CN's Paul M. Tellier Says It's Time for a National Debate on the Tough Questions Facing Canada.

Business Editors

MONTREAL--(BUSINESS WIRE)--Dec. 14, 2001

Canadians face a crucial debate about the consequences of increasing Canadian and American economic integration, says Paul M. Tellier, president and chief executive officer of Canadian National (NYSE:CNI) (TSE:CNR.).

"CN's success - and the success of other Canadian businesses - comes from acknowledging that our economy is increasingly integrated with the United States," Tellier told the Canadian Railway Club here. "The integration will continue. It is inevitable. It is irreversible... The integration of the North American economy is taking place faster than any of us expected."

Tellier said economic integration raises tough questions Canadians need to debate now:

-- What Canadian policies and practices should be protected as distinct and
part of the national fabric?

-- Which policies should Canada align with American ones?

-- Is the Canadian dollar helping or hurting Canadian sovereignty?

-- Should Canada pursue a common currency with the United States?

"We cannot just drift along, hoping the issues will go away. We have to have the courage to ask the tough questions, and the openness to debate them honestly.

"We must ask ourselves what changes will help us strengthen what we value most... I would argue that the health of Canada's Canadian-ness depends - first and foremost - on a strong, healthy economy," an economy that gives Canadians the wherewithal to provide the things they value most - quality health care, a sound education system, jobs for the best and brightest, and policies that reduce economic disparities.

Tellier said he favours public policies that build strong, globally competitive Canadian companies that can generate the income needed to support key programs.

He also called for greater synchronization of Canadian and U.S. policies and the adoption of more bilateral agreements to allow Canada to address North American issues on a more equal footing with the U.S.

Tellier said the question of a common currency between Canada and the U.S. is a real issue for an integrated North American company like CN.

"We have customers in both countries. We have employees in both countries. We pay taxes and report to regulators in both countries... In the end, the value of the Canadian dollar has a big impact on our customers' decisions on where to locate operations.

"My own view is that, eventually, Canada and its biggest trading partner will move to a common currency. But the broader point is that we must have a discussion on this now."

A copy of Tellier's full remarks is available on CN's web site, www.cn.ca.

Canadian National Railway Company 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 cities of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, Jackson, Miss., with connections to all points in North America.