CN investing US$165 million to expand Kirk Yard and relocate locomotive repair shop to Gary, Ind.

CHICAGO, IN, Aug. 3, 2011 /PRNewswire/ – CN (TSX: CNR) (NYSE: CNI) today
announced plans for a US$165-million expansion of its Kirk Yard in Gary, Ind.,
and relocation of its Chicago area locomotive repair shop to the upgraded
freight car classification facility in Northwest Indiana.

The project will increase Kirk Yard’s processing capacity to 2,500 cars per day
from 1,500 today. Additional classification tracks, along with more receiving
and departure tracks, will allow the yard to handle longer and more efficient
trains, improve interchange with other railroads, and consolidate CN’s switching
operations in the Chicago area at a single primary yard.

Jim Vena, CN senior vice-president, Southern Region, said: “Our Kirk Yard
improvements, to be completed over the next four years, will deliver significant
gains in productivity and create new capacity for growth in the Chicago area.
Additionally, the redesign of Kirk Yard represents a significant investment by
CN in Northwest Indiana which will bring approximately 250 new jobs to Gary.”

CN’s locomotive repair work now performed at a shop in Homewood, Ill., south of
Chicago will be gradually moved to a new 155,000-square foot shop facility in
Kirk Yard. The facility will be capable of servicing CN’s fleet of locomotives
operating across its U.S. network.

A new wastewater treatment facility, upgrades to utilities throughout the yard,
and the renovation of several yard buildings will also be part of the Kirk Yard
redevelopment. CN’s Clark Road overpass leading to the lakefront industrial area
will be expanded during the project to allow improved truck access.

CN has partnered with the State of Indiana, its Regional Development Authority,
and the City of Gary on an economic development incentive package to assist the
Kirk Yard development. The incentives are provided through city of Gary tax
increment financing (TIF), a Regional Development Authority grant, and grants
and tax credits from the state of Indiana for job creation.

“Whether its bringing dollars back from overseas or from right next door,
finding new investments and jobs is always job one for us,” said Indiana
Governor Mitch Daniels. “Today, we see a product of that effort as one of the
leaders of the rail industry chooses Indiana’s lower-cost, business-friendly
climate and, best of all, chooses Northwest Indiana for its new expansion.”

CN acquired the 350-acre yard as part of its purchase of the Elgin, Joliet &
Eastern Railway in 2009. With Kirk Yard as the primary classification yard in
the Chicago area, CN’s rail satellite operations around Chicago in Markham,
Schiller Park, Hawthorne, Glenn and Joliet yards will continue to be focused on
local pick-up and delivery of freight cars to customers.

The relocation of the locomotive repair shop to Kirk Yard will free space in
CN’s Markham Yard for redevelopment adjacent to CN’s Chicago Intermodal
Terminal. CN continues to invest in its fast growing intermodal terminal in
Harvey, Ill. and is actively exploring redevelopment potential for this area
strategically located south of Chicago.

CN – Canadian National Railway Company and its operating railway subsidiaries -
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 metropolitan areas of
Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay,
Wis., Minneapolis/St. Paul, Memphis, and Jackson, Miss., with connections to all
points in North America. For more information on CN, visit the company’s website
at www.cn.ca

SOURCE CN