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Rail investments key to economic growth in oil sands and other natural resource regions of northern Alberta

EDMONTON, Alta., June 16, 2011 — Claude Mongeau, president and chief executive officer of CN (TSX: CNR)(NYSE: CNI), said today the company will have invested almost C$400 million to buy and rehabilitate four short-line railways serving resource-rich regions of northern Alberta by year-end 2011.

“CN has stepped up to the plate in Alberta with sizable rail infrastructure investments,” Mongeau told the Edmonton Chamber of Commerce today. “Since 2006, we've purchased four rail short lines that are key to economic growth and prosperity in northern Alberta and have spent significant sums to maintain and improve them.

“Reliable, consistent rail service is essential to current and future oil sands and resource developments, and our infrastructure investments represent a clear and meaningful commitment to help foster that growth with quality rail transportation for our customers.”

Mongeau said CN's short-line acquisitions and improvements have helped solidify its freight franchise in northern Alberta, characterized by important volumes of coal, sulphur, petroleum coke, steel pipe, grain, wood pulp, lumber and diesel fuel.

CN paid a total of C$76 million in 2006 and 2007 to buy the Mackenzie Northern Railway (MKNR), Lakeland & Waterways Railway (LWR), Savage Alberta Railway, Inc., (SAR), and the Athabasca Northern Railway (ANY). View the map of the former short lines CN has acquired.

Between 2006 and 2010, CN spent C$260 million to upgrade the infrastructure of these lines -- including the installation of new rail, ties, ballast, track, other track materials, bridges, sidings and communication technology – and expects to spend another C$45 million this year on further upgrades. In addition to these expenditures, CN invested approximately C$10 million in a petroleum coke transload operation at Fort McMurray, the logistics gateway to Alberta's oil sands production region.

As part of its purchase agreement, CN targeted the former ANY line to Fort McMurray for the largest portion of the improvements – a C$135 million rehabilitation program, which remains on-track to be completed by the end of 2011. CN's purchase and
upgrading plan for the ANY was based on long-term traffic volume guarantees negotiated with shippers Suncor Energy Inc., OPTI Canada Inc., and Nexen Inc.

In addition to infrastructure investments, CN is helping its Alberta petroleum and chemicals customers grow with quality transportation and delivery of new supply chain efficiencies for grain and coal shipments, powered by innovation and a strong focus on productivity improvements.

Further growth opportunities are on the horizon. CN plans to build a new Calgary Logistics Park, which will provide seamless transportation solutions to rail customers moving products and commodities into and out of Calgary, one of the fastest growing cities in North America and a key logistics hub for consumer and industrial goods markets in southern Alberta.

While CN is important to Alberta, the province is equally important to CN – the province is home to almost 2,200 company employees and roughly 15 per cent of CN's carloads originated or were destined for Alberta last year.

Mongeau said: “CN is a major economic force in Alberta and we're here for the long haul, aiming to create value for our customers and economic prosperity for the province through operational and service excellence, critical infrastructure investments and commitment to greater supply chain collaboration.”

Forward-Looking Statements
Certain information included in this news release are “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws. CN cautions that, by their nature, these forward-looking statements, including statements relating to expected future investments, involve risks, uncertainties and assumptions. The Company cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of the Company or the rail industry to be materially different from the outlook or any future results or performance implied by such statements.

Important risk factors that could affect the forward-looking statements include, but are not limited to, the effects of general economic and business conditions, industry competition, inflation, currency and interest rate fluctuations, changes in fuel prices, legislative and/or regulatory developments, compliance with environmental laws and regulations, actions by regulators, various events which could disrupt operations, including natural events such as severe weather, droughts, floods and earthquakes, labor negotiations and disruptions, environmental claims, uncertainties of investigations, proceedings or other types of claims and litigation, risks and liabilities arising from derailments, 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 “Management's Discussion and Analysis” in CN's annual and interim reports, Annual Information Form and Form 40-F filed with Canadian and U.S. securities regulators, available on CN's website, for a summary of major risks.

CN assumes no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable Canadian securities laws. In the event CN does update any forward-looking statement, no inference should be made that CN will make additional updates with respect to that statement, related maters, or any other forward-looking statement.

About CN

CN – Canadian National Railway Company and its operating railway subsidiaries – spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America.


Mark Hallman
Communications and Public Affairs


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Robert Noorigian
Investor Relations


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