ANNUAL INFORMATION FORM MARCH 1, 2006 TABLE OF CONTENTS COVER PAGE TABLE OF CONTENTS CORPORATE STRUCTURE NAME, ADDRESS AND INCORPORATION INFORMATION ..............................................................................................................................................2 INTERCORPORATE RELATIONSHIPS PRINCIPAL SUBSIDIARIES .......................................................................................................................................................................................3 GENERAL DEVELOPMENT OF THE BUSINESS RECENT DEVELOPMENTS .......................................................................................................................................................................................4 DESCRIPTION OF THE BUSINESS OUR BACKGROUND AND NETWORK.........................................................................................................................................................................6 STRATEGY ............................................................................................................................................................................................................6 PARTNERSHIPS, ALLIANCES AND NETWORK EFFICIENCY ..........................................................................................................................................6 NETWORK AND RIGHT OF WAY ...............................................................................................................................................................................7 BUSINESS CATEGORIES .......................................................................................................................................................................................10 FREIGHT REVENUES.............................................................................................................................................................................................10 RAILWAY PERFORMANCE .....................................................................................................................................................................................14 PERFORMANCE INDICATORS .................................................................................................................................................................................14 FRANCHISE INVESTMENT ......................................................................................................................................................................................14 INTEGRATED OPERATING PLAN.............................................................................................................................................................................15 INFORMATION TECHNOLOGY .................................................................................................................................................................................15 LABOUR PRODUCTIVITY AND EFFICIENCY ..............................................................................................................................................................16 RISK FACTORS ....................................................................................................................................................................................................16 SAFETY...............................................................................................................................................................................................................18 BORDER SECURITY..............................................................................................................................................................................................18 LABOUR RELATIONS ............................................................................................................................................................................................19 ENVIRONMENTAL PROTECTION .............................................................................................................................................................................20 REGULATION AND OTHER ISSUES..........................................................................................................................................................................21 INSURANCE .........................................................................................................................................................................................................22 RELATED-PARTY TRANSACTIONS ..........................................................................................................................................................................22 DIVIDENDS DECLARED DIVIDENDS AND DIVIDEND POLICY........................................................................................................................................................23 CAPITAL STRUCTURE DESCRIPTION OF CAPITAL STRUCTURE .................................................................................................................................................................24 SECURITY RATINGS .............................................................................................................................................................................................26 MARKET FOR SECURITIES STOCK EXCHANGE LISTINGS ................................................................................................................................................................................27 TRADING PRICE AND VOLUME...............................................................................................................................................................................27 DIRECTORS AND OFFICERS DIRECTORS .........................................................................................................................................................................................................29 CEASE TRADE ORDERS........................................................................................................................................................................................30 SENIOR OFFICERS ...............................................................................................................................................................................................30 SHAREHOLDINGS OF DIRECTORS AND OFFICERS....................................................................................................................................................31 LEGAL PROCEEDINGS…………………………………………………………………………………………………………………………………………………………...…....….3 2 TRANSFER AGENTS AND REGISTRAR TRANSFER AGENT ...............................................................................................................................................................................................33 INTERESTS OF EXPERTS……………………………………………………………………………………… ……………… . …………………………….……......…...………...… 3 4 AUDIT, FINANCE AND RISK MANAGEMENT COMMITTEE INFORMATION COMPOSITION OF THE AUDIT, FINANCE AND RISK MANAGEMENT COMMITTEE AND RELEVANT EDUCATION AND EXPERIENCE.....................................35 PRE-APPROVAL OF POLICIES AND PROCEDURES ...................................................................................................................................................35 AUDIT, FINANCE AND RISK MANAGEMENT COMMITTEE CHARTER ...........................................................................................................................36 AUDIT AND NON-AUDIT FEES AND SERVICES .........................................................................................................................................................41 ADDITIONAL INFORMATION ADDITIONAL COMPANY INFORMATION....................................................................................................................................................................42 All dollar amounts in this Annual Information Form (“AIF”) are in Canadian dollars, unless otherwise noted. CORPORATE STRUCTURE Unless the context requires otherwise, “our”, “us”, “we”, “CPR” and “the Company” refer to Canadian Pacific Railway Limited and, where applicable, its subsidiaries, including Canadian Pacific Railway Company (“CPRC”). Name, Address and Incorporation Information Canadian Pacific Railway Limited (“the Company” or “CPR”) was incorporated on June 22, 2001, as 3913732 Canada Inc. pursuant to the Canada Business Corporations Act (“the CBCA”). On July 20, 2001, CPR amended its Articles of Incorporation to change its name to Canadian Pacific Railway Limited. On October 1, 2001, Canadian Pacific Limited (“CPL”) completed an arrangement (“the Arrangement”) whereby it distributed to its common shareholders all of the shares of newly formed corporations holding the assets of four of CPL’s five primary operating divisions. The Arrangement was effected as an arrangement pursuant to section 192 of the CBCA. On September 26, 2001, the Arrangement was approved by the shareholders of CPL, and CPRC, previously a wholly owned subsidiary of CPL, was transferred to CPR, effective October 1, 2001. The transfer was accomplished as part of a series of steps, pursuant to the terms of the Arrangement, whereby CPL transferred all of its outstanding shares of CPRC to a CPL subsidiary, 3921760