Exhibit 13.2

Consolidated Income

(unaudited)	Three months ended September 30						Nine months ended September 30
(millions of dollars except per share amounts)	2006			2005			2006			2005
Revenues	1,850			1,494			5,429			4,353

Operating Expenses
Cost of sales	382			319			1,224			834
Other costs and expenses	593			438			1,696			1,279
Depreciation	264			247			787			752
	1,239			1,004			3,707			2,865
Other Expenses/(Income)
Financial charges	203			210			612			625
Financial charges of joint ventures	22			16			67			49
Equity income	(4		)	(120		)	(28		)	(196		)
Interest income and other	(32		)	(21		)	(96		)	(49		)
Gain on sale of Northern Border Partners, L.P. interest	—			—			(23		)	—
Gains related to Power LP	—			(245		)	—			(245		)
Gain on sale of PipeLines LP units	—			—			—			(82		)
	189			(160		)	532			102
Income from Continuing Operations before Income Taxes and Non-Controlling Interests	422			650			1,190			1,386

Income Taxes
Current	31			189			278			429
Future	75			12			71			38
	106			201			349			467
Non-Controlling Interests
Preferred share dividends of subsidiary	6			6			17			17
Non-controlling interest in PipeLines LP	11			15			32			36
Other	6			1			10			7
	23			22			59			60

Net Income from Continuing Operations	293			427			782			859
Net Income from Discontinued Operations	—			—			28			—
Net Income	293			427			810			859
Net Income Per Share
Continuing operations	$	0.60		$	0.88		$	1.60		$	1.77
Discontinued operations	—			—			0.06			—
Basic	$	0.60		$	0.88		$	1.66		$	1.77
Diluted	$	0.60		$	0.87		$	1.65		$	1.76

Average Shares Outstanding – Basic (millions)	487.9			486.7			487.7			485.9
Average Shares Outstanding – Diluted (millions)	490.2			489.6			490.1			488.7

See accompanying notes to the consolidated financial statements.

Consolidated Cash Flows

(unaudited)	Three months ended September 30				Nine months ended September 30
(millions of dollars)	2006		2005		2006		2005
Cash Generated From Operations
Net income	293		427		810		859
Depreciation	264		247		787		752
Gain on sale of Northern Border Partners, L.P. interest, net of current income tax	—		—		(11	)	—
Gains related to Power LP, net of current income tax	—		(166	)	—		(166	)
Gain on sale of PipeLines LP units, net of current income tax	—		—		—		(31	)
Equity income in excess of distributions received	(1	)	(53	)	(8	)	(70	)
Future income taxes	75		12		71		38
Non-controlling interests	23		22		59		60
Funding of employee future benefits (in excess of)/lower than expense	(2	)	12		(17	)	(5	)
Other	10		2		27		(16	)
Funds generated from operations	662		503		1,718		1,421
(Increase)/decrease in operating working capital	(43	)	90		(136	)	(173	)
Net cash provided by operations	619		593		1,582		1,248
Investing Activities
Capital expenditures	(372	)	(166	)	(1,002	)	(409	)
Acquisitions, net of cash acquired	—		—		(358	)	(632	)
Disposition of assets, net of current income tax	—		444		23		546
Deferred amounts and other	(47	)	43		(63	)	93
Net cash (used in)/provided by investing activities	(419	)	321		(1,400	)	(402	)
Financing Activities
Dividends on common shares	(156	)	(149	)	(461	)	(438	)
Distributions paid to non-controlling interests	(16	)	(24	)	(47	)	(62	)
Notes payable issued/(repaid), net	4		(696	)	(449	)	(163	)
Long-term debt issued	—		—		1,250		799
Reduction of long-term debt	(4	)	(10	)	(352	)	(962	)
Long-term debt of joint ventures issued	14		—		38		5
Reduction of long-term debt of joint ventures	(27	)	(2	)	(48	)	(19	)
Common shares issued	12		10		25		39
Net cash used in financing activities	(173	)	(871	)	(44	)	(801	)
Effect of Foreign Exchange Rate Changes on Cash and Short-Term Investments	1		(12	)	(8	)	10
Increase in Cash and Short-Term Investments	28		31		130		55
Cash and Short-Term Investments
Beginning of period	314		215		212		191
Cash and Short-Term Investments
End of period	342		246		342		246

Supplementary Cash Flow Information
Income taxes paid	87		102		455		409
Interest paid	195		221		629		676

See accompanying notes to the consolidated financial statements.

Consolidated Balance Sheet

	September 30, 2006		December 31,
(millions of dollars)	(unaudited)		2005

ASSETS
Current Assets
Cash and short-term investments	342		212
Accounts receivable	762		796
Inventories	277		281
Other	265		277
	1,646		1,566
Long-Term Investments	77		400
Plant, Property and Equipment	20,846		20,038
Other Assets	2,218		2,109
	24,787		24,113

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Notes payable	513		962
Accounts payable	1,274		1,494
Accrued interest	265		222
Current portion of long-term debt	415		393
Current portion of long-term debt of joint ventures	124		41
	2,591		3,112
Deferred Amounts	1,109		1,196
Future Income Taxes	773		703
Long-Term Debt	10,306		9,640
Long-Term Debt of Joint Ventures	1,157		937
Preferred Securities	513		536
	16,449		16,124
Non-Controlling Interests
Preferred shares of subsidiary	389		389
Non-controlling interest in PipeLines LP	298		318
Other	82		76
	769		783
Shareholders’ Equity
Common shares	4,780		4,755
Contributed surplus	273		272
Retained earnings	2,611		2,269
Foreign exchange adjustment	(95	)	(90	)
	7,569		7,206
	24,787		24,113

See accompanying notes to the consolidated financial statements.

Consolidated Retained Earnings

(unaudited)	Nine months ended September 30
(millions of dollars)	2006		2005

Balance at beginning of period	2,269		1,655
Net income	810		859
Common share dividends	(468	)	(445	)
	2,611		2,069

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 audited consolidated financial statements for the year ended December 31, 2005. 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 2005 audited consolidated financial statements included in TransCanada’s 2005 Annual Report. 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. Segmented Information

Effective June 1, 2006, TransCanada revised the composition and names of its reportable business segments to Pipelines and Energy. Pipelines is principally comprised of the company’s pipelines in Canada, the United States and Mexico. Energy includes the company’s power operations, natural gas storage and liquefied natural gas (LNG) businesses in Canada and the U.S. The financial reporting of these segments was aligned to reflect the internal organizational structure of the company. The segmented information has been retroactively restated to reflect the changes in reportable segments. These changes had no impact on consolidated net income.

The impacts on segment net income of each of Pipelines and Energy in each quarter of 2005 and first quarter 2006 are as follows.

	2005										2006
(unaudited – millions of dollars)	First		Second		Third		Fourth		Total		First
Pipelines
Net Income – previously reported as Gas Transmission	211		165		148		160		684		168
Reclassifications:
Natural gas storage	(4	)	(1	)	(2	)	(9	)	(16	)	(13	)
Costs related to LNG	2		2		3		4		11		2
Net Income – revised	209		166		149		155		679		157

Energy
Net Income – previously reported as Power	30		42		292		197		561		89
Reclassifications:
Natural gas storage	4		1		2		9		16		13
Costs related to LNG	(2	)	(2	)	(3	)	(4	)	(11	)	(2	)
Net Income – revised	32		41		291		202		566		100

Three months ended September 30	Pipelines				Energy				Corporate				Total
(unaudited – millions of dollars)	2006		2005		2006		2005		2006		2005		2006		2005
Revenues	1,010		993		840		501		—		—		1,850		1,494
Cost of sales	—		—		(382	)	(319	)	—		—		(382	)	(319	)
Other costs and expenses	(351	)	(310	)	(240	)	(127	)	(2	)	(1	)	(593	)	(438	)
Depreciation	(231	)	(235	)	(33	)	(12	)	—		—		(264	)	(247	)
	428		448		185		43		(2	)	(1	)	611		490
Financial charges and non-controlling interests	(197	)	(198	)	—		—		(29	)	(34	)	(226	)	(232	)
Financial charges of joint ventures	(17	)	(16	)	(5	)	—		—		—		(22	)	(16	)
Equity income	4		21		—		99		—		—		4		120
Interest income and other	25		8		2		2		5		11		32		21
Gains related to Power LP	—		—		—		245		—		—		—		245
Income taxes	(113	)	(114	)	(59	)	(98	)	66		11		(106	)	(201	)
Continuing Operations	130		149		123		291		40		(13	)	293		427
Discontinued Operations													—		—
Net Income													293		427

Nine months ended September 30	Pipelines				Energy				Corporate				Total
(unaudited – millions of dollars)	2006		2005		2006		2005		2006		2005		2006		2005
Revenues	2,956		2,981		2,473		1,372		—		—		5,429		4,353
Cost of sales	—		—		(1,224	)	(834	)	—		—		(1,224	)	(834	)
Other costs and expenses	(994	)	(899	)	(695	)	(376	)	(7	)	(4	)	(1,696	)	(1,279	)
Depreciation	(692	)	(700	)	(95	)	(52	)	—		—		(787	)	(752	)
	1,270		1,382		459		110		(7	)	(4	)	1,722		1,488
Financial charges and non-controlling interests	(573	)	(588	)	—		(2	)	(98	)	(95	)	(671	)	(685	)
Financial charges of joint ventures	(50	)	(44	)	(17	)	(5	)	—		—		(67	)	(49	)
Equity income	28		54		—		142		—		—		28		196
Interest income and other	59		21		5		5		32		23		96		49
Gain on sale of Northern Border Partners, L.P. interest	23		—		—		—		—		—		23		—
Gain on sale of PipeLines LP units	—		82		—		—		—		—		—		82
Gains related to Power LP	—		—		—		245		—		—		—		245
Income taxes	(323	)	(383	)	(127	)	(131	)	101		47		(349	)	(467	)
Continuing Operations	434		524		320		364		28		(29	)	782		859
Discontinued Operations													28		—
Net Income													810		859

Total Assets

	September 30, 2006	December 31,
(millions of dollars)	(unaudited)	2005
Pipelines	17,966	17,872
Energy	5,715	5,303
Corporate	1,106	938
	24,787	24,113

3. Risk Management and Financial Instruments

The following represents the material changes to the company’s financial instruments since December 31, 2005.

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 value and notional volumes of contracts for differences and the swap, future, option and heat rate contracts are shown in the tables below.

Power

Asset/(Liability)

		September 30, 2006
		(unaudited)		December 31, 2005
	Accounting	Fair		Fair
(millions of dollars)	Treatment	Value		Value
Power – swaps and contracts for differences
(maturing 2006 to 2011)	Hedge	(89	)	(130	)
(maturing 2006 to 2010)	Non-hedge	(6	)	13
Gas – swaps and futures
(maturing 2006 to 2016)	Hedge	(58	)	17
(maturing 2006 to 2008)	Non-hedge	26		(11	)

Notional Volumes
September 30, 2006	Accounting	Power (GWh)		Gas (Bcf)
(unaudited)	Treatment	Purchases	Sales	Purchases	Sales
Power – swaps and contracts for differences
(maturing 2006 to 2011)	Hedge	4,946	11,189	—	—
(maturing 2006 to 2010)	Non-hedge	1,465	917	—	—
Gas – swaps and futures
(maturing 2006 to 2016)	Hedge	—	—	81	60
(maturing 2006 to 2008)	Non-hedge	—	—	15	20
Heat rate contracts
(maturing 2006)	Non-hedge	—	12	—	—

Notional Volumes	Accounting	Power (GWh)		Gas (Bcf)
December 31, 2005	Treatment	Purchases	Sales	Purchases	Sales
Power – swaps and contracts for differences	Hedge	2,566	7,780	—	—
	Non-hedge	1,332	456	—	—

Gas – swaps and futures	Hedge	—	—	91	69
	Non-hedge	—	—	15	18

Certain of the company’s joint ventures use power derivatives to manage energy price risk exposures. The company’s proportionate share of the fair value of these outstanding power sales derivatives at September 30, 2006 was $55 million (December 31, 2005 – $(38) million) and relates to contracts which cover the period 2006 to 2010. The company’s proportionate share of the notional sales volumes associated with this exposure at September 30, 2006 was 4,500 GWh (December 31, 2005 – 2,058 GWh).

4. Long-Term Debt

In January 2006, the company issued $300 million of 4.3 per cent medium-term notes due 2011; in March 2006, the company issued US$500 million of 5.85 per cent senior unsecured notes due 2036; and in October 2006, the company issued $400 million of 4.65 per cent medium-term notes due October 2016.

In April 2006, TC PipeLines, LP (PipeLines LP) borrowed US$307 million under its unsecured credit facility to finance the cash portion of the purchase price of its acquisition of an additional 20 per cent interest in Northern Border Pipeline Company (Northern Border). The credit facility has a term of two years and all amounts outstanding will be due and payable on March 31, 2008. Borrowings under the credit facility will bear interest based, at PipeLines LP’s election, on the London interbank offered rate or the base rate plus, in either case, an applicable margin.

5. Discontinued Operations

TransCanada’s net income for the nine months ended September 30, 2006 includes $28 million or $0.06 per share of net income from discontinued operations, reflecting settlements received in first quarter 2006 from bankruptcy claims related to TransCanada’s Gas Marketing business divested in 2001.

6. Acquisitions and Dispositions

In April 2006, PipeLines LP closed its acquisition of an additional 20 per cent general partnership interest in Northern Border for US$307 million bringing its total general partnership interest to 50 per cent. As part of the transaction, PipeLines LP indirectly assumed approximately US$120 million of debt of Northern Border. Of the total purchase price, US$114 million was allocated to goodwill and the

remainder was allocated primarily to plant, property and equipment. Northern Border became a jointly controlled entity and TransCanada commenced proportionately consolidating its investment in Northern Border on a prospective basis as of April 2006. As part of the transaction, and effective early second quarter 2007, a subsidiary of TransCanada will become the operator of Northern Border which is currently operated by a subsidiary of ONEOK Inc. (ONEOK).

Concurrent with this transaction, TransCanada closed the sale of its 17.5 per cent general partner interest in Northern Border Partners, L.P. to a subsidiary of ONEOK, for net proceeds of approximately US$30 million, resulting in an after-tax gain of $13 million. The net gain was recorded in the Pipelines segment and the company recorded a $10 million income tax charge, including $12 million of current income tax expense, on this transaction.

7. Income Taxes

In second quarter 2006, TransCanada recorded a $33 million future income tax benefit ($23 million in Energy and $10 million in Corporate) as a result of reductions in Canadian federal and provincial corporate income tax rates enacted in second quarter 2006. In third quarter 2006, TransCanada recorded an income tax benefit of approximately $50 million on the resolution of certain income tax matters with taxation authorities and changes in estimates during the quarter.

8. 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 months and nine months ended September 30, respectively, is as follows.

Three months ended September 30	Pension Benefit Plans				Other Benefit Plans
(unaudited – millions of dollars)	2006		2005		2006		2005
Current service cost	10		7		1		—
Interest cost	16		16		2		1
Expected return on plan assets	(18	)	(16	)	(1	)	—
Amortization of transitional obligation related to regulated business	—		—		1		1
Amortization of net actuarial loss	6		5		1		—
Amortization of past service costs	1		1		—		—
Net benefit cost recognized	15		13		4		2

Nine months ended September 30	Pension Benefit Plans				Other Benefit Plans
(unaudited – millions of dollars)	2006		2005		2006		2005
Current service cost	28		22		2		1
Interest cost	49		48		6		4
Expected return on plan assets	(53	)	(48	)	(2	)	—
Amortization of transitional obligation related to regulated business	—		—		2		2
Amortization of net actuarial loss	20		13		2		1
Amortization of past service costs	3		2		1		—
Net benefit cost recognized	47		37		11		8

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/Myles Dougan at (403) 920-7911. The investor fax line is (403) 920-2457. Media Relations: Jennifer Varey at (403) 920-7859

Visit TransCanada’s Internet site at: 0Hhttp://www.transcanada.com