Successive federal governments of the period had frequently forced the company to undertake various endeavours in the national interest, often at the expense of business and economic logic.

Restructuring applied to operations which lost money and required subsidization, or which were not part of CN's core freight railway business.

Many of the island's largest communities developed along the main line, largely because of their location; as a result, the Trans-Canada Highway paralleled its route in many places.

Rail operations in Newfoundland remained economically unfeasible because of slow service times, a side effect of the narrow-gauge format.

Nicknamed the Newfie Bullet, the Caribou operated until June 1969, when it was replaced by the CN Roadcruiser bus service started in the Fall of 1968.

Specialized ferries were still needed for carrying non-LCL railway cars, and by the mid-1980s were approaching the end of their operational life and required replacement.

Terra Transport operations were largely captive on Newfoundland and would specialize in handling import/export LCL and inter-island non-LCL freight.

In 1987, the federal government deregulated the railway industry in Canada and CN promptly applied to abandon its Newfoundland operations under Terra Transport.