Exhibit 13.2

Consolidated Income

(unaudited)	Three months ended March 31
(millions of dollars except per share amounts)	2008			2007
Revenues		2,133			2,244
Operating Expenses
Plant operating costs and other		698			732
Commodity purchases resold		410			571
Depreciation		296			290
		1,404			1,593
		729			651
Other Expenses/(Income)
Financial charges		218			237
Financial charges of joint ventures		16			21
Interest income and other		(39	)		(31	)
Calpine bankruptcy settlements		(279	)		-
Writedown of Broadwater LNG project costs		41			-
		(43	)		227
Income before Income Taxes and Non-Controlling Interests		772			424
Income Taxes
Current		247			168
Future		5			(37	)
		252			131
Non-Controlling Interests
Preferred share dividends of subsidiary		6			6
Non-controlling interest in PipeLines LP		21			17
Other		44			5
		71			28
Net Income		449			265
Net Income Per Share
Basic	$	0.83		$	0.52
Diluted	$	0.83		$	0.52
Average Shares Outstanding - Basic (millions)		541			508
Average Shares Outstanding - Diluted (millions)		543			511
See accompanying notes to the consolidated financial statements.

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FIRST QUARTER REPORT 2008

Consolidated Cash Flows

(unaudited)	Three months ended March 31
(millions of dollars)	2008			2007
Cash Generated From Operations
Net income		449			265
Depreciation		296			290
Future income taxes		5			(37	)
Non-controlling interests		71			28
Employee future benefits funding lower than expense		20			12
Writedown of Broadwater LNG project costs		41			-
Other		40			24
		922			582
Decrease in operating working capital		6			36
Net cash provided by operations		928			618
Investing Activities
Capital expenditures		(460	)		(306	)
Acquisitions, net of cash acquired		(2	)		(4,265	)
Deferred amounts and other		112			(61	)
Net cash used in investing activities		(350	)		(4,632	)
Financing Activities
Dividends on common shares		(130	)		(156	)
Distributions paid to non-controlling interests		(21	)		(16	)
Notes payable (repaid)/issued, net		(30	)		1,065
Long-term debt issued		112			1,362
Reduction of long-term debt		(394	)		(325	)
Long-term debt of joint ventures issued		17			12
Reduction of long-term debt of joint ventures		(29	)		(12	)
Common shares issued, net of issue costs		9			1,690
Partnership units of subsidiary issued		-			348
Net cash (used in)/ provided by financing activities		(466	)		3,968
Effect of Foreign Exchange Rate Changes on Cash
and Cash Equivalents		23			(3	)
Increase /(Decrease) in Cash and Cash Equivalents		135			(49	)
Cash and Cash Equivalents
Beginning of period		504			399
Cash and Cash Equivalents
End of period		639			350
Supplementary Cash Flow Information
Income taxes paid		167			87
Interest paid		204			273
See accompanying notes to the consolidated financial statements.

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FIRST QUARTER REPORT 2008

Consolidated Balance Sheet

(unaudited)	March 31,		December 31,
(millions of dollars)	2008		2007
ASSETS
Current Assets
Cash and cash equivalents		639		504
Accounts receivable		964		1,116
Inventories		503		497
Other		268		188
		2,374		2,305
Plant, Property and Equipment		23,877		23,452
Goodwill		2,839		2,633
Other Assets		1,782		1,940
		30,872		30,330
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable		373		421
Accounts payable and accrued liabilities		1,702		1,767
Accrued interest		303		261
Current portion of long-term debt		895		556
Current portion of long-term debt of joint ventures		28		30
		3,301		3,035
Deferred Amounts		1,221		1,107
Future Income Taxes		1,171		1,179
Long-Term Debt		12,037		12,377
Long-Term Debt of Joint Ventures		900		873
Junior Subordinated Notes		1,015		975
		19,645		19,546
Non-Controlling Interests
Non-controlling interest in PipeLines LP		619		539
Preferred shares of subsidiary		389		389
Other		119		71
		1,127		999
Shareholders' Equity		10,100		9,785
		30,872		30,330
See accompanying notes to the consolidated financial statements.

 

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FIRST QUARTER REPORT 2008

Consolidated Comprehensive Income

(unaudited)	Three months ended March 31
(millions of dollars)	2008			2007
Net Income		449			265
Other Comprehensive Income/(Loss), Net of Income Taxes
Change in foreign currency translation gains and losses on
investments in foreignoperations (1)		53			(37	)
Change in gains and losses on hedges of investments
in foreign operations (2)		(41	)		9
Change in gains and losses on derivative instruments
designated as cash flow hedges (3)		4			(1	)
Reclassification to net income of gains and losses on derivative
instruments designated as cash flow hedges pertaining to
prior periods (4)		(19	)		(3	)
Other Comprehensive Income/(Loss)		(3	)		(32	)
Comprehensive Income		446			233
(1) Net of income tax recovery of $25 million for the three months ended March 31, 2008 (2007 - $5 million expense).
(2) Net of income tax recovery of $22 million for the three months ended March 31, 2008 (2007 - $5 million expense).
(3) Net of income tax expense of $12 million for the three months ended March 31, 2008 (2007 - $5 million recovery).
(4) Net of income tax recovery of $9 million for the three months ended March 31, 2008 (2007 - $2 million recovery).
See accompanying notes to the consolidated financial statements.

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FIRST QUARTER REPORT 2008

Consolidated Accumulated Other Comprehensive Income

(unaudited)                                                                                                     (millions of dollars)	Currency Translation Adjustment			Cash Flow Hedges			Total
Balance at December 31, 2007		(361	)		(12	)		(373	)
Change in foreign currency translation gains and losses on investments in
foreign operations (1)		53			-			53
Change in gains and losses on hedge of investments in foreign operations (2)		(41	)		-			(41	)
Change in gains and losses on derivative instruments designated as cash flow
hedges (3)		-			4			4
Reclassification to net income of gains and losses on derivative instruments
designated as cash flow hedges pertaining to prior periods (4)(5)		-			(19	)		(19	)
Balance at March 31, 2008		(349	)		(27	)		(376	)
Balance at December 31, 2006		(90	)		-			(90	)
Transition adjustment resulting from adopting new financial instruments standards (6)		-			(96	)		(96	)
Change in foreign currency translation gains and losses on investments in
foreign operations (1)		(37	)		-			(37	)
Change in gains and losses on hedge of investments in foreign operations (2)		9			-			9
Change in gains and losses on derivative instruments designated as cash flow
hedges (3)		-			(1	)		(1	)
Reclassification to net income of gains and losses on derivative instruments
designated as cash flow hedges pertaining to prior periods (4)		-			(3	)		(3	)
Balance at March 31, 2007		(118	)		(100	)		(218	)
(1) Net of income tax recovery of $25 million for the three months ended March 31, 2008 (2007 - $5 million expense).
(2) Net of income tax recovery of $22 million for the three months ended March 31, 2008 (2007 - $5 million expense).
(3) Net of income tax expense of $12 million for the three months ended March 31, 2008 (2007 - $5 million recovery).
(4) Net of income tax recovery of $9 million for the three months ended March 31, 2008 (2007 - $2 million recovery).

⁽⁵⁾ The amount of gains and losses related to cash flow hedges reported in accumulated other comprehensive income that will be reclassified to net income in the next 12 months is expected to be $12 million ($15 million net of tax) of net losses.

⁽⁶⁾ Net of income tax expense of $44 million.

See accompanying notes to the consolidated financial statements.

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FIRST QUARTER REPORT 2008

Consolidated Shareholders’ Equity

(unaudited)	Three months ended March 31
(millions of dollars)	2008			2007
Common Shares
Balance at beginning of period		6,662			4,794
Shares issued under dividend reinvestment plan		54			-
Proceeds from shares issued on exercise of stock options		9			8
Proceeds from shares issued under public offering (1)		-			1,682
Balance at end of period		6,725			6,484
Contributed Surplus
Balance at beginning of period		276			273
Issuance of stock options		1			1
Balance at end of period		277			274
Retained Earnings
Balance at beginning of period		3,220			2,724
Transition adjustment resulting from adopting new financial
instruments accounting standards		-			4
Net income		449			265
Common share dividends		(195	)		(182	)
Balance at end of period		3,474			2,811
Accumulated Other Comprehensive Income
Balance at beginning of period		(373	)		(90	)
Transition adjustment resulting from adopting new financial instruments
accounting standards		-			(96	)
Other comprehensive income		(3	)		(32	)
Balance at end of period		(376	)		(218	)
Total Shareholders' Equity		10,100			9,351
(1) Net of underwriting commissions and future income taxes.
See accompanying notes to the consolidated financial statements.

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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, 2007. 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 2007 audited Consolidated Financial Statements included in TransCanada’s 2007 Annual Report.  Amounts are stated in Canadian dollars unless otherwise indicated.

In Pipelines, which consists primarily of the Company's investments in regulated pipelines and regulated natural gas storage facilities, annual revenues and net earnings fluctuate over the long term based on regulators' decisions and negotiated settlements with shippers. Generally, quarter-over-quarter revenues and net earnings during any particular fiscal year remain relatively stable with fluctuations resulting from adjustments being recorded due to regulatory decisions and negotiated settlements with shippers, seasonal fluctuations in short-term throughput on U.S. pipelines, acquisitions and divestitures, and developments outside of the normal course of operations.

In Energy, which consists primarily of the Company’s investments in electrical power generation plants and non-regulated natural gas storage facilities, quarter-over-quarter revenues and net earnings are affected by seasonal weather conditions, customer demand, market prices, planned and unplanned plant outages, acquisitions and divestitures, and developments outside of the normal course of operations.

In preparing these financial statements, TransCanada is required to make estimates and assumptions that affect both the amount and timing of recording assets, liabilities, revenues and expenses since the determination of these items may be dependent on future events. The Company uses the most current information available and exercises careful judgement in making these estimates. In the opinion of management, these consolidated financial statements have been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies.

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FIRST QUARTER REPORT 2008

2.   Segmented Information

Three months ended March 31	Pipelines		Energy		Corporate		Total
(unaudited - millions of dollars)	2008	2007	2008	2007	2008	2007	2008	2007
Revenues	1,176	1,124	957	1,120	-	-	2,133	2,244
Plant operating costs and other	(399)	(383)	(298)	(347)	(1)	(2)	(698)	(732)
Commodity purchases resold	-	-	(410)	(571)	-	-	(410)	(571)
Depreciation	(254)	(251)	(42)	(39)	-	-	(296)	(290)
	523	490	207	163	(1)	(2)	729	651
Financial charges and non-controlling interests	(235)	(217)	-	1	(54)	(49)	(289)	(265)
Financial charges of joint ventures	(11)	(16)	(5)	(5)	-	-	(16)	(21)
Interest income and other	32	13	1	3	6	15	39	31
Calpine bankruptcy settlements	279	-	-	-	-	-	279	-
Writedown of Broadwater LNG project costs	-	-	(41)	-	-	-	(41)	-
Income taxes	(227)	(115)	(52)	(56)	27	40	(252)	(131)
Net Income	361	155	110	106	(22)	4	449	265

Total Assets
(unaudited - millions of dollars)	March 31, 2008		December 31, 2007
Pipelines		22,429		22,024
Energy		7,171		7,037
Corporate		1,272		1,269
		30,872		30,330

3.   Share Capital

In the three months ended March 31, 2008, TransCanada issued 1.4 million common shares under its Dividend Reinvestment and Share Purchase Plan (DRP). In accordance with the DRP, dividends were paid with common shares issued from treasury instead of cash dividend payments totalling $54 million.

4.   Financial Instruments and Risk Management

Natural Gas Inventory

At March 31, 2008, $207 million of proprietary natural gas storage inventory was included in Inventories (December 31, 2007 - $190 million). Effective April 1, 2007, TransCanada began valuing its proprietary natural gas storage inventory at fair value, as measured by the one-month forward price for natural gas. The Company did not have any proprietary natural gas inventory prior to April 1, 2007. The change in fair value of proprietary natural gas inventory in the three months ended March 31, 2008 resulted in a gain of $59 million, which was recorded as an increase to Revenues and Inventory. The net change in fair value of natural gas forward purchase and sales contracts in first-quarter 2008 was a loss of $76 million (three months ended March 31, 2007 – loss of $3 million), which was recorded in Revenues.

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FIRST QUARTER REPORT 2008

Derivative Financial Instruments

Derivatives Hedging Net Investment in Foreign Operations

Asset/(Liability)
(unaudited)
(millions of dollars)	March 31, 2008				December 31, 2007
				Notional or				Notional or
	Fair			Principal	Fair			Principal
	Value(1)			Amount	Value(1)			Amount
Derivative financial Instruments in hedging relationships
U.S. dollar cross-currency swaps
(maturing 2009 to 2014)		62		U.S. 450		77		U.S. 350
U.S. dollar forward foreign exchange contracts
(maturing 2008 )		(36	)	U.S. 1,440		(4	)	U.S. 150
U.S. dollar options
(maturing 2008 )		(1	)	U.S. 50		3		U.S. 600
		25		U.S. 1,940		76		U.S. 1,100
(1) Fair values are equal to carrying values.

Derivative Financial Instruments Summary

Significant changes from December 31, 2007 for the Company’s derivative financial instruments are as follow:

	Natural Gas
(unaudited)	March 31, 2008			December 31, 2007
Derivative Financial Instruments Held for Trading
Fair Values(1)
Assets	$	98		$	43
Liabilities	$	(149	)	$	(19	)
Volumes(2)
Purchases		55			47
Sales		74			64

⁽¹⁾ Fair value is equal to the carrying value of these derivatives.  Amounts are in millions of dollars.

⁽²⁾  Volumes for natural gas derivatives are in billion cubic feet.

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5.   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 ended March 31, 2008 is as follows.

Three months ended March 31	Pension Benefit Plans		Other Benefit Plans
(unaudited - millions of dollars)	2008	2007	2008	2007
Current service cost	13	11	-	-
Interest cost	19	17	2	1
Expected return on plan assets	(23)	(19)	-	-
Amortization of transitional obligation related to
regulated business	-	-	-	1
Amortization of net actuarial loss	4	6	-	1
Amortization of past service costs	1	1	-	-
Net benefit cost recognized	14	16	2	3

6.   Calpine Bankruptcy Settlements

Certain subsidiaries of Calpine Corporation (Calpine) filed for bankruptcy protection in both Canada and the U.S. in 2005. Gas Transmission Northwest Corporation (GTNC) and Portland reached agreements with Calpine for allowed unsecured claims in the Calpine bankruptcy. In February 2008, GTNC and Portland received initial distributions of 9.4 million shares and 6.1 million shares, respectively, which represented approximately 85 per cent of their agreed-for claims. These shares were subsequently sold into the open market for total pre-tax income of $279 million.

7.   Writedown of Development Costs

On March 24, 2008, the U.S. Federal Energy Regulatory Committee authorized the construction and operation of the Broadwater liquefied natural gas (LNG) project, subject to the conditions reflected in the authorization. On April 10, 2008, the New York State Department of State rejected a proposal to construct the Broadwater facility. As a result of this unfavourable decision, TransCanada wrote down $27 million after tax ($41 million pre-tax) of costs that had been previously capitalized for the Broadwater LNG project to March 31, 2008.

8.   Commitments

On March 31, 2008, TransCanada entered into an agreement with National Grid plc to acquire, for US$2.8 billion, 100 per cent of KeySpan–Ravenswood, LLC, which owns the Ravenswood Generating Facility in Queens, New York. The acquisition is expected to be financed in a manner that is consistent with TransCanada’s current capital structure.

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/Terry Hook at (403) 920-7911. The investor fax line is (403) 920-2457. Media Relations: Cecily Dobson/Shela Shapiro at (403) 920-7859 or 1-800-608-7859.

Visit the TransCanada website at: http://www.transcanada.com