April 30, 2025

This management’s discussion and analysis (MD&A) contains information to help the reader make investment decisions about TC Energy Corporation (TC Energy). It discusses our business, operations, financial position, risks and other factors for the three months ended March 31, 2025 and should be read with the accompanying unaudited Condensed consolidated financial statements for the three months ended March 31, 2025, which have been prepared in accordance with U.S. GAAP.

This MD&A should also be read in conjunction with our December 31, 2024 audited Consolidated financial statements and notes and the MD&A in our 2024 Annual Report. Capitalized and abbreviated terms that are used but not otherwise defined herein are defined in our 2024 Annual Report. Certain comparative figures have been adjusted to reflect the current period's presentation.

On October 1, 2024, TC Energy completed the spinoff of its Liquids Pipelines business into a new public company, South Bow Corporation (the Spinoff Transaction). Upon completion of the Spinoff Transaction, the Liquids Pipelines business was accounted for as a discontinued operation. Discussions throughout this MD&A are based on continuing operations unless otherwise noted. Prior year results have been recast to reflect the split between continuing and discontinued operations. Refer to our 2024 Annual Report and the Discontinued operations section for additional information.

We disclose forward-looking information to help the reader understand management's assessment of our future plans and financial outlook and our future prospects overall.

Statements that are forward looking are based on certain assumptions and on what we know and expect today and generally include words like anticipate, expect, believe, may, will, should, estimate or other similar words.

Forward-looking statements in this MD&A include information about the following, among other things:

•our financial and operational performance, including the performance of our subsidiaries

•expectations about strategies and goals for growth and expansion, including acquisitions

•expected cash flows and future financing options available along with portfolio management

•expectations regarding the size, structure, timing, conditions and outcome of ongoing and future transactions

•expected dividend growth

•expected access to and cost of capital

•expected energy demand levels

•expected costs and schedules for planned projects, including projects under construction and in development

•expected capital expenditures, contractual obligations, commitments and contingent liabilities, including environmental remediation costs

•expected regulatory processes and outcomes

•expected outcomes with respect to legal proceedings, including arbitration and insurance claims

•expected impact of future tax and accounting changes

•commitments and targets contained in our Report on Sustainability and GHG Emissions Reduction Plan, including statements related to our GHG emissions intensity reduction goals

•expected industry, market and economic conditions, and ongoing trade negotiations, including their impact on our customers and suppliers.

Forward-looking statements do not guarantee future performance. Actual events and results could be significantly different because of assumptions, risks or uncertainties related to our business or events that happen after the date of this MD&A.

Our forward-looking information is based on the following key assumptions and subject to the following risks and uncertainties:

•realization of expected impacts from acquisitions and divestitures, including the Spinoff Transaction

•regulatory decisions and outcomes

•planned and unplanned outages and the utilization of our pipelines, power and storage assets

•integrity and reliability of our assets

•anticipated construction costs, schedules and completion dates

•access to capital markets, including portfolio management

•expected industry, market and economic conditions, including the impact of these on our customers and suppliers

•inflation rates, commodity and labour prices

•interest, tax and foreign exchange rates

•nature and scope of hedging.

•realization of expected impacts from acquisitions and divestitures, including the Spinoff Transaction

•our ability to successfully implement our strategic priorities and whether they will yield the expected benefits

•our ability to implement a capital allocation strategy aligned with maximizing shareholder value

•operating performance of our pipelines, power generation and storage assets

•amount of capacity sold and rates achieved in our pipeline businesses

•amount of capacity payments and revenues from power generation assets due to plant availability

•production levels within supply basins

•construction and completion of capital projects

•cost, availability of, and inflationary pressures on, labour, equipment and materials

•availability and market prices of commodities

•access to capital markets on competitive terms

•interest, tax and foreign exchange rates

•performance and credit risk of our counterparties

•regulatory decisions and outcomes of legal proceedings, including arbitration and insurance claims

•our ability to effectively anticipate and assess changes to government policies and regulations, including those related to the environment

•our ability to realize the value of tangible assets and contractual recoveries

•competition in the businesses in which we operate

•unexpected or unusual weather

•acts of civil disobedience

•cybersecurity and technological developments

•sustainability-related risks including climate-related risks and the impact of energy transition on our business

•economic and political conditions, and ongoing trade negotiations in North America, as well as globally

•global health crises, such as pandemics and epidemics, and the impacts related thereto.

You can read more about these factors and others in this MD&A and in other reports we have filed with Canadian securities regulators and the SEC, including the MD&A in our 2024 Annual Report.

As actual results could vary significantly from the forward-looking information, you should not put undue reliance on forward-looking information and should not use future-oriented information or financial outlooks for anything other than their intended purpose. We do not update our forward-looking statements due to new information or future events unless we are required to by law.

You can find more information about TC Energy in our Annual Information Form and other disclosure documents, which are available on SEDAR+ (www.sedarplus.ca).

We use certain financial measures that do not have a standardized meaning under GAAP because we believe they improve our ability to compare results between reporting periods and enhance understanding of our operating performance. Known as non-GAAP measures, they may not be comparable to similar measures provided by other companies.

Comparable EBITDA, comparable earnings and comparable earnings per common share from continuing and discontinued operations and comparable funds generated from operations are all non-GAAP measures. Refer to the Non-GAAP measures section for additional information, as well as each business segment, the Financial Condition and Discontinued operations sections for reconciliations to the most directly comparable GAAP measures.

Discussions throughout this MD&A are based on continuing operations unless otherwise noted. Prior year results have been recast to reflect the split between continuing and discontinued operations.

1Prior year results have been recast to reflect the split between continuing and discontinued operations.

2Additional information on the most directly comparable GAAP measure can be found in the Non-GAAP measures section.

3Reflects dividends declared following the Spinoff Transaction.

1Includes continuing and discontinued operations.

2Additional information on the most directly comparable GAAP measure can be found in the Non-GAAP measures section.

3Represents three months of Liquids Pipelines earnings in first quarter 2024 compared to Liquids Pipelines earnings of nil for the three months ended March 31, 2025. Refer to the Discontinued operations section and our 2024 Annual Report for additional information.

4Capital spending reflects cash flows associated with our Capital expenditures, Capital projects in development and Contributions to equity investments. Refer to Note 4, Segmented information of our Condensed consolidated financial statements for additional information.

5Included in the Financing activities section of the Condensed consolidated statement of cash flows.

1Prior year results have been recast to reflect the split between continuing and discontinued operations.

1Prior year results have been recast to reflect the split between continuing and discontinued operations.

Net income (loss) attributable to common shares from continuing operations decreased by $10 million or $0.01 per common share for the three months ended March 31, 2025 compared to the same period in 2024.

This MD&A references non-GAAP measures, which are described in the table below. These measures do not have any standardized meaning as prescribed by GAAP and therefore may not be comparable to similar measures presented by other entities. These measures are reviewed regularly by our President and Chief Executive Officer, management and the Board of Directors in assessing our performance and making decisions regarding the ongoing operations of our business and its ability to generate cash flows. Some or all of these measures may also be used by investors and other external users of our financial statements as a supplemental measure to provide decision-useful information regarding our period-over-period performance and ability to generate earnings that are core to our ongoing operations. Discussions throughout this MD&A on the factors impacting comparable earnings before interest, taxes, depreciation and amortization (comparable EBITDA) and comparable earnings before interest and taxes (comparable EBIT) are consistent with the factors that impact segmented earnings, except where noted otherwise.

We calculate comparable measures by adjusting certain GAAP measures for specific items we believe are significant but not reflective of our underlying operations in the period. Except as otherwise described herein, these comparable measures are calculated on a consistent basis from period to period and are adjusted for specific items in each period, as applicable.

Our decision to adjust for a specific item in reporting comparable measures is subjective and made after careful consideration. We maintain a consistent approach to adjustments, which generally fall into the categories described below:

•by their nature are unusual, infrequent and separately identifiable from our normal business operations and in our view are not reflective of our underlying operations in the period and generally include the following:

◦gains or losses on sales of assets or assets held for sale; impairment of goodwill, plant, property and equipment, equity investments and other assets; legal, contractual and other infrequent settlements; acquisition, integration and restructuring costs; expected credit loss provisions on net investment in leases and certain contract assets in Mexico; impacts resulting from changes in legislation and enacted tax rates and unusual tax refunds/payments and valuation allowance adjustments

•unrealized gains and losses related to fair value adjustments and unrealized foreign exchange on intercompany loans that do not reflect realized earnings or losses or cash impacts incurred in the current period from our underlying operations and generally include the following:

◦unrealized gains and losses from changes in the fair value of derivatives related to financial and commodity price risk management activities; unrealized fair value adjustments related to our proportionate share of Bruce Power’s risk management activities and its funds invested for post-retirement benefits; unrealized foreign exchange gains and losses on intercompany loans that impact consolidated earnings.

The following table identifies our non-GAAP measures against their most directly comparable GAAP measures. These measures are applicable to each of our continuing operations and discontinued operations. Quantitative reconciliations of our comparable measures to their GAAP measures and a discussion of specific adjustments made for the three months ended March 31, 2025 and comparative period are found throughout this MD&A.

Comparable EBITDA represents segmented earnings (losses) adjusted for specific items described in the Comparable measures section, excluding charges for depreciation and amortization. We use comparable EBITDA as a measure of our earnings from ongoing operations as it is a useful indicator of our performance and is also presented on a consolidated basis. Comparable EBIT represents segmented earnings (losses) adjusted for specific items and is an effective tool for evaluating trends in each segment. Refer to each business segment and the Discontinued operations section for a reconciliation to segmented earnings (losses).

Funds generated from operations reflects net cash provided by operations before changes in operating working capital. The components of changes in working capital are disclosed in our 2024 Consolidated financial statements. Comparable funds generated from operations is adjusted for the cash impact of specific items described in the Comparable measures section. We believe funds generated from operations and comparable funds generated from operations are useful measures of our consolidated operating cash flows because they exclude fluctuations from working capital balances, which do not necessarily reflect underlying operations in the same period, and are used to provide a consistent measure of the cash-generating ability of our businesses. Refer to the Financial condition section for a reconciliation to Net cash provided by operations.

Comparable earnings represents earnings attributable to common shareholders on a consolidated basis, adjusted for specific items described in the Comparable measures section. Comparable earnings is comprised of segmented earnings (losses), Interest expense, AFUDC, Foreign exchange (gains) losses, net, Interest income and other, Income tax expense (recovery), Net income (loss) attributable to non-controlling interests and Preferred share dividends in our Condensed consolidated statement of income, adjusted for specific items. We use comparable earnings as a measure of our earnings from ongoing operations as it is a useful indicator of our performance and is also presented on a consolidated basis. Refer to the following page and the Discontinued operations section for reconciliations to Net income (loss) attributable to common shares and Net income (loss) per common share for our continuing operations and discontinued operations.

The following specific items were recognized in Net income (loss) attributable to common shares from continuing operations and were excluded from comparable earnings from continuing operations:

•pre-tax unrealized foreign exchange gains, net of $3 million on the peso-denominated intercompany loan between TransCanada PipeLines Limited (TCPL) and Transportadora de Gas Natural de la Huasteca (TGNH), net of non-controlling interest

•a pre-tax recovery of $2 million on the expected credit loss provision related to TGNH net investment in leases and certain contract assets in Mexico, net of non-controlling interest.

•pre-tax unrealized foreign exchange gains, net of $55 million on the peso-denominated intercompany loan between

TCPL and TGNH

•a pre-tax recovery of $21 million on the expected credit loss provision related to TGNH net investment in leases and certain contract assets in Mexico

•a pre-tax expense of $34 million related to a non-recurring third-party settlement

•a pre-tax expense of $10 million related to Focus Project costs.

1Prior year results have been recast to reflect continuing operations only.

2In 2023, TCPL and TGNH became party to an unsecured revolving credit facility. The loan receivable and loan payable are eliminated upon consolidation; however, due to differences in the currency that each entity reports its financial results, there is an impact to net income reflecting the revaluation and translation of the loan receivable and loan payable to TC Energy's reporting currency. As the amounts do not accurately reflect what will be realized at settlement, we exclude from comparable measures the unrealized foreign exchange gains and losses on the loan receivable, as well as the corresponding unrealized foreign exchange gains and losses on the loan payable, net of non-controlling interest.

3In 2022, TGNH and the CFE executed agreements which consolidate several natural gas pipelines under one TSA. As this TSA contains a lease, we have recognized amounts in net investment in leases on our Condensed consolidated balance sheet and have recognized an expected credit loss provision in relation to the net investment in leases and certain contract assets in Mexico, which will fluctuate from period to period based on changing economic assumptions and forward-looking information. This provision does not reflect losses or cash outflows that were incurred under this lease arrangement in the current period or from our underlying operations, and therefore, we have excluded any unrealized changes, net of non-controlling interest, from comparable measures. Refer to Note 12, Risk management and financial instruments, in the Condensed consolidated financial statements for additional information.

4    In 2022, we launched the Focus Project with benefits in the form of enhanced safety, productivity and cost-effectiveness expected to be realized over the long term. In 2023 and 2024, we recognized expenses in Plant operating costs and other, for external consulting and severance, some of which are not recoverable through regulatory and commercial tolling structures.

Comparable EBITDA from continuing operations represents segmented earnings (losses) adjusted for the specific items described on the previous page and excludes charges for depreciation and amortization. Refer to each business segment for further information on our reconciliation of comparable EBITDA.

1Prior year results have been recast to reflect continuing operations only.

Comparable EBITDA increased by $39 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to the net effect of the following:

•increased EBITDA in Canadian Natural Gas Pipelines mainly due to higher flow-through costs and increased contributions from Coastal GasLink

•decreased Power and Energy Solutions EBITDA mainly attributable to reduced contributions from Bruce Power primarily due to the commencement of the Unit 4 Major Component Replacement (MCR), lower realized power prices in Canadian Power and lower realized Alberta natural gas storage spreads

•decreased U.S. dollar-denominated EBITDA from U.S. Natural Gas Pipelines mainly due to decreased earnings as a result of the sale of Portland Natural Gas Transmission System (PNGTS), which was completed in August 2024 and lower earnings from our equity investments, partially offset by incremental earnings from projects placed in service and additional

contract sales

•a positive foreign exchange impact of a stronger U.S. dollar on the Canadian dollar equivalent comparable EBITDA in our

U.S. dollar-denominated operations, which was translated at a rate of 1.43 in 2025 versus 1.35 in 2024. Refer to the Foreign exchange section for additional information.

Due to the flow-through treatment of certain costs including income taxes, financial charges and depreciation in our Canadian rate-regulated pipelines, changes in these costs impact our comparable EBITDA despite having no significant effect on net income.

Comparable earnings decreased by $72 million or $0.07 per common share for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to the net effect of the following:

•changes in comparable EBITDA described above

•higher interest expense primarily due to lower capitalized interest, the foreign exchange impact from a stronger U.S. dollar on translation of U.S. dollar-denominated interest expense and long-term debt issuances and maturities

•risk management activities used to manage our foreign exchange exposure to net liabilities in Mexico and to U.S. dollar-denominated income

•higher depreciation and amortization primarily due to higher depreciation rates on the NGTL System under the 2025-2029 Revenue Requirement Settlement

•lower interest income and other due to lower interest earned on short-term investments

•higher income tax expense primarily due to higher flow-through income taxes, partially offset by a change in the geographic and business mix of earnings

•higher AFUDC primarily due to capital expenditures on the Southeast Gateway pipeline project and U.S. natural gas pipeline projects.

Net capital expenditures represents capital costs incurred for growth projects, maintenance capital expenditures, contributions to equity investments and projects under development, adjusted for the portion attributed to non-controlling interests in the entities we control. Net capital expenditures reflect capital costs incurred during the period, excluding the impact of timing of cash payments. We use net capital expenditures as a key measure in evaluating our performance in managing our capital spending activities in comparison to our capital plan.

Net capital expenditures does not include an adjustment related to the CFE’s minority interest in TGNH capital expenditures for projects included as part of the 2022 strategic alliance between TGNH and the CFE, including Villa de Reyes, Southeast Gateway and Tula. The CFE’s contribution in second quarter 2024 to obtain a 13.01 per cent equity interest in TGNH included consideration of its proportionate share of required capital contributions for approved projects. Net capital expenditures will be adjusted for any new capital projects approved in TGNH going forward.

Our overall comparable EBITDA and comparable earnings per common share outlooks for 2025 remain consistent with our 2024 Annual Report.

Our expected total capital expenditures for 2025 as outlined in our 2024 Annual Report remain materially unchanged.

We are developing quality projects under our capital program. These long-life infrastructure assets are supported by     long-term commercial arrangements with creditworthy counterparties and/or regulated business models and are expected to generate growth in earnings and cash flows.

Our capital program consists of approximately $28 billion of secured projects that represent commercially supported, committed projects that are either under construction or are in, or preparing to, commence the permitting stage.

Three years of maintenance capital expenditures for our businesses are included in the Secured projects table. Maintenance capital expenditures on our regulated Canadian and U.S. natural gas pipelines are added to rate base on which we have the opportunity to earn a return and recover these expenditures through current or future tolls, which is similar to our capacity capital projects on these pipelines. During the three months ended March 31, 2025, we incurred $0.3 billion of maintenance capital expenditures.

All projects are subject to cost and timing adjustments due to factors including weather, market conditions, route refinement, land acquisition, permitting conditions, scheduling and timing of regulatory permits, as well as other potential restrictions and uncertainties, including inflationary pressures on labour and materials. Amounts exclude capitalized interest and AFUDC, where applicable.

In addition to our secured projects, we are pursuing a portfolio of quality projects in various stages of development across each of our business units as discussed in our 2024 Annual Report. Projects under development have greater uncertainty with respect to timing and estimated project costs and are subject to corporate and regulatory approvals, unless otherwise noted. While each business segment also has additional areas of focus for further ongoing business development activities and growth opportunities, new opportunities will be assessed within our capital allocation framework in order to fit within our annual capital expenditure parameters. As these projects advance and reach necessary milestones they will be included in the Secured projects table on the following page. Refer to the Recent developments section for updates to our secured projects and projects under development.

Estimated and incurred project costs referred to in the following table include 100 per cent of the capital expenditures related to projects within entities that we own or partially own and fully consolidate, as well as our share of equity contributions to fund projects within our equity investments.

1Our share of committed equity to fund the estimated cost of the Coastal GasLink - Cedar Link project is $37 million.

2Includes amounts related to projects within the Multi-Year Growth Plan (MYGP) that have received FID.

3Includes capital expenditures related to certain large-scope maintenance projects across our U.S. natural gas footprint due to their discrete nature for regulatory recovery.

4We are working with the CFE on completing the remaining section of the Villa de Reyes pipeline. The in-service date will be determined upon resolution of outstanding stakeholder issues.

5Estimated project cost as per contracts signed in 2022 as part of the TGNH strategic alliance between TC Energy and the CFE. We continue to evaluate the development and completion of the Tula pipeline, with the CFE, subject to a future FID and an updated cost estimate.

6Amounts are net of expected Investment Tax Credits announced by the Government of Canada in February 2024.

7Reflects amounts to be invested under the Asset Management program to 2027, other life extension projects and the incremental uprate initiative.

8Includes non-recoverable maintenance capital expenditures from all segments and is primarily related to our Power and Energy Solutions and Corporate assets.

9Reflects U.S./Canada foreign exchange rate of 1.44 at March 31, 2025.

1Includes results from Foothills, Ventures LP, Great Lakes Canada and our proportionate share of income related to investments in Trans Québec & Maritimes (TQM) and Coastal GasLink, as well as general and administrative and business development costs related to our Canadian Natural Gas Pipelines.

For the three months ended March 31, 2025, Canadian Natural Gas Pipelines segmented earnings increased by $15 million compared the same period in 2024.

Net income for our rate-regulated Canadian natural gas pipelines is primarily affected by our approved ROE, investment base, the level of deemed common equity and incentive earnings. Comparable EBITDA is impacted by these factors, as well as changes in depreciation, financial charges and income taxes. These additional items do not have a significant impact on net income as they are almost entirely recovered in revenues on a flow-through basis.

Net income for the NGTL System for the three months ended March 31, 2025 was generally consistent with the same period in 2024. The NGTL System is operating under the 2025-2029 Revenue Requirement Settlement which includes an approved ROE of 10.1 per cent on 40 per cent deemed common equity. This settlement provides the NGTL System with higher depreciation rates and the opportunity to further increase depreciation rates with an incentive if tolls fall below specified levels, or if growth projects are undertaken. It also includes incentive mechanisms to reduce both physical emissions and emission compliance costs, while also providing incentive for certain operating costs where variances from projected amounts and emissions savings are shared with customers.

Net income for the Canadian Mainline for the three months ended March 31, 2025 was generally consistent with the same period in 2024. The Canadian Mainline is operating under the 2021-2026 Mainline Settlement which includes an approved ROE of 10.1 per cent on 40 per cent deemed common equity and an incentive to decrease costs and increase revenues on the pipeline under a beneficial sharing mechanism with our customers.

Comparable EBITDA for Canadian Natural Gas Pipelines increased by $44 million for the three months ended March 31, 2025 compared to the same period in 2024 due to the net effect of:

•higher flow-through depreciation and income taxes, partially offset by lower flow-through financial charges on the NGTL System

•higher contributions from Coastal GasLink mainly resulting from the declared commercial in-service of the pipeline in fourth quarter 2024.

Depreciation and amortization increased by $29 million for the three months ended March 31, 2025 compared to the same period in 2024, primarily reflecting higher depreciation rates on the NGTL System under the 2025-2029 Revenue Requirement Settlement.

1Includes non-controlling interest. Refer to the Corporate section for additional information.

2The sale of PNGTS was completed in August 2024.

3Reflects comparable EBITDA from our ownership in our mineral rights business (CEVCO), North Baja, Gillis Access, Tuscarora, Bison, Crossroads and our share of equity income from Northern Border, Iroquois, Millennium and Hardy Storage, our U.S. natural gas marketing business, as well as general and administrative and business development costs related to our U.S. natural gas pipelines.

U.S. Natural Gas Pipelines segmented earnings increased by $66 million for the three months ended March 31, 2025 compared to the same period in 2024 and included unrealized gains and losses from changes in the fair value of derivatives related to our U.S. natural gas marketing business, which have been excluded from our calculation of comparable EBITDA and comparable EBIT.

A stronger U.S. dollar for the three months ended March 31, 2025 had a positive impact on the Canadian dollar equivalent segmented earnings from our U.S. dollar-denominated operations compared to the same period in 2024. Refer to the Foreign exchange section for additional information.

Earnings from our U.S. Natural Gas Pipelines operations are generally affected by contracted volume levels, volumes delivered and the rates charged, as well as by the cost of providing services. Columbia Gas and ANR results are also affected by the contracting and pricing of their natural gas storage capacity and incidental commodity sales. Natural gas pipeline and storage volumes and revenues are generally higher in the winter months because of the seasonal nature of the business.

Comparable EBITDA for U.S. Natural Gas Pipelines decreased by US$15 million for the three months ended March 31, 2025 compared to the same period in 2024 and was primarily due to the net effect of:

•decreased earnings as a result of the sale of PNGTS, which was completed in August 2024

•decreased equity earnings from Iroquois and Millennium

•decreased earnings due to higher operational costs, reflective of increased system utilization across our footprint and higher property taxes from projects placed in service

•incremental earnings from growth and modernization projects placed in service, as well as increased earnings from additional contract sales on ANR and GTN.

Depreciation and amortization decreased by US$2 million for the three months ended March 31, 2025 compared to the same period in 2024 due to the impact of the sale of PNGTS in August 2024, partially offset by new projects placed in service.

1TGNH includes the operating sections of the Tamazunchale, Villa de Reyes and Tula pipelines.

2Includes non-controlling interest. Refer to the Corporate section for additional information.

3Represents equity income from our 60 per cent interest and fees earned from the construction and operation of the pipeline.

Mexico Natural Gas Pipelines segmented earnings for the three months ended March 31, 2025 was generally consistent with the same period in 2024 and included an unrealized recovery of $2 million (2024 – recovery of $21 million), on the expected credit loss provision related to the TGNH net investment in leases and certain contract assets in Mexico, which has been excluded from our calculation of comparable EBITDA and comparable EBIT. Refer to Note 12, Risk management and financial instruments, of our Condensed consolidated financial statements for additional information.

A stronger U.S. dollar for the three months ended March 31, 2025 had a positive impact on the Canadian dollar equivalent segmented earnings from our U.S. dollar-denominated operations in Mexico compared to the same period in 2024. Refer to the Foreign exchange section for additional information.

Comparable EBITDA for Mexico Natural Gas Pipelines for the three months ended March 31, 2025 was generally consistent with the same period in 2024.

Depreciation and amortization for the three months ended March 31, 2025 was consistent with the same period in 2024.

1Represents our share of equity income from Bruce Power.

2Includes non-controlling interest in the Fluvanna and Blue Cloud Wind Farms (Texas Wind Farms), which is comprised of Class A Membership Interests. Refer to the Corporate section for additional information.

Power and Energy Solutions segmented earnings decreased by $117 million for the three months ended March 31, 2025 compared to the same period in 2024 and included the following specific items which have been excluded from our calculation of comparable EBITDA and comparable EBIT:

•our proportionate share of Bruce Power's unrealized gains and losses on funds invested for post-retirement benefits and risk management activities

•unrealized gains and losses from changes in the fair value of derivatives used to reduce commodity exposures.

Comparable EBITDA for Power and Energy Solutions decreased by $96 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to the net effect of:

•decreased contributions from Bruce Power due to reduced generation primarily resulting from the commencement of the Unit 4 MCR and higher operating costs, partially offset by a higher contract price. Refer to the Bruce Power section for additional information

•lower Canadian Power financial results primarily from lower realized power prices

•decreased Natural Gas Storage and other results primarily due to lower realized Alberta natural gas storage spreads.

Depreciation and amortization for the three months ended March 31, 2025 was generally consistent with the same period in 2024.

The following is our proportionate share of the components of comparable EBITDA and comparable EBIT.

1Net of amounts recorded to reflect operating cost efficiencies shared with the IESO, if applicable.

2Represents our 48.3 per cent ownership interest and internal costs supporting our investment in Bruce Power. Excludes unrealized gains and losses on funds invested for post-retirement benefits and risk management activities.

3The percentage of time the plant was available to generate power, regardless of whether it was running.

4Excludes MCR outage days.

5Sales volumes include deemed generation, if applicable.

6Calculation based on actual and deemed generation. Realized power price per MWh includes realized gains and losses from contracting activities and cost flow-through items. Excludes unrealized gains and losses on contracting activities and non-electricity revenues.

A planned outage on Unit 5 was completed in first quarter 2025. Planned maintenance on Unit 2 is expected to commence in third quarter 2025.

On January 31, 2025 Unit 4 was removed from service to commence its MCR program, with a return to service expected

in 2028.

1Prior year results have been recast to reflect continuing operations only.

Corporate segmented losses decreased by $56 million for the three months ended March 31, 2025 compared to the same period in 2024. Corporate segmented losses included the following specific items, which have been excluded from our calculation of comparable EBITDA and comparable EBIT:

•a pre-tax expense of $34 million (US$25 million) in first quarter 2024 related to a non-recurring third-party settlement

•a pre-tax charge of $10 million for the three months ended March 31, 2024 related to Focus Project costs.

Comparable EBITDA for Corporate increased by $11 million for the three months ended March 31, 2025 compared to the same period in 2024, primarily due to shared costs in 2024 related to TC Energy's corporate services and governance functions that were not allocated to discontinued operations.

1Prior year results have been recast to reflect continuing operations only.

Interest expense included in comparable earnings increased by $60 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to the net effect of:

•lower capitalized interest due to the declared commercial in-service of the Coastal GasLink pipeline in fourth quarter 2024

•no interest expense allocated to discontinued operations in 2025 compared to first quarter 2024

•the foreign exchange impact from a stronger U.S. dollar on translation of U.S. dollar-denominated interest expense

•long-term debt issuances and maturities, including lower interest expense resulting from TCPL’s cash tender offers completed in fourth quarter 2024. Refer to our 2024 Annual Report and the Financial Condition section for additional information.

AFUDC increased $91 million for the three months ended March 31, 2025 compared to the same period in 2024. The increase in U.S. dollar-denominated AFUDC is mainly the result of capital expenditures on the Southeast Gateway pipeline project and U.S. natural gas pipeline projects, partially offset by the suspension of AFUDC on the south section of the Villa de Reyes pipeline effective March 1, 2025 due to ongoing construction delays on the project pending the resolution of outstanding stakeholder issues.

1     Includes non-controlling interest. Refer to Net (income) loss attributable to non-controlling interests for additional information.

Foreign exchange gains (losses), net changed by $16 million for the three months ended March 31, 2025 compared to the same period in 2024. The following specific items have been removed from our calculation of Foreign exchange gains (losses), net included in comparable earnings:

•unrealized foreign exchange gains and losses on the peso-denominated intercompany loan between TCPL and TGNH

•unrealized gains and losses from changes in the fair value of derivatives used to manage our foreign exchange risk. Refer to the Financial risks and financial instruments section for additional information.

Foreign exchange gains (losses), net included in comparable earnings changed by $53 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to risk management activities used to manage our foreign exchange exposure to net liabilities in Mexico and to U.S. dollar-denominated income.

1Prior year results have been recast to reflect continuing operations only.

Interest income and other decreased by $24 million for the three months ended March 31, 2025 compared to the same period in 2024 due to lower interest earned on short-term investments.

1Prior year results have been recast to reflect continuing operations only.

Income tax expense increased by $49 million for the three months ended March 31, 2025 compared to the same period in 2024. The income tax impacts on specified items referenced throughout the MD&A have been reflected in our calculation of Income tax expense included in comparable earnings.

Income tax expense included in comparable earnings increased by $11 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to higher flow-through income taxes, partially offset by a change in the geographic and business mix of earnings.

1    The sale of PNGTS was completed on August 15, 2024.

2    Tax equity investors own 100 per cent of the Class A Membership Interests, to which a percentage of earnings, tax attributes and cash flows are allocated. We own 100 per cent of the Class B Membership Interests.

3    In second quarter 2024, the CFE became a partner in TGNH with a 13.01 per cent equity interest in TGNH. Refer to the Recent developments – Mexico Natural Gas Pipelines section for additional information.

Net income attributable to non-controlling interests decreased by $2 million for the three months ended March 31, 2025 compared to the same period in 2024 and includes the non-controlling interest portion of the unrealized foreign exchange gains and losses on the TGNH peso-denominated intercompany loan payable to TCPL, which has been removed from our calculation of Net (income) loss attributable to non-controlling interests included in comparable earnings.

Net income attributable to non-controlling interests included in comparable earnings increased by $6 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to the sale of the 13.01 per cent non-controlling equity interest in TGNH to the CFE in second quarter 2024 and the foreign exchange impacts resulting from a stronger U.S. dollar on the Canadian dollar equivalent. This was partially offset by the divestiture of PNGTS in third quarter

of 2024.

Preferred share dividends increased by $5 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to the dividend rate resets on Series 1, 7 and 9 preferred shares in 2024.

Certain of our businesses generate all or most of their earnings in U.S. dollars and, since we report our financial results in Canadian dollars, changes in the value of the U.S. dollar against the Canadian dollar directly affect our comparable EBITDA and may also impact comparable earnings. As our U.S. dollar-denominated operations continue to grow, this exposure increases. A portion of the U.S. dollar-denominated comparable EBITDA exposure is naturally offset by U.S. dollar-denominated amounts below comparable EBITDA within Depreciation and amortization, Interest expense and other income statement line items. A portion of the remaining exposure is actively managed on a rolling forward basis up to three years using foreign exchange derivatives; however, the natural exposure beyond that period remains. The net impact of the U.S. dollar movements on comparable earnings during the three months ended March 31, 2025 after considering natural offsets and economic hedges was not significant.

The components of our financial results denominated in U.S. dollars are set out in the table below, including our

U.S. Natural Gas Pipelines and Mexico Natural Gas Pipelines operations. Comparable EBITDA is a non-GAAP measure.

1    Prior year results have been recast to reflect continuing operations only.

Changes in the value of the Mexican peso against the U.S. dollar can affect our comparable earnings as a portion of our Mexico Natural Gas Pipelines monetary assets and liabilities are peso-denominated, while our financial results are denominated in U.S. dollars for our Mexico operations. These peso-denominated balances are revalued to U.S. dollars, creating foreign exchange gains and losses that are included in Income (loss) from equity investments, Foreign exchange (gains) losses, net and Net income (loss) attributable to non-controlling interests in the Condensed consolidated statement of income.

In addition, foreign exchange gains or losses calculated for Mexico income tax purposes on the revaluation of U.S. dollar‑denominated monetary assets and liabilities result in a peso-denominated income tax exposure for these entities, leading to fluctuations in Income from equity investments and Income tax expense. This exposure increases as our U.S. dollar‑denominated net monetary liabilities grow.

The above exposures are managed using foreign exchange derivatives, although some unhedged exposure remains. The impacts of the foreign exchange derivatives are recorded in Foreign exchange (gains) losses, net in the Condensed consolidated statement of income. Refer to the Financial risks and financial instruments section for additional information.

The period end exchange rates for one U.S. dollar to Mexican pesos were as follows:

A summary of the impacts of transactional foreign exchange gains and losses from changes in the value of the Mexican peso against the U.S. dollar and associated derivatives is set out in the table below:

1Includes the foreign exchange impacts from the Sur de Texas joint venture recorded in Income (loss) from equity investments in the Condensed consolidated statement of income.

2    Represents the non-controlling interest portion related to TGNH. Refer to the Corporate section for additional information.

In March 2022, we announced the signing of option agreements to sell up to a 10 per cent equity interest in Coastal

GasLink Limited Partnership (Coastal GasLink LP) to Indigenous communities across the project corridor, from our current

35 per cent equity ownership. In February 2025, the option agreements were amended to address the declared commercial in-service of the Coastal GasLink pipeline in fourth quarter 2024, establishing a revised timeline for the option exercise, including a three-month non-binding window scheduled to commence in September 2025.

In April 2025, ANR and GLGT each filed Section 4 Rate Cases with FERC requesting an increase to their respective maximum transportation rates expected to become effective November 1, 2025, subject to refund. We will pursue a collaborative process to find a mutually beneficial outcome with our customers through settlement.

In April 2025, we approved the Northwoods Project, an expansion project on our ANR system designed to provide

0.4 Bcf/d of capacity to serve natural gas-fired electric generation demand in the U.S. Midwest, including data centres and

overall economic growth. The project involves pipeline looping, compressor facility additions as well as other system updates, with an anticipated in-service date of late 2029 and estimated project cost of approximately US$0.9 billion.

In August 2022, we announced a strategic alliance with Mexico’s state-owned electric utility, the CFE, for the development of new natural gas infrastructure in central and southeast Mexico. In connection with the strategic alliance, we reached an FID to develop and construct the Southeast Gateway pipeline. The 1.3 Bcf/d, 715 km (444 mile) natural gas pipeline is ready for service and was constructed approximately 13 per cent under the original cost estimate of US$4.5 billion. Approval of our regulated rates from the Comisión Nacional de Energía (CNE) is expected by the end of May 2025, at which time we anticipate in-service of the Southeast Gateway pipeline.

During second quarter 2024, upon the CFE’s equity injection of US$340 million as well as non-cash consideration in recognition of the completion of certain contractual obligations, including land acquisition and permitting support, the CFE became a partner in TGNH with a 13.01 per cent equity interest. Provided that the CFE's contractual commitments are met related to land acquisition, community relations and permitting support, the CFE's equity in TGNH would build up to a maximum of 15 per cent with the in-service of the Southeast Gateway pipeline and subsequent receipt of regulatory approvals, and will increase to approximately 35 per cent upon expiry of the contract in 2055.

Bruce Power received approval of the Unit 5 MCR final cost and schedule estimate from the IESO on April 2, 2025. The Unit 5 MCR is expected to commence in fourth quarter 2026 with a return to service in early 2030.

TC Energy disagrees with many of the Court’s findings and believes the Court’s ruling departs from established Delaware law. TC Energy has appealed the decision to the Delaware Supreme Court and a final decision is expected in mid-2025. During the appeal process, in lieu of paying the judgment, TC Energy posted an appeal bond in the amount of US$380 million, which approximates the amount of the Final Judgment plus nine months of post-judgment interest. Our legal assessment is that it is not probable that TC Energy will incur a loss upon completion of the appeal process, and therefore, we have not accrued a provision for this claim at March 31, 2025.

We strive to maintain financial strength and flexibility in all parts of the economic cycle. We rely on our operating cash flows to sustain our business, pay dividends and fund a portion of our growth. In addition, we access capital markets and engage in portfolio management activities to meet our financing needs and to manage our capital structure and credit ratings.

We believe that we have the financial capacity to fund our existing capital program through predictable cash flows from operations, access to capital markets, portfolio management activities, joint ventures, asset-level financing, cash on hand and substantial committed credit facilities. Annually, in the fourth quarter, we renew and extend our credit facilities as required.

At March 31, 2025, our current assets totaled $7.0 billion and current liabilities amounted to $10.2 billion, leaving us with a working capital deficit of $3.2 billion compared to a deficit of $4.8 billion at December 31, 2024, excluding discontinued operations. Our working capital deficiency is considered to be in the normal course of business and is managed through:

•our ability to generate predictable cash flows from operations

•a total of $8.0 billion of TCPL committed revolving credit facilities, of which $6.7 billion of short-term borrowing capacity remains available, net of $1.3 billion backstopping outstanding commercial paper balances, and arrangements for a further         $2.0 billion of demand credit facilities, of which $1.1 billion remains available as of March 31, 2025

•additional $2.2 billion of committed revolving credit facilities at certain of our subsidiaries and affiliates, of which

$2.0 billion of short-term borrowing capacity remains available, net of $0.2 billion backstopping outstanding commercial paper balances as of March 31, 2025

•our access to capital markets, including through securities issuances, incremental credit facilities, capital rotation and DRP, if deemed appropriate.

CASH PROVIDED BY OPERATING ACTIVITIES1,2

1    Includes continuing and discontinued operations.

2Represents three months of Liquids Pipelines earnings in first quarter 2024 compared to Liquids Pipelines earnings of nil for the three months ended March 31, 2025. Refer to the Discontinued operations section and our 2024 Annual Report for additional information.

Net cash provided by operations decreased by $683 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to lower funds generated from operations and the timing of working capital changes.

Comparable funds generated from operations, a non-GAAP measure, helps us assess the cash generating ability of our businesses by excluding the timing effects of working capital changes, as well as the cash impact of our specific items.

Comparable funds generated from operations decreased by $487 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to lower comparable EBITDA and lower distributions from our equity investments.

Net cash used in investing activities decreased by $119 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to lower contributions to equity investments.

Capital expenditures incurred for the three months ended March 31, 2025 were primarily for the advancement of the Columbia Gas and ANR projects, Southeast Gateway pipeline, as well as maintenance capital expenditures. Lower capital expenditures for the three months ended March 31, 2025 compared to the same period in 2024 reflect reduced spending on the Southeast Gateway pipeline, partially offset by increased spending on the Columbia Gas and ANR projects.

The following table outlines significant long-term debt issuances in the three months ended March 31, 2025:

1    The notes were fully repaid and retired in March 2025. Related unamortized fair value adjustment of $3 million, related to the acquisition of CPG was included in Interest expense in the Condensed consolidated statement of income.

In February 2025, TCPL issued US$750 million of junior subordinated notes maturing in 2065 with a fixed interest rate of

7.00 per cent per year until June 1, 2030, and resetting every five years thereafter. We intend to use the net proceeds from the issuance to fund the redemption price of the US$750 million in aggregate principal amount of outstanding Trust Notes - Series 2015-A issued by TransCanada Trust, a wholly owned financing trust subsidiary of TCPL, in May 2025 pursuant to their terms. Prior to such redemption, the funds will be used to reduce other indebtedness of TC Energy and for general corporate purposes. Refer to Note 8, Junior Subordinated Notes, of our Condensed consolidated financial statements for additional information.

On May 1, 2025, we announced a quarterly dividend on our outstanding common shares of $0.85 per share payable on July 31, 2025 to shareholders of record at the close of business on June 30, 2025.

Commencing with the dividends payable on January 31, 2025 to shareholders of record at the close of business on December 31, 2024, the amounts reflect TC Energy's proportionate allocation following the Spinoff Transaction. Refer to our 2024 Annual Report for additional information.

At April 28, 2025, we had approximately 1.0 billion issued and outstanding common shares and approximately 3.7 million outstanding options to buy common shares, of which 3.2 million were exercisable.

At April 28, 2025, we had a total of $7.9 billion of TCPL committed revolving credit facilities, of which $6.7 billion of

short-term borrowing capacity remains available, net of $1.2 billion backstopping outstanding commercial paper balances. We also have arrangements in place for a further $2.0 billion of demand credit facilities, of which $1.1 billion remains available.

In addition, we have $2.1 billion of committed revolving credit facilities at certain of our subsidiaries and affiliates, of which $2.1 billion of borrowing capacity remains available at April 28, 2025.

There were no material changes to our contractual obligations in first quarter 2025 or to payments due in the next five years or thereafter. Refer to our 2024 Annual Report for additional information about our contractual obligations.

On October 1, 2024, TC Energy completed the spinoff of its Liquids Pipelines business into a new public company, South Bow Corporation. Upon completion of the Spinoff Transaction, the Liquids Pipelines business was accounted for as a discontinued operation. Prior year amounts have been recast to present the Liquids Pipelines business as a discontinued operation. Refer to our 2024 Annual Report for additional information.

1    Prior year results have been recast to reflect the Liquids Pipelines business as a discontinued operation as a result of the Spinoff Transaction.

This MD&A references non-GAAP measures, which are described in the Non-GAAP measures section. These measures do not have any standardized meaning as prescribed by GAAP and therefore may not be comparable to similar measures presented by other entities.

1Prior year results have been recast to reflect the Liquids Pipelines business as a discontinued operation as a result of the Spinoff Transaction.

2During first quarter 2024, a pre-tax charge of $16 million related to Liquids Pipelines business separation costs from the Spinoff Transaction was recognized in Net income (loss) from discontinued operations, net of tax and excluded from our calculation of comparable earnings from discontinued operations.

3The income tax impacts on the specified items mentioned in the table above have been removed from our calculation of Income tax expense included in comparable earnings from discontinued operations below.

Comparable EBITDA from discontinued operations represents segmented earnings (losses) from discontinued operations adjusted for the specific items described above and excludes charges for depreciation and amortization.

1    Prior year results have been recast to reflect the Liquids Pipelines business as a discontinued operation as a result of the Spinoff Transaction.

We are exposed to various financial risks and have strategies, policies and limits in place to manage the impact of these risks on our earnings, cash flows and, ultimately, shareholder value.

Risk management strategies, policies and limits are designed to ensure our risks and related exposures are in line with our business objectives and risk tolerance.

Refer to our 2024 Annual Report for additional information about the risks we face in our business which have not changed materially since December 31, 2024, other than as noted within this MD&A.

We utilize both short- and long-term debt to finance our operations which exposes us to interest rate risk. We typically pay fixed rates of interest on our long-term debt and floating rates on short-term debt including our commercial paper programs and amounts drawn on our credit facilities. A small portion of our long-term debt bears interest at floating rates. In addition, we are exposed to interest rate risk on financial instruments and contractual obligations containing variable interest rate components. We actively manage our interest rate risk using interest rate derivatives.

Certain of our businesses generate all or most of their earnings in U.S. dollars and, since we report our financial results in Canadian dollars, changes in the value of the U.S. dollar against the Canadian dollar directly affect our comparable EBITDA and may also impact comparable earnings.

A portion of our Mexico Natural Gas Pipelines' monetary assets and liabilities are peso-denominated, while our Mexico operations' financial results are denominated in U.S. dollars. Therefore, changes in the value of the Mexican peso against the U.S. dollar can affect our comparable earnings. In addition, foreign exchange gains or losses calculated for Mexico income tax purposes on the revaluation of U.S. dollar-denominated monetary assets and liabilities result in a peso-denominated income tax exposure for these entities, leading to fluctuations in Income (loss) from equity investments and Income tax expense (recovery) in the Condensed consolidated statement of income.

We actively manage a portion of our foreign exchange risk using foreign exchange derivatives. We hedge a portion of our net investment in foreign operations (on an after-tax basis) with U.S. dollar‑denominated debt and cross-currency interest rate swaps as appropriate.

We have exposure to counterparty credit risk in a number of areas including:

•cash and cash equivalents

•accounts receivable

•available-for-sale assets

•fair value of derivative assets

•net investment in leases and certain contract assets in Mexico.

Market events causing disruptions in global energy demand and supply may contribute to economic uncertainties impacting a number of our customers. While the majority of our credit exposure is to large creditworthy entities, we maintain close monitoring and communication with those counterparties experiencing greater financial pressures. Refer to our 2024 Annual Report for more information about the factors that mitigate our counterparty credit risk exposure.

We review financial assets carried at amortized cost for impairment using the lifetime expected loss of the financial asset at initial recognition and throughout the life of the financial asset. We use historical credit loss and recovery data, adjusted for our judgment regarding current economic and credit conditions, along with reasonable and supportable forecasts to determine any impairment, which is recognized in Plant operating costs and other. At March 31, 2025, we had no significant credit risk concentrations and no significant amounts past due or impaired. We recorded a pre-tax recovery of $2 million on the expected credit loss provision on the TGNH net investment in leases and certain contract assets in Mexico for the three months ended March 31, 2025 (2024 – pre-tax recovery of $21 million). Refer to Note 12, Risk management and financial instruments, of our Condensed consolidated financial statements for additional information.

We have significant credit and performance exposure to financial institutions that hold cash deposits and provide committed credit lines and letters of credit that help manage our exposure to counterparties and provide liquidity in commodity, foreign exchange and interest rate derivative markets. Our portfolio of financial sector exposure consists primarily of highly-rated investment grade, systemically important financial institutions.

Liquidity risk is the risk that we will not be able to meet our financial obligations as they come due. We manage our liquidity risk by continuously forecasting our cash flows and ensuring we have adequate cash balances, cash flows from operations, committed and demand credit facilities and access to capital markets to meet our operating, financing and capital expenditure obligations under both normal and stressed economic conditions.

With the exception of Long-term debt and Junior subordinated notes, our derivative and non-derivative financial instruments are recorded on the balance sheet at fair value unless they were entered into and continue to be held for the purpose of receipt or delivery in accordance with our normal purchase and sales exemptions and are documented as such. In addition, fair value accounting is not required for other financial instruments that qualify for certain accounting exemptions.

We use derivative instruments to reduce volatility associated with fluctuations in commodity prices, interest rates and foreign exchange rates. Derivative instruments, including those that qualify and are designated for hedge accounting treatment, are recorded at fair value.

The majority of derivative instruments that are not designated or do not qualify for hedge accounting treatment have been entered into as economic hedges to manage our exposure to market risk and are classified as held-for-trading. Changes in the fair value of held-for-trading derivative instruments are recorded in net income in the period of change. This may expose us to increased variability in reported operating results since the fair value of the held-for-trading derivative instruments can fluctuate significantly from period to period.

The recognition of gains and losses on derivatives for Canadian natural gas regulated pipeline exposures is determined through the regulatory process. Gains and losses arising from changes in the fair value of derivatives accounted for as part of RRA, including those that qualify for hedge accounting treatment, are expected to be refunded or recovered through the tolls charged by us. As a result, these gains and losses are deferred as regulatory liabilities or regulatory assets and are refunded to or collected from the ratepayers in subsequent years when the derivative settles.

The balance sheet presentation of the fair value of derivative instruments were as follows:

The following summary does not include hedges of our net investment in foreign operations.

1Realized and unrealized gains (losses) on held-for-trading derivative instruments used to purchase and sell commodities are included on a net basis in Revenues. Realized and unrealized gains (losses) on foreign exchange and interest rate held-for-trading derivative instruments are included on a net basis in Foreign exchange (gains) losses, net and Interest expense, respectively, in the Condensed consolidated statement of income.

For further details on our non-derivative and derivative financial instruments, including classification assumptions made in the calculation of fair value and additional discussion of exposure to risks and mitigation activities, refer to Note 12, Risk management and financial instruments, of our Condensed consolidated financial statements.

Management, including our President and CEO and our CFO, evaluated the effectiveness of our disclosure controls and procedures as at March 31, 2025, as required by the Canadian securities regulatory authorities and by the SEC and concluded that our disclosure controls and procedures are effective at a reasonable assurance level.

There were no changes in first quarter 2025 that had or are likely to have a material impact on our internal controls over financial reporting.

When we prepare financial statements that conform with U.S. GAAP, we are required to make estimates and assumptions that affect the timing and amounts we record for our assets, liabilities, revenues and expenses because these items may be affected by future events. We base the estimates and assumptions on the most current information available, using our best judgment. We also regularly assess the assets and liabilities themselves. In addition to the items discussed below, refer to our 2024 Annual Report for a listing of critical accounting estimates.

Goodwill is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate it might be impaired. We can initially make this assessment based on qualitative factors. If we conclude that it is not more likely than not that the fair value of the reporting unit is greater than its carrying value, we will then perform a quantitative goodwill impairment test.

The estimated fair value in excess of the carrying value was less than 10 per cent on our Columbia and Great Lakes reporting units at the date of our last quantitative goodwill impairment test. Any future reductions in cash flow forecasts or adverse changes in other key assumptions could result in a future impairment of our goodwill balance.

Our significant accounting policies have remained unchanged since December 31, 2024 other than as described in Note 2, Accounting changes, of our Condensed consolidated financial statements. A summary of our significant accounting policies is included in our 2024 Annual Report.