The majority of these ferries also required federal subsidies to supplement fares, thus CN was unwilling to have the operating losses appear in the railway's accounts.

CN Marine undertook several major service improvements on the constitutionally mandated services to Newfoundland and Prince Edward Island by commissioning the construction of the new vessels Abegweit and Caribou in the late 1970s and early 1980s.

In 1986, the federal government approved a restructuring at CN which saw the company remove itself completely from the east coast ferry service, which was renamed Marine Atlantic.

At the time of the changeover to Marine Atlantic, the last of the rail ferries to Newfoundland were retired, with that province's railway abandoned in September 1988; Prince Edward Island followed in December 1989.

Marine Atlantic itself made many changes a decade later in 1997, virtually decimating the remnants of CN Marine by removing itself from all routes and vessels except the constitutionally mandated service to Port aux Basques and the seasonal service to Argentia, both originating in North Sydney.