Canadian Pacific Shareholders Approve Break-up

Calgary, Canada (26 September 2001) - At a Special Meeting of Shareholders held today in Calgary, Alberta, Canadian Pacific Limited's (CPL) common and preferred shareholders overwhelmingly approved the Plan of Arrangement to divide the Corporation into five independent public companies. The Plan of Arrangement was approved by 98% of the 206,432,190 votes cast by common and preferred shareholders. Additionally, shareholders approved the Stock Option Plans adopted by Canadian Pacific Railway Limited, CP Ships Limited, Fairmont Hotels & Resorts Inc. and Fording Inc. A majority of preferred shareholders voted in favour of the transaction and of accepting Canadian Pacific's offer to redeem their preferred shares for $26 per share. The Plan of Arrangement is subject to the approval of the Alberta Court of Queen's Bench. If the court approval is obtained, CPL anticipates that the Plan of Arrangement will become effective on or about October 1, 2001.

"I am pleased but not surprised that our shareholders voted so strongly in favour of the breakup of Canadian Pacific Limited into the five independent public companies," said David P. O'Brien, Chairman, President and CEO. "Our goal at the outset of this process was to reward our shareholders by unlocking the value and potential of these excellent companies and today's vote was a solid endorsement of the process."

Mr. O'Brien added, "Today's decision will equip all five companies to pursue even greater success by providing them with growth opportunities and direct access to public equity markets.

It will allow investors to value these industry leaders on a stand-alone basis against competitors, benchmarks and performance criteria specific to each business sector."

Under the Plan of Arrangement approved today, preferred shareholders will receive cash for their preferred shares and for every CPL Common Share, each CPL Common Shareholder will receive the following share distribution in the five resulting public companies:

• 0.684 of a Common Share in new PanCanadian;
• 0.166 of a Common Share in new Fording;
• 0.50 of a Common Share in new Canadian Pacific Railway;
• 0.25 of a Common Share in new CP Ships;
• 0.25 of a new Common Share in Fairmont Hotels and Resorts Inc. which will hold CPL's only significant remaining business, Canadian Pacific Hotels and Resorts;
• and a cheque for any fractional interests in those shares.

Calgary-based, CPL is a diversified operating company active in energy, transportation and hotels. The Canadian Pacific group of companies includes, PanCanadian, Fording, Canadian Pacific Railway, CP Ships and Fairmont Hotels & Resorts. The Common Shares of CPL are listed on the Toronto and New York stock exchanges. CPL's Preferred Shares are listed on the Toronto Stock Exchange.

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