THE CP BOOK · As a part of our bulk portfolio, CP plays a critical role in the movement of agricultural products from key producing regions in Canada and the U.S. to markets throughout

1

THE CP BOOK

Facts current as of July 31st, 2012

2

Section

3

Section

This document contains certain forward-looking information within the meaning of applicable securities laws relating, but not limited, to our operations, priorities and plans, anticipated financial performance, business prospects, planned capital expenditures, programs and strategies. This forward looking information also includes, but is not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions information and statements about possible future events, conditions, and results of operations or performance. Forward-looking information may contain statements with words such as “anticipate”, “believe”, “expect”, “plan” or similar words suggesting future outcomes.

Undue reliance should not be placed on forward-looking information as actual results may differ materially from the forward-looking information. Forward-looking information is not a guarantee of future performance. By its nature, CP’s forward-looking information involves numerous assumptions, inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking information, including but not limited to the following factors: changes in business strategies; general North American and global economic, credit and business conditions; risks in agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures; industry capacity; shifts in market demand; inflation; changes in laws and regulations,

including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; uncertainties of investigations, proceedings or other types of claims and litigation; labour disputes; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; currency and interest rate fluctuations; effects of changes in market conditions and discount rates on the financial position of pension plans and investments, including long-term floating rate notes; and various events that could disrupt operations, including severe weather, droughts, floods, avalanches and earthquakes as well as security threats and governmental response to them, and technological changes. The foregoing list of risks is not exhaustive.

These and other factors are detailed from time to time in reports filed by CP with securities regulators in Canada and the United States. Reference should be made to “Management’s Discussion and Analysis” in CP’s annual and interim reports, Annual Information Form and Form 40-F. Readers are cautioned not to place undue reliance on forward-looking information. Forward-looking information is based on current expectations, estimates and projections and it is possible that predictions, forecasts, projections, and other forms of forward-looking information will not be achieved by CP. Except as required by law, CP undertakes no obligation to update publicly or otherwise revise any forward-looking information, whether as a result of new information, future events or otherwise.

Forward-Looking information

Canadian Pacific is focused on

enhancing service to customers;

driving shareholder value; providing

sustainable, profitable growth;

controlling costs; improving asset

utilization and operating safely.

CP will deliver this based on the

strong foundation, our people.

4 5

the cP network

CALGARY

KINGSGATE

COUTTS

EDMONTONLLOYDMINSTER

REGINAWINNIPEG

MONTREAL

PHILADELPHIA

NEW YORK

KANSAS CITY

RAPID CITY

THUNDER BAY

CHICAGO

VANCOUVER

DETROIT

MINNEAPOLIS/ST. PAUL

DULUTH

TORONTO

SUDBURY

ALBANY

SASKATOON

the cP network

THE CP NETWORKCP has numerous routing options across Canada and through the U.S. as well as excellent North American reach through gateways with all Class I railways. We have extensive Canadian and U.S. shortline partners and serve leading Atlantic and Pacific port facilities.

Canadian paCifiC

pRinCipaL HaULaGE OR TRaCKaGE RiGHTS

7

MArketS

GRAINDeveloping our extensive grain network.As a part of our bulk portfolio, CP plays a critical role in the movement of agricultural products from key producing regions in Canada and the U.S. to markets throughout the world. The core of our grain business is the movement of whole grains like wheat, canola, corn, soybeans, specialty crops and product from grain processors.

CP’s new Scheduled Grain Program has established a new Transportation Hub System that delivers dedicated day of week service. This means better reliability, maximizing elevators’ capacity, improving car velocity, improving on-time performance and creating capacity for growth.

CP’s targeted investments with key partners, plus our ongoing efforts in efficient shipment management and execution are delivering consistent and reliable results in this core component of our franchise.

KINGSGATEKINGSGATECOUTTS

CALGARYCALGARY


REGINA

WINNIPEG

MONTREAL

PHILADELPHIA

NEW YORK

KANSAS CITY

RAPID CITY

THUNDER BAY

CHICAGO

VANCOUVER

DETROIT


DULUTH

TORONTO

SUDBURY

ALBANY

SASKATOON


REGINA

WINNIPEG

MONTREAL

PHILADELPHIA

NEW YORK

KANSAS CITY

RAPID CITY

THUNDER BAY

CHICAGO

VANCOUVER

DETROIT


DULUTH

TORONTO

SUDBURY

ALBANY

SASKATOON

Cp main LinE

HaULaGE, TRaCKaGE OR maRKETinG RiGHTS

pRimaRy TRaffiC fLOwS

GRain SOURCE

GRAIN BREAKOUT(Percentage of 2011 Freight Revenues)

Canada 63%

U.S. 37%

CANADIAN GRAIN(Percentage of 2011 Freight Revenues)

Regulated 65%

Commercial 35%

U.S. GRAIN(Percentage of 2011 Freight Revenues)

Domestic 63%

Export 37%

6

MArketS

Our Plan is based on three major sources of growth: Asian demand for commodities; growth in energy production and North American economic growth.

There are strong long – term fundamentals underlying all of our bulk commodities as Asian economies develop, expand and diversify. We have 10-year contracts with both Teck in metallurgical coal and with Canpotex in export potash. We continue to develop our extensive grain network through expansions at existing high-throughput grain elevators, new elevator development and collaboration in planned expansion of oil seed processing.

In the energy sector, our franchise accesses the Bakken Oil Formation in North Dakota and Saskatchewan, the Alberta Industrial Heartland supporting the Oilsands, and the Marcellus Gas Formation in the northeastern U.S. and

allows us to develop new long-haul markets. With the strong global demand for energy we are growing our shipments in crude oil, ethanol and energy-related inputs such as pipe and fracture sand.

North American economic growth will result in additional opportunities in a number of lines of business, including intermodal, automotive and forest products. We are leveraging our relationships, capital investments and the disciplined execution of our IOP to enable growth in these markets. In addition, we continue to enhance our intermodal franchise by expanding on our co-location model and terminal network.

MARKETS

Bulk 44%Grain 22%Coal 11%Sulphur and Fertilizers 11%

Merchandise 30%Industrial and Consumer Products 19%Automotive 7%Forest Products 4%

Intermodal 26%Import/Export 13%Domestic 13%

FREIGHT REVENUE(Percentage of 2011 Freight Revenues)









Bulk 44%Grain 22%Coal 11%Sulphur and fertilizers 11%

Merchandise 30%industrial and Consumer products 20%automotive 6%forest products 4%

Intermodal 26%import/Exportdomestic 13%

8 9

Section MArketS

CALGARYCALGARY

KINGSGATEKINGSGATE

CALGARYCALGARY

COUTTSCOUTTS


REGINAWINNIPEG

MONTREAL

PHILADELPHIA

NEW YORK

KANSAS CITY

RAPID CITY

THUNDER BAY

CHICAGO

VANCOUVER

DETROIT


DULUTH

TORONTO

SUDBURY

ALBANY

SASKATOON


REGINAWINNIPEG

MONTREAL

PHILADELPHIA

NEW YORK

KANSAS CITY

RAPID CITY

THUNDER BAY

CHICAGO

VANCOUVER

DETROIT


DULUTH

TORONTO

SUDBURY

ALBANY

SASKATOON

COALCP serves both the metallurgical coal market–used primarily in the steel manufacturing process and the thermal coal market which is utilized for power generation.

Within our bulk coal franchise, our metallurgical business is almost entirely generated from Teck Resources’ five mines in the Elk Valley region of southeastern British Columbia. Most of this coal volume is moved to Port Metro Vancouver for export throughout the world.

In 2010, we announced a 10-year agreement with Teck that provides for a collaborative approach to the coal supply chain and investments by CP that will increase our coal handling capacity and productivity through long trains to support Teck’s volume growth.

CP continues to invest in building a truly world-class coal transportation model. Our service is based on highly efficient unit trains in continuous motion through the mine to port transportation cycle.

Cp main LinE



COaL SOURCE

COAL BREAKOUT(Percentage of 2011 Freight Revenues)

Canadian Coal 89%

U.S. Coal 11%

COAL CARLOADS(Percentage of 2011 Carloads)

Canadian Coal 69%

U.S. Coal 31%

CANADIAN COAL(Percentage of 2011 Freight Revenues)

Export 86%

Non-Export 14%

10 11

MArketS

FOREST PRODUCTSA part of CP’s merchandise portfolio, the forest product sector consists of the movement of lumber, panel and pulp and paper products.

The pulp and paper products originate from CP-served mills in B.C., Ontario and Quebec. Mills in the interior of B.C. ship two-thirds of their production to Asia through Port Metro Vancouver and the balance moves to various North American markets. In recent years, B.C. mills have made capital investments and with a recovering economy, are positioned for long term success.

CP’s lumber movements represent 26% of CP’s forest products business and move primarily from western- based reload facilities to markets across North American. As U.S. housing starts to recover, we anticipate seeing a strengthening in shipments.

FOREST PRODUCTS BREAKOUT(Percentage of 2011 Freight Revenues)

Pulp and Paper 71%

Lumber and Panel 26%

Other Forest 3%

KINGSGATEKINGSGATE

CALGARYCALGARY


REGINA

WINNIPEG

MONTREAL

PHILADELPHIA

NEW YORK

KANSAS CITY

RAPID CITY

THUNDER BAY

CHICAGO

VANCOUVER

DETROIT


DULUTH

TORONTO

SUDBURY

ALBANY

SASKATOON


REGINA

WINNIPEG

MONTREAL

PHILADELPHIA

NEW YORK

KANSAS CITY

RAPID CITY

THUNDER BAY

CHICAGO

VANCOUVER

DETROIT


DULUTH

TORONTO

SUDBURY

ALBANY

SASKATOON

COUTTS

Cp main LinE



fOREST pROdUCTS SOURCE

MArketS

KINGSGATEKINGSGATE

CALGARYCALGARY


REGINA

MONTREAL

PHILADELPHIA

NEW YORK

KANSAS CITY

RAPID CITY

THUNDER BAY

CHICAGO

VANCOUVER

DETROIT


DULUTH

TORONTO

SUDBURY

ALBANY

SASKATOON


BHP PROJECTBHP PROJECT

REGINA

MONTREAL

PHILADELPHIA

NEW YORK

KANSAS CITY

RAPID CITY

THUNDER BAY

CHICAGO

VANCOUVER

DETROIT


DULUTH

TORONTO

SUDBURY

ALBANY

SASKATOON

WINNIPEGWINNIPEG

COUTTS

SULPHUR & FERTILIZERSCP’s sulphur and fertilizers traffic originates from plants where sulphur is extracted, potash mines and natural gas and nitrogen plants in Canada’s prairie provinces.

While this sector is subject to short-term demand fluctuations, due to a number of factors including weather and global commodity pricing, the long-term prospects are for growth and capacity expansion. The outlook is particularly promising for potash, based on a multi-billion dollar investment underway by leading players in this segment.

Our focus going forward is to:

+ Maintain our strong position in potash including harnessing mine expansion opportunities;

+ Improve access to new sulphur production, primarily from oil sands-related facilities;

+ Strengthen our relationships through service reliability and responsiveness; and

+ Improve productivity and equipment cycle times through a combination of unit train and mixed product train services within our Operating Plan.

SULPHUR AND FERTILIZER BREAKOUT(Percentage of 2011 Freight Revenues)

Potash 60%

Fertilizers 28%

Sulphur 12%

POTASH BREAKOUT(Percentage of 2011 Freight Revenues)

Export 64%

Domestic 36%

Cp main LinE



pOTaSH SOURCE

BHp pROjECT✪

12

Section

13

Section

14 15

MArketS

the BAkken ForMAtionCP has a strong position for long-term participation in the energy play through the positioning of our network in the Canadian and U.S. Bakken regions, the fracture sand producing areas in the U.S. Midwest, and through our shortlines and transload facilities that extend our reach.

CP is working with companies on both sides of the border to ship crude oil to refineries and other facilities throughout North America. Growth in this market has been based on the proven capabilities of the rail model and the rapid expansion in the extraction of oil in this area.

MArceLLuS ShALeThe Marcellus Shale lies under the four states of Pennsylvania, Ohio, West Virginia and New York.

The Marcellus is purported to be the largest natural gas reserve in the United States.

Our Northeast U.S. network, transload facilities and shortline partnerships enable us to participate in the movement of drilling and construction materials; primarily fracture sand, steel pipe, chemicals and construction products. The strength of our network positions us to access key fracture sand production areas in the U.S. Midwest.

the ALBertA induStriAL heArtLAndThe Alberta Industrial Heartland (AIH) is one of the premier chemical and energy-related processing districts in North America and is known for its concentration of oil refineries and a major oil sands upgrading facility. The location is ideal for the development of future upgraders due to its

proximity to the Alberta oil sands and offers growth opportunities for shipments both into and out of the region. CP has a rail corridor that accesses all of the major upgrader sites in the AIH.

ethAnoLLarge corn producing areas in Iowa and Minnesota have attracted a number of ethanol production facilities. CP offers the only direct, single line-haul from these U.S. Midwest production facilities to U.S. Northeast markets.

CP’s network has a clear competitive advantage from the standpoint of origin market share and destination market reach. These factors provide the basis for continued strong and growing participation.

windIn Canada, CP serves three major wind tower manufacturers. CP provides the network reach and access to transload facilities that deliver customers’ products close to their final destination. CP’s strong position in the U.S. Midwest aligns well with anticipated new wind farm projects.

CP is positioned to build on its network strength and proven market experience to participate in future wind farm development and component manufacturing.

Supporting existing and emerging markets.KINGSGATEKINGSGATE

CALGARYCALGARY


REGINA

WINNIPEG

MONTREAL

PHILADELPHIA

NEW YORK

KANSAS CITY

RAPID CITY

THUNDER BAY

CHICAGO

VANCOUVER

DETROIT


DULUTH

TORONTO

SUDBURY

ALBANY

SASKATOON


REGINA

WINNIPEG

MONTREAL

PHILADELPHIA

NEW YORK

KANSAS CITY

RAPID CITY

THUNDER BAY

CHICAGO

VANCOUVER

DETROIT


DULUTH

TORONTO

SUDBURY

ALBANY

SASKATOON

COUTTS

MArketS

INDUSTRIAL & CONSUMER PRODUCTSOur industrial and consumer products business encompasses a wide array of commodities grouped under energy, chemicals and plastics, mines, metals and aggregates. CP’s industrial and consumer products traffic is dispersed widely across our Canadian and U.S. network.

Energy is a key market for CP and the increase in traffic has been particularly strong as a result of a targeted growth strategy. Energy-related traffic represented approximately 45% of this portfolio’s revenue in 2011.

With an extensive rail network and proven expertise in moving energy, CP offers a competitive option for transporting energy related products, including crude oil, to and from key locations in North America. CP’s successful market development activities have enabled us to successfully take advantage of our access to the Bakken oil formation, the Marcellus gas formation and the Alberta oil sands area.

aLBERTa indUSTRiaL HEaRTLand

BaKKEn OiL fORmaTiOn

ETHanOL

maRCELLUS SHaLE

Energy and Chemicals 51%

Mines, Metals and Aggregates 43%

Food and Consumer 6%

INDUSTRIAL AND CONSUMER PRODUCTS BREAKOUT(Percentage of 2011 Freight Revenues)

16 17

MArketS

REGINA

VANCOUVER

CALGARY

EDMONTON

SASKATOON

WINNIPEG

COTTAGE GROVE

EC ROW

WINDSOR

AGINCOURT ST. LUC

QUEBEC SAINT JOHN

MONTREAL

PHILADELPHIA

NEW YORK

KANSAS CITY

RAPID CITY

THUNDER BAY

CHICAGO


TORONTO

DULUTH

LLOYDMINSTER

ALBANY

KINGSGATE

REGINA

VANCOUVER

CALGARY

EDMONTON

SASKATOON

WINNIPEG

COTTAGE GROVE

EC ROW

WINDSOR

AGINCOURT ST. LUC

QUEBEC SAINT JOHN

MONTREAL

PHILADELPHIA

NEW YORK

KANSAS CITY

RAPID CITY

THUNDER BAY

CHICAGO


TORONTO

DULUTH

LLOYDMINSTER

ALBANY

KINGSGATE

COUTTS

Cp main LinE


aUTOmOTivE COmpOUndS

AUTOMOTIVEOur automotive business consists of three core finished-vehicle traffic segments: import vehicles that move through Port Metro Vancouver to Eastern Canadian markets; Canadian-produced vehicles that ship to the U.S. from Ontario production facilities; and U.S. produced vehicles that travel cross-border into Canadian markets. In all of these segments, our business has been built on strategic alliances with major car manufacturers and designing services to meet supply chain needs.

Our automotive franchise is built around strong industry transplant production companies, such as Toyota and Honda, sometimes referenced as the New Domestics. Our relationship and business within this segment has grown steadily. Today, the New Domestic segment represents almost 40% of automotive carloads.

Our product offering, which combines reliable train service with automotive facility services, low damage occurrence and quality equipment supply, has translated into value improvement opportunities.

AUTOMOTIVE BREAKOUT(Percentage of 2011 Freight Revenues)

Automobiles 58%

Trucks 37%

Parts 5%

MArketS

TRANSLOAD SERVICESCP’s transload facilities are the link between non-rail transportation and our rail network. Our customers are served through a variety of transload facilities that offer various services like trucking and storage, managed by operator partners.

These services include industrial products, such as steel products, metals, aggregates, forest products and plastics as well as energy related products like crude, sulphur, condensate and fuels. Our network along with our comprehensive and strategically located transload facilities allow us to continually develop new market opportunities.

SASKATOON

ESTEVAN

REGINA

NEWTOWN

MONTREAL

KANSAS CITY

RAPID CITY

THUNDER BAY

CHICAGO

CALGARY

VANCOUVER


TORONTO

SUDBURY SMITHS FALLSQUEBEC CITY

ALBANY

EDMONTON

KAMLOOPS

NELSON

SPARWOOD

WILSON

SCOTFORD

VERMILLION BAY

LA CROSSE

DULUTH

MILWAUKEE

ROCKFORDWINDSOR

MUSCATINE

NEW HAMPTON

WINNIPEG

PHILADELPHIABINGHAMTON

OAK ISLAND

SASKATOON

ESTEVAN

REGINA

NEWTOWN

MONTREAL

KANSAS CITY

RAPID CITY

THUNDER BAY

CHICAGO

CALGARY

VANCOUVER


TORONTO

SUDBURY SMITHS FALLSQUEBEC CITY

ALBANY

EDMONTON

KAMLOOPS

NELSON

SPARWOOD

WILSON

SCOTFORD

VERMILLION BAY

LA CROSSE

DULUTH

MILWAUKEE

ROCKFORDWINDSOR

MUSCATINE

NEW HAMPTON

WINNIPEG

PHILADELPHIABINGHAMTON

OAK ISLANDCp main LinE


Cp TRanSLOad faCiLiTiES

18

Section

19

Section

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interModAL

EDMONTON

SASKATOON

REGINA

WINNIPEG

MONTREAL

LACHINE

NEW YORK

KANSAS CITY

RAPID CITY

THUNDER BAY

CALGARY

PITT MEADOWS

DETROIT


MILWAUKEE

SUDBURY

TORONTO

BENSENVILLESCHILLER PARK

CHICAGOOBICO

VAUGHAN

VANCOUVER

PHILADELPHIA

EDMONTON

SASKATOON

REGINA

WINNIPEG

MONTREAL

LACHINE

NEW YORK

KANSAS CITY

RAPID CITY

THUNDER BAY

CALGARY

PITT MEADOWS

DETROIT


MILWAUKEE

SUDBURY

TORONTO

BENSENVILLESCHILLER PARK

CHICAGOOBICO

VAUGHAN

VANCOUVER

PHILADELPHIA

DULUTH

LLOYDMINSTER

ALBANY

KINGSGATE

DULUTH

LLOYDMINSTER

ALBANY

KINGSGATE

COUTTS

Cp main LinE


Cp inTERmOdaL faCiLiTiES

The long-term fundamentals for intermodal remain strong. The rail industry’s position as an environmentally friendly transportation choice combined with global sourcing, general population growth, highway congestion and rising fuel cost all support long-term growth.

interModAL

INTERMODALCP’s intermodal portfolio involves the movement of freight through multiple modes of transportation (rail, ship, truck) and includes both domestic and international services.

Domestic intermodal primarily involves moving manufactured consumer products in containers within North America. A major strategic focus on the domestic side of our business continues to be enhancing the door-to-door product offering. As customers’ shipping requirements evolve and their supply chains become more complex, we believe there will be a growing need for more value-added services such as Canadian Pacific Logistics Solutions (CPLS) and co-location opportunities. Co-location refers to customers constructing warehouses adjacent to CP intermodal facilities.

International intermodal services are the movement of marine containers to and from the ports of Vancouver, Montreal, New York and Philadelphia and into inland ports across Canada and the U.S.

Store

INTERMODAL BREAKOUT(Percentage of 2011 Freight Revenues)

Import/Export 51%

Domestic 49%

INTERMODAL UNITS(Percentage of 2011 Carloads)

Import/Export 66%

Domestic 34%

terMinALS And networkCP has been able to leverage growth through our expanded Western Corridor and our strong network of 14 modern intermodal terminals within Canada and the U.S. We continue to invest in new technologies and infrastructure designed to support growth and improve supply chain efficiency.

Our strategy is to be proactive in ensuring infrastructure capacity and to that end we have acquired land for future terminal expansions in Edmonton, Montreal and Regina. The new terminal in Regina, SK is scheduled to open in 2012.

»

23

oPerAtionS

OPERATING PLANThe Operating Plan is the foundation of our railway operations. All key aspects of the operation are scheduled to drive service reliability and on-time shipment performance. This encompasses road train operations, our first mile-last mile program and all mechanical, engineering and other maintenance activities. The Operating Plan continues to be enhanced through Lean continuous improvement, simplification and standardization of business processes and improved information systems. Our Operating Plan is supported by a culture of accountability built on clear established metrics tied to each position in the organization and incentives tied to performance.

the underlying design principles of the operating Plan are:

VeLocity – keeping our assets moving through an efficient, scheduled 24/7 operation;

BALAnce – train and car movements are balanced daily in each corridor, yard and terminal, which drives efficiencies and asset velocity; and

network – all aspects of the network’s operation are optimized to drive the best service, safety, productivity and efficiency outcome.

+ First Mile / Last Mile

+ Grain Reliability

+ Long Train

+ Fuel Ef�ciency

+ Locomotive Reliability Centres

+ Network Capacity

KEY PROGRAMS

+ Scheduled Operations

+ 24 X 7

+ Asset Velocity

+ Balance

+ Network

+ Safety & People

OPERATING PLAN

+ Reliable Service

+ Productivity

+ Ef�ciency

+ Financials

RESULTS

Disciplined, safe execution of our Operating Plan and Key Programs delivers �nancial improvements

22

The operating team is executing its strategies and programs to deliver CP’s Plan. We are focused on the disciplined execution of our Operating Plan and on delivering, sustaining and improving results in service, safety, productivity and efficiency. Asset velocity and labour productivity are central to driving improved financial results. We have clear accountabilities within the team ensuring the plan is executed and results are achieved.

OPERATIONS

24 25

oPerAtionS

LOCOMOTIVE RELIABILITY CENTRESWe are consolidating the number of major locomotive repair facilities from eight to four highly efficient super shops which will result in improved maintenance capabilities, lower unit costs, reduced overheads and improved locomotive availability and reliability.

SCHEDULED BULKWe continue to schedule all aspects of our bulk train operations as part of our Operating Plan. In grain, our efforts involve leveraging our grain elevator footprint by scheduling all aspects of our grain shipments, including first mile-last mile switching and bulk unit train operations, all centered around a simplified network of origin grain hubs.

FUEL EFFICIENCYThis program targets year-over-year improvements in fuel efficiency and reduced emissions. It consists of the acquisition of new locomotives, the remanufacturing of older locomotives and using new technologies which improve train handling and reduces idling. This program is enhanced by the disciplined execution of our Operating Plan, improving velocity and driving fleet productivity.

oPerAtionS

FIRST MILE – LAST MILEThe First Mile-Last Mile program drives improvements in service, asset velocity and enables low-cost growth by reducing railcars required to service the business and creating additional terminal capacity.

We are continuing to enhance our Operating Plan with the following key programs.

EFFICIENT TRAINS & DISTRIBUTED POWERCP’s efficient train strategy is driving increased train lengths; improving service, and increasing safety, productivity and efficiency.

Efficient trains with Distributed Power configurations reduce lateral forces, enhance locomotive productivity and create safer operations.

The efficient train strategy includes targeted infrastructure enhancements and the use of proprietary train marshaling software, which maximizes the use of distributed locomotive power.

LEAD POWER

MIDPOWER

Driving the Digital Railway

LEAD POWERMIDPOWER

REAR POWER

26 27

Section inVeStMentS

INVESTMENTSCP is committed to the renewal of its infrastructure and making investments for productivity and growth through network enhancements, locomotive upgrades and information technology (“IT”) renewal. During 2011, we completed the first year of our multi-year accelerated capital program.

Our network investment plans include investing $75 to $100 million to increase the productivity in our Western Corridor which supports approximately 40% of our volumes. Our targeted infrastructure investments support the operation of longer trains and enables low-cost growth.

In addition, approximately $250 million in upgrades are underway on CP’s North Line, running from Winnipeg, Manitoba to Edmonton, Alberta. This program will result in an increase in track speeds and will support productivity and growth in potash, grain, energy related products and intermodal. By upgrading this portion of the network, route miles for some shipments will be reduced by between 5%-10%. This upgrade will provide operating flexibility, with a second routing option for traffic currently traversing over the more southerly mainline, improving overall service reliability and network speed.

In order to capitalize on growth in energy, agriculture and potash shipments, we are investing approximately $90 million in enhancements to our North/ South corridors in the U.S. Midwest. These upgrades will increase capacity,

enhance routing flexibility and lift the efficiency on all the business that travels on these lines. Similar to the North Line improvements, the investments will enhance network resiliency facilitating increased train speeds, car miles per car day, fuel efficiency and reducing terminal dwell.

Managing the movement of assets and information is a critical business process. Our multi- year IT program includes upgrades to our Shipment management and SAP suites. Predictive technologies will become important to driving even more efficiencies in field operations. These planned multi-year system upgrades position CP to enhance labour productivity, improve asset management and provide better shipment visibility to all parties.

CP has deployed a series of strategies expected to deliver a 1-2% per year improvement in fuel efficiency. Our plans include: expanding the application of fuel trip optimizer technology that assist train crews in efficient train handling; remanufacturing a portion of our older yard and local locomotive fleet in order to increase locomotive productivity by up to 25%; the introduction of new stop-start technology that will reduce the amount of cold weather idling; and the annual renewal of our large mainline locomotive fleet. In addition to improved fuel efficiency, reduced emissions and enhanced service reliability, this program will result in a more homogeneous fleet, further enhancing shop productivity. The re-manufacturing of older units will enhance inter-operability allowing for further productivity gains.

WESTERN CORRIDOR

$75 – 100 MILLIONNORTH LINE

$250 MILLIONUS MIDWEST

$90 MILLION

CALGARY

KINGSGATE

COUTTS


REGINAWINNIPEG

RAPID CITY

VANCOUVER

DULUTH

SASKATOON

29

executiVe ProFiLeS

e. hunter harrison President & Chief Executive Officer

E. Hunter Harrison is Canadian Pacific’s 17th President and Chief Executive Officer, he was appointed in June 2012.

Hunter brings valuable railroad knowledge to CP with almost 50 years of experience in the railroad industry. He previously served as the President and Chief Executive Officer of Canadian National (CN) from 2003 to 2009 and Chief Operating Officer from 1998 to 2002. He served on CN’s Board of directors for 10 years.

Prior to joining CN, Hunter held various positions at Illinois Central Corporation (IC) and Illinois Central Rail Road Company (ICRR) from 1989 to 1998. From 1993 to 1998 he was President and Chief Executive Officer, during which time he was also a member of the Board. He held various positions throughout his time at IC and ICRR, including Vice-President, Chief Operating Officer and Senior Vice-President of Operations.

Before his time at IC and ICRR, he served as Burlington Northern’s Vice-President of Transportation and Vice-President of Service Design. His railroad career began in 1963 when he joined the Frisco (St. Louis-San Francisco) Railroad as a carman-oiler in Memphis while still attending school.

Hunter currently serves or has served as a director on several railway companies and industry associations, including The Belt Railway of Chicago, Wabash National Corporation, The American Association of Railroads, Terminal Railway, TTX Company, CN, IC, and ICRR.

kathryn McQuade Executive Vice-President & Chief Financial Officer

Kathryn McQuade was appointed Executive Vice-President & Chief Financial Officer in September 2008.

Kathryn is responsible for providing the strategic leadership for Canadian Pacific’s finance, information technology and strategic sourcing groups. She is focused on driving the benefits of CP’s efficiency initiatives to the bottom line. As CFO, Kathryn has led efforts to enhance financial flexibility by completing an equity offering, four debt financings, a debt tender and voluntary pension plan prepayments, which collectively reduced indebtedness, extended maturities and improved near-term liquidity. She also led the integration of the DM&E acquisition.

Kathryn joined CP in June 2007 as Chief Operating Officer. Prior to CP, she spent 27 years with Norfolk Southern in key leadership positions that involved major change initiatives, Conrail restructuring and integration, information technology, strategic and network planning, industrial engineering and all finance functions, up to and including Senior Vice-President of Finance.

Kathryn serves as a director of Altria Group Inc. and a privately-held company. She serves on the Board of the TTX Company and the Trustees of The College of William & Mary Foundation. She has also served on several industry boards including Indian Harbor Belt Railroad (IHB) and Conrail Shared Assets.

Kathryn is a CPA and holds a Bachelors of Business Administration in Accounting with a minor in Mathematics from the College of William and Mary in Virginia. She has also completed the Advanced Management Program (AMP) at Harvard.

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ExECUTIVE PROFILES

30 31

Section executiVe ProFiLeS

Jane o’hagan Executive Vice-President & Chief Marketing Officer

Jane O’Hagan was appointed Executive Vice-President and Chief Marketing Officer in December 2010.

Jane is responsible CP’s marketing and sales, corporate communications and public affairs and network strategy and interline relationships.

Jane’s early career was with CP’s sales and marketing group before establishing and running a successful consultancy for several years in the U.S. and Canada. Over the past nine years, she has taken on positions of increased scope and responsibility at CP including corporate strategy, yield, product design, government affairs and Canadian Pacific Logistics Services.

Jane rejoined CP in August 2002 as Assistant Vice-President, Strategy and Research. She was appointed Vice-President of Strategy and Research in November 2005; Senior Vice-President, Strategy and Yield in November 2008; and Senior Vice-President, Marketing and Sales and Chief Marketing Officer in April 2010.

She currently represents CP on the Asia Pacific Gateway Executive Committee.

Jane holds a Bachelor of Administrative and Commercial Studies (Finance) and a Bachelor of Arts (Honours), as well as graduate studies in Program and Policy Evaluation from the University of Western Ontario.

Mike Franczak Executive Vice-President & Chief Operations Officer

Mike Franczak was appointed Executive Vice-President and Chief Operations Officer March 1, 2012. He was appointed Executive Vice-President of Operations in April 2011.

Mike provides strategic leadership for the operating team at Canadian Pacific. He is accountable for delivering a reliable, safe and efficient rail service through the disciplined execution of CP’s Operating Plan and supporting multi-year programs.

Mike is responsible for all aspects of Canadian Pacific’s rail operations, including network and production management, field operations, engineering, mechanical, service design, asset management, intermodal operations and safety and regulatory affairs.

Mike joined CP’s operations team in 1987 after working as a geologist in the Canadian exploration industry. He has subsequently held a variety and succession of positions of increased accountability in operations across CP’s network.

He is a member of the Safety and Operations Management Committee (SOMC) of the American Association of Railroads (AAR) and is on the Board of Directors for the Railway Association of Canada (RAC).

Mike holds a Bachelor of Science (Honours) in Geology from the University of Western Ontario and a Master of Business Administration from Western’s Richard Ivey School of Business.

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Section

32

BOARD OFDIRECTORSThe charters of CP’s Board of Directors and its committees are compliant with current U.S. and Canadian governance requirements and standards and are annually reviewed and amended as appropriate. The charters outline significant responsibilities for the Board and its committees, as well as eligibility criteria for Board and Board committee service. CP has adopted guidelines regarding: • Directorqualificationstandardsandresponsibilities • Accessbydirectorstomanagementandindependentadvisors• Directorcompensation • Directororientationandcontinuingeducation • Managementsuccession • AnnualperformanceevaluationsoftheBoard,itscommitteesandindividualdirectors

(1) Audit Committee

(2) Finance Committee

(3) Corporate Governance and Nominating Committee

(4) Management Resources and Compensation Committee

(5) Safety, Operations and Environment Committee

*denotes chairman of the committee

BOARD OF DIRECTORS NOTES

Paul G. haggis

ChairmanCanadian Pacific Railway LimitedCanmore, Alberta

william A. Ackman (2)(3)

Founder, Chief Executive OfficerPershing Square Capital Management, L.P.New York, New York

Gary F. colter (1)(4)

PresidentCRS Inc.Mississauga, Ontario

e. hunter harrison (5)

President and Chief Executive OfficerCanadian Pacific Railway LimitedCalgary, AB

Paul c. hilal (2)(4)*

PartnerPershing Square Capital Management, L.P.New York, New York

krystyna t. hoeg, c.A. (3)*(4)

Former President and Chief Executive OfficerCorby Distilleries LimitedToronto, Ontario

richard c. kelly (1)*(2)

Retired Chairman, President and Chief Executive OfficerXcel Energy, Inc.Denver, Colorado

rebecca Macdonald (3)(4)

Founder, Executive ChairJust Energy Group Inc.Toronto, Ontario

the honourable John P. Manley, P.c., o.c. (1)(2)

President and Chief Executive OfficerCanadian Council of Chief ExecutivesOttawa, Ontario

dr. Anthony r. Melman (2)*(5)

President and CEOAcasta CapitalToronto, Ontario

Linda Morgan (1)(5)

PartnerNossaman LLPBethesda, Maryland

Madeleine Paquin (3)(5)

President and Chief Executive OfficerLogistec CorporationMontreal, Quebec

hartley t. richardson, c.M., o.M. (1)(5)

President and Chief Executive OfficerJames Richardson & Sons, LimitedWinnipeg, Manitoba

Stephen c. tobais (3)(4)(5)*

Former Vice-Chairman and Chief Operating OfficerNorfolk Southern CorporationGarnett, South Carolina

DIRECTORS & COMMITTEES

34

Section

www.cpr.ca

Documents

THE CP BOOK · As a part of our bulk portfolio, CP plays a critical role in the movement of agricultural products from key producing regions in Canada and the U.S. to markets throughout