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February 2026
By Bridget Dean, Associate Editor
Throughout the 2010s and continuing in the 2020s, the Class Is have mostly increased their capital expenditure budgets each year. Every now and then, one of them would trim their spending for a given year and bump it up the next. But that pattern has shifted in 2026.
All six Class Is have budgeted lower capex amounts this year compared with their 2025 budgets. Union Pacific Railroad, CSX and BNSF Railway have all trimmed their budgets by single-digit percentages, while Norfolk Southern Railway and CPKC both cut their capex by about 15%.
CN’s year-over-year budget change is the most significant: Its capex is down nearly 20% (about $600 million in Canadian dollars) to C$2.8 billion.
The decrease reflects the completion of key infrastructure projects and fleet investments over the past three years that were necessary for the Class I to meet growing capacity demand, said CN Executive Vice President and Chief Operating Officer Patrick Whitehead in an email.
“This level of capital spending aligns us with our peers in terms of investment,” he said about the 2026 capex plan. “This is a rebalancing of capital, not a pullback from growth.”
“This is a rebalancing of capital, not a pullback from growth.” — Patrick Whitehead, CN EVP and COO
Rolling stock acquisitions and several double-track projects in western Canada have prepared CN to handle projected traffic growth along key corridors and trade routes. The added capacity also allows for more operational flexibility throughout 2026, which the Class I anticipates to be another year of uncertainty surrounding North American trade and U.S. tariff policies.
The 2026 capex plan reflects that trade environment, said CN CEO and President Tracy Robinson during the company’s fourth-quarter earnings call with analysts on Jan. 30. Despite optimism for growth in several key commodities in 2026 — including petroleum, chemicals and grain — CN expects overall flat volume for the year. The potash, lumber, metals and minerals segments, along with international intermodal traffic, are expected to face headwinds in 2026.
CN is hoping for clarity on tariff agreements with the United States and progress on Canadian trade diversification in 2026, Robinson added. However, the railroad made no assumptions about changes to tariff policies when developing its spending plan for the year. It instead prioritizes long-term volume growth and the delivery of consistent and reliable service to customers no matter what the broader economic environment is, CN leaders say.
Following are highlights of CN’s recently completed capacity expansions and higher-reliability projects that set the stage for the lower capex budget in 2026.
In 2025, CN completed two double-track projects in its Edson Subdivision, one of the railroad’s busiest and most important stretches of mainline. Spanning over 300 miles between Edmonton and Jasper, Alberta, the subdivision connects the rest of CN’s western network to Canada’s two largest export gateways: Vancouver and Prince Rupert, British Columbia.
It’s a critical corridor for agriculture, potash, energy and forest products, according to a CN online article. Now, the subdivision is more than 60% double tracked, allowing for bi-directional travel, Whitehead said.
During the year, crews double-tracked two segments totaling 17 miles and added a new double crossover in an area that was notoriously bottlenecked. Since 2022, double-track work and other improvements to the subdivision have resulted in a 25% increase in capacity, CN officials say.
More trains crossing the subdivision daily means fewer transit delays for shippers, including grain farmers, who rely on CN to complete time-sensitive deliveries to West Coast ports.
The added capacity also contributes to the delivery of frac sand for natural gas drilling in the Montney region of British Columbia and Alberta. Timely delivery prevents work stoppages and energy outages in communities that depend on Canadian energy, CN officials say.
The Class I used forecasting and simulation modeling tools to determine where double track was needed in western Canada, based on anticipated growth in bulk exports and container traffic out of the ports in Vancouver and Prince Rupert.
Beyond the double-tracking work, CN crews also lengthened sidings, upgraded rail yards and improved defect detection technology along the Edson Subdivision corridor in recent years.
In December 2024, CN completed a 4-mile siding extension in the Chicago area that resulted in a 17% increase in capacity. Work was performed between Sutton and Spaulding, Illinois, on a line historically operated by the Elgin, Joliet & Eastern Railway Co. (EJ&E), which CN acquired in 2009 and merged with Wisconsin Central Ltd. in 2013.
The former EJ&E lines loop around downtown Chicago, providing CN with a bypass around the freight hub and easier interchange points with other carriers.
The siding extension project was deemed necessary in 2023 and originally scheduled for completion in second-quarter 2024, but a series of drainage issues and permitting challenges pushed work into late 2024.
To ensure the project’s completion before 2025, CN crews built the entire track in house — a first for the railroad, CN officials said in an online article.
CN also has boosted its network capacity through locomotive modernizations and investments in higher-capacity rail cars. Since 2023, the Class I has converted 183 direct current (DC) locomotives to alternating current (AC) traction units, improving their performance and reliability in cold weather months, Whitehead said.
These conversions have allowed CN to deploy 50 more AC locomotives in western Canada in the 2025-2026 winter season compared to prior years, according to CN’s latest winter plan. About 60% of the 1,950 locomotives deployed this winter are AC traction compared to 45% during the 2024-2025 winter season.
The Class I also completed rolling stock renewals in recent years. In 2024, CN took delivery of new ore cars, box cars, bi-level autoracks and — notably — 750 new high-capacity grain hopper cars, helping to increase grain movements across western Canada, according to the winter plan.
With the fleet and rolling stock improvements, CN could better meet the high demand for grain movements in 2025. CN hauled a record 32.7 million metric tons of Canadian grain last year.
Although smaller than prior years, CN’s 2026 capex plan still calls for a robust slate of projects that will improve velocity, reduce dwell and maximize returns on prior capex investments, Whitehead said.
The railroad will continue to invest in its locomotive and rail-car fleets to make the rolling stock more reliable, which will help reduce maintenance costs in the long term.
CN also is planning more double-track projects, siding additions and improvements along the route from the Canadian West Coast to Chicago. For example, construction on a 12,000-foot siding project in the Vancouver area is scheduled to begin in 2026, with completion expected at the end of 2027.
“This project will add fluidity and resilience at a critical West Coast gateway, supporting both growth and service reliability,” Whitehead said.
The Class I also anticipates wrapping up construction on the Prince Rupert Zanardi Bridge project in 2026. The original single-track railroad bridge crosses the Zanardi Rapids in British Columbia. It connects CN to the city and Port of Prince Rupert, where CN is the exclusive rail service provider.
Prince Rupert is Canada’s third-busiest port, with plans for expansion on the horizon. The port has proposed adding a second ship terminal by the early 2030s, and a new export transloading facility is currently under development in partnership with CN.
As it stands, the Port of Prince Rupert is already one of CN’s biggest traffic generators, Whitehead said. With capacity for just 24 trains per day, the existing Zanardi Bridge is prone to frequent gridlock and won’t be able to handle future growth.
To resolve this, CN in second-quarter 2025 began constructing a second, two-track bridge with capacity for more than 50 trains per day. The original bridge will also be restored and remain in service when the new bridge enters service in early 2027.
Like many of CN’s prior-year and 2026 capex projects, the Zanardi Bridge construction directly supports future traffic growth by expanding capacity.
“Each of these projects is directly tied to efficiency,” said Whitehead. “Collectively, they allow CN to operate with lower capital intensity in 2026 while still supporting growth. We have increased capacity for us to sell into while at the same time allowing us to continue delivering consistent and reliable service to customers.”
Both prior and ongoing capital projects have helped position the Class I to remain resilient even if trade conditions and product demand face headwinds in 2026, CN officials say.
Beyond capital projects, the railroad is pursuing commercial prospects, helping shippers find new markets and convert truck traffic to rail. Further integrating its commercial and operations teams has allowed CN to make faster decisions and offer new service solutions to shippers, Whitehead said.
On the operational side, CN plans to continue pushing its scheduled railroading plan in 2026. CN’s “Make the plan, run the plan, sell the plan” scheduled railroading model, introduced in 2023, has proven to be resilient over the past few years, Whitehead said.
CN’s operational teams analyze cargo volumes across the entire network and determine the optimal use of available crews, rolling stock, locomotives and infrastructure. The completed investments in capacity expansions and more reliable locomotives help ensure the railroad has flexibility to keep that plan on track, even during economic uncertainty.
“As we look at what we’ve been doing over the last year and the last couple of years, you’ve seen us invest in the network,” Robinson said during the Q4 earnings conference. “We’ve got our network set up now for what we see happening. We’re exactly where we want to be.”
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