Canadian National Railway Co. is eyeing the benefits of its $1 billion takeover of BC Rail Ltd.'s freight operations after the deal was approved by Canada's Competition Bureau.
 
Already North America's largest forest products carrier, CN is looking to expand its service to shippers in the province, a move it hopes will boost economic growth in northern British Columbia.
 
CN is set to introduce a new express service to Chicago from the heart of B.C.'s lumber industry in Prince George.
 
It will also invest about $15 million in line improvements near the port of Prince Rupert while adding 600 new flat cars to the BC Rail fleet.
 
"CN is pleased to move ahead with this transaction and is ready to integrate the 1,500 mile BC Rail into our North American network spanning Canada and mid-America," CN chief executive officer Hunter Harrison said.
 
Under an agreement that is expected to close by mid-July, CN is paying the province $1 billion for all the shares of BC Rail and will operate the tracks under a 90 year lease agreement.
 
For the province, the deal will have immediate benefits including the elimination of $500 million in BC Rail debt and $30 million in annual interest payments.
 
"This is great news for British Columbians and communities along the BC Rail corridor," B.C. Transportation Minister Kevin Falcon said.
 
He said the spinoffs include a $32 million investment in a new container terminal at the port of Prince Rupert.
 
However, representatives of 1,200 BC Rail employees are still waiting to see CN's operating plan.
 
"Obviously, we are anxious to see how this will affect the employees," said Bob Sharpe, chairman of the Council of Trade Unions.
 
CN has said it aims to reduce the number of BC Rail employees to 950 from 1,380.
 
CN (TSX) fell 95 cents to close at $56.81.
 
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