CN to construct five sidings on its B.C. North Line in 2012 as part of multiyear program to expand freight train capacity between Edmonton, Alberta, and Prince Rupert, British Columbia

Cindy Allen

EDMONTON, Alberta , July 6, 2012 (press release) – CN (CNR.TO) (CNI) announced today that it plans to construct five extended sidings on its B.C. North Line in 2012 as part of a multi-year capital program to expand freight train capacity to handle growing freight volumes along its important Edmonton, Alta.-Prince Rupert, B.C., corridor.

In 2011, more than half a million carloads/intermodal units moved over CN's B.C. North corridor. By 2015, CN traffic on this line could nearly double.

CN has extended or constructed 21 sidings to handle 12,000-foot trains between Edmonton and Prince Rupert since 2004. This is in addition to new signaling and train control, several tunnel and bridge clearances, yard expansions at Smithers and Terrace, B.C., and the installation of a longer siding at Swan Landing, Alta.

CN's investments since 2004 in capacity expansion along the Edmonton-Prince Rupert corridor will total more than C$150 million by the end of this year, with further extended sidings expected to be built in future years.

Keith Creel, CN executive vice-president and chief operating officer, said: "CN's sizable investments in rail infrastructure in northern B.C. and western Alberta are helping us accommodate growing import-export traffic moving between the Port of Prince Rupert, the B.C. interior and major centres across CN's network in Canada and the United States. The investments will also help us better move rising export coal volumes from existing and new mines in the region to Ridley Terminals at Prince Rupert, whose handling capacity is expected to double by the end of 2014 to 24 million tonnes.

"The longer sidings increase the fluidity of operations in this major CN freight corridor and allow us to haul increased volumes in safer, more efficient trains equipped with distributed power (DP) technology."

DP permits remote control of a locomotive or locomotives throughout a train from the lead control locomotive. DP provides faster, smoother train starts, improved braking and lower pulling forces at the head-end of a train, and improved safety. With more optimum matching of motive power to train weight, DP locomotives allow CN to reduce fuel consumption and reduce environmental emissions.

Creel said: "Our infrastructure investments are critical parts of our B.C. North Gateway strategy to handle increased volumes of containers, coal and other commodities to and from the Port of Prince Rupert. This strategy aims to help CN tap new opportunities efficiently and productively while helping our customers to expand their businesses and compete more effectively in their end markets."

CN plans to invest a total of C$1.8 billion in 2012 to maintain and upgrade its overall North American railway network, support growth and productivity initiatives, and continue to provide its customers quality service.

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, and Jackson, Miss., with connections to all points in North America. For more information on CN, visit the company's website at www.cn.ca.

Forward-Looking Statements
Certain information included in this news release constitutes "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 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 factors that could affect the above 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.

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