Canadian rail service legislation puts at risk innovation and supply chain collaboration, says President and CEO Claude Mongeau

MONTREAL, Dec. 11, 2012 /PRNewswire/ - Claude Mongeau , president and chief executive officer of CN (TSX: CNR) (NYSE: CNI), says that, putting aside normal operational and commercial issues, there is no evidence of systemic rail service performance problems in Canada warranting the federal government's introduction today of legislation to impose level of service obligations on railways through increased regulation.

Mongeau said: "The objective fact is that Canada has a world-class rail system, one known internationally for efficiency and reliability - a key asset for a trading nation like Canada - and that reflects a well-functioning market for rail services.

"The government's Rail Freight Service Review (RFSR) process launched in 2008 was a key factor in spurring further improvement in rail service. CN addressed every commercial recommendation of the RFSR panel to improve service, entering framework cooperation agreements with a wide array of stakeholders and level of service agreements with many of its customers to increase supply chain collaboration and deepen customer relationships.

" Jim Dinning , while heading the RFSR's railway-shipper facilitation process, recognized this fact, saying in his report that commercial forces were already driving improved rail service and advising the government that shippers should take advantage of the improved customer focus of the rail industry. In recent years, CN has launched a comprehensive series of commercial initiatives that benefit our supply chain partners and the Canadian economy. CN is committed to helping its customers be more competitive in markets at home and abroad through better service and a relentless focus on continuous improvement.

"This is why I am troubled by the government's decision to introduce service legislation that is inconsistent with the facts underscoring improved rail service, as well as the government's stated agenda of innovation and productivity to foster economic prosperity for Canadians.  I also believe the legislation sends mixed signals to customers and suppliers around the world about the government's approach to commercial markets in Canada.

"CN invites the government to identify specific, systemic service issues that warrant this legislation. We are ready to address any legitimate problems brought to our attention, in the same way we addressed all the commercial recommendations of the RFSR panel. We will continue to make our case that a commercial framework for the rail industry is what Canada needs to foster prosperity.

"CN is a true backbone of the Canadian economy. We are central to sustained economic growth, helping take the nation's goods and commodities to market efficiently and reliably. Canada should not put the commercial framework of its rail system at risk through unnecessary and overly burdensome rail regulation. Such an approach would stifle innovation, chill the positive service momentum that's taken hold and result in potentially unintended consequences for the rail industry and the customers we serve."

Click here to see table identifying key RFSR issues and CN's comprehensive response

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.

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SOURCE CN