Paul Tellier, CN's chief executive, stopped just short of calling for BC Rail's sale -- and declined to say if CN would be interested in buying it -- but he told a business luncheon the province could benefit just as the federal government did when CN was privatized in 1995.

British Columbia Premier Gordon Campbell has said that BC Rail is not for sale, but Tellier noted that Campbell has vowed to reduce his government's involvement in private business and both the province and BC Rail have been struggling with large debt loads.

"I do not want to prejudge what the premier might want to do about BC Rail, but I can see when CN's turnaround from Crown corporation to a successful North American railroad has some relevance to the situation here," Tellier said in a speech that lavished praise on the right-wing Campbell government.

Ottawa received about C$2.4 billion when CN was privatized in 1995 and the company, now worth about C$15 billion, has expanded its operations as far south as the Gulf of Mexico by buying U.S. competitors.

BC Rail, which operates 2,300 km (1,500 miles) of track, has been owned by British Columbia since 1918. It suffered a C$106 million ($68.4 million) loss last fiscal year, including a C$100 million restructuring charge, due to a drop in coal business and losses on soon-to-be-discontinued passenger trains.

CN is North America's fifth largest railway in terms of revenues, and operates nearly 29,000 km (18,000 miles) of track. It is the only railway that connects directly with BC Rail.

Despite the province's statements that BC Rail is not for sale, a published report in May said said Canadian Pacific Railway , Canada's second largest, had contacted provincial officials saying it might be interested in buying it.

At least one U.S.-based shortline rail holding company is also believed to be considering an offer if the west coast line were to become available.

While refusing to say if Canadian National would make an offer for BC Rail in the event of its privatization, Tellier noted to reporters that CN has put in an offer for Ontario Northland railway, which the province of Ontario has put on the market.

"We did not go and knock on the door of the Ontario government saying if you ever decide to privatize this, keep us in mind. We just waited," Tellier said.

Ontario Northland operates on about 1,100 km (700 miles) of mainline track in northern Ontario and northwestern Quebec. It also has bus and marine services.

Tellier told the Vancouver gathering he expects there will be more consolidation in the rail industry -- which has seen the number of large Class 1 carriers drop from 39 in 1980 to only six this year -- and he said CN must get bigger to be ready for that consolidation.