Union Pacific and Norfolk Southern submitted a nearly 7,000‑page merger application to the board in December, kicking off a regulatory review of what would be one of the rail industry’s most significant transactions in decades.

The $85 billion deal (C$117.9 billion), announced in July, is aimed at speeding shipments by reducing handoffs and delays and would create the first U.S. coast-to-coast railroad. The proposal has drawn criticism from labor unions and rival railroads.

CN said the applicants did not fully detail their assessment of the merger’s competitive impact, citing incomplete market analyses, missing required market-share projections and other gaps in the filing.

“Given the scale and stakes of the proposed combination, the applicants must meet the highest standard of transparency and compliance,” Canadian National said.

“Rather than trying to convince everyone that there is ‘nothing to see here’, the applicants should instead be focused on meeting the rigorous and heightened standard called for by the new merger rules,” it added.

Union Pacific and Norfolk Southern did not immediately respond to a request for comment.

The review is expected to face intense scrutiny from the Surface Transportation Board and could take 12 to 18 months, with the companies targeting an early-2027 close.

“While the application outlines compelling earnings and free cash flow under favorable outcomes, regulatory uncertainty is elevated,” BMO Capital Markets analyst Fadi Chamoun wrote in a note last week.

— Reporting by Abhinav Parmar in Bengaluru

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The VRCPI for the Canadian National Railway is set at 1.9734, an increase of 1.72 per cent over last crop year. For Canadian Pacific Kansas City Railway, the VRCPI is set to 1.9349, an increase of 3.11 per cent from the previous crop year, the CTA said in a news release on Wednesday.

The VRCPI is an inflation factor determined based historical price information for railway inputs like labour, fuel, material and “other capital items,” the CTA said. Future changes in railway price components are also factored in.

The indices are used to determine the railways’ maximum revenue entitlements for movement of Western Canadian grain in the 2025-2026 crop year.

If the railways exceed their maximum revenue entitlement, they must pay the excess, plus a penalty, to the Western Grains Research Foundation.

In 2024, CPKC exceeded its revenue cap by a bit more than $1.8 million. CN did not exceed its maximum revenue entitlement.

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The Agricultural Producers Association of Saskatchewan had long advocated for the removal of the surcharges, saying they affected farm profitability.

Carbon surcharges were implemented to cover costs associated with emissions and fuel consumption.

Both Canadian National Railway and Canadian Pacific Kansas City eliminated the surcharges as of April 1 in Alberta, Saskatchewan, Manitoba, Ontario and New Brunswick after the federal government ended consumer carbon pricing.

“This is massive for farmers,” said APAS president Bill Prybylski in a news release. “Axing the surcharges puts more cash where it belongs, in our pockets and back into our rural communities.”

APAS said since 2019, Saskatchewan farmers paid about $200 million in the fees. It estimated that the bill in 2025 would have been $80 million.

“We’ve fought tirelessly for relief and seeing it finally come to an end is incredibly rewarding,” Prybylski said.

The move comes at a time of incredible trade uncertainty.

A CN notice to producers said the Low Carbon Fuel Standard is still in place in British Columbia and “will remain unchanged per the tariffs issued effective April 1, 2025.”

APAS said it remains concerned about that and whether it will increase shipping costs to B.C. ports. The organization is also advocating for transparency of how the federal Output-Based Pricing System, or industrial levy, impacts farm input costs.

CN said it would follow legislation closely and re-adjust if necessary.

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The new agreement replaces the previous three-year deal, that was effective through December 31, 2026, CN Rail said, adding that the new agreement does not require ratification from the union’s members.

The rail company had faced a threat of work stoppage last year by rail unions until the Canadian government called for a binding arbitration to reach an agreement over a new contract.

Monday’s announcement follows a recent wave of agreements and ratifications across sectors, as unions push for better working conditions and pay.

“The arbitrator’s decision underscores the importance of a full industrial review of labor relations in Canada’s rail sector,” said Paul Boucher, TCRC president.

Last year, Unifor, which represents more than 3,000 rail workers, ratified a new four-year collective agreement with CN Rail, averting a potential strike action.

—Reporting by Anshuman Tripathy in Bengaluru

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Some 750 signals and communications workers at the railway had voted to strike as early as today if a deal was not reached.

No details of the agreement were released.

CN has been in talks with the International Brotherhood of Electrical Workers (IBEW) union since September.

In 2022, IBEW workers walked off the job for 17 days. The strike concluded when the union and CN agreed to take the dispute to binding arbitration. That strike did not directly affect rail traffic.

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“CN’s contingency plans are in place, operations will continue, and our dedicated teams are prepared to ensure the seamless continuity of service,” the railway said on its website.

CN has been in talks with the International Brotherhood of Electrical Workers (IBEW) union since September. According to the railway, the union, which represents 750 workers, rejected a recent offer and issued a strike notice. A work stoppage could begin just after midnight on January 28.

In 2022, IBEW workers walked off the job for 17 days. The strike concluded when the union and CN agreed to take the dispute to binding arbitration. That strike did not directly affect rail traffic.

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That’s as per the Canadian Transportation Agency’s (CTA) ruling, announced on Christmas Eve in a news release.

• CN’s grain revenue of $1,213,732,435 was $34,329,653 below its entitlement of $1,248,062,088.
• CPKC’s grain revenue of $871,716,922 was $1,824,083 above its entitlement of $869,892,839.

CPKC has 30 days to pay the excess revenue, plus a five per cent penalty of $91,204, to the Western Grains Research Foundation.

The CTA determines the two railways’ annual revenue entitlement as a form of economic regulation, the CTA said.

The total amount of Western Canadian grain moved in 2023-2024 was a bit more than 43.7 million tonnes. This was down 3.5 per cent from the previous crop year, which the CTA attributed to lower crop exports for the year.

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Unifor, which represents more than 3,000 members at the railroad’s Council 4000 and Local 100 committees, said the agreement includes improvements to wages and benefits as well as job protections for members working in CN terminals and headquarters across Canada.

The railroad earlier this month had reached a new tentative four-year collective agreement with the union. These new four-year agreements include three per cent wage increases annually, CN said in a statement.

“This agreement secures important gains that reflect the critical contributions of Unifor members to CN’s operations,” Unifor National President Lana Payne said in a statement.

“By working together with Unifor, we now have new agreements that strengthen our workforce and enhance our ability to serve customers reliably across North America,” said Tracy Robinson, CN’s president and chief executive officer in a statement today.

The ratification comes after Unifor members last month authorized a strike action if the parties failed to reach an agreement by Jan. 1.

The union had initiated negotiations with CN Rail in September, with bargaining priorities that included higher wages, addressing concerns about the pension plan and job security for its members.

— Reporting by Nilutpal Timsina in Bengaluru. Additional reporting by Geralyn Wichers, Glacier FarmMedia.

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Employees represented by Unifor voted in late November to authorize a strike if a deal wasn’t reached by January 1. Workers called for improved compensation, job security and working conditions.

In a statement today, CN said it won’t release details of the agreement until the agreement is ratified. The current collective agreement expires on Dec. 31. The agreement affects some 3,300 employees, CN said.

“This agreement marks a significant step forward in securing improved conditions and protections for Unifor members at CN,” Unifor said in a statement to members.

Ratification votes will happen “in the coming weeks,” it added.

Labour Minister Steven MacKinnon praised the parties for reaching an agreement.

“Thank you to the parties for putting in the work to get a deal and to federal mediators for their support. Negotiated agreements are always the best way forward,” MacKinnon said in a post on X.

Earlier this year, CN and Canadian Pacific Kansas City railways briefly ground to a halt after talks with the Teamsters Canada Rail Conference union broke down. The situation ended with the federal government mandating binding arbitration, which is scheduled to take place in 2025.

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Unifor, which represents more than 3,600 members at the railroad’s Council 4000 and Local 100 committees, said members voted “overwhelmingly” in favor of the strike action.

CN Rail did not immediately respond to a Reuters request for comment.

Unifor, which represents CN Rail’s car technicians and heavy duty mechanics among other workers, said negotiations with the railroad will resume from Nov. 30 to Dec. 8 in Montreal.

The union had initiated negotiations with CN Rail in September, with bargaining priorities that included higher wages, addressing concerns about the pension plan and job security for its members.

— Reporting by Utkarsh Shetti in Bengaluru

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