CN and Sault Ste. Marie Economic Development Corp. announce fleet acquisition for Agawa Canyon Tour Train

SAULT STE. MARIE, ON, May 15 /PRNewswire-FirstCall/ – CN (TSX: CNR)(NYSE: CNI) and the Sault Ste. Marie Economic Development Corp. (SSMEDC) announced today an agreement to acquire locomotives and passenger cars to re-equip the Agawa Canyon Tour Train that runs north of The Sault into spectacular Canadian Shield country.

CN, the operator of the tour train, is acquiring three Electro-Motive F-40 locomotives, eight coaches, two cafe/lounge cars, three club cars and a presentation coach from Ansco Investment Company of Denver, Colo.

The fleet renewal will include the refurbishment of the Ansco cars, as well as two existing CN passenger dome cars.

The re-equipped train will accommodate more than 900 people, with passenger car upgrades including improved handicap accessibility.

CN and the Northern Ontario Heritage Fund Corporation (NOHFC) – an agency of the Ontario government – are jointly funding the $10-million fleet renewal project.

CN expects the re-equipped tour train will enter service when the tour season commences in mid-June 2009, with the refurbishment completed during the coming season. To view a picture of the new tour train, click here. (http://www.cn.ca/en/agawa-canyon-tour-train.htm)

The Agawa Canyon Tour Train is the chief tourism draw for the Sault Ste. Marie area, generating an estimated $30 million annually in economic activity for the city and region. The train takes passengers on a one-day wilderness excursion 114 miles north of Sault Ste. Marie through a region of northern lakes and rivers, granite rock formations and mixed forest that inspired the Group of Seven to create some of Canada’s most notable landscape art.

Jeff Liepelt, CN vice-president, Eastern Region, said: “CN recognizes the importance of the Agawa Tour Train to Sault Ste. Marie and Northern Ontario, and we have worked closely with provincial agencies as well as Tourism Sault Ste. Marie to develop a solid, financially responsible replacement for the current train fleet.

“We believe the new locomotives and refurbished equipment will ensure the tour train remains a vital economic force in the region.”

Michael Gravelle, Ontario minister of northern development and mines and also chair of the NOHFC, said: “By investing in the Agawa Canyon Tour Train we are ensuring the long-term sustainability of one of the North’s most recognizable tourist attractions as well as boosting the area’s economy and creating much-needed employment opportunities.”

Sault Ste. Marie MPP David Orazietti said: “Our government has delivered the financial resources necessary to significantly improve the passenger experience on the Agawa Canyon Tour Train, which is our community’s most prominent tourist attraction. This investment in modern rail cars will provide a boost to the local economy by playing a major role in helping to rejuvenate tourism in Sault Ste. Marie.”

Greg Punch, president of the SSMEDC, said: “The SSMEDC board of directors would like to thank our partners, CN, the Northern Ontario Heritage Fund Corporation, and our SSMEDC staff team in securing this agreement to support the revitalization of one of our most important tourism icons – the Agawa Canyon Tour Train. We still have much work to do on the Agawa Canyon Revitalization Project, but the most critical step in coming to an agreement has been achieved. This agreement supports the values of both the SSMEDC and CN in rebuilding this most important tourism asset.”

Ian McMillan, executive director of Tourism Sault Ste. Marie, a division of SSMEDC, said:

“This is the announcement the tourism industry of this city has been waiting for. I believe that once consumers see first hand the upgrades in equipment and service on this iconic attraction it will help to build ridership to historic levels. With this increase in tourism visitation the economic impact will be felt in direct consumer spending, job creation and additional infrastructure investment.”

Under the agreement, CN will be the owner of the revitalized fleet. It will also take ownership of 26 obsolescent passenger cars it leases currently for tour train service and will dispose of them, using proceeds for marketing and/or enhancements to the tour facilities and services.

The SSMEDC will manage the food and beverage concession on the tour train, with applicable revenues collected by the agency, which will be free to enhance on-board customer services, including technological entertainment and hospitality attendants, subject to prior CN approval.

CN – Canadian National Railway Company and its operating railway subsidiaries – 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, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, and Jackson, Miss., with connections to all points in North America. For more information on CN, visit the company’s website at www.cn.ca.

The Sault Ste. Marie Economic Development Corporation is a non-profit organization, funded by public and private partners, whose goal is to be the community’s leader in supporting and promoting an environment that generates sustainable employment in a healthy, growing and diversified economy.

SOURCE CN