CN Proposes Post-Acquisition Investment of $30-Million-Plus in ONRail Network, Employees.

Business Editors

TIMMINS, Ontario--(BUSINESS WIRE)--Nov. 22, 2002

Canadian National (NYSE:CNI) (TSX:CNR) is prepared to invest more than $30-million in ONRail assets and employees following its proposed acquisition of the Northeastern Ontario railway, says Keith L. Heller, CN's senior vice-president, Eastern Canada division.

Heller said in a presentation to municipal officials here today that CN would invest in right-of-way and highway crossing improvements, shop equipment, passenger train equipment, modern tools, systems, and employee training.

The investments are subject to ONRail unions agreeing to come under CN's existing collective agreements and CN signing a definitive purchase agreement with the Government of Ontario. CN is aiming to complete all negotiations by yearend, with the transaction closing in the first quarter of 2003.

Heller, speaking to the Northeastern Ontario Municipalities Action Group, said CN's plans for ONRail will benefit shippers, communities and employees.

He said CN would offer ONRail shippers more frequent, reliable service and greater reach into important consuming markets. Communities would also enjoy more reliable passenger services for inter-city travel and tourism under CN ownership of ONRail. In addition, ONRail's employees could expect solid employment opportunities with a strong Class 1 railway, he said.

Heller said CN would increase freight service from five to seven days per week, provide 90 per cent on-time service, offer scheduled transit times and establish a guaranteed car supply program for shippers. CN would also maintain or enhance rail competition in Northeastern Ontario by assuring competitive rail options for shippers and introducing federal Canada Transportation Act shipper protections.

CN's acquisition proposal would protect ONRail employment by fully utilizing the North Bay shop through in-sourcing work, making Cochrane shops responsible for passenger equipment repair, and maintaining the operations centre at Englehart.

Heller added that passenger services would benefit from a new reservation system, renovated rolling stock for the Little Bear, additional passenger cars for the Northlander and eco-tourism promotion of the Polar Bear service in partnership with the Moose Cree First Nation.

Heller said CN has a flawless record of integrating Illinois Central and Wisconsin Central railways and expects the acquisition of ONRail would proceed just as smoothly.

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, and Jackson, Miss., with connections to all points in North America.