Canadian National lays out $615 million capital plan for eastern provinces

Source: Canadian National Railway

Canadian National (NYSE: CNI) laid out plans to invest C$615 million this year in network infrastructure in eastern Canada amid wider efforts by stakeholders to revamp Canada’s transportation infrastructure and support the nation’s export markets.

The railway is spending $320 million in Ontario on several expansion projects, including adding capacity near CN’s Brampton intermodal terminal by building a satellite intermodal facility, investing in infrastructure and equipment at the Brampton terminal and making improvements at CN’s Toronto auto compound.

CN will also spend $245 million in Quebec, $45 million in New Brunswick and $5 million in Nova Scotia to implement technologies such as autonomous track inspection, distributed air cars and automated inspection portals.

The railway will also invest in completing maintenance projects throughout the eastern provinces, including replacing rail track, installing railroad ties and rebuilding road crossing surfaces.

CN’s capital investment efforts – a planned $3.9 billion this year and a combined $7.4 billion in 2018 and 2019 – come as Canada itself and other stakeholders are seeking to position Canada as a leading global export player. Government agency Transport Canada is working to implement the transportation goals of Transportation 2030, a program the agency started in 2016 while it was conducting a multiyear review of federal transportation regulations.

Meanwhile, Atlantic coast ports with access to CN and Candian Pacific (NYSE: CP)  are also seeking to expand capacity and their ability to serve export markets in Europe, the Middle East and Africa. Their efforts come as the port of Toronto experienced record volumes last year.

In Quebec province, the port of Montreal is working on a $50 million project to expand rail capacity. The port expects work to start this summer. At the port of Quebec City, La COOP Fédérée will invest $90 million on a grain export terminal.

In the Maritime provinces, the port of Halifax in Nova Scotia is spending $35 million to expand its South End container terminal to allow for two ultra-class vessels, while Port Saint John in New Brunswick is developing a $205 million project to modernize its container infrastructure.