Government Operations Committee on May 1st, 2020

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Lem, thanks very much.

[The Chair, Conservative, Tom Lukiwski]

We'll now go to Mr. MacKinnon for six minutes, please.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you, Mr Chair.

Good morning, everyone.

Welcome to our witnesses.

Mr. Whalen, I know that name to be a New Brunswick name, so it's good to see you and I thank you for joining us.

Mr. Lem, of course, we've had a couple of encounters over the last few years, and I appreciate your and your company's vigilance here.

At the risk, Mr. Chair, of eliciting a groan or two from my friends across the virtual aisle, I want to give a tip of the hat to our procurement professionals who have worked with folks like the two witnesses that we see here today and who I know have been working day and night to procure these vital supplies, things like swabs and chemicals for reagent for these testing regimes that we know have to become more aggressive and ramp up.

That will be the essence of my first question for both gentlemen. I would appreciate it if you could keep your responses short.

I'll go to Mr. Whalen first. What do you see now, as we sit here today, as the supply challenges with respect to ramping up testing?

[Pat Whalen]

I think it's some of the more basic materials, Mr. MacKinnon, things around having Canadian production facilities for swabs and some of the base chemicals that are required for reagents. Having that capacity, I think, will make a world of difference from the standpoint of preparedness moving forward.

[Steven MacKinnon, Liberal, Gatineau, QC]

Before we go to Mr. Lem, do you see that capacity ramping up?

[Pat Whalen]

Yes, I do. In discussions with ISED, PSPC, PHAC and NRC, they are already working to shore those things up.

[Steven MacKinnon, Liberal, Gatineau, QC]

Very good.

Mr. Lem.

[Paul Lem]

Thank you, Mr. MacKinnon. It's good to be in contact with you again.

In terms of supply chain, one of the things that we found Canada is very good at is that we have tier one contract manufacturers that have domestic capacity. A few weeks ago, we signed a major contract with Sanmina. They are a tier one contract manufacturer. We requested that they implement more manufacturing capacity for us at their facility in Mississauga. All we had to do was pay them and transfer over our designs. After 90 to 120 days later, we will be able to add capacity for 100,000 tests per week. It can be cloned simply with more capital, which is what we're doing in Canada.

[Steven MacKinnon, Liberal, Gatineau, QC]

Is that capital available to you?

[Paul Lem]

Yes, the government has been very good at working with us, not only with the down payments from the federal and provincial governments but also with BDC. They made a line of credit available to us, and that has allowed us to scale up extremely quickly.

[Steven MacKinnon, Liberal, Gatineau, QC]

Diversity in the supply chain is obviously very important. Diversity of testing modes of course is important, and each of you has highlighted the features of the different kinds of testing that you are involved with.

Perhaps I'll go to Mr. Whalen first. Can you highlight for the committee again the advantages of—if I'm getting this term right—lab-based testing?

Mr. Lem, of course you have a more instant-type testing regime. Perhaps you could outline the advantages of that.

Mr. Whalen.

[Pat Whalen]

As for the laboratory-based or centralized testing, the advantage is simply scale: being able to process a very large number of samples very quickly using large equipment that is typically automated or robotic. The backbone of that style of testing lies in the different provincial health laboratories and other private laboratories across Canada. The benefit there is scale, being able to do it in large numbers.

[Steven MacKinnon, Liberal, Gatineau, QC]

If we are going to achieve the kinds of testing numbers we will need on an ongoing basis, that will of course require significant and continued investment in lab-based testing.

[Pat Whalen]

Yes, absolutely, and investment not only in the equipment but also in the people, the trained professionals who can run these styles of tests. It's important to have that infrastructure, that backbone, so we can crank out a maximum number of tests.

[Steven MacKinnon, Liberal, Gatineau, QC]

For certainty of supply, there was a chemical we needed to import from China in significant quantities. Our folks on the ground in China, as well as folks at PSPC, were able to secure that material. Can you comment on that?

[Pat Whalen]

It was an interesting situation. It was a supplier we typically use that we know to be very reliable. It makes the highest quality product in the world.

Typically this material has to be shipped by boat. We had a shipment scheduled, but it would have taken 30 days to cross the Pacific and make its way across Canada to us. I floated an idea to the Public Health Agency of Canada: What if we put it on a plane? They put us in contact with the people at PSPC, and within a week and a half we had it landed here in Canada, in Fredericton, safe and secure. It was a true team effort involving PHAC, PSPC and the Embassy of Canada to China, in Beijing. There were a lot of people involved, and it's a great success story.

[The Chair, Conservative, Tom Lukiwski]

Unfortunately, we're completely out of time for that round.

We'll now go to Madam Vignola.

Ms. Vignola, you have six minutes.

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

Good day, gentlemen.

My first questions will be for Mr. Whalen from LuminUltra.

Before obtaining this contract, had you ever made COVID-19 test kits?

[Pat Whalen]

The answer to that is no. We were making similar technologies and measuring similar things, bacteria and other viruses, but not COVID-19 specifically.

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

I see.

You've never made these kits before, but now you're being asked to make 500,000 a week. What's the status of your weekly production, and when do you expect to reach the target of 500,000 kits?

[Pat Whalen]

We actually already have. Saying we have not produced this test for COVID before is perhaps a bit of a mistake on my side. We are producing the chemical reagents that are universal for measuring any virus, including the novel coronavirus, and we have produced them before.

We have ramped up from producing several tens of thousands of tests per week to 500,000 tests per week. In fact, we've gone beyond that. We just shipped our millionth test today, and we're already at a point where we will be shipping half a million tests per week moving forward.

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

You mentioned reagents. Is there a possibility of obtaining these reagents from Canada or North America rather than China?

[Pat Whalen]

Yes, absolutely. In fact, in our work with the different government partners I've mentioned, they have already identified basic chemical manufacturers where many of these raw materials that are currently sourced outside of Canada can be synthesized and produced in large quantities within our borders. I think we are already on our way there.

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

Over what period of time do you have an agreement with the Government of Canada and what is its total value?

[Pat Whalen]

The total value is approximately $102 million for these 25 million to 26 million tests over the next year. The span of the contract goes until March 31, 2021.