Post by UP Patcher on Dec 30, 2006 23:35:05 GMT -5
The Canadian National Railway (CN; AAR reporting marks CN, CNA, CNIS), known as Canadian National Railways (CNR) between 1918 and 1960, and Canadian National/Canadien National (CN) from 1960 to present, is a Canadian Class I railway operated by Canadian National Railway Company headquartered in Montreal, Quebec. It is the largest railway in Canada, in terms of both revenue and the physical size of its rail network. CN is currently Canada's only transcontinental railway company, spanning Canada from Nova Scotia to British Columbia. It also has extensive trackage in the central United States along the Mississippi River valley from the Great Lakes to the Gulf of Mexico.
Canadian National Railways was created between 1918 and 1923, comprising several railways that had become bankrupt and fallen into federal government hands, along with some railways already owned by the government. In 1995, the federal government privatized CN. Over the next decade, the company expanded significantly in the United States, purchasing Illinois Central Railroad and Wisconsin Central Railway, among others. Now primarily a freight railway, CN also operated passenger services until 1978, when they were assumed by VIA Rail.
Creation of Canadian National Railways, 1918–1923
In response to public concerns fearing loss of key transportation links, the Government of Canada assumed majority ownership of the 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 control of Canadian Government Railways (CGR), a system comprised of the Intercolonial Railway of Canada (IRC), National Transcontinental Railway (NTR), and the Prince Edward Island Railway (PEIR), among others. On December 20, 1918 the federal government created the Canadian National Railways (CNR) through a Privy Council order 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, National Transcontinental Railway, encountered financial difficulty on March 7, 1919 when the Grand Trunk Pacific Railway's (GTPR) parent company Grand Trunk Railway (GTR), defaulted on repayment of construction loans to the federal government. The federal government's Department of Railways and Canals took over operation of the GTPR until July 12, 1920 when it too was placed under the CNR.
Finally, the bankrupt GTR itself was placed under the care of a federal government "Board of Management" on May 21, 1920, while GTR management and shareholders opposed to nationalization took legal action. After several years of arbitration, the GTR was absorbed into CNR on January 30, 1923. In subsequent years, several smaller independent railways would be added to the CNR as they went bankrupt, or it became politically expedient to do so, however the system was more or less finalized following the addition of the GTR.
Canadian National Railways was born out of both wartime and domestic urgency. Railways, until the rise of the personal automobile and creation of taxpayer-funded all-weather highways, were the only viable long-distance land transportation available in Canada for many years. As such, their operation consumed a great deal of public and political attention. Many countries regard railway networks as critical infrastructure (even to this day) and at the time of the creation of CNR during the continuing threat of the First World War, Canada was not the only country to engage in railway nationalization.
In the early twentieth 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 intervention.
Criticism of CNR
Regardless of the political and economic importance of railway transportation in Canada; there were many critics of the Canadian government's policies in maintaining CNR as a Crown corporation from its inception in 1918 until its privatization in 1995. Some of the most scathing criticism came from the railway industry itself, namely the commercially successful Canadian Pacific Railway (CPR) which argued that its taxes should not be used to fund a competitor. Some argue that the CPR could afford to make this criticism, having been itself the child of government and recipient of untold wealth by virtue of land and resource grants, as well as its position as a monopoly from its completion in 1885 until the CNoR started operations on the Prairies at the turn of the century.
As a result of history and geography, CPR served larger population centres in the southern prairies, while the CNR's merged system served as a de-facto government colonization railway to serve remote and undeveloped regions of Western Canada, northern Ontario and Quebec, and the economically-depressed Maritimes. The company also became a convenient instrument of federal government policy from the operation of ferries in Atlantic Canada, to assuming the operation of the narrow-gauge Newfoundland Railway following that province's entry into Confederation, and the partnership with CPR in purchasing and operating the Northern Alberta Railway. A company-driven decision to create a radio network across Canada for its passenger train customers led to the federal government assuming total control in 1932, naming the radio network the Canadian Radio Broadcasting Commission, which was then renamed and organized into a separate Crown corporation in 1936 as the Canadian Broadcasting Corporation (CBC).
Politics and government priorities
It is generally accepted that government policy dictated CNR commercial decisions, whether such decisions were in the nation's interest, or in the political interest of the party in power. As such, CNR lost money for many years, except during the Second World War when its extensive network reaching into the resource hinterland proved beneficial, and during the late 1980s and early 1990s following deregulation of the Canadian railway industry. Where CNR failed to address costs was largely due to government interference, such as the requirement to purchase locomotives from all Canadian locomotive manufacturers, resulting in operational inefficiencies.
CNR was considered to be competitive with CPR in several areas, notably in Central Canada, prior to the age of the automobile and the dense highway network that grew in Ontario and Quebec. The former GTR's superior track network in the Montreal-Chicago corridor has always been a more direct route with higher capacity than CPR's. CNR was also considered a railway industry leader throughout its time as a Crown corporation in terms of research and development into railway safety systems, logistics management, and in terms of its relationship with labour unions.
Deregulation and recapitalization
Another problem that hobbled CNR was in the sheer number of low-volume branch railway lines which did not produce sufficient traffic to pay for their operation. Without deregulation in the railway industry permitting abandonment or sale of a railway line, or even the ability to set prices to match those of trucks, both CNR and CPR paid dearly for owning these inefficient lines. One tactic that CNR perfected was to demarket a line by providing sufficiently poor service to its few customers, that those customers would turn to trucks for improved service and lower costs. Once customers ceased to exist on a small branch line, the federal government would permit the line's abandonment. Had deregulation been in place several decades earlier, it is conceivable that many Canadian branch lines would have been viable in the hands of short line operators, saving millions of dollars for taxpayers funding highways, since the railway lines had already been publicly funded in their construction.
From the creation of CNR in 1918 until its recapitalization in 1978, whenever the company posted a deficit, the federal government would assume those costs in the government budget. The result of various governments using CNR as a vehicle for various social and economic policies was a subsidization running into billions of dollars over successive decades. Following its 1978 recapitalization and changes in management, CN (name changed to Canadian National Railway, using the shortened acronym CN in 1960) started to operate much more efficiently, by assuming its own debt, improving accounting practices to allow depreciation of assets and to access financial markets for further capital. Now operating as a for-profit Crown corporation, CN reported a profit in 11 of the 15 years from 1978 to 1992, paying $371 million CAD in cash dividends (profit) to the federal government during this time.
Cutbacks and refocusing
CN's rise to profitability was assisted when the company started to remove itself from non-core freight rail transportation starting in 1977 when subsidiary Air Canada (created in 1937 as Trans-Canada Air Lines) became a separate federal Crown corporation. That same year saw CN move its ferry operations into a separate Crown corporation named CN Marine, followed similarly by the grouping of passenger rail services (for marketing purposes) under the name VIA. The following year (1978), the federal government decided to create VIA Rail as a separate Crown corporation to take over passenger services previously offered by both CN and CPR, including CN's flagship transcontinental train the Super Continental and its eastern counterpart the Ocean. CN Marine was renamed Marine Atlantic in 1986 to remove any references to its former parent organization. CN also grouped its money-losing Newfoundland operations into a separate subsidiary called Terra Transport so that federal subsidies for this service would be more visible in company statements.
CN also divested itself during the late 1970s and throughout the 1980s of several non-rail transportation activities such as trucking subsidiaries, a hotel chain (sold to CPR), real estate, and telecommunications companies. The biggest telecommunications property was a company which was co-owned by CN and CP (CNCP Telecommunications) which, upon its sale in the 1980s, was successively renamed Unitel (United Telecommunications), AT&T Canada, and Allstream as it went through various owners and branding agreements. Another more-famous telecommunications property wholly-owned and built by CN was the CN Tower in Toronto which still keeps its original name but was divested by the railway company in the early 1990s. All the proceeds from such sales were used to pay down CN's accumulated debt. At the time of their divestitures, all of these subsidiaries required considerable subsidies which partly explained CN's financial problems prior to recapitalization.
CN also was given free rein by the federal government following deregulation of the railway industry in the 1970s, as well as in 1987, when railway companies began to make tough business decisions by removing themselves from operating money-losing branch lines. In CN's case, some of these branch lines were those which it had been forced to absorb through federal government policies and outright patronage, while others were from the heady expansion era of rural branchlines in the 1920s and early 1930s and were considered obsolete following the development of local road networks.
During the period starting in the late 1970s and throughout the 1980s and early 1990s, thousands of kilometres of railway lines were abandoned, including the complete track networks in Newfoundland (CN subsidiary Terra Transport, the former Newfoundland Railway ended freight operations in 1988 and passenger travel in 1969.) and Prince Edward Island (the former PEIR), as well as numerous branch lines in Nova Scotia, New Brunswick, Southern Ontario, throughout the Prairie provinces, in the British Columbia interior, and on Vancouver Island. Virtually every rural area served by CN in some form was affected, creating resentment for the company and the federal government. Many of these now-abandoned right-of-ways were divested by CN and the federal government and have since been converted into recreational trails by local municipalities and provincial governments.
CN's U.S. subsidiaries prior to privatization
CN's railway network in the late 1980s 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; Detroit, Toledo and Ironton Railroad (DTI) operating in Michigan and Ohio; 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 a former GT line 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 bureaucrat, Paul Tellier, started preparing CN for privatization by emphasizing increased productivity. This was achieved largely through aggressive cuts to the company's bloated and inefficient management structure, widescale layoffs in its workforce and continued abandonment or sale of its branch lines. In 1993 and 1994 the company experimented with a rebranding that saw the names CN, Grand Trunk Western, and Duluth, Winnipeg, and Pacific replaced under a collective CN North America moniker. During this time, CPR and CN entered into negotiations regarding a possible merger of the two companies. This was later rejected by the federal government, whereby 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 exclusively.
The CN Commercialization Act was enacted into law on July 13, 1995 and by November 28, 1995, the federal government had completed an initial public offering (IPO) and transferred all of its shares to private investors. Two key prohibitions in this legislation include, 1) that no individual or corporate shareholder may own more than 15% of CN, and 2) that the company's headquarters must remain in Montreal, thus maintaining CN as a Canadian corporation.
Purchasing Illinois Central
Following the successful IPO, CN has recorded impressive gains in its stock price. In 1998, during an era of mergers in the U.S. railway industry, CN purchased 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 railroad. CN is now feeding Canadian raw material exports into the U.S. heartland and beyond to Mexico through a strategic alliance with Kansas City Southern Railway (KCS).
Failed BNSF merger
In 1999, CN and Burlington Northern and Santa Fe Railway (BNSF), the second largest rail system in the U.S., announced their intent to merge, forming a new corporate entity North American Railways to be headquartered in Montreal to conform with 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 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 (SP). In response to the rail industry, shippers, and political pressure, the STB placed an 15-month moratorium on all rail industry mergers, effectively scuttling CN-BNSF plans. Both companies dropped their merger applications and have never refiled.
Purchasing Wisconsin Central
After the STB moratorium expired, CN purchased Wisconsin Central (WC) in 2001, which allowed the company's rail network to completely 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.
Quoted from Wikipedia
en.wikipedia.org/wiki/Canadian_National
Canadian National Railways was created between 1918 and 1923, comprising several railways that had become bankrupt and fallen into federal government hands, along with some railways already owned by the government. In 1995, the federal government privatized CN. Over the next decade, the company expanded significantly in the United States, purchasing Illinois Central Railroad and Wisconsin Central Railway, among others. Now primarily a freight railway, CN also operated passenger services until 1978, when they were assumed by VIA Rail.
Creation of Canadian National Railways, 1918–1923
In response to public concerns fearing loss of key transportation links, the Government of Canada assumed majority ownership of the 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 control of Canadian Government Railways (CGR), a system comprised of the Intercolonial Railway of Canada (IRC), National Transcontinental Railway (NTR), and the Prince Edward Island Railway (PEIR), among others. On December 20, 1918 the federal government created the Canadian National Railways (CNR) through a Privy Council order 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, National Transcontinental Railway, encountered financial difficulty on March 7, 1919 when the Grand Trunk Pacific Railway's (GTPR) parent company Grand Trunk Railway (GTR), defaulted on repayment of construction loans to the federal government. The federal government's Department of Railways and Canals took over operation of the GTPR until July 12, 1920 when it too was placed under the CNR.
Finally, the bankrupt GTR itself was placed under the care of a federal government "Board of Management" on May 21, 1920, while GTR management and shareholders opposed to nationalization took legal action. After several years of arbitration, the GTR was absorbed into CNR on January 30, 1923. In subsequent years, several smaller independent railways would be added to the CNR as they went bankrupt, or it became politically expedient to do so, however the system was more or less finalized following the addition of the GTR.
Canadian National Railways was born out of both wartime and domestic urgency. Railways, until the rise of the personal automobile and creation of taxpayer-funded all-weather highways, were the only viable long-distance land transportation available in Canada for many years. As such, their operation consumed a great deal of public and political attention. Many countries regard railway networks as critical infrastructure (even to this day) and at the time of the creation of CNR during the continuing threat of the First World War, Canada was not the only country to engage in railway nationalization.
In the early twentieth 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 intervention.
Criticism of CNR
Regardless of the political and economic importance of railway transportation in Canada; there were many critics of the Canadian government's policies in maintaining CNR as a Crown corporation from its inception in 1918 until its privatization in 1995. Some of the most scathing criticism came from the railway industry itself, namely the commercially successful Canadian Pacific Railway (CPR) which argued that its taxes should not be used to fund a competitor. Some argue that the CPR could afford to make this criticism, having been itself the child of government and recipient of untold wealth by virtue of land and resource grants, as well as its position as a monopoly from its completion in 1885 until the CNoR started operations on the Prairies at the turn of the century.
As a result of history and geography, CPR served larger population centres in the southern prairies, while the CNR's merged system served as a de-facto government colonization railway to serve remote and undeveloped regions of Western Canada, northern Ontario and Quebec, and the economically-depressed Maritimes. The company also became a convenient instrument of federal government policy from the operation of ferries in Atlantic Canada, to assuming the operation of the narrow-gauge Newfoundland Railway following that province's entry into Confederation, and the partnership with CPR in purchasing and operating the Northern Alberta Railway. A company-driven decision to create a radio network across Canada for its passenger train customers led to the federal government assuming total control in 1932, naming the radio network the Canadian Radio Broadcasting Commission, which was then renamed and organized into a separate Crown corporation in 1936 as the Canadian Broadcasting Corporation (CBC).
Politics and government priorities
It is generally accepted that government policy dictated CNR commercial decisions, whether such decisions were in the nation's interest, or in the political interest of the party in power. As such, CNR lost money for many years, except during the Second World War when its extensive network reaching into the resource hinterland proved beneficial, and during the late 1980s and early 1990s following deregulation of the Canadian railway industry. Where CNR failed to address costs was largely due to government interference, such as the requirement to purchase locomotives from all Canadian locomotive manufacturers, resulting in operational inefficiencies.
CNR was considered to be competitive with CPR in several areas, notably in Central Canada, prior to the age of the automobile and the dense highway network that grew in Ontario and Quebec. The former GTR's superior track network in the Montreal-Chicago corridor has always been a more direct route with higher capacity than CPR's. CNR was also considered a railway industry leader throughout its time as a Crown corporation in terms of research and development into railway safety systems, logistics management, and in terms of its relationship with labour unions.
Deregulation and recapitalization
Another problem that hobbled CNR was in the sheer number of low-volume branch railway lines which did not produce sufficient traffic to pay for their operation. Without deregulation in the railway industry permitting abandonment or sale of a railway line, or even the ability to set prices to match those of trucks, both CNR and CPR paid dearly for owning these inefficient lines. One tactic that CNR perfected was to demarket a line by providing sufficiently poor service to its few customers, that those customers would turn to trucks for improved service and lower costs. Once customers ceased to exist on a small branch line, the federal government would permit the line's abandonment. Had deregulation been in place several decades earlier, it is conceivable that many Canadian branch lines would have been viable in the hands of short line operators, saving millions of dollars for taxpayers funding highways, since the railway lines had already been publicly funded in their construction.
From the creation of CNR in 1918 until its recapitalization in 1978, whenever the company posted a deficit, the federal government would assume those costs in the government budget. The result of various governments using CNR as a vehicle for various social and economic policies was a subsidization running into billions of dollars over successive decades. Following its 1978 recapitalization and changes in management, CN (name changed to Canadian National Railway, using the shortened acronym CN in 1960) started to operate much more efficiently, by assuming its own debt, improving accounting practices to allow depreciation of assets and to access financial markets for further capital. Now operating as a for-profit Crown corporation, CN reported a profit in 11 of the 15 years from 1978 to 1992, paying $371 million CAD in cash dividends (profit) to the federal government during this time.
Cutbacks and refocusing
CN's rise to profitability was assisted when the company started to remove itself from non-core freight rail transportation starting in 1977 when subsidiary Air Canada (created in 1937 as Trans-Canada Air Lines) became a separate federal Crown corporation. That same year saw CN move its ferry operations into a separate Crown corporation named CN Marine, followed similarly by the grouping of passenger rail services (for marketing purposes) under the name VIA. The following year (1978), the federal government decided to create VIA Rail as a separate Crown corporation to take over passenger services previously offered by both CN and CPR, including CN's flagship transcontinental train the Super Continental and its eastern counterpart the Ocean. CN Marine was renamed Marine Atlantic in 1986 to remove any references to its former parent organization. CN also grouped its money-losing Newfoundland operations into a separate subsidiary called Terra Transport so that federal subsidies for this service would be more visible in company statements.
CN also divested itself during the late 1970s and throughout the 1980s of several non-rail transportation activities such as trucking subsidiaries, a hotel chain (sold to CPR), real estate, and telecommunications companies. The biggest telecommunications property was a company which was co-owned by CN and CP (CNCP Telecommunications) which, upon its sale in the 1980s, was successively renamed Unitel (United Telecommunications), AT&T Canada, and Allstream as it went through various owners and branding agreements. Another more-famous telecommunications property wholly-owned and built by CN was the CN Tower in Toronto which still keeps its original name but was divested by the railway company in the early 1990s. All the proceeds from such sales were used to pay down CN's accumulated debt. At the time of their divestitures, all of these subsidiaries required considerable subsidies which partly explained CN's financial problems prior to recapitalization.
CN also was given free rein by the federal government following deregulation of the railway industry in the 1970s, as well as in 1987, when railway companies began to make tough business decisions by removing themselves from operating money-losing branch lines. In CN's case, some of these branch lines were those which it had been forced to absorb through federal government policies and outright patronage, while others were from the heady expansion era of rural branchlines in the 1920s and early 1930s and were considered obsolete following the development of local road networks.
During the period starting in the late 1970s and throughout the 1980s and early 1990s, thousands of kilometres of railway lines were abandoned, including the complete track networks in Newfoundland (CN subsidiary Terra Transport, the former Newfoundland Railway ended freight operations in 1988 and passenger travel in 1969.) and Prince Edward Island (the former PEIR), as well as numerous branch lines in Nova Scotia, New Brunswick, Southern Ontario, throughout the Prairie provinces, in the British Columbia interior, and on Vancouver Island. Virtually every rural area served by CN in some form was affected, creating resentment for the company and the federal government. Many of these now-abandoned right-of-ways were divested by CN and the federal government and have since been converted into recreational trails by local municipalities and provincial governments.
CN's U.S. subsidiaries prior to privatization
CN's railway network in the late 1980s 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; Detroit, Toledo and Ironton Railroad (DTI) operating in Michigan and Ohio; 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 a former GT line 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 bureaucrat, Paul Tellier, started preparing CN for privatization by emphasizing increased productivity. This was achieved largely through aggressive cuts to the company's bloated and inefficient management structure, widescale layoffs in its workforce and continued abandonment or sale of its branch lines. In 1993 and 1994 the company experimented with a rebranding that saw the names CN, Grand Trunk Western, and Duluth, Winnipeg, and Pacific replaced under a collective CN North America moniker. During this time, CPR and CN entered into negotiations regarding a possible merger of the two companies. This was later rejected by the federal government, whereby 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 exclusively.
The CN Commercialization Act was enacted into law on July 13, 1995 and by November 28, 1995, the federal government had completed an initial public offering (IPO) and transferred all of its shares to private investors. Two key prohibitions in this legislation include, 1) that no individual or corporate shareholder may own more than 15% of CN, and 2) that the company's headquarters must remain in Montreal, thus maintaining CN as a Canadian corporation.
Purchasing Illinois Central
Following the successful IPO, CN has recorded impressive gains in its stock price. In 1998, during an era of mergers in the U.S. railway industry, CN purchased 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 railroad. CN is now feeding Canadian raw material exports into the U.S. heartland and beyond to Mexico through a strategic alliance with Kansas City Southern Railway (KCS).
Failed BNSF merger
In 1999, CN and Burlington Northern and Santa Fe Railway (BNSF), the second largest rail system in the U.S., announced their intent to merge, forming a new corporate entity North American Railways to be headquartered in Montreal to conform with 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 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 (SP). In response to the rail industry, shippers, and political pressure, the STB placed an 15-month moratorium on all rail industry mergers, effectively scuttling CN-BNSF plans. Both companies dropped their merger applications and have never refiled.
Purchasing Wisconsin Central
After the STB moratorium expired, CN purchased Wisconsin Central (WC) in 2001, which allowed the company's rail network to completely 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.
Quoted from Wikipedia
en.wikipedia.org/wiki/Canadian_National