UNITED STATES



SECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549



______________________



FORM 40-F

______________________



[   ]
REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934



OR

[X]
ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



|For the fiscal year ended:
    December 31, 2015 | Commission File Number: 1-2413
|------------------------------------------------ | ------------------------------



CANADIAN NATIONAL RAILWAY COMPANY

(Exact name
of registrant as specified in its charter)



|Canada                                                                                                                     | 4011                                                                          | 98-0018609                                                 
|-------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------- | -----------------------------------------------------------
|(Jurisdiction of 
    incorporation or organization)                                                                       | (Primary Standard Industrial
    Classification Code Number)                  | (I.R.S. Employer 
    Identification No.)                  
|                                                                                                                           |                                                                               |                                                            
|                                                                                                                           | 935 de La Gauchetiere Street WestMontreal, QuebecCanada H3B 2M9(514) 399-7091 |                                                            
|(Address, including zip code, and
    telephone number including area code, of Registrant’s principal executive offices)  
|                                                                                                                          
|CT Corporation System111 Eighth AvenueNew York, N.Y. 10011(212) 894-8600                                                  
|(Name,
address, including  zip code, and telephone number, including area code, of agent for service in the United States)
|____________________                                                                                                      
|                                                                                                                           |                                                                               | Securities registered pursuant to Section 12(b) of the Act:





|Title of each classCommon shares | Name of each exchange on which registeredNew York Stock Exchange
        
        Toronto Stock Exchange
|-------------------------------- | --------------------------------------------------------------------------------------------------------



Securities registered pursuant to Section 12(g) of the
Act: None



Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act:





|5.80% notes due June 1, 2016

1.45% notes due December 15, 2016



floating
rate notes due November 14, 2017

5.85%
notes due November 15, 2017

5.55% notes due May 15, 2018



6.80% notes due July 15, 2018



5.55%
notes due March 1, 2019

2.85% notes due December 15, 2021



2.25%
notes due November 15, 2022

7.63% debentures due May 15, 2023



2.95% notes due November 21, 2024



6.90% notes due July 15, 2028

7.38% debentures due October 15, 2031
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





1









|6.25% notes due August 1, 2034



6.20% notes due June 1, 2036



6.71%
Puttable Reset Securities (PURS)SM due July 15, 2036

6.375% debentures due November 15, 2037

3.50% notes due November 15, 2042

4.50% notes due November 7, 2043



7.70% 100-year debentures due September
15, 2096
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



For annual reports, indicate by check mark
the information filed with this Form:



|[X] Annual information form | [   ] Audited annual financial statements
|--------------------------- | -----------------------------------------



Indicate the number of outstanding shares of each of the issuer’s
classes of capital or common stock as of the close of the period covered by the annual report:



At December 31, 2015, 788,668,176 common shares were issued
and outstanding.



Indicate by check mark whether the Registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
Registrant was required to submit and post such files).



Yes ý No
o



Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements
for the past 90 days.



Yes ý No
o




2





CONTROLS AND PROCEDURES



Disclosure Controls and Procedures



The United States
Securities and Exchange Commission (the “Commission”) defines "disclosure controls and procedures" as
controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by an issuer in
the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms.



After evaluating the
effectiveness of Canadian National Railway Company’s disclosure controls and procedures as of the end of the fiscal year
covered by this report, Canadian National Railway Company’s President and Chief Executive Officer (the “CEO”)
and its Executive Vice President and Chief Financial Officer (the “CFO”) have concluded that Canadian National Railway
Company’s disclosure controls and procedures were effective as of the end of the fiscal year covered by this report.



Management’s Annual Report on
Internal Control over Financial Reporting



The report of management
on our internal control over financial reporting is located under the heading “Management’s Report on Internal Control
Over Financial Reporting” in our audited consolidated financial statements, which are filed as Exhibit 99.2 to this
annual report on Form 40-F, and is incorporated by reference herein.



Attestation Report of the Registered
Public Accounting Firm



The attestation report
on our internal control over financial reporting is located under the heading “Report of Independent Registered Public Accounting
Firm” in our audited consolidated financial statements, which are filed as Exhibit 99.2 to this annual report on Form 40-F,
and is incorporated by reference herein.



Changes in Internal Control Over Financial
Reporting



During the year ended
December 31, 2015, there was no change in Canadian National Railway Company’s internal control over financial reporting that
has materially affected, or is reasonably likely to materially affect, Canadian National Railway Company’s internal control
over financial reporting.



AUDIT COMMITTEE FINANCIAL EXPERT



The Registrant’s
board of directors has determined that it has several audit committee financial experts serving on its Audit Committee. Mr. Donald
J. Carty has been determined to be an audit committee financial expert and is independent, as that term is defined by the New York
Stock Exchange’s listing standards applicable to U.S. Companies. The SEC has indicated that the designation or identification
of Mr. Carty as an audit committee financial expert does not deem him an “expert” for any purpose, impose any
duties, obligations or liability on Mr. Carty that are greater than those imposed on members of the audit committee and board
of directors who do not carry this designation or identification, or affect the duties, obligations or liability of any other member
of the audit committee or board of directors.



CODE OF ETHICS



The Registrant has
adopted a code of ethics (the “Code of Business Conduct”) that applies to all employees and officers, including its
principal executive officer, principal financial officer and principal accounting officer. The Code of Business Conduct is available
at the Registrant’s Internet website, www.cn.ca, under the caption “Delivering Responsibly / Governance.”
Any amendments to the Code of Business Conduct will be posted at the Registrant’s Internet website at the address listed
above.





3









Principal
Accountant Fees and Services



Information relating
to principal accountant fees and services is set forth under the heading “Auditors’ Fees” in Item 10.2 of the
Registrant’s 2015 annual information form included in this Form 40-F.



Off
balance sheet arrangements



The information provided
under the heading “Off Balance Sheet Arrangements” set forth in the 2015 Management’s Discussion and Analysis
filed as Exhibit 99.1 to this annual report on Form 40-F is incorporated by reference herein.



TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS



The information provided
under the heading “Contractual Obligations” set forth in the 2015 Management’s Discussion and Analysis filed
as Exhibit 99.1 to this annual report on Form 40-F is incorporated by reference herein.



IDENTIFICATION OF THE AUDIT COMMITTEE



The members of the
Audit Committee are set forth under the heading “Composition of the Audit Committee” in Item 9.2 of the Registrant’s
2015 annual information form included in this Form 40-F .



MINE SAFETY DISCLOSURE



Not applicable.



CORPORATE GOVERNANCE PRACTICES



The Registrant’s
board of directors has reviewed the Registrant’s corporate governance practices in response to the U.S. Sarbanes-Oxley Act
of 2002, applicable rules of the U.S. Securities and Exchange Commission, as well as the NYSE Corporate Governance Standards (the
“NYSE Standards”). Except as disclosed on its website, the Registrant’s corporate governance practices do not
differ significantly from that followed by U.S. domestic companies under the NYSE Standards. A discussion of differences is available
at the Registrant’s Internet website, www.cn.ca under the caption “Delivering Responsibly / Governance”.



UNDERTAKING



Registrant undertakes
to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish
promptly, when requested to do so by the Commission staff, information relating to the securities in relation to which the obligation
to file an annual report on Form 40-F arises; or transactions in said securities.





4













CANADIAN NATIONAL



RAILWAY COMPANY



















2015



ANNUAL INFORMATION FORM























February
1,2016









TABLE
OF CONTENTS





|Annual
        
        Information
        Form |                                                            |                                                                 |    | Management's Discussion & Analysis
        
        (as filed on February 1, 2016) Incorporated
        by Reference
|------------------------------------------------ | ---------------------------------------------------------- | --------------------------------------------------------------- | -- | --------------------------------------------------------------------------------------------------------------------
|Item 1                                           | general information                                        | 1                                                               |   
|Item 2                                           | Incorporation                                              | 2                                                               |   
|                                                 | 2.1                                                        | Incorporation of the Issuer                                     | 2  |                                                                                                                     
|                                                 | 2.2                                                        | Subsidiaries                                                    | 2  |                                                                                                                     
|Item 3                                           | General Development of the Business                        | 2                                                               |   
|                                                 | 3.1                                                        | General Development of the Business During the Last Three Years | 2  |                                                                                                                     
|                                                 | 3.2                                                        | Strategy overview                                               | 11 | 47-50                                                                                                               
|Item 4                                           | Description of the Business                                | 12                                                              |   
|                                                 | 4.1                                                        | Overview                                                        | 12 |                                                                                                                     
|                                                 | 4.2                                                        | Commodity Groups                                                | 12 | 54-58                                                                                                               
|                                                 | 4.3                                                        | Competitive Conditions                                          | 12 | 88                                                                                                                  
|                                                 | 4.4                                                        | Labor                                                           | 12 | 89                                                                                                                  
|                                                 | 4.5                                                        | Social Policies                                                 | 12 |                                                                                                                     
|                                                 | 4.6                                                        | Regulation                                                      | 13 | 90-94                                                                                                               
|                                                 | 4.7                                                        | Environmental Matters                                           | 17 | 86-87                                                                                                               
|                                                 | 4.8                                                        | Legal Matters                                                   | 18 | 84-87                                                                                                               
|                                                 | 4.9                                                        | Intangible Properties                                           | 19 |                                                                                                                     
|                                                 | 4.10                                                       | Risk Factors                                                    | 19 | 88-97                                                                                                               
|Item 5                                           | Dividends                                                  | 19                                                              |   
|Item 6                                           | Description of Capital Structure                           | 19                                                              |   
|                                                 | 6.1                                                        | General Description of Capital Structure                        | 19 |                                                                                                                     
|                                                 | 6.2                                                        | Share Ownership Constraints                                     | 20 |                                                                                                                     
|                                                 | 6.3                                                        | Ratings of Debt Securities                                      | 20 |                                                                                                                     
|Item 7                                           | Transfer Agent and Registrar                               | 21                                                              |   
|Item 8                                           | Market for Securities                                      | 22                                                              |   
|                                                 | 8.1                                                        | Trading Price and Volume                                        | 22 |                                                                                                                     
|                                                 | 8.2                                                        | Prior Sales                                                     | 22 |                                                                                                                     
|Item 9                                           | Directors and Executive Officers                           | 23                                                              |   
|                                                 | 9.1                                                        | Directors                                                       | 23 |                                                                                                                     
|                                                 | 9.2                                                        | Audit Committee Disclosure                                      | 25 |                                                                                                                     
|                                                 | 9.3                                                        | Executive Officers                                              | 28 |                                                                                                                     
|                                                 | 9.4                                                        | Cease Trade Orders, Bankruptcies, Penalties or Sanctions        | 29 |                                                                                                                     
|Item 10                                          | Interest of management and others in material transactions | 29                                                              |   
|Item 11                                          | Interest of experts                                        | 30                                                              |   
|Item 12                                          | AdditioNal Information                                     | 30                                                              |   
|SCHEDULE A - CHARTER OF THE AUDIT COMMITTEE      | 31                                                         |                                                                







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2015 Annual Information Form









| | Item 1 | general
information
| | ------ | -------------------





Except as
otherwise indicated in this Annual Information Form (AIF), the information contained herein is given as of December 31, 2015.
All references in this AIF to “dollars” or “$” are to Canadian dollars and all financial information reflected
herein is determined on the basis of, and prepared in accordance with, United States generally accepted accounting principles
(U.S. GAAP), unless otherwise indicated.



As used herein,
the word Company or CN means, as the context requires, Canadian National Railway Company and/or its subsidiaries.



Certain information
included in this AIF or incorporated by reference herein are “forward-looking statements” within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws. CN cautions that, by
their nature, forward-looking statements involve risks, uncertainties and assumptions. The Company cautions that its assumptions
may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made,
subject to greater uncertainty. These forward-looking statements include, but are not limited to, statements with respect to growth
opportunities; statements that the Company will benefit from growth in North American and global economies; the anticipation that
cash flow from operations and from various sources of financing will be sufficient to meet debt repayments and future obligations
in the foreseeable future; statements regarding future payments, including income taxes and pension contributions; as well as
the projected capital spending program. Forward-looking statements could further be identified by the use of terminology such
as the Company “believes,” “expects,” “anticipates,” “assumes” or other similar
words.



Such forward-looking
statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which
may cause the actual results or performance of the Company or the rail industry to be materially different from the outlook or
any future results or performance implied by such statements. Key assumptions used in determining forward-looking information
are set forth below.



|Forward-looking
    statements                                                                                                                                                      | Key
    assumptions or expectations                                                                                                                                                                                                                                                                     
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Statements
    relating togeneral economic and business conditions,
    including those referring to revenue growth opportunities                                                   | ·North American and global economic growth
        
        ·Long-term
growth opportunities being less affected by current economic conditions                                                                                                                                                          
|Statements
    relating to the Company’s ability to meet debt repayments and future obligations in the foreseeable future, including
    income tax payments, and  capital spending | ·North American and global economic growth
        
        ·Adequate credit ratios
        ·Investment-grade credit ratings
        
        ·Access
to capital markets
        ·Adequate cash generated from operations and other sources of financing                                                
|Statements
    relating to pension contributions                                                                                                                                    | ·Adequate
cash generated from operations and other sources of financing
        ·Adequate long-term return on investment on pension plan assets
        
        ·Level
        of funding as determined by actuarial valuations, particularly influenced by discount rates for funding
        purposes



Important
risk factors that could affect the forward-looking statements include, but are not limited to, the effects of general economic
and business conditions; industry competition; inflation, currency and interest rate fluctuations; changes in fuel prices; legislative
and/or regulatory developments; compliance with environmental laws and regulations; actions by regulators; various events which
could disrupt operations, including natural events such as severe weather, droughts, floods and earthquakes; labor negotiations
and disruptions; environmental claims; uncertainties of investigations, proceedings or other types of claims and litigation; risks
and liabilities arising from derailments; and other risks detailed from time to time in reports filed by CN with securities regulators
in Canada and



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2015 Annual Information Form







the United
States. Reference should be made to the discussion of business risks in CN’s 2015 Management’s Discussion and Analysis
(MD&A) for detailed information on major risk factors, which may be found on SEDAR at www.sedar.com and on EDGAR at www.sec.govand on CN’s website, at www.cn.ca.



CN assumes
no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in
beliefs, unless required by applicable Canadian securities laws. In the event CN does update any forward-looking statement, no
inference should be made that CN will make additional updates with respect to that statement, related matters, or any other forward-looking
statement.



| | Item 2 | Incorporation
| | ------ | -------------



| | 2.1 | Incorporation
                                         of the Issuer
| | --- | --------------------------------------------------------------------



CN was incorporated
in 1919 by special act of the Parliament of Canada with the appointment of its first Board of Directors by Order in Council in
1922. CN’s continuance under the Canada Business Corporations Actwas authorized by the CN Commercialization Actand was effected by Certificate of Continuance dated August 24, 1995. On November 9, 1995, CN filed Articles of Amendment
in order to subdivide its outstanding common shares (Common Shares). As of November 28, 1995, CN ceased to be a Crown corporation
and became a publicly held corporation with its Common Shares listed on the New York Stock Exchange (NYSE) and the Toronto Stock
Exchange (TSX). On April 19, 2002, CN filed Articles of Amendment in order to provide that shareholder meetings may be held
at certain specified places in the United States. Such constating documents are hereinafter collectively referred to as the Articles.



CN’s
Articles provide that the head office of the Company shall be situated in the Montreal Urban Community, Quebec. The Company’s
registered and head office is located at 935 de La Gauchetière Street West, Montreal, Quebec, H3B 2M9, Canada, and
its telephone number is 1-888-888-5909.



| | 2.2 | Subsidiaries
| | --- | ------------



CN’s
principal subsidiaries as of December 31, 2015, all of which are wholly owned (directly or indirectly), and their jurisdiction
of incorporation, are indicated below:



|Name                                     | Jurisdiction
    of Incorporation
|---------------------------------------- | ---------------------------------
|North
    American Railways, Inc.        | Delaware                         
|Grand
    Trunk Corporation              | Delaware                         
|Grand
    Trunk Western Railroad Company | Michigan                         
|Illinois
    Central Corporation         | Delaware                         
|Illinois
    Central Railroad Company    | Illinois                         
|Wisconsin
    Central Ltd.               | Delaware                         



The financial
statements of each of the above principal subsidiaries are consolidated within CN’s financial statements.



| | Item 3 | General
Development of the Business
| | ------ | -----------------------------------



| | 3.1 | General
                                         Development of the Business During the Last Three Years
| | --- | --------------------------------------------------------------------------------------------------------



CN’s
goal is to deliver valuable transportation services for its customers and to grow the business at low incremental cost. CN thereby
creates value for its shareholders by striving for sustainable financial performance through profitable top-line growth, adequate
free cash flow and return on invested capital. CN is also focused on returning





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2015 Annual Information Form





value to
shareholders through dividend payments and share repurchase programs. With a clear strategic agenda, driven by a commitment to
innovation, productivity, supply-chain collaboration, while running trains safely and minimizing environmental impact, CN aims
to create value for its customers as well as its shareholders.



The initiatives
undertaken by CN in the last three years to achieve its growth and profitability goals and to enhance shareholder value can be
grouped into a few key areas. These include acquisitions and dispositions, targeted capital investment spending and other initiatives
to strengthen the Company’s position in the marketplace, and financial management initiatives, as described below.



2015
Highlights



Strategic
Initiatives and Capital Spending



CN’s
business strategy is anchored on the continuous pursuit ofOperational and Service Excellence,
an unwavering commitment to safety and sustainability, and the development of a solid team of motivated and competent railroaders.
CN’s success is dependent on long-term economic viability and on the presence of a supportive regulatory and policy environment
that drives investment and innovation. CN’s success also depends on a stream of capital investments that supports its business
strategy. These investments cover a wide range of areas, from track infrastructure and rolling stock, to information technology,
other equipment and assets that improve the safety, efficiency and reliability of CN’s service offering.



In 2015,
CN spent $2.7 billion in its capital program, with $1.53 billion targeted at maintaining the safety and integrity of the network,
particularly track infrastructure. This investment included the replacement of rail, ties, and other track materials, bridge improvements,
as well as various branch line upgrades. CN has invested significantly to build for the future, increasing network capacity, resilience
and fluidity across its network, including its Edmonton-Winnipeg and Winnipeg-Chicago corridors. As part of its overall capital
program, CN invested more than $120 million in 2015 to install sections of double tracks, extended sidings, crossovers and yard
improvements on main lines in the two corridors.



In 2015,
CN’s equipment capital expenditures reached $555 million, allowing the Company to be ready for growth opportunities and
to improve the quality of the fleet, including the acquisition of 90 new high-horsepower locomotives. Orders have been placed
for 90 additional new locomotives to be delivered in 2016. CN also spent $615 million on initiatives to support growth and drive
productivity, such as transloads and distribution centers; and information technology to improve service and operating efficiency.



The Company
is also strengthening its commitment to Operational and Service Excellence through a wide range of innovations anchored
on its continuous improvement philosophy. CN is building on its industry leadership in terms of fast and reliable hub-to-hub service
by continuing to improve across the range of customer touch points. The Company’s major push in first-mile/last-mile service
is all about improving the quality of customer interactions – developing a sharper outside-in perspective; better monitoring
of traffic forecasts; higher and more responsive car order fulfillment; and proactive customer communication at the local level,
supported by iAdvise, an information tool that is improving the reliability and consistency of shipment information.



CN is committed
to the safety of its employees, the communities in which it operates and the environment. The Company’s long-term safety
improvement is driven by continued significant investments in infrastructure, rigorous safety processes and a focus on employee
training and safety awareness. CN continues to strengthen its safety culture by investing significantly in training, coaching,
recognition and employee involvement initiatives.



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2015 Annual Information Form





Financial
Management Initiatives



The Company
has a commercial paper program in Canada and a new commercial paper program was established in the U.S. during the second quarter
of 2015. Both programs are backstopped by the Company’s revolving credit facility, enabling it to issue commercial paper
up to a maximum aggregate principal amount of $800 million, or the U.S. dollar equivalent, on a combined basis. As at December
31, 2015, the Company had total commercial paper borrowings of $458 million ($U.S. 331 million). The weighted-average interest
rate on these borrowings was 0.41%.



The Company
has an agreement to sell an undivided co-ownership interest in a revolving pool of accounts receivable to unrelated trusts for
maximum cash proceeds of $450 million. On
June 18, 2015, the expiry date of the agreement was extended by one year to February 1, 2018. As at December 31, 2015, the Company
had no proceeds received under the accounts receivable securitization program. The accounts receivable securitization program
provides the Company with readily available short-term financing for general corporate use.



The Company
has an $800 million revolving credit facility agreement with a consortium of lenders. The agreement, which contains customary
terms and conditions, allows for an increase in the facility amount, up to a maximum of $1.3 billion, as well as the option to
extend the term by an additional year at each anniversary date, subject to the consent of individual lenders. The Company exercised
such option, and on March 12, 2015, the expiry date of the agreement was extended by one year to May 5, 2020.The credit
facility is available for general corporate purposes, including back-stopping the Company’s commercial paper program, and
provides for borrowings at various interest rates, including the Canadian prime rate, bankers’ acceptance rates, the U.S.
federal funds effective rate and the London Interbank Offered Rate (LIBOR), plus applicable margins. The credit facility agreement
has one financial covenant, which limits debt as a percentage of total capitalization, and with which the Company is in compliance.
As at December 31, 2015, the Company had no outstanding borrowings under its revolving credit facility and there were no draws
during the year ended December 31, 2015.



The Company
has a series of bilateral letter of credit facility agreements with various banks to support its requirements to post letters
of credit in the ordinary course of business. On March 12, 2015 the expiry date of these agreements was extended by one year to
April 28, 2018. Under these agreements, the Company has the option from time to time to pledge collateral in the form of cash
or cash equivalents, for a minimum term of one month, equal to at least the face value of the letters of credit issued.As
at December 31, 2015, the Company had letters of credit drawn of $551million from a total committed amount of $575million by the various banks. As at December 31, 2015, cash and cash equivalents of $523million were pledged as collateral and recorded as Restricted cash and cash equivalents on the Consolidated Balance Sheet.



On September
11, 2015, CN announced that the TSX had accepted CN's amended 2014-2015 notice of intention of October 2014 to make a Normal Course
Issuer Bid. The notice was amended to permit the repurchase by CN of its Common Shares under a specific share repurchase program
during the term of the Normal Course Issuer Bid. The purchases formed part of CN's 2014-2015 Normal Course Issuer Bid for up to
28.0 million common shares announced on October 21, 2014. CN entered into an agreement with a third party to repurchase its common
shares through daily purchases that took place from September 16 to October 23, 2015. Pursuant to the terms of the agreement,
and subject to the terms of an issuer bid exemption order issued by the Ontario Securities Commission (OSC), the third party purchased
CN’s Common Shares on the open market for its own account in accordance with the rules applicable to the Normal Course Issuer
Bid, for the purpose of ultimately fulfilling its delivery obligations to CN under the agreement. The price that CN paid for Common
Shares purchased by it from the third party under the agreement was negotiated by CN and the third party and was at a discount
to the prevailing market price of CN’s Common Shares on the TSX at the time of the purchase.



On September
22, 2015, under its then current shelf prospectus and registration statement, the Company issued $350 million 2.80% Notes due
2025, $400 million 3.95% Notes due 2045 and $100 million 4.00% Notes due 2065, in



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2015 Annual Information Form





the Canadian
capital markets, which resulted in total net proceeds of $841 million, intended for general corporate purposes, including the
redemption and refinancing of outstanding indebtedness and share repurchases.



On October
27, 2015, the Board of Directors of the Company (Board of Directors) approved a new share repurchase program which allows for
the repurchase of up to 33.0 million Common Shares, between October 30, 2015 and October 29, 2016, pursuant to a normal course
issuer bid at prevailing market prices plus brokerage fees, or such other prices as may be permitted by the TSX and on the same
day, the Company announced that it would enter into an agreement with a third party to repurchase Common Shares through daily
purchases subject to a maximum of 4.0 million Common Shares. The agreement was amended on November 30, 2015 to increase the number
of Common Shares to be purchased to 5.175 million Common Shares. The purchases took place from October 30, 2015 to December 24,
2015. Pursuant to the terms of the agreement, and subject to the terms of an issuer bid exemption order issued by the OSC, the
third party purchased CN’s Common Shares on the open market for its own account in accordance with the rules applicable
to the Normal Course Issuer Bid, for the purpose of ultimately fulfilling its delivery obligations to CN under the agreement.
The price that CN paid for Common Shares purchased by it from the third party under the agreement was negotiated by CN and the
third party and was at a discount to the prevailing market price of CN’s Common Shares on the TSX at the time of the purchase.
The purchases formed part of CN's repurchase of up to 33.0 million Common Shares under its current share repurchase program.



On December
18, 2015, the Company announced that it had entered into an agreement with a third party to repurchase Common Shares through daily
purchases subject to a maximum of 4.356 million Common Shares. The purchases are taking place from December 29, 2015 to February
29, 2016. Pursuant to the terms of the agreement, and subject to the terms of an issuer bid exemption order issued by the OSC,
the third party is purchasing CN’s Common Shares on the open market for its own account in accordance with the rules applicable
to the Normal Course Issuer Bid, for the purpose of ultimately fulfilling its delivery obligations to CN under the agreement.
The price that CN is paying for Common Shares purchased by it from the third party under the agreement was negotiated by CN and
the third party and was at a discount to the prevailing market price of CN’s Common Shares on the TSX at the time of the
purchase. The purchases form part of CN's repurchase of up to 33.0 million Common Shares under its current share repurchase program.



On
January 5, 2016, CN filed a new shelf prospectus with the Canadian securities regulators and a registration statement with the
United States Securities and Exchange Commission (SEC) pursuant to which CN may issue up to $6.0 billion of debt securities in
Canadian and U.S. markets. The current shelf prospectus and registration statement expires February 4, 2018 and replaces CN’s
previous shelf prospectus and registration statement. Access to capital markets under the shelf prospectus is dependent on market
conditions at the time of pricing.



Significant
Collective Agreements



Canadian
workforce



On January
30, 2015, the agreement for the renewal of the collective agreement with the United Steelworkers of America (USW) governing maintenance
of way employees was ratified. The new collective agreement expires on December 31, 2018.



On February
25, 2015, the agreement for the renewal of the collective agreement with the Teamsters Canada Rail Conference (TCRC-RCTC) governing
rail traffic controllers was ratified. The new collective agreement expires on December 31, 2018.



On March
13, 2015, the agreements for the renewal of the collective agreements with Unifor governing clerical, intermodal employees and
owner operator truck drivers were ratified. The new collective agreements expire on March 31, 2019.



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2015 Annual Information Form





On March
17, 2015, the agreement for the renewal of the collective agreement with Unifor governing shopcraft employees was ratified. The
new collective agreement expires on December 31, 2018.



On April
16, 2015, the agreement for the renewal of the collective agreement with the TCRC governing locomotive engineers (TCRC-LE) was
ratified. The new collective agreement expires on December 31, 2017.



Under the
Canada Labour Code, the law governing labor relations for the Canadian railroad industry, collective agreements remain in force
until such time as the parties have either reached a renewed agreement or the dispute resolution mechanisms in the Code have been
exhausted.



U.S. workforce



As of February
1, 2016, the Company had in place agreements with bargaining units representing the entire unionized workforce at Grand Trunk
Western Railroad Company (GTW), companies owned by Illinois Central Corporation (ICC), companies owned by Wisconsin Central Ltd.
(WC), Bessemer & Lake Erie Railroad Company (BLE) and The Pittsburgh and Conneaut Dock Company (PCD). Agreements in place
have various moratorium provisions up to 2018, which preserve the status quo in respect of the given collective
agreement during the terms of such moratoriums. All collective agreements covering non-operating craft employees and four collective
agreements covering operating craft employees are currently under renegotiation.



During 2015,
the Company renewed a collective agreement with the United Transportation Union (UTU) (a division of the International Association
of Sheet Metal, Air, Rail, and Transportation Workers - SMART) governing conductors on the Grand Trunk Western. On January 15,
2016, the Company renewed three additional collective agreements with UTU, governing 57 yardmasters at GTW, WC, and a small subset
working on the ICC.



The general
approach to labor negotiations by U.S. Class I railroads is to
bargain on a collective national basis with the industry, which GTW, ICC, WC and BLE have agreed to participate in, effective
January 2015, for collective agreements covering non-operating employees. Collective agreements covering operating employees at
GTW, ICC, WC, BLE and all employees at PCD continue to be bargained on a local (corporate) basis.



Where negotiations
are ongoing, the terms and conditions of existing agreements generally continue to apply until new agreements are reached or the
processes of the Railway Labor Act have been exhausted.



2014
Highlights



Acquisitions
and Dispositions



On February
28, 2014, the Company closed a transaction with Agence Métropolitaine de Transport to sell the Deux-Montagnes subdivision
between Saint-Eustache and Montreal, Quebec, including the Mont-Royal tunnel, together with the rail fixtures (collectively Deux-Montagnes),
for cash proceeds of $97 million before transaction costs. Under the agreement, the Company obtained the perpetual right to operate
freight trains over the Deux-Montagnes at its then current level of operating activity, with the possibility of increasing its
operating activity for additional consideration. The transaction resulted in a gain on disposal of $80 million ($72 million after-tax)
that was recorded in Other income under the full accrual method of accounting for real estate transactions.



On September
4, 2014, the Company closed a transaction with Metrolinx to sell a segment of the Guelph subdivision located between Georgetown
and Kitchener, Ontario, together with the rail fixtures and certain passenger agreements (collectively Guelph), for cash proceeds
of $76 million before transaction costs. The Company did not meet all the conditions to record the sale under the full accrual
method for real estate transactions as it continues to have substantial continuing involvement on the Guelph. The Company will
have relinquished substantially all of the



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risks and
rewards of ownership on the Guelph in 2018, at which time the gain on the sale is expected to be recognized.



Strategic
Initiatives and Capital Spending



In 2014,
CN spent approximately $2.3 billion in its capital program, with $1.25 billion targeted at maintaining the safety and integrity
of the network. This investment included the replacement of rail, ties, and other track materials, bridge improvements, as well
as various branch line upgrades. CN invested significantly to build for the future, increasing network capacity, resilience and
fluidity across its network, including its Edmonton-Winnipeg and Winnipeg-Chicago corridors. As part of its overall capital program,
CN invested more than $100 million in 2014 to install sections of double tracks, extended sidings, crossovers, high-speed switches
and yard improvements on main lines in the two corridors.



In 2014,
CN’s equipment capital expenditures reached approximately $375 million, allowing the Company to tap growth opportunities
and improve the quality of the fleet. In order to handle the expected traffic increase and improve operational efficiency, 60
new high-horsepower locomotives were added to the fleet in 2014. Furthermore, orders were placed for 180 additional new locomotives:
90 delivered in 2015 and 90 to be delivered in 2016. CN also spent approximately $575 million on initiatives to support growth
and drive productivity, such as transloads and distribution centers; and information technology to improve service and operating
efficiency.



As part of
its objective to build a solid team of railroaders, the Company opened two new state-of-the-art training facilities in 2014, in
Winnipeg, Manitoba and Homewood, Illinois, at a cost of $55 million, aimed at preparing employees to be highly skilled, safety
conscious and confident in their work environment. Curricula for technical training and leadership development was also improved
to meet the learning needs of CN’s railroaders – both
current and future. These programs and initiatives provided a solid platform for the assessment and development of the Company’s
talent pool, and are tightly integrated with the Company’s
business strategy.



The Company
also strengthened its commitment to Operational and Service Excellence through a wide range of innovations anchored on
its continuous improvement philosophy. Through a portfolio of initiatives called CustomerFIRST, the Company innovated to address
key customer pinch points, including the first-mile and last-mile of the shipment cycle. iAdvise, an information tool that is
improving the reliability and consistency of shipment information, was the latest initiative in CN’s strategy to communicate
better with customers. In 2014, CN rolled out its iAdvise tool to a significant number of its largest customers.



Financial
Management Initiatives



The Company
has a commercial paper program, which is back-stopped by its revolving credit facility, enabling it to issue commercial paper
up to a maximum aggregate principal amount of $800 million, or the U.S. dollar equivalent. As at December 31, 2014, the Company
had no commercial paper borrowings.



The Company
has an agreement to sell an undivided co-ownership interest in a revolving pool of accounts receivable to unrelated trusts for
maximum cash proceeds of $450 million. On July 23, 2014, the expiry date of the agreement was extended by one year to February
1, 2017. As such, as at December 31, 2014, the Company recorded $50 million of proceeds received under the accounts receivable
securitization program in the Current portion of long-term debt on the Consolidated Balance Sheet at a weighted-average interest
rate of 1.24% which is secured by and limited to $56 million of accounts receivable.The accounts receivable securitization program provides the Company with readily available short-term financing for general
corporate use.



The Company
has an $800 million revolving credit facility agreement with a consortium of lenders. The agreement, which contains customary
terms and conditions, allows for an increase in the facility amount, up to a maximum of $1.3 billion, as well as the option to
extend the term by an additional year at each anniversary date, subject to the



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consent of
individual lenders. The Company exercised such option and on March 14, 2014, the expiry date of the agreement was extended by
one year to May 5, 2019. The credit facility is available for general corporate purposes, including back-stopping the Company’s
commercial paper program, and provides for borrowings at various interest rates, including the Canadian prime rate, bankers’
acceptance rates, the U.S. federal funds effective rate and the LIBOR, plus applicable margins.
The credit facility agreement has one financial covenant, which limits debt as a percentage of total capitalization, and with
which the Company is in compliance. As at December 31, 2014, the Company had no outstanding borrowings under its revolving credit
facility and there were no draws during the year ended December 31, 2014.



The Company
has a series of bilateral letter of credit facility agreements with various banks to support its requirements to post letters
of credit in the ordinary course of business. On March 14, 2014, the expiry date of these agreements was extended by one year
to April 28, 2017. Under these agreements, the Company has the option from time to time to pledge collateral in the form of cash
or cash equivalents, for a minimum term of one month, equal to at least the face value of the letters of credit issued. As at
December 31, 2014, the Company had letters of credit drawn of $487 million from a total committed amount of $511 million by the
various banks. As at December 31, 2014, cash and cash equivalents of $463 million were pledged as collateral and recorded as Restricted
cash and cash equivalents on the Consolidated Balance Sheet.



On February
18, 2014, under its then current shelf prospectus, the Company issued $250 million 2.75% Notes due 2021 in the Canadian capital
markets, which resulted in net proceeds of $247 million, intended for general corporate purposes, including the redemption and
refinancing of outstanding indebtedness and share repurchases.



On October
21, 2014, the Board of Directors approved a new share repurchase program which allowed for the repurchase of up to 28.0 million
Common Shares, between October 24, 2014 and October 23, 2015, pursuant to a normal course issuer bid at prevailing market prices
plus brokerage fees, or such other prices as may be permitted by the TSX.



On October
27, 2014, the Company announced its intention to repurchase up to 5.175 million of its Common Shares from an arm's-length third-party
seller by means of private agreements to be formalized at the time of each such purchase. Such repurchases were made pursuant
and subject to the terms of an issuer bid exemption order issued by the OSC and took place before October 23, 2015. The purchases
formed part of CN's repurchase of up to 28.0 million Common Shares under the share repurchase program announced on October 21,
2014. The price that CN paid for any Common Shares purchased under such private agreements was negotiated by CN and the third-party
seller and was at a discount to the prevailing market price of CN's Common Shares on the TSX at the time of the purchase.



On November
14, 2014, under its then current shelf prospectus and registration statement, the Company completed a two-tranche debt offering
of U.S.$600 million ($682 million), comprised of U.S.$250 million ($284 million) Floating Rate Notes due 2017, and U.S.$350 million
($398 million) 2.95% Notes due 2024 in the U.S. capital markets, which resulted in net proceeds of U.S.$593 million ($675 million),
intended for general corporate purposes, including the redemption and refinancing of outstanding indebtedness, and share repurchases.



Significant
Collective Agreements



On June 19,
2014, settlement through binding arbitration decision was reached on the collective agreement between CN and the Teamsters Canada
Rail Conference, covering approximately 3,000 mainline conductors and yard crews (TCRC-CTY). The new collective agreement is set
to expire on July 22, 2016.



In the fourth
quarter of 2014, the bargaining process commenced for the renewal of CN’s collective agreements expiring on December 31,
2014, with:



| | · | Unifor
                                         governing clerical, intermodal, shopcraft employees and owner operator truck drivers;
| | - | -------------------------------------------------------------------------------------------------------------------------------------



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| | · | the
                                         Teamsters Canada Rail Conference governing rail traffic controllers (TCRC-RCTC);
| | - | -----------------------------------------------------------------------------------------------------------------------------



| | · | the
                                         Teamsters Canada Rail Conference governing locomotive engineers (TCRC-LE); and
| | - | ---------------------------------------------------------------------------------------------------------------------------



| | · | the
                                         United Steelworkers of America (USW) governing maintenance of way employees.
| | - | -------------------------------------------------------------------------------------------------------------------------



See Item
3.1 of this AIF General Development of the Business during the last three years – 2015 Highlights for an update on
these labor negotiations.



As of February
2, 2015, the Company had in place agreements with bargaining units representing the entire unionized workforce at Grand Trunk
Western Railroad Company (GTW), companies owned by Illinois Central Corporation (ICC), companies owned by Wisconsin Central Ltd.
(WC), Bessemer & Lake Erie Railroad Company (BLE) and The Pittsburgh and Conneaut Dock Company (PCD). Agreements in place
have various moratorium provisions up to 2018, which maintain the terms of the collective agreement and clearly
define when a party to the agreement can serve notice of an intention to negotiate contractual changes.



2013
Highlights



Acquisitions
and Dispositions



On March
19, 2013, the Company entered into an agreement with Metrolinxto
sell a segment of the Oakville subdivision in Oakville and Burlington, Ontario, together with the rail fixtures and certain passenger
agreements (collectively Lakeshore West), for cash proceeds of $52 million before transaction costs. Under the agreement, the
Company obtained the perpetual right to operate freight trains over the Lakeshore West at its then current level of operating
activity, with the possibility of increasing its operating activity for additional consideration. The transaction resulted in
a gain on disposal of $40 million ($36 million after-tax) that was recorded in Other income under the full accrual method of accounting
for real estate transactions.



On June 8,
2013, the Company entered into an agreement with another Class I
railroad to exchange perpetual railroad operating easements including the track and roadway assets on specific rail lines (collectively
the exchange of easements) without monetary consideration. The transaction resulted in a gain on exchange of easements of $29
million ($18 million after-tax) that was recorded in Other income.



Strategic
Initiatives and Capital Spending



CN’s
capital expenditure programs support the Company’s commitment to its core principles and strategy and its ability to grow
the business profitably. In 2013, CN invested approximately $2.0 billion on capital programs, of which approximately $1.2 billion
was for track infrastructure to continue operating a safe railway and improve the productivity and fluidity of the network; and
includes the replacement of rail, ties, and other track materials, bridge improvements, as well as rail-line improvements for
the Elgin, Joliet and Eastern (EJ&E) railway property. In 2013, CN’s equipment capital expenditures of approximately
$300 million allowed the Company to tap growth opportunities and improve the quality of the fleet. In order to handle expected
traffic increase and improve operational efficiency, CN took delivery of 44 new and 37 second-hand high-horsepower locomotives.
CN also spent approximately $500 million on facilities to grow the business including transloads, distribution centers, the recently
opened Joliet Intermodal Terminal in Illinois, and the continued development of its Calgary Logistics Park (Logistics Park) project;
on information technology to improve service and operating efficiency; and on other projects to increase productivity.



Given expectations
of continued strong freight volume growth in Western Canada, including grain and other commodities, CN enhanced its network fluidity.
As part of its $2 billion overall 2013 capital program, CN earmarked several capacity enhancement projects in its Edmonton-Winnipeg
corridor at a cost of $100 million, which was completed in 2013. Of the $100 million, $90 million was invested for increased capacity
on CN’s main corridor between Edmonton and Winnipeg, including extended sidings on the main corridor, sections of mainline
double track, as well as yard track extensions in Winnipeg, Saskatoon and Wainwright. CN invested $10 million in improvements
to



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CN’s
Prairie North Line, which runs parallel north of the Company’s main corridor between Edmonton and Winnipeg, principally
between Saskatoon and Edmonton. The improved line serves as a new “relief valve” for the main corridor, providing
flexibility and resilience to the network. The work involved included increased capital spending for new rail, ties, track surfacing,
as well as new sidings to handle increased traffic volumes.



Financial
Management Initiatives



The Company
has a commercial paper program, which is back-stopped by its revolving credit facility, enabling it to issue commercial paper
up to a maximum aggregate principal amount of $800 million, or the U.S. dollar equivalent. As at December 31, 2013, the Company
had total borrowings of $273 million under its commercial paper program, presented in Current portion of long-term debt on the
Consolidated Balance Sheet. The weighted-average interest rate on these borrowings was 1.14%.



On December
20, 2012, the Company entered into a three-year agreement, which commenced on February 1, 2013, to sell an undivided co-ownership
interest in a revolving pool of accounts receivable to unrelated trusts for maximum cash proceeds of $450 million. The trusts
are multi-seller trusts and the Company is not the primary beneficiary. Funding for the acquisition of these assets is customarily
through the issuance of asset-backed commercial paper notes by the unrelated trusts. Based on the structure of the program, the
Company accounts for the proceeds as secured borrowings. As at December 31, 2013, the Company had recorded $250 million of proceeds
received under the accounts receivable securitization program in the Current portion of long-term debt on the Consolidated Balance
Sheet at a weighted-average interest rate of 1.18% which is secured by and limited to $281 million of accounts receivable.



The
Company has an $800 million revolving credit facility agreement with a consortium of lenders. On March 22, 2013, the agreement
was amended to extend the term to May 5, 2018. The agreement allows for an increase in the facility amount, up to a maximum of
$1.3 billion, as well as the option to extend the term by an additional year at each anniversary date, subject to the consent
of individual lenders. The credit facility, containing customary terms and conditions, is available for general corporate purposes,
including back-stopping the Company’s commercial paper program, and provides for borrowings at various interest rates, including
the Canadian prime rate, banker’s acceptance rates, the U.S. federal funds effective rate and the LIBOR, plus applicable
margins. The credit facility agreement has one financial covenant, which limits debt as a percentage of total capitalization,
and with which the Company is in compliance. As at December 31, 2013, the Company had no outstanding borrowings under its revolving
credit facility and there were no draws during the year ended December 31, 2013.



The Company
has a series of bilateral letter of credit facility agreements with various banks to support its requirements to post letters
of credit in the ordinary course of business. On March 22, 2013, the expiry date of these agreements was extended by one year
to April 28, 2016. Under these agreements, the Company has the option from time to time to pledge collateral in the form of cash
or cash equivalents, for a minimum term of one month, equal to at least the face value of the letters of credit issued. As at
December 31, 2013, the Company had letters of credit drawn of $481 million from a total committed amount of $503 million by the
various banks. As at December 31, 2013, cash and cash equivalents of $448 million were pledged as collateral and recorded as Restricted
cash and cash equivalents on the Consolidated Balance Sheet.



In March
2013, the Company, through a wholly-owned subsidiary, repurchased 85% of the 4.40% Notes due 2013, with a carrying value of U.S.$340
million pursuant to a tender offer for a total cost of U.S.$341 million, including consent payments. The remaining 15% of the
4.40% Notes with a carrying value of U.S.$60 million were paid upon maturity.



On October
22, 2013, the Board of Directors approved a two-for-one common stock split which was effected in the form of a stock dividend
of one additional Common Share of CN for each Common Share outstanding, which was paid on November 29, 2013, to shareholders of
record on November 15, 2013. At the effective date of the stock split,



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all equity-based
benefit plans and the share repurchase program were adjusted to reflect the issuance of additional shares. All share and per share
data presented herein reflect the impact of the stock split. In addition, the Company’s Board of Directors approved an increase
of 16% to the quarterly dividend to common shareholders, from $0.215 in 2013 to $0.250 in 2014.



On October
22, 2013, the Board of Directors approved a new share repurchase program which allowed for the repurchase of up to 30.0 million
Common Shares (on a post-split basis), between October 29, 2013 and October 23, 2014 pursuant to a normal course issuer bid at
prevailing market prices plus brokerage fees, or such other prices as may be permitted by the TSX.



On
October 25, 2013, the Company announced its intention to repurchase up to 10.0 million of its Common Shares (on a post-split basis)
from an arm's-length third-party seller by means of private agreements to be formalized at the time of each such purchase. The
purchases formed part of CN's repurchase of up to 30.0 million Common Shares under the share repurchase program announced on October
22, 2013. Such repurchases were made pursuant and subject to the terms of an issuer bid exemption order issued by the OSC and
took place before the end of March 2014. The price that CN paid for any Common Shares purchased under such agreements was negotiated
by CN and the seller and was at a discount to the prevailing market price of CN's Common Shares on the TSX at the time of the
purchase.



On November
7, 2013, CN issued U.S.$350 million ($365 million) floating rate Notes due 2015 and U.S.$250 million ($260 million) 4.50% Notes
due 2043 in the U.S. capital markets, which resulted in net proceeds of U.S.$592 million ($617 million), intended for general
corporate purposes, including the redemption and refinancing of outstanding indebtedness.



On
December 3, 2013, CN filed a shelf prospectus with Canadian securities regulators and a registration statement with the SEC, providing
for the issuance by CN of up to $3.0 billion of debt securities in Canadian and U.S. markets. This shelf prospectus and registration
statement expired January 2, 2016 and was replaced by a new shelf prospectus and registration statement filed on January 5, 2016.



Significant
Collective Agreements



On January
31, 2013, the agreement reached for the renewal of the collective agreement the International Brotherhood of Electrical Workers
(IBEW), covering approximately 700 signals and communications employees was ratified. The new collective agreement will expire
on December 31, 2016.



On October
30, 2013, a tentative agreement was reached between CN and the TCRC to renew the collective agreements covering approximately
3,000 mainline conductors and yard crews, which expired on July 22, 2013. On January 31, 2014, CN announced that the TCRC advised
the Company that the membership did not ratify the tentative agreement. CN and the TCRC resumed discussions during the week of
February 3, 2014.



See Item
3.1 of this AIF General Development of the Business during the last three years – 2014 Highlights for an update on
these labor negotiations.



| | 3.2 | Strategy
                                         overview
| | --- | ----------------------------------------------------------



For a discussion
of the Company’s business strategy and anticipated developments for 2016, please see the section entitled “Strategy
overview” on pages 47 to 50 of the MD&A, which are incorporated by reference herein. The MD&A may be found on SEDAR
at www.sedar.com and on EDGAR at www.sec.gov.



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| | Item
4 | Description
of the Business
| | ------ | ---------------------------



| | 4.1 | Overview
| | --- | --------



CN is engaged
in the rail and related transportation business. CN’s network of approximately 20,000 route miles of track spans Canada
and mid-America, uniquely connecting three coasts: the Atlantic, the Pacific and the Gulf of Mexico and serving the cities and
ports of Vancouver, Prince Rupert (British Columbia), Montreal, Halifax, New Orleans, and Mobile (Alabama), and the metropolitan
areas of Toronto, Edmonton, Winnipeg, Calgary, Chicago, Memphis, Detroit, Duluth (Minnesota)/Superior (Wisconsin), and Jackson
(Mississippi), with connections to all points in North America. CN’s extensive network and efficient connections to all
Class I railroads provide CN customers access to all three North
American Free Trade Agreement (NAFTA) nations. CN handles over $250 billion worth of goods annually and carries more than 300
million tons of cargo, serving exporters, importers, retailers, farmers and manufacturers.



CN’s
freight revenues are derived from seven commodity groups representing a diversified and balanced portfolio of goods transported
between a wide range of origins and destinations. This product and geographic diversity better positions the Company to face economic
fluctuations and enhances its potential for growth opportunities. In 2015, no individual commodity group accounted for more than
23% of total revenues. From a geographic standpoint, 18% of revenues relate to U.S. domestic traffic, 33% transborder traffic,
18% Canadian domestic traffic and 31% overseas traffic. The Company is the originating carrier for approximately 85% of traffic
moving along its network, which allows it both to capitalize on service advantages and build on opportunities to efficiently use
assets.



| | 4.2 | Commodity
                                         Groups
| | --- | ---------------------------------------------------------



For a description
of the various commodity groups transported by CN, their principal markets, as well as select revenue, revenue ton miles and carload
information, please see pages 54 to 58 of the MD&A, which are incorporated by reference herein.



| | 4.3 | Competitive
                                         Conditions
| | --- | ---------------------------------------------------------------



For a discussion
of the competitive conditions under which CN operates, please see the section entitled “Competition” in the discussion
of Business risks located on page 88 of the MD&A, which is incorporated by reference herein.



| | 4.4 | Labor
| | --- | -----



As at December
31, 2015, CN employed a total of 23,172 employees,
of which 17,292were
unionized employees.



For a discussion
of CN’s labour negotiations, please see the section entitled “Labor negotiations” in the Business risks discussion
located on page 89 of the MD&A, which are incorporated by reference herein.



| | 4.5 | Social
                                         Policies
| | --- | --------------------------------------------------------



In addition
to its Employment Equity Policy (for Canadian employees) and Equal Employment Opportunity Policy (for U.S. employees), CN maintains
a comprehensive Human Rights Policy and a Harassment Free Environment Policy for its Canadian employees and a Prohibited Harassment,
Discrimination and Anti-Retaliation Policy for its U.S. employees. These policies affirm CN’s commitment to ensuring that
there is no discrimination against any employee or applicant based on grounds of religion, race, sex, nationality, disability
or any other prohibited grounds of discrimination. The policy extends to recruitment, selection and compensation practices, as
well as to working conditions and the work environment. All Company vice-presidents have been mandated with the responsibility
of implementing these policies and ensuring that all work practices are in compliance. Internal complaint procedures



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have been
established whereby any person covered by the Harassment Free Environment Policy (for Canadian employees) and the Equal Employment
Opportunity Policy or the Prohibited Harassment, Discrimination and Anti-Retaliation Policy (for U.S. employees) can contact his
or her human resources director or human resources manager who will address his or her complaint. The employee can also call either
the Human Resources Center, which will forward the complaint to the appropriate human resources manager for further handling,
or the CN Ombudsman directly, who can be contacted on a confidential basis.As part of CN’s commitment to providing a safe, healthy and violence-free workplace for all employees, CN has in
place a Workplace Violence Prevention Policy which applies to all employees.The objective of this policy is to reiterate
the prohibition of workplace violence at CN and set out how threats, acts or risks of workplace violence are to be reported and
addressed.



| | 4.6 | Regulation
| | --- | ----------



The Company’s
operations are subject to regulations both in Canada and in the U.S. A summary of such regulations is provided below. For a complete
discussion of recent and pending legislative and other regulatory developments both in Canada and in the U.S., see the section
entitled “Regulation” in the Business risks discussion located on pages 90 to 94 of the MD&A, which are incorporated
by reference herein.



Economic
regulation – Canada



The Company’s
rail operations in Canada are subject to economic regulation by the Canadian Transportation Agency (Agency) under the Canada
Transportation Act(CTA). The CTA provides rate and service remedies, including final offer arbitration (FOA), competitive
line rates and compulsory interswitching. It also regulates the maximum revenue entitlement for the movement of grain, charges
for railway ancillary services and noise-related disputes. In addition, various Company business transactions must gain prior
regulatory approval, with attendant risks and uncertainties, and the Company is subject to government oversight with respect to
rate, service and business practice issues.



The CTA gives
railroads in Canada the freedom to negotiate prices according to market forces, subject to certain provisions aimed at protecting
shippers. These shipper protections include, inter alia, interswitching, final offer arbitration, competitive line rates
and the right to seek a regulatory order as to the reasonableness of the terms and conditions imposed by carriers for incidental
services. Pursuant to the interswitching provisions, all shippers within a 30 km radius (approximately 19 miles) of
an interchange between two federally regulated railroads have access to both at a prescribed interswitching rate. During 2014,
the CTA issued an amendment to the interswitching regulations extending the distance to 160 kilometers from the current 30 kilometers
limits for all commodities in the provinces of Manitoba, Saskatchewan and Alberta. The CTA also issued regulations defining what
constitutes “operational terms” for the purpose of
rail level of service arbitrations. Final offer arbitration is used in cases of rate disputes between a shipper and a railroad
and involves the selection by an arbitrator of either the shipper’s or the carrier’s rate and service offer. Competitive
line rate provisions can be invoked to require an originating railroad to issue to a shipper with access to a single rail carrier,
a rate covering the movement to the nearest junction with another railroad according to predetermined formulae. In addition, certain
rail shipments of export grain are subject to a government-established revenue cap, which effectively specifies a maximum revenue
entitlement that railways can earn.



To supplement
public rates issued under tariffs, the CTA permits confidential contracts to be negotiated between rail carriers and shippers
to govern the terms, conditions and rates for service. Furthermore, railroads are subject to service level obligations and, in
case of breach, shippers may seek redress from the Agency. Railroads are also required to enter into an agreement, at the request
of a shipper, respecting the manner in which it intends to fulfill their service obligations. In the absence of an agreement,
the shipper may submit the matter for determination by an arbitrator.



When a railroad
operator wants to sell or abandon lines, the CTA encourages their sale to other railroad operators and provides the framework
for line discontinuance. The railroads are required to publish a plan for lines they intend



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to discontinue
within the next three years. Prior to discontinuance, the line must be advertised as being for sale for continued rail operation
and, if no interest is shown, must be offered specifically for sale to applicable federal, provincial and municipal governments
as well as urban transit authorities. The entire process is intended to take, at most, 24 months. The Company’s operations
are also subject to safety and environmental provisions relating to track standards, equipment standards, transportation of hazardous
materials, environmental assessments and certain labor regulations, which are in many respects similar when comparing Canadian
and U.S. regulations.



In addition,
periodically, a comprehensive review is made by the federal government of the effectiveness of theCTA, the Canadian Railway
Safety Actand other statutes related to transportation, which may prompt regulatory amendments as a result.



Economic
regulation – U.S.



The Company’s
U.S. rail operations are subject to economic regulation by the Surface Transportation Board (STB). The STB serves as both an adjudicatory
and regulatory body and has jurisdiction over, amongst other things, service levels, carrier practices, car compensation, and
limited jurisdiction over carrier rates. It also has jurisdiction over the situations and terms under which one railroad may gain
access to another railroad’s traffic or facilities, the construction, extension, or abandonment of rail lines, railroad
consolidations, and labor protection provisions in connection with the foregoing. The STB’s jurisdiction in these areas
of rail transportation, including intrastate rail transportation, is exclusive, pre empting other remedies under United States
federal and state laws. As such, various Company business transactions must gain prior regulatory approval and aspects of its
pricing and service practices may be subject to challenge, with attendant risks and uncertainties.



Government
regulation of the railroad industry is a significant determinant of the competitiveness and profitability of railroads. Deregulation
of certain rates and services, plus the ability to enter into confidential contracts, pursuant to the Staggers Rail Act of
1980(Staggers Act), has substantially increased the flexibility of railroads to respond to market forces and has resulted
in highly competitive rates. Various interests have sought and continue to seek reimposition of government controls on the railroad
industry in areas deregulated in whole or in part by the Staggers Act. Additional regulation, changes in regulation and re-regulation
of the industry through legislative, administrative, judicial or other action could materially affect the Company.



Safety
regulation – Canada



The
Company’s rail operations in Canada are subject to safety regulation by the Federal Minister of Transport under the Railway
Safety Actas well as the rail portions ofother safety-related statutes, which are administered by Transport
Canada. The Company may be required to transport toxic inhalation hazard materials as a result of its common carrier
obligations and, as such, is exposed to additional regulatory oversight in Canada. The Transportation of Dangerous Goods
Act,also administered by Transport Canada, establishes the safety requirements for the transportation of goods classified as
dangerous and enables the establishment of regulations for security training and screening of personnel working with
dangerous goods, as well as the development of a program to require a transportation security clearance for dangerous goods
and that dangerous goods be tracked during transport.



Following
a significant derailment involving a non-related short-line railroad within the Province of Quebec (Lac-Mégantic derailment)
on July 6, 2013, several measures have been taken by Transport Canada to strengthen the safety of the railway and transportation
of dangerous goods systems in Canada. Amendments to the Canada Railway Safety Actand Transportation of Dangerous Goods
Actinclude requirements for classification and sampling of crude oil, the provision of yearly aggregate information on the
nature and volume of dangerous goods the company transports by rail through designated municipalities, and new speed limit restrictions
of 40 miles per hour for certain trains carrying dangerous commodities. Additional requirements for railway companies to conduct
route assessments for rail corridors handling significant volumes of dangerous goods and an Emergency Response Assistance Plan
in order to ship large volumes of flammable liquids were also put into place. Further to this, Transport Canada issued



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new rules
prohibiting the use of certain DOT-111 tank cars for the transportation of dangerous goods, and announced a new standard for tank
cars transporting flammable liquid dangerous goods. The new standard, called TC-117, establishes enhanced construction specifications
along with a phase out schedule for DOT-111 and CPC-1232 tank cars.



Transport
Canada has also issued new regulations that provide for: (1) administrative monetary penalties that could be issued for violation
of the Railway Safety Act and its associated regulations, (2) specific standards for new highway-railway crossings and requirements
that existing crossings be upgraded to basic safety standards within seven years, as well as safety related data that must be
provided by railway companies on an annual basis, and (3) modified requirements for safety management systems for both federally-regulated
railway companies as well as local carriers operating on railway lines of federally-regulated carriers. As well, under Bill C-52,
which was enacted on June 18, 2015, the Agency now has jurisdiction to order railway companies to compensate municipalities for
the costs incurred in responding to fires caused by railway operations.



In compliance
with an order issued by Transport Canada, the Railway Association of Canada filed revised rules on behalf of CN and its other
member railway companies, respecting the securement of unattended locomotives and crew size requirements, which were approved
by the Federal Minister of Transport. Additional rules are under development. CN has reviewed its safety policies for unattended
trains and adjusted its safety practices in light of events occurring subsequent to the Lac-Mégantic derailment.



Safety
regulation – U.S.



The Company’s
U.S. rail operations are subject to safety regulation by the Federal Railroad Administration (FRA) under the Federal Railroad
Safety Actas well as rail portions of other safety statutes, with the transportation of certain hazardous commodities also
governed by regulations promulgated by the Pipeline and Hazardous Materials Safety Administration (PHMSA). The PHMSA requires
carriers operating in the U.S. to report annually the volume and route-specific data for cars containing these commodities; conduct
a safety and security risk analysis for each used route; identify a commercially practicable alternative route for each used route;
and select for use the practical route posing the least safety and security risk. In addition, the Transportation Security Administration
(TSA) requires rail carriers to provide upon request, within five minutes for a single car and 30 minutes for multiple cars, location
and shipping information on cars on their networks containing toxic inhalation hazard materials and certain radioactive or explosive
materials; and ensure the secure, attended transfer of all such cars to and from shippers, receivers and other carriers that will
move from, to, or through designated high-threat urban areas.



The FRA has
also jurisdiction over railroad safety and equipment standards, and most rail safety regulation is handled at the federal level.
In contrast, however, to the exclusive role of the STB over railroad economic regulation, state and local regulatory agencies
have jurisdiction over certain local safety and operating matters and these agencies are becoming more aggressive in their exercise
of jurisdiction. State legislatures have also recently enacted new laws in this regard that are intended to regulate railroads
more extensively.



In the aftermath
of the July 2013 Lac-Mégantic derailment, the FRA issued Emergency Order No. 28, Notice No. 1 on August 2, 2013 directing
that railroads take specific actions regarding unattended trains transporting specified hazardous materials, including securement
of these trains. That same day, the FRA and the PHMSA issued Safety Advisory 2013-06, which made recommendations to railroads
on issues including crew staffing practices and operational testing to ensure employees’ compliance with securement-related
rules, as well as recommendations to shippers of crude oil to be transported by rail. In addition, the railroad industry has acted
on its own to enhance rail safety in light of the Lac-Mégantic derailment and fire. Effective August 5, 2013, the AAR amended
the industry’s Recommended Railroad Operating Practices for Transportation of Hazardous Materials by expanding the definition
of a “key train” (for which heightened operating safeguards are required).



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As a result
of FRA’s Emergency Order No. 28, the Railroad Safety Advisory Committee (RSAC), which was established by the FRA in 1996
to provide advice and recommendations to the FRA on railroad safety matters, was directed with four new tasks (1) train crew size,
(2) operational testing for securement, (3) securement and (4) hazardous material issues. CN was an active participant in all
four task groups, which have all now completed their work.



The National
Transportation Safety Board (NTSB) issued a series of recommendations to the U.S. Department of Transportation, to address the
safety risk of transporting crude oil by rail. Specifically, the NTSB recommended (1) expanded hazardous materials route planning
for railroads to avoid populated and other sensitive areas; (2) development of an FRA/PHMSA audit program to ensure that railroads
carrying petroleum products have adequate emergency response capabilities to address worst-case discharges of the product; and
(3) audits of shippers and railroads to ensure that they are properly classifying hazardous materials being transported and that
they have adequate safety and security plans in place.



Other
regulations – Canada and U.S.



Positive
train control (PTC)



On October
16, 2008, the U.S. Congress enacted the Rail Safety Improvement Act of 2008, which required all Class Irailroads and intercity passenger and commuter railroads to implement a PTC system by December 31, 2015 on mainline track
where intercity passenger railroads and commuter railroads operate and where toxic inhalation hazard materials are transported.
PTC is a collision avoidance technology intended to override locomotive controls and stop a train before an accident. Pursuant
to the Positive Train Control Enforcement and Implementation Act of 2015 and the FAST Act of 2015 (collectively
the PTCEIA), Congress extended the PTC deadline until December 31, 2018, with the option for a railroad carrier to implement PTC
by no later than December 31, 2020. Pursuant to the PTCEIA, the Company submitted its revised implementation plan on January 27,
2016. The Company will also have to file a progress report on March 31, 2016, and annually thereafter until implementation is
completed. The Company was progressing its implementation of PTC pursuant to the prior law and will continue to do so under the
new timeline, including working with the FRA and other Class I
railroads to satisfy the requirements for U.S. network interoperability.



Security



The Company
is subject to statutory and regulatory directives in the U.S. addressing homeland security concerns. In the U.S., safety matters
related to security are overseen by the Transportation Security Administration (TSA), which is part of the U.S. Department of
Homeland Security (DHS) and the PHMSA, which, like the FRA, is part of the U.S. Department of Transportation. Border security
falls under the jurisdiction of U.S. Customs and Border Protection (CBP), which is part of the DHS. In Canada, the Company is
subject to regulation by the Canada Border Services Agency (CBSA). Matters related to agriculture-related shipments crossing the
Canada/U.S. border also fall under the jurisdiction of the U.S, Department of Agriculture (USDA) and the Food and Drug Administration
(FDA) in the U.S. and the Canadian Food Inspection Agency (CFIA) in Canada.



More specifically,
the Company is subject to:



| | · | Border
                                         security arrangements, pursuant to an agreement the Company and Canadian Pacific Railway
                                         Company entered into with the CBP and the CBSA.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The
                                         CBP’s Customs-Trade Partnership Against Terrorism program and designation as a
                                         low-risk carrier under CBSA’s Customs Self-Assessment program.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Regulations
                                         imposed by the CBP requiring advance notification by all modes of transportation for
                                         all shipments into the U.S. The CBSA is also working on similar requirements for Canada-bound
                                         traffic.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Inspection
                                         for imported fruits and vegetables grown in Canada and the agricultural quarantine and
                                         inspection user fee for all traffic entering the U.S. from Canada.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | · | Gamma
                                         ray screening of cargo entering the U.S. from Canada, and potential security and agricultural
                                         inspections at the Canada/U.S. border.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Vessels



The Company’s
vessel operations are subject to regulation by the U.S. Coast Guard and the Department of Transportation, Maritime Administration,
which regulate the ownership and operation of vessels operating on the Great Lakes and in U.S. coastal waters. In addition, the
Environmental Protection Agency has authority to regulate air emissions from these vessels.



Transportation
of hazardous materials



As a result
of its common carrier obligations, the Company is legally required to transport toxic inhalation hazard materials regardless of
risk or potential exposure or loss. A train accident involving the transport of these commodities could result in significant
costs and claims for personal injury, property damage, and environmental penalties and remediation in excess of insurance coverage
for these risks, which may materially adversely affect the Company’s results of operations, or its competitive and financial
position.



| | 4.7 | Environmental
                                         Matters
| | --- | --------------------------------------------------------------



Regulatory
Compliance



A risk of
environmental liability is inherent in railroad and related transportation operations; real estate ownership, operation or control;
and other commercial activities of the Company with respect to both current and past operations. As a result, the Company incurs
significant operating and capital costs, on an ongoing basis, associated with environmental regulatory compliance and clean-up
requirements in its railroad operations and relating to its past and present ownership, operation or control of real property.
In as much as such liability is inherent to railroad and transportation operations, CN is in all material aspects similarly situated
relative to its competitors and thus the resulting environmental protection requirements and expenditures are not expected to
have a material adverse effect on CN’s competitive position. Environmental expenditures that relate to current operations
are expensed unless they relate to an improvement to the property. Expenditures that relate to an existing condition caused by
past operations and which are not expected to contribute to current or future operations are expensed.



In Canada,
the matter of environmental permits for the Company is complex because of an overlap between federal and provincial jurisdictions.
When projects trigger an environmental assessment, CN proceeds in accordance with the Canadian Environmental Assessment
Act, 2012. Provincial and municipal environmental legislation may be applicable to railway activities if such legislation
does not aim to regulate the management or operations of railways. Therefore, the Company does not apply systematically for provincial,
municipal or local environmental permits for its railway operations in Canada except (i) where obtaining and complying with
such permits would not interfere with the operations or management of its railway activities, (ii) where permitting issues
are primarily of a provincial, municipal or local nature, (iii) where the Company or the governmental authority thought it
is necessary to obtain such permits to continue minor aspects of its railway operations or maintenance, or (iv) where the
absence of a permit may affect a third party (such as a customer or a supplier). Because of the multiple jurisdictions involved
and the extensive provincial legislative authority to regulate environmental matters, there can be no assurance that additional
provincial, municipal or local environmental permits will not be required in the future. The Company may incur additional expenses
or changes in its operations if such additional permits were to be required in the future.



See Note
16 – Major commitments and contingencies, to CN’s 2015 Annual Consolidated Financial Statements (Financial Statements)
for a further discussion of environmental matters, as well as the section entitled “Environmental matters”, on pages
86 to 87 of the MD&A, and the section entitled “Environmental matters” in the Business risks discussion located
on pages 88 to 89 of the MD&A, which are incorporated by reference herein.



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Environmental
Policy



CN is committed
to conducting its operations and activities in a manner that protects the natural environment. CN considers protecting the environment
a fundamental corporate social responsibility governing its activities. Consequently, CN has implemented comprehensive environmental
management programs. The Company's programs aim to minimize the impact of the Company's activities on the environment. The Company
strives to contribute to the protection of the environment by integrating environmental priorities into the Company’s overall
business plan and through the specific monitoring and measurement of such priorities against historical performance and, in some
cases, specific targets. All employees must demonstrate commitment to the programs at all times and it is the Environment, Safety
and Security Committee, established by the Board of Directors, which has the responsibility of overseeing the Company's environmental
programs. The Environment, Safety and Security Committee is composed of CN’s directors and its responsibilities, powers
and operation are further described in the charter of such committee, which is included in the Company’s Corporate Governance
Manual available on CN’s website. Certain risk mitigation strategies, such as periodic audits, employee training programs
and emergency plans and procedures, are in place to minimize the environmental risks to the Company. The Company’s environmental
strategy, its Carbon Disclosure Project report, and its Corporate Citizenship Report “Delivering Responsibly” are
available on CN’s website at www.cn.ca.



| | 4.8 | Legal
                                         Matters
| | --- | ------------------------------------------------------



Legal
Proceedings



As of the
date hereof, there are no legal proceedings to which CN is a party involving claims for damages, exclusive of interest and costs,
in excess of 10% of its current assets. The Company will regularly assess its position as events progress.



See Note
16 – Major commitments and contingencies to the Financial Statements, for further discussion of legal actions, if any, as
well as pages 84 to 87 of the MD&A, for a general discussion of personal injury and other claims, which are incorporated by
reference herein.



Aboriginal
Claims



CN and its
predecessor companies have acquired lands throughout Canada from the Crown, including certain lands contained in Aboriginal reserves.
A portion of the Company’s network, primarily in British Columbia, is currently operated on these lands.



The Company
believes that it possesses unrestricted and absolute title to lands acquired out of Aboriginal reserves. However, in recent years,
some Aboriginal bands have claimed to have a continuing legal interest in such lands. They allege this interest prohibits the
Company from disposing of the lands when they are no longer needed for railway purposes, except by allowing them to revert to
the Crown for the benefit of Aboriginals. This issue is one which will ultimately be decided by the courts; however, regardless
of the outcome, there is no perceived material adverse effect, as the right of the Company to continue to occupy and operate over
such lands is not being called into question.



As the issues
surrounding Aboriginal claims are complex and involve not only private interests but fiduciary and other obligations of the Crown
in the right of Canada, CN has agreed not to sell or otherwise dispose of land which is not essential to its rail operations and
which is located in, or adjacent to, an Aboriginal reserve, unless each of CN and the Government of Canada is satisfied that no
legitimate Aboriginal claim exists with respect to such land. In addition, CN has agreed to convey to the Government of Canada,
for no consideration, any land not integral to its rail operations that may be necessary to settle legitimate Aboriginal claims
with respect to such land, or lands which were formerly reserve lands and have become non-rail assets. The Government of Canada,
for its part, has agreed that it



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will provide
the necessary compensation for settlement of legitimate Aboriginal claims which would otherwise result in CN having to relinquish
land essential to its rail network, unless such claims arise out of, or are substantially based upon, willful, known, negligent
or fraudulent acts or omissions of CN which adversely affected the rights or interests of Aboriginal people.



| | 4.9 | Intangible
                                         Properties
| | --- | --------------------------------------------------------------



CN uses various
works protected by intellectual property rights to which the Company owns or for which it has been granted rights to use. These
works include customers’ lists, copyrights, patents, trade-marks, logos and trade names. This intellectual property is important
to the Company’s operations and its success.



| | 4.10 | Risk
                                         Factors
| | ---- | -----------------------------------------------------



A description
of risks affecting CN and its business appears under the heading “Business risks” located on pages 88 to 97 of the
MD&A, and under the heading “Financial Instruments” for risks associated with the Company’s use of financial
instruments located on pages 75 to 76 of the MD&A, which pages are incorporated by reference herein. See Item 1 of this AIF
for a further discussion of risks associated with forward-looking statements.



| | Item 5 | Dividends
| | ------ | ---------



The Company
has declared dividends in line with its overall financial performance and cash flow generation. The Board of Directors makes decisions
on dividend levels on an annual basis and on dividend payout on a quarterly basis. Consistent with this practice, the quarterly
rate of $0.2150per
share, starting with the first quarter of 2013, was increased to $0.2500per share, starting with the first quarter of 2014; the quarterly dividend was next increased to $0.3125per share, starting with the first quarter of 2015 and to $0.3750per share, starting with the first quarter of 2016. There can be no assurance as to the amount or timing of such dividends
in the future. All share and per share data presented herein reflect the impact of the stock split, described in Item 3.1of this AIF under the heading “2013 Highlights – Financial Management Initiatives”.



| | Item 6 | Description
of Capital Structure
| | ------ | --------------------------------



| | 6.1 | General
                                         Description of Capital Structure
| | --- | ---------------------------------------------------------------------------------



The authorized
share capital of CN consists of an unlimited number of Common Shares, an unlimited number of Class A Preferred Shares issuable
in series and an unlimited number of Class B Preferred Shares issuable in series, all without par value.



There are
no Class A Preferred Shares or any Class B Preferred Shares currently issued and outstanding.



Common
Shares



The Common
Shares carry and are subject to the following rights, privileges, restrictions and conditions described below:



Voting:Each Common Share entitles its holder to receive notice of and to attend all general and special meetings of shareholders
of CN, other than meetings at which only the holders of a particular class or series of shares are entitled to vote, and each
such Common Share entitles its holder to one vote.



Dividends:The holders of Common Shares are, at the discretion of the directors, entitled to receive, out of any amounts properly applicable
to the payment of dividends, and after the payment of any dividends payable on any Preferred Shares, any dividends declared and
payable by CN on the Common Shares.



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Dissolution:
The holders of Common Shares shall be entitled to share equally in any distribution of the assets of CN upon the liquidation,
dissolution or winding-up of CN or other distribution of its assets among its shareholders. Such participation is subject to the
rights, privileges, restrictions and conditions attaching to any issued and outstanding Preferred Shares or shares of any other
class ranking prior to the Common Shares.



Preferred
Shares



The Class
A Preferred Shares and the Class B Preferred Shares are issuable in series and, subject to CN’s Articles, the Board of Directors
is authorized to fix, before issuance, the designation, rights, privileges, restrictions and conditions attaching to the shares
of each series. The holders of Class A Preferred Shares or Class B Preferred Shares shall not be entitled to vote at meetings
of shareholders otherwise than as provided by law and holders of Class A or Class B Preferred Shares shall not be entitled to
vote separately as a class except as provided by law.



| | 6.2 | Share
                                         Ownership Constraints
| | --- | --------------------------------------------------------------------



CN’s
Articles provide that where the total number of voting shares held, beneficially owned, or controlled, directly or indirectly,
by any one person together with his or her associates exceed 15%, no person shall exercise the voting rights attached to the voting
shares held, beneficially owned or controlled, directly or indirectly, by such person or his or her associates. Furthermore, all
dividends attributable to the percentage of voting shares held by such persons in excess of 15% shall be forfeited, including
any cumulative dividend. However, CN’s Articles provide that in the event where the 15% limit is exceeded solely as a result
of share buybacks conducted by CN, the only consequence to the relevant shareholder under CN’s Articles is that the shareholder
shall not be entitled to exercise the voting rights attached to the common shares held by such shareholder that are in excess
of the 15% limit. CN’s Articles confer on the Board of Directors all powers necessary to give effect to the ownership restrictions,
including the ability to pay dividends or to make other distributions which would otherwise be prohibited if the event giving
rise to the prohibition was inadvertent or of a technical nature or it would otherwise be inequitable not to pay the dividends
or make the distribution. CN’s Articles provide that the Board of Directors may adopt by-laws concerning the administration
of the constrained share provisions described above, including by-laws requiring a shareholder to furnish a declaration indicating
whether he or she is the beneficial owner of the shares and whether he or she is an associate of any other shareholder. In addition,
CN is also authorized to refuse to recognize the ownership rights that would otherwise be attached to any voting shares held,
beneficially owned or controlled, directly or indirectly, contrary to the share ownership constraint. Finally, CN has the right,
for the purpose of enforcing any constraint imposed pursuant to its Articles, to sell, as if it were the owner thereof, any voting
shares that are owned or that the directors determine may be owned, by any person or persons contrary to such share ownership
constraint.



| | 6.3 | Ratings
                                         of Debt Securities
| | --- | -------------------------------------------------------------------



The Company’s
access to long-term funds in the debt capital markets depends on its credit rating and market conditions. The Company believes
that it continues to have access to the long-term debt capital markets. Rating downgrades could limit the Company’s access
to the credit markets, or increase its borrowing costs. Various classes of CN’s outstanding securities have been rated by
several rating organizations as described in detail below, as of the date hereof.



|                     | DBRS          | Moody’s
    Investors Service | Standard
    & Poor’s
|-------------------- | ------------- | ----------------------------- | ---------------------
|Long-Term
    Debt   | A             | A2                            | A                    
|Commercial
    Paper | R-1
    (low) | P-1                           | A-1                  



The above-noted
ratings are given the following credit characteristics by the various rating agencies:



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DBRS
Limited (DBRS)



| | · | Long-term
                                         debt rated A is of good credit quality. The capacity for the payment of financial obligations
                                         is substantial, but of lesser quality than AA. May be vulnerable to future events, but
                                         qualifying negative factors are considered manageable. This rating falls within the third
                                         highest of DBRS’s ten long-term debt rating categories which range from “AAA”
                                         to “D”.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Commercial
                                         paper rated R-1 (low) is of good credit quality. The capacity for the payment of short-term
                                         financial obligations as they fall due is substantial. Overall strength is not as favourable
                                         as higher rating categories. May be vulnerable to future events, but qualifying negative
                                         factors are considered manageable. This rating falls within the third highest of DBRS’s
                                         ten short-term debt rating categories which range from “R-1 (high)” to “D”.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Moody’s
Investors Service (Moody’s)



| | · | Long-term
                                         debt obligations rated A are judged to be upper-medium grade and are subject to low credit
                                         risk. This rating falls within the third highest of Moody’s nine generic long-term
                                         obligation rating categories which range from “Aaa” to “C”. The
                                         modifier “2” indicates a ranking in the mid-range of that generic rating
                                         category.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Commercial
                                         paper rated P-1 indicates that CN has a superior ability to repay short-term debt obligations.
                                         This rating falls within the highest of Moody’s four generic short-term debt rating
                                         categories which range from “P-1” to “NP”.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Standard
& Poor’s Financial Services LLC (S&P)



| | · | Long-term
                                         debt obligations rated A are somewhat more susceptible to the adverse effects of changes
                                         in circumstances and economic conditions than obligations in higher rated categories.
                                         However, the obligor’s capacity to meet its financial commitment on the obligations
                                         is still strong. This rating falls within the third highest of S&P’s ten major
                                         long-term credit rating categories which range from “AAA” to “D”.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | A
                                         short-term obligation rated “A-1” is rated in the highest category by S&P.
                                         The obligor’s capacity to meet its financial commitment on the obligation is strong.
                                         Within this category, certain obligations are designated with a plus sign (+). This indicates
                                         that the obligor’s capacity to meet its financial commitment on these obligations
                                         is extremely strong.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The ratings
of CN’s securities described above should not be construed as a recommendation to buy, sell, or hold CN securities. Ratings
may be revised or withdrawn at any time by the rating agencies.



As is common
practice, during the last two years, each of the above-noted credit rating agencies charged CN for their rating services which
include annual surveillance fees covering CN’s outstanding long-term and short-term debt securities, in addition to one-time
rating fees when debt is initially issued. CN reasonably expects that such payments will continue to be made for rating services
in the future.



| | Item 7 | Transfer
Agent and Registrar
| | ------ | ----------------------------



In Canada,
the transfer agent and registrar for each class of CN’s publicly issued securities is Computershare Trust Company of Canada
and, in the United States, the co-transfer agent and co-registrar is Computershare Trust Company, N.A., both of which maintain
registers of transfers for CN’s securities at the locations specified below:



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Computershare Trust Company of
Canada100 University Avenue, 8th FloorToronto, Ontario M5J 2Y1Toll Free Tel: 1-800-564-6253Toll Free Fax: 1-888-453-0330Email: service@computershare.comWeb: www.investorcentre.com\service



Co-transfer
agent and co-registrar:



Computershare
Trust Company, N.A.



Att: Stock
Transfer Department



Overnight
Mail Delivery: 250 Royall Street, Canton, Massachusetts 02021



Regular Mail
Delivery: P.O. Box 43078, Providence, Rhode Island 02940-3070



Telephone:
(303) 262-0600 or 1-800-962-4284



| | Item 8 | Market
for Securities
| | ------ | ---------------------



| | 8.1 | Trading
                                         Price and Volume
| | --- | -----------------------------------------------------------------



CN’s
Common Shares are listed on both the TSX and the NYSE under the stock symbols CNR and CNI, respectively. The following table sets
forth the price ranges and aggregate trading volumes of the Common Shares on the TSX for each month of 2015:



|Month     | High  | Low   | Volume    
|--------- | ----- | ----- | ----------
|January   | 86.73 | 76.03 | 26,654,051
|February  | 88.89 | 84.00 | 19,351,564
|March     | 88.62 | 82.67 | 30,552,448
|April     | 85.32 | 77.71 | 25,540,870
|May       | 80.53 | 72.58 | 28,476,440
|June      | 76.09 | 71.07 | 35,590,983
|July      | 82.10 | 71.67 | 30,549,500
|August    | 83.37 | 69.90 | 28,573,944
|September | 76.98 | 70.69 | 37,739,381
|October   | 82.80 | 74.51 | 27,882,504
|November  | 80.61 | 75.81 | 26,748,000
|December  | 80.56 | 72.11 | 35,424,667



| | 8.2 | Prior
                                         Sales
| | --- | ----------------------------------------------------



On September
22, 2015, under its then current shelf prospectus and registration statement, CN completed a debt offering in the Canadian markets
of $350 million 2.80% Notes due 2025, $400 million 3.95% Notes due 2045 and $100 million 4.00% Notes due 2065, which are together
detailed in the following table:



|Security                     | Notes
    due 2025                                                                                                           | Notes
    due 2045     | Notes
    due 2065    
|---------------------------- | ---------------------------------------------------------------------------------------------------------------------------- | ---------------------- | ----------------------
|Size
    of Offering:        | $350,000,000                                                                                                                 | $400,000,000           | $100,000,000          
|Maturity
    Date:           | September
    22, 2025                                                                                                       | September
    22, 2045 | September
    22, 2065
|Coupon
    Rates:            | 2.80%                                                                                                                        | 3.95%                  | 4.00%                 
|Net
    Proceeds of Issue:   | $346,773,500                                                                                                                 | $396,276,000           | $98,141,000           
|Public
    Offering Price:   | 99.68%                                                                                                                       | 99.669%                | 98.741%               
|Application
    of Proceeds: | General
    corporate purposes, including the redemption and refinancing of outstanding indebtedness, and share repurchases.



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In addition,
in the ordinary course of business, the Company has the capability to issue commercial paper with maturities of less than 12 months.
As at December 31, 2015, the Company had total commercial paper borrowings of $458 million ($U.S. 331 million). The weighted-average
interest rate on these borrowings was 0.41%.



| | Item 9 | Directors
and Executive Officers
| | ------ | --------------------------------



| | 9.1 | Directors
| | --- | ---------



The directors
of the Company are elected by the shareholders at the Annual General Meeting of the Company, and hold office until their term
expires at the following Annual General Meeting, subject to resignation, retirement, or re-election. The following table lists
the directors of the Company as of the date hereof:



|Name
        
        Province
        or State of Residence and Date of First Election to Board                                                            | Current
    Principal Occupation              | Past
    Occupations held in the Preceding Five Years                              
|----------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------- | -----------------------------------------------------------------------------------
|Donald J. Carty, O.C.,
        LL. D.
        
        Texas, U.S.A.
        
        January 1, 2011                                                       | Corporate Director                            |                                                                                    
|Ambassador Gordon D. Giffin
        
        Georgia, U.S.A.
        
        May 1, 2001                                                                   | Partner, Dentons U.S.
    LLP (law firm)      |                                                                                    
|Edith E. Holiday
        
        Florida, U.S.A.
        
        June 1, 2001                                                                             | Corporate Director
    and Trustee            |                                                                                    
|V. Maureen Kempston Darkes,
        O.C., D. Comm., LL.D.
        
        Ontario, Canada
        
        Florida, U.S.A.
        
        March 29, 1995 | Corporate Director                            |                                                                                    
|The Hon. Denis Losier,
        P.C., LL.D., C.M.
        
        New Brunswick, Canada
        
        October 25, 1994                                   | Corporate Director                            | President and Chief
    Executive Officer, Assumption Life (life insurance company)
|The Hon. Kevin G. Lynch,
        P.C., O.C., PH. D., LL.D.
        
        Ontario, Canada
        
        April 23, 2014                                 | Vice-Chair, BMO Financial
    Group (bank)    |                                                                                    
|Claude Mongeau
        
        Quebec, Canada
        
        October 20, 2009                                                                            | President and Chief
    Executive Officer, CN |                                                                                    



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2015 Annual Information Form







|Name
        
        Province
        or State of Residence and Date of First Election to Board | Current
    Principal Occupation                                                                                                                                                | Past
    Occupations held in the Preceding Five Years                                      
|------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------
|James E. O’Connor
        
        Florida, U.S.A.
        
        April 27, 2011               | Corporate Director                                                                                                                                                              | Chairman and Chief
    Executive Officer, Republic Services, Inc (waste management company)
|Robert Pace, D. COMM.
        
        Nova Scotia, Canada
        
        October 25, 1994     | Chair of the Board of
        Directors, CN
        
        President and Chief Executive
Officer, The Pace Group (radio broadcasting, real estate and environmental services) |                                                                                            
|Robert L. Phillips
        
        British Columbia, Canada
        
        April 23, 2014     | President, R.L. Phillips
    Investments Inc.                                                                                                                                   |                                                                                            
|Laura Stein
        
        California, U.S.A.
        April 23, 2014                           | Executive Vice-President
    – General Counsel, The Clorox Company (marketer and manufacturer of consumer products)                                                             | Senior Vice-President,
    The Clorox Company                                              







Committee
Membership



The membership
of each Board committee is composed of the following directors:



Audit
Committee



Donald J.
Carty (chair), Ambassador Gordon D. Giffin, Edith E. Holiday, V. Maureen Kempston Darkes, James E. O'Connor, Robert L. Phillips,
Laura Stein.



Finance
Committee



The Hon.
Kevin G. Lynch (chair), Edith E. Holiday, V. Maureen Kempston Darkes, James E. O'Connor, Laura Stein.



Corporate
Governance and Nominating Committee



The Hon.
Denis Losier (chair), Donald J. Carty, the Hon. Kevin G. Lynch, V. Maureen Kempston Darkes, Robert Pace, Robert L. Phillips.



Donations
and Sponsorships Committee



Claude Mongeau
(chair), Ambassador Gordon D. Giffin, the Hon. Denis Losier, Robert Pace.



Environment,
Safety and Security Committee



V. Maureen
Kempston Darkes (chair), Donald J. Carty, James E. O'Connor, Robert Pace, Robert L. Phillips, Laura Stein.



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2015 Annual Information Form





Human
Resources and Compensation Committee



Ambassador
Gordon D. Giffin (chair), Donald J. Carty, Edith E. Holiday, the Hon. Denis Losier, the Hon. Kevin G. Lynch, James E. O’Connor,
Robert L. Phillips, Laura Stein.



Investment
Committee of CN’s Pension Trust Funds



Edith E.
Holiday (chair) Ambassador Gordon D. Giffin, the Hon. Denis Losier, the Hon. Kevin G. Lynch.



Strategic
Planning Committee



James E.
O'Connor (chair), Donald J. Carty, Ambassador Gordon D. Giffin, Edith E. Holiday, V. Maureen Kempston Darkes, the Hon. Denis Losier,
the Hon. Kevin G. Lynch, Claude Mongeau, Robert Pace, Robert L. Phillips, Laura Stein.



| | 9.2 | Audit
                                         Committee Disclosure
| | --- | -------------------------------------------------------------------



The Audit
Committee Charter is reproduced in its entirety at Schedule A of this AIF.



Composition
of the Audit Committee



The Audit
Committee is composed of seven independent directors, namely, Donald J. Carty, chair of the Audit Committee, Ambassador Gordon
D. Giffin, Edith E. Holiday, V. Maureen Kempston Darkes, James E. O'Connor, Robert L. Phillips and Laura Stein.



Education
and Relevant Experience of the Audit Committee Members



The Board
of Directors believes that the composition of the Audit Committee reflects a high level of financial literacy and experience.
Each member of the committee has been determined by the Board of Directors to be financially literate, as such term is defined
under Canadian and United States securities laws and regulations and the NYSE Corporate Governance Standards. The Board of Directors
has made such determination based on the education and experience of each committee member. The following is a description of
the education and experience of each member of the Audit Committee that is relevant to the performance of his responsibilities
as a member of the committee:



Mr. Carty,
Chair of the Audit Committee since April 23, 2014, is the retired Vice-Chairman and Chief Financial Officer of Dell, Inc.,
a position he assumed from January 2007 until June 2008. Before joining Dell, Mr. Carty retired in June 2003 as Chairman
and CEO of AMR Corporation and American Airlines. He had previously served as President, Executive Vice-President – Finance
and Planning and Senior Vice-President and Controller of AMR Airline Group and American Airlines. He was President and CEO of
CP Air from 1985 to 1987. Mr. Carty is Chairman of the Board of Directors of Virgin America Airlines Inc. and Porter Airlines
Inc. and is serving as a director and member of the audit committee of EMC Corporation and Virgin America Airlines Inc. Mr. Carty
holds a Master of Business Administration from the Harvard Business School.



Ambassador
Giffin is a Partner of the law firm of Dentons U.S. LLP, where he maintains offices in Washington, D.C. and Atlanta. His practice
focuses on international transactions and trade matters and public policy. He has been engaged in the practice of law or government
service for more than thirty years. Mr. Giffin was United States Ambassador to Canada from 1997 to 2001. Mr. Giffin is a member
of the board of trustees of the Jimmy Carter Presidential Center and is a member of the Council on Foreign Relations and the Tri-Lateral
Commission. Mr. Giffin serves on the Board of Counsellors of McLarty Global. Mr. Giffin is also Chair of the board of TransAlta
Corporation and a director of the Canadian Imperial Bank of Commerce. He is Lead Director and member of the audit committee



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2015 Annual Information Form





of Canadian
Natural Resources Limited and a director of Element Financial Corporation. Mr. Giffin holds a B.A. from Duke University and a
J.D. from Emory University School of Law in Atlanta, Georgia.



Ms. Holiday
is a Corporate Director and Trustee and a former General Counsel, United States Treasury Department and former Secretary of the
Cabinet, The White House. Ms. Holiday serves on the board of directors of Hess Corporation and serves as director and member of
the audit committee of White Mountains Insurance Group, Ltd. She is also a director or trustee and member of the audit committee
of various investment companies of the Franklin Templeton Group of Funds. Ms. Holiday holds a B.S. and a J.D. from the University
of Florida, and she was admitted to the bars of the states of Florida, Georgia and the District of Columbia.



Ms. Kempston
Darkes is the retired Group Vice-President and President Latin America, Africa and Middle East, General Motors Corporation. In
2009 she ended a 35-year career at GM during which she attained the highest operating position ever held by a woman at GM. From
1994 to 2001, she was President and General Manager of General Motors of Canada Limited and Vice-President of General Motors Corporation.
Ms. Kempston Darkes serves on the board of director of Brookfield Asset Management Inc., Enbridge Inc. and Balfour Beatty Plc.
Ms. Kempston Darkes also serves as director and member of the audit committee of Schlumberger Limited and Irving Oil Co. Ltd.
(private company). Ms. Kempston Darkes holds a B.A. in history and political science from Victoria University and the University
of Toronto and an LL.B. from the University of Toronto Faculty of Law.



Mr. O’Connor
is the retired chair of the board of directors of Republic Services, Inc., a leading provider of non-hazardous solid waste collection,
recycling and disposal services in the United States. From 1998 to 2011, Mr. O’Connor was Chair and Chief Executive Officer
of Republic Services, Inc. Prior to 1998, he had held various management positions at Waste Management, Inc. He was named to the
list of America’s Best CEOs each year between 2005 and 2010. In 2011, Mr. O’Connor was named to the Institutional
Investors’ All American Executive Team. He is Lead Director of Casella Waste Systems, Inc. and director of Clean Energy
Fuels Corp. and holds a Bachelor of Science in Commerce (concentration in accounting) from DePaul University.



Mr. Phillips
is the President of R.L. Phillips Investments Inc. and was previously President and Chief Executive Officer and director of British
Columbia Railway Company Limited from 2001-2004. Mr. Phillips was Executive Vice-President, Business Development and Strategy
for MacMillan Bloedel Ltd. and, before that, held the position of Chief Executive Officer at PTI Group and Dreco Energy Services
Limited. He also enjoyed a prestigious career as a corporate lawyer. Mr. Phillips is currently a director and member of the Audit
Committee of Canadian Western Bank and Precision Drilling Corporation of which he is also chairman of the board. He is chairman
of the Board of Directors of MacDonald Dettwiler & Associates Ltd. and lead director of West Fraser Timber Corporation Ltd.
Mr. Phillips received his Bachelor of Laws (Gold Medalist), and Bachelor of Science, Chemical Engineering (Hons) from the University
of Alberta.



Ms. Stein
is the Executive Vice-President – General Counsel of The Clorox Company, where she serves on the executive committee. From
2000-2005, Ms. Stein was Senior Vice-President, General Counsel of the H.J. Heinz Company. She was also previously a corporate
lawyer with Morrison & Foerster in San Francisco and Hong Kong. Ms. Stein is a director and member of the audit committee
of Franklin Resources, Inc. Ms. Stein received her J.D. from Harvard Law School, and is a graduate of Dartmouth College where
she earned an undergraduate and master’s degrees.



Auditors’
Fees



KPMG LLP
has served as the Company’s auditors since 1992. For the years ended December 31, 2015 and 2014, the fees for audit, audit
related, tax and other services provided to the Company by KPMG LLP were the following:



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|Fees (1)       | 2015       | 2014      
|-------------- | ---------- | ----------
|Audit          | $2,708,000 | $2,728,000
|Audit-related  | $1,039,000 | $1,162,000
|Tax            | $913,000   | $746,000  
|All
    Other  | $17,000    | $92,000   
|Total
    Fees | $4,677,000 | $4,728,000

(1)
Fees rounded to the nearest thousand.



Pursuant
to the terms of its charter, the Audit Committee approves all audit and audit-related services, audit engagement fees and terms
and all non-audit engagements with the independent auditor. The Audit Committee pre-approved all the services performed by CN’s
independent auditors for audit-related and non-audit related services for the years ended December 31, 2015 and 2014.



A discussion
of the nature of the services under each category is described below.



Audit
fees



Consists
of fees incurred for professional services rendered by the auditors in relation to the audit of the Company’s consolidated
annual financial statements and those of its subsidiaries and the audit relating to the Company’s internal control over
financial reporting.



Audit-related
fees



Audit-related
fees were incurred for professional services rendered by the auditors in relation to the audit of the financial statements for
the Company’s pension plans, and for attestation services in connection with reports required by statute or regulation and
due diligence and other services, including comfort letters, in connection with the issuance of securities.



Tax
fees



Consists
of fees incurred for consultations on cross-border tax implications for employees and tax compliance.



All Other
fees



Consists
of fees related to data analytics assistance (2015) and for services related to a foreign subsidiary (2014).



Non-Audit
Services



The mandate
of the Audit Committee, attached as Schedule A to this AIF, provides that the Audit Committee determines which non-audit services
the external auditors are prohibited from providing, approves audit services and pre-approves permitted non-audit services to
be provided by the external auditors. CN’s Audit Committee and the Board of Directors have adopted resolutions prohibiting
the Company from engaging KPMG LLP to provide certain non-audit services to the Company and its subsidiaries, including bookkeeping
or other services related to the accounting records or financial statements, financial information systems design and implementation,
appraisal or valuation services, fairness opinions, or contribution in-kind reports, actuarial services, internal audit outsourcing
services, management functions or human resources functions, broker or dealer, investment adviser, or investment banking services
and legal services and expert services unrelated to the audit. Pursuant to such resolutions, the



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Company may
engage KPMG LLP to provide non-audit services, including tax services, other than the prohibited services listed above, but only
if the services have specifically been pre-approved by the Audit Committee.



| | 9.3 | Executive
                                         Officers
| | --- | -----------------------------------------------------------



The following
table lists the senior executive officers of the Company as of the date hereof:



|Name
        and
        
        Province
        or
        
        State
        of Residence                     | Current
    Principal Position                                                                        | Past
    Positions held in the Preceding Five Years                                                                                                     
|--------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|Claude Mongeau
        
        Quebec, Canada                                                                        | President and Chief
    Executive Officer                                                             |                                                                                                                                                         
|Mike Cory
        
        Alberta, Canada                                                                            | Senior Vice-President,
        
        Western Region                                                |                                                                                                                                                         
|Janet Drysdale
        
        Quebec, Canada                                                                        | Vice-President,
        
        Investor Relations                                                   | Director, Economics
    & Strategy                                                                                                                      
|Michael Farkouh
                                                                                       Quebec, Canada | Vice-President, Eastern
    Region                                                                    | General Manager, British
    Columbia South; Assistant Vice-President, British Columbia South; Vice-President, Chief Safety and Sustainability Officer  
|Sean Finn
        
        Quebec, Canada                                                                             | Executive Vice-President
        
        Corporate Services and
        
        Chief Legal Officer |                                                                                                                                                         
|Russell Hiscock
        
        Quebec,
        Canada                                                               | President and Chief Executive
        Officer,
        
        CN Investment Division                |                                                                                                                                                         
|Luc Jobin
        
        Quebec, Canada                                                                             | Executive Vice-President
    and Chief Financial Officer                                              |                                                                                                                                                         
|Kimberly A. Madigan
        
        Quebec, Canada                                                                   | Vice-President,
        
        Human Resources                                                      |                                                                                                                                                         
|John Orr
        
        Illinois, U.S.A.                                                                            | Senior Vice-President,
    Southern Region                                                            | Vice-President, Eastern
    Region; Vice-President, Chief Safety and Sustainability Officer; Assistant Vice-President Operations, British Columbia South
|Jean-Jacques Ruest
        
        Quebec, Canada                                                                    | Executive Vice-President
    and Chief Marketing Officer                                              |                                                                                                                                                         
|Jim Vena,
        
        Alberta, Canada                                                                            | Executive Vice-President
    and Chief Operating Officer                                              | Senior Vice-President,
    Southern Region                                                                                                              





The senior
executive officers are appointed by the Board of Directors and hold office until their successors are appointed subject to resignation,
retirement or removal by the Board of Directors.



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As at December
31, 2015, the directors and the members of the executive committee, including the senior executive officers mentioned above, of
the Company, as a group, beneficially owned, directly or indirectly, or exercised control or direction over an aggregate of approximately
1.4million Common Shares
of the Company, representing approximately 0.18% of the outstanding Common Shares.



| | 9.4 | Cease
                                         Trade Orders, Bankruptcies, Penalties or Sanctions
| | --- | -------------------------------------------------------------------------------------------------



To the knowledge
of the Company and based upon information provided to it by the Company’s directors and executive officers, none of such
directors or executive officers is or has been, in the last 10 years, a director or executive officer of any company that, while
such person was acting in that capacity: (a) was the subject of a cease trade or similar order or an order that denied the
relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days; (b) was
subject to an event that resulted, after that person ceased to be a director or executive officer, in the company being the subject
of a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation,
for a period of more than 30 consecutive days; or (c) within a year of that person ceasing to act in that capacity, became
bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings,
arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, except for
the following:



| | (i) | Mr. Mongeau,
                                         a director and the President and Chief Executive Officer of the Company, became a director
                                         of Nortel Networks Corporation (NNC) and Nortel Networks Limited (NNL) on June 29, 2006.
                                         On January 14, 2009, NNC, NNL and certain other Canadian subsidiaries initiated creditor
                                         protection proceedings under the CCAA in Canada. Certain U.S. subsidiaries filed voluntary
                                         petitions in the United States under Chapter 11 of the U.S. Bankruptcy Code, and certain
                                         Europe, Middle East and Africa subsidiaries made consequential filings in Europe and
                                         the Middle East. Mr. Mongeau resigned as a director of NNC and NNL effective August 10,
                                         2009;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Mrs.
                                         Kempston Darkes, a director of the Company, was an officer of General Motors Corporation
                                         (GM) when GM filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy
                                         Code on June 1, 2009. None of the operations for which she was directly responsible in
                                         Latin America, Africa and the Middle East were included in the bankruptcy filing. GM
                                         emerged from bankruptcy protection on July 10, 2009 in a reorganization in which a new
                                         entity acquired GM’s most valuable assets. Mrs. Kempston Darkes retired as a GM
                                         officer on December 1, 2009;
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | Mr.
                                         Giffin, a director of the Company, was a director of AbitibiBowater Inc. until January
                                         22, 2009. AbitibiBowater Inc. and certain of its U.S. and Canadian subsidiaries filed
                                         voluntary petitions in the United States under Chapter 11 of the U.S. Bankruptcy Code
                                         on April 16, 2009. AbitibiBowater Inc. and certain of its Canadian subsidiaries filed
                                         for creditor protection under the CCAA in Canada on April 17, 2009. Mr. Giffin resigned
                                         as a director of AbitibiBowater Inc. on January 22, 2009; and
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | Mr.
                                         Losier, a director of the Company, was a director of XL-ID Solutions Inc. (formerly Excellium
                                         Inc.) (“XL-ID”) from July 23, 2013 until August 29, 2013. On January 3, 2014,
                                         XL-ID announced that it had submitted a proposal to its creditors under the Bankruptcy
                                         and Insolvency Act (Canada). On February 13, 2014, XL-ID announced that it had received
                                         a final order from the superior court of Quebec approving the proposal approved by its
                                         creditor.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Item 10 | Interest
of management and others in material transactions
| | ------- | ----------------------------------------------------------



To the knowledge
of the Company and based upon information provided to it by the Company’s directors and executive officers, there were no
(i) directors or executive officers, (ii) persons that beneficially own, or control or direct, directly or indirectly, more than
10% of CN common shares, or (iii) any associate or affiliate of persons



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referred
to in (i) and (ii), with a material interest in any transaction within the three most recently completed financial years that
has materially affected the Company or is reasonably expected to materially affect the Company.



| | Item 11 | Interest
of experts
| | ------- | -------------------



KPMG LLP
is the external auditor who prepared the Reports of Independent Registered Public Accounting Firm to the Board of Directors and
shareholders of CN relating to the effectiveness of internal controls over financial reporting and relating to the audit of the
2015 Annual Consolidated Financial Statements and Notes thereto prepared under U.S. generally accepted accounting principles.
We are advised that, as at the date hereof, the members of KPMG LLP are independent with respect to the Company within the meaning
of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable
legislation or regulation.



| | Item 12 | AdditioNal
Information
| | ------- | ----------------------



Additional
information regarding CN can be found on SEDAR at www.sedar.com. Additional financial information is provided in CN’s
Annual Consolidated Financial Statements and Management’s Discussion & Analysis for its most recently completed financial
year. Additional information, including directors’ and officers’ remuneration and securities authorized for issuance
under equity compensation plans, is contained in the Company’s Management Information Circular prepared in respect of its
annual meeting of shareholders to be held on April 26, 2016 (Circular). The Circular will become available on SEDAR at www.sedar.comand on EDGAR at www.sec.gov on or about March 23, 2016.



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SCHEDULE
A - CHARTER OF THE AUDIT COMMITTEE



| | 1. | Membership
                                         and Quorum
| | -- | --------------------------------------------------------------



| | · | a
                                         minimum of five directors appointed by the Board, one of whom must be the chair of the
                                         Human Resources and Compensation Committee;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | only
                                         Independent directors, as determined by the Board of Directors and following the Canadian
                                         and U.S. securities’ legislation and regulations, may be appointed. A member of
                                         the Audit Committee may not, other than in his or her capacity as a director or member
                                         of a board committee and subject to the exceptions provided in Canadian and U.S. laws
                                         and regulations, accept directly or indirectly any fee from CN or any subsidiary of CN
                                         nor be an affiliated person of CN or any subsidiary of CN;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | each
                                         member must be “financially literate” (as determined by the Board);
| | - | -----------------------------------------------------------------------------------------------------------------



| | · | at
                                         least one member must be an “audit committee financial expert” (as determined
                                         by the Board);
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | quorum
                                         of majority of members.
| | - | -----------------------------------------------------------------------



| | 2. | Frequency
                                         and Timing of Meetings
| | -- | -------------------------------------------------------------------------



| | · | normally
                                         one day prior to CN board meetings;
| | - | -------------------------------------------------------------------------------------



| | · | at
                                         least five times a year and as necessary;
| | - | -------------------------------------------------------------------------------------



| | · | committee
                                         members meet before or after every meeting without the presence of management.
| | - | ---------------------------------------------------------------------------------------------------------------------------------



| | 3. | Mandate
| | -- | -------



The
responsibilities of the Audit Committee include the following:



| | A. | Overseeing
                                         financial reporting
| | -- | -----------------------------------------------------------------------



| | · | monitoring
                                         the quality and integrity of CN’s accounting and financial reporting process through
                                         discussions with management, the external auditors and the internal auditors;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         with management and the external auditors, the annual audited financial statements to
                                         be included in the annual report of CN, including CN’s MD&A disclosure and
                                         earnings press releases prior to their release, filing and distribution;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         with management and the external auditors, quarterly consolidated financial statements
                                         of CN and accompanying information, including CN’s MD&A disclosure and earnings
                                         press releases prior to their release, filing and distribution, and reviewing the level
                                         and type of financial information provided, from time to time, to financial markets;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         the financial information contained in the annual information form and other reports
                                         or documents, financial or otherwise, requiring Board approval;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         the procedures in place for the review of CN’s disclosure of financial information
                                         extracted or derived from CN’s financial statements and periodically assessing
                                         the adequacy of those procedures;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         with the external auditors and management, the quality, appropriateness and disclosure
                                         of CN’s accounting principles and policies, underlying assumptions and reporting
                                         practices, and any proposed changes thereto;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         any analysis or other written communications prepared by management, the internal auditors
                                         or external auditors setting forth significant financial reporting issues and judgments
                                         made in connection with the preparation of the financial statements, including analyses
                                         of the effect of alternative generally accepted accounting principles methods;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         the external auditors’ report on the consolidated financial statements and internal
                                         controls over financial reporting of CN and on the financial statements of CN’s
                                         Pension Trust Funds;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | · | reviewing
                                         the external auditors’ quarterly review engagement report;
| | - | -------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         the compliance of management certification of financial reports with applicable legislation;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         any litigation, claim or other contingency and any regulatory or accounting initiatives
                                         that could have a material effect upon the financial position or operating results of
                                         CN and the appropriateness of the disclosure thereof in the documents reviewed by the
                                         Committee;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         the results of the external audit, any significant problems encountered in performing
                                         the audit, and management’s response and/or action plan related to any Management
                                         Letter issued by the external auditors and any significant recommendations contained
                                         therein.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | Monitoring
                                         risk management and internal controls
| | -- | -----------------------------------------------------------------------------------------



| | · | receiving
                                         periodically management’s report assessing the adequacy and effectiveness of CN’s
                                         disclosure controls and procedures and systems of internal control;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         CN’s risk assessment and risk management policies, including CN’s insurance
                                         coverage (annually and as otherwise may be appropriate);
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | assisting
                                         the Board with the oversight of CN’s compliance with applicable legal and regulatory
                                         requirements;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         CN’s delegation of financial authority;
| | - | ------------------------------------------------------------------------------------------



| | · | making
                                         recommendations with respect to the declaration of dividends;
| | - | -------------------------------------------------------------------------------------------------------------



| | · | while
                                         ensuring confidentiality and anonymity, establishing procedures for the receipt, retention
                                         and treatment of complaints received by CN regarding accounting, internal accounting
                                         controls or auditing matters or employee concerns regarding accounting or auditing matters;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | requesting
                                         the performance of any specific audit as required.
| | - | ------------------------------------------------------------------------------------------------------



| | C. | Monitoring
                                         internal auditors
| | -- | ---------------------------------------------------------------------



| | · | ensuring
                                         that the chief internal auditor reports directly to the Audit Committee;
| | - | --------------------------------------------------------------------------------------------------------------------------



| | · | regularly
                                         monitoring the internal audit function’s performance, its responsibilities, staffing,
                                         budget and the compensation of its members;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         annually the internal audit plan;
| | - | ------------------------------------------------------------------------------------



| | · | ensuring
                                         that the internal auditors are accountable to the Audit Committee and to the Board.
| | - | -------------------------------------------------------------------------------------------------------------------------------------



| | D. | Monitoring
                                         external auditors
| | -- | ---------------------------------------------------------------------



| | · | recommending
                                         to the Board and CN’s shareholders the retention and, if appropriate, the removal
                                         of external auditors, evaluating and remunerating them, and monitoring their qualifications,
                                         performance and independence;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | approving
                                         and overseeing the disclosure of all audit, review and attest services provided by the
                                         external auditors, determining which non-audit services the external auditors are prohibited
                                         from providing, and pre-approving and overseeing the disclosure of permitted non-audit
                                         services by the external auditors to CN or any of its subsidiaries, in accordance with
                                         applicable laws and regulations;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         recommendations to shareholders on the continued engagement or replacement of external
                                         auditors, for CN and CN’s Pension Trust Funds;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | ensuring
                                         that the external auditors are accountable to the Audit Committee and to the Board;
| | - | -------------------------------------------------------------------------------------------------------------------------------------



| | · | discussing
                                         with the external auditors the quality and not just the acceptability of CN’s accounting
                                         principles, including (i) all critical accounting policies and practices used, (ii) any
                                         alternative treatments of financial information that have been discussed with management,
                                         the ramification of their use and the treatment preferred by the external auditors, as
                                         well as (iii) any other material written communications between CN and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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the
external auditors (including a disagreement, if any, with management and any audit problems or difficulties and management’s
response);



| | · | reviewing
                                         at least annually, a report by the external auditors describing their internal quality-control
                                         procedures; any material issues raised by their most recent internal quality-control
                                         review of their firm, or peer review, or by any inquiry or investigation by governmental
                                         or professional authorities, within the preceding five years, respecting one or more
                                         audits carried out by them, to the extent available, and any steps taken to deal with
                                         any such issues;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         at least annually, the formal written statement from the external auditors stating all
                                         relationships the external auditors have with CN and confirming their independence, and
                                         holding discussions with the external auditors as to any relationship or services that
                                         may impact their objectivity or independence;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reviewing
                                         hiring policies for employees or former employees of CN’s firm of external auditors;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------



| | · | ensuring
                                         the rotation of lead, concurring and other audit partners, to the extent required by
                                         Canadian Corporate Governance Standards and U.S. Corporate Governance Standards.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | E. | Evaluating
                                         the performance of the Audit Committee
| | -- | ------------------------------------------------------------------------------------------



| | · | ensuring
                                         that processes are in place to annually evaluate the performance of the Audit Committee.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



In
addition to the above responsibilities, the Audit Committee may discharge the responsibilities of the Finance Committee if no
meeting of the Finance Committee is scheduled to be held in the immediate future.



Because
of the Audit Committee’s demanding role and responsibilities, the Board chair, together with the Corporate Governance and
Nominating Committee chair, reviews any invitation to Audit Committee members to join the audit committee of another entity. Where
a member of the Audit Committee simultaneously serves on the audit committee of more than three public companies, including CN,
the Board determines whether such simultaneous service impairs the ability of such member to effectively serve on the Audit Committee
and either requires a correction to the situation or discloses in CN’s Management Information Circular that there is no
such impairment.



As
appropriate, the Audit Committee may retain independent advisors to help it carry out its responsibilities, including fixing such
advisors’ fees and retention terms, subject to advising the Board chair; the Audit Committee makes arrangements for the
appropriate funding for payment of the external auditors and any advisors retained by it. The Board also provides appropriate
funding for all administrative expenses necessary or appropriate to allow the Audit Committee to carry out its duties.



The
Audit Committee has direct communication channels with the internal and external auditors to discuss and review specific issues,
as appropriate. In addition, each must meet separately with the Audit Committee, without management, twice a year, and more frequently
as required; the Audit Committee must also meet separately with management twice a year, and more frequently as required.



The
Audit Committee shall report to the Board regularly on its deliberations and annually on the adequacy of its mandate.



Nothing
contained in the above mandate is intended to assign to the Audit Committee the Board’s responsibility to ensure CN’s
compliance with applicable laws or regulations or to expand applicable standards of liability under statutory or regulatory requirements
for the directors or the members of the Audit Committee. Even though the Audit Committee has a specific mandate and its members
may have financial experience and expertise, it is not the duty of the Audit Committee to plan or conduct audits, or to determine
that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting
principles. Such matters are the responsibility of management, the internal auditors and the external auditors.



Members
of the Audit Committee are entitled to rely, absent knowledge to the contrary, on (i) the integrity of the persons and organizations
from whom they receive information, (ii) the accuracy and completeness of the information provided, and (iii) representations
made by management as to the non-audit services provided to the Company by the external auditors.



The
Audit Committee’s oversight responsibilities are not established to provide an independent basis to determine that (i) management
has maintained appropriate accounting and financial reporting principles or appropriate internal controls and procedures, or (ii)
the Company’s financial statements have been prepared and, if applicable, audited in accordance with generally accepted
accounting principles or generally accepted auditing standards.





33


Table of Contents


SIGNATURES



Pursuant to the requirements of the Exchange
Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual
report to be signed on its behalf by the undersigned, thereto duly authorized.



|CANADIAN NATIONAL RAILWAY COMPANY |                  
|--------------------------------- | -----------------
|                                  |                  
|                                  |                  
|By:                               | /s/
    Sean Finn
|                                  | Name:            
|                                  | Title:           
|                                  | Date:            







Table of Contents


EXHIBIT INDEX





|Exhibit No. | Description                                                                           
|----------- | --------------------------------------------------------------------------------------
|            |                                                                                       
|99.1        | Management's Discussion and Analysis for the year ended December 31, 2015*            
|           
|99.2        | Audited Annual Consolidated Financial Statements for the year ended December 31, 2015*
|           
|99.3        | Consent of KPMG LLP                                                                   
|           
|99.4        | CEO Section 302 Certification                                                         
|           
|99.5        | CFO Section 302 Certification                                                         
|            |                                                                                       
|99.6        | CEO and CFO Section 906 Certification                                                 
|           
|101         | Interactive Data File*                                                                



_________________*Incorporated by reference from the Registrant’s Form 6-K dated February 1, 2016.