Filed by Canadian National Railway Company
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Canadian National Railway Company
Commission File No. 333-94399
[GRAPHIC OMITTED] News
North America's Railroad FOR IMMEDIATE RELEASE
Stock symbols: TSE: CNR / NYSE: CNI
www.cn.ca
Canadian National tells U.S. regulator
safeguarding quality of post-merger rail service
should top any change in rail consolidation rules
by November 2000
WASHINGTON, June 5, 2000 -- Canadian National said today the United States
Surface Transportation Board (STB) should focus on safeguarding the quality of
post-merger rail service as the top priority for any change to its rail
consolidations rules.
CN told the STB in a filing that it should complete its merger rulemaking by
Nov. 16, six months after opening comments were received in the STB's current
rule-making review. Because only a few matters should proceed to the stage of a
proposed merger rule, CN believes that a 15-month study is not warranted.
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CN, in its reply comments regarding the STB's advance notice of proposed
rulemaking for major rail merger procedures, said that, if the Board decides to
proceed with a rulemaking only a few matters other than safeguarding the
quality of post-merger rail service should proceed to the stage of a proposed
merger rule.
CN said the STB could adopt a simple change relating to petitions for waiver of
the one-case-at-a-time rule. The rule should be essentially maintained, said
CN, not scrapped as some competing railroads urge. CN also asked the STB to
preserve for shippers in rail mergers the contract exception provided by the
STB's Bottleneck decision. (That exception says railroads must offer separately
challengeable rates for "bottleneck" segments of certain freight moves when
shippers have contracts for service over the "non-bottleneck" segments of
through routes.)
CN reiterated its stand that the STB should examine broader, industry-wide
issues - such as increased rail competition -- separate and apart from any
revisions to its merger rules. The STB could hold an informational hearing on
potential transcontinental railroads, CN said, and launch a separate inquiry
into competition and other issues that are not related to rail mergers.
To safeguard service, CN is urging the STB to require merger applicants to
submit a service integration plan designed to ensure that implementation of
their transaction will not cause disruption. The agency should also examine the
financial ability of the carriers involved to utilize existing and acquire new
infrastructure and capacity, and to respond quickly to service problems that
require additional financial resources. The agency should also determine
whether either railroad proposing to combine is still suffering from any
service problems associated with earlier consolidations.
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CN is also recommending the STB maintain its current "one-case-at-a-time"
approach to assessing rail merger transactions. Simply put, in deciding whether
a merger is consistent with the public interest, the STB should judge the
transaction on its own merits and direct competitive effects. However, it could
broaden the class of persons that can petition to waive application of this
approach. Any party that can produce demonstrable evidence that a second merger
was proposed in response to the first, and would have direct adverse impacts on
that party, could petition the STB to consider the second merger in its review
of the first. (Today, only an applicant in a common control proceeding or the
STB can waive the one-case-at-a-time consideration of rail mergers.)
CN said that railroads urging repeal of the one-case-at-a-time approach, so
that the STB could consider hypothetical rail merger transactions and
hypothetical industry structures - Union Pacific and CSX Corporation -- "want
to control the timing and use of mergers as a competitive tool ...These
railroads want, through the Board, to control the timetable for structural
change, and the railroads still in trouble want insulation from further
competitive pressure."
"All of this central planning approach...is protectionist and thereby
inherently anti-competitive to its core."
CN and Burlington Northern Santa Fe Corporation (BNSF) are challenging the
legality of a rail merger moratorium imposed by the STB on March 17, 2000. The
moratorium has blocked CN and BNSF from filing a common control application
with the Board, as the two railroads believe they are entitled to do under
applicable law. Oral argument in the legal challenge is scheduled for June 13
in Washington before the U.S. Court of Appeals for the District of Columbia
Circuit.
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CN and BNSF announced their proposed combination through a new company, North
American Railways, Inc., on Dec. 20, 1999. The combination will create a rail
system stretching 50,000 route miles, linking eight Canadian provinces and 33
states in the western and central United States, and employing 67,000 people.
The combined system will offer North American rail shippers greatly expanded
single-line service options and gateway choices; a coordinated marketing plan;
reduced transit times; enhanced reliability; unified customer service
information, including easier tracking, tracing and ordering; simplified
billing; greater capacity; and improved asset utilization.
Comprehensive information about the CN/BNSF combination and the carriers'
service guarantees is available at a new Web site, www.cn-bnsfcombination.com.
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, Memphis, St.
Louis, and Jackson, Miss., with connections to all points in North America.
Through its subsidiary, The Burlington Northern and Santa Fe Railway Company,
BNSF, headquartered in Fort Worth, Texas, operates one of the largest rail
networks in North America, with 33,500 route miles of track covering 28 states
and two Canadian provinces.
CN and North American Railways, Inc. have filed a registration statement on
Form F-4/S-4 with the United States Securities and Exchange Commission (SEC) in
connection with the securities to be issued in the combination. This filing
also includes the proxy statement for the shareholders' meeting to be held for
approval of the combination. Investors should read this document and other
documents filed with the SEC by CN, BNSF and North American Railways, Inc.
about
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the combination, because they contain important information. These documents
may be obtained for free at the SEC Web site, www.sec.gov, or the Web site of
the Canadian Securities Administrators, www.sedar.com. Other filings made by CN
on forms 40-F and 6-K and CN's annual information form may be obtained for free
from the CN Corporate Secretary at (514) 399-6569. Other filings made by BNSF
on forms 10-K, 10-Q and 8-K may be obtained for free from the BNSF Corporate
Secretary at (817) 352-6856. For information concerning participants in CN's
solicitation of proxies for approval of the combination, see "Certain
Information Concerning Participants" filed by CN under Rule 14a-12. For
information concerning participants in BNSF's solicitation of proxies for
approval of the combination, see "Certain Information Concerning Participants"
filed by BNSF on Schedule 14A under Rule 14a-12.
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Contact: Mark Hallman
System Director, Media Relations
(416) 217-6390
