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As was stated in the Canadian income tax section set out on pages 66 - 70 of the Joint Management Information Circular dated May 19, 1998 (the "Joint Information Circular"), the determination of the fair market value of certain shares is relevant to the shareholders of NOVA and TransCanada in determining the Canadian income tax consequences of the transactions described in the Plan of Arrangement (the "Plan"), which became effective on July 2, 1998.

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

Revenue Canada may accept a number of different approaches in valuing shares of a public company at a particular time. For your information, NOVA and TransCanada are presently planning for purposes of their respective Canadian tax filings to determine the fair market value of the publicly traded shares by reference to the ten day weighted average prices as transacted on The Toronto Stock Exchange.

Based on a valuation approach derived from the use of ten day weighted average prices, the fair market values were:

• NOVA Common Share (pre-merger)
  $16.90
• TransCanada Common Share
  $32.50
• NOVA common share* (post-merger)
  $27.85

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

Using this valuation approach,

1. the proceeds of disposition of a NOVA Common Share were $16.90;
2. the cost of a TransCanada Common Share received by a NOVA Common Shareholder was initially $32.50;
3. for purposes of calculating the cost of a TransCanada common share (referred to in the Joint Information Circular as an EnergyCo. Common Share) immediately after the Plan is effective, $5.57 (being .2 of $27.85 to reflect the 1 for 5 share consolidation) must be deducted from the adjusted cost base otherwise determined of each TransCanada Common Share;
4. the cost of a NOVA common share (post-merger) (referred to in the Joint Information Circular as a NOVA Chemicals Common Share) was $27.85.

The above information is being provided in light of numerous requests received by both companies from Canadian 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. Accordingly, shareholders should consult their own advisors as to the tax consequences to them of the Plan in their circumstances, particularly if a shareholder wishes to consider adopting a different valuation approach.

In addition to the foregoing, NOVA will be sending its shareholders T5 income tax reporting slips for purposes of reporting the deemed dividend arising on the cash payment in lieu of (and on the cancellation of) an interest in a fractional share as described on page 68 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.