CANADIAN NATIONAL RAILWAY CO

The Canadian National Railways (CNR) was incorporated on June 6, 1919, comprising several railways that had become bankrupt and fallen into Government of Canada hands, along with some railways already owned by the government. Primarily a freight railway, CN also operated passenger services until 1978, when they were assumed by Via Rail. The only passenger services run by CN after 1978 were several mixed trains (freight and passenger) in Newfoundland, and several commuter trains both on CN's electrified routes and towards the South Shore in the Montreal area (the latter lasted without any public subsidy until 1986). The Newfoundland mixed trains lasted until 1988, while the Montreal commuter trains are now operated by Montreal's Exo.

On November 17, 1995, the Government of Canada privatized CN. Over the next decade, the company expanded significantly into the United States, purchasing Illinois Central Railroad in 1998 and Wisconsin Central Transportation in 2001, among others.

Creation of the company, 1918–1923

The excessive construction of railway lines in Canada led to significant financial difficulties striking many of them in the years leading up to 1920. In response to public concerns, the Government of Canada assumed majority ownership of the near-bankrupt Canadian Northern Railway (CNoR) on September 6, 1918, and appointed a "Board of Management" to oversee the company. At the same time, CNoR was also directed to assume management of Canadian Government Railways (CGR), a system mainly comprising the Intercolonial Railway of Canada (IRC), National Transcontinental Railway (NTR), Prince Edward Island Railway (PEIR), and the Hudson Bay Railway (HBR). On December 20, 1918, the Government of Canada created the Canadian National Railways (CNR) – a body with no corporate powers – through Order in Council as a means to simplify the funding and operation of the various railway companies. The absorption of the Intercolonial Railway would see CNR adopt that system's slogan, The People's Railway. Another Canadian railway, the Grand Trunk Pacific Railway (GTPR), encountered financial difficulty on March 7, 1919, when its parent company Grand Trunk Railway (GTR) defaulted on repayment of construction loans to the Government of Canada.

The Canadian National Railway Company then evolved through the following steps:

the "railways, works and undertakings of the Companies comprised in the Canadian Northern System" were vested in the newly incorporated Company in June 1919, with provision for the later inclusion of any of the Government Railways

vesting of the Grand Trunk Pacific Railway System in the Minister of Railways and Canals, acting as Government Receiver, in March 1919

acquisition of the Grand Trunk Railway System in November 1919, implemented in May 1920

GTR management and shareholders opposed to nationalization took legal action, but after several years of arbitration, the GTR was finally absorbed into the CNR on January 30, 1923. Although several smaller independent railways would be added to the CNR in subsequent years as they went bankrupt or it became politically expedient to do so, the system was more or less finalized at that point. However, certain related lawsuits were not resolved until as late as 1936.

Canadian National Railways was born out of both wartime and domestic urgency. Until the rise of the personal automobile and creation of taxpayer-funded all-weather highways, railways were the only viable long-distance land transportation available in Canada. As such, their operation consumed a great deal of public and political attention. Canada was one of many nations to engage in railway nationalization in order to safeguard critical transportation infrastructure during the First World War.

In the early 20th century, many governments were taking a more interventionist role in the economy, foreshadowing the influence of economists like John Maynard Keynes. This political trend, combined with broader geo-political events, made nationalization an appealing choice for Canada. The Winnipeg General Strike of 1919 and allied involvement in the Russian Revolution seemed to validate the continuing process. The need for a viable rail system was paramount in a time of civil unrest and foreign military action.

Acquisitions

Bessemer & Lake Erie Railroad

The B&LE was acquired with the purchase of Great Lakes Transportation and the DM&IR.

British Columbia Railway

In 2003, BCOL sold to Canadian National and leased the railroad to CN for 60 years.

Central Vermont Railway

Central Vermont was nationalized in 1918 and consolidated into the Grand Trunk Western in 1971 with the creation of the Grand Trunk Corporation.

Duluth Missabe & Iron Range Railroad

The DM&IR was purchased by Great Lakes Transportation and in 2011 the DM&IR was merged into CN's Wisconsin Central Subsidiary. The DM&IR was acquired at the same time as the Bessemer & Lake Erie Railroad.

Duluth Winnipeg & Pacific Railroad

The DWP was nationalized with CN in 1918 and became a part of CN's Grand Trunk Corporation in 1971. In 2011 the DWP was merged into the larger Wisconsin Central Subsidiary of CN.

Elgin, Joliet and Eastern Railway

In 2009, CN acquired the Elgin, Joliet and Eastern Railway to assist with traffic congestion in Chicago and the surrounding area. In 2013 EJ&E was merged into the greater Wisconsin Central Subsidiary of CN.

Grand Trunk Western Railroad

The GTW was merged with Central Vermont in 1971 with the creation of the Grand Trunk Corporation. In 1991 the GTW was merged with CN under the "North America" consolidation program. Many of GTWs locomotives and rolling stock would be repainted and the motive power would get the new CN scheme.

Illinois Central Railroad

In 1998, IC was purchased by CN, which also acquired the Chicago Central in the deal. A year later, the two railroads were formally amalgamated into the CN system.

Iowa Northern Railway

In 2023, CN acquired the Iowa Northern Railway, but the transaction is awaiting approval by the Surface Transportation Board (STB). On January 14, 2025, the STB approved the CN acquisition of the Iowa Northern Railway, a Class III shortline that specializes in the transport of grain, ethanol, and other bio-fuels commodities in the state of Iowa.

Mackenzie Northern Railway

In 2006, CN acquired Mackenzie Northern Railway, previously purchased by RailAmerica. This purchase allowed CN to increase their network footprint and hold the northernmost trackage of the contiguous North American railway network. Since being purchased by CN in 2006, it has been officially known as the Meander River Subdivision.

Newfoundland Railway On March 31, 1949, CNR acquired the assets of the Newfoundland Railway, which in 1979 were reorganized into Terra Transport. CN officially abandoned its rail network in Newfoundland on October 1, 1988.

Savage Alberta Railway

On December 1, 2006, CN announced that it had purchased Savage Alberta Railway for $25 million and that it had begun operating the railway the same day.

TransX Group of Companies

In 2018, CN acquired the Winnipeg-based TransX Group of Companies. TransX continues to operate independently.

Wisconsin Central Railroad

In January 2001, CN acquired the WC for $800 million.

CN's U.S. subsidiaries before privatization

In the late 1980s, CN's railway network consisted of the company's Canadian trackage, along with the following U.S. subsidiary lines: Grand Trunk Western Railroad (GTW) operating in Michigan, Indiana, and Illinois; Duluth, Winnipeg and Pacific Railway (DWP) operating in Minnesota; Central Vermont Railway (CV) operating down the Connecticut River valley from Quebec to Long Island Sound; and the Berlin subdivision to Portland, Maine, known informally as the Grand Trunk Eastern, sold to a short-line operator in 1989.

Privatization

In 1992, a new management team led by ex-federal government bureaucrats Paul Tellier and Michael Sabia started preparing CN for privatization by emphasizing increased productivity. This was achieved largely by cutting the company's management structure, laying off many employees, and continuing to abandon or sell branch lines. In 1993 and 1994, the company replaced the names CN, Grand Trunk Western, and Duluth, Winnipeg, and Pacific with CN North America. CPR and CN officials began to discuss a merger. When the idea was rejected by the Canadian government, CPR offered to purchase outright all of CN's lines from Ontario to Nova Scotia, while an unidentified U.S. railroad (rumoured to have been Burlington Northern Railroad ) would purchase CN's lines in western Canada. This too was rejected. In 1995, the entire company, including its U.S. subsidiaries, reverted to using CN.

The CN Commercialization Act was enacted on July 13, 1995, and by November 28, 1995, the Government of Canada had completed an initial public offering (IPO) and transferred all of its shares to private investors. Under the legislation, no individual or corporate shareholder may own more than 15 percent of CN, and the company's headquarters must remain in Montreal, thus maintaining CN as a Canadian corporation.

Contraction and expansion since privatization

Following the successful IPO, CN has recorded impressive gains in its stock price, largely through an aggressive network rationalization and purchase of newer more fuel-efficient locomotives. Numerous branch lines were shed in the late 1990s across Canada, resulting in dozens of independent short line railway companies being established to operate former CN track that had been considered marginal. This network rationalization resulted in a core east–west freight railway stretching from Halifax to Chicago and Toronto to Vancouver and Prince Rupert. The railway also operated trains from Winnipeg to Chicago using trackage rights for part of the route south of Duluth.

In addition to the rationalization in Canada, the company also expanded in a strategic north–south direction in the central United States. In 1998, in an era of mergers in the U.S. rail industry, CN bought the Illinois Central Railroad (IC), which connected the already existing lines from Vancouver, British Columbia, to Halifax, Nova Scotia, with a line running from Chicago, Illinois, to New Orleans, Louisiana. This single purchase of IC transformed CN's entire corporate focus from being an east–west uniting presence within Canada (sometimes to the detriment of logical business models) into a north–south NAFTA railway (in reference to the North American Free Trade Agreement ). CN was then feeding Canadian raw material exports into the U.S. heartland and beyond to Mexico through a strategic alliance with Kansas City Southern Railway (KCS).

In 1999, CN and BNSF Railway, the second-largest rail system in the U.S., announced their intent to merge, forming a new corporate entity North American Railways, headquartered in Montreal to conform to the CN Commercialization Act of 1995. The merger announcement by CN's Paul Tellier and BNSF's Robert Krebs was greeted with skepticism by the U.S. government's Surface Transportation Board (STB), and protested by other major North American rail companies, namely CPR and Union Pacific Railroad (UP). Rail customers [ who? ] also denounced the proposed merger, following the confusion and poor service sustained in southeastern Texas in 1998 following UP's purchase of Southern Pacific Railroad two years earlier. In response to the rail industry, shippers, and political pressure, the STB placed a 15-month moratorium on all rail-industry mergers, effectively scuttling CN-BNSF plans. Both companies dropped their merger applications and have never refiled.

After the STB moratorium expired, CN purchased Wisconsin Central (WC) in 2001, which allowed the company's rail network to encircle Lake Michigan and Lake Superior, permitting more efficient connections from Chicago to western Canada. The deal also included Canadian WC subsidiary Algoma Central Railway (ACR), giving access to Sault Ste. Marie and Michigan's Upper Peninsula. The purchase of Wisconsin Central also made CN the owner of EWS, the principal freight train operator in the United Kingdom.

On May 13, 2003, the provincial government of British Columbia announced the provincial Crown corporation, BC Rail (BCR), would be sold with the winning bidder receiving BCR's surface operating assets (locomotives, cars, and service facilities). The provincial government is retaining ownership of the tracks and right-of-way. On November 25, 2003, it was announced CN's bid of CA$1 billion would be accepted over those of CPR and several U.S. companies. The transaction was closed effective July 15, 2004. Many opponents – including CPR – accused the government and CN of rigging the bidding process, though this has been denied by the government. Documents relating to the case are under court seal, as they are connected to a parallel marijuana grow-op investigation connected with two senior government aides also involved in the sale of BC Rail.

Also contested was the economic stimulus package the government gave cities along the BC Rail route. Some saw it as a buy-off to get the municipalities to cooperate with the lease, though the government asserted the package was intended to promote economic development along the corridor. Passenger service along the route had been ended by BC Rail a few years earlier due to ongoing losses resulting from deteriorating service. The cancelled passenger service has subsequently been replaced by a blue-plate tourist service, the Rocky Mountaineer, with fares well over double what the BCR coach fares had been.

CN also announced in October 2003 an agreement to purchase Great Lakes Transportation (GLT), a holding company owned by Blackstone Group for US$380 million. GLT was the owner of Bessemer & Lake Erie Railroad, Duluth, Missabe and Iron Range Railway (DM&IR), and the Pittsburgh & Conneaut Dock Company. The key instigator for the deal was that since the Wisconsin Central purchase, CN was required to use DM&IR trackage rights for a short 18 km (11 mi) "gap" near Duluth, Minnesota, on the route between Chicago and Winnipeg. To purchase this short section, CN was told by GLT it would have to purchase the entire company. Also included in GLT's portfolio were eight Great Lakes vessels for transporting bulk commodities such as coal and iron ore as well as various port facilities. Following Surface Transportation Board approval for the transaction, CN completed the purchase of GLT on May 10, 2004.

On December 24, 2008, the STB approved CN's purchase for $300 million of the principal lines of the Elgin, Joliet & Eastern Railway Company (EJ&E) ( reporting mark EJE) from the U.S. Steel Corporation, originally announced on September 27, 2007. The STB's decision was to become effective on January 23, 2009, with a closure of the transaction shortly thereafter. The EJ&E lines create a bypass around the western side of heavily congested Chicago-area rail hub and its conversion to use for mainline freight traffic is expected to alleviate substantial bottlenecks for both regional and intercontinental rail traffic subject to lengthy delays entering and exiting Chicago freight yards. The purchase of the lightly used EJ&E corridor was positioned by CN as a boon not only for its own business but for the efficiency of the entire U.S. rail system.

On December 31, 2011, CN completed the merger of DM&IR, DWP, and WC into its Wisconsin Central Ltd. (WCL) subsidiary.

In March 2021, CN subsidiary WCL reached a deal to sell roughly 1,400 km (900 mi) of non-core rail lines and assets in Michigan, Wisconsin, and Ontario to short-line operator Watco.

In April 2021, CN bid nearly $30 billion for Kansas City Southern (KCS), ostensibly creating a bidding war between itself and CPR, who had placed a $25 billion bid for the company in March. CN's offer represented a 21percent premium to the one made by Canadian Pacific, offering $325 for each share and including $200 in cash. The move by CN was influenced by the projected economic upturn once the world began to emerge from the COVID-19 pandemic, with KCS's railroad network reaching from Canada, through the United States, and running along the Panama Canal. On May 21, CN and KCS agreed to merge, but lengthy regulatory approvals are required to put it into effect. However, on August 31, the US Surface Transportation Board (STB) denied a voting trust between CN and KCS. With the decision by the STB, KCS re-engaged with CP on CP's original offer. The merger between the Kansas City Southern and Canadian Pacific Railway was ultimately approved on March 15, 2023, and the two railroads merged on April 14, 2023.

After losing the battle against CP for the purchase of KCS, in hearings before the STB for the CP-KCS merger, CN filed a plan to acquire the KCS line linking Kansas City with Springfield, IL, St. Louis, MO and East St. Louis, IL, the former Gateway Western, tie it to its former IC Gilman Subdivision, and thus create a new corridor between Kansas City and St. Louis with Michigan and Eastern Canada, bypassing Chicago, and which, according to the plan presented by CN, divert 80,000 long haul-truck shipments to rail annually. A few months later, CN resigned its intentions to purchase the Springfield Line in order to try to obtain trackage rights on the line, always with the same intention of creating the corridor proposed in the original plan to purchase the line filed with the STB. Both the initial plan to purchase the line and the subsequent plan to acquire trackage rights included the execution of corridor improvement works, valued at more than US$250 million. The STB would ultimately reject plans submitted by CN to operate on the Springfield Line.

Due to a failure to reach an agreement with the Teamsters Canada Rail Conference Canadian National's Canadian operations, along with those of CPKC, shut down from August 22, 2024 as the companies engaged in a lockout.

In December 2023, CN set to acquire the Iowa Northern Railway (IANR) with the proposition to be reviewed by the Surface Transportation Board (STB). On January 14, 2025, the STB approved the CN acquisition of the Iowa Northern Railway.