IPSCO Protests Federal Grain Hauling Revenue Cap

Regina, Saskatchewan, May 12, 2000 -- IPSCO Inc. said today that the Canadian federal government's decision to impose a cap on the country's railroads' grain hauling revenues would undoubtedly result in higher freight costs and poorer service for the other users of rail services in Western Canada. "Either the government doesn't understand economics or it just doesn't care whether this move hurts others", said Peter MacPhail, President, IPSCO Saskatchewan Inc. Faced with lower income the railways will either spend less, meaning poorer service, or charge higher rates to others, he said. "Money doesn't grow on trees and we are worried that the move will impact negatively on us".

"Fortunately our company will have a solution if this happens, but it won't be a palatable one for our Saskatchewan workers. Despite our new steel operations in the United States we continue to ship speciality steel products from Regina to several American states", he said. "If this change renders those sales unprofitable I know our parent company will switch this production to our U.S. subsidiaries. In addition, we have already been developing our Iowa steelworks' capability to make steel for our Alberta pipe mills. If Canadian freight rates get too high we could lose all or part of this business too."

IPSCO said it received and shipped annually 1.5 million tons of steel and supplies by rail, to and from its Regina operations.

"In the longer term this move, illustrating as it does, Canada's willingness to meddle with the market system, harms our reputation with potential investors. Without continuing investment and economic growth in Canada the need for steel won't increase, frustrating any potential expansion plans we would have," MacPhail added. 

This news release contains forward looking information with respect to IPSCO's operations and beliefs. Actual results may differ from these forward looking statements due to numerous factors, including Government actions, third party responses to Government actions, transportation costs, estimated time of completion of equipment installation, cost of installation, potential markets and prices for the materials produced, and oil and gas industry activity. These and other factors are outlined in IPSCO's regulatory filings with the Securities and Exchange Commission, including those on IPSCO's Annual Report for 1999, its MD & A and Form 40-F.

Company Contact:
Peter MacPhail
Vice President and General Manager, Canadian Steel Mill Products
IPSCO Inc.
Tel: 306-924-7520

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