In 1879, the ICR purchased the GTR line between Rivière-du-Loup and Levis, opposite from Quebec City. This line had been completed in 1860 by the GTR, and the ICR had had running rights on it since 1876.
The main line of the ICR competed directly with the steamship service of the Quebec & Gulf Ports Steamship Company, which was reorganized in 1880 as the Quebec Steamship Company. By the late 1880s, this concern operated only one steamer, the Miramichi, between Quebec and Pictou; all of its other vessels had been shifted to service between New York and the West Indies.
In 1884, the ICR built a branch from its mainline east of Campbellton to service the port and forest industry town of Dalhousie.
At Rivière du Loup, in the 1880s the ICR made connections with the steamers of the St. Lawrence Steam Navigation Company. This steamship line was absorbed by the Richelieu & Ontario Navigation Company in 1886.
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In the late 1880s, the ICR received running rights over the GTR main line between Levis and Montreal (via Richmond), allowing passengers and cargo from the Maritimes to Canada's then-largest city to transit without interchanging.
In 1887 the ICR took over and completed construction of a line running from Oxford Junction to Stellarton, along Nova Scotia shores of the Northumberland Strait. This line was known as the "Short Line" and it provided an alternate route for ICR trains heading to Pictou County and Cape Breton Island from New Brunswick.
The Temiscouata Railway was completed in 1889 from Rivière du Loup to Edmundston, New Brunswick, giving the ICR a connection with the Canadian Pacific line up the St. John Valley.
In 1890, the ICR completed construction of what had begun as the Cape Breton Eastern Extension Railway, with a line running from its former NSR terminus at New Glasgow eastward through Antigonish to the port of Mulgrave where a railcar ferry service was instituted over a 1.6-kilometre (1 mi) route across the deep waters of the Strait of Canso to Point Tupper. The line then headed east across the centre of Cape Breton Island, crossing the Bras d'Or Lake on the newly built Grand Narrows Bridge, continuing to the port of North Sydney (with ferry and steamship connections to Port aux Basques, Newfoundland) and terminating in the burgeoning industrial centre and port of Sydney.
In 1899, the Department of Railways and Canals purchased the Drummond County Railway from James Naismith Greenshields and folded it into the ICR to provide the railway with a direct route from Sainte-Rosalie (east of Saint-Hyacinthe where it met the GTR main line) to Lévis. After this purchase was complete, the ICR stopped using the GTR's route via Richmond.
The ICR opened a branch of 10.06 kilometres (6.25 mi) on June 22, 1903, between Rivière Ouelle Station and Pointe St. Denis on the South Shore of the St. Lawrence. In 1904 the ferry Champlain entered service between Pointe St. Denis and the North Shore ports of St. Irenée, Murray Bay and Cap à l'Aigle.
Also in 1904, the ICR purchased the Canada Eastern Railway, giving it a connection to the Fredericton area.
Moncton became the headquarters for the company and extensive shops and yard facilities were built, as well as a grand station, built to rival the Canadian Pacific Railway station in McAdam. Following a February 24, 1906 fire, the Moncton shops were rebuilt at a new location at the insistence of the local Member of Parliament, Henry Emmerson, who was the Minister of Railways and Canals in Prime Minister Wilfrid Laurier's cabinet. The replacement shops were built northwest of downtown while the former shops location was converted into yard facilities. Both Rivière-du-Loup and Campbellton had unsuccessfully lobbied to become the new headquarters of the ICR following the Moncton fire.
As a result of the ICR with its subsidized freight-rate agreements, as well as the National Policy of prime minister John A. Macdonald, the industrial revolution struck Maritime towns quickly. The ICR was the perfect vehicle for transporting raw ore such as iron ore and coal to steel plants in Trenton, Sydney Mines and Sydney, as well as finished and semi-finished products to other Maritime and central Canadian locations. This led to foundries and factories of various industries springing up throughout Nova Scotia and New Brunswick along the ICR main line and branch lines.
