CN says UTU refuses to re-start bargaining, end strike during new negotiations

MONTREAL, Feb. 15, 2007 — CN said the United Transportation Union (UTU) general chairmen today refused a comprehensive company offer from CN President and Chief Executive Officer E. Hunter Harrison to resume collective bargaining on Feb. 19 and for the immediate return to work by striking conductors and yard-service employees.

Mr. Harrison said: “It's truly unfortunate that the UTU bargaining team has declined CN's offer – an offer aimed at settling this regrettable strike as soon as possible. Because of the general chairmen's intransigence, the strike continues, with management personnel filling in for striking CN conductors in Canada. We will maintain this state of affairs for as long as it takes to reach a reasonable settlement with the UTU.”

The CN offer rejected by the UTU bargaining team contained the following:

• Resumption of CN-UTU negotiations on Feb. 19, with an immediate return to work of striking UTU members.
• Withdrawal, without prejudice, of CN's application to the Canada Industrial Relations Board (CIRB) for a declaration that the UTU strike is illegal.
• Withdrawal of CN's legal action against the UTU general chairmen and others, for damages from what the company contends is an illegal strike.
• No discipline of UTU members, except those individuals accused of misconduct and/or illegal activities related to the strike.
• A reasonable cooling-off period for renewed bargaining.
• Agreement from the UTU to withdraw, without prejudice, authorization of the strike and strike notice.
• Agreement to recognize the validity of the existing strike vote held by the UTU for a period of 63 days commencing on Feb. 19 and a commitment by the UTU not to issue the company a 72-hour strike notice prior to the end of the cooling-off period.

The UTU launched its work action against CN's Canadian network at 0001 hours Feb. 10.

CN's other unionized employees remain on the job in Canada and the United States.

The CIRB will continue on Feb. 19 its hearing on CN's application for a declaration that the UTU's strike is illegal. CN on Feb. 10 requested the CIRB declare the strike illegal because the railway believes the UTU's strike notice was deficient, and because the general chairmen who issued the strike notice on Feb. 6, 2007, did not have proper authorization from the certified UTU bargaining agent.

CN and the UTU are maintaining normal commuter rail operations on CN lines in Toronto and Montreal.

Excluded from strike action are UTU members employed on CN's Northern Quebec Internal Short Line, Algoma Central Railway in northern Ontario, and Mackenzie Northern Railway in northern Alberta.

This news release contains forward-looking statements. CN cautions that, by their nature, forward-looking statements involve risk and uncertainties, and that its results could differ materially from those expressed or implied in such statements. Important factors that could cause such differences include, but are not limited to, industry competition, legislative and/or regulatory developments, compliance with environmental laws and regulations, various events which could disrupt operations, including natural events such as severe weather, droughts, floods and earthquakes, the effects of adverse general economic and business conditions, inflation, currency fluctuations, changes in fuel prices, labour disruptions, environmental claims, investigations or proceedings, other types of claims and litigation, and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. 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 2005 Annual Consolidated Financial Statements and Notes thereto and Management's Discussion and Analysis (MD&A), as well as its 2006 quarterly consolidated financial statements and MD&A, for a summary of major risks.