[The Loewen Group Inc. Letterhead]
                                
                                
                           May 7, 1997
                                
                             URGENT


Dear Shareholder:

          At the Annual General Meeting, the Company has asked
its shareholders to approve:

                    1 million share increases to each of its
               stock option plans and

                    changing the limit on the number of shares
               that can be awarded to any one person from 300,000
               to 600,000.

          Management of your Company strongly recommends that
shareholders approve these proposals.  We believe that approval
of these proposals is crucial to the continued success of your
Company, for the following reasons:

                    The Company uses stock options to reward and
               motivate a BROAD BASE of its employees.  In 1996,
               OVER 580 OF THE COMPANY'S EMPLOYEES RECEIVED STOCK
               OPTIONS.

                    Many of these stock options grants were made
               in connection with the Company's highly successful
               acquisition program, where the grant of options
               incites new managers to remain with the Company
               for the long-term.  In 1996 alone, the number of
               employees increased by more than 5,000.  THE
               COMPANY NEEDS TO BE ABLE TO GRANT STOCK OPTIONS TO
               KEY NEW EMPLOYEES.

                    In 1996, senior executives (the top five most
               highly compensated officers) received options to
               acquire 451,342 Common Shares, LESS THAN 25% OF
               THE APPROXIMATELY 2 MILLION COMMON SHARES SUBJECT
               TO OPTIONS GRANTED IN 1996.  And all but 68,000 of
               the senior executive grants were in lieu of salary
               or bonus.

                    Long-term incentives are becoming an
               increasingly important part of executive
               compensation.  IN ORDER TO ATTRACT AND RETAIN KEY
               EXECUTIVES, THE COMPANY MUST BE ABLE TO OFFER A
               COMPETITIVE COMPENSATION PACKAGE, INCLUDING STOCK
               OPTIONS, TO ITS EXECUTIVES.

                    ALL OF THE OPTIONS RAYMOND L. LOEWEN RECEIVED
               IN 1996 WERE IN LIEU OF SALARY OR BONUS.
               Following the example of Lee Iacocca, Mr. Loewen
               asked to forego 1996 salary and bonus in order to
               link his compensation more closely to the long-
               term interests of the Company's shareholders.

          Some of you may have received the Institutional
Shareholders Services and Fairvest Securities Corporation
recommendations against the proposals to increase the number of
Common Shares and to increase the number of Common Shares that
can be granted to any one individual.  Both recommendations focus
on the potential level of dilution, when considered in connection
with the 1994 Management Equity Investment Plan (MEIP). COMMON
SHARES ISSUABLE UNDER THE MEIP SHARES SHOULD NOT BE CONSIDERED IN
THE DILUTION ANALYSIS.  The MEIP share should really be viewed as
convertible debt.  THE MEIP STRUCTURE BROUGHT $127 MILLION OF NEW
FINANCING TO THE COMPANY AT LOWER THAN MARKET BANK DEBT INTEREST
RATES.  The MEIP options can't be converted into Common Shares
unless the Common Share price is $30.04, a 25% premium over the
Common Share Price when the MEIP options were issued.  And,
absent extraordinary circumstances, no MEIP options can be issued
until 1999.

          WHEN THE MEIP OPTIONS ARE APPROPRIATELY BACKED OUT OF
THE DILUTION ANALYSIS, THE OPTIONS OUTSTANDING AND AVAILABLE FOR
GRANT UNDER THE PLANS, AS PROPOSED, WOULD BE ONLY 10.6% OF THE
COMPANY'S OUTSTANDING COMMON SHARES AS AT MARCH 27, 1997.  WHEN
YOU INCLUDE THE COMPANY'S PROPOSED PUBLIC OFFERING OF 10,000,000
COMMON SHARES (ANNOUNCED MAY 5), THE PERCENTAGE DECREASES TO
9.1%.

          Thank you for your careful consideration of these
items, which are vital for the continued success of our
acquisition program.

          Should you have any questions, please call, either
Peter S. Hyndman, Vice President, Law and Corporate Secretary at
(604) 293-6306 or Randall M. Walters, U.S. General Counsel at
(606) 655-7248.

                              Yours sincerely,



                           /s/  Peter S. Hyndman
                              Peter S. Hyndman
                              Vice President, Law and Corporate
Secretary

PSH/lsp

THE BOARD OF DIRECTORS (2/3 OF WHOM ARE OUTSIDE DIRECTORS) HAS
UNANIMOUSLY APPROVED, AND RECOMMENDS THAT SHAREHOLDERS VOTE FOR
APPROVAL OF THESE IMPORTANT PROPOSALS.