Evidence of meeting #19 for Government Operations and Estimates in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was employees.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Clerk of the Committee  Mr. Paul Cardegna
Manon Fortin  Vice-President, Operations Integration, Canada Post Corporation
Ryan Persad  Director, Global Supply Chain Solutions, Purolator Inc.
Jean-Philippe Gentès  President, Galenova Inc.
Ernie Philip  President, Medline Canada

12:35 p.m.

Conservative

Brad Redekopp Conservative Saskatoon West, SK

Mr. Green mentioned the rejection of N95 masks. Did you experience that sort of thing in your supply chain?

12:35 p.m.

President, Medline Canada

Ernie Philip

Again, I don't want to come off like we're perfect, but I really wanted to be careful. We did not buy anything if we didn't know the factory and we didn't have quality and regulatory people doing it; we just avoided it. We did not want to collect deposits and have money go [Inaudible—Editor]. We decided that very early on.

It hasn't happened to us yet, knock wood, and I hope it doesn't. We were very thorough in making sure we leveraged the fact that we do have 600 factories and we do have 350 people on the ground. So no, it hasn't happened.

12:35 p.m.

Conservative

Brad Redekopp Conservative Saskatoon West, SK

Mr. Gentès, I understand you produce antiseptic hand gels. I assume that you would then import other products, such as masks and things like that. Is that true?

12:35 p.m.

President, Galenova Inc.

Jean-Philippe Gentès

That is correct.

12:35 p.m.

Conservative

Brad Redekopp Conservative Saskatoon West, SK

Did you experience disruptions in your supply chain, specifically with masks?

June 12th, 2020 / 12:35 p.m.

President, Galenova Inc.

Jean-Philippe Gentès

Yes. Since we're smaller than Medline, yes, we did. Basically, in PPE we sold almost everything we had in February.

We experienced some issues in the resupply of our PPE. We sold everything we had in February and March. Now we're struggling to get back some of the materials. Masks have been difficult. Today you see a lot of masks on the market, but from unknown manufacturers.

We talked about the N95 mask recall, but there's not only the N95 recall. If you look at the NIOSH list, you see a whole bunch of masks that are not equivalent to what they're supposed to be. We've been careful the same way Mr. Philip has.

12:35 p.m.

Conservative

The Chair Conservative Tom Lukiwski

Thank you.

Madam Romanado, you have four minutes.

12:35 p.m.

Liberal

Sherry Romanado Liberal Longueuil—Charles-LeMoyne, QC

Thank you so much.

My first question will go to Medline.

You mentioned that you had about a four-month capacity in terms of warehouse space and so on. Going forward, what are your thoughts on how this will change your business model in terms of not having as much stock and/or having to increase stock, given the challenges with respect to transport and delivery?

12:35 p.m.

President, Medline Canada

Ernie Philip

We're hoping to do two things. We are absolutely expanding our contract manufacturing and manufacturing capabilities out of the province of just Hubei. Obviously, that was the PPE capital of the world in terms of making PPE products. My personal opinion is that if ground zero had been somewhere else, I don't think we'd have near the challenges we have today. So we'd sprout across Southeast Asia and leverage Canadian manufacturers as well as our buying power all over the world.

We hold about $120 million in inventory currently. We're really hoping that a long-term, lasting solution is for industry to work with both the federal government and the provinces, if necessary, to create a PPE continuity program. When the next crisis happens, it's here, the stock has been rotated and governments can decide how to allocate the inventory.

12:40 p.m.

Liberal

Sherry Romanado Liberal Longueuil—Charles-LeMoyne, QC

That brings me to my next question. I'm chair of the industry committee, and we've been studying this as well in terms of how industry can help and how we can support industry in terms of dealing with global pandemics. You mentioned that you work with two retail stores. Is it possible to find out who they are?

12:40 p.m.

President, Medline Canada

Ernie Philip

It's actually our retail stores. Medline has a store in Mississauga and Medline has a store in Quebec.

12:40 p.m.

Liberal

Sherry Romanado Liberal Longueuil—Charles-LeMoyne, QC

With respect to provincial economies starting to open up and businesses going back to work, what is the challenge, or perhaps opportunity, for industry to assist in terms of getting the economy rolling again and supporting businesses in getting PPE? This is given the fact that we want to make sure our front-line workers in hospitals and so on and so forth, and the Canadian Armed Forces, are getting it. How can we make sure that the industry is able to proceed with a safe opening, given the challenges?

12:40 p.m.

President, Medline Canada

Ernie Philip

We will stay fanatically focused on being a medical company and not try to sell masks and gowns to everybody. We will stay in our lane and be fanatically focused on keeping our employees safe and delivering PPE items to front-line health care workers.

We believe we have the solution going forward. We're certainly getting ready for flu season and if there's a second wave.... We're actively working with government on this PPE continuity program. I think I've mentioned that four times, so I guess you have it now. Do it with Medline and do it with industry. There's a way to do this where you don't have to manufacture every single thing in Canada, because it's a lot when you think of the tens of thousands and thousands of items.

12:40 p.m.

Liberal

Sherry Romanado Liberal Longueuil—Charles-LeMoyne, QC

Thank you.

I'm going to address you, Mr. Gentès. Thank you very much for your testimony. I always enjoy meeting with representatives of Quebec companies.

You talked about the criteria for tenders and the importance of promoting product quality and local purchasing. Can you tell us more about that? What are the challenges your company faces due to excess merchandise? What storage costs are associated with this?

12:40 p.m.

President, Galenova Inc.

Jean-Philippe Gentès

Thank you very much for your question...

12:40 p.m.

Conservative

The Chair Conservative Tom Lukiwski

Unfortunately, Mr. Gentès, we're completely out of time. I would ask you to please respond to that question as quickly as possible in writing to our clerk. That would be much appreciated.

Our final four-minute intervention will go to Mr. McCauley.

12:40 p.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

Thanks very much, witnesses. It's been very interesting.

Mr. Philip, you talked about masks. What does your company provide? Is it the full range, from surgical to the standard to the N95?

12:40 p.m.

President, Medline Canada

Ernie Philip

We provide the whole range. Medline produces medical grade masks, both surgical and procedural masks, and we are an authorized distributor in Canada for 3M for the N95 mask.

12:40 p.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

A report from a consulting company came out, and it said that over the next couple of years we'll require three billion N95 masks. Did you see that report? Do you have an idea what is required industry-wide?

12:40 p.m.

President, Medline Canada

Ernie Philip

No, I really don't. I have another report that says we're going to need a billion masks, so I think at this point we're trying to evaluate what the demand is now. I wouldn't be able to give you a really good educated, academic answer to that.

12:40 p.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

The push seems to be for N95 masks. Do you think that is where the priority needs to be for the country? The reason I ask is that I've had suppliers.... We hear so much about the need for N95 masks, and a huge percentage of what has been brought in so far has been faulty masks. We haven't procured any masks in the last month that have passed PHAC's standards, yet I continue to hear from producers and suppliers that they've approached different levels of government—federal, provincial—but no one is actually looking to buy the masks. Can you shed any light on that? It just doesn't make sense.

12:40 p.m.

President, Medline Canada

Ernie Philip

I'll answer as best I can.

We're a distributor of N95 masks, and that has to happen. We are certainly talking to all levels of government about procedural and medical grade masks. Certainly, for isolation purposes, if you're not performing surgeries they're a really strong mask. That's where a lot of our previous activity was. We sold a lot of ASTM level 1 and 2 procedure and isolation masks. We've been a voice saying that we need N95 masks and that this is not going to change and will grow exponentially, but for general isolation types of applications that is a really good, appropriate mask.

12:45 p.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

Sorry, what is a really good, appropriate mask?

12:45 p.m.

President, Medline Canada

Ernie Philip

It's the medical grade ASTM level 1 or 2 mask.

12:45 p.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

Is there too much focus on obtaining the N95 mask and we should be focusing on what you've just mentioned?