A CN locomotive at the CN Stuart Yard in Hamilton, Ont. The railway has cut its capital spending plans by $600-million for next year.Peter Power/The Canadian Press
Canadian National Railway Co. CNR-T is slashing its capital spending and laying off managers as the tariff war crimps freights shipments between Canada and the United States.
The cuts will help it weather a “challenging” economy buffeted by U.S. President Donald Trump’s chaotic rollout of tariffs on lumber, metals and other goods, said Tracy Robinson, CN’s chief executive officer.
“Adjusting cost structures is critical, especially in a soft macro environment, and we’re pursuing all opportunities across our whole work force and asset base,” Ms. Robinson told analysts on a financial results conference call on Friday morning.
Montreal-based CN posted a 5-per-cent rise in profit in the third quarter, while revenue rose by 1 per cent to $4.2-billion from the same period a year ago.
Profit for the three months ending on Sept. 30 was $1.13-billion or $1.83 a share, CN said, compared with $1.09-billion or $1.72 a year ago.
CN increased train length by 3 per cent and fuel efficiency by 2 per cent, contributing to a 3-per-cent drop in operating expenses, compared with the same quarter of 2024. The removal of the federal carbon tax helped reduce fuel expenses by 20 per cent.
Ms. Robinson said cargo volumes were lower than the railway expected for the period because of the tariffs and overall economic weakness.
CN posted drops in revenue from shipments of metals and minerals (5 per cent), forest products (3 per cent) and agriculture (1 per cent). Shipping containers, CN’s largest revenue generator, rose by 11 per cent, while petroleum and chemicals increased by 2 per cent. Automotive sales were flat.
In financial results released before markets opened, CN said it is sticking with earlier 2025 guidance of adjusted earnings growth of 5 per cent to 9 per cent.
Ms. Robinson said the railway is cutting its capital spending plans for 2026 by $600-million from $3.4-billion this year. The move follows construction to add capacity at some terminals, and upgrades to the locomotive and railcar fleets.
CN has shed 1,200 jobs since this time last year and recently laid off 400 managers at locations across Canada and the United States. The management cuts saved $75-million.
“As we look to 2026, we see another year of limited volume growth with a weak outlook for North American industrial production and housing starts and some mixed headwinds given the continued impact of tariffs on forest products, in particular,” Ms. Robinson said.
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Fadi Chamoun, a Bank of Montreal stock analyst, said CN’s expenditure plans are less than he expected and place the company among the lowest spenders in the industry.
Analysts on the call asked if the reduced spending would hamper the railway’s ability to respond to any rise in demand for freight shipments.
Ms. Robinson said the company is set to handle any growth in cargo, but expects 2026 freight volumes will be flat. “We’re going to run tight, we’re going to be lean, but we will have the ability to flex up as the volumes turn up,” she said.
CN employs 24,000 people and operates a rail network that spans Canada and extends through the United States.
CN’s share price closed up 3 per cent Friday on the Toronto Stock Exchange. Before Friday, CN’s share price had fallen by 11 per cent year-to-date.
Ariel Rosa, a Citigroup analyst, said CN’s quarterly results were “solid.” In a note to clients, he said CN has been out of favour with investors because of trade uncertainty and fears the company would be in a tougher position should the proposed Union Pacific-Norfolk Southern railway takeover be approved in the U.S.