What is the primary purpose of this Form 40-F filing?

This Form 40-F filing serves as an annual report for Canadian Pacific Railway Limited and Canadian Pacific Railway Company for the fiscal year ended December 31, 2010. It consolidates and incorporates by reference key information, including the Annual Information Form, audited financial statements, and Management's Discussion and Analysis, as well as details on corporate governance, internal controls, and principal accountant fees, all of which are required by the SEC.

How did the company ensure the effectiveness of its internal controls and financial reporting?

The company's management, including the CEO and CFO, conducted an evaluation of the effectiveness of its disclosure controls and procedures as of December 31, 2010, and concluded they were effective. Furthermore, the effectiveness of the company's internal control over financial reporting was audited by PricewaterhouseCoopers LLP, who provided an attestation report, confirming its effectiveness.

What was the total cost of auditor services in 2010, and how does it compare to 2009?

The total fees paid to the independent auditor, PricewaterhouseCoopers LLP, for the year ended December 31, 2010, were $2,525,200. This represents a decrease from the $3,396,200 paid in the prior year ended December 31, 2009. The reduction was mainly observed in audit-related fees and tax fees.

What changes were made to the company's corporate governance in 2010?

In December 2010, the company amended its Corporate Governance Principles and Guidelines to include enhanced shareholder engagement, the introduction of shareholder advisory votes on executive compensation, director attendance at annual meetings, and performance reviews for the Chairman of the Board. These principles also cover director qualifications, term limits, access to advisors, compensation, retirement, orientation, management succession, and board performance evaluations.

CP 10-K FY2010 Annual Report — Revenue, Net Income, EPS

Summary

This Form 40-F filing for Canadian Pacific Railway Limited and Canadian Pacific Railway Company covers the fiscal year ended December 31, 2010. The report confirms that the companies have filed all required reports and are subject to reporting requirements. It highlights the effectiveness of their disclosure controls and procedures as of December 31, 2010, as evaluated by management and audited by PricewaterhouseCoopers LLP, indicating no material changes in internal controls over financial reporting during the period. The filing also details the company's commitment to ethical conduct through its Code of Business Ethics and a specific Code of Ethics for senior financial officers, with information readily available to shareholders. Corporate governance principles were updated in December 2010, focusing on shareholder engagement and executive compensation. The report also outlines the independence of the Board of Directors and its committees, including the Audit, Finance and Risk Management Committee, with a clear identification of audit committee financial experts. Principal accountant fees for PricewaterhouseCoopers LLP are detailed, showing a decrease in fees from 2009 to 2010, and the company has a robust policy for pre-approval of audit and non-audit services to ensure auditor independence.

Key Highlights

1Canadian Pacific Railway Limited and Canadian Pacific Railway Company have met all SEC filing requirements for the preceding 12 months and were subject to these for the past 90 days.

2Disclosure controls and procedures were evaluated as effective by management, including the CEO and CFO, and their effectiveness was confirmed by an independent audit by PricewaterhouseCoopers LLP.

3No material changes in internal controls over financial reporting occurred during the fiscal year ended December 31, 2010.

4The company maintains a comprehensive Code of Business Ethics and a specific Code of Ethics for its CEO and Senior Financial Officers, with mechanisms for reporting and transparency.

5Corporate Governance Principles and Guidelines were updated in December 2010 to enhance shareholder engagement and oversight of executive compensation.

6The Audit Committee comprises financially literate and independent members, with several designated as audit committee financial experts.

7Total fees paid to independent auditor PricewaterhouseCoopers LLP decreased from $3,396,200 in 2009 to $2,525,200 in 2010, primarily driven by reductions in audit-related and tax fees.

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