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On Oct. 18, Canadian National Railway Co. announced that the Ontario government directed Ontario Northland Transportation Commission to exclusively negotiate a sale agreement with CN for provincially owned Ontario Northland Railway (ONT).


CN expects an agreement by year end and plans to close the transaction in first-quarter 2003. To complete the deal, CN would need to reach a labor agreement with the 700-mile regional's workers and secure approval from Ontario's government.


ONT, which provides freight and passenger services in northeastern Ontario and northwestern Quebec, interchanges with CN at North Bay, Ontario, about 200 miles north of Toronto.


CN plans to improve the regional's freight and passenger services, inject capital into its operations, maintain employment levels at the railroad's shops and integrate the shops into the Class I's system.


"Our scheduled freight service and network reach would offer Ontario Northland's shippers better service and the most direct route to key North American markets," said Keith Heller, senior vice president of CN’s eastern Canada division, in a prepared statement.


ONT, which operates 30 diesel electric locomotives and 810 rail cars, primarily serves metal and forest-product shippers.