Canadian National

The Canadian National Railway Company (french: Compagnie des chemins de fer nationaux du Canada) is a Canadian Class I freight railway headquartered in Montreal, Quebec, which serves Canada and the Midwestern and Southern United States.

CN is Canada's largest railway, in terms of both revenue and the physical size of its rail network, spanning Canada from the Atlantic coast in Nova Scotia to the Pacific coast in British Columbia across approximately of track. In the late 20th century, CN gained extensive capacity in the United States by taking over such railroads as the Illinois Central.

CN is a public company with 22,600 employees, and it has a market cap of approximately CA$90 billion. CN was government-owned, having been a Canadian Crown corporation from its founding in 1919 until being privatized in 1995. , Bill Gates is the largest single shareholder of CN stock, owning a 14.2% interest through Cascade Investment and his own Bill and Melinda Gates Foundation.

From 1919 to 1978, the railway was referred to as "Canadian National Railways" (CNR).

History

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 and Wisconsin Central Transportation, 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

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.

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.

Wisconsin Central Railroad

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

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 & Eastern Railroad

In 2007 CN acquired the EJ&E 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.

Bessemer & Lake Erie Railroad

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

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.

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.

British Columbia Railway

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

Illinois Central Railroad

In 1998 IC was purchased by CN and CN also acquired the Chicago Central in the deal.

TransX Group of Companies

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

Pros and cons of nationalization

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 its taxes should not be used to fund a competitor.

As a result of history and geography, the 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 underdeveloped regions of Western Canada, northern Ontario and Quebec, and the Maritimes.

CN was also disadvantaged by being formed from a collection of insolvent rail systems that were not intrinsically viable, as they seldom had the shortest route between any major cities or industrial centres; to this day, CN has many division points far from significant industries or traffic sources. The only notable exception is the former Grand Trunk mainline between Montreal and Chicago.

The company was also used as an instrument of Government of Canada 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 Canadian Confederation, Confederation, and the partnership with CPR in purchasing and operating the Northern Alberta Railways.

CNR as a social and economic tool

CNR was considered 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

From the creation of CNR in 1918 until its recapitalization in 1978, whenever the company posted a deficit, the Government of Canada 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 million in cash dividends (profit) to the Government of Canada in 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-CN''. The following year (1978), the Government of Canada 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 federal subsidies for this service would be more visible in company statements.

CN also divested itself in 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 co-owned by CN and CP (CNCP Telecommunications) that originated from a joint venture involving the railways' respective telegraph services. On its sale in the 1980s, it was successively renamed Unitel (United Telecommunications), AT&T Canada, and Allstream as it went through various owners and branding agreements. CN sold Terra Nova Tel to Newfoundland Telephone in 1988. Another 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 mid-1990s. All 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 Government of Canada 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 it had been forced to absorb through Government of Canada policies and outright patronage, while others were from the heady expansion era of rural branch lines in the 1920s and early 1930s and were considered obsolete following the development of local road networks.

In 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 on Newfoundland (CN subsidiary Terra Transport, the former Newfoundland Railway ended railway freight operations and mixed freight-passenger trains in 1988. Mainline Passenger rail service in Newfoundland ended 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 Government of Canada. Many of these now-abandoned rights-of-way were divested by CN and the Government of Canada 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; 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 through aggressive cuts to the company's 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. In this time, CPR and CN entered into negotiations regarding a possible merger of the two companies. This was later rejected by the Government of Canada, whereupon 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 Government of Canada 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.

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 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).

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 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 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&I), and the Pittsburgh & Conneaut Dock Company. The key instigator for the deal was the fact that since the Wisconsin Central purchase, CN was required to use DM&I trackage rights for a short "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&I, DWP, and WC into its Wisconsin Central Ltd. subsidiary.

In March 2021, CN subsidiary WCL reached a deal to sell roughly 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 21% 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.

CN today

Since the company operates in two countries, CN maintains some corporate distinction by having its U.S. lines incorporated under the Delaware-domiciled Grand Trunk Corporation for legal purposes; however, the entire company in both Canada and the U.S. operates under CN, as can be seen in its locomotive and rail car repainting programs.

Since the Illinois Central purchase in 1998 CN has been increasingly focused on running a "scheduled freight railroad/railway." This has resulted in improved shipper relations, as well as reduced the need for maintaining pools of surplus locomotives and freight cars. CN has also undertaken a rationalization of its existing track network by removing double track sections in some areas and extending passing sidings in other areas.

CN is also a rail industry leader in the employment of radio-control (R/C) for switching locomotives in yards, resulting in reductions to the number of yard workers required. CN has frequently been touted in recent years within North American rail industry circles as being the ''most-improved railroad'' in terms of productivity and the lowering of its operating ratio, acknowledging the fact the company is becoming increasingly profitable. Due to the rising popularity of ethanol, shuttle trains, and mineral commodities, CN Rail Service is increasing in popularity.

Projects

In April 2012 a plan was announced to build an railway that would run north from Sept-Îles, Quebec; the railway would support mining and other resource extraction in the Labrador Trough.

In September 2012, CN announced the trial of locomotives fuelled by natural gas as a potential alternative to conventional diesel fuel. Two EMD SD40 diesel-electric locomotives fuelled with 90% natural gas and 10% diesel were tested in service between Edmonton and Fort McMurray, Alberta.

Controversies

Accidents

*in 1986, an accident happened near Dalehurst, Alberta. CN westbound freight slammed into a Via Rail eastbound, killing 23 and injuring 71. The wreck was caused due to multiple factors caused by CN.
*In December 1999 the ''Ultratrain'', a petroleum products unit train linking the Levis (Quebec) Ultramar oil refinery with a petroleum depot in Montreal, exploded when it collided with a derailed freight train travelling in the opposite direction between Sainte-Madeleine and Saint-Hilaire-Est, south of Montreal, killing the crew of the freight train (the Ultratrain crew's last words were "you guys are derailed, we're hitting you!"). The other train derailed at a broken rail caused by a defective weld that was not fixed in time, despite being repeatedly reported by train crews; the report by the Transportation Safety Board of Canada called into question CN's quality assurance program for rail welds as well as the lack of detection equipment for defective wheels. In memory of the dead crewmen, two new stations on the line have been named after them (Davis and Thériault).
*On May 14, 2003, a trestle collapsed under the weight of a freight train near McBride, British Columbia, killing both crew members. Both men had been disciplined earlier for refusing to take another train on the same bridge, claiming it was unsafe. It was revealed that as far back as 1999, several bridge components had been reported as rotten, yet no repairs had been ordered by management. Eventually, the disciplinary records of both crewmen were amended posthumously.
*Two CN trains collided on August 4, 2007, on the banks of the Fraser River near Prince George, British Columbia. Several cars carrying gasoline, diesel and lumber burst into flames. Water bombers were used to help put out the fires. Some fuel had seeped into the Fraser River.
*On December 4, 2007, a CN train derailed near Edmonton in Strathcona County, Alberta, at 3:30 a.m Mountain Standard Time. Of the 28 cars derailed, the majority were empty or carrying non-hazardous materials such as lumber or pipes.

Derailments

*On May 27, 2002, a CN train derailed at 12:30 p.m. north of Vermontville Highway in Potterville, Michigan. The train was hauling a total of 58 cars. Thirty-five of the cars derailed and 11 of them contained hazmat material. Nine were carrying propane and two cars carried sulfuric acid. Two of the propane tankers were leaking and a third was suspected of leaking. Each propane car contains 34,000 gallons of propane gas which is considered an extreme fire and explosive hazard. An evacuation of Potterville was declared. CN along with other agencies worked throughout the week to clean the area.
*A second CN train derailment in Potterville, Michigan, occurred in May 2006, though no evacuation was necessary. The cause of this derailment was found to be a failed wheel bearing on the 82nd car.
*About 9:04 am central standard time on February 9, 2003, northbound CN freight train M33371 derailed 22 of its 108 cars in Tamaroa, Illinois. Four of the derailed cars released methanol, and the methanol from two of these four cars fueled a fire. Other derailed cars contained phosphoric acid, hydrochloric acid, formaldehyde, and vinyl chloride. Two cars containing hydrochloric acid, one car containing formaldehyde, and one car containing vinyl chloride released product but were not involved in the fire. About 850 residents were evacuated from the area within a radius of the derailment, which included the entire village of Tamaroa. Improper placement of bond wire welds on the head of the rail just outside the joint bars, where untempered martensite associated with the welds led to fatigue and subsequent cracking that, because of increased stresses associated with known soft ballast conditions, rapidly progressed to rail failure.
*On August 5, 2005, in the Cheakamus River derailment, a CN train had nine cars derail on a bridge over the Cheakamus River, causing of caustic soda to spill into the river, killing thousands of fish by caustic burns and asphyxiation. The CBC reported environmental experts say it would take the river 50 years or more to recover from the toxic pollution. CN is facing accusations from local British Columbians over the railway's supposed lack of response to this issue, touted as the worst chemical spill in British Columbia's history.
*A derailment at Moran, north of Lillooet, on June 30, 2006, has raised more questions about CN's safety policies. Two more derailments near Lytton in August 2006 have continued criticism. In the first case, 20 coal cars of a CPR train using a CN bridge derailed, dumping 12 cars of coal into the Thompson River. In the second case half a dozen grain cars spilled on a CN train.
*On June 19, 2009, a CN freight train derailed at a highway/rail grade crossing in Cherry Valley, Illinois (near Rockford). The train consisted of two locomotives and 114 cars, 19 of which derailed. All of the derailed cars were tank cars carrying denatured fuel ethanol, a flammable liquid, and thirteen were breached or lost product and caught fire. As a result of the fire that erupted after the derailment, a passenger in a car stopped at the crossing was fatally injured, two passengers in the same car received serious injuries, and five occupants of other cars waiting at the highway/rail crossing were injured. Two responding firefighters also sustained minor injuries. The release of ethanol and the resulting fire prompted a mandatory evacuation of about 600 residences within a radius of the accident site. Monetary damages were estimated to total $7.9 million. The probable cause of the accident was the washout of the track structure that was discovered about 1 hour before the train's arrival, and CN's failure to notify the train crew of the known washout in time to stop the train. Contributing factors were CN's failure to work with Winnebago County to develop a comprehensive storm water management plan to address previous washouts, CN's failure to issue the flash flood warning to the train crew, and the inadequate design of the train's DOT-111 tank cars.

Disputes

*In March 2004 a strike by the Canadian Auto Workers union showed deep-rooted divisions between organized labour and the company's current management.
*Transport Canada has restricted CN to trains not exceeding 80 car lengths because of the multiple derailments on the former BCR line north from Squamish. This was due to sufficient warnings from the former B.C. Rail to Canadian National Railway to avoid trains of over 60 cars. Unfortunately these warnings were ignored by CN who had been running trains well in excess of 80 cars on this winding and mountainous section of track, known for some of the steepest track in North America.
*In October 2013 the James Street bridge between Thunder Bay and Fort William First Nation was subject to an act of arson causing great structural damage to the bridge. The bridge was the most direct route between Thunder Bay and Fort William First Nation reserve and was used by foot traffic, vehicular traffic, and rail traffic. The matter of who is responsible for the maintenance and repair of the bridge is subject to great controversy between the City of Thunder Bay and CN due to an agreement dating back to 1906 between the Grand Trunk Pacific Railway Company (later incorporated as CNR along with other railways) and the City of Fort William (later merged with the City of Port Arthur into the City of Thunder Bay). The 1906 Agreement states that "The Company will give the Municipal Corporation the perpetual right to cross said bridge for ...vehicle and foot traffic" and that "The Company will maintain the bridge in perpetuity without cost to the Town..." After the fire, CN made repairs to the bridge for use of its rail system but did not repair the damage to the vehicle lanes which render it unsafe for vehicle use. CN maintains that the 1906 Agreement does not speak to replacement of the bridge while the position of the City of Thunder Bay is that CN is solely responsible for making the necessary repairs to restore function to the vehicle lanes of the bridge.

Other incidents

*Controversy arose again in Canadian political circles in 2003 following the company's decision to refer solely to its acronym "CN" and not "Canadian National", a move some interpret as being an attempt to distance the company from references to "Canada". Canada's Minister of Transport at the time called this policy move "obscene" after nationalists noted it could be argued the company is no longer Canadian, being primarily owned by American stockholders. The controversy is somewhat tempered by the fact a majority of large corporations are being increasingly referred to by acronyms.

*The residents of Wabamun Lake, in Alberta, staged a blockade of CN tracks in August 2005, when they were unsatisfied with the railway's response to a derailment catastrophe that spilled over 700,000 Litres of tarry fuel oil and about 80,000 L of carcinogenic pole treatment oil into the lake. Reporters found pre-spill evidence. CN executives admitted CN failed to provide public safety information to prevent public exposure to carcinogenic, toxic chemicals. The tar-like oil and chemicals killed over 500 large migratory birds, animals, fish and other aquatic life.
*In the years following CN's 1998 acquisition of Illinois Central, the company has come under scrutiny for illicit practices that allegedly cause the delay of Amtrak schedules. In 2012, Amtrak filed a formal complaint against CN with the Surface Transportation Board, stating that the prioritization of freight traffic over passenger traffic was commonplace on Amtrak routes operating on CN lines. The complaint cited over 4,000 delays during fiscal year 2011 on the route between Chicago and Carbondale, totaling over 26 days of net wasted schedule time; it also reported 99% of delays between Chicago and New Orleans on the '' City of New Orleans route'' were caused by CN dispatching issues. In 2018, Amtrak began issuing public report cards, grading the impact of freight railroads on passenger train performance. CN received the lowest-possible grade of "F" on the first card issued in March 2018.

Non-rail subsidiaries

CN Telegraph

CN Telegraph originated as the Great North West Telegraph Company in 1880 to connect Ontario and Manitoba and became a subsidiary of Western Union in 1881. In 1915, facing bankruptcy, GNWTC was acquired by the Canadian Northern Railway's telegraph company. When Canadian Northern was nationalized in 1918 and amalgamated into Canadian National Railways in 1921, its telegraph arm was renamed the Canadian National Telegraph Company. CN Telegraphs began co-operating with its Canadian Pacific-owned rival CPR Telegraphs in the 1930s, sharing telegraph networks and co-founding a teleprinter system in 1957. In 1967 the two services were amalgamated into a joint venture CNCP Telecommunications which evolved into a telecoms company. CN sold its stake of the company to CP in 1984.

CNR Radio

In 1923 CNR's second president, Sir Henry Thornton who succeeded David Blyth Hanna (1919–1922), created the CNR Radio Department to provide passengers with entertainment radio reception and give the railway a competitive advantage over its rival, CP. This led to the creation of a network of CNR radio stations across the country, North America's first radio network. As anyone in the vicinity of a station could hear its broadcasts the network's audience extended far beyond train passengers to the public at large.

Claims of unfair competition from CP as well as pressure on the government to create a public broadcasting system similar to the British Broadcasting Corporation
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