Officer & Corporate Development from May 2006  to January 2008. Group Vice President & Chief Financial Officer from  April 2003 to May 2006.                                                           |
| Bonnie  D. DuPont

Calgary,  Alberta

Canada        | Group  Vice President, Corporate Resources                                     | Group  Vice President, Corporate Resources since September 2000. Ms. DuPont is  retiring from Enbridge on March 1, 2010.                                                                                                                                                                                                   |
|                                                     |                                                                                |                                                                                                                                                                                                                                                                                                                            |  |  |

 

 

28

----

 
|                                           | ** **                                                   |                                                                                                                                                                                                                                                                                                                           |
|------------------------------------------------|--------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Name and**

**Place of Residence**           | **Present Position Held**                                    | **Principal Occupation During the Five Preceding  Years**                                                                                                                                                                                                                                                                      |
| Leigh S. Cruess

Calgary, Alberta

Canada      | Senior Vice President, Energy  Marketing & International | Senior Vice President, Energy Marketing &  International since October 2008. Senior Vice President, International &  Gas Services from January 2008 to October 2008. Senior Vice President,  International from September 2006 to January 2008. Vice President, Financial  Services from April 2003 to September 2006. |
| James A. Schultz

Millarville, Alberta

Canada | Senior Vice President, 

New Ventures                        | Senior Vice President, New Ventures since September 2006.  Senior Vice President from April 2003 to September 2006. President of  Enbridge Gas Distribution Inc. from June 2001 to September 2006.                                                                                                                             |
| John K. Whelen

Calgary, Alberta

Canada       | Senior Vice President, Corporate  Development                | Senior Vice President, Corporate Development since  September 2006. Vice President & Treasurer from February 2002 to August  2006.                                                                                                                                                                                         |
|                                                |                                                              |                                                                                                                                                                                                                                                                                                                                |  |  |

 

**CONFLICTS OF INTEREST**

Directors and officers of Enbridge and its subsidiaries are required todisclose the existence of potential conflicts in accordance with Enbridgepolicies governing directors and officers and in accordance with the CanadaBusiness Corporations Act. Although some of the directors sit on boards or maybe otherwise associated with companies that ship crude oil and/or natural gason Enbridge’s pipeline systems, Enbridge as a common carrier in Canada cannot,under its tariff, deny transportation service to a credit-worthy shipper.Further, due to the specialized nature of the industry, Enbridge believes it isimportant for its Board to be composed of qualified and knowledgeabledirectors, so some of them must come from oil and gas producers and shippers.The Governance Committee closely monitors relationships among directors toensure that business associations do not affect the Board’s performance. In acircumstance where a director declares an interest in any material contract ormaterial transaction being considered at a meeting, the director generallyabsents himself or herself from the meeting during the consideration of thematter, and does not vote on the matter.

 

**AUDIT, FINANCE & RISK COMMITTEE**

** **

The Audit, Finance & Risk Committee's Terms of Referenceare attached to this AIF as Appendix A and can also be found on the Company'swebsite at www.enbridge.com.

 

**RELEVANT**EDUCATIONAND EXPERIENCE OF MEMBERS

The members of the AFR Committee at Year End were David A.Leslie (Chair), J. Herb England, George K. Petty, Charles E. Shultz andCatherine L. Williams. The Board believes the composition of the AFR Committeereflects a high level of financial literacy and expertise. Each member of theAFR Committee has been determined by the Board to be “independent” and“financially literate” as those terms are defined under Canadian and UnitedStates securities laws and NYSE requirements.

 

In addition, the Board has determined that Messrs. Englandand Leslie and Ms. Williams are each an “Audit Committee Financial Expert” asthat term is defined under United States securities laws. The Board has madethese determinations based on the education and breadth and depth of experienceof each member of the AFR Committee. The following is adescription of the education and experience, apart 

 

 

29

----

 

from their respective roles as Directors of Enbridge, ofeach member of the AFR Committee that is relevant to the performance of his orher responsibilities as a member of the AFR Committee.

 

***David A.Leslie, F.C.A.***

Mr. Leslie is a chartered accountantand in his career of over 30 years, he was, among other things, personallyinvolved in and then an active supervisor of persons engaged in auditing,analyzing and evaluating financial statements. He is the former Chairman andChief Executive Officer of Ernst & Young LLP. He is also a director andmember of the audit committees of Enbridge Gas Distribution Inc. (a subsidiaryof Enbridge Inc.), Crombie REIT, Empire Company Limited, Sobeys Inc. (asubsidiary of Empire Company Limited), and Imris Inc. The NYSE CorporateGovernance Standards requires that listed companies disclose if any member ofthe audit committee serves on more than three public companies’ auditcommittees. While Mr. Leslie does serve on more than three audit committees, heis no longer employed on a full-time basis and the Board has determined thathis service on these audit committees enhances and does not impair his abilityto serve on the Enbridge audit committee.

 

***J. Herb England***

***Mr. England acquired extensivefinancial experience and exposure to accounting and financial issues during alengthy career with the John Labatt Limited group of companies, including asChief Financial Officer of John Labatt Limited. He is currently Chairman andChief Executive Officer of Stahlman-England Irrigation Inc., a contractingcompany in Florida.***

*** ***

***George K.Petty***

Mr. Petty acquired significant financial experienceand exposure to accounting and financial issues during his lengthy businesscareer, which included serving as President and Chief Executive Officer ofTelus Corporation from 1994 to 1999. He has acted as a member of other UnitedStates and Canadian audit committees.

 

***CharlesE. Shultz***

Mr. Shultz acquired significant financial experienceas a business executive and board member of several large Canadian and U.S. public companies. He served as President and Chief Executive Officerof Gulf Canada Resources Limited from 1990 to 1995 and has served as a directorof Canadian Oil Sands Limited since its inception and was Chairman until 2009.

 

**Catherine L. Williams**

Ms. Williams held senior finance positions during a30-year career in business which included international experience. She workedfor 20 years in the Shell group of companies, including as Chief FinancialOfficer of Shell Canada Limited from 2003 to 2007 and as Controller of ShellEurope Oil Productions from 2001 to 2003.

 

**PRE-APPROVAL POLICIES AND PROCEDURES**

The AFR Committee has adopted apolicy that requires pre-approval by the Committee of any services to beprovided by the external auditors, PricewaterhouseCoopers LLP (PwC), whetheraudit or non-audit services. The policy prohibits the Company from engaging theauditors to provide the following non-audit services:

·      bookkeeping or otherservices related to accounting records and financial statements;

·      financial informationsystems design and implementation;

·      appraisal or valuationservices, fairness opinions or contribution-in-kind reports;

·      actuarial services;

·      internal audit outsourcingservices;

·      management functions orhuman resources;

·      broker or dealer, investmentadviser or investment banking services;

·      legal services; and

·      expert services unrelated tothe audit.

 

The AFR Committee believes that thepolicy will protect the Company from the potential loss of independence of theexternal auditors. The AFR Committee has also adopted a policywhich prohibits the Company from hiring former employees of the auditors whoprovided more than 10 hours of audit, review

 

 

30

----

 

or attest services for the Companyor its subsidiaries within the one year preceding the commencement of the auditof the current year's financial statements.

 

A copy of the policies and procedures applicable tothe pre-approval of non-audit services by the Company's external auditors maybe obtained from the Corporate Secretary of the Company by sending a writtenrequest to 3000, 425 - 1st Street S.W., Calgary, Alberta, T2P 3L8, byfaxing a written request to (403) 231-5929, by calling (403) 231-3900 or bysending an e-mail request to corporatesecretary@enbridge.com.

 

**EXTERNAL AUDITOR SERVICES – FEES**

The following table sets forthall services rendered by the auditors, PwC, by category, together with thecorresponding fees billed by the auditors for each category of service for thefinancial years ended December 31, 2009 and 2008.

 
|               | ** ** |       |
|--------------------|------------|------------|
| * *           | **2009**   | **2008**   | **Description of Fee Category** |
| Audit Fees         | $4,085,718 | $3,855,563 | Represents the aggregate fees for audit services. |
| Audit-Related Fees | 822,734    | 305,944    | Represents the aggregate fees for assurance and related  services by the Company’s auditors that are reasonably related to the  performance of the audit or review of the Company's financial statements and  are not included under “Audit Fees”. During fiscal 2009 and 2008, the  services provided in this category included due diligence related to  prospectus offerings, technical guidance and other items. Services provided  in fiscal 2009 also included work performed in relation to the new Customer  Information System in EGD. |
| Tax Fees           | 388,091    | 429,539    | Represents the aggregate fees for professional services  rendered by the Company's auditors for tax compliance, tax advice and tax  planning. |
| All  Other Fees    | 1,004,061  | 146,383    | Represents  the aggregate fees for products and services provided by the Company's auditors  other than those services reported under “Audit Fees”, “Audit -Related Fees”  and "Tax Fees". These fees include those related to International  Financial Reporting Standards (IFRS), Canadian Public Accountability Board  fees, French translation work and process reviews. |
| Total  Fees        | $6,300,604 | $4,737,429 |   |
|                    |            |            |  |  |  |

** **

**Legal proceedings**

 

Informationrelated to Enbridge’s legal proceedings can be found in Note 31, “Commitmentsand Contingencies”, to the 2009 Audited Annual Consolidated FinancialStatements.

 

**Interest of management andothers in material transactions**

 

No director, executive officer orprincipal shareholder of Enbridge, or associate or affiliate of these persons,has any material interest, direct or indirect, in any transaction within thelast three years that has materially affected or will materially affectEnbridge.

 

**Registrar and TransferAgent**

 

The registrar and transfer agent forthe Company’s Common Shares is CIBC Mellon Trust Company:

 

 

31

----

 
| In Canada:

**CIBC  Mellon Trust Company**

P.O. Box  7010, Adelaide Street Postal Station

Toronto,  Ontario M5C 2W9

Telephone:  1-800-387-0825 or

416-643-5500  outside of North America

Website:  www.cibcmellon.com/investorinquiry | In the United States:

**BNY Mellon  Shareowner Services**

480 Washington Blvd.

Jersey City, New Jersey

United States of America 07310

  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

 

The registrar and transfer agent forthe Company’s Preferred Shares, Series A is CIBC Mellon Trust Company:

 

In Canada:

**CIBC Mellon Trust Company**

P.O. Box 7010, Adelaide Street Postal Station

Toronto, Ontario M5C 2W9

Telephone: 1-800-387-0825 or

416-643-5500 outside of North America

Website: www.cibcmellon.com/investorinquiry

** **

**material contracts**

** **

Enbridge has not entered into anymaterial contracts outside the ordinary course of business.

 

**interests of experts**

** **

The Company’s auditors arePricewaterhouseCoopers LLP, Chartered Accountants. PwC has issued an auditors’report in respect of Enbridge’s consolidated financial statements, withaccompanying notes, as at December 31, 2009 and 2008 and for each of the yearsin the three year period ended December 31, 2009. PwC has also provided anopinion on the effectiveness of internal control over financial reporting as atDecember 31, 2009. Both of these opinions are dated February 18, 2010.

 

PwC has advised that it isindependent with respect to Enbridge within the meaning of the Rules ofProfessional Conduct of the Institute of Chartered Accountants of Alberta andthe rules of the United States Securities and Exchange Commission.

** **

**ADDITIONAL INFORMATION**

** **

Additional information aboutEnbridge is available on our website at www.enbridge.com and on SEDAR (System forElectronic Document Analysis and Retrieval) at www.sedar.com in Canada, and on the UnitedStates Securities and Exchange Commission’s website (EDGAR) at www.sec.gov. Theaforementioned information is made available in accordance with legalrequirements and is not incorporated by reference into this AIF.

 

Additional information, includingdirectors’ and officers’ remuneration and indebtedness, principal holders ofour securities and securities authorized for issuance under equity compensationplans, where applicable, is contained in the Management Information Circularfor Enbridge’s most recent annual meeting of shareholders at which directorswere elected.

 

Additional financial information isprovided in Enbridge’s Consolidated Financial Statements and MD&A for themost recently completed financial year.

 

**Enbridge Gas Distribution Inc.**

Additional information about EGD can be found in its AIF,Financial Statements and MD&A which have been filed with CanadianSecurities Regulatory Authorities and are available at www.sedar.com. These documents are notincorporated by reference into this AIF.

 

 

32

----

 

**Enbridge Energy Partners, L.P. and Enbridge EnergyManagement, L.L.C.**

Additional information about EEP and EEM can be found intheir Annual Reports on Form 10-K that have been filed with the United StatesSecurities and Exchange Commission. These documents contain detailed disclosurewith respect to each entity and are publicly available at www.sec.gov. No part of the Form 10-Kfiled by EEP or by EEM is incorporated by reference into this AIF.

 

**Enbridge Income Fund**

Additional information about EIF can be found in its AnnualReport and AIF filed with Canadian Securities Administrators in Canada. The AIFand the Annual Report, which includes Consolidated Financial Statements andMD&A, contain detailed disclosure with respect to the Enbridge Income Fundand are publicly available at www.sedar.com.EIF’s Annual Report, Consolidated Financial Statements, MD&A and AIF arenot incorporated by reference into this AIF.

 

**Enbridge Pipelines Inc.**

Additional information about EPI can be found in its AIF,Financial Statements and MD&A which have been filed with CanadianSecurities Regulatory Authorities and are available at www.sedar.com. These documents are notincorporated by reference into this AIF.

 

 

33

----

 

**APPENDIX A**

** **

**AUDIT,FINANCE & RISK COMMITTEE TERMS OF REFERENCE**

** **

# **I.****    ****CONSTITUTION**

There shall be a committee, to be known as the Audit,Finance & Risk Committee (AFR Committee or the Committee), of the Board ofDirectors of Enbridge Inc.

 

# **II.****   ****MEMBERSHIP**

Following each annual meeting of shareholders of theCorporation, the Board shall elect from its members, not less than three (3)Directors to serve on the Committee (the Members). The Members and the Chair ofthe Committee are elected by the Board following the nomination of Directors bythe Governance Committee. No Member of the Committee shall be an officer oremployee of the Corporation or any of the Corporation's affiliates. All membersof the Committee shall, in the judgment of the Board, be unrelated andindependent and shall satisfy applicable stock exchange and legal requirements.Determinations on whether a Director meets the requirements for membership onthe Committee shall be made by the Board. At least one member of the Committeeshall be a "financial expert" as determined by the Board and asdefined by American legal or regulatory requirements. No Director may serve asa member of the Committee if such Director also serves on the audit committeesof more than two other public entities unless the Board determines that suchsimultaneous service would not impair the ability of such Director toeffectively serve on the Committee.

 

Any Member may be removed or replaced at any time by theBoard and shall cease to be a Member upon ceasing to be a Director of theCorporation. Each Member shall hold office until the close of the next annualmeeting of Shareholders of the Corporation or until the Member ceases to be aDirector, resigns or is replaced, whichever first occurs. Vacancies may befilled by the Board with nominees approved by the Governance Committee.

 

# **III.****  ****MEETINGS**

The Committee shall convene at such times and placesdesignated by its Chair or whenever a meeting is requested by a Member, theBoard, an officer, the internal auditor or the external auditors of theCorporation. A minimum of twenty-four (24) hours notice of each meeting shallbe given to each Member and to the internal and external auditors.

 

A majority of the committee shall be duly convened if allMembers are present, or at least a majority of the Members are present. Aquorum at a meeting shall consist of at least a majority of Members. Where theMembers consent, and proper notice has been given or waived, Members of theCommittee may participate in a meeting of theCommittee by means of such telephonic, electronic or other communicationfacilities as permit all persons participating in the meeting to communicateadequately with each other, and a Member participating in such a meetingby any such means is deemed to be present at that meeting.

 

In the absence of the Chair of the Committee, the Membersmay choose one (1) of the Members to be the Chair of the meeting.

 

At the invitation of a Member, other Board members, officersor employees of the Corporation, the external auditors, external counsel andother experts or consultants may attend any meeting of the Committee.

 

Members of the Committee may meet separately with any memberof management, the external auditors, the internal auditor, internal orexternal counsel or any other expert or consultant.

 

Minutes shall be kept of all meetings of the Committee.

 

# **IV.**** ****FUNDING**

The Corporation shall provide appropriate funding, asdetermined by the Committee, for the payment of compensation to the externalauditors and any independent counsel, experts or advisors employed by theCommittee and administrative expenses of the Committee.

 

 

34

----

 

# **V.****   ****REVIEWOF CHARTER**

The Committee shall review and reassess the adequacy of itsTerms of Reference at least annually and propose recommended changes to theBoard.

 

# **VI.**** ****DUTIESAND RESPONSIBILITIES OF THE CHAIR**

# ** **

The Chair is responsible for:

 

A.    conveningCommittee meetings and designating the times and places of those meetings;

 

B.    ensuringCommittee meetings are duly convened and that quorum is present when required;

 

C.    working withManagement on the development of agendas and related materials for theCommittee meetings;

 

D.    ensuringCommittee meetings are conducted in an efficient, effective and focused manner;

 

E.    ensuring theCommittee has sufficient information to permit it to properly make decisionswhen decisions are required;

 

F.    advising theCommittee of any finance, accounting or misappropriation matters brought to theChair’s attention through the Corporation’s Ethics and Conduct hotlineprocedures;

 

G.   reviewingthe CEO’s expense reports;

 

H.    providing leadership to theCommittee and to assist the Committee in reviewing and monitoring itsresponsibilities; and

 

I.      reporting tothe Board on the recommendations and decisions of the Committee.

 

# **VII.********DUTIESAND RESPONSIBILITIES**

The Committee provides assistance to the Board in fulfillingits oversight responsibility to the shareholders, the investment community andothers, relating to the integrity of the Corporation’s financial statements andthe financial reporting process, the management information systems andfinancial controls, the internal audit function, the external auditors’qualifications, independence, performance and reports, the Corporation’scompliance with legal and regulatory requirements and the risk identification,assessment and management program. In so doing, it is the Committee’sresponsibility to maintain an open avenue of communication between theCommittee, the external auditors, the internal auditors and management of theCorporation.

 

Management is responsible for preparing the interim andannual financial statements and financial disclosure of the Corporation and formaintaining a system of internal controls to provide reasonable assurance thatassets are safeguarded and that transactions are authorized, executed, recordedand reported properly. The Committee’s role is to provide meaningful andeffective oversight and counsel to management without assuming responsibilityfor management’s day-to-day duties.

 

In performance of its duties and responsibilities, theCommittee shall have the right as it determines necessary to carry out itsduties to engage independent counsel, experts and other advisors, to inspectany and all of the books and records of the Corporation, its subsidiaries andaffiliates, and to discuss with the officers of the Corporation, itssubsidiaries and affiliates, the internal auditor and the external auditors,such accounts, records and other matters as any Member considers appropriate.

 

The Committee shall have the following specific duties andresponsibilities:

 

 

35

----

 

A.    DUTIES ANDRESPONSIBILITIES RELATED TO THE EXTERNAL AUDITORS.

 

The Committeeshall:

 

(i)            (a)            be responsible forthe appointment, compensation, oversight, retention and termination of theexternal auditors who shall report directly to the Committee, provided that theappointment of the auditor shall be subject to shareholder approval; and

 

(b)          be responsible for theappointment, compensation, oversight, retention and termination of any otherregistered public accounting firm for audit, review or attestation services;

 

(ii)           review andapprove the terms of the external auditors’ annual engagement letter, includingthe proposed audit fees;

 

(iii)          review and approve all engagementsfor audit services and non-audit services to be provided by the externalauditors and, as necessary, consider the potential impact of such services onthe independence of the external auditors;

 

(iv)          review anddiscuss with the external auditors all relationships that the external auditorsand their affiliates have with the Corporation and its affiliates in order todetermine the external auditors’ independence;

 

(v)           at least annually,obtain and review a report by the external auditors describing the firm’sinternal quality-control procedures, any material issues raised by the mostrecent internal quality-control review or peer review of the firm or by anyinquiry or investigation by governmental or professional authorities within thepreceding five years respecting one or more independent audits carried out bythe external auditors and any steps taken to deal with any such issues and allrelationships between the external auditors and the Corporation;

 

(vi)          resolvedisagreements, if any, between management and the external auditors regardingfinancial reporting;

 

(vii)         inform theexternal auditors and management that the external auditors shall have accessdirectly to the Committee at all times, as well as the Committee to theexternal auditors and that the external auditors are ultimately accountable tothe Committee as representatives of the shareholders of the Corporation;

 

(viii)        discuss withmanagement and the external auditors any correspondence from or with regulatorsor governmental agencies, any employee complaints or any published reports thatraise material issues regarding the Corporation’s financial statements oraccounting policies; and

 

(ix)         establishhiring policies for employees or former employees of the external auditors.

 

B.    DUTIES ANDRESPONSIBILITIES RELATED TO AUDITS AND FINANCIAL REPORTING.

 

The Committeeshall:

 

(i)            review theengagement terms and the audit plan with the external auditors and with theCorporation’s management;

 

(ii)           review withmanagement and the Corporation’s external auditors the Corporation’s financialreporting in connection with the annual audit and the preparation of thefinancial statements, including, without limitation, the judgment of theexternal auditors as to the quality, not just the acceptability of, and theappropriateness of the Corporation’s accountingprinciples as applied in its financial reporting and the degree of 

 

 

36

----

 

aggressivenessor conservatism of the Corporation’s accounting principles and underlyingestimates;

 

(iii)          review with management anyanticipated changes in reporting standards, the preparedness of management andpotential outcomes and impacts;

 

(iv)          review withmanagement and the external auditors and make recommendations to the Board onall financial statements and financial disclosure which require approval by theBoard including:

 

(a)          the Corporation’s annualfinancial statements including the notes thereto and “Management’s Discussionand Analysis”;

 

(b)          any report or opinion to be rendered in connection therewith;

 

(c)          any change or initial adoption in accounting policies and theirapplicability to the business;

 

(d)          any audit problems or difficulties and management’s response;

 

(e)          all significant adjustments proposed by the external auditors; and

 

(f)            satisfying itself that there are no unresolved issues betweenmanagement and the external auditors that could reasonably be expected tomaterially affect the financial statements.

 

(v)           review theCorporation’s interim financial results, including the notes thereto and“Management’s Discussion and Analysis” with management and the externalauditors and approve the release thereof by management or recommend approvalthereof to the Board for release by the Board;

 

(vi)          reviewannually the approach taken by management in the preparation of earnings pressreleases, as well as financial information and earnings guidance provided toanalysts and rating agencies;

 

(vii)         discuss withthe external auditors their perception of the Corporation’s internal audit andaccounting personnel, and any recommendations which the external auditors mayhave;

 

(viii)        review withmanagement, the external auditors and, as necessary, internal and externallegal counsel, any litigation, claim or contingency, including tax assessments,that could have a material effect upon the financial position of theCorporation, and the manner in which these matters may be, or have been,disclosed in the financial statements;

 

(ix)         review with management and monitorthe funding exposure of the Corporation under the Corporation’s pension plans,annually review the Annual Pension Report and review and approve the financialstatements applicable to each of the pension plans;

 

(x)          annually or more frequently asdeemed necessary, meet separately with management and the external auditors,and at least annually with the internal auditors, to review issues and mattersof concern respecting audits and financial reporting processes;

 

(xi)         review withthe Corporation’s management and, as deemed necessary, review with the externalauditors, any proposed changes in or initial adoption of accounting policies,the presentation and impact of significant risks and uncertainties, and keyestimates and judgments of the Corporation’s management that may be material tofinancial reporting;

 

(xii)        review with theCorporation’s management and, as deemed necessary, with the external auditors, significant financial reporting issues arisingduring the fiscal period, including the

 

 

37

----

 

methods of resolution;

 

(xiii)       review any problemsexperienced by the external auditors in performing an audit, including anyrestrictions imposed by the Corporation’s management or significant accountingissues on which there was a disagreement with the Corporation’s management;

 

(xiv)        review thepost-audit or management letter containing the recommendations of the externalauditors and the response of the Corporation’s management, if any, including anevaluation of the adequacy and effectiveness of the internal financial controlsof the Corporation (in respect of the scope of review of internal controls bythe external auditors, the review is carried out to enable the externalauditors to express an opinion on the Corporation's financial statements);

 

(xv)         reviewbefore release relevant public disclosure documents containing audited orunaudited financial information, including annual and interim earnings pressreleases, prospectuses, the Annual Information Form, and the Management'sDiscussion and Analysis disclosure;

 

(xvi)        review, inconjunction with the Human Resources & Compensation Committee, theappointment of the chief financial officer;

 

(xvii)       inquire into anddetermine the appropriate resolution of conflicts of interest in respect ofaudit, finance or risk matters between or among an officer, Director,shareholder, the internal auditors, or the external auditors, which areproperly directed to the Committee by the Chair of the Board, the Board, ashareholder, the internal auditors, the external auditors, or the Corporation’smanagement; and

 

(xviii)      as deemed necessaryby the Committee, inquire into and examine matters relating to the financialaffairs of the Corporation, its subsidiaries or affiliates, or any of them,including the review of subsidiary or affiliate Audit Committee reports.

 

C.    DUTIES ANDRESPONSIBILITIES RELATED TO FINANCIAL REPORTING PROCESSES AND INTERNAL CONTROLS

 

The Committeeshall:

 

(i)            review theadequacy and effectiveness of the accounting and internal control policies ofthe Corporation and procedures through inquiry and discussions with theexternal auditors, management, and the internal auditor;

 

(ii)           review withmanagement the Corporation’s administrative, operational and accountinginternal controls, including controls and security of the computerizedinformation systems, and evaluate whether the Corporation is operating inaccordance with prescribed policies, procedures and the Statement on BusinessConduct;

 

(iii)          annually ormore frequently if deemed necessary, meet separately with the external auditor,the head of the internal audit group and management, to review issues andmatters of concern respecting financial reporting processes and internalcontrols;

 

(iv)          review withmanagement and the external auditors any reportable conditions, materialweaknesses and significant deficiencies affecting internal control;

 

(v)           establishand maintain free and open means of communication between and among theCommittee, the external auditors, the internal auditor and management;

 

(vi)          review atleast annually with the internal auditor the Corporation’s internal control procedures, and the scope and plans for the work of theinternal audit group; and

 

 

38

----

 

(vii)         review theadequacy of resources of the internal auditor and ensure that the internalauditor has unrestricted access to all functions, records, property andpersonnel of the Corporation and inform the internal auditors and managementthat the internal auditors shall have unfettered access directly to theCommittee at all times, as well as the Committee to the internal auditors.

 

D.    DUTIES ANDRESPONSIBILITIES RELATED TO FINANCE.

 

The Committeeshall:

 

(i)            review andas required, approve or recommend for approval to the Board, prospectuses anddocuments, where practicable, which may be incorporated by reference into aprospectus;

 

(ii)           review the issuanceof equity or debt securities by the Corporation, and if deemed appropriate,authorize the filing with securities regulatory authorities of any prospectus,prospectus supplement or other documentation relating thereto; and

 

(iii)          review andrecommend for approval to the Board the annual management information circularwith respect to matters related to the auditor, affecting the capital of theCorporation or principal risks to be managed by the Corporation.

 

E.    DUTIES ANDRESPONSIBILITIES RELATED TO RISK MANAGEMENT

 

The Committeeshall:

 

(i)            review atleast annually with senior management, internal counsel and, as necessary,external counsel and the Corporation’s internal and external auditors:

 

(a)          the Corporation's method ofreviewing major risks inherent in the Corporation’s businesses, facilities, andstrategic directions, including the Corporation's risk management andevaluation process (in respect of risk management evaluations and guidelinesrelating to environment, health and safety matters, the Committee shall consultwith and, as deemed necessary, review the recommendations of the Environment,Health & Safety Committee);

 

(b)          the strategies and practicesapplicable to the Corporation's assessment, management, prevention andmitigation of risks (including the foreign currency and interest rate riskstrategies, counterparty credit exposure, the use of derivative instruments,insurance and adequacy of tax provisions);

 

(c)          the Corporation’s annualinsurance report including the risk retention philosophy and resultinguninsured exposure, if any; and

 

(d)          the loss prevention policies,risk management programs, disaster response and recovery programs, corporateliability protection programs for Directors and officers, and standards andaccountabilities of the Corporation in the context of competitive andoperational considerations.

 

F.    OTHER DUTIESOF AUDIT, FINANCE & RISK COMMITTEE

 

The Committeeshall, as required, or as deemed necessary by the Committee:

 

(i)            meetseparately with senior management, the internal auditors, the external auditorsand, as is appropriate, internal and external legal counsel and independentadvisors in respect of issues not elsewhere listed concerning any other audit,finance and risk matters;

 

 

39

----

 

(ii)           reviewincidents or alleged incidents as reported by senior management, auditservices, the external auditor, the Corporate Secretary, the law department, orotherwise of fraud, illegal acts and conflicts of interest;

 

(iii)          establishprocedures for the receipt, retention and treatment of complaints received bythe Corporation regarding accounting, internal accounting controls or auditingmatters and the confidential, anonymous submission by employees of concernsregarding questionable accounting or auditing matters;

 

(iv)          report tothe Board after each Committee meeting, as required during the year, withrespect to the Committee’s activities and recommendations;

 

(v)           address anyother matter properly referred to the Committee by the Chair of the Board, theBoard, a Director, the internal auditors, the external auditors, the CEO, orthe management of the Corporation or any other matter as may be required understock exchange rules or by law;

 

(vi)          inconjunction with the Governance Committee, conduct an annual performanceevaluation of the Committee; and

 

(vii)         theCommittee shall, in conjunction with Management, coordinate the performance ofits duties concerning:

 

(a)           the externalauditor;

 

(b)           audits andfinancial reporting;

 

(c)           financial reportingprocesses and internal controls;

 

(d)           finance;

 

(e)           risk management;and

 

(f)            with any auditcommittee of a subsidiary corporation, respecting the independence of suchsubsidiary directors and managing to ensure efficiency, effectiveness andconsistency of approach with such subsidiary.

 

# **VIII.****       ****COMMITTEETIMETABLE**

The major annual activities of the Committee shall beoutlined in an annual schedule.

 

# **IX.**** ****DELEGATIONTO SUBCOMMITTEE**

The Committee may, in its discretion, delegate all or aportion of its duties and responsibilities to a subcommittee of the Committee.The Committee may, in its discretion, delegate to one or more of its membersthe authority to pre-approve any audit or non-audit services to be performed bythe external auditors, provided that any such approvals are presented to theCommittee at its next scheduled meeting.

 

 

40

----