1. THE COMPANY

Canadian National Railway Company (CN or the Company), directly and through its subsidiaries, is engaged in the rail transportation business. CN 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, Alabama, and the key cities of Toronto, Buffalo, Chicago, Detroit, Duluth, Minnesota/Superior, Wisconsin, Green Bay, Wisconsin, Minneapolis/St. Paul, Memphis, St. Louis and Jackson, Mississippi, with connections to all points in North America. CN’s revenues are derived from the movement of a diversified and balanced portfolio of goods, including petroleum and chemicals, grain and fertilizers, coal, metals and minerals, forest products, intermodal and automotive.

The following brief description of the Canadian National Railway Company Union Savings Plan for U.S. Operations (the “Plan”) provides only general information. Participants should refer to the summary plan description for a more complete description of the Plan's provisions.

GENERAL
The Plan, as amended through July 1, 2004, covers certain union employees of Illinois Central Railroad Company (ICR), Grand Trunk Western Railroad Incorporated (GTW), Chicago Central and Pacific Company (CCPR), Duluth, Winnipeg and Pacific Railway Company, Wisconsin Central Limited (WCL) and Sault Ste. Marie Bridge Company (SSM). Prior to November 1, 2000, ICR maintained the Illinois Central Railroad Company Retirement Savings Plan (the “IC PLAN”), GTW maintained the Grand Trunk Group Employee Savings Plan (the “Grand Trunk Plan”) and CCPR maintained the Chicago, Central and Pacific Company Bargaining Employees’ 401(k) Plan (the “CC&P Plan”). The Plan is a result of the merger of the IC Plan, the Grand Trunk Plan and the CC&P plan. On July 1, 2004, the WCL and SSM union employees also became participants of the Plan.

Eligible employees may participate on the first day of the calendar month coinciding with or next, following the first day of employment. Part-time eligible employees may participate once they have completed certain employment requirements. This Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

Effective July 1, 2004, Fidelity Investments Trust Company (the “Trustee”) was the appointed trustee and record keeper of the Plan. Until June 30, 2004, American Express Trust Company was the trustee of the Plan under a trust agreement with the Company and also performed administrative services including participant accounting.

There were 6,469 and 6,494 participants in the Plan at December 31, 2004 and 2003, respectively.

CONTRIBUTIONS
Participants may elect to make contributions to the Plan through periodic payroll deductions in amounts ranging from 1% to 100% (up to 20% prior to July 1, 2002) of their eligible earnings. The total pre-tax contributions by a participant were limited to $13,000 in 2004 and $12,000 in 2003 (the limit will increase by $1,000 each year until it reaches $15,000 in 2006, after which the limit will be subject to adjustments to reflect increases in the cost of living pursuant to Section 402(g) of the Internal Revenue Code). Effective July 1, 2002, the Plan incorporated the “Catch-up” provisions provided for in the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) for employees meeting the eligibility requirements set forth therein. The “Catch-up” provision allows employees who are at least age 50 by the end of the plan year to contribute additional pre-tax dollars up to a maximum amount of $3,000 in 2004 and $2,000 in 2003 (the maximum amount will be $4,000 and $5,000 in 2005 and 2006, respectively, after which the amount will be increased to reflect increases in the cost of living).

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