ENB – ENF Transaction FAQs

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The Transaction closed November 8, 2018.

Enbridge Income Fund Holdings Inc. (ENF) shares’ last day of trading on the Toronto Stock Exchange was November 9, 2018 and closed at $31.88. Enbridge Inc. Common shares closed at $31.32.

• Upon close of the Transaction, ENF Shareholders received for each ENF Share held, 0.7350 of an Enbridge Share (the Share Consideration); and a cash payment equal to the greater of: (i) $0.45 plus (A) an amount calculated by multiplying the sum of the amount of the dividends per Enbridge Share declared by Enbridge in respect of which the record date for such dividend has occurred during the period commencing on the date of the Arrangement Agreement and ending on the date immediately prior to the effective date of the Arrangement by the Exchange Ratio, less (B) the sum of the amount of the dividends per ENF Share declared by ENF in respect of which the record date for such dividend has occurred during the period commencing on November 30, 2018 and ending on the effective date of the Arrangement; and (ii) $0.45 (the Cash Consideration).
• No certificates representing fractional Enbridge Shares were issued under the Arrangement. Each registered ENF Shareholder otherwise entitled to a fractional interest in an Enbridge Share received the nearest whole number of Enbridge Shares. For greater certainty, where such fractional interest was greater than or equal to 0.5 of an Enbridge Share, the number of Enbridge Shares issued was rounded up to the nearest whole number, and where such fractional interest was less than 0.5 of an Enbridge Share, the number of Enbridge Shares issued was rounded down to the nearest whole number.

ENF mailed the Circular to its shareholders in advance of the Meeting. The Circular was filed on SEDAR at www.sedar.com under ENF’s profile.

If you have tax related questions, please contact your own tax advisor. General information about tax consequences of the Transaction has been set out in the Management Information Circular, Enbridge's investor relations department is not staffed by tax personnel and Enbridge personnel do not provide tax advice to shareholders.

a. Canadian shareholder implications

The exchange was structured such that ENF Shareholders would be entitled to an automatic tax deferral on substantially all (the Share Consideration portion) of the gain that would have otherwise been realized on the Transaction. ENF Electing Shareholders had the option to elect for a full tax deferral, including the Cash Consideration portion of any gain, by filing a joint Section 85 Election with Enbridge. It is expected that the incremental gain that could be deferred by filing the joint Section 85 Election will not be significant for most Canadian shareholders. ENF Shareholders were encouraged to consider their aggregate amount of Cash Consideration and / or the capital gain / loss amount to determine the incremental benefit of electing a full tax deferral.

i. For the automatic tax deferral, the tax implications were dependent on the relative consideration received:

A. Enbridge Share Consideration:

• Automatic tax deferred rollover (no forms required to be filed).
• Sharehoders wishing to claim the full gain (eg. to utilize capital losses) could have done so by reporting the gain amount on their tax return with respect to the year of disposition. Neither Enbridge nor ENF need to be informed.

B. Cash Consideration:

• Realized a capital gain (or capital loss) on the disposition of the Cash Consideration ENF Shares to the extent the amount of Cash Consideration exceeded (or is less than) the proportionate adjusted cost base ("ACB") of the ENF Cash Consideration Shares.
• To the extent there was a gain, only 50% was taxable.
• To the extent there was a loss, it would offset any current year capital gains and could have been applied against capital gains incurred in the prior 3 years or be carried forward indefinitely.

ii. ENF Shareholders had the option to defer 100% of the gain that would not be automatically deferred by filing a joint Section 85 Election with Enbridge. Shareholders were encouraged to consider their aggregate amount of Cash Consideration and / or the capital gain/ loss amount to determine the incremental benefit of electing a full tax deferral.

The following is an illustrative example of the incremental benefit of electing a full tax deferral for an ENF Electing Shareholder. For purposes of this illustrative example, the September 17, 2018 ENB Share price has been used as the ENB Share price upon Closing. This calculation is only an estimate and should be used accordingly.

b. U.S. shareholder implications

The Transaction, together with the liquidation of ENF, was intended to qualify as a "reorganization" within the meaning of Section 368(a) of the U.S. Internal Revenue Code of 1986, as amended (the "Code"). Assuming the Transaction so qualifies, a U.S. ENF shareholder whose ENF Shares were exchanged in the Transaction for Enbridge Shares and Cash Consideration generally would recognize gain (but not loss) in an amount equal to the lesser of (i) the amount by which the sum of the fair market value of the Enbridge common shares and Cash Consideration received by such shareholder exceeds such shareholder's tax basis in the ENF Shares surrendered, and (ii) the amount of Cash Consideration received by such shareholder.

a. Canadian implications

i. The Plan of Arrangement provided for an automatic tax deferred rollover on substantially all of any inherent gains. There were no tax forms to file.

ii. To elect to defer 100% of the gain, including the portion attributable to the Cash Consideration,

A. It was the responsibility of the ENF Electing Shareholder to:

• indicate the intention to elect on the Letter of Transmittal. The Depositary would then send the ENF Electing Shareholder a tax instruction letter with the appropriate tax election forms for completion; and
• prepare the tax election forms (including number of ENF Shares and the applicable agreed amounts), ensure the accuracy of the numbers and sign it. The completed forms had to be submitted to the Depositary (AST Trust Company (Canada) within 90 days following the effective date of the Arrangement as per the mailing instructions in the tax instruction letter.

B. The tax election forms were to be prepared as follows, depending on the ENF Electing Shareholder:

• Form T2057: Election on disposition of property by a taxpayer to a taxable Canadian corporation.
• Form T2058: Election on disposition of property by a partnership to a taxable Canadian corporation.

C. Within 60 days of receipt from the Depositary, Enbridge executed (i.e., signed) all properly completed Tax Election Forms and returned it to the ENF Electing Shareholder. Enbridge is not responsible for the proper completion of the forms.

D. It was the responsibility of the ENF Electing Shareholder to file the form with the Canada Revenue Agency (CRA) or any other applicable provincial agency, if desired. Enbridge is not responsible for any taxes, interest or penalties resulting from the ENF Electing Shareholder failing to properly complete or file the tax election form in the appropriate manner.

b. U.S. Implications

There are no tax forms to be filed.

Following the completion of the Transaction, ENF shares were exchanged for Enbridge Inc. shares and subsequent Enbridge dividends, which are generally declared on a quarterly basis, are subject to the discretion of the Enbridge Board of Directors.

Declaration of dividends is subject to the discretion of the Enbridge Board of Directors. Enbridge generally declares dividends on a quarterly basis. For information about the historical dividends paid on Enbridge common shares, please visit www.enbridge.com.

For both Canadian shareholders and non-resident shareholders, any Enbridge common share dividends generally will be treated the same as your ENF dividends for tax purposes, including a withholding tax being applied to any dividends paid to non-resident shareholders.

a. How will any Enbridge dividends be reported for tax purposes?

i. Canadian Enbridge shareholders who received dividends outside of an RRSP, RRIF or DPSP should receive a T5 Supplementary slip from their brokerage firm or intermediary.
ii. U.S. Enbridge shareholders will receive an annual IRS Form 1099-DIV reflecting their dividend income.
iii. Non-Resident holders (any holder residing outside of Canada) will also receive an NR4 tax form which shows the non-resident tax that was deducted where applicable.

b. For non-residents shareholders, are Enbridge's dividend subject to withholding taxes?

i. Yes. Common share dividends paid by Enbridge will be subject to Canadian withholding tax at the rate of 25% unless the rate is reduced under the provisions of a tax treaty between Canada and the non-resident shareholder's jurisdiction of residence. You may be eligible to claim a credit or deduction against your local taxes with respect to these Canadian non-resident withholding taxes.
ii. Where the non-resident shareholder is a United States resident entitled to benefits under the Canada-U.S. tax treaty, the rate of Canadian withholding tax on dividends is generally reduced to 15%. Subject to certain limitations, Canadian tax withheld will be deductible or creditable against your U.S. federal income tax liability. The rules governing the foreign tax credit are complex and involve the application of rules that depend upon a U.S. holder's particular circumstances. Accordingly, U.S. holders should consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.
iii. Please contact your account administrator or broker for additional information and forms related to filing for exemption from Canadian withholding taxes for U.S. residents. Additional information was included in the Circular, which was mailed to ENF shareholders and is available at www.sedar.com.

a. Certificated Shareholders: Those shareholders holding certificates representing common shares of ENF must properly complete a Letter of Transmittal and submit their ENF certificates to the exchange agent for the Transaction in order to complete the exchange for Enbridge common shares.

b. Book-Entry Shareholders: Any ENF common shares held electronically in uncertificated (book-entry) form were automatically exchanged for Enbridge common shares.

c. Upon exchange, all Enbridge common shares will be registered in the same manner as your common shares of ENF.

d. If you also hold shares of ENF common stock in "street name" through a bank, broker or other nominee, you should contact your bank, broker or other nominee for further information regarding such shares.