North America’s Largest Railroad Operating Union Joins Others and Calls on STB to Reject CN Voting Trust

June 15, 2021

SMART-TD says it expects voting trust approval will “negatively affect employees, shippers and most importantly public safety”

More than 130 shippers, communities, labor organizations, and other stakeholders have already communicated opposition to CN’s voting trust proposal directly to the STB

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CALGARY – June 15, 2021 – Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP) (“CP”)  announced today that SMART-Transportation Division (“SMART-TD”), North America’s  largest railroad operating union, has submitted a letter urging the Surface Transportation  Board (“STB”) to reject Canadian National’s (“CN”) proposed use of a voting trust.  

SMART-TD joins a growing list of shippers, communities, labor unions and other  stakeholders who have voiced opposition to CN’s voting trust as part of its proposal to  combine with Kansas City Southern (“KCS”). In a letter to the STB, SMART-TD President  Jeremy Ferguson writes: 

“The approval of the CN voting trust by the STB would be risky for the railway industry and  quite possibly will negatively impact our involved SMART-TD members. Approval of the CN  voting trust proposal would harm employees of both KCS and CN due to the amount of debt  CN will carry and the real possibility that the CN transaction would fail the regulatory test in  the end.  

“The CN/KCS transaction is the opposite of an end-to-end merger and would be anti competitive due to the overlap of existing rail lines and affected customers. The CN already  has a high capacity mainline route from Chicago, IL straight to New Orleans, LA, therefore  with CN acquiring KCS there would be no need for parallel routes such as the KCS line from  Kansas City through to New Orleans.  

“If the CN voting trust and proposed merger were granted approval, we fully expect  significant job losses on either CN or KCS because ultimately the transaction would require  either a sale or abandonment of duplicative rail lines. The consequences for SMART-TD  members would be uncertain, adverse, and certainly contrary to the public interest.” 

In contrast, the SMART-TD letter says of Canadian Pacific’s proposed combination with KCS: “we anticipate growth in both rail businesses and jobs for SMART-TD members.”  

Additional Union Concerns about a CN/KCS transaction 

The Transportation Communications Union/IAM (“TCU”) separately noted in a recent letter  to the STB that the CN/KCS transaction is not end-to-end and could have long-lasting  impacts: “…railroad workers lose with CN’s proposed voting trust. The consequences for  TCU’s members and Union Brothers and Sisters will likely be adverse and contrary to the  public interest.” 

District Lodge 19 of the International Association of Machinists and Aerospace Workers, AFL CIO, and the Teamsters Canada Rail Conference-MWED have also filed letters with the STB  opposing the CN/KCS voting trust. Those labor organizations join more than 130 shippers,  communities and other stakeholders writing directly to the STB in opposition to CN’s voting  trust proposal.  

Public Comment Period for CN Voting Trust 

The next two weeks, leading up to the STB’s June 28 deadline, and the STB’s subsequent  deliberations, will determine the course of competition for U.S. railroading and North  American commerce for the next 150 years. 

Now is the time for stakeholders to voice their concerns about whether CN should be able to  lock in its anti-competitive plan to buy KCS via a voting trust. Stakeholders can express  their concerns directly to the STB.  

Allowing CN to close into trust would not be in the public interest because its approval would  pre-judge STB review, harm competition, risk CN shifting financial burdens to shippers, and  pave the way for additional U.S. rail consolidation. CN’s arguments in favor of a trust  amount to the claim that CN and KCS should be able to decide what is in the public interest  based on which railroad is offering more money to acquire KCS – that argument elevates  private interests over the public interest.  

CP maintains that a CP-KCS combination is the only viable Class 1 merger that serves the  best interests of customers and stakeholders, but also the continent’s rail network to enable  a new corridor of investment and capacity for the North American economy to grow. 

For more information on the transaction and the benefits CP-KCS is expected to bring to the  full range of stakeholders, visit 


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Chris De Bruyn
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