The company generally purchases the property, plant and equipment used in operations, but there are situations where assets are leased, primarily storage tanks, rail cars, marine vessels

and

transportation

facilities.

Right of use assets and lease liabilities are established on the balance sheet for leases with an expected term greater than one year, by discounting the amounts fixed in the lease agreement for the duration of the lease which is reasonably certain, considering the probability of exercising any early termination and extension options. The portion of the fixed payment related to service costs

for

tankers

and finance

leases

excluded from the calculation of right of use assets and lease liabilities. Usually, assets are leased only for a portion of their useful lives and are accounted for as operating leases. In limited situations assets are leased for nearly all of their useful lives and are accounted for as finance leases. In general, leases are capitalized using the company’s incremental borrowing rate.


	2019

millions of Canadian dollars	Operating leases		Finance leases
Operating lease cost		151
Short-term and other (net of sublease rental income)		76

Amortization of right of use assets				55
Interest on lease liabilities				40
Total lease cost		227		95

The following table summarizes the amounts related to operating leases and finance leases recorded on the Consolidated balance sheet as at December 31, 2019:


	2019

millions of Canadian dollars	Operating leases		Finance leases
Right of use assets
Included in Other assets, including intangibles, net		260
Included in Property, plant and equipment, net				546
Total right of use assets		260		546

Lease liability due within one year
Included in Accounts payable and accrued liabilities		115		15
Included in Notes and loans payable				18
Long-term lease liability
Included in Other long-term obligations		143		-
Included in Long-term debt				514
Total lease liability		258		547

The maturity analysis of the company’s lease liabilities, weighted average remaining lease term and weighted average discount rates applied at December 31, 2019, are summarized below:


	2019

millions of Canadian dollars, unless noted		Operating leases		Finance leases
Maturity analysis of lease liabilities
202 0		121		71
2021		70		50
2022		30		49
2023		13		48
2024		11		47
2025 and beyond		30		1,086
Total lease payments		275		1,351

Discount to present value		(17	)	(804	)
Total lease liability		258		547

Weighted average remaining lease term (years)		4		40
Weighted average discount rate (percent)		2.6		7.5

In addition to the operating lease liabilities in the table immediately above, at December 31, 2019,

additional undiscounted commitments for leases not yet commenced totalled $6 million.

The table below summarizes the cash paid for amounts included in the measurement of lease liabilities and the right of use assets obtained in exchange for new lease liabilities:


	2019

millions of Canadian dollars		Operating leases	Finance leases
Cash paid for amounts included in the measurement of lease liabilities
Cash flows from operating activities		147	45
Cash flows from financing activities			27

Non-cash right of use assets recorded for lease liabilities
For January 1 adoption of Leases (Topic 842)		298
In exchange for new lease liabilities during the year		104

Disclosures under the previous lease standard

(Topic 840)

Net rental cost incurred under both cancelable and non-cancelable operating leases was $221 million in 2018 and $206 million in 2017. At December 31, 2018, minimum undiscounted lease commitments under non-cancelable operating leases for 2019 and beyond were $291 million.