Canadian National Reaffirms Commitment to Safe Rail Operations.

Business Editors

TORONTO--(BUSINESS WIRE)--April 5, 2001

Canadian National (NYSE:CNI) (TSE:CNR.) said today it has taken significant steps over the past two years to improve rail operating safety on its non-signaled main tracks and will carefully study further safety measures for these lines.

CN was responding to a report issued today by the Transportation Safety Board of Canada (TSB) regarding its investigation into the derailment of VIA Rail Canada Inc. passenger train 74 at Thamesville, Ont., on April 23, 1999.

CN said it has worked with Transport Canada following the derailment to make meaningful safety improvements on its non-signaled lines. And CN said it will carefully study today's TSB safety recommendations directed at the Department of Transport, the Railway Association of Canada and provincial authorities. To date, CN has:

- Completed the $25-million installation of Centralized Traffic
  Control (CTC) on two of its high-speed rail lines in Ontario that
  accommodate passenger traffic - the Chatham Subdivision between
  Komoka, a town west of London, Ont., and Chatham, Ont.; and the
  Grimsby Subdivision between Hamilton and St. Catharines, Ont. With
  these installations, CN's core high-speed Quebec City-Montreal-
  Toronto-Niagara Falls-Windsor-Sarnia, Ont., corridors are
  electronically signaled. Rail traffic on CTC-controlled track is
  governed by line-side signal indications and instructions issued by
  rail traffic controllers. The signals tell locomotive engineers to
  proceed or stop by indicating the occupancy and condition of the
  track ahead, including the position of switches. Under CTC, rail
  traffic controllers designate routes, remotely operate switches and
  monitor switch position integrity to ensure safe train movements.

- Developed a $20-million plan to upgrade to CTC existing signaling on
  portions of its Toronto-London and Montreal-Quebec City high- speed
  main lines that accommodate passenger trains. Work will commence
  this year;

- Started testing new technology designed to give train crews advance
  notice of switch positions in other non-signaled territory;

- Installed higher-visibility switch targets on all non-signaled
  main-line track;

- Introduced new communication requirements for train crews handling
  switches in non-signaled territory, including mandatory
  communication between two employees to confirm switches have been
  left lined and locked in the normal position;

- Reinforced training and testing of train crews on rules and
  procedures governing switches in non-signaled territory.

The TSB report concludes that the VIA Rail train derailed because it encountered main track crossover switches at Thamesville that were lined and locked in the reversed position. The issues of liability for the derailment are before the Ontario Superior Court of Justice as part of on-going litigation. For that reason, CN is precluded from commenting on any evidence at this time.

CN also said it is in full compliance with a Transport Canada directive issued Nov. 14, 2000, to major Canadian railroads. The directive requires a crew member handling a switch in non-signaled territory to report the position of the switch to another employee before leaving the location. It also restricts speeds of trains approaching facing point switches in non-signaled territory; the speed limits are 45 miles per hour for freight trains (40 miles per hour for freights carrying special dangerous commodities), and 50 miles per hour for passenger trains.

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 key cities of Toronto, Buffalo, Chicago, Detroit, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America.