CN to spend approximately C$430 million in 2008 on rail infrastructure improvements in Western Canada

EDMONTON, March 18, 2008 — CN (TSX: CNR)(NYSE: CNI) announced today plans to invest approximately C$430 million in rail infrastructure projects in Western Canada this year to maintain a safe railway and improve the productivity and fluidity of its network.

CN's capital spending in its Western Region is targeted at replacement of rail, ties and other track materials, and bridge improvements. The Company is also investing in extended sidings and terminal improvements to grow its business and permit more efficient movement of traffic in Western Canada, including CN's line to the new Port of Prince Rupert container terminal, as well as upgrading of its recently acquired Athabasca Northern Railway (ANY). The ANY terminates near Fort McMurray, Alta., and is an important rail link to the booming oilsands region of Northern Alberta. In addition, CN will continue upgrading other former Northern Alberta short lines purchased in 2006.

Jim Vena, senior vice-president, Western Region, said: “Our investments in rail infrastructure will ensure plant quality and safety, build capacity and speed, and improve the productivity of our operations.”

CN plans to make its spending work harder in 2008 through improved work-block planning and greater labour productivity, made possible through changes negotiated in the four-year labour contract recently ratified by the United Steelworkers, which represents approximately 3,000 CN track maintenance employees in Canada.

Day-to-day rail inspection and maintenance programs will benefit from the roll out of the first phase of CN's Precision Engineering program. The mobile computer system at the heart of this initiative will help CN manage engineering processes more efficiently, reduce engineering related delays to trains, improve labour efficiency as a result of better information availability, and increase material and machine utilization.

CN's Western Region capital program is part of a plan to invest approximately C$1.5 billion company-wide in 2008, of which more than C$1.1 billion will be focused on track infrastructure. Equipment spending, targeted to reach approximately C$140 million in 2008, will include the acquisition of new fuel-efficient locomotives, as well as improvements to the existing fleet. CN also expects to spend approximately C$250 million on facilities to grow the business, including transloads and distribution centers, information technology to improve service and operating efficiency, and other projects to increase productivity.