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
[CN LOGO]
A combination that's good for
all North America
Notes for remarks by
Paul M. Tellier
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CANADIAN NATIONAL RAILWAY COMPANY
at the Twenty-fifth Annual Conference of
New England Governors and Eastern Canadian Premiers
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Halifax, Nova Scotia
July 17, 2000
(Please check against delivery)
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Thank you, Premier Hamm, for inviting me to speak at the 25th Annual Conference
of New England Governors and Eastern Canadian Premiers.
Port of Halifax
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I also want to thank Premier Hamm for his support for CN in Canada. The
Government of Nova Scotia has been a very effective partner in our mutual
efforts to bring more freight through the Port of Halifax.
The Halifax Port Authority reports that it handled more container traffic last
year than ever before. And for the first five months of 2000, the container
business is up 17 percent from last year.
The fastest growing volume is container traffic from Europe to the Midwest -
cities like Memphis and St. Louis.
These destinations weren't viable before last year. But when CN bought the
Illinois Central Railroad, we created a single-line network that links the
Atlantic, Pacific, and the Gulf of Mexico. We have efficient, single-line
service to the American heartland.
Today Halifax accounts for only 10 percent of the Midwest market. We're going to
build on that. We're helping make Halifax a gateway to the heart of the
continent.
Improving domestic intermodal service
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We're also making bold moves to improve our domestic intermodal service. Last
month we announced new service that cut 24 hours off the trip from Toronto to
Vancouver.
Today we are announcing major improvements in transit times for intermodal
service between Halifax and Toronto.
Premier Lord will appreciate how the new service will make a big difference in
Moncton, which is emerging as a major transportation hub for the Maritimes.
Premier Hamm will appreciate how the Michelin tire plants in Nova Scotia will
now use rail rather than trucks to link with the Michelin facility in Oregon.
1 Notes for remarks by Paul M. Tellier
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And premiers and governors everywhere will appreciate how service like this
helps take freight off the highways and onto rail. Less need for highway
spending. Less greenhouse gas. In fact, the U.S. Environment Protection Agency
estimates that, for every ton-mile, a locomotive emits only a third the nitrogen
oxides that a typical truck does.
An impact on New England's shortlines
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Premier Hamm, I hope that your New England colleagues will excuse me for having
taken this opportunity to talk about the Port of Halifax and about domestic
intermodal service.
But I think the New England governors appreciate that CN's service has a direct
impact on their states. CN serves New England through our partnerships with the
shortline railroads that are the life blood of the New England rail system. In
fact, we've become the best railroad in North America at working with shortline
railroads.
One of our most successful shortline partners is the St. Lawrence & Atlantic
Railroad. Last week it announced it would expand the capacity of its terminal in
Auburn, Maine.
Why? Because of the growth in intermodal traffic it is receiving from Asia. It
receives this traffic from the Zim shipping line - not from the Atlantic, which
is just a few miles away, but across the continent from the Port of Vancouver.
CN and the St. Lawrence & Atlantic have worked together to put Auburn on the
international transportation map. The service works so well that Zim is now
looking at ways to expand service through both the Port of Vancouver and the
Port of Halifax.
Customer service
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Working with our shortline partners has won more business for everyone.
And in the process, we have also learned valuable lessons about how to serve our
customers better. Shortlines are successful because they can serve the needs of
smaller customers.
CN took these lessons to heart when we reorganized following our merger with the
Illinois Central. We put our marketing and operations decision-makers in closer
contact with our customers in our five geographic regions.
2 Notes for remarks by Paul M. Tellier
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We developed a scheduled service plan that is unique in the rail industry.
Customers use our catalogue that lists origin and destination pairs. The
catalogue lists delivery times in hours - not days.
We are a railroad that dares to issue a customer bill of rights.
Our goal is to be a different railroad. And by taking a page out of the service
offered by shortlines, and combining this with the reach of a transcontinental
railroad, we are redefining transportation in North America. We've become North
America's railroad.
Extending reach
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An important part of our strategy has been our steps to extend the reach of
shippers.
With free trade, transportation corridors are growing north-south. Canada-U.S.
trade is growing at more than 10 percent per year. Businesses are reorganizing
to take advantage of opportunities across the continent. Of CN's top 20
customers, 14 have plants more than one NAFTA nation. Only six are located just
in Canada.
Half of our revenue comes from operations in the United States and trans-border
operations. We're a railroad with continental vision.
In the past year, we've proven that we can merge two railroads to give better
north-south reach. And at the same time, we can:
o improve customer service;
o win new business; and,
o become the most efficient railroad in North America.
One year after our merger with the Illinois Central Railroad, delivery of
carload freight is now more than 90 percent on time. Overall transit times have
improved by up to 24 hours system-wide.
Our operating ratio is now the best in North America.
The merger is having a positive impact on safety.
We have proven that it is possible to merge two railroads flawlessly, without
disruption, and with improved service.
3 Notes for remarks by Paul M. Tellier
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CN-BNSF combination
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We want to repeat that achievement with our proposed combination with the
Burlington Northern Santa Fe Railway.
CN and BNSF would combine to form North American Railways, Inc. It would bring
33 states and eight provinces onto a single-line network.
This combination is good for all North America. I want to thank Governor Dean
for Vermont's support for our submission to the Surface Transportation Board. In
the coming weeks and months, we intend to approach the rest of the New England
states to secure their support as well.
This combination would provide alternative gateways to Mexico and give shippers
new choices for gateways to Asia and Europe.
It would foster competition among railroads, and make railroads more competitive
with trucks. It would open new competitive options for shortline railroads
across the continent.
With the CN-BNSF combination, New England shortlines need only get their traffic
to Montreal. With the combination:
o Paper plants in Maine would have single line access to makets in California;
o Plastics producers in Massachusetts would have better sourcing options from
chemical plants in Texas;
o Farmers in New Hampshire would have a better source of feed grains from the
West.
Throughout New England, more freight would be taken off the highways and put on
rail. The trucks that now do long-haul runs to BNSF's railhead in Chicago would
be able to use CN's reload center in Buffalo instead.
Will there be an impact on New England ports? CN commissioned an extensive port
diversion study. It shows that the combination will have little, if any,
negative impact.
A mode for the 21st century
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Premiers, Governors: CN is a different kind of railroad:
o Better service;
o Better partnerships with ports and shortline railroads;
4 Notes for remarks by Paul M. Tellier
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o Better north-south reach for shippers in a free trade marketplace;
o Better labour relations;
o Stronger customer focus.
We're different, because we believe this is how railroads should run in the 21st
century. We believe we can win back freight now carried by trucks.
And I think that the public will be on our side. Everyone wants more freight off
highways. Everyone wants cleaner air and less land paved over with asphalt.
Everyone wants goods from a global marketplace.
In the coming years, public policy makers will face choices that will affect
competition among transportation modes. Railroads are a vital part of North
America's transportation infrastructure. They can become even more competitive
if given the chance.
Continental vision
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One point here is crucial: the infrastructure challenges we all face are
continental in scope. Just as the premiers and governors recognize there are
regional issues that require a united response, so the time has come when
transportation issues can no longer be regarded simply from a national
perspective
Increasingly, people on both sides of the border are thinking and acting like
North Americans. This doesn't mean we lose our national or regional identities.
We keep those identities, but keep our eye on the bigger picture.
For a quarter century, your group has shown the way. Each of you speaks
forcefully and passionately for the interests of your state or province. But
everyone recognizes there are some issues best resolved together - some issues
on which it is best to present a united front.
CN has made the transition to thinking and acting like a North American company.
We've become North America's railroad. We're proud of our role in making North
America competitive. We have a vision for a future where the quality of rail
infrastructure and service is a key North American advantage in the global
marketplace.
Thank you.
5 Notes for remarks by Paul M. Tellier
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Investors are urged to read the joint proxy statement/circular/prospectus
related to the CN/BNSF combination that was filed with the United States
Securities and Exchange Commission (SEC) on Form F-4, together with any
amendments to it, as it contains important information. Investors can obtain
this and any other documents filed with the SEC without charge at the Internet
web site of the SEC (www.sec.gov). In addition, any documents incorporated by CN
by reference in the joint proxy statement/circular/prospectus are available
without charge from CN, as described on page three of the joint proxy
statement/circular/prospectus.
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