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A Canadian Pacific train makes its way along the water's edge near Lake Louise, Alta.

CHRIS BOLIN FOR THE GLOBE AND MAIL/chris bolin The Globe and Mail

Canadian Pacific Railway Ltd. says it will make strategic investments this year to smooth freight deliveries.

The company said Tuesday that it will spend between $1.1-billion and $1.2-billion "for infrastructure renewal, network enhancements and expansion projects."

The capital spending will increase CP's network capacity.

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"We are executing our accelerated multiyear investment plan to further improve service reliability, asset velocity and operational efficiency," CP chief executive officer Fred Green said in a statement. "We are confident that the investments we are making under our 2012 capital plan will allow us to achieve a low-70s operating ratio in the next three years."

CP's operating ratio, a key indicator of productivity that measures costs as a percentage of revenue, is the worst among North America's Big Six railways.

Calgary-based CP's quest to improve comes as New York-based Pershing Square Capital Management LP pushes the railway to revamp the freight carrier's underperforming operations.

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