The CAR was created in September 1988 as a business unit of CP Rail (CPR) to serve the Maritime Provinces and state of Maine. Its creation was predated by several years of declining traffic during the 1980s on CPR's eastern mainline from Montreal to Saint John and its supporting branchlines. The assets of CAR were sold or abandoned in stages and the company ceased to exist December 31, 1994 as CP Rail exited eastern Canada and at the same time ceased to be a transcontinental railway.