Canadian railroading is dominated by two of the worlds largest rail systems: the privately owned Canadian Pacific (CP) Railway and the formerly government-owned Canadian National (CN) Railways, which was privatized in 1995. Both railroads extend east and west, roughly parallel to the U.S.-Canada border, and serve almost every major city in Canada. CN is Canada largest railroad; its track network extends from coast to coast. CN serves the major Canadian ports on the Atlantic and Pacific coasts and the Great Lakes. In conjunction with its St. Lawrence and Hudson Railway, CP also has a coast to coast system.
Full management of passenger service on both lines was taken over in 1978 by VIA Rail Canada, a government corporation. At the end of the 20th century, passenger volumes and service levels continued to decline in the face of high costs and strong competition from other forms of transportation, such as private automobiles and airlines.
There are several other major Canadian railroads, running generally north and south. The Ontario Northland Railway runs from North Bay to Moosonee, Ontario, on James Bay. The Algoma Central Railway, located in Ontario, runs from Sault Ste. Marie to Hearst. BC Rail (formerly Pacific Great Eastern) stretches from North Vancouver, British Columbia, to Fort Nelson in northeastern British Columbia.
Modern commuter rail services are provided in Toronto, Montreal, and Vancouver. There was little change in total track mileage from the 1920s through the early 1970s. Many unprofitable lines were abandoned, but new expanded lines took their place. Beginning in the mid-1970s, overall track mileage began to decrease in Canada.
Physically and operationally, Canada railroads are practically identical to those of the United States. Lines of each country extend into the other, and freight and passenger cars are freely interchanged between them. Both major Canadian lines have major corporate holdings and rail operations in the United States. CN owns the Grand Trunk Western from Detroit, Michigan, into Chicago, Illinois. CN also has access to Duluth, Minnesota, through its subsidiary, Duluth Winnipeg and Pacific. CP connects into the United States through ownership of the Soo Line and the Delaware and Hudson Railway. With the implementation of the North American Free Trade Agreement (NAFTA) in 1994, there was a marked shift in traffic volumes from east-west to north-south. The shift in traffic has brought new opportunities to the Canadian lines
In the 1960s and 1970s, the Canadian systems had more freedom in setting rates and meeting competition than did rail companies in the United States. However, the U.S. Staggers Act of 1980 deregulated much of the U.S. system and gave a competitive advantage to U.S. carriers. In the 1980s and 1990s the Canadian railways faced heavier taxation, less freedom to eliminate unprofitable lines, and stiffer highway competition than railroads in the United States