May 28, 2009
CN to pay $1.8 Million for derailments in Alberta and B.C. in August 2005

On May 25, 2009, CN, Canada’s largest railway, pleaded guilty to charges arising from two major derailments and toxic spills in
Western Canada over the course of two days in August 2005.

CN agreed in provincial court to pay $1.8 million to resolve disputes stemming from derailments in Wabamun, Alberta and Squamish,
B.C.  Most of the money will go to environmental and emergency response programs in Alberta and British Columbia.

The Company has also been ordered by a provincial court judge to conduct another review of its procedures to identify any gaps to
its emergency response plans.

On August 3, 2005, a train derailed causing about 800,000 litres of bunker oil and wood preservative to spill into Lake Wabamun,
located just west of Edmonton.  The toxic spill killed birds and fish, polluted the shoreline with thick, gooey deposits and forced
authorities to transport drinking water into the area for 18 months.

Two days later, on August 5th, a similar derailment occurred near Squamish, B.C. where 40,000 litres of sodium hydroxide (caustic
soda) spilled into the Cheakamus River.  More than half a million fish were killed when 9 rail cars derailed on the Cheakamus Canyon
Bridge.  Several environmental reports have said stocks of salmon and other species may take decades to recover.

The Company was facing charges under federal laws protecting fish and migratory birds.  In the case of the Alberta derailment and
spill, the larger of the two derailments, CN was facing a charge of failing to properly remediate a spill.

Last September, CN agreed to pay $10 million to the Paul First Nation, which is situated on Lake Wabamun, for damages caused by
the derailment and offered an additional $7.5 million (approximate) to the area’s 1,600 residents.

The Edmonton Sun reported that Don Meredith, an author and biologist who has lived east of Wabamun since the 1970s, said he is
glad to see an end to this legal chapter.

“You have to look really hard to see any oil, although some of it will occasionally get up on shore in these little tar balls, but you
have to look hard for that,” said Meredith, who also works on a local watershed management group.  He said the incident perhaps
exposed how ill-prepared both CN and the provincial government were for such an environmental disaster.

CN said it and its insurers spent more than $132 million on remediation and compensation following the Wabamun Lake spill and
more than $5 million in the wake of the spill into the Cheakamus River in B.C., mainly to continue work to help rebuild fish habitats in
the river.

Since the two spills, a number of changes have been made on how the Company responds to incidents that threaten the
environment.