CN and Sault Ste. Marie Economic Development Corp. announce fleet acquisition for Agawa Canyon Tour Train



    SAULT STE. MARIE, ON, May 15 /CNW Telbec/ - CN (TSX: CNR)(NYSE:   CNI) and
the Sault Ste. Marie Economic Development Corp. (SSMEDC) announced today an
agreement to acquire locomotives and passenger cars to re-equip the Agawa
Canyon Tour Train that runs north of The Sault into spectacular Canadian
Shield country.
    CN, the operator of the tour train, is acquiring three Electro-Motive
F-40 locomotives, eight coaches, two café/lounge cars, three club cars and a
presentation coach from Ansco Investment Company of Denver, Colo.
    The fleet renewal will include the refurbishment of the Ansco cars, as
well as two existing CN passenger dome cars.
    The re-equipped train will accommodate more than 900 people, with
passenger car upgrades including improved handicap accessibility.
    CN and the Northern Ontario Heritage Fund Corporation (NOHFC) - an agency
of the Ontario government - are jointly funding the $10-million fleet renewal
project.
    CN expects the re-equipped tour train will enter service when the tour
season commences in mid-June 2009, with the refurbishment completed during the
coming season. To view a picture of the new tour train, click here.
(http://www.cn.ca/en/agawa-canyon-tour-train.htm)
    The Agawa Canyon Tour Train is the chief tourism draw for the Sault Ste.
Marie area, generating an estimated $30 million annually in economic activity
for the city and region. The train takes passengers on a one-day wilderness
excursion 114 miles north of Sault Ste. Marie through a region of northern
lakes and rivers, granite rock formations and mixed forest that inspired the
Group of Seven to create some of Canada's most notable landscape art.
    Jeff Liepelt, CN vice-president, Eastern Region, said: "CN recognizes the
importance of the Agawa Tour Train to Sault Ste. Marie and Northern Ontario,
and we have worked closely with provincial agencies as well as Tourism Sault
Ste. Marie to develop a solid, financially responsible replacement for the
current train fleet.
    "We believe the new locomotives and refurbished equipment will ensure the
tour train remains a vital economic force in the region."
    Michael Gravelle, Ontario minister of northern development and mines and
also chair of the NOHFC, said: "By investing in the Agawa Canyon Tour Train we
are ensuring the long-term sustainability of one of the North's most
recognizable tourist attractions as well as boosting the area's economy and
creating much-needed employment opportunities."
    Sault Ste. Marie MPP David Orazietti said: "Our government has delivered
the financial resources necessary to significantly improve the passenger
experience on the Agawa Canyon Tour Train, which is our community's most
prominent tourist attraction. This investment in modern rail cars will provide
a boost to the local economy by playing a major role in helping to rejuvenate
tourism in Sault Ste. Marie."
    Greg Punch, president of the SSMEDC, said: "The SSMEDC board of directors
would like to thank our partners, CN, the Northern Ontario Heritage Fund
Corporation, and our SSMEDC staff team in securing this agreement to support
the revitalization of one of our most important tourism icons - the Agawa
Canyon Tour Train. We still have much work to do on the Agawa Canyon
Revitalization Project, but the most critical step in coming to an agreement
has been achieved. This agreement supports the values of both the SSMEDC and
CN in rebuilding this most important tourism asset."
    Ian McMillan, executive director of Tourism Sault Ste. Marie, a division
of SSMEDC, said:
    "This is the announcement the tourism industry of this city has been
waiting for. I believe that once consumers see first hand the upgrades in
equipment and service on this iconic attraction it will help to build
ridership to historic levels. With this increase in tourism visitation the
economic impact will be felt in direct consumer spending, job creation and
additional infrastructure investment."
    Under the agreement, CN will be the owner of the revitalized fleet. It
will also take ownership of 26 obsolescent passenger cars it leases currently
for tour train service and will dispose of them, using proceeds for marketing
and/or enhancements to the tour facilities and services.
    The SSMEDC will manage the food and beverage concession on the tour
train, with applicable revenues collected by the agency, which will be free to
enhance on-board customer services, including technological entertainment and
hospitality attendants, subject to prior CN approval.

    CN - Canadian National Railway Company and its operating railway
subsidiaries - spans Canada and mid-America, from the Atlantic and Pacific
oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert,
B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key
metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth,
Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, and
Jackson, Miss., with connections to all points in North America. For more
information on CN, visit the company's website at www.cn.ca.

    The Sault Ste. Marie Economic Development Corporation is a non-profit
organization, funded by public and private partners, whose goal is to be the
community's leader in supporting and promoting an environment that generates
sustainable employment in a healthy, growing and diversified economy.




For further information:

For further information: Contacts for CN: Media: Mark Hallman, Director,
Communications, Media, (905) 669-3384, mark.hallman@cn.ca; Investment
Community: Robert Noorigian, Vice-President, (514) 399-0052,
robert.noorigian@cn.ca; Contacts for SSMEDC: Ian McMillan, Executive Director,
Tourism Sault Ste. Marie, (705) 759-5465


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