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October 24, 2005 15:14 ET

CN to discontinue seven Saskatchewan branch lines as a result of grain handling system restructuring

EDMONTON, ALBERTA--(CCNMatthews - Oct. 24, 2005) - CN announced today plans to discontinue seven Saskatchewan branch lines. None of the rail lines has carried any grain or other traffic for at least the past three years.

As required by federal law, CN today classified the seven lines as discontinuance candidates in its three-year network plan, which is viewable on the "Company Information" (http://www.cn.ca/about/company_information/en_index.shtml) pages under the "About CN" section of the company's website, www.cn.ca.

After the lines have been listed for 12 months, CN is required by the Canada Transportation Act to offer these lines to third parties for continued operation. If there are no commercial purchasers or governments prepared to acquire them, the lines can be discontinued. The entire process can take almost two years. The seven Saskatchewan lines identified for discontinuance, totalling 329 miles in length, are:

- The Lewvan Subdivision between Minard Junction (mile post 0.00) and Rowatt (MP 106.80);

- The Northgate Spur between Lampman (MP 39.4) and Northgate (MP 1.0);

- The Turtleford Subdivision between Hamlin (MP 10.00) and St. Walburg (MP 77.0);

- The Bolney Spur between Spruce Lake Junction (MP 0.00) and Paradise Hill (MP 15.4);

- The Robinhood Subdivision between RH Junction (MP 0.00) and Glaslyn (MP 69.6);

- The Amiens Spur between England (MP 75.0) and Spiritwood (MP 49.4);

- The Lillian Spur (Identified as Preeceville on the Plan) between Lillian MP 67.4 and Preeceville (MP 72.70).

"These discontinuances reflect changes made by other industry stakeholders," said Peter Marshall, senior vice-president, CN Western Canada Region. "Over the past four years, farmers, grain companies and other grain industry interests have made major changes in the ways they market and move grain. These changes have made certain sections of CN's Saskatchewan network redundant - the lines are no longer being used."

In 2001, CN placed a moratorium on prairie grain branch line discontinuances. CN's intent was to give farmers a period of time to adjust to changes taking place in the grain handling and transportation system. CN also committed to work with farmers and other stakeholders to develop innovative ways to meet local grain transportation needs.

"We had some successes, notably with the West Central Road and Rail group," said Marshall. "We had other initiatives, such as the Prairie Alliance for the Future, which did not generate local rail traffic despite intensive efforts by all concerned parties. We believe that farmers' local shipping patterns in the areas served by these branch lines are now well established, and it's time for CN to make the necessary changes to its network.

Marshall noted that the Canadian Transportation Agency discontinuance process provides another lengthy period for local interests to take new steps to preserve their interests.

Marshall said most municipalities affected by the discontinuances would benefit under terms of federal legislation that require railways to pay them $30,000 per discontinued mile over three years when grain-dependent branch lines listed in schedule 1 of the Canadian Transportation Act are abandoned. Under CN's current discontinuance plan, the affected municipalities would receive $10 million from CN over the three-year period.

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.

www.cn.ca

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