RDiestler asks, "What has prevented American railroads from expanding into Canada? At least on a major scale." Good question. I think the obvious answer is there weren't a whole lot of takeover opportunities. In Canada you had the two biggest RRs in North America, CN and CP, and then a few short lines. Hardly anything that would even qualify as a "regional" except, perhaps, BCR and NAR. Before the mega-mergers of the 80s and 90s no RR in the US was big enough to swallow CP, and CN was owned by the Canada govt until 1996 (not to mention that it was even bigger than CP).

After deregulation, NAFTA, and CN severing ties with the govt, it was easier for CN and CP to absorb US regionals than for US RRs to absorb anything in Canada.

With the consolidation of US RRs into two western systems (BNSF, UP) and two eastern systems (NS, CSX) in the late 90s you finally had RRs in the US close to size of Canada RRs and possible mergers. BNSF and CN discussed merger several years ago, but it was too close to UP-SP and ensuing hassles, so regulatory agencies weren't ready for the next round of consolidation.

I think a few years down the line we'll see the final North American mergers. One of the Canada systems will consolidate with one of the Western systems and one of the eastern systems. Then the others left standing will join and we'll have two North American RRs.

Here are the possible results:

CN-BNSF-CSX
CP-UP-NS

or

CN-BNSF-NS
CP-UP-CSX

or

CN-UP-CSX
CP-BNSF-NS

or

CN-UP-NS
CP-BNSF-CSX