November 17, 2006 10:30 ET

CN to reduce fuel surcharge for the third time since April 2005

MONTREAL, QUEBEC--(CCNMatthews - Nov. 17, 2006) - CN announced today it will reduce its fuel surcharge under the company's Tariff 7401, effective Jan. 1, 2007. The surcharge reduction will be the third since CN introduced Tariff 7401 in April 2005.

James Foote, executive vice-president, Sales and Marketing, for CN, said: "This latest reduction in CN's fuel surcharge reflects our commitment to fair pricing for a quality transportation product. We apply the surcharge to our customer base as broadly as possible. We believe this universal application is equitable to all of our customers and responsive to the marketplace."

When the West Texas Intermediate (WTI) crude oil monthly average price equals or exceeds US$25.00 in the second calendar month prior to the month in which the fuel surcharge is applied, CN's fuel surcharge is calculated starting from a base of 1.5 per cent of the line haul freight charge. Effective Jan.1, 2007, for each incremental fluctuation of US$1.00 per barrel of WTI crude oil above US$25.00, the fuel surcharge will decrease or increase by an incremental 0.23 per cent, which is eight per cent lower than the 0.25 per cent incremental change under CN's current Tariff 7401.

CN's new fuel surcharge will remain the lowest in the North American rail industry based on a WTI price per barrel of US$25.00.

At a WTI price level of about US$60 per barrel on Jan. 1, 2007, CN's new fuel surcharge would be 9.32 per cent, compared with 10.0 per cent under the current tariff.

This news release contains forward-looking statements. CN cautions that, by their nature, forward-looking statements involve risk and uncertainties, including the assumption that the positive economic trends in North America and Asia will continue, and that its results could differ materially from those expressed or implied in such statements. 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 Management's Discussion and Analysis, 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.

Contact Information

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    Mark Hallman (Media)
    System Director, Media Relations
    (905) 669-3384
    Robert Noorigian (Investment Community)
    Vice-President, Investor Relations
    (514) 399-0052