The Board of Directors of Canadian Pacific Railway Limited (TSX/NYSE: CP) today declared an increase in CP’s next quarterly dividend to twenty seven cents ($0.27) Canadian per share on the outstanding Common Shares, from twenty-four and three quarter cents ($0.2475) per share. The increased dividend is payable on July 26, 2010, to holders of record at the close of business on June 25, 2010, and is an eligible dividend pursuant to subsection 89(14) of the Income Tax Act.

The Board also approved a $70 million increase in capital spending in 2010. CP now plans to spend in the range of $750 million to $800 million on capital programs in 2010.

“The improving economy, our strong balance sheet and solid earnings and free cash flows have enabled us to expand our capital programs to take advantage of growth and productivity opportunities” said Kathryn McQuade, Executive Vice President and Chief Financial Officer. “CP’s strong franchise showed resilience through the recession and this dividend increase continues our trend of dividend growth aligned with earnings growth.”