CN targets C$1.7 billion capex 2011

CN plans to invest C$1.7 billion in 2011 to maintain a safe and fluid railway network, to grow the business efficiently and to continue to provide customers with a high level of service.

Claude Mongeau, president and chief executive officer, said: "CN is
focused on running a safe, sustainable railway and growing our business
profitably at low incremental cost. We are pursuing this agenda through
infrastructure investments, strengthening ties with our customers, and
innovative service improvements. Our service innovations include
‘first-mile/last-mile’ initiatives that respond to customer needs at
origin and destination, and supply chain collaboration that emphasizes
an end-to-end view of service quality.

"CN’s capital spending
program is critical to these safety, growth and service objectives. In
the last five years, CN spent almost C$8 billion on capital
improvements. Such investments serve to build a quality network that, in
turn, supports economic growth across Canada and the United States."

Approximately
C$1 billion of CN’s 2011 capital investment program will be targeted on
track infrastructure to maintain safe railway operations and to improve
the productivity and fluidity of its rail network. This includes
replacement of rail, ties and other track materials and bridge
improvements, as well as rail-line improvements on the Elgin, Joliet and
Eastern Railway Company (EJ&E) that CN acquired in 2009. The
EJ&E addresses the "missing link" for CN in Chicago, connecting its
five rail lines entering the city; full integration of the EJ&E will
result in improved reliability and service.

CN’s infrastructure
envelope includes funds for strategic initiatives across the system and
additional network improvements in western and eastern Canada.

Equipment
spending, which is intended to improve the quality of the fleet to meet
customer requirements and includes the acquisition of new
fuel-efficient locomotives as well as new freight cars, is targeted to
reach approximately C$200 million in 2011.

CN also expects to
spend approximately C$500 million on facilities to grow the business,
including transloads and distribution centers to serve off-line
customers; new information technology to support operational and service
excellence and other projects to increase productivity.