Government Operations Committee on April 30th, 2020

[The Chair, Conservative, Tom Lukiwski]

Colleagues, I will call this meeting to order. Paul has very graciously provided some speaking notes for me, which I will go over with you before we officially start the meeting.

I'd like to welcome you to meeting number seven of the House of Commons Standing Committee on Government Operations and Estimates. Pursuant to the order of reference of Saturday, April 11, 2020, the committee is meeting on its study of the government’s response to the COVID-19 pandemic.

Before we start, let me just say that I noticed, when seeing all of my colleagues in attendance on the video conference, that many of you must be anxiously awaiting the reopening of barber shops across the country. I hope that happens within the next few weeks.

Colleagues, I would also like to announce the schedule for committee meetings for next week. This has been approved by the whips, although I'm sure it's subject to change. Our first meeting will be on Monday, May 4, from 2 p.m. to 4 p.m., eastern time. On Friday, May 8, we will meet from 11 a.m. to 1 p.m., eastern time. Now, that has been a change. I believe all of you, however, were notified by your respective whips and by the House a little earlier this week.

Based on the discussion at the last meeting, the analysts have prepared a revised work plan, and it was distributed to all members of the committee this last Tuesday. As OGGO will be meeting on Monday, it is very important that the committee review that work plan and give the clerk some guidance on who should be invited to appear on Monday and Friday of next week. We only have a few days, so if there are additional witnesses, or if you want to make major revisions to the work plan, the clerk would appreciate it very much if you could get that information to him immediately.

At 2:50 p.m., or approximately 10 minutes before we conclude the first hour of this afternoon's meeting, I will be suspending the meeting and dismissing the industry officials, who will be with us for the first 50 minutes, as we consider the work plan. The analysts took all the suggestions that were made by members at our last meeting and combined them into a revised work plan. This was distributed to the committee on Tuesday. Before we set up the witnesses who will appear from 3 p.m. to 4 p.m., I would like to have some conclusion and some agreement as to the work plan as suggested. If there are any major changes, we will try to deal with that before we get to the second hour of this meeting. We are not going in camera at any time. All of the discussions will be completely in public.

Pursuant to the order made on April 11, the committee cannot consider any motions except for those “requesting or scheduling specific witnesses, and these motions shall be decided by way of a recorded vote”. We can consider this work plan and make changes to it as long as it deals with the subject matter of the COVID-19 pandemic and the government's response to it.

Now, as you know—we have discussed this individually—earlier today the clerk sent out some guidelines about interpretation and how to use the interpretation channels during the meetings. If you are going to be speaking in English, we encourage you to make sure you click on the English channel. If you are going to be speaking French, click on the French channel. If you are going to be alternating between English and French, we would ask that, as you change languages, you pause for a moment or two to allow the interpreters the chance to switch channels.

Our first set of witnesses will be from the industry department. We have with us Mr. Simon Kennedy, deputy minister, and Mr. Paul Thompson.

Gentlemen, welcome to our committee.

Mr. Kennedy, the floor is yours.

[Simon Kennedy, Deputy Minister, Department of Industry]

Thank you.

I will proceed with my remarks in English, just because of the challenges of having to switch back and forth with my laptop computer here, but I will say that I would be honoured to respond to members' questions in either official language.

It will be an honour for me to respond in the official language of—

[The Chair, Conservative, Tom Lukiwski]

Mr. Kennedy, for some reason, your screen is frozen and I'm not receiving any audio whatsoever.

Now we have you back on the video screen, but your audio is still very low.

[Simon Kennedy]

I'm very sorry about this.

I was just on with the industry committee and things were working fine, so I'm hopeful it's not my equipment. I have a high-speed connection here.

I was going to say, just as all departments have been called on to protect Canadians and our economy during this extraordinary time, Innovation, Science and Economic Development has been working hard and trying to do its part to deliver a strong, immediate and effective response.

I have witnessed a deep commitment within my own and other departments to do what it takes to help individuals and businesses manage the economic disruption caused by this pandemic. I've had the privilege of working closely with colleagues in other departments and agencies to help mobilize Canada's industrial and research communities as part of these efforts.

Since the government's call to action to Canadian business about six weeks ago, nearly 6,000 Canadian companies have offered their expertise and capacity to help combat COVID-19 by retooling, scaling up or providing urgently needed goods and services. ISED has been moving swiftly to work with these companies to help build a secure domestic supply of key personal protective equipment for Canada's front-line health workers as they fight the pandemic, and we have shifted the focus of our business innovation programs to directly target COVID-19.

We are accelerating applications and the approval process so that projects can get off the ground quickly to address the most urgent issues, and we are making progress through our strategic innovation fund, innovation superclusters, the innovative solutions Canada program and the National Research Council's industrial research assistance program.

Through these programs. ISED is helping meet the urgent needs of health care workers for equipment such as masks, face shields, medical gowns, ventilators and test kits. For example, funding from the National Research Council's IRAP helped Ottawa's Spartan Bioscience fast-track the certification process for its COVID-19 test kit.

Following a call-out to its more than 970 members to develop and scale up new health products and equipment, the Next Generation Manufacturing Canada supercluster has already reviewed and conditionally approved seven projects for ventilators, test kits and face shields. To take a final example, Innovative Solutions Canada has received a tremendous response from SMEs across the country to its challenge and testing streams focused on a response to COVID-19. These initiatives will be moving into selection and funding faster than ever before.

Throughout all of this work, we have been in lockstep with Health Canada, the Public Health Agency of Canada, Public Services and Procurement Canada, and others. PSPC has been instrumental in leading significant investments to increase Canada's supplies of critical equipment for the health care sector. With a coordinated strategy among these departments, we are maximizing the contributions of federal innovation programs as part of Canada's response to this extraordinary challenge.

Complementing these industrial contributions and those of our science and research community, there is no denying that Canada must act quickly to accelerate promising research aimed at treatments and a vaccine for COVID-19. That is why the ISED ministry has been working diligently with Canada's world-class science and research community in taking on this challenge. The results of this work will be accessible to researchers around the world to advance the global fight.

Organizations such as the NRC and the Canadian Institutes of Health Research have received federal funding to conduct COVID-19 research in important areas, such as diagnostic tools and vaccine candidates.

The University of Saskatchewan VIDO-InterVac facility has also received funding to help get clinical trials set up and running as soon as possible so that we can ensure no time is wasted in developing a vaccine to protect Canadians against potentially recurring waves of COVID-19.

Genome Canada has received funding for the new Canadian COVID genomics network to further its genome sequencing research and help scientists better track the virus, its different strains and its impact on patients. The research conducted by this network will also guide public health authorities and policy-makers in their efforts to curb the pandemic.

Finally, my department worked quickly to facilitate the establishment of a new $600-million COVID-19 stream under the strategic innovation fund. This stream will support vaccine and therapy clinical trials, as well as Canadian biomanufacturing opportunities.

ISED is working hard to support the scale-up of national platforms to develop and deliver a vaccine to Canadians when one is discovered, including support for manufacturing. Combined with efforts to mobilize industry, we are trying to do our part in the larger whole-of-government approach to protecting Canadians and preventing the spread of the virus.

We want to help ensure the capacity of our health care system as well as supporting international and domestic efforts. I'm proud ISED can contribute to the coordinated response, one that hopefully will allow Canadians to return to work, get the economy moving again, and set up our country for a rebound when it is safe to do so.

That concludes my remarks, Mr. Chair. Again, thanks for the opportunity to speak with members today. I would be, of course, pleased to answer your questions.

[The Chair, Conservative, Tom Lukiwski]

Thank you, Mr. Kennedy.

Colleagues, before we go into a round of questioning, I've been informed that we should be concluding our meeting as close to 4 p.m. as possible. The technicians are going to be needing at least one hour to set up for the next meeting, which starts at 5 p.m., so I'm going to make a decision that this first hour will be somewhat truncated. We will continue along until about 2:50 p.m., at which time I will dismiss the witnesses and suspend the meeting, have a brief committee business meeting, and then bring our next witnesses in at 3 p.m. sharp.

With that said, we have time for about 25 to 35 minutes' worth of questions.

Mr. Aboultaif, go ahead for six minutes, sir.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you, Chair.

This is a question for Mr. Kennedy. Is ISED aware that there have been many deliberate attempts by foreign actors to seize our PPE supply for their own domestic benefit? According to Global News, this has been going on since probably January, and it's by a group that is tied to the PRC. Are ISED and the government aware of that, yes or no, and what is our plan to somehow counter or prevent that from happening?

[Simon Kennedy]

I would say that, as the Deputy Prime Minister has been widely quoted in the press as saying, there is a bit of a Wild West internationally in terms of efforts to procure these kinds of supplies. I'll be frank with this committee that I'm not directly involved in the international procurement of these supplies. That's run by Public Services and Procurement Canada, so some of the specific answers to those questions would have to be directed to them.

What I will say is that the concerns around the difficulty procuring items are one of the key motivating factors in our ministry working to scale up domestic production. When we are actually working with Canadian firms in an effort, in some cases, to shift their production into manufacturing things such as medical gowns or ventilators, one of the things we look at with those companies is potential vulnerabilities in their supply chain. We want to make sure that when we're contracting with Canadian firms, we're able to ensure that they're able to deliver and that they're not, for example, reliant on important components that may be coming from abroad or coming from sources out of the country that are risky. That is part of the context in which we do our domestic manufacturing scale-up work, but my organization and I personally are not directly involved in overseas purchases. Those are led by PSPC.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Speaking of local manufacturing and dependency on local products, do we have the proper raw materials in Canada to be able to produce some of the PPE?

[Simon Kennedy]

Mr. Chair, I think the great answer to that is that in many cases we do. This is new territory, I think, for many of us, in the private sector as well as in government. A lot of innovation has been brought to the table. I can give just a couple of examples. There's a global shortage of the specialized fabric that's used to make medical and surgical gowns and other kinds of protective clothing, but we've been able to discover Canadian-made fabric that actually meets all of the specifications of Health Canada. Actually, that fabric wrap is used in the construction business. It's not actually used in health care, but it turns out, after testing and assessment, that it fully meets the medical specifications. The company that makes that fabric, which is in Nova Scotia, has shifted its supplies to the garment industry and we're now making these medical gowns in Canada.

Much the same is true in a number of the other areas so, yes, I think the answer to your question is that to date we have been able to find Canadian replacements for many of these products.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

I think, Mr. Kennedy, you're referring to something called non-woven material, and China basically bought everything that was in international supplies months before the COVID-19, and now they are running out of it, and that's why I'm asking if Canada is ready. Do we have the raw material? That's good news, and do you think we have enough to be self-sufficient?

[Simon Kennedy]

Well, Mr. Chair, I think I'd be going out on a limb making a definitive declaration, but certainly, in the case of gowns, for example, the volumes of this kind of alternative fabric are significant, and my understanding is that we're not concerned about a shortage in that area because we found these alternative supplies.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

That brings to our attention the counterfeit equipment that has come into Canada from different sources. What effort is the government making to track down this counterfeit equipment and make sure that it is not coming into the country and being used by our own people?

[Simon Kennedy]

Mr. Chair, I think, again, that question is probably best directed to the procurement ministry because they are the ones who will make those purchases and do the follow-up.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

There were so many applications that came through ISED for local companies to be qualified to start producing products that we need in this situation. How many businesses have applied, how many were accepted, and what were the main criteria for accepting or rejecting those applicants?

[The Chair, Conservative, Tom Lukiwski]

Mr. Kennedy, if you could, give a very short answer, please, sir, if possible.

[Simon Kennedy]

No trouble, Mr. Chair.

There have been about 6,000 companies that have applied to date. We haven't rejected anybody because it doesn't really work that way, but basically we're going with firms that are able to fill the identified gaps. We're still doing the count because in some cases we're not directly contracting. We're simply getting them sent to the right regulator to have their stuff checked out, and then they can sell it directly into the market. Our count is about 200 firms to date that we have worked with directly as part of the mobilization of industry, but we've spoken directly to every one of the 6,000 firms.

[The Chair, Conservative, Tom Lukiwski]

Thank you so much.

Mr. Jowhari, you have six minutes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair.

Welcome to Mr. Kennedy, especially as he comes from the industry committee meeting from 11 a.m. to 1 p.m. We benefited in that committee from insight from the minister as well as your feedback.

Specifically, in your closing remarks, you talked about the $600 million COVID-19 response as part of the strategic innovation fund. Can you quickly expand on that, and is that the reallocation of the $2.5 billion? How did that number come about, and what is it focused on?

[Simon Kennedy]

These are new funds, and the plan for these funds is, as I mentioned before, to support the development of medical countermeasures. In my layperson's simple terms, that would be in support, for example, of large-scale vaccine clinical trials as well as manufacturing capability to produce a vaccine at scale for the Canadian population. Those are two really key examples of what that's for.

Those funds are available. They have not yet been deployed, but they're available to us now as we do the work to identify the most promising therapies that we can test here in Canada and then to have the manufacturing firepower to—for example, once a vaccine is discovered—be able to have a fill-and-finish capacity to make 40 million doses for the Canadian population. That capacity needs to be built, and we want to get a head start on that. That's what those funds are for.

[Majid Jowhari, Liberal, Richmond Hill, ON]

That's a great segue to the next question I want to ask. Once again, in your closing remarks, you talked about the initiative that ISED is undertaking to set the country on the right path for rebuild and recovery.

Can you quickly expand on what we're doing holistically as one Canada and specifically as the ISED department to help us with the planning and eventual execution of the recovery?

[Simon Kennedy]

Well, one thing we are responsible for as a ministry is to work closely and have a good relationship and good visibility with major industrial sectors in Canada. I could give just a couple of examples. We have a good relationship and work closely with the automotive sector, and have for many years. We work closely with the aerospace industry. We work closely with the biotech and high-technology sectors. Those are just a couple of examples. There are many more.

We have staff who actually talk to the analysts and talk to the CEOs. One piece of value added that I think we're bringing to the government is that we are trying to provide good intelligence on how those industries operate, what some of their needs are and any adjustments they're making to deal with this crisis. We are not the only one, but we are a centre of expertise for our colleagues in the health ministry, the finance ministry and the other ministries that will be involved in helping out with the recovery. We're one player, but we aim to ensure that we bring good sectoral intelligence and relationships to the table.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Great. Thank you.

I'm sure that everyone agrees that in an effort to be able to reopen the economy, testing and tracing and tracking will be some of the key drivers. Vis-à-vis the department, what specifically are we doing to help make sure that, in terms of capacity as well as supply, we have enough testing material and testing product available in order that different jurisdictions can have ready access to those tests so that they can ensure that they use it, in a timely way and appropriately, as one of the key drivers to kick-start the economy?

[Simon Kennedy]

As part of the made-in-Canada approach, we're working very closely with colleagues at Health Canada and the Public Health Agency to try to ensure that we have sufficient domestic capacity on the testing front to be able to support the testing volumes that will be needed by the provinces and territories and the federal government.

I should maybe clarify for the committee members that the specific decisions on how many tests, what kinds of tests and where, and those sorts of things will be made by health authorities. In many cases, those will be provincial and territorial decisions. We obviously, though, want to have a sufficient quantity of testing materials to be able to do that as a country. That's an area where we're working very closely with the National Microbiology Laboratory, our colleagues at Health Canada, the Public Health Agency, and frankly the procurement ministry.

Again, to give you my layperson's explanation, you can think of testing as having very different kinds of tests. There's the lab-based PCR test. That's kind of the gold standard. It's lab-based testing. There are point-of-care tests. We're trying to work across all fronts. Basically, we're going through the list of ingredients and equipment needed for those lab-based tests that are being done and making sure that for every one of those things, we have some line of sight on whether there's Canadian manufacturing capability or whether those ingredients can be sourced in Canada. We don't want to be in a position where some vital constituent part of the test is from a country where there's no supply or it's unreliable or whatever. We're kind of going through the shopping list and making sure we have access to all the ingredients.

We're also—

[The Chair, Conservative, Tom Lukiwski]

Unfortunately, Mr. Kennedy, if you have further information to share with the committee, I'd ask you to do so in writing through our clerk. We're quite tight for time.

Ms. Vignola, you have the floor for six minutes.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much for your statement, Mr. Kennedy.

You said that 26,000 businesses had been studied. Once those companies have been identified and offered financial support, Public Services and Procurement Canada, or PSPC, determines their production capacity. Isn't that a duplication of effort? If you've identified and contacted these companies, why do you have to go back to Public Services and Procurement Canada to make sure they have the production capacity? Wasn't that checked before?