Short Term Incentive Plan for Non-Unionized Employees (Canada) and US Salaried Employees dated January 1, 2014, as amended July 1, 2021

The Management Resources and Compensation Committee of the Board of Directors of Canadian Pacific Railway (the "Committee") has complete authority to interpret and define individual and group eligibility and to establish rules and regulations required to properly administer the Plan. The Board may also suspend, amend or terminate this Plan at any time

On an annual basis, managers are responsible for guiding their employees in the objective setting process. Managers must conduct regular progress reviews throughout the year, evaluate performance against objectives at year end and report results to Human Resources.

Employees are responsible for setting and striving to achieve their annual performance objectives and for soliciting performance feedback from their managers.

Human Resources is responsible for interpreting this policy, guiding its administration and supporting employees and managers applying the policy.

Regular employees who participate in the Company’s non-unionized compensation program are eligible to participate in the Plan provided they join the Plan prior to October 1st in their first year of participation.

Employees must complete three (3) months (65 working days) of cumulative active service in the Plan year in order to be eligible for a STIP payout.

Unionized employees who temporarily assume a non- unionized position will be eligible for STIP, provided the temporary assignment commences prior to October 1st of the Plan year and has a minimum continuous duration of three (3) months (65 working days) in the Plan year.

The objectives of the Plan are:

•to tie a part of the employee’s compensation directly to CP's results;

•to reward the achievement of individual and team objectives that support CP's achievement of its annual business plans and long-term strategy; and

•to maintain the competitiveness of CP's compensation program.

Individual STIP awards are based on two components, individual and corporate. STIP award payouts are based on an employee’s group and weighting category at year-end.

The following table outlines the weighting for corporate and individual performance for the various management levels in the organization:

Level A to F 75% 25%

Level 1 60% 40%

Level 2 to 6 50% 50%

The individual component of STIP awards is tied directly to the individual’s PMP objectives established under the Performance Management Program (PMP). A PMP rating (from Unsatisfactory to Outstanding) will be assigned to each of the individual’s PMP objectives.

The performance ratings are determined on the basis of three dimensions:

1.achievement of objectives against the standards and measures established for each objective;

2.context of performance throughout the year; and

3.peer clustering of employees into a distribution profile established by the Company.

The context of performance dimension considers the “how” of the achievement and adds a necessary judgmental component to the assessment process. The demonstration of company values must be considered.

Taking the three dimensions into account, through the calibration process, an overall PMP rating and an overall STIP attainment level, based on the scales below, are determined for the employee’s individual performance component.

Outstanding     170% - 200%

Exceeds 125% - 165%

Achieved     90% - 120%

Partially Achieved     0% - 85%

Unsatisfactory     0%

Annually, the Committee establishes the performance criteria, the weighting assigned to each performance criterion and corporate performance target levels for the STIP Program.

Each corporate performance criterion will have three levels of performance and payout.

a.Exceptional Level - 200% of Target Award Level assigned to the corporate component where the actual CP performance meets or exceeds the exceptional level established by the Committee;

b.Target Level - 100% of Target Award Level assigned to the corporate component where the actual CP performance meets the target level established by the Committee;

c.Threshold Level - 50% of Target Award Level assigned to the corporate component when the actual CP performance level for the Plan Year is at the threshold level established by the Committee; and

Where the actual CP performance falls between the threshold and exceptional levels, the payout level will be prorated.

Where the actual CP performance falls below the threshold level, no awards will be paid under the corporate component.

Awards are calculated by performing the following

calculation:

Target Award Level multiplied by the weighting for the individual component, multiplied by the annual salary in effect at the end of the Plan Year, multiplied by the STIP attainment level

the Target Award Level, multiplied by the weighting for the corporate component, multiplied by the annual salary in effect at the end of the Plan Year, multiplied by the weighting of the performance measure, multiplied by the payout level. This calculation is repeated for each of the Company’s performance measures.

For sample STIP calculations, see Appendix 1.

Employees that retire on or after April 1 of the plan year without a severance payment are eligible for a prorated STIP award provided:

•he/she provided Retirement Notice in accordance with Retirement Policy 8101; and

•retirees are between 55 and less than 60 years of age with a minimum of 5 years of company service from the last date of hire or if retiring at age 60 or greater, must have a minimum of 2 years of company service from their last date of hire.