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Management Information CircularFEBRUARY 20, 2018

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 27, 2018

DELIVERING ENERGY RESPONSIBLY

1 LETTER TO SHAREHOLDERS 2 NOTICE OF 2018 ANNUAL MEETING 3 MANAGEMENT INFORMATION CIRCULAR 4 Summary 6 ABOUT THE SHAREHOLDER MEETING 6 Delivery of meeting materials 6 Voting 10 Business of the meeting 26 GOVERNANCE 26 About our governance practices 53 COMPENSATION 53 Compensation governance 59 Director compensation discussion and analysis 63 Director compensation – 2017 details68 Human Resources committee letter to shareholders 71 Executive compensation discussion and analysis 98 Executive compensation – 2017 details112 OTHER INFORMATION 113 SCHEDULES

With more than 65 years’ experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas and liquids pipelines, power generation and gas storage facilities.

TransCanada’s common shares trade on the Torontoand New York stock exchanges under the symbol TRP.

We encourage you to sign up for electronic delivery of the 2018 Annual Report and 2019 Management Information Circular.Registered Shareholders can go to www.investorcentre.com, and click on “Sign up for eDelivery” at the bottom of the page. Enter your Holder Account Number from your form of proxy, and enter your postal code (if you are a Canadian resident), or your Family or Company Name (if you are not a resident of Canada), and click “Sign In”.

Non-registered shareholders can go to www.investordelivery.com using the control number found on your voting instruction form or at www.proxyvote.com when you have finished voting. You can click on “Enroll for Electronic Delivery” and follow the instructions.

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Boardcomposition

Men (10)Women (3)

Managementestablishes annualstrategic priorities

and five-yearobjectives

Managementrevises and extends

the five-yearstrategic plan

annually, reflectingchanges to our

business

The Board reviewsmanagement’s

progress at regularBoard meetings

Strategic issuessessions with theBoard, updating

the Board onspecific and

emerging issues

Managementimplements thestrategic plan

Managementincorporates Boardfeedback into theannual strategic

plan update

Board overseesour overall

strategy

Governancecommittee

oversees strategicprocess

Executivecomposition

Men (7)Women (3)

Assessment Committee analysis and discussion Board discussion and report

Chair of Boardinterviews eachdirector

Chair of Governancecommittee interviewseach director aboutChair of Board

Committeeself-assessment

Chair of Boardinterviews each memberof executive leadershipteam about Board

Results reportedto Governancecommittee fordiscussion

Chair ofGovernancecommittee reportsto Board

Chair of eachcommittee reportsto Board

Chair of Boardreports to Board

Committeediscussion

26FEB201809451217

Accounting/audit • Kevin E. Benson• Russell K. Girling• John E. Lowe• Siim A. Vanaselja

• Richard E. WaughCapital markets • Kevin E. Benson• Russell K. Girling• John E. Lowe• Siim A. Vanaselja

• Paula Rosput Reynolds• Indira Samarasekera• Thierry Vandal• Richard E. Waugh

CEO • Kevin E. Benson • Derek H. Burney • Stéphan Crétier• S. Barry Jackson

Government & regulatory • Derek H. Burney• Paula Rosput Reynolds• Indira Samarasekera• Thierry Vandal

Operations/health, safety & environment • Kevin E. Benson• Stéphan Crétier• S. Barry Jackson• Mary Pat Salomone

• D. Michael G. Stewart

Human resources & compensation • S. Barry Jackson• Paula Rosput Reynolds• Mary Pat Salomone• Indira Samarasekera

Major projects • Paula Rosput Reynolds• Mary Pat Salomone• D. Michael G. Stewart• Thierry Vandal

Mergers & acquisitions • Stéphan Crétier• John E. Lowe• Siim A. Vanaselja

Electric power • Russell K. Girling• Mary Pat Salomone• Thierry Vandal

Risk management • Derek H. Burney• Stéphan Crétier• D. Michael G. Stewart • Siim A. Vanaselja

• Richard E. Waugh

• Indira Samarasekera• Siim A. Vanaselja• Richard E. Waugh

Strategy & leading growth • Derek H. Burney • Stéphan Crétier• Russell K. Girling• S. Barry Jackson

Upstream oil & gas • S. Barry Jackson• John E. Lowe• D. Michael G. Stewart

• Richard E. Waugh

• Thierry Vandal

Governance • Kevin E. Benson • Derek H. Burney • Mary Pat Salomone• Indira Samarasekera

Energy, midstream & transportation • Russell K. Girling • John E. Lowe• Paula Rosput Reynolds• D. Michael G. Stewart

Area of expertise

Skills analysisDirector with expertise

Director with expertise + retiringwithin three years

Legend

Currentcomposition

0-5 years 46%6-10 years 23%11+ years 31%

Post-meetingcomposition

0-5 years 55%6-10 years 18%11+ years 27%

Total direct compensation awardedto the named executives ($ millions)

Comparable earnings per share - Basic ($ dollars)

Comparable funds generated from operations ($ billions)

$0

$1

$2

$3

$4

$5

$6

$0

$10

$20

$30

$40

$50

$60

20172016201520142013

$2.48$2.24

$4.0

$2.42

$4.5$4.8

$2.78

$5.2

$3.09

$5.6

$19.7 $19.5 $20.9$23.5

$21.3

Totalshareholderreturn

Total direct compensation awarded to the named executives ($ millions)

Total directcompensation awarded

to the named executives

TransCanada (TRP)

S&P/TSX Composite Total Returns Index (TSX)

$0

$10

$20

$30

$40

$50

$60

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

2014 2015 2016 20172013

$19.7 $19.5 $20.9 $21.3$23.5

Analysis Recommendation Approval

Independent consultant• Research, analyze and provide competitive market data for named executives

HR committee• Approve and recommend compensation for the CEO and all executive leadership team members

Board• Approve compensation for the CEO and all executive leadership team members

Human resources management • Research, analyze and provide competitive market data for other executive leadership team members• Compile corporate business unit and individual performance data

CEO• Assess corporate, business unit and individual performance and make compensation recommendations for executive leadership team members (excluding the CEO)• Provide CEO self-assessment

Independent consultant

• Review and provide opinion on the CEO's recommendations and CEO pay

• Review compensation analysis from independent consultant and human resources management• Review corporate, business unit and individual performance and CEO recommendations

HR committee

Target

Performancemeets expectations Exceeds expectationsBelow expectations

Below median market compensation Above median market compensationMedian marketcompensation

26FEB201816181164

Basesalary

xShort-termincentivetarget

x Business unit /individualperformance factor

x Business unit /individualweighting

+Corporateperformancefactor

x Corporateweighting

= Short-termincentive award ($)

9JAN201800312579

Numberof ESUsvesting

xValuation priceon thevesting date

x Performancemultiplier

= ESUpayout ($)

1.25% of employee’s highestaverage earnings (up to the finalaverage YMPE)

+1.75% of employee’s highestaverage earnings (above the finalaverage YMPE)

x Creditedservice

= Annual retirementbenefit ($)

26FEB20181253315366% Long-term incentive

2017 Pay mix

Base salary 14%Short-term incentive 20%ESUs 33%Stock options 33%

26FEB20181253341067% Long-term incentive

2017 Pay mix

Base salary 18%Short-term incentive 15%ESUs 33.5%Stock options 33.5%

64% Long-term incentive

2017 Pay mix



2017 Pay mix



2017 Pay mix

Base salary 21%Short-term incentive 16%ESUs 31.5%Stock options 31.5%

Please recycle.

Shareholder InformationTransCanada welcomes questions from shareholders and investors. Please contact:

David Moneta, Vice President, Investor Relations telephone: 1.403.920.7911 toll free: 1.800.361.6522 email: [email protected]

Visit TransCanada.com for Investor information: TransCanada.com/Investors

Board of DirectorsYou may contact the Board directly by writing to:Chair of the Board of Directorsc/o Corporate SecretaryTransCanada Corporation450 – 1 Street SWCalgary, Alberta, CanadaT2P 5H1

Transfer AgentComputershare Investor Services100 University Avenue, 8th FloorToronto, Ontario M5J 2Y1

telephone: 1.514.982.7959toll free: 1.800.340.5024fax: 1.888.453.0330email: [email protected]

Corporate Head OfficeTransCanada Corporation450 – 1 Street SWCalgary, Alberta, CanadaT2P 5H1

Place FSC logo here

View our website for more information: TransCanada.com

View our Annual Report: AnnualReport.TransCanada.com

Printed in Canada February 2018

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