Exhibit 13.2

Consolidated Income

(unaudited)	Three months ended June 30						Six months ended June 30
(millions of dollars except per share amounts)	2005			2004			2005			2004
Revenues	1,444			1,344			2,851			2,700
Operating Expenses
Cost of sales	245			242			510			491
Other costs and expenses	423			398			844			773
Depreciation	253			232			503			464
	921			872			1,857			1,728
Operating Income	523			472			994			972
Other Expenses/(Income)
Financial charges	208			210			415			417
Financial charges of joint ventures	16			16			32			30
Equity income	(17		)	(59		)	(58		)	(117		)
Interest income and other	(4		)	(9		)	(28		)	(24		)
Gain related to PipeLines LP	(2		)	—			(82		)	—
Gains related to Power LP	—			(197		)	—			(197		)
Gain related to Millennium	—			(7		)	—			(7		)
	201			(46		)	279			102
Income before Income Taxes and Non-Controlling Interests	322			518			715			870
Income Taxes
Current	79			127			240			230
Future	38			(2		)	26			21
	117			125			266			251
Non-Controlling Interests
Preferred share dividends	5			5			11			11
Other	—			—			6			6
	5			5			17			17
Net Income	200			388			432			602
Net Income Per Share - Basic and Diluted	$	0.41		$	0.80		$	0.89		$	1.24
Average Shares Outstanding - Basic (millions)	485.9			484.0			485.6			483.7
Average Shares Outstanding - Diluted (millions)	488.4			486.6			488.1			486.3

See accompanying notes to the consolidated financial statements.

Consolidated Cash Flows

(unaudited)	Three months ended June 30				Six months ended June 30
(millions of dollars)	2005		2004		2005		2004
Cash Generated From Operations
Net income	200		388		432		602
Depreciation	253		232		503		464
Gain related to PipeLines LP, net of current tax expense (Note 5)	(1	)	—		(31	)	—
Gains related to Power LP	—		(197	)	—		(197	)
Gain related to Millennium	—		(7	)	—		(7	)
Equity income lower than/(in excess of) distributions received	8		(39	)	(26	)	(90	)
Pension funding (in excess of)/lower than expense	(10	)	13		(17	)	1
Future income taxes	38		(2	)	26		21
Non-controlling interests	5		5		17		17
Other	(14	)	(11	)	(18	)	(14	)
Funds generated from operations	479		382		886		797
Increase in operating working capital	(176	)	(38	)	(218	)	(82	)
Net cash provided by operations	303		344		668		715
Investing Activities
Capital expenditures	(135	)	(93	)	(243	)	(194	)
Acquisitions, net of cash acquired	(632	)	(14	)	(632	)	(14	)
Disposition of assets	2		408		153		408
Deferred amounts and other	3		33		(55	)	(14	)
Net cash (used in)/ provided by investing activities	(762	)	334		(777	)	186
Financing Activities
Dividends	(154	)	(150	)	(300	)	(290	)
Notes payable issued/(repaid), net	289		(72	)	533		(301	)
Long-term debt issued	499		—		799		665
Reduction of long-term debt	(615	)	(25	)	(936	)	(501	)
Non-recourse debt of joint ventures issued	—		81		5		87
Reduction of non-recourse debt of joint ventures	(14	)	(3	)	(21	)	(12	)
Partnership units of joint ventures issued	—		88		—		88
Common shares issued	18		4		29		17
Net cash provided by/(used in) financing activities	23		(77	)	109		(247	)
Effect of Foreign Exchange Rate Changes on Cash and Short-Term Investments	20		(1	)	22		3
(Decrease)/Increase in Cash and Short-Term Investments	(416	)	600		22		657
Cash and Short-Term Investments
Beginning of period	626		395		188		338
Cash and Short-Term Investments
End of period	210		995		210		995
Supplementary Cash Flow Information
Income taxes paid	115		91		307		252
Interest paid	238		221		428		393

See accompanying notes to the consolidated financial statements.

Consolidated Balance Sheet

	June 30, 2005		December 31,
(millions of dollars)	(unaudited)		2004
ASSETS
Current Assets
Cash and short-term investments	210		188
Accounts receivable	537		627
Inventories	239		174
Other	153		120
	1,139		1,109
Long-Term Investments	830		840
Plant, Property and Equipment	19,184		18,704
Other Assets	1,490		1,459
	22,643		22,112
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Notes payable	1,079		546
Accounts payable	885		1,135
Accrued interest	220		214
Current portion of long-term debt	391		766
Current portion of non-recourse debt of joint ventures	73		83
	2,648		2,744
Deferred Amounts	851		783
Long-Term Debt	10,014		9,713
Future Income Taxes	562		509
Non-Recourse Debt of Joint Ventures	798		779
Preferred Securities	564		554
	15,437		15,082
Non-Controlling Interests
Preferred shares of subsidiary	389		389
Other	77		76
	466		465
Shareholders’ Equity
Common shares	4,740		4,711
Contributed surplus	271		270
Retained earnings	1,790		1,655
Foreign exchange adjustment	(61	)	(71	)
	6,740		6,565
	22,643		22,112

See accompanying notes to the consolidated financial statements.

Consolidated Retained Earnings

(unaudited)	Six months ended June 30
(millions of dollars)	2005		2004
Balance at beginning of period	1,655		1,185
Net income	432		602
Common share dividends	(297	)	(281	)
	1,790		1,506

See accompanying notes to the consolidated financial statements.

Notes to Consolidated Financial Statements

(Unaudited)

1.Significant Accounting Policies

The consolidated financial statements of TransCanada Corporation (TransCanada or the company) have been prepared in accordance with Canadian generally accepted accounting principles (GAAP).  The accounting policies applied are consistent with those outlined in TransCanada’s annual financial statements for the year ended December 31, 2004 except as stated below.  These consolidated financial statements reflect all normal recurring adjustments that are, in the opinion of management, necessary to present fairly the financial position and results of operations for the respective periods.  These consolidated financial statements do not include all disclosures required in the annual financial statements and should be read in conjunction with the restated 2004 annual financial statements.  Amounts are stated in Canadian dollars unless otherwise indicated.  Certain comparative figures have been reclassified to conform with the current period’s presentation.

Since a determination of many assets, liabilities, revenues and expenses is dependent upon future events, the preparation of these consolidated financial statements requires the use of estimates and assumptions.  In the opinion of Management, these consolidated financial statements have been properly prepared within reasonable limits of materiality and within the framework of the company’s significant accounting policies.

2.Accounting Change

Financial Instruments – Disclosure and Presentation

Effective January 1, 2005,  the company adopted the provisions of the Canadian Institute of Chartered Accountants amendment to the existing Handbook Section “Financial Instruments – Disclosure and Presentation” which provides guidance for classifying certain financial instruments that embody obligations that may be settled by issuance of the issuer’s equity shares as debt when the instrument does not establish an ownership relationship.  In accordance with this amendment, TransCanada reclassified the non-controlling interest component of preferred securities as long-term debt.

This accounting change was applied retroactively with restatement of prior periods.  The impact of this change on TransCanada’s net income in second quarter 2005 and prior periods was nil.

The impact of the accounting change on the company’s consolidated balance sheet as at December 31, 2004 is as follows.

(unaudited - millions of dollars)	Increase/(Decrease)
Deferred Amounts (1)	135
Preferred Securities	535
Non-Controlling Interest Preferred securities of subsidiary	(670	)
Total Liabilities and Shareholders’ Equity	—

(1) Regulatory deferral

3.Segmented Information

Three months ended June 30	GasTransmission				Power				Corporate				Total
(unaudited - millions of dollars)	2005		2004		2005		2004		2005		2004		2005		2004
Revenues	1,032		948		412		396		—		—		1,444		1,344
Cost of sales	—		—		(245	)	(242	)	—		—		(245	)	(242	)
Other costs and expenses	(324	)	(298	)	(98	)	(99	)	(1	)	(1	)	(423	)	(398	)
Depreciation	(233	)	(215	)	(20	)	(17	)	—		—		(253	)	(232	)
Operating income/(loss)	475		435		49		38		(1	)	(1	)	523		472
Financial charges and non-controlling interests	(182	)	(193	)	—		(2	)	(31	)	(20	)	(213	)	(215	)
Financial charges of joint ventures	(13	)	(15	)	(3	)	(1	)	—		—		(16	)	(16	)
Equity income	4		11		13		48		—		—		17		59
Interest income and other	(1	)	2		—		1		5		6		4		9
Gain related to PipeLines LP	2		—		—		—		—		—		2		—
Gains related to Power LP	—		—		—		197		—		—		—		197
Gain related to Millennium	—		7		—		—		—		—		—		7
Income taxes	(120	)	(101	)	(17	)	(32	)	20		8		(117	)	(125	)
Net Income	165		146		42		249		(7	)	(7	)	200		388

Six months ended June 30	GasTransmission				Power				Corporate				Total
(unaudited - millions of dollars)	2005		2004		2005		2004		2005		2004		2005		2004
Revenues	2,027		1,897		824		803		—		—		2,851		2,700
Cost of sales	—		—		(510	)	(491	)	—		—		(510	)	(491	)
Other costs and expenses	(630	)	(583	)	(211	)	(187	)	(3	)	(3	)	(844	)	(773	)
Depreciation	(465	)	(427	)	(38	)	(37	)	—		—		(503	)	(464	)
Operating income/(loss)	932		887		65		88		(3	)	(3	)	994		972
Financial charges and non-controlling interests	(369	)	(389	)	(2	)	(4	)	(61	)	(41	)	(432	)	(434	)
Financial charges of joint ventures	(27	)	(29	)	(5	)	(1	)	—		—		(32	)	(30	)
Equity income	15		21		43		96		—		—		58		117
Interest income and other	13		5		3		5		12		14		28		24
Gain related to PipeLines LP	82		—		—		—		—		—		82		—
Gains related to Power LP	—		—		—		197		—		—		—		197
Gain related to Millennium	—		7		—		—		—		—		—		7
Income taxes	(270	)	(207	)	(32	)	(67	)	36		23		(266	)	(251	)
Net Income	376		295		72		314		(16	)	(7	)	432		602

Total Assets	June 30, 2005	December 31,
(millions of dollars)	(unaudited)	2004
Gas Transmission	18,140	18,410
Power	3,589	2,802
Corporate	914	900
	22,643	22,112

4.Risk Management and Financial Instruments

The following represents the material changes to the company’s financial instruments since December 31, 2004.

Energy Price Risk Management

The company executes power, natural gas and heat rate derivatives for overall management of its asset portfolio.  Heat rate contracts are contracts for the sale or purchase of power that are priced based on a natural gas index.  The fair values and notional volumes of the swap, option, future and heat rate contracts are shown in the tables below.  In accordance with the company’s accounting policy, each of the derivatives in the table below is recorded on the balance sheet at its fair value at June 30, 2005 and December 31, 2004.

Power

		June 30, 2005
		(unaudited)		December 31, 2004
Asset/(Liability)	Accounting	Fair		Fair
(millions of dollars)	Treatment	Value		Value
Power - swaps
(maturing 2005 to 2011)	Hedge	(60	)	7
(maturing 2005 to 2010)	Non-hedge	2		(2	)
Gas - swaps, futures and options
(maturing 2005 to 2016)	Hedge	(27	)	(39	)
(maturing 2005 to 2006)	Non-hedge	1		(2	)
Heat rate contracts
(maturing 2005 to 2006)	Hedge	—		(1	)

Notional Volumes
June 30, 2005	Accounting	Power (GWh)		Gas (Bcf)
(unaudited)	Treatment	Purchases	Sales	Purchases	Sales
Power - swaps
(maturing 2005 to 2011)	Hedge	1,299	7,177	—	—
(maturing 2005 to 2010)	Non-hedge	878	—	—	—
Gas - swaps, futures and options
(maturing 2005 to 2016)	Hedge	—	—	85	73
(maturing 2005 to 2006)	Non-hedge	—	—	5	7
Heat rate contracts
(maturing 2005 to 2006)	Hedge	—	55	—	—

Notional Volumes	Accounting	Power (GWh)		Gas (Bcf)
December 31, 2004	Treatment	Purchases	Sales	Purchases	Sales
Power - swaps	Hedge	3,314	7,029	—	—
	Non-hedge	438	—	—	—
Gas - swaps, futures and options	Hedge	—	—	80	84
	Non-hedge	—	—	5	8
Heat rate contracts	Hedge	—	229	2	—

5.Dispositions

PipeLines LP

In March 2005, TransCanada sold 3.5 million common units of TC PipeLines, LP (PipeLines LP) for US$37.04 per unit, resulting in net proceeds to the company of approximately $151 million and an after-tax gain of approximately $48 million.  The net gain was recorded in the Gas Transmission segment and the company recorded a $32 million tax charge, including $50 million of current income tax expense, on this transaction. In April 2005, underwriters purchased an additional 74,200 common units, exercising, in part, their option to purchase up to 525,000 additional units on the same terms and conditions as the 3.5 million common units already sold and an additional net after-tax gain of $1 million was recorded in the Gas Transmission segment.  Subsequent to these transactions, TransCanada continues to own a 13.4 per cent interest in PipeLines LP represented by the general partner interest of 2.0 per cent as well as an 11.4 per cent limited partner interest.

Power LP

In May 2005, TransCanada announced that it had entered into an agreement with EPCOR Utilities Inc. (EPCOR) whereby EPCOR will purchase TransCanada’s interest in TransCanada Power, L.P. (Power LP) for $529 million. EPCOR’s acquisition includes 14.5 million units of Power LP, representing 30.6 per cent of  the outstanding units; 100 per cent ownership of the General Partner of Power LP; and management and operations’ agreements governing the ongoing operation of Power LP’s generation assets.

The Boards of Directors of each of TransCanada, EPCOR and Power LP have approved this transaction. This transaction is expected to close in third quarter 2005 pending receipt of regulatory approvals. TransCanada expects to realize an after-tax gain of approximately $200 million from this sale.  TransCanada will continue to operate and maintain Power LP’s power plants until closing.

Paiton Energy

In June 2005, TransCanada reached an agreement  to sell its approximate 11 per cent interest in PT Paiton Energy Company (Paiton Energy) to subsidiaries of The Tokyo Electric Power Company for US$103 million ($127 million), subject to adjustments. TransCanada originally purchased its interest in Paiton Energy in 1996.  Paiton Energy owns two 615 megawatt coal-fired plants in East Java, Indonesia.  Pending various approvals, this transaction is expected to close in third quarter 2005. Upon closing,

TransCanada expects to realize an after-tax gain of approximately $115 million.

6.Employee Future Benefits

The net benefit plan expense for the company’s defined benefit pension plans and other post-employment benefit plans for the three and six months ended June 30 is as follows.

Three months ended June 30	Pension Benefit Plans				Other Benefit Plans
(unaudited - millions of dollars)	2005		2004		2005	2004
Current service cost	8		7		1	1
Interest cost	16		14		2	2
Expected return on plan assets	(16	)	(13	)	—	—
Amortization of transitional obligation related to regulated business	—		—		—	—
Amortization of net actuarial loss	4		3		—	—
Amortization of past service costs	—		—		—	—
Net benefit cost recognized	12		11		3	3
Six months ended June 30	Pension Benefit Plans				Other Benefit Plans
(unaudited - millions of dollars)	2005		2004		2005	2004
Current service cost	15		14		1	1
Interest cost	32		28		3	3
Expected return on plan assets	(32	)	(27	)	—	—
Amortization of transitional obligation related to regulated business	—		—		1	1
Amortization of net actuarial loss	8		6		1	1
Amortization of past service costs	1		1		—	—
Net benefit cost recognized	24		22		6	6

TransCanada welcomes questions from shareholders and potential investors.  Please telephone:

Investor Relations, at 1-800-361-6522 (Canada and U.S.  Mainland) or direct dial David Moneta at (403) 920-7911.  The investor fax line is (403) 920-2457.  Media Relations: Kurt Kadatz/Hejdi Feick at (403) 920-7859

Visit TransCanada’s Internet site at: http://www.transcanada.com