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UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 40-F
¨ REGISTRATION
STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x ANNUAL
REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| For the fiscal year ended: December 31, 2024 |
Commission File Number: 1-2413 |
CANADIAN
NATIONAL RAILWAY COMPANY
(Exact
name of registrant as specified in its charter)
| Canada |
4011 |
98-0018609 |
(Province
or other jurisdiction of
incorporation or organization) |
(Primary
Standard Industrial
Classification Code Number) |
(I.R.S.
Employer
Identification No.) |
| |
|
|
| |
935
de La Gauchetiere Street West |
|
| |
Montreal,
Quebec |
|
| |
Canada
H3B 2M9 |
|
| |
(514)
399-7091 |
|
| (Address
and telephone number of Registrant’s principal executive offices) |
| |
| C
T Corporation System |
| 28
Liberty Street |
| New
York, New
York 10005 |
| (212)
894-8940 |
(Name,
address (including zip code) and telephone number (including area code) of agent for service in the
United States) |
Securities
registered pursuant to Section 12(b) of the Act:
| Title of each
class |
Trading Symbol(s) |
Name of each
exchange on which registered |
| Common
shares |
CNI |
New
York Stock Exchange |
| |
CNR |
Toronto Stock Exchange |
Securities
registered pursuant to Section 12(g) of the Act: None
Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act:
2.75% notes due March 1, 2026
6.90% notes due July 15, 2028
7.38% debentures due October 15, 2031
3.85% notes due August 5, 2032
5.85% notes due November 1, 2033
6.25% notes due August 1, 2034
4.375% notes due September 18, 2034
6.20% notes due June 1, 2036
6.712% Puttable Reset Securities (PURS)SM
due July 15, 2036
6.375% debentures due November 15, 2037
3.50% notes due November 15, 2042
4.50% notes due November 7, 2043
3.20% notes due August 2, 2046
3.65% notes due February 3, 2048
4.45% notes due January 20, 2049
2.45% notes due May 1, 2050
4.40% notes due August 5, 2052
6.125% notes due November 1, 2053
7.70% 100-year debentures due September 15, 2096
For
annual reports, indicate by check mark the information filed with this Form:
| x
Annual information form |
¨
Audited annual financial statements |
Indicate
the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered
by the annual report:
At
December 31, 2024, 628,834,857
common shares were issued and outstanding.
Indicate
by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.
Yes
x No
¨
Indicate
by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant
was required to submit such files).
Yes
x No
¨
Indicate
by check mark whether the Registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
Emerging
growth company ¨
If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ¨
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. x
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ¨
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ¨
Auditor
Name: KPMG LLP |
Auditor
Location: Montreal,
Quebec, Canada |
Auditor
Firm ID: 85 |
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The United States Securities
and Exchange Commission (the “Commission”) defines “disclosure controls and procedures” as controls and other
procedures of an issuer that are designed to ensure that information required to be disclosed by an issuer in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s
rules and forms.
After evaluating the effectiveness
of Canadian National Railway Company’s disclosure controls and procedures as of the end of the fiscal year covered by this report,
Canadian National Railway Company’s President and Chief Executive Officer (the “CEO”) and its Executive Vice President
and Chief Financial Officer (the “CFO”) have concluded that Canadian National Railway Company’s disclosure controls
and procedures were effective as of the end of the fiscal year covered by this report.
Management’s Annual Report on Internal Control over Financial
Reporting
The report of management
on our internal control over financial reporting is located under the heading “Management’s Report on Internal Control Over
Financial Reporting” in our audited consolidated financial statements, which are filed as Exhibit 99.2 to this annual report
on Form 40-F, and is incorporated by reference herein.
Attestation Report of the Registered Public Accounting Firm
The attestation report on
our internal control over financial reporting is located under the heading “Report of Independent Registered Public Accounting
Firm” in our audited consolidated financial statements, which are filed as Exhibit 99.2 to this annual report on Form 40-F,
and is incorporated by reference herein.
Changes in Internal Control Over Financial Reporting
During the year ended December 31,
2024, there was no change in Canadian National Railway Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, Canadian National Railway Company’s internal control over financial reporting.
AUDIT COMMITTEE FINANCIAL EXPERT
The Registrant’s board
of directors has determined that it has more than one audit committee financial expert serving on its Audit, Finance and Risk Committee.
Ms. Margaret McKenzie has been determined to be an audit committee financial expert and is independent, as that term is defined
by the New York Stock Exchange’s listing standards applicable to U.S. companies. The SEC has indicated that the designation or
identification of Ms. McKenzie as an audit committee financial expert does not deem her an “expert” for any purpose,
impose any duties, obligations or liability on Ms. McKenzie that are greater than those imposed on members of the audit committee
and board of directors who do not carry this designation or identification, or affect the duties, obligations or liability of any other
member of the audit committee or board of directors.
CODE OF ETHICS
The Registrant has adopted
a code of ethics (the “Code of Business Conduct”) that applies to all employees and officers, including its principal executive
officer, principal financial officer and principal accounting officer. The Code of Business Conduct is available at the Registrant’s
Internet website, www.cn.ca, under the caption “Delivering Responsibly / Governance.” Any amendments to the Code of Business
Conduct will be posted at the Registrant’s Internet website at the address listed above.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information relating to principal
accountant fees and services is set forth under the heading “Auditors’ Fees” in Item 9.2 of the Registrant’s
2024 annual information form included in this Form 40-F.
OFF BALANCE SHEET ARRANGEMENTS
The information provided
under the heading “Off balance sheet arrangements” set forth in the 2024 Management’s Discussion and Analysis filed
as Exhibit 99.1 to this annual report on Form 40-F is incorporated by reference herein.
CONTRACTUAL AND OTHER OBLIGATIONS
The information provided
under the heading “Liquidity and capital resources” set forth in the 2024 Management’s Discussion and Analysis filed
as Exhibit 99.1 to this annual report on Form 40-F is incorporated by reference herein.
IDENTIFICATION OF THE AUDIT COMMITTEE
The members of the Audit,
Finance and Risk Committee are set forth under the heading “Composition of the AFR Committee” in Item 9.2 of the Registrant’s
2024 annual information form included in this Form 40-F.
MINE SAFETY DISCLOSURE
Not applicable.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS
THAT PREVENT INSPECTIONS
Not applicable.
CORPORATE GOVERNANCE PRACTICES
The Registrant’s board
of directors has reviewed the Registrant’s corporate governance practices in response to the U.S. Sarbanes-Oxley Act of 2002, applicable
rules of the U.S. Securities and Exchange Commission, as well as the NYSE Corporate Governance Standards (the “NYSE Standards”).
Except as disclosed on its website, the Registrant’s corporate governance practices do not differ significantly from that followed
by U.S. domestic companies under the NYSE Standards. A discussion of differences is available at the Registrant’s Internet website,
www.cn.ca under the caption “Delivering Responsibly / Governance”.
UNDERTAKING
Registrant undertakes to
make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly,
when requested to do so by the Commission staff, information relating to the securities in relation to which the obligation to file an
annual report on Form 40-F arises; or transactions in said securities.
CANADIAN NATIONAL
RAILWAY COMPANY
2024
ANNUAL INFORMATION FORM
February 4, 2025
2024 Annual Information Form
| ITEM 1 |
GENERAL
INFORMATION AND FORWARD-LOOKING STATEMENTS |
Except as otherwise indicated in this Annual
Information Form (AIF), the information contained herein is given as of December 31, 2024. As used herein, references to the "Company"
or "CN", or "we" or "us", refer to Canadian National Railway Company and, as the context
requires, its wholly-owned subsidiaries.
All references in this AIF to "dollars"
or "$" are to Canadian dollars and all financial information reflected herein is determined on the basis of, and prepared in
accordance with, United States generally accepted accounting principles (GAAP), unless otherwise indicated.
Certain statements included in this AIF or incorporated
by reference herein are "forward-looking statements" within the meaning of the United States Private Securities Litigation
Reform Act of 1995 and under Canadian securities laws, including statements based on management’s assessment and assumptions
and publicly available information with respect to CN. By their nature, forward-looking statements involve risks, uncertainties and assumptions.
CN cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable
at the time they were made, subject to greater uncertainty. Forward-looking statements may be identified by the use of terminology such
as "believes", "expects", "anticipates", "assumes", "outlook", "plans", "targets"
or other similar words.
Forward-looking statements are not guarantees
of future performance and involve risks, uncertainties and other factors which may cause actual results, performance or achievements
of CN to be materially different from the outlook or any future results, performance or achievements implied by such statements. Accordingly,
readers are advised not to place undue reliance on forward-looking statements. Important risk factors that could affect the forward-looking
statements include, but are not limited to, general economic and business conditions, including factors impacting global supply chains
such as pandemics and geopolitical conflicts and tensions; industry competition; inflation, currency and interest rate fluctuations;
changes in fuel prices; legislative and/or regulatory developments; compliance with environmental laws and regulations; actions by regulators;
increases in maintenance and operating costs; security threats; reliance on technology and related cybersecurity risk; trade restrictions,
trade barriers, or the imposition of tariffs or other changes to international trade arrangements; transportation of hazardous materials;
various events which could disrupt operations, including illegal blockades of rail networks, and natural events such as severe weather,
droughts, fires, floods and earthquakes; climate change; labor negotiations and disruptions; environmental claims; uncertainties of investigations,
proceedings and other types of claims and litigation; risks and liabilities arising from derailments; timing and completion of capital
programs; the availability of and cost competitiveness of renewable fuels and the development of new locomotive propulsion technology;
reputational risks; supplier concentration; pension funding requirements and volatility; and other risks detailed from time to time in
reports filed by CN with securities regulators in Canada and the United States (U.S.). Reference should be made to the discussion
of business risks in CN’s 2024 Management’s Discussion and Analysis (MD&A) for detailed information on major risk
factors. The MD&A may be found online on SEDAR+ at www.sedarplus.ca, on the U.S.
Securities and Exchange Commission’s (SEC) website at www.sec.gov through
EDGAR, and on CN’s website at www.cn.ca in the "Investors" section.
CN has sustainability-related commitments
and climate goals, and continues to assess the impact on its operations of related initiatives, plans and proposals that CN and
other stakeholders (including government, regulatory and other bodies) are pursuing in relation to climate change and carbon
emissions. The achievement of CN’s climate goals is subject to several risks and uncertainties, including those disclosed in
the section entitled “Reputation” in the Business risks discussion located on pages 66 to 67 of the MD&A. The
achievement of these goals is also subject to circumstances outside of the Company’s control, including the availability and
cost competitiveness of renewable fuels and the development and availability of new technologies, such as alternative propulsion
locomotive technologies, and the cooperation of third parties such as suppliers, customers, supply chain partners and
2024 Annual Information Form
regulators. While the Company currently believes its goals are reasonably achievable,
there can be no certainty that the Company will achieve any or all of these goals within the stated timeframe, or that achieving any
of these goals will meet all of the expectations of its stakeholders or applicable legal requirements. If the Company is unable to achieve
its climate goals or satisfy the expectations of its stakeholders, its brand and reputation could be materially and adversely affected.
Forward-looking statements reflect information
as of the date on which they are made. CN assumes no obligation to update or revise forward-looking statements to reflect future events,
changes in circumstances, or changes in beliefs, unless required by applicable securities laws. In the event CN does update any forward-looking
statement, no inference should be made that CN will make additional updates with respect to that statement, related matters, or any other
forward-looking statement.
Other than in instances where CN specifically
provides otherwise, information contained on, or accessible through, our website is not incorporated by reference in this AIF.
2024 Annual Information Form
| 2.1 | INCORPORATION
OF THE ISSUER |
CN was incorporated in 1919 by special act of
the Parliament of Canada with the appointment of its first Board of Directors (Board of Directors) by Order in Council in 1922.
CN’s continuance under the Canada Business Corporations Act was authorized by the CN Commercialization Act and was
effected by Certificate of Continuance dated August 24, 1995. On November 9, 1995, CN filed Articles of Amendment in order to subdivide
its outstanding common shares (common shares). As of November 28, 1995, CN ceased to be a Crown corporation and became a
publicly held corporation with its common shares listed on the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX).
On April 19, 2002, CN filed Articles of Amendment in order to provide that shareholder meetings may be held at certain specified
places in the U.S. Pursuant to amendments to the CN Commercialization Act, on May 24, 2018, CN filed Articles of Amendment in
order to increase the maximum percentage of voting shares of CN that can be owned or controlled, directly or indirectly, by any one person
together with their associates to 25%, up from the 15% limit imposed since CN became a public company in 1995. Such constating documents
are hereinafter collectively referred to as the Articles.
CN’s Articles provide that the head office
of the Company shall be situated in the Montreal Urban Community, Province of Quebec, Canada. The Company’s registered and head
office is located at 935 de La Gauchetière Street West, Montreal, Quebec, H3B 2M9, Canada, and its telephone number is 1-888-888-5909.
CN’s principal subsidiaries as of December
31, 2024, all of which are wholly-owned (directly or indirectly), and their jurisdiction of incorporation, are indicated below:
| Corporate
Entity |
Jurisdiction
of Incorporation |
| North
American Railways, Inc. |
Delaware |
| Grand
Trunk Corporation |
Delaware |
| Illinois
Central Corporation |
Delaware |
| Illinois
Central Railroad Company |
Illinois |
| Wisconsin
Central Ltd. |
Delaware |
The financial statements of each of the above
principal subsidiaries are consolidated within CN’s financial statements.
| ITEM 3 |
GENERAL
DEVELOPMENT OF THE BUSINESS |
For a discussion of the Company’s business
strategy throughout 2024 and anticipated developments for 2025 and beyond, please see the section entitled "Strategy overview"
on pages 9 to 12 of the MD&A, which pages are incorporated by reference herein. The MD&A may be found online on SEDAR+ at www.sedarplus.ca,
on the SEC’s website at www.sec.gov through EDGAR, and on the Company’s website at www.cn.ca in the "Investors" section.
2024 Annual Information Form
Strategic Initiatives
CN’s purpose is to power the economy by
enabling global supply chains and moving goods sustainably and efficiently, working together with our customers, our people, and the
communities in which we operate. CN is committed to delivering a safe, consistent and reliable scheduled service that creates value for
customers, shareholders and stakeholders. CN’s "make the plan, run the plan, sell the plan" operating approach has driven
strong operational, safety, and customer service outcomes.
CN aims to drive consistent shareholder returns
and earnings growth over the long-term by striving for sustainable financial performance, including profitable top-line growth, strong
free cash flow generation and return on invested capital well above the Company’s cost of capital. CN also returns value to shareholders
through dividend payments and share repurchases.
Build service excellence, grow our business and invest in our
people
CN will continue to focus on sustaining and building
service excellence, growing the business and developing our people. Providing reliable and efficient customer service is the foundation
for growth. CN aims to leverage its strong customer service and operating efficiency of rail to grow the business profitably. CN continues
to invest in the safety and fluidity of the network, and in increasing capacity to cost effectively grow volumes. CN is also investing
to drive incremental fuel and carbon efficiency and to improve network resiliency. Critical to CN’s long-term success are also
the people investments being made to ensure an optimal workforce with the right skills and leadership capabilities is available to meet
the challenges of tomorrow.
Disciplined capital allocation and execution
CN's success depends on a steady stream of capital
investments that are aligned with and support its business strategy. These investments cover a wide range of areas, from track infrastructure
and rolling stock to information and operating technologies, as well as other equipment and assets that are intended to improve the safety,
efficiency, capacity and reliability of CN's service offering. Investments in track infrastructure are designed to enhance the safety
and integrity of the physical plant, increase the capacity and fluidity of the network, promote service excellence, and support growth.
New locomotives equipped with distributed power capability increase capacity, fuel and carbon productivity and efficiency, and improve
service reliability, particularly in cold weather, while improving train handling and safety. Targeted railcar acquisitions aim to tap
growth opportunities, complementing the fleet of privately owned railcars that traverse CN's network. CN is also investing in various
technologies to improve operational productivity, enable automation in various areas and improve the customer experience. CN's long-term
economic viability depends on the presence of a supportive regulatory and government policy environment that encourages investment and
innovation.
The multi-year implementation of CN’s strategic
plan requires a disciplined, analysis-driven approach to capital investment and a focus on deploying capital as efficiently as possible.
Talent, technology and capital need to be fully aligned. The Company’s capital investment roadmap includes several core elements:
| • | Investing in the maintenance of a safe
and reliable network. |
| • | Investing in asset infrastructure to
increase the capacity of its three-coast network. |
| • | Developing a portfolio approach to technology
with business-led investment decisions, delivering value at each stage of implementation. |
| • | Deepening supply chain partnerships with
its customers, including road-to-rail conversion. |
| • | Investing in data analytic systems, including
artificial intelligence, to support data-driven decision-making. |
| • | Investing in technologies and capital
assets to support decarbonization of its footprint. |
| • | Growing its physical and commercial reach through strategic partnerships
and acquisitions. |
2024 Annual Information Form
Delivering Responsibly
Sustainability is at the heart of how CN is building
for the future. Delivering Responsibly is the encapsulation of the Company’s sustainability strategy and commitments. The Company
is focused on transporting goods safely and efficiently, doing so in a manner that seeks to minimize the impact on the environment, attracting,
retaining and engaging top talent, and helping to build stronger, safer communities, while adhering to the highest governance standards.
CN understands that transparency is essential for stakeholder trust concerning the Company’s sustainability commitments. In that
regard, CN seeks to align its sustainability disclosures with global best practice frameworks, reporting on commitments and performance
with focus, clarity and comparability. In 2024, CN published its annual sustainability data supplement report, disclosing the Company's
key sustainability performance indicators and progress towards its goals. CN is proud of its 2024 accomplishments including earning a
placement on the Corporate Knights list of Canada’s Best Corporate Citizens for the 16th year in a row as well as announcing that
CN’s science-based net-zero by 2050 goal was approved by the Science Based Targets initiative. Additionally, the Company's sustainability
practices earned it a place on the Dow Jones Sustainability World and North American Indices, for the 13th and 16th
consecutive year, respectively.
Safety is a core value
CN is committed to the health and safety of its
employees, the communities and environments in which it operates and the customers it serves. The Company embraces a values-based safety
culture. CN’s objective is to reduce serious injuries and fatalities. The Company is employing advanced technologies and innovative
training to help achieve this goal. More specifically, CN is:
| • | Fostering an engaged workforce that understands
and respects Life Critical Rules. |
| • | Embedding a mindset whereby employees
take ownership for their own safety and the safety of others by Looking Out for Each Other. |
| • | Implementing Behavior-Based Training
to encourage proactive safety behaviors, focused on the importance strong leadership plays
in establishing the safety culture in the workplace. The culture that is created influences
the level of exposure for employees. |
| • | Assessing and addressing its Safety Culture
to reach a level where employees actively evolve and improve safety procedures. |
| • | Ensuring customer safety through communication
procedures and safety resources on critical safety practices. |
| • | Training employees on Risk Reduction
to ensure they understand Serious Injury/Fatality potential injuries and how to mitigate
them. |
| • | Adopting a Fatigue Risk Management Program
to provide employees with knowledge and tools necessary to understand the cause and risk
of fatigue. |
| • | Training employees to identify and mitigate
exposures through scenario-based methodologies and through advanced technologies, including
Virtual Reality. |
| • | Providing new hire employees ergonomic
training through available exercise programs. |
| • | Using advanced technologies to proactively
mitigate human error and reduce risk. |
| • | Maintaining reliable and safe equipment
and infrastructure. |
| • | Investing in employee training, coaching,
recognition and engagement initiatives. |
| • | Carrying out a targeted risk-based audit
program. |
Tackling the impact of climate change
The Company's goal is to conduct its operations
in a way that seeks to minimize environmental impact, while offering a carbon-efficient and sustainable way to move goods. CN is focused
on making a positive contribution in the fight against climate change and playing a key role in the transition to a lower-carbon economy.
2024 Annual Information Form
With 87% of its direct greenhouse gas (GHG)
emissions generated from rail operations, CN focuses on five key strategic areas in the view of reducing GHG emissions: fleet renewal,
innovative technology, big data, operating practices and cleaner fuels. Over the years, this focus has resulted in significant progress
in decoupling CN's volume growth from locomotive carbon emissions intensity. CN also continues to remain a leader in locomotive fuel
efficiency among Class I North American railways, consuming approximately 15% less locomotive fuel per gross ton mile than the industry
average. CN aims to reduce GHG emissions in line with the Paris Agreement and in 2024, received approval for its science-based net-zero
goal from the Science Based Targets initiative.
To achieve its decarbonization goals, CN will
need to continue improving the fuel efficiency of its fleets, increase its use of sustainable renewable fuels and test, and eventually
deploy alternative propulsion locomotive technologies. Collaboration with suppliers, customers, supply chain partners, innovators and
regulators is critical for CN to deliver on its climate commitments and to help drive economic prosperity in a lower-carbon emissions
environment.
Building the talent and culture to drive
CN's continuous performance
CN aims to attract, develop, and retain the best
talent, building a workforce that embodies the values we firmly believe in. We aim to cultivate an inclusive work environment where all
employees feel valued, engaged, and motivated. We train our people with the necessary skills to remain competitive and at the forefront
of innovation.
Community engagement
At CN, we are committed to leading responsibly.
By being good neighbors who listen, learn, and do our part to help build safer, stronger, more prosperous communities, we acknowledge
the impact we have on all our stakeholders. Connecting Canada’s Eastern and Western coasts with the U.S. Gulf Coast, CN spans eight
provinces, 16 states, and operates within or adjacent to nearly 230 reserve lands of more than 120 First Nations and Métis communities
in Canada, seven Tribal communities in the U.S., and more than 2,000 towns and cities across its network. CN plays an essential role
and contributes to economic prosperity through job creation, investments and freight transportation services. The Company seeks open
and proactive engagement to ensure stakeholders and Indigenous communities are aware of its strategy, operations, opportunities and obligations,
and aims to foster effective two-way communications that ensure a respectful and beneficial exchange.
CN also partners with communities to enhance
railway safety. Under CN's Structured Community Engagement Program, the Company engages with municipal officers and their emergency responders
to assist them in their emergency response planning. During this frequent outreach, CN discusses its comprehensive safety programs and
performance, the nature, volume and economic importance of dangerous goods it transports through their communities and emergency response
planning. CN annually conducts hundreds of training events for thousands of emergency responders, totaling over 135,000 first responders
since 1988. Additional training sites have been constructed to offer onsite full scale dangerous goods training. Training activities
are also supported by annual spill drill exercises, engaging local first responders and agencies, in addition to stakeholders and rightsholders,
while building resiliency within CN’s response contractor and sub-contractor network.
This outreach builds on CN's involvement in Transportation
Community Awareness and Emergency Response (TRANSCAER®), through which the Company has been working for many years to help communities
in Canada and the U.S. understand the movement of hazardous materials and what is required in the event of transportation incidents.
All Aboard for Safety is CN’s flagship community education program. Every year, CN employees make hundreds of presentations and
talk to thousands of children and adults at schools and community events in Canada and the U.S. about the importance of rail safety and
the dangers of walking or playing on or near railway tracks.
2024 Annual Information Form
CN is committed to fostering sustainable communities
through strategic financial contributions to hundreds of grassroots, regional and national non-profit organizations across our North
American footprint. We actively partner with organizations and provide funding to support causes that align with CN core values and resonate
with our railroaders. These include disaster relief; mental health initiatives; inclusive workplaces and environments; poverty; and environmental
stewardship. For example, in 2024 CN announced a commitment of $10 million to support disaster relief efforts across our network through
annual partnerships with the Red Cross and Team Rubicon.
We take immense pride in our employees, retirees,
and their families who volunteer to make their communities better places to live, work and play. The CN Railroaders in the Community
program recognizes these efforts by providing donations to community-based non-profit organizations supported by our volunteers.
Working alongside Indigenous communities, CN
makes it a priority to strengthen its ties, cultivate respectful and mutually beneficial relationships, and work toward reconciliation.
Over the past year, significant progress has been made in advancing Indigenous relations. We have publicly acknowledged the complex history
of railways and the role they played as instruments of colonial policies. Early in 2024, CN published its first Indigenous Relations
Policy, and in November 2024 adopted and published its first Indigenous Reconciliation Action Plan (IRAP). The IRAP will guide
CN’s reconciliation efforts. These steps reflect our dedication to meaningful change and reconciliation. For a further discussion
on our Indigenous Relations Policy and the IRAP, please refer to the section entitled "Social Policies – Indigenous Relations
Policy" beginning on page 16 of this AIF.
| 3.2 | GENERAL
DEVELOPMENTS OVER THE PAST THREE YEARS |
CN has undertaken various initiatives over the
course of the last three years to continuously further the general development of its business, including acquisitions and business combinations,
financial management initiatives, and other corporate initiatives, as further described below.
Significant transactions
Acquisition of Iowa Northern Railway Company
On December 6, 2023, the Company acquired the
shares of the Iowa Northern Railway Company (IANR), a Class III short-line railroad that owns and leases approximately 175 route
miles in northeast Iowa that are connected to CN’s U.S. rail network. CN paid US$230 million ($312 million), including transaction
costs to date. IANR serves upper Midwest agricultural and industrial markets covering many goods, including biofuels and grain. This
transaction represents a meaningful opportunity to support the growth of local business by creating single-line service to North American
destinations, while preserving access to existing carrier options.
The shares of IANR were deposited into an independent
voting trust while the U.S Surface Transportation Board (STB) considered the Company's application to acquire control of IANR.
During the trust period, IANR continues to be operated under its current management and the Company cannot exercise day-to-day control.
On January 14, 2025, the STB issued a final decision
approving CN’s application to acquire control of IANR, subject to certain conditions, with an effective date of 30 days thereafter.
CN will assume control of IANR during the first quarter of 2025.
2024 Annual Information Form
Cape Breton & Central Nova Scotia Railway
On November 1, 2023, the Company acquired from
Genesee & Wyoming Inc. a stake in the Cape Breton & Central Nova Scotia Railway, a Class III short-line railroad that owns approximately
150 route miles. CN paid $78 million in cash, net of cash acquired and including working capital adjustments.
Financial management initiatives
Revolving credit facilities
The Company has two unsecured revolving credit
facilities with a consortium of lenders. The unsecured credit facility of $2.5 billion is available for general corporate purposes and
backstopping the Company's commercial paper programs. The facility consists of two tranches of $1.25 billion and was last amended on
March 28, 2024 to extend the tenor of each tranche by one year to, respectively, March 31, 2027 and March 31, 2029. This revolving credit
facility agreement is structured as a sustainability linked loan whereby its applicable margins are adjusted up or down based on the
Company's performance under certain sustainability goals. The unsecured credit facility of $1.0 billion was entered into on March 18,
2022, is available for general corporate purposes, and was amended on March 28, 2024 to extend its tenor by one year to March 17, 2026.
The $2.5 billion credit facility was amended
in March 2022 to transition the benchmark on U.S. borrowings from the London Interbank Offered Rate (LIBOR) to the Secured Overnight
Financing Rate (SOFR). Both credit facilities were amended in March 2023 to include fallback language that addresses the cessation
of Canadian Dollar Offered Rate (CDOR) and adoption of the Canadian Overnight Repo Rate Average (CORRA) as the alternative
benchmark. Accordingly, on March 28, 2024, the Company amended both credit facilities to transition from CDOR to CORRA. The credit facilities
provide borrowings at various benchmark interest rates, such as SOFR and CORRA, plus applicable margins, based on CN's credit ratings.
Subject to the consent of the individual lenders,
the Company has the option to increase the revolving credit facilities by an additional $500 million each during their terms and to request
an extension of the $2.5 billion credit facility once a year to maintain the tenors of three year and five year of the respective tranches.
Both revolving credit facility agreements have
one financial covenant, which limits debt as a percentage of total capitalization. As at December 31, 2024, the Company was in compliance
with its financial covenant and had no outstanding borrowings under these revolving credit facilities.
Equipment loans
The Company has various secured non-revolving
term loan credit facilities for financing or refinancing the purchase of equipment. The equipment loans made under the non-revolving
credit facilities have a tenor at inception varying from 15 to 20 years and are secured by rolling stock.
On March 31, 2023, the Company entered into new
loan supplements to its existing agreement for an additional principal amount of US$304 million, which was available to be drawn, in
Canadian or U.S. dollars, through March 31, 2024. The Company drew on such facilities on March 22, 2024.
In addition, on November 3, 2023, the Company
entered into a new term loan facility for a principal amount of $366 million, which was available to be drawn through November 4, 2024.
The Company drew on such facility on October 29, 2024.
On March 31, 2023, outstanding loans referencing
LIBOR were transitioned to SOFR. The facilities also included fallback language that addressed the cessation of CDOR and adoption of
CORRA as the
2024 Annual Information Form
alternative benchmark and accordingly, on March 21, 2024, the Company amended certain of its non-revolving term loan facilities
to transition from CDOR to CORRA. Borrowings under the non-revolving term loan facilities are provided at SOFR or CORRA plus applicable
margins.
The Company repaid $63 million, $41 million and
US$31 million ($40 million) of its equipment loans in 2024, 2023 and 2022, respectively. As at December 31, 2024, the Company had outstanding
borrowings of $1,449 million, at a weighted-average interest rate of 4.79% and had no further amounts available to be drawn under these
facilities.
Commercial paper
The Company has a commercial paper program in
Canada and in the U.S. Both programs are backstopped by the Company's $2.5 billion revolving credit facility. The maximum aggregate principal
amount of commercial paper that can be issued is $2.5 billion, or the U.S. dollar equivalent, on a combined basis. The commercial paper
programs, which are subject to market rates in effect at the time of financing, provide the Company with a flexible financing alternative,
and can be used for general corporate purposes. The cost of commercial paper and access to the commercial paper market in Canada and
the U.S. are dependent on credit ratings and market conditions. If the Company were to lose access to its commercial paper program for
an extended period of time, the Company could rely on its revolving credit facilities to meet its short-term liquidity needs.
The Company had total commercial paper borrowings
of US$501 million ($721 million), US$1,360 million ($1,801 million) and US$594 million ($805 million) as at December 31, 2024, 2023 and
2022, respectively.
Accounts receivable securitization program
The Company has an agreement to sell an undivided
co-ownership interest in a revolving pool of accounts receivable to unrelated trusts for maximum cash proceeds of $450 million. On March
20, 2024, the Company extended the term of its agreement by one year to February 2, 2026. The trusts are multi-seller trusts and the
Company is not the primary beneficiary. Funding for the acquisition of these assets is customarily through the issuance of asset-backed
commercial paper notes by the unrelated trusts.
The Company has retained the responsibility for
servicing, administering and collecting the receivables sold. The average servicing period is approximately one month and the interest
on borrowings under the accounts receivable securitization program is renewed based on commercial paper rates then in effect, or CORRA
or SOFR if the commercial paper market is inaccessible. Subject to customary indemnifications, each trust's recourse is limited to the
accounts receivable transferred.
The accounts receivable securitization program
provides the Company with readily available short-term financing for general corporate use. 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 facilities and commercial paper program, and/or access to capital markets.
During the year ended December 31, 2024, the
Company had proceeds from the accounts receivable securitization program of $450 million and repayments of $450 million and had no outstanding
borrowings under the accounts receivable securitization program.
Bilateral letter of credit facilities
The Company has a series of committed and uncommitted
bilateral letter of credit facility agreements. On March 28, 2024, the Company extended the maturity date of its committed bilateral
letter of credit facility agreements to April 28, 2027. The agreements are held with various banks to support the Company's requirements
to post letters of credit in the ordinary course of business. Under these agreements, the Company has the option from time to time to
pledge collateral in the form of cash or cash equivalents, for
2024 Annual Information Form
a minimum term of one month, equal to at least the face value of the letters
of credit outstanding.
As at December 31, 2024, the Company had outstanding
letters of credit of $329 million under the committed facilities from a total available amount of $366 million and $142 million under
the uncommitted facilities, and had no amounts pledged as collateral under the committed bilateral letter of credit facilities, and no
amounts pledged as collateral under the uncommitted bilateral letter of credit facilities.
Normal Course Issuer Bid (NCIB)
On January 25, 2022, the Board of Directors approved
a NCIB for the repurchase of up to 42.0 million common shares over a twelve-month period, between February 1, 2022 and January 31, 2023.
On January 24, 2023, the Board of Directors
approved a NCIB for the repurchase of up to 32.0 million common shares between February 1, 2023 and January 31, 2024.
On January 23, 2024, the Board of Directors approved
a NCIB for the repurchase of up to 32.0 million common shares between February 1, 2024 and January 31, 2025.
On
January 30, 2025, the Board of Directors approved a new NCIB, which allows for the repurchase of up to 20.0 million common shares
between February 4, 2025 and February 3, 2026.
| 3.3 | OTHER
DEVELOPMENTS BY YEAR IN THE PAST THREE YEARS |
In addition to the general developments described
in Section 3.2 of this AIF under the heading "General Developments Over the Past Three Years", other developments specific to
particular years in the past three years have also occurred and are described hereinafter.
2024 Highlights
Reinvestment in the business
In 2024, CN spent approximately $3.5 billion
in its capital program, of which $1.7 billion was invested to maintain the safety and integrity of its network, particularly track infrastructure.
CN's capital spending also included $1.0 billion for strategic initiatives to increase capacity, enable growth and improve network resiliency,
including line capacity upgrades and information technology initiatives, and $0.8 billion on equipment, including the acquisition of
750 new grain hopper cars.
Shelf prospectus and registration statement
On April 2, 2024, the Company filed a shelf prospectus
with Canadian securities regulators and a registration statement with the SEC, pursuant to which CN may issue debt securities in the
Canadian and U.S. capital markets over a 25-month period following the filing date. This shelf prospectus and registration statement
replaces CN's previous shelf prospectus and registration statement that was set to expire on June 4, 2024.
On May 2, 2024, under the shelf prospectus and
registration statement, the Company issued $700 million 4.60% Notes due 2029 and $550 million 5.10% Notes due 2054 in the Canadian capital
markets.
On September 18, 2024, under the shelf prospectus
and registration statement, the Company issued US$750 million ($1,020 million) 4.375% Notes due 2034 in the U.S capital markets.
Access to the Canadian and U.S. capital markets
under the shelf prospectus and registration statement is dependent on market conditions. The Company's access to long-term funds in the
capital markets
2024 Annual Information Form
depends on its credit ratings and market conditions. The Company believes that it continues to have access to the capital
markets. If the Company were unable to borrow funds at acceptable rates in the capital markets, the Company could borrow under its credit
facilities, draw down on its accounts receivable securitization program, access the pledged cash under its letter of credit facilities,
raise cash by disposing of surplus properties or otherwise monetizing assets, reduce discretionary spending or take a combination of
these measures to assure that it has adequate funding for its business.
For more information on the Company's capital
markets transactions completed in 2024, please refer to the section entitled "Prior Sales" on page 26 of this AIF.
Transfer of ownership of Quebec Bridge
On May 8, 2024, CN entered into an agreement
to transfer the ownership and related risks and obligations of a road, rail, and pedestrian bridge known as the Quebec Bridge located
in Quebec, Canada, to the Government of Canada for a nominal amount. On November 12, 2024, the transaction was completed. CN retains
requisite rights to occupy and operate the portion of the bridge where the rail infrastructure is located and will pay an annual occupancy
fee over a term that also includes a noncancellable period.
Labor matters
Many of our employees in Canada and the U.S.
are unionized and are covered by collective agreements. CN is involved in several ongoing negotiations concerning labor matters, including
the negotiation of new collective agreements as described below. There can be no assurance that the Company will be able to reach a tentative
agreement without a strike or lockout or that the resolution of these negotiations, or the outcome of any arbitration or litigation,
will not have a material adverse effect on the Company's results of operations or financial position.
The Company’s existing collective agreements
remain in effect until the bargaining process outlined under the Canada Labor Code or the U.S. Railway Labor Act has been exhausted.
For a further discussion of CN’s labor
negotiations, please see the section entitled "Labor workforce and negotiations" in the 2024 Highlights discussion located on
pages 7 to 8 of the MD&A, which section is incorporated by reference herein.
Ongoing negotiations - Canadian workforce
On November 27, 2023, CN commenced
negotiations with the Teamsters Canada Rail Conference (TCRC). The TCRC represents approximately 6,000 conductors, conductor
trainees, yard coordinators and locomotive engineers across CN’s network in Canada. On February 16, 2024, CN filed a Notice of
Dispute, causing the Minister of Labor to appoint a conciliator. On May 9, 2024, the Minister of Labor requested clarity from the
Canadian Industrial Relations Board (CIRB) on whether or not any services provided by TCRC-represented employees were
essential and therefore needed to be maintained during a labor disruption. On August 9, 2024, the CIRB ruled that none of those
services were essential within the meaning of the law. On August 18, 2024, CN issued a notice to the TCRC formally advising them of
its intention to lock out employees. On August 22, 2024, CN proceeded with the lockout, which was revoked less than 24 hours after,
following the Minister of Labor's direction to the CIRB to order the parties to end the lockout, return employees to work, resolve
outstanding issues in binding interest arbitration and extend the collective agreements until the arbitration process is complete.
On August 23, 2024, the TCRC served CN with a 72-hour strike notice. On August 24, 2024, the CIRB issued an order consistent with
the Minister's directive, which indicated that there can be no labor stoppage, including a lockout or strike, during the arbitration
process. Mediation meetings are scheduled to occur over seven days in March 2025. If a mediated settlement is not reached during
those seven days, arbitration will be scheduled to take place in April 2025. As per the protocol negotiated between the parties, the
arbitrator will have sixty days to rule. The TCRC has filed applications to judicially review both the Ministerial directive and
the
2024 Annual Information Form
CIRB order respectively in Federal Court and in the Federal Court of Appeal.
While there can be no assurance in that regard, it is unlikely that all outstanding litigation would be finally resolved before a binding
arbitration award.
On September 5, 2024, the International Brotherhood
of Electric Workers (IBEW) served notice to commence bargaining for the renewal of the collective agreement with the Company,
covering approximately 750 Signals and Communications employees across Canada, which expired on December 31, 2024. Bargaining commenced
on September 24, 2024. On October 29, the IBEW filed a Notice of Dispute as part of the ongoing bargaining process. The Minister of Labor
had appointed conciliation officers to assist the parties in reaching an agreement. On January 28, 2025, the parties reached a four-year
tentative agreement which is pending ratification.
Ongoing negotiations - U.S. workforce
The general approach to labor negotiations by
U.S. Class I railroads is to bargain on a collective national basis with the industry, which CN's subsidiaries Grand Trunk Western Railroad
Company, companies owned by Illinois Central Corporation, Wisconsin Central Ltd., and Bessemer & Lake Erie Railroad Company currently
participate in for collective bargaining agreements covering all union-represented employees, with the exception of two employee groups
working at Pittsburgh and Conneaut Dock Company. On November 1, 2024, the National Carriers Conference Committee served a Section 6 notice
pursuant to the Railway Labor Act, which officially opened collective bargaining for the freight industry. As of February 4, 2025,
agreements have been reached and ratified with five unions, tentative agreements have been reached with two unions, and negotiations continue
with the remaining five unions. There can be no strike or lockout until such time as negotiations enter mediation under the auspice of
the National Mediation Board (NMB), an independent federal agency that facilitates the resolution of labor disputes, the NMB releases
the parties from mediation and there is a thirty-day cooling-off period.
Collective agreements ratified during the
year - Canadian workforce
On January 17, 2024, Canadian National Transportation
Limited (CNTL), a wholly-owned subsidiary of the Company, reached a tentative agreement with owner-operators affiliated with Unifor.
On May 14, 2024, the new collective agreement with Unifor was ratified by employees of CNTL. This four-year agreement covers approximately
750 owner-operator truck drivers in Canada under contract with CNTL until December 31, 2027.
On May 1, 2024, a new collective agreement with
the United Steel Workers Union (USW) was ratified by CN employees. The three-year agreement covers approximately 2,500 track and
bridge employees primarily responsible for track maintenance across Canada until December 31, 2026.
On December 22, 2024, the new collective agreements
with Unifor were ratified by CN employees. The four-year agreements cover approximately 3,300 employees across Canada working in various
departments such as Mechanical, Intermodal, Facility Management, and in clerical positions until December 31, 2028.
2023 Highlights
Reinvestment in the business
In 2023, CN spent approximately $3.2 billion
in its capital program, of which $1.6 billion was invested to maintain the safety and integrity of its network, particularly track infrastructure.
CN's capital spending also included $0.9 billion for strategic initiatives to increase capacity, enable growth and improve network resiliency,
including line capacity upgrades and information technology initiatives, and $0.7 billion on equipment, including the acquisition of
500 new grain hopper cars.
2024 Annual Information Form
Shelf prospectus and registration statement
On May 10, 2023, under the 2022 shelf prospectus
(as defined herein), the Company issued $550 million 4.15% Notes due 2030, $400 million 4.40% Notes due 2033 and $800 million 4.70% Notes
due 2053 in the Canadian capital markets. The net proceeds of the offering were intended for general corporate purposes, which may include
the redemption and refinancing of outstanding indebtedness, share repurchases, acquisitions and other business opportunities.
On November 1, 2023, under the 2022 shelf prospectus,
the Company issued US$300 million ($416.25 million) 5.85% Notes due 2033 and US$300 million ($416.25 million) 6.125% Notes due 2053 in
the U.S capital markets. The net proceeds of the offering were intended for general corporate purposes, which may include the redemption
and refinancing of outstanding indebtedness, share repurchases, acquisitions and other business opportunities.
Labor matters
Canadian workforce
On May 1, 2023, CN's collective agreement with
Unifor was ratified by its members, renewing the collective agreement for a two-year term, retroactive to January 1, 2023. The collective
agreement expired on December 31, 2024.
On May 26, 2023, CN's collective agreement with
TCRC was ratified by its members, renewing the collective agreement for a one-year term, retroactive to January 1, 2023. The collective
agreement expired on December 31, 2023.
On September 6, 2023, the USW served notice to
commence bargaining for the renewal of the collective agreement with the Company, which expired on December 31, 2023. Bargaining commenced
on October 23, 2023.
2022 Highlights
Leadership changes
On January 25, 2022, CN announced that Tracy
Robinson was appointed as CN's President and CEO and as a member of the Board of Directors of CN, effective February 28, 2022. This appointment
followed the previously announced retirement of Jean-Jacques Ruest.
On May 20, 2022, CN announced that Shauneen Bruder
was unanimously elected by the Board of Directors as board chair, replacing Robert Pace who retired from the Board of Directors the same
day.
Reinvestment in the business
In 2022, CN spent approximately $2.75 billion
in its capital program, of which $1.60 billion was invested to maintain the safety and integrity of its network, particularly track infrastructure.
CN's capital spending also included $0.75 billion for strategic initiatives to increase capacity, enable growth and improve network resiliency,
including line capacity upgrades and information technology initiatives, and $0.40 billion on equipment, including the acquisition of
500 new grain hopper cars.
Shelf prospectus and registration statement
On May 4, 2022, the Company filed a new shelf
prospectus with Canadian securities regulators and a registration statement with the SEC, pursuant to which CN could issue up to $6.0
billion of debt securities in the Canadian and U.S. capital markets over a 25-month period following the filing date (collectively, the
2024 Annual Information Form
2022 shelf prospectus). The 2022 shelf prospectus replaced CN's previous shelf prospectus and registration statement that expired
on March 11, 2022.
On August 5, 2022, under the 2022 shelf prospectus,
the Company issued US$800 million ($1,028 million) 3.85% Notes due 2032 and US$700 million ($900 million) 4.40% Notes due 2052 in the
U.S capital markets. The net proceeds of the offering were intended for general corporate purposes, including the redemption and refinancing
of outstanding indebtedness and share repurchases.
Acquisitions
On June 7, 2022, the purchase and sale agreement
between the Company and CSX Corporation (CSX) for the acquisition of the Massena rail line in New York, which was announced on
August 29, 2019, was terminated. The Company’s appeal of the STB's decision to deny the Company and CSX’s request for the
removal of the conditional approval of the acquisition was rendered moot and the appeal was dismissed.
Labor matters
Canadian workforce
Following a binding arbitration, on October 12,
2022, the collective agreement between CN and the IBEW was finalized. The agreement expired on December 31, 2024.
On December 1, 2022, a tentative agreement was
reached between CN and TCRC for Rail Traffic Controllers for the renewal of their collective agreement. This agreement was ratified on
December 23, 2022. This is a three-year agreement expiring on December 31, 2025 and impacts approximately 160 employees.
U.S. workforce
On December 2, 2022, the round of national bargaining
between the nation’s freight railroads (including the Company) and all 12 rail unions was fully resolved when President Biden signed
legislation passed by the U.S. Congress. The legislation implemented collective bargaining agreement terms for the four unions that had
not previously ratified their agreements. These agreement terms are the same terms that previously were ratified and implemented by the
other eight rail unions. All U.S. employees in the bargaining round therefore became covered by new collective bargaining agreement terms
based on the recommendations of Presidential Emergency Board 250. The new terms increased wages by a compounded 24 percent over the five-year
term of the contract, from 2020 through 2024, with a 14.1 percent wage increase effective immediately. The agreements also included five
US$1,000 annual lump sum payments, adjustments to health care premiums, health benefit enhancements, and an additional personal leave
day for all employees.
| ITEM 4 |
DESCRIPTION
OF THE BUSINESS |
CN is engaged in the rail and related transportation
business and powers the economy by safely transporting more than 300 million tons of natural resources, manufactured products, and finished
goods throughout North America every year for its customers. With its nearly 20,000-mile rail network and related transportation services,
CN connects Canada’s Eastern and Western coasts with the U.S. Midwest and the Gulf of Mexico, contributing to sustainable trade
and the prosperity of the communities in which it operates since 1919.
2024 Annual Information Form
CN's freight revenues are derived from seven
commodity groups representing a diversified and balanced portfolio of goods transported between a wide range of origins and destinations.
This product and geographic diversity better position the Company to face economic fluctuations and enhances its potential for growth
opportunities. For the year ended December 31, 2024, CN's largest commodity group, Intermodal, accounted for 22% of total revenues. From
a geographic standpoint, 35% of revenues relate to overseas traffic, 32% to transborder traffic, 17% to Canadian domestic traffic and
16% to U.S. domestic traffic. The Company is the originating carrier for over 85%, and the originating and terminating carrier for over
65%, of traffic moving along its network, which allows it both to capitalize on service advantages and build on opportunities to efficiently
use assets.
Revenues generated by the Company during the
year are influenced, among other things, by seasonal weather conditions, general economic conditions, cyclical demand for rail transportation
and competitive forces in the transportation marketplace. Operating expenses reflect the impact of freight volumes, seasonal weather
conditions, labor costs, fuel prices, and the Company’s productivity initiatives.
For a further description of the various commodity
groups transported by CN, their principal markets, as well as select revenue, revenue ton miles and carload information, please see pages
22 to 28 of the MD&A, which pages are incorporated by reference herein.
| 4.3 | COMPETITIVE
CONDITIONS |
For a discussion of the competitive conditions
under which CN operates, please see the section entitled “Competition” in the Business risks discussion located on page 59
of the MD&A, which section is incorporated by reference herein.
As at December 31, 2024, CN employed a total
of 24,671 employees, of which 18,590 were unionized employees.
For more information on recent labor developments
within our Canadian and U.S. workforce, please see the section entitled "General Developments of the Business - Other Developments
by Year in the Past Three Years" beginning on page 10 of this AIF. For a discussion on CN’s labor negotiations, please see
the section entitled “Labor workforce and negotiations” in the 2024 Highlights discussion located on pages 7 to 8 of the
MD&A, which section is incorporated by reference herein.
CN has adopted a number of policies in support
of its commitment to Delivering Responsibly. These policies include, among others:
| • | CN's policies against workplace
harassment, violence, and discrimination; |
| • | the Code of Business Conduct; |
| • | the Supplier Code of Business Conduct;
and |
| • | CN's Indigenous Relations Policy,
adopted in 2024. |
Policies Against Workplace Harassment, Violence
and Discrimination
In addition to its Employment Equity Policy (for
Canadian employees) and Equal Employment Opportunity Policy (for U.S. employees), CN maintains a (i) comprehensive Human Rights Policy,
(ii) a Workplace Harassment and Violence Prevention Policy for its Canadian employees, and (iii) a Workplace Violence Prevention Policy
and a Prohibited Harassment, Discrimination and Anti-Retaliation Policy for its U.S.
2024 Annual Information Form
employees ((i), (ii) and (iii) collectively referred
to as the Policies). These Policies affirm CN’s commitment to providing employees with a safe, respectful and violence-free
workplace and to preventing harassment and discrimination against any employee or applicant based on grounds such as, without limitation,
religion, race, sex, nationality, disability, or any other basis protected by law, ordinance or regulation. The policies against harassment
and discrimination extend to recruitment, selection and compensation practices, as well as to working conditions and the work environment.
Internal complaint resolution procedures have
been established whereby any person covered by the Policies can contact the appropriate member of the human resources team who will address
the employee's complaint. The employee can also call either the Human Resources Center, which will forward the complaint to the appropriate
human resources manager for further handling, or the CN Ombudsman directly, who can be contacted on a confidential basis. In Canada,
all harassment complaints are submitted to CN’s Designated Recipient in accordance with the Canada Labour Code Regulations on Work
Place Harassment and Violence Prevention.
Code of Business Conduct
CN has adopted a Code of Business Conduct, which
applies to all directors, officers and employees of the Company. The Code of Business Conduct affirms CN’s commitment to ensuring
everyone working on behalf of the Company adheres to the highest ethical standards. It addresses a number of matters, including, without
limitation, conflicts of interest, compliance with laws and reporting of any illegal or unethical behavior. Each director, executive
officer and management employee must certify annually their compliance with the Code of Business Conduct. Management periodically reports
to the Governance and Sustainability Committee on the implementation of the Code of Business Conduct and, as applicable, on any significant
violations thereof. Yearly, the CN Ombudsman presents a report that summarizes issues reported under the Code of Business Conduct and
handled by the Office of the Ombudsman to the Governance and Sustainability Committee. The Code of Business Conduct is regularly reviewed,
including most recently in 2024, to ensure it continues to adhere to CN’s core values of integrity and respect and that it remains
consistent with industry standards and trends.
Supplier Code of Conduct
CN has also adopted a Supplier Code of Conduct,
which extends the principles of our Code of Business Conduct and Human Rights Policy to our suppliers, agents, consultants and other
third parties and business partners, and their respective employees, directors and officers (collectively, Suppliers). Our Supplier
Code of Conduct affirms our commitment to doing the right thing and to working with Suppliers who share our commitment to being socially,
ethically and environmentally responsible. The Supplier Code of Conduct sets forth the standards of ethical conduct expected from our
Suppliers. It aims to ensure, among other matters, that we continue to work with Suppliers who comply with all applicable laws (including
applicable employment laws, anti-bribery, anti-corruption and antitrust laws, and data protection and privacy laws and regulatory requirements),
prohibit the use of forced and child labor in their operations, promote an inclusive and safe work environment, and are conscious of
their environmental impact and focus on building positive community relations (including with Indigenous peoples) when conducting their
operations.
Indigenous Relations Policy
In early 2024, CN released its new Indigenous
Relations Policy, which builds on CN's commitment to reconciliation and Indigenous engagement and outlines CN's commitment to developing
respectful, sustainable and mutually beneficial relationships with all Indigenous peoples across its network. The Indigenous Relations
Policy sets out the guiding principles that underpin CN's approach to Indigenous reconciliation, including by increasing opportunities
for CN personnel to learn about and engage with Indigenous communities; increasing Indigenous representation, retention and promotion
in CN's workforce; actively seeking ways to provide economic benefits to Indigenous communities where CN
2024 Annual Information Form
operates; proactively engaging
with and fostering respectful and mutually beneficial relationships with Indigenous communities; and working towards protecting the environment
in which CN operates and reducing its environmental impact.
CN also published its first IRAP in November
2024, which outlines concrete steps, measurable commitments, and a clear vision to guide CN on its reconciliation journey for the period
of 2025 to 2027, in Canada, and further supports the effective implementation of the Indigenous Relations Policy.
All CN personnel are expected to follow the guidelines
set forth in the Indigenous Relations Policy when performing work for CN, and non-compliance with the Indigenous Relations Policy may
be reported by CN personnel on a confidential basis to their supervisor, their human resources representative, the CN Law Department,
or the CN Ombudsman.
CN's operations are subject to regulations both
in Canada and in the U.S. A summary of the regulations material to CN's business and operations and of recent significant regulatory
developments that are relevant to CN is provided below.
For a further discussion of the potential risks
and contemplated impacts of pending legislative and other regulatory developments (both in Canada and in the U.S.) on our business, see
the section entitled “Regulation” in the Business risks discussion located on pages 61 to 62 as well as the section entitled
"U.S. regulatory updates" in the 2024 Highlights discussion located on pages 6 to 7 of the MD&A, which sections are
incorporated by reference herein.
Economic regulation - Canada
The Company's rail operations in Canada are subject
to economic regulation by the Canadian Transportation Agency (CTA) under the Canada Transportation Act. The CTA establishes
regulations on various topics, including interswitching rates, insurance, and procedures for arbitration cases. The CTA adjudicates disputes
between a shipper and carrier, including final offer arbitration for rate disputes and level of service disputes. The CTA also regulates
the maximum revenue entitlement for the movement of regulated grain, charges for railway ancillary services, railway crossing and noise-related
disputes, and discontinuance of service over a rail line. In addition, various Company business transactions must gain prior regulatory
approval, with attendant risks and uncertainties, and the Company is subject to government oversight with respect to rate, service and
business practice issues.
Economic regulation - U.S.
The Company's U.S. rail operations are subject
to economic regulation by the STB. The STB serves as both an adjudicatory and regulatory body and has exclusive jurisdiction over certain
railroad rate and service issues, and carrier practices. It also has jurisdiction over the situations and terms under which one railroad
may use another railroad’s traffic or facilities, the construction, acquisition or abandonment of rail lines, railroad consolidations,
and labor protection provisions in connection with the foregoing. As such, various Company business transactions must gain prior regulatory
approval and aspects of its pricing and service practices may be subject to challenge, with attendant risks and uncertainties. Recent
proposals in proceedings undertaken by the STB in several significant matters remain pending as of the date hereof.
Government regulation of the railroad industry
is a significant determinant of the competitiveness and profitability of railroads. Deregulation of certain rates and services, plus
the ability to enter into confidential contracts pursuant to the Staggers Rail Act of 1980 has substantially increased the flexibility
of railroads to respond to market forces and has resulted in highly competitive rates. Additional
2024 Annual Information Form
regulation, changes in regulation and re-regulation
of the industry through legislative, administrative, judicial or other action could materially affect the Company.
Reciprocal switching
On April 30, 2024, the STB issued a final rule
for reciprocal switching for inadequate service. The STB’s new rule allows customers to obtain reciprocal switching access to an
alternate carrier in a terminal area if the incumbent railroad’s service falls below one of three objective metrics (original estimated
time of arrival, transit time, and first-mile/last-mile service) and if certain other conditions are met. Any prescribed reciprocal switching
arrangement for a facility in the U.S. would be effective for a period between three to five years and could be renewed. On May 10, 2024,
the Company and two other railroads filed a petition for review of the rule with the U.S. Court of Appeals for the Seventh Circuit. On
January 16, 2025, the Court heard oral arguments and CN is awaiting a decision as of the date hereof.
Crew size
On April 9, 2024, the Federal Railroad Administration
(FRA) issued a final rule establishing minimum requirements for the size of train crews depending on the type of operation. The
FRA's new rule requires railroad operations to have a minimum of two crew members, except in certain circumstances, including remote-control
operations. The rule includes a process to petition the FRA for special approval to operate with fewer than two crew members. The rule
became effective on June 10, 2024. The rail industry has challenged the rule as arbitrary and contrary to law in federal circuit court.
No assurance can be given that these and any
other current or future regulatory or legislative initiatives by the U.S. federal government and agencies will not materially adversely
affect the Company's results of operations or its competitive and financial position.
Safety regulation – Canada
CN's operations are also subject to safety and
environmental provisions relating to track standards, equipment standards, transportation of hazardous materials, environmental assessments
and certain labor regulations, which are in many respects similar when comparing Canadian and U.S. regulations.
In Canada, CN's rail operations are subject to
safety regulation by the Minister of Transport (Minister) under the Railway Safety Act (RSA) as well as the rail
portions of other safety-related statutes, which are administered by Transport Canada (TC). TC is also empowered to conduct
inspections, investigate, and enforce safety regulations under the RSA. The Company is often required to submit information to TC in
compliance with regulations, including applications for a railway operating certificate.
In addition, CN may be legally required to transport
dangerous goods and hazardous materials, including toxic inhalation hazard materials as a result of its common carrier obligations and,
as such, is also subject to additional regulatory oversight in Canada under the Transportation of Dangerous Goods Act (TDGA),
which is also administered by TC. The TDGA establishes the safety requirements for the transportation of goods classified as dangerous
and enables the adoption of regulations for security training and screening of personnel working with dangerous goods, as well as the
development of a program to require a transportation security clearance for dangerous goods, the tracking of dangerous goods during transport
and the development of an emergency response plan.
Safety regulation – U.S.
The Company's U.S. rail operations are subject
to safety regulation by the FRA under the Federal Railroad Safety Act as well as rail portions of other safety statutes, with
the transportation of hazardous commodities also governed by regulations promulgated by the Pipeline and Hazardous Materials Safety
2024 Annual Information Form
Administration (PHMSA). The FRA has jurisdiction
over railroad safety and equipment standards, and most rail safety regulation is handled at the federal level. The FRA requires submission
of certain information from railroads, and railroads may be subject to inspection or audits by the FRA. A state may regulate rail safety
unless the FRA has regulated the matter, or the state regulation is necessary to address a local condition, is consistent with federal
law, and does not unduly burden interstate commerce. There is a risk that states could enact new laws in this regard that are intended
to regulate rail safety more extensively.
PHMSA requires carriers operating in the U.S.
to report annually the volume and route-specific data for cars containing hazardous commodities; conduct a safety and security risk analysis
for each used route; identify a commercially practicable alternative route for each used route; and select for use the practical route
posing the least safety and security risk. In addition, the Transportation Security Administration (TSA) requires rail carriers
to provide upon request, within five minutes for a single car and 30 minutes for multiple cars, location and shipping information on
cars on their networks containing toxic inhalation hazard materials and certain radioactive or explosive materials; and ensure the secure,
attended transfer of all such cars to and from shippers, receivers and other carriers that will move from, to, or through designated
high-threat urban areas.
Other regulations – Canada and U.S.
Vessels - U.S.
CN's vessel operations are subject to regulation
by the U.S. Coast Guard and the Department of Transportation, Maritime Administration, which regulate the ownership and operation of
vessels operating on the Great Lakes and in U.S. coastal waters. In addition, in the U.S., the Environmental Protection Agency regulates
air emissions from these vessels.
Security - Canada
In Canada, the Company is subject to border security
regulation by the Canada Border Services Agency (CBSA). In particular, the Company is subject to border security arrangements
pursuant to an agreement between the Company, Canadian Pacific Kansas City Limited (formerly known as Canadian Pacific Railway) and the
CBSA.
The Company is also required to comply with regulations
on agriculture-related shipments crossing the Canada/U.S. border which are mandated by the Canadian Food Inspection Agency in Canada.
Security - U.S.
The Company is subject to statutory and regulatory
directives in the U.S. addressing homeland security concerns. In the U.S., the TSA regulates transportation security, which is part of
the U.S. Department of Homeland Security (DHS) and PHMSA, which, like the FRA, is part of the U.S. Department of Transportation.
Border security falls under the jurisdiction of U.S. Customs and Border Protection (CBP), which is part of the DHS. In particular,
the Company is subject to regulations against terrorism, regulations imposed by the CBP requiring advance notification by all modes of
transportation for all shipments into the U.S., potential security inspections at the Canada/U.S. border, and gamma ray screening of
cargo entering the U.S. from Canada, among others.
The Company is also required to comply with regulations
on agriculture-related shipments crossing the Canada/U.S. border, including inspection requirements for imported fruits and vegetables
grown in Canada and an agricultural quarantine and inspection user fee for all traffic entering the U.S. from Canada, which are mandated
by the U.S. Department of Agriculture and the Food and Drug Administration.
2024 Annual Information Form
The Company has worked with the Association of
American Railroads to develop and put in place an extensive industry-wide security plan to address terrorism and security-driven efforts
by state and local governments seeking to restrict the routings of certain hazardous materials.
Cybersecurity and technology
CN relies on information technology operated
by it or under the control of third parties in all aspects of its business, and, as a result, is subject to regulations regarding cybersecurity
and technology in both Canada and the U.S., including regulations specific to companies operating in the rail industry. In particular,
CN is subject to cyber risk monitoring and assessment requirements, testing requirements, and reporting requirements.
CN has invested, and continues to invest in,
technology security initiatives, information technology risk management, business continuity and disaster recovery plans, and other security
and mitigation programs to meet evolving network and cybersecurity expectations and regulations. New regulatory obligations related to
cybersecurity and technology risk may impose additional costs and obligations on CN and may lead to government inquiries or requests
for information.
Regulatory Compliance
A risk of environmental liability is inherent
in railroad and related transportation operations; real estate ownership, operation or control; and other commercial activities of the
Company with respect to both current and past operations. As a result, the Company incurs significant operating and capital costs, on
an ongoing basis, associated with environmental regulatory compliance and clean-up requirements in its railroad operations and relating
to its past and present ownership, operation or control of real property. CN is in all material respects similarly situated relative
to its competitors as it relates to its exposure to environmental liability risk and thus the resulting environmental protection requirements
and expenditures are not expected to have a material adverse effect on CN’s competitive position. Environmental expenditures that
relate to current operations, or to an existing condition caused by past operations, are expensed as incurred. Environmental expenditures
that provide a future benefit are capitalized.
In Canada, the matter of environmental permits
for the Company is complex because of an overlap between federal and provincial jurisdictions. When projects trigger an environmental
assessment, CN proceeds in accordance with the Impact Assessment Act. Provincial and municipal environmental legislation may be
applicable to CN 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. Because of the multiple
jurisdictions, there can be no assurance that additional provincial, municipal or local environmental permits will not be required in
the future and the Company may incur additional expenses or changes in its operations if such additional permits were to be required.
For a further discussion of environmental matters,
refer to Note 21 – Major commitments and contingencies contained in CN’s 2024 Annual Consolidated Financial Statements
(Financial Statements), which note is incorporated by reference herein, as well as the section entitled "Environmental matters"
in the Business risks discussion located on pages 59 to 60 of the MD&A, which pages are incorporated by reference herein. The Financial
Statements may be found online on SEDAR+ at www.sedarplus.ca, on the SEC’s website at www.sec.gov through EDGAR, and on the Company’s
website at www.cn.ca in the "Investors" section.
2024 Annual Information Form
Environmental Policy
CN is committed to building a sustainable future,
to working with its supply chain partners and customers to provide cleaner, more sustainable transportation services, and to working
with stakeholders and rightsholders to avoid, minimize, or offset its environmental impact and when required, to restore it. CN's Environmental
Policy guides its environmental strategy, with a focus on emissions and energy efficiency, waste management, and biodiversity and land
management, and is regularly reviewed, including most recently in 2024. All CN employees, suppliers, and contractors performing services
on behalf of CN are expected to act in accordance with the Environmental Policy when performing work for CN. CN has also implemented
comprehensive environmental management programs which establish the governance structure and processes it implements to support the environmental
commitments set out in its Environmental Policy, in the view of minimizing the risk and potential impacts of its activities on the environment
and of ensuring compliance with applicable environmental regulations.
The Company strives to contribute to the protection
of the environment by integrating environmental priorities into its overall business plan and through the specific monitoring and measurement
of such priorities against historical performance and, in some cases, specific goals. Certain risk mitigation strategies, such as periodic
audits, employee training programs and emergency plans and procedures, are in place with the view of minimizing the environmental risks
to the Company.
The Safety and Environment Committee of the Board
of Directors has the responsibility of overseeing the Company's Environmental Policy and environmental programs. The Safety and Environment
Committee is composed of CN directors and its mandate is further described in the charter of such committee, which is included in the
Company’s Corporate Governance Manual.
CN's most recent data supplement report, as well
as the Company’s CDP report and the Company’s Corporate Governance Manual are available on CN’s website www.cn.ca in
the "Delivering Responsibly" section.
Legal Proceedings
As of the date hereof, there are no legal proceedings
to which CN is or was a party to during the last financial year, or that any of its property is or was the subject of during the last
financial year, in each case involving claims for damages (exclusive of interest and costs) in excess of 10% of the Company’s current
assets. The Company is not aware of any such legal proceedings being contemplated.
See Note 21 – Major commitments and
contingencies to the Financial Statements, which note is incorporated by reference herein, for further discussion of material legal
actions, if any.
Indigenous Claims
The Company believes that it possesses unrestricted
and absolute title to its lands. However, in recent years, some Indigenous communities have claimed to have a continuing legal interest
in certain lands. As the issues surrounding Indigenous claims are complex and involve not only private interests but fiduciary and other
obligations of the Crown in the right of Canada, CN has agreed not to sell or otherwise dispose of land which is not essential to its
rail operations and which is located in, or adjacent to, an Indigenous reserve, unless each of CN and the Government of Canada is satisfied
that no legitimate Indigenous claim exists with respect to such land. CN has also agreed to convey to the Government of Canada, for no
consideration, any land not integral to its rail operations that may be necessary to settle legitimate Indigenous claims with respect
to such land, or lands which were formerly reserve lands and have become non-rail assets. The Government of Canada, for its part, has
agreed that it will provide the necessary compensation for settlement of legitimate Indigenous claims which would otherwise result in
2024 Annual Information Form
CN having to relinquish land essential to its rail network, unless such claims arise out of, or are substantially based upon, willful,
known, negligent or fraudulent acts or omissions of CN which adversely affected the rights or interests of Indigenous peoples. There
is no perceived material adverse effect on the Company, as the right of the Company to continue to occupy and operate over such lands
is not being called into question.
See Note 21 – Major commitments and
contingencies to the Financial Statements, which note is incorporated by reference herein, for further discussion of material legal
actions, if any.
CN uses various works protected by intellectual
property rights which the Company owns or for which it has been granted rights to use. These works include customers’ lists, copyrights,
patents, trademarks, logos and trade names. This intellectual property is important to the Company’s operations and its success.
A description of material risks to CN and its
business appears under the heading “Business risks” located on pages 59 to 67 of the MD&A, and under the heading “Financial
Instruments” for risks associated with the Company’s use of financial instruments located on pages 49 to 51 of the MD&A,
which pages are incorporated by reference herein. See Item 1 of this AIF for a further discussion of risks associated with forward-looking
statements.
The Company has declared dividends in line with
its overall financial performance and cash flow generation. The Board of Directors makes decisions on dividend levels on an annual basis
and on dividend payout on a quarterly basis. Consistent with this practice, the quarterly dividend rate has increased as follows during
the three most recently completed financial years and for 2025:
| Effective year | |
Amount
of quarterly dividend (per common share) | |
| 2022 | |
$ | 0.7325 | |
| 2023 | |
$ | 0.7900 | |
| 2024 | |
$ | 0.8450 | |
| 2025 | |
$ | 0.8875 | |
There can be no assurance as to the amount or timing of such dividends
in the future.
| ITEM
6 |
DESCRIPTION
OF CAPITAL STRUCTURE |
| 6.1 | GENERAL
DESCRIPTION OF CAPITAL STRUCTURE |
The authorized share capital of CN consists of
an unlimited number of common shares, an unlimited number of Class A Preferred Shares issuable in series and an unlimited number of Class
B Preferred Shares issuable in series, all without par value.
There are no Class A Preferred Shares or Class
B Preferred Shares currently issued and outstanding.
2024 Annual Information Form
Common Shares
The common shares carry and are subject to the
following rights, privileges, restrictions and conditions described below:
Voting - Each common share entitles
its holder to receive notice of and to attend all general and special meetings of shareholders of CN, other than meetings at which only
the holders of a particular class or series of shares are entitled to vote, and each such common share entitles its holder to one vote.
Dividends - The holders of common
shares are, at the discretion of the directors, entitled to receive, out of any amounts applicable to the payment of dividends, and after
the payment of any dividends payable on any Class A Preferred Shares, Class B Preferred Shares or shares of any other class of the Company
ranking prior to the common shares, any dividends declared and payable by CN on the common shares.
Dissolution - The holders of common
shares shall be entitled to share equally in any distribution of the assets of CN upon the liquidation, dissolution or winding-up of
CN or other distribution of its assets among its shareholders for the purpose of winding-up its affairs. Such participation is subject
to the rights, privileges, restrictions and conditions attaching to any issued and outstanding Class A Preferred Shares, Class B Preferred
Shares or shares of any other class ranking prior to the common shares.
Preferred Shares
The Class A Preferred Shares and the Class B
Preferred Shares are issuable in series and, subject to CN’s Articles, the Board of Directors is authorized to fix, before issuance,
the designation, rights, privileges, restrictions and conditions attaching to the shares of each series. The holders of Class A Preferred
Shares or Class B Preferred Shares shall not be entitled to vote at meetings of shareholders otherwise than as provided by law and holders
of Class A Preferred Shares or Class B Preferred Shares shall not be entitled to vote separately as a class except as provided by law.
| 6.2 | SHARE OWNERSHIP
CONSTRAINTS |
CN’s Articles provide that no person, together
with their associates, shall hold, beneficially own or control, directly or indirectly, more than 25% of the issued and outstanding voting
shares of the Company (share ownership constraint).
Where the total number of voting shares
held, beneficially owned or controlled, directly or indirectly, by any one person together with his or her associates exceeds 25% of
the issued and outstanding voting shares of the Company, no person shall exercise the voting rights attached to the voting shares
held, beneficially owned or controlled, directly or indirectly, by such person or their associates. All dividends attributable to
the percentage of voting shares held by such persons in excess of 25% shall be forfeited, including any cumulative dividend.
However, CN’s Articles provide that in the event that the 25% limit is exceeded solely as a result of a redemption, purchase
for cancellation or other acquisition of common shares by CN, the only consequence to the relevant shareholder is that the
shareholder is not entitled to exercise the voting rights attached to the common shares held by such shareholder that are in excess
of the 25% limit.
CN’s Articles confer on the Board of Directors
all powers necessary to give effect to the share ownership constraint, including the ability to pay dividends or to make other distributions
which would otherwise be prohibited if the event giving rise to the prohibition was inadvertent or of a technical nature or it would
otherwise be inequitable not to pay the dividends or make the distribution. CN’s Articles provide that the Board of Directors may
adopt by-laws concerning the administration of the share ownership constraint described above, including by-laws requiring a shareholder
to furnish a declaration indicating whether he or she is the beneficial owner of the shares and whether he or she is an associate of
any other shareholder.
2024 Annual Information Form
In addition, CN is authorized to refuse to recognize
the ownership rights that would otherwise be attached to any voting shares held, beneficially owned or controlled, directly or indirectly,
contrary to the share ownership constraint. Finally, CN has the right, for the purpose of enforcing any share ownership constraint imposed
pursuant to its Articles, to sell, as if it were the owner thereof, any voting shares that are owned or that the directors determine
may be owned, by any person or persons contrary to such share ownership constraint.
| 6.3 | RATINGS
OF DEBT SECURITIES |
The Company’s access to long-term funds
in the debt capital markets depends on its credit rating and market conditions. The Company believes that it continues to have access
to the long-term debt capital markets. Rating downgrades could limit the Company’s access to the credit markets, or increase its
borrowing costs. Various classes of CN’s outstanding securities have been rated by several rating organizations, as described in
detail below, as of the date hereof.
| |
DBRS
Morningstar |
Moody’s
Investors Service |
S&P
Global Ratings
Canada |
| Long-Term
Debt |
A |
A2 |
A- |
| Commercial
Paper |
R-1
(low) |
P-1 |
A-2 |
The above-noted
ratings are given the following credit characteristics by the various rating agencies:
DBRS Morningstar (DBRS)
| • | Long-term debt rated A is of good credit
quality. The capacity for the payment of financial obligations is substantial, but of lesser
quality than AA. May be vulnerable to future events, but qualifying negative factors are
considered manageable. This rating falls within the third highest of DBRS’s ten long-term
debt rating categories which range from “AAA” to “D”. |
| • | Commercial paper rated R-1 (low) is of
good credit quality. The capacity for the payment of short-term financial obligations as
they fall due is substantial. Overall strength is not as favourable as higher rating categories.
May be vulnerable to future events, but qualifying negative factors are considered manageable.
This rating falls within the third highest of DBRS’s ten short-term debt rating categories
which range from “R-1 (high)” to “D”. |
Moody’s Investors Service (Moody’s)
| • | Long-term debt obligations rated A are
judged to be upper-medium grade and are subject to low credit risk. This rating falls within
the third highest of Moodys' nine generic long-term obligation rating categories which range
from “Aaa” to “C”. The modifier “2” indicates a ranking
in the mid-range of that generic rating category. |
| • | Commercial paper rated P-1 indicates that
CN has a superior ability to repay short-term debt obligations. This rating falls within
the highest of Moodys' four generic short-term debt-rating categories, which range from “P-1”
to “NP”. |
S&P Global Ratings Canada (S&P)
| • | Long-term debt obligations rated A are
somewhat more susceptible to the adverse effects of changes in circumstances and economic
conditions than obligations in higher rated categories. However, the obligor’s capacity
to meet its financial commitment on the obligations is still strong. This rating falls within
the third highest of S&P’s ten major long-term credit rating categories which range
from “AAA” to “D”. The modifier “-” indicates a ranking
in the low-range of that generic rating category. |
2024 Annual Information Form
| • | A short-term obligation rated A-2 is rated
in the second highest category by S&P, which ranges from "A-1" to "D".
The obligor’s capacity to meet its financial commitment on the obligation is satisfactory,
but somewhat more susceptible to the adverse effects of changes in circumstances and economic
conditions. |
The ratings of CN’s securities described
above should not be construed as a recommendation to buy, sell, or hold CN securities and do not address the market price or suitability
of a specific security for a particular investor. Ratings may be revised or withdrawn at any time by the rating agencies.
As is common practice, during the last two years,
each of the above-noted credit rating agencies charged CN for their rating services, which include annual surveillance fees covering
CN’s outstanding long-term and short-term debt securities, in addition to one-time rating fees when debt is initially issued. CN
reasonably expects that such payments will continue to be made for rating services in the future. CN has not made any payments to any
of the above-noted credit rating agencies for any other service during the last two years.
| ITEM
7 |
TRANSFER
AGENT AND REGISTRAR |
In Canada, the transfer agent and registrar for
CN’s common shares is Computershare Trust Company of Canada and, in the U.S., the co-transfer agent and co-registrar is Computershare
Trust Company, N.A., both of which maintain registers of transfers for CN’s common shares at the locations specified below:
Transfer agent and registrar
Computershare Trust Company of Canada
100 University Avenue, 8th Floor
Toronto, Ontario M5J 2Y1
Toll Free Tel: 1-800-564-6253
Toll Free Fax: 1-888-453-0330
Email: service@computershare.com
Web: www.investorcentre.comservice
Co-transfer agent and co-registrar
Computershare Trust Company, N.A.
Att: Shareholder Services
680 S 4th St, Louisville, KY 40202
Regular Mail Delivery: P.O. Box 505000, Louisville,
KY 40233-5000
Telephone: 1-800-962-4284
The register for CN’s Canadian notes, issued pursuant to its senior indenture dated as of July 12, 2013, between the Company and
BNY Trust Company of Canada (as amended and supplemented), is kept at the principal office of BNY Trust Company of Canada in Montréal,
Canada. The register for CN’s U.S. notes, issued pursuant to its senior indenture dated as of June 1, 1998 between the Company
and The Bank of New York Mellon (as amended and supplemented), is kept at the principal office of The Bank of New York Mellon in New
York, U.S.
2024 Annual Information Form
| ITEM
8 |
MARKET
FOR SECURITIES |
| 8.1 | TRADING
PRICE AND VOLUME |
CN’s common shares are listed on both the
TSX and the NYSE under the stock symbols CNR and CNI, respectively.
The following table sets forth the price ranges
and aggregate trading volumes of the common shares on the TSX and NYSE for each month of 2024:
| | |
TSX (CNR) | | |
NYSE (CNI) | |
| Month | |
High ($) | | |
Low ($) | | |
Volume | | |
High ($) | | |
Low ($) | | |
Volume | |
| January | |
| 170.19 | | |
| 164.59 | | |
| 17,529,500 | | |
| 127.43 | | |
| 122.23 | | |
| 25,494,100 | |
| February | |
| 178.38 | | |
| 167.26 | | |
| 19,611,900 | | |
| 132.12 | | |
| 124.48 | | |
| 18,779,600 | |
| March | |
| 181.34 | | |
| 171.03 | | |
| 25,498,800 | | |
| 134.02 | | |
| 126.48 | | |
| 20,347,500 | |
| April | |
| 180.12 | | |
| 167.08 | | |
| 21,675,400 | | |
| 132.27 | | |
| 121.37 | | |
| 23,257,200 | |
| May | |
| 175.57 | | |
| 165.24 | | |
| 21,825,900 | | |
| 129.18 | | |
| 120.08 | | |
| 19,155,000 | |
| June | |
| 174.15 | | |
| 157.87 | | |
| 32,012,900 | | |
| 127.89 | | |
| 115.24 | | |
| 31,493,400 | |
| July | |
| 169.49 | | |
| 155.04 | | |
| 25,306,900 | | |
| 123.96 | | |
| 111.85 | | |
| 25,257,500 | |
| August | |
| 160.50 | | |
| 150.69 | | |
| 21,623,900 | | |
| 119.29 | | |
| 109.15 | | |
| 21,247,500 | |
| September | |
| 164.53 | | |
| 153.84 | | |
| 33,627,400 | | |
| 121.12 | | |
| 113.05 | | |
| 26,499,700 | |
| October | |
| 160.88 | | |
| 150.16 | | |
| 20,959,500 | | |
| 117.42 | | |
| 107.88 | | |
| 29,783,000 | |
| November | |
| 158.17 | | |
| 147.35 | | |
| 21,848,300 | | |
| 114.13 | | |
| 105.28 | | |
| 26,240,800 | |
| December | |
| 156.93 | | |
| 143.72 | | |
| 29,363,900 | | |
| 111.67 | | |
| 98.96 | | |
| 27,115,900 | |
On May 2, 2024, under its current shelf prospectus
and registration statement, the Company issued $700 million 4.60% Notes due 2029 and $550 million 5.10% Notes due 2054 in the Canadian
capital markets, detailed in the following table:
| Security |
Notes
due 2029 |
Notes
due 2054 |
| Size
of Offering: |
$700,000,000 |
$550,000,000 |
| Maturity
Date: |
May
2, 2029 |
May
2, 2054 |
| Coupon
Rate: |
4.60% |
5.10% |
| Net
Proceeds of Issue (before expenses): |
$696,500,000 |
$545,908,000 |
| Public
Offering Price: |
99.850% |
99.756
% |
| Application
of Proceeds: |
General
corporate purposes, which may include the redemption and refinancing of outstanding indebtedness, share repurchases, acquisitions
and other business opportunities. |
2024 Annual Information Form
On September 18, 2024, under its current shelf
prospectus and registration statement, the Company issued US$750 million ($1,020 million) 4.375% Notes due 2034 in the U.S capital markets,
detailed in the following table:
| Security |
Notes
due 2034 |
| Size
of Offering: |
US$750,000,000 |
| Maturity
Date: |
September
18, 2034 |
| Coupon
Rate: |
4.375% |
| Net
Proceeds of Issue (before expenses): |
US$743,685,000 |
| Public
Offering Price: |
99.808% |
| Application
of Proceeds: |
General
corporate purposes, which may include the redemption and refinancing of outstanding indebtedness, share repurchases, acquisitions
and other business opportunities. |
In addition, in the ordinary course of business,
the Company has the capability to issue commercial paper with maturities of less than 12 months. As at December 31, 2024, the Company
had total commercial paper borrowings of US$501 million ($721 million). The weighted-average interest rate on these borrowings was 4.73%.
| ITEM
9 |
DIRECTORS
AND EXECUTIVE OFFICERS |
The directors of the Company are elected by the
shareholders at the Annual General Meeting of the Company, and hold office until their term expires at the subsequent Annual General
Meeting, subject to resignation, retirement, or re-election. The following table lists the directors of the Company as of the date hereof:
Name
&
Province or State and Country of Residence
|
Director
Since |
Current
Principal Occupation |
Principal
Occupations held in the Preceding Five Years
(if different from the current principal
occupation) |
Shauneen
Bruder
Ontario, Canada |
April
25, 2017 |
Corporate
Director
Chair of the Board, CN |
— |
David
Freeman
Tennessee, U.S. |
May
20, 2022 |
Corporate
Director |
— |
Denise
Gray
Michigan, U.S. |
April
27, 2021 |
Corporate
Director |
Director,
External Affairs & Government Relations, North America, LG Energy Solution Michigan Inc.
President, LG Chem Michigan Inc. Tech Center |
Justin
M. Howell
Washington, U.S. |
April
27, 2021 |
Senior
Investment Manager, Cascade Asset Management Co. |
— |
Susan
C. Jones
Alberta, Canada |
May
20, 2022 |
Corporate
Director |
— |
Robert
Knight
Florida, U.S. |
May
20, 2022 |
Corporate
Director |
— |
2024 Annual Information Form
Michel
Letellier
Quebec, Canada |
October
1, 2022 |
President
and Chief Executive Officer, Innergex Renewable Energy Inc. |
— |
Margaret
A. McKenzie
Alberta, Canada |
October
6, 2020 |
Corporate
Director |
— |
Al
Monaco
Alberta, Canada |
April
25, 2023 |
Corporate
Director |
President
and Chief Executive Officer, Enbridge Inc. |
Jo-ann
dePass Olsovsky
Texas, U.S. |
October
27, 2021 |
Corporate
Director |
Executive
Vice-President and Chief Information Officer, Salesforce.com, Inc. |
Tracy
Robinson
Alberta, Canada
Quebec, Canada |
February
28, 2022 |
President
and Chief Executive Officer, CN |
Executive
Vice-President, TC Energy Corporation
President, Canadian Natural Gas Pipelines, TC Energy Corporation
President, Coastal GasLink, TC Energy Corporation |
Committee Membership
As of the date hereof, the membership of each
committee of the Board of Directors is composed of the following directors:
Audit,
Finance and Risk
(AFR) Committee |
Governance
and
Sustainability (GS)
Committee |
Human
Resources and
Compensation (HRC)
Committee |
Safety
and Environment (SE)
Committee |
Margaret
A. McKenzie (chair)
Shauneen Bruder
David Freeman
Susan C. Jones
Robert Knight
Michel Letellier |
Denise
Gray (chair)
Shauneen Bruder
Justin M. Howell
Michel Letellier
Margaret A. McKenzie |
Jo-ann
dePass Olsovsky (chair)
Shauneen Bruder
Justin M. Howell
Robert Knight
Al Monaco
|
Susan
C. Jones (chair)
Shauneen Bruder
David Freeman
Denise Gray
Al Monaco
Jo-ann dePass Olsovsky
|
| 9.2 | AUDIT, FINANCE
AND RISK (AFR) COMMITTEE DISCLOSURE |
Composition of the AFR Committee
As of the date hereof, the AFR Committee is composed
of six independent directors. The Board of Directors believes that all AFR Committee members reflect a high level of financial literacy
and experience, each of them having been determined by the Board of Directors to be financially literate, as such term is defined
under Canadian securities laws, and as such qualification is interpreted by the Board of Directors as required under NYSE corporate governance
standards, based on their respective education and experience.
The following is a description of the education
and experience of each member of the AFR Committee that is relevant to the performance of their responsibilities as a member of the committee:
Ms. Margaret A. McKenzie, Chair
of the AFR Committee since May 20, 2022, is a corporate director with more than 30 years of experience in the energy sector, where she
developed expertise in financial reporting, treasury, corporate finance and risk management. She currently serves as chair of the board
of directors of PrairieSky Royalty Ltd., where she previously served as chair of the audit committee as well. She also currently sits on the board of directors
of Spur Petroleum Ltd., a private energy company in
2024 Annual Information Form
Western Canada, and is the former Chief Financial Officer of Profico Energy Management
Ltd., a position she held from 2000 to 2006. Ms. McKenzie is the founder and former Chief Financial Officer of Range Royalty Management
Ltd., a position she held from 2006 to 2014. Ms. McKenzie holds a Bachelor of Commerce Degree (Accounting) from the University of Saskatchewan
and obtained her designation as ICD.D with the Institute of Corporate Directors in 2013. She has also been a Chartered Professional Accountant
(CPA, CA) since 1985 and received the designation of Fellow CPA in 2022.
Ms. Shauneen Bruder, Chair
of the CN Board of Directors since May 20, 2022, is the retired Executive Vice-President, Operations at the Royal Bank of Canada (RBC)
where she was responsible for overseeing operations related to all personal and business clients in Canada. She previously served for
RBC as Executive Vice-President of Business and Commercial Banking, Chief Operating Officer of the Global Wealth Management division
and President of RBC Centura Bank, Inc. in North Carolina. Ms. Bruder is a former director and member of the audit, finance and risk
committee of Andrew Peller Limited. She is also a member of the Institute of Corporate Directors and has obtained the Competent Boards
Climate & Biodiversity Designation (CCB.D). Previously, she served as Chair of the Board of Governors for the University of Guelph
and as the Chairperson of the Canadian Chamber of Commerce and the Canadian American Business Council. Ms. Bruder holds a Bachelor of
Arts from the University of Guelph and an MBA from Queen’s University.
Mr. David Freeman is a corporate
director and the former Executive Vice-President of Operations of BNSF Railway, where he also held various other senior-level positions
with significant financial responsibilities over the course of his 19-year tenure at the company. He has held various directorship positions,
and currently sits on the board of directors and is chair of the human resources and governance committee of Loram Holdings, Inc. (a
private company involved in the design, build and operations for various maintenance of way equipment and activities in the railroad
industry) and is chair of the finance committee of Direct ChassisLink Inc. (a provider of marine and domestic container chassis to the
U.S. intermodal industry), where he also sits on the operations committee. He holds a Bachelor of Science in Civil Engineering from Lehigh
University.
Ms. Susan C. Jones is a corporate
director having served on numerous public company boards and having held various leadership positions within public companies throughout
her career in the energy, energy transition, mining and agricultural sectors. She currently sits on the board of directors and on the
audit committee as well as the human resources committee of TC Energy Corporation, an energy company listed on the TSX and on the NYSE.
She previously sat on the board of directors of ARC Resources Ltd. (and its predecessor Seven Generations Energy Ltd.), and is a former
director and member of the audit committee of Piedmont Lithium Inc. and Gibson Energy Inc. Prior to joining CN’s Board of Directors,
Ms. Jones held various leadership roles at Nutrien Ltd., including most recently as Executive Vice-President and Chief Executive
Officer of the Potash Business Unit until her retirement in 2019. Ms. Jones holds a Bachelor of Arts in Political Science cand Hispanic
Studies from the University of Victoria, as well as a Bachelor of Laws from the University of Ottawa. She also earned a Leadership Diploma
from the University of Oxford and holds a Director Certificate from Harvard University.
Mr. Robert Knight is a corporate
director and the former Chief Financial Officer of Union Pacific Corporation, a position he held for 15 years before retiring in December
2019. For seven consecutive years, Mr. Knight was named to Institutional Investor magazine’s All-America Executive Team as the
top CFO in all of transportation. During Mr. Knight’s 40-year tenure at Union Pacific Corporation, he held a variety of senior
executive positions, including General Manager of the company’s energy and automotive business units. As a proven leader with extensive
experience in finance, strategy and corporate governance, Mr. Knight serves as a director and member of the compensation committee and
of the governance committee at Schneider National, Inc., a U.S. transportation and logistics company, and as director and chair of the
audit committee at Hyliion Holdings Corp., a provider of electrified powertrain solutions headquartered in Austin, Texas. He was previously
a director at Carrix Corporation, a private transportation services company. Mr. Knight holds a Master of Business Administration degree
from Southern Illinois University and a Bachelor of Arts from Kansas State University.
2024 Annual Information Form
Mr. Michel Letellier is the President
and Chief Executive Officer of Montreal-headquartered Innergex Renewable Energy Inc. (Innergex), one of the largest Canadian independent
renewable power producers with operations in Canada, the U.S., France and Chile. Mr. Letellier has extensive North American business
experience and has been a driving force in the renewable energy industry with Innergex since 1997, including as Vice President and Chief
Financial Officer from 2003 until 2007, and as President and Chief Executive Officer since 2007. He also served as Vice President and
Chief Financial Officer of Innergex GP Inc. from 1997 to 2003, where he was responsible for the financial management of the affairs of
Innergex GP Inc., Innergex, Limited Partnership and Innergex Power Income Fund. Previously, Mr. Letellier was responsible for the development
and operation of hydroelectric projects for Boralex Inc., and prior to that, he spent two years as a member of the Corporate Finance
group at Brault, Guy, O'Brien Inc. Mr. Letellier is an experienced director having served on public and private boards since 2012, including
as a current member of the Innergex board of directors, and as a former member of the board of directors and audit committee of KP Tissue
Inc. He holds a Bachelor of Commerce (Finance) degree from Université du Québec à Montreal and a Master of Business Administration
degree from Université de Sherbrooke.
Auditors’ Fees
KPMG LLP has served as the Company’s auditors
since 1992. For the years ended December 31, 2024 and 2023, the fees for audit, audit-related, tax and other services provided to the
Company by KPMG LLP were the following:
| Fees
(1) | |
2024 | | |
2023 | |
| Audit | |
$ | 3,196,000 | | |
$ | 3,348,000 | |
| Audit-related | |
$ | 1,335,000 | | |
$ | 1,363,000 | |
| Tax | |
$ | 942,000 | | |
$ | 982,000 | |
| All Other | |
$ | — | | |
$ | — | |
| Total Fees | |
$ | 5,473,000 | | |
$ | 5,693,000 | |
(1) Fees rounded to the nearest
thousand.
Pursuant to the terms of its charter (attached
as Schedule A of this AIF), the AFR Committee approves all audit and audit-related services, audit engagement fees and terms and
all non-audit engagements with the independent auditor. The AFR Committee pre-approved all the services performed by CN’s independent
auditors for audit-related and non-audit related services for the years ended December 31, 2024 and 2023.
The nature of the services under each category is described below.
Audit fees are for services rendered
in relation to the audits of the Company’s consolidated annual financial statements and internal control over financial reporting,
review of quarterly reports and audits of the financial statements of certain of the Company’s subsidiaries.
Audit-related fees are for services
related to the audits of the Company’s various pension plan financial statements, attestation and assurance services in connection
with sustainability-related reports and other reports required by statute or regulation and services rendered in connection with the
issuance of debt.
Tax fees are for services related
to tax compliance including assistance with the preparation and review of tax returns for expatriate employees, corporate tax returns
and other tax compliance services related to transfer pricing and indirect tax.
All Other fees are for advisory services related to
non-audit projects.
2024 Annual Information Form
Non-Audit Services
The charter of the AFR Committee (attached as
Schedule A to this AIF) provides that the AFR Committee determines which non-audit services the external auditors are prohibited
from providing, approves audit services and pre-approves permitted non-audit services to be provided by the external auditors. The AFR
Committee and the Board of Directors have adopted resolutions prohibiting the Company from engaging KPMG LLP to provide certain non-audit
services to the Company and its subsidiaries, including bookkeeping or other services related to the accounting records or financial
statements, financial information systems design and implementation, appraisal or valuation services, fairness opinions, or contribution
in-kind reports, actuarial services, internal audit outsourcing services, management functions or human resources functions, broker or
dealer, investment adviser, or investment banking services and legal services and expert services unrelated to the audit. Pursuant to
such resolutions, the Company may engage KPMG LLP to provide non-audit services, including tax services, other than the prohibited services
listed above, but only if the services have specifically been pre-approved by the AFR Committee.
The following table lists the CN executive officers as of the date
hereof:
Name
&
Province or State and
Country of Residence |
Office
held at CN |
Principal
Occupations held in the Preceding
Five Years
(if different from the current office held
at CN) |
Tracy
Robinson
Alberta, Canada
Quebec, Canada |
President
and Chief Executive Officer |
Executive
Vice-President, TC Energy Corporation
President, Canadian Natural Gas Pipelines, TC Energy Corporation
President, Coastal GasLink, TC Energy Corporation |
Ghislain
Houle
Quebec, Canada |
Executive
Vice-President and Chief Financial Officer |
— |
Rémi
G. Lalonde
Quebec, Canada |
Executive
Vice-President and Chief Commercial Officer |
Executive
Vice-President and Special Advisor to the CEO, CN
President & CEO, Resolute Forest Products Inc.
Senior Vice-President & Chief Financial Officer, Resolute
Forest Products Inc. |
Dominique
Malenfant
Quebec, Canada
|
Executive
Vice-President and Chief Information and Technology Officer |
Senior
Vice-President, Engineering and Chief Technology Officer, Wabtec Corporation
Vice-President, Global Technologies and Chief Technology Officer,
GE Transportation |
Derek
Taylor
Illinois, U.S.
|
Executive
Vice-President and Chief Field Operating Officer |
Senior
Vice-President, Transportation, CN
Vice-President, Operational Excellence, CN
Vice-President, Eastern Region, CN |
Patrick
Whitehead
Alberta, Canada
|
Executive
Vice-President and Chief Network Operating Officer |
Senior
Vice-President, Network Operations, CN
Vice-President, Eastern Region, CN
General Manager (Chicago), CN
Vice-President, Transportation, Norfolk Southern Railway
Assistant Vice-President, Mechanical, Norfolk Southern Railway |
Olivier
Chouc
Quebec, Canada |
Senior
Vice-President and
Chief Legal Officer |
Vice-President,
Law, CN |
2024 Annual Information Form
Janet
Drysdale
Quebec, Canada
|
Senior
Vice-President and Chief Stakeholder Relations Officer |
Vice-
President, Investor Relations & Sustainability
Vice-President Financial Planning & Sustainability, CN
Vice-President Sustainability, CN
Vice-President Financial Planning, CN |
Josée
Girard
Quebec, Canada
|
Senior
Vice-President and Chief
Human Resources Officer
|
Chief
People and Purpose Officer, Ivanhoé Cambridge
Executive Vice-President, Organizational Alignment and Human Resources,
Ivanhoé Cambridge |
Patrick
Lortie
Quebec, Canada
|
Senior
Vice-President and Chief Strategy Officer |
Partner,
Oliver Wyman |
The 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.
As at December 31, 2024, the directors and the executive officers of the Company, as a group, beneficially owned, or exercised control
or direction, directly or indirectly, over an aggregate of approximately 276 thousand common shares of the Company, representing approximately
0.04% of the outstanding common shares.
| 9.4 | CEASE TRADE
ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS |
To the knowledge of the Company and based on
information provided by the Company’s directors and executive officers, none of its directors or executive officers is or has been,
in the last 10 years, a director, chief executive officer or chief financial officer of any company (including CN) that: (a) was subject
to a cease trade or similar order or an order that denied such company access to any exemption under securities legislation, in each
case for a period of more than 30 consecutive days, (each an Order) that was issued while such person was acting in the capacity
of director, chief executive officer or chief financial officer of such company; or (b) was subject to an Order that was issued after
that person ceased to be a director, chief executive officer or chief financial officer of such company and which resulted from an event
that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer of such company.
Except as disclosed in this section, to the knowledge
of the Company and based on information provided by its directors and executive officers, no director or executive officer (i) is or
has been, in the last 10 years, a director or executive officer of a company (including CN) that, while such person was acting in that
capacity or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating
to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver,
receiver manager or trustee appointed to hold its assets, or (ii) has, in the last 10 years, themselves become bankrupt, made a proposal
under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise
with creditors, or had a receiver, receiver manager or trustee appointed to hold their assets.
On March 31, 2016, Ms. McKenzie, a current member
of the Board of Directors, resigned as a director of Endurance Energy Ltd., a privately held natural gas exploration company which filed
for creditor protection under the Companies’ Creditors Arrangement Act (Canada) in May 2016 and was later placed into bankruptcy
in November 2017.
To the knowledge of the Company and based on
information provided by its directors and executive officers, no director or executive officer has been subject to (i) any penalties
or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement
agreement with a securities regulatory authority, or (ii) any other penalties or sanctions
2024 Annual Information Form
imposed by a court or regulatory body that
would likely be considered important to a reasonable investor making an investment decision.
To the knowledge of the Company, based on the
most recent publicly available information, no person beneficially owns, or directly or indirectly exercises control or direction over,
a sufficient number of securities of the Company to affect materially the control of the Company.
| ITEM
10 |
INTEREST
OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS |
To the knowledge of the Company and based on
information provided by the Company’s directors and executive officers, there were no (i) directors or executive officers, (ii)
persons that beneficially own, or control or direct, directly or indirectly, more than 10% of CN's common shares, or (iii) any associate
or affiliate of persons referred to in (i) and (ii), with a material interest, direct or indirect, in any transaction within the three
most recently completed financial years that has materially affected the Company or is reasonably expected to materially affect the Company.
| ITEM
11 |
INTEREST
OF EXPERTS |
KPMG LLP is the external auditor who prepared
the Reports of Independent Registered Public Accounting Firm to the Board of Directors and shareholders of CN relating to the effectiveness
of internal controls over financial reporting and relating to the audit of the 2024 Annual Consolidated Financial Statements and the
related notes in conformity with U.S. GAAP.
KPMG LLP confirmed with respect to CN that they
are independent within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in
Canada and any applicable legislation or regulation, and also that they are independent accountants with respect to CN under all relevant
U.S. professional and regulatory standards.
| ITEM
12 |
ADDITIONAL
INFORMATION |
Additional information regarding CN can be found
on SEDAR+ at www.sedarplus.ca. Additional financial information is provided in CN’s
Annual Consolidated Financial Statements and MD&A for its most recently completed financial year. Additional information, including
directors’ and officers’ remuneration and indebtedness and securities authorized for issuance under equity compensation plans,
is contained in the Company’s Management Information Circular prepared in respect of its most recent annual meeting of shareholders
held on April 26, 2024 (Circular). The Circular is available on SEDAR+ at www.sedarplus.ca,
on the SEC’s website at www.sec.gov through EDGAR, and on the Company’s website
at www.cn.ca.
2024 Annual Information Form
SCHEDULE A
CHARTER OF THE AUDIT, FINANCE AND RISK COMMITTEE
The purpose of the AFR Committee is to assist
the Board in fulfilling its oversight responsibilities in relation to:
| • | the integrity and quality of CN’s
financial statements, financial reporting, systems of internal control and internal audit
function; |
| • | the
qualifications, independence and performance of CN’s auditor; |
| • | CN’s financing plans and programs
relating to treasury operations, credit facilities and credit ratings, and financial risks
and contingent exposures; |
| • | the
funding of CN’s Pension Plans, the investment management performance of the CN Investment
Division and the activities of the Pension Advisory Working Committee; |
| • | CN’s
risk assessment and enterprise risk management process, policies and practices; and |
| • | any
additional matters delegated to the AFR Committee by the Board. |
| • | Number. The Board shall appoint
a minimum of four directors to be members of the AFR Committee, one of whom shall be a member
of the HRC Committee. |
| • | Independent Directors. Only
independent directors, as determined by the Board and under Canadian and U.S. corporate governance
standards, may be appointed. A member of the AFR Committee may not, other than in his or
her capacity as a director or member of a Board committee and subject to the exceptions provided
in Canadian and U.S. laws and regulations, accept directly or indirectly any fee from CN
or any subsidiary of CN nor be an affiliated person of CN or any subsidiary of CN. |
| • | Qualifications.
Each member must be “financially literate” and at least one member must be an
“audit committee financial expert”, as determined by the Board. |
| • | Simultaneous
Service. Because of the AFR Committee’s demanding role and responsibilities, the
Board Chair, together with the GS Committee chair, shall review any invitation to the AFR
Committee members to join the audit committee of another entity. Where a member of the AFR
Committee simultaneously serves on the audit committee of more than three public companies,
including CN, the Board shall determine whether such simultaneous service impairs the ability
of such member to effectively serve on the AFR Committee and either requires a correction
to the situation or discloses in CN’s Information Circular that there is no such impairment. |
| • | Meetings. The AFR Committee
shall meet at least four times annually, or more frequently as circumstances dictate. Such
meetings may be held by telephone or by any other means which enables all participants to
communicate with each other simultaneously and as necessary. |
| • | Quorum.
A quorum for the transaction of business at an AFR Committee meeting shall be a majority
of the AFR Committee members. |
| • | Timing.
The AFR Committee shall typically meet one day prior to CN’s Board meetings, or as
otherwise required. |
| • | Meeting
Without Management. Each AFR Committee meeting will include a portion without the presence
of management. |
| • | Access
to Outside Advisers. As appropriate, the AFR Committee may retain independent advisors
to help it carry out its responsibilities, including fixing such advisors’ fees and
retention terms, subject to advising the Board Chair. The AFR Committee has the authority
to independently make arrangements for the appropriate funding for payment of any advisors
retained by it. The Board will make arrangements for the appropriate funding for all administrative
expenses necessary or appropriate to allow the AFR Committee to carry out its duties. |
| • | Reporting.
The AFR Committee shall report to the Board following each regularly scheduled meeting of
the AFR Committee, or more frequently if circumstances warrant, on the AFR Committee’s
activities. |
2024 Annual Information Form
The AFR Committee will be responsible for overseeing
the performance of the following functions:
| • | Overseeing Financial Reporting.
The AFR Committee shall monitor and review the quality and integrity of CN’s accounting
and financial reporting process, which includes: |
| ◦ | monitoring the
quality and integrity of CN’s accounting and financial reporting process through discussions
with management, the external auditors and the internal auditors; |
| ◦ | reviewing
with management and the external auditors and recommending for approval to the Board both
the annual audited financial statements to be included in the annual report of CN and the
quarterly consolidated financial statements of CN and accompanying information, including
in each case CN’s MD&A disclosure and earnings press releases prior to their release,
filing and distribution; |
| ◦ | reviewing
with management and the external auditors and recommending for approval to the Board the
annual audited financial statements of CN’s pension trust funds of CN’s Pension
Plans (the "Pension Trust Funds"); |
| ◦ | reviewing
the level and type of financial information provided, from time to time, to financial markets; |
| ◦ | reviewing
and recommending for approval to the Board the financial information contained in the annual
information form, prospectuses or other offering documents and other reports or documents,
financial or otherwise, requiring Board approval; |
| ◦ | reviewing
with the external auditors and management, the quality, appropriateness and disclosure of
CN’s accounting principles and policies, underlying assumptions and reporting practices,
and any proposed changes thereto, as well as any significant financial reporting issues and
judgments made in connection with the preparation of financial statements, including without
limitation (i) all critical accounting policies and practices used, (ii) any alternative
treatments of financial information that have been discussed with management, the ramification
of their use and the treatment preferred by the external auditors, as well as (iii) any other
material written communications between CN and the external auditors (including a disagreement,
if any, with management and any audit problems or difficulties and management’s response); |
| ◦ | reviewing
the external auditors’ reports on the annual consolidated financial statements and
internal controls over financial reporting of CN and on the annual financial statements of
CN’s Pension Trust Funds; |
| ◦ | reviewing the external auditors’
quarterly review engagement reports on the quarterly consolidated financial statements of
CN; |
| ◦ | reviewing the
compliance of management certification of financial reports with applicable legislation;
and |
| ◦ | reviewing
the results of the external audit, any significant problems encountered in performing the
audit, and management’s response and/or action plan related to any Management Letter
issued by the external auditors and any significant recommendations contained therein. |
| • | Monitoring Internal Controls
over Financial Reporting (“Internal Controls”). The AFR Committee shall monitor
the integrity and quality of CN’s Internal Controls. This includes: |
| ◦ | receiving periodically
management’s report assessing the adequacy and effectiveness of CN’s disclosure
controls and procedures and Internal Controls; |
| ◦ | reviewing
CN’s compliance with applicable legal and regulatory requirements relating to Internal
Controls; |
| ◦ | while
ensuring confidentiality and anonymity, establishing procedures for the receipt, retention
and treatment of complaints received by CN regarding any matter that could pose a risk to
CN’s business, including concerns regarding accounting or auditing matters; and |
| ◦ | requesting
the performance of an audit of any specific risk or of Internal Controls, as required. |
| • | Monitoring Internal Auditors.
The AFR Committee will monitor the performance of the internal auditors. This includes: |
| ◦ | ensuring that
the chief internal auditor reports directly to the AFR Committee and recommending the appointment
and termination of the chief internal auditor; |
| ◦ | regularly
monitoring the internal audit function’s performance, responsibilities, staffing and
resources; |
2024 Annual Information Form
| ◦ | approving
at least annually the internal audit plan and monitoring the progress thereof on a regular
basis; and |
| ◦ | ensuring that the internal auditors
are accountable to the AFR Committee and to the Board. |
| • | Monitoring External Auditors.
The external auditor is accountable to and reports directly to the AFR Committee. Accordingly,
the AFR Committee will evaluate and be directly responsible for CN’s relationship with
the external auditor. Specifically, this includes: |
| ◦ | recommending to
the Board and CN’s shareholders the appointment and, if appropriate, the removal of
external auditors for CN and CN’s Pension Trust Funds, evaluating and remunerating
them, and monitoring their qualifications, performance and independence; |
| ◦ | approving
and overseeing the disclosure of all audit, review and attest services provided by the external
auditors, determining which non-audit services the external auditors are prohibited from
providing, and pre-approving and overseeing the disclosure of permitted non-audit services
by the external auditors to CN or any of its subsidiaries, in accordance with applicable
laws and regulations; |
| ◦ | approving
all fees paid to the external auditors; |
| ◦ | reviewing
at least annually, a report by the external auditors describing their internal quality-control
procedures; any material issues raised by their most recent internal quality-control review
of their firm, or peer review, or by any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or more audits carried out by
them, to the extent available, and any steps taken to deal with any such issues; |
| ◦ | reviewing
at least annually, the formal written statement from the external auditors stating all relationships
the external auditors have with CN and confirming their independence, and holding discussions
with the external auditors as to any relationship or services that may impact their objectivity
or independence; |
| ◦ | reviewing
hiring policies for employees or former employees of CN’s external auditors; and |
| ◦ | ensuring
the rotation of lead, concurring and other audit partners, to the extent required by Canadian
corporate governance standards and US corporate governance standards. |
| • | Communications with Auditors
and Management. The AFR Committee has direct communication channels with the internal
and external auditors to discuss and review specific issues, as appropriate. In addition,
each must meet separately with the AFR Committee, without management, quarterly, and more
frequently as required; the AFR Committee must also meet separately with management quarterly,
and more frequently as required. |
| • | Communications
with Investors. The AFR Committee shall oversee CN’s policies and procedures related
to disclosure of financial and other material information to investors and the processes
in place to ensure the information is accurate, complete and consistent with other public
disclosures made by CN; the AFR Committee will ensure procedures in place for the review
of CN’s disclosure of financial information extracted or derived from CN’s financial
statements and periodically assessing the adequacy of those procedures. |
| • | Operating and Capital Plans.
Following the Board’s annual approval of CN’s strategic and business plan, and
overall capital allocation plan and shareholder distributions (including with respect to
dividends and share repurchases), the AFR Committee shall monitor performance against CN’s
annual operating plans, capital expenditures programs and capital allocation plans, including
monitoring CN’s capital structure and cash flows, and the alignment of these plans
to CN’s long-term strategy. |
| • | Financial
Policy and Financings. The AFR Committee shall review and make recommendations to the
Board relating to CN’s financial policies and financing plans, including: |
| ◦ | treasury operations
such as the opportunity and parameters of debt and equity financings and the prepayment,
redemption, repurchase or defeasance of any indebtedness; |
| ◦ | the
use of financial derivatives and hedging activities; |
| ◦ | loans,
guarantees of the credit of others, or other extensions of credit by CN; and |
| ◦ | significant
additional voluntary pension contributions above current service cost and above any required
special payments that would materially impact CN’s capital allocation plan, in each
case that exceed any delegation of authority to management. |
2024 Annual Information Form
| • | Credit Ratings. The AFR Committee
shall regularly review CN’s credit ratings and monitor CN’s activities relating
to credit rating agencies. |
| • | Credit
Facilities. The AFR Committee shall review CN’s credit facilities, including amendments
thereto, and review compliance by CN with its financial covenants. |
| • | Significant
Investments. The AFR Committee shall receive regular reports from management on the status
and risks related to CN’s significant or strategic investments, such that the AFR Committee
may monitor the execution of such investments against objectives and oversee any related
risks. |
| • | Risk Monitoring and Assessment.
The AFR Committee shall oversee and monitor management’s assessment of CN’s major
risk exposures, defined as exposures that have the potential to materially impact CN’s
ability to meet or support its business objectives, and report to the Board on any significant
risks. This includes reviewing: |
| ◦ | principal risks
and their potential impact on CN’s ability to achieve its business and financial objectives,
including, in coordination with the GS, HRC and SE Committees, any risks overseen by such
Committees and the adequacy and effectiveness of applicable internal controls related to
such risks; |
| ◦ | CN’s
processes and policies for identifying, assessing and managing risks, including CN’s
insurance coverage, to satisfy itself as to the effective risk management of all risks to
CN’s business; |
| ◦ | management’s
oversight of matters relating to non-operating information technology, cyber security or
data governance affecting CN and CN’s information technology systems; |
| ◦ | CN’s
business continuity plans and disaster recovery plans; and any litigation, claim or other
contingency, any investigations and any regulatory or accounting initiatives that could have
a material effect upon the financial position or operating results of CN. |
| • | Enterprise Risk Management. The
AFR Committee shall be responsible for the overall oversight of CN’s enterprise risk
management program and the work carried out by management in this regard. This shall include
the review of regular enterprise risk management reports prepared by management. The AFR
Committee shall review and discuss with management all key enterprise risk exposures (with
the exception of risks for which another committee has been delegated responsibility for
by the AFR Committee or the Board) and the steps management has taken to monitor/control
and mitigate those exposures. The AFR Committee shall be informed of any risk reports relating
to specific risks which fall within the mandate of, or have been delegated to, other Board
committees, enabling the AFR Committee to have a holistic view of all risks faced by CN.
The AFR Committee shall periodically report to the Board on any significant risks or other
matters identified in the enterprise risk management reports it receives and on any major
issues arising with respect to the management of those risks. |
The GS Committee will ensure that a
proper governance framework over risks is in place between the Board and each of its committees and that specific risks which naturally
fall within the expertise or mandate of a committee receive appropriate oversight within such committee. The AFR Committee will ensure
the proper identification of all key risks and will work with the GS Committee in ensuring proper oversight of such key risks across
committees.
| • | Delegation
to Other Board Committees. The AFR Committee shall have the authority to delegate to
other committees of the Board the responsibility for oversight of specific risks that fall
within such committee’s mandate and receive periodic reports from any such committee
on the management of those risks. |
| • | Fraud
Control. The AFR Committee shall oversee CN’s anti-fraud programs and controls,
including its policies and procedures over fraud risk assessments and fraud risk management. |
| D. | DELEGATION
OF AUTHORITY |
| • | The AFR Committee shall review and
recommend for approval CN’s Standing Resolutions on Delegation of Authority, including
the delegation of authority to approve financing transactions and other matters. |
| • | Pension Plan Funding. The
AFR Committee shall oversee and review the funding and investment management of CN’s
Pension Plans. In this regard, the AFR Committee shall: |
2024 Annual Information Form
| ◦ | approve CN’s
overall pension risk management strategy and report thereon to the Board; |
| ◦ | approve
all of CN’s Pension Trust Funds investments made in any one real estate property, resource
property, the shares or debt of any single corporation not listed on a prescribed stock exchange
as defined in the Income Tax Act (Canada), or any investment in a single externally managed
fund in any asset class with a locked-in investment term of more than three years, including
real estate, oil and gas, private equities, private debt, infrastructure, and absolute return,
for which the aggregate investment exceeds CAD $150,000,000 (or the equivalent thereof),
except when the loan or interest is by way of a first mortgage. Debt securities included
in standard investment-grade Canadian bond indices are excluded from this requirement; |
| ◦ | review
and recommend to the Board changes to the Statement of Investment Policies and Procedures
and Derivative Policy for CN’s Pension Trust Funds for approval, including the investment
beliefs and principles that are to underly investment decisions to ensure alignment with
CN’s overall values and risk tolerance; and |
| ◦ | review
and recommend to the Board actuarial valuations and funding of CN’s Pension Plans. |
| • | Pension Advisory Working Committee |
| ◦ | review and recommend to the Board
the governance structure of the management Pension Advisory Working Committee; and |
| ◦ | appoint
members of the management Pension Advisory Working Committee and its Chair. |
| • | Investment Division. Oversee,
through the Pension Advisory Working Committee, the Investment Division performance on investment
of assets of CN’s Pension Trust Funds in accordance with the Statement of Investment
Policies and Procedures approved by the Board, as well as the funded status of CN’s
Pension Plans more broadly. |
| 5. | EVALUATION OF THE AFR COMMITTEE |
| • | Review. The AFR Committee
will review and assess its mandate annually or otherwise as it deems appropriate and shall
report to the Board regularly on its deliberations and annually on the adequacy of its mandate. |
| • | Assessment. At least annually,
the AFR Committee will review its effectiveness in fulfilling its responsibilities and duties
as set out in its mandate. |
Nothing contained in the above mandate is intended
to assign to the AFR Committee the Board’s responsibility to ensure CN’s compliance with applicable laws or regulations or
to expand applicable standards of liability under statutory or regulatory requirements for the directors or the members of the AFR Committee.
Even though the AFR Committee has a specific mandate and its members may have financial experience and expertise, it is not the duty
of the AFR Committee to plan or conduct audits, or to determine that CN’s financial statements are complete and accurate and are
in accordance with generally accepted accounting principles. Such matters are the responsibility of management, the internal auditors
and the external auditors.
Members of the AFR Committee are entitled to
rely, absent knowledge to the contrary, on (i) the integrity of the persons and organizations from whom they receive information, (ii)
the accuracy and completeness of the information provided, and (iii) representations made by management as to the non-audit services
provided to CN by the external auditors.
SIGNATURES
Pursuant to the requirements of the Exchange
Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to
be signed on its behalf by the undersigned, thereto duly authorized.
| |
CANADIAN NATIONAL RAILWAY COMPANY |
|
| |
|
|
| |
|
/s/ Olivier Chouc |
|
| |
Name: |
Olivier Chouc |
|
| |
Title: |
Senior Vice-President and Chief Legal Officer |
|
| |
Date: |
February 4, 2025 |
|
EXHIBIT INDEX
*Incorporated by reference from the Registrant’s Form 6-K dated
February 4, 2025.
Exhibit 97
CANADIAN NATIONAL
RAILWAY COMPANY
FINANCIAL STATEMENT
COMPENSATION RECOUPMENT POLICY
This Canadian National Railway Company Compensation
Recoupment Policy (the “Policy”) has been adopted by the Human Resources and Compensation Committee and the Board of
Directors of Canadian National Railway Company (the “Company”) at their meetings held respectively on October 23
and 24, 2023. This Policy provides for the recoupment of certain executive compensation in the event of an accounting restatement resulting
from material noncompliance with financial reporting requirements under U.S. federal securities laws in accordance with the terms and
conditions set forth herein. This Policy is intended to comply with the requirements of Section 10D of the Exchange Act (as defined
below) and Section 303A.14 of the NYSE Listed Company Manual.
1. Definitions.
For the purposes of this Policy, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in
this Policy shall have the meanings set forth in the 1996 Management Long-Term Incentive Plan (as may be amended from time to time).
(a) “Committee”
means the Human Resources and Compensation Committee of the Board of Directors (“the Board”) or any successor committee
thereof. If there is no Human Resources and Compensation Committee of the Board, references herein to the Committee shall refer to the
Company’s committee of independent directors that is responsible for executive compensation decisions, or in the absence of such
a compensation committee, the independent members of the Board.
(b) “Covered
Compensation” means any Incentive-based Compensation “received” by a Covered Executive during the applicable Recoupment
Period; provided that:
(i) such Covered Compensation was received by such Covered Executive (A) after the Effective
Date, (B) after he or she commenced service as an Executive Officer and (C) while the Company
had a class of securities publicly listed on a United States national securities exchange; and
(ii) such Covered Executive served as an Executive Officer at any time during the performance period applicable
to such Incentive-based Compensation.
For purposes of this Policy, Incentive-based Compensation
is “received” by a Covered Executive during the fiscal period in which the Financial Reporting Measure applicable to
such Incentive-based Compensation (or portion thereof) is attained, even if the payment or grant of such Incentive-based Compensation
is made thereafter.
(c) “Covered
Executive” means any current or former Executive Officer.
(d) “Effective
Date” means October 2, 2023.
(e) “Exchange
Act” means the U.S. Securities Exchange Act of 1934, as amended.
(f) “Executive
Officer” of the Company means executives holding the position of Senior Vice-President or more senior positions at the Company,
as well as the Vice-President and Corporate Comptroller of the Company.
(g) “Financial
Reporting Measure” means any (i) measure that is determined and presented in accordance with the accounting principles
used in preparing the Company’s financial statements, (ii) stock price measure or (iii) total shareholder return measure
(and any measures that are derived wholly or in part from any measure referenced in clause (i), (ii) or (iii) above). For the
avoidance of doubt, any such measure does not need to be presented within the Company’s financial statements or included in a filing
with the U.S. Securities and Exchange Commission to constitute a Financial Reporting Measure.
(h) “Financial
Restatement” means a restatement of the Company’s financial statements due to the Company’s material noncompliance
with any financial reporting requirement under U.S. federal securities laws that is required in order to correct:
(i) an error in previously issued financial statements that is material to the previously issued financial statements; or
(ii) an
error that would result in a material misstatement if the error were (A) corrected in the current period or (B) left uncorrected
in the current period.
For purposes of this Policy, a Financial Restatement shall not be deemed
to occur in the event of a revision of the Company’s financial statements due to an out-of-period adjustment (i.e., when the error
is immaterial to the previously issued financial statements and the correction of the error is also immaterial to the current period)
or a retrospective (1) application of a change in accounting principles; (2) revision to reportable segment information due
to a change in the structure of the Company’s internal organization; (3) reclassification due to a discontinued operation;
(4) application of a change in reporting entity, such as from a reorganization of entities under common control; or (5) revision
for stock splits, reverse stock splits, stock dividends or other changes in capital structure.
(j) “Incentive-based
Compensation” means any compensation (including, for the avoidance of doubt, any cash or equity or equity-based compensation,
whether deferred or current) that is granted, earned and/or vested based wholly or in part upon the achievement of a Financial Reporting
Measure. For purposes of this Policy, “Incentive-based Compensation” shall also be deemed to include any amounts which were
determined based on (or were otherwise calculated by reference to) Incentive-based Compensation (including, without limitation, any amounts
under any long-term disability, life insurance or supplemental retirement or severance plan or agreement or any notional account that
is based on Incentive-based Compensation, as well as any earnings accrued thereon).
(k) “NYSE”
means the New York Stock Exchange, or any successor thereof.
(l) “Recoupment
Period” means the three fiscal years completed immediately preceding the date of any applicable Recoupment Trigger Date. Notwithstanding
the foregoing, the Recoupment Period additionally includes any transition period (that results from a change in the Company’s fiscal
year) within or immediately following those three completed fiscal years, provided that a transition period between the last day of the
Company’s previous fiscal year end and the first day of its new fiscal year that comprises a period of nine (9) to twelve (12)
months would be deemed a completed fiscal year.
(m) “Recoupment
Trigger Date” means the earlier of (i) the date that the Board (or a committee thereof or the officer(s) of the Company
authorized to take such action if Board action is not required) concludes, or reasonably should have concluded, that the Company is required
to prepare a Financial Restatement, and (ii) the date on which a court, regulator or other legally authorized body directs the Company
to prepare a Financial Restatement.
| 2. | Recoupment of Erroneously Awarded Compensation. |
(a) In
the event of a Financial Restatement, if the amount of any Covered Compensation received by a Covered Executive (the “Awarded
Compensation”) exceeds the amount of such Covered Compensation that would have otherwise been received by such Covered Executive
if calculated based on the Financial Restatement (the “Adjusted Compensation”), the Company shall reasonably promptly
recover from such Covered Executive an amount equal to the excess of the Awarded Compensation over the Adjusted Compensation, each calculated
on a pre-tax basis (such excess amount, the “Erroneously Awarded Compensation”).
(b) If
(i) the Financial Reporting Measure applicable to the relevant Covered Compensation is stock price or total shareholder return (or
any measure derived wholly or in part from either of such measures) and (ii) the amount of Erroneously Awarded Compensation is not
subject to mathematical recalculation directly from the information in the Financial Restatement, then the amount of Erroneously Awarded
Compensation shall be determined (on a pre-tax basis) based on the Company’s reasonable estimate of the effect of the Financial
Restatement on the Company’s stock price or total shareholder return (or the derivative measure thereof) upon which such Covered
Compensation was received.
(c) For
the avoidance of doubt, the Company’s obligation to recover Erroneously Awarded Compensation is not dependent on (i) if or
when the restated financial statements are filed or (ii) any fault of any Covered Executive for the accounting errors or other actions
leading to a Financial Restatement.
(d) Notwithstanding
anything to the contrary in Sections 2(a) through (c) hereof, the Company shall not be required to recover any Erroneously
Awarded Compensation if both (x) the conditions set forth in either of the following clauses (i), (ii), or (iii) are satisfied
and (y) the Committee (or a majority of the independent directors serving on the Board) has determined that recovery of the Erroneously
Awarded Compensation would be impracticable:
(i) the
direct expense paid to a third party to assist in enforcing the recovery of the Erroneously Awarded Compensation under this Policy would
exceed the amount of such Erroneously Awarded Compensation to be recovered; provided that, before concluding that it would be impracticable
to recover any amount of Erroneously Awarded Compensation pursuant to this Section 2(d), the Company shall have first made a
reasonable attempt to recover such Erroneously Awarded Compensation, document such reasonable attempt(s) to make such recovery and
provide that documentation to the NYSE;
(ii) recovery
of the Erroneously Awarded Compensation would violate the laws of Canada and the Province of Québec to the extent such law was
adopted prior to November 28, 2022 (provided that, before concluding that it would be impracticable to recover any amount
of Erroneously Awarded Compensation pursuant to this Section 2(d)), the Company shall have first obtained an opinion of home country
counsel of Canada and the Province of Québec, that is acceptable to the NYSE, that recovery would result in such a violation, and
the Company must provide such opinion to the NYSE; or
(iii) recovery
of the Erroneously Awarded Compensation would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly
available to employees of the Company, to fail to meet the requirements of Sections 401(a)(13) or 411(a) of the U.S. Internal Revenue
Code of 1986, as amended (the “Code”).
(e) The
Company shall not indemnify any Covered Executive, directly or indirectly, for any losses that such Covered Executive may incur in connection
with the recovery of Erroneously Awarded Compensation pursuant to this Policy, including through the payment of insurance premiums or
gross-up payments.
(f) The
Committee shall determine, in its sole discretion, the manner and timing in which any Erroneously Awarded Compensation shall be recovered
from a Covered Executive in accordance with applicable law, including, without limitation, by (i) requiring reimbursement of Covered
Compensation previously paid in cash; (ii) seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer
or other disposition of any equity or equity-based awards; (iii) offsetting the Erroneously Awarded Compensation amount from any
compensation otherwise owed by the Company or any of its affiliates to the Covered Executive; (iv) cancelling outstanding vested
or unvested equity or equity-based awards; and/or (v) taking any other remedial and recovery action permitted by applicable law.
For the avoidance of doubt, except as set forth in Section 2(d), in no event may the Company accept an amount that is less than the
amount of Erroneously Awarded Compensation; provided that, to the extent necessary to avoid any adverse tax consequences to the
Covered Executive pursuant to Section 409A of the Code, any offsets against amounts under any nonqualified deferred compensation
plans (as defined under Section 409A of the Code) shall be made in compliance with Section 409A of the Code.
3. Administration.
This Policy shall be administered by the Committee. All decisions of the Committee shall be final, conclusive and binding upon the Company
and the Covered Executives, their beneficiaries, executors, administrators and any other legal representative. The Committee shall have
full power and authority to (i) administer and interpret this Policy; (ii) correct any defect, supply any omission and reconcile
any inconsistency in this Policy; and (iii) make any other determination and take any other action that the Committee deems necessary
or desirable for the administration of this Policy and to comply with applicable law (including Section 10D of the Exchange Act)
and applicable stock market or exchange rules and regulations. Notwithstanding anything to the contrary contained herein, to the
extent permitted by Section 10D of the Exchange Act and Section 303A.14 of the NYSE Listed Company Manual, the Board may, in
its sole discretion, at any time and from time to time, administer this Policy in the same manner as the Committee.
4. Amendment/Termination.
Subject to Section 10D of the Exchange Act and Section 303A.14 of the NYSE Listed Company Manual, this Policy may be amended
or terminated by the Committee at any time. To the extent that any applicable law, or stock market or exchange rules or regulations
require recovery of Erroneously Awarded Compensation in circumstances in addition to those specified herein, nothing in this Policy shall
be deemed to limit or restrict the right or obligation of the Company to recover Erroneously Awarded Compensation to the fullest extent
required by such applicable law, stock market or exchange rules and regulations. Unless otherwise required by applicable law, this
Policy shall no longer be effective from and after the date that the Company no longer has a class of securities publicly listed on a
United States national securities exchange.
5. Interpretation.
Notwithstanding anything to the contrary herein, this Policy is intended to comply with the requirements of Section 10D of the Exchange
Act and Section 303A.14 of the NYSE Listed Company Manual (and any applicable regulations, administrative interpretations or stock
market or exchange rules and regulations adopted in connection therewith). The provisions of this Policy shall be interpreted in
a manner that satisfies such requirements and this Policy shall be operated accordingly. If any provision of this Policy would otherwise
frustrate or conflict with this intent, the provision shall be interpreted and deemed amended so as to avoid such conflict.
6. Other
Compensation Clawback/Recoupment Rights. Any right of recoupment under this Policy is in addition to, and not in lieu of, any other
remedies, rights or requirements with respect to the clawback or recoupment of any compensation that may be available to the Company pursuant
to the terms of any other recoupment or clawback policy of the Company (or any of its affiliates) that may be in effect from time to time,
any provisions in any employment agreement, offer letter, equity plan, equity award agreement or similar plan or agreement, and any other
legal remedies available to the Company, as well as applicable law, stock market or exchange rules, listing standards or regulations;
provided, however, that any amounts recouped or clawed back under any other policy that would be recoupable under this Policy
shall count toward any required clawback or recoupment under this Policy and vice versa.
7. Exempt
Compensation. Notwithstanding anything to the contrary herein, the Company has no obligation to seek recoupment of amounts paid to
a Covered Executive which are granted, vested or earned based solely upon the occurrence or non-occurrence of nonfinancial events. Such
exempt compensation includes, without limitation, base salary, time-vesting awards, compensation awarded on the basis of the achievement
of metrics that are not Financial Reporting Measures or compensation awarded solely at the discretion of the Committee or the Board, provided
that such amounts are in no way contingent on, and were not in any way granted on the basis of, the achievement of any Financial Reporting
Measure performance goal.
8. Miscellaneous.
(a) Any
applicable award agreement or other document setting forth the terms and conditions of any compensation covered by this Policy shall be
deemed to include the restrictions imposed herein and incorporate this Policy by reference and, in the event of any inconsistency, the
terms of this Policy will govern. For the avoidance of doubt, this Policy applies to all compensation that is received on or after the
Effective Date, regardless of the date on which the award agreement or other document setting forth the terms and conditions of the Covered
Executive’s compensation became effective, including, without limitation, compensation received under the 1996 Management Long-Term
Incentive Plan and any successor plan thereto.
(b) This
Policy shall be binding and enforceable against all Covered Executives and their beneficiaries, heirs, executors, administrators or other
legal representatives.
(c) All
issues concerning the construction, validity, enforcement and interpretation of this Policy and all related documents, including, without
limitation, any employment agreement, offer letter, equity award agreement or similar agreement, shall be governed by, and construed in
accordance with, the laws of Canada and the Province of Québec, without giving effect to any choice of law or conflict of law rules or
provisions (whether of Canada and the Province of Québec or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than Canada and the Province of Québec.
(d) The
Covered Executives, their beneficiaries, executors, administrators and any other legal representative and the Company shall initially
attempt to resolve all claims, disputes or controversies arising under, out of or in connection with this Policy by conducting good faith
negotiations amongst themselves. Any and all disputes, claims or causes of action arising from or relating to the enforcement, performance
or interpretation of this Policy shall be brought in any state or federal court of competent jurisdiction in the State of Illinois, City
of Chicago or in any federal or provincial courts of the Province of Quebec. The Covered Executives, their beneficiaries, executors, administrators
and any other legal representative and the Company, shall not commence any suit, action or other proceeding arising out of or based upon
this Agreement except in such courts, and hereby waive, and agree not to assert, by way of motion, as a defense or otherwise, in any such
suit, action or proceeding, any claim that such party is not subject to the jurisdiction of the above-named courts, that its property
is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue
of the suit, action or proceeding is improper or that this Policy or the subject matter hereof may not be enforced in or by such courts.
To the fullest extent permitted by law, the Covered Executives, their beneficiaries, executors, administrators, and any other legal representative,
and the Company, shall waive (and shall hereby be deemed to have waived) the right to resolve any such dispute through a trial by jury.
(e) If
any provision of this Policy is determined to be unenforceable or invalid under any applicable law, such provision will be applied to
the maximum extent permitted by applicable law and shall automatically be deemed amended in a manner consistent with its objectives to
the extent necessary to conform to any limitations required under applicable law.
Exhibit 99.3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors
Canadian National Railway Company:
We consent to the use of:
| • | Our report dated February 4, 2025 on the consolidated financial statements of Canadian National Railway Company (the
“Entity”) which comprise the consolidated balance sheets as at December 31, 2024 and December 31, 2023, the related
consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the years in the
three-year period ended December 31, 2024, and the related notes (collectively the “consolidated financial statements”),
and |
| • | Our report dated February 4, 2025 on the effectiveness of the Entity’s internal control over financial reporting as of December
31, 2024 each of which is included in the Annual Report on Form 40-F of the Entity for the fiscal year ended December 31, 2024. |
We also consent to the incorporation by reference of such reports in
the Registration Statements (No. 333-5258, No. 333- 131856, No. 333-197799, No. 333-7520 and No. 333-204974) on Form S-8, and in the Registration
Statement (No. 333-278466) on Form F-10 of the Entity.
(s) KPMG LLP
February 4, 2025
Montréal, Canada
Exhibit 99.4
ceo
section 302 certification
I, Tracy Robinson, certify that:
| (1) | I have reviewed this annual report
on Form 40-F of Canadian National Railway Company; |
| (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 issuer
as of, and for, the periods presented in this report; |
| (4) | The issuer’s other certifying
officer 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)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the issuer and have: |
| (a) | Designed such disclosure controls and
procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the issuer, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which
this report is being prepared; |
| (b) | Designed such internal control over financial
reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles; |
| (c) | Evaluated the effectiveness of the issuer’s
disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in
the issuer’s internal control over financial reporting that occurred during the period
covered by the annual report that has materially affected, or is reasonably likely to materially
affect, the issuer’s internal control over financial reporting; and |
| (5) | The issuer's other certifying officer
and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the issuer's auditors and the audit committee of the issuer's board of directors
(or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material
weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the issuer’s ability to record, process,
summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that
involves management or other employees who have a significant role in the issuer's internal
control over financial reporting. |
Date: February 4, 2025
| |
/s/ Tracy Robinson |
| |
Tracy Robinson |
| |
President and Chief Executive Officer |
Exhibit 99.5
cfo
section 302 certification
I, Ghislain Houle, certify that:
| (1) | I have reviewed this annual report on Form 40-F of Canadian National Railway Company; |
| (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 issuer as of, and for, the
periods presented in this report; |
| (4) | The issuer’s other certifying officer 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)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the issuer’s internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the
issuer’s internal control over financial reporting; and |
| (5) | The issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the issuer's auditors and the audit committee of the issuer's board of directors (or persons performing
the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report
financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant
role in the issuer's internal control over financial reporting. |
Date:
February 4, 2025
| |
/s/ Ghislain
Houle |
| |
Ghislain Houle |
| |
Executive Vice-President and Chief Financial Officer |
Exhibit 99.6
CEO AND CFO SECTION 906 CERTIFICATION
February 4, 2025
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 Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the
United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Tracy Robinson, President and
Chief Executive Officer, and Ghislain Houle, Executive Vice-President and Chief Financial Officer, of Canadian National Railway Company,
each certifies that, to the best of her or his knowledge:
| 1. | the Annual Report on Form 40-F of Canadian National
Railway Company for the year ended December 31, 2024 (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/ Tracy
Robinson |
|
/s/ Ghislain
Houle |
| Tracy Robinson |
|
Ghislain Houle |
| President and Chief Executive Officer |
|
Executive Vice-President and |
| |
|
Chief Financial Officer |
v3.25.0.1
Cover
|
12 Months Ended |
|
Dec. 31, 2024
shares
|
|---|
| Document Information [Line Items] |
|
| Document Type |
40-F
|
| Amendment Flag |
false
|
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false
|
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true
|
| Document Period End Date |
Dec. 31, 2024
|
| Document Fiscal Period Focus |
FY
|
| Document Fiscal Year Focus |
2024
|
| Current Fiscal Year End Date |
--12-31
|
| Entity File Number |
1-2413
|
| Entity Registrant Name |
CANADIAN
NATIONAL RAILWAY COMPANY
|
| Entity Central Index Key |
0000016868
|
| Entity Primary SIC Number |
4011
|
| Entity Tax Identification Number |
98-0018609
|
| Entity Incorporation, State or Country Code |
Z4
|
| Entity Address, Address Line One |
935
de La Gauchetiere Street West
|
| Entity Address, City or Town |
Montreal
|
| Entity Address, State or Province |
QC
|
| Entity Address, Country |
CA
|
| Entity Address, Postal Zip Code |
H3B 2M9
|
| City Area Code |
514
|
| Local Phone Number |
399-7091
|
| Title of 12(b) Security |
Common
shares
|
| Trading Symbol |
CNI
|
| Security Exchange Name |
NYSE
|
| Annual Information Form |
true
|
| Audited Annual Financial Statements |
false
|
| Entity Current Reporting Status |
Yes
|
| Entity Interactive Data Current |
Yes
|
| Entity Emerging Growth Company |
false
|
| Entity Common Stock, Shares Outstanding |
628,834,857
|
| ICFR Auditor Attestation Flag |
true
|
| Auditor Name |
KPMG LLP
|
| Auditor Location |
Montreal,
Quebec, Canada
|
| Auditor Firm ID |
85
|
| Business Contact [Member] |
|
| Document Information [Line Items] |
|
| Entity Address, Address Line One |
28
Liberty Street
|
| Entity Address, City or Town |
New
York
|
| Entity Address, State or Province |
NY
|
| Entity Address, Postal Zip Code |
10005
|
| City Area Code |
212
|
| Local Phone Number |
894-8940
|
| Contact Personnel Name |
C
T Corporation System
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