Government Operations Committee on March 22nd, 2021

[The Chair (Mr. Robert Kitchen (Souris—Moose Mountain, CPC)), Conservative, Robert Gordon Kitchen]

Good afternoon, everybody. I call the meeting to order.

Welcome to meeting number 21 of the House of Commons Standing Committee on Government Operations and Estimates. The committee is meeting today from 3:36 to 5:36. We'll hear from PHAC and PSPC as part of the committee's study on the government's response to the COVID-19 pandemic, and then discuss committee business afterwards.

I'd like to take this opportunity to remind all participants in this meeting that screenshots or taking photos of your screen are not permitted.

To ensure an orderly meeting, I would like to outline a few rules to follow. Interpretation in this video conference will work very much like in a regular committee meeting. You have the choice at the bottom of your screen of floor, English or French.

Before speaking, please wait until I recognize you by name. When you are ready to speak, you may click on your microphone icon to activate your mike. When you are not speaking, your mike should be on mute. To raise a point of order during the meeting, committee members should ensure their microphone is unmuted and then say “point of order” to get the chair's attention.

In order to ensure social distancing in the committee room, if you need to speak privately with the clerk or the analyst during the meeting, please email them through their committee email address. For those people who are participating in the committee room, please note that masks are required unless you are seated and when physical distancing is not possible.

I will now invite the witnesses to make their opening statements. We will begin with the Public Health Agency of Canada.

Thank you.

[Cindy Evans, Acting Vice-President, Emergency Management Branch, Public Health Agency of Canada]

Good afternoon.

I'd like to thank the chair of the committee and the committee members for inviting the Public Health Agency of Canada to speak today. My name is Cindy Evans, and I'm the vice-president of emergency management. In this role I'm responsible for the national emergency strategic stockpile.

Joining me today is Martin Krumins, vice-president and chief financial officer of the Public Health Agency of Canada.

The COVID-19 pandemic continues to have impacts across multiple sectors. Access to critical personal protective equipment for frontline health care workers and others in the health care system is a top priority for the Public Health Agency of Canada. Provincial, territorial and local governments are responsible for preparing for the most common emergencies and the federal government has a role to provide additional support during exceptional circumstances.

One way we do this is through the national emergency strategic stockpile or the NESS, which is the federal government's stockpile for emergencies with health implications. The NESS plays two important roles. It provides surge capacity to provinces and territories when their existing resources have been exhausted, and it's the sole provider of certain niche assets for rare public health emergencies, for example, costly and rarely used vaccines or antidotes.

To respond to the COVID-19 pandemic in Canada, the Public Health Agency of Canada mobilized the NESS to support response efforts. The agency worked with Public Services and Procurement Canada as well as provinces and territories to lead the bulk procurement of personal protective equipment or PPE, medical equipment and supplies for Canada. We rapidly activated to accept, assess and allocate donations that came in from domestic and international donors. We increased our internal capacity and created a dedicated team on the procurement of PPE to identify appropriate types and quantities and to direct procurement.

We also added warehousing capacity and increased the footprint of the NESS by approximately one million square feet of dedicated space.

To address early quality issues with PPE, we also worked with the National Research Council to establish capacity to test products to determine if they met the performance and technical specifications required by the health care sector. Steady supplies of PPE and medical equipment continue to arrive daily and 80% are rapidly allocated to the provinces and territories to support health care workers across the country. The other 20% is retained to replenish the inventory of the NESS so it can provide PPE and medical equipment to provinces and territories with urgent needs above and beyond their allocation.

In addition to the original bulk procurement efforts, Innovation, Science and Economic Development and PSPC continue to galvanize Canadian industries to increase domestic manufacturing capacity and reduce dependencies on external supply chains. This includes retooling facilities to produce equipment and supplies, including portable ventilators, surgical masks and rapid testing kits.

The COVID-19 pandemic is an unprecedented situation and it continues to challenge the Canadian health care sector at all levels. Demand for PPE, medical equipment and supplies created global supply challenges that required a whole-of-government approach to deliver innovative solutions to meet the needs of our health care sector.

As much as we achieved in responding to COVID-19, there remains work to do. Life-cycle management processes are top of mind, and we utilize a first in, first out protocol so that PPE, medical devices and equipment are put to use well before expiry.

We committed to reviewing the lessons learned from the COVID-19 pandemic and look forward to receiving the recommendations from the Office of the Auditor General on their COVID-19-related audits. This information will help to shape the future of emergency management at the Public Health Agency of Canada and to better position the NESS for the future.

Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Ms. Evans.

Do we have another presentation?

Go ahead, please.

[Michael Mills, Associate Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services]

Good afternoon.

Mr. Chair, thank you for having me here alongside my colleagues from the Public Health Agency of Canada.

With me today is Alain Dorion, Director General within the Procurement Branch at Public Services and Procurement Canada.

It is our pleasure to appear before this committee to talk about our department's role in Canada's National Emergency Strategic Stockpile.

As you know, the stockpile is managed by the Public Health Agency of Canada. It contains supplies that provinces and territories can request in cases of emergency.

These supplies include a variety of items such as personal protective equipment, medical supplies, pharmaceuticals and social service supplies, such as beds and blankets.

The Public Health Agency of Canada is responsible for maintaining the stockpile, assessing the composition of the stockpile, and restoring supplies that are distributed. Public Services and Procurement Canada is responsible for purchasing supplies on behalf of, and with direction from, the Public Health Agency of Canada.

Ever since the beginning of the COVID-19 crisis, PSPC has worked closely with PHAC to acquire supplies for distribution to provinces and territories to support our frontline health care workers. These purchases are supplementary to the existing national emergency strategic stockpile as well as to the stocks and supplies that exist in and are being procured directly by the provinces and territories. We've also provided procurement support to PHAC regarding warehousing and distribution services when needed.

In the beginning, much of the supplies we were buying were coming in from overseas, and we were operating in a highly competitive international market. Canada simply did not have the domestic manufacturing capability at the time for vital equipment such as N95 respirators and other critical supplies.

We have since established important domestic sources of supply that, in the early days of the pandemic, PSPC had to take an aggressive approach to buying in a complex global environment, especially when it came to personal protective equipment for frontline health care workers. That approach included buying large quantities of supplies in bulk with delivery spread over several months and supplementing those orders by purchasing everything immediately available that met Health Canada's requirements.

As part of these efforts, just over one year ago now, the PSPC launched a call to action asking suppliers to come forward with products or services they could offer to support Canada's response to the pandemic. The response was overwhelming, with approximately 26,000 responses from both Canadian and international businesses.

At the same time, due to a plan to mobilize industry being led by Innovation, Science and Economic Development Canada, domestic manufacturers began to retool and ramp up domestic production of much-needed supplies. In all, so far, the Government of Canada has purchased approximately 2.5 billion pieces of equipment to help Canada fight COVID-19, with many of those supplies now being made in Canada.

Today, domestic production is now set up in many places across the country, and marketplaces for PPE are much more stable in general. That is why, over the past few months, we have been able to return to using competitive bidding processes to secure the goods and services needed to meet Canada's evolving pandemic needs where circumstances permit and when the needs are not urgent.

Open competitions for goods and services are now regularly being launched on our website for a range of PPE, medical equipment and supplies. In addition, to further support domestic manufacturing, we've also issued a number of competitive procurement processes limited to Canadian manufacturers only.

By continuing to securing vital supplies through competitive processes, and with domestic suppliers now making up a greater portion of our supplier pool, we are better equipped for the longer term.

I can tell you that we are committed to continuing to support the Public Health Agency of Canada in their efforts to maintain and replenish the National Emergency Strategic Stockpile.

Thank you for your attention. I look forward to your questions.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Mills.

We will now go into our first round of questions.

We'll start with Mr. Paul-Hus for six minutes.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Chair.

Good afternoon, ladies and gentlemen.

My first question goes to Mr. Mills or Mr. Dorion.

When the pandemic was declared, the government ordered 40,000 medical ventilators. How was it determined that we needed 40,000? Let me remind you that we are talking about contracts of more than $1 billion.

[Michael Mills]

For our purchases, we consult with Health Canada and the Public Health Agency to get our requirements. For determining the numbers, we would consult certainly with our client group, the Public Health Agency of Canada, and the number would have come in consultation with them and Health Canada.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

In terms of the procurement, the Library of Parliament's briefing notes indicate that 63% of the ventilators ordered have arrived, a total of 25,000 ventilators. We now know that the need for ventilators is not great and we already have enough of them to meet the demand.

Is it true that we have received 25,000 ventilators? Are they being kept in the national stockpile in case of another crisis? Does the contract contain a clause allowing the rest of the order, some 15,000 ventilators, to be cancelled? If it does not, we are going to end up with a surplus worth hundreds of millions of dollars.

[Michael Mills]

Yes, over the course of the crisis, the needs have evolved, as well as the clinical practice, so over the period, it has come to light that we do need less. We are currently working with our suppliers to try to reduce the overall number. We do not expect to take delivery of all 40,000, but we've certainly had over 25,000 delivered, which we will maintain. We'll work with our suppliers to reduce the overall number that we take possession of.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

How many ventilators did Canada and the provinces need? Do you know how many ventilators have really been put to public health use in the last year?

[Michael Mills]

Perhaps Cindy Evans can answer that question.

[Cindy Evans]

Thank you for the question. I do have the information. Just give me two seconds.

Early on in the pandemic, we deployed over 400 ventilators from the national emergency strategic stockpile to the provinces and territories to address our anticipated needs. Since then, from the additional ventilators purchased, we have deployed over 500 additional ventilators to the provinces and territories.

[A voice]

Ha, ha!

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Ha, ha!

I am not laughing at you, Ms. Evans. I am not laughing at anyone from the public service, of course. I am laughing at the stupidity of the initial order for 40,000 ventilators. We now have 25,000. I feel that will be enough for about 50 years. I hope that the government will be able to cancel the additional 15,000 units because they really have no use. Whatever the case, thank you for your answer.

My next question is about personal protective equipment. At the beginning of 2020, Canada sent a large number of items—20 million, I believe—to China. I would like to know from which department the order came. Who gave the order to send that equipment to China? It was in February 2020.

[Cindy Evans]

Early on in the pandemic, through a request that was coordinated through the Red Cross and the Chinese arm of the Red Cross, we did supply some supplies to China. It did not impact on our response in Canada. In addition, a number of the types of supplies that we provided were near their expiry.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

I am trying to understand. Perhaps it's more difficult because of the interpretation.

If I understand correctly, you are saying that the equipment was sent to China as the result of a system that was already in place. It was not a direct order from the government. You received no order to send that equipment to China. Is that what you are telling me?

[Cindy Evans]

Through Global Affairs Canada, we did contribute to a national effort to contribute to PPE requests from China.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

So it was the Minister of Foreign Affairs at the time who asked for the equipment to be sent to assist China.

Through Public Services and Procurement Canada, do we continue to buy personal protective equipment from China, equipment that is made by forced labour? Everyone knows about the many victims of forced labour in China.

Have we put an end to purchases of personal protective equipment from Chinese companies or from the Chinese government, in the light of the forced labour?

[Michael Mills]

We currently have contracts with companies located in China. We are aware that there is a region, the Uighur Autonomous Region of China, where there are concerns around forced labour. We currently do not have any contracts with suppliers manufacturing in that region of China.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Paul-Hus.

We'll now go to Mr. Jowhari for six minutes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair.

Let me start by thanking both PHAC and PSPC not only for participating here today once again but also for the great work that both of your departments and you have done. You have strong leadership. We started from a very disadvantaged situation and far from ideal circumstances over the last year, and what you, your organization and members have done needs to be appreciated, acknowledged and commended. On behalf of all of us, I'd like to thank you all.

Let me start by asking questions to Ms. Evans. In my understanding, PHAC is responsible for NESS. NESS, by its nature, contains medical equipment, pharmaceuticals and social services supplies that can be deployed usually within 24 hours to the provinces and territories, upon request, in cases of emergencies such as infection and disease outbreak.

Ms. Evans, can you give us some idea of the types of requests that have come in and how much you have supported provinces? In your opening remarks, you talked about how 80% of the stock that comes into NESS goes to the provinces and territories.

[Cindy Evans]

There are two things that have happened. We have both procurement that was done and those stocks that are coming in. For the personal protective equipment, we've really focused on five key commodities. Those are surgical masks, N95 respirators and equivalents, face shields, gloves and gowns. Eighty per cent of the supplies that come in are immediately disbursed to the provinces and territories. There's a 20% holdback of those supplies that stays and helps to restock the national emergency strategic stockpile.

Over and above that, since the outbreak doesn't happen in a uniform manner across the country, if a jurisdiction is having difficulty and shortage in a specific area, it can come to us with a request for assistance. As well, it might run out of supplies in a specific area or size, for example, gloves in size small, and ask if it can get them from the national—

[Majid Jowhari, Liberal, Richmond Hill, ON]

Ms. Evans, can you give us an idea of a quantitative number for how many times the provinces have reached out to you for things in various categories, just very roughly?

[Cindy Evans]

I could tell you the number of requests for assistance, but I just don't have that number directly in front of me. I'm sorry.

[Majid Jowhari, Liberal, Richmond Hill, ON]

That's okay. Can you make that submission to the committee? I'd really appreciate it.

Provinces also hold their own stockpiles. I'd like to get some perspective from you as to how well our provinces, PHAC and NESS are connected in working together, collaborating and making sure that their needs and inventory are taken into consideration when you plan your replenishment.