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The Plan of Arrangement (the "Plan") involving NOVA Corporation ("NOVA") and TransCanada PipeLines Limited ("TransCanada") described in the Joint Management Information Circular dated May 19, 1998 (the "Joint Information Circular") became effective on July 2, 1998 (the "Effective Date"). As stated in the United States income tax section, set forth on pages 70 - 75 of the Joint Information Circular, the fair market value of a common share of NOVA on the Effective Date after consummation of the Plan (a "NOVA Common Share", which is referred to in the Joint Information Circular as a NOVA Chemicals Common Share) and the fair market value of a common share of TransCanada without giving effect to the distribution of the Nova Common Shares (a "TransCanada Common Share") is relevant to shareholders of TransCanada and NOVA for purposes of determining certain United States federal income tax consequences to them of the Plan. The purpose of this letter is to provide information regarding estimates of such fair market values.

All capitalized terms not otherwise defined herein have the same meanings as set out in the Joint Information Circular.

The Internal Revenue Service may accept different approaches in valuing shares of a publicly-traded company at a particular time.

Based on discussions with U.S. tax counsel, we believe that it would be reasonable to use the following amounts (which are expressed in United States dollars) as estimates of fair market value:

• TransCanada Common Share
  $22.23
• NOVA Common Share*
  $20.89

* referred to in the Joint Information Circular as a NOVA Chemicals Common Share

The estimated fair market value of a TransCanada Common Share was derived from the simple average of the high and low trading prices on the Toronto Stock Exchange on July 2, 1998. The estimated fair market value of a NOVA Common Share (referred to in the Joint Information Circular as a NOVA Chemicals Common Share) was derived from the opening trading price on the Toronto Stock Exchange on July 3, 1998. These amounts were converted to United States dollars based on the mid-day exchange rate in effect on the particular date.

Using these estimated values,

1. the fair market value of the consideration received for a NOVA Common Share was $11.56 (being .52 x $22.23);
2. the initial tax basis in a TransCanada Common Share received by a NOVA Common Shareholder, prior to any adjustment to such tax basis as a result of the distribution of the NOVA Common Shares, was $22.23;
3. the initial tax basis in a NOVA Common Share (referred to in the Joint Information Circular as a NOVA Chemicals Common Share) received by NOVA and TransCanada common shareholders was $20.89.

TransCanada intends to report to United States shareholders in February 1999 the portion of the fair market value of a NOVA Common Share (referred to in the Joint Information Circular as a NOVA Chemicals Common Share) that should be treated as a dividend for U.S. federal income tax purposes.

The above information is being provided in light of numerous requests received by both companies from United States shareholders. This letter is not intended to be a substitute for the description of tax consequences in the Joint Information Circular and should not be construed to be legal, business, tax or valuation advice to any particular shareholder. We believe that the use of the trading prices set forth above is a reasonable approach to estimate the fair market values of a TransCanada Common Share and a NOVA Common Share for purposes of determining certain United States federal income tax consequences of the Plan; however, as stated above, other approaches could be utilized for this purpose. Accordingly, shareholders should review the United States tax section in the Joint Information Circular and should consult their own advisors as to the tax consequences to them of the Plan in their particular circumstances, particularly if a shareholder wishes to consider adopting a different valuation approach.

In addition to the foregoing, NOVA will be sending its United States shareholders NR4 supplementary income tax reporting slips for purposes of reporting for Canadian federal income tax purposes the deemed dividend and related non-resident withholding tax arising on the cash payment in lieu of (and on the cancellation of) an interest in a fractional share as described on page 70 of the Joint Information Circular.If you have any questions with respect to any of the foregoing please contact NOVA at 1.800.661.8686 or TransCanada at 1.800.361.6522.