Ever since its formation, CN had served Canadians well as a vital support to the economy. However, it had failed to earn a profit in most of the years of its existence, and by the early 1960s the company's long-term debt had climbed to an unsustainable level.

Passage of Canada's National Transportation Act (NTA) in 1967 eased the situation to some extent. It permitted the railroads to receive subsidies to cover most of their losses on the uneconomic passenger services and branch lines that they were required to maintain in the public interest.

Throughout the 1970s, CN concentrated on improving its financial position. It transformed departments responsible for activities other than rail freight service into "profit centers," which encouraged managers to focus on making each part of the company as efficient as possible.

Then in 1978, Parliament passed legislation making it possible for CN to balance its books and indeed maintain a profitable position. The Capital Revision Act relieved CN of most of its debt to government, thus easing the annual interest burden. CN was expected to earn a profit and to pay a dividend to the government each year. If it needed capital, it was now permitted to borrow funds on commercial money markets. In the years to come, the company succeeded in earning at least modest profits most of the time.


CN's first unit train hauled iron ore pellets, Temagami, Ontario, 1968.

Always a leader in transportation and communication technology, CN decided in the early 1970s to capitalize on this expertise on a global scale. It created an international consulting division, known today as Canac Inc., which soon was marketing the railroad's prowess in dozens of countries around the world.

Passenger services transferred to VIA Rail Canada

Through much of the 1960s and 1970s, CN did its best to revive the popularity of rail passenger services and lure travelers away from highways and airlines. While dropping the most unprofitable trains, CN launched new services and introduced new equipment on heavily traveled routes, especially the Quebec City/Windsor corridor. But despite these efforts, CN's passenger trains continued to lose money. So in 1977, the government entrusted the passenger services of both CN and Canadian Pacific to a new state-owned company, VIA Rail Canada.