CN announces new share repurchase program, declares third-quarter 2005 dividend

MONTREAL, July 20, 2005 — CN announced today that its Board of Directors has authorized a normal course issuer bid to purchase for cancellation up to 16 million, or approximately six per cent, of the common shares outstanding of the Company not held by its insiders on July 8, 2005. Approximately 275.4 million CN common shares were issued and outstanding on that date.

The price CN will pay for any common shares will be the market price at the time of acquisition, plus brokerage fees.

This new share buy-back follows the recent completion of the Company's 14-million common share repurchase program announced in October 2004, under which CN paid an average price per share of C$72.94.

The new repurchase program – starting July 25, 2005, and ending no later than July 24, 2006 – will be conducted through the facilities of the Toronto and New York stock exchanges and will conform to their regulations.

Claude Mongeau, executive vice-president and chief financial officer of CN, said: “CN's superior free cash flow generation capacity and strong balance sheet provide the Company with considerable financial and strategic flexibility. CN's management and directors believe this new share buy-back program is a sound use of cash to enhance shareholder value.”

CN also announced today that its Board of Directors has approved a third-quarter 2005 dividend on the Company's common shares outstanding. A quarterly dividend of twenty-five cents (C$0.25) per common share will be paid on Sept. 30, 2005, to shareholders of record at the close of business on Sept. 9, 2005.

This news release contains forward-looking statements. CN cautions that, by their nature, forward-looking statements involve risks and uncertainties and that its results could differ materially from those expressed or implied in such statements. Reference should be made to CN's most recent Form 40-F filed with the United States Securities and Exchange Commission, its Annual Information Form filed with the Canadian securities regulators, its 2004 Annual and 2005 Quarterly Consolidated Financial Statements and notes thereto, and Management's Discussion and Analysis, for a summary of major risks.