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December 01, 2006 13:20 ET

CN buys northwestern Alberta shortline from Savage Companies for C$25 million

EDMONTON, ALBERTA--(CCNMatthews - Dec. 1, 2006) - CN announced today the purchase of Savage Alberta Railway, Inc. (SAR), a 345-mile short-line railway, from Savage Companies of Salt Lake City, Utah, for C$25 million.

The acquisition represents an opportunity for CN to solidify its freight franchise in resource-rich northwestern Alberta.

The SAR transported about 35,000 carloads of freight last year. CN will upgrade the shortline's track to improve operations and customer service, and to maximize its potential for transporting greater volumes of coal, grain and forest products.

The SAR's primary connection with CN is at Swan Landing, Alta., located approximately 38 miles northeast of Jasper. From there the SAR runs north to Grande Prairie, the current base of operations, where one branch runs west to a connection with CN at Hythe, Alta., and another branch runs northeast to Wanham, Alta.

CN began operating the line today, following the close of the transaction with Savage Companies.

CN is offering employment to SAR's approximately 75 employees and will honour the existing collective labour agreement at SAR.

This news release contains forward-looking statements. CN cautions that, by their nature, forward-looking statements involve risk and uncertainties, and that its results could differ materially from those expressed or implied in such statements. Important factors that could cause such differences include, but are not limited to, industry competition, legislative and/or regulatory developments, compliance with environmental laws and regulations, various events which could disrupt operations, including natural events such as severe weather, droughts, floods and earthquakes, the effects of adverse general economic and business conditions, inflation, currency fluctuations, changes in fuel prices, labour disruptions, environmental claims, investigations or proceedings, other types of claims and litigation, 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 CN's most recent Form 40-F filed with the United States Securities and Exchange Commission, its Annual Information Form filed with the Canadian securities regulators, its 2005 Annual Consolidated Financial Statements and Notes thereto and Management's Discussion and Analysis (MD&A), as well as its 2006 quarterly consolidated financial statements and MD&A, for a summary of major risks.

CN - 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.

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