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DERIVATIVE FINANCIAL INSTRUMENTS
 12 Months Ended
Dec. 31, 2021
Disclosure of detailed information about financial instruments [abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS
The company’s activities expose it to a variety of financial risks, including market risk (i.e. currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The company selectively uses derivative financial instruments principally to manage these risks.
The aggregate notional amount of the company’s derivative positions at December 31, 2021 and 2020 is as follows:
AS AT DEC. 31 (MILLIONS)Note20212020
Foreign exchange(a)$63,083 $39,284 
Interest rates(b)55,899 61,111 
Equity derivatives(c)4,448 2,081 
Commodity instruments(d)
Energy (GWh)35,156 27,564 
Natural gas (MMBtu – 000’s)246,375 121,468 
a)    Foreign Exchange
The company held the following foreign exchange contracts with notional amounts at December 31, 2021 and 2020:
Notional Amount
(U.S. Dollars)
Average Exchange Rate
(MILLIONS)2021202020212020
Foreign exchange contracts
Canadian dollars$11,689 $7,539 0.81 0.76 
British pounds12,089 3,986 1.19 1.31 
European Union euros9,939 4,561 1.14 1.17 
Australian dollars4,791 2,632 0.72 0.69 
Indian rupee3,281 1,288 78.90 77.56 
Chilean peso— 159 — 770.89 
Korean won1
756 700 1,151 1,175 
Chinese yuan1
2,484 1,633 6.02 7.05 
Japanese yen1
793 212 111.27 105.82 
Colombian pesos1
740 96 3,937 3,621 
Brazilian reais1,291 276 0.16 0.19 
Swedish krona1,475 1,647 9.08 8.58 
Other currencies2,799 903 VariousVarious
Cross currency interest rate swaps
Canadian dollars5,566 6,868 0.63 0.77 
European Union euros848 1,914 1.06 1.06 
Australian dollars1,317 1,374 0.98 0.53 
Japanese yen1
750 750 113.33 113.33 
British pounds298 275 1.48 1.49 
Colombian pesos1
— 88 — 3,880 
Foreign exchange futures
   Brazilian reais175 105 0.18 0.19 
Foreign exchange options
Canadian dollars— 2,030 — 0.74 
European Union euros1,430 245 1.11 1.17 
Indian rupee572 — 74.56 — 
1.Average rate is quoted using USD as base currency.
Included in net income are unrealized net losses on foreign currency derivative contracts amounting to $53 million (2020 – losses of $41 million) and included in the cumulative translation adjustment account in other comprehensive income are gains in respect of foreign currency contracts entered into for hedging purposes amounting to $367 million (2020 – gains of $28 million).
b)    Interest Rates
At December 31, 2021, the company held interest rate swap and forward starting swap contracts having an aggregate notional amount of $28.6 billion (2020 – $30.2 billion), interest rate swaptions with an aggregate notional amount of $0.2 billion (2020 – $3.9 billion) and interest rate cap contracts with an aggregate notional amount of $27.1 billion (2020 – $27 billion).
c)    Equity Derivatives
At December 31, 2021, the company held equity derivatives with a notional amount of $4.4 billion (2020 – $2.1 billion) which includes $1.8 billion (2020 – $1.3 billion) notional amount that hedges long-term compensation arrangements. The balance represents common equity positions established in connection with the company’s investment activities as well as general equity market hedges. The fair value of these instruments was reflected in the company’s consolidated financial statements at year end.
d)    Commodity Instruments
The company has entered into energy derivative contracts primarily to hedge the sale of generated power. The company endeavors to link forward electricity sale derivatives to specific periods in which it expects to generate electricity for sale. All energy derivative contracts are recorded at an amount equal to fair value and are reflected in the company’s consolidated financial statements. The company has financial contracts outstanding on 246,375,000 MMBtu’s (2020 – 121,468,000 MMBtu’s) of natural gas as part of its electricity sale price risk mitigation strategy.
Other Information Regarding Derivative Financial Instruments
The following table classifies derivatives elected for hedge accounting during the years ended December 31, 2021 and 2020 as either cash flow hedges or net investment hedges. Changes in the fair value of the effective portion of the hedge are recorded in either other comprehensive income or net income, depending on the hedge classification, whereas changes in the fair value of the ineffective portion of the hedge are recorded in net income:
20212020
FOR THE YEARS ENDED DEC. 31
(MILLIONS)		NotionalEffective PortionIneffective PortionNotionalEffective PortionIneffective Portion
Cash flow hedges1
$43,776 $582 $24 $39,128 $(479)$10 
Net investment hedges
43,997 407 (14)17,788 182 10 
$87,773 $989 $10 $56,916 $(297)$20 
1.Notional amount does not include 17,753 GWh, 93,623 MMBtu – 000’s and 1,152 bbls – millions of commodity derivatives at December 31, 2021 (2020 – 13,950 GWh, 82,663 MMBtu – 000’s and 1,302 bbls – millions).
The following table presents the change in fair values of the company’s derivative positions during the years ended December 31, 2021 and 2020, for derivatives that are fair valued through profit or loss, and derivatives that qualify for hedge accounting:

(MILLIONS)		Unrealized Gains During 2021Unrealized Losses During 2021Net Change During 2021Net Change During 2020
Foreign exchange derivatives$191 $(244)$(53)$(41)
Interest rate derivatives332 (149)183 (227)
Equity derivatives788 (31)757 850 
Commodity derivatives
44 (227)(183)(42)
$1,355 $(651)$704 $540 

The following table presents the notional amounts underlying the company’s derivative instruments by term to maturity as at December 31, 2021 and 2020, for derivatives that are classified as fair value through profit or loss, and derivatives that qualify for hedge accounting:
20212020
AS AT DEC. 31 (MILLIONS)<1 Year1 to 5 Years>5 Years
Total Notional
Amount
Total Notional
Amount
Fair value through profit or loss
Foreign exchange derivatives$8,836 $1,829 $268 $10,933 $12,178 
Interest rate derivatives9,409 10,012 240 19,661 27,080 
Equity derivatives3,334 1,019 — 4,353 2,081 
Commodity instruments
Energy (GWh)2,335 12,602 2,466 17,403 13,613 
Natural gas (MMBtu – 000’s)134,298 18,455 — 152,753 38,805 
Elected for hedge accounting
Foreign exchange derivatives$16,494 $34,763 $893 $52,150 $27,106 
Interest rate derivatives11,494 22,846 1,898 36,238 34,032 
Equity derivatives95 — — 95 — 
Commodity instruments
Energy (GWh)
6,165 7,780 3,809 17,754 13,950 
Natural gas (MMBtu – 000’s)58,741 34,882 — 93,623 82,664