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Two of Canadian National Railway Co.’s goals to meet traffic demand are to improve network fluidity and boost productivity. To meet them, the Class I plans to increase capital spending next year by 4 percent to $1.4 billion — or about 20 percent of annual revenue.

CN will spend more than $700 million on maintenance-of-way projects, and more than $175 million on network and growth-related projects, such as siding extensions and double-stack clearances on the B.C. North Line to accommodate container traffic from the Prince Rupert Intermodal Terminal set to open in second-half 2007. The railroad also will add siding capacity between Winnipeg, Manitoba, and Chicago, and continue upgrading a Memphis, Tenn., classification yard.

In addition, CN will spend more than $300 million on equipment, such as to acquire 65 new locomotives, and upgrade the freight-car and intermodal equipment fleets.

Lastly, the Class I is budgeting more than $175 million to improve information technology and facilities, including transload and distribution centers.

“This [spending] reflects our key priorities — plant quality and safety, building capacity and speed, accelerating growth potential and improving productivity across the board,” said CN President and Chief Executive Officer E. Hunter Harrison in a prepared statement.