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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 40-F

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[ ]
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, 2003**
      Commission File Number: **1-2413**


CANADIAN NATIONAL RAILWAY COMPANY(Exact name of registrant as specified in its charter)

Canada
      4011
      E.I. 980018609(Jurisdiction of
      (Primary Standard Industrial
      (I.R.S. Employerincorporation or organization)
      Classification Code Number)
      Identification No.)935 de La Gauchetiere Street WestMontreal, QuebecCanada H3B 2M9(514) 399-2100 (Address, including zip code, and telephone number
  including area code, of Registrants principal executive offices)


CT Corporation System111
Eighth Avenue
New 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)

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Securities registered
          pursuant to Section 12(b) of the Act:


Title of each class
      Name of each exchange on which registeredCommon shares
      New York Stock ExchangeToronto 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:Debentures
and Notes (Debt Securities) of Registrant

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, 2003, 189,438,695 common shares
were issued and outstanding.

Indicate by check mark whether the Registrant by filing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934 (the Exchange Act). If Yes is marked, indicate the file number assigned to the Registrant in connection with such Rule.

Yeso    No:  xIndicate
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.

Yesx   No:  o

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DISCLOSURE CONTROLS AND PROCEDURES

Canadian National Railway Companys President and Chief Executive Officer (the CEO) and its Executive Vice-President and Chief Financial Officer (the "CFO"), after evaluating the effectiveness of Canadian
National Railway Companys "disclosure controls and procedures" (as defined in Exchange Act Rules 13a-14(c) and 15d-14(c)) as of December 31, 2003, have concluded that as of such date, Canadian National Railway Companys disclosure
controls and procedures were adequate and effective and designed to ensure that material information relating to Canadian National Railway Company (the Company) and its consolidated subsidiaries would be made known to them by others
within those entities.

During the year ended December 31, 2003, there was no change in the Canadian National Railway Companys internal controls over financial reporting that has materially affected, or is reasonably likely to materially
affect Canadian National Railway Companys internal control over financial reporting, except Canadian National Railway Company implemented its SAP enterprise system on the former Wisconsin Central territory, thereby enhancing Canadian National
Railway Companys internal control over financial reporting, as the core finance and accounting reporting system is now applied across all of its rail operations.

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. Hugh J. Bolton 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
the Registrant. The SEC has indicated that the designation or identification
of Mr. Bolton as an audit committee financial expert does  not deem him an expert for
any purpose, impose any duties, obligations or liability on Mr. Bolton 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.caunder the caption Corporate
Governance. All amendments to the Code of Business Conduct will be posted on the Registrants Internet website at the address listed above.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

KPMG LLP has served as the Companys auditors since 1992. In 2003 and 2002, fees for audit, audit-related, tax and other services provided to the Company by KPMG LLP were the following:

|                       
|-----------------------
|Year ended December 31,
|                       
|                       
|Audit fees             
|Audit-related fees     
|Tax fees               
|Other fees             
|                       
|Total                  
|                       

Pursuant to the terms
of its charter, the Audit, Finance and Risk Committee of Canadian National Railway
Company approves all audit services, audit engagement fees and terms and all
non-audit engagements with the  independent auditor. The Audit, Finance and Risk
Committee pre-approved 100% of the services performed by our independent auditors
for audit-related and non-audit related services for the year ended December
31, 2003 that were required to be pre-approved.

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

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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, those of its subsidiaries and the Companys
pension plan financial statements. Audit fees of $321,695 relating to 2002 have been included in 2003 as they were billed and paid for in 2003.

Audit-related fees

Audit-related fees were incurred 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. In 2002, $2,246,391 was attributable to a one-time implementation fee in respect of a research and development
claim for tax credits. In 2003, an additional $250,000 was incurred for similar services.

Other fees

In 2003, the entire amount was incurred for consultations with respect to our Report on Internal Controls as required under Section 404 of the Sarbanes-Oxley Act of 2002.  Fees incurred in 2002 were mainly for
consultations on a legal matter, review and training related to the Companys SAP enterprise system and financial counselling for terminated employees.

OFF-BALANCE SHEET ARRANGEMENTS

Accounts receivable securitization program

In June 2003, the Company renewed its accounts receivable securitization program for a term of three years, to June 2006. Under the terms of the renewal the Company may sell, on a revolving basis, a maximum of $450
million of eligible freight trade and other receivables outstanding at any point in time, to an unrelated trust. The Company has a contingent residual interest of approximately 10% of receivables sold, which is recorded in Other current assets.

The Company is subject to customary reporting requirements for which failure to perform could result in termination of the program. In addition, the trust is subject to customary credit rating requirements, which if not
met could also result in termination of the program. The Company is not currently aware of any trend, event or condition that would cause such termination.

The accounts receivable securitization program provides the Company with readily available short-term financing for general corporate uses.  In the event the program is terminated before its scheduled maturity, the Company
expects to meet its future payment obligations through its various sources of financing, including its revolving credit facility and commercial paper program, and/or access to capital markets.

At December 31, 2003, pursuant to the agreement, $448 million had been sold compared to $350 million at December 31, 2002.

Guarantees and indemnifications

In the normal course of business, the Company, including certain of its subsidiaries, enters into agreements that may involve providing certain guarantees or indemnifications to third parties and others, which extend over
the term of the agreement. These include, but are not limited to, residual value guarantees on operating leases, standby letters of credit and surety bonds, and indemnifications that are customary for the type of transaction or for the railway
business.

Effective January 1, 2003, pursuant to FASB Interpretation (FIN) No. 45, Guarantors Accounting and Disclosure requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, the
Company is required to recognize a liability for the fair value of the obligation undertaken in issuing certain guarantees on the

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date the guarantee is issued or modified. Where the Company expects to make a payment in respect of a guarantee, a liability will be recognized to the extent that one has not yet been recognized.

The nature of these guarantees or indemnifications, the maximum potential amount of future payments, the carrying amount of the liability, if any, and the nature of any recourse provisions are disclosed in Note 20 
Major commitments and contingencies of the Companys 2003 Annual Consolidated Financial Statements.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

In the normal course of business, the Company incurs contractual obligations. The following table sets forth the Companys contractual obligations for the following items as at December 31, 2003:

|                              
|------------------------------
|
|
|*(In millions)*               
|                              
|Long-term debt obligations (a)
|Capital lease obligations (b) 
|Operating lease obligations   
|Purchase obligations (c)      
|                              
|Total obligations             
|                              

|    |                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Excludes capital lease obligations of $746 million.                                                                                                  
|    |                                                                                                                                                      
|(b) | Includes $395 million of imputed interest on capital leases at rates ranging from approximately 1.9% to 11.9%.                                       
|    |                                                                                                                                                      
|(c) | Includes commitments for railroad ties, rail, freight cars, locomotives and other equipment and outstanding information technology service contracts.

IDENTIFICATION OF THE AUDIT COMMITTEE

The Registrants
audit committee is composed of the following directors: Robert Pace (Chair),
Michael R. Armellino, A. Charles Baillie, Hugh J. Bolton, J.V. Raymond Cyr, James
K. Gray, Edith E. Holiday, Gilbert H.  Lamphere and Denis Losier.

CORPORATE GOVERNANCE PRACTICES

The Registrants board of directors has also 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). The board of directors will continue to review its corporate governance practices on an ongoing basis in response to the evolving standards. The
Registrants corporate governance does not differ significantly from that followed by U.S. domestic companies under the NYSE Standards.

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.

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2003

ANNUAL INFORMATION
      FORM









April 21,2004

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TABLE OF CONTENTS

|                 |  |                                                            |  |                                                                        |  |                                                      |  |   
|---------------- |  | ---------------------------------------------------------- |  | ---------------------------------------------------------------------- |  | ---------------------------------------------------- |  | --
|Item
          1 |  | Incorporation                                              |  | 1                                                                     
|                
|                 |  | 1.1                                                        |  | Incorporationof
        the Issuer                                     |  | 1                                                   
|                
|                 |  | 1.2                                                        |  | Subsidiaries                                                           |  | 1                                                   
|                
|Item
          2 |  | GeneralDevelopmentof
          the Business                |  | 2                                                                     
|                
|                 |  | 2.1                                                        |  | Overview                                                               |  | 2                                                   
|                
|                 |  | 2.2                                                        |  | GeneralDevelopment
        of the Business During the Last Three Years |  | 2                                                   
|                
|Item
          3 |  | NarrativeDescriptionof
          the Business              |  | 5                                                                     
|                
|                 |  | 3.1                                                        |  | RegionalOrganization                                                   |  | 5                                                   
|                
|                 |  | 3.2                                                        |  | BusinessUnits                                                          |  | 6                                                   
|                 |  |                                                            |  | 3.2.1                                                                  |  | Petroleum
        and Chemicals                      |  | 6 
|                 |  |                                                            |  | 3.2.2                                                                  |  | Metals and
        Minerals                          |  | 7 
|                 |  |                                                            |  | 3.2.3                                                                  |  | Forest Products                                      |  | 7 
|                 |  |                                                            |  | 3.2.4                                                                  |  | Coal                                                 |  | 8 
|                 |  |                                                            |  | 3.2.5                                                                  |  | Grain and
        Fertilizers                        |  | 8 
|                 |  |                                                            |  | 3.2.6                                                                  |  | Intermodal                                           |  | 9 
|                 |  |                                                            |  | 3.2.7                                                                  |  | Automotive                                           |  | 10
|                 |  |                                                            |  |                                                                        |  |                                                     
|                 |  | 3.3                                                        |  | Technology                                                             |  | 10                                                  
|                
|                 |  | 3.4                                                        |  | Labor                                                                  |  | 11                                                  
|                 |  |                                                            |  |                                                                        |  |                                                      |  |   
|                 |  |                                                            |  | 3.4.1                                                                  |  | Canada                                               |  | 11
|                 |  |                                                            |  | 3.4.2                                                                  |  | United States                                        |  | 11
|                 |  |                                                            |  |                                                                        |  |                                                     
|                 |  | 3.5                                                        |  | Facilities,Right-of-way,
        Rolling Stock and Equipment           |  | 12                                                  
|                
|                 |  | 3.6                                                        |  | PassengerRail
        Services                                         |  | 15                                                  
|                
|                 |  | 3.7                                                        |  | Safety                                                                 |  | 15                                                  
|                
|                 |  | 3.8                                                        |  | Regulation                                                             |  | 16                                                  
|                 |  |                                                            |  |                                                                        |  |                                                      |  |   
|                 |  |                                                            |  | 3.8.1                                                                  |  | Canadian
        Regulation                          |  | 16
|                 |  |                                                            |  | 3.8.2                                                                  |  | CTA Review                                           |  | 16
|                 |  |                                                            |  | 3.8.3                                                                  |  | U.S. Regulation                                      |  | 17
|                 |  |                                                            |  | 3.8.4                                                                  |  | Canada U.S.
        Customs and US Homeland Security |  | 17
|                 |  |                                                            |  |                                                                        |  |                                                     
|                 |  | 3.9                                                        |  | EnvironmentalMatters                                                   |  | 18                                                  
|                 |  |                                                            |  |                                                                        |  |                                                      |  |   
|                 |  |                                                            |  | 3.9.1                                                                  |  | Canada                                               |  | 18
|                 |  |                                                            |  | 3.9.2                                                                  |  | United States                                        |  | 19
|                 |  |                                                            |  | 3.9.3                                                                  |  | Future Costs                                         |  | 19
|                 |  |                                                            |  |                                                                        |  |                                                      |  |   
|                 |  | 3.10                                                       |  | Legal                                                                  |  |                                                      |  | 20
|                 |  |                                                            |  | 3.10.1                                                                 |  | General                                              |  | 20
|                 |  |                                                            |  | 3.10.2                                                                 |  | Aboriginal
        Claims                            |  | 21
|                
|Item
          4 |  | SelectedConsolidatedFinancial
          and Operating Data |  | 22                                                                    
|                
|                 |  | 4.1                                                        |  | SelectedThree-Year
        Annual Consolidated Financial Information   |  | 22                                                  
|                
|                 |  | 4.2                                                        |  | SelectedTwo-Year
        Quarterly Consolidated Financial Information  |  | 25                                                  
|                
|                 |  | 4.3                                                        |  | Dividends                                                              |  | 25                                                  

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|                                                                                                                       |  |                                                                                     |  |                                                                |  |   
|---------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------- |  | -------------------------------------------------------------- |  | --
|Item
          5                                                                                                       |  | ManagementsDiscussion
          and Analysis of Financial Condition and Results of |  |                                                               
|                                                                                                                       |  | Operations                                                                          |  | 25                                                            
|                                                                                                                       |  |                                                                                     |  |                                                               
|Item
          6                                                                                                       |  | Marketfor
          Securities                                                      |  | 26                                                            
|                                                                                                                       |  |                                                                                     |  |                                                               
|Item
          7                                                                                                       |  | Directorsand
          Executive Officers                                           |  | 26                                                            
|                                                                                                                       |  |                                                                                     |  |                                                                |  |   
|                                                                                                                       |  | 7.1                                                                                 |  | Directors                                                      |  | 26
|                                                                                                                       |  | 7.2                                                                                 |  | Executive
        Officers                                     |  | 26
|                                                                                                                       |  |                                                                                     |  |                                                               
|Item
          8                                                                                                       |  | AdditionalInformation                                                               |  | 27                                                            
|                                                                                                                       |  |                                                                                     |  |                                                                |  |   
|                                                                                                                       |  | 8.1                                                                                 |  | Executive
        Compensation; Financial Information          |  | 27
|                                                                                                                       |  | 8.2                                                                                 |  | Undertaking
        to Provide Documents                       |  | 27
|                                                                                                                       |  | 8.3                                                                                 |  | Auditors
        Report and Consolidated Financial Statements |  | 28
|                                                                                                                       |  | 8.4                                                                                 |  | Factors
        for Forward-Looking Information                |  | 28
|                                                                                                                       |  |                                                                                    
|ExhibitA
          CautionaryStatements
          for Purposes of the Safe Harbor Provisions of the
          United |  |                                                                                    
|                                                                                                                       |  | StatesPrivate
          Securities Litigation Reform Act of 1995                    |  | A-1                                                           
|                                                                                                                       |  |                                                                                    
|ExhibitB
          Facilities                                                                                          |  | B-1                                                                                
|                                                                                                                       |  |                                                                                    
|ExhibitC
          GAAPReconciliation                                                                                  |  | C-1                                                                                

|                                             |   |                                                                                 |                                                     |  |         
|-------------------------------------------- | - | ------------------------------------------------------------------------------- | --------------------------------------------------- |  | --------
|                                             |   |                                                                                
|Documentsincorporated
          by reference |   |                                                                                
|                                            
|                                             |   |                                                                                 |                                                     |  |         
|Documents                                    |   | Part of Annual Information
          Formin which incorporated
    by reference
|                                            
|1                                            | . |                                                                                 | Portions
        of the Companys 2003 Annual       |  | Item 5  
|                                             |   |                                                                                 | Report
        to shareholders for the year ended   |  |         
|                                             |   |                                                                                 | December
        31, 2003.                          |  |         
|                                            
|2                                            | . |                                                                                 | Portions
        of the Companys Notice of 2004    |  | Item 7  
|                                             |   |                                                                                 | Annual
        Meeting of Shareholders and          |  |         
|                                             |   |                                                                                 | Management
        Proxy Circular.                  |  |         
|                                            
|3                                            | . |                                                                                 | Auditors Report
        and Consolidated Financial |  | Item 8.3
|                                             |   |                                                                                 | Statements.                                         |  |         

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ITEM 1INCORPORATION

1.1INCORPORATION
      OF THE ISSUER

Canadian National Railway Company (CN or
    the Company) was incorporated in 1922 by special act of
    the Parliament of Canada. CNs continuance under theCanada Business Corporations Actwas
    authorized by theCN 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. As of November 28, 1995, CN ceased to be a Crown corporation.
    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.

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 (514) 399-5430.

All references herein to dollars or $ are
    to Canadian dollars and all financial information reflected herein
    is determined on the basis of, and prepared in accordance with Canadian
    generally accepted accounting principles (Canadian GAAP),
    unless otherwise indicated.

The information in this Annual Information
    Form includes Wisconsin Central Transportation Corporation as of October
    9, 2001, unless otherwise indicated.

This Annual Information Form contains
    or makes reference to Non-GAAP measures that do not have any standardized
    meaning prescribed by GAAP and are therefore not necessarily comparable
    to similar measures presented by other companies and as such, should
    not be considered in isolation. Management believes that Non-GAAP measures
    such as adjusted net income, and the resulting adjusted performance
    measures for items such as operating income, operating ratio and per
    share data, are useful measures of performance that can facilitate
    period-to-period comparisons, as they exclude items that do not arise
    as part of the normal day-to-day business or that could potentially
    distort the analysis of trends in business performance. The exclusion
    of specified items in the adjusted measures set out in this Annual
    Information Form does not imply that they are necessarily non-recurring.
    Schedule C attached to this Annual Information Form provides the corresponding
    GAAP measures for the Non-GAAP measures used herein and a reconciliation
    of such Non-GAAP measures to the corresponding GAAP measures.

1.2SUBSIDIARIES

CNs principal subsidiaries as
    of December 31, 2003, all of which are wholly owned (directly or indirectly),
    and their jurisdiction of incorporation, are indicated below:

|                                                                                   |  |                          
|---------------------------------------------------------------------------------- |  | -------------------------
|Name                                                                               |  | Jurisdiction
          of
|                                                                                   |  | incorporation            
|                                                                                  
|Grand Trunk Corporation                                                            |  | Delaware                 
|Grand Trunk Western
        Railroad Incorporated (Grand Trunk Western or "GTW") |  | Delaware                 
|Illinois Central
        Corporation (IC or Illinois Central)                  |  | Delaware                 
|Illinois Central
        Railroad Company (ICRR)                                 |  | Illinois                 
|Wisconsin Central
        Transportation Corporation (WC)                        |  | Delaware                 
|Wisconsin Central
        Ltd                                                      |  | Illinois                 

The financial statements of each of
    the above principal subsidiaries are consolidated with CNs financial
    statements.

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- 2 -

ITEM 2GENERAL
      DEVELOPMENT OF THE BUSINESS

2.1OVERVIEW

As of December 31, 2003, CN operated
    approximately 11,500 route miles in eight Canadian provinces and 6,000
    route miles in 15 U.S. states totaling approximately 17,500 route miles
    with principal routes to every major metropolitan area in Canada and
    to the major U.S. rail hubs of Buffalo, Detroit, Duluth/Superior, Minneapolis/St.
    Paul, Chicago, St. Louis, Jackson, Memphis, New Orleans, Baton Rouge and
    Mobile. The Company is North Americas only transcontinental railroad,
    and Canadas largest railroad serving all five major Canadian
    ports on the Atlantic and Pacific Oceans and the Great Lakes as well
    as New Orleans on the Gulf of Mexico.

The Companys revenues derive from
    the movement of a diversified and balanced portfolio of goods. In 2003,
    no single business unit accounted for more than 22% of revenues. The
    sources of revenue also reflect a balanced mix of destinations. In
    2003, 22% of revenues came from U.S. domestic traffic, 34% from transborder
    traffic, 25% from Canadian domestic traffic, and 19% from overseas
    traffic.

CN originated approximately 80% of traffic
    moving along its network in 2003. This allowed the Company both to
    capitalize on service advantages and to build on opportunities to efficiently
    use assets.

2.2GENERAL
      DEVELOPMENT OF THE BUSINESS DURING THE LAST THREE YEARS

CNs financial performance, when
    measured on the basis of profit margin, balance sheet strength and
    free cash flow performance, has been amongst the best in the industry
    since 1999. To maintain that position, CN has focused on strategies
    to grow the business profitably. Profitable growth is driven by high-quality
    service that meets customer needs and the relentless pursuit of productivity
    to contain and reduce its cost base. At CN, the ultimate goal is to
    achieve sustainable financial health.

Growth

CNs revenues have increased from
    a level of $3.9 billion in 1995, the year in which it was privatized,
    to $5.9 billion in 2003. This has resulted from a combination of organic
    growth and well-executed acquisitions.

Revenues for 2003 were down by 4% when
    compared to 2002, reflecting the impact of a stronger Canadian dollar
    on the translation of U.S dollar denominated revenues. Excluding the
    conversion impact of the stronger Canadian dollar of approximately
    $380 million, CNs revenues would have been up 3% compared to
    2002, driven by growth in merchandise and intermodal traffic. Revenues
    in 2003 continued to be affected by a poor Canadian grain crop that
    carried over into the first half of the year and by declining coal
    traffic due to mine closures in Western Canada.

CNs strategy of extending reach
    and providing seamless service to North American customers was launched
    when it took control of IC in 1999. CN has been taking other important
    steps in that regard, with the implementation of alliances and arrangements
    with other major players in the railway industry, including arrangements
    with CSX Corporation (CSX) in May 2001 and Union Pacific
    Corporation (UP) in September 2001.

The acquisition of WC in October 2001
    was another key step in increasing CNs ability to offer seamless
    service in the North American Free Trade Agreement ("NAFTA") market.
    As in the case of IC, the integration of WC into the CN family was
    flawless. The integration of customers, many of which were already
    being served by CN, the pooling of assets and resources to tap synergy
    benefits, and the step-by-step combination of systems took place very
    smoothly. All this has contributed to the success of the WC acquisition,
    which was accretive from the outset.

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- 3 -

In October 2003, CN entered into agreements
    to acquire the railroads and related holdings of Great Lakes Transportation
    LLC (GLT) in the United States. The acquisition of GLTs
    railroads and related holdings will strengthen CNs position in
    the steel industry, in addition to driving new efficiencies in the
    network by giving the Company ownership of an essential link in the
    important Chicago-Western Canada corridor. As of April 2004, the Company
    has received all necessary regulatory approvals, including the U.S.
    Surface Transportation Board (STB) ruling rendered on April
    9, 2004. The Company expects the transaction will close in mid-May
    2004.

In November 2003, CN also entered into
    an agreement to acquire BC Rail Ltds shares and all the partnership
    units of BC Rail Partnership (collectively BC Rail), and
    the right to operate over BC Rails roadbed under a long-term
    lease. The acquisition of BC Rail will extend CNs business reach
    in Western Canada and open up real growth opportunities in the Companys
    already solid forest products franchise. The acquisition is subject
    to regulatory approval by the Canadian Competition Bureau.

Together, the GLT and B.C. Rail acquisitions
    represent a total investment of approximately $1.5 billion.

Service

CN understands that the best way to
    increase shareholder value is to create value for its customers. The
    purpose of CN's service plan, which was originally introduced in 1998,
    is to put the tools in place to deliver the quality and reliability
    of service that customers require. Under the plan, CN runs regularly
    scheduled trains that leave at predetermined times. Each car or container
    has a specific trip plan that fits into the design of the train schedule.

CNs success in the implementation
    of the service plan is seen in the performance of traffic compared
    to the trip plans set for each shipment on each day, with a very tight
    window of compliance. CN believes its success in growing merchandise
    and intermodal traffic would not be possible without the quality of
    service afforded by precise execution of the service plan.

The largest portion of CNs capital
    expenditures is focused on rail infrastructure to maintain the quality
    and enhance the fluidity of the network, and to provide safe, reliable
    service to customers across the U.S. and Canada. In the last three
    years, CN has spent in excess of $600 million (U.S. GAAP) per year
    in this respect. Quality service also equates to providing quality
    equipment, both cars and locomotives. In 2002, the Company acquired
    30 new high-horsepower units, to be followed by an additional 60 units
    in 2003/2004.

For CN, service also entails ease of
    doing business, in particular, responding promptly and effectively
    to customer requests for information and for equipment. Major efforts
    have been and are being made in this regard, such as the emphasis on
    pro-active account management and the availability of a product catalogue
    providing the sales force with the details of CNs service offering.
    CN has expanded its local sales force to ensure a more effective interface
    with its customer base. Over the past several years, CN has been working
    to improve its interface with customers by enhancing its eBusiness
    capabilities with the objective of increasing electronic interface
    across a wide range of transactions.

Shippers value quality service because
    it allows them to better plan production schedules and inventory levels,
    reduce distribution costs, and deal reliably with their own customers.
    With the quality of service that CN offers, the Company is confident
    the business can grow and that yield can continue to improve going
    forward.

Productivity

CNs focus on profitable, top-line
    growth implies a relentless pursuit of efficiency and productivity
    improvements in all aspects of the business and in all corners of the
    organization. With an asset-intensive business, one of CNs top
    priorities is to constantly improve asset utilization in the network
    and the yards.

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- 4 -

The service plan plays a central role
    in the pursuit of better asset utilization. It allows CN to simultaneously
    improve the quality of service and the productivity of assets.

The reliability that is now possible
    at CN has also opened a whole new perspective on the intermodal business.
    Generally characterized by highly uneven traffic flows on different
    days of the week, intermodal traffic generates significant asset requirements
    for railways to meet peak demand. With the ability to deliver as promised
    each and every day, a high level of reliability is allowing CN to smooth
    out traffic, improve the management of capacity on a daily basis, and
    grow intermodal margins.

New and innovative labor agreements
    have also been put in place with several labor unions representing
    running trades employeeslocomotive engineers, conductors and
    brakemenin the U.S. The agreements change the method of pay to
    hourly wages, giving CN the flexibility to run trains based on the
    needs of the customer and not on antiquated mileage rules, in return
    for a predictable work schedule, improved job security and higher pay.
    While such agreements to date have been largely negotiated in the U.S.,
    CN is looking to expand the concept to other parts of the system.

Productivity improvements are being
    pursued through the implementation of cutting-edge information technology.
    Over the last several years, CN has implemented a new SAP enterprise
    system, a powerful integrated software application. After the completion
    of the third phase of the implementation of SAP in 2002, CN had replaced
    more than 70 fragmented mainframe component systems. During 2003, CN
    continued its implementation of SAP by implementing this system on
    WC and completed such implementation by mid-year. With such tools,
    new savings opportunities can be identified to an extent that was not
    previously possible.

In an ongoing effort to improve labor
    productivity, the Company has streamlined the organization. In that
    context, the Company recorded charges of $120 million in 2002 and $98
    million in 2001 for workforce reductions.

Sustainable Profitability

Over the last three years, CN has continued
    to improve its performance in spite of significant turmoil in the business
    environment. With recession during 2001, followed by severe drought
    in Canada in 2002, and continued economic uncertainty and lingering
    effects of the earlier drought well into 2003, the Company managed
    to post solid earnings throughout the period. Net income, on a U.S.
    GAAP basis, was $1 billion in 2003, essentially unchanged from 2002
    on an adjusted basis,1generating
    an overall return on investment of 10.1% .1

CN continues to be an industry leader
    in free cash flow generation. In 2003, CN produced $578 million of
    free cash flow,1reaching
    10% of revenues, compared to approximately $386 million or 7% of revenues,
    in 2000. The improvement in free cash flow continued while CN increased
    its dividend to shareholders for the seventh consecutive year.

The Company is constantly seeking ways
    to improve cash flow through increased earnings, better asset utilization,
    tighter control of working capital, and the monetization of surplus
    assets. In early 2001, CN sold its 50 per cent interest in the Detroit
    River Tunnel Company for net proceeds of $112 million. In 2002, CN
    sold Tranz Rail Holdings Inc. in New Zealand and Australian Transport
    Network Limited in Australia for aggregate net proceeds of $69 million.
    CN also sold, in 2002, IC Terminal Holdings Company, a U.S. subsidiary
    of IC, for $28 million.

Given strong free cash flow and a solid
    balance sheet, CN's Board of Directors authorized a share repurchase
    program over the course of one year beginning on October 25, 2002 at
    prevailing market prices. That program was completed in August 2003,
    with 13 million shares repurchased at a total cost of $859 million
    and at an average price of $66.06.



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- 5 -

On January 6, 2004, the shareholders
      of the English Welsh & Scottish Railway Holdings Limited (EWS),
      a company which provides rail services in the United Kingdom, approved
      a plan to reduce the EWS share capital by offering shareholders the
      ability to cancel a portion of their EWS shares. CN elected to have
      the maximum allowable number of shares cancelled under the plan,
      thereby reducing its ownership interest in EWS to approximately 31%
      on a fully diluted basis. In 2004, CN received £81.6 million
      (Cdn$199 million) from EWS, of which £23.9 million (Cdn$58
      million) was in the form of EWS 8% notes due in 2009.

CNs ultimate goal is to achieve
      sustainable financial health through the ups and downs of the business
      environment. This means generating solid earnings on an ongoing basis,
      but also solid free cash flow, after payment of capital expenditures
      and dividends.

ITEM 3NARRATIVE
        DESCRIPTION OF THE BUSINESS

3.1REGIONAL
        ORGANIZATION

Following its acquisition and integration
      of WC, CN had six operating divisions organized along geographical
      lines. With the merging of the WC division into the Midwest Division
      in early 2003, CNs operating divisions were reduced to five.
      In mid-2003, CN consolidated its five divisions into three regions.
      Each region is headed by a senior officer and is charged with the
      authority to meet local customer service needs, control costs, expand
      local accounts and develop new business from medium-sized shippers.
      To ensure the integrity of the CN network, Company-wide control of
      operations and marketing remains at the corporate level. As of December
      31, 2003, CN operated approximately 17,500 route miles of track.

CNs three operating regions,
      as of December 31, 2003, are described as follows:

- Western Canada RegionThe Western Canada Region, headquartered
        in Edmonton, Alberta, extends from Thunder Bayand
        Armstrong in northwestern Ontario to the ports of Vancouver and
        Prince Rupert on thePacific
        Ocean. The Region operates approximately 7,000 route miles of track,
        serves the Port ofVancouver,
        the inland port of Thunder Bay and is the exclusive rail link to
        Prince Rupert, theclosest
        North American port to Northeast Asia. CNs Western Canada
        Region carries bulk exportcommodities
        such as grain and fertilizers, coal, potash and sulfur, as well
        as petrochemicals,forest
        products and intermodal traffic destined for domestic, international
        and U.S. markets.
- Eastern Canada RegionThe Eastern Canada Region, headquartered
        in Toronto, Ontario, extends east from Armstrong innorthwestern
        Ontario to Halifax on the Atlantic Ocean, and from Chibougamau,
        Quebec south tothe Ontario-Michigan
        border. The Region operates approximately 4,500 route miles of
        track andserves the ports
        of Montreal, Quebec, Saint John, New Brunswick and Halifax, Nova
        Scotia. Theprincipal commodities
        carried by the Eastern Canada Region are automotive, intermodal,
        metals,chemicals and forest
        products.

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- 6 -

- United States RegionThe United States Region, headquartered
        in Homewood, Illinois, extends from International Fallsjust
        south of Fort Francis, Ontario, to Chicago, Illinois then on to
        New Orleans, Louisiana on theGulf
        of Mexico, and from Minneapolis and St. Paul, Minnesota to Sault
        Ste. Marie, Michigan, andfrom
        Sioux City, Iowa and Omaha, Nebraska heading east to Port Huron
        and Detroit, Michigan.The
        United States Region operates approximately 6,000 route miles of
        track and serves the Gulfports
        of Mobile, Alabama and New Orleans, Louisiana and the river ports
        of Memphis, Tennesseeand
        Baton Rouge, Louisiana. Major commodities transported in this Region
        include finishedautomobiles
        and auto parts, intermodal, iron and steel, petroleum and chemicals,
        forest products,coal, fertilizers
        and grain. The United States Region interchanges traffic with Kansas
        CitySouthern Railroad (KCS)
        at Jackson, Mississippi, as part of the marketing alliance that
        providesCN customers access
        to Mexico and the U.S. Southwest. With connections in Chicago and
        otherlocations to all North American Class 1 carriers, the
        CN United States Region serves as a criticallink
        for the Company's NAFTA strategy.

3.2BUSINESS
        UNITS

In addition to its regional structure
      described above, the Company has organized its business under seven
      business units. The following table sets forth revenue and carload
      information by business unit for each of the years in the three-year
      period ended December 31, 2003, presented under U.S. generally accepted
      accounting principles:

|                                  |  |                                   |  |                          |  |          |                          |       |  |                                       |  |       |                  |       |     |  |       |     |  |       |    
|--------------------------------- |  | --------------------------------- |  | ------------------------ |  | -------- | ------------------------ | ----- |  | ------------------------------------- |  | ----- | ---------------- | ----- | --- |  | ----- | --- |  | ----- | ---
|                                  |  |                                   |  |                          |  |          |                          |       |  |                                       |  |       |                  |       |     |  |       |     |  |       |    
|                                  |  | Rail Operating
          Revenues |  |                          |  | Carloads |                          |       |  | Freight
          Revenues perCarload | 
|                                  |  |                                   |  |                          |  |          |                          |       |  |                                       | 
|                                  |  | 2003                              |  | 2002                     |  | 2001     |                          | 2003  |  | 2002                                  |  | 2001  |                  | 2003  |     |  | 2002  |     |  | 2001  |    
|                                  |  |                                   |  | (In
          million $) |  |          | (In
          thousands) |       |  |                                       |  |       | (In
          $) |       |     |  |      
|Petroleum and
          Chemicals |  | 1,058                             |  | 1,102                    |  | 923      |                          | 604   |  | 587                                   |  | 519   |                  | 1,752 |     |  | 1,877 |     |  | 1,778 |    
|Metals and Minerals               |  | 527                               |  | 521                      |  | 458      |                          | 396   |  | 388                                   |  | 287   |                  | 1,331 |     |  | 1,343 |     |  | 1,596 |    
|Forest Products                   |  | 1,284                             |  | 1,323                    |  | 1,088    |                          | 594   |  | 600                                   |  | 501   |                  | 2,162 |     |  | 2,205 |     |  | 2,172 |    
|Coal                              |  | 261                               |  | 326                      |  | 338      |                          | 471   |  | 499                                   |  | 517   |                  | 554   |     |  | 653   |     |  | 654   |    
|Grain and Fertilizers             |  | 938                               |  | 986                      |  | 1,161    |                          | 548   |  | 535                                   |  | 590   |                  | 1,712 |     |  | 1,843 |     |  | 1,968 |    
|Intermodal                        |  | 1,101                             |  | 1,052                    |  | 969      |                          | 1,276 |  | 1,237                                 |  | 1,103 |                  | 863   |     |  | 850   |     |  | 879   |    
|Automotive                        |  | 525                               |  | 591                      |  | 520      |                          | 303   |  | 318                                   |  | 304   |                  | 1,733 |     |  | 1,858 |     |  | 1,711 |    
|Other(1)                          |  | 190                               |  | 209                      |  | 195      |                          | n/a   |  | n/a                                   |  | n/a   |                  | n/a   |     |  | n/a   |     |  | n/a   |    
|                                  |  |                                   |  |                          |  |          |                          |       |  |                                       |  |       |                  |       |     |  |       |     |  |       |    
|Total                             |  | 5,884                             |  | 6,110                    |  | 5,652    |                          | 4,192 |  | **4,164**                             |  | 3,821 |                  | 1,358 | (2) |  | 1,417 | (2) |  | 1,428 | (2)

|(1) | Principally non-freight
            revenues derived from third parties.                                                                                                                                           
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Total Freight Revenues
            per Carload is calculated by subtracting Other Rail Operating
            Revenues from Total Rail Operating Revenues and dividing the
            result by the Total Carloads.

3.2.1Petroleum
          and Chemicals

The Petroleum and Chemicals business
      unit includes a wide range of commodities which can be divided into
      the following categories: chemicals, representing 44% of the business
      units revenues in 2003, and plastics, sulfur, petroleum and
      gas products, representing 56%.

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- 7 -

The primary markets are within North
      America, and the business is closely correlated with the North American
      economy. The consolidation and rationalization of industrial production
      facilities have resulted in increased rail-based business opportunities
      in both the Canadian and U.S. markets.

This business unit is a strong originator
      of traffic. CN has access to northern Alberta, a major center for
      natural gas, feedstock and world scale petrochemicals and plastics
      complex derivatives, as well as the Oil Sands development. The Company
      also enjoys access to the low-cost Louisiana petrochemical corridor
      between New Orleans and Baton Rouge and a large number of Eastern
      Canadian regional plants. CN provides a highly efficient route to
      the large consuming areas in the Midwest and Northeast of the United
      States.

3.2.2Metals
          and Minerals

The Metals and Minerals business unit
      comprises metals (steel, aluminum and other non-ferrous metals),
      representing 72% of the business unit's revenues in 2003, and equipment
      and parts, and construction materials, representing 28%. CNs
      unique rail access to major mines and smelters makes it a transportation
      leader of copper, lead, zinc concentrates, refined metals and aluminum.
      Copper and zinc commodities, such as ores, concentrates and anodes
      are produced in northern Quebec, Ontario and Manitoba. The commodities
      are shipped to refineries for further processing and then shipped
      to manufacturers of finished goods.

Major producers of steel, primarily
      in Ontario and the U.S. Midwest, ship their products throughout North
      America and Mexico. Such products are mainly used in the automotive
      and construction industries.

Construction materials are mainly
      aggregates (stone and sand) and cement. CN enjoys access to major
      cement producers and aggregate mines in Canada as well as in the
      U.S.

CNs Metals and Minerals traffic
      is sensitive to fluctuations in the economy. CN serves a variety
      of major industries along its network and has the most direct route
      to the Ports of New Orleans and Mobile from the Midwest, as well
      as an efficient route into Mexico via its marketing alliance with
      KCS.

3.2.3Forest
          Products

CN is the leading carrier of forest
      products in North America. CN has superior rail access to the Western
      and Eastern Canadian fiber producing regions, which are among the
      largest fiber source areas in North America. This geographic position
      is a significant factor in attracting new mills to locate on CNs
      network. With the north-south corridor between Chicago, Illinois
      and New Orleans, Louisiana, CN can also take advantage of opportunities
      in the Southeastern U.S. The acquisition of WC has enabled CN to
      access approximately 38 additional paper mills on the WC network.
      CN serves customers that are leaders in all areas of forest products.

The Forest Products business unit
      consists of four major commodity segments: lumber accounted for 31%
      of the business unit's revenues in 2003, fibers, 29%, paper, 28%,
      and panels 12%.

The key drivers for newsprint are
      advertising lineage and overall economic conditions in the United
      States. The ability to provide consistent, reliable service gives
      railroads the opportunity to convert traffic from truck to rail.
      The key driver for fibers (mainly wood pulp) is the consumption of
      paper worldwide. Housing starts and renovation activities in the
      United States are the key drivers for the lumber and panels traffic.

CN continues to hold a substantial
      share of the rail market for forest products in Canada. Although
      demand for forest products tends to be cyclical, CNs geographical
      advantages and product diversity tend to reduce the impact of market
      fluctuations. CN's scheduled service offering and guaranteed car
      order program have also been significant contributors to growing
      market share.

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- 8 -

3.2.4Coal

Of the coal traffic moved by CN in
      2003, 36% originated in Canada and 64% in the United States, with
      coal providing 82% of revenues and petroleum coke 18%.

CNs coal business consists primarily
      of thermal grades of bituminous coal. Canadian thermal coal is delivered
      to power utilities primarily in Eastern Canada. In the United States,
      shipments of U.S. thermal coal are transported from mines served
      in southern Illinois, or from western U.S. mines via interchange
      with other railroads, to major utilities in the Midwest, east and
      southeast United States. CNs origin base continues to shrink
      as more industrial receivers look to Powder River Basin (PRB)
      coal origination as their primary energy source due to its low sulfur
      content, which is more environmentally compliant. As more PRB coal
      moves into these markets, however, CN has been able to aggressively
      market seamless service options through connections with western
      rail carriers. This strategy has allowed CN to stabilize volumes
      and target growth areas.

The coal business also includes Canadian
      metallurgical coal, which is generally exported to steel makers in
      Japan and other Asian markets from three coal terminals in British
      Columbia. In 2003, CN metallurgical coal volumes continued to decline
      as a result of mine closures. This trend is expected to continue.
      CN continues to work with existing and potential customers to optimize
      opportunities relating to any new mine project which may develop,
      should there be a change in market conditions.

3.2.5Grain
          and Fertilizers

This business unit depends primarily
      on crops grown and fertilizers processed in Western Canada and the
      U.S. Midwest. Of the grain traffic moved by CN in 2003, 64% originated
      in Canada, almost all in the west, and 36% in the United States.

The grain segment, which represents
      74% of the business unit's revenues, consists of three primary commodities:
      food grains, mainly wheat, representing 31% of the grain segments
      revenues in 2003; oilseeds and oilseed products (primarily canola
      seed, oil and meal), 39%; and feed grains (including feed barley,
      feed wheat and corn), 30%.

The vast majority of the grain produced
      in Western Canada is exported. Production of grain in Canada varies
      considerably from year to year, affected primarily by weather conditions.
      Grain exports are highly volatile, reflecting the size of the crop
      produced, international market conditions and foreign government
      policy. In fact, due to a severe drought in Western Canada, the Grain
      and Fertilizers business units revenues declined by $175 million
      in 2002. In 2003, the business units revenues continued to
      suffer from the lingering effects of this drought and revenues were
      down slightly for the year despite a solid rebound in the latter
      half of 2003.

Most of the Western Canadian grain
      destined to offshore markets is moved to the ports of Vancouver,
      Prince Rupert, B.C., or Thunder Bay, Ontario. Both major Canadian
      railroads, CN and Canadian Pacific Railway, operate branch lines
      and mainlines by which grain is moved from primary elevators to terminals
      at the ports of Vancouver and Thunder Bay. The port of Prince Rupert
      is served solely by CN. The principal offshore markets for Canadian
      grain are in the Pacific Rim and in the Middle East. CN also moves
      grain rail-direct into the domestic U.S. and into the growing Mexican
      market.

In the U.S., the CN rail system is
      well positioned in the heart of the grain producing territory. Two
      of the states where CN has direct access, Illinois and Iowa, historically
      have the largest annual production of corn and soybeans. This allows
      CN to serve large grain processors in Illinois, Iowa, Tennessee,
      and Mississippi. Other domestic grain movements are to the poultry
      feeder markets in the southeastern United States, which rely on corn
      for feed. Exports of grain and grain products represent another market
      for CN due to its access to major export facilities on the Mississippi
      River and the Gulf of Mexico.

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- 9 -

Some of the world's largest grain
      companies have processing plants located on the CN rail system. As
      a result, much of the grain traffic in which CN participates involves
      the movement of grain products that are produced and then shipped
      to other receiver markets. Soybean meal, corn gluten feed, vegetable
      oils, corn syrups and starches are some of the products moved by
      CN.

Fertilizers and potash represent 26%
      of this business unit's revenues. CN is a significant player in the
      Canadian rail market for nitrogen-based fertilizers, with production
      centered primarily in Western Canada. CN serves or has access to
      all major potash mines in Saskatchewan, the center for Western Canadian
      production. CN also serves a major production facility on Canadas
      east coast. Virtually all Canadian potash moves by rail to markets
      in the U.S. or overseas.

In the United States, CN serves producers
      of various types of fertilizers, including nitrogen solutions, ammonium
      nitrate, urea and phosphate fertilizers. U.S. and Canadian fertilizer
      production is heavily impacted by the price of natural gas that is
      a main raw material for most fertilizer production. When gas prices
      are high, many of the local producers reduce production. At the same
      time, however, imports can become more competitive and CN is positioned
      to handle this business through access to Gulf ports in Louisiana.

3.2.6 Intermodal

Intermodal has been a fast growing
      segment over the past several years and is a key growth driver for
      CN. This business unit comprises the following two segments:

Domestic,
      which represented 55% of the business units revenues in 2003,
      includes domestic Canada, transborder, Mexico and domestic U.S. traffic.
      The unit provides intermodal services through a number of channels
      in which services are retailed directly to beneficial owners of freight,
      and wholesaled to motor carriers, intermodal marketing companies,
      third-party logistics companies, and other transportation intermediaries.

The Domestic segment is driven by
      consumer markets, with market growth generally expected to be tied
      to the economy. The service is market-driven, and competition from
      the trucking industry is intense. The business units focus
      is to define its services as truck competitive and cost-effective.
      To that end, several products have been introduced in the domestic
      segment over the last few years, including expedited intermodal train
      service and marketing arrangements with CSX and UP.

International,
      which represented 45% of the business units revenues in 2003,
      transports import/export container business on behalf of ocean carrier
      companies. Within Canada, CN ships from/to the ports of Vancouver,
      Montreal, St. John and Halifax. In the United States, CN ships from/to
      the ports of New Orleans and Gulfport and via rail connections at
      Chicago and Detroit to both the U.S. east and west coast ports. Key
      growth markets for the international segment have been between the
      ports of Halifax, Vancouver and Montreal and locations in the Midwest.
      Connections with other Class 1 railways in Chicago have further extended
      the reach of CNs international business into the U.S. Southeast.
      The international segment is driven mainly by North American economic
      conditions.

In 2003, CN launched its Intermodal
      Excellence (IMX) program to smooth traffic flows, increase speed
      and reliability, and improve asset utilization and margins. IMX applies
      the discipline and precision of scheduled railroading to intermodal
      transportation. With IMX, shippers are required to make reservations
      for spots on trains, while day-of-the-week pricing shifts traffic
      to off-peak days. This, in combination with required gate reservations
      at CN's largest terminals, enables CN to align traffic with equipment
      and gate capacity and to improve speed and asset utilization. As
      a result of IMX, CN is seeing improvements in profit margins and
      CN's customers are benefiting from improvements in speed and service
      reliability.

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- 10 -

3.2.7 Automotive

CN is a leading carrier of automotive
      products originating in southern Ontario, Michigan and Mississippi
      and moves finished vehicles and parts within Canada, the United States
      and in both directions across the border. The principal commodities
      within the automotive unit are finished vehicles, with 81% of the
      business units revenues in 2003, and automotive parts, with
      the remaining 19%.

CN's automotive revenues are closely
      correlated to automotive production and sales in North America. CN
      can access traffic from all Canadian vehicle assembly plants, nine
      assembly plants in Michigan and one in Mississippi. CN also has access
      to parts production facilities in both the U.S. and Canada. CNs
      broad coverage enables it to consolidate full trainloads of automotive
      traffic for delivery to connecting railroads at key interchange points.
      CN has the most direct rail link from southern Ontario to the Chicago
      gateway, providing efficient service in this time-sensitive sector.
      The St. Clair tunnel provides the ability to handle the tallest multi-level
      vehicle carriers as well as maximum clearance for stacking vehicle
      frames. CN also offers single-line service through Chicago to a variety
      of other interchange locations for automotive traffic and CNs
      marketing alliance with KCS provides automotive customers with single-line
      service between facilities in Canada and Mexico. CN also serves shippers
      of import vehicles via the ports of Halifax and Vancouver, and through
      interchange with other railroads.

3.3TECHNOLOGY

CN runs a 7 days a week, 24 hours
      a day operation, servicing all of Canada and central U.S. CN has
      9,000 PCs supporting approximately 21,400 employees across North
      America as at December 31, 2003. CNs mission critical systems
      run on large central mainframes in a secured environment with full
      backup and disaster recovery. These are linked to geographically
      distributed servers supporting process control and specialized applications
      across its three regions. CNs modern PC workstations are connected
      to Local Area Networks ("LANs"). These networks, as well as the internal
      telephone network, railroad signals and radio systems all share basic
      communication services on a Company-owned, high capacity fiber network,
      supplemented with public facilities as required. CNs customers,
      vendors and partners tie into this network through secured internet,
      direct connect or third-party communication links, providing CN with
      the ability to conduct business electronically with its critical
      business customers and contacts at the best cost/quality mix.

In 2003, CN invested approximately
      $75,000,000 in new and upgrade infrastructure and software development
      programs. Key among these were the continued move to XP on the desktop
      and to Windows 2000 on its servers to ensure compatibility for major
      investments it has made in SAP, eBusiness and its Customer Relationship
      Management Systems in the recent past, as well as future investments
      in 2004 in Websphere eBusiness environment, Web Methods Enterprise
      Application Integration and Customer Service Center Multimedia for
      integrated voice and fax for improved customer service.

With security remaining on high alert,
      CN completed its new Directory Synchronization project to ensure
      better control over password verification and authentication. Automated
      virus protection was improved and CN has continued to remain clean from
      external attacks. CN continues to participate in the Rail Security
      councils for North America through the Association of American Railroads.

CN continues to invest heavily in
      eBusiness and Customer Service Systems. The Customer Service Center
      Multimedia project will provide integrated voice, fax and email service
      to its customers thereby improving service and quality. In 2003,
      CN continued to enhance its Customer Relationship Management capabilities
      providing enhanced pricing and rate publication capabilities including A+B instantaneous
      interline pricing with CSX using web services technology.

To further improve safety and efficiency,
      CN continues to develop its new train signaling and dispatch systems,
      targeted for 2004-2005. This multi-year project will replace CNs
      current dispatch systems with state-of-the-art technology.

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- 11 -

As in prior years, CN will continue
      to implement and leverage strategic investments in information technology
      that will help to improve CNs already industry-leading practices
      in safety, reliability and customer service.

3.4LABOR

3.4.1Canada

As of December 31, 2003, CN employed
      a total of 14,981 employees in Canada. Labor agreements covering
      approximately 97% of the Companys Canadian unionized workforce
      expired on December 31, 2003. As of March 2004, the Company had successfully
      negotiated four collective agreements with the Canadian Auto Workers
      (CAW) union, retroactive to January 1, 2004, covering the Companys
      shopcraft forces, clerical workers, intermodal yard employees and
      owner operators. The Company is currently undergoing discussions
      with all its remaining trade unions whose agreements also expired
      on December 31, 2003. Under the terms of theCanada
      Labour Code(the governing legislation), no legal strikes
      or lockouts are possible before the conciliation process is completed,
      a union obtains a majority by secret ballot and proper notification
      of at least seventy-two hours notice is given to the other party.

In the first quarter of 2004, the
      Companys shopcraft forces, clerical workers and intermodal
      yard employees, represented by the CAW, rejected three tentative
      agreements signed by the CAW and the Company on January 23, 2004.
      The strike that ensued lasted one month and disrupted the Companys
      operations and accordingly adversely impacted the Company's financial
      results. There can be no assurance that the Company will be able
      to have all its collective agreements renewed and ratified without
      any other strikes or lockouts or that the resolution of these collective
      bargaining negotiations will not have a material adverse effect on
      the Companys financial position or results of operations.

3.4.2 United States

As of December 31, 2003, CN employed
      a total of 6,508employees
      in the United States.

The general approach to labor negotiations
      by U.S. Class 1 railroads is to bargain on a collective national
      basis. Grand Trunk Western (GTW), Duluth, Winnipeg and Pacific (DWP),
      ICRR, CCP Holdings, Inc. (CCP) and WC, have bargained on a local
      basis rather than holding national, industry-wide negotiations because,
      they believe, it results in agreements that better address both the
      employees concerns and preferences, and the railways actual
      operating environment. Local negotiations may not, however, generate
      federal intervention in a strike or lockout situation, since a dispute
      may be localized. The Company believes the potential mutual benefits
      of local bargaining outweigh the risks.

As of March 2004, the Company had
      in place agreements with bargaining units representing the entire
      unionized workforce at ICRR, GTW, DWP, and CCP, and over 60% of the
      unionized workforce at WC. These agreements have various moratorium
      provisions, ranging from the end of 2001 to the end of 2005, which
      preserve the status quo in respect of given areas during the terms
      of such moratoriums. Several of these agreements are currently under
      renegotiation and several will open for negotiation in 2004.

Negotiations are ongoing with the
      bargaining units with which the Company does not have agreements
      or settlements. Until new agreements are reached or the processes
      of theRailway Labor Acthave
      been exhausted, the terms and conditions of existing agreements or
      policies continue to apply. Although the Company does not anticipate
      work action related to these negotiations while they are ongoing,
      there can be no assurance that there will not be any such work action
      and that the resolution of these negotiations will not have a material
      adverse effect on the Companys financial position or results
      of operations.

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- 12 -

3.5FACILITIES,
        RIGHT-OF-WAY, ROLLING STOCK AND EQUIPMENT

Unless otherwise indicated, the following
      information excludes WC for periods prior to October 9, 2001.

CNs main facilities are described
      in Exhibit B to this Annual Information Form.

As of December 31, 2003, CN operated
      the following track as part of its rail operations:

|                                         | Owned | Jointly
      Owned | Leased | Trackage
      Rights | Total
|---------------------------------------- | ----- | ------------------- | ------ | --------------------- | -----
|
|Main
          track                     |       | 19,246              |        | 86                    |      
|Passing
          siding                 |       | 1,501               |        | 9                     |      
|Spurs,
          sidings and yard tracks |       | 6,409               |        | 136                   |      
|                                         |       |                     |        |                       |      
|**Total**                                |       | 27,156              |        | 231                   |      

CNs entire rail network is standard
      gauge. As of December 31, 2003 8,935 miles of main track had centralized
      traffic control. In addition, 1,035track miles had automatic block signals.

The following table sets forth certain
      information with respect to CNs track for the last three years:



|                                           
|-------------------------------------------
|
|
|
|                                           
|Rail
          laid or relaid (track miles)
|Ties installed
          (thousands)       

---

Yards are located at various points
      along the lines, including large classification yards in Montreal,
      Quebec; Toronto, Ontario; Winnipeg, Manitoba; Vancouver, British
      Columbia; Edmonton, Alberta; Battle Creek, Michigan; Fond du Lac,
      Wisconsin; Centralia, Champaign and Markham, Illinois; Memphis, Tennessee
      and Jackson, Mississippi. Locomotive and freight car servicing and
      repair facilities are also located at various points on the network
      whereas heavy repair and rebuilding facilities are located in Winnipeg,
      Manitoba, Homewood and Centralia, Illinois and Fond du Lac, Wisconsin.

The table below shows other relevant
      information for the last three years:

|                                                            |  |                                      |  |      |  |     
|----------------------------------------------------------- |  | ------------------------------------ |  | ---- |  | ----
|                                                            |  | Year
              ended December 31
|                                                            |  |                                     
|                                                            |  | 2003                                 |  | 2002 |  | 2001
|                                                            |  |                                     
|Train accidents
          per million train miles(1)        |  | 2.0                                  |  | 2.0  |  | 2.0 
|Injury frequency
          rate per 200,000 person hours(1) |  | 2.9                                  |  | 3.0  |  | 4.4 



---

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- 13 -



|                                 |  |          |  |              |  |       
|-------------------------------- |  | -------- |  | ------------ |  | ------
|                                 |  | Owned(1) |  | Leased(2)(3) |  | Total 
|                                 |  |          |  |              |  |       
|Diesel locomotives               |  |          |  |              |  |       
|Road                             |  | 1,410    |  | 81           |  | 1,491 
|Yard                             |  | 407      |  | -            |  | 407   
|                                 |  |          |  |              |  |       
|Total                            |  | 1,817    |  | 81           |  | 1,898 
|Freight cars                     |  |          |  |              |  |       
|Box                              |  | 14,478   |  | 14,996       |  | 29,474
|Gondola                          |  | 5,826    |  | 3,153        |  | 8,979 
|Hopper  open
          top      |  | 1,122    |  | 3,344        |  | 4,466 
|Hopper  covered                 |  | 8,449    |  | 18,939       |  | 27,388
|Flat  multilevel                |  | 1,792    |  | 713          |  | 2,505 
|Flat  other                     |  | 6,630    |  | 6,106        |  | 12,736
|Tank                             |  | 35       |  | 153          |  | 188   
|Other(4)                         |  | 3,380    |  | 878          |  | 4,258 
|                                 |  |          |  |              |  |       
|Sub-total
          Revenue Cars |  | 41,712   |  | 48,282       |  | 89,994
|                                 |  |          |  |              |  |       
|Caboose/Passenger                |  | 140      |  | 24           |  | 164   
|Work equipment
          cars    |  | 3,528    |  | 4            |  | 3,532 
|                                 |  |          |  |              |  |       
|Total freight
            cars   |  | 45,380   |  | 48,310       |  | 93,690

---

|(1) | Includes units under
          capital leases.                                                                                                                                                
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Includes long-term and
          short-term leases.                                                                                                                                           
|(3) | Includes 504 coal gondolas
          and 8,781 grain hopper cars assigned to the Company by customers,
          and by the Government of Canada and provincial governments, respectively.    
|(4) | Other revenue
          cars includes ballast cars which are classified as revenue cars
          for such potential use and refrigerator cars plus cars pending
          sale or disposal.

The Company expects to meet service
      demands with improved car management utilization while continuing
      to optimize the number of cars in its fleet.

The following table details, for the
      years indicated, the acquisitions and retirements of equipment used
      in CNs rail operations. Acquisitions include equipment financed
      under capital leases, grain and coal cars owned by others but assigned
      to CN as well as second-hand equipment and remanufactures of equipment.
      Retirements relate solely to owned or leased equipment bearing CNs
      mark (logo). Although the Companys strategy involves increased
      utilization of its fleet, the Company continues to selectively acquire
      new cars to meet the demands of specific markets.

|                       |  |                                      |  |       |  |       |    
|---------------------- |  | ------------------------------------ |  | ----- |  | ----- | ---
|                       |  | Year
              ended December 31
|                       |  |                                     
|
|                       |  | 2003                                 |  | 2002  |  | 2001  | (1)
|                       |  |                                     
|Acquisitions           |  |                                      |  |       |  |       |    
|Locomotives            |  | 7                                    |  | 30    |  | -     |    
|Freight
          cars |  | 1,437                                |  | 668   |  | 1,287 |    
|Retirements            |  |                                      |  |       |  |       |    
|Locomotives            |  | 21                                   |  | 105   |  | 103   |    
|Freight
          cars |  | 2,786                                |  | 2,271 |  | 1,731 |    

---

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- 14 -



CN has negotiated the purchase of
      60 General Electric Dash 9 (4,400 horsepower) locomotives. Thirty
      (30) of these units were scheduled for delivery by the end of February
      2004, although seven (7) of those were received ahead of schedule
      at the end of 2003. The remainder are scheduled for delivery by the
      end of October 2004.

The expected useful life of new locomotives,
      depending on horsepower and use, ranges from 20 to 40 years. Remanufacture
      can add up to 25 years for certain uses. The expected useful life
      of new freight cars is 40 years. A used car can be rebuilt but no
      car can be used under applicable regulations if it is older than
      50 years.

The average age of equipment in CNs
      operations as at December 31, 2003 was 17.9 years for locomotives
      (based on a Canadian definition which assumes the age is reset upon
      remanufacture) and 25.0 years for freight cars.

The Company believes that its rail
      network and equipment are maintained adequately and that no significant
      rehabilitation is required to accommodate increased volume. The Company
      maintains insurance coverage for its rail and non-rail operations,
      which the Company believes is comparable in terms of amounts and
      coverage to that maintained by other major railroads in North America.

The following table shows the capital
      and maintenance expenditures (excluding depreciation and rent but
      including labor and materials) of CN for the years indicated:

|                         |  |                                    |  |       |  |      
|------------------------ |  | ---------------------------------- |  | ----- |  | -----
|                         |  | Year
            ended December 31
|                         |  |                                   
|                         |  | 2003                               |  | 2002  |  | 2001 
|                         |  |                                   
|                         |  | (in
            million $)        
|Capital expenditures     |  |                                    |  |       |  |      
|Roadway                  |  | 491                                |  | 434   |  | 541  
|Equipment                |  | 139                                |  | 251   |  | 120  
|                         |  |                                    |  |       |  |      
|Total                    |  | 630                                |  | 685   |  | 661  
|Maintenance expenditures |  |                                    |  |       |  |      
|Roadway                  |  | 588                                |  | 594   |  | 571  
|Equipment                |  | 516                                |  | 539   |  | 516  
|                         |  |                                    |  |       |  |      
|Total                    |  | 1,104                              |  | 1,133 |  | 1,087

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- 15 -



3.6PASSENGER
        RAIL SERVICES

Inter-city passenger trains in Canada
      are operated for the most part by VIA Rail Canada Inc. (VIA),
      a corporation owned by the Government of Canada. Where VIA operates
      over CN infrastructure, CN provides the roadbed and related facilities
      and services for operations of these trains under commercial contracts.
      In anticipation of CNs ceasing to be owned by the Government
      of Canada in November 1995, CN and VIA agreed to review existing
      agreements. As a result, CN entered into new agreements with VIA
      on an arms-length, commercial and fair basis to continue arrangements
      with regard to facilities and services that were integral to VIAs
      operations. With the acquisition of WC, CN provides by Canadian federal
      contract an intercity passenger service between Sault Ste. Marie
      and Hearst, Ontario, a distance of about 296 miles. Further, under
      contract, CN provides access and crews for passenger service between
      Toronto and North Bay on behalf of ON Rail, a unit of Ontario Northland
      Transportation Commission, an agency of the Ontario government. CN
      also provides certain commuter train services in Montreal, Quebec
      and Toronto, Ontario under contract with transit authorities. In
      addition, CN provides access to several seasonal tour operators,
      including a CN passenger tour train operating between Sault Ste.
      Marie, Ontario and the Agawa Canyon, a distance of about 114 miles.
      In 2003, these passenger train and associated services represented
      approximately $137 million and contributed to CNs operating
      income.

The National Railroad Passenger Corporation
      (AMTRAK), a corporation subsidized by the United States
      federal government, operates inter-city passenger trains in the United
      States. IC and GTW provide roadbed and ancillary facilities under
      separate Operating Agreements dated February 1, 1995 and April 16,
      1971, respectively. Operating expense reimbursements attributable
      to AMTRAK service in 2003 were about US$1.4 million on IC and another
      US$0.3 million on GTW.

3.7SAFETY

In 2003, CN's train accident ratio,
      using the U.S. Federal Railroad Administration (FRA)
      reporting basis, remained at 2.0 per million train miles, unchanged
      from its 2002 ratio. CN continues to be one of the safest railroads
      in North America.

In 2003, CN sustained its improvement
      trend in personal injuries. An FRA ratio of 2.9 per 200,000 person
      hours was achieved in 2003, which represents a 4% improvement versus
      2002, and a 35% improvement versus 2001.

CN continues to reinforce its ongoing
      commitment to safety by implementing and updating a systematic safety
      action plan with the active involvement of all its Regions. This
      safety plan encompasses People, Process and Equipment while leveraging
      on the active participation of supervisors and health and safety
      committees to focus on prevention. Significant components of CNs
      safety plan involve the implementation of Best Safety Practices developed
      by all of CNs Regions, which represents the most effective
      means of industry benchmarking and minimizing risk. As well, continued
      focus is placed on rules compliance through efficiency testing, auditing,
      and focus on behavioural factors.

Infrastructure improvements will continue
      to advance CNs safety initiatives with substantial capital
      investments in CNs physical plant expected to be made in 2004
      and with increases in preventive inspections of rail and track geometry.

CN's industry-leading wayside detection
      system has been further improved with the recent implementation of
      wheel profile detectors and the enhancement of CNs monitoring
      process, which is expected to further minimize the risk of rail accidents.

CN is a leader in Responsible Care®,
      and the initiative will continue to be actively progressed systemwide
      with the objective of continuously improving in the areas of health
      and safety, environment and

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- 16 -



community outreach along transportation
      corridors. CN 911, a tank car specially designed and equipped for
      training emergency responders, will continue to be used along the
      entire CN network.

The successful implementation of the
      safety integration plan for the IC merger was concluded in 2001 with
      the FRA praising it as a model document for the industry. Most recently,
      the WC integration plan was implemented flawlessly and a similar
      diligent approach is currently being prepared for the proposed acquisitions
      of the railroads and related holdings of GLT and BC Rail.

3.8REGULATION

The Companys rail operations
      in Canada are subject to regulation as to (1) rate setting and network
      rationalization by the Canadian Transportation Agency(the Agency) under theCanada
      Transportation Act(Canada)
      (the CTA), and (2) safety by the federal Minister of
      Transport under theRailway
      Safety Act(Canada) and
      certain other statutes. The Companys U.S. rail operations are
      subject to regulation by the STB (successor to the Interstate Commerce
      Commission) and the FRA.

3.8.1 Canadian Regulation

The CTA gives the 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 and competitive line rates.
      Pursuant to 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. 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 sole rail access,
      a rate covering the movement to the nearest junction with another
      railroad according to predetermined formulae.

The CTA permits confidential contracts.
      Furthermore, railroads are subject to common carrier obligations
      for their services and, in case of breach, shippers may seek redress
      from the Agency. These shipper protections, however, except for final
      offer arbitration, are subject to the requirement for the applicant
      to demonstrate that the shipper would suffer substantial commercial
      harm if the Agency did not intervene.

The CTA encourages the sale of lines
      to short-line operators and facilitates abandonment. The railroads
      are required to publish a three-year plan for sales and abandonments.
      For abandonment, the line must be advertised as being for sale to
      the public and, if no interest is shown, offered specifically for
      sale to applicable federal, provincial and municipal governments.
      The entire process is intended to take at most 18 months. Legislation
      currently in force in the provinces of British Columbia and Saskatchewan
      requires a corporations successor by merger or purchase of
      assets to assume the predecessors labor arrangements. These successor
      rights therefore limit the Companys ability to dispose
      of routes to intraprovincial short-line operators in such provinces.
      The Company has considered provincial successor rights legislation
      in identifying routes for rationalization.

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.

3.8.2 CTA Review

Periodically, a comprehensive review
      is made of the effectiveness of theCTA
      and other statutes related to the economic regulation of transportation.
      A five-member CTA Review Panel was established in June 2000 to conduct
      the review through research and consultations with purchasers and
      suppliers of transportation services and other parties. The CTA Review
      Panel issued an interim report in December 2000 and a final report,
      including recommendations, to the federal Minister of Transport at
      the

---

- 17 -



end of June, 2001. This review revisits
      many important issues for CN, including forced access, competitive
      access rates, and fiscal equity across modes of transportation. Subsequently,
      the Minister of Transport launched a broad consultation process,
      commonly referred to as the Blueprint Process which,
      combined with the review considerations, resulted in the Minister
      of Transport releasing on February 25, 2003, a policy document entitledStraight
      Ahead  A Vision for Transportation in Canada,
      which provided specific direction and called for action in various
      areas of transportation and the tabling of Bill C-26 in the House
      of Commons, being an Act to amend theCanada
      Transportation Actand
      theRailway Safety Act,
      and to enact theVIA Rail
      Canada Act. Bill C-26 died
      on the Order Paper (i.e., it was terminated) when Parliament was
      prorogued on November 12, 2003. No assurance can be given that any
      future legislative action by the federal government pursuant to the
      reports recommendations and the consultation document, or other
      future governmental initiatives, will not materially adversely affect
      the Company's position or results of operations.

3.8.3 U.S. Regulation

The STB 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 over rail transportation, including intrastate
      rail transportation, is exclusive, pre-empting other remedies under
      federal and state law.

The FRA has jurisdiction over railroad
      safety and equipment standards, and most rail safety regulation is
      handled at the federal level. In contrast to the exclusive role of
      the STB over railroad economic regulation, however, 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.

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
      theStaggers Rail Act of
      1980(the 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.

Following an extended review, in June
      2001 the STB issued new regulations governing mergers between Class
      1 Railroads. CN had recommended higher public interest standards
      for mergers and the new regulations effectively raised the bar for
      the quality of customer service in all future major railroad mergers.
      The STB also agreed with CN that foreign-headquartered railroads
      would be treated the same as U.S.-based railroads under its merger
      rules.

3.8.4 Canada-U.S. Customs and
          U.S. Homeland Security

In October 2002, CN became the first
      North American railroad to gain membership in the U.S. Customs Services
      Customs-Trade Partnership Against Terrorism (C-TPAT).
      C-TPAT is a joint government-business initiative designed to build
      cooperative relationships that strengthen overall supply chain and
      border security regarding goods exported to the U.S. CN is also designated
      as a low-risk carrier under the Customs Self-Assessment ("CSA") program,
      a new Canada Customs and Revenue Agency (CCRA) program
      designed to expedite the cross-border movement of goods of CSA-accredited
      importing companies for goods imported into Canada. In addition,
      the Company is subject to statutory and regulatory directives in
      the United States addressing homeland security concerns. These include
      border security arrangements, pursuant to an agreement the Company
      and Canadian Pacific Railway entered into with the U.S. Bureau of
      Customs and Border Protection (CBP) and the CCRA. The
      customs

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- 18 -



program is now part of the new Canada
      Border Services Agency (CBSA), requiring advance electronic transmission
      of cargo information for U.S.-bound traffic and cargo screening (including
      gamma ray and radiation screening), as well as U.S. government-imposed
      restrictions on the transportation into the United States of certain
      commodities. In the fourth quarter of 2003, the CBP issued regulations
      to extend advance notification requirements to all modes of transportation,
      and the U.S. Food and Drug Administration promulgated interim final
      rules requiring advance notification by all modes for certain food
      imports into the United States. The Company has also worked closely
      with the Association of American Railroads to develop and put in
      place an extensive industry-wide security plan.

3.9ENVIRONMENTAL
        MATTERS

The Companys operations in Canada
      and the United States are subject to extensive federal, provincial,
      state and municipal regulation under environmental laws and regulations
      concerning, amongst other things, emissions to the air, discharges
      to waters, the generation, handling, storage, transportation, treatment
      and disposal of waste, hazardous substances and other materials,
      decommissioning of underground and aboveground storage tanks, and
      soil and groundwater contamination. A risk of environmental liability
      is inherent in the 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.

Federal, provincial, state and local
      authorities continue to be increasingly active in the area of environmental
      legislation and its enforcement. The new regulations and active intervention
      by those different levels of government can be expected to affect
      the Company in the future and may increase the Companys future
      environmental costs. In addition, the Companys ongoing efforts
      to identify and address potential environmental concerns that may
      be associated with many of its properties may result in the identification
      of additional environmental costs and liabilities. As a result of
      all of the foregoing, the Company has in the past and will in the
      future continue to make substantial expenditures relating to environmental
      compliance issues and to the assessment and remediation of environmental
      conditions on its rail and general real estate properties and properties
      previously owned or operated by the Company. The insurance policies
      maintained by the Company have environmental exclusions; the Company
      does, however, have coverage for discharges of an accidental and
      sudden nature.

3.9.1 Canada

In addition to the general areas of
      potential liability discussed above, there are specific environmental
      concerns relating to Canada. In Canada, environmental legislation
      can be adopted by both federal and provincial governments in their
      respective spheres of competence. The Company has operated the larger
      of Canadas two principal railways since the incorporation of
      the Company in 1922. Because of the nature of the operations of the
      Company, the date from which such operations began and the constitutional
      distribution of powers between the federal and provincial governments,
      some parts of federal, provincial and municipal environmental legislation
      may not be applicable in all circumstances to the railway operations
      of the Company or, in some instances, for various reasons, to its
      real estate.

In Canada, the matter of environmental
      permits for the Company is complex because of an overlap between
      federal and provincial jurisdictions. When projects require approval
      by federal regulatory authorities, environmental impact assessments
      are undertaken in accordance with federal requirements. 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
      were primarily of a provincial, municipal or local nature, (iii)
      where the Company or the governmental authority thought it was 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

---

- 19 -



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.

3.9.2 United States

In addition to the general areas of
      potential liability discussed above, the Company may incur other
      environmental liabilities with respect to its U.S. operations. TheU.S.
      Comprehensive Environmental Response, Compensation and Liability
      Act(CERCLA or Superfund)
      and similar state laws (known as state Superfund laws) impose liability
      for the cost of remedial or removal actions, natural resources damages
      and related costs at certain sites identified as posing a threat
      to the environment or public health. Liability may be imposed, without
      regard to fault or the legality of the activity, on certain classes
      of persons, including the current and certain prior owners or operators
      of a site and persons that arranged for the disposal or treatment
      of hazardous substances. Liability is imposed on a joint and several
      basis, which means one Company could be held responsible for all
      costs even if other parties contributed to the contamination. In
      addition, other potentially responsible parties, adjacent landowners
      or other third parties, may initiate cost recovery actions or toxic
      tort litigation against sites subject to CERCLA or similar state
      laws.

The Company owns or previously owned
      or has been named as a potentially responsible party (PRP)
      by virtue of its activities with respect to certain properties that
      are the subject of claims by the federal government or by a state
      under CERCLA or a state Superfund statute.

3.9.3 Future Costs

The Companys total costs for
      environmental matters cannot be predicted with certainty due, amongst
      other things, to the various issues described above, as well as to
      incomplete technical information concerning environmental conditions
      at many sites and changing regulatory requirements. The Company regularly
      reviews potential environmental costs and liabilities which might
      be incurred by the Company in either Canada or the United States
      as a result of the Companys ongoing review of environmental
      matters or due to the various environmental regulations and issues
      described above. The Company has not materially changed its methodology
      for identifying and estimating environmental liabilities likely to
      be incurred in the next five years.

The Company estimates that capital
      expenditures for compliance and clean-up costs relating to environmental
      matters is expected to be similar to that of previous years. The
      Company also anticipates that it will incur up to approximately $83
      million in additional remediation costs relating to environmental
      matters within the next five years and has made provisions relating
      to these remediation costs. In addition, the Company expects to incur
      other expenses, which may be considered environmental costs. Such
      other costs are, however, inextricably intertwined in the Companys
      operational budget and are not accounted for separately.

The Company has accrued for environmental
      matters with respect to compliance costs and operating and non-operating
      properties, as well as for certain properties previously sold, based
      on the costs estimated to be incurred when such costs are likely
      to occur and when amounts (or at least a minimum amount) can be estimated
      based on available information. To date, the Companys ongoing
      efforts to identify and address potential environmental concerns
      that may be associated with its properties or other events may lead
      to future environmental investigations which may result in the identification
      of additional environmental costs and liabilities. Due to the lack
      of technical information available with respect to specific sites,
      the absence of any governmental or third-party orders or claims with
      respect to particular sites, the potential for development of new
      laws and remediation technologies and uncertainty regarding the timing
      of the work and the ability to recover costs from any third parties,
      the probability of particular additional liabilities occurring, the
      likelihood of any such additional costs being incurred or whether
      such costs would be material to the Company cannot be determined
      at this time and therefore no provisions have been made with respect
      to environmental matters which might arise during any period beyond
      the next five years. Therefore, there can be no assurance that material
      liabilities or costs related to environmental matters will not be
      incurred in the future or that the Companys liquidity will
      not be

---

- 20 -



adversely impacted by such environmental
      liabilities or costs. The Company believes, however, based on current
      information, that environmental matters will not have a material
      adverse effect on the Companys financial condition or competitive
      position.

3.10LEGAL

3.10.1 General

In the normal course of its operations,
      the Company becomes involved in various legal actions, including
      claims relating to personal injuries, occupational disease and damage
      to property.

In Canada, employee injuries are governed
      by the workers compensation legislation in each province whereby
      employees may be awarded either a lump sum or future stream of payments
      depending on the nature and severity of the injury. Accordingly,
      the Company accounts for costs related to employee work-related injuries
      based on actuarially developed estimates of the ultimate cost associated
      with such injuries, including compensation, health care and administration
      costs. For all other Canadian legal actions, the Company maintains,
      and regularly updates, on a case-by-case basis, provisions for such
      items when the expected loss is both probable and can be reasonably
      estimated based on currently available information.

Assumptions used in estimating the
      ultimate costs for Canadian employee injury claims consider, amongst
      others, the discount rate, the rate of inflation, wage increases
      and health care costs. The Company periodically reviews its assumptions
      to reflect currently available information. Over the past three years,
      the Company has changed certain of these assumptions, which have
      not had a material effect on its results of operations. For all other
      legal claims in Canada, estimates are based on case history, trends
      and judgment.

In the United States, employee work-related
      injuries, including occupational disease claims, are compensated
      according to the provisions of the Federal Employers Liability
      Act (FELA) and represent a major expense for the railroad
      industry. The FELA system, which requires either the finding of fault
      through the U.S. jury system or individual settlements, has contributed
      to a significant increase in the Companys personal injury expense
      in recent years. In view of the Companys growing presence in
      the United States and the increase in the number of occupational
      disease claims over the past few years, an actuarial study was conducted
      in 2002, and in the fourth quarter of 2002, the Company changed its
      methodology for estimating its liability for U.S. personal injury
      and other claims, including occupational disease claims and claims
      for property damage, from a case-by-case approach to an actuarial-based
      approach. Consequently, the Company recorded a charge of $281 million
      ($173 million after tax) to increase its provision for these claims
      in the fourth quarter of 2002.

Under the actuarial-based approach,
      the Company accrues the cost for expected personal injuries and property
      damage claims and existing occupational disease claims, based on
      actuarial estimates of their ultimate cost. The Company is unable
      to estimate the total cost for unasserted occupational disease claims.
      A liability for unasserted occupational disease claims is accrued,
      however, to the extent they are probable and can be reasonably estimated.

For the U.S. personal injury and other
      claims liability, historical claim data is used to formulate assumptions
      relating to the expected number of claims and average cost per claim
      (severity) for each year. Changes in any one of these assumptions
      could materially affect Casualty and Other expense as reported in
      the Companys results of operations.

The Companys expenses for personal
      injury and other claims, net of recoveries, and including the above-mentioned
      charge, were $127 million in 2003 ($393 million in 2002 and $78 million
      in 2001) and payments for such items were $126 million in 2003 ($156
      million in 2002 and $149 million in 2001). As at December 31, 2003,
      the Company had aggregate reserves for personal injury and other
      claims of $590 million ($664 million at December 31, 2002).

---

- 21 -

3.10.2 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 but, in recent years, some aboriginal bands have claimed
      a continuing legal interest in such lands and 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 but, 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 Government of Canada, CN has agreed
      with the Government 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 are satisfied that there is no legitimate aboriginal claim
      with respect to such land. In addition, CN has agreed to convey to
      the Government, for no consideration, any land not integral to its
      rail operations which may be necessary to settle legitimate aboriginal
      claims with respect to such land, or lands which were formerly reserve
      lands and which have become non-rail assets. The Government of Canada,
      for its part, has agreed that it 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,
      wilful, known, negligent or fraudulent acts or omissions of CN which
      adversely affected the rights or interests of aboriginal people.

---

- 22 -



ITEM 4SELECTED
        CONSOLIDATED FINANCIAL AND OPERATING DATA

4.1SELECTED
        THREE-YEAR ANNUAL CONSOLIDATED FINANCIAL INFORMATION

The selected financial data presented
      below for each of the years in the three-year period ended and as
      of December 31, 2003 under both Canadian generally accepted accounting
      principles (Canadian GAAP) and United States generally
      accepted accounting principles (U.S. GAAP) were derived
      from the consolidated financial statements incorporated by reference
      herein, which have been audited by KPMG LLP, independent auditors,
      for the years 2003, 2002 and 2001. Unless otherwise indicated, the
      financial data is presented on the basis of Canadian GAAP.



|                                                                         | **Year ended
            December 31,**
|------------------------------------------------------------------------ | ---------------------------------------
|
|
|                                                                         |                                        
|                                                                         |                                        
|**Canadian
              GAAP(1)**                                       |                                        
|**Income
            Statement Data:(3)(4)**                             |                                        
|Revenues                                                                 |                                        
|Operating
          expenses(5)                                          |                                        
|Operating
          income                                               |                                        
|Interest
          expense                                               |                                        
|Other
          income                                                   |                                        
|                                                                         |                                        
|Net
          income(6)                                                  |                                        
|Basic
          earnings per share                                       |                                        
|Diluted
          earnings per share                                     |                                        
|                                                                         |                                        
|Dividend
          declared per share                                    |                                        
|**Balance
            Sheet Data (at end of period)**                    |                                        
|                                                                         |                                        
|Cash
          and cash equivalents                                      |                                        
|Total
          assets                                                   |                                        
|Long-term
          debt (excluding current portion)                     |                                        
|Shareholders'
          equity                                           |                                        
|                                                                         |                                        
|**U.S. GAAP**                                                            |                                        
|                                                                         |                                        
|**Income
            Statement Data:(4)**                                |                                        
|Revenues                                                                 |                                        
|Operating
          expenses(5)                                          |                                        
|Operating
          income                                               |                                        
|Interest
          expense                                               |                                        
|Other
          income                                                   |                                        
|                                                                         |                                        
|Income
          before cumulative effect of change in accounting policy |                                        
|Net
          income(6)(7)                                               |                                        
|                                                                         |                                        
|Basic
          earnings per share                                       |                                        
|Income
          before cumulative effect of change in accounting policy |                                        
|Net
          income                                                     |                                        
|Diluted
          earnings per share                                     |                                        
|Income
          before cumulative effect of change in accounting policy |                                        
|Net
          income                                                     |                                        
|Dividend
          declared per share                                    |                                        
|                                                                         |                                        
|Balance Sheet
            Data (at end of period)                        |                                        
|Cash
          and cash equivalents                                      |                                        
|Total
          assets                                                   |                                        
|Long-term
          debt (excluding current portion                      |                                        
|and
          including convertible preferred securities)                |                                        
|Shareholders'
          equity                                           |                                        
|                                                                         |                                        
|                                                                         |                                        

---

- 23 -



---

|(1) | The Company's consolidated
          financial statements, from which the data are derived, are prepared
          on the basis of Canadian GAAP, which are different in some respects
          from U.S. GAAP, principally in the treatment of track replacement
          costs, expenditures relating to improvements of bridges and other
          structures and freight cars, derivative instruments, stock-based
          compensation and convertible preferred securities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The 2001 figures include
          WC from October 9, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(3) | Effective January 1,
          2003, the Company adopted the fair value based approach recommended
          in the Canadian Institute of Chartered Accountants (CICA) Handbook
          Section 3870 "Stock-based Compensation and Other Stock-Based
          Payments," and retroactively applied this method of accounting
          to all awards of employee stock options granted, modified or
          settled on or after January 1, 2002. Accordingly, the 2002 comparative
          period was restated to reflect this change in accounting policy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(4) | In 2003, the significant
          year-over-year appreciation of the Canadian dollar relative to
          the U.S. dollar impacted the conversion of the Company's U.S.
          dollar denominated revenues and expenses. Under Canadian GAAP,
          the stronger Canadian dollar reduced revenues, operating income
          and net income by approximately $380 million, $110 million and
          $55 million, respectively, whereas under U.S. GAAP, revenues,
          operating income and net income were reduced by approximately
          $380 million, $120 million and $62 million, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(5) | Operating expenses included
          a fourth quarter 2002 charge of $281 million to increase the
          Company's U.S. personal injury and other claims liability and
          workforce reduction charges of $120 million and $98 million in
          2002 and 2001, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Depreciation and
            amortization expense:
            The Company follows the group method of depreciation and, as
            such conducts comprehensive depreciation studies generally
            every three years to assess the reasonableness of the lives
            of properties based upon current information, including actual
            results of prior years. In 2001, such a study was conducted
            for the Company's Canadian properties. Under U.S. GAAP, the
            study revealed that estimated depreciable lives for certain
            asset types had increased, and therefore, those asset lives
            have been extended prospectively, resulting in a reduction
            to depreciation and amortization expense of $44 million in
            2001. Under Canadian GAAP, the study did not have a significant
            effect on depreciation expense as the benefit of increased
            depreciation lives was offset by deficiencies in certain accumulated
            depreciation balances.
|(6) | In the fourth quarter
          of 2003, the Company recorded a deferred income tax expense of
          $33 million under Canadian GAAP and $79 million under U.S. GAAP
          resulting from the enactment of higher corporate tax rates in
          the province of Ontario. The difference in expense is attributable
          to a larger net deferred tax liability position under U.S. GAAP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(7) | Effective January 1,
          2003, pursuant to the requirements of Statement of Financial
          Accounting Standards No. 143, "Accounting for Asset Retirement
          Obligations," the Company changed its accounting policy for certain
          track structure assets to exclude removal costs as a component
          of depreciation expense where the inclusion of such costs would
          result in accumulated depreciation balances exceeding the historical
          cost basis of the assets. As a result, the Company recorded a
          cumulative benefit of $75 million ($48 million after tax) for
          the amount of removal costs accrued in accumulated depreciation
          on certain track structure assets at January 1, 2003.                                                                                                                                                                                                                                                                                            

---

- 24 -



|                                                           |  |             | 
|---------------------------------------------------------- |  | ----------- | 
|                                                          
|*Year
            ended December 31,*                     
|                                                          
|***Statistical
              operating data***             |  |             | 
|                                                           |  |             | 
|Freight
          revenues ($ millions)                    |  | **5,694**   | 
|Gross ton miles
          (GTM) (millions)(2)              |  | **313,593** | 
|Revenue ton miles
          (RTM) (millions)(3)            |  | **163,717** | 
|Carloads (thousands)                                       |  | **4,192**   | 
|Route miles (includes
          Canada and the U.S.)       |  | **17,544**  | 
|Employees (end
          of period)(4)                     |  | **21,489**  | 
|Employees (average
          during period)(4)             |  | **22,012**  | 
|                                                           | 
|***Productivity***                                         | 
|                                                           | 
|Operating ratio(%)(5)(6)                                   | 
|Canadian
          GAAP                                    |  | **76.8**    | 
|U.S.
          GAAP                                        |  | **69.8**    | 
|Freight revenue
          per RTM (cents)(7)               |  | **3.48**    | 
|Freight revenue
          per carload ($)                  |  | **1,358**   | 
|Operating expenses
          per GTM (cents)(6)            | 
|Canadian
          GAAP                                    |  | **1.44**    | 
|U.S.
          GAAP                                        |  | **1.31**    | 
|GTMs per average
          number of employees (thousands) |  | **14,246**  | 
|Diesel fuel consumed
          (U.S. gallons in millions)  |  | **374**     | 
|Average fuel price
          ( $ /U.S. gallon)             |  | **1.21**    | 
|GTMs per U.S. gallon
          of fuel consumed            |  | **838**     | 

---

|(1) | Includes Wisconsin Central
          Transportation Corporation from October 9, 2001.                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Gross ton miles is a
          measure of the total volume transported by the Company, expressed
          in ton miles, representing the product of the weight of the cars
          and their contents multiplied by the distance traveled measured
          in miles.   
|(3) | Revenue ton miles represents
          the volume of freight transported by the Company for revenue
          measured in ton miles.                                                                                                                                        
|(4) | Excludes non-productive
          rail employees (employees on employment security status, furlough
          board and employees on leave of absence) and those employed in
          non-rail units of the Company.                                                       
|(5) | Operating ratio, defined
          as operating expenses as a percentage of revenues, is a measure
          of operating performance commonly disclosed in the railroad industry
          that provides a useful basis for year-over-year comparison.                     
|(6) | 2002 includes fourth
          quarter charges of $281 million to increase the Company's U.S.
          personal injury and other claims liability and $120 million for
          workforce reductions. 2001 includes a workforce reduction charge
          of $98 million.
|(7) | Freight revenue per
          revenue ton mile represents a measurement of yield defined as
          revenue earned on the movement of a ton of freight over one mile.                                                                                                     

---

- 25 - .



4.2SELECTED
        TWO-YEAR QUARTERLY CONSOLIDATED FINANCIAL INFORMATION

|                                        | 2003 | 2002
|--------------------------------------- | ---- | ----
|
|
|
|                                        |      |     
|**Canadian
                GAAP(1)**    |      |     
|                                        |      |     
|Revenues                                |      |     
|Operating
            income            |      |     
|Net
            income                  |      |     
|                                       
|Basic
            earnings per share    |      |     
|Diluted
            earnings per share  |      |     
|                                       
|Dividend
            declared per share |      |     
|                                        |      |     
|**U.S.
                GAAP**           |      |     
|                                        |      |     
|Revenues                                |      |     
|Operating
            income            |      |     
|Net
            income                  |      |     
|                                       
|Basic
            earnings per share    |      |     
|Diluted
            earnings per share  |      |     
|                                       
|Dividend
            declared per share |      |     
|                                       
|                                       

|(1) | The 2002 comparative
          period was restated to conform to the recommendations of CICA
          Handbook Section 3870 "Stock-based Compensation and Other Stock-Based
          Payments," adopted on January 1, 2003.                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                 
|(2) | In the fourth quarter
          of 2002, the Company recorded a charge of $281 million ($173
          million after tax) to increase its liability for U.S. personal
          injury and other claims and a charge for workforce reductions
          of $120 million ($79 million after tax).

4.3DIVIDENDS

The Company has declared, and intends
      to continue declaring, dividends in line with its overall financial
      performance and cash flow generation. The Board of Directors makes
      decisions on dividend payout on a quarterly basis. Consistent with
      this practice and taking into account the three-for-two common share
      split effective February 27, 2004, the quarterly rate of $0.13 per
      share, starting with the first quarter of 2001, was increased to
      $0.143 per share, starting with the first quarter of 2002; to $0.167
      per share, starting with the first quarter of 2003; and to $0.195
      per share, starting with the first quarter of 2004. There can be
      no assurance as to the amount or timing of such dividends in the
      future.

|                   |  |                                                                            
|------------------ |  | ---------------------------------------------------------------------------
|ITEM
            5 |  | MANAGEMENTS
            DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|                   |  | RESULTS
            OF OPERATIONS                                          

A discussion and analysis by management
      of the financial condition and results of operations for the financial
      year ended December 31, 2003 (U.S. and Canadian GAAP) is presented
      under the item Managements Discussion and Analysis on
      pages 31 to 48 (U.S. GAAP) and on pages 74 to 92 (Canadian GAAP)
      of the Companys 2003 Annual Report, which item is incorporated
      herein by reference.

---

- 26 -

ITEM 6MARKET
        FOR SECURITIES

CNs common shares are listed
      on both The Toronto Stock Exchange and the New York Stock Exchange
      under the stock symbols CNR and CNI, respectively.

ITEM 7DIRECTORS
        AND EXECUTIVE OFFICERS

7.1DIRECTORS

The information with respect to directors,
      which appears on pages 4 to 9 of the Companys Management Proxy
      Circular (the Circular) dated March 2, 2004, under the
      heading Election of Directors, is incorporated herein
      by reference. Each of the nominees for election to the Companys
      Board of Directors were elected to the Board at the Companys
      annual meeting of shareholders held on April 22, 2004.

|                                                                                                          |  |                                                               
|--------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------
|7.2EXECUTIVE
            OFFICERS                                                                        
|                                                                                                         
|As
          of the date hereof, the followingare
          the senior executive officers of the Company:
|                                                                                                         
|Name                                                                                                      |  | Position
              and Municipality of Residence          
|                                                                                                         
|E. Hunter Harrison                                                                                        |  | President
          and Chief Executive Officer               
|                                                                                                          |  | Burr
          Ridge, Illinois, United States                 
|                                                                                                         
|Tullio Cedraschi                                                                                          |  | President
          and Chief Executive Officer,              
|                                                                                                          |  | CN
          Investment Division                              
|                                                                                                          |  | Montreal,Quebec,
          Canada                             
|                                                                                                         
|Keith Creel                                                                                               |  | Senior
          Vice-President,                              
|                                                                                                          |  | Eastern
          Canada Region                               
|                                                                                                          |  | Stouffville,
          Ontario, Canada                        
|                                                                                                         
|Les P. Dakens                                                                                             |  | Senior
          Vice-President, People                       
|                                                                                                          |  | Montreal,
          Quebec, Canada                            
|                                                                                                         
|Sean Finn                                                                                                 |  | Senior
          Vice-President Public Affairs,               
|                                                                                                          |  | Chief
          Legal Officer and Corporate Secretary         
|                                                                                                          |  | St-Lambert,
          Quebec, Canada                          
|                                                                                                         
|James M. Foote                                                                                            |  | Executive
          Vice-President, Sales and Marketing       
|                                                                                                          |  | Chicago,
          Illinois, United States                    
|                                                                                                         
|Fred R. Grigsby                                                                                           |  | Senior
          Vice-President and Chief Information Officer 
|                                                                                                          |  | Beaconsfield,
          Quebec, Canada                        
|                                                                                                         
|Edmond L. Harris                                                                                          |  | Senior
          Vice-President, Operations                   
|                                                                                                          |  | Edmonton,
          Alberta, Canada                           
|                                                                                                         
|Peter C. Marshall                                                                                         |  | Senior
          Vice-President, Western Canada Region        
|                                                                                                          |  | Edmonton,
          Alberta, Canada                           
|                                                                                                         
|Claude Mongeau                                                                                            |  | Executive
          Vice-President and Chief Financial Officer
|                                                                                                          |  | Boucherville,
          Quebec, Canada                        
|                                                                                                         
|Gordon T. Trafton                                                                                         |  | Senior
          Vice-President, United States Region         
|                                                                                                          |  | Naperville,
          Illinois. United States                 

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.

---

- 27 -



For the past five years each of the
      senior executive officers of the Company has held the principal occupation
      indicated above or other positions within the Company or its affiliates
      except as follows: Keith Creel was appointed Senior Vice President, Eastern
      Canada Region in January 2004 and, prior to that, he was Senior Vice-President
      of the Western Canada Region since July 1, 2003 and was Vice President
      of the Prairie Division since 2002; before that, he was General Manager  Michigan
      Zone, Midwest Division since June 2000 and District Superintendent,
      Battle Creek Michigan since 1999; prior thereto, Mr. Creel was Director
      of Corridor Operations at Illinois Central Railroad; Les P. Dakens
      was appointed Senior Vice-President, People in January 2003 and,
      prior to that, he was Senior Vice-President, Corporate Services of
      CN since June 2001; prior thereto, he was Vice-President, Human Resources
      and Administration, Heinz North America; Edmond L. Harris was appointed
      Senior Vice-President, Operations, in June 2003, prior to which he
      was Chief Transportation Officer since 2000; before that he had been
      Vice-President, Midwest Division and Vice-President Operations, for
      Illinois Central Corporation since 1998; prior thereto, he was General
      Manager Northern at Illinois Central Railroad. E. Hunter Harrison
      was appointed President and Chief Executive Officer of the Company
      effective January 1, 2003, prior to which he was Executive Vice-President
      and Chief Operating Officer of the Company since March, 1998; he
      was also President and Chief Executive Officer and a director of
      Illinois Central Corporation prior to March 1998; Gordon Trafton
      was appointed Senior Vice-President, United States Region, in June
      2003 and, from 2000 to 2003, he was successively Vice-President of
      the Wisconsin Central Division, Vice-President of the Midwest Division
      and Vice President of both the Midwest and Gulf Divisions; prior
      to that he was Vice-President, Operations Integration since 1999
      and before that he was Vice-President, Transportation and Information
      Technology Services at Illinois Central Corporation.

As at February 29, 2004, the directors
      and executive officers, including the senior executive officers mentioned
      above, of the Company, as a group, beneficially owned, directly or
      indirectly, or exercised control or direction over, or held options
      to exercise an aggregate ofapproximately
      6.9 million Common Shares (after giving effect to the three-for-two
      stock split effective on February 27, 2004), representing approximately
      2.4% of the outstanding Common Shares.

ITEM 8ADDITIONAL
        INFORMATION

8.1EXECUTIVE
        COMPENSATION; FINANCIAL INFORMATION

Additional information including directors and
      officers remuneration and indebtedness, principal holders of
      the Companys securities, options to purchase securities and
      interests of insiders in material transactions, if applicable, is
      contained in the Circular. Additional financial information is provided
      in the Companys Consolidated Financial Statements included
      in its 2003 Annual Report.

8.2UNDERTAKING
        TO PROVIDE DOCUMENTS

The Company will, upon request to
      the Corporate Secretary of the Company, 935 de La Gauchetière
      Street West, 16thFloor,
      Montreal, Quebec H3B 2M9, provide to any person or company, the documents
      specified below:

|(a) | when the Company is
          in the course of a distribution of its securities under a short
          form prospectus, or has filed a preliminary short form prospectus
          in respect of a proposed distribution of its securities;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | (i)                                                                                                                                                                                                                                         

---

- 28 -



|    | (ii)                                                                                                                                                                                                                                                                                                                                                                                       | one copy of the comparative
          Consolidated Financial Statements of the Company for the most
          recently completed financial year for which financial statements
          have been filed, together with the Auditors Report thereon,
          and one copy of any interim financial statements of the Company
          for any period after its most recently completed financial year;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | (iii)                                                                                                                                                                                                                                                                                                                                                                                      | one copy of the information
          circular of the Company in respect of its most recent annual
          meeting of shareholders that involved the election of directors
          or one copy of any annual filing prepared instead of that information
          circular, as appropriate; and                                                                                                      
|    | (iv)                                                                                                                                                                                                                                                                                                                                                                                       | one copy of any other
          documents that are incorporated by reference into the preliminary
          short form prospectus or the short form prospectus and are not
          required to be provided under subparagraphs (i) to (iii); or                                                                                                                                                         
|(b) | at any other time,
          the Company shall provide to any person or company one copy of
          any of the documents referred to in subparagraphs (a)(i),(ii)
          and (iii) above, provided that the Company may require the payment
          of a reasonable charge if the request is made by a person or
          company who is not a holder of the Companys securities.

8.3AUDITORS
        REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

The Auditors Report, Consolidated
      Financial Statements and Managements Discussion and Analysis
      included on pages 31 to 72 (U.S. GAAP) and 73 to 117 (Canadian GAAP)
      of the Company's 2003 Annual Report are incorporated herein by reference.

8.4FACTORS
        FOR FORWARD-LOOKING INFORMATION

The United StatesPrivate
        Securities Litigation Reform Act of 1995(the Act)
        provides a safe harbor for forward-looking statements to
        encourage companies to provide prospective information, so long
        as such information is identified as forward-looking and is accompanied
        by meaningful cautionary statements identifying important factors
        that could cause actual results to differ materially from those
        discussed in the statement. Except for historical information,
        certain statements contained in this annual information form and
        annual report filed on Form 40-F with the U.S. Securities and Exchange
        Commission may be forward-looking statements within
        the meaning of the Act. In order to take advantage of the safe
        harbor provisions of the Act, the Company identified the
        important factors set forth below that could affect the Companys
        actual results and cause such results to differ materially from
        those projected, forecasted, estimated, budgeted or otherwise expressed
        by the Company in forward-looking statements made by or on behalf
        of the Company. Reference is made to Exhibit A hereto for additional
        discussion of the foregoing factors.

|(1) | Significant competition
          may lead to reduced volumes and revenues and narrower profit
          margins.                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Significant environmental
          regulatory compliance and clean-up costs and unforeseen environmental
          liabilities and costs may adversely affect the Companys
          liquidity.         
|(3) | The outcome of outstanding
          or pending legal actions cannot be predicted with certainty.                                                                                                         
|(4) | The outcome of the current
          labor negotiations of certain of the Companys labor agreements
          is uncertain.                                                                              
|(5) | New legislative, administrative
          or judicial actions that constrain market forces may have a material
          adverse effect on the Companys competitive position and
          profitability.

---

- 29 -



|(6)  | A sustained increase
          in fuel prices may have a negative impact on the Companys
          earnings and cash flow.                                                                                                                        
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(7)  | Substantial ongoing
          capital expenditures may require the Company to seek additional
          financing or reduce dividends.                                                                                                             
|(8)  | Changes in the exchange
          rate between the Canadian dollar and other currencies may adversely
          affect the Companys results of operations.                                                                                        
|(9)  | Adverse economic conditions
          in the industries and geographic areas that produce and consume
          the freight the Company transports or the supplies it requires
          to operate may affect the Companys results of operations.
|(10) | International conflicts
          and potential terrorist actions may impact the Company's results
          of operations.                                                                                                                        
|(11) | Severe weather conditions,
          particularly in the winter months, may result in temporary halts
          or slowdown in train operations, which may lead to some revenue
          loss.                                                    

---

EXHIBIT A

CAUTIONARY
        STATEMENTS FOR PURPOSES OF THE
SAFE HARBOR PROVISIONS OF THE UNITED STATES
  PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The U.S.Private
        Securities Litigation Reform Act of 1995(the Act)
        provides a safe harbor for forward-looking statements to
        encourage companies to provide prospective information, so long
        as such information is identified as forward-looking and is accompanied
        by meaningful cautionary statements identifying important factors
        that could cause actual results to differ materially from those
        discussed in the forward-looking statement(s). Canadian National
        Railway Company (the Company) wishes to take advantage
        of the safe harbor provisions of the Act.

Except for historical information,
      the Companys annual information forms and annual reports filed
      on Form 40-F with the U.S. Securities and Exchange Commission (including
      the annual information form and annual report on Form 40-F for the
      year ended December 31, 2003 to which this exhibit is appended),
      the Companys current reports on Form 6-K, periodic press releases,
      as well as other public documents and statements, may contain forward-looking
      statements within the meaning of the Act.

In addition, the Company and its representatives
      from time to time participate in speeches and calls with market analysts,
      conferences with investors and potential investors in the Companys
      securities, and other meetings and conferences. Some of the information
      presented in such speeches, calls, meetings and conferences may be
      forward-looking within the meaning of the Act.

It is not reasonably possible to itemize
      all of the factors and specific events that could affect the Company
      and the railroad industry as a whole. In some cases, information
      regarding certain important factors that could cause actual results
      to differ materially from those projected, forecasted, estimated,
      budgeted or otherwise expressed in forward-looking statements made
      by or on behalf of the Company may appear or otherwise be conveyed
      together with such statements. The following additional factors (in
      addition to other possible factors not listed) could affect the Companys
      actual results and cause such results to differ materially from those
      projected, forecasted, estimated, budgeted or otherwise expressed
      in forward-looking statements made by or on behalf of the Company.

Significant Competition.The
      Company faces significant competition from a variety of carriers,
      including Canadian Pacific Railway Company, which operates the other
      major rail system in Canada, serving most of the same industrial
      and population centers as CN, long distance trucking companies and,
      in many markets, major U.S. railroads and other Canadian and U.S.
      railroads. Competition is generally based on the quality and reliability
      of services provided, price, and the condition and suitability of
      carriers equipment. Competition is particularly intense in
      Eastern Canada, where an extensive highway network and population
      centers, located relatively close to one another, have encouraged
      significant competition from trucking companies. In addition, much
      of the freight carried by the Company consists of commodity goods
      that are available from other sources in competitive markets. Factors
      affecting the competitive position of suppliers of these commodities,
      including exchange rates, could materially adversely affect the demand
      for goods supplied by the sources served by the Company and, therefore,
      the Companys volumes, revenues and profit margins.

In addition to trucking competition,
      and to a greater degree than other rail carriers, the Companys
      subsidiary, Illinois Central Railroad Company (ICRR),
      is vulnerable to barge competition because its main routes are parallel
      to the Mississippi River system. The use of barges for some commodities,
      particularly coal and grain, often represents a lower cost mode of
      transportation. Barge competition and barge rates are affected by
      navigational interruptions from ice, floods and droughts, which can
      cause widely fluctuating barge rates. The ability of ICRR to maintain
      its market share of the freight has traditionally been affected by
      the navigational conditions on the river.

---

A-2

The significant consolidation of rail
      systems in the United States has resulted in larger rail systems
      that are able to offer seamless services in larger market areas and,
      accordingly, compete effectively with the Company in certain markets.
      There can be no assurance that the Company will be able to compete
      effectively against current and future competitors in the railroad
      industry and that further consolidation within the railroad industry
      will not adversely affect the Companys competitive position.
      No assurance can be given that competitive pressures will not lead
      to reduced revenues, profit margins or both.

Actual and Potential Environmental
        Liabilities. The Companys
        operations are subject, in Canada and the United States, to federal,
        provincial, state, municipal and local environmental laws and regulations
        concerning, among other things, emissions into the air, discharges
        into waters, the generation, handling, storage, transportation,
        treatment and disposal of waste, hazardous substances and other
        materials, decommissioning of underground and aboveground storage
        tanks and soil and groundwater contamination. 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 compliance
        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.

While the Company believes that it
      has identified the costs likely to be incurred for environmental
      matters in the next several years, based on known information, its
      ongoing efforts to identify potential environmental concerns that
      may be associated with its properties may lead to future environmental
      investigations, which may result in the identification of additional
      environmental costs and liabilities.

In the operation of a railroad, it
      is possible that derailments, explosions or other accidents may occur
      that could cause harm to human health or to the environment. As a
      result, the Company may incur costs in the future, which may be material,
      to address any such harm, including costs relating to the performance
      of the clean-ups, natural resource damages and compensatory or punitive
      damages relating to harm to individuals or property.

The ultimate cost of known contaminated
      sites cannot be definitely established, and the estimated environmental
      liability for any given site may vary depending on the nature and
      extent of the contamination, the available clean-up technique, the
      Companys share of the costs and evolving regulatory standards
      governing environmental liability. Also, additional contaminated
      sites yet unknown may be discovered or future operations may result
      in accidental releases. For these reasons, there can be no assurance
      that material liabilities or costs related to environmental matters
      will not be incurred in the future, or will not have a material adverse
      effect on the Companys financial position or results of operations
      in a particular quarter or fiscal year, or that the Companys
      liquidity will not be adversely affected by such environmental liabilities
      or costs.

Legal Actions.In
      the normal course of its operations, the Company becomes involved
      in various legal actions, including claims relating to personal injuries,
      occupational disease, and damage to property. The Company maintains
      provisions for such items, which it considers to be adequate for
      all of its outstanding or pending claims.

In Canada, employee injuries are governed
      by workers' compensation legislation in each province whereby employees
      may be awarded either a lump sum or future stream of payments depending
      on nature and severity of the injury. The Company accounts for costs
      related to employee work-related injuries based on actuarially developed
      estimates of the ultimate cost associated with such injuries, including
      compensation, health care and administration costs. Assumptions used
      in making such estimates are periodically reviewed and revised by
      the Company to reflect currently available information. For all other
      Canadian legal actions, the Company maintains, and regularly updates,
      on a case-by-case basis, provisions for such items when the expected
      loss is both probable and can be reasonably estimated based on currently
      available information and estimates are based on case history, trends
      and judgment.

---

A-3

In the United States, employee work-related
      injuries, including occupational disease claims, are compensated
      according to the provisions of the Federal Employers' Liability Act
      ("FELA") and represents a major expense for the railroad industry.
      In view of the Company's growing presence in the United States and
      the increase in the number of occupational disease claims over the
      past few years, an actuarial study was conducted in 2002, and in
      the fourth quarter of 2002 the Company changed its methodology for
      estimating its liability for U.S. personal injury and other claims,
      including occupational disease claims and claims for property damage,
      from a case-by-case approach to an actuarial-based approach. Consequently,
      the Company recorded a charge of $281 million ($173 million after
      tax) to increase its provision for these claims.

Under the actuarial-based approach,
      the Company accrues the cost for expected personal injury and property
      damage claims and existing occupational disease claims, based on
      actuarial estimates of their ultimate cost. The Company is unable
      to estimate the total cost for unasserted occupational disease claims.
      A liability for unasserted occupational disease claims is accrued,
      however, to the extent they are probable and can be reasonably estimated.

Although the Company considers such
      provisions to be adequate for these matters, the final outcome with
      respect to actions outstanding or pending at March 31, 2004, or future
      claims, cannot be predicted with certainty, and therefore there can
      be no assurance that their resolution will not have a material adverse
      effect on the Companys financial position or results of operations
      in a particular quarter or fiscal year.

Potential Adverse Consequences
        of Labor Negotiations.Labor
        agreements covering approximately 97% of the Companys Canadian
        unionized workforce expired on December 31, 2003. As of March 2004,
        the Company has successfully negotiated four collective agreements
        with the Canadian Auto Workers (CAW) union, retroactive to January
        1, 2004, covering the Companys shopcraft forces, clerical
        workers, intermodal yard employees and owner operators. The Company
        is currently undergoing discussions with all its remaining trade
        unions whose agreements also expired on December 31, 2003. Under
        the terms of the Canada Labour Code (the governing legislation),
        no legal strikes or lockouts are possible before the conciliation
        process is completed, a union obtains a majority by secret ballot
        and proper notification of at least seventy-two hours notice is
        given to the other party.

In the first quarter of 2004, the
      Companys shopcraft forces, clerical workers and intermodal
      yard employees, represented by the CAW, rejected three tentative
      agreements signed by the CAW and the Company on January 23, 2004.
      The strike that ensued lasted almost four weeks and disrupted the
      Companys operations and accordingly adversely impacted the
      Company's financial results. There can thus be no assurance that
      the Company will be able to have all its collective agreements renewed
      and ratified without any other strikes or lockouts or that the resolution
      of these collective bargaining negotiations will not have a material
      adverse effect on the Companys financial position or results
      of operations.

The general approach to labor negotiations
      by U.S. Class 1 railroads is to bargain on a collective national
      basis. Grand Trunk Western (GTW), Duluth, Winnipeg and Pacific (DWP),
      ICRR, CCP Holdings, Inc. (CCP) and WC, have bargained on a local
      basis rather than holding national, industry wide negotiations because,
      they believe, it results in agreements that better address both the
      employees concerns and preferences, and the railways actual
      operating environment. Local negotiations may not, however, generate
      federal intervention in a strike or lockout situation, since a dispute
      may be localized. The Company believes the potential mutual benefits
      of local bargaining outweigh the risks.

As of March 2004, the Company had
      in place agreements with bargaining units representing the entire
      unionized workforce at ICRR, GTW, DWP, and CCP, and over 60% of the
      unionized workforce at WC. These agreements have various moratorium
      provisions, ranging from the end of 2001 to the end of 2005, which
      preserve the status quo in respect of given areas during the terms
      of such moratoriums. Several of these agreements are currently under
      renegotiation and several will open for negotiation in 2004.

---

A-4

Negotiations are ongoing with the
      bargaining units with which the Company does not have agreements
      or settlements. Until new agreements are reached or the processes
      of the Railway Labor Act have been exhausted, the terms and conditions
      of existing agreements or policies continue to apply. Although the
      Company does not anticipate work action related to these negotiations
      while they are ongoing, there can be no assurance that there will
      not be any such work action and that the resolution of these negotiations
      will not have a material adverse effect on the Companys financial
      position or results of operations.

Potential Business Constraints
        Resulting from Regulation.
        The Companys rail operations in Canada are subject to regulation
        as to (1) rate setting and network rationalization by the Canadian
        Transportation Agency (the "Agency") under theCanada
        Transportation Act(Canada)
        (the "CTA"), and (2) safety by the federal Minister of Transport
        under theRailway Safety
        Act(Canada) and certain
        other statutes. The Companys U.S. rail operations are subject
        to regulation as to (1) economic regulation by the Surface Transportation
        Board (the "STB") (the successor to the Interstate Commerce Commission)
        and (2) safety by the Federal Railroad Administration. As such,
        various Company business transactions must gain prior regulatory
        approval, with attendant risks and uncertainties. In addition,
        the Company is subject to a variety of health, safety, labor, environmental
        and other regulations, all of which can affect its competitive
        position and profitability.

The CTA Review Panel, which was appointed
      by the federal government to carry out a comprehensive review of
      the Canadian transportation legislation, issued its report to the
      Minister of Transport at the end of June, 2001. It was released to
      the public on July 18, 2001 and contained numerous recommendations
      for legislative changes affecting all modes of transportation, including
      rail. Subsequently, the Canadian Minister of Transport released on
      February 25, 2003 its consultation documentStraight
      Ahead  A Vision for Transportation in Canadaand
      tabled in the House of Commons Bill C-26 entitledAn Act to Amend the Canada Transportation Actand
      theRailway
      Safety Act,and
      to enact theVIA
      Rail Canada Act and to make consequential amendments to other Acts.
      Bill C-26 died on the Order Paper (i.e., it was terminated) when
      Parliament was prorogued on November 12, 2003. No assurance can be
      given that any future legislative action by the federal government
      pursuant to the reports recommendations and the consultation
      document, or other future governmental initiatives, will not materially
      adversely affect the Companys financial position or results
      of operations.

The U.S. Congress has had under consideration
      for several years various pieces of legislation that would increase
      federal economic regulation of the railroad industry. In addition,
      the STB is authorized by statute to commence regulatory proceedings
      if it deems them to be appropriate. No assurance can be given that
      any future regulatory initiatives by the federal government will
      not materially adversely affect the Companys operations, or
      its competitive and financial position.

Finally, the Company is subject to
      new statutory and regulatory directives in the United States addressing
      homeland security concerns. These include new border security arrangements,
      pursuant to an agreement the Company and Canadian Pacific Railway
      entered into with the U.S. Bureau of Customs and Border Protection
      (CBP) and the Canada Customs and Revenue Agency (CCRA). The customs
      program is now part of the new Canada Border Services Agency (CBSA),
      requiring advance electronic transmission of cargo information of
      U.S.-bound traffic and cargo screening (including gamma ray and radiation
      screening), as well as U.S. government-imposed restrictions on the
      transportation into the United States of certain commodities. In
      the fourth quarter of 2003, the CBP issued regulations to extend
      advance notification requirements to all modes of transportation
      and the U.S. Food and Drug Administration promulgated interim final
      rules requiring advance notification by all modes for certain food
      imports into the United States. The Company has also worked with
      the Association of American Railroads to develop and put in place
      an extensive industry-wide security plan. While the Company will
      continue to work closely with the CBSA, CBP, and other Canadian and
      U.S. agencies, as above, no assurance can be given that future decisions
      by the U.S. or Canadian governments on homeland security matters,
      or joint decisions by the industry in response to threats to the
      North American rail network, will not materially adversely affect
      the Companys operations, or its competitive and financial position.

---

A-5



Adverse Factors Affecting Fuel
        Price.Fuel represents
        an appreciable proportion of the Companys annual operating
        expense. A sustained increase in fuel prices may have a negative
        impact on the Companys earnings and cash flow. To mitigate
        the effects of fuel price changes on its operating margins and
        overall profitability the Company has adopted a systematic approach
        to its hedging activities, which calls for regularly entering into
        swap positions on crude and heating oil to cover a target percentage
        of future fuel consumption up to two years in advance.

Potential Adverse Consequences
        of Limited Cash.The
        Companys business is capital intensive and requires substantial
        ongoing expenditures for, among other things, improvements to roadway,
        structures and technology, acquisition and repair of equipment
        and maintenance of the rail network. If the Companys cash
        from continuing operations fails to cover capital expenditures
        for a sustained period, the Company may have to seek additional
        financing, reduce planned capital expenditures, reduce or eliminate
        dividends on its Common Shares or some combination of the foregoing.

Currency Risks.Although
      the Company conducts its business and receives revenues primarily
      in Canadian dollars, a growing portion of its revenues, expenses,
      assets and debt are denominated in U.S. dollars. Thus, the Companys
      results are affected by fluctuations in the exchange rate between
      these currencies. Changes in the exchange rate between the Canadian
      dollar and other currencies (including the U.S. dollar) make the
      goods transported by the Company more or less competitive in the
      world marketplace and thereby affect the Companys revenues
      and expenses.

The Company has limited involvement
      with derivative financial instruments and does not use them for trading
      purposes. Collateral or other security to support financial instruments
      subject to credit risk is usually not obtained. Where the Company
      is exposed to counterparty credit risk in the event of non-performance,
      the credit standing of counterparties or their guarantors is regularly
      monitored.

Adverse Economic Conditions.
      In any given year, the Company, like other railroads, is susceptible
      to changes in the economic conditions of the industries and geographic
      areas that produce and consume the freight it transports or the supplies
      it requires to operate. Many of the goods and commodities carried
      by the Company experience cyclicality in demand. Many of the bulk
      commodities the Company transports, however, move offshore and are
      affected more by global economic conditions than North American economic
      conditions. The Companys results of operations can be expected
      to reflect these conditions because of the significant fixed costs
      inherent in railroad operations. The Companys revenues are
      affected by prevailing economic conditions and should a major economic
      slowdown or recession occur in North America or other key markets,
      or should major industrial restructuring take place, the volume of
      rail shipments carried by the Company is likely to be adversely affected.
      Global as well as North American trade conditions, including trade
      barriers on certain commodities, may interfere with the free circulation
      of goods across Canada and the United States.

Security.Potential
      terrorist actions can have a direct or indirect impact on the transportation
      infrastructure, including railway infrastructure in North America,
      and interfere with the free flow of goods. International conflicts
      can also have an impact on the Company's markets.

Impact of Severe Weather Conditions.
      In addition to the inherent risks of the business cycle, the Company's
      operations are occasionally susceptible to severe weather conditions,
      which can disrupt operations and service for the railroad as well
      as for CN customers. Recently severe drought conditions in Western
      Canada, for example, significantly reduced bulk commodity revenues,
      principally grain.

---

EXHIBIT B

FACILITIES





SEE ATTACHED

---

|                                                                                |  |                  |  |             |  |                             |  |                           |  |                           |  |                            |  |                               |  |     |  |                     |  |       |  |                     |  |     |  |                     |  |       |  |                    
|------------------------------------------------------------------------------- |  | ---------------- |  | ----------- |  | --------------------------- |  | ------------------------- |  | ------------------------- |  | -------------------------- |  | ----------------------------- |  | --- |  | ------------------- |  | ----- |  | ------------------- |  | --- |  | ------------------- |  | ----- |  | -------------------
|CN
            FacilitiesInventoryas
            atFebruary 1,
            2004 |  |                  |  |             |  |                             |  |                           |  |                           |  |                            |  |                               |  |     |  |                     |  |       |  |                     |  |    
|                                                                               
|                                                                                |  | Location         |  | DieselShops |  | Offices-
            Leased |  | Office-
            Owned |  | Shop/
            Garages |  | Station/
            Other |  | Warehouse/
            Office |  |     |  | Total              
|                                                                                |  |                  |  | #           |  | Sq.
            ft.         |  | #                         |  | Sq.
            ft.       |  | #                          |  | Sq.
            ft.           |  | #   |  | Sq.
            ft. |  | #     |  | Sq.
            ft. |  | #   |  | Sq.
            ft. |  | #     |  | Sq.
            ft.
|                                                                                |  |                  |  |             |  |                             |  |                           |  |                           |  |                            |  |                               |  |     |  |                     |  |       |  |                     |  |     |  |                     |  |       |  |                    
|                                                                               
|CN                                                                              |  | British          |  | 4           |  | 263,212                     |  | 3                         |  | 24,970                    |  | 21                         |  | 95,290                        |  | 34  |  | 116,508             |  | 9     |  | 50,556              |  | 2   |  | 44,480              |  | 73    |  | 595,016            
|                                                                                |  | Columbia         |  |             |  |                             |  |                           |  |                           |  |                            |  |                               |  |     |  |                     |  |       |  |                     |  |     |  |                     |  |       |  |                    
|                                                                                |  | Alberta          |  | 2           |  | 127,688                     |  | 3                         |  | 144,812                   |  | 22                         |  | 105,689                       |  | 37  |  | 135,135             |  | 9     |  | 29,375              |  | 4   |  | 82,155              |  | 77    |  | 624,854            
|                                                                                |  | Saskatchewan     |  | 1           |  | 10,752                      |  | 3                         |  | 9,644                     |  | 21                         |  | 30,649                        |  | 29  |  | 103,229             |  | 13    |  | 67,969              |  | 4   |  | 41,662              |  | 71    |  | 263,865            
|                                                                                |  | Manitoba         |  | 2           |  | 485,021                     |  | 1                         |  | 109,837                   |  | 15                         |  | 51,931                        |  | 51  |  | 834,934             |  | 2     |  | 8,954               |  | 15  |  | 454,747             |  | 86    |  | 1,945,424          
|                                                                                |  | Ontario          |  | 3           |  | 226,692                     |  | 9                         |  | 181,759                   |  | 38                         |  | 171,857                       |  | 68  |  | 420,535             |  | 103   |  | 307,169             |  | 16  |  | 864,409             |  | 237   |  | 2,172,421          
|                                                                                |  | Quebec           |  | 1           |  | 144,817                     |  | 2                         |  | 35,113                    |  | 59                         |  | 1,304,838                     |  | 99  |  | 1,467,965           |  | 61    |  | 113,801             |  | 94  |  | 408,833             |  | 316   |  | 3,475,367          
|                                                                                |  | Nova Scotia      |  | -           |  | -                           |  | -                         |  | -                         |  | 6                          |  | 9,994                         |  | 9   |  | 37,298              |  | 6     |  | 14,370              |  | 4   |  | 2,413               |  | 25    |  | 64,075             
|                                                                                |  | New Brunswick    |  | -           |  | -                           |  | 3                         |  | 32,357                    |  | 7                          |  | 35,956                        |  | 22  |  | 151,435             |  | 6     |  | 13,114              |  | 6   |  | 10,780              |  | 44    |  | 243,642            
|                                                                                |  | US Properties    |  | -           |  | -                           |  | -                         |  | -                         |  | 2                          |  | 12,956                        |  | -   |  | -                   |  | 1     |  | 3,920               |  | 1   |  | 1,248               |  | 4     |  | 18,124             
|GT                                                                              |  | Michigan         |  | -           |  | -                           |  | 1                         |  | 39,415                    |  | 11                         |  | 93,338                        |  | 28  |  | 370,086             |  | -     |  | -                   |  | -   |  | -                   |  | 40    |  | 502,839            
|                                                                                |  | Ohio             |  | -           |  | -                           |  | -                         |  | -                         |  | 1                          |  | 16,503                        |  | 1   |  | 2,315               |  | -     |  | -                   |  | -   |  | -                   |  | 2     |  | 18,818             
|                                                                                |  | Indiana          |  | -           |  | -                           |  | 1                         |  | 10,350                    |  | -                          |  | -                             |  | -   |  | -                   |  | -     |  | -                   |  | -   |  | -                   |  | 1     |  | 10,350             
|                                                                                |  | Illinois         |  | -           |  | -                           |  | -                         |  | -                         |  | 2                          |  | 5,866                         |  | -   |  | -                   |  | -     |  | -                   |  | 1   |  | 22,000              |  | 3     |  | 27,866             
|                                                                                |  | DC               |  | -           |  | -                           |  | 1                         |  | 3,032                     |  | -                          |  | -                             |  | -   |  | -                   |  | -     |  | -                   |  | -   |  | -                   |  | 1     |  | 3,032              
|IC                                                                              |  | Illinois         |  | 1           |  | 490,161                     |  | 1                         |  | 22,450                    |  | 29                         |  | 108,312                       |  | 15  |  | 164,727             |  | 11    |  | 1,656               |  | 13  |  | 46,167              |  | 70    |  | 833,563            
|                                                                                |  | Louisiana        |  | 2           |  | 13,440                      |  | -                         |  | -                         |  | 14                         |  | 31,100                        |  | 11  |  | 10,100              |  | 11    |  | 1,978               |  | 5   |  | 1,500               |  | 43    |  | 58,118             
|                                                                                |  | Mississippi      |  | 1           |  | 11,000                      |  | 1                         |  | 6,333                     |  | 11                         |  | 21,600                        |  | 3   |  | -                   |  | 18    |  | 4,500               |  | 2   |  | 11,670              |  | 36    |  | 55,103             
|                                                                                |  | Iowa             |  | -           |  | -                           |  | -                         |  | -                         |  | 13                         |  | 18,300                        |  | 3   |  | 33,867              |  | 11    |  | 2,800               |  | 5   |  | 301,250             |  | 32    |  | 356,217            
|                                                                                |  | Kentucky         |  | -           |  | -                           |  | -                         |  | -                         |  | 1                          |  | 600                           |  | 2   |  | 35,667              |  | -     |  | -                   |  | 4   |  | 11,426              |  | 7     |  | 47,693             
|                                                                                |  | Alabama          |  | -           |  | -                           |  | -                         |  | -                         |  | 2                          |  | 6,000                         |  | -   |  | -                   |  | -     |  | -                   |  | -   |  | -                   |  | 2     |  | 6,000              
|                                                                                |  | Tennessee        |  | -           |  | -                           |  | -                         |  |                           |  | 13                         |  | 30,595                        |  | 18  |  | 623,699             |  | 1     |  | -                   |  | 2   |  | 112,152             |  | 34    |  | 766,446            
|                                                                                |  | Texas            |  | -           |  | -                           |  | 1                         |  | 2,700                     |  | -                          |  | -                             |  | -   |  | -                   |  | -     |  | -                   |  | -   |  | -                   |  | 1     |  | 2,700              
|                                                                                |  | Mexico           |  | -           |  | -                           |  | 1                         |  | 1,465                     |  | -                          |  | -                             |  | -   |  | -                   |  | -     |  | -                   |  | -   |  | -                   |  | 1     |  | 1,465              
|WC                                                                              |  | Wisconsin        |  | 2           |  | 39,032                      |  | -                         |  |                           |  | 18                         |  | 71,924                        |  | 8   |  | 306,911             |  | -     |  | -                   |  | -   |  | -                   |  | 28    |  | 417,867            
|                                                                                |  | Illinois         |  | -           |  | -                           |  | 1                         |  | 5,075                     |  | 1                          |  | 5,700                         |  | -   |  | -                   |  | -     |  | -                   |  | -   |  | -                   |  | 2     |  | 10,775             
|                                                                                |  | Minnesota        |  | -           |  | -                           |  | 1                         |  | 3,200                     |  | 1                          |  | 240                           |  | -   |  | -                   |  | -     |  | -                   |  | -   |  | -                   |  | 2     |  | 3,440              
|                                                                                |  | Michigan         |  | -           |  | -                           |  | -                         |  | -                         |  | 3                          |  | 21,549                        |  | 1   |  | 15,000              |  | -     |  | -                   |  | -   |  | -                   |  | 4     |  | 36,549             
|AC                                                                              |  | Ontario          |  | -           |  | -                           |  | -                         |  | -                         |  | -                          |  | -                             |  | 2   |  | 14,800              |  | -     |  | -                   |  | 3   |  | 56,900              |  | 5     |  | 71,700             
|                                                                                |  | Other Buildings  |  |             |  |                             |  |                           |  |                           |  |                            |  |                               |  |     |  |                     |  | 1,034 |  | 1,368,255           |  |     |  |                     |  | 1,034 |  | 1,368,255          
|                                                                                |  | Other Facilities |  |             |  |                             |  |                           |  |                           |  |                            |  |                               |  |     |  |                     |  | 2,663 |  | 3,153,054           |  |     |  |                     |  | 2,633 |  | 3,153,054          
|                                                                                |  | Total            |  | 19          |  | 1,811,815                   |  | 33                        |  | 632,602                   |  | 311                        |  | 2,250,787                     |  | 441 |  | 4,844,211           |  | 3,929 |  | 5,141,471           |  | 181 |  | 2,473,752           |  | 4,914 |  | 17,154,638         

|                                 |  |           |  |       |  |                   
|-------------------------------- |  | --------- |  | ----- |  | ------------------
|Other Facilities                 |  |           |  | #-    |  | Sq.
            ft
|                                 |  |           |  |       |  |                   
|Fenced Compound                  |  |           |  | 91    |  | 1,251,733         
|Container/Truck
          railer |  |           |  | 734   |  | 160,356           
|Loading Platform                 |  |           |  | 132   |  | 321,211           
|Mobile Home                      |  |           |  | 24    |  | 13,488            
|Mobile Trailer                   |  |           |  | 269   |  | 138,857           
|Parking Lot                      |  |           |  | 28    |  | 786,986           
|Radiotower Base                  |  |           |  | 232   |  | 74,228            
|Storage Shed                     |  |           |  | 991   |  | 392,983           
|Tank                             |  |           |  | 132   |  | 13,212            
|                                 |  |           |  |       |  |                   
|                                 |  | Sub-Total |  | 2,633 |  | 3,153,054         

|                                           |  |       |  |                   
|------------------------------------------ |  | ----- |  | ------------------
|SUMMARY                                    |  | #     |  | Sq.
            ft
|
|                                           |  |       |  |                   
|Major Buildings
            (> 10K sq ft.) |  | 167   |  | 11,021,617        
|Other Owed
            Facilities          |  | 4,714 |  | 5,500,419         
|Other Leased
            Facilities        |  | 33    |  | 632,602           
|                                           |  |       |  |                   
|TOTAL                                      |  | 4,914 |  | 17,154,638        

---

EXHIBIT C

GAAP RECONCILIATION





SEEATTACHED

---

C-2



|                                                |  |                      
|----------------------------------------------- |  | ---------------------
|Reconciliation of
            Non-GAAP Measures |  | U.S.
            GAAP
|                                               

|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|------------------------------------------------- |  | ----- |  | -------- | ----- |  | ----- |  | -------------- | - |  | ----- |  | --------- | ----- | - | -------------- | - |  | ---- | ----- | --------- | -----
|2003                                              |  |       |  | Reported |       |  |       |  | Adjustments(1) |   |  |       |  | Adjusted  |       |   |                |   |  |      |       |           |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Revenues                                          |  | $     |  | 5,884    |       |  | $     |  | -              |   |  | $     |  | 5,884     |       |   |                |   |  |      |       |           |      
|Operating
        expenses                        |  |       |  | 4,107    |       |  |       |  | -              |   |  |       |  | 4,107     |       |   |                |   |  |      |       |           |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Operating
          income                        |  |       |  | 1,777    |       |  |       |  | -              |   |  |       |  | 1,777     |       |   |                |   |  |      |       |           |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Interest
        expense                          |  |       |  | (315     | )     |  |       |  | -              |   |  |       |  | (315      | )     |   |                |   |  |      |       |           |      
|Other
        income                              |  |       |  | 21       |       |  |       |  | -              |   |  |       |  | 21        |       |   |                |   |  |      |       |           |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Income
        before income taxes and cumulative |  |       |  | 1,483    |       |  |       |  | -              |   |  |       |  | 1,483     |       |   |                |   |  |      |       |           |      
|effect
        of change in accounting policy     |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Income
        tax expense                        |  |       |  | (517     | )     |  |       |  | 79             |   |  |       |  | (438      | )     |   |                |   |  |      |       |           |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Income
        before cumulative effect of change |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|in
        accounting policy                      |  |       |  | 966      |       |  |       |  | 79             |   |  |       |  | 1,045     |       |   |                |   |  |      |       |           |      
|Cumulative
        effect of change in accounting |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|policy
        (net of applicable taxes)          |  |       |  | 48       |       |  |       |  | (48            | ) |  |       |  | -         |       |   |                |   |  |      |       |           |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Net
          income                              |  | $     |  | 1,014    |       |  | $     |  | 31             |   |  | $     |  | 1,045     |       |   |                |   |  |      |       |           |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|                                                 
|**Operating
          ratio**                     |  |       |  | **69.8** | **%** |  |       |  |                |   |  |       |  | **69.8**  | **%** |   |                |   |  |      |       |           |      
|**Basic
          earnings per share**            |  | **$** |  | **5.30** |       |  |       |  |                |   |  | **$** |  | **5.47**  |       |   |                |   |  |      |       |           |      
|**Diluted
          earnings per share**          |  | **$** |  | **5.23** |       |  |       |  |                |   |  | **$** |  | **5.40**  |       |   |                |   |  |      |       |           |      
|                                                 
|2002                                              |  |       |  | Reported |       |  |       |  | Adjustments(2) |   |  |       |  | Adjusted  |       |   |                |   |  |      |       |           |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Revenues                                          |  | $     |  | 6,110    |       |  | $     |  | -              |   |  | $     |  | 6,110     |       |   |                |   |  |      |       |           |      
|Operating
        expenses                        |  |       |  | 4,641    |       |  |       |  | (401           | ) |  |       |  | 4,240     |       |   |                |   |  |      |       |           |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Operating
          income                        |  |       |  | 1,469    |       |  |       |  | 401            |   |  |       |  | 1,870     |       |   |                |   |  |      |       |           |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Interest
        expense                          |  |       |  | (361     | )     |  |       |  | -              |   |  |       |  | (361      | )     |   |                |   |  |      |       |           |      
|Other
        income                              |  |       |  | 76       |       |  |       |  | -              |   |  |       |  | 76        |       |   |                |   |  |      |       |           |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Income
        before income taxes                |  |       |  | 1,184    |       |  |       |  | 401            |   |  |       |  | 1,585     |       |   |                |   |  |      |       |           |      
|Income
        tax expense                        |  |       |  | (384     | )     |  |       |  | (149           | ) |  |       |  | (533      | )     |   |                |   |  |      |       |           |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Net
          income                              |  | **$** |  | **800**  |       |  | **$** |  | **252**        |   |  | **$** |  | **1,052** |       |   |                |   |  |      |       |           |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|                                                 
|Operating
          ratio                         |  |       |  | **76.0** | **%** |  |       |  |                |   |  |       |  | **69.4**  | **%** |   |                |   |  |      |       |           |      
|Basic
          earnings per share                |  | **$** |  | **4.07** |       |  |       |  |                |   |  | **$** |  | **5.35**  |       |   |                |   |  |      |       |           |      
|Diluted
          earnings per share              |  | **$** |  | **3.97** |       |  |       |  |                |   |  | **$** |  | **5.22**  |       |   |                |   |  |      |       |           |      
|                                                 
|2001                                              |  |       |  | Reported |       |  |       |  | Adjustments(3) |   |  |       |  | Adjusted  |       |   | Pro-forma      |   |  |      |       | Adjusted  |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   | adjustments(4) |   |  |      |       | Pro-forma |      
|
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Revenues                                          |  | $     |  | 5,652    |       |  | $     |  | -              |   |  | $     |  | 5,652     |       | $ | 438            |   |  |      | $     | 6,090     |      
|Operating
        expenses                        |  |       |  | 3,970    |       |  |       |  | (98            | ) |  |       |  | 3,872     |       |   | 303            |   |  |      |       | 4,175     |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Operating
          income                        |  |       |  | 1,682    |       |  |       |  | 98             |   |  |       |  | 1,780     |       |   | 135            |   |  |      |       | 1,915     |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Interest
        expense                          |  |       |  | (327     | )     |  |       |  | -              |   |  |       |  | (327      | )     |   | (80            | ) |  |      |       | (407      | )    
|Other
        income                              |  |       |  | 65       |       |  |       |  | (2             | ) |  |       |  | 63        |       |   | 24             |   |  |      |       | 87        |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Income
        before income taxes                |  |       |  | 1,420    |       |  |       |  | 96             |   |  |       |  | 1,516     |       |   | 79             |   |  |      |       | 1,595     |      
|Income
        tax expense                        |  |       |  | (380     | )     |  |       |  | (158           | ) |  |       |  | (538      | )     |   | (29            | ) |  |      |       | (567      | )    
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|Net
          income                              |  | $     |  | 1,040    |       |  | $     |  | (62            | ) |  | $     |  | 978       |       | $ | 50             |   |  |      | $     | 1,028     |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      
|                                                 
|Operating
          ratio                         |  |       |  | **70.2** | **%** |  |       |  |                |   |  |       |  | **68.5**  | **%** |   |                |   |  |      |       | **68.6**  | **%**
|Basic
          earnings per share                |  | **$** |  | **5.41** |       |  |       |  |                |   |  | **$** |  | **5.09**  |       |   |                |   |  | **** | **$** | **5.35**  |      
|Diluted
          earnings per share              |  | **$** |  | **5.23** |       |  |       |  |                |   |  | **$** |  | **4.92**  |       |   |                |   |  | **** | **$** | **5.17**  |      
|                                                  |  |       |  |          |       |  |       |  |                |   |  |       |  |           |       |   |                |   |  |      |       |           |      

---

|(1) | Includes a cumulative
        benefit of $75 million ($48 million after tax) resulting from a
        change in the accounting for certain track structure assets pursuant
        to the requirements of Statement of Financial Accounting Standards
        No. 143, "Accounting for Asset Retirement Obligations," and a fourth
        quarter deferred income tax expense of $79 million resulting from
        the enactment of higher corporate tax rates in the province of
        Ontario.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Includes a fourth quarter
        charge of $281 million ($173 million after tax) to increase the
        Company's U.S. personal injury and other claims liability and a
        workforce reduction charge of $120 million ($79 million after tax).                                                                                                                                                                                                                                               
|(3) | Includes a charge of $98
        million ($62 million after tax) for workforce reductions, a gain
        of $101 million ($73 million after tax) from the sale of the Company's
        50 per cent interest in the Detroit River Tunnel Company, a charge
        of $99 million ($71 million after tax) to write down the Company's
        net investment in 360networks Inc. and a deferred income tax recovery
        of $122 million.                                                       
|(4) | Wisconsin Central Transportation
        Corporation (WC) was acquired and consolidated on October 9, 2001.
        Pro forma assumes that the acquisition took place on January 1,
        2001.                                                                                                                                                                                                                                                                                                   

---

C-3

|                                              |  |                        
|--------------------------------------------- |  | -----------------------
|Reconciliation
          of Non-GAAP Measures |  | Canadian
          GAAP
|                                             

in millions, except per share data,
      or unless otherwise indicated

|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |   |      |  
|------------------------------------ |  | - |  | -------- | - |  | - |  | -------------- | - |  | - |  | -------- | - | - | -------------- | - | - | --------- | - | ---- | -
|2003                                 |  |   |  | Reported |   |  |   |  | Adjustments(1) |   |  |   |  | Adjusted |   |   |                |   |   |           |   |      |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |   |      |  
|Revenues                             |  | $ |  | 5,884    |   |  | $ |  | -              |   |  | $ |  | 5,884    |   |   |                |   |   |           |   |      |  
|Operating expenses                   |  |   |  | 4,516    |   |  |   |  | -              |   |  |   |  | 4,516    |   |   |                |   |   |           |   |      |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |   |      |  
|Operating income                     |  |   |  | 1,368    |   |  |   |  | -              |   |  |   |  | 1,368    |   |   |                |   |   |           |   |      |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |   |      |  
|Interest expense                     |  |   |  | (317     | ) |  |   |  | -              |   |  |   |  | (317     | ) |   |                |   |   |           |   |      |  
|Other income                         |  |   |  | 21       |   |  |   |  | -              |   |  |   |  | 21       |   |   |                |   |   |           |   |      |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |   |      |  
|Income before income
        taxes   |  |   |  | 1,072    |   |  |   |  | -              |   |  |   |  | 1,072    |   |   |                |   |   |           |   |      |  
|Income tax expense                   |  |   |  | (338     | ) |  |   |  | 33             |   |  |   |  | (305     | ) |   |                |   |   |           |   |      |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |   |      |  
|Net income                           |  | $ |  | 734      |   |  | $ |  | 33             |   |  | $ |  | 767      |   |   |                |   |   |           |   |      |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |   |      |  
|                                    
|Operating ratio                      |  |   |  | 76.8     | % |  |   |  |                |   |  |   |  | 76.8     | % |   |                |   |   |           |   |      |  
|Basic earnings
          per share   |  | $ |  | 3.84     |   |  |   |  |                |   |  | $ |  | 4.01     |   |   |                |   |   |           |   |      |  
|Diluted earnings
          per share |  | $ |  | 3.79     |   |  |   |  |                |   |  | $ |  | 3.96     |   |   |                |   |   |           |   |      |  
|                                    
|2002                                 |  |   |  | Reported |   |  |   |  | Adjustments(2) |   |  |   |  | Adjusted |   |   |                |   |   |           |   |      |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |   |      |  
|Revenues                             |  | $ |  | 6,110    |   |  | $ |  | -              |   |  | $ |  | 6,110    |   |   |                |   |   |           |   |      |  
|Operating expenses                   |  |   |  | 5,012    |   |  |   |  | (401           | ) |  |   |  | 4,611    |   |   |                |   |   |           |   |      |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |   |      |  
|Operating income                     |  |   |  | 1,098    |   |  |   |  | 401            |   |  |   |  | 1,499    |   |   |                |   |   |           |   |      |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |   |      |  
|Interest expense                     |  |   |  | (353     | ) |  |   |  | -              |   |  |   |  | (353     | ) |   |                |   |   |           |   |      |  
|Other income                         |  |   |  | 76       |   |  |   |  | -              |   |  |   |  | 76       |   |   |                |   |   |           |   |      |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |   |      |  
|Income before income
        taxes   |  |   |  | 821      |   |  |   |  | 401            |   |  |   |  | 1,222    |   |   |                |   |   |           |   |      |  
|Income tax expense                   |  |   |  | (268     | ) |  |   |  | (149           | ) |  |   |  | (417     | ) |   |                |   |   |           |   |      |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |   |      |  
|Net income                           |  | $ |  | 553      |   |  | $ |  | 252            |   |  | $ |  | 805      |   |   |                |   |   |           |   |      |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |   |      |  
|                                    
|Operating ratio                      |  |   |  | 82.0     | % |  |   |  |                |   |  |   |  | 75.5     | % |   |                |   |   |           |   |      |  
|Basic earnings
          per share   |  | $ |  | 2.78     |   |  |   |  |                |   |  | $ |  | 4.06     |   |   |                |   |   |           |   |      |  
|Diluted earnings
          per share |  | $ |  | 2.73     |   |  |   |  |                |   |  | $ |  | 3.98     |   |   |                |   |   |           |   |      |  
|                                    
|2001                                 |  |   |  | Reported |   |  |   |  | Adjustments(3) |   |  |   |  | Adjusted |   |   | Pro-forma      |   |   | Adjusted  |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   | adjustments(4) |   |   | Pro-forma |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |  
|Revenues                             |  | $ |  | 5,652    |   |  | $ |  | -              |   |  | $ |  | 5,652    |   | $ | 438            |   | $ | 6,090     |  
|Operating expenses                   |  |   |  | 4,286    |   |  |   |  | (98            | ) |  |   |  | 4,188    |   |   | 327            |   |   | 4,515     |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |  
|Operating income                     |  |   |  | 1,366    |   |  |   |  | 98             |   |  |   |  | 1,464    |   |   | 111            |   |   | 1,575     |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |  
|Interest expense                     |  |   |  | (312     | ) |  |   |  | -              |   |  |   |  | (312     | ) |   | (80            | ) |   | (392      | )
|Other income                         |  |   |  | 65       |   |  |   |  | (2             | ) |  |   |  | 63       |   |   | 24             |   |   | 87        |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |  
|Income before income
        taxes   |  |   |  | 1,119    |   |  |   |  | 96             |   |  |   |  | 1,215    |   |   | 55             |   |   | 1,270     |  
|Income tax expense                   |  |   |  | (392     | ) |  |   |  | (39            | ) |  |   |  | (431     | ) |   | (19            | ) |   | (450      | )
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |  
|Net income                           |  | $ |  | 727      |   |  | $ |  | 57             |   |  | $ |  | 784      |   | $ | 36             |   | $ | 820       |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |  
|                                    
|Operating ratio                      |  |   |  | 75.8     | % |  |   |  |                |   |  |   |  | 74.1     | % |   |                |   |   |           |   | 74.1 | %
|Basic earnings
          per share   |  | $ |  | 3.72     |   |  |   |  |                |   |  | $ |  | 4.02     |   |   |                |   |   |           | $ | 4.21 |  
|Diluted earnings
          per share |  | $ |  | 3.62     |   |  |   |  |                |   |  | $ |  | 3.90     |   |   |                |   |   |           | $ | 4.08 |  
|                                     |  |   |  |          |   |  |   |  |                |   |  |   |  |          |   |   |                |   |   |           |   |      |  

|(1) | Includes a fourth quarter
        deferred income tax expense of $33 million resulting from the enactment
        of higher corporate tax rates in the province of Ontario.                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Includes a fourth quarter
        charge of $281 million ($173 million after tax) to increase the
        Company's U.S. personal injury and other claims liability and a
        workforce reduction charge of $120 million ($79 million after tax).                                                                                                                               
|(3) | Includes a charge of $98
        million ($62 million after tax) for workforce reductions, a gain
        of $101 million ($82 million after tax) from the sale of the Company's
        50 per cent interest in the Detroit River Tunnel Company and a
        charge of $99 million ($77 million after tax) to write down the
        Company's net investment in 360networks Inc.
|(4) | Wisconsin Central Transportation
        Corporation (WC) was acquired and consolidated on October 9, 2001.
        Pro forma assumes that the acquisition took place on January 1,
        2001.                                                                                                                                                                                   

---

C-4

---

in millions

|                                                           |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|---------------------------------------------------------- |  |  | - | ------ | - | - | ----- | - | - | ------ | - | - | ----- | -
|U.S. GAAP                                                  |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|                                                           |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|                                                           |  |  |   | 2003   |   |   | 2002  |   |   | 2001   |   |   | 2000  |  
|                                                           |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|Cash provided
          from operating activities          |  |  | $ | 1,976  |   | $ | 1,612 |   | $ | 1,621  |   | $ | 1,506 |  
|Less:                                                      |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|Net capital
        expenditures                           |  |  |   | (1,043 | ) |   | (938  | ) |   | (941   | ) |   | (958  | )
|Other investing
        activities                         |  |  |   | (32    | ) |   | 14    |   |   | (1,232 | ) |   | (23   | )
|Dividends
        paid                                     |  |  |   | (191   | ) |   | (170  | ) |   | (150   | ) |   | (136  | )
|                                                           |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|Cash provided
          (used) before financing activities |  |  |   | 710    |   |   | 518   |   |   | (702   | ) |   | 389   |  
|                                                           |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|Adjustments:                                               |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|Change in
        level of accounts receivable sold(1)     |  |  |   | (132   | ) |   | (5    | ) |   | (133   | ) |   | (3    | )
|Acquisition
        of WC(2)                               |  |  |   | -      |   |   | -     |   |   | 1,278  |   |   | -     |  
|                                                           |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|Free cash flow                                             |  |  | $ | 578    |   | $ | 513   |   | $ | 443    |   | $ | 386   |  
|                                                           |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|Canadian GAAP                                              |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|                                                           |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|                                                           |  |  |   | 2003   |   |   | 2002  |   |   | 2001   |   |   | 2000  |  
|                                                           |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|Cash provided
          from operating activities          |  |  | $ | 1,500  |   | $ | 1,173 |   | $ | 1,232  |   | $ | 1,128 |  
|Less:                                                      |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|Net capital
        expenditures                           |  |  |   | (583   | ) |   | (571  | ) |   | (605   | ) |   | (607  | )
|Other investing
        activities                         |  |  |   | (16    | ) |   | 95    |   |   | (1,159 | ) |   | 21    |  
|Dividends
        paid                                     |  |  |   | (191   | ) |   | (179  | ) |   | (174   | ) |   | (149  | )
|                                                           |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|Cash provided
          (used) before financing activities |  |  |   | 710    |   |   | 518   |   |   | (706   | ) |   | 393   |  
|                                                           |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|Adjustments:                                               |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|Change in
        level of accounts receivable sold(1)     |  |  |   | (132   | ) |   | (5    | ) |   | (133   | ) |   | (3    | )
|Acquisition
        of WC(2)                               |  |  |   | -      |   |   | -     |   |   | 1,278  |   |   | -     |  
|                                                           |  |  |   |        |   |   |       |   |   |        |   |   |       |  
|Free cash flow                                             |  |  | $ | 578    |   | $ | 513   |   | $ | 439    |   | $ | 390   |  
|                                                           |  |  |   |        |   |   |       |   |   |        |   |   |       |  

|(1) | Changes in the level of
        accounts receivable sold under the securitization program are considered
        a financing activity.         
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Significant acquisitions
        are excluded, as they are not indicative of normal day-to-day investments
        in the Company's asset base.

---

C-5



|                                     |  |                    
|------------------------------------ |  | -------------------
|Return
          on Invested Capital |  | U.S.
          GAAP
|                                    

The Company
    uses Return on Invested Capital (ROIC) as a measure of return on investment.
    The Company calculates ROIC as follows,

| | Adjusted
          Net Income before Interest ExpenseAverage
    Net Indebtedness*&
    Shareholders' Equity
| | ------------------------------------------------------------------------------------------------------------

*Total
    debt (current and long-term) minus cash

---

|                                                            |  |                     |  |        |  
|----------------------------------------------------------- |  | ------------------- |  | ------ | -
|*in millions $, unless otherwise indicated*                 |  |                     |  | 2003   |  
|                                                            |  |                     |  |        |  
|Adjusted
            Net Income before Interest Expense     |  |                     |  |        |  
|                                                           
|Net
        income, as reported                             |  |                     |  | 1,014  |  
|Adjustments:                                                |  |                     |  |        |  
|Cumulative
        effect of change in policy(1)            |  |                     |  | (48    | )
|Deferred
        income tax expense(2)                      |  |                     |  | 79     |  
|                                                            |  |                     |  |        |  
|Adjusted
          net income                               |  |                     |  | 1,045  |  
|Add:
        Interest expense                               |  |                     |  | 315    |  
|                                                            |  |                     |  |        |  
|Adjusted
          net income before interest expense       |  | A                   |  | 1,360  |  
|                                                            |  |                     |  |        |  
|                                                           
|                                                           
|Average
            Net Indebtedness & Shareholders' Equity |  |                     |  |        |  
|Net
          Indebtedness                                  |  |                     |  |        |  
|Beginning
        of period                                 |  |                     |  | 5,552  |  
|End
        of period                                       |  |                     |  | 4,528  |  
|                                                            |  |                     |  |        |  
|                                                            |  |                     |  | 10,080 |  
|Average
        for the period                              |  | B                   |  | 5,040  |  
|                                                           
|Shareholders'
          Equity                              |  |                     |  |        |  
|Beginning
        of period                                 |  |                     |  | 8,369  |  
|End
        of period                                       |  |                     |  | 8,432  |  
|                                                            |  |                     |  |        |  
|                                                            |  |                     |  | 16,801 |  
|Average
        for the period                              |  | C                   |  | 8,401  |  
|                                                           
|Average
          Net Indebtedness & Shareholders' Equity   |  | D
          = (B+C) |  | 13,441 |  
|                                                            |  |                     |  |        |  
|                                                           
|                                                           
|Return
          on Invested Capital                        |  | (
          A/D )   |  | 10.1   | %
|                                                            |  |                     |  |        |  

|(1) | Consists
        of a cumulative benefit of $75 million ($48 million after tax)
        resulting from a change in the accounting for certain track structure
        assets pursuant to the requirements of Statement of Financial Accounting
        Standards No. 143, "Accounting for Asset Retirement Obligations."
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                         
|(2) | Consists
        of a fourth quarter deferred income tax expense of $79 million
        resulting from the enactment of higher corporate tax rates in the
        province of Ontario.                                                                                                                                  

---



---

CEO SECTION302CERTIFICATION

I, E. Hunter Harrison, certify that:

| | (1) | I have reviewed this
        annual report on Form 40-F of Canadian National Railway Company (CN);                                                                                                                                                                                                                                      
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                           
| | (2) | Based on my knowledge,
        this report does not contain any untrue statement of a material fact
        or omit to state a material fact necessary to make the statements made,
        in light of the circumstances under which such statements were made,
        not misleading with respect to the period covered by this report;
| |     |                                                                                                                                                                                                                                                                                                                                           
| | (3) | Based on my knowledge,
        the financial statements, and other financial information included in
        this report, fairly present in all material respects the financial condition,
        results of operations and cash flows of the registrant as of, and for,
        the periods presented in this report;                   
| |     |                                                                                                                                                                                                                                                                                                                                           
| | (4) | The registrants
        other certifying officer(s) and I are responsible for establishing and
        maintaining disclosure controls and procedures (as defined in Exchange
        Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:                                                                                    
|
| |     | (a)                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                           
| |     | (b)                                                                                                                                                                                                                                                                                                                                       
|
| |     | (c)                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                           
| |     | (d)                                                                                                                                                                                                                                                                                                                                       
| |    
| | (5) | The registrant's other
        certifying officer(s) and I have disclosed, based on our most recent
        evaluation of internal control over financial reporting, to the registrant's
        auditors and the audit committee of the registrant's board of directors
        (or persons performing the equivalent functions):        
|
| |     | (a)                                                                                                                                                                                                                                                                                                                                       
|
| |     | (b)                                                                                                                                                                                                                                                                                                                                       

|Date: April 30, 2004 |                                              
|-------------------- | ---------------------------------------------
|                     |                                              
|                     | (s) E. Hunter Harrison                       
|                     |                                              
|                     | E. Hunter Harrison                           
|                     | President and Chief
        Executive Officer

---

CFO SECTION302CERTIFICATION

I, Claude Mongeau, certify that:

| | (1) | I have reviewed this
        annual report on Form 40-F of Canadian National Railway Company (CN);                                                                                                                                                                                                                                      
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                           
| | (2) | Based on my knowledge,
        this report does not contain any untrue statement of a material fact
        or omit to state a material fact necessary to make the statements made,
        in light of the circumstances under which such statements were made,
        not misleading with respect to the period covered by this report;
| |     |                                                                                                                                                                                                                                                                                                                                           
| | (3) | Based on my knowledge,
        the financial statements, and other financial information included in
        this report, fairly present in all material respects the financial condition,
        results of operations and cash flows of the registrant as of, and for,
        the periods presented in this report;                   
| |     |                                                                                                                                                                                                                                                                                                                                           
| | (4) | The registrants
        other certifying officer(s) and I are responsible for establishing and
        maintaining disclosure controls and procedures (as defined in Exchange
        Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                           
| |     | (a)                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                           
| |     | (b)                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                           
| |     | (c)                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                           
| |     | (d)                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                           
| | (5) | The registrant's other
        certifying officer(s) and I have disclosed, based on our most recent
        evaluation of internal control over financial reporting, to the registrant's
        auditors and the audit committee of the registrant's board of directors
        (or persons performing the equivalent functions):        
| |     |                                                                                                                                                                                                                                                                                                                                           
| |     | (c)                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                           
| |     | (d)                                                                                                                                                                                                                                                                                                                                       

|Date: April 30, 2004 |                                           
|-------------------- | ------------------------------------------
|                     |                                           
|                     | (s) Claude Mongeau                        
|                     |                                           
|                     | Claude Mongeau                            
|                     | Executive Vice-President
        and Chief
|                     | Financial Officer                         

---

CEO AND CFO SECTION 906 CERTIFICATION



April 30, 2004

Securities and Exchange Commission
  450 Fifth Street, N.W Washington, D.C. 20549

Ladies and Gentlemen:

The certification
    set forth below is being submitted to the Securities and Exchange Commission
    for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the
    Exchange Act of 1934 (the Exchange Act) and Section 1350 of Chapter
    63 of Title 18 of the United States Code.

E. Hunter Harrison,
    President and Chief Executive Officer, and Claude Mongeau, Executive Vice-President
    and Chief Financial Officer, of Canadian National Railway Company, each certifies
    that, to the best of his knowledge:

| | 1. | the Report fully complies
        with the requirements of Section 13(a) or 15(d) of the Exchange Act;
        and                                                                        
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                           
| | 2. | the information contained
        in the Report fairly presents, in all material respects, the financial
        condition and results of operations of Canadian National Railway Company.



|(s) E. Hunter Harrison                | (s) Claude Mongeau          
|------------------------------------- | ----------------------------
|                                      |                             
|E. Hunter Harrison                    | Claude Mongeau              
|President and Chief Executive Officer | Executive Vice-President and
|                                      | Chief Financial Officer     

---

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 COMPANYBy:
      (s) Sean FinnName:
      Sean FinnTitle:
      Senior Vice-President Public Affairs, ChiefLegal Officer and Corporate SecretaryDate:
      April 30th, 2004


---

EXHIBIT INDEX



|Exhibit No. | Description                                                                                                                                                                                                       
|----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |                                                                                                                                                                                                                   
|99.1        | 2003 Consolidated Financial Statements
        (pages 50 through 72 (U.S. GAAP) and pages 94 through 117 (Canadian GAAP)
        of the 2003 Annual Report)*                                                      
|            |                                                                                                                                                                                                                   
|99.2        | Managements Discussion and
        Analysis of Financial Condition and Results of Operations (pages 31 through
        48 (U.S. GAAP) and pages 74 through 92 (Canadian GAAP) of the 2003 Annual
        Report)*
|            |                                                                                                                                                                                                                   
|99.3        | Management Proxy Circular for the
        Annual Meeting of Shareholders on April 22, 2004 (pages 4 through 9 (Election
        of Directors))*                                                                   
|            |                                                                                                                                                                                                                   
|99.4        | Auditors Consent                                                                                                                                                                                                 

____________*Incorporated by reference to the Registrants
  Report on Form 6-K dated March 23, 2004.